EXHIBIT 3.1.1
TENASKA GEORGIA PARTNERS, L.P.
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
Dated as of
December 31, 1999
TABLE OF CONTENTS
PAGE
Article 1 PARTIES TO THIS AGREEMENT.............................................................1
1.1 Parties...............................................................................1
Article 2 DEFINITIONS...........................................................................2
2.2 Other Defined Terms..................................................................11
2.3 Construction.........................................................................11
2.4 References...........................................................................11
Article 3 FORMATION OF THE PARTNERSHIP; OTHER RELATED MATTERS..................................12
3.1 Formation............................................................................12
3.2 Name.................................................................................12
3.3 Sole Purpose.........................................................................12
3.4 Representations and Warranties Concerning Formation of Partnership...................12
3.5 Offices..............................................................................13
3.6 Power and Authority..................................................................13
3.7 Regulatory Status of the Partnership.................................................13
3.8 Filings..............................................................................14
3.9 Term.................................................................................14
3.10 Limitation on Liability of Partners..................................................14
3.11 No Partner Responsible for Other Partner's Commitments...............................14
Article 4 CAPITALIZATION OF THE PARTNERSHIP AND PARTNERSHIP BUDGETS............................15
4.1 Capitalization of the Partnership....................................................15
4.2 Construction Equity Contributions; Equity Guarantees.................................15
4.3 Development Funds....................................................................15
4.4 Project Guarantees...................................................................15
4.5 Additional Capital...................................................................16
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4.6 Partnership Budgets..................................................................17
Article 5 REIMBURSEMENT OF DEVELOPMENT FUNDS, FEES, AND DISTRIBUTION OF UNSPENT
CONTINGENCY AND UNSPENT EQUITY CONTRIBUTIONS.........................................18
5.1 Reimbursement of Development Funds...................................................18
5.2 Annual Fee...........................................................................19
5.3 Distribution of Unspent Contingency..................................................19
5.4 Distribution of Unspent Equity Contributions.........................................19
Article 6 ALLOCATIONS OF INCOME, PROFITS AND LOSSES AND DISTRIBUTIONS OF CASH AND ASSETS.......19
6.1 Income, Profits and Losses...........................................................19
6.2 Distributions--General...............................................................20
6.3 Tax Distributions ...................................................................20
6.4 Special Priority Cash Distributions..................................................20
Article 7 MANAGEMENT OF THE PARTNERSHIP........................................................20
7.1 Managing Partner.....................................................................20
7.2 Executive Review Committee...........................................................22
7.3 Actions Requiring Eighty-Five Percent (85%) Approval or Consent of the ERC...........24
7.4 Actions Requiring Ninety Percent (90%) Approval or Consent of the ERC................27
7.5 Actions Requiring Unanimous Approval or Consent of the General Partners..............28
7.6 Actions Requiring Unanimous Approval or Consent of all Partners......................28
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Article 8 SERVICES FROM PARTNERS OTHER THAN THE MANAGING PARTNER...............................29
8.1 Services Requested From Partners Other Than the Managing Partner.....................29
8.2 Billing Statement Deadline...........................................................29
8.3 Payment Deadline.....................................................................30
8.4 Failure to Make Payment..............................................................30
8.5 Examination of Books and Records.....................................................30
8.6 Services Currently Provided by the Managing Partner's Affiliates.....................30
Article 9 ACCOUNTING AND TAXATION..............................................................30
9.1 Location of Records..................................................................30
9.2 Books of Account.....................................................................30
9.3 Annual Financial Statements and Tax Information......................................31
9.4 Interim Financial Statements.........................................................31
9.5 Taxation.............................................................................31
9.6 Governmental Reports.................................................................32
9.7 Inspection of Facilities and Records..................... ...........................32
9.8 Deposit and Withdrawal of Funds......................................................32
9.9 Tax Matters Partner..................................................................32
Article 10 TRANSFERS OF PARTNERSHIP INTERESTS...................................................33
10.1 Permitted Transfers..................................................................33
10.2 Withdrawal of Transferor Partner.....................................................34
10.3 Effect of Prohibited Transfers.......................................................34
10.4 Transfers under a Security Interest..................................................35
10.5 Tax Election.........................................................................35
10.6 Pledge of Partnership Interests......................................................35
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Article 11 ADMISSION OF ADDITIONAL PARTNERS.....................................................35
11.1 Permitted Admissions.................................................................35
11.2 Effect of Prohibited Admission.......................................................36
Article 12 DEFAULT AND WITHDRAWAL PROVISIONS....................................................36
12.1 Default..............................................................................37
12.2 Certain Rights and Obligations During Cure Period....................................37
12.3 Cure Period Distributions............................................................39
12.4 Automatic Withdrawal.................................................................39
12.5 General Withdrawal Provisions........................................................40
Article 13 TERMINATION OF THE PARTNERSHIP.......................................................41
13.1 Voluntary Dissolution................................................................41
13.2 Automatic Dissolution................................................................41
13.3 Avoidance of Dissolution.............................................................42
13.4 Winding Down and Liquidation.........................................................42
13.5 Continuance of Partnership...........................................................42
Article 14 MISCELLANEOUS PROVISIONS.............................................................43
14.1 Effect of Agreement..................................................................43
14.2 Notices..............................................................................43
14.3 Further Assurances...................................................................45
14.4 Applicable Law and Jurisdiction......................................................45
14.5 Dispute Resolution; Binding Arbitration..............................................45
14.6 Counterparts.........................................................................46
14.7 Headings.............................................................................46
14.8 Waiver...............................................................................46
14.9 Partition............................................................................47
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14.10 Laws and Regulatory Bodies...........................................................47
14.11 Waiver of Consequential and Punitive Damages.........................................47
14.12 Partnership Opportunity..............................................................47
14.13 Article and Section Numbers..........................................................47
14.14 Confidentiality Provisions...........................................................48
14.15 Reference to Money...................................................................50
14.16 Severability.........................................................................50
14.17 Agency...............................................................................50
14.18 Materiality..........................................................................50
14.19 Prior Agreements.....................................................................50
14.20 Affiliated Contracts.................................................................50
14.21 Binding Effect.......................................................................51
APPENDIX A PARTNERSHIP PERCENTAGES...................................................................1
APPENDIX B ACTIVITIES TO BE UNDERTAKEN BY THE MANAGING
PARTNER STANDARD BILLING PRACTICES....................................................2
APPENDIX C REPRESENTATIVES AND ALTERNATE REPRESENTATIVES TO
THE ERC...............................................................................5
APPENDIX D PARTNERSHIP BUDGET FOR THE DEVELOPMENT PERIOD.............................................6
APPENDIX E PERCENTAGES FOR DISTRIBUTIONS OF UNSPENT
CONTINGENCY AND UNSPENT EQUITY CONTRIBUTIONS..........................................7
APPENDIX F SERVICES PERFORMED BY AFFILIATES OF TENASKA GEORGIA
PARTNERS, L.P.........................................................................8
APPENDIX G SCHEDULE OF SPECIAL PRIORITY CASH DISTRIBUTIONS ..........................................9
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TENASKA GEORGIA PARTNERS, L.P.
SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
THIS SECOND AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT (the
"Agreement") of Tenaska Georgia Partners, L.P. (the "Partnership") is entered
into by and among Tenaska Georgia, Inc., Tenaska Georgia I, L.P., and Diamond
Georgia, LLC, effective as of midnight on December 31, 1999.
WHEREAS, the Parties hereto desire to enter into this Agreement in order to
reflect the admission of Diamond Georgia, LLC as a new General Partner to the
Partnership and to amend and restate in its entirety the Amended and Restated
Partnership Agreement of the Partnership, effective as of October 29, 1999, as
set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1
PARTIES TO THIS AGREEMENT
1.1 PARTIES. The Parties to this Agreement are as follows:
Tenaska Georgia, Inc. ("TENASKA GP"), a corporation organized under the
laws of the State of
Delaware, with its principal offices and address at
0000 Xxxxx 000 Xxxxxx, Xxxxx 000, Xxxxx, XX 00000, which is a "General
Partner" (as defined in Section 2.1) in the Partnership;
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 0000 Xxxxx 000 Xxxxxx, Xxxxx 000, Xxxxx, XX 00000, which is a
"Limited Partner" (as defined in Section 2.1) in the Partnership; and
Diamond Georgia, LLC ("DIAMOND GEORGIA"), a limited liability company
organized under the laws of the State of
Delaware, with its principal
offices and address at 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX
00000, which is a "General Partner" (as defined in Section 2.1) in the
Partnership."
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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 (or any
corresponding provisions of succeeding law).
"ADDITIONAL CAPITAL" means any capital advances, equity contribution(s),
or loans made by the Partners to the Partnership, other than or in
addition to the advance, provision or contribution of Equity Guarantees,
Project Guarantees, 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
Admission Date.
"ADMISSION DATE" means December 31, 1999.
"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.
"AFFILIATED CONTRACT" means any contract or agreement between the
Partnership on the one hand and any Partner, or an Affiliate thereof, on
the other hand.
"AGENT" has the meaning set forth in Section 14.14(b).
"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).
"ASSET TRANSFER" has the meaning provided in Section 7.3.
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"BUDGET ITEMS" means revenues, expenses, Capital Expenditures, Cash
Reserves, cash calls and distributions.
"BUSINESS DAY" means any day upon which national banks are open for
business in Omaha, Nebraska and Los Angeles, California.
"CAPACITY UPGRADE" means any capital improvement or series of related
capital improvements associated with increasing the electrical output
capacity of the Project which are economically advantageous to the
Partnership and involving the expenditure of $5 million or more; provided
such improvements do not include the installation of additional electric
generator(s) beyond the Project's then current design.
"CAPITAL EXPENDITURES" means all expenditures, costs and expenses
(including, without limitation, capital leases) authorized in accordance
with this Agreement and made or incurred by or on behalf of the
Partnership, which are capitalized on the books and records of the
Partnership according to GAAP.
"CASH RESERVES" means the cash reserves included in the Partnership Budget
or otherwise approved by the ERC as being the amount necessary to account
for the usual and ordinary operating expenses to be incurred by the
Partnership in connection with its operations including, without
limitation, as applicable, (i) ad valorem taxes and assessments on real
and personal property of the Partnership; (ii) required reserves under the
Common Agreement and agreements related to the financing of the Project;
(iii) interest and principal payments on all debt, if any, of the
Partnership; (iv) insurance premiums; (v) management/fixed fees; (vi) the
Partnership's obligations under the Project Contracts entered into in
accordance with the provisions of this Agreement; (vii) reserves for
operating expenses; and (viii) other necessary expenses of operation.
"CERTIFIED PUBLIC ACCOUNTANTS" means Xxxxxx Xxxxxxxx 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 Collateral Agent, 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.
"COLLATERAL AGENT" means The Chase Manhattan Bank, in its capacities as
Trustee, Depository Bank and Collateral Agent as defined in the Common
Agreement.
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"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 Collateral Agent, 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 14.14(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.
"CONTRIBUTE" or "CONTRIBUTED" has the meaning provided in Section 4.5.
"CURE DATE" has the meaning provided in Section 12.2(d).
"CURE PERIOD" means, (a) in reference to Monetary Obligations, the lesser
of (i) a period of fifteen (15) days after the date a Default Notice is
given or such longer cure period as may be approved by vote of the ERC or
(ii) the period, if any, allowed under the applicable Project Contracts,
minus one Business Day, before the Default in Monetary Obligations which
is the subject of the Default Notice will constitute a default or event of
default under any applicable Project Contract; and (b) in reference to
Non-Monetary Obligations, the lesser of (i) a period of thirty (30) days
after the date a Default Notice is given or such longer cure period as may
be approved by vote of the ERC, or (ii) the period, if any, allowed under
the applicable Project Contracts, minus one Business Day, before the
Default in Non-Monetary Obligations which is the subject of the Default
Notice will constitute a default or event of default under any applicable
Project Contract.
"DEFAULT" means any breach or default by a Partner in its obligations
under or pursuant to this Agreement.
"DEFAULT NOTICE" means a written notice of a Default.
"DEFAULTING PARTNER" means a Partner which is in Default.
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"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.
"DISPUTE" has the meaning provided in Section 14.5.
"EFFECTIVE DATE" means April 16, 1998.
"EQUITY CONTRIBUTION AGREEMENT" means the Equity Contribution Agreement
among the contributing Partners, the Partnership and the 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.
"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 such Partner's 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.
"EXPANSION" means any capital improvement or series of related capital
improvements beyond the Project's initial design involving the expenditure
of more than $5 million.
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"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 DIAMOND GEORGIA and any other
Person which is admitted to the Partnership after the Admission Date as a
general partner pursuant to and in accordance with this Agreement.
"INCURRING PARTNER" has the meaning provided in Section 3.11.
"INTEREST RATE" means the lesser of (a) the "Prime Rate" as reported in
THE WALL STREET JOURNAL on the first Business Day of each calendar quarter
plus five hundred (500) basis points or (b) the highest rate allowed by
applicable law.
"LIMITED PARTNER" means TENASKA LP and any other Person admitted to the
Partnership after the Admission Date 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 two hundred fifty thousand dollars
($250,000); EXCLUDING, however, agreements related to the ordinary
day-to-day business activities of the Partnership, including but not
limited to agreements related to insurance or short-term cash management.
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"MONETARY DEFAULT" means a Default by a Partner of its Monetary
Obligations.
"MONETARY OBLIGATIONS" means any obligation of a Partner under this
Agreement to advance, provide or contribute Development Funds, Equity
Guarantees, Project Guarantees, Equity Contributions or Additional
Capital.
"NON-DEFAULTING PARTNER" means a Partner which is not a Defaulting Partner
and "NON-DEFAULTING PARTNERS" means such Partners collectively.
"NON-MONETARY OBLIGATIONS" means any obligation of a Partner under this
Agreement that is not a Monetary Obligation.
"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 1.1.
"PARTNER" means each of the Parties executing this Agreement, and any
Additional Partner which is admitted to the Partnership after the
Admission Date 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 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
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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 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.
"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.
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"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, health and safety. 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 generally acceptable practices,
methods and acts in the United States, 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 and other agreements referenced therein.
"PRUDENT OPERATING COSTS" means, collectively, those costs and
expenditures which are incurred, expended or accrued in connection with
the operation of the Project in accordance with Prudent Generator
Practices.
"PUHCA" means the Public Utility Holding Company Act of 1935 and any
regulations promulgated thereunder, and any successor laws and
regulations.
"REFERRAL DATE" has the meaning provided in Section 14.5.
"REFERRAL NOTICE" has the meaning set forth in Section 14.5.
"RELINQUISHED INTEREST" has the meaning set forth in Section 12.2(d).
"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.
"TAX MATTERS PARTNER" has the meaning provided in Section 9.9.
"TENASKA DIAMOND PARTNERSHIP" means Tenaska Diamond, L.P., a
Delaware
limited partnership.
"TENASKA DIAMOND PARTNERSHIP AGREEMENT" means the
Limited Partnership
Agreement of Tenaska Diamond, L.P., dated as of December 31, 1999.
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"TRANSFER" means any sale, assignment, pledge or transfer of, or to sell,
assign, pledge or transfer, all or any portion of a Partnership Interest
by a Partner.
"UNSPENT CONTINGENCY" means the aggregate amount of funds transferred to
the "Partnership Distribution Fund" (as defined in the Collateral Agency
Agreement) pursuant to Section 3.2 of the Collateral Agency Agreement
which are, or have met all of the conditions for being, transferred to the
Partnership pursuant to the Collateral Agency Agreement.
"UNSPENT EQUITY CONTRIBUTIONS" means the amount, if any, by which the
aggregate Equity Contributions committed to or on behalf of the
Partnership by the Partners under the Common Agreement exceeds the amount
actually called by the Partnership pursuant to the requirements of the
Common 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 the voting percentage of an ERC
Representative (or the General Partner, as the case may be) eligible to
vote 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 (or General Partner's, as the
case may be) voting eligibility determined pursuant to Section 7.2(d).
"WITHDRAWAL NOTICE" means a notice from the Partnership, pursuant to
Sections 12.1(b) or 12.4, advising that a Partner has become a Withdrawn
Partner.
"WITHDRAWN PARTNER" means a Partner which has become withdrawn from the
Partnership pursuant to this Agreement.
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. Any reference herein to a
"covenant or "covenants" shall include all undertakings and agreements
whether or not denominated in this Agreement as a covenant or covenants.
Any reference to "include", "including" and similar terms shall be
construed as if
Page 11
followed by the phrase "without limitation." 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.
The term "MATERIAL" as used herein, 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. Notwithstanding the fact that one
of the Parties may have taken the lead in preparing this Agreement, all of
the Parties confirm that they and their respective counsel have reviewed,
negotiated and adopted this Agreement as the joint agreement and
understanding of the Parties and accordingly any presumption that
ambiguities are to be resolved against a primary drafting party shall not
apply.
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) 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
Page 12
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 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
0000 Xxxxx 000 Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000, 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 0000 Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, 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
Page 13
Partnership does not lose its EWG status and to ensure that the
Partnership and each Partner does not become regulated as 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 regulated as 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 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
Page 14
"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.
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
Page 15
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.
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 the form of loans
unless the Managing Partner and the Contributing Partners (as defined
below) agree on another form of contribution.
(b) A Partner shall have the right to decline to Contribute requested
funds for Prudent Operating Costs in its sole and absolute discretion.
Within ten (10) days after receipt of the written request from the
Managing Partner for Additional Capital for Prudent Operating Costs, each
Partner shall advise the Partnership of its election to Contribute, or of
its election not to Contribute, the requested Additional Capital for
Prudent Operating Costs; provided, however, each Partner shall in good
faith use its reasonable best efforts to provide its election to the
Partnership as soon as practicably possible giving due consideration to
the Project's needs and the intended application of such called Additional
Capital. Partners which so elect to Contribute such requested Additional
Capital 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 Additional Capital
for Prudent Operating Costs are referred to individually as a
"Non-Contributing Partner" and collectively as the "Non-Contributing
Partners".
(c) Within twenty (20) days after receipt of the written request from the
Managing Partner for Additional Capital for Prudent Operating Costs, each
Contributing Partner shall Contribute the requested Additional Capital for
Prudent Operating Costs, or if the Managing Partner specifically requests,
the Contributing Partners shall each provide credit facilities or other
credit support for such Prudent Operating Costs, in each case in an amount
equal to the Contributing Partner's pro rata share of the requested
Additional Capital for Prudent Operating Costs (based on the proportion
which its Equity Ownership
Page 16
Percentage represents of the aggregate Equity Ownership Percentages of all
Contributing Partners); provided, however, each Contributing Partner shall
in good faith use its reasonable best efforts to provide its share of the
requested Additional Capital for Prudent Operating Costs as soon as
practically possible giving due consideration to the Project's needs and
the intended application of such requested Additional Capital.
(d) In the event that Additional Capital for Prudent Operating Costs
requested 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 (Reimbursement of Development Funds), 5.2 (Annual
Fee), 5.3 Distribution of Unspent Contingency), 5.4 (Distribution of
Unspent Equity Contributions), 6.2 (Distributions--General), 6.3 (Tax
Distributions) or 6.4 (Special Priority Cash Distributions), until (i) the
Contributing Partner(s) have been repaid the Additional Capital which it
or they have Contributed to the Partnership for Prudent Operating
Requirements in the place of the Non-Contributing Partners, plus (ii)
interest on such Additional Capital at the Interest Rate from the date
such Additional Capital was Contributed until the date the Contributing
Partner(s) have been repaid in full.
(e) In the event that Additional Capital pursuant to this Section 4.5 is
Contributed 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
(Reimbursement of Development Funds), 5.2 (Annual Fee), 5.3 (Distribution
of Unspent Contingency), 5.4 (Distribution of Unspent Equity
Contributions), 6.2 (Distributions--General), 6.3 (Tax Distributions) or
6.4 (Special Priority Cash Distributions), 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 until
(ii) the Contributing Partners have been reimbursed for any draws on such
credit facilities or other credit support plus interest at the Interest
Rate on such sums from the date drawn.
Page 17
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
is attached hereto as APPENDIX D.
(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 1st 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 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 three percent (3%); provided
that if there is no Partnership Budget for the then current Fiscal
Year related to the Operating Period because the Operating Period has
not yet commenced and the ERC has not approved a proposed Partnership
Budget for such initial Fiscal Year of the Operating Period, then the
Budget Items for the initial Fiscal Year of the Operating Period
included in the closing pro forma
Page 18
economic projection approved by the Lenders (adjusted to conform with
the actual length of such initial Fiscal Year if different than the
pro forma) which are not directly related to, based upon or connected
with a Project Contract or the long-term maintenance program for the
Project; and
(iii) non-recurring or extraordinary Budget Items in amounts based on the
long-term maintenance program for the Project including scheduled
outages under the Power Purchase Agreement.
Page 19
ARTICLE 5
REIMBURSEMENT OF DEVELOPMENT FUNDS, FEES,
AND DISTRIBUTION OF UNSPENT CONTINGENCY
AND UNSPENT EQUITY CONTRIBUTIONS
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 and from the first available cash of the Partnership, after any tax
distributions under Section 6.3, but before any payments are made under
Sections 5.2, 5.3 or 5.4, or any distributions of operating cash flow are
made under Sections 6.2 or 6.4. 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, the
amount of Unspent Contingency, if any, shall be distributed to TENASKA GP
and DIAMOND GEORGIA as a return of capital on the earliest date or dates
that the funds constituting such Unspent Contingency are transferred to
the Partnership pursuant to the Collateral Agency Agreement. The Unspent
Contingency, if any, shall be distributed to TENASKA GP and DIAMOND
GEORGIA in accordance with the formulas set forth in APPENDIX E
Page 20
hereto. Any Unspent Contingency not previously distributed shall be
distributed upon liquidation of the Partnership.
5.4 DISTRIBUTION OF UNSPENT EQUITY CONTRIBUTIONS. On the date that is the
later of (i) the date that the last Equity Contributions are paid to or on
behalf of the Partnership pursuant to the Common Agreement and (ii) the
Commercial Operation Date, the Partners shall cause their respective
applicable Affiliate(s) to contribute to the Tenaska Diamond Partnership
the amount of Unspent Equity Contributions which has not otherwise been
required to be contributed under the Common Agreement, all as provided in
Section 6.3 of the Tenaska Diamond Partnership Agreement. For the
avoidance of doubt, Section 6.3 of the Tenaska Diamond Partnership
Agreement also provides that such Unspent Equity Contributions shall be
immediately distributed as a return of capital to the applicable "Project
Interest Owners", as such term is defined therein, in accordance with the
formulas set forth in APPENDIX E hereto.
Page 21
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--GENERAL. Subject to Article 5, Sections 6.3 and 6.4, 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.
Except for tax distributions pursuant to Section 6.3 which shall be made
prior to reimbursement of Development Funds under Section 5.1, all
distributions of cash or other assets contemplated by Article 5 shall be
made in the order of priority indicated in Section 5.1 prior to any
distributions under this Article 6. All distributions of cash or other
assets pursuant to this Article 6 shall be made in the following order of
priority: tax distributions pursuant to Section 6.3, special priority cash
distributions pursuant to Section 6.4, and then general distributions
pursuant to this Section 6.2.
6.3 TAX DISTRIBUTIONS. Subject to Section 12.3, and the terms of the Common
Agreement, during each Fiscal Year the Partnership shall make quarterly
cash distributions to the Partners as required for the Partners to pay
their respective federal, state and local income tax liabilities, if any.
Such tax distributions shall be equal to each Partner's Equity Ownership
Percentage multiplied by an amount equal to the taxable income of the
Partnership for each Fiscal Year, or relevant portion thereof, (determined
under Section 703(a) of the Code with items of income, loss, or deduction
under Section 703(a)(1) included in the determination) multiplied by the
sum of (i) the then current maximum marginal federal income tax rate for
individuals or corporations, whichever is higher, in
Page 22
the United States (the "Marginal Federal Rate"), and (ii) 5% (stipulated
state and local income tax rate) multiplied by 1 minus the Marginal
Federal Rate. Such distributions shall be made from time to time during
each Fiscal Year (and/or during the following January) just prior to the
time that estimated income tax payment obligations are due from the
Partners to federal, state and local tax authorities.
6.4 SPECIAL PRIORITY CASH DISTRIBUTIONS. In lieu of the Annual Fees of
which Tenaska GP has waived payment through 2009 pursuant to Section 5.2,
Tenaska GP shall be allocated and receive special priority cash
distributions each Fiscal Year in amounts equal to those set forth in
Appendix G from the first available cash from the Partnership after tax
distributions pursuant to Section 6.3 but prior to any distributions of
the operating cash flow made to the Partners pursuant to Section 6.2 each
Fiscal Year. For the avoidance of doubt, in the event Tenaska GP has not
fully realized the amount(s) of priority cash distributions which are due
and payable to it under this Section 6.4 as of the end of each Fiscal Year
(including amounts related to the current Fiscal Year and all applicable
prior Fiscal Years), there shall be no distributions made to the Partners
pursuant to Section 6.2 in the ensuing Fiscal Year(s) until Tenaska GP has
fully realized all such priority cash distributions due and payable to it
under this Section 6.4.
Page 23
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 subject to Section 7.2(d) and the provisos in this
Section 7.1(b), upon the unanimous vote of the General Partners, excluding
the vote of the Managing Partner and any General 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) a material Default by the Managing Partner or Affiliate thereof
under this Agreement which is not cured within the applicable Cure Period,
(ii) a material default by any Affiliate of the Managing Partner under the
Tenaska Georgia I, L.P. partnership agreement, as amended and/or restated,
which is not cured within the applicable cure period prescribed by such
agreement, (iii) a material Default under any Project Contract which is
proximately caused by the action or inaction of the Managing Partner or
Affiliates thereof with respect to matters under its or their control and
which is not cured with the applicable cure period prescribed by such
Project Contract, (iv) any action or inaction of the Managing Partner or
any Affiliate thereof involved with the Partnership or the Project which
constitutes fraud, gross negligence or willful misconduct, (v) the filing
by the Managing Partner or any Affiliate involved with the Project of a
voluntary petition in bankruptcy (excluding a filing by Tenaska Georgia I,
L.P. which occurs as a result of a vote in accordance with the Tenaska
Georgia I, L.P. partnership agreement or Section 7.7 of the Tenaska
Diamond Partnership Agreement) or the filing of an involuntary petition in
bankruptcy against the Managing Partner, which is not dismissed within
ninety (90) days after the filing date, provided that a trustee is
appointed to manage the estate of the debtor in bankruptcy, (vi) the
cessation of the Managing Partner's existence as a legal entity and no
successor is created by the Managing Partner, or (vii) the Managing
Partner and its Affiliates ceasing to have, directly or indirectly, an
Equity Ownership Percentage or beneficial ownership, collectively, of
twenty percent (20%) or more of the total Partnership Interests; PROVIDED
that 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
Page 24
which the Managing Partner is to be removed within thirty (30) days after
the date such "cause" for removal has become known to any General Partner
other than the Managing Partner and its Affiliates; if the Managing
Partner does not receive such written notice within the foregoing time
period, the Managing Partner may not be removed in respect of such "cause"
for removal which has become known to a General Partner other than the
Managing Partner but the General Partners other than the Managing Partner
shall retain all other rights and remedies which they may have at law or
in equity by reason of any action or inaction which resulted in such
event; provided further that, if there is a good faith dispute regarding
the occurrence of any event described in Section 7.1(b)(i), (ii), (iii) or
(iv) which entitles the General Partners to remove the Managing Partner
from such office and the Managing Partner commences arbitration
proceedings in accordance with Section 14.5 within twenty (20) days
following receipt of the notice of exercise of right of removal pursuant
to this Section 7.1(b) to resolve such good faith dispute, and thereafter
diligently pursues such arbitration proceedings, then the exercise of the
right of removal as a result of the occurrence of any event described in
Section 7.1(b)(i), (ii),(iii) or (iv) shall not become effective unless
and until the arbitrators in such arbitration proceedings determine that
an event described in Section 7.1(b)(i), (ii), (iii) or (iv) has occurred
which entitles the General Partners to remove the Managing Partner from
such office.
(c) The Partnership shall reimburse the Managing Partner in accordance
with the Standard Billing Practices for all reasonable time charges,
expenses and costs it or its Affiliate(s) incur 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 pertaining to its
services provided to or on behalf of the Partnership. 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 14.14.
7.2 EXECUTIVE REVIEW COMMITTEE.
(a) The Executive Review Committee ("ERC") shall have the primary
authority for the management and control of the business, affairs,
policies and decisions of the Partnership. 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
Page 25
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. Members of the ERC shall carry out the purposes and
business of the Partnership in accordance with this Agreement, shall
devote to the Partnership's business such time as reasonably shall be
required, and shall conduct the affairs of the Partnership in the best
interests of the Partnership.
(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 who shall be selected by the Managing Partner. The individual selected
as secretary may or may not be a member of the ERC.
(c) The Chairman shall preside at all meetings of the ERC. The ERC shall
meet at least 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 seventy-two and one-half percent (72.5%) 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 distributed
concurrently to all ERC Representatives and 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. Copies of signed
written consents shall be promptly provided to all ERC Representatives and
Partners (whether the General Partners, the Limited Partners or all
Partners, as the case may be), as applicable. 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
Page 26
or participate in matters or actions before the ERC or the Partners for so
long as it is a Defaulting Partner.
(e) To the fullest extent permitted by applicable law, 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, however, such
indemnification shall not apply to any Person to the extent that their
action or inaction constitutes willful misconduct, fraud, or gross
negligence.
7.3 ACTIONS REQUIRING SEVENTY-TWO AND ONE-HALF PERCENT (72.5%) APPROVAL OR
CONSENT OF THE ERC. Subject to Section 7.2(d) and except as otherwise
provided herein, the approval or consent of seventy-two and one-half
(72.5%) percent 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, approving, amending or modifying a Partnership Budget,
except as provided in Section 4.6;
(b) requesting the Partners to Contribute Additional Capital or to provide
credit facilities or other credit support, except as provided in 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 two hundred fifty thousand dollars ($250,000): 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) the ordinary day-to-day business activities of the
Partnership in accordance with the applicable Partnership Budget approved
by the ERC, or (iii) Section 4.5; 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);
Page 27
(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 Generator
Practices;
(e) selling, exchanging, leasing, abandoning, mortgaging, pledging or
otherwise disposing of or transferring assets (an "Asset Transfer") in
each case having a fair market value of more than two hundred fifty
thousand dollars ($250,000); EXCEPT for (i) any Asset Transfer which
relates to property covered by liens and encumbrances granted pursuant to
a deed of trust or other security documents executed in connection with
the Common Agreement, (ii) any Asset Transfer which relates to the sale of
parts and equipment inventory in the ordinary course of business, or (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.
(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 two
hundred fifty thousand dollars ($250,000);
(g) subject to Section 14.20, engaging in any transaction, or entering
into any agreement which is an Affiliated Contract; EXCEPT when such
transaction or agreement is otherwise for goods or services provided by a
Partner pursuant to provisions set forth in this Agreement or modifying or
amending any such Affiliated Contract. For the purposes of this Section
7.3(g) and Section 14.20, the term "Affiliate" when used in reference to a
Person who is an individual shall also include members of such Person's
immediate family (as defined in Instruction 2 of Item 404(a) of Regulation
S-K promulgated by the Securities and Exchange Commission); trusts for
which the trustee and all beneficiaries are such Person or members of such
Person's immediate family; and corporations, limited liability companies
and other entities owned and/or controlled by such Person;
(h) establishing or amending material Partnership tax policies and
determining material Partnership tax elections, other than elections made
pursuant to Section 754 of the Code as may be required hereunder;
(i) establishing or amending material Partnership accounting policies,
procedures or practices;
(j) replacing the Certified Public Accountants;
Page 28
(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
14.14;
(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 as provided in
Sections 10.1 or 10.4;
(n) approving the extension of a Cure Period;
(o) determining the amount and timing of distributions of cash or property
to the Partners, except when such distributions are made pursuant to
Section 6.3 or are included in the Partnership Budget; provided, however,
no member of the ERC shall unreasonably withhold or delay its approval of
a proposed distribution of cash or property to the Partners;
(p) making any public announcements related to the Project, the
Partnership or any Partner;
(q) adopting or modifying any risk management policies and insurance
programs of the Partnership, except as required pursuant to the
requirements of Project Contracts;
(r) instituting policies for the protection of confidential information,
and policies and guidelines for health and safety;
(s) approving the timing of when Construction Equity Contributions shall
be required to be made other than on the Construction Equity Contributions
Date or as otherwise required by the Collateral Agent under the Common
Agreement;
(t) approving a change in Fiscal Year period for the Partnership;
(u) approving the timing of when Equity Guarantees shall be required to be
provided other than on the date of Financial Closing or as otherwise
required by the Collateral Agent under the Common Agreement;
(v) approving any return of any capital contributions to any Partner
except as provided in Article 6;
(w) granting additional authority to the Managing Partner beyond what is
provided in this Partnership Agreement;
(x) authorizing any Partner other than the Tax Matters Partner to carry
out tax related duties or actions on behalf of the Partnership;
Page 29
(y) approving the determination of fair market value to be used for the
purpose of liquidation of the Partnership under the terms of the
Partnership Agreement;
(z) approving the formation of, or acquisition of an interest in, and the
contribution of property to, any further limited or general partnerships,
joint ventures, or corporations;
(aa) approving the indemnification of any Person by the Partnership
against liabilities and contingencies to the extent permitted by law and
involving more than two hundred fifty thousand dollars ($250,000);
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;
(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 regulated as a holding company under
PUHCA, EXCEPT when such action is required by law;
(d) approving a Capacity Upgrade; or
(e) approving an Expansion.
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" in accordance with Section
7.1(b).
Page 30
7.6 ACTIONS REQUIRING UNANIMOUS APPROVAL OR CONSENT OF ALL PARTNERS.
Subject to Section 7.2(d) and except as otherwise provided herein, the
unanimous approval or consent of all 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, Section 12.1(a)(iii) or
Section 12.2(d); 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.
Page 31
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 "Prime Rate" as reported in THE WALL
STREET JOURNAL on the first Business Day of each calendar quarter, 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 14.14.
8.6 SERVICES CURRENTLY PROVIDED BY THE MANAGING PARTNER'S AFFILIATES. The
Partners acknowledge that Affiliates of the Managing Partner currently
provide or shall provide the services to or on behalf of the Partnership
which are described in APPENDIX F.
Page 32
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 and the General Partners shall
review, discuss and consult on matters relating to the preparation of the
items listed in subsections (a) through (c) below. As soon as practicable
after such consultation, 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
Page 33
(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;
(d) an estimate of Partnership taxable income or loss, as shall be
necessary for each Partner to make its estimated income tax payments(s),
if any, due for such calendar quarter, at least twenty (20) Business Days
prior to the estimated tax due date, which estimate shall be based upon
information reasonably available to the Managing Partner at that time.
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 14.14.
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.
9.9 TAX MATTERS PARTNER. The Managing Partner is hereby designated as the
"Tax Matters Partner" of the Partnership, as defined in Section 6231(a)(7)
of the Code. In carrying out its duties set out in this Agreement, the Tax
Matters Partner shall act in a fiduciary capacity with respect to the
Partnership and the other Partners and shall take no action (other than
the performance of ministerial duties) without prior written approval of
such action by the other Partners.
(a) The Tax Matters Partner shall have the authority to extend the statute
of limitations for assessment of tax deficiencies against the Partners
with respect to adjustments to the
Page 34
Partnership's federal, state, local or foreign tax returns, and to the
extent provided in Sections 6222 through 6231 of the Code, to represent
the Partnership and the Partners before taxing authorities or courts of
competent jurisdiction in tax matters affecting the Partnership and the
Partners in their capacities as Partners, and to file any tax returns and
execute any agreements or other documents relating to or affecting such
tax matters, including agreements or other documents that bind the
Partners with respect to such tax matters or otherwise affect the rights
of the Partnership and the Partners; provided that, to the extent any such
extension, agreement, election or document might have a material effect on
any Partner, such Partner must consent in writing to such extension,
agreement, election or document and the Tax Matters Partner must
reasonably consult with such Partner in any discussions or negotiations
associated with such agreement or document. Each Partner agrees to
cooperate with the Tax Matters Partner and to do or refrain from doing any
or all things reasonably required by the Tax Matters Partner to conduct
such proceedings.
(b) The Tax Matters Partner shall keep each Partner informed of all
administrative and judicial proceedings, as required by Section 6223(g) of
the Code, and shall furnish each Partner in writing a copy of each notice
or other communication received by the Tax Matters Partner. If any Partner
intends to file a notice of inconsistent treatment under Section 6222(b)
of the Code, such Partner shall, prior to the filing of such notice,
provide notice to the Tax Matters Partner of such intent and the manner in
which the Partner's intended treatment of the Partnership item is (or may
be) inconsistent with the treatment of that item by the Partnership.
(c) Each Partner shall bear its own costs resulting from any tax
examination of its investment in the Partnership. Furthermore, each
Partner shall indemnify and hold harmless the other Partners, their
successors and assigns, against all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines,
costs, reasonable amounts paid in settlement, liabilities, obligations,
taxes, liens, losses, expenses, and fees (including reasonable attorneys
fees and costs) against or incurred by the other Partners and the
Partnership, their successors and assigns, that proximately result from,
relate to, or arise in any respect from the payment of, or failure to pay,
federal or state income taxes due or payable by such Partner, or any
investigation or enforcement action relating thereto. Such indemnification
shall survive until the expiration of the applicable statute of
limitations with respect to the damages in question.
(d) The Tax Matters Partner shall be reimbursed by the Partnership for all
time and reasonable costs incurred by it as Tax Matters Partner, in
accordance with the Standard Billing Practices, in connection with any tax
related matters, including but not limited to the examination of the
Partnership tax returns by a taxing authority.
Page 35
ARTICLE 10
TRANSFERS OF PARTNERSHIP INTERESTS
10.1 PERMITTED TRANSFERS. A Partner shall be permitted to 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, unless such termination would not materially
adversely affect the Partnership or any Partner;
(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 regulated as 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 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;
(e) such Transfer is in compliance with all applicable requirements of
law, including but not limited to any applicable securities laws;
(f) 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, provided however that such prior
written notice shall not be required for a Transfer (i) between a Partner
and its Affiliates or (ii) between or among TENASKA GP, TENASKA LP and/or
DIAMOND GEORGIA;
(g) if applicable, 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;
provided, however, that any such assumption shall not relieve the
transferor Partner of such obligations unless the ERC, in its sole
discretion (excluding the vote of the
Page 36
Representative or Alternate Representative of the transferor Partner and
of any Partner which is an Affiliate of the transferor Partner),
specifically agrees pursuant to Section 7.3(m);
(h) 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; and
(i) the transferor Partner is NOT a Defaulting Partner at the time of the
Transfer.
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 not expressly permitted by Article 10 or
Section 12.1(a)(iii) or Section 12.2(d) shall be prohibited, and in the
event a Transfer is erroneously effectuated and later found not to conform
with the requirements of Article 10, Section 12.1(a)(iii) or Section
12.2(d), 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, (a) at the request of a
transferee of ten percent (10%) or more of the Partnership Interests, the
Partnership shall make an election pursuant to Section 754 of the Code,
and (b) at the request of transferee of less than ten percent (10%) of the
Partnership Interests, the Partnership shall make such an election only
with the requisite approval of the ERC.
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.
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ARTICLE 11
ADMISSION OF ADDITIONAL PARTNERS
11.1 PERMITTED ADMISSIONS.
(a) AUTOMATIC ADMISSION OF TRANSFEREE OF A PERMITTED TRANSFER. Upon
compliance with the terms of Section 11.1(c), the transferee with respect
to a Permitted Transfer pursuant to Article 10 shall be automatically
admitted as an Additional Partner (a General Partner in respect of a
transferred General Partner Partnership Interest or a Limited Partner in
respect of a transferred Limited Partner Partnership Interest) in
substitution for the transferor Partner to the extent of the transferred
Partnership Interest. Upon the request of a Partner, a Permitted Transfer
pursuant to Article 10 may be structured as the admission of the
transferee as an Additional Partner with the entire dilution in the
Partnership Interests resulting from such admission of the transferee as
an Additional Partner being allocated wholly against the Partnership
Interest of the Partner making such Permitted Transfer (in which case the
transferee would be admitted as a new General Partner to the extent of the
dilution in the General Partner Partnership Interest of the transferor
Partner and would be admitted as a new Limited Partner to the extent of
the dilution in the Limited Partner Partnership Interest of the transferor
Partner), provided that the Partner requesting the admission of the
transferee as an Additional Partner, and such Partner's Affiliates, shall
indemnify, hold harmless and reimburse the other Partners and its
Affiliates for any adverse tax consequences to the extent resulting from
such admission of the transferee as an Additional Partner, including but
not limited to adverse consequences under Section 704(c) of the Code.
(b) ADMISSION PURSUANT TO PARTNER APPROVAL. Upon compliance with the terms
of Section 11.1(c), a Person which the Partners have approved for
admission to the Partnership as an Additional Partner pursuant to Section
7.6(a) shall be admitted as an Additional Partner with such Partnership
Interest (whether a General Partner Partnership Interest or a Limited
Partner Partnership Interest) as the Partners shall have approved.
(c) REQUIREMENTS FOR ADMISSION. An admission of an Additional Partner to a
new or substituted Partnership Interest must first comply with all of the
conditions specified in Article 10 (for this purpose, substituting the
word "admission" for the word "Transfer" in Sections 10.1(a) through (e))
and in addition such Person which is to be admitted as an Additional
Partner must execute a counterpart of this Agreement, and must assume 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.
11.2 EFFECT OF PROHIBITED ADMISSION. Any proposed admission of an Additional
Partner which is not expressly permitted by Sections 11.1, 12.1(c) or
12.2(d) shall be prohibited, and in
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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.
ARTICLE 12
DEFAULT AND WITHDRAWAL PROVISIONS
12.1 DEFAULT.
(a) MONETARY DEFAULTS. Except as may otherwise be provided in Section
12.2(d), the Partnership and/or any Non-Defaulting Partner shall have the
right to provide the Defaulting Partner a Default Notice identifying a
Monetary Default. If at the end of the Cure Period, if any, applicable to
such Monetary Default, such Monetary Default shall remain uncured by the
Defaulting Partner, then all of the following provisions and Sections 12.2
and 12.5 shall immediately apply:
(i) such Defaulting Partner shall be deemed to have withdrawn from the
Partnership effective as of the date of the Monetary Default and
shall thereafter be a Withdrawn Partner in accordance with the
applicable provisions of this Agreement;
(ii) the Partnership shall provide a Withdrawal Notice to each
Non-Defaulting Partner advising that such Defaulting Partner has
become a Withdrawn Partner; and
(iii) the Withdrawn Partner's Partnership Interest shall automatically be
assigned to the Non-Defaulting Partners pro rata in accordance with
their Partnership Percentages (the Withdrawn Partner's Equity
Ownership Percentage being allocated in proportion to the
Non-Defaulting Partners' respective Equity Ownership Percentages and
the Withdrawn Partner's Voting Interest Percentage being allocated
in proportion to the Non-Defaulting Partners' respective Voting
Interest Percentages) and the Non-Defaulting Partners shall
automatically be substituted as Additional Partners for the
Withdrawn Partner in respect thereto.
(b) NON-MONETARY DEFAULT. In the event any Partner is in Default of its
Non-Monetary Obligations under this Agreement, the Partnership and any
Partner shall have the right to pursue any rights and remedies against
such Defaulting Partner which they may have at law and in equity
(including, but not limited to, the right to seek damages for and specific
performance of those obligations that continue uncured by such Defaulting
Partner, the Parties acknowledging that remedies at law would be
inadequate) as a result of such Defaulting Partner's Default of its
Non-Monetary Obligations under this Agreement.
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12.2 CERTAIN RIGHTS AND OBLIGATIONS DURING CURE PERIOD.
(a) After the receipt of a Default Notice and prior to the curing of any
Monetary Default or the withdrawal of the Defaulting Partner as provided
in Section 12.1(a), the Defaulting Partner shall continue to be a Partner
until the expiration of the Cure Period, if any, and shall continue to be
obligated to contribute all funds and perform all obligations required of
the Defaulting Partner under this Agreement.
(b) If, within the Cure Period applicable to a Monetary Default, the
Defaulting Partner cures such Monetary Default, it shall be deemed as if
the Monetary Default had not occurred and the Defaulting Partner shall
lose no rights under this Agreement (other than the rights which were
suspended pending such cure pursuant to Sections 7.2(d) and 12.3). A
Defaulting Partner shall be deemed to have cured a Monetary Default within
the meaning of this Section 12.2(b) when it has made all payments and
provided all guarantees then due or overdue within the applicable Cure
Period.
(c) The withdrawal of a Defaulting Partner as provided in Section 12.1(a)
is not an exclusive right or remedy and is in addition to the rights and
remedies of the Partnership and/or the Non-Defaulting Partners which are
described in the following sentence. The Partnership and/or the
Non-Defaulting Partners shall have and may exercise (without regard to
prior, concurrent, or subsequent exercise of any other rights or remedies)
all rights and remedies at law and in equity (including, but not limited
to, the right to seek damages for and specific performance of those
obligations that continue uncured by such Defaulting Partner, the Parties
acknowledging that remedies at law would be inadequate).
(d) The provisions of this Section 12.2(d) shall apply notwithstanding
anything to the contrary in Sections 12.1, 12.2, 12.3, 12.4 and 12.6. In
the event that any Partner transfers a portion of its Partnership Interest
to a transferee pursuant to a Permitted Transfer under Article 10 and such
transferee is in Monetary Default (a "Defaulting Transferee"), then the
Partner which transferred such portion of its Partnership Interest to the
Defaulting Transferee and remains a Partner in the Partnership (the
"Transferor") shall have the right, at its election, to cure the
Defaulting Transferee's Monetary Default at any time within two (2)
Business Days prior to the expiration of the Cure Period. If the
Transferor cures the Defaulting Transferee's Default within such two (2)
Business Days prior to the expiration of the Cure Period (the date of such
cure during the Cure Period hereinafter referred to as the "Cure Date"),
then subject to compliance with the terms of Sections 10.1 and 11.1(c),
the provisions of Section 12.1 will apply, except however the provisions
of Section 12.1(a)(iii) will not apply and instead the Defaulting
Transferee shall be deemed to have automatically assigned to the
Transferor all of such Defaulting Transferee's Partnership Interest (the
"Relinquished Interest") effective as of the date of the Monetary Default
and the right to receive distributions during the Cure Period as provided
in Section 12.3 shall instead be solely allocated and automatically
assigned to the Transferor. For the avoidance of doubt, any voting rights
associated with the Relinquished Interest which may have been suspended
pursuant to Section 7.2(d) shall be restored to the Transferor as of the
Cure Date. The Transferor shall provide notice to all
Page 40
Partners and the Partnership that such automatic assignment has occurred
pursuant to this Section 12.2(d). The foregoing assignment(s) shall be
effective for all purposes without necessity of execution of any documents
by the Defaulting Transferee; provided, however, that upon request of the
Transferor, the Defaulting Transferee shall execute such assignment(s) and
other documents evidencing the foregoing assignment(s) as the Transferor
may reasonably request and the Defaulting Transferee hereby irrevocably
appoints the Transferor as its attorney-in-fact, coupled with an interest,
to so execute such assignment(s) on its behalf. Subject to Section
11.1(c), the Transferor, upon being assigned a Relinquished Interest
pursuant to this Section 12.2(d), shall be admitted as a Partner in
substitution for the Defaulting Transferee to the extent of the
Relinquished Interest.
12.3 CURE PERIOD DISTRIBUTIONS. In the event a Partner is in Monetary
Default and reimbursements, payments, allocations or distributions are
made pursuant to this Agreement, including but not limited to Sections
5.1, 5.2, 5.3, 5.4, 6.2, 6.3 or 6.4, during the Cure Period, if any,
pertaining to such Monetary Default, the amount of such reimbursements,
payments, allocations or distributions that would otherwise be made to the
Defaulting Partner during such Cure Period shall be reflected in the
capital account of the Defaulting Partner but shall not be distributed to
the Defaulting Partner unless and until such Monetary Default is cured by
the Defaulting Partner before the end of the Cure Period. If the Monetary
Default is not cured before the end of the Cure Period, (a) the
reimbursements, payments, allocations or distributions previously
reflected in the capital account of the Defaulting Partner and
attributable to the period after the date of the Monetary Default shall be
removed from such Defaulting Partner's capital account and (b) the amount
so removed shall lapse as a reimbursement, payment, allocation or
distribution obligation and shall not be an amount owed to such Defaulting
Partner by the Partnership, and (c) except as provided in Section 12.2(d),
the amount so removed shall be reallocated to and distributed to the
Non-Defaulting Partners in proportion to their respective Equity Ownership
Percentages.
12.4 AUTOMATIC WITHDRAWAL. In addition to those instances in which withdrawal
is deemed to occur under this Agreement upon the happening of any of the
following events with respect to a Partner, such Partner shall
automatically become a Withdrawn Partner and promptly following receipt of
notice of the happening of any such event the Partnership shall provide a
Withdrawal Notice to all other Partners advising that such Partner has
become a Withdrawn Partner:
(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
Page 41
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.
12.5 GENERAL WITHDRAWAL PROVISIONS.
(a) A Partner which has become a Withdrawn Partner pursuant to Sections
12.1(a) or 12.4:
(1) shall not be entitled to payment or distribution of any
positive balance in its capital account;
(2) shall not be entitled to reimbursement of any Equity
Contributions, Additional Capital or Development Funds
contributed and/or advanced prior to the date of its withdrawal;
(3) shall not be entitled to release of any Equity Guarantees
and/or Project Guarantees provided prior to the date of its
withdrawal, and such Equity Guarantees and/or Project Guarantees
shall be released to the Withdrawn Partner only after they are no
longer required by the Partnership, the Project, Collateral
Agent, or any Person which is a party to a Project Contract, as
the case may be;
(4) 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; and
(5) shall remain liable for all of its obligations under this
Agreement.
Page 42
(b) Except pursuant to Section 13.2, a withdrawal by one or more Partners
as described in this Article 12 shall not effect a dissolution of the
Partnership.
(c) The Partnership may set off any amounts owed to a Partner which has
become a Withdrawn Partner against amounts owed to the Partnership by such
Withdrawn Partner.
(d) A Withdrawn Partner's withdrawal from the Partnership pursuant to
Sections 12.1 or 12.4 is not an exclusive right or remedy and is
additional to the rights and remedies of the Partnership and/or the
Non-Withdrawn Partners which are described in the following sentence. The
Partnership and/or the Non-Withdrawn Partners shall have and may exercise
(without regard to prior, concurrent, or subsequent exercise of any other
rights or remedies) all rights and remedies at law and in equity
(including, but not limited to, the right to seek damages and specific
performance of those obligations that continue uncured by such Withdrawn
Partner (without regard to whether or not any Non-Withdrawn Partners or
Additional Partner has succeeded to the Withdrawn Partner's obligations
(including Monetary Obligations) hereunder), the Parties acknowledging
that remedies at law would be inadequate).
Page 43
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.
Immediately 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
Page 44
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.
Page 45
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 overnight delivery 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 sent by
overnight delivery shall be deemed given and received twenty-four (24)
hours after such communication is deposited with a reputable overnight
courier. 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.
0000 Xxxxx 000xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Chief Financial Officer
Tel. 402/000-0000
Fax: 402/000-0000
IF TO TENASKA GP:
Tenaska Georgia, Inc.
0000 Xxxxx 000xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Chief Financial Officer
Tel. 402/000-0000
Fax: 402/000-0000
Page 46
IF TO TENASKA LP:
Tenaska Georgia I, L.P.
0000 Xxxxx 000xx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Chief Financial Officer
Tel. 402/000-0000
Fax: 402/000-0000
IF TO DIAMOND GEORGIA:
Diamond Georgia, LLC
000 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: General Manager
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Tel: 000 000-0000
Fax: 000 000-0000
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
Page 47
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 within seven (7) days after receipt
by the Managing Partner. 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, excluding its internal conflicts of
laws principles. With respect to any claim of any Person arising out of
this Agreement, (a) each Partner irrevocably submits to the exclusive
jurisdiction of the Delaware Court of Chancery, 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 DISPUTE RESOLUTION; BINDING ARBITRATION.
(a) Each Partner shall appoint a representative who shall be responsible
for administering this Agreement on behalf of such Partner and for
representing the Partner's interests in any dispute, controversy or
disputed claim arising under, in connection with, or relating to, this
Agreement, including any amendment, purported amendment or termination, or
any breach or violation of this Agreement (each, a "Dispute"). Any Dispute
between the Partners relating to this Agreement that is not resolved
between the Partners' representatives shall be referred to the senior
management of the Partners for resolution. Such referral shall occur by
written notice from any Partner's representative to the senior management
of all Partners (the "Referral Notice") and "senior management" for
purposes of the Referral Notice shall mean the respective officers of the
Partners specified in Section 14.2 for receipt of Notices. The date that
the Referral Notice is deemed given and received in accordance with
Section 14.2 shall be the "Referral Date". The senior management of the
Partners shall then use all reasonable efforts to attempt to
Page 48
resolve the Dispute within 30 days after the Referral Date. If the senior
management of the Partners are unable to (or for any reason do not)
resolve the Dispute within such 30 day period, any Partner shall have the
right immediately thereafter to seek resolution of the Dispute by binding
arbitration in accordance with this Section 14.5.
(b) Any Dispute shall be finally settled and determined under and pursuant
to the applicable commercial arbitration rules and procedures of the
American Arbitration Association ("AAA"). The arbitration shall be held at
Wilmington, Delaware. The arbitration shall be conducted by three
arbitrators selected by AAA who shall have no affiliation or relationship
with any Partner or their counsel and, if deemed feasible by the AAA,
shall have training or experience in the subject matter of the Dispute. If
all Partners agree, the arbitration shall follow expedited procedures;
otherwise, the arbitration shall follow non-expedited procedures. The
arbitrators shall have the authority to make interim decisions and to
grant injunctive relief, specific performance, and similar relief pending
final award or decision. Any award or decision rendered by the arbitrators
shall be final and binding on each of the Partners and their respective
successors and assigns. Such award or decision shall be in writing signed
by the arbitrators and shall state the reasons upon which the award or
decision is based. The arbitrators, in deciding any Dispute, shall look to
the substantive laws of the State of Delaware for the resolution of the
Dispute. Judgment on any decision or award pursuant to this Section 14.5
may be entered in any court having jurisdiction thereof.
(c) The Partners shall continue to perform their respective obligations
under this Agreement during the pendency of any arbitration, including an
arbitration regarding the purported effectiveness or the purported
termination of this Agreement.
14.6 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.
14.7 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
14.8 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.
Page 49
14.9 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.
14.10 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.
14.11 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 PROVIDED THAT THIS
WAIVER IS NOT INTENDED TO IN ANY WAY LIMIT OR EXCLUDE ANY SPECIFIC
REMEDIES PROVIDED FOR IN ARTICLES 10 AND 12 HEREIN.
14.12 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
14.12 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.
14.13 ARTICLE AND SECTION NUMBERS. Unless otherwise indicated, references to
article and section numbers are to articles and sections of this
Agreement.
14.14 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
14.14(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
Page 50
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 14.14 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 14.14, 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 Section 14.14 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
14.14, 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
Page 51
(e) 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 assurances that
confidential treatment shall be accorded to the Confidential Information
which is disclosed in such manner.
(f) 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.
(g) 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 14.14.
(h) The obligations of the Parties pursuant to this Section 14.14 shall
survive the termination of this Agreement for a period of three (3) years.
14.15 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.
14.16 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.
Page 52
14.17 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.
14.18 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.
14.19 PRIOR AGREEMENTS. This Agreement, its attached Appendices which are
incorporated herein by this reference, and the Tenaska Diamond Partnership
Agreement constitute the entire agreement of the Parties with respect to
the subject matter hereof. This Agreement amends and restates the Amended
and Restated
Limited Partnership Agreement, dated effective as of October
29, 1999, 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.
14.20 AFFILIATED CONTRACTS. TENASKA GP acknowledges that the Partnership is
relying on the performance of services by TENASKA GP and/or its Affiliates
under those contracts described in APPENDIX F and under any other
Affiliated Contracts which are hereafter negotiated, executed and
delivered by the Partnership. As between DIAMOND GEORGIA and its
Affiliates, and TENASKA GP and its Affiliates, the Representative to the
ERC designated by DIAMOND GEORGIA shall have rights (a) to participate in
the negotiations and discussions regarding and to approve Affiliated
Contracts, including amendments, modifications or extensions thereof and
(b) to determine any claim in respect of any such Affiliated Contract for
which TENASKA GP and/or its Affiliates would be liable to the Partnership,
including retaining legal counsel, experts and other persons as may be
necessary or desirable to enforce the Partnership's rights against TENASKA
and/or its Affiliates.
14.21 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.
* * *
Page 53
IN WITNESS WHEREOF, the Partners have caused this Agreement to be executed by
their respective duly authorized officers as of the date first written above.
TENASKA GEORGIA, INC.
By: /s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx, Vice President
TENASKA GEORGIA I, L.P.
By: Tenaska Georgia, Inc.
Its: General Partner
By: /s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx, Vice President
DIAMOND GEORGIA, LLC
By: Diamond Generating Corporation
Its: Member
By: /s/ Xxxxxx Xxxxx
---------------------------------
Xxxxxx Xxxxx, Treasurer
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX A
PARTNERSHIP PERCENTAGES
Column A Column B
-------- --------
Equity Voting
Ownership Interest
Percentage Percentage
---------- ----------
TENASKA GP 0.7000% 70.0000%
DIAMOND GEORGIA 0.3000% 30.0000%
TENASKA LP 99.0000% 0.0000%
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- Xxxxxx X. Xxxxx
Alternate Representative- Xxxxxx X. Xxxxx
Alternate Representative- Xxxx X. Xxxxx
Alternate Representative Xxxxxx X. Xxxxxxxx
Alternate Representative- Xxxx X. Xxxxx
DIAMOND GEORGIA Representative- Xxxxxxx Xxxxx
Alternate Representative- Xxxxx Xxxxxxxx
Alternate Representative- Xxxxxx Xxxxxxxxx
Alternate Representative- Xxxxxx Xxxxx
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX D
PARTNERSHIP BUDGET FOR THE DEVELOPMENT PERIOD
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX E
PERCENTAGES FOR DISTRIBUTIONS OF UNSPENT CONTINGENCY AND UNSPENT
EQUITY CONTRIBUTIONS
DIAMOND
GEORGIA 25% of the percentage derived by dividing Diamond's Project
Participation Percentage by the sum of Diamond's Project
Participation Percentage and Tenaska's Project Participation
Percentage (as Diamond, Tenaska, and Project Participation
Percentage are defined in the Tenaska Diamond Partnership
Agreement) ("Diamond's Pro Rata Share"). ILLUSTRATIVE
CALCULATION: As of the Admission Date, based on the above
formula, Diamond Georgia's percentage share of Unspent
Contingency and Unspent Equity Contributions would be 7.5% [25%
of 30%/100%].
TENASKA GP 100% minus Diamond's Pro Rata Share.
ILLUSTRATIVE CALCULATION: As of the Admission Date, based on the
above formula, Tenaska GP's percentage share of Unspent
Contingency and Unspent Equity Contributions would be 92.5%
[100% minus 7.5%].
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX F
SERVICES PERFORMED BY AFFILIATES OF TENASKA GEORGIA PARTNERS, L.P.
1) Operations and Maintenance Agreement between Tenaska Georgia Partners, LP and
Tenaska Operations, Inc. dated 9/10/99
2) 1st Amendment to O&M Agreement dated 10/26/99
3) 2nd Amendment to O&M Agreement dated 11/4/99
4) Ground Lease between Tenaska, Inc. and Tenaska Georgia Partners, LP dated
11/10/99
5) Short Form Ground Lease Agreement between Tenaska, Inc. and Tenaska Georgia
Partners, LP dated 11/10/99
6) Access and Utility Easement Agreement between Tenaska, Inc. and Tenaska
Georgia Partners, LP dated 11/10/99
7) Electric Substation Site Option Agreement and Memorandum between Tenaska,
Inc. and Tenaska Georgia Partners, LP dated 11/10/99
8) Non-Interference and Cross-Indemnity Agreement between Tenaska, Inc. and
Tenaska Georgia Partners, LP dated 11/10/99
9) Perpetual Right of Way and Easement Agreement between Tenaska Georgia
Partners, LP and Tenaska, Inc. dated 11/10/99.
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX G
SPECIAL PRIORITY CASH DISTRIBUTIONS
FISCAL YEAR "ANNUAL FEE" CASH
DISTRIBUTION
2001 $ 225,000
2002 405,000
2003 425,000
2004 447,000
2005 469,000
2006 492,000
2007 517,000
2008 543,000
2009 570,000
2010 599,000
