EXHIBIT 3.22
AGREEMENT OF LIMITED PARTNERSHIP
OF
DUKE ENERGY XXXXXXX, X.X.
THIS AGREEMENT OF LIMITED PARTNERSHIP ("Agreement") is made as of the
24th day of May, 1999, by and between Duke Energy Xxxxxxx, Inc., a Delaware
corporation (the "General Partner"), and Duke Energy Mesquite, Inc., a Delaware
corporation (the "Limited Partner"). The General Partner and the Limited Partner
are sometimes collectively referred to as the "Partners." or singularly as a
"Partner".
WHEREAS, the Partners desire to form a limited partnership under the
laws of the State of Delaware.
WHEREAS, the Partners desire to enter into an agreement of limited
partnership in which the General Partner will be the sole general partner and
the Limited Partner will be the sole limited partner.
NOW, THEREFORE, in consideration of the mutual promises made in this
Agreement, and other valuable consideration, the Partners agree as follows:
ARTICLE I
FORMATION OF PARTNERSHIP
Section 1.1 Formation. The Partners hereby enter into and form a
limited partnership (the "Partnership") for the purposes set forth in this
Agreement. Except as otherwise provided in this Agreement, the rights and duties
of the Partners and the administration and termination of the Partnership shall
be governed by the Delaware Limited Partnership Act (6 Del. C. Section 17-101,
et. seq.), as amended from time to time (the "Act").
Section 1.2 Ownership of Property. All property (irrespective of its
nature) owned by the Partnership ("Property") shall be held in the name of the
Partnership and shall be deemed to be owned by the Partnership as an entity.
Accordingly, no Partner shall have the right to seek partition of any property
of the Partnership during the term of this Agreement or to apply to any court or
authority having jurisdiction in the matter or commence or prosecute any action
or proceeding for partition and the sale of the Property. Upon any breach of the
provisions of this subparagraph by any Partner, the other Partner, in addition
to all other rights and remedies at law and in equity it may have, shall be
entitled to an order restraining and enjoining any application, action or
proceeding.
Section 1.3 Filing Requirements. The General Partner shall execute a
Certificate of Limited Partnership ("Certificate"), shall cause that Certificate
to be filed for record in the office of the Secretary of State of Delaware, and
shall execute any other documents and take any other actions appropriate to
comply with the requirements for the formation of the Partnership in the State
of Delaware and any other states where the Partnership may elect to do business.
The General Partner shall retain the Certificate at the principal office of the
Partnership.
Section 1.4 Name of the Partnership. The name of the Partnership shall
be "Duke Energy Xxxxxxx, X.X." or any other name the General Partner shall
elect.
Section 1.5 Principal Office and Agent. The principal office of the
Partnership shall be located at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx
00000-0000, or at any other place or places the General Partner (with the prior
written approval of the Limited Partner) may designate from time to time. The
Corporation Trust Company, or any other person the General Partner shall
designate, shall be the agent for service of process on the Partnership, with
offices located 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. If the General
Partner changes the office, agent or address set forth above, it shall file an
amendment to the Certificate reflecting that change.
Section 1.6 Term of Partnership. The Partnership shall commence on the
date of the filing of the Certificate with the Secretary of State of Delaware.
The Partnership shall continue in existence until it is terminated in accordance
with this Agreement.
Section 1.7 Character of the Business. The character and purpose of the
Partnership's business shall be to carry on any business which is permitted
under the Act.
Section 1.8 Name and Address of Each Partner. The name and address of
each Partner are shown on Exhibit A attached to this Agreement. All notices and
other communications required or permitted to be given pursuant to this
Agreement shall be in writing and shall be considered to have been properly
delivered if mailed, by certified mail, with postage prepaid, addressed to the
address set forth on Exhibit A for the respective Partner or to such other
address as that Partner may have designed as its address by proper notice to the
Partnership and the other Partner.
ARTICLE II
CAPITAL CONTRIBUTIONS AND PARTNERSHIP UNITS
Section 2.1 Capital Contributions.
A. Initial Contribution. Upon execution of this
Agreement, the General Partner shall make an initial capital contribution to the
Partnership in the amount of $10.00 in cash and shall receive one Class A Unit
for that contribution. The Limited Partner shall make an initial capital
contribution to the Partnership in the amount of $990.00 in cash and shall
receive 90 Class B Units for that contribution. "Class A Unit" shall mean a unit
of Partnership interest held by the General Partner and represented by a
contribution to the Partnership of $10.00, or such other amount as determined
from time to time by the General Partner. "Class B Unit" shall mean a unit of
Partnership interest held by the Limited Partner and represented by a
contribution to the Partnership of $990.00 or such other amount as determined
from time to time by the General Partner.
B. Additional Contributions. No Partner shall have any
obligation to make any additional contributions, or lend any cash or property,
to the Partnership. The Partners may make additional contributions to the
Partnership with the prior written agreement of all Partners.
2
Section 2.2 No Third Party Rights. Any agreement by the Partners to
make additional contributions to the Partnership shall not be construed as
conferring any rights or benefits to or upon any person not a party to this
Agreement.
Section 2.3 Capital Accounts. A separate capital account shall be
maintained for each Partner in accordance with regulations issued under Section
704 of the Internal Revenue Code of 1986, as amended ("Code").
Section 2.4 Partnership Units. Interests in the Partnership shall be
divided into and consist of ten Class A Units and 100,000 Class B Units, or such
other number of Class A or Class B Units as may be authorized from time to time
by the General Partner. In addition to the Units issued pursuant to Section 2.1.
A. of this Agreement, the General Partner may, from time to time, issue
additional Units in exchange for cash or other property. This Agreement shall be
amended to reflect the issuance of any additional Units by the Partnership. A
Class A Unit shall represent an Interest in the Partnership as a General Partner
and a Class B Unit shall represent an Interest in the Partnership as a Limited
Partner. Each Unit shall be in all respects equal to every other Unit and shall
be entitled to one vote on all matters for which Partners are entitled to vote
as provided in this Agreement. The rights and powers represented by the Units
shall include (a) the right to receive distributions, including liquidating
distributions, from the Partnership, and (b) all other rights, benefits, and
privileges enjoyed by the Partners (under the Act and this Agreement) in their
capacities as either General Partner or a Limited Partner, as the case may be,
including rights to vote, consent and approve as provided in this Agreement.
ARTICLE III
DISTRIBUTIONS AND ALLOCATIONS
Section 3.1 Allocations.
A. Allocation of Income. All items of net income (after
all operating expenses) of the Partnership for each taxable year shall be
allocated to the Partners and shall be credited to each Partner's capital
account pro rata in accordance with the following:
Allocation Percentage
---------- ----------
Duke Energy Xxxxxxx, Inc. 1.0%
Duke Energy Mesquite, Inc. 99.0%
-----
100.0%
B. Allocation of Loss and Deduction. All items of
Partnership loss and deduction shall be allocated to the Partners and charged to
each Partner's capital account in accordance with the allocation percentages in
Section 3.1.A. above. Notwithstanding the foregoing, in no event shall any such
loss or deduction be allocated to a Partner, to the extent that it would result
in that Partner having a negative capital account balance, if any other Partner
has a positive
3
capital account balance. The foregoing reallocation of losses to a Partner with
a positive capital account balance shall remain in effect only until those
Partners with positive capital account balances have capital accounts balances
of zero. In addition, after all capital accounts are reduced to zero, any losses
of the Partnership which are deemed to be attributable to indebtedness of the
Partnership for which a Partner bears the economic risk of loss (within the
meaning of Code Section 752 and the regulations under that Section) shall be
allocated to the Partner who bears such economic risk of loss.
Section 3.2 Distributions.
A. Distributions. The General Partner, in its
discretion, may cause the Partnership to make cash distributions to the
Partners, at those times and in amounts as it deems reasonable. All
distributions to the Partners shall be made in proportion to the Partners'
capital account balances.
B. Distributions in Dissolution of the Partnership. All
distributions to Partners on the dissolution of the Partnership shall be in
accordance with the positive capital accounts of the Partners at that time after
allocation of all net income and loss from the liquidation of all assets held by
the Partnership and payment of all of the Partnership's liabilities.
ARTICLE IV
MANAGEMENT
Section 4.1 Management of the Partnership.
A. Management. Except as provided in Section 4.1.B. of
this Agreement, the General Partner shall manage and control the business of the
Partnership and is hereby authorized to take any reasonable action it deems
necessary or desirable and in the best interest of the Partnership, including
causing the Partnership to enter into contracts with affiliates of the General
Partner that are in the best interests of the Partnership. The Limited Partner
shall not any right to participate in or have any authority or right to act for
or bind the Partnership.
B. Restrictions on General Partner. Without the prior
written approval of the Limited Partner, the General Partner shall not cause the
Partnership to:
(1) admit any other person or entity as a
general or limited partner in the Partnership;
(2) enter into any transactions with or, except
as provided in this Agreement, make any payments to the General Partner;
(3) confess a judgment against the Partnership;
(4) take any action that would subject the
Limited Partner to liability in any jurisdiction;
4
(5) do any act that would make it impossible for
the Partnership to carry on its business in the ordinary course;
(6) amend this Agreement or the Certificate;
(7) merge or consolidate the Partnership with or
into another entity;
(8) sell, exchange, lease or otherwise transfer
all or substantially all of the assets of the Partnership; or
(9) liquidate or dissolve the Partnership.
Section 4.2 Duties and Obligations of the General Partner.
A. Separate Operations. The General Partner shall cause
the Partnership to conduct its business and operations separate and apart from
that of the General Partner and any of its affiliates, including, without
limitation, (i) segregating Partnership assets and not allowing funds or other
assets of the Partnership to be commingled with the funds or other assets of,
held by, or registered in the name of, the General Partner or any of its
affiliates, (ii) maintaining books and financial records of the Partnership
separate from the books and financial records of the General Partner and its
affiliates, and observing all Partnership procedures and formalities, including,
without limitation, maintaining minutes of Partnership meetings and acting on
behalf of the Partnership only pursuant to due authorization of the Partners as
required in this Agreement, (iii) causing the Partnership to pay its liabilities
when due from assets of the Partnership, and (iv) causing the Partnership to
conduct its dealings with third parties in its own name and as a separate and
independent entity.
B. Compliance with Law. The General Partner shall take
all actions that may be necessary or appropriate (i) for the General Partner and
the Partnership to maintain all required licenses and permits, (ii) for the
continuation of the Partnership's valid existence as a limited partnership under
the laws of the State of Delaware and of each other jurisdiction in which that
existence is necessary to protect the limited liability of the Limited Partner
or to enable the Partnership to conduct the business in which it is engaged, and
(iii) for the accomplishment of the Partnership's purposes, including the
operation of the Partnership's business in accordance with the provisions of
this Agreement and applicable laws and regulations.
C. Fiduciary Obligation. The General Partner shall be
under a fiduciary duty to conduct the affairs of the Partnership in the best
interests of the Partnership, including the safekeeping and use of the
Partnership's assets for the exclusive benefit for the Partnership.
D. Insurance. The General Partner shall cause to be
provided, or cause the Partnership to carry, insurance as is customary in the
business in which the Partnership is engaged and in the places in which is so
engaged.
5
E. Tax Matters Partner. The General Partner shall serve
as the "tax matters partner" of the Partnership and shall be vested with the
authority and responsibility necessary to comply with the provisions of the
"Code" and regulations under the Code, including, but not limited to, Sections
6221-6231 of the Code.
Section 4.3 Limitations on Obligations of the Limited Partner. The
Limited Partner shall not participate in the management of the Partnership or
its business. The Limited Partner shall not be deemed to participate in
management if it or any of its shareholders, directors or officers acts as a
contractor for, or agent or employee of, the Partnership, the General Partner or
an affiliate of the General Partner, or if it takes any other action permitted
to be taken by a limited partner under the Act. The liability of the Limited
Partner to any third party shall be limited to its capital contribution
described in Section 2.1.A., plus any additional contributions actually made by
the Limited Partner pursuant to Section 2.1.B. of this Agreement.
Section 4.4 Other Activities of Partners. The Partners specifically
acknowledge that the Partners and their affiliates will be engaged in other
businesses including businesses which may be similar to the business of this
Partnership. Nothing in this Agreement shall be deemed to restrict in any manner
the freedom of the Partners to conduct any other business or activity whatsoever
(including, without limitation, the acquisition, ownership, leasing or sale of
real property), without any accountability to the Partnership or to any Partner,
even if that business or activity competes with the business of the Partnership.
Section 4.5 Compensation to General Partner and Affiliates. The General
Partner shall not be entitled to any compensation from the Partnership, but will
be entitled to reimbursement for reasonable expenses incurred on behalf of the
Partnership.
ARTICLE V
BOOKS AND RECORDS; ACCOUNTING; TAX ELECTIONS
Section 5.1 Books and Records. The books, records and financial
statements of the Partnership shall be maintained in accordance with the income
tax accounting principles elected by the General Partner. These and all other
records of the Partnership, including a copy of this Agreement and all
amendments to this Agreement, copies of the Partnership's federal, state and
local tax returns and financial statements for the six most recent years,
information relating to the status of the Property, and all other information
required by the Act shall be kept at the principal office or at another location
as determined by the General Partner in compliance with the Act.
Section 5.2 Custody of Partnership Funds; Bank Accounts. The General
Partner shall have fiduciary responsibility for the safekeeping and use of all
funds and accounts of the Partnership, whether or not in the immediate
possession or control of the General Partner. The funds of the Partnership shall
not be commingled with the funds of any other person or entity, and the General
Partner shall not employ, or permit any other person or entity to employ,
Partnership funds in any manner except for the benefit of the Partnership.
6
Section 5.3 Tax Elections. The General Partner may elect to make any
election permitted under any provision of the Code.
Section 5.4 Tax Information to the Limited Partners. The General
Partner shall provide the Limited Partner with all necessary tax information
within a reasonable time after the fiscal year end of the Partnership.
Section 5.5 Fiscal Year. The fiscal year of the Partnership shall be
January 1 through December 31.
ARTICLE VI
CHANGE OF PARTNERS; TRANSFERS OF INTERESTS
Section 6.1 Transfers of Interest. No Partner shall have the right or
power to assign, transfer or otherwise dispose of its interest in the
Partnership without the prior written approval of all other Partners. For this
purpose, a transfer of the ownership interest in either Partner or the admission
of a new owner by the Partners shall be deemed a transfer of a Partnership
interest.
Section 6.2 Conditions of Transfer of Interest. No transfer of any
Partnership interest shall be made except in compliance with all securities and
other applicable laws. The Partnership may, in addition to the other
requirements of this Agreement, require as a condition to permitting any
transfer an opinion of counsel satisfactory to the Partnership showing that no
violation of any applicable law shall result from the transfer.
Section 6.3 Substituted Partner. A valid transfer in accordance with
this Article 6 shall vest rights to distributions from the Partnership as
provided in this Agreement, but no transferee shall become a new Partner unless
and until:
(1) All Partners shall have approved the
admission of the transferee as a Partner;
(2) The transferee shall have executed this
Agreement and any other documents reasonably required by the Partnership; and
(3) The transferee shall have reimbursed the
Partnership for all expenses incurred in making the substitution, including
legal fees and other expenses of preparing and filing an amended Certificate.
7
ARTICLE VII
TERMINATION AND DISSOLUTION
Section 7.1 Events Causing Dissolution. Although the Partners
contemplate a long term business relationship, the Partnership shall be
dissolved and its affairs wound up in the following circumstances:
(1) The withdrawal of the General Partner from
the Partnership as a result of the occurrence of any of the events set forth in
the Act;
(2) The unanimous written consent of the
Partners;
(3) Entry of a decree of judicial dissolution
under the Act; or
(4) Any other event causing the dissolution of
the Partnership under the Act.
Section 7.2 Liquidation. Following the occurrence of the event
resulting in the dissolution of the Partnership under Section 7.1, the
Partnership shall be liquidated as promptly as possible in an orderly manner.
The Partners shall continue to share net income and losses during liquidation in
the same proportion as before dissolution. The proceeds from the liquidation of
Partnership assets shall be applied as follows:
(1) In payment to creditors of the Partnership,
including Partners to the extent otherwise permitted by law, in the order of
priority provided by law, in satisfaction of liabilities of the Partnership
other than liabilities for distributions to Partners; and
(2) Subject to Section 7.3 below, in payment to
the Partners, both limited and general, of the credit balances in their capital
accounts no later than 30 days after liquidation proceeds are received by the
Partnership, less any reasonable reserves for known or contingent liabilities.
All Partners shall look solely to the assets of the
Partnership for any distribution under this Agreement and no Partner shall have
any recourse against the personal assets of any other Partner, whether general
or limited, for this purpose.
Section 7.3 Gains and Losses in Liquidation. Any income, gain or loss
on disposition of Partnership Property in the process of liquidation shall be
credited or charged to the Partners in accordance with Section 3.1 of this
Agreement.
8
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Entire Agreement. This Agreement sets forth the entire
agreement of the Partners with respect to the subject matter. This Agreement
supersedes all prior agreements or understandings among the Partners and may be
modified or amended only by the unanimous written consent of all of the
Partners.
Section 8.2 Governing Law. This Agreement and all questions arising in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, excluding its conflict of law
principles.
Section 8.3 Interpretation and Severance. All paragraph headings in
this Agreement are for convenience only, and this Agreement shall be construed
according to its full terms and not by its headings. If any provision of this
Agreement is determined by a court of proper jurisdiction to be invalid or
unenforceable, that provision may be severed or modified to the extent necessary
to make it valid and enforceable, and the other provisions of this Agreement
shall remain fully effective and binding on the Partners. When the context in
which words are used in this Agreement permits use of the singular shall include
the plural, and use of masculine or neuter pronouns shall include masculine,
neuter and feminine.
Section 8.4 Counterparts. This Agreement may be executed in a number of
counterparts and, when so executed, all of those counterparts shall constitute a
single instrument binding on all Partners notwithstanding the fact that all
Partners did not sign the original or the same counterpart.
Section 8.5 Successors and Assigns. This Agreement shall be binding on
and, subject to the restrictions on transfer in this Agreement, shall inure to
the benefit of the Partners and their respective personal representatives,
heirs, successors and permitted assigns.
9
IN WITNESS WHEREOF, the Partners have caused this Agreement to be
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
DUKE ENERGY XXXXXXX, INC.
General Partner
By: /s/ Xxxxx X. Wall
------------------
Xxxxx X. Xxxx, Xx.
Vice President
DUKE ENERGY MESQUITE, INC.
Limited Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
10
EXHIBIT A
(Names and Addresses of Partners)
General Partner:
Duke Energy Xxxxxxx, Inc.
Attention: Xxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Telephone: 713/000-0000
Facsimile: 713/627-5550
Limited Partner:
Duke Energy Mesquite, Inc.
Attention: Xxxxxxx X. Hunting
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telephone: 704/000-0000
Facsimile: 704/382-8137
