Exhibit 10.23
AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
OF
GRAYS FERRY COGENERATION PARTNERSHIP
This Amended and Restated Partnership Agreement
("Agreement") is executed this 1st day of March, 1996, by and
among O'Brien (SCHUYLKILL) COGENERATION, INC., a Delaware
corporation, with its principal offices located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter
"O'Brien"), ADWIN (SCHUYLKILL) COGENERATION, INC., a Pennsylvania
corporation, with its principal offices located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter
"Adwin"), and TRIGEN-SCHUYLKILL COGENERATION, INC., a
Pennsylvania corporation, with its principal offices located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter
"Trigen"). All three parties are sometimes collectively
referred to as "the Partners."
BACKGROUND
A. As of October 28, 1991, O'Brien and Adwin Equipment
Company ("AEC"), the parent company of Adwin, formed a general
partnership know as the Grays Ferry Cogeneration Partnership (the
"Partnership") pursuant to a Partnership Agreement of Grays Ferry
Cogeneration Partnership dated as of such date, which agreement
was amended by the First Amendment to Partnership Agreement of
Grays Ferry Cogeneration Partnership dated as of September 17,
19193, and the Second Amendment to Partnership Agreement of Grays
Ferry Cogeneration Partnership, dated September 27, 1994
(collectively the "Partnership Agreement").
B. AEC has assigned all of its right, title and interest
in and to the Partnership to Adwin pursuant to the Third
Amendment to Partnership Agreement of Grays Ferry Cogeneration
Partnership, dated January 23, 1996, and, simultaneously
therewith, Adwin has been admitted to the Partnership as a
partner, has assumed the Managing Partner position, and AEC has
withdrawn from the Partnership as a Partner.
▇. ▇'▇▇▇▇▇ is a wholly owned subsidiary of O'Brien
Environmental Energy, Inc., which is a corporation involved in
the development, ownership, operation, and management of
cogeneration facilities which produce steam and electric power
for sale to industrial and commercial users and public utilities.
D. Adwin is a wholly owned subsidiary of AEC, which, in
turn, is a wholly owned subsidiary of Eastern Pennsylvania
Development Company, which, in turn, is a wholly-owned subsidiary
of PECO Energy Company ("PECO").
E. Philadelphia United Power Corporation ("PUPCO") has
agreed to terminate its option to purchase a one-third interest
in the Partnership in consideration of Trigen's purchase of such
interest directly from the Partnership.
F. The terms of the acquisition of the Partnership
interest by Trigen are set out in the Acquisition Agreement among
Adwin, O'Brien, and Trigen dated March __, 1996 (the "Acquisition
Agreement").
G. Adwin, O'Brien and Trigen wish to amend and restate the
Partnership Agreement in its entirety for the purpose of
continuing development of a qualifying cogeneration facility to
be located at the Schuylkill Station of the Trigen-Philadelphia
Energy Corporation ("TPEC") in Philadelphia, Pennsylvania, and to
provide for the ownership, operation and maintenance of said
cogeneration facility by the Partnership once completed.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the sufficiency of which is acknowledged by all
parties, Adwin, O'Brien and Trigen, intending to be legally
bound, hereby agree as follows:
SECTION 1. DEFINITIONS
Except as otherwise expressly stated, the singular includes
the plural and the plural includes the singular; a reference to
any law or rule includes any amendment or modification to such
law or rule and all regulations, rulings and other governmental
interpretations promulgated thereunder; a reference to any person
includes such person's permitted successors and permitted
assigns; the words "include," "includes" and "including" are not
limiting, and references to any document includes all amendments,
modifications and supplements thereto.
The capitalized terms used in this Agreement shall have the
meanings set forth below:
"Affiliate" means, with respect to any Partner, any other
Person who, directly or indirectly, controls, is controlled by,
or is under common control with (including, but not limited to,
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any Person that, directly or indirectly, is a beneficial owner of
fifty percent (50%) or more of any class of equity securities of)
such Partner.
"Affiliated Party Decision" is defined in Section 7.03.
"As Adjusted" means with respect to any dollar amount
specified as such in the Agreement, such dollar amount as
adjusted for inflation on an annual basis measured by the change
in the Consumer Price Index (Philadelphia, for all urban
Consumers) (1982 - 1984 equals 100) since the execution and
delivery of this Agreement.
"Agreement Date" means the date of this Agreement.
"Capital Account" means the account maintained for each
partner pursuant to Section 12.
"Carrying Value" of any asset means its adjusted basis for
federal income tax purposes, except that the initial Carrying
Value of any property contributed to the Partnership by a partner
shall be its Fair Value at the time of contribution. Carrying
Value of assets shall be adjusted to Fair Value at the following
times: (I) acquisition of an additional interest in the
Partnership by a new or existing Partner in exchange for more
than a de minimis capital contribution, (ii) disposition by the
Partnership of assets to a partner in exchange for more than a de
minimis amount of money or Partnership property as consideration
for an interest in the Partnership, and (iii) upon liquidation of
the Partnership. Carrying Value of an asset shall be reduced for
depreciation, amortization, and other cost recovery deductions
allowable for federal income tax purposes, but to the extent that
the Carrying Value of an asset differs from its adjusted tax
basis, such Carrying Value shall be reduced by the same ratio
used to compute depreciation of the asset's adjusted basis for
tax purposes.
"Code" means the Internal Revenue Code of 1986, as amended.
"Credit Agreement" means the Construction and Term Loan
Agreement between the Lenders and the Partnership dated March 1,
1996.
"Disbursable Assets" means the sum of (a) all Gross Receipts
of the Partnership less Operating Expenses plus (b) any other
assets of the Partnership that the Partnership determines to be
in excess of the current needs of the Partnership.
"Disinterested Partner" is defined in Section 7.02.
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"Electric Contract" means collectively (1) the Agreements
for Purchase of Electric Output (Phase 1) and (Phase 2) dated as
of July 8, 1992, between the Partnership and PECO, and (2) the
Phase 1 and Phase 2 Contingent Capacity Purchase Addendums, dated
as of September 17, 1993, between the Partnership and PECO, as
well as the Letter Agreement, dated March 30, 1995, pursuant to
which PECO tendered its Activation Notice under Section 3.3 of
the Phase 1 and Phase 2 Electric Capacity Contractors, as the
foregoing Agreements may be amended, modified, or supplemented
from time-to-time.
"Event of Default" is defined in Section 20.
"Fair Value" of any property, other than of interests in the
Partnership, means the fair market value of such property as
determined by the Partners through the same procedure provided
for in Section 22.04.
"FERC" means the Federal Energy Regulatory Commission.
"Financial Closing Date" means the date on which the
Partnership closes on construction financing for the Project.
"GAAP" means generally accepted accounting principles,
consistently applied.
"Gross Receipts" means, collectively, all receipts from
operations of the Partnership, receipts from the sale, exchange,
transfer, assignment or other disposition of property of the
Partnership, proceeds of insurance and receipts from any other
source by the Partnership.
"Lenders" means Chase Manhattan Bank, N.A., and such other
participating lenders as are signatories to the Credit Agreement,
or participate in any additional financing or re-financing of the
Project.
"Major Decision" has the meaning set forth in Section 7.04.
"Management Committee" means the committee established
pursuant to Section 7.01(b).
"Managing Partner" means the partner responsible for day-to-
day administration of the Partnership's business, as more fully
described in Section 6.01.
"Operating Expenses" means all expenses necessary for the
construction, repair, operation, and maintenance of the Project
including, without limitation, payments, if any, required to be
made to any Affiliate of the Partnership pursuant to the Project
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Documents, debt service, capital expenditures, amounts used for
the creation or restoration of reserves, and taxes.
"Overdue Rate" means the prime rate of the Chase Manhattan
Bank, N.A., as announced from time-to-time, plus three percent.
"Partner" means each of Adwin, O'Brien and Trigen, as long
as it remains a Partner of the Partnership and each other Person
or entity who becomes a partner of the partnership pursuant to
the terms of this Partnership Agreement.
"Partnership" means the Grays Ferry Cogeneration
Partnership, the partnership formed by the Partners pursuant to
this Agreement.
"Partner Percentage" means the respective percentage
interest of each Partner in the Partnership, initially as set
forth in Section 3.01, as such percentage may be adjusted in
connection with the assignment, from time-to-time, by a Partner
of its interest I the Partnership pursuant to the terms hereof.
"PECO" means the PECO Energy Company, a Pennsylvania
corporation, its successors and permitted assigns.
"Person" means any individual, corporation, partnership,
association, joint stock company, limited liability company,
unincorporated organization, or other entity.
"Project" means the cogeneration facility to be developed,
constructed, owned and operated by the Partnership, located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, of at least
150 megawatts of nominal capacity.
"Project Documents" means the Credit Agreement, all
agreements, permit applications, final permits, surety bonds, and
other documents material to the development, financing,
construction and operation of the Project, including, without
limitation, those set out in Exhibit B.
"Project Equity Contribution" means the amount required by
the Lenders for the construction of the Project to be contributed
as equity by the Partners to the Partnership.
"Project Services and Development Agreement" means the
Amended and Restated Project Services and Development Agreement,
dated as of September 17, 1993, by and between the Partnership
and PUPCO, as clarified by the Acquisition Agreement and as
further amended, modified or supplemented from time-to-time
pursuant to the terms thereof.
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"PUPCO" means Philadelphia United Power Corporation, a
Delaware Corporation, its successors and permitted assigns.
"PURPA" means the Public Utility Regulatory Policies Act of
1978, as amended.
"Steam Venture Agreement" means the Amended and Restated
Steam Venture Agreement, dated September 17, 1993, by and among
AEC, O'Brien Environmental Energy, Inc., TPEC and PUPCO (which
Agreement has been assigned by AEC and O'Brien Environmental
Energy, Inc. to the Partnership), as clarified by the Acquisition
Agreement and as the same may be further amended, supplemented,
and modified from time-to-time pursuant to the terms thereof.
"TPEC" means Trigen-Philadelphia Energy Corporation,
formerly known as Philadelphia Thermal Energy Corporation, its
successors and permitted assigns.
"Turnkey Contractor" means Westinghouse, or such substitute
contractor as may be engaged by the Partnership to complete
construction of the Project.
"Unreimbursed Development Costs" means those costs to
develop the Project incurred by O'Brien and AEC and/or Adwin, as
set out in Exhibit A.
"Westinghouse" means Westinghouse Electric Corporation, its
successors and assigns.
"Work Product" means all work products produced by, or on
behalf of, a Partner prior to the Agreement Date that relate to
the development, construction and operation of the Project,
including without limitation, engineering drawings and
feasibility studies, plans and specifications, construction costs
estimates, financial studies, surveys, and governmental approvals
and permits.
SECTION 2. FORMATION OF PARTNERSHIP
2.01 Adwin and O'Brien hereby continue the Partnership
for the purposes set forth in this Agreement, and Trigen hereby
joins the Partnership for said purposes. The Partnership will be
governed by the Uniform Partnership Act of the Commonwealth of
Pennsylvania ("the Act) as from time-to-time amended.
2.02 A duly executed application for registration of
fictitious name will be filed with the offices of the Secretary
of State of Pennsylvania. The Managing Partner shall execute and
cause to be filed amended applications for registration of
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fictitious name and shall take any and all other actions as may
be necessary or advisable to perfect and maintain the Partnership
as qualified to do business in accordance with this Agreement in
any state which may be required from time-to-time.
2.03 The name of the Partnership is Grays Ferry
Cogeneration Partnership.
2.04 The principal office of the Partnership shall be
located at the offices of the Managing Partner.
2.05 Title to any assets acquired to effectuate or
implement the purposes of the Partnership shall be held in the
name of the Partnership or at any time, from time-to-time, in the
name of a nominee of the Partnership selected by the Managing
partner, and approved by the other Partners. The Managing
Partner shall obtain such documents as may be necessary to
reflect the Partnership's ownership of such assets.
SECTION 3. PARTNER PERCENTAGES; CAPITAL CONTRIBUTIONS
3.01 The Partner Percentage of each Partner is set
forth below:
Partner Partner Percentage
Adwin 33 1/3%
O'Brien 33 1/3%
Trigen 33 1/3%
3.02 Simultaneously with the execution of this
Agreement, Adwin and O'Brien shall be deemed to have contributed
to the capital of the Partnership the Unreimbursed Development
Costs set out in Exhibit A.
3.03 Trigen will have no obligation to contribute to
development expenses paid prior to the Financial Closing Date.
Certain development costs listed in Schedule 3.03 have been
incurred, but not paid prior to Financial Closing Date. These
will be paid by the Partnership at or after the Financial Closing
Date.
3.04 Each Partner shall contribute Ten Million Dollars
($10,000,000) as its share of the Project Equity Contribution,
for a total of Thirty Million Dollars ($30,000,000). Such
Project Equity Contributions shall be made after all construction
loan proceeds under the Credit Agreement have been utilized, or
at such time as is required by the Lenders under the Credit
Agreement, and prior to any drawdowns under the subordinated debt
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to be provided by Westinghouse. On, or prior to, the Financial
Closing Date, each Partner shall post one or more letters of
credit, corporate guarantees or other security, in each case
acceptable to the Lenders, to secure its obligation under this
paragraph.
3.05 (a) Following completion of the Project and
except as provided in subparagraph (b), any subsequent equity
contributions shall be subject to the unanimous approval of the
Partners, and unless otherwise agreed, shall be in accordance
with the Partner Percentage of each Partner.
(b) In the event that one or more Partners fail
to make part or all of any subsequent equity contributions
approved pursuant to subparagraph (a) or approved by the
Management Committee in order to avoid default under the Project
Documents, or which, in the reasonable judgment of the Management
Committee, may be necessary to avoid default under such Project
Documents, the interest of each such non-contributing Partner
shall be subject to the following restrictions until such time as
the default is cured:
(i) loss of all voting rights under this
Agreement, and
(ii) suspension of all distributions to which
such Partner would otherwise be entitled, with the stipulation
that such distributions shall be placed in escrow by the
Management Committee until such time as the default is either
cured or the interest of the non-contributing Partner is
purchased pursuant to the procedures set out below.
(c) A non-contributing Partner under this Section
3.05 shall have six (6) months from the date the Management
Committee sets for payment of the subsequent equity contribution
to cure any default. Cure shall consist of payment in full of
the subsequent equity contribution required of the Partner plus
interest on the unpaid amount at the Default Rate applicable to
late payments under the Credit Agreement. If any such Partner
has failed to cure the default within said six (6) month period,
the remaining Partners shall have the opportunity, pro rata to
their respective Partner Percentages, to purchase the Partnership
interest of the non-contributing Partner, pursuant to the
provisions of Section 22, except that the purchase price shall
equal the amount of the subsequent equity contribution which the
non-contributing Partner failed to make.
(d) As a condition to participating in any such
buyout, a Partner shall have paid to the Partnership, pro rata
to its Partner Percentage, that part of the capital shortfall
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created by the non-contributing Partner either through an
additional equity contribution to the Partnership (which shall be
added to the Partner's Capital Account) or, if approved by the
Management Committee, and permitted by the Credit Agreement,
through a loan to the Partnership. To the extent that a partner
fails to pay its pro rata share of the subsequent equity
contribution required of the non-contributing Partner, the
remaining Partners shall have the opportunity, pro rata to their
respective Partner Percentages, to make up the shortfall, and
thereby be eligible to participate in the purchase of the non-
contributing Partner's interest should a cure not be effected by
such non-contributing Partner within the six (6) months set out
herein. If none of the Partners make up the shortfall created by
the non-contributing Partner, the contributing Partners shall
take action as they deem appropriate.
(e) In addition to its other obligations under
subparagraphs (a) and (b) of this Section, each Partner agrees to
contribute additional capital to the Partnership pursuant to the
provisions of this Section 3.05 to satisfy obligations owed third
parties if, as a result of such obligations, the Partnership's
liabilities exceed its assets.
SECTION 4. PURPOSE AND POWERS
4.01 The purpose of the Partnership is to develop,
construct, own, maintain, and operate the Project. Unless all of
the Partners otherwise agree, the Project shall at all times be a
"qualifying cogeneration facility" within the meaning of Section
3(18)(B) of the Federal Power Act, as amended by Section 201 of
PURPA and the applicable rules and regulations of FERC.
4.02 The Partnership shall have the following powers:
(a) To buy, lease, own or sell any personal or
real property useful or necessary for the development,
construction and operation of the Project;
(b) To borrow money and issue evidences of
indebtedness in furtherance of any or all of the objects of the
Partnership's business or for the refinancing of any
indebtedness, and to secure the same by mortgage, pledge or other
liens on any or all of the Partnership's property;
(c) To enter into, perform and carry out
contracts of any kind necessary to, or in connection with, or
incidental to, the accomplishment of the foregoing purposes;
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(d) Negotiate for and conclude agreements for
the sale, exchange or other disposition of all, or substantially
all, of the property of the Partnership;
(e) Make Permitted Investments of Partnership
funds, as such Permitted Investments are defined in the Credit
Agreement;
(f) Bring or defend actions at law or in equity;
(g) Sell, purchase, cancel, or otherwise dispose
of, the interest of any Partner in the Partnership in accordance
with the terms of this Agreement; and
(h) Undertake any other action or thing
reasonably necessary to carry out the purposes set forth in this.
4.03 Partners may not engage in or possess interests in
business ventures of any kind other than in accordance with this
Agreement. Affiliates of a Partner may engage in or possess
interests in other business ventures of any kind for their own
account including, without limitation, owning or participating in
or serving as a partner or other owner of other entities that
own, either directly or through interests in other Persons,
projects similar to, or that compete with, the Project. Neither
the Partnership nor any of the Partners shall have any rights by
virtue of this Agreement in, or to, such other business ventures
or to the income or profits derived from Affiliate activities.
SECTION 5. DESCRIPTION OF THE PROJECT;
RELEASE OF CERTAIN PRIOR FINANCIAL COMMITMENTS
5.01 Initially, the Project will consist of a
Westinghouse 501D5A Econopac combustion turbine, a heat recovery
steam generator, a condensing-extraction steam turbine which, in
combination with the combustion turbine, is expected to be
capable of generating 170 MW at 90 degrees Fahrenheit, and an
auxiliary boiler whose capacity shall be approximately 730,000
pounds of steam per hour, and shall be capable of burning both
No. 2 oil and natural gas.
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SECTION 6. MANAGEMENT OF PARTNERSHIP BUSINESS;
ROLE OF THE MANAGING PARTNER
6.01 (a) The day-to-day responsibility to administer
the business of the Partnership shall be vested in the Managing
Partner, pursuant to guidelines and policies issued by the
Management Committee established by Section 7.01(b) herein. The
Managing partner shall report on a regular basis to the
Management Committee. The intent of the Partners is that policy
decisions be referred to the Management Committee by the Managing
Partner, but that the Managing partner perform all administrative
or ministerial duties of the Partnership within the guidelines
and policies approved by the Partnership. Subject to any
requirement under Section 7.02 that a Disinterested Partner
handle such activities, the Managing Partner shall have the
authority and responsibility to undertake the following actions
without the need to seek approval from the Management Committee:
(i) prepare for the Partnership an annual
budget for approval by the Partners (to be presented to the
Partnership no later than ninety (90) days prior to the beginning
of each year), which budget shall include a narrative description
of construction, repair, operating and maintenance activities
proposed to be undertaken by the Partnership during such year and
a description of such other information, plans, agreements and
other matters as are necessary to inform the Partners of matters
materially relevant to the operation and management of the
Partnership and the Project during such year;
(ii) recommend staffing and compensation to
the Management Committee for consultants, attorneys, accountants
and other professionals utilized by the Partnership;
(iii) pursue all permits required for the
development, financing, construction and operation of the
Project;
(iv) except as specifically provided herein
with respect to transactions with Affiliates, negotiate and
administer the Partnership's obligations under the Project
Documents;
(v) provide the other Partners with copies
of new Project Documents promptly after each has been executed by
the Partnership;
(vi) promptly notify the other Partners of
any material impediments to the expected completion of
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construction of the Project within the proposed capital budget
which is attached hereto as Schedule 6.01;
(vii) monthly notify the Partnership of
any anticipated deviations of five percent (5%) or more from any
line item of the annual approved budget;
(viii) invest and re-invest the funds of
the Partnership in accordance with Section 4.02(e);
(ix) execute and deliver in accordance with
the terms of this Agreement, on behalf of the Partnership,
construction contracts, instruments for the transfer of real
property, loan agreements, any and all instruments and documents
which shall be required by the Lenders, or any other document or
instrument in any way related thereto or necessary or appropriate
in connection therewith;
(x) provide all required risk management
services, including development of an indemnity program and
maintenance of adequate insurance to insure compliance by the
Partnership with the Project Documents;
(xi) provide administration of the
Partnership including, without limitation, its accounting
requirements, and administration for the Project while under
construction and, after completion, for its operation;
(xii) handle all public relations
matters; and
(xiii) handle all environmental,
regulatory and contractual reporting requirements.
(b) Any Person dealing with the Partnership may
rely (without duty of further inquiry) upon a certificate signed
by the Managing Partner as to the identity of any Partner; the
existence or nonexistence of any fact or facts which constitute a
condition precedent to acts by the Partnership or which are in
any other manner germane to the affairs of the Partnership; the
Persons who are authorized to execute and deliver any instrument
or document of the Partnership; and any act or failure to act by
the Partnership or any other matter whatsoever involving the
Partnership; subject in each case to any requirements under
Section 7.02 that a Disinterested partner handle such activity.
(c) Subject to the Managing Partner's compliance
with Sections 7 and 17 herein, the signature of the Managing
Partner shall be sufficient to convey title to any assets or
property owned by the Partnership, or to lease, mortgage, lien or
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encumber the same, and all of the Partners agree that a copy of
this Agreement may be shown to the appropriate parties in order
to confirm the same, and further agree that the signature of the
Managing Partner shall be sufficient to execute any "statement of
partnership' or other documents necessary to effectuate this or
any other provision of this Agreement or to satisfy any
requirement of the Act or of other applicable law.
(d) The Managing Partner may not, except with
approval of the Partnership under Section 7.04:
(i) Knowingly take any action in
contravention of this Agreement;
(ii) Deal with or assign rights in any
Partnership property for other than Partnership purposes;
(iii) Confess judgment against the
Partnership or make an assignment for the benefit of creditors;
(iv) Take any action which would make it
impossible to carry on the business of the Partnership; or
(v) Cause the Partnership to cease to be a
partnership for any reason, including federal income tax
purposes.
6.02 Adwin shall serve as the Managing Partner until
the Financial Closing Date, at which time, it shall automatically
be replaced by O'Brien. O'Brien shall serve as the Managing
Partner until care, custody and control of the Project is turned
over to the Partnership by the turnkey Contractor, (or at such
earlier time as the Management Committee determines is necessary
to avoid ownership problems under PURPA), at which point O'Brien
will automatically be replaced by Trigen as the Managing Partner
until it resigns or is replaced pursuant to Section 6.03, or
until it ceases to be a Partner.
6.03 If an Event of Default by the Managing partner
occurs, the non-Managing Partners may elect to remove the
Managing Partner by serving notice of the election on the
Managing Partner. If, at the time of removal, there is only one
other Partner, such Partner will become the Managing Partner. If
there is more than one non-Managing Partner, the non-Managing
Partners shall jointly agree on a substitute Managing partner.
The substituted Managing Partner shall be formally designated by
an amendment to this Agreement signed by all the non-Managing
Partners.
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6.04 Notwithstanding any other provision of this
Agreement, no Partner shall become Managing partner or remain in
such position if fulfillment of such responsibilities will
jeopardize the Project's qualifying facility status under PURPA.
6.05 Any Partner (including the Managing Partner) may
appoint, employ, or contract with any Person to assist it in
fulfilling its duties hereunder, but may not delegate its powers,
rights or obligations hereunder to such Person, and only so long
as any such appointment, employment, contract, or other dealing
is at no cost to the other Partners or to the Partnership.
6.06 Each Partner hereby makes, constitutes, and
appoints the Managing Partner its true and lawful attorney-in-
fact for the express purposes contained in this Section 6.06 (and
no others) and authorizes it to act in its name, place, and stead
and for its use and benefit, to sign, execute, certify,
acknowledge, swear to, file, publish and record (i) all amended
name certificates to be filed by the Partnership under the laws
of any jurisdiction in which the Partnership is doing business;
(ii) any amendments and the instruments described in clause (i),
as now or hereafter amended, which are required to admit any
substituted Partner in accordance with the terms of this
Agreement; and (iii) all certificates of cancellation and other
instruments which shall be required by applicable law to effect
the dissolution and termination of the Partnership; provided that
any such actions are taken in accordance with the terms and
provisions of this Agreement. The power of attorney granted
herein may be exercised by any such attorney-in-fact by listing
the Partners executing any agreement, certificate, instrument, or
other document with the single signature of any such attorney-in-
fact acting as attorney-in-fact for such Partners.
6.07 To reimburse the Managing Partner for all of its
internal costs incurred in performing its responsibilities
hereunder, the Partnership shall provide the Managing Partner
with an annual fee of One Hundred fifty Thousand Dollars
($150,000), As Adjusted, which fee shall be pro-rated on a
monthly basis for any periods less than a year during which a
Partner serves as Managing Partner. Third party expenses,
including legal and accounting costs, shall be payable by the
Partnership, consistent with the annual budget approved by the
Partners.
SECTION 7. PARTNERSHIP DECISION MAKING; MAJOR DECISIONS
7.01 (a) For those decisions requiring a vote of the
Partners (i.e., those decisions for which the Managing Partner
does not have sole authority under paragraph 6.01), the Partners
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shall have a vote equal to their respective Partner Percentage.
The Partnership shall execute its decision making through a
Management Committee, established pursuant to sub-paragraph (b)
below.
(b) The Management Committee shall consist of one
non-voting General Manager appointed by the Managing Partner, and
one voting member from each of Adwin, O'Brien and Trigen. The
Management Committee shall be chaired by the General Manager, and
shall meet quarterly at the offices of the Managing Partner, or
at such other location as may be mutually agreeable. The agenda
for each meeting of the Management Committee will consist of an
Operations Report (which shall address Project availability,
efficiency, net projection, equipment runtime, PURPA
calculations, equipment condition, permit compliance, and
explanation of any downtime), a Financial Report (which shall
address net income, balance sheet, available cash, deviations
from approved budgets, loan balances, and recommendations for
distributions), a Third Party Relationships Report (which shall
address relations with lenders, customers, contractors/vendors,
permitting and regulatory bodies, neighbors and the press), and a
Major Decision Report, with recommendations on Major Decisions to
be made. Minutes of the meetings of the Management Committee
shall be maintained by the General Manager and a copy served on
each Partner within five (5) business days after any meeting of
the Committee. The General Manager shall ensure that (1)
unaudited annual financial statements are ready for review and
approval by the end of February of each year and that audited
financial statements are ready for approval by the end of March
of each year, (2) annual tax returns are ready for review and
approval by April 1 of each year, and (3) annual staffing plans
and proposed annual budgets are ready for review by October 1 of
each year. To the extent possible, the Management Committee will
seek to make "Major Decisions" (as defined in Section 7.04) by
consensus. In the absence of a consensus, the provisions of
Section 7 shall control.
(c) Special meetings of the Management Committee
may be called by Partners holding at least thirty-three and one-
third percent (33 1/3%) of the voting interests in the
Partnership upon reasonable written or telephonic notice to the
other Partners. Meeting of the Management Committee shall be
authorized if a quorum representing fifty0one percent (51%) or
more of the voting interests in the Partnership is represented
either in person or by proxy. Any meeting of the Management
Committee may be held by conference telephone or similar
telecommunications arrangement whereby all Partners in attendance
may hear one another. Any action that may betaken at a meeting
of the Partners may be taken, without a meeting, by the unanimous
written consent of those Partners holding voting interests
15
sufficient to approve such action pursuant to the terms of this
Agreement.
7.02 To avoid the appearance of any conflict of
interest, the Management Committee shall assign primary
responsibility for the negotiation and monitoring of any
agreements, or amendments thereto, between the Partnership and a
Partner (or an Affiliate thereof) to a Disinterested Partner
unless there is no Disinterested Partner. For purposes of this
Agreement, a "Disinterested partner" as to a particular decision
is one which neither (1) is a contracting party or an Affiliate
of such contracting party with respect to said decisions, nor (2)
has a financial interest in the agreement that is the subject of
the decision which is materially different from the financial
interest of the remaining partners or the Partnership, due to a
separate agreement with the contracting party or its Affiliate.
The Disinterested Partner shall have no authority to make final
decisions with respect to said agreements, but shall have the
primary responsibility for negotiating or monitoring the terms of
such agreements or amendments, subject to approval by the
Partnership, as set out in Sections 7.03 and 7.04. If the
Managing Partner is not a Disinterested Partner and is,
therefore, not assigned to any such negotiation or monitoring
responsibility, it shall nevertheless assist and consult with the
assigned Disinterested Partner, including attendance at
negotiation sessions, if requested.
7.03 With the exception of those decisions set out in
Sections 7.04, any decisions which is supported by fifty-one
percent (51%) or more of the voting interests of the Partners
shall be deemed to be a decision or act of the Partnership.
Unless there is no Disinterested Partner, and notwithstanding any
provisions herein to the contrary, the vote of a majority of the
voting interests held by the Disinterested Partners (or the
unanimous consent of the voting interests held by the
Disinterested Partners for decisions covered by Section 7.04)
shall be required for those actions of the Partnership which
specially affect the interests of one Partner, either because
such Partner or an Affiliate thereof has a separate contract with
the Partnership involving such decision or has a financial
interest in the decision which is materially different from the
financial interests of the remaining Partners or the Partnership,
due to a separate agreement with the contracting party or its
Affiliate (such a decision is hereinafter referred to as
"Affiliated party Decision"). Without limiting the foregoing, an
Affiliated party Decision shall include waivers, elections,
default notices and the initiation of enforcement actions under,
and the execution, modification, or termination or, contracts
between the Partnership and a Partner or Affiliate of such
Partner.
16
7.04 Any of the actions specified below (each, a "Major
Decision") may be taken only if agreed upon by a unanimous vote
of the Disinterested Partners with respect to any such decision
if such decision involves an "Affiliated party Decision";
otherwise, the unanimous vote of all partners shall be required.
The following actions shall be covered by this paragraph:
(a) Any action which would change or materially
or adversely affect the purpose or business of the Partnership as
specified in Section 4;
(b) Any issuance of additional interests in the
Partnership or the admission of any Person as a Partner;
(c) Any material modification to the Project
Documents, including any modification which involves an
expenditure or incurrence of liability, or a potential liability,
on the part of the Partnership in excess of an annual aggregate
total of Two Hundred Thousand Dollars ($20,000), As Adjusted;
(d) Any execution by the Partnership of any
unbudgeted agreement with a term greater than one year or
involving the expenditure or incurrence of liability, or a
potential liability, in excess of One Hundred Thousand Dollars
($100,000), As Adjusted, in the aggregate;
(e) Any sale, assignment, or grant of mortgage or
other encumbrance involving all or substantially all of the
assets of the Partnership; provided, however, that this clause
shall not apply to the leasing or installment purchase of office
and related equipment and vehicles;
(f) The incurring of unbudgeted indebtedness, or
a potential indebtedness, by the Partnership in excess of One
Hundred Thousand Dollars ($100,000), As Adjusted, per occurrence
or Five Hundred Thousand ($500,000), As Adjusted, in the
aggregate on an annual basis;
(g) The determination of compensation for
professionals and consultants retained by the Partnership;
(h) Any material modifications to an insurance
and indemnity program for the Partnership, including any
modification which involves an expenditure or the incurrence of
liability, or a potential liability, in excess of Two Hundred
Thousand Dollars ($200,000), As Adjusted, in the aggregate;
(i) Approval of the annual operating budget for
any calendar year and approval of any action or actions, which
17
in the aggregate result is an increase than five percent (5%) in
the expenditures or a decrease of greater than five percent (5%)
in the revenues of or to the Partnership as set forth in the
approved annual operating budget;
(j) The dissolution of the Partnership, except
under Section 21.01(iv);
(k) Disposition of assets of the Partnership upon
dissolution or termination of the Partnership;
(l) The distribution of cash or other assets to
the Partners, the establishment of any reserves not required by
the Lenders or the determination of Disbursable Assets;
(m) The merger or consolidation of the
Partnership with or into any Person; and
(n) The decisions identified in Section 6.01(d).
7.05 Whenever any Partner is requested to evidence its
approval of or agreement to any decision or action of any nature
whatsoever that requires consent of the Partners, the Partner to
whom such request has been made shall respond to such request
with reasonable promptness. Commensurate with the nature of the
approval, action or agreement being sought, the partner to whom
the request is made shall advise the requesting Partner(s) of its
approval or its reasons for withholding the same. If the request
for approval, agreement or other action is in writing, the
response must also be in writing.
SECTION 8. TERM; TERMINATION
8.01 The Partnership shall continue in existence until
the first to occur of the following events: (a) the date
determined by unanimous decision of the Partners to dissolve the
Partnership; (b) the sale of all or substantially all of the
assets of the Partnership; (c) the withdrawal by any Partner
resulting in less than two remaining Partners, unless, if there
is a sole remaining Partner, a second Partner is admitted within
the time required by applicable law; (d) the occurrence of an
event specified under applicable law resulting in a dissolution
of the Partnership unless, pursuant to applicable law, the
Partners elect to continue the business of the Partnership; (e)
December 31, k2035; or (f) the dissolution of the Partnership due
to an Event of Default or otherwise in accordance with this
Agreement.
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8.02 Upon termination of this Agreement, none of the
Partners shall have any further liability to each other, except
any liability which expressly survives pursuant to Section 30.02
of this Agreement.
SECTION 9. SCOPE OF AUTHORITY
9.01 Except as otherwise expressly provided in this
Agreement, no Partner shall have any authority to bind or act
for, or in the name of, or assume any obligations or
responsibilities on behalf of, the other Partners or the
Partnership. Neither the Partnership nor any Partner shall be
responsible or liable for any indebtedness of a Partner, whether
incurred or arising before or after the execution of this
Agreement, except those responsibilities, liabilities,
indebtedness or obligations expressly assumed by such Partner or
the Partnership in writing. This Agreement shall not be deemed
to create a general partnership among the Partners with respect
to any activities whatsoever, other than activities within the
scope and purpose of the Partnership.
SECTION 10. INDEMNIFICATION
10.01 Each Partner hereby indemnifies and holds
harmless the partnership as well as the other Partners(s) and
their or its Affiliates, officers, directors, employees and
agents from and against any and all claims, demands, losses,
damages, liabilities, lawsuits and other proceedings, judgments
and awards, and costs and expenses (including but not limited to
reasonable attorneys' fees) arising directly or indirectly, in
whole or in part, out of any breach of the provisions of this
Agreement by such Partner or its Affiliate, director, officer,
employee or agent.
10.02 Except as provided in non-waivable provisions
of applicable law:
(a) The Partnership hereby indemnifies each
Partner (and its officers, directors, employees and agents) from
and against any liability resulting from any act omitted or
performed by such Partner (or its officer, director, employee or
agent) in good faith on behalf of the Partnership and in a manner
reasonably believed by such Partner (or its officer, director,
employee, or agent) to be within the scope of the authority
conferred upon such Partner by this Agreement and in the best
interests of the Partnership.
19
(b) No Partner (and no officer, director,
employee or agent of a Partner) shall be liable, responsible or
accountable, in damages or otherwise, to the Partnership or the
partners for or as a result of any act, omission or error in
judgment which was taken, omitted or made by it in good faith on
behalf of the Partnership and in a manner reasonably believed by
it to be within the scope of the authority granted to it by this
Agreement and in the best interests of the Partnership. A
Partner may consult with such legal or other professional counsel
as it may select. Any action taken or omitted by it in good
faith reliance on, and in accordance with, the opinion or advice
of such counsel shall afford full protection and justification to
it with respect to the action taken or omitted.
(c) The Partnership may reimburse a partner for
all expenses, including reasonable legal fees, and losses in
connection with any suit or action involving Partnership business
(but no in connection with any action brought by one Partner
against another). Any such indemnification and advancement of
expenses agreed to by the Partnership shall not be exclusive of
any other right available to the Partners, unless otherwise
provided in extending the offer thereof. The Partnership shall
purchase and maintain insurance on behalf of the Partners against
liability.
SECTION 11. LIMITATION OF LIABILITIES
11.01 No Partner, except as provided in Section
3.05, shall be liable to any third Person for losses, liabilities
or obligations of the Partnership (except as otherwise expressly
agreed to in writing by such Partner) unless the assets of the
Partnership shall first have been exhausted.
11.02 Unless otherwise decided by the Partnership,
the Partnership shall not enter into any contract, lease,
sublease, note, deed of trust, or other agreement unless there is
contained in such instrument an appropriate provision which (a)
limits the claims of all parties to, and beneficiaries under,
such instrument to the assets of the Partnership and (b)
expressly waives any rights of such parties and other
beneficiaries to proceed against the Partners individually. To
the extent the Partnership has entered into any contract, lease,
sublease, note or other agreement in violation of this
requirement prior to the date of this Agreement, the Partners
hereby waive any violation of the provisions of this Section.
11.03 Unless due to a Partner's willful misconduct,
gross negligence, actions taken in bad faith, or actions taken by
a Partner for which there was no basis for the Partner to form a
20
reasonable belief that such actions were in compliance with the
Affiliated Party Decision requirements of Section 7.03, in no
event shall any Partner be liable to any other Partner for
indirect, incidental, special or consequential damages including,
but not limited to loss of revenue, loss of profit, cost of
capital, or loss of opportunity, regardless of whether such
liability arises out of contract, tort (including negligence),
strict liability, or otherwise.
SECTION 12. CAPITAL ACCOUNTS
12.01 A separate "Capital Account" shall be
maintained for each Partner in accordance with applicable United
States Treasury regulations. Upon execution of this Agreement,
the Capital Accounts of Adwin and O'Brien shall consist of the
Unreimbursed Development Costs set out in Exhibit A plus their
respective shares of the Project Equity Contribution set out in
Section 3.03. The Capital Account of Trigen shall consist of its
share of the Project Equity Contribution. The resulting initial
Capital Accounts of the Partners are set out in Exhibit A.
Following execution of this Agreement, the Capital Account of
each Partner shall be:
(a) increased by (i) the amount of cash and Fair
Value of any property (net of liabilities assumed by the
Partnership and liabilities to which the property is subject)
contributed by such Partner to the Partnership pursuant to this
Agreement; (ii) the items of income and gain allocated to such
Partner in accordance with Section 13.01; and (iii) any positive
adjustment to such Capital Account by reason of an adjustment to
the Carrying Value of Partnership Assets;
(b) decreased by (i) the amount of case and Fair
Value of any property (net of liabilities assumed by the Partner
and liabilities to which the property is subject) distributed to
such Partner by the Partnership pursuant to this Agreement; (ii)
the items of loss and deduction allocated to such Partner in
accordance with Section 13.01; and (iii) any negative adjustment
to such Capital Account by reason of an adjustment to the
Carrying Value of Partnership Assets.
12.02 Immediately prior to the distribution of any
property (other than cash) to a Partner, the Capital Account of
each Partner shall be increased or decreased, as the case may be,
to reflect the manner in which the unrealized income, gain, loss
and deduction inherent in such property (that has not previously
been reflected in the Capital Accounts of the Partners) would be
allocated among the Partners in accordance with GAAP as if there
21
had been a taxable disposition of such property for its Fair
Value.
SECTION 13. ALLOCATION
13.01 For purposes of making allocations to Capital
Accounts, all items of income, gain, loss, deduction and credit
of the Partnership shall be allocated among the Partners in
accordance with their respective Partner Percentages.
13.02 Any allocation pursuant to Section 13.01
will, however, be subject to any adjustment required to comply
with Sections 704(b) and 704(c) of the Code and the Treasury
Regulations thereunder including, without limitation, adjustments
with respect to any nonrecourse deduction or minimum gain
chargeback within the meaning of Treasury regulation Section
1.704-2. Any special allocations of items pursuant to this
Section 13.02 shall be taken into account, to the extent
permitted by the Treasury Regulations, in computing subsequent
allocations of income, gain, loss or deductions pursuant to
Section 13.01 or 13.03 so that the net amount of any items so
allocated and all other items allocated to each Partner over the
life of the Partnership shall, to the extent possible, be equal
to the amount that would have been allocated to each Partner
pursuant to Section 13.02 had such special allocation not
occurred.
13.03 For purposes of making allocations for
federal, state, and local income tax purposes, all items of
income, gain, loss, deduction and credit realized by the
Partnership shall, for each fiscal period, be allocated, among
the Partners in the same manner as the correlative items of
income, gain, loss, deduction and credit were allocated pursuant
to Section 13.01.
SECTION 14. DISTRIBUTIONS TO PARTNERS
14.01 Subject to Section 24, and as permitted by
the Partnership's Lenders, the Partnership shall distribute its
Disbursable Assets, if any, for each fiscal quarter to the
Partners simultaneously in accordance with the Partner Percentage
of each Partner.
SECTION 15. BOOKS, RECORDS AND ACCOUNTS
15.01 The Partnership shall maintain, at its
principal office, full and accurate accounts and financial
records which all Partners shall have the right to inspect and
examine during
22
reasonable business hours. In addition, each Partner may
designate a Person or Persons to inspect, examine and audit such
accounts and financial records and to make copies of documents
deemed appropriate during regular business hours at such
Partner's sole cost and expense. The Managing Partner shall keep
or cause such books to be kept and shall fully and accurately
enter all transactions of the Partnership in the books. Such
books and records of account shall be maintained on the accrual
basis and shall be adequate to provide each partner with all
financial information that may be needed buy such Partner or any
of its Affiliates for purposes of satisfying the financial and
tax reporting obligations of such Partner or Affiliate. Such
books shall be closed and balanced at the end of each fiscal
year. The Managing Partner will furnish financial statements,
prepared in accordance with GAAP, to each Partner within thirty
(30) days following the end of each quarter. On or before March
1 of each year, the partnership will furnish each Partner, for
the prior calendar year, audited financial statements of the
Partnership. At the request of any Partner, the Partnership
shall give specific answers to questions upon which information
is desired from time-to-time relative to the income, assets,
liabilities, contracts, operations, condition of the property,
status of any loans and any other data with respect to the
Partnership or its property.
15.02 The Partnership shall engage as independent
auditors for the Partnership the firm recommended by the Managing
Partner, and approved by the Management Committee. The
independent auditors shall at the end of each fiscal year (i)
audit the records and accounts of the Partnership and (ii) render
their opinion on the statements of financial condition of the
Partnership as of the end of each fiscal year and related
statements of income and changes in financial condition for each
fiscal year.
SECTION 16. TAX RETURNS; TAX ACCOUNTING; TAX ELECTIONS
16.01 It is the intention of the parties that the
relationship created by this Agreement will, for federal, state,
local and foreign purposes, be treated as a partnership. The
Partners agree to take all action, including the amendment of
this Agreement and the execution of other documents, as may be
required to qualify for and receive such tax treatment. Subject
to the provisions of Section 16.04, all of the Partnership's
elections for federal and state tax purposes, except those
specifically reserved by the Code to be made by the individual
Partners, shall be determined by the "Tax Matters Partner" (as
defined in Section 16.05) and approved by the other Partners.
Subject to the provisions of this Section 16.01, the
23
Partnership's federal and state tax returns of the Partnership
shall be reviewed and approved by each Partner. Any Partner who
objects to the presentation of any Partnership item on any such
return shall so notify the Managing partner in writing within
fifteen (15) days after the date on which the income tax return
in question was furnished to such Partner by the Partnership's
independent auditors. Such notice shall set forth in reasonable
detail the nature of, and basis for, each such objection. Copies
of such notice shall be provided to the other Partners and to the
independent auditors. If the Partners cannot agree upon a
mutually satisfactory resolution of any disputed item, any
Partner who objects to the majority decision of the Partners
shall be entitled to take an inconsistent position with respect
to any unresolved items on its own income tax return. In all
other respects each partner shall report the results of the
operation of the partnership on its own returns in a manner
consistent with the manner in which such results were reported by
the Partnership.
16.02 Income tax returns of the Partnership shall
be prepared by the independent auditors. Copies of all income
tax returns of the Partnership shall be furnished to each of the
Partners for review and approval by April 1 of each year for
filing such returns, including extensions, if any. If any
Partner shall fail to approve any such return, an application for
an extension of time to file shall be timely filed. If all
Partners fail to approve the return prior to the expiration of
the extension period, the Managing Partner shall file the return
as approved by a majority-in-interest of the Partners, subject to
the provisions of Section 16.01.
16.03 The fiscal year and the tax year of the
Partnership shall end on December 31 of each year.
16.04 The Partnership shall, if requested by any
Partner, make the election provided under Section 754 of the
Code.
16.05 The Managing Partner is hereby designated as
the "Tax Matters Partner," pursuant to Section 6231 of the Code
and the applicable regulations thereunder.
16.06 Prompt notice shall be given to the Partners
upon receipt of notice that the Internal Revenue Service or any
other taxing authority intends to examine partnership tax returns
for any period. The Tax Matters partner shall promptly supply to
the other Partners copies of any communications with any taxing
authority relating to any audit of any tax returns filed by or on
behalf of the Partnership which involve any material issue and
shall take such other steps as may be appropriate to keep the
24
other Partners fully informed about the course of the audit and
any other administrative or judicial proceeding relating thereto.
The Tax Matters partner shall not settle any material claim for
additional taxes, interest or penalties, or other adjustments to
the Partnership's tax returns without first obtaining the
approval of the Management Committee.
SECTION 17. BANK ACCOUNTS
17.01 Except as otherwise required by the Lenders,
all funds shall be deposited in the name of partnership in such
account or accounts as shall be designated by the Managing
Partner. Except as provided below or as otherwise required by
the Partnership's Lenders, all withdrawals therefrom shall be
made upon checks signed (i) by the chief executive officer, the
chief operations office, or the chief financial officer of the
Managing Partner and (ii) by such additional person or persons as
shall be designated by the Managing Partner from time-to-time.
Any withdrawal in excess of Twenty Thousand Dollars ($20,000)
which is out of the ordinary course of business of the
Partnership or outside the scope of the approved annual budget,
shall be approved in writing by the Managing Partner and at least
one other Partner. The Managing Partner shall have no authority
to approve withdrawals to itself or its Affiliates that are
outside the scope of the approved annual budget, without the
approval of the Partnership, which decision shall not be
unreasonably delayed.
SECTION 18. TRANSFER OF A PARTNER'S INTEREST
18.01 No Partner may sell, assign or encumber all
or any part of its interest in the partnership unless each of the
conditions set forth herein are satisfied or waived by consent of
the partners; provided, however, that each partner may transfer
all or a portion of its interest in the Partnership to an
Affiliate without the consent of, but with notice to the other
Partner(s); provided, however, that such transfer does not cause
the Project to lose its status as a "qualifying cogeneration
facility" under PURPA. Notwithstanding any other provision of
this agreement, no partner may sell or assign all or any part of
its interest in the Partnership if such sale or assignment would
result in a total of more than three (3) Partners in the
Partnership, unless to remedy a failed capital call under Section
3.05, or to remedy a potential violation of the ownership
requirements under PURPA, pursuant to Section 18.02 below.
18.02 If it is determined that the ownership of
interests in the Partnership by any Partner would cause the
25
Project to cease being a "qualifying cogeneration facility" under
PURPA or would cause the Partnership to be regulated pursuant to
the Public Utility Holding Company Act, each Partner agrees,
consistent with the provisions of the Agreement, to reduce its
Partnership Interest, pro rata to its Partner Percentage, to a
level which avoids loss of "qualifying facility" status. Each
Partner agrees that it will not transfer any interest in the
Partnership, the result of which transfer would cause a loss of
"qualify facility" status. No transfer shall be allowed or be
effective unless an opinion of counsel satisfactory to the
Management Committee is obtained stating that such transfer would
not (i) cause the Partnership to be classified as an entity other
than a partnership for purposes of the Code or to be treated as a
publicly traded partnership within the meaning of Section 7704 of
the Code, (ii) require registration under the Securities Act of
1933 and would not violate or cause the Partnership to violate
any applicable law, and (iii) adversely affect the status of the
Project as a qualifying facility under PURPA.
18.3 As a condition to the transfer of any interest,
the transferee shall execute and deliver to each remaining
Partner an instrument pursuant to which it agrees to be bound by
the terms of this Agreement and such additional instruments and
documents as may be reasonably required by the remaining
Partners.
SECTION 19. FIRST RIGHT OF PURCHASE
19.01 If, at any time, any Partner desires to sell
all or any portion of its interest (other than a sale by a
Partner to any Affiliate), such Partner shall give the other
Partners notice of its intention to seek a purchaser for such
interest promptly after making the determination to do so. Such
Partner, upon securing a bona fide offer to purchase such
interest intended to be sold shall give the other Partners notice
of (a) the price (which shall be a dollar sum), (b) the identity
of the proposed purchaser (if then known to the seller) and (c)
all other terms of sale. The Remaining Partners shall have the
right pro rata to their Partner Percentage, during the forty-five
(45) day period after the giving of the notice of the proposed
sale and its terms to enter into agreement to purchase all of the
interest specified in the notice (which price shall be prorated
if the Remaining Partners want o purchase only a portion of the
interest being offered for sale) and upon the terms set forth in
the notice. In the event less than all of the Remaining Partners
determine to purchase the interest to be sold within the said
forty-five (45) day period, those Remaining Partners who elect to
purchase shall have the right within the ten (10) day period to
26
purchase the interest to be sold in the same proportion as the
Partner Percentage of each purchasing Remaining Partner bears to
the total Partner Percentage of all such purchasing Remaining
Partners. If none of the remaining Partners elect to purchase
the seller Partner's interest to be sold within the said time
periods, the selling Partner shall be free for a period of thirty
(30) days thereafter to sell the interest to be sold to the
proposed purchaser on the same terms and conditions contained in
the notice to the Remaining Partners of the proposed sale. If
the said sale is not effected within the said thirty (30) day
period, any subsequent sale must again comply with the
requirements of this Section. Settlement under any purchase
agreement entered into by one or more of the Remaining Partners
pursuant to this Section shall occur within ninety (90) days of
the execution of a written purchase agreement.
SECTION 20. EVENTS OF DEFAULT
20.01 Each of the following shall be considered to
be an "Event of Default" by a partner:
(a) such Partner shall be named a debtor in any
petition, whether voluntary or involuntary, in any bankruptcy or
insolvency proceeding, whether state or federal, and such
petition is not stayed or dismissed within sixty days;
(b) such Partner shall enter into an assignment
for the benefit of creditors;
(c) such Partner shall have a receiver appointed
to administer its interest in the Partnership;
(d) such Partner shall have its Partnership
interest seized by a general creditor;
(e) it shall become unlawful for such Partner to
carry on the business of owning an interest in the Partnership;
(f) Except for a failure to make a capital call
pursuant to Section 3.05, such Partner defaults in the
performance of, or fails to comply with, any material obligation
or agreement set out in this Agreement, and has not cured such
default within thirty (30) days after notice from any of the
remaining Partners of such default;
(g) such Partner commits fraud, is convicted of a
crime, or violates the Affiliated Party provisions of Section
7.02; or
27
(h) such Partner is either dissolved or
liquidated.
20.02 Upon the occurrence of an Event of Default,
the nondefaulting Partner(s) may, in addition to all other
remedies at law or in equity to which such Partner(s) may be
entitled, elect to purchase the defaulting Partner's interest in
the Partnership pursuant to the provisions of Section 22.
SECTION 21. DISSOLUTION
21.01 The Partnership shall dissolve upon the first
to occur of (i) termination of the Partnership pursuant to
Section 8.01, (ii) such time as the last Project Document expires
by its terms and no longer requires, or prospectively could
require, administration by the Partnership, (iii) upon the
withdrawal of a Partner or upon the occurrence of an Event of
Default as to a Partner under Sections 20.01(a), (b), (c), (d),
or (e), unless all of the remaining, non-defaulting Partners
agree, in writing, to continue the business of the Partnership,
or (iv) upon an Event of Default as to Partner under Section
20.01(f) if the non-defaulting Partners elect to dissolve the
Partnership.
SECTION 22. PURCHASE OF DEFAULTING PARTNER'S INTEREST
22.01 Upon the occurrence of any Event of Default
by any Partner (the "Defaulting Partner"), the other Partner(s)
(the "Remaining Partner(s)") shall have the right to acquire the
Partnership interest of the Defaulting Partner for cash, in
proportion to the respective Partner Percentage of the Remaining
Partners, or if only one Partner remains, all of the Defaulting
Partner's interest, at a price determined pursuant to the
procedure set forth in Section 22.04. If any Remaining Partner
should elect not to purchase its pro rata share of the Defaulting
Partner's interest, the remaining Partner(s) may purchase the pro
rata share of the Defaulting Partner's interest to which the
Partner who chooses not to participate in the buy out of the
Defaulting Partner's interest would otherwise be entitled. The
Remaining Partner(s) may notify the Defaulting Partner at any
time within thirty (3) days of their knowledge of an Event of
Default of its or their election to institute the procedures set
forth in Section 22.04. Upon receipt of notice of the
determination of the Net Fair Market Value of the Defaulting
Partner's interest, the Remaining Partner(s) may notify the
Defaulting Partner of its or their election to purchase the
interest of the Defaulting Partner.
28
22.02 The closing of any purchase pursuant to this
Section 22 shall take place at the principal office of the
Partnership, unless otherwise mutually agreed by the Remaining
Partner(s), on a date specified by the Remaining Partner(s) that
is not less than ten (10) days following receipt of notice of
determination of the Net Fair Market Value of the Defaulting
Partner's Partnership interest pursuant to Sections 22.04 or
22.05. Upon closing of such purchase, the Remaining Partner or
Partners may elect to offset against the purchase price the
amount of any loss, damage or injury, the amount of which has
been established by a final nonappealable judgment, suffered by
it or incurred as a result of the default of the Defaulting
Partner.
22.03 The right of a single Remaining Partner to
elect to acquire the entire interest of the Defaulting Partner as
set forth in this Section 22, is independent of the Remaining
Partner' s right to elect to dissolve and terminate the
Partnership pursuant to Section 21 of this Agreement by sixty
(60) days written notice to the Defaulting Partner.
22.04 The "Net Fair Market Value" of an interest in
the Partnership for purposes of a purchase pursuant to this
Section 22 shall be determined as follows:
(a) The Partners shall first attempt to agree
upon the "Net Fair Market Value" of the Partnership as a whole.
The "Net Fair Market Value" of the Partnership shall mean the
cash price at which a sophisticated purchaser would purchase, and
a sophisticated seller would sell, one hundred percent (100%) of
the interests in the Partnership, with neither party being under
any compulsion to effect such transaction and with both parties
being reasonably informed as to all material facts.
(b) In the event the Partners are unable to
mutually agree upon the Net Fair Market Value of the Partnership
for purposes of Section 22.04 within thirty (30) days of the date
the remaining Partners notify the Defaulting Partner to institute
the procedures set forth in Section 22.04, the Partners shall
then attempt to agree upon the appointment of two disinterested
appraisers who shall be members of the American Institute of
Appraisers. If the Partners are unable to agree upon the
selection of two appraisers within seventy five days, then each
partner shall, within ten (10) days thereafter, select a single
appraiser so qualified and such two appraisers shall select a
third appraiser so qualified. Each appraiser so selected shall
furnish the Partners with a written appraisal within ninety (90)
days of the selection, setting forth such appraiser's
determination of the Net Fair Market Value of the Partnership.
The average of the two closest valuation of such appraisers
29
shall be treated as the Net Fair Market Value of the Partnership,
and such amount shall be final and binding on the Partners. The
cost of such appraisal shall be an expense of the Defaulting
Partner.
(c) The Net Fair Market Value of the Defaulting
Partner's Interest to be purchased pursuant to this Section 22
shall equal the greater of the positive balance, if any, in the
defaulting Partner's "Adjusted Capital Account" or $100. For
this purpose, the Defaulting Partner's Adjusted Capital Account
shall equal such Partner's Capital Account on the date of the
valuation of the Net Fair Market Value plus or minus the net gain
or loss which would have been credited or debited to such account
if: (i) the Partnership's assets had been sold on such date at a
price equal to the Net Fair Market Value of the Partnership and
(ii) the net gain or net loss so determined were allocated among
the Partners in accordance with the provisions of Section 13.
SECTION 23. WINDING UP
23.01 Upon dissolution of the Partnership pursuant
to Section 21 the Partnership shall immediately commence to wind
up its affairs and the Managing Partner shall proceed with
reasonable promptness to liquidate the business of the
Partnership and take account of the assets and liabilities of the
Partnership as promptly as is consistent with obtaining the Fair
Value of such assets. During the period of the winding up of the
affairs of the Partnership, the rights and obligations of the
Partners set forth herein with respect to the management of the
Partnership shall continue to act as such subject to Section
7.02, unless Section 6.04 applies.
SECTION 24. DISTRIBUTIONS ON TERMINATION
24.01 The proceeds from a liquidation, together
with assets distributed in kind, shall be applied and distributed
in the following order:
(a) First, to the payment of debts and
liabilities of the third-party creditors of the Partnership, in
the order of priority provided by law and to the expenses of
liquidation;
(b) Second, to the establishment of any reserve
that the Partnership may deem reasonably necessary for any
contingent or unforeseen liabilities of the Partnership or of the
Partners arising out of or in connection with the Partnership.
Such reserves shall be paid to a trust to be held for the purpose
of disbursing such reserves in payment of any contingencies, and,
30
at the expiration of such period as the Partnership shall deem
advisable, to distribute the balance thereafter remaining in the
manner provided by this Section 25;
(c) Third, to the payment of any net indemnity
obligations owed Trigen by either Adwin and/or O'Brien under
Section 13 of the Acquisition Agreement, subject to the
requirement that any such indemnity payments be deducted from the
Unreimbursed Development Costs otherwise payable to Adwin and/or
O'Brien under subparagraph (d) below;
(d) Fourth, to the payment of any Unreimbursed
Development Costs as set out in Exhibit A (as adjusted pursuant
to subparagraph (c)), pro rata to the amounts owed to individual
Partners;
(e) Fifth, to the payment of any indebtedness
owed to the Partners by the Partnership, pro rata to the amounts
owed to individual Partners;
(f) Any balance then remaining shall be
distributed to the Partners (i) to the extent of the positive
balances of their Capital Accounts (after adjustments, if any,
for payments under (c) and (d) and any net indemnity payments
owed Adwin and O'Brien by Trigen pursuant to Section 14 of the
Acquisition Agreement, which amounts, if any, shall be deducted
from Trigen's Capital Account and credited to Adwin's and
O'Brien's Capital Accounts, as the case may be), as determined
after taking into account all adjustments to Capital Accounts for
the Partnership taxable year during which the liquidation occurs,
in the proportion of such positive balances and (ii) any excess
over Capital Account balances being distributed according to the
Partner Percentage of each Partner, by the end of such taxable
year or, if later, within ninety (90) days after the date of such
liquidation. For purposes of determining Capital Accounts on
liquidation, all unrealized gains, losses and accrued income and
deductions are treated as realized and recognized immediately
before the date of distribution; and
(g) Every reasonable effort shall be made to
dispose of the assets of the Partnership so that all
distributions may be made to the Partners in cash. To the extent
such assets are not disposed of for cash, they will be offered
to each Partner and the Partner offering the highest cash price
for such assets shall have the right to purchase them, and the
proceeds from such sale(s) distributed to the Partners as
otherwise provided herein.
31
SECTION 25. DOCUMENTS AND RECORDS
25.01 All documents and records of the Partnership
including, without limitation, all financial records, vouchers,
canceled checks and bank statements shall be delivered to the
Managing Partner upon termination of the Partnership. Unless
otherwise approved by the Partnership, the Managing partner shall
retain such documents and records for a period of not less than
seven (7) years and shall make such documents and records
available during normal business hours to the other Partners for
inspection and copying at the other Partners' cost and expense;
provided, however, that if there is an audit or threat of audit,
such documents and records shall be retained until the audit is
completed and any tax liability finally determined.
SECTION 26. COMPLIANCE WITH LEGAL REQUIREMENTS
26.01 This Agreement, and the obligations and
rights of the Partners under this Agreement, shall be construed
and applied, so as to be in conformity with all environmental,
regulatory and other laws and rules and regulations of
governmental bodies applicable to the Partnership, or any
Partner, or any Affiliate of a Partner. In the event that this
Agreement, or the performance by any party of its obligations
hereunder, shall conflict with, or be contrary to, any such law,
rule or regulation, the parties agree to negotiate in good faith
to amend or modify this Agreement so as to comply with such law,
rule or regulation. In furtherance thereof, the Partners
acknowledge their intent to have the Project be and remain a
"qualifying cogeneration facility" under PURPA. Accordingly and
except for the provisions of Section 18.02 as to the transfer of
interests in the Partnership to maintain" qualifying cogeneration
facility" status, if the operation of any provision in this
Agreement results or, with the passage of time, will result in
the loss of such "qualifying cogeneration facility" status, the
Partners agree to negotiate in good faith to amend or modify this
Agreement so as to retain and continue such "qualifying
cogeneration facility" status.
SECTION 27. RESOLUTION OF DISPUTES
27.01 In the event of a dispute under this
Agreement involving (1) the legal interpretation of the terms of
this Agreement, or (2) an amount of money owed a Partner under
this Agreement:
(a) Each Partner involved in the dispute and/or
the Partnership shall appoint a senior manager from its
32
management, or in the case of the Partnership, the Chief
Executive Officer of the Managing Partner, or of a Disinterested
Partner if required under Section 7.02, who shall meet within ten
(10) days of notice of such a dispute in an effort to resolve the
matter.
(b) If the matter has not been resolved within
ten (10) days of the first meeting of the managers, or if the
managers fail to meet within ten (10) days, the parties will
attempt in good faith to resolve the dispute or claim by
mediation administered by the American Arbitration Association
("AAA") under its Commercial Mediation Rules, before resorting to
arbitration. Either party may initiate mediation by filing a
submission to mediation with the AAA. The mediation shall be
conducted in Philadelphia, Pennsylvania.
(c) (i) If the matter has not been resolved
pursuant to mediation within sixty (60) days of the initiation of
mediation, or if either party fails to participate in the
mediation, the controversy shall be resolved by binding
arbitration under the commercial Arbitration Rules of the
American Arbitration Association. Where no disclosed claim or
counterclaim exceeds One Million Dollars ($1,000,000), exclusive
of interest and arbitration costs, the arbitration shall be heard
and determined by one neutral arbitrator. Where any disclosed
claim or counterclaim exceeds One Million Dollars ($1,000,000),
exclusive of interest and arbitration costs, the arbitration
shall be heard and determined by three neutral arbitrators and
shall be conducted under the Supplementary Procedures of Large,
Complex Disputes then in effect.
(ii) Either party may initiate arbitration
under this Section 27.01 by filing a demand for arbitration with
the AAA or the parties may jointly initiate arbitration by filing
a submission to arbitration. The arbitration shall be conducted
as a common law arbitration under Pennsylvania law, 42 Pa. Cons.
Stat ▇▇▇. Section 7341, and judgment upon the award rendered by
the arbitrator(s) may be entered by any court having
jurisdiction thereof. The arbitrator(s) shall have no authority
to award punitive or treble damages. The arbitration process
shall be concluded not later than three (3) months after the date
that it is initiated and the award of the arbitrator(s) shall be
accompanied by a reasoned opinion if requested by either party.
The arbitration shall be conducted in Philadelphia, Pennsylvania.
(d) (i) All deadlines specified in this Section
27 may be extended by mutual agreement of the parties.
(ii) The procedures specified in this Section
27 shall be the sole and exclusive procedures for the
33
resolution of disputes covered by this Section 27; provided,
however, that a party may seek a preliminary injunction or other
preliminary judicial relief if, in its judgment, such action is
necessary to avoid irreparable damage or to preserve the status
quo. Despite such action, the parties will continue to
participate in good faith in the procedures specified in this
Section 27.
(iii) All applicable statutes of
limitation and defenses based upon the passage of time shall be
tolled while the procedures specified in this Section 27 are
pending. The parties will take such actions, if any, required to
effectuate such tolling.
(iv) All negotiations pursuant to this
Section 27 shall be confidential and shall be treated as
compromise and settlement negotiations for purposes of the
Federal Rules of Evidence and state rules of evidence.
(e) (i) Pending final resolution of any dispute,
the parties shall continue to fulfill their respective
obligations under this Agreement.
(ii) During any dispute concerning the
payment of money due under the Agreement, the amount in
controversy shall not be paid unless and until the dispute is
resolved in favor of the party claiming entitlement to the
disputed payment.
SECTION 28. NOTICES
28.01 All notices, requests and other
communications to any Partner shall be in writing (including bank
wire, telecopier or similar writing) and shall be given to such
party at its address or telecopier number set forth at the
heading of this Agreement or such other address or telecopier
number as such Partner may specify for the purpose by notice to
such Partner. Each such notice, request or other communication
shall be effective (a) if given by telecopier, when such telecopy
is transmitted to the telecopier number specified in this Section
and the appropriate answer back is received, (b) if given by
mail, seventy-two (72) hours after such communication is
deposited in the mail with first class postage prepaid, addressed
as required, or (c) if given by any other means, when delivered
at the address specified in this section.
34
SECTION 29. CONFIDENTIALITY
29.01 (a) Confidential Information consists of:
(i) information identified at the time of
disclosure as confidential, proprietary or secret by the provider
or its partners, employees, agents, attorneys or consultants;
(ii) information involving the economic
plans, development, construction, permitting, financing,
equipment procurement, fuel procurement, power sales, feasibility
assessments of, or parties involved with, the Project;
(iii) the terms or proposed terms of any
existing or proposed agreement between or among the Partners; and
(iv) analyses, computations, studies,
documents and records, prepared by either party or its employees,
agents or representatives which contain or otherwise reflect or
are generated from information furnished by the other party, its
partners, employees, agents, attorneys or consultants with
respect to the Partnership or the Project.
(b) Confidential Information shall not include:
(i) information which is in the public
domain at the time of disclosure;
(ii) information which becomes publicly known
through no wrongful act of the receiver, its Affiliates,
attorneys, consultants or other third party;
(iii) information which is or becomes
known to the receiver from a third party without a similar
confidentiality obligation to the provider, and without breach of
this Agreement;
(iv) information which is approved for
release in writing by the provided; or
(v) information which the Partners
unanimously agree should be made public as part of the financing
or development or operation of the Project.
29.02 Confidential Information may be disclosed as
required to carry out the purpose of the Partnership; provided,
however, that any Confidential Information disclosed, to or
obtained by, any Partner with respect to the Project and all
other Confidential Information obtained by any Partner shall be
held in the strictest confidence by the receiver. The receiver
35
shall not disclose, make public, or disseminate in any way any
Confidential Information except as expressly permitted by this
Agreement. The receiver shall take the strictest precautions to
protect against unauthorized and inadvertent disclosure of
Confidential Information and shall not disclose Confidential
Information to any party without the prior written consent of the
provider.
SECTION 30. GENERAL CONTRACT TERMS
30.01 Further Assurances. Each of the Partners
will execute and deliver such further instruments, and do such
further acts and things as may be reasonably requested to carry
out the intent and purposes of this Agreement.
30.02 Survival. All payment obligations which
shall have arisen under this Agreement shall survive termination
of this Agreement. The indemnification obligations of the
Partners under this Agreement shall survive termination of this
Agreement.
30.03 Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the
Commonwealth of Pennsylvania. Subject to the provisions of
Section 27, for the purposes of any suit, action or proceeding
arising out of the Project, this Agreement, or any of the Project
Documents, each Partner hereby consents and submits to the
exclusive jurisdiction and venue of any of the courts of the
Commonwealth of Pennsylvania and the United States District Court
for the Eastern District of Pennsylvania and irrevocably agrees
that service of process by certified mail, return receipt
requested addressed as provided in Section 28 shall be deemed in
every respect effective and valid personal service of process.
Each Partner irrevocably waives any objection which it may now or
hereafter have to the laying of venue in such courts and any
claim that such suit, action or proceeding has been brought in an
inconvenient forum.
30.04 Complete Agreement; Amendments. This
Agreement represents the complete agreement and understanding of
the parties with respect to the Project and there are no other
agreements, oral or written, with respect to the subject matter
hereof. With the exception of an amendment pursuant to Section
6.03, this Agreement may not be modified or amended except by
written consent of all Partners.
30.05 Successors in Interest. All provisions of
this Agreement shall be binding upon, inure to the benefit of,
and be enforceable by and against the successors and permitted
assigns of any of the parties to this Agreement.
36
30.06 Severability. Each provision of this
Agreement shall be considered severable, and if for any reason
any provision which is not essential to the effectuation of the
basic purposes of the Agreement is determined to be invalid and
contrary to any existing or future law, such invalidity shall not
impair the operation of or affect those provisions of this
Agreement that are valid.
IN WITNESS WHEREOF, the Partners have executed this Amended
and Restated Partnership Agreement as of the date written above.
O'BRIEN (SCHUYLKILL) COGENERATION, TRIGEN-SCHUYLKILL
INC. COGENERATION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇.▇. ▇▇▇▇▇
Date March 1, 1996 Date March 1, 1996
ADWIN (SCHUYLKILL) COGENERATION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Date March 1, 1996
37
Exhibit A
Partner Capital Accounts
Unreimbursed Project Equity Total
Development Costs Contribution
Adwin $3,599,666 $10,000,000 $13,599,666
O'Brien $3,473,988 $10,000,000 $13,473,988
Trigen -0- $10,000,000 $10,000,000
1
Exhibit B
List of Project Documents
Amended and Restated Project Services and Development
Agreement, dated as of September 17, 1993, by and between Grays
Ferry Cogeneration Partnership and Philadelphia United Power
Corporation.
Amended and Restated Site Lease dated December 17, 1993,
between Philadelphia Thermal Energy Corporation and Grays Ferry
Cogeneration Partnership.
Amended and Restated Steam Venture Agreement dated September
17, 1993, by and among Philadelphia Thermal Energy Corporation,
Philadelphia United Power Corporation, Adwin Equipment Company,
and O'Brien Environmental Energy, Inc.
Agreement Relating to Amended and Restated Steam Venture
Agreement and Amended and Restated Project Services and
Development Agreement dated September 29, 1995, by and among
Trigen-Philadelphia Energy Corporation, Philadelphia United Power
Corporation, Adwin Equipment Company, O'Brien Environmental
Energy, Inc., and Grays Ferry Cogeneration Partnership.
Dock Facility Service Agreement dated as of November 11,
1991, by and among Philadelphia Thermal Development Corporation,
Philadelphia Thermal Energy Corporation, and Grays Ferry
Cogeneration Partnership.
Fuel Management Agreement dated ___, by and between Adwin
(Schuylkill) Cogeneration, Inc. and Grays Ferry Cogeneration
Partnership.
Construction Management Agreement dated February 20, 1996,
by and between NRG Generating Company and Grays Ferry
Cogeneration Partnership.
Agreement for Engineering, Procurement, and Construction
Services, as amended by Amendments Nos. 1 through 4, between
Grays Ferry Cogeneration Partnership and Westinghouse Electric
Corporation, dated as of August 31, 1995.
Agreement for Purchase of Electric Output (Phases I and II)
dated as of July 28, 1992, between Grays Ferry Cogeneration
Partnership and PECO Energy Company.
Contingent Capacity Purchase Addendum to the Agreement for
Purchase of Electric Output (Phases I and II) dated as of
B-1
September 17, 1993, between Grays Ferry Cogeneration Partnership
and PECO Energy Company.
Letter Agreement dated March 30, 1995, pursuant to which
PECO Energy Company tendered its Activation Notice under Section
3.3 of the Agreement for Purchase of Electric Output (Phases 1
and 2).
Amended and Restated Steam Purchase Agreement dated
September 17, 1993, among Grays Ferry Cogeneration Partnership,
Adwin Equipment Company, O'Brien Environmental Energy, Inc. and
Trigen-Philadelphia Energy Corporation.
Credit Agreement by and between Grays Ferry Cogeneration
Partnership and Westinghouse Electric Corporation dated as of
August 31, 1995.
Credit Agreement dated March 1, 1996, by and between Grays
Ferry Cogeneration Partnership and Chase Manhattan Bank, and its
participating Lenders.
Acquisition Agreement dated March 1, 1996, by and among
Adwin (Schuylkill) Cogeneration, Inc., O'Brien (Schuylkill)
Cogeneration, Inc., and Trigen-Schuylkill Cogeneration, Inc.
Gas Sales Agreement dated March 1, 1996, by and among Aquila
Energy Marketing Corporation, Utilicorp United, Inc., and Grays
Ferry Cogeneration Partnership.
Amended and Restated Utility Relocation Agreement for
Engineering and Construction Services dated as of September 27,
1995, by and between Grays Ferry Cogeneration Partnership and
Westinghouse Electric Corporation.
Gas Service Agreement dated March 1, 1996; by and between
Philadelphia Facilities Management Corporation and Grays Ferry
Cogeneration Partnership.
Relocation Agreement dated February 28, 1996, by and between
Grays Ferry Cogeneration Partnership and PECO Energy Company.
Equipment Subcontract Agreement dated as of August 31, 1995,
by and between Grays Ferry Services Partnership and Ferry
Services Partnership and Westinghouse Electric Corporation.*
* To be terminated pursuant to Termination Agreement dated
March 1, 1996, by and between Grays Ferry Services Partnership
and Westinghouse Electric Corporation.
B-2
Agreement for Assignment and Assumption of Option to
Purchase Combusion Turbine dated as of August 31, 1995, by and
among Westinghouse Electric Corporation, Adwin Equipment Company,
O'Brien (Schuylkill) and Cogeneration, Inc. and O'Brien
Environmental Energy, Inc.**
Agreement for Use In Commonn of Water Conveyance System
dated March 1, 1996, by and between PECO Energy Company, Trigen-
Philadelphia Energy Corporation and Grays Ferry Cogeneration
Partnership.
Amended and Restated Option to Purchase Capacity
Agreement between Grays Ferry Cogeneration Partnership and Adwin
Equipment Company, dated March 1, 1996.
Consent with respect to the Project Services Agreement
between PUPCO and Grays Ferry Cogeneration Partnership dated
March 1, 1996.
Consent with respect to the Steam Venture Agreement among
PUPCO, TPEC, AEC and O'Brien Environmental Energy dated March 1,
1996.
Consent with respect to the Steam Purchase Agreement between
the Partnership and TPEC dated March 1, 1996.
Consent with respect to the Dock Facility Agreement among
Philadelphia Thermal Development Corporation, TPEC, and the
Partnership dated March 1, 1996.
Assignment and Assumption Agreement among the Partnership,
O'Brien, and Adwin dated March 1, 1996.
Escrow Agreement among O'Brien, Adwin, Purchaser and
Ballard, Spahr, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇.
** To be terminated pursuant to Termination Agreement dated
February , 1996, by and among Westinghouse Electric Corporation,
Adwin Equipment Company, O'Brien (Schuylkill) Cogeneration, Inc.
and O'Brien Environmental Energy, Inc.
B-3
Schedule 3.03
Grays Ferry Congeneration Partnership
Current Liabilities
▇.▇. ▇▇▇▇ 616.73
826.62 1,443.35
▇. ▇▇▇▇▇▇ 2,163.54
4,271.87
2,829.74
2,500.00 11,765.15
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 58,370.00
1,318.50
57,890.50
4,658.09 122,237.09
Dames & ▇▇▇▇▇ 1,988.75
1,462.94
1,525.81
894.86
1,335.05 7,207.41
▇▇▇▇▇▇▇▇ 177,782.10
14,282.00
2,536.18
65,000.00 259,600.28
Skadden, Arps 1,016,465.00
150,000.00
600,000.00 1,766,465.00
▇▇▇▇▇▇▇▇▇▇ Park 850,000.00
Calpine 8,255.00
2,839.31
755.00
2,585.84
3,840.84
250,000.00 268,275.99
Stone & ▇▇▇▇▇▇▇ 61,493.13
PECO - Raytheon 5,238.19
Westinghouse 88,000.00
▇▇▇▇▇ ▇▇▇▇▇▇ 84,731.98
Sedgewick & ▇▇▇▇▇ 7,000.00
Glass & Associates 4,406.11
5,902.23 10,308.34
▇. ▇▇▇▇▇▇▇ 1,500.00
Total A/P at 2/29/96 3,545,265.91
Schedule 3.03
Grays Ferry Cogeneration Partnership
Contingent Liabilities
WEC a) $550,000 due upon termination, per EPC AM #2
b) $100,000 due upon termination, per EPC AM #3
Chase a) $500,000 Cancellation Payment, per 10/23/95
Commitment Letter
Trigen a) $55,176 Legal Reimbursement, per 9/93
negotiations
b) $300,000 Past Due Development Fees, per ▇/▇▇
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇) $300,000 Development work and other
minor liabilities
GRAYS FERRY COGENERATION PARTNERSHIP
Estimated Project Budget
$103,000 Base EPC Price
2,000 Phantom (Subdebt Contingent Rebate)
5,670 Options
670 Amendment #2
1,230 Amendment #3
1,414 Amendment #4; Underground
550 Technical Changes in Letter Agreement
1,434 Time Value for NRG milestones, less umbrella insr
$116,017 Estimated as of 3/1/96
WESTINGHOUSE EPC BUDGET $116,100 $110,295
DRAWDOWN SCHEDULE
Retainage = 5% 5,805
PECO INTERCONNECT 3,800
PECO 11/10 Letter
OWNER'S COSTS
FUEL OIL LINE CONSTR $ 1,200
NGR CONSTR MGMT COSTS 964
+ MGP COSTS
CLOSING LEGAL COSTS 2,200
CLOSING & POST CLOSING G & A 525
CIBC Consultants 850
TETCO Res Charge 378
$.07 X 15000 X 390 DAYS - Worst
PROJECT CONTINGENCY 10,000
START UP COST 2,000
GFCP Liability Contingency 300
LENDER FEES:
Up - Front fee (Arrangement & Advisory)1.75% $ 2,978
Cost Reimbursement 1,250
Commitment Fee 0.38% 249
Agency Fee 150
LOC Comm Fee 63
WEC Up - Front Fee (Sub Debt) $515
ACQUILA Up Front Fee 500
Calpine Financial Advisory 250
PUPCO FEES:
Up - front Fee and Pipeline Reimbursement $860
Pre-Occupational Development Fees 900
Mobilization Fees 200
DEBT SERVICE RESERVE FUND $ 0
O&M SPARE PARTS INVENTORY $2,500
6.10%
148,731
1.10%
7.20% 8,772
$157,503