Exhibit 3.2
AMENDED AND RESTATED
AGREEMENT OF
LIMITED PARTNERSHIP
OF
EME HOMER CITY GENERATION L.P.
TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINITIONS...................................................................................1
"ACT".................................................................................................1
"ADJUSTED CAPITAL ACCOUNT"............................................................................1
"ADJUSTED CAPITAL ACCOUNT DEFICIT"....................................................................1
"AFFILIATE"...........................................................................................1
"AGENT"...............................................................................................1
"AGREED VALUE"........................................................................................2
"AGREEMENT"...........................................................................................3
"ALLOCATION YEAR".....................................................................................3
"CAPITAL ACCOUNTS"....................................................................................3
"CAPITAL CONTRIBUTIONS"...............................................................................3
"CERTIFICATE".........................................................................................3
"CODE"................................................................................................3
"DEPRECIATION"........................................................................................3
"DISSOLUTION EVENT"...................................................................................4
"FISCAL YEAR".........................................................................................4
"GENERAL PARTNER".....................................................................................4
"GP INTEREST".........................................................................................4
"INTEREST HOLDER".....................................................................................4
"LIMITED PARTNER".....................................................................................4
"LIQUIDATOR"..........................................................................................4
"LP INTEREST".........................................................................................4
"MAJORITY INTEREST"...................................................................................4
"NONDEDUCTIBLE EXPENDITURE"...........................................................................4
"NONRECOURSE DEDUCTIONS"..............................................................................4
"PARTICIPATION AGREEMENTS"............................................................................4
"PARTNER".............................................................................................4
"PARTNER NONRECOURSE DEBT MINIMUM GAIN"...............................................................4
"PARTNER NONRECOURSE DEBT"............................................................................5
"PARTNER NONRECOURSE DEDUCTIONS"......................................................................5
"PARTNERSHIP".........................................................................................5
"PARTNERSHIP INTEREST"................................................................................5
"PARTNERSHIP MINIMUM GAIN"............................................................................5
"PERCENTAGE INTEREST".................................................................................5
"PERMITTED TRANSFER"..................................................................................5
"PERSON"..............................................................................................5
"PROFITS" and "LOSSES"................................................................................5
"REGULATIONS".........................................................................................6
"TRANSFER"............................................................................................6
ARTICLE 2. FORMATION OF PARTNERSHIP; PURPOSE............................................................6
2.1. FORMATION....................................................................................6
2.2. NAME.........................................................................................6
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2.3. REGISTERED OFFICE, REGISTERED AGENT AND PLACES OF BUSINESS...................................7
2.4. POWER OF ATTORNEY............................................................................7
2.5. TERM.........................................................................................8
2.6. CERTIFICATE OF LIMITED PARTNERSHIP...........................................................8
2.7. PURPOSE ....................................................................................8
ARTICLE 3. CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS..................................................8
3.1. GENERAL PARTNER..............................................................................8
3.2. LIMITED PARTNERS.............................................................................8
3.3. NO INTEREST..................................................................................9
3.4. LOANS FROM PARTNERS.........................................................................10
3.5. ADDITIONAL CONTRIBUTIONS....................................................................10
ARTICLE 4. CAPITAL ACCOUNTS............................................................................10
ARTICLE 5. DISTRIBUTIONS...............................................................................10
5.1. IN GENERAL..................................................................................10
5.2. LIQUIDATING DISTRIBUTIONS...................................................................10
ARTICLE 6. ALLOCATIONS OF PROFITS AND LOSSES...........................................................11
6.1. PROFITS.....................................................................................11
6.2. LOSSES......................................................................................11
6.3. LIMITATIONS ON ALLOCATIONS OF LOSSES........................................................11
6.4. SPECIAL ALLOCATIONS.........................................................................11
6.5. CURATIVE ALLOCATIONS........................................................................12
6.6. OTHER ALLOCATION RULES......................................................................13
6.7. TAX ALLOCATIONS; CODE SECTION 704(c)........................................................14
ARTICLE 7. TAX MATTERS.................................................................................15
7.1. PREPARATION OF TAX RETURNS..................................................................15
7.2. TAX ELECTIONS...............................................................................15
7.3. TAX CONTROVERSIES...........................................................................16
ARTICLE 8. BUSINESS MANAGEMENT AND OPERATION; INDEMNIFICATION..........................................16
8.1. POWERS OF GENERAL PARTNER...................................................................16
8.2. DUTIES OF GENERAL PARTNER...................................................................17
8.3. PROHIBITED ACTIONS AND ACTIONS REQUIRING LIMITED PARTNER APPROVAL...........................18
8.4. REIMBURSEMENT OF THE GENERAL PARTNER........................................................19
8.5. PARTNERSHIP FUNDS...........................................................................19
8.6. OUTSIDE ACTIVITIES..........................................................................19
8.7. LIMITED LIABILITY; INDEMNIFICATION..........................................................19
8.8. BOOKS, RECORDS, AND ACCOUNTING..............................................................20
8.9. FISCAL YEAR; TAXABLE YEAR...................................................................21
ARTICLE 9. LIMITED PARTNER RIGHTS AND OBLIGATIONS......................................................21
9.1. LIMITATION OF LIABILITY.....................................................................21
9.2. MANAGEMENT OF BUSINESS......................................................................21
9.3. OUTSIDE ACTIVITIES..........................................................................21
9.4. RETURN OF CAPITAL...........................................................................21
9.5. RIGHTS OF LIMITED PARTNERS..................................................................21
9.6. ABILITY TO REMOVE GENERAL PARTNER...........................................................23
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ARTICLE 10. TRANSFERS OF INTERESTS......................................................................22
10.1. GENERAL PARTNER.............................................................................22
10.2. LIMITED PARTNERS............................................................................23
ARTICLE 11. ADDITIONAL PARTNERS.........................................................................24
ARTICLE 12. DISSOLUTION AND LIQUIDATION.................................................................24
12.1. DISSOLUTION.................................................................................24
12.2. LIQUIDATION.................................................................................25
12.3. DISTRIBUTION IN KIND........................................................................26
12.4. CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP..........................................27
12.5. NO GENERAL PARTNER LIABILITY FOR RETURN OF CAPITAL..........................................27
12.6. WAIVER OF PARTITION.........................................................................27
12.7. COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS..........................................28
12.8. NON-DISSOLVING CODE SECTION 708(B) TERMINATIONS.............................................29
12.9. ALLOCATIONS DURING THE PERIOD OF LIQUIDATION................................................29
12.10. VOLUNTARY BANKRUPTCY FILINGS................................................................29
ARTICLE 13. AMENDMENT OF AGREEMENT......................................................................29
ARTICLE 14. GENERAL PROVISIONS..........................................................................29
14.1. PERSONAL PROPERTY...........................................................................29
14.2. ADDRESSES AND NOTICES.......................................................................29
14.3. HEADINGS....................................................................................30
14.4. BINDING EFFECT..............................................................................30
14.5. INTEGRATION.................................................................................30
14.6. WAIVER......................................................................................30
14.7. COUNTERPARTS................................................................................30
14.8. SEVERABILITY................................................................................30
14.9. APPLICABLE LAW..............................................................................30
iii
EME HOMER CITY GENERATION L.P.
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, is
dated as of [ ], 2001, and is entered into by and among MISSION ENERGY WESTSIDE,
INC., a California corporation ("Mission"), as general partner, and CHESTNUT
RIDGE ENERGY COMPANY, a California corporation ("Chestnut Ridge"), as a limited
partner.
WHEREAS, the parties hereto entered into an Agreement of
Limited Partnership dated as of October 26, 1998; and
WHEREAS, the parties now wish to amend and restate such
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS
The following definitions shall for all purposes, unless
otherwise clearly indicated to the contrary, apply to the terms used in this
Agreement.
"ACT" means the
Pennsylvania Revised Uniform Limited
Partnership Act, 15 Pa.C.S.A. ch.85, as amended from time to time (or any
corresponding provisions of succeeding law).
"ADJUSTED CAPITAL ACCOUNT" means, with respect to an Interest
Holder, an account the balance (which may be a deficit balance) in which is
equal to the balance in such Interest Holder's Capital Account as of the end of
the relevant Allocation Year, after giving effect to the following adjustments:
(i) credit to such Capital Account any amounts which such Interest Holder is
obligated to restore pursuant to any provision of this Agreement or is deemed to
be obligated to restore to the Partnership pursuant to Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5); and (ii) debit to such Capital Account such
Interest Holder's share of items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted
Capital Account is intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means, with respect to an
Interest Holder, the deficit balance, if any, in such Interest Holder's Adjusted
Capital Account.
"AFFILIATE" means, with respect to any Person (i) any other
Person who bears a relationship to the first Person described in either Code
Section 267(b) (substituting, however, "10 percent" for "50 percent" everywhere
in Code Section 267) or Code Section 707(b) (substituting, however, "10 percent"
for "50 percent" everywhere in Code Section 707), and (ii) any officer,
director, general partner, or trustee of any Person described in clauses (i) or
(ii) of this sentence.
"AGENT" has the meaning specified in Section 2.4.1.
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"AGREED VALUE" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) The initial Agreed Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset;
(ii) The Agreed Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values (taking Code Section
7701(g) into account) as of the following times: (a) the acquisition of an
additional interest in the Partnership by any new or existing Interest Holder in
exchange for more than a DE MINIMIS Capital Contribution; (b) the distribution
by the Partnership to an Interest Holder of more than a DE MINIMIS amount of
Partnership property as consideration for an interest in the Partnership; (c)
the liquidation of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); and (d) at such other times as the General Partner shall
reasonably determine necessary or advisable in order to comply with Regulations
Sections 1.704-1(b) and 1.704-2; provided that the adjustments described in
clauses (a) and (b) of this paragraph shall be made only if the General Partner
reasonably determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Interest Holders in the
Partnership;
(iii) The Agreed Value of any Partnership asset distributed to
any Interest Holder shall be the gross fair market value (taking Code Section
7701(g) into account) of such asset on the date of distribution; and
(iv) The Agreed Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 732(d), Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into account in
determining capital accounts pursuant to Regulations Section
1.704-1(b)(2)(iv)(m); provided, however, that Agreed Values shall not be
adjusted pursuant to this clause (iv) to the extent that an adjustment pursuant
to clause (ii) hereof is made in connection with a transaction that would
otherwise result in an adjustment pursuant to this clause (iv).
The Agreed Value of any interest in another partnership held
by the Partnership shall be determined as provided above, except that (a) at any
time at which such Agreed Value is determined pursuant to clause (i), (ii) or
(iii) above, it shall be increased by the Partnership's share of the liabilities
of such other partnership under Code Section 752 at such time and (b) Agreed
Value shall be increased or decreased to reflect subsequent increases or
decreases in the Partnership's share of such liabilities or increases in the
Partnership's individual liabilities by reason of its assumption of liabilities
of such other partnership or decreases in the Partnership's individual
liabilities by reason of such other partnership's assumption thereof to the same
extent and at the same time that it would be so increased or decreased if it
were actually the federal income tax basis of the Partnership's interest in such
other partnership.
If the Agreed Value of an asset has been determined or
adjusted pursuant to this definition of Agreed Value, such Agreed Value shall
thereafter be adjusted by
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Depreciation with respect to such asset taken into account in computing Profits
and Losses.
Determinations of gross fair market value for purposes of this
definition of Agreed Value shall be made as follows: (a) in situations described
in paragraphs (i), (ii)(a), (ii)(b) and (iii) above by agreement between the
General Partner and the Interest Holder making the contribution or receiving the
distribution as the case may be, provided, however that if the General Partner
(or any Affiliate of the General Partner) is the contributor or the distributee
such determination shall require agreement between the contributor or the
distributor and a Majority Interest; and (b) in other situations by agreement
between the General Partner and a Majority Interest. In a case in which
agreement cannot be reached as required in the foregoing provisions of this
paragraph, gross fair market value shall be determined by a mutually
acceptable independent appraiser, whose fees shall be divided equally between
the Partnership on behalf of the General Partner and the contributor or
distributee.
"AGREEMENT" means this Amended and Restated Agreement of
Limited Partnership.
"ALLOCATION YEAR" means (i) the period commencing on the date
of inception of the Partnership and ending on the next following December 31,
(ii) any subsequent twelve (12) month period commencing on January 1 and ending
on December 31, or (iii) any portion of the period described in clauses (i) or
(ii) for which the Partnership is required to allocate Profits, Losses and other
items of Partnership income, gain, loss or deduction pursuant to Article 6.
"CAPITAL ACCOUNTS" mean the capital accounts maintained with
respect to Partnership Interests pursuant to Article 4.
"CAPITAL CONTRIBUTIONS" means with respect to any Partner the
amount of money and the initial Agreed Value of any property (other than money)
contributed to the Partnership with respect to the interest in the Partnership
held by such Partner.
"CERTIFICATE" means the certificate of limited partnership for
the Partnership required to be filed pursuant to Section 8511 of the Act.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time (or any corresponding provisions of succeeding law).
"DEPRECIATION" means, for each Allocation Year, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such Allocation Year, except that if the
Agreed Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Allocation Year,
Depreciation shall be determined in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g)(3) or Regulations Section
1.704-3(d)(2), whichever is applicable.
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"DISSOLUTION EVENT" has the meaning assigned to that term in
Section 12.1.
"EFFECTIVE DATE" means [ ].
"FACILITY LEASES" means each of those eight Facility Lease
Agreements dated on or about the date of this Agreement by and among the
Partnership and each of ▇▇▇▇▇ City OL1 LLC, ▇▇▇▇▇ City OL2 LLC, ▇▇▇▇▇ City
OL3 LLC, ▇▇▇▇▇ City OL4 LLC, ▇▇▇▇▇ City OL5 LLC, ▇▇▇▇▇ City OL6 LLC, ▇▇▇▇▇
City OL7 LLC, ▇▇▇▇▇ City OL8 LLC, each a Delaware limited liability company.
"FEDERAL BANKRUPTCY CODE" means the United States
Bankruptcy Code of 1978, as amended from time to time, 11 U.S.C. Section 101
ET SEQ.
"FISCAL YEAR" means (i) the period commencing on the date of
inception of the Partnership and ending on the next following December 31, (ii)
any subsequent twelve-month period commencing on January 1 and ending on
December 31 and (iii) the period commencing on the immediately preceding January
1 and ending on the date on which all Partnership property has been distributed
to the Interest Holders pursuant to Section 12.2 hereof.
"GENERAL PARTNER" means Mission or its successor in interest
or any other Person admitted to the Partnership pursuant to this Agreement in
the capacity of a general partner.
"GP INTEREST" means an interest in the Partnership issued
pursuant to this Agreement to a Person in its capacity as the General Partner.
"INTEREST HOLDER" means any Person who is entitled to receive
distributions and allocations with respect to a Partnership Interest.
"LIMITED PARTNER" means, as the case may be, Chestnut Ridge or
any other Person admitted to the Partnership pursuant to this Agreement in the
capacity of a limited partner.
"LIQUIDATOR" has the meaning specified in Section 12.2.
"LP INTEREST" means an interest in the Partnership issued
pursuant to this Agreement to a Person its capacity as a Limited Partner.
"MAJORITY INTEREST" means Limited Partners whose aggregate
Percentage Interests total more than one-half of the aggregate Percentage
Interests of the Limited Partners.
"NONDEDUCTIBLE EXPENDITURE" has the meaning specified under
the definition of Profits below.
"NONRECOURSE DEDUCTIONS" has the meaning set forth in
regulations Section 1.704-2(b)(1). The amount and items of Nonrecourse
Deductions shall be determined in accordance with Regulations Sections
1.704-2(c) and 1.704-2(j)(1).
"PARTICIPATION AGREEMENTS"
means those eight Participation Agreements dated on or
about the date of this Agreement by and among the Partnership, each of ▇▇▇▇▇
City OL1 LLC, ▇▇▇▇▇ City OL2 LLC, ▇▇▇▇▇ City OL3 LLC, ▇▇▇▇▇ City OL4 LLC,
▇▇▇▇▇ City OL5 LLC, ▇▇▇▇▇ City OL6 LLC, ▇▇▇▇▇
4
City OL7 LLC, and ▇▇▇▇▇ City OL8 LLC, each a Delaware limited liability
company; [_], both in its individual capacity and solely as Owner Manager
under each Participation Agreement; General Electric Capital Corporation (in
the case of the Participation Agreement with ▇▇▇▇▇ City OL1 LLC) or Full
Service Lease Corp. (in the case of the other seven Participation
Agreements), each a Delaware corporation, as Owner Participant; ▇▇▇▇▇ City
Funding LLC, a Delaware limited liability company; [__________], both in its
individual capacity and solely as Lease Indenture Trustee under each
Participation Agreement; [____], both in its individual capacity and solely
as Security Agent under each Participation Agreement; and The Bank of New
York (as successor to United States Trust Company of New York), both in its
individual capacity and solely as Bondholder Trustee under each Participation
Agreement.
"PARTNER" means the General Partner or a Limited Partner.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set
forth in Regulations Section 1.704-2(i).
"PARTNER NONRECOURSE DEBT" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
"PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i).
"PARTNERSHIP" means EME Homer City Generation L.P., a
Pennsylvania limited partnership.
"PARTNERSHIP INTEREST" means a GP Interest or an LP Interest.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in
Regulations Sections 1.704-2(b)(2) and 1.704-2(d).
"PERCENTAGE INTEREST" means, with respect to any Interest
Holder, the Interest Holder's interest, expressed as a percentage, in certain
Profits, Losses (and items thereof) and distributions of the Partnership as set
out in this Agreement and as may be amended from time to time to reflect the
transfer of Partnership Interests or the issuance of additional Partnership
Interests.
"PERMITTED TRANSFER" is defined in Section 10.2.2.
"PERSON" means an individual, a corporation, a partnership, a
trust, an unincorporated organization, an association, or any other entity.
"PLEDGE AND COLLATERAL AGREEMENT"
means that certain Pledge and Collateral Agreement dated on
or about the date of this Agreement made by Edison Mission Holdings Co., in
favor of The Bank of New York (as successor to United States Trust Company
of New York), as Collateral Agent.
"PROFITS" and "LOSSES" means, for each Allocation Year, an
amount equal to the Partnership's taxable income or loss for such Allocation
Year, determined in accordance with Code Section 703(a) (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
5
(i) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(b) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i) ("Nondeductible
Expenditures"), and not otherwise taken into account in computing Profits or
Losses pursuant to this definition shall be subtracted from such taxable income
or loss;
(iii) If the Agreed Value of any Partnership asset is adjusted
pursuant to clause (ii) or clause (iii) of the definition of Agreed Value
hereunder, the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such asset for purposes of computing Profits or
Losses;
(iv) Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Agreed Value
of the property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its Agreed Value;
(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Allocation Year;
(vi) To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) is required, pursuant to
Regulations Section 1.704-(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as a result of a distribution other than in
liquidation of an Interest Holder's interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases such basis) from
the disposition of such asset and shall be taken into account for purposes of
computing Profits or Losses; and
(vii) Notwithstanding any other provision of this definition,
any items which are specially allocated pursuant to Section 6.4 or Section 6.5
hereof shall not be taken into account in computing Profits or Losses.
"REGULATIONS" means the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"TRANSFER" means, as a noun, any voluntary or involuntary
transfer, sale, pledge, hypothecation, or other disposition and, as a verb,
voluntarily or involuntarily to transfer, sell, pledge, hypothecate, or
otherwise dispose of.
6
ARTICLE 2. FORMATION OF PARTNERSHIP; PURPOSE
2.1. FORMATION. The General Partner and the Limited Partner
have formed the Partnership as a limited partnership pursuant to the
provisions of the Act. The General Partner and the Limited Partner have
entered into this Amended and Restated Agreement to set forth the rights and
obligations of the Partners and certain matters related thereto. Except as
expressly provided herein to the contrary, the rights and obligations of the
Partners and the administration, dissolution, and termination of the
Partnership shall be governed by the Act.
2.2. NAME. The name of the Partnership shall be, and the
business of the Partnership shall be conducted under the name of, "EME Homer
City Generation L.P."; provided, however, that (a) the Partnership's business
may be conducted under any other name or names deemed advisable by the General
Partner, (b) the General Partner in its sole discretion may change the name of
the Partnership at any time and from time to time, and (c) the name of the
Partnership and any name under which the Partnership conducts business shall
include "L.P." or "Limited Partnership" (or similar words or letters) where
necessary for purposes of maintaining the limited liability status of the
Limited Partners or otherwise complying with the laws of any jurisdiction that
so requires.
2.3. REGISTERED OFFICE, REGISTERED AGENT AND PLACES OF
BUSINESS. The registered office of the Partnership in the Commonwealth of
Pennsylvania is CT Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇. The General Partner may change the registered office of the Partnership
in the Commonwealth of
Pennsylvania upon giving notice of such change to the
other Partners. The Partnership may establish other offices at such places as
the General Partner deems advisable.
2.4. POWER OF ATTORNEY.
2.4.1. The Limited Partners hereby constitute and appoint the
General Partner or, if a Liquidator shall have been selected pursuant to Section
12.2, the Liquidator, with full power of substitution, as their true and lawful
agent and attorney-in-fact ("Agent"), with full power and authority in such
Partners' name, place, and stead to:
2.4.1.1. execute, swear to, acknowledge, deliver, file, and
record in the appropriate public offices (A) all certificates,
documents, and other instruments (including, without limitation, this
Agreement and the Certificate and any amendments or restatements
thereof) that the Agent deems appropriate or necessary to form or
qualify, or continue the existence or qualification of, the Partnership
as a limited partnership (or a partnership in which the Limited
Partners have limited liability) under the laws of any state or
jurisdiction; (B) all certificates, documents, and other instruments
that the Agent deems appropriate or necessary to reflect any
amendments, changes, or modifications of this Agreement in accordance
with its terms; (C) all conveyances and other documents or instruments
that the Agent deems appropriate or
7
necessary to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement; and (D) all certificates,
documents, and other instruments relating to the admission,
substitution or withdrawal of any Partner pursuant to Article 10 or 11
and other events described in Article 10 or 11; and
2.4.1.2. execute, swear to, acknowledge, and file all ballots,
consents, approvals, waivers, certificates, documents, and other
instruments that the Agent deems appropriate or necessary in order to
make, evidence, give, confirm, or ratify any vote, consent, approval,
agreement, or other action that is made or given by the Partners
hereunder, is deemed to be made or given by the Partners hereunder, is
consistent with the terms of this Agreement, or is deemed by the Agent
to be appropriate or necessary to effectuate the terms or intent of
this Agreement or the purposes of the Partnership; provided, however,
that, if any vote or approval of the Limited Partners is specifically
required for an action by any provision of this Agreement, the Agent
may exercise the power of attorney made in this Section 2.4.1.2 to take
such action only after such vote or approval is obtained.
2.4.2. The foregoing power of attorney is hereby declared to
be irrevocable and a power coupled with an interest, and it shall survive and
not be affected by the subsequent termination, incapacity, or bankruptcy of any
Limited Partner and the transfer of all or any portion of a Limited Partner's
Partnership Interest and shall extend to a Limited Partner's transferees and
assigns. The Limited Partners hereby agree to be bound by any representations
made by the Agent acting in good faith pursuant to such power of attorney; and
the Limited Partners hereby waive any and all defenses that may be available to
contest, negate, or disaffirm the action of the Agent taken in good faith
pursuant to such power of attorney. The Limited Partners shall execute and
deliver to the Agent, within fifteen days after receipt of the Agent's request
therefor, such further designations, powers of attorney, and other instruments
as the Agent deems appropriate or necessary to effectuate the terms or intent of
this Agreement or the purposes of the Partnership.
2.5. TERM. The term of the Partnership commenced upon the
filing of the Certificate with the
Pennsylvania Secretary of State and shall
continue until the close of Partnership business on December 31, 2048 or such
later date as may constitute the estimated expiration of the useful life of
the Facility, unless the Partnership is earlier terminated in accordance with
the provisions of Section 12.10.
2.6. CERTIFICATE OF LIMITED PARTNERSHIP. The General
Partner shall file an amendment to the Certificate for the Partnership with
the Secretary of State of the Commonwealth of
Pennsylvania as required by the
Act. The Certificate, and any further amendment to the Certificate, shall
address only the matters set forth in Section 8511(a)(1), (2), (3) and (4) of
the Act. The General Partner shall deliver to each Limited Partner a copy of
the Certificate and any further certificate of amendment thereto. The General
Partner shall cause to be filed such other certificates or documents as may
be required for the operation, and qualification of a limited partnership in
Pennsylvania and any other state in which the Partnership may elect to do
business. The General Partner shall thereafter file any necessary
certificates of amendment to the Certificate and such
8
other certificates and documents and do all things requisite to the maintenance
of the Partnership as a limited partnership (or as a partnership in which the
Limited Partners have limited liability) under the laws of
Pennsylvania and any
other state in which the Partnership may elect to do business.
2.7. PURPOSE. The purpose and business of the Partnership
shall be to engage in acquiring, leasing, owning, and/or operating the ▇▇▇▇▇
City Electric Generation Station located near Indiana,
Pennsylvania, and certain
facilities and other assets associated therewith and ancillary thereto, to enter
into financing arrangements in respect thereof and to engage in all other lawful
business activities in connection therewith, including those activities
contemplated by the Participation Agreements.
ARTICLE 3. CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS
3.1. GENERAL PARTNER. Mission has, in its capacity as the
General Partner, contributed to the Partnership such amount and, as of the
Effective Date, shall own the Percentage Interest, set forth opposite its
name in SCHEDULE A hereto.
3.2. LIMITED PARTNERS. At the request of the General
Partner, Chestnut Ridge, in its capacity as a Limited Partner, has
contributed to the Partnership such amount and, as of the Effective Date,
shall own the Percentage Interest, set forth opposite its name in SCHEDULE A
hereto.
3.3. NO INTEREST. No interest shall be paid by the Partnership
on any Capital Contributions or on the amount in any Partner's Capital Account.
3.4. LOANS FROM PARTNERS. Loans or other similar advances by a
Partner to or for the account of the Partnership shall not be considered Capital
Contributions. Any such loans or other similar advances shall be made subject to
such terms and conditions acceptable to the lending Partner as the General
Partner determines to be in the best interests of the Partnership.
3.5. ADDITIONAL CONTRIBUTIONS. Except as provided in this
Section 3.5 or as required pursuant to an agreement relating to the purchase by
any person other than Mission or Chestnut Ridge of a Partnership Interest in the
Partnership, no Partner shall be entitled to make additional capital
contributions to the Partnership, except upon the approval of the General
Partner; PROVIDED that each Partner shall be given the opportunity for 30 days
after written notice from the General Partner to make such Partner's PRO RATA
share of additional contributions. If such rights of contribution are exercised
by some but not all of the partners, the General Partner shall so notify all of
the Partners. Thereafter, the Partners that elected to exercise such rights of
contribution shall have the further right to make additional contributions up to
the amount of the contribution shortfall on a PRO RATA basis, or as they may
otherwise agree, within 10 days of receipt of such second notice, and the
respective Partnership Interests of all the Partners shall be adjusted to
reflect such unequal additional contributions. Nothing in this Section 3.5 shall
require the General Partner to give the initial written notice requesting
additional Capital contributions.
9
ARTICLE 4. CAPITAL ACCOUNTS
The Partnership shall maintain for each Interest Holder a
single Capital Account with respect to the Interest Holder's Partnership
Interest in accordance with the regulations issued pursuant to Section 704 of
the Code. The Capital Account of each Interest Holder shall be maintained for
such Person in accordance with the following provisions:
(a) To each Person's Capital Account there shall be credited
such Person's Capital Contributions, and such Person's distributive
share of Profits and any items in the nature of income or gain which
are specially allocated pursuant to Section 6.4 or Section 6.5 or
Section 6.6.5 hereof, and the amount of any Partnership liabilities
which are assumed by such Person or which are secured by any
Partnership property distributed to such Person.
(b) To each Person's Capital Account there shall be debited
the amount of cash and the Agreed Value of any Partnership property
distributed to such Person pursuant to any provision of this Agreement,
such Person's distributive share of Losses and any items in the nature
of expenses or losses which are specially allocated pursuant the
Section 6.4 or Section 6.5 or Section 6.6.5 hereof, and the amount of
any liabilities of such Person which are assumed by the Partnership or
which are secured by any property contributed by such Person to the
Partnership.
(c) In the event that all or a portion of a Partnership
Interest is transferred in accordance with the terms of this Agreement,
the transferee shall succeed to the Capital Account of the transferor
to the extent that it relates to the transferred interest.
(d) In determining the amount of any liability for purposes of
paragraphs (a) and (b) of this definition, there shall be taken into
account Code Section 752(c) and any other applicable provisions of the
Code and Regulations.
The principal amount of a promissory note which is not readily
traded on an established securities market and which is contributed to the
Partnership by the maker of the note shall not be included in the Capital
Account of any Interest Holder until the Partnership makes a taxable disposition
of the note or until (and to the extent) principal payments are made on the
note, all in accordance with Regulations Section 1.704-1(b)(2)(iv)(d)(2).
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and
applied in a manner consistent with such Regulations. To the extent that such
Regulations require that adjustments other than those set out above or in
Section 6.4.6 be made to the Capital Accounts of the Partners, such adjustments
shall be made, but without duplication of any
10
such required adjustments that are effected through the definitions of "Profits"
and "Losses" or Section 6.4.6 or Section 6.6.6.
ARTICLE 5. DISTRIBUTIONS
5.1. IN GENERAL. The General Partner shall determine from time
to time whether the Partnership has funds in excess of those reasonably needed
by the business of the Partnership (including reasonable reserves for operating
expenses, for debt service, for repairs, for capital expenditures, improvements,
and additions, and for contingencies). Such determination shall be made as of
the end of each calendar year and the excess funds so determined with respect to
a calendar year, if any, shall be distributed to the Partners within 60 days
after the end of such calendar year. The General Partner may also determine in
its sole discretion to make additional distributions of excess Partnership funds
to the Partners. Any such annual or additional distributions shall be made to
the Interest Holders in proportion to their respective Percentage Interests.
Notwithstanding anything in this Section 5.1 to the contrary, however, the
Partnership shall not under any circumstances make any such distributions from
any accounts (including accounts that may accrue emission allowances or proceeds
from the sales of the same) established pursuant to the financing arrangements
entered into by the Partnership with third parties, other than in accordance
with the applicable security agreements or other financing documents governing
such accounts or restricting such distributions.
5.2. LIQUIDATING DISTRIBUTIONS. Notwithstanding Section 5.1 to
the contrary, following the dissolution of the Partnership, distributions to the
Partners shall be made in accordance with the provisions of Article 12.
ARTICLE 6. ALLOCATIONS OF PROFITS AND LOSSES
6.1. PROFITS. After giving effect to the special allocations
set forth in Sections 6.4 and 6.5 hereof, Profits for any Allocation Year shall
be allocated among the Interest Holders in proportion to their respective
Percentage Interests.
6.2. LOSSES. After giving effect to the special allocations
set forth in Sections 6.4 and 6.5 hereof, and subject to the provisions of
Section 6.3 below, Losses for any Allocation Year shall be allocated among the
Interest Holders in proportion to their respective Percentage Interests.
6.3. LIMITATIONS ON ALLOCATIONS OF LOSSES. The Losses
allocated to any Interest Holder pursuant to Section 6.2 hereof for any
Allocation Year shall not exceed the maximum amount of Losses that can be so
allocated without causing such Interest Holder to have (or to suffer an increase
to) an Adjusted Capital Account Deficit at the end of the Allocation Year. Any
Losses otherwise allocable to an Interest Holder but for the limitation set
forth in this Section 6.3 shall be reallocated among Interest Holders, if any,
having positive balances in their Adjusted Capital Accounts in accordance with
the provisions of Section 6.2, subject, however, to the limitation of the
preceding sentence and a consequent reallocation pursuant to this sentence. Any
Losses
11
which may be allocated to no Interest Holder under Section 6.2 due to such
limitation shall be allocated among the Interest Holders in the proportions
required by Regulations Section 1.704-1(b)(3).
6.4. SPECIAL ALLOCATIONS. The following special allocations
shall be made in the following order:
6.4.1. MINIMUM GAIN CHARGEBACK. Except as otherwise provided
in Section 1.704-2(f) of the Regulations, notwithstanding any other provision of
this Article 6, if there is a net decrease in Partnership Minimum Gain during
any Allocation Year, each Interest Holder shall be specially allocated items of
Partnership income and gain for such Allocation Year (and, if necessary,
subsequent Allocation Years) in an amount equal to such Interest Holder's share
of the net decrease in Partnership Minimum Gain, determined in accordance with
Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated
to each Interest Holder pursuant thereto. The items to be so allocated shall be
determined in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the
Regulations. This Section 6.4.1 is intended to comply with the minimum gain
chargeback requirement in Section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
6.4.2. PARTNER MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other
provision of this Article 6, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any
Allocation Year, each Interest Holder who has a share of the Partner Nonrecourse
Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially
allocated items of Partnership income and gain for such Allocation Year (and, if
necessary, subsequent Allocation Years) in an amount equal to such Interest
Holder's share of the net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated
to each Interest Holder pursuant thereto. The items to be so allocated shall be
determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the
Regulations. This Section 6.4.2 is intended to comply with the minimum gain
chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be
interpreted consistently therewith.
6.4.3. QUALIFIED INCOME OFFSET. If any Interest Holder
unexpectedly receives any adjustment, allocation or distribution described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership
income and gain shall be specially allocated to such Interest Holder in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, any resulting Adjusted Capital Account Deficit of such Interest
Holder as quickly as possible; provided, however, that an allocation pursuant to
this Section 6.4.3 shall be made if and only to the extent that such Interest
Holder would have an Adjusted Capital Account Deficit after all other
12
allocations provided for in this Article 6 have been tentatively made as if this
Section 6.4.3 were not in this Agreement.
6.4.4. NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for any
Allocation Year shall be allocated among the Interest Holders in proportion to
their respective Percentage Interests.
6.4.5. PARTNER NONRECOURSE DEDUCTIONS. Partner Nonrecourse
Deductions for any Allocation Year shall be allocated to the Interest Holder who
bears the economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(1).
6.4.6. CERTAIN 754 ADJUSTMENTS. To the extent an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Code Section 743(b),
Code Section 732(d) or Code Section 734(b) is required pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital
Accounts as the result of a distribution to an Interest Holder in complete
liquidation of its interest in the Partnership, the amount of such adjustment to
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis) and such gain or loss shall be specially allocated to the Interest
Holders in accordance with their interests in the Partnership as determined
under Regulations Section 1.704-1(b)(3) in the event Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Interest Holder to whom such
distribution was made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4)
applies.
6.5. CURATIVE ALLOCATIONS. The allocations set forth in
Sections 6.4.1 through 6.4.6, inclusive, and 6.6.5 hereof (the "REGULATORY
ALLOCATIONS") are intended to comply with certain requirements of the
Regulations and Internal Revenue Service advance ruling requirements. It is the
intent of the parties to this Agreement that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations of other items of income, gain, loss or deduction
pursuant to this Section 6.5. Therefore, notwithstanding any other provision of
this Article 6 (other than the Regulatory Allocations and the following
sentence), the General Partner shall make such offsetting special allocations of
Partnership income, gain, loss or deduction in whatever manner it determines
appropriate so that, after such offsetting allocations are made, each Interest
Holder's Capital Account balance is, to the extent possible, equal to the
Capital Account balance which such Interest Holder would have had if the
Regulatory Allocations were not part of this Agreement and all Partnership items
were allocated pursuant to Sections 6.1 and 6.2 hereof. In exercising its
discretion under this Section 6.5, the General Partner shall take into account
Regulatory Allocations under Sections 6.4.1 and 6.4.2 that, although not yet
made, are likely to offset other Regulatory Allocations previously made under
Sections 6.4.4 and 6.4.5.
13
6.6. OTHER ALLOCATION RULES.
6.6.1. ALLOCATIONS WHEN INTERESTS CHANGE. For purposes of
determining the Profits, Losses or any other items allocable to any period,
Profits, Losses and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Regulations thereunder;
provided, however, that any adjustments to the Agreed Value of a Partnership
asset treated as gain or loss under paragraph (iii) of the definition of
"Profits" and "Losses" or under Section 6.6.6.3 hereof shall be allocated only
to those persons who were Interest Holders immediately before the event giving
rise to such adjustment.
6.6.2. ALLOCATION OF PARTICULAR ITEMS. Except as otherwise
provided in this Agreement, all items of Partnership income, gain, loss,
deduction and any other allocations not otherwise provided for shall be divided
among the Interest Holders in the same proportions as they share Profits or
Losses, as the case may be, for the year.
6.6.3. TAX REPORTING. The Interest Holders are aware of the
income tax consequences of the allocations made by this Article 6 and hereby
agree to be bound by the provisions of this Article 6 in reporting their shares
of Partnership income and loss for income tax purposes.
6.6.4. PROFIT SHARES. Solely for purposes of determining an
Interest Holder's proportionate share of the Partnership's "excess nonrecourse
liabilities," as defined in Regulations Section 1.752-3(a), the Interest
Holders' interests in Partnership profits shall be deemed to be in proportion to
their respective shares of Profits set forth in Section 6.1.
6.6.5. MINIMUM ALLOCATIONS TO GENERAL PARTNER. Notwithstanding
the preceding provisions of this Article 6, other than Sections 6.3. and 6.4,
the General Partner shall be allocated not less than [one percent] of each item
of income, gain, deduction or loss of the Partnership for each Allocation Year.
6.6.6. BOOK ITEMS USED IN SPECIAL ALLOCATIONS. For purposes of
determining the Partnership's items of income, gain, loss or deduction for any
Allocation Year available to be allocated pursuant to Sections 6.4, 6.5 and
6.6.5 hereof, the following rules shall be applied:
6.6.6.1. Any income of the Partnership that is exempt from
federal income tax shall be taken into account as an item of income;
6.6.6.2. Any Nondeductible Expenditure of the Partnership
shall be taken into account as an item of deduction;
6.6.6.3. In the event the Agreed Value of any Partnership
asset is adjusted pursuant to paragraph (ii) or paragraph (iii) under
the
14
definition herein of "Agreed Value," the amount of such adjustment
shall be taken into account as gain or loss from the disposition of
such asset;
6.6.6.4. Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized
for federal income tax purposes shall be computed by reference to the
Agreed Value of the property disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Agreed Value;
6.6.6.5. In lieu of the depreciation, amortization and other
cost recovery deductions taken into account in computing the
Partnership's taxable income or loss there shall be taken into account
Depreciation for such Allocation Year; and
6.6.6.6. To the extent an adjustment to the adjusted tax basis
of any Partnership asset pursuant to Code Section 734(b) is required,
pursuant to Regulations Section 1.704-(b)(2)(iv)(m)(4), to be taken
into account in determining Capital Accounts as a result of a
distribution other than in liquidation of an Interest Holder's interest
in the Partnership, the amount of such adjustment shall be treated as
an item of gain (if the adjustment increases the basis of the asset) or
loss (if the adjustment decreases such basis) from the disposition of
such asset.
6.7. TAX ALLOCATIONS; CODE SECTION 704(c).
6.7.1. GENERALLY. An Interest Holder's allocable share of the
Partnership's items of income (including income exempt from tax), gain,
deduction, loss and Nondeductible Expenditure for tax purposes shall be
determined under the foregoing provisions of this Article 6 except as provided
in this Section 6.7.
6.7.2. CONTRIBUTED PROPERTY. In accordance with Code Section
704(c) and the Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the Partnership shall,
solely for tax purposes, be allocated among the Interest Holders so as to take
account of any variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Agreed Value,
determined in accordance with the definition of Agreed Value hereunder.
6.7.3. ADJUSTMENTS TO AGREED VALUE. If the Agreed Value of any
Partnership asset is adjusted pursuant to the definition of Agreed Value
hereunder, subsequent allocations of income, gain, loss and deduction with
respect to such asset for tax purposes shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Agreed Value in the same manner as under Code Section 704(c) and the Regulations
thereunder.
6.7.4. ELECTIONS. Any elections or other decisions relating to
allocations pursuant to this Section 6.7 shall be made by the General Partner in
any manner that reasonably reflects the purpose and intention of this Agreement.
Allocations
15
pursuant to this Section 6.7 are solely for purposes of federal, state and local
taxes and shall not affect, or in any way be taken into account in computing,
any Interest Holder's Capital Account or share of Profits, Losses, other items
or distributions pursuant to any provision of this Agreement.
ARTICLE 7. TAX MATTERS
7.1. PREPARATION OF TAX RETURNS. The General Partner shall
arrange for the preparation and timely filing of all returns of Partnership
income, gains, losses, deductions, credits, and other items necessary for
federal, state and local income tax purposes and shall use reasonable best
efforts to furnish to the Interest Holders within ninety days after the close of
each taxable year of the Partnership the tax information reasonably required for
federal, state and local income tax reporting purposes. The classification,
realization, and recognition of income, gains, losses, deductions, credits, and
other items shall be on the accrual method of accounting for federal income tax
purposes, unless the General Partner shall elect otherwise in its sole
discretion in accordance with applicable law. The General Partner shall not
change the method of accounting initially elected by the Partnership (except if
required to do so by law) without the prior written consent of a Majority
Interest.
7.2. TAX ELECTIONS.
Except as provided in Section 7.1, the General Partner shall,
in its sole discretion, determine whether to make any election available under
the Code or any other applicable taxing statute; provided, however, (i) that the
General Partner shall not make an election to adjust the basis of property
pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions of
state or local law, without the prior written consent of a Majority Interest and
shall make such election if requested to do so by a Majority Interest, and (ii)
the General Partner shall not extend the statute of limitations for assessment
of tax deficiencies against the Interest Holders with respect to adjustments to
the Partnership's federal, state or local tax returns unless the Limited
Partners unanimously vote for such extension.
7.3. TAX CONTROVERSIES. The General Partner is designated as
the Tax Matters Partner (as defined in section 6231 of the Code) and is
authorized and required to represent the Partnership (at the Partnership's
expense) in connection with all examinations of the Partnership's affairs by tax
authorities, including resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and costs associated
therewith. Each of the Interest Holders agrees to cooperate with the General
Partner and to do or refrain from doing any and all things reasonably required
by the General Partner to conduct such proceedings.
ARTICLE 8. BUSINESS MANAGEMENT AND OPERATION; INDEMNIFICATION
8.1. POWERS OF GENERAL PARTNER. Except as otherwise expressly
provided in this Agreement, all powers to control and manage the business and
16
affairs of the Partnership shall be exclusively vested in the General Partner,
and no Limited Partner shall have any right or power to control or manage the
business and affairs of the Partnership.
Except as otherwise expressly provided in this Agreement, and
in addition to the powers now or hereafter granted a general partner of a
limited partnership under applicable law, or which are granted to the General
Partner under any other provisions of this Agreement, the General Partner is
hereby authorized and empowered, in the name of and on behalf of the
Partnership, to do and perform any and all acts and things that it deems
appropriate or necessary in the conduct of the business and affairs of the
Partnership, including, without limitation, the following (but subject to the
restrictions set forth in the following), but only in furtherance of the
purposes of the Partnership and for the benefit of the Partnership:
8.1.1. To lend money and, without recourse to the Partners: to
borrow money, to assume, guarantee, or otherwise become liable for
indebtedness and other liabilities, to pledge its interest in the
Partnership in support of such obligations of the Partnership, and to
issue evidences of indebtedness and, in connection therewith, to
authorize confession of judgment against the Partnership;
8.1.2. To buy, lease (as lessor or lessee), sell, pledge,
mortgage or encumber (without personal recourse to the Partners), or
otherwise acquire or dispose of any or all of the assets of the
Partnership, including without limitation sales and dispositions of
emission credits provided such disposition is undertaken in accordance
with the provisions of the Participation Agreements;
8.1.3. To invest the assets of the Partnership;
8.1.4. To purchase and sell products, services, and supplies;
8.1.5. To make tax, regulatory, and other filings with, and to
render periodic and other reports to, governmental agencies or bodies
having jurisdiction over the assets or business of the Partnership ;
8.1.6. To open, maintain, and close bank accounts and to draw
checks and other orders for the payment of money, provided that funds
maintained in accounts established pursuant to the Participation
Agreements and related sale-leaseback transaction documents shall be
applied solely in accordance with the applicable provisions of any
security deposit agreement or similar agreement governing the same;
8.1.7. To negotiate, execute, and perform any contracts,
conveyances, or other instruments;
8.1.8. To distribute cash and other property of the
Partnership in accordance with the provisions of this Agreement;
8.1.9. To utilize the services of employees of the General
17
Partner and of any other Persons and to select and dismiss employees
(if any) and outside attorneys, accountants, consultants, and
contractors;
8.1.10. To maintain insurance for the benefit of the
Partnership and the Partners;
8.1.11. To form, participate in, or contribute or loan cash or
property to limited or general partnerships, joint ventures,
corporations, or similar arrangements in which, in all cases the
Partnership shall have an ownership interest;
8.1.12. To expand the business activities in which the
Partnership is engaged or engage in new business activities by
acquisition or internal development;
8.1.13. To conduct litigation and incur legal expenses and
otherwise deal with or settle claims or disputes; and
8.1.14. To purchase or otherwise acquire Partnership Interests
from, or sell or otherwise or dispose of Partnership Interests to,
Persons other than the Partnership;
in each case at such times and upon such terms and conditions as the General
Partner deems appropriate or necessary, and subject to any express restrictions
contained elsewhere in this Agreement;
8.2. DUTIES OF GENERAL PARTNER. The General Partner shall
manage the business and affairs of the Partnership in the manner that the
General Partner deems appropriate or necessary. Without limiting the generality
of the foregoing, the General Partner's duties shall include the following:
8.2.1. To take possession of the assets of the Partnership;
8.2.2. To staff and operate the business of the Partnership;
8.2.3. To perform or cause to be performed financial,
accounting, logistical, and other administrative functions for the Partnership;
8.2.4. To render such reports and make such periodic and other
filings as may be required under applicable federal, state, and local laws,
rules, and regulations;
8.2.5. To provide or cause to be provided purchasing,
procurement, repair, and other services for the Partnership; and
8.2.6. To conduct the business of the Partnership in
accordance with this Agreement, the Participation Agreements and related
sale-leaseback transaction documents, and all applicable laws, rules, and
regulations;
18
in each case in such a manner as the General Partner deems appropriate or
necessary, and provided moreover that the General Partner shall not be deemed to
be in violation of this Article 8.2 or any of its other duties or obligations
hereunder as a result of its compliance with Sections or 8.1.2 and 8.1.6.
hereof.
8.3. PROHIBITED ACTIONS AND ACTIONS REQUIRING LIMITED PARTNER
APPROVAL. Notwithstanding any other provisions of this Agreement to the contrary
the General Partner shall not take any of the following actions without the
prior consent of all of the Partners:
8.3.1. Change the nature of the Partnership business or the
purpose of the Partnership set forth in Section 2.7;
8.3.2. Amend the provisions contained in Articles 5 or 6;
8.3.3. Amend the provisions of this Section 8.3 or the
definitions of the defined terms used herein;
8.3.4. Terminate or dissolve the Partnership (except for
terminations or dissolutions by reason of the circumstances described in
Article 12) or file a petition with a bankruptcy court pursuant to the
Federal Bankruptcy Code (except for filings described in Article 12);
8.3.5. Take any action or cause the Partnership to take action
that could cause the Partnership not to be recognized as a partnership for
federal income tax purposes; or
8.3.6. Admit to the Partnership any additional or successor
Partners or recognize the validity of any attempted transfer of an interest in
the Partnership except in accordance with the provisions of Article 10.
The foregoing rights granted to each Partner in this Section 8.3 shall include
only the right to grant or withhold consent to any of the foregoing actions that
are initiated or proposed by the General Partner and each Partner shall have no
right to require the General Partner to take any such action. If any consent of
any Partner with respect to any course of action to be taken or not taken by the
Partnership is requested, such consent shall not be unreasonably denied or
withheld; and if such Partner shall not respond within fifteen (15) days after
receipt of such request, such Partner shall be deemed to have given its consent
pursuant to such request, and the other Partners (i) shall be entitled to take
or refrain from taking any action in reliance thereon, and (ii) shall have no
liability to such Partner as a result of such action or inaction.
8.4. REIMBURSEMENT OF THE GENERAL PARTNER. The General Partner
shall be promptly reimbursed from the assets of the Partnership for all
reasonable and proper expenses incurred on behalf of the Partnership.
8.5. PARTNERSHIP FUNDS. The funds of the Partnership shall be
deposited in such account or accounts as shall be designated by the General
Partner and
19
shall not be commingled with the funds of the General Partner. All withdrawals
from or charges against such accounts shall be made by the General Partner or by
its agents.
8.6. OUTSIDE ACTIVITIES.
8.6.1. The General Partner shall be entitled to and may have
business interests and engage in business activities in addition to those
relating to the Partnership, and in particular may be a creditor of the
Partnership, for its own account and for the account of others, without having
or incurring any obligation to offer any interest in such businesses or
activities to the Partnership or any Partner. Neither the Partnership nor any of
the Partners shall have any rights by virtue of this Agreement or the
Partnership relationship created hereby in any such business interests.
8.6.2. The General Partner may lend to the Partnership funds
needed by the Partnership on such terms and for such periods of time as the
General Partner may determine; provided, however, that the General Partner may
not charge the Partnership an effective rate of interest (including points or
other financing charges or fees) greater than the effective rate of interest
(including points or other financing charges or fees) that would be charged to
the Partnership by unrelated lenders on loans with comparable terms. The
Partnership shall reimburse the General Partner for any costs reasonably
incurred by the General Partner in connection with the borrowing of funds
obtained by the General Partner and loaned to the Partnership.
8.7. LIMITED LIABILITY; INDEMNIFICATION.
The General Partner will not be liable to the Partnership or
the Limited Partners for any act or omission by the General Partner pursuant to
the authority granted to it by this Agreement, except by reason of willful
misconduct, recklessness, or any act in breach of this Agreement. The General
Partner will indemnify and save harmless the Partnership and the Limited
Partners from any loss or liability arising out of its willful misconduct,
recklessness, or breach of this Agreement. In determining whether the General
Partner's acts hereunder constitute willful misconduct or recklessness, the
Partners hereby agree that it shall not constitute willful misconduct or
recklessness for the General Partner to comply with the provisions of those
certain sale-leaseback transaction documents entered into on or about the date
hereof and contemplated by the Participation Agreements (and specifically the
return conditions set forth in Section 5 of the Facility Leases related
thereto) and any other related documents to which the Partnership is a party.
Further, in discharging its duties to the Partnership hereunder, the General
Partner shall, to the fullest extent permitted by
Pennsylvania law, be
entitled to consider, to the extent it deems it appropriate in determining
the best interests of the Partnership, the effects of any action it might
take, upon creditors of the Partnership. The foregoing sentence shall
continue to be in effect even though the General Partner is, or is an
Affiliate of, a creditor of the Partnership, so long as any such
determination does not constitute willful misconduct or recklessness.
The Partnership will indemnify and save harmless the General
Partner from any loss or liability incurred by the General Partner by reason of
any act performed
20
by the General Partner on behalf of the Partnership or in furtherance of the
Partnership's interest other than by reason of the General Partner's willful
misconduct, recklessness or breach of this Agreement, to the broadest extent
permitted under Section 8510 of the Act or any similar successor statute. In
the event the General Partner is found personally liable for any debts of the
Partnership and is required to and does satisfy a Partnership liability out
of its personal assets, the General Partner will have a right of
reimbursement out of the assets of the Partnership (the "Right of
Reimbursement"). The Right of Reimbursement will accrue to the General
Partner 30 days after written notice thereof is given to each of the other
Partners. Upon such accrual of the Right of Reimbursement, the General
Partner will be reimbursed out of the assets of the Partnership in the
following order of priority, but only to the extent necessary to satisfy such
Right of Reimbursement: (i) out of the amounts then available for
distribution to Interest Holders pursuant to Section 5.1 or Section 12.2;
(ii) out of funds obtained by the Partnership from unsecured borrowings by
the Partnership without recourse to any Partner; (iii) out of funds obtained
by the Partnership from sale or refinancing of the assets of the Partnership;
and (iv) out of funds obtained by the Partnership in any other manner;
provided, however, that before any such sale or refinancing is consummated,
the General Partner will have endeavored to obtain funds in the form of loans
to the Partnership from the Limited Partners in an amount sufficient to
reimburse the General Partner; and, provided further, that in the event the
General Partner is to be reimbursed out of the proceeds of a proposed sale or
refinancing of the assets of the Partnership, the General Partner will give
90 days prior written notice of any such proposed sale or refinancing to each
of the other Partners. If sufficient funds described in clauses (i) or (ii)
of the preceding sentence are obtained and used by the Partnership to
reimburse the General Partner prior to the expiration of such 90-day period,
such proposed sale or refinancing will not be consummated unless all of the
Partners consent thereto. To the extent not reimbursed as provided above, the
General Partner will have no right of contribution from the Limited Partners.
8.8. BOOKS, RECORDS, AND ACCOUNTING.
8.8.1. The General Partner shall keep or cause to be kept
books and records with respect to the Partnership's business, which books and
records shall at all times be kept at the principal office of the Partnership.
The books of the Partnership shall be maintained, for financial reporting
purposes, under an accounting method that is consistent with the accounting
method selected under Section 7.1 for federal income tax purposes.
8.8.2. The Partnership shall also keep at its principal office
the following items:
(i) a current list of the full name and last known business
address or home address of each Partner;
(ii) a copy of the Certificate and all certificates of
amendment thereto, together with executed copies of any powers of
attorney pursuant to which any certificate has been executed;
21
(iii) copies of the Partnership's federal, state, and local
income tax returns and reports, if any, for all Fiscal Years since
inception of the Partnership; and
(iv) copies of the then effective Partnership Agreement and of
any financial statements of the Partnership for the three most recent
years.
8.9. FISCAL YEAR; TAXABLE YEAR. The fiscal year of the
Partnership for financial accounting purposes and the taxable year of the
Partnership for income tax purposes shall be the Fiscal Year, unless the General
Partner shall determine otherwise in its sole discretion in accordance with
applicable law.
ARTICLE 9. LIMITED PARTNER RIGHTS AND OBLIGATIONS
9.1. LIMITATION OF LIABILITY. No Limited Partner shall have
liability for the debts, obligations, or liabilities of the Partnership.
9.2. MANAGEMENT OF BUSINESS. A Limited Partner shall not, in
its capacity as a Limited Partner, take part in the operation, management, or
control (within the meaning of the Act) of the Partnership's business, transact
any business in the Partnership's name, or have the power to sign documents for
or otherwise bind the Partnership.
9.3. OUTSIDE ACTIVITIES. A Limited Partner shall be entitled
to and may have business interests and engage in business activities in addition
to those relating to the Partnership. Neither the Partnership nor any of the
other Partners shall have any rights by virtue of this Agreement or the
Partnership relationship created hereby in any business ventures of any Limited
Partner.
9.4. RETURN OF CAPITAL. A Limited Partner shall not be
entitled to the withdrawal or return of its Capital Contributions, except to the
extent provided for in this Agreement.
9.5. RIGHTS OF LIMITED PARTNERS. In addition to other rights
provided by this Agreement or by applicable law, a Limited Partner shall have
the right, upon reasonable demand, during ordinary business hours, and at the
Limited Partner's own expense:
(a) to inspect and copy any of the Partnership's records
maintained pursuant to Section 8.8.2;
(b) to obtain from the General Partner annual financial
information regarding the state of the business and financial
condition of the Partnership; and
(c) promptly after becoming available, to receive a copy of
the
22
Partnership's federal, state, and local income tax returns for each
year.
9.6 ABILITY TO REMOVE GENERAL PARTNER.
9.6.1 No Limited Partner may remove the General Partner
except as otherwise provided under the Laws of the State of Pennsylvania with
regard to judicial dissolution.
ARTICLE 10. TRANSFERS OF INTERESTS
10.1. GENERAL PARTNER.
10.1.1. VOLUNTARY TRANSFERS AND WITHDRAWALS. The General
Partner shall not voluntarily resign or dissolve, or withdraw, transfer, sell,
assign or pledge all or any part of its GP Interest without the prior written
consent of all of the Limited Partners, which may be withheld in their
discretion. A resignation or removal of the General Partner shall become
effective only upon the approval by the Majority Interest of a successor general
partner and such successor general partner's acceptance of appointment as
provided in this Section. It shall be understood and agreed that the pledge
of the General Partner's stock under the Pledge and Collateral Agreement and
any transfer of such stock as a result of the exercise of remedies pursuant
to such Pledge and Collateral Agreement shall not be deemed to violate this
Section.
The withdrawing, transferring, selling or assigning General
Partner who has received the prior written consent of the Limited Partners to
the withdrawal, transfer, sale or assignment of all of its GP Interest, shall
cease to be the General Partner upon (i) the withdrawal, transfer, sale or
assignment of all of its GP Interest and (ii) the filing, in accordance with the
provisions of the Act, of an appropriate certificate of amendment to the
Certificate. The General Partner who withdraws, transfers, sells or assigns any
portion, but less than all, of its GP Interest with the consent of the Limited
Partners, shall continue to be the General Partner of the Partnership. If the
General Partner does resign or dissolve, or withdraw, transfer, sell or assign
all or any part of its GP Interest without the prior written consent of the
Limited Partners, the remaining Partners may proceed in accordance with the
provisions of Section 12.1 hereof to continue the business of the Partnership.
If the General Partner shall request the Limited Partners'
consent to a sale of all (but not less than all) of its GP Interest pursuant to
a bona fide written offer to purchase such interest on a date (the "Proposed
Purchase Date") that follows such request by not less than 90 days and the
Limited Partners shall withhold such consent, and if the General Partner shall
furnish to the Partnership an opinion of counsel, which counsel and opinion
shall be satisfactory to the Limited Partners, that such sale will not cause the
Partnership to terminate for federal income tax purposes or to be classified as
an association taxable as a corporation for federal income tax purposes, then
the General Partner shall (except in connection with the dissolution of the
Partnership) have the option to require, subject to the proviso below, that the
Limited Partners (ratably in proportion to their respective Percentage
Interests) or another willing Person designated by a Majority Interest purchase
the GP Interest for an amount equal to the purchase price set out in such
written offer, and payable on the same terms contained in such written offer;
provided, however, that the Limited Partners (or such other purchaser designated
by a Majority Interest) may elect instead to purchase the GP Interest on the
last day of the calendar month that includes the Proposed Purchase Date for a
cash purchase price (payable, if the Limited Partners are the purchasers,
ratably by the Limited Partners in proportion to their respective Percentage
Interests) equal to the positive balance, if any, in the Capital Account of the
General Partner as determined by closing the books of the
23
Partnership on the last day of such calendar month and payable within 30 days
after the end of such calendar month.
10.1.2. INVOLUNTARY TRANSFERS. The successor in interest to
the General Partner by reason of the dissolution, liquidation or other
termination of the General Partner shall have the rights of an assignee to
receive only (i) the allocations of Profits, Losses and other items of
Partnership income, gain, deduction, loss and credit, (ii) and the distributions
of money or other property to which the General Partner would have been entitled
under the provisions of this Agreement. If, following such dissolution,
liquidation or other termination of the General Partner, the Partnership has
been continued pursuant to Section 12.1, and all of the remaining Partners
consent thereto (which consent may be withheld for any reason), an appropriate
amendment to this Agreement is executed and an appropriate amendment to the
Certificate is executed and filed, and the successor in interest to the General
Partner agrees to be bound by all of the obligations of the General Partner
hereunder, such successor in interest may be admitted to the Partnership as a
substitute General Partner.
10.1.3. PROHIBITED TRANSFERS. Any purported Transfer of a GP
Interest in the Partnership that is not authorized pursuant to this Agreement
shall be null and void and of no effect whatever.
10.2. LIMITED PARTNERS.
10.2.1. IN GENERAL. Except as hereinafter provided, no Limited
Partner may Transfer all or any part of its LP Interest.
10.2.2. PERMITTED TRANSFERS. Subject to the conditions and
restrictions set forth in Section 10.2.3 hereof and so long as no filing by
the Limited Partner under the Federal Bankruptcy Code has occurred, a Limited
Partner may at any time Transfer all or any portion of its interest in the
Partnership (a) to any Limited Partner, or (b) subject to the prior written
consent of the General Partner, which may be withheld in its discretion, to
any Purchaser (any such Transfer being referred to in this Agreement as a
"Permitted Transfer").
10.2.3. CONDITIONS TO PERMITTED TRANSFERS. A Transfer shall
not be treated as a Permitted Transfer under Section 10.2.2 hereof unless and
until the following conditions are satisfied (except to the extent that a
General Partner shall waive any or all of such conditions):
10.2.3.1.The transferor and transferee shall execute and
deliver to the Partnership such documents and instruments of conveyance
as may be necessary or appropriate in the opinion of counsel to the
Partnership to effect such Transfer and to confirm the agreement of the
transferee to be bound by the provisions of this Section 10. In any
case not described in the preceding sentence, the Transfer shall be
confirmed by presentation to the Partnership of legal evidence of such
Transfer, in form and substance satisfactory to counsel to the
Partnership. In all cases, the Partnership shall be reimbursed by the
transferor
24
and/or transferee for all costs and expenses that it reasonably incurs
in connection with such Transfer.
10.2.3.2. The transferor shall furnish to the Partnership an
opinion of counsel, which counsel and opinion shall be satisfactory to
the Partnership, that the Transfer will not cause the Partnership to
terminate for federal income tax purposes.
10.2.3.3. The transferor and transferee shall furnish the
Partnership with the transferee's taxpayer identification number,
sufficient information to determine the transferee's initial tax basis
in the interests transferred, and any other information reasonably
necessary to permit the Partnership to file all required federal and
state tax returns and other legally required information statements or
returns. Without limiting the generality of the foregoing, the
Partnership shall not be required to make any distribution otherwise
provided for in this Agreement with respect to any transferred
interests until it has received such information.
10.2.3.4. The transferor shall provide an opinion of counsel,
which opinion and counsel shall be satisfactory to the Partnership, to
the effect that such Transfer is exempt from all applicable
registration requirements and that such Transfer will not violate any
applicable laws regulating the Transfer of securities.
10.2.4. PROHIBITED TRANSFERS. Any purported Transfer of an LP
Interest that is not a Permitted Transfer shall be null and void and of no
effect whatever.
ARTICLE 11. ADDITIONAL PARTNERS
The General Partner may admit additional or substitute
Partners to the Partnership only in accordance with the Act and only with the
prior consent of each Partner, which consent may be withheld for any reason.
Upon such an admission of any substitute or additional Partner, the General
Partner shall cause to be properly prepared, filed and executed: (i) pursuant to
the Act any amendment of the Certificate that is required by the Act by reason
of such admission and (ii) any amendment to any registration, certificate or
other document required by any State by reason of such admission.
ARTICLE 12. DISSOLUTION AND LIQUIDATION
12.1. DISSOLUTION. The Partnership shall be dissolved, and its
affairs shall be wound up, upon the first to occur of any of the following
events (each a "Dissolution Event"):
12.1.1. the expiration of its term as provided in Section 2.5;
25
12.1.2. the withdrawal or bankruptcy of the General Partner or
any other event that results in a General Partner ceasing to be a general
partner in the Partnership under the Act, provided that any such event shall not
constitute a Dissolution Event if the Partnership is continued pursuant to this
Section 12.1;
12.1.3. a written election by all Partners;
12.1.4. the sale of all or substantially all of the properties
of the Partnership; or
12.1.5. the occurrence of any other event that makes it
unlawful, impossible or impractical to carry on the business of the Partnership;
provided, however, that upon the occurrence of any event set forth in Section
12.1.2, the Partnership shall not be dissolved or required to be wound up if
within one hundred eighty (180) days after such event a Majority Interest of the
remaining Partners agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of such event, of a successor
General Partner.
For purposes of this Section 12.1, bankruptcy of the General
Partner shall be deemed to have occurred when the General Partner: (i) makes an
assignment for the benefit of creditors; (ii) files a voluntary petition in
bankruptcy; (iii) is adjudged bankrupt or insolvent; (iv) files an application
or answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation; (v) files an answer or other pleading admitting or failing to
contest the material allegations of a petition or application filed against it
in any proceeding of a type referred to in clause (ii) or (iv); or (vi) seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the General Partner or of all or any substantial part of its
properties. In addition, for purposes of this Section 12.1, bankruptcy of the
General Partner shall be deemed to have occurred if within 120 days after the
commencement of any proceeding against the General Partner seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation the proceeding has not
been dismissed or if within 90 days after the appointment without its consent or
acquiescence of a trustee, receiver or liquidator of the General Partner or of
all or any substantial part of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any such stay, the appointment
is not vacated.
12.2. LIQUIDATION. Upon dissolution of the Partnership, the
then General Partner, or in the event the General Partner has withdrawn from the
Partnership or become bankrupt (as defined in Section 12.1), a liquidator or
liquidating committee approved by a Majority Interest, shall be the liquidator
of the Partnership (the "Liquidator"). The Liquidator shall be entitled to
receive such compensation for its services as may be approved by a Majority
Interest. The Liquidator shall not resign at any time without fifteen days'
prior written notice and, if other than the General Partner, may be removed at
any time, with or without cause, by notice of removal approved by a Majority
Interest. Upon dissolution, resignation, or removal of the Liquidator, a
successor
26
and substitute Liquidator (who shall have and succeed to all rights, powers, and
obligations of the original Liquidator) shall, within thirty days thereafter, be
approved by a Majority Interest. Except as expressly provided in this Article
12, the Liquidator approved in the manner provided herein shall have and may
exercise, without further authorization or approval of any of the parties
hereto, all of the powers conferred upon the General Partner under the terms of
this Agreement (but subject to all of the applicable limitations, contractual
and otherwise, upon the exercise of such powers) to the extent appropriate or
necessary in the good faith judgment of the Liquidator to carry out the duties
and functions of the Liquidator hereunder for and during such period of time as
shall be reasonably required in the good faith judgment of the Liquidator to
complete the winding-up and liquidation of the Partnership as provided for
herein. The Liquidator shall liquidate the assets of the Partnership and apply
and distribute the proceeds of such liquidation in the following order and
priority, to the maximum extent permitted by law:
12.2.1. First, to pay the costs and expenses of the winding
up, liquidation and termination of the Partnership;
12.2.2. Then, to creditors of the Partnership (including
Interest Holders to the extent permitted by law) in satisfaction of the
Company's known debts and liabilities (whether by payment or the making of
provision for the known amount thereof);
12.2.3. Then, to establish reserves adequate to meet any and
all contingent or unforeseen liabilities or obligations of the Partnership,
provided that at the expiration of such period of time as the Liquidator may
deem advisable, the balance of such reserves remaining after the payment of such
contingencies or liabilities shall be distributed as hereinafter provided;
12.2.4. Then, to the Interest Holders, in proportion to, and
to the extent of, the positive balances in their respective Capital Accounts
adjusted pursuant to Article 6 to reflect (i) their respective distributive
shares of the income, gain, loss, and deduction of the Partnership for the
taxable year of the Partnership in which the distribution in liquidation occurs
up through and including the date of distribution and (ii) all distributions
made to the Interest Holders during such taxable year up to but not including
such date.
12.2.5. The balance, if any, to the Partners in proportion to
their respective Partnership Interests.
12.3. DISTRIBUTION IN KIND. Notwithstanding the provisions of
Section 12.2 requiring the liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if on dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole discretion, defer for a reasonable
time the liquidation of any assets except those necessary to satisfy liabilities
of the Partnership and may, in its sole discretion, distribute to the Partners,
as tenants in common, in lieu of cash, and as their interests may appear in
27
accordance with the provisions of Section 12.2.2, undivided interests in such
Partnership assets as the Liquidator deems not suitable for liquidation;
provided, however, that the Liquidator must comply with the liquidating
distribution timing requirements of Section 12.7 hereof. Any distributions in
kind shall be subject to such conditions relating to the disposition and
management thereof as the Liquidator deems reasonable and equitable. By way of
clarification, for purposes of determining the Interest Holders' respective
shares of income, gain, loss, and deduction of the Partnership for the taxable
year of the Partnership in which the distribution in liquidation occurs and of
adjusting the Capital Accounts of the Interest Holders therefor in accordance
with Section 12.2.2 and Article 6, the definitions herein of "Agreed Value" and
"Profits" and "Losses" require that Partnership assets to be distributed in kind
shall be considered to have been first sold at their fair market values (taking
Code Section 7701(g) into account) and the Profits or Losses deemed realized
therefrom shall be allocated among the Interest Holders as if an actual sale had
occurred, and the Capital Accounts of the Interest Holders shall be adjusted to
reflect such allocation in accordance with Article 6. The fair market value of
any property distributed in kind shall be the value determined by an appraiser
selected by a Majority Interest unless the Partners agree as to such fair market
value.
12.4. CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon
the completion of the distribution of Partnership property pursuant to Sections
12.2 and 12.3, the Partnership shall be terminated, and the Liquidator (or the
Limited Partners if necessary) shall cause the cancellation of the Certificate
and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the Commonwealth of Pennsylvania and shall take such
other actions as may be necessary to terminate the Partnership.
12.5. NO GENERAL PARTNER LIABILITY FOR RETURN OF CAPITAL. No
General Partner shall be personally liable for the return of the Capital
Contributions of the Limited Partners, or any portion thereof, it being
expressly understood that any such return shall be made solely from Partnership
assets.
12.6. WAIVER OF PARTITION. Each Partner hereby waives any
rights to partition of the Partnership's property.
12.7. COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS. In
the event that the Partnership is liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(G), then (a) distributions shall be made pursuant to
Section 12.2 to the Interest Holders who have positive Capital Accounts in
compliance with the timing requirements of Regulations Section
1.704-1(b)(2)(ii)(B)(2); provided, however, that the Liquidator may exercise the
discretion set forth in Section 12.2.2. If any Interest Holder has a deficit
balance in its Capital Account (after giving effect to all contributions,
distributions and allocations for all taxable years, including the year during
which such liquidation occurs), such Interest Holder shall have no obligation to
make any contribution to the capital of the Partnership with respect to such
deficit, and such deficit shall not be considered a debt owed to the Partnership
or to any other Person for any purpose whatsoever.
28
12.8. NON-DISSOLVING CODE SECTION 708(B) TERMINATIONS.
Notwithstanding any other provision of this Section 12, in the event that the
Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Dissolution Event has occurred, the Partnership's
assets shall not be liquidated, the Partnership's liabilities shall not be paid
or discharged, and the Partnership's affairs shall not be wound up.
12.9. ALLOCATIONS DURING THE PERIOD OF LIQUIDATION. Until the
date on which all of the assets of the Partnership have been distributed to the
Interest Holders pursuant to Section 12.2 hereof, the Interest Holders shall
continue to share Profits, Losses and other items of Partnership income, gain,
deduction and loss as provided in Article 6 hereof.
12.10. VOLUNTARY BANKRUPTCY FILINGS
The General Partner shall not file a voluntary case for the
protection of the Partnership under a chapter of the Federal Bankruptcy Code
except in accordance with the organic documents of the General Partner, which
provide for the unanimous vote of the General Partner's board of directors to
take such action. Further, no such action shall be taken unless the
Partnership is insolvent in the good faith judgment of the General Partner,
after receiving the written opinion of an independent nationally recognized
appraisal firm experienced in evaluating companies like the Partnership, to
the effect that the Partnership is "insolvent" as defined under Section
101(32) of the Federal Bankruptcy Code. Specifically, the General Partner
shall not be acting recklessly or committing willful misconduct if it
considers the interests of the Partnership's creditors in accordance with
Pennsylvania law in determining whether it is in the best interests of the
Partnership to file for voluntary bankruptcy protection.
ARTICLE 13. AMENDMENT OF AGREEMENT
Amendments to this Agreement may be proposed by any Partner. A
proposed amendment shall be effective only when approved in writing by the
General Partner and a Majority Interest unless the consent of all Partners is
unambiguously required by the Act.
ARTICLE 14. GENERAL PROVISIONS
14.1. PERSONAL PROPERTY. The Partnership Interest of any
Partner shall be personal property for all purposes.
14.2. ADDRESSES AND NOTICES. Any notice, demand, request,
payment, or report required or permitted to be given or made to a Limited
Partner under this Agreement shall be in writing and shall be deemed given or
made when delivered in person or when sent by first class mail or by other means
of written communication to such Partner at such Partner's address as shown on
the signature page or pages hereof or to such other address as such Partner may
specify for the purpose by notice to the General Partner given in accordance
with this Section 14.2. Any notice to the Partnership or the
29
General Partner shall be deemed given if received in writing by the General
Partner at the General Partner's address as shown on the signature page or pages
hereof or to such other address as the General Partner may specify for the
purpose by notice to each Limited Partner in accordance with this Section 14.2.
14.3. HEADINGS. All article or section headings in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any of the provisions hereof
14.4. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto (including the additional Persons
that become Partners as provided herein) and their heirs, executors,
administrators, successors, legal representatives, and assigns.
14.5. INTEGRATION. This Agreement constitutes the entire
Agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
14.6. WAIVER. No failure by any party to insist upon the
strict performance of any covenant, duty, agreement, or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or of any other covenant, duty,
agreement, or condition.
14.7. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one agreement
binding on the parties hereto including the additional Persons that become
Interest Holders as provided herein.
14.8. SEVERABILITY. If any provision of this Agreement is or
becomes invalid, illegal, or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions hereof, or of such
provision in other respects, shall not be affected thereby.
14.9. APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, without reference to principles of choice of law or choice of
forum.
* * *
30
IN WITNESS WHEREOF, this Amended and Restated Agreement of
Limited Partnership of EME Homer City Generation L.P. has been duly executed
and entered into by the General Partner and the Limited Partner on the date
first above written.
GENERAL PARTNER
MISSION ENERGY WESTSIDE
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Its: Vice President
LIMITED PARTNER
CHESTNUT RIDGE ENERGY
COMPANY
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Its: Vice President
31
SCHEDULE A
INITIAL CAPITAL CONTRIBUTION/PERCENTAGE INTEREST
CAPITAL PERCENTAGE
NAME INTEREST CONTRIBUTION INTEREST
Mission G.P. __[_______]_____ 0.1%
Chestnut Ridge L.P. ___[_______]___ 99.9%
32