Exhibit 10(a)94
AGREEMENT OF LIMITED PARTNERSHIP
of
ENTERGY-▇▇▇▇, ▇▇
dated and effective as of January 31, 2001
among
EKLP, LLC
and
EK HOLDING I, LLC
EK HOLDING II, LLC
and
▇▇▇▇ ENERGY, INC.
AGREEMENT OF LIMITED PARTNERSHIP
OF
ENTERGY-▇▇▇▇, ▇▇
This AGREEMENT OF LIMITED PARTNERSHIP is entered into and
shall be effective as of the 31st day of January, 2001, among
EKLP, LLC, a Delaware limited liability company (the "General
Partner"), as general partner of the Partnership, and EK Holding
I, LLC, a Delaware limited liability company ("Entergy A Limited
Partner"), EK Holding II, LLC, a Delaware limited liability
company ("Entergy B Limited Partner"), and ▇▇▇▇ Energy, Inc., a
Kansas corporation ("▇▇▇▇ Limited Partner"), each as limited
partners of the Partnership.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For purposes of this Agreement, the
following terms have the meanings specified or referred to in
this Section 1.1:
"Act" means the Delaware Revised Uniform Limited Partnership
Act, as set forth in Del. Code ▇▇▇. Tit. 6, Sections 17-101, et
seq. and any successor statute, as the same may be amended from
time to time.
"Additional Capital Contributions" means, with respect to
each Partner, the Capital Contributions made by such Partner (or
its predecessors in interest) pursuant to Section 3.2 of this
Agreement.
"Adjusted Capital Account" means, with respect to any
Limited Partner, such Limited Partner's Capital Account adjusted
by crediting to such Capital Account any amounts which such
Limited Partner is obligated to restore pursuant to any provision
of this Agreement or is deemed obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5).
"Adjusted Capital Account Deficit" means, with respect to
any Limited Partner, the deficit balance, if any, in such Limited
Partner'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
Limited Partner is obligated to restore pursuant to any provision
of this Agreement or is deemed obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1)
and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit
is intended to comply with the provisions of Section 1.704-
1(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly Controlling or Controlled by, or
Under Common Control with such Person. Notwithstanding the
foregoing, none of the Partnership, the General Partner or their
respective Subsidiaries shall be treated as Affiliates of the
▇▇▇▇ Limited Partner, the Entergy A Limited Partner or the
Entergy B Limited Partner for any purpose hereunder.
"Agreement" means this Agreement of Limited Partnership of
Entergy-▇▇▇▇, ▇▇ dated effective as of January 31, 2001,
including all exhibits attached hereto, as amended, modified, or
supplemented from time to time.
"Allocation Year" means (i) the period commencing on the
Effective Date and ending on the following December 31, (ii) any
subsequent period commencing on January 1 and ending on the
following December 31, or (iii) any portion of a 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 Articles IV, X and XI of this
Agreement.
"Bankruptcy" means, with respect to any Person, a Voluntary
Bankruptcy or an Involuntary Bankruptcy. A "Voluntary Bankruptcy"
means, with respect to any Person: (i) (A) the inability or
failure of such Person generally to pay its debts as such debts
become due, or (B) an admission in writing by such Person of its
inability or failure to pay its debts generally or a general
assignment by such Person for the benefit of creditors; (ii) the
filing of any petition by such Person seeking to adjudicate it a
bankrupt or insolvent, or seeking for itself any liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of such Person or its debts under any
Legal Requirement relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking, consenting to,
or acquiescing in the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for such Person or for any substantial part of its
property or the filing of an answer or other pleading admitting
or failing to contest the allegations of a petition filed against
it in any proceeding of the foregoing nature; or (iii) action
taken by such Person to authorize any of the actions set forth
above. An "Involuntary Bankruptcy" means, with respect to any
Person, without the consent or acquiescence of such Person, the
entering of an order for relief or approving a petition for
relief or reorganization or any other petition seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or other similar relief under any
present or future bankruptcy, insolvency or similar Legal
Requirement, or the filing of any such petition against such
Person, that shall not be dismissed or stayed within 60 days, or,
without the consent or acquiescence of such Person, the entering
of an order appointing a trustee, custodian, receiver or
liquidator of such Person or of all or any substantial part of
the property of such Person that shall not be dismissed or stayed
within 60 days. This definition is intended to supersede the
definition of Bankruptcy set forth in Section 17-402(a)(4) and
(5) of the Act.
"Business Day" means any day other than Saturday, Sunday or
any other day on which banking institutions in New York, New York
or Houston, Texas are required or authorized by law to suspend
operations.
"Business Opportunities Agreement" means the Business
Opportunities Agreement entered into by and among Entergy, KII
and the Partnership.
"Business Plan" means a document setting forth the
Partnership's business objectives and strategy, profit plan,
marketing and trading plan, financing and capitalization plan,
capital expenditures budget and expense budget, as approved by
the General Partner.
"Capital Account" means, with respect to any Partner, the
capital account maintained for such Partner in accordance with
Section 1.704-1(b)(2)(iv) of the Regulations.
"Capital Contributions" means, with respect to any Partner,
the amount of Cash Equivalents and the initial Gross Asset Value
of any property (other than Cash Equivalents) contributed
pursuant to Article III to the Partnership by such Partner (or
its predecessors in interest) with respect to the Interest held
by such Partner. 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
(or a Partner related to the maker of the note within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(c)) shall not be
included in the Capital Account of any Partner 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).
"Cash Available for Distribution" means, as of the end of
each Fiscal Quarter, the Cash Equivalents of the Partnership less
any portion thereof set aside by the General Partner from current
distributions to maintain reasonably adequate reserves for
Partnership operations (considering prospective cash receipts and
expenditures from operations). Potential reserves would include,
without limitation, reserves for capital expenditures, reserves
required to maintain the Partnership's credit rating, and
reserves for debt service, principal amortization, working
capital, and Taxes.
"Cash Equivalents" means cash and any of the following: (i)
readily marketable direct obligations of the Government of the
United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, or (ii) insured
certificates of deposit of time or demand deposits with any
commercial bank that is a member of the Federal Reserve System,
the parent of which issues commercial paper rated at least P-1
(or the then equivalent grade) by Moody's or A-1 (or the then
equivalent grade) by S&P, is organized under the laws of the
United States or any State thereof and, the long term unsecured
debt of which is rated A-3 or better by Moody's and A- or better
by S&P; provided, however, that all Cash Equivalents described in
this definition other than cash shall have a remaining maturity
of not longer than ninety days.
"Certificate" means the Certificate of Limited Partnership
for the Partnership, as required pursuant to Section 17-201 of
the Act, as amended or restated from time to time.
"Code" means the United States Internal Revenue Code of
1986, as amended from time to time and any regulations
promulgated pursuant thereto.
"Contribution Agreement" means the Amended and Restated
Contribution Agreement dated as of May 26, 2000 among EPIH, the
▇▇▇▇ Limited Partner, the Entergy A Limited Partner and the
Entergy B Limited Partner.
"Controlling", "Controlled By" or "Under Common Control"
means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, through the ownership of
voting securities, by contract, or otherwise.
"Default Interest Rate" means a rate per annum equal to the
lesser of (i) 3% per annum plus the Prime Interest Rate or (ii)
the maximum rate permitted by applicable Legal Requirements.
"Delinquent Partner" has the meaning set forth in Section
3.4(d) of this Agreement.
"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 Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the
beginning of such Allocation Year, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or
other cost recovery deduction for such Allocation Year bears to
such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the
beginning of such Allocation Year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value
using any reasonable method selected by the General Partner.
"Derivative Contracts" means any and all futures, forward,
swap, collar, put, call, floor, cap, option, or other financial
contracts which derive their value from an underlying commodity,
security, or currency generally intended to provide benefits from
or to reduce or to eliminate the risk of, fluctuations in
interest rates, weather or the price of commodities or equities,
including, without limitation, natural gas, electric power,
currencies and securities.
"Determination" means, for any Allocation Year, the earlier
of (i) a "determination" for such Allocation Year as such term is
used in Section 1313(a) of the Code, or (ii) the expiration of
the applicable statute of limitations for the assessment of a
federal income tax deficiency with respect to such Allocation
Year.
"Disclosure Schedule" means the Disclosure Schedule to the
Contribution Agreement executed and delivered by each of the
parties thereto as of the Execution Date, each Interim
Contribution Date, if any, and the Final Contribution Date.
"Effective Date" means January 31, 2001.
"EGT Holding" means EGT Holding, Ltd., a Cayman Islands
corporation.
"EK International Group" shall mean, collectively, all
direct and indirect Subsidiaries of the Partnership that are not
formed or incorporated in the United States.
"Encumbrance" means any charge, claim, equitable interest,
lien, option, pledge, security interest, mortgage, easement,
warrant, right of first refusal, right of first offer, or
restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other
attribute of ownership.
"Entergy" means Entergy Corporation, a Delaware corporation.
"Entergy Assets" means the assets and businesses of EPMC,
ET&M and EGT Holding through ownership of the Entergy Interests.
"Entergy Interests" means all of the equity interests in
EPMC, ET&M and EGT Holding.
"Entergy Partner Group" means the Entergy A Limited Partner
and the Entergy B Limited Partner and any successors or assigns
that are Wholly-Owned Affiliates of Entergy.
"EPIH" means Entergy Power International Holdings
Corporation, a Delaware corporation.
"EPMC" means Entergy Power Marketing Corporation (including
such entity as converted pursuant to Section 3.4 of the
Contribution Agreement).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations
promulgated and rulings issued from time to time thereunder.
"ET&M" means Entergy Trading & Marketing, Limited.
"Execution Date" means the date upon which the Contribution
Agreement was executed.
"Fair Market Value" means the value that would be obtained
in an arm's length transaction between an informed and willing
creditworthy buyer under no compulsion to buy and an informed and
willing creditworthy seller under no compulsion to sell.
"Final Contribution Date" has the meaning set forth in the
Contribution Agreement.
"Fiscal Quarter" means (i) the period commencing on the
Effective Date and ending on the last day of the first calendar
quarter ending after the Effective Date, and (ii) any subsequent
three-month period commencing on each of January 1, April 1, July
1 and October 1 and ending on the next March 31, June 30,
September 30 and December 31, respectively; provided that the
last Fiscal Quarter shall end on the first date on which all
Partnership Property is distributed pursuant to Section 11.1 of
this Agreement and the Certificate has been canceled pursuant to
the Act.
"Fiscal Year" means (i) the period commencing on the
Effective Date and ending on the following December 31, and (ii)
any subsequent period commencing on January 1 and ending on the
earlier to occur of (a) the following December 31, or (b) the
date on which all Partnership Property is distributed pursuant to
Section 11.1 of this Agreement and the Certificate has been
canceled pursuant to the Act.
"GAAP" means generally accepted accounting principles for
the United States of America, consistently applied, as in effect
from time to time.
"Gateway" means ▇▇▇▇ Gateway Pipeline Company, a Delaware
corporation (including such entity as converted pursuant to
Section 3.4 of the Contribution Agreement).
"Gateway Assets" means all of the assets owned by Gateway.
"Gateway Interests" means all of the equity interests in
Gateway.
"Gateway Sale Price" means (a) in the case of the sale of
the Gateway Assets, the gross sale price received by the
Partnership on such sale (without reduction for Encumbrances, but
reduced for transaction expenses), and (b) in the case of the
special redetermination of Gross Asset Value of Gateway Assets
pursuant to Section 10.1, the Liquidation Value of the Gateway
Assets determined in accordance with such Section 10.1.
"Governmental Body" means any (i) nation, state, county,
city, town, village, district, territory, or other jurisdiction
of any nature; (ii) federal, state, local, municipal, foreign, or
other government; (iii) governmental authority of any nature
(including any governmental agency, branch, department, official,
or entity and any court or other tribunal); or (iv) body
exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as
follows:
(i) The initial Gross Asset Values of the assets contributed to
the Partnership shall be as set forth in Section 3.2(f);
(ii) The Gross Asset Values of all Partnership Property shall be
adjusted to equal their respective Liquidation Values as
determined in accordance with Section 10.1 of this Agreement in
connection with the following events: (A) the acquisition of an
additional interest in the Partnership by any new or existing
Partner in exchange for more than a de minimis Capital
Contribution; (B) the distribution by the Partnership to a
Partner of more than a de minimis amount of Partnership Property
as consideration for an interest in the Partnership; or (C) the
liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments
pursuant to clauses (A) and (B) above shall be made only if the
General Partner reasonably determines in good faith that such
adjustments are necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership; provided
further, however, that the Partners agree that such adjustments
shall be made upon a distribution made pursuant to Section
5.2(b);
(iii) The Gross Asset Value of any Partnership Property
distributed to any Partner shall be the gross value of such asset
as determined in accordance with Section 10.1 of this Agreement
on the date of such distribution; and
(iv) The Gross Asset Values of Partnership Property shall be
increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to 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) and subparagraph (vi)
of the definition of "Profits" and "Losses" or Section 4.3(g) of
this Agreement; provided, however, that Gross Asset Values shall
not be adjusted pursuant to this subparagraph (iv) to the extent
that an adjustment pursuant to subparagraph (ii) is required in
connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (iv).
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to subparagraph (i), (ii), or (iv), such Gross
Asset Value shall thereafter be adjusted by the Depreciation
taken into account with respect to such asset for purposes of the
allocations made pursuant to Article IV.
"Indebtedness" means, with respect to any Person at any
date, (i) indebtedness of such Person for borrowed money,
including, without limitation, obligations under letters of
credit and agreements relating to the issuance of letters of
credit or acceptance financing; (ii) obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments; (iii) obligations of such Person to pay the deferred
purchase price of property or services; (iv) obligations of such
Person as lessee under any lease of any Property by such Person
as lessee; (v) obligations of such Person under any Derivative
Contracts; (vi) obligations of such Person under direct or
indirect guaranties in respect of, and obligations (contingent or
otherwise) of such Person to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (v) above; (vii) any obligations in
connection with any volumetric or production prepayments; and
(viii) indebtedness or obligations of others of the kinds
referred to in clauses (i) through (vii) secured by any
Encumbrance on or in respect of any Property of such Person.
"Indemnitee" means (a) any Partner, (b) any Person who is or
was, at the time of the alleged event giving rise to such
indemnity, an Affiliate of a Partner, (c) any Person who is or
was, at the time of the alleged event giving rise to such
indemnity, a member, partner, officer, director, employee, agent,
or trustee of the Partnership or any Partner, and (d) any Person
who is or was, at the time of the alleged event giving rise to
such indemnity, serving at the request of the Partnership or any
Partner as an officer, director, employee, member, partner,
agent, fiduciary, or trustee of another Person; provided, that a
Person shall not be an Indemnitee by reason of providing, on a
fee-for-service basis, trustee, fiduciary, or custodial services.
"Indemnity Agreement" means the Amended and Restated Parent
Indemnity Agreement dated and effective as of May 26, 2000 by and
between the Parents.
"Interest" means any interest in the Partnership held by a
Partner.
"Interim Contribution Date" means any date prior to the
Final Contribution Date on which the ▇▇▇▇ Limited Partner, the
Entergy A Limited Partner, the Entergy B Limited Partner or EPIH
mutually agree to contribute any of the ▇▇▇▇ Interests or the
Entergy Interests to the Partnership.
"International Non-Weather Profits" means the Profits of EK
International Group other than Profits Attributable to the
Weather Derivatives Business.
"International Weather Profits" means the Profits of EK
International Group which are Profits Attributable to the Weather
Derivatives Business.
"Involuntary Bankruptcy" has the meaning set forth in the
definition of "Bankruptcy".
"KII" means ▇▇▇▇ Industries, Inc., a Kansas corporation.
"▇▇▇▇ Assets" means the assets of the ▇▇▇▇ Contributed
Subsidiaries through ownership of the ▇▇▇▇ Interests.
"▇▇▇▇ Contributed Subsidiaries" means ▇▇▇▇ Energy Trading,
Inc. and Gateway (including such entities as converted pursuant
to Section 3.4 of the Contribution Agreement).
"▇▇▇▇ Interests" means all of the equity interests in the
▇▇▇▇ Contributed Subsidiaries.
"▇▇▇▇ Partner Group" means the ▇▇▇▇ Limited Partner and any
successors or assigns that are Wholly-Owned Affiliates of KII.
"Legal Requirement" means any order, constitution, law,
ordinance, regulation, statute, or treaty issued by any federal,
state, local, municipal, foreign, international, multinational,
or other administrative body or any principle of common law.
"Limited Partners" means the Entergy A Limited Partner, the
Entergy B Limited Partner and the ▇▇▇▇ Limited Partner, and any
other Person admitted to the Partnership as an additional or
substitute limited partner of the Partnership pursuant to Article
VIII hereof.
"Liquidating Event" has the meaning set forth in Section 9.1
of this Agreement.
"Liquidation Balance Sheet" has the meaning set forth in
Section 7.2(d)(i) of this Agreement.
"Liquidation Measurement Date" means, with respect to the
liquidation of the Partnership pursuant to Section 11.1 of this
Agreement, the last day of the Fiscal Quarter immediately
preceding the Fiscal Quarter during which the Liquidating Event
giving rise to such liquidation occurred.
"Liquidation Value" has the meaning set forth in Section
10.1 of this Agreement.
"LLC Agreement" means the Limited Liability Company
Agreement for the General Partner by and between ▇▇▇▇ Energy,
Inc. and EPIH.
"Loan Documents" means (i) the Credit Agreement (364-Day),
dated as of January 31, 2001 (the "364-Day Credit Agreement"),
among the Partnership, the financial institutions as parties
thereto (the "364-Day Lenders") and The Chase Manhattan Bank
("Chase"), as Administrative Agent for the 364 Day Lenders and as
the Issuing Bank; (ii) the Credit Agreement (Five-Year Term),
dated as of January 31, 2001 (the "Five-Year Credit Agreement"),
among the Partnership, the financial institutions as parties
thereto (the "Five-Year Lenders") and Chase, as Administrative
Agent for the Five-Year Lenders and as the Issuing Bank; (iii)
the Bridge Credit Agreement, dated as of January 31, 2001 (the
"Bridge Credit Agreement"), among the Partnership, the financial
institutions as parties thereto (the "Bridge Lenders"), and
Chase, as Administrative Agent for the Bridge Lenders; (iv) the
Revolving Loan Promissory Notes issued by the Partnership to the
364-Day Lenders pursuant to the 364-Day Credit Agreement; (v) the
Revolving Loan Promissory Notes issued by the Partnership to the
Five-Year Lenders pursuant to the Five-Year Credit Agreement;
(vi) the Bridge Loan Promissory Notes issued by the Partnership
to the Bridge Lenders pursuant to the Bridge Credit Agreement;
and (vii) all other documents, agreements, instruments and
certificates contemplated thereby or related thereto.
"Losses" has the meaning set forth in the definition of
"Profits" and "Losses."
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any
successor by merger or consolidation to its business.
"Non-Delinquent Partner" has the meaning set forth in
Section 3.4(d).
"Nonrecourse Deductions" has the meaning set forth in
Sections 1.704-2(b)(1) and 1.704-2(c) of the Regulations.
"Nonrecourse Liability" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"Obligation" means, with respect to any Person, any legal or
equitable obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim,
whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed, secured or
unsecured, and whether or not such claim is discharged, stayed or
otherwise affected by any proceeding.
"Officers" has the meaning set forth in Section 6.2(a).
"Original Capital Contribution" means, with respect to each
Partner, the Capital Contribution made by such Partner (or its
predecessors in interest) pursuant to Section 3.1 of this
Agreement.
"Parent" means either Entergy or KII. "Parents" means
Entergy and KII collectively.
"Partner" means any of the General Partner or Limited
Partners. "Partners" means all of such Partners collectively.
"Partner Group" means either the Entergy Partner Group or
the ▇▇▇▇ Partner Group.
"Partner Nonrecourse Debt" has the same meaning as the term
"partner nonrecourse debt" in Section 1.704-2(b)(4) of the
Regulations.
"Partner Nonrecourse Debt Minimum Gain" means an amount,
with respect to each Partner Nonrecourse Debt, equal to the
Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the
Regulations.
"Partner Nonrecourse Deductions" has the same meaning as the
term "partner nonrecourse deductions" in Sections 1.704-2(i)(1)
and 1.704-2(i)(2) of the Regulations.
"Partnership" means Entergy-▇▇▇▇, ▇▇, a Delaware limited
partnership formed pursuant to this Agreement and the
Certificate.
"Partnership Minimum Gain" has the same meaning as the term
"partnership minimum gain" in Sections 1.704-2(b)(2) and 1.704-
2(d) of the Regulations.
"Partnership Property" means all real and personal property
owned by the Partnership and any improvements thereto, and shall
include both tangible and intangible property.
"Percentage Interest" means, as of any date, 1% with respect
to the General Partner, and 49.5% with respect to each of the
Series A Limited Partners and the Series B Limited Partners.
With respect to any Series A Limited Partner, as of any date,
Percentage Interest means 49.5% multiplied by the ratio of such
Partner's Adjusted Capital Account on such date to the aggregate
Adjusted Capital Accounts of all Series A Limited Partners on
such date. With respect to any Series B Limited Partner, as of
any date, Percentage Interest means 49.5% multiplied by the ratio
of such Partner's Adjusted Capital Account on such date to the
aggregate Adjusted Capital Accounts of all Series B Limited
Partners on such date. For purposes of the preceding two
sentences, Adjusted Capital Accounts shall be determined after
giving effect to all contributions, distributions and allocations
for all Allocation Years ending on or prior to the date for which
the Percentage Interest is being calculated. The initial
Percentage Interest of each Partner is set forth in Exhibit B to
this Agreement.
"Permitted Transfer" has the meaning set forth in Section
8.1(a) of this Agreement.
"Permitted Transferee" has the meaning set forth in Section
8.1(a) of this Agreement.
"Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, unincorporated
organization, business, syndicate, sole proprietorship,
association, organization, labor union, or other entity or
Governmental Body.
"Prime Interest Rate" means a rate per annum equal to the
lesser of (i) the prime rate or (ii) the maximum rate permitted
by any applicable Legal Requirement. For the purposes of the
preceding sentence, the term "prime rate" shall mean a variable
rate per annum equal to the prime rate for corporate loans most
recently published in the Money Rates column of The Wall Street
Journal, with adjustments in that varying rate to be made on the
same date as any change in that rate.
"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:
(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 of "Profits" and
"Losses" 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), and not otherwise taken into account in computing
Profits or Losses pursuant to this definition of "Profits" and
"Losses" shall be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Partnership
Property is adjusted pursuant to subparagraphs (ii) or (iii) of
the definition of Gross Asset Value, 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
Gross Asset Value of the Partnership Property disposed of,
notwithstanding that the adjusted tax basis of such Partnership
Property differs from its Gross Asset 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, computed in accordance with the
definition of "Depreciation";
(vi) To the extent an adjustment to the adjusted tax basis of any
Partnership Property pursuant to Code Section 734(b) is required,
pursuant to Regulations Section 1.704-1(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 a Partner's Interest,
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) Any items that are allocated pursuant to Sections 3.3,
4.3 or 4.4 of this Agreement shall not be taken into account in
computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss
or deduction available to be allocated pursuant to Sections 4.3
and 4.4 of this Agreement shall be determined by applying rules
analogous to those set forth in subparagraphs (i) through (vi)
above.
"Profits Attributable to International Non-Weather" means
the Profits attributable to the EK International Group, other
than Profits Attributable to the Weather Derivatives Business,
computed as if all entities in the EK International Group were
disregarded under Regulations Section 301.7701-3(b)(2)(C).
"Profits Attributable to International Weather" means the
Profits attributable to the EK International Group, which are
Profits Attributable to the Weather Derivatives Business,
computed as if all entities in the EK International Group were
disregarded under Regulations Section 301.7701-3(b)(2)(C).
"Profits Attributable to the Sale of the Gateway Assets"
means profits, determined in the same manner as "Profits", except
such profits shall be determined solely with respect to the sale
of all or substantially all of the Gateway Assets or the Gateway
Interests, or the adjustment to the Gross Asset Value thereof
pursuant to subparagraph (iii) of the definition of "Profits".
"Profits Attributable to the Weather Derivatives Business"
means the profits and losses determined in the manner as set
forth in the Weather Side Letter, computed as if all entities in
the EK International Group were disregarded under Regulations
Section 301.7701-3(b)(2)(C).
"Receivables Purchase Agreement" means the Receivables
Purchase Agreement entered into by and among the ▇▇▇▇ Limited
Partner, ▇▇▇▇ Energy Finance Corporation and EPIH.
"Regulations" means the Income Tax Regulations, including
Temporary Regulations, promulgated under the Code, as such
regulations are amended, modified or supplemented from time to
time.
"Regulatory Allocations" has the meaning set forth in
Section 4.4 of this Agreement.
"S&P" means Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor by merger or
consolidation to its business.
"Securities Act" means the Securities Act of 1933, as
amended, or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.
"Series A Limited Partners" means the ▇▇▇▇ Limited Partner
and its permitted successors and assigns.
"Series B Limited Partners" means the Entergy A Limited
Partner and the Entergy B Limited Partner, and their respective
permitted successors and assigns.
"Special Adjustment Account" means, with respect to the
Series B Limited Partners, a notional account with a balance
equal to the excess, if any, of $129,500,000 over all amounts
allocated to the Series B Limited Partners pursuant to Sections
4.1(a), 4.3(i)(ii) and 4.3(k)(ii).
"Special Series B Distribution Account" means, with respect
to the Series B Limited Partners, a notional account with a
balance equal to the excess, if any, of (a) over (b):
(a) the sum of the Special Series B Distribution Amounts for
each Allocation Year ending on or before December 31, 2003 (plus
6% simple interest on the undistributed Special Series B
Distribution Amount from the third anniversary of the first day
of the year to which the Special Series B Distribution Amount
applies) for which there shall have been a Determination with
regard to the Series A Limited Partners' distributive share of
Profits from the Partnership, provided, however, that such
Special Series B Distribution Amounts shall be adjusted
appropriately to account for any adjustments to the Partners'
distributive shares pursuant to such Determination. In
particular, but not in derogation of the foregoing:
(i) In the event that the distributive share of the income (as
determined for federal income tax purposes) of the Series A
Limited Partners from the Partnership is increased or the
distributive share of the deductions (as determined for federal
income tax purposes) of the Series A Limited Partners from the
Partnership is decreased for an Allocation Year ending on or
before December 31, 2003, by the Determination, then the Special
Series B Distribution Amount shall be reduced by (x) 26.25%
multiplied by the Series A Limited Partners' increased income (as
determined for federal income tax purposes) resulting from such
Determination plus (y) 26.25% multiplied by the Series A Limited
Partners' decreased deductions (as determined for federal tax
purposes) resulting from such Determination. Determination shall
be taken into account for Special Series B Distribution Account
purposes upon written notice by the Series A Limited Partners'
Parent's independent accounting firm to the Partnership and to
the Series B Limited Partners of such Determination, which notice
such Parent shall be required to give within ten (10) Business
Days following any such Determination. Such notice shall include
any calculation of necessary adjustments required by this
paragraph (a)(i).
(ii) In the event that the distributive share of the income (as
determined for federal income tax purposes) of the Series B
Limited Partners from the Partnership is increased for an
Allocation Year ending on or before December 31, 2003, by the
Determination, then the Special Series B Distribution Amount
shall be increased by 26.25% multiplied by the Series B Limited
Partners' increased income (as determined for federal income tax
purposes) resulting from such Determination. Such a
Determination shall be taken into account for Special Series B
Distribution Account purposes upon written notice by the Series B
Limited Partners' Parent's independent accounting firm to the
Partnership and to the Series A Limited Partners of such
Determination, which notice Entergy shall be required to give
within ten (10) Business Days following any such Determination.
Such notice shall include any calculation of necessary
adjustments required by this paragraph (a)(ii).
(b) the sum of all distributions of Cash Available for
Distribution to the Series B Limited Partners pursuant to Section
5.1(a).
Upon the occurrence of a Triggering Event, the amount calculated
under (a) above for each Allocation Year for which there has been
a Determination shall be reduced by the excess, if any, of (i)
the amount allocated pursuant to Section 4.3(h) for such
Allocation Year, over (ii) 12.8625% multiplied by the taxable
income of the Partnership for such Allocation Year. For purposes
of the preceding sentence, "taxable income" shall mean taxable
income as defined by Code Section 703(a), by including in the
computation of such taxable income any items that are separately
stated pursuant to Code Section 703(a)(1).
"Special Series B Distribution Amount" means, for any
Allocation Year ending on or before December 31, 2003, the
product of (i) 26.25% multiplied by (ii) the excess, if any, of
(A) the taxable income allocated to the Series B Limited Partners
pursuant to Section 4.1(a), over (B) the taxable income that
would have been allocable to the Series B Limited Partners if
Section 4.1(c) were applicable to the Allocation Year instead of
Section 4.1(a), provided that both the quantities in (A) and (B)
shall be computed as though the special allocation in Section
4.3(h) had not been made. For purposes of this definition of
Special Series B Distribution Amount, "taxable income" shall mean
taxable income as defined by Code Section 703(a), by including in
the computation of such taxable income any items that are
separately stated pursuant to Code Section 703(a)(1).
"Subsidiary" means any of Gulf South Pipeline Company, LLC,
a Delaware limited liability company, Axia Energy, LLC, a
Delaware limited liability company, Gulf South Pipeline Company,
LP, a Delaware limited partnership, Axia Energy, LP, a Delaware
limited partnership, EGT Holding, ET&M and any other Person of
which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the
power to direct the business and policies of that other Person
(other than securities or other interests having such power only
upon the happening of a contingency that has not occurred) are
held by the Partnership or one or more of its Subsidiaries, and
"Subsidiaries" means all such Subsidiaries collectively.
"Target Gap" means, for any Allocation Year, the difference
between (a) the sum of the Capital Contributions by the Series A
Limited Partners plus the Undistributed Series A Weather Profits
(calculated after application of Sections 4.3(j) and 5.1(b) for
such Allocation Year), reduced by all distributions to the Series
A Limited Partners pursuant to Sections 5.2(a) and 5.2(b), minus
(b) the sum of (i) the Capital Contributions by the Series B
Limited Partners, (ii) the Special Series B Distribution Account,
and (iii) the cumulative amount allocated through the end of the
current Allocation Year to the Series B Limited Partners pursuant
to Section 4.1(a) up to a maximum of $129,500,000. For purposes
of this definition of Target Gap, for any Allocation Year for
which there has been no Determination, the Special Series B
Distribution Account shall be calculated as though there has been
a Determination for such Allocation Year that does not affect the
allocations made among the Partners for such Allocation Year. The
Target Gap may be greater than, less than, or equal to zero.
"Tax" or collectively, "Taxes" means any and all federal,
state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties
and additions imposed with respect to such amounts and any
obligations under any agreement or arrangements with any other
Person with respect to such amounts and including any liability
for taxes of a transferor or predecessor entity.
"Tax Matters Partner" has the meaning set forth in Section
7.3(a) of this Agreement.
"Transaction Documents" means this Agreement, the
Contribution Agreement, the Disclosure Schedule, the Business
Opportunities Agreement, the Indemnity Agreement, the Valuation
Side Letter (as defined in the Contribution Agreement), the
Weather Side Letter, the Receivables Purchase Agreement, the LLC
Agreement, the Transfer Restrictions Agreement and all documents
executed and delivered by the General Partner, the Partnership,
any of the Subsidiaries of the Partnership or any Partner in
connection with this Agreement or the Contribution Agreement.
"Transfer" means as a noun, any voluntary or involuntary
sale, lease, pledge, or other disposition and, as a verb,
voluntarily or involuntarily to sell, lease, pledge, or otherwise
dispose of, including, in each case, any transfer by operation of
any applicable Legal Requirement, merger or bankruptcy or
otherwise. The adjective "Transferred" has the correlative
meaning.
"Transfer Restrictions Agreement" means the Transfer
Restrictions Agreement dated as of the Effective Date between
Entergy and KII.
"Triggering Event" means (i) the sale of all or
substantially all of the Gateway Assets prior to January 1, 2007,
(ii) on or after January 1, 2004, the Transfer by the ▇▇▇▇
Partner Group of its Interests prior to January 1, 2007, if and
only if Entergy or an Affiliate of Entergy is the "Notifying
Party" pursuant to Section 4 of the Transfer Restrictions
Agreement, and (iii) the Transfer by the ▇▇▇▇ Partner Group of
its Interests prior to January 1, 2004, if and only if ▇▇▇▇ or an
Affiliate of ▇▇▇▇ is the "Notifying Party" pursuant to Section 4
of the Transfer Restrictions Agreement.
"UCC" means the Uniform Commercial Code as in effect in the
State of Delaware, or any other jurisdiction that may be
relevant.
"Undistributed Series A Weather Profits" means, at any time,
the excess, if any, of (i) the difference between (A) the
cumulative amounts allocated to the Series A Limited Partners
pursuant to Section 4.3(j), minus (B) the cumulative amounts
distributed to the Series A Limited Partners pursuant to Section
5.1(b), over (ii) the difference between (A) the cumulative
amounts allocated to the Series B Limited Partners pursuant to
Section 4.3(j), minus (B) the cumulative amounts distributed to
the Series B Limited Partners pursuant to Section 5.1(b).
"Voluntary Bankruptcy" has the meaning set forth in the
definition of "Bankruptcy".
"Weather Derivatives Business" means the trade or business
of (i) the entry into, performance or discharge of Derivative
Contracts relating to weather and (ii) the performance of
advisory services relating to the foregoing activities.
"Weather Shortfall Distribution Amount" means, as to any
Partner, the excess, if any, of (i) the cumulative amounts
allocated to such Partner pursuant to Section 4.3(j) for all
prior Allocation Years, over (ii) the cumulative amounts
distributed to such Partner pursuant to Section 5.1(b) for all
prior Allocation Years.
"Weather Side Letter" means the letter agreement
establishing the methodology for determining the Profits
Attributable to the Weather Derivatives Business, attached hereto
as Exhibit A.
"Wholly Owned Affiliate" of any Person means (i) an
Affiliate of such Person 100% of the capital stock (or its
equivalent in the case of entities other than corporations) of
which is owned beneficially by such Person, directly, or
indirectly through one or more Wholly Owned Affiliates, or by any
Person who, directly or indirectly, owns beneficially 100% of the
capital stock (or its equivalent in the case of entities other
than corporations) of such Person, and (ii) an Affiliate of such
Person who, directly or indirectly, owns beneficially 100% of the
capital stock (or its equivalent in the case of entities other
than corporations) of such Person; provided that, for purposes of
determining the ownership of the capital stock of any Person, de
minimis amounts of stock held by directors, nominees and similar
Persons pursuant to statutory or regulatory requirements shall
not be taken into account.
Section 1.2 Other Terms. Unless the content shall require
otherwise:
(a) Words importing the singular number or plural number shall
include the plural number and singular number respectively;
(b) Words importing the masculine gender shall include the
feminine and neuter genders and vice versa;
(c) Reference to "include," "includes," and "including" shall be
deemed to be followed by the phrase "without limitation;"
(d) Reference in this Agreement to "herein," "hereby" or
"hereunder", or any similar formulation, shall be deemed to refer
to this Agreement as a whole, including the Exhibits hereto;
(e) References to documents and agreements shall include such
documents and agreements as amended from time to time; and
(f) The headings of this Agreement are for reference only and
shall not be deemed to form part of the text or be used in the
construction or interpretation of this Agreement. All references
to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement.
ARTICLE II
THE PARTNERSHIP
Section 2.1 Continuation. The Partners formed the
Partnership as a limited partnership under and pursuant to the
provisions of the Act and the Certificate was filed with the
Secretary of State of the State of Delaware on January 11, 2001.
The Partners hereby agree to continue the Partnership as a
limited partnership pursuant to the provisions of the Act and
upon the terms and conditions set forth in this Agreement. This
Agreement completely amends, restates and supersedes in its
entirety that certain Agreement of Limited Partnership of Entergy-
▇▇▇▇, ▇▇ entered into on January 11, 2001 by the Partners.
Simultaneously with the execution of this Agreement, without the
need for any additional act or consent of any Person, the General
Partner is hereby admitted as general partner of the Partnership
and the Entergy A Limited Partner, the Entergy B Limited Partner
and the ▇▇▇▇ Limited Partner are hereby admitted as limited
partners of the Partnership. The ▇▇▇▇ Limited Partner is hereby
admitted as a Series A Limited Partner and the Entergy A Limited
Partner and the Entergy B Limited Partner are hereby admitted as
Series B Limited Partners. The rights and liabilities of the
Partners shall be as provided under the Act and this Agreement.
Section 2.2 Name. The name of the Partnership shall continue
to be Entergy-▇▇▇▇, ▇▇, and all business of the Partnership shall
continue to be conducted in such name or, in the discretion of
the General Partner, under any other name; provided that the
General Partner may change the name of the Partnership only upon
executing (by an authorized Person designated by the General
Partner) and filing an amendment to the Certificate.
Section 2.3 Purpose.
(a) The purposes of the Partnership shall be any business or
activity as determined by the General Partner that is not
forbidden by Legal Requirement.
(b) The initial businesses of the Partnership, acting on behalf
of itself and its Subsidiaries, shall be the following:
(i) development, ownership and operation of assets engaged in
the transportation, gathering, storage and treating of pipeline
quality natural gas;
(ii) marketing and trading of all energy products and services
(as long as such marketing and trading is in compliance with the
Business Opportunities Agreement), including, without limitation,
natural gas, electricity, air emission allowances, coal and
lignite, including Derivative Contracts related thereto, and
weather Derivative Contracts;
(iii) providing financial products and capital support to the
Partnership's customers to stimulate business, reduce risk and
enhance profitability;
(iv) power generation asset ownership; and
(v) any other business or activity that now or in the future may
be necessary, incidental, proper, advisable, or convenient to
accomplish the foregoing purposes (including obtaining
appropriate financing) as determined by the General Partner and
that is not forbidden by Legal Requirement.
(c) The Partnership, and the General Partner or any Officer on
behalf of the Partnership, acting singly or jointly, may enter
into and perform the Transaction Documents to which the
Partnership is a party and all documents, agreements, and
certificates contemplated thereby or related thereto, all without
further act, vote or approval of any Person, notwithstanding any
other provision of this Agreement.
(d) The Partnership, and the General Partner or any Officer on
behalf of the Partnership, acting singly or jointly, may enter
into and perform the Loan Documents to which the Partnership is
a party or a signatory, all without further act, vote or approval
of any Person, notwithstanding any other provision of this
Agreement.
(e) The Partnership shall have the power to do any and all acts
necessary, appropriate, proper, advisable, incidental or
convenient to or in furtherance of the purposes of the
Partnership set forth in this Section 2.3 and shall have, without
limitation, any and all powers that may be exercised on behalf of
the Partnership by the General Partner pursuant to Article VI
hereof.
Section 2.4 Principal Office. The principal office of the
Partnership shall be in Houston, Texas. The registered office of
the Partnership in the State of Delaware is located at c/o The
Corporation Trust Company, Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Section 2.5 Term. The term of the Partnership commenced on
the date the Certificate was filed in the office of the Secretary
of State of the State of Delaware in accordance with the Act and
shall continue until the completion of the winding up and
liquidation of the Partnership following a Liquidating Event as
provided in Article IX.
Section 2.6 Filings; Agent for Service of Process.
(a) The General Partner executed, delivered and filed the
Certificate with the Secretary of State of the State of Delaware.
The General Partner shall take any and all other actions
including without limitation the filing of amendments to the
Certificate necessary to perfect and maintain the status of the
Partnership as a limited partnership under the laws of the State
of Delaware or any other states in which the Partnership is
engaged in business, including the preparation, execution and
filing of such amendments to the Certificate and such other
certificates, documents, instruments and publications as may be
required by law.
(b) The General Partner shall provide notice to the Partners of
any state or jurisdiction in which the Partnership is qualified
to do business (other than its jurisdiction of organization).
(c) The registered agent for service of process on the
Partnership in the State of Delaware shall be The Corporation
Trust Company or any successor as appointed by the General
Partner in accordance with the Act.
(d) Upon the dissolution and completion of the winding up and
liquidation of the Partnership, the General Partner shall
promptly execute and cause to be filed a certificate of
cancellation in accordance with the Act and the laws of any other
states or jurisdictions in which the General Partner deems such
filing necessary or advisable.
(e) The General Partner shall promptly deliver copies of all
filings made on behalf of the Partnership in accordance with this
Section to the Partners.
Section 2.7 Title to Partnership Property. All Partnership
Property shall be owned by the Partnership as an entity, and no
Partner shall have any ownership interest in such property in its
individual name or right. Each Partner's Interest in the
Partnership shall be personal property for all purposes. The
Partnership shall hold all of its property in the name of the
Partnership and not in the name of any Partner.
Section 2.8 Payments of Individual Obligations. The
Partnership's credit and assets shall be used solely for the
benefit of the Partnership, and no Partnership Property shall be
Transferred or encumbered for or in payment of any individual
obligation of any Partner.
Section 2.9 Independent Activities; Transactions with
Affiliates.
(a) Prior to the third anniversary of the Final Contribution
Date, no Partner shall, nor shall it permit any of its Affiliates
to, solicit, other than a general solicitation through help
wanted advertisements in newspapers or employee search firms, any
employee of the Partnership or of any of its Wholly Owned
Affiliates to become employed (whether as an employee,
consultant, independent contractor, or any other relationship
pursuant to which such Person may render services to such Partner
or its Affiliates) by such Partner or any of its Affiliates,
without obtaining the prior written consent of the other Partner
Group, which consent shall not be unreasonably withheld.
(b) Except as otherwise provided in Section 6.4(c), each Partner
and any Affiliate thereof may also lend money to, borrow money
from, act as a surety, guarantor or endorser for, guarantee or
assume one or more specific obligations of, provide collateral
for, and transact other business with the Partnership and,
subject to any other applicable Legal Requirement, has the same
rights and obligations with respect thereto as a Person who is
not a Partner. The existence of these relationships and acting
in such capacities will not result in the Limited Partners being
deemed to be participating in the control of the business of the
Partnership or otherwise affect the limited liability of the
Limited Partners.
(c) The General Partner and any partner, member, manager,
stockholder, officer, director or employee of the General
Partner, and any of its Affiliates shall be required to devote
only such time to the affairs of the Partnership as such Person
determines in its sole discretion may be necessary to manage and
operate the Partnership, and each such Person shall be free to
serve any other Person or enterprise in any capacity that it may
deem appropriate in its discretion.
(d) Except as otherwise provided in the Business Opportunities
Agreement, each Partner acknowledges that the other Partners and
their Affiliates are free to engage or invest in an unlimited
number of activities or businesses, any one or more of which may
be related to the activities or businesses of the Partnership,
without having or incurring any obligation to offer any interest
in such activities or businesses to the Partnership or any
Partner, and neither this Agreement nor any activity undertaken
pursuant to this Agreement shall prevent any Partner or its
Affiliates from engaging in such activities, or require any
Partner to permit the Partnership or any Partner or its
Affiliates to participate in any such activities, and as a
material part of the consideration for the execution of this
Agreement by each Partner, each Partner hereby waives,
relinquishes, and renounces any such right or claim of
participation. The Partners acknowledge that certain conflicts
of interest may thus arise and hereby agree that the specific
rights with respect to the Partners' and their Affiliates'
freedom of action provided in this Section 2.9(d) and the
Business Opportunities Agreement are sufficient to protect their
respective interests in relation to such possible conflicts and
are to be in lieu of all other possible limitations which might
otherwise be implied in fact, in law or in equity.
Section 2.10 UCC Election. The Partnership, by and through its
General Partner, hereby irrevocably elects that each Interest
shall constitute a "security" within the meaning of (i) Section 8-
102(a)(15) of the UCC and (ii) the Uniform Commercial Code of any
other applicable jurisdiction that now or hereafter substantially
includes the 1994 revisions to Article 8 thereof as adopted by
the American Law Institute and the National Conference of
Commissioners on Uniform State Laws and approved by the American
Bar Association on February 14, 1995, and shall be evidenced by
certificates, executed by the General Partner on behalf of the
Partnership, each of which shall bear the following legend: "This
certificate evidences an interest in ENTERGY-▇▇▇▇, ▇▇ and shall
be a security for purposes of Article 8 of the Uniform Commercial
Code as in effect in the State of Delaware and the Uniform
Commercial Code of any other applicable jurisdiction that now or
hereafter substantially includes the 1994 revisions to Article 8
thereof as adopted by the American Law Institute and the National
Conference of Commissioners on Uniform State Laws and approved by
the American Bar Association on February 14, 1995."
ARTICLE III
PARTNERS' CAPITAL CONTRIBUTIONS
Section 3.1 Partners' Original Capital Contributions.
(a) General Partner. Simultaneously with the execution and
delivery of this Agreement, the General Partner shall make the
Original Capital Contribution listed on Exhibit B. The name,
address, Original Capital Contribution and the initial Percentage
Interest of the General Partner, are as listed on Exhibit B, as
such may be amended from time to time.
(b) Limited Partner. Simultaneously with the execution and
delivery of this Agreement, the Limited Partners shall make the
Original Capital Contributions listed on Exhibit B. The name,
address, Original Capital Contribution and the initial Percentage
Interest of each Limited Partner, is as listed on Exhibit B, as
such may be amended from time to time.
(c) Contribution Agreement. Each of the Partners shall
contribute to the Partnership the Capital Contributions described
in the Contribution Agreement at the times and upon the terms and
conditions described therein.
(d) Pre-formation Expenses. Each of the Partners shall be
required to pay its own expenses incurred in connection with
formation of the Partnership (collectively the "Pre-formation
Expenses"). The Entergy Partner Group and the ▇▇▇▇ Partner Group
shall submit a schedule to the Partnership of Pre-formation
Expenses incurred. The expenses so submitted shall represent a
deemed contribution to the capital of the Partnership from the
Series A Limited Partner for the ▇▇▇▇ Partner Group expenses and
from the Series B Limited Partners for the Entergy Partner Group.
The initial Fair Market Value of the Pre-formation Expenses shall
be zero.
Section 3.2 Additional Capital Contributions.
(a) Except as otherwise provided in Section 3.1 or this Section
3.2, no Partner shall be required or permitted to make any
Additional Capital Contributions to the Partnership unless
approved by an affirmative vote of all of the Partners, which
vote shall be in each Partner's sole and absolute discretion.
(b) On the earlier of January 1, 2004 (or if such day is not a
Business Day, then on the next succeeding Business Day) or the
occurrence of a Liquidating Event, without further action and
without vote, the Series B Limited Partners shall make an
Additional Capital Contribution to the Partnership in the amount
of $72,750,000 in Cash Equivalents.
(c) In the event that the Partners in accordance with Article VI
determine that additional capital is required by the Partnership
from the Partners, it will be funded through one or a combination
of the following mechanisms: (i) through Additional Capital
Contributions from all Partners according to their Percentage
Interests, (ii) subject to Section 6.4(c), through revolving
credit facilities or other credit support from Partners, their
Affiliates or other third parties (such as banks), or (iii)
through such other means as all the Partners may approve.
(d) In the event that such funding is made in the form of
Additional Capital Contributions, the Partners shall determine
the date (which date may be no earlier than the fifth Business
Day following such determination) before which the Additional
Capital Contributions must be made.
(e) In the event that such funding is made in the form of
revolving credit facilities or other committed credit support
from a Partner, then the Partner shall be compensated for such
commitment on an annual basis for the duration of that support by
the payment of a commitment fee. The annual commitment fee will
be at a commercially determined rate (such as might be required
by a third party bank). In the event the Partnership draws on
the credit facilities provided by a Partner, then the Partner
shall be paid an annual interest charge calculated by reference
to commercial rates for a loan of that character for so long as
the borrowing continues. If pursuant to a committed credit
support provided by one or more of the Partners, one or more
Partners advance all or part of the funds needed for or on behalf
of the Partnership, each other Partner shall have the right to
advance a proportionate part (based upon the relative Percentage
Interest of the Partner advancing funds and each other Partner
desiring to make an advance) of any funds described in this
Section 3.2(e).
(f) The initial Gross Asset Value of any Partnership Property
(other than cash) contributed pursuant to this Section 3.2 shall
be determined as follows:
(i) The initial Gross Asset Value of any Cash Equivalent shall
be equal to its face value, less unamortized discount and plus
unamortized premium, if any;
(ii) The initial Gross Asset Value of the Entergy Assets and the
▇▇▇▇ Assets shall be the "Contribution Value" as determined in
accordance with the Contribution Agreement; and
(iii) The initial Gross Asset Value of any additional
property contributed by any Partner with the consent of all of
the Partners, shall be equal to the Fair Market Value as
reasonably determined by the General Partner in good faith.
Section 3.3 Obligations Under Representations and Warranties.
(a) Any payment required to be made by any Partner to or on
behalf of the Partnership pursuant to the indemnification
provisions of the Contribution Agreement will be treated for
income tax purposes as a contribution to the Partnership by such
Partner so long as such Partner, or an Affiliate thereof, is a
Partner in the Partnership at the time of payment; provided,
however, that (i) such payments will not be treated as a
contribution for purposes of determining the Capital Account or
Percentage Interest of any Partner, and (ii) to the extent that
any payment is required to be made to the Partnership by such
Partner pursuant to the indemnification provisions of the
Contribution Agreement and such payment is either indemnity for
the payment by the Partnership of an item that is deductible for
income tax purposes or results in an increase in the basis of any
Partnership Property that is depreciable, depletable,
amortizable, or subject to cost recovery, any such deduction or
cost recovery allowance will not be taken into account in
determining Profits, Losses or other items of deduction or loss
allocable pursuant to Article IV of this Agreement, but will be
specially allocated to such Partner for income tax purposes, and
such special allocation will not affect the Capital Account or
Percentage Interest of any Partner.
(b) In the event any payment is required to be made pursuant to
the Contribution Agreement by the Partnership to any Partner to
return any payment received by it from such Partner pursuant to
the indemnification provisions of the Contribution Agreement,
such payment will be treated for income tax purposes as a
distribution by the Partnership to such Partner so long as such
Partner or an Affiliate thereof is a Partner in the Partnership
at the time of receipt of payment; provided, however, that (i)
such payment will not be treated as a distribution for purposes
of determining the Capital Account or Percentage Interest of any
Partner, and (ii) to the extent that any payment is required to
be made by the Partnership to any Partner to return any payment
received by it from such Partner pursuant to the indemnification
provisions of the Contribution Agreement, and such payment is
attributable to the receipt by the Partnership of an item that
constitutes income for income tax purposes, such income will not
be taken into account in determining Profits, Losses or other
items of income or gain allocable pursuant to Article IV of this
Agreement, but will be specially allocated to such Partner for
income tax purposes, and such special allocation will not affect
the Capital Account or Percentage Interest of any Partner.
Section 3.4 Other Matters.
(a) Except as otherwise provided in Article VIII, Section 9.1,
or Article X, to the fullest extent permitted by any applicable
Legal Requirement, no Partner shall be entitled to demand or
receive a return of its Capital Contributions or withdraw from
the Partnership without the consent of all Partners. Under
circumstances requiring a return of any Capital Contributions, no
Partner shall have the right to receive property other than cash
except as may be specifically provided in this Agreement.
(b) No Partner shall receive any interest or draw with respect
to its Capital Contributions or its Capital Account.
(c) The Limited Partners shall not be liable for the debts,
liabilities, contracts or any other obligations of the
Partnership or the other Partners. Except as otherwise provided
by the provisions of this Article III, such Limited Partner shall
not be required to lend any funds to the Partnership or to make
any Additional Capital Contributions to the Partnership. No
General Partner shall have personal liability for the repayment
of any Capital Contributions of any Limited Partner.
(d) If any Limited Partner fails to contribute timely all or any
portion of any monetary sum that such Limited Partner is required
to contribute pursuant to this Article III (other than Section
3.1(c)) (individually or collectively, the "Delinquent Partner"),
then the Partnership or any other Limited Partner(s) who timely
contributed all or any portion of any monetary sum that it has
agreed to contribute in respect of Capital Contributions pursuant
to this Article III (individually or collectively, the "Non-
Delinquent Partner") may exercise, by seven Business Days prior
written notice to the Delinquent Partner and the Partnership any
one or more of the following rights or remedies:
(i) Taking such action as the General Partner or the Non-
Delinquent Partner deems appropriate to obtain payment by the
Delinquent Partner of its agreed contribution that is in default,
together with interest thereon at the Default Interest Rate from
the date that such contribution was due until the date that such
contribution is made, at the cost and expense of the Delinquent
Partner;
(ii) The Non-Delinquent Partner may elect to advance that portion
of the contribution that is in default and to treat such advance
as a loan to such Delinquent Partner on the terms and conditions
described in clause (iii) below;
(iii) The Non-Delinquent Partner may elect to advance that
portion of the contribution that is in default as follows:
(A) the sum advanced shall be a loan from the Non-Delinquent
Partner to the Delinquent Partner and a Capital Contribution of
such sum to the Partnership by the Delinquent Partner pursuant to
this Section 3.4;
(B) the principal balance of such loan and all accrued unpaid
interest thereon shall be due and payable in whole upon written
demand given to the Delinquent Partner by the Non-Delinquent
Partner;
(C) the loan shall bear interest at the Default Interest Rate,
from the date that the loan was made until the date that such
loan, together with all interest accrued thereon, is repaid to
the Non-Delinquent Partner;
(D) all distributions from the Partnership that would otherwise
be made to the Delinquent Partner are hereby assigned by the
Delinquent Partner to the Non-Delinquent Partner (whether before
or after dissolution of the Partnership) until the loan and all
interest accrued thereon have been repaid in full to the Non-
Delinquent Partner (with all such payments being applied first to
interest earned and unpaid and then to principal), but all such
payments to the Non-Delinquent Partner shall be treated for all
purposes of this Agreement as a distribution by the Partnership
to the Delinquent Partner and a payment by the Delinquent Partner
to the Non-Delinquent Partner;
(E) the payment of the loan and interest accrued on it is hereby
secured by a security interest in the Delinquent Partner's
Interest, as more fully set forth below; and
(F) the Non-Delinquent Partner shall have the right, in addition
to the other rights and remedies granted to it pursuant to this
Agreement or available to it at law or in equity, to take such
action as the Non-Delinquent Partner deems appropriate to obtain
payment by the Delinquent Partner of the principal balance of
such loan and all accrued and unpaid interest thereon, at the
cost and expense of the Delinquent Partner.
(iv) The Partnership and/or the Non-Delinquent Partner, if
applicable, may exercise the rights of a secured party under the
UCC, as more fully set forth below; or
(v) The Partnership and/or the Non-Delinquent Partner, if
applicable, may exercise any other rights and remedies available
at law or in equity.
(e) Each Partner grants to the Partnership, and to each Non-
Delinquent Partner with respect to any loans made by any Non-
Delinquent Partner to that Partner as a Delinquent Partner as
described above, as security, equally and ratably, for the
payment of all loans and interest accrued on them made by the Non-
Delinquent Partner to that Partner as a Delinquent Partner as
described above, a security interest in and a general lien on
its Interest and the proceeds of that Interest, all under the
UCC. On any default in the payment of a Capital Contribution or
in the payment of such a loan or interest accrued on it, the
Partnership or the Non-Delinquent Partner, as applicable, is
entitled to all the rights and remedies of a secured party under
the UCC with respect to the security interest granted pursuant to
this Section 3.4(e). At the request of any Partner, each Partner
shall execute and deliver to the Partnership and the other
Partners all financing statements, control agreements and other
instruments to effectuate and carry out the preceding provisions
of this Section 3.4(e).
(f) Any Partner who becomes a Delinquent Partner shall cease to
be a Delinquent Partner only upon payment in full of all sums
provided for in this Section 3.4.
(g) The Partners agree that all Capital Contributions to the
Partnership are intended to qualify as nontaxable contributions
of property pursuant to Section 721 of the Code. The Partners
and the Partnership agree to make all reports, returns, claims
and other statements in respect of Taxes consistent with this
characterization, except as directly required by a Governmental
Body.
Section 3.5 Certain Bonus and Pension Payments. In the
event any Partner shall be required to make a payment to the
Partnership in order that the Partnership shall make a payment of
a bonus to an employee pursuant to the side letter regarding ▇▇▇▇
bonus compensation payments, payments pursuant to the side letter
regarding Entergy retention bonus compensation payments or
payments for Pension Plan Uplifts as described in the Cost
Sharing Side Letter, each of even date herewith, such payment
shall be treated as a Capital Contribution by such Partner and
any deduction attributable thereto (whether directly as a
deduction for employee compensation or indirectly for
depreciation or the like for any increase in the tax basis of
Partnership property) shall be specially allocated to such
Partner pursuant to Section 4.3(m).
ARTICLE IV
ALLOCATIONS
Section 4.0 Ordering. Allocations pursuant to this
Article IV shall be made pursuant to Section 4.5(g).
Section 4.1 Profits. Profits for any Allocation Year shall
be allocated as follows:
(a) First, for each Allocation Year ending on or before December
31, 2003, 99% to the Series B Limited Partners and 1% to the
General Partner;
(b) Second, after the Allocation Year ending December 31, 2003,
to the Partners in such a manner and in such a minimum amount as
to cause the difference between the Adjusted Capital Account of
the Series A Limited Partners minus the sum of the Adjusted
Capital Accounts of the Series B Limited Partners to equal the
Target Gap; and
(c) Third, after the Allocation Year ending December 31, 2003,
49.5% to the Series A Limited Partners, 49.5% to the Series B
Limited Partners, and 1% to the General Partner.
Section 4.2 Losses. Losses for any Allocation Year shall be
allocated as follows:
(a) First, for each Allocation Year ending on or before
December 31, 2003, to the Partners, in proportion to their
Percentage Interests;
(b) Second, after the Allocation Year ending December 31,
2003, to the Partners in such a manner and in such a minimum
amount as to cause the difference between the Adjusted Capital
Account of the Series A Limited Partners minus the sum of the
Adjusted Capital Accounts of the Series B Limited Partners to
equal the Target Gap; and
(c) Third, thereafter to the Partners, in proportion to
their Percentage Interests.
The Losses allocated pursuant to this section shall not
exceed the maximum amount of Losses that can be so allocated
without causing any Limited Partner to have an Adjusted Capital
Account Deficit at the end of any Allocation Year. All Losses in
excess of the limitations set forth in the preceding sentence
shall be allocated to the General Partner.
Section 4.3 Special Allocations. The following special
allocations shall be made in the order specified in Section
4.5(g):
(a) Minimum Gain Chargeback. Except as otherwise provided in
Section 1.704-2(f) of the Regulations, notwithstanding any other
provision of this Article IV, if there is a net decrease in
Partnership Minimum Gain during any Allocation Year, each Partner
shall be allocated items of Partnership income and gain for such
Allocation Year (and, if necessary, subsequent Allocation Years)
in an amount equal to such Partner'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 Partner 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 4.3(a) 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.
(b) 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 IV, if there
is a net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to a Partner Nonrecourse Debt during any Allocation
Year, each Partner 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 allocated items of Partnership income and
gain for such Allocation Year (and, if necessary, subsequent
Allocation Years) in an amount equal to such Partner'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 Partner
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 4.3(b) 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.
(c) Qualified Income Offset. In the event that any Partner
unexpectedly receives any adjustments, allocations, or
distributions described in Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) of the
Regulations, items of Partnership income and gain shall be
allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Partner as quickly as
possible; provided that an allocation pursuant to this Section
4.3(c) shall be made only if and to the extent that such Partner
would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article IV have been tentatively
made as if this Section 4.3(c) were not in this Agreement.
(d) Gross Income Allocation. In the event that any Partner has
an Adjusted Capital Account Deficit at the end of any Allocation
Year, such Partner shall be allocated items of Partnership income
and gain in the amount of such deficit as quickly as possible;
provided that an allocation pursuant to this Section 4.3(d) shall
be made only if and to the extent that such Partner would have an
Adjusted Capital Account Deficit in excess of such sum after all
other allocations provided for in this Article IV have been
tentatively made as if Section 4.3(c) and this Section 4.3(d)
were not in this Agreement.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Allocation Year shall be allocated to the
Partner 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).
(f) Nonrecourse Deductions. Nonrecourse Deductions for any
Allocation Year shall be allocated to the Partners in proportion
to their Percentage Interests.
(g) Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership Property pursuant to Code
Section 734(b) or Code Section 743(b) is required pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-
1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as the result of a distribution to a Partner in complete
liquidation of its Interest, 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
allocated to the Partners in accordance with their interests in
the Partnership in the event Regulations Section 1.704-
1(b)(2)(iv)(m)(2) applies, or to the Partner to whom such
distribution was made in the event Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.
(h) Special Loss Allocation. In each Allocation Year ending on
or before December 31, 2003 there shall be specially allocated to
the Series A Limited Partner items of gross deduction equal to
the Special Series B Distribution Amount for such Allocation
Year. The General Partner shall select items for this special
allocation only from among those items of deduction for which the
tax deduction shall be equal to the "book" deduction (using
"book" in the sense in which such term is used in Treasury
Regulations Section 1.704-1(b)(2)(iv)).
(i) Gateway Assets Profit Allocations. Profits Attributable to
the Sale of the Gateway Assets, if any, shall be allocated on a
cumulative basis from the Effective Date as follows:
(i) First, to the Partners in such a manner and in such a
minimum amount as to cause the difference between the Adjusted
Capital Account of the Series A Limited Partners minus the sum of
the Adjusted Capital Accounts of the Series B Limited Partners to
equal the Target Gap;
(ii) Second, to the Series B Limited Partners until the Special
Adjustment Account has been reduced to zero; and
(iii) Finally, 49.5% to the Series A Limited Partners, 49.5%
to the Series B Limited Partners and 1% to the General Partner.
(j) Weather Derivatives Business Profit Allocations. Profits
Attributable to the Weather Derivatives Business (other than
Profits Attributable to International Weather), if any, shall be
allocated as follows:
(i) For each of the Allocation Years ending on or before
December 31, 2010, in the following order and priority:
(A) First, 49.5% to the Series A Limited Partners, 49.5% to
the Series B Limited Partners, and 1% to the General Partner
until such time, if any, that the Profits Attributable to the
Weather Derivatives Business allocated for each such Allocation
Year pursuant to this Section 4.3(j)(i)(A) are equal to
$20,000,000;
(B) Second, 90% to the Series A Limited Partners and 10% to
the Series B Limited Partners, until such time, if any, that the
Profits Attributable to the Weather Derivatives Business
allocated for each such Allocation Year pursuant to this Section
4.3(j)(i)(B) are equal to $12,500,000 (in other words, the first
$12,500,000 after $20,000,000 has been allocated under (A)
above); and
(C) Third, the balance, if any, for each such Allocation
Year to the Partners in proportion to their Percentage Interests;
and
(ii) For each Allocation Year thereafter, to the Partners
in proportion to their Percentage Interests.
(k) Special Allocation of Gain on Sales in Liquidation or
Revaluation. On a sale of the Partnership Property (other than
the Gateway Assets) pursuant to the liquidation of the
Partnership or on a readjustment of the book values of all of the
Partnership Property (other than the Gateway Assets) (a "book-
up"), the Partnership shall allocate items of income or gain (as
determined for "book" purposes in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv)) (i) in such a manner and
in such a minimum amount as to cause the difference between the
Adjusted Capital Account of the Series A Limited Partners minus
the sum of the Adjusted Capital Accounts of the Series B Limited
Partners to equal the Target Gap; then (ii) to the Series B
Limited Partners until the Special Adjustment Account has been
reduced to zero; and (iii) finally, to the Partners in proportion
to their Percentage Interests.
(l) EK International Group Profit Allocations. For each
Allocation Year ending on or before December 31, 2010, the
Profits and Losses of the EK International Group, as determined
on a consolidated basis for the EK International Group, shall be
divided into Profits Attributable to International Weather and
Profits Attributable to International Non-Weather and allocated
in the following manner:
(i) If there are any Profits Attributable to International
Weather, the allocations made pursuant to Section 4.3(j)(i) shall
be hypothetically made as if Profits Attributable to the Weather
Derivatives Business that are allocated thereunder include the
Profits Attributable to International Weather.
(ii) If there are any Profits Attributable to International Non-
Weather, they shall be hypothetically allocated:
(A) First, to the Partners in proportion to their
Percentage Interests until the amount allocated pursuant to this
Section 4.3(l)(ii)(A) for each such Allocation Year equals
$1,500,000;
(B) Second, 90% to the Series B Limited Partners and 10% to
the Series A Limited Partners until such time, if any, that the
amount allocated pursuant to this Section 4.3(l)(ii)(B) for each
such Allocation Year equals $2,812,500 (in other words, the first
$2,812,500 after $1,500,000 has been allocated under (A) above);
and
(C) Third, the balance, if any, for each such Allocation
Year to the Partners in proportion to their Percentage Interests.
(iii) Each Limited Partner shall add its additional
hypothetical allocation for the year under Section 4.3(l)(i)
(i.e., its allocation under such provision over what it would
have been allocated under Section 4.3(j)(i) without regard to the
application of this Section 4.3(l)) and its hypothetical
allocation for the year under Section 4.3(l)(ii).
(iv) The aggregate net allocation for the year under Section
4.3(l)(iii) to the Series A Limited Partners shall be netted
against the aggregate net allocation for the year under Section
4.3(l)(iii) to the Series B Limited Partners. For each
Allocation Year, the results of such netting shall be known as
the "Net Allocation" for the Limited Partners with the larger net
allocations under Section 4.3(l)(iii).
(v) If the Series A Limited Partners have larger net allocations
under Section 4.3(l)(iii) than the Series B Limited Partners,
then the Series A Limited Partners may elect unilaterally to
require the General Partner to cause the EK International Group
to make distributions in the Allocation Year in the minimum
amount reasonably projected to distribute an amount resulting in
Profits equal to the Net Allocation calculated for the Series A
Limited Partners under Section 4.3(l)(iv) and Profits
attributable to such distributions shall be specially allocated
100% to the Series A Limited Partners.
(vi) If the Series B Limited Partners have larger net allocations
under Section 4.3(l)(iii) than the Series A Limited Partners,
then the Series B Limited Partners may elect unilaterally to
require the General Partner to cause the EK International Group
to make distributions in the Allocation Year in the minimum
amount reasonably projected to distribute an amount resulting in
Profits equal to the Net Allocation calculated for the Series B
Limited Partners under Section 4.3(l)(iv) and Profits
attributable to such distributions shall be specially allocated
100% to the Series B Limited Partners.
(vii) Except to the extent otherwise provided above under
this Section 4.3(l), if in any Allocation Year there are
dividends from EK International Group, taxable income included
from EK International Group under Section 951 of Subpart F of the
Code or gain from the sale or adjustment to the Gross Asset Value
of the stock of EK International Group, Profits attributable to
such dividends, taxable income or gain shall be allocated:
(A) First, to the Partners in the ratio and to the extent
of the excess, if any, of (a) the aggregate Net Allocations to
each Partner under Section 4.3(l)(iv) for all prior Allocation
Years, over (b) the aggregate Profits attributable to
distributions from EK International Group under Section 4.3(l)(v)
or Section 4.3(l)(vi) allocated to such Partner thereunder for
all prior Allocation Years; and
(B) Second, to the Partners in proportion to their
Percentage Interests.
(viii) All amounts allocated to the Series A Limited Partners
under Section 4.3(l)(v) or 4.3(l)(vii)(A) shall be deemed to have
been allocated pursuant to Section 4.3(j) for purposes of
computing Target Gap, Undistributed Series A Weather Profits,
Weather Shortfall Distribution Amount, and for Section 5.1(b).
(m) Certain Bonus and Pension Payments. The deduction
described in Section 3.5 shall be allocated as therein provided.
(n) Management Fee. The deductions described in Section
6.3 shall be allocated as therein provided.
Section 4.4 Curative Allocations. The allocations set forth
in Sections 4.3(a), 4.3(b), 4.3(c), 4.3(d), 4.3(e), 4.3(f) and
4.3(g) (the "Regulatory Allocations") are intended to comply with
certain requirements of the Regulations. It is the intent of the
Partners that, to the extent possible, all Regulatory Allocations
shall be offset either with other Regulatory Allocations or with
allocations of other items of Partnership income, gain, loss or
deduction pursuant to this Section 4.4. Therefore,
notwithstanding any other provision of this Article IV (other
than the Regulatory Allocations), the General Partner shall make
such offsetting allocations of Partnership income, gain, loss or
deduction in whatever manner it determines appropriate so that,
after such offsetting allocations are made, each Partner's
Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Partner would have had if the
Regulatory Allocations were not part of this Agreement and all
Partnership items were allocated pursuant to this Article IV
without regard to the Regulatory Allocations. In exercising its
discretion under this Section 4.4, the General Partner shall take
into account future Regulatory Allocations under Sections 4.3(a)
and 4.3(b) that, although not yet made, are likely to offset
other Regulatory Allocations previously made under Sections
4.3(e) and 4.3(f).
Section 4.5 Other Allocation Rules.
(a) Profits, Losses and any other items of income, gain, loss or
deduction shall be allocated to the Partners pursuant to this
Article IV as of the last day of each Allocation Year; provided
that Profits, Losses and such other items shall also be allocated
at such other times as the Gross Asset Values of Partnership
Property are adjusted pursuant to subparagraph (ii) of the
definition of Gross Asset Value.
(b) In the case of a Partner who sells its entire Interest in
the Partnership, the Partnership taxable year shall close with
respect to such Partner, and such Partner's distributive share of
all items of Profits, Losses and any other items of income, gain,
loss or deduction shall be determined using the interim closing
of the books method under Code Section 706 and Regulations
Section 1.706-1(c)(2)(i). Except as otherwise provided in this
Article IV, in all other cases in which it is necessary to
determine 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.
(c) All allocations to the Partners, or to a class of Partners,
pursuant to this Agreement shall, except as otherwise provided,
be divided among them in proportion to their Percentage
Interests.
(d) The Partners hereby agree to be bound by the provisions of
this Article IV in reporting their share of Partnership income
and loss for income tax purposes, except to the extent otherwise
required by law. Notwithstanding any requirements of law, the
Partners agree, for purposes of maintaining their Capital
Accounts, to be bound by the allocations contained in this
Article IV, notwithstanding any allocations for income tax
purposes.
(e) Solely for purposes of determining the Partners'
proportionate share of the "excess nonrecourse liabilities" of
the Partnership within the meaning of Regulations Section 1.752-
3(a)(3), the shares shall be: 90% to the Series A Limited
Partners, 10% to the Series B Limited Partners, and 0% to the
General Partner, which the Partners agree is reasonably
consistent with allocations of significant items of Partnership
income or gain under Section 4.3(j).
(f) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the General Partner shall endeavor to treat
distributions of cash as having been made from the proceeds of a
Nonrecourse Liability only to the extent that such distributions
would cause or increase an Adjusted Capital Account Deficit for
any Limited Partner.
(g) The allocations contained in this Agreement shall be made in
the following order for Allocation Years ending prior to January
1, 2004: Sections 4.3(a)-(g); Section 4.3(m); Section 4.3(n);
Section 4.3(h); Section 4.3(j); Section 4.3(l); Section 4.2;
Section 4.1; Section 4.3(i); Section 4.3(k); and Section 4.4.
For Allocation Years thereafter, the allocations shall be made in
the following order: Sections 4.3(a)-(g); Section 4.3(m);
Section 4.3(n); Section 4.3(i); Section 4.3(k); Section 4.3(h);
Section 4.3(j); Section 4.3(l); Section 4.2; Section 4.1 and
Section 4.4.
Section 4.6 Tax Allocations; Code Section 704(c). In
accordance with Code Section 704(c) and the applicable
Regulations thereunder, income, gain, loss, and deduction with
respect to any property contributed to the Partnership shall,
solely for tax purposes, be allocated among the Partners 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 Gross Asset Value (computed in accordance with the
definition of Gross Asset Value). Such allocation shall be made
in accordance with the traditional method described by
Regulations Section 1.704-3(b) of the Regulations.
In the event the Gross Asset Value of any Partnership
Property is adjusted pursuant to subparagraph (ii) or (iv) of the
definition of Gross Asset Value, subsequent allocations of
income, gain, loss, and deduction with respect to such asset
shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset
Value in the same manner as under Code Section 704(c) and the
applicable Regulations thereunder.
Any elections or other decisions relating to such
allocations shall be made by the General Partner in any manner
that reasonably reflects the purpose and intention of this
Agreement. Allocations pursuant to this Section 4.6 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
Partner's Capital Account or share of Profits, Losses, other
items, or distributions pursuant to any provision of this
Agreement.
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 allocated to the
Partners in the same manner as its correlative item of "book"
income, gain, loss or deduction is allocated pursuant to Section
4.1, 4.2 and 4.3.
To the extent that allocations made pursuant to this Article
IV for any Allocation Year include the allocation of an item of
income or gain that is recaptured as ordinary income under Code
Sections 1245, 1250 and 1254 and that is attributable to
deductions taken prior to the Effective Date, such ordinary
income shall be allocated to the Partner to whom the deduction
was allocated.
Section 4.7 Pre-formation Expenses. The Partnership
shall make the election under Code Section 709 to amortize
organizational expenses over 60 months. The Pre-formation
Expenses shall be amortized in accordance with Code Section 709
and the amortization expense attributable to Pre-formation
Expenses shall be allocated to the Series A Limited Partner and
the Series B Limited Partners in the ratio of the total Pre-
formation Expenses incurred by the Entergy Partner Group and the
▇▇▇▇ Partner Group.
ARTICLE V
DISTRIBUTION
Section 5.1 Cash Flow. Except as otherwise provided in
Section 3.4(d), Section 5.2, Section 5.4 and Article XI, Cash
Available for Distribution shall be distributed within five
Business Days after the end of each Fiscal Quarter as follows:
(a) First, if the Adjusted Capital Account of the Series A
Limited Partners minus the sum of the Adjusted Capital Accounts
of the Series B Limited Partners equals the Target Gap, to the
Series B Limited Partners, until the Special Series B
Distribution Account has been reduced to zero;
(b) Second, for each Allocation Year ending on or before
December 31, 2010, up to the sum of the amounts allocated
pursuant to Section 4.3(j) for such Allocation Year plus the
amount to be distributed by Section 5.1(b)(i) for such Allocation
Year, in the following order and priority:
(i) To each Partner in proportion to its share of the sum of all
Partners' Weather Shortfall Distribution Amounts, up to the
amount of such Partner's Weather Shortfall Distribution Amount;
(ii) 49.5% to the Series A Limited Partners, 49.5% to the Series
B Limited Partners and 1% to the General Partner, until such
time, if any, as the distributions for each such Allocation Year
pursuant to this Section 5.1(b)(ii) are equal to $20,000,000;
(iii) 90% to the Series A Limited Partners and 10% to the
Series B Limited Partners, until such time, if any, as the
distributions for each such Allocation Year pursuant to this
Section 5.1(b)(iii) are equal to $12,500,000 (in other words, the
first $12,500,000 after the $20,000,000 is distributed pursuant
to (ii) above); and
(iv) The balance, if any, for each such Allocation Year to the
Partners in proportion to their Percentage Interests; and
(c) Thereafter, 49.5% to the Series A Limited Partners, 49.5%
to the Series B Limited Partners and 1% to the General Partner.
Section 5.2 Other Distributions. Notwithstanding any
provision to the contrary contained in this Agreement (except
Section 11.1 providing that distributions must be made in the
accordance with Capital Accounts upon a Liquidating Event), the
following distributions shall be made as follows:
(a) on the date that the Gateway Interests are contributed to
the Partnership pursuant to the Contribution Agreement, the gross
amount of the financing obtained by the Partnership as referenced
in Sections 2.4.1(i) and 2.4.2(i) of the Contribution Agreement
in cash shall be distributed to the Series A Limited Partners;
(b) on the earlier of January 1, 2004, or the occurrence of
a Liquidating Event, $72,750,000 shall be distributed to the
Series A Limited Partners; and
(c) except as provided in Section 5.1 and Section 11.1, no
other distributions shall be permitted.
Section 5.3 Amounts Withheld. If required by the Code or by
any other applicable Legal Requirement, the Partnership will
withhold any required amount from distributions to a Partner, or
with respect to the distributive share of a Partner, for payment
to the appropriate taxing authority. Any amount so withheld from
a Partner will be treated as a distribution by the Partnership to
such Partner, except as otherwise provided below. Each Partner
agrees to file timely any agreement that is required by any
taxing authority in order to avoid any withholding obligation
that would otherwise be imposed on the Partnership. If the
amount required to be withheld with respect to a Partner exceeds
the amount of distributions payable to such Partner, such excess
will be treated as a demand loan to the Partner, payable within
10 days after such time that the Partnership makes payment to the
appropriate taxing authority and demand is made on such Partner
to pay.
Section 5.4 Limitation on Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, the
Partnership shall not be required to make a distribution to any
Partner on account of its interest in the Partnership if such
distribution would violate Section 17-607 or 17-804 of the Act or
other applicable Legal Requirement.
Section 5.5 Capital Expenditure Reimbursement. The Partnership
is making the distribution set forth in Section 5.2(a) to the
Series A Limited Partners to reimburse such Partners if and to
the extent that capital expenditures were (i) incurred during the
two-year period preceding the date of such Partners' Capital
Contributions and (ii) incurred by such Series A Limited Partners
with respect to Partnership organization and syndication costs
described in Code Section 709 or property contributed to the
Partnership by such Partners, within the meaning of and subject
to the limitations provided in Regulations Section 1.707-4(d).
ARTICLE VI
MANAGEMENT OF THE PARTNERSHIP
Section 6.1 Management by the General Partner. Except as
otherwise provided in this Agreement, (i) the General Partner
shall conduct, direct, and exercise full control over all
activities of the Partnership and its businesses, including the
operation and management of the Partnership Property, (ii) all
management powers over the businesses and affairs of the
Partnership shall be exclusively vested in the General Partner,
and (iii) the Limited Partners shall not have any right of
control or management power over the business and affairs of the
Partnership. Under the direction of the General Partner, the day-
to-day activities of the Partnership shall be conducted on its
behalf by the Officers, who shall be agents of the Partnership.
Section 6.2 Officers.
(a) Generally. The Partnership shall have employees or agents
who are denominated as officers as the General Partner may
designate from time to time (the "Officers"). Any number of
offices may be held by the same Person. Unless otherwise
provided by resolution of the General Partner, the Officers shall
have the titles, power, authority and duties described in this
Section 6.2. Notwithstanding anything to the contrary contained
in this Agreement, in no event shall any Officer be considered a
general partner of the Partnership by agreement, estoppel, as a
result of the performance of its duties, or otherwise.
Notwithstanding the delegation of certain rights and powers over
the management of the Partnership to the Officers, the General
Partner shall not cease to be a general partner of the
Partnership.
(b) Election; Vacancies; Removal. The Officers shall hold their
offices for such terms and shall exercise such powers and perform
such duties as described in this Agreement and as shall be
determined from time to time by the General Partner. All
Officers of the Partnership shall hold office until their
successors are chosen and qualified or until their earlier death,
resignation or removal. Whenever any vacancies shall occur in
any office by death, resignation, removal, increase in the number
of Officers, or otherwise, the same shall be filled by the
General Partner, and the Officer so appointed shall hold office
until his or her successor is chosen and qualified. Any Officer
elected or appointed by the General Partner may be removed at the
sole discretion of the General Partner. Such removal may be with
or without prejudice to the contract rights, if any, of the
Person so removed. Election or appointment of an Officer shall
not of itself create contract rights.
(c) Salaries. The salaries or other compensation of all
Officers shall be determined by the General Partner and may be
altered by the General Partner from time to time except as
otherwise provided by contract.
(d) General Officer Duties. The Officers shall be responsible
for implementing the decisions of the General Partner and,
subject to the policies and limitations established by the
General Partner, for conducting the day-to-day activities of the
Partnership as determined by the General Partner.
(e) Specific Duties of the CEO. The Chief Executive Officer
(the "CEO") shall have responsibility for the general and active
day-to-day management of the business of the Partnership and
shall ensure that all orders and resolutions of the General
Partner or the Partners are carried into effect. The CEO may
sign deeds, mortgages, bonds, contracts or other instruments,
except in cases where the signing and execution thereof shall be
expressly delegated by the General Partner or by this Agreement
to some other officer or agent of the Partnership, or shall be
required by law to be otherwise signed and executed. The CEO
shall also perform such other duties and may exercise such other
powers as may be assigned by this Agreement or prescribed by the
General Partner from time to time.
(f) Specific Duties of the CFO. The Chief Financial Officer
(the "CFO") shall have custody of the funds of the Partnership as
may be entrusted to his or her keeping and account for the same.
The CFO shall be prepared at all times to give information as to
the condition of the Partnership and shall make an annual report
of the entire business and financial condition of the
Partnership. The CFO shall also perform, under the direction and
subject to the control of the CEO or the General Partner, such
other duties as may be assigned to him or her. The duties of the
CFO may also be performed by the Treasurer or any Assistant
Treasurer.
(g) Specific Duties of Vice Presidents. Any Vice President, in
the order of seniority, unless otherwise determined by the
General Partner, shall, in the absence or disability of the CEO,
perform the duties and exercise the powers of the CEO. They
shall also perform the usual and customary duties that pertain to
such office and generally assist the CEO by executing contracts
and agreements and exercising such other powers and performing
such other duties as are delegated to them by the CEO and as the
General Partner may further prescribe.
(h) Specific Duties of General Counsel. The General Counsel
shall perform such duties as may be prescribed by the General
Partner or the CEO, under whose supervision he or she shall be.
The General Counsel shall perform the usual and customary duties
that pertain to such office and generally exercise such other
powers and perform such other duties as are delegated to him or
her by the CEO and as the General Partner may further prescribe.
(i) Specific Duties of Secretary. The Secretary shall perform
such duties as may be prescribed by the CEO, under whose
supervision he or she shall be. The Secretary shall have custody
of the seal of the Partnership, if any, and the Secretary shall
have authority to affix the same to any instrument requiring it,
and when so affixed, it may be attested by the signature of the
Secretary. The General Partner or CEO may give general authority
to any other officer to affix the seal of the Partnership and to
attest the affixing by his or her signature. The Secretary shall
see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are
properly kept or filed, as the case may be. The duties of the
Secretary may be performed by any Assistant Secretary.
(j) Other Officers. Such other Officers as the General Partner
may appoint shall perform such duties and have such powers as
from time to time may be assigned to them by the General Partner.
The General Partner may delegate to any other Officer of the
Partnership the power to choose such other Officers and to
prescribe their respective duties and powers.
(k) Delegation of Authority. Notwithstanding the foregoing, in
the case of any absence of any Officer of the Partnership or for
any other reason that the General Partner may deem sufficient,
the General Partner may delegate some or all of the powers or
duties of such Officer to any other Officer or to any other
employee or agent for whatever period of time seems desirable.
(l) Voting Securities Owned by the Partnership. Powers of
attorney, proxies, waivers of notice of meeting, consents and
other instruments relating to securities owned by the Partnership
may be executed in the name and on behalf of the Partnership by
the CEO or any Vice President, and any such Officer may, in the
name of and on behalf of the Partnership, take all such action as
any such Officer may deem advisable to vote in person or by proxy
at any meeting of security holders of any entity in which the
Partnership may own securities and at any such meeting shall
possess and may exercise any and all rights and powers incident
to the ownership of such securities and which, as the owner
thereof, the Partnership might have exercised and possessed if
present. The General Partner may confer like powers upon any
other Person or Persons.
Section 6.3 Compensation and Expenses. Except as provided
otherwise in this Agreement or in any service agreement approved
by the General Partner, no Partner or Affiliate of any Partner
shall receive any salary, fee, or draw for services rendered to
or on behalf of the Partnership or otherwise in its capacity as a
Partner. The Partnership agrees to pay to the General Partner a
management fee in the amount of $3,000,000 per year, or such
other amount as determined by the Board of Directors, payable
quarterly in advance, from the Effective Date until the
Partnership is liquidated in accordance with Article XI. Any
deductions attributable thereto shall be allocated equally
between the Series A Limited Partners and the Series B Limited
Partners. The General Partner shall be reimbursed for all
expenses, disbursements, and advances reasonably incurred or made
in connection with the formation of the Partnership and the
qualification of the Partnership to do business. The General
Partner shall be reimbursed on a monthly basis for all proper,
direct expenses it reasonably incurs on behalf of the Partnership
in performing its duties as General Partner (including amounts
paid to any Person to perform services for the Partnership).
Section 6.4 Powers Reserved to the Limited Partners. Except
as otherwise provided in this Agreement, without the consent of
all of the Partners, the Partnership shall not, and shall cause
its Subsidiaries not to, have the authority to and shall not:
(a) Do any act in contravention of this Agreement or the
Certificate or that would make it impossible to carry on the
ordinary business of the Partnership;
(b) Under any circumstances, possess Partnership Property for
other than a Partnership purpose;
(c) Except as otherwise expressly provided for in this
Agreement, cause or permit the Partnership for its own account or
cause or permit the Partnership to cause or permit any of the
Subsidiaries to deal with any Partner or any Affiliate of any
Partner on terms and conditions that are materially less
favorable to the Partnership or such Subsidiary than if the
transaction had been made with an independent third party;
(d) Make an agreement on behalf of or bind any Partner, except
to the extent a Partner, in its capacity as such, may be liable
to a creditor of the Partnership by operation of law;
(e) Cause the Partnership to become a party to any merger,
consolidation, conversion or any other business combination or
cause or permit the Partnership or any Subsidiary to Transfer all
or substantially all of its assets;
(f) Make a change to the nature, purpose, or scope of the
business conducted by the Partnership or its Subsidiaries or the
strategic direction of the Partnership or its Subsidiaries as set
forth in Section 2.3(b);
(g) Admit any new Partner, except for Permitted Transfers;
(h) Cause or permit the Partnership or any of the Subsidiaries
to commence any Voluntary Bankruptcy (other than (i)(A) of the
definition thereof), dissolution, winding up or liquidation
proceedings under any Legal Requirement;
(i) Cause the Partners to make any Additional Capital
Contributions to the Partnership or its Subsidiaries;
(j) Form, invest in, or acquire any interest in any Person that
is not contained in the then current Business Plan of the
Partnership or is in excess of those limits established by the
Board of Directors of the General Partner;
(k) Sell, license, pledge or otherwise Transfer any proprietary
software owned by the Partnership or any of its Subsidiaries
relating to the marketing and trading of any energy products or
services; or
(l) Solicit others to commence, an Involuntary Bankruptcy
against the Partnership or the Subsidiaries.
In any circumstances requiring the approval or consent of
the Partners specified in this Agreement, such approval or
consent may be given or withheld in the sole and absolute
discretion of the Partners.
Section 6.5 Duties, Rights and Obligations.
(a) The Partners have agreed that it is in the best interest of
the Partnership and all of its Partners to cause the Partners to
act solely through the mechanisms provided herein relating to the
authority of the General Partner and the appointment of the
Officers. Except as specifically provided herein, no Partner
shall take any act on behalf of or that would bind the
Partnership.
(b) Except as otherwise permitted by this Agreement or required
by any applicable Legal Requirement, the Limited Partners acting
in their capacity as Limited Partners shall not have any right
(i) to participate in the management or control of the
Partnership or its business and affairs, (ii) to bring an action
for partition or sale in connection with the property or assets
of the Partnership, whether real or personal, or (iii) to act for
or bind the Partnership in any way. A Limited Partner, and any
Affiliate, board of directors member, partner, member, manager,
stockholder, officer, director or employee thereof may also be a
board of directors member, partner, member, manager, stockholder,
officer, director or employee of a General Partner, the
Partnership or any Subsidiary. The existence of these
relationships and acting in such capacities will not result in a
Limited Partner being deemed to be participating in the control
of the business of the Partnership or otherwise affect the
limited liability of any Limited Partner.
(c) To the extent permitted by law, the General Partner may
exercise direction and control of the decisions of the
Partnership without any duty to or regard for the interests of
any other Partner or the Partnership. The Partnership and each
Partner therefore waive, to the full extent permitted by law, any
claim or cause of action against the General Partner, or any
Affiliate of the General Partner asserting, in connection with
the determination of any and all matters presented to the General
Partner for any action, breach of fiduciary duty, duty of care,
duty of loyalty or any other duty, or breach of any duty created
by special circumstances arising out of this Agreement or
otherwise.
(d) Whenever in this Agreement a Partner is permitted or
required to make a decision (i) in its "sole discretion" or
"discretion" or under a grant of similar authority or latitude,
the Partner shall be entitled to consider only such interests and
factors as it desires, including its own interests, or (ii) in
its "good faith" or under another express standard, the Partner
shall act under such express standard and shall not be subject to
any other or different standards imposed by this Agreement or any
other agreement contemplated herein or by relevant provisions of
law or in equity or otherwise.
(e) The General Partner may rely and shall be protected in
acting or refraining from acting on the basis of any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(f) To the fullest extent permitted by law and except as
otherwise provided in this Agreement, any Partner when voting its
interest in the Partnership on any matter shall not be acting in
a fiduciary capacity and therefore shall be entitled to consider
only such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of, or factors affecting, the
Partnership or any Partner.
Section 6.6 Sales and Distributions of Partnership Property.
Partnership Property may not be sold to any Affiliate of any
Partner, unless the Partnership or the selling Subsidiary shall
receive, contemporaneously with such sale, cash in an amount or
other approved consideration having a value equal to the Fair
Market Value thereof as reasonably determined by the General
Partner in good faith. In the event of any distribution of any
Partnership Property to any Partner, such Partner's Capital
Account shall be decreased by a total amount equal to the Fair
Market Value thereof as reasonably determined by the General
Partner in good faith.
Section 6.7 Meetings of Partners. From time to time, any
Partner, on a date reasonably acceptable to the other Partners,
may call a meeting of the Partnership to discuss the business and
affairs of the Partnership since the latest meeting and to vote
on such matters requiring Partner approval. The Partners may
make recommendations to or otherwise advise and consult with the
other Partners regarding the business and affairs of the
Partnership at any time. Any action required or permitted to be
taken at a meeting may be taken without a meeting, without prior
notice and without a vote if a consent or consents in writing,
setting forth the action so taken, is signed by all the Partners.
The Partners may participate in and hold meetings by means of
conference telephone, video conference or similar communications
equipment by means of which all persons participating in the
meeting can hear each other.
Section 6.8 Reliance on Partnership Agreement. No Partner or
other Person acting pursuant to the terms of this Agreement shall
be liable to the Partners or the Partnership for such Partner's
or other Person's good faith reliance on the provisions of this
Agreement.
Section 6.9 Indemnification.
(a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees
shall be indemnified and held harmless by the Partnership, its
receiver or its trustee (in the case of its receiver or trustee,
to the extent of Partnership Property), from and against any and
all losses, claims, damages, liabilities, joint or several,
expenses (including reasonable legal fees and expenses),
judgments, fines, penalties, interest, settlements or other
amounts actually and reasonably incurred by such Indemnitee
arising from any and all pending or completed claims (including
but not limited to negligence, strict or absolute liability,
liability in tort and liabilities arising out of violation of
laws or regulatory requirements of any kind), demands, actions,
suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
Partnership), in which any Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, by reason of
its status as an Indemnitee; provided, that in each case the
Indemnitee either acted in good faith and in a manner that such
Indemnitee reasonably believed to be in, or (in the case of a
Person other than a Partner) not opposed to, the best interests
of the Partnership or in accordance with Section 6.5, and with
respect to any criminal proceeding, had no reasonable cause to
believe its conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that the Indemnitee acted in a manner
contrary to that specified above.
(b) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees
shall be indemnified and held harmless by the Partnership, its
receiver or its trustee (in the case of its receiver or trustee,
to the extent of Partnership Property), from and against any and
all losses, claims, damages, liabilities, joint or several,
expenses (including reasonable legal fees and expenses),
judgments, fines, penalties, interest, settlements or other
amounts actually and reasonably incurred by such Indemnitee
arising from any and all pending or completed claims (including
but not limited to negligence, strict or absolute liability,
liability in tort and liabilities arising out of violation of
laws or regulatory requirements of any kind), demands, actions,
suits or proceedings, whether civil, criminal, administrative or
investigative, by or in the right of the Partnership, in which
any Indemnitee may be involved, or is threatened to be involved,
as a party or otherwise, by reason of its status as an
Indemnitee; provided, that in each case the Indemnitee acted
either in good faith and in a manner that such Indemnitee
reasonably believed to be in, or (in the case of a Person other
than a Partner) not opposed to, the best interests of the
Partnership or in accordance with Section 6.5, and with respect
to any criminal proceeding, had no reasonable cause to believe
its conduct was unlawful; provided, that no indemnification shall
be made under this subsection (b) in respect of any claims, issue
or matter as to which such Indemnitee shall have been adjudged to
be liable to the Partnership unless and only to the extent that
the Delaware Court of Chancery, or other court of appropriate
jurisdiction, shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such Indemnitee is fairly and reasonably entitled to
indemnity of such expenses which the Delaware Court of Chancery,
or other court of appropriate jurisdiction, shall deem proper.
The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere,
or its equivalent, shall not create a presumption that the
Indemnitee acted in a manner contrary to that specified above.
(c) Any indemnification pursuant to this Section 6.9 shall be
made only out of the assets of the Partnership, it being agreed
that the Partners shall not be personally liable for such
indemnification and shall have no obligation to contribute or
loan any monies or property to the Partnership to enable it to
effectuate such indemnification.
(d) To the fullest extent permitted by law, expenses (including
reasonable legal fees and expenses) incurred by an Indemnitee who
is indemnified pursuant to Section 6.9(a) or (b) in defending any
claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Partnership at reasonable intervals
prior to the final disposition of such claim, demand, action,
suit or proceeding; provided, however, that the Partnership shall
have received an undertaking by or on behalf of the Indemnitee to
repay such amount if it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified as authorized in
this Section 6.9. In that case, the Indemnitee shall reimburse
to the Partnership all such funds so advanced.
(e) Any indemnification under this Section 6.9 (unless ordered
by the Delaware Court of Chancery or other court of appropriate
jurisdiction) shall be made by the Partnership only as authorized
in the specific case upon a determination that indemnification of
such Indemnitee is proper in the circumstances because such
Indemnitee has met the applicable standard of conduct set forth
in subsections (a) and (b) of this Section 6.9. Such
determination shall be made (i) by the General Partner; or (2) if
the General Partner so directs, by independent legal counsel, in
a written opinion, selected by the Partners. In the event a
determination is made under this subsection (e) that the
Indemnitee has met the applicable standard of conduct as to some
matters but not as to others, amounts to be indemnified may be
reasonably prorated.
(f) If a court of competent jurisdiction determines that an
Indemnitee is entitled to indemnification under this Section 6.9,
the court shall award, and the Partnership shall pay, to such
Indemnitee the expenses incurred in securing such judicial
determination.
(g) The indemnification provided by this Section 6.9 shall be in
addition to any other rights to which an Indemnitee may be
entitled under any agreement, pursuant to any vote of the
Partners, as a matter of law or otherwise, both as to actions in
the Indemnitee's capacity as an Indemnitee and as to actions in
any other capacity, and shall continue as to an Indemnitee who
has ceased to serve in such capacity; provided that such Person
was an Indemnitee at the time the alleged event giving rise to
such indemnity occurred.
(h) The Partnership may purchase and maintain (or reimburse the
General Partner or its Affiliates for the cost of) insurance, on
behalf of the Partners, their Affiliates and such other Persons
as the General Partner shall determine, against any liability
that may be asserted against or expense that may be incurred by
such Persons in connection with the Partnership's activities or
such Persons' activities on behalf of the Partnership, regardless
of whether the Partnership would have the power to indemnify such
Persons against such liability under the provisions of this
Agreement.
(i) In no event may an Indemnitee subject any Partner to
personal liability by reason of the indemnification provisions
set forth in this Agreement.
(j) The provisions of this Section 6.9 are for the benefit of
the Indemnitees, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for
the benefit of any other Persons.
(k) No amendment, modification or repeal of this Section 6.9 or
any provision hereof shall in any manner terminate, reduce or
impair the right of any past, present or future Indemnitee to be
indemnified by the Partnership, nor the obligations of the
Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 6.9 as in effect
immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring,
in whole or in part, prior to such amendment, modification or
repeal, regardless of when such claims may arise or be asserted.
(l) Notwithstanding the foregoing, no Indemnitee shall be
indemnified from any liability for fraud, willful misconduct, bad
faith, or gross negligence of itself or any of its Affiliates.
Section 6.10 Liability of Indemnitees.
(a) To the extent that, at law or in equity, an Indemnitee has
duties (including fiduciary duties) and liabilities relating
thereto to the Partnership or to the Partners, the General
Partner and any other Indemnitee acting in connection with the
Partnership's business or affairs shall not be liable to the
Partnership or to any Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement,
to the extent that they restrict or otherwise modify the duties
and liabilities of an Indemnitee otherwise existing at law or in
equity, are agreed by the Partners to replace such other duties
and liabilities of such Indemnitee.
(b) Any amendment, modification or repeal of this Section 6.10
or any provision hereof shall be prospective only and shall not
in any way affect the limitations on the liability to the
Partnership, the Limited Partners, the General Partner, and the
Partnership's and General Partner's directors, officers and
employees under this Section 6.10 in effect immediately prior to
such amendment, modification or repeal with respect to claims
arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless
of when such claims may arise or be asserted.
Section 6.11 Indemnification Procedures.
(a) In the event any claim is made by a third party against any
Indemnitee with respect to an actual or potential liability for
which such Indemnitee is entitled to be indemnified under any
provisions of Section 6.9, and such Indemnitee wishes to be
indemnified with respect thereto, such Indemnitee shall promptly
notify the Partnership, its receiver or its trustee (in the case
of a receiver or trustee, to the extent of Partnership Property)
(the "Indemnitor"); provided that the failure of any such
Indemnitee to notify the Indemnitor shall not relieve the
Indemnitor from any liability which it otherwise may have to such
Indemnitee hereunder.
(b) Unless the Indemnitor has given the notice provided in
Section 6.11(c), each Indemnitee may by notice to the Indemnitor
take control of all aspects of the investigation and defense of
all claims asserted against it and may employ counsel of its
choice and at the expense of the Indemnitor; provided that (i)
the amount of any settlement such Indemnitee may enter into must
be consented to by the Indemnitor and no Indemnitee may in
connection with any such investigation, defense or settlement,
without the consent of the Indemnitor, require the Indemnitor or
any of the Subsidiaries to take or refrain from taking any action
(other than payment of such a settlement amount) or to make any
public statement, which such Person reasonably considers to
materially adversely affect its interest, and (ii) such
Indemnitee may not take control of any investigation, defense or
settlement which could entail a risk of criminal liability to the
Indemnitor or any of its Affiliates. Upon the request of the
Indemnitor, each Indemnitee shall use commercially reasonable
efforts to keep the Indemnitor apprised of the status of those
aspects of such investigation and defense controlled by such
Indemnitee and shall provide such information with respect
thereto as the Indemnitor may reasonably request. The Indemnitor
shall cooperate with the Indemnitee in all reasonable respects
with respect thereto.
(c) Notwithstanding Section 6.11(b), any Indemnitor may, by
notice to the Indemnitees, take control of all aspects of the
investigation and defense of all claims asserted against it, and
may employ counsel of its choice and at its expense; provided
that (i) the Indemnitor may not without the consent of any
Indemnitee agree to any settlement that requires such Indemnitee
to make any payment that is not indemnified hereunder, or does
not grant a general release to such Indemnitee, and in any event
the Indemnitor may not in connection with any such investigation,
defense, or settlement, without the consent of any Indemnitee,
take or refrain from taking any action which would reasonably be
expected to materially impair the indemnification of such
Indemnitee hereunder or would require such Indemnitee to take or
refrain from taking any action or to make any public statement,
which such Person reasonably considers to materially adversely
affect its interests, (ii) the Indemnitor may not take control of
any investigation, defense, or settlement, without the consent of
any Indemnitee, if the liabilities involved in such proceedings
involve any material risk of the sale, forfeiture, or loss of, or
the creation of any Encumbrance on, any property of such
Indemnitee and (iii) the Indemnitor may not take control of any
investigation, defense, or settlement which could entail a risk
of criminal liability to any Indemnitee. Upon the request of any
Indemnitee, the Indemnitor shall use commercially reasonable
efforts to keep such Indemnitee apprised of the status of those
aspects of such investigation and defense controlled by such
Indemnitor and shall provide such information with respect
thereto as such Indemnitee may reasonably request. The
Indemnitees shall cooperate with the Indemnitor in all reasonable
respects with respect thereto.
Section 6.12 Additional Indemnities. Entergy shall indemnify
and hold harmless the Partnership from and against any and all
losses, claims, damages, liabilities, joint or several, expenses
(including reasonable legal fees and expenses), judgments, fines,
penalties, interest, settlements or other amounts actually and
reasonably incurred by the Partnership attributable to or as a
result of any determination that EGT Holding is not a foreign
utility company within the meaning of Section 33 of the Public
Utility Holding Company Act of 1935, as amended.
ARTICLE VII
ACCOUNTING; BOOKS AND RECORDS
Section 7.1 Accounting; Books and Records.
(a) Maintenance of Books and Records. The Partnership shall
maintain at its principal office or, upon notice to the Partners,
at such other place as the General Partner shall determine,
separate books of account for the Partnership, which shall
include a record of all costs and expenses incurred, all charges
made, all credits made and received, and all income derived in
connection with the conduct of the Partnership and the operation
of its business in accordance with this Agreement.
(b) Accounting Methods.
(i) The Partnership shall use the accrual method of accounting
in preparation of its annual reports and for tax purposes and
shall keep its books and records accordingly.
(ii) All amounts payable under any agreement between the
Partnership and the Partners or their Affiliates (excluding the
Partnership) shall be treated as occurring between the
Partnership and a Person who is not a Partner within the meaning
of Section 707(a)(1) of the Code and such amounts payable by the
Partnership to any Partner or such Partner's Affiliates shall be
considered an expense or capital cost, as the case may be, of the
Partnership for income tax and financial reporting purposes, and
shall not be considered a distribution to such Partner, including
in maintaining such Partner's Capital Account, and any such
amounts payable by any Partner or its Affiliates to the
Partnership shall not be considered a contribution to the
Partnership, including in maintaining such Partner's Capital
Account.
(c) Access to Books, Records, etc. Each Partner or any of their
agents or representatives (subject to reasonable safety
requirements), at such Partner's own expense upon reasonable
notice during normal business hours, may visit and inspect any of
the properties of the Partnership and examine or audit any
information it may reasonably request and make copies of and
abstracts from the financial and operating records and books of
account of the Partnership and its Subsidiaries and copies of any
other documents relating to the businesses of the Partnership and
the Subsidiaries, and discuss the affairs, finances and accounts
of the Partnership and its Subsidiaries with the General Partner,
the Officers, the General Partner members and officers of the
Subsidiaries and independent accountants of the Partnership and
its Subsidiaries, all at such reasonable times and as often as
such Partner or any of its agents or representatives may
reasonably request.
Section 7.2 Reports.
(a) In General. The General Partner shall be responsible for
the preparation of financial reports of the Partnership and the
coordination of financial matters of the Partnership with the
Partnership's accountants.
(b) Annual Reports. Within 90 days after the end of each Fiscal
Year commencing with the first Fiscal Year ending on the December
31 following the Effective Date, the General Partner shall cause
to be prepared and to be delivered to the Partners the following:
(i) A consolidated balance sheet as of the last day of such
Fiscal Year and a consolidated income statement and consolidated
statement of cash flows for the Partnership and the Subsidiaries
for such Fiscal Year and notes associated with each, prepared in
each case in accordance with GAAP and audited by an independent
public accounting firm of national reputation selected by the
General Partner;
(ii) A statement of the Partners' capital accounts and changes
therein for such Fiscal Year prepared in accordance with this
Agreement and audited by an independent public accounting firm of
national reputation selected by the General Partner; and
(iii) A statement of the amount of the gain or loss, if any,
realized or deemed to be realized during such Fiscal Year on the
sale, disposition or adjustment of the Gross Asset Value of any
Partnership Property, prepared in accordance with this Agreement.
The financial statements described in this Section 7.2(b) shall
be accompanied by a written certification of the General Partner
that (a) such statements have been prepared in accordance with
GAAP and present fairly in all material respects the financial
position, results of operation and cash flows of the Partnership
and the Subsidiaries and (b) no Liquidating Event has occurred
and is continuing, or if any such event has occurred or is
continuing, the action that the General Partner has taken or
proposes to take with respect thereto.
(c) Quarterly Reports. Within 45 days after the close of each
of the first three Fiscal Quarters during any Fiscal Year
beginning with the Fiscal Quarter ending after the Effective
Date, the General Partner shall cause to be prepared and to be
delivered to each Partner unaudited financial statements
consisting of a consolidated balance sheet as of the last day of
such Fiscal Quarter and a consolidated income statement and a
consolidated statement of cash flows for the Partnership and the
Subsidiaries for such Fiscal Quarter, in each case prepared in
accordance with GAAP. The financial statements described in this
Section 7.2(c) shall be accompanied by a written certification of
the General Partner that (i) such statements have been prepared
in accordance with GAAP and present fairly in all material
respects the financial position, results of operation and cash
flows of the Partnership and the Subsidiaries and (ii) no
Liquidating Event has occurred and is continuing, or if any such
event has occurred or is continuing, the action that the General
Partner has taken or proposes to take with respect thereto.
(d) Liquidation Date Reports. The General Partner shall cause
to be prepared and to be delivered to each Partner on the date on
which final distributions are made to the Partners pursuant to
Section 11.1 hereof, a certification by a nationally recognized
accounting firm selected by the General Partner that the
following statements have been prepared in accordance with this
Agreement:
(i) A balance sheet as of the Liquidation Measurement Date
setting forth the aggregate Liquidation Value for all of the
Partnership Property (a "Liquidation Balance Sheet"); and
(ii) A statement of (A) the Partners' Capital Accounts and the
changes therein as of the Liquidation Measurement Date pursuant
to Section 10.1, and (B) the amount of the gain or loss, if any,
realized or deemed to be realized during the Fiscal Year during
which the Liquidation Measurement Date occurs on the sale,
disposition or adjustment of the Gross Asset Value of any
Partnership Property.
(e) Valuation Reports. The General Partner shall cause to be
prepared and delivered to each Partner contemporaneously with any
adjustment to the Gross Asset Values of Partnership Property in
accordance with subparagraph (ii) of the definition of Gross
Asset Value, reports required to determine Liquidation Value in
accordance with Section 10.1 and (x) in the event any Partnership
Property is acquired (whether by contribution or purchase), sold
or distributed by the Partnership, with respect to such
Partnership Property only and (y) upon the occurrence of any
adjustment to the Gross Asset Value of all Partnership Property,
with respect to all Partnership Property.
(f) Other Reports. The General Partner shall cause to be
prepared and to be delivered to each Partner by the Partnership,
any Subsidiaries or the General Partner any other reports or
information as the General Partner in its sole discretion, acting
in good faith, determines to be necessary or desirable for the
orderly conduct of the business of the Partnership.
Section 7.3 Tax Matters.
(a) The General Partner is hereby designated tax matters partner
(the "Tax Matters Partner") as defined in Section 6231(a)(7) of
the Code. The Tax Matters Partner will take no action (other
than ministerial action or any action specifically permitted
under this Section 7.3) without the prior approval of all of the
Partners. The Tax Matters Partner will not be required to take
any action or incur any expenses for the prosecution of any
administrative or judicial remedies in its capacity as Tax
Matters Partner unless the Partners agree on a method of sharing
expenses incurred in connection with the prosecution of such
remedies. As long as the Tax Matters Partner acts in good faith
pursuant to instructions it receives from the Partners or from
the Partnership, the Partnership will indemnify and hold harmless
the Tax Matters Partner from and against any and all liabilities
incurred by the Tax Matters Partner in connection with any
activities and undertakings taken by it in its capacity as Tax
Matters Partner.
(b) The Tax Matters Partner will be responsible for undertaking
the statutory responsibilities of the "Tax Matters Partner"
pursuant to subchapter C of chapter 63 of subtitle F of the Code,
as set forth in the Code and the Treasury Regulations. The Tax
Matters Partner will fully comply with the requirements of
Temporary Treasury Regulations Section 301.6223(g)-1 and any
successor provision, including providing each Partner with
notices of the following:
(i) The Tax Matters Partner will, within five (5) Business Days
after the mailing by the Internal Revenue Service of the notice
specified in Section 6223(a)(1), forward a copy of that notice to
each Partner.
(ii) The Tax Matters Partner will, within five (5) Business Days
after the mailing by the Internal Revenue Service of the notice
specified in Section 6223(a)(2), forward a copy of that notice to
each Partner.
(c) The Tax Matters Partner will promptly furnish to each
Partner information with respect to the following (in the case of
any action, within five (5) Business Days of taking that action):
(i) Closing conference with the examining agent;
(ii) Proposed adjustments, rights of appeal, and requirements for
filing of a protest;
(iii) Time and place of any appeals conference;
(iv) Acceptance by the Internal Revenue Service;
(v) Consent to the extension of the period of limitations with
respect to all members;
(vi) Filing of a "Request for Administrative Adjustment"
(including a request for substituted return treatment under
Section 301.6227(b)-1T) on behalf of the Partnership;
(vii) Filing by the Tax Matters Partner or any other Partner
of any petition for judicial review under Section 6226 or
6228(a);
(viii) Filing of any appeal with respect to any judicial
determination provided for in Section 6226 or 6228(a); and
(ix) Final judicial redetermination.
(d) Except as otherwise provided in the Code, the tax treatment
of any Partnership item will be determined at the Partnership
level.
(e) Any Partner has the right to participate in any
administrative proceeding relating to the determination of
Partnership items at the Partnership level.
(f) Partners will furnish the Tax Matters Partner with such
information (including information specified in Section 6230(e)
of the Code) as it may reasonably request to permit it to provide
the Internal Revenue Service with sufficient information to allow
proper notice to the Partners in accordance with Section 6223 of
the Code.
(g) Every Partner will, on the Partner's return, treat a
Partnership tax item in a manner which is consistent with the
treatment of such item on the Partnership's return unless the
Partner has given the Partnership prior written notice of
inconsistent treatment identifying the inconsistency. If any
Partner intends to file a Notice of Inconsistent Treatment under
Section 6222(b) of the Code, that Partner will, at least ten (10)
Business Days prior to the filing of that notice, notify the
other Partners of the intent and the manner in which such
Partner's intended treatment of a Partnership item is (or may be)
inconsistent with the treatment of that item by the Partnership.
(h) The Tax Matters Partner will not enter into any extension of
the period of limitations for making assessments on behalf of any
other Partner without first securing the written consent of that
Partner.
(i) No Partner will, pursuant to Section 6227 of the Code, file
a "Request for Administrative Adjustment" of the Partnership
items for any Partnership taxable year without first notifying
all other Partners. If all other Partners agree with the
requested adjustment, the Tax Matters Partner will file the
"Request for Administrative Adjustment" on behalf of the
Partnership. If unanimous consent is not obtained within 30 days
(or, if shorter, within the period required to timely file the
"Request for Administrative Adjustment"), any Partner, including
the Tax Matters Partner, may file a "Request for Administrative
Adjustment" on its own behalf.
(j) The Tax Matters Partner will not, in its capacity as Tax
Matters Partner, file a petition under Section 6226, 6228, 6234
or other sections of the Code with respect to any Partnership
item, or other tax matters involving the Partnership, without the
unanimous consent of all the Partners. Any Partner intending to
file a petition under Sections 6226, 6228, 6234 or other Sections
of the Code with respect to any Partnership item, or other tax
matters involving the Partnership, will notify the other Partners
at least ten (10) Business Days in advance of filing a petition
for review.
(k) The Tax Matters Partner will not bind the other Partners to
a settlement agreement without obtaining the written concurrence
of the other Partners that would be bound by that agreement. Any
other Partner that enters into a settlement agreement with the
Secretary of the Treasury with respect to any Partnership items,
as defined by Section 6231(a)(3) of the Code will notify the
other Partners of that settlement agreement and its terms within
ten (10) Business Days from the date of settlement.
(l) The provisions of this Section 7.3 will survive the
termination of the Partnership or the termination of any
Partner's interest in the Partnership and will remain binding on
the Partners for a period of time necessary to resolve any and
all matters regarding the federal and, if applicable, state
income taxation of the Partnership. The Partnership will retain
its records with respect to each fiscal year until the expiration
of the period within which additional federal or state income tax
may be assessed for such year. This provision provides
reasonable restrictions on the activities of the Tax Matters
Partner.
(m) A reasonable estimate of the necessary tax information for
each Partner's tax filings shall be delivered to the General
Partner as soon as practicable after the end of each Fiscal Year
of the Partnership but not later than March 1st of the next
succeeding Fiscal Year. Necessary tax information for each
Partner's annual tax filings shall be delivered to the General
Partner as soon as practicable after the end of each Fiscal Year
of the Partnership but not later than July 15 of the next
succeeding Fiscal Year. The General Partner shall file or cause
to be filed tax returns for the Partnership prepared in
accordance with the Code and the Regulations. The Tax Matters
Partner has nothing to do with returns; this position relates to
audits. At least thirty (30) days prior to the due date for
filing tax returns for the Partnership, the General Partner shall
forward copies of proposed returns to the Partners for review and
comment. The parties agree to negotiate in good faith to resolve
their differences with respect to any disagreements with respect
to such returns.
(n) Upon the request of any Partner, the Partnership shall file
the election provided for in Section 754 of the Code and any
corresponding provisions of state law.
(o) The General Partner shall make the election provided for in
Section 6231(a)(1)(B)(ii) of the Code or take any other action
necessary to cause the provisions of Sections 6221 through 6231
of the Code to apply to the Partnership.
(p) The General Partner shall determine, in its sole discretion,
exercisable in good faith, whether to make or not to make any
federal, state or local tax elections (other than other than
those provided for in the two immediately preceding paragraphs).
ARTICLE VIII
TRANSFERS OF INTERESTS
Section 8.1 Permitted Transfers.
(a) Any Transfer permitted by this Section 8.1 shall be referred
to in this Agreement as a "Permitted Transfer", and the Person to
which the Interest is transferred shall be a "Permitted
Transferee". A Permitted Transferee shall automatically become a
substituted Partner in the Partnership in respect of the Interest
so Transferred to it without any further act on the part of any
other Partner being required.
(b) No Partner may Transfer all or any portion of its Interest
unless (i) (A) if such Transfer occurs on or before January 1,
2004, all of the other Partners have given their prior written
consent, which consent may be withheld for any reason, (B) the
transferee is a Wholly-Owned Affiliate of such Partner or (C)
such Transfer occurs after January 1, 2004, (ii) the Partners
have complied with the terms and conditions of the Transfer
Restrictions Agreement and (iii) the conditions set forth in
Section 8.1(c) hereof have been satisfied.
(c) To the fullest extent permitted by law, a Transfer shall not
be treated as a Permitted Transfer under this Article VIII unless
and until all of the following conditions are satisfied:
(i) The Interest being Transferred shall not be less than 12.5%
of the aggregate of the Percentage Interests of all Partners
unless the entire remaining Interests of such Partner is being
Transferred. In addition, the ultimate parent of the transferee
shall agree in writing to be bound by the provisions of the
Transfer Restrictions Agreement.
(ii) The effect of such transfer shall not violate the terms of
or constitute a breach of or a default under, or result in the
breach of or a default under, with the giving of notice, the
passage of time, or both, any Transaction Document or any other
material agreement, document, contract or instrument to which the
Partnership or any Subsidiary is a party or by which the
Partnership, any Subsidiary or their respective assets are bound.
(iii) 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 free and clear of all
Encumbrances, except those created or permitted under this
Agreement, and to confirm the agreement of the transferee to be
bound by the provisions of this Agreement.
(iv) Except as otherwise permitted by the Transfer Restrictions
Agreement, the Transfer will not cause the Partnership to
terminate for federal income tax purposes and if requested by the
General Partner, the transferor shall provide the Partnership an
opinion of counsel to such effect reasonably satisfactory to the
General Partner. The General Partner and the transferor shall
provide to such counsel any information available to the General
Partner and the transferor and relevant to such opinion, if so
reasonably requested.
(v) The transferor and transferee shall furnish the Partnership
with the transferee's taxpayer identification number, 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.
(vi) Such Transfer will be exempt from all applicable
registration requirements and will not violate any Legal
Requirements regulating the Transfer of securities, and, except
in the case of a Transfer of Interests to another Partner, if
requested by the General Partner, the transferor shall provide an
opinion of counsel to such effect reasonably satisfactory to the
General Partner, and the General Partner and the transferor shall
provide to such counsel any information available to the General
Partner and the transferor and relevant to such opinion, if so
reasonably requested.
(vii) Such Transfer will not cause the Partnership to be
deemed to be an "investment company" under the Investment Company
Act of 1940, as amended and if requested by the General Partner,
the transferor shall provide an opinion of counsel to such effect
reasonably satisfactory to the General Partner, and the General
Partner and the transferor shall provide to such counsel any
information available to the General Partner and the transferor
and relevant to such opinion, if so reasonably requested.
(viii) If requested by the General Partner, the transferor and
transferee shall provide the Partnership with an opinion of
counsel, which opinion of counsel shall be reasonably acceptable
to the other Partners, to the effect that such Transfer will not
cause the Partnership to become taxable as a corporation for
federal income tax purposes.
(ix) The transferor and the transferee shall pay, or reimburse
the Partnership for, all reasonable costs incurred by the
Partnership in connection with such transfer or admission on or
before the 10th day after the receipt by that Person of the
Partnership's invoice for the amount due. If payment is not made
by the date due, the Person owing that amount shall pay interest
on the unpaid amount from the date due until paid at a rate per
annum equal to the Default Interest Rate.
Section 8.2 Prohibited Transfers.
(a) To the fullest extent permitted by law, any purported
Transfer of an Interest that is not a Permitted Transfer shall be
null and void and of no effect whatsoever; provided that, if the
Partnership is required to recognize a Transfer of an Interest
that is not a Permitted Transfer, the Interest Transferred shall
be strictly limited to the transferor's rights to allocations and
distributions as provided by this Agreement with respect to the
Transferred Interest, which allocations and distributions may be
applied (without limiting any other legal or equitable rights of
the Partnership) to satisfy any debts, obligations, or
liabilities for damages that the transferor or transferee of such
Interest may have to the Partnership, and shall be subject to the
restrictions and prohibitions on Transfers and Encumbrances on
Interests set forth herein as though such transferee were a
Partner.
(b) To the fullest extent permitted by law, in the case of a
Transfer or attempted Transfer of an Interest that is not a
Permitted Transfer, the parties engaging or attempting to engage
in such Transfer shall indemnify and hold harmless the
Partnership and the other Partners from all cost, liability, and
damage that any of such indemnified Persons may incur (including
incremental tax liability and reasonable attorneys' fees and
expenses) as a result of such Transfer or attempted Transfer and
efforts to enforce the indemnity granted in this Section 8.2(b).
(c) Except as otherwise provided in Section 3.4(e), a Partner
may not grant an Encumbrance in its Interest, unless (i) the
General Partner consents to such Encumbrance; provided, however,
that any Partner may grant an Encumbrance in its Interest if such
Encumbrance is being pledged to secure the repayment of
Indebtedness of such Partner and (ii) the instrument creating
such Encumbrance provides that any foreclosure of such
Encumbrance (or sale in lieu of such foreclosure) must comply
with the requirements of this Article VIII, other than the
restrictions on Transfers set forth in Sections 8.1(b)(i) and
(ii).
(d) No Partner may Transfer all or any portion of its Interest
to (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, (ii) ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, (iii) any spouse,
lineal descendant or spouse of a lineal descendant of a Person
identified in clauses (i) or (ii), or (iv) any Person that is an
Affiliate of any Person identified in clauses (i), (ii) or (iii);
provided, however, that the ▇▇▇▇ Limited Partner has notified the
transferring Partner as to the identity of any of these Persons
in connection with any proposed Transfer.
Section 8.3 Admission of Additional Limited Partners.
(a) Except with respect to Permitted Transfers, the Partnership
may admit one or more additional Limited Partners with the
written consent of each Partner, which consent may be withheld in
the sole discretion of such Partner. Any additional Limited
Partner so admitted to this Partnership under this Section 8.3
shall (i) make a Capital Contribution and (ii) have a Percentage
Interest, in such amounts as shall be determined by the General
Partner.
(b) Notwithstanding subsection (a) above, but excluding
Permitted Transfers, no Person shall be admitted to the
Partnership as an additional Limited Partner (i) if the effect of
such admission would be the transfer of 50% or more of the
Interests in any twelve-month period within the meaning of Code
Section 708; or (ii) if such admission could, with the giving of
notice, the passage of time or both, violate the terms of, or
constitute a breach of or a default under, or cause an
acceleration of the rights and remedies under, this Agreement or
any other material agreement, document, contract, or instrument
to which the Partnership or any Subsidiary is a party or by which
the Partnership, any Subsidiary or their respective assets are
bound.
(c) The admission of any new Partner to the Partnership shall be
conditioned on the satisfaction of the requirements set forth in
Section 8.1(c) with respect to transferees.
Section 8.4 Withdrawal of a Partner. Except following a
Transfer of a Partner's remaining Interest in compliance with
this Article VIII and the Transfer Restrictions Agreement, no
Limited Partner may voluntarily withdraw from the Partnership
without the written consent of the General Partner. In granting
such consent, the General Partner shall condition the withdrawal
of the withdrawing Limited Partner on such matters as the General
Partner may deem appropriate, and, in granting such consents,
shall determine (i) the extent, if any, to which such withdrawing
Limited Partners shall retain an interest in the Partnership;
(ii) the terms and conditions on and timing of the return of such
withdrawing Limited Partner's capital; and (iii) the extent, if
any, to which such withdrawing Limited Partner shall remain
obligated or liable for obligations and liabilities of the
Partnership and/or at risk with respect to ongoing Partnership
operations, but not beyond the obligations, liabilities, and
risks such Partner had at the time of withdrawal. In the event a
Limited Partner withdraws other than as the result of a Permitted
Transfer or without General Partner approval, the other Partner
Group may exercise their rights and remedies under this Agreement
or the Transfer Restrictions Agreement. If such rights are not
exercised, the Interest of the withdrawing Limited Partner shall
be redeemed by the Partnership at the Fair Market Value of such
Limited Partner's Interest as reasonably determined by the
General Partner in good faith. The payment of the redemption
price to the withdrawing Limited Partner may, at the discretion
of the non-withdrawing Partner Group, be deferred until the end
of the term of the Partnership or its earlier winding-up and
dissolution. On the withdrawal of a Limited Partner from the
Partnership in accordance with this Section, such Limited Partner
shall cease to be a Partner for all purposes, except to the
extent such Partner retains any obligation or liability for
obligations and liabilities of the Partnership as described
above.
Section 8.5 Withdrawal of General Partner. The General
Partner may not withdraw from the Partnership.
ARTICLE IX
LIQUIDATING EVENTS
Section 9.1 Liquidating Events. The Partnership shall
dissolve and commence winding up and liquidating upon the first
to occur of any of the following ("Liquidating Events"):
(a) The affirmative vote of all of the Partners (or if the
Bankruptcy of any Parent has occurred, then the unanimous vote of
the Partners excluding the Partners in the affected Partner Group
or the affected Partner, as the case may be);
(b) The Delaware Court of Chancery has entered a decree pursuant
to Section 17-802 of the Act, and such decree has become final;
(c) Upon the occurrence of an event of withdrawal of the General
Partner unless at the time there is at least one other general
partner of the Partnership (who is hereby authorized and shall
continue the business of the Partnership without dissolution),
except the Partnership shall not be dissolved upon the occurrence
of any such event if within 90 days after the withdrawal, all of
the Limited Partners agree in writing or vote to continue the
business of the Partnership without dissolution and appoint,
effective as of the date of withdrawal, one or more additional
general partners of the Partnership; and
(d) At any time there are no limited partners of the Partnership
unless the Partnership is continued without dissolution in
accordance with the Act.
The Partners hereby agree that, notwithstanding any provision of
the Act, the Partnership shall not dissolve prior to the
occurrence of a Liquidating Event.
Anything in this Agreement to the contrary notwithstanding:
(i) the Bankruptcy of any General Partner shall not cause such
Partner to cease to be a general partner of the Partnership and
upon the occurrence of such Bankruptcy, the business of the
Partnership shall continue without dissolution; and (ii) the
existence of the Partnership as a separate legal entity shall
continue until the cancellation of the Certificate as provided in
the Act.
ARTICLE X
LIQUIDATION VALUATION
Section 10.1 Determination of Liquidation Values. For purposes
of determining the amount of any adjustment to the Gross Asset
Values of Partnership Property pursuant to subparagraph (ii) and
(iii) of the definition of Gross Asset Value, the value of each
item of Partnership Property will be determined in accordance
with this Section 10.1 (the "Liquidation Value").
(a) The Liquidation Value of the Partnership's interests in the
Subsidiaries shall be valued at the total Liquidation Value of
the assets and liabilities owned by the Partnership's
Subsidiaries.
(b) The Liquidation Value of any cash and Cash Equivalents shall
be valued at their face value less unamortized discounts and plus
unamortized premium, if any.
(c) The Liquidation Value of any other Partnership Property
shall be the Fair Market Value thereof reasonably determined by
the General Partner in good faith. If any Partner disagrees with
the Liquidation Value determined by the General Partner, then it
may assert a different Liquidation Value if it in good faith
believes that the correct Liquidation Value differs from the
Liquidation Value determined by the General Partner by more than
5%.
(i) If the Partners fail to agree on the final Liquidation Value
of such Partnership Property, they shall mutually select an
investment banking firm knowledgeable of the business of the
Partnership to determine such final Liquidation Value. Such
determination shall be final and binding. The fees and expenses
of such investment banking firm shall be paid by the Partnership.
(ii) If the Partners are unable to mutually select such
investment banking firm, then each Series of Limited Partners
shall select an investment banking firm which shall determine the
Liquidation Value of the Partnership Property. The Liquidation
Value of the Partnership Property shall be the average of the two
investment banking firms' Liquidation Value. Such determination
shall be final and binding. The fees and expenses of such
investment banking firms shall be paid by the Series of Limited
Partners whose submitted Liquidation Value is furthest from the
final determination, and if the final determination is the
precise mean of each submitted Liquidation Value, the obligation
to pay the fees and expenses of such investment banking firms
shall be shared equally.
(iii) If such Liquidation Values determined by each such
investment banking firm are not within 10% of each other, then
the two investment banking firms shall mutually select a third
investment banking firm. Such third investment banking firm
shall determine the Liquidation Value of the Partnership
Property. The Liquidation Value of the Partnership Property
shall be the average of the third investment banking firm's
Liquidation Value and the Liquidation Value as determined by the
one of the two investment banking firms which is closest to the
third investment banking firm's determination. Such
determination shall be final and binding. The fees and expenses
of such investment banking firms shall be paid by the Series of
Limited Partners whose submitted Liquidation Value is furthest
from the final determination, and if the final determination is
the precise mean of each such submitted Liquidation Values, the
obligation to pay the fees and expenses of such investment
banking firms shall be shared equally.
(iv) Any Partner may independently request any investment banking
firm to prepare a report with respect to any Partnership Property
at any time at its own expense.
Section 10.2 Liquidation Gains and Losses. Upon the
determination of the Liquidation Values of all the Partnership
Property and the Subsidiaries, the Partnership shall be deemed to
have realized gain or loss in an amount equal to the Liquidation
Value of each item of Partnership Property less the basis for
such assets as determined pursuant to Section 704(b) of the Code.
ARTICLE XI
WINDING UP
Section 11.1 Winding Up. Upon the occurrence of a Liquidating
Event, the Partnership shall continue solely for the purposes of
winding up its affairs in an orderly manner, liquidating its
assets, and satisfying the claims of its creditors and Partners,
and no Partner shall take any action with respect to the
Partnership that is inconsistent with the winding up of the
Partnership's business and affairs; provided that all covenants
contained in this Agreement and obligations provided for in this
Agreement shall continue to be fully binding upon the Partners
until such time as the Partnership Property has been distributed
pursuant to this Section 11.1 and the Certificate has been
canceled pursuant to the Act. The General Partner or if there is
no General Partner, the Person appointed by the unanimous consent
of the Limited Partners (the General Partner or such Person, the
"Liquidating Trustee") shall be responsible for overseeing the
winding up of the Partnership. On the occurrence of a
Liquidating Event, the value of the Partnership's assets shall be
determined in accordance with Section 10.1, the Gross Asset
Values of all Partnership Property shall be adjusted pursuant to
subparagraph (ii) of the definition of Gross Asset Value as of
the Liquidation Measurement Date and any Profits or Losses of the
Partnership shall be allocated among the Partners as of such
Liquidation Measurement Date in accordance with Article IV
hereof. The Liquidating Trustee shall take full account of the
Partnership's liabilities and the Partnership Property and,
except as otherwise provided in Section 11.2, shall cause, as
soon as reasonably practicable, the Partnership Property or the
proceeds from the sale or disposition thereof (as determined
pursuant to Section 11.5), to the extent sufficient therefor, to
be applied and distributed, to the maximum extent permitted by
any applicable Legal Requirement and notwithstanding anything in
this Agreement to the contrary, in the following order (without
duplication):
(a) First, to creditors, including, without limitation, the
Partners and their Affiliates, in satisfaction (whether by
payment or reasonable provision for payment) of all of the
Partnership's debts and liabilities other than liabilities for
which reasonable provision for payment has been made and
liabilities for distributions to Partners under Section 17-601 or
17-604 of the Act;
(b) Second, the balance to the Partners in accordance with their
respective Capital Accounts, as provided under Article IV,
immediately after giving effect to the adjustments and
allocations required by the third sentence of this Section 11.1
and as reflected on the statement of Capital Accounts provided to
the Partners pursuant to Section 7.2(d)(ii).
The General Partner shall not receive any additional compensation
for any services performed pursuant to this Article XI.
Section 11.2 Restoration of Deficit Capital Accounts;
Compliance With Timing Requirements of Regulations. In the event
the Partnership is "liquidated" within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g), (x) distributions shall be made
pursuant to this Article XI to the Partners who have positive
Capital Accounts in compliance with Regulations Section 1.704-
1(b)(2)(ii)(b)(2), and (y) if the General Partner's Capital
Account has a deficit balance (after giving effect to all
contributions, distributions, and allocations for all taxable
years, including the taxable year during which such liquidation
occurs), then the General Partner shall contribute to the capital
of the Partnership the amount necessary to restore such deficit
balance to zero, in compliance with Regulations Section 1.704-
1(b)(2)(ii)(b)(3). If any Limited Partner has a deficit balance
in its Capital Account (after giving effect to all contributions,
distributions, and allocations for all taxable years, including
the taxable year during which such liquidation occurs), such
Limited Partner shall have no obligation to contribute 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. In the
discretion of the Liquidating Trustee a portion (determined in
the manner provided below) of the distributions that would
otherwise be made to the Partners pursuant to this Article XI may
be distributed to a trust established for the benefit of the
Partners solely for the purposes of liquidating Partnership
Property, collecting amounts owed to the Partnership, and paying
any contingent, conditional or unmatured liabilities or
obligations of the Partnership or of the Partners arising out of
or in connection with the Partnership. The assets of any such
trust shall be distributed to the Partners from time to time, in
the reasonable discretion of the General Partner, in the same
proportions as the amount distributed to such trust by the
Partnership would otherwise have been distributed to the Partners
pursuant to Section 11.1. The portion of the distributions that
would otherwise have been made to each of the Partners that is
instead distributed to a trust pursuant to this Section 11.2
shall be determined in the same manner as the expense or
deduction would have been allocated if the Partnership had
realized an expense equal to such amounts immediately prior to
distributions being made pursuant to Section 11.1.
Section 11.3 Deemed Distribution and Recontribution. In the
event the Partnership is liquidated within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event
has occurred, the Partnership Property shall not be liquidated,
the Partnership's liabilities shall not be paid or discharged,
and the Partnership's affairs shall not be wound up. Instead,
solely for federal income tax purposes, the Partnership shall be
deemed to have contributed all Partnership Property and
liabilities to a new limited partnership in exchange for an
interest in such new limited partnership and immediately
thereafter, the Partnership will be deemed to liquidate by
distributing interests in the new limited partnership to the
Partners.
Section 11.4 Rights of Partners. Each Partner shall look
solely to the Partnership Property for the return of its Capital
Contribution and, except as otherwise provided in Section 11.5,
shall have no right or power to demand or receive property other
than cash from the Partnership.
Section 11.5 Form of Liquidating Distributions. For purposes
of making distributions required by Section 11.1, the Liquidating
Trustee may determine whether to distribute all or any portion of
the Partnership Property in-kind or to sell all or any portion of
the Partnership Property and distribute the proceeds therefrom.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Amendments. Amendments to this Agreement may be
proposed by any Partner. Following such proposal, the General
Partner shall submit to the Partners a verbatim statement of any
proposed amendment if counsel for the Partnership shall have
approved of the same in writing as to form, and the General
Partner shall include in any such submission a recommendation as
to the proposed amendment. The General Partner shall seek the
written vote of the Partners on the proposed amendment or shall
call a meeting to vote thereon and to transact any other business
that it may deem appropriate. A proposed amendment shall be
adopted and be effective as an amendment to this Agreement only
if it receives the affirmative vote of all of the Partners.
Section 12.2 Governing Law. This Agreement and the rights and
duties of the Partners arising out of this Agreement shall be
governed by, and construed in accordance with, the laws of the
State of Delaware, without reference to the conflict of laws
rules thereof.
Section 12.3 Waiver of Action for Partition. Each of the
Partners irrevocably waives any right that it may have to
maintain any action for partition with respect to any of the
Partnership Property.
Section 12.4 Specific Performance. Each Partner agrees with
the other Partners that the other Partners would be irreparably
damaged if any of the provisions of this Agreement are not
performed in accordance with their specific terms and that
monetary damages would not provide an adequate remedy in such
event. Accordingly, it is agreed that, in addition to any other
remedy to which the nonbreaching Partners may be entitled, at law
or in equity, the nonbreaching Partners shall be entitled to
injunctive relief to prevent breaches of the provisions of this
Agreement and specifically to enforce the terms and provisions of
this Agreement.
Section 12.5 Enforceability of this Agreement. Each of the
Partners hereby represents, covenants, and agrees that, upon
execution and delivery of this Agreement by or on behalf of such
Partner and the other Partners hereto, this Agreement shall
constitute a legal, valid, and binding agreement of such Partner,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws from time
to time in effect that affect creditors' rights generally and by
legal and equitable limitations on the availability of specific
remedies.
Section 12.6 Notices. Any notice required or permitted to be
given under this Agreement shall be in English and shall be in
writing. A notice may be delivered (i) personally, (ii) sent by
registered or certified U.S. Mail with return receipt requested,
or (iii) sent by telecopy (with confirmation of such notice) to
the party entitled thereto. Such notices shall be deemed to be
duly given and received (x) on the third Business Day after
posting if mailed as provided, (y) when delivered personally
(including delivery by private courier services) unless such day
is not a Business Day, in which case such delivery shall be
deemed to be made as of the next succeeding Business Day, or (z)
in the case of telecopy (with confirmation of such notice), when
sent, so long as it was received during working hours (8:00 a.m.
to 5:00 p.m.) for the intended recipient on a Business Day and
otherwise such delivery shall be deemed to be made as of the next
succeeding Business Day.
The initial addresses for notices to the Parties shall be:
General Partner:
EKLP, LLC
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
With copies to:
EKLP, LLC
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
Koch Limited Partner:
Koch Energy, Inc.
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Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With copies to:
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Entergy A Limited Partner and Entergy B Limited Partner:
c/o Entergy Corporation
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With copies to:
Senior Counsel - Project Overlay
Entergy Services, Inc.
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 12.7 Further Assurances. The Partners agree (a) to
furnish upon request to each other such further information, (b)
to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as a Partner may
reasonably request for the purpose of carrying out the intent of
this Agreement.
Section 12.8 Waiver; Cumulative Remedies. Failure of any
Partner at any time to require another Partner's performance of
any obligation under this Agreement shall not affect the right of
any Partner to require performance of that or any other
obligation hereunder at any other time. No delay or forbearance
of any Partner in exercising any right or remedy under this
Agreement shall affect the ability of that Partner subsequently
to exercise such right or to pursue any remedy, nor shall such
delay or forbearance constitute a waiver of any other right or
remedy. Any waiver by any Partner of any right under this
Agreement or of any failure to perform or breach hereof by any
other Partner shall be in writing and signed by the waiving
Partner. No such waiver shall be construed as a waiver of any
continuing or succeeding breach of any provision of this
Agreement, a waiver or modification of such provision itself, or
a waiver or modification of any right under this Agreement,
unless the instrument constituting the waiver so states. The
remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by any Legal Requirement.
Section 12.9 Exclusive Jurisdiction; Service of Process. Any
action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may only be
brought against any of the parties in the courts of the State of
Texas, County of ▇▇▇▇▇▇; or the State of Delaware, County of New
Castle; or, if it has or can acquire jurisdiction, in the United
States District Court for the Southern District of Texas or the
United States District Court for Delaware, and each of the
parties consents and irrevocably submits to the exclusive
jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection
to venue laid therein.
Section 12.10 Waiver of Jury Trial. EACH PARTY TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 12.11 Limitation on Damages. NOTWITHSTANDING ANYTHING
TO THE CONTRARY IN THIS AGREEMENT, NO PARTY SHALL BE LIABLE OR
HAVE ANY RESPONSIBILITY TO THE OTHER FOR ANY INDIRECT, SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES INCLUDING, WITHOUT LIMITATION,
LOST EARNINGS OR PROFITS, OTHER THAN THE OBLIGATION TO INDEMNIFY
THE OTHER PARTY PURSUANT TO SECTIONS 6.8 OR 8.2 FOR SUCH DAMAGES
ACTUALLY PAID BY SUCH OTHER PARTY.
Section 12.12 Counterparts. This Agreement may be executed in
one or more counterparts and by one or more parties to any
counterpart, each of which shall be deemed an original and all of
which together shall constitute one and the same agreement.
Facsimile signatures shall be as effective as originals hereto.
Section 12.13 Severability. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity
or enforceability of its other provisions. Following a
determination by a court of competent jurisdiction that any
provision of this Agreement is invalid or unenforceable, the
parties shall negotiate in good faith new provisions that, as far
as legally possible, most nearly reflect the intent of the
parties originally expressed herein and that restore this
Agreement as nearly as possible to its original intent and
effect.
Section 12.14 No Third-Party Beneficiaries. This Agreement is
solely for the benefit of, and shall inure to the benefit of, the
parties and their respective successors and permitted assigns,
and this Agreement shall not otherwise be deemed to confer upon
or give to any third party any right, claim, cause of action or
other interest herein.
Section 12.15 Construction. Every covenant, term, and provision
of this Agreement shall be construed simply according to its fair
meaning and not strictly for or against any party hereto.
Section 12.16 Entire Agreement. This Agreement (together
with any Exhibits hereto and any documents described in or
expressed to be entered into in connection therewith and, to the
extent not terminated pursuant to Section 12.2 of the
Contribution Agreement, the Confidentiality Agreement) constitute
the entire agreement among the Partners concerning the subject
matter hereof and supersede any previous agreement between or
representation by any party to any other party (whether oral or
written) concerning the subject matter hereof.
IN WITNESS WHEREOF the duly authorized representatives of
the Partners have executed this Agreement of Limited Partnership
on the date set forth above.
EKLP, LLC
By: Entergy Power International Holdings
Corporation
By:
▇▇▇ ▇. ▇▇▇▇▇▇▇
Authorized Signatory
[SIGNATURE PAGE TO
AGREEMENT OF LIMITED PARTNERSHIP OF
ENTERGY -▇▇▇▇, ▇▇]
IN WITNESS WHEREOF the duly authorized representatives of
the Partners have executed this Agreement of Limited Partnership
on the date set forth above.
EK HOLDING I, LLC
By:
▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager
[SIGNATURE PAGE TO
AGREEMENT OF LIMITED PARTNERSHIP OF
ENTERGY-▇▇▇▇, ▇▇]
IN WITNESS WHEREOF the duly authorized representatives of
the Partners have executed this Agreement of Limited Partnership
on the date set forth above.
EK HOLDING II, LLC
By:
▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager
[SIGNATURE PAGE TO
AGREEMENT OF LIMITED PARTNERSHIP OF
ENTERGY-▇▇▇▇, ▇▇]
IN WITNESS WHEREOF, the duly authorized representatives of
the Partners have executed into this Agreement of Limited
Partnership on the date set forth above.
▇▇▇▇ ENERGY, INC.
By:
Name:
Title:
[SIGNATURE PAGE TO
AGREEMENT OF LIMITED PARTNERSHIP OF
ENTERGY-▇▇▇▇, ▇▇]