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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 4, 2000.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TENASKA GEORGIA PARTNERS, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
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DELAWARE 221100 47-0812088
<S> <C> <C>
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
OF INCORPORATION OR CLASSIFICATION CODE NUMBER)
ORGANIZATION)
</TABLE>
<TABLE>
<S> <C>
MICHAEL F. LAWLER
VICE PRESIDENT OF FINANCE AND TREASURER
1044 N. 115 STREET, SUITE 400 TENASKA GEORGIA PARTNERS, L.P.
OMAHA, NEBRASKA 68154-4446 1044 N. 115 STREET, SUITE 400
(402)691-9500 OMAHA, NEBRASKA 68154-4446
(402) 691-9500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE (NAME, ADDRESS, INCLUDING ZIP CODE, AND
NUMBER, TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL INCLUDING AREA CODE, OF AGENT FOR SERVICE OF
EXECUTIVE OFFICES) PROCESS)
</TABLE>
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with a copy to:
TODD W. ECKLAND, ESQ.
WINTHROP, STIMSON, PUTNAM & ROBERTS
ONE BATTERY PARK PLAZA
NEW YORK, NEW YORK 10004
(212) 858-1000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. / /
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PER OFFERING FEE
TO BE REGISTERED REGISTERED (1) UNIT PRICE (2)
9.50% Senior Secured Bonds due
2030............................... $275,000,000 100% $275,000,000 $72,600
</TABLE>
(1) Equals the aggregate principal amount of the securities being registered.
(2) Pursuant to Rule 457(f)(2), the registration fee has been calculated using
the book value of the securities being registered.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 4, 2000
PROSPECTUS
TENASKA GEORGIA PARTNERS, L.P.
OFFER TO EXCHANGE OUR
9.50% SENIOR SECURED BONDS DUE 2030 THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OUTSTANDING
9.50% SENIOR SECURED BONDS DUE 2030
The Exchange Offer
- We will exchange all old bonds that are validly tendered and not validly
withdrawn for an equal principal amount of new bonds.
- We are relying on the position of the SEC staff in certain interpretive
letters to third parties providing that the new bonds will be freely
tradeable.
- You may withdraw tenders of old bonds at any time prior to the expiration
of the exchange offer.
- The exchange offer expires at 5:00 p.m., New York City time, on
, 2000, unless we extend the offer.
- An exchange of old bonds for new bonds will not constitute a taxable event
for U.S. federal income tax purposes.
The New Bonds
- The terms of the new bonds to be issued in the exchange offer are
substantially identical to the old bonds issued on November 10, 1999,
except that the new bonds will not contain terms with respect to transfer
restrictions or an increase in interest rate.
- No public market currently exists for the old bonds. We do not intend to
list the new bonds on any securities exchange and, therefore, no active
public market is anticipated.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 28 OF THIS
PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS
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PAGE
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Important Notice About Information Presented in this
Prospectus................................................ ii
Where You Can Find More Information......................... ii
Forward-Looking Statements.................................. ii
Prospectus Summary.......................................... 1
Risk Factors................................................ 28
The Exchange Offer.......................................... 36
Use of Proceeds............................................. 46
Estimated Sources and Uses of Funds......................... 46
Selected Financial Information.............................. 47
Ratio of Earnings to Fixed Charges.......................... 47
Management of the Partnership............................... 47
Management of Tenaska Georgia, Inc.......................... 48
Affiliate Transactions...................................... 49
Management's Discussion and Analysis of Financial
Condition................................................. 50
Business and Regulatory Environment......................... 51
Energy Regulation........................................... 51
Description of the New Bonds................................ 54
Summary Description of Principal Financing Documents........ 60
Summary of Principal Project Documents...................... 92
Certain United States Federal Income Tax Consequences....... 135
Plan of Distribution........................................ 139
Certain ERISA Considerations................................ 139
Litigation.................................................. 140
Legal Matters............................................... 140
Experts..................................................... 140
Miscellaneous............................................... 140
Index to Financial Statements............................... F-1
Report of Independent Public Accountants.................... F-2
Appendix A: Defined Terms................................... A-1
Appendix B: Independent Engineer's Report................... B-1
Appendix C: Independent Market Consultant's Report.......... C-1
</TABLE>
i
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IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
We have not authorized anyone to give you any information or to make any
representations about us or the transactions we discuss in this prospectus other
than those contained in this prospectus. If you are given any information or
representations about these matters that is not discussed in this prospectus,
you must not rely on that information. This prospectus is not an offer to sell
or a solicitation of an offer to buy securities anywhere or to anyone where or
to whom we are not permitted to offer or sell securities under applicable law.
The delivery of this prospectus does not, under any circumstances, mean that our
affairs have not changed since the date of this prospectus. It also does not
mean that the information in this prospectus is correct after this date.
We include cross-references in this prospectus to captions where you can
find further related discussions. The preceding Table of Contents provides the
pages on which these captions are located. For your convenience, a glossary of
technical terms used in this prospectus appears in Appendix A at the end of this
prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We are filing a registration statement on Form S-4 to register with the SEC
the new bonds to be issued in exchange for the old bonds. This prospectus is
part of that registration statement. As allowed by the SEC's rules, this
prospectus does not contain all of the information you can find in the
registration statement and the exhibits to the registration statement.
Upon effectiveness of the registration statement, we will file annual and
quarterly reports and other information with the SEC. You may read and copy any
reports, documents and other information we file at the SEC's public reference
rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Please
call 1-800-SEC-0330 for further information on the public reference rooms. Our
filings will also be available to the public from commercial document retrieval
services and at the web site maintained by the SEC at http://www.sec.gov.
Our obligations to file reports with the SEC will be suspended if the new
bonds are held of record by fewer than 300 holders as of the beginning of any
fiscal year, and may cease filing reports with the SEC in respect of such fiscal
year, other than the fiscal year in which this registration statement is
declared effective.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus are forward-looking
statements. Such forward-looking statements can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "intends,"
"will," "should" or "anticipates," or by the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy.
Although these statements are based upon assumptions the partnership believes
are reasonable, no assurance can be given that the future results covered by the
forward-looking statements will be achieved. Such statements are subject to
risks, uncertainties and other factors which could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. The most significant of such risks, uncertainties
and other factors are discussed in this prospectus under "RISK FACTORS," and you
are urged to consider these factors carefully. You will be deemed to have
represented and agreed that you have read and understood the description of the
assumptions and uncertainties underlying the projections that are set forth in
this prospectus and the annexes hereto. We do not intend to provide bondholders
with any revised or updated financial projections or analysis of the difference
between the financial projections and actual operating results.
ii
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY CONTAINS BASIC INFORMATION ABOUT US AND ABOUT THE EXCHANGE
OFFER. IT DOES NOT CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. FOR A
MORE COMPLETE UNDERSTANDING OF OUR BUSINESS AND FINANCIAL STATUS AND THE
EXCHANGE OFFER, YOU SHOULD READ CAREFULLY THIS ENTIRE PROSPECTUS AND THE OTHER
DOCUMENTS THAT WE REFER YOU TO. INVESTORS SHOULD CONSIDER THE INFORMATION SET
FORTH UNDER "RISK FACTORS" PRIOR TO PARTICIPATING IN THE EXCHANGE OFFER. UNLESS
OTHERWISE INDICATED OR THE CONTEXT OTHERWISE REQUIRES, THE WORDS "PARTNERSHIP,"
"WE," "OUR," "OURS," AND "US" REFER ONLY TO TENASKA GEORGIA PARTNERS, L.P. AND
NOT TO ANY OF OUR PARTNERS, AFFILIATES OR ANYBODY ELSE.
IN THIS PROSPECTUS, REFERENCES TO "BONDS" MEANS BOTH THE OLD BONDS AND THE
NEW BONDS, UNLESS THE CONTEXT OTHERWISE REQUIRES. FOR YOUR CONVENIENCE, A
GLOSSARY OF THE TECHNICAL TERMS USED IN THIS PROSPECTUS APPEARS IN APPENDIX A AT
THE END OF THIS PROSPECTUS.
THE PARTNERSHIP
We were formed on April 16, 1998, to develop, finance, construct, own or
lease, operate and maintain an electric generating plant in Heard County,
Georgia that will include six gas turbine-generators. In this prospectus, we
refer to this plant as the "facility" and, together with all its associated
contracts and infrastructure that we may own and lease, as our "project." We do
not engage and do not intend to engage in any business activities other than
those related to our project.
We are owned by Tenaska Georgia, Inc., a Delaware corporation, and Tenaska
Georgia I, L.P.,a Delaware limited partnership. In this prospectus, we refer to
Tenaska Georgia, Inc. as "TGI" and Tenaska Georgia I, L.P. as "TGILP." TGI, our
managing general partner, owns 1% of the partnership, and TGILP, a limited
partner, owns the other 99% of the partnership. TGI is a wholly-owned subsidiary
of Tenaska Energy, Inc., which is owned by individual shareholders. TGI is also
the managing general partner of TGILP and owns a 1% general partner interest in
TGILP. The remaining 99% of TGILP consists of limited partner interests owned by
Tenaska Energy, Inc. and by individual limited partners. Other equity partners
may be added to our partnership in the future, subject to certain limitations
set forth in the financing arrangements for our project.
Tenaska, Inc., whose stock is also owned by Tenaska Energy, Inc., is an
energy project development and management services company specializing in
long-term ownership and operation of independent power generation, electricity
and natural gas marketing and natural gas supply and transportation systems.
Tenaska, Inc.'s affiliates are the majority owners and the managing general
partners of approximately 1,700 MW of energy related projects in active
development throughout the United States and internationally. Principals and
employees of Tenaska, Inc. have extensive career experience in the energy
industry, including the management and development of approximately 3,200 MW of
gas-fired electric generating plants and financing for $2.8 billion of energy
related projects. Tenaska, Inc.'s affiliates are the majority owners and the
managing general partners of five electrical generation facilities in the U.S.:
an 830 MW, gas-fired, independent electrical generation facility under
construction in Grimes County, Texas; an 845 MW gas-fired independent electrical
generation facility under construction in Rusk County, Texas; a 245 MW
gas-fired, combined-cycle cogeneration facility in Ferndale, Washington; a
223 MW, gas-fired combined-cycle cogeneration plant in Paris, Texas; and a
263 MW gas-fired combined-cycle cogeneration plant in Cleburne, Texas. Other
affiliates of Tenaska, Inc. are the lead developers and managers of a gas-fired
independent electrical generation facility with nominal capacity of 586 MW under
construction in Pakistan and an 83 MW hydro-electric facility under construction
in Bolivia. Tenaska, Inc.'s headquarters are located in Omaha, Nebraska, with
regional offices in Arlington, Texas and Calgary, Alberta. Tenaska, Inc. has
approximately 170 employees and consultants dedicated to domestic and
international power project development, ownership and operation, fuel
management, asset management and acquisitions.
1
<PAGE>
We have been designated by the Federal Energy Regulatory Commission to be an
exempt wholesale generator under the Public Utility Holding Company Act of 1935.
As an exempt wholesale generator, we must be engaged exclusively in the business
of owning or operating an eligible facility and selling electricity at
wholesale. As an exempt wholesale generator, we are subject to the Federal Power
Act and to the jurisdiction of the Federal Energy Regulatory Commission with
respect to wholesale electric rates and other matters.
The bonds are not guaranteed by and are not obligations of our partners,
Tenaska Energy, Inc., Tenaska, Inc., or any other affiliate of our partners. You
may demand payment on the bonds only from us and your recourse for non-payment
is limited to the amount of the collateral.
THE DEVELOPMENT AUTHORITY OF HEARD COUNTY
The Development Authority of Heard County was created by the Board of
Commissioners of Heard County on January 3, 1972 pursuant to an activating
resolution authorized by an Act of the General Assembly of the State of Georgia
for the purpose of encouraging and promoting the expansion and development of
industrial and commercial facilities in Heard County, Georgia. The Authority has
issued, and we have purchased, the Authority's Taxable Industrial Development
Revenue Bonds (Tenaska Georgia Partners, L.P. Project), Series 1999 on the same
date and in the same principal amount as the old bonds, to finance the
development and construction of our project and certain other costs described in
this prospectus.
2
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MAJOR CONTRACTUAL RELATIONSHIPS
[CHART SHOWING CONTRACTUAL RELATIONSHIPS OMITTED]
3
<PAGE>
KEY PROJECT PARTICIPANTS
The table below indicates some of the principal participants in our project
and the partnership.
<TABLE>
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TGI................................. Tenaska Georgia, Inc., our managing general partner.
TGILP............................... Tenaska Georgia I, L.P., our limited partner.
Authority........................... Development Authority of Heard County, which owns the
facility, the facility site and certain related
infrastructure facilities and easements, and has
leased them to us.
EPC Contractor...................... Zachry Construction Corporation, the construction
contractor for the facility and its related electric
interconnection facilities.
PECO................................ PECO Energy Company, our long-term power purchaser.
General Electric.................... General Electric Company, which will provide the six
General Electric PG7241 (FA) heavy-duty single shaft
gas turbine-generators that will be used to produce
the electric energy at the facility.
Operator............................ Tenaska Operations, Inc., a wholly owned subsidiary of
Tenaska, Inc. and the operator of our project.
Transco............................. Transcontinental Gas Pipe Line Corporation, which will
provide gas interconnection and metering facilities
for our project's gas pipeline.
Water Authority..................... The Heard County Water Authority, the water supplier
for the facility.
GPC................................. Georgia Power Company, the owner and operator of the
electric interconnection facilities that will allow
the facility to be connected to the Georgia
Integrated Transmission System at 500 kV.
Willbros Engineers.................. Willbros Engineers, Inc., the construction contractor
for an approximately one-mile pipeline to deliver
natural gas from the Transco interconnection to the
facility site.
</TABLE>
Certain of the parties described above or their affiliates, including
publicly held affiliates, file reports, proxy statements and other information
with the SEC. You may read and copy such reports, proxy statements and other
information at the SEC's public reference room in Washington, D.C. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the public
reference rooms. Such material may also be accessed electronically at the SEC's
web site on the Internet at http://www.sec.gov.
4
<PAGE>
THE PROJECT
OVERVIEW. The facility is expected to be a 936 MW (nominal summer rating)
natural gas-fired simple-cycle electric generating plant. It will be located on
a site near Georgia State Highway 34 in Heard County, Georgia, approximately
40 miles southwest of Atlanta. The facility will use natural gas to produce
electric energy and will use fuel oil as a back-up fuel. We expect the facility
to serve as a peaking facility, operating primarily during the summer months
with very low capacity factors during the remainder of the year.
Pursuant to a 29-year Power Purchase Agreement dated August 24, 1999, we
will sell all of the facility's net capacity and electrical output to PECO
Energy Company and PECO will provide us with natural gas and fuel oil. Pursuant
to a lump sum, fixed-price, date-certain contract (the "EPC Contract"), Zachry
Construction Corporation (the "EPC Contractor") will provide engineering,
procurement and construction services with respect to the facility and its
related electric interconnection facilities. Pursuant to a Contract for
Purchase, dated August 27, 1999 (the "Turbine Contract"), General Electric
Company ("General Electric") will provide six General Electric PG7241 (FA)
heavy-duty single shaft gas turbine-generators that will be used to produce the
electric energy at the facility. On the date of issuance of the old bonds, the
right to acquire the turbine-generators under the Turbine Contract was assigned
to the EPC Contractor, who acquired the turbine-generators as a part of its
obligations under the EPC Contract. Certain other operations and maintenance
services for our project will be provided by Tenaska Operations, Inc. under an
Operations and Maintenance Agreement (the "O&M Agreement").
FACILITY LOCATION. The facility site lies in the middle of the Southern
Company transmission system, which extends from Mississippi to South Carolina
and from Tennessee to Florida. According to an analysis of the Southeast U.S.
power market prepared for us by Resource Data International, Inc. ("RDI") and
included in this prospectus as Appendix C, our project has many strong
competitive advantages including direct access to additional power markets
beyond Georgia via relatively strong transmission links into the TVA, Virginia
and Southwest Power Pool markets, and ready access to competitively-priced gas
supply from a diversified range of sources through an extensive interstate gas
pipeline transmission system. In addition, according to RDI, our project
represents a low cost, highly competitive and much needed peaking resource for
the growing Southeastern power market.
Tenaska, Inc., the previous owner of the 101-acre facility site, conveyed it
to us concurrent with the issuance of the old bonds, and we transferred it,
together with related easements held by us, to the Authority. In addition,
Tenaska, Inc., at the same time, granted us a lease of a nearby 13-acre area for
laydown of material and equipment during construction. This lease will remain in
effect through the end of project construction. Tenaska, Inc. also granted us an
option to acquire certain land adjacent to the facility site. This land,
together with a portion of the facility site, will be the site at which the
interconnection facilities will be installed to interconnect the facility with
the transmission grid and will be transferred by deed, ground lease, license or
other conveyance to Georgia Power Company, as owner of these facilities.
EMCON, our environmental consultant, conducted a Phase I Environmental Site
Assessment of the facility site. EMCON found the facility site to be undeveloped
with no evidence of recognized adverse environmental conditions.
THE FACILITY. The facility, when completed, will include six
turbine-generators. Each turbine-generator contains an enclosed inlet air
filter, evaporative cooler, air compressor, dual fuel combustion system, power
turbine, 3,600 rpm 60 Hz generator and auxiliary systems. In each of the
turbine-generators, atmospheric air and water are delivered into the turbine
combustion chamber for NO(x) control when firing fuel oil. Fuel oil operation is
limited by the air permit to 57 million gallons in any consecutive 12 month
period and is expected to occur only when natural gas is not available. The
turbine-generators can be fueled by either natural gas or fuel oil, and will be
capable of switching fuels on-line at reduced load.
5
<PAGE>
POWER PURCHASE AGREEMENT. Our power purchase agreement with PECO provides
for completion of the facility in two stages of three turbine-generators each.
The base term of the power purchase agreement expires 29 years after the first
three turbine-generators are operational. The first three turbine-generators are
scheduled to be operational on June 1, 2001. The second three turbine-generators
are scheduled to be operational on June 1, 2002. These dates are subject to
adjustment to a limited extent in the case of a FORCE MAJEURE event. PECO is
responsible for supplying all the natural gas and fuel oil necessary to fulfill
our obligations under the power purchase agreement. PECO will have the ability
to dispatch any turbine-generator upon the turbine-generator achieving
operational status, as defined in the power purchase agreement.
All of the capacity and energy produced by the facility is committed to be
sold to PECO, except for electricity that is used for the facility's own energy
needs. The power purchase agreement provides for certain fixed payments (subject
to off-setting payments by us to PECO for reduced availability), an availability
incentive bonus and certain variable payments. We expect that the fixed
payments, which are payable whether or not PECO chooses to dispatch any of the
turbine-generators, will be adequate to cover our debt service and our fixed
operating and maintenance costs and to provide us with a return on equity.
PECO is one of the largest retail utilities in the United States with
1,500,000 retail electric and more than 400,000 retail natural gas customers in
southeastern Pennsylvania. In 1998, PECO reported $5.2 billion in annual
revenues. PECO and its operating divisions also provide energy commodity and
related services, power plant operations and infrastructure management,
telecommunications, and retail energy marketing to customers nationally. One of
PECO's stated corporate objectives is to increase its electric generating
capabilities to 25 gigawatts. PECO is a leading nationwide wholesale marketer of
energy. On September 23, 1999, Unicom Corporation and PECO issued a joint press
release announcing that they, along with a wholly owned subsidiary of PECO, had
entered into an Agreement and Plan of Exchange and Merger, dated as of
September 22, 1999. Unicom, an Illinois corporation, is engaged predominantly in
the business of electric energy generation, transmission and distribution,
through Commonwealth Edison Company, one of its subsidiaries.
The PECO Energy Power Team, a unit of PECO's Generation Division, was formed
in 1994 to market power across the United States. The PECO Energy Power Team
will be responsible for marketing the capacity and energy purchased from our
project. With an operating presence in 47 states, the PECO Energy Power Team is
now one of the most active energy traders and wholesale energy suppliers in
North America. The PECO Energy Power Team's sales to customers (excluding PECO)
in 1998 totaled 41.8 million MWh. Its traders market on average 10,000 MW per
hour of power around the U.S. and purchase up to 10,000 MW per hour of economic
energy for resale.
According to RDI, control of a physical asset in the Southeast is a source
of strategic advantage to marketers such as the PECO Energy Power Team, because
it allows the marketer to ensure delivery of firm power. In addition, according
to RDI, the optionality embedded in peaking power plants plays an integral role
in the portfolio of power marketers like PECO.
EPC CONTRACT. Under our EPC Contract, we are obligated to pay a fixed price
of $229,064,832 (including the cost of the turbine-generators under the Turbine
Contract) to Zachry Construction Corporation for the construction of the
facility and its related electric interconnection facilities (subject to
increase for scope changes). More than 70% of the value of the EPC Contract is
represented by the cost of turbine-generators purchased under the Turbine
Contract. Construction of the facility will begin in March or April 2000. Our
EPC Contract contains liquidated damages provisions for late completion and for
failure to meet certain performance guarantees. The EPC Contractor's aggregate
liability for liquidated damages for such late completion and for failure to
meet the performance guarantees is limited to 30% of the fixed price of
$229,064,832. On September 10, 1999, we delivered to the EPC Contractor a
limited notice to proceed which authorized the commencement of geotechnical
investigations and engineering and procurement activities by the EPC Contractor.
We delivered to the EPC Contractor full notice to proceed
6
<PAGE>
on the date of issuance of the old bonds. The EPC Contractor's obligations under
the EPC Contract are guaranteed by its parent company, H.B. Zachry Company. The
EPC Contractor has provided a payment and performance bond in the amount of
$229,064,832 issued by United States Fidelity and Guaranty Company.
The EPC Contractor is a wholly owned subsidiary of H.B. Zachry Company. As
of December 31, 1998, H.B. Zachry Company had annual revenues, total assets and
stockholders' equity of approximately $670 million, $150 million and
$100 million, respectively. H.B. Zachry Company and its affiliates have
constructed over 29,000 MW of power plants both domestically and
internationally, including 8,000 MW of combustion turbines and 1,130 MW of
simple-cycle combustion turbines. H.B. Zachry Company and its affiliates have
been involved in the construction of various types of power plant technologies
including lignite, coal, gas, oil and nuclear. Through a joint venture with
Black & Veatch, L.L.P., the EPC Contractor was the contractor for a 263 MW
gas-fired combined -cycle power plant in Cleburne, Texas that was constructed
for Tenaska IV Texas Partners, Ltd., an affiliate of ours. The EPC Contractor,
in a joint venture with Black & Veatch, L.L.P., is the contractor for an 845 MW
gas-fired combined cycle power plant in Henderson, Texas that is being
constructed for another affiliate of ours, Tenaska Gateway Partners, Ltd. That
plant is expected to be completed in 2001.
TURBINE CONTRACT. TGILP had previously acquired rights to purchase the
turbine-generators from General Electric. The Turbine Contract was assigned to
the EPC Contractor at cost, resulting in approximately $33.6 million in savings
over recent market prices. As assignee of the Turbine Contract, the EPC
Contractor acquired the turbine-generators. The Turbine Contract requires the
turbine-generators to be delivered in installments beginning September 30, 2000
and continuing through December 15, 2001. General Electric is obligated to pay
damages to the EPC Contractor for unexcused late delivery of the
turbine-generators and if the performance of the turbine-generators is not as
required under the Turbine Contract. General Electric will also issue certain
warranties in connection with the performance of the turbine-generators.
OPERATIONS AND MAINTENANCE AGREEMENT. We entered into the O&M Agreement
with Tenaska Operations, Inc. on September 10, 1999 for the operation and
maintenance of our project. The O&M Agreement has a term of 29 years from the
date of commercial operation of the first three turbine-generators. The Operator
is obligated to provide all services necessary for the safe and reliable
start-up, commissioning, operation and maintenance of our project. The Operator
will be compensated with a fixed management fee and an incentive fee, with an
availability adjustment based on performance.
The Operator is organized under Delaware law and is a wholly-owned
subsidiary of Tenaska, Inc. The Operator was formed to provide operations and
maintenance services to electric generating facilities in which affiliates of
Tenaska, Inc. have an interest. Pursuant to the O&M Agreement, the Operator is
obligated to provide initial start-up support for our project prior to the date
of commercial operation of the first three turbine-generators, operate and
maintain the first three turbine-generators once they achieve commercial
operation and operate and maintain our completed project. The Operator is
obligated to provide skilled personnel, procedures, training, administrative,
management, and professional and technical services necessary for the safe and
reliable start-up, commissioning, operation and maintenance of our project.
The Operator currently manages and administers operating and maintenance
contracts for a 223 MW plant in Paris, Texas; a 245 MW plant in Ferndale,
Washington; and a 263 MW plant in Cleburne, Texas. In addition to our project,
the Operator also has contracts to operate two additional facilities currently
under construction in Texas that will have a combined capacity of 1,675 MW. All
of the above-mentioned plants are natural gas-fired facilities.
FUEL ARRANGEMENTS. PECO is obligated to supply us with all the fuel
necessary to produce electric energy for PECO. We entered into the Interconnect,
Reimbursement and Operating Agreement with
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Transcontinental Gas Pipe Line Corporation on August 18, 1999 (the "Gas
Interconnect Agreement"). Under this agreement, Transco will install and own
metering facilities for an interconnection between Transco's pipeline and a
lateral gas pipeline to be constructed to deliver natural gas from this
interconnection point to the facility site. The gas pipeline will be part of the
property owned by the Authority and leased to us and will be designed,
constructed and installed pursuant to a Fixed Price Engineering, Procurement and
Construction Contract between us and Willbros Engineers, Inc., dated
September 23, 1999.
Fuel oil will be delivered to the facility site by truck and stored in a
165,000 barrel storage tank. We expect this quantity to be sufficient to operate
all six turbine-generators for over 80 hours at full capacity. Four fuel oil
unloading stations will be constructed to enable the facility to operate on fuel
oil for extended periods of time, should the need arise, subject to air permit
restrictions.
ELECTRIC INTERCONNECTION ARRANGEMENTS. The facility will be interconnected
to the Georgia Integrated Transmission System ("GITS") pursuant to our
Interconnection Agreement (the "GPC Interconnection Agreement") with Georgia
Power Company. The interconnection facilities are being designed, procured and
constructed under the EPC Contract. It will consist of equipment operating at
500 kV at the high-side of the step-up transformers, and will include a new
500 kV substation and modification of the Wansley to Fortson 500 kV transmission
line. The GITS consists of the aggregate of the Georgia transmission assets of
GPC, Georgia Transmission Corporation ("GTC") and two other participants, and
was created through bilateral contracts between GPC on the one hand, and each of
the other three participants on the other hand. The point of interconnection of
the facility is on a portion of the GITS owned and maintained by GTC.
WATER AND WASTEWATER ARRANGEMENTS. The facility will require water to
operate the evaporative coolers of the turbine-generators and to operate the
turbine-generators on fuel oil. We will purchase our water from the Heard County
Water Authority under the Water Purchase Agreement, dated as of February 25,
1999. The Water Agreement has a term of 30 years. We expect that the water in
the storage tanks combined with the 350 gallons per minute of water supplied by
the Heard County Water Authority pursuant to the Water Agreement will provide
sufficient water to operate the turbine-generators on fuel oil for approximately
160 hours over a two-week period. A small amount of wastewater will be produced
when the evaporative coolers are used or when fuel oil is fired. This wastewater
will be discharged into Hilly Mill Creek under the partnership's wastewater
discharge permit.
The Heard County Water Authority is a public body corporate and politic
formed under Georgia law in 1984. The Heard County Water Authority is primarily
engaged in the distribution and sale of water, and the disposition and treatment
of wastewater for more than 2,200 residential, commercial and industrial
customers in Heard and Carroll Counties in Georgia and Randolph County, Alabama.
The Heard County Water Authority operates its own water and wastewater treatment
plants near Franklin, Georgia.
LEASE AGREEMENT. Simultaneously with the issuance of the old bonds, we
entered into the Lease Agreement with the Development Authority of Heard County.
Under the Lease Agreement, the Authority has agreed to lease the facility, the
facility site and certain related infrastructure facilities and easements to us
and we have agreed to make rent payments sufficient to pay, when due, the
principal of and interest on the revenue bonds issued by the Authority together
with certain other payments that may be retained by the Authority or paid by the
Authority to Heard County. In addition, we have agreed to guarantee the payment
obligations of the Authority on its revenue bonds (the "Guaranty").
AD VALOREM TAX AGREEMENT. In order to obtain certain benefits primarily
related to local property taxation, we have entered into the Ad Valorem Taxation
Agreement (the "Tax Agreement") with the Board of Commissioners of Heard County
and the Board of Tax Assessors of Heard County. While the Tax Agreement is in
effect, the facility, the facility site and certain related infrastructure
facilities and easements will not be subject to ad valorem taxation because they
will be owned by the Authority. However, our leasehold interest will be subject
to ad valorem taxes. The Tax Agreement sets forth how our interest under the
Lease Agreement will be valued before the completion of construction, and for
the 20-year period following the year in which the facility is completed.
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THE EXCHANGE OFFER
On November 10, 1999, we completed the private offering of our 9.50% Senior
Secured Bonds due 2030. We entered into an exchange and registration rights
agreement with Goldman, Sachs & Co., and TD Securities (USA) Inc. in the private
placement in which we agreed to deliver to you this prospectus and to complete
the exchange offer within 315 days after the date of original issuance of the
old bonds. You are entitled to exchange in the exchange offer your old bonds for
new bonds that are identical in all material respects to the old bonds except
that:
- the new bonds will be registered under the Securities Act of 1933;
- the new bonds will not be entitled to certain rights that are applicable
to the old bonds under the exchange and registration rights agreement; and
- the new bonds will not contain terms with respect to an increase in
interest rate.
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The Exchange Offer................... We are offering to exchange up to $275.0 million aggregate
principal amount of 9.50% Senior Secured Bonds due 2030 that
have been registered under the Securities Act of 1933 for up
to $275.0 million aggregate principal amount of 9.50%
Senior Secured Bonds due 2030 that were issued on
November 10, 1999 in the private offering. Old bonds may be
exchanged in denominations of $100,000 and integral
multiples of $1,000 in excess thereof. We will issue the new
bonds promptly after the expiration of the exchange offer.
Resales.............................. Based on an interpretation by the SEC staff set forth in
no-action letters issued to third parties, we believe that
the new bonds issued pursuant to the exchange offer in
exchange for old bonds may be offered for resale, resold and
otherwise transferred by you (unless you are our "affiliate"
within the meaning of Rule 405 under the Securities Act of
1933) without compliance with the registration and
prospectus delivery provisions of the Securities Act of
1933, provided that you are not our affiliate, that you are
acquiring the new bonds in the ordinary course of your
business and that you have not engaged in, do not intend to
engage in, and have no arrangement or understanding with any
person to participate in, a distribution of the new bonds.
All participating broker-dealers that receive new bonds for
their own accounts pursuant to the exchange offer in
exchange for old bonds that were acquired as a result of
market-making or other trading activity must acknowledge
that they will deliver a prospectus in connection with any
resale of the new bonds. See "PLAN OF DISTRIBUTION."
Any holder of old bonds who
- is our affiliate,
- does not acquire new bonds in the ordinary course of its
business or
- tenders in the exchange offer with the intention to
participate, or for the purpose of participating, in a
distribution of new bonds, cannot rely on the position of
the SEC staff enunciated in EXXON CAPITAL HOLDINGS
CORPORATION, MORGAN STANLEY & CO. INCORPORATED or similar
no-action letters and, in the absence of an exemption,
must comply with the registration and prospectus delivery
requirements
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of the Securities Act of 1933 in connection with the
resale of the new bonds.
Expiration Date; Withdrawal of
Tenders.............................. The exchange offer will expire at 5:00 p.m., New York City
time, on , 2000, unless we decide to extend it.
We do not currently intend to extend the expiration date,
although we reserve the right to do so, and we have agreed
to use our reasonable best efforts to commence and complete
the exchange offer promptly but no later than ,
2000. A tender of old bonds pursuant to the exchange offer
may be withdrawn at any time prior to the expiration date as
provided in "THE EXCHANGE OFFER--Withdrawl of Tenders." Any
old bonds not accepted for exchange for any reason will be
returned without expense to the tendering holder promptly
after the expiration or termination of the exchange offer.
Conditions to the Exchange Offer..... The exchange offer is subject to customary conditions, any
of which we may waive. The exchange offer is not conditioned
upon any minimum aggregate principal amount of old bonds
being tendered for exchange. See "THE EXCHANGE
OFFER--Conditions to the Exchange Offer."
Procedures for Tendering Old Bonds... If you wish to accept the exchange offer, you must complete,
sign and date the accompanying letter of transmittal, or a
copy of the letter of transmittal, according to the
instructions contained in this prospectus and the letter of
transmittal. You must also mail or otherwise deliver the
letter of transmittal, or the copy, together with the old
bonds and any other required documents, to the exchange
agent at the address set forth on the cover of the letter of
transmittal on or prior to the expiration date. If you hold
old bonds through The Depository Trust Company and wish to
participate in the exchange offer, you must comply with the
Automated Tender Offer Program procedures of DTC, by which
you will agree to be bound by the letter of transmittal. By
signing or agreeing to be bound by the letter of
transmittal, you will represent to us that, among other
things:
- any new bonds that you receive will be acquired in the
ordinary course of your business;
- you have no arrangement or understanding with any person
or entity to participate in the distribution of the new
bonds;
- if you are a broker-dealer that will receive new bonds for
your own account in exchange for old bonds that were
acquired as a result of market-making activities, you will
deliver a prospectus, as required by law, in connection
with any resale of the new bonds; and
- you are not our "affiliate" as defined in Rule 405 under
the Securities Act of 1933, or, if you are an affiliate,
you will comply with any applicable registration and
prospectus delivery requirements of the Securities Act of
1933.
Special Procedures for Beneficial
Owners............................... If you are a beneficial owner of old bonds that are
registered in the name of a broker, dealer, commercial bank,
trust company or other
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nominee and you wish to tender those old bonds for exchange,
you should contact the registered holder promptly and
instruct it to tender those old bonds on your behalf. If you
wish to tender those old bonds yourself, you must either
make appropriate arrangements to re-register ownership of
those old bonds in your own name or obtain a properly
completed bond power from the registered holder. The
transfer of registered ownership to your own name may take
considerable time and you may not be able to complete the
transfer prior to the expiration date.
Guaranteed Delivery Procedures....... If you wish to tender your old bonds and your old bonds are
not immediately available or you cannot deliver your old
bonds, the letter of transmittal or any other documents
required by the letter of transmittal or comply with the
applicable procedures under DTC's Automated Tender Offer
Program on or prior to the expiration date, you must tender
your old bonds according to the guaranteed delivery
procedures set forth in this prospectus under "THE EXCHANGE
OFFER--Guaranteed Delivery Procedures."
Effect on Holders of Old Bonds....... As a result of the making of, and upon acceptance for
exchange of all validly tendered old bonds pursuant to the
terms of, the exchange offer, we will have fulfilled a
covenant contained in the exchange and registration rights
agreement and, accordingly, we will not be obligated to pay
an increased interest rate as described in the exchange and
registration rights agreement. If you are a holder of old
bonds and do not tender your old bonds in the exchange
offer, you will continue to hold the old bonds and you will
be entitled to all the rights and limitations applicable to
the old bonds in the indenture, except for any rights under
the exchange and registration rights agreement that by their
terms terminate upon the consummation of the exchange offer.
Consequences of Failure to
Exchange............................. All untendered old bonds will continue to be subject to the
restrictions on transfer provided for in the old bonds and
in the indenture. In general, the old bonds may not be
offered or sold unless registered under the Securities Act
of 1933, except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act of 1933 and
applicable state securities laws. Other than in connection
with the exchange offer, we do not currently anticipate that
we will register the old bonds under the Securities Act of
1933.
Certain U.S. Federal Income Tax
Consequences......................... An exchange of old bonds for new bonds pursuant to the
exchange offer will not constitute a taxable event for U.S.
federal income tax purposes. See "CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES."
Use of Proceeds...................... We will not receive any proceeds from the issuance of the
new bonds in the exchange offer.
Exchange Agent....................... The Chase Manhattan Bank is the exchange agent for the
exchange offer. The address and telephone number of the
exchange agent are set forth in this prospectus under "THE
EXCHANGE OFFER--Exchange Agent."
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THE NEW BONDS
The following summary contains basic information about the new bonds. It
does not contain all the information that may be important to you. For a more
complete description of the new bonds, please refer to the section of this
prospectus entitled "DESCRIPTION OF THE NEW BONDS."
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The Issuer........................... Tenaska Georgia Partners, L.P.
The Bonds............................ $275,000,000 aggregate principal amount of 9.50% Senior
Secured Bonds due 2030.
Conduit Financing.................... To obtain certain benefits primarily related to local
property taxation, the Development Authority of Heard
County, a public corporation created and existing under the
laws of the State of Georgia, owns the facility, the
facility site and certain related facilities and easements.
The Authority issued, and we have purchased with the
proceeds of the old bonds, certain revenue bonds issued by
the Authority.
These revenue bonds are secured by a mortgage on the
facility, the facility site and certain related facilities
and easements and by the Authority's rights in the Lease
Agreement and the Guaranty, described above. These revenue
bonds have been issued in the same principal amount as, and
bear interest at the same rate as, the bonds, and are
redeemable at our option as their holder. We have agreed to
redeem these revenue bonds in a principal amount equal to
any principal amount of the bonds redeemed. We delivered
these revenue bonds and related security to The Chase
Manhattan Bank, as collateral agent, as security for the
bonds and other senior debt, and the Authority transfered
the proceeds of these revenue bonds to The Chase Manhattan
Bank, as collateral agent, for deposit in a special
construction fund, as described below in this prospectus.
Payments made by us in respect of principal and interest on
the bonds will be deemed to be a payment of, and will also
reduce a like amount of, principal and interest due on these
revenue bonds and corresponding amounts due under the Lease
Agreement.
Senior Financing
Arrangements......................... On the date of the original issuance of the old bonds, we
incurred certain obligations with respect to the old bonds
and we issued or otherwise incurred other senior debt
consisting of:
- reimbursement obligations in respect of a $25 million
letter of credit to be used as security for PECO in
connection with the power purchase agreement (the "power
purchase agreement letter of credit") and
- reimbursement obligations in respect of a letter of credit
to be issued in lieu of, or in combination with, cash
funding of a debt service reserve account on or before
June 1, 2002 in an aggregate amount equal to, from time to
time, the next succeeding semi-annual scheduled payment of
debt service on the bonds plus if a debt service reserve
letter of credit is in effect, six months of interest on
the maximum amount of the debt service reserve letter of
credit.
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Ranking of the Bonds................. The bonds rank:
- equally in right of payment, and entitled to the benefit
of the liens on the collateral, with present and future
senior debt, except in certain circumstances as described
in this prospectus and
- senior in right of payment to all subordinated debt.
Repayment of drawings under the debt service reserve letter
of credit and the power purchase agreement letter of credit
constitute senior debt and are secured on a parity basis by
the collateral, but unless a "Trigger Event" has occurred,
or certain other events have occurred, as described in this
prospectus, principal payments of reimbursement obligations
in respect of these drawings will be made at a lower order
of priority than payments of principal of other senior debt
(including the bonds).
Under certain circumstances involving certain delays in
repayment of the principal amount of these drawings, or in
the case of a Trigger Event, the reimbursement may be made
at the same level of priority as payments of principal of
the bonds. In addition, under certain circumstances
involving non-renewal, failure to replace or a rating
downgrade of the debt service reserve letter of credit
provider, or non-renewal or failure to replace of the power
purchase agreement letter of credit, the letter of credit
may be drawn upon up to the full available amount, and the
principal repayments of these drawings would be made at the
same level of priority as payments of principal of the
bonds.
Principal amounts of debt service reserve letter of credit
drawings that have the same priority as the principal of the
bonds are referred to as "debt service reserve bonds" if
they have that priority because of delays in making a
reimbursement to the debt service reserve letter of credit
provider, and are referred to as "debt service reserve term
loans" if they have that priority because they result from a
drawing upon non-renewal, failure to replace or a rating
downgrade of the debt service reserve letter of credit
provider.
Principal amounts of power purchase agreement letter of
credit drawings that have the same priority as the principal
of the bonds are referred to as "power purchase agreement
term loans." Principal amounts of drawings under the debt
service reserve letter of credit, other than debt service
reserve bonds or debt service reserve term loans, are
referred to as "debt service reserve letter of credit
loans," and principal amounts of drawings under the power
purchase agreement letter of credit, other than power
purchase agreement term loans, are referred to as "power
purchase agreement letter of credit loans."
In this prospectus, debt service reserve letter of credit
loans, debt service reserve term loans and debt service
reserve bonds are referred to individually or collectively
as "debt service reserve loans," and power purchase
agreement letter of credit loans and power purchase
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agreement term loans are referred to individually and
collectively as "power purchase agreement loans."
Collateral........................... The bonds and the other senior debt are senior secured debt
obligations of ours secured ratably by a lien on and
security interest in:
- our interest in all real property leased to and easements
held by us,
- ]all personal property owned by or leased to us,
equipment, certain insurance policies and other tangible
and intangible assets including all of our right, title
and interest in, to and under the Lease Agreement
(including our right to succeed to the ownership of the
facility, the facility site and certain related
infrastructure facilities and easements after payment in
full of the revenue bonds issued by the Development
Authority of Heard County),
- all of our right, title and interest in and to all project
documents,
- all of our revenues,
- all funds and sub-accounts established by us pursuant to
the Collateral Agency Agreement,
- an assignment of all proceeds in respect of any property
insurance policy covering the partnership or our project
or all proceeds in respect of any action to condemn, seize
or appropriate all or any part of our project (other than
with respect to third party liability insurance and
worker's compensation),
- the revenue bonds issued by the Development Authority of
Heard County and all related security granted to The Chase
Manhattan Bank, as trustee under the related indenture to
secure these revenue bonds, including the mortgage on the
Authority's interest in the facility, the facility site
and certain related infrastructure facilities and
easements, the Authority's rights under the Lease
Agreement and the rents thereunder (but not including
certain payments to be retained by the Authority or to be
paid to Heard County, and the Authority's rights to
enforce certain covenants thereunder), and the Guaranty,
- all of our rights to receive equity contributions
including our rights in any guarantees or other security
for those equity contributions,
- all permits and other governmental approvals to the extent
permitted by law, and
- the equity interests of our partners in the partnership.
In addition, the bonds are secured by an exclusive lien on
and security interest in the funds and accounts established
under the Indenture, the debt service reserve account and
the debt service reserve letter of credit (other than to the
extent of the debt service reserve letter of credit
provider's right to certain proceeds thereunder).
Non-Recourse Obligations............. Our obligations to pay the principal of and premium, if any,
and interest on the bonds are obligations solely of the
partnership and are nonrecourse to the Development Authority
of Heard County, to any
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of our partners or affiliates or to any shareholder,
partner, officer, employee or director of the partnership,
our partners or affiliates. Recourse on the bonds is limited
to the partnership and the collateral.
Ratings.............................. "BBB" by Standard & Poor's, a division of the McGraw Hill
Companies, and "Baa3" by Moody's Investors Service, Inc.
Interest Payment Dates............... Semi-annually in arrears on each February 1 and August 1,
commencing August 1, 2000, and at earlier redemption.
Denominations........................ We will issue the new bonds in denominations of $100,000 and
integral multiples of $1,000 in excess thereof.
Use of Proceeds...................... We will not receive any cash proceeds from the issuance of
the new bonds. In consideration for issuing the new bonds as
contemplated in this prospectus, we will receive in exchange
old bonds in like principal amount, which will be cancelled
and as these will not result in any increase in our
indebtedness.
Average Life......................... At the time the old bonds were originally issued, the
initial average life of the bonds was approximately
22.8 years.
Equity Commitment.................... The partners have committed to fund up to $35.5 million, to
be funded when and as required to pay project costs upon and
after the earlier to occur of:
- the expenditure of all proceeds of the revenue bonds
issued by the Development Authority of Heard County and
all other amounts available in the special construction
fund, as described below in this prospectus and
- the occurrence and continuation of a defaulting event
under the Collateral Agency Agreement prior to the date of
commercial operation of the three final three
turbine-generators which will not be earlier than June 1,
2002.
The obligation of partners contributing equity to the
partnership are supported by a letter of credit from a bank
or financial institution rated at least "A" by S&P and "A2"
by Moody's or by a corporate guarantee, provided the
guarantor is rated at least investment grade by S&P and
Moody's and has a minimum net worth of $100,000,000. Any
equity commitment that remains committed but unfunded on the
date of commercial operation (which will not be earlier than
June 1, 2002) of the final three turbine-generators will,
after effecting any required funding to be made from the
proceeds, be canceled on that date.
Scheduled Principal Payments......... The principal of the bonds is payable in semi-annual
installments commencing February 1, 2006, on each
February 1 and August 1 to the registered owners on the
immediately preceding record date as set forth under
"DESCRIPTION OF THE BONDS--General" and "--Scheduled
Principal Payments."
Optional Redemption.................. We may redeem any of the bonds at any time at a redemption
price equal to the sum of:
- 100% of the principal amount of the bonds redeemed,
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- accrued and unpaid interest on the bonds redeemed and
- a premium based on rates of comparable treasury
securities, plus 50 basis points.
Mandatory Redemptions................ EVENTS OF LOSS. Notwithstanding the priorities of payment
set forth in "Flow of Funds" below, upon an event of loss,
damage, destruction, condemnation, seizure or appropriation
of our project, we will, subject to certain exceptions and
conditions, use insurance or condemnation proceeds actually
received by us that are not used to repair or replace our
project, on a ratable basis, to redeem bonds in whole or in
part at a redemption price equal to 100% of the principal
amount of the bonds redeemed, plus accrued and unpaid
interest on the bonds redeemed, and to prepay all or a
portion of our other senior debt.
EPC BUY-DOWN. Notwithstanding the priorities of payment set
forth in "Flow of Funds" below, upon the receipt by the
partnership of proceeds of performance liquidated damages
under the EPC Contract, and subject to certain exceptions
and conditions, we will use proceeds actually received by us
that are not used to repair, modify or replace our project,
on a ratable basis, to redeem bonds in whole or in part at a
redemption price equal to 100% of the principal amount of
the bonds redeemed, plus accrued and unpaid interest on the
bonds redeemed, and to prepay all or a portion of our other
senior debt.
ENERGY CONTRACT BUY-OUTS. Notwithstanding the priorities of
payment set forth in "Flow of Funds" below, upon receipt of
the proceeds of a buyout of the power purchase agreement or
another contract for the sale of power from the facility, we
will apply those proceeds as follows:
- in the case of proceeds received by us upon the exercise
by PECO of its option to terminate the power purchase
agreement effective on the 20(th) anniversary of the
commencement of the operating term of the power purchase
agreement,
first, to redeem bonds in whole or in part at a redemption
price equal to the principal amount of the bonds redeemed,
plus accrued and unpaid interest on the bonds redeemed and
second, subject to certain exceptions and conditions, to
prepay all or a portion of our other senior debt; and
- in the case of proceeds of any involuntary buyout of the
power purchase agreement or any other contract for the
sale of power from the facility and subject to certain
exceptions and conditions, on a ratable basis, to redeem
bonds in whole or in part at a redemption price equal to
the principal amount of the bonds redeemed, plus accrued
interest on the bonds redeemed, and to prepay all or a
portion of our other senior debt.
BLOCKED PARTNER DISTRIBUTIONS. Notwithstanding the
priorities of payment set forth in "Flow of Funds" below, if
amounts have been on deposit in the "distribution suspense
account," as described in this prospectus below, for
eighteen months after a default or an event of default under
our financing documents or a failure by us to satisfy the
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debt service coverage ratios required to distribute profits
to our partners, we will, under certain conditions, use
these monies, on a ratable basis, to redeem bonds in whole
or in part at a redemption price equal to the principal
amount of the bonds redeemed, plus accrued and unpaid
interest on the bonds redeemed, and to prepay our other
senior debt. This redemption and prepayment will occur only
if the "required senior parties" (which generally means the
affirmative vote of 51% of the aggregate principal amount of
our senior debt) elect to have these amounts so applied
following our request that the required senior parties
determine whether these funds will be used to redeem bonds
and to prepay our other senior debt or will be released for
distribution to the partners.
Permitted Indebtedness............... In addition to the issuance of the bonds, the Common
Agreement permits us to incur:
- indebtedness in respect of the revenue bonds issued by the
Development Authority of Heard County, the Lease Agreement
and the Guaranty,
- reimbursement obligations in respect of the debt service
reserve letter of credit,
- reimbursement obligations in respect of the power purchase
agreement letter of credit,
- up to $10 million for working capital in connection with
our project,
- indebtedness to make capital improvements to our project
to maintain compliance with applicable law or our project
documents if:
-- an independent engineer certifies that the proposed
improvements are reasonably expected to enable our
project to comply with applicable laws and, after the
financing, the projected debt service coverage ratio
will not be less than 1.10 to 1.00 or
-- we receive a confirmation of the then current ratings
of the bonds;
- up to $15 million for discretionary capital improvements
to our project, provided that after giving effect to the
incurrence of this indebtedness, there is no current event
of default, under the Common Agreement, and we receive a
confirmation of the then current ratings of the bonds;
- up to $100,000 in respect of reimbursement obligations
under a letter of credit securing our obligations under
the GPC Interconnection Agreement;
- up to $10 million of other indebtedness to pay for project
costs, operating and maintenance expenses or capital
expenditures for our project; and
- up to $20 million of indebtedness of the partnership
subordinated to the bonds and the other senior debt.
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The provisions of the Common Agreement restrict the terms on
which we may incur obligations in respect of subordinated
debt, which will consist solely of unsecured loans, from
either our affiliates or third parties, fully subordinated
to the bonds and our other senior debt as to payment and
exercise of remedies in accordance with the Collateral
Agency Agreement.
The indebtedness identified above is referred to as
permitted indebtedness and all permitted indebtedness other
than the reimbursement obligations under the letter of
credit described above securing our obligations under the
GPC Interconnection Agreement and the subordinated debt
described above is referred to as senior debt.
Principal Covenants.................. Subject to certain exceptions, we have agreed to, among
other things:
- construct, operate and maintain our project in compliance
with our project documents;
- obtain and maintain in full force and effect all necessary
government approvals and maintain the partnership as an
exempt wholesale generator under Public Utility Holding
Company Act of 1935;
- comply with applicable laws;
- obtain and maintain customary insurance; and
- pay and discharge all taxes, assessments, charges and
claims;
Subject to certain exceptions, we have agreed not to, among
other things:
- make any distributions other than as permitted under the
Collateral Agency Agreement;
- make any investments other than permitted investments;
- sell our assets;
- terminate, amend, modify or otherwise take or fail to take
certain actions with respect to our project documents
relating to our project;
- enter into non-arm's length transactions with our
affiliates;
- create any lien on our properties other than permitted
liens; or
- engage in activities other than those contemplated by our
project and financing documents.
Change in Control.................... An event of default under the Common Agreement will occur if
our partners cease collectively to maintain "control" of the
partnership unless we receive a confirmation of the then
current ratings of the bonds. "Control" means the
possession, directly or indirectly, of the economic interest
in or power to direct or cause the direction of the
management and policies of a person through ownership of
equity interests.
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Debt Service Reserve Account......... We are required to maintain a debt service reserve account
for the benefit of the holders of the bonds. On or before
June 1, 2002, this account will be funded by cash and/or a
letter of credit in an amount sufficient to pay principal
and interest on the bonds on the next semi-annual payment
date for the bonds (initially to be approximately
$13.1 million) plus, if a debt service reserve letter of
credit is in effect, six months of interest on the maximum
amount of the debt service reserve letter of credit. In this
prospectus, we refer to the amount of the required funding
of the debt service reserve account as the "debt service
reserve required balance" and to the issuer of the debt
service reserve letter of credit as the "debt service
reserve letter of credit issuer."
The partnership may use the amount in this account to
satisfy its payment obligations due with respect to the
bonds in the event of a shortfall in other available funds.
The use of the debt service reserve account to satisfy these
obligations will not, by itself, constitute an event of
default under the Indenture or the Common Agreement. The
debt service reserve letter of credit issuer will be a
commercial bank or other financial institution with a
long-term unsecured debt rating of at least "A-" from S&P
and "A3" from Moody's.
Reimbursement obligations incurred under the debt service
reserve letter of credit will constitute senior debt and be
secured on a parity basis with the bonds by the collateral.
However, unless a Trigger Event has occurred and except to
the extent the reimbursement obligations consist of debt
service reserve bonds or debt service reserve term loans,
payments in respect of the principal amount of the
reimbursement obligations will be made in a lower order of
priority than payments of principal on other senior debt.
Partnership Distribution
Conditions........................... Except as stated below, and in certain other circumstances
as described in this prospectus, the partnership may make
distributions to our partners from the partnership
distribution fund created under the Collateral Agency
Agreement on any semi-annual payment date for the bonds at
least six months after the date of commercial operation of
the final three turbine-generators only if:
- there has been no default or event of default;
- the debt service coverage ratio for the historical two
semi-annual periods taken as one period, and the projected
debt service coverage ratio for the bonds for the
subsequent two semi-annual periods, taken as one period,
each equals or exceeds 1.2 to 1.0 for ordinary
distributions, or 1.15 to 1.0 in the case of distributions
in amounts equal to partner tax liability in respect of
partnership income;
- the balance in the debt service reserve account (including
the amount available under any debt service reserve letter
of credit) is at least equal to the debt service reserve
required balance, and
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- the partnership is not insolvent and would not be rendered
insolvent by the distribution.
With respect to any semi-annual payment date for the bonds
occurring prior to the first anniversary of the date of
commercial operation of the final three turbine-generators
(which will not be earlier than June 1, 2002), the debt
service coverage ratio for the two historical semi-annual
periods will be the debt service coverage ratio achieved for
the period since the date of commercial operation (not
earlier than June 1, 2002) of the final three
turbine-generators, even though that period may not include
any complete semi-annual period. If any of the conditions
set forth above are not satisfied, then the amounts on
deposit in the partnership distribution fund, created under
the Collateral Agency Agreement, will be transferred to the
distribution suspense account instead of being distributed
to our partners.
Distributions may be made to our partners on any monthly
funding date after the date of commercial operation of the
final three turbine-generators if the partnership certifies
that each of the conditions set forth above is satisfied
and:
- the debt service coverage ratio for the historical two
semi-annual periods, taken as one period, and the
projected debt service coverage ratios for the subsequent
two semi-annual periods, taken as one period (using the
expired portion of the semi-annual period in which the
funding date occurs as the first subsequent semi-annual
period for the calculation) equal or exceed 1.4 to 1.0 and
- sufficient cash will be available on the next succeeding
payment date for the bonds to make required debt service
payments on the bonds without giving effect to, or drawing
on, any funds available in the debt service reserve
account, the distribution suspense account, the
partnership distribution fund, the unrestricted account,
the subordinated debt account or any working capital
facility.
Funds held in the distribution suspense account will be
available to pay debt service on the bonds (or other senior
debt) and/or to fund required balances with respect to any
of our project funds.
Amounts that have been on deposit in the distribution
suspense account for more than 18 months after a default or
event of default has occurred or is continuing, or if the
partnership has not met the required debt service coverage
ratios, may be paid out to the partnership if the required
senior parties, upon the request of the partnership, have
not elected that these amounts be applied to the redemption
of the bonds (without premium) and ratable retirement of
other senior debt.
Form of Bonds........................ New bonds will be represented by one or more global
securities in fully registered form, without coupons, which
will be deposited with a custodian for, and registered in
the name of, DTC, or its nominee. Beneficial interests in
these global securities will be shown on, and transfers of
these interests will be effected only through, the
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book-entry records maintained by DTC and its direct and
indirect participants.
Risk Factors......................... Investment in the bonds involves certain risks. There are
certain factors that you should carefully consider. Before
participating in the exchange offer, see "Risk Factors."
Flow of Funds........................ In most circumstances, following the date of commercial
operation of the final three turbine-generators (which will
not be earlier than June 1, 2002), in accordance with the
Collateral Agency Agreement, the partnership will cause the
direct payment to the "revenue fund" created under the
Collateral Agency Agreement, of all revenues or other
proceeds received by the partnership. In most circumstances,
monies on deposit in the revenue fund will be deposited into
the other accounts for the following uses, in order of
priority:
- operating and maintenance expenses, including major
maintenance expenses;
- payment of principal, interest or fees and other charges
relating to, any working capital facility;
- payment of administrative fees, expenses, costs,
liabilities and indemnities of the trustee under our
indenture and other agents related to senior debt;
- payment of interest on the bonds and on any other senior
debt and interest on any debt service reserve loans and
power purchase agreement loans and letter of credit fees
on the debt service reserve letter of credit and the power
purchase agreement letter of credit;
- payment of principal and premium, if any, due on the
bonds, any debt service reserve bonds, debt service
reserve term loans or power purchase agreement term loans
and any other senior debt (other than debt service reserve
letter of credit loans and power purchase agreement letter
of credit loans);
- payment of any other amount (other than as otherwise
provided for in this flow of funds) due or becoming due on
the bonds, on any debt service reserve letter of credit
loans, on any power purchase agreement letter of credit
loans and on any other senior debt; and
- payment of principal of any debt service reserve letter of
credit loans and replenishment of the debt service reserve
account;
- payment of principal of any power purchase agreement
letter of credit loans;
- upon the occurrence of certain events, the prepayment of
debt service reserve loans and power purchase agreement
loans (other than debt service reserve letter of credit
loans and power purchase agreement letter of credit
loans);
- payments with respect to any third-party subordinated
debt; and
- upon satisfaction of certain conditions, permitted
distributions to, or upon the direction of, our partners.
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In connection with an exercise by PECO of its option to
terminate the power purchase agreement effective on the
20(th) anniversary of the commencement of the operating term
of the power purchase agreement, any cash collateral held by
PECO as security for our obligations under the power
purchase agreement and released upon termination of the
power purchase agreement, will be applied first to the
payment of power purchase agreement loans and then to other
obligations as provided in the Collateral Agency Agreement.
Trustee.............................. The Chase Manhattan Bank.
Collateral Agent..................... The Chase Manhattan Bank.
Collateral Agency Agreement.......... The Collateral Agency Agreement designates The Chase
Manhattan Bank as the collateral agent for each of the
Senior Parties and describes, among other things:
- the preservation and administration of the collateral,
- the establishment of the accounts in our project funds,
- the disposition of our project revenues among the senior
parties and us,
- the exercise of certain rights, remedies and options by
the senior parties and
- disposition of liquidated damages, loss proceeds and
energy contract buy-out proceeds.
Pursuant to the Collateral Agency Agreement, the affirmative
vote of the "required senior parties" is required to direct
certain actions of The Chase Manhattan Bank, as collateral
agent, including the exercise of remedies following a
Trigger Event.
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INDEPENDENT CONSULTANTS' REPORTS
This prospectus contains reports by R. W. Beck, Inc. and Resource Data
International, Inc. as independent consultants. In their preparation of these
reports and projections, the independent consultants have relied on assumptions
regarding circumstances beyond the control of the partnership, the independent
consultants or any other person. By their nature, these assumptions are subject
to significant uncertainties and actual results will differ, perhaps materially,
from those projected. The persons responsible for these projections or the
assumptions cannot give any assurance that these assumptions are correct or that
these projections will reflect actual results of operations. Accordingly, these
projections are not intended to be an illustration or prediction as to the
likelihood of future results. If the actual results of our project are
materially less favorable than those shown, or if the assumptions used in the
projections prove to be incorrect, the partnership's ability to make payments of
principal of and interest on the bonds may be adversely affected. For certain
additional information relating to the projections included in the independent
consultants' reports, see "RISK FACTORS--Financing Risks."
INDEPENDENT ENGINEER'S REPORT
R. W. Beck has prepared a report that analyzes certain technical,
environmental and economic aspects of our project. This report includes, among
other things, projections of revenues, expenses and debt service coverage and a
technical review of our project and the documents and agreements relating to our
project. The report also contains a projection of the cash flow to be used to
pay principal and interest on the bonds. A copy of the report is attached as
Appendix B to this prospectus (the "Independent Engineer's Report") and should
be read in its entirety. R. W. Beck is a leading consulting and engineering firm
that devotes a substantial portion of its resources to providing services
related to the technical, environmental and economic aspects of power projects
and other industrial facilities.
Below is a summary of the conclusions expressed by R. W. Beck in its
Independent Engineer's Report. This is merely a summary and is subject to the
information contained, and the assumptions made, in the report. The report
should be read in its entirety in order for the reader to completely understand
the basis of the conclusions and the assumptions upon which they are based.
Certain terms used in the summary below are defined in the report. On the basis
of its studies, analyses and investigations of the facility and the assumptions
set forth in the Independent Engineer's Report, R. W. Beck is of the opinion
that:
1. The EPC Contractor and the Operator have previously demonstrated the
capability to perform their responsibilities under the EPC Contract and the O&M
Agreement respectively.
2. Provided that, as required by the EPC Contract, the EPC Contractor takes
into account the recommendations in the Subsurface Report and in the EPC
Contract design criteria regarding site development, subsurface conditions, and
foundations during design and construction of the facility, the facility site is
suitable for construction and operation of the facility.
3. Based upon its review of the environmental site assessments conducted by
EMCON for the facility site and the construction lay-down area, the
investigations appear to have been conducted in a manner consistent with
industry standards, using comparable industry protocols for similar studies with
which R. W. Beck is familiar. Although R. W. Beck has not conducted an
independent assessment of the facility site, the conclusions reached by EMCON
appear to be supported by the data it has reviewed.
4. The technology proposed for the facility is a sound and proven method of
electric generation. If operated and maintained consistent with generally
accepted industry practices, the facility should be capable of passing the
acceptance tests pursuant to the EPC Contract and meeting the requirements of
the power purchase agreement and the current environmental permits. Further, the
facility has adequately provided for all off-site requirements, including fuel
supply and transportation, water supply, wastewater disposal, and electrical
interconnection.
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5. The proposed method of design, construction and operation of the facility
has been developed in accordance with generally accepted industry practices and
has taken into consideration the current environmental, license and permit
requirements that the facility must meet.
6. If designed, constructed, operated and maintained as currently proposed,
the facility should be capable of operating in a peaking operation mode and of
achieving an average annual output of 908 MW, and an average annual net plant
heat rate of 11,088 Btu/kWh (HHV). The average annual output of 908 MW is within
the range where neither party shall owe a penalty or adjustment under the power
purchase agreement. The average annual net plant heat rate of
11,088 Btu/kWh (HHV) is within the range where neither party shall owe a fuel
adjustment payment under the power purchase agreement.
7. Based on the projected level of dispatch, the facility should be capable
of achieving a summer availability percentage of 98 percent and an annual
availability percentage of 97 percent, both as defined in the power purchase
agreement. The annual availability percentage of 97 percent is the level
required to avoid reductions in the reservation payments under the power
purchase agreement.
8. The facility should have a useful life extending beyond the term of the
bonds.
9. Assuming the absence of events such as delivery delays, labor
difficulties, unusually adverse weather conditions, force majeure events, the
discovery of underground obstructions or hazardous materials or wastes not
previously known, or other abnormal events that are prejudicial to normal
construction or installation, based on a limited notice to proceed of
September 10, 1999, the scheduled commercial operation dates of June 1, 2001 for
the initial three turbine-generators and June 1, 2002 for the final three
turbine-generators are achievable using generally accepted project and
construction management practices.
10. Given the range of dispatch factors projected by RDI, which is typical
of peaking operation, and the requirements of the power purchase agreement, the
acceptance tests and guarantees included in the EPC Contract are adequate to
estimate the future performance of the facility.
11. The partnership has received the key environmental permits and approvals
required from the various federal, state, and local agencies, that are currently
necessary to construct the facility. While not all the required permits and
approvals have been issued, including some which cannot be obtained until the
facility is ready to operate, R. W. Beck is not aware of any technical
circumstances that would prevent the issuance of the remaining permits.
12. The estimates which serve as the basis for the EPC Contract price and
the total construction cost were prepared in accordance with generally accepted
engineering and estimating practices and methods. The EPC Contract price and the
total construction cost, including project Contingency, are comparable to the
costs of simple cycle projects at similar stages of development utilizing
similar technologies with which R. W. Beck is familiar.
13. Based upon the interest and reinvestment rates as estimated by the
initial purchasers of the old bonds and the total uses of funds as estimated by
the partnership, the principal amount of the bonds, when combined with the
equity from the partnership, power purchase agreement revenue during the
construction period from the initial three turbine-generators and interest
income during the construction period, should be sufficient to fund the total
construction cost and interest on the bonds through May 31, 2002.
14. The methodology used by the partnership in preparing the operation and
maintenance cost estimate for the facility.
15. For the base case projected operating results for the facility, the
projected revenues under the power purchase agreement are adequate to pay annual
operating and maintenance expenses and other operating expenses and provide an
annual debt service coverage ratio of at least 1.30 times the annual debt
service requirement on the bonds and a weighted average debt service coverage
ratio of 1.49 times the annual debt service requirement over the term of the
bonds.
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16. If the EPC Contractor pays the partnership performance liquidated
damages due to a failure to achieve the guaranteed net electrical output and
guaranteed net heat rate, then the weighted average debt service coverage ratio
over the term of the bonds is projected to remain generally at the same level as
in the base case projected operating results for deficiencies in guaranteed net
electrical output and guaranteed net heat rate equivalent to the performance
minimums under the EPC Contract.
INDEPENDENT MARKET CONSULTANT'S REPORT
Resource Data International has prepared a report that analyzes the
Southeast United States electricity market and the economic competitiveness of
our project within that market. The report provides an assessment of the
long-term market opportunities, including capacity and energy prices expected to
be received by generators, in the region for the years 2000 through 2030. A copy
of the report is attached as Appendix C to this prospectus (the "Independent
Market Consultant's Report") and should be read in its entirety.
Below is a summary of the conclusions expressed by RDI in its Independent
Market Consultant's Report. This is merely a summary and is subject to the
information contained, and the assumptions made, in the report. The report
should be read in its entirety in order for the reader to completely understand
the basis of the conclusions and the assumptions upon which they are based.
Certain terms used in the summary below are defined in the report. On the basis
of its studies, analyses, and investigations of the facility and the assumptions
set forth in the Independent Market Consultant's Report, RDI is of the opinion
that:
1. Our project represents a low cost, highly competitive and much needed
peaking resource for the growing Southeastern power market. The total capacity
of our project is equal to only one percent of the capacity required in the
Southeastern power market by the year 2020.
2. Our project has many strong competitive advantages such as:
- Direct access to additional power markets beyond Georgia via relatively
strong transmission links into the TVA, Virginia/Carolina, and Southwest
Power Pool markets.
- State of the art generation technology which is ideal for serving peak
electricity loads.
- Ready access to competitively priced gas supply from a diversified range
of sources through an extensive interstate gas pipeline transmission
system.
3. As noted above, PECO has entered into a long term mutually acceptably
priced power purchase agreement with our project. PECO is very active in U.S.
wholesale power markets nationally and also in the Southeast U.S.
- Due to recent price spikes and the curtailment of firm contract
deliveries, control or ownership of a physical asset in the Southeast has
become a source of strategic advantage to marketers such as PECO. Such an
asset allows the marketer to ensure delivery of firm power. This provides
both an advantage in marketing the power (as the purchaser is less likely
to enter into a contract with a seller that does not have control of
physical assets) and in avoiding liquidated damage payments in the event
of a transmission curtailment or other loss of power supplies.
- The optionality embedded in peaking power plants plays an integral role in
the portfolio of marketers such as PECO.
4. It is expected that PECO will operate our project only during summer peak
hours when electricity prices are highest. It is expected that our project will
achieve monthly summer capacity factors of 7 to 18%, averaging approximately 4%
on an annual basis during the 20 years forecast period. Based on RDI's
assumptions regarding price and electricity demand growth for the period
2020-2030, RDI expects that our project's utilization will continue to trend
down slightly throughout that period.
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5. The technical capability of our project to start up and shut down quickly
should allow PECO to select operating hours in which revenues and profitability
can be maximized.
6. The cost of capacity and energy to PECO Energy under the power purchase
agreement remains below the market price forecast under both RDI's base and
downside cases, confirming the economic attractiveness of the power purchase
agreement to PECO.
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RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE
PARTICIPATING IN THE EXCHANGE OFFER.
CONSTRUCTION RISK
WE MAY NOT BE ABLE TO COMPLETE THE CONSTRUCTION OF OUR PROJECT ON TIME FOR
REASONS BEYOND OUR CONTROL OR OUR CONTRACTORS' CONTROL.
The construction and timely completion of our project may be adversely
affected by factors commonly associated with any major construction effort,
including:
(a) shortages of materials and labor,
(b) work stoppages,
(c) labor disputes,
(d) weather interferences,
(e) unforeseen engineering, environmental or geological problems, and
(f) unanticipated cost increases.
If any of these events occur, the construction of our project may be
delayed, our project may cost us more to complete than we have currently
budgeted or our project may not perform as well as we expect it to. In turn, our
ability to pay amounts due on the bonds would be impaired.
WE MAY INCUR ADDITIONAL COSTS OR A REDUCTION IN REVENUE UNDER OUR POWER
PURCHASE AGREEMENT IF EACH TURBINE-GENERATOR IS NOT OPERATING BY THE DATE ON
WHICH OUR DELIVERY OBLIGATIONS UNDER OUR POWER PURCHASE AGREEMENT BEGIN WITH
RESPECT TO SUCH TURBINE-GENERATOR.
The power purchase agreement obligates us to pay liquidated damages to PECO
if certain delays cause any turbine-generator to become operational later than
scheduled. We will not be obligated to pay liquidated damages until after twelve
months of delay if the delay is by reason of a FORCE MAJEURE event under the
power purchase agreement against which business interruption insurance is not
available or an act or omission of PECO. The aggregate amount of liquidated
damages payable by the partnership to PECO for delay will not exceed
(i) $8 million for each turbine-generator and (ii) $25 million in the aggregate.
The present construction schedule for our project does not anticipate the
payment of any liquidated damages to PECO, but there can be no assurance that
this schedule will be met. If the initial three turbine-generators have not all
achieved operational status by June 1, 2002 (subject to adjustment to a limited
extent for FORCE MAJEURE events which occur prior to June 1, 2001), PECO has the
right to terminate the power purchase agreement in respect of the initial three
turbine-generators. If the final three turbine-generators have not all achieved
operational status by June 1, 2003 (subject to adjustment to a limited extent
for FORCE MAJEURE events), PECO has the right to terminate the power purchase
agreement in respect of the final three turbine-generators.
THE LIQUIDATED DAMAGES THAT WE MAY RECEIVE UNDER OUR EPC CONTRACT MAY NOT
FULLY COMPENSATE US FOR OUR LOSSES IF THERE IS A DELAY IN CONSTRUCTION OR IF THE
COMPLETED FACILITY DOES NOT SATISFY ITS PERFORMANCE REQUIREMENTS.
We are entitled to receive delay liquidated damages from the EPC Contractor
upon the occurrence of certain delays. We are not entitled to receive these
liquidated damages if the delay is caused by a FORCE MAJEURE event under the EPC
Contract or certain acts or omissions by us (including the exercise by us of
certain of our rights under or with respect to the Turbine Contract). If one or
more turbine-generators do not achieve operational status by their scheduled
dates under the EPC Contract, the EPC Contractor could be obligated to pay
liquidated damages at the rates determined in accordance with the EPC Contract.
If
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and to the extent that a delay is caused by an unexcused failure by General
Electric to perform under the Turbine Contract, the liquidated damages payable
by the EPC Contractor under the EPC Contract may be in a lower amount. The total
amount of these liquidated damages payable because of delay in achieving
operational status, in the aggregate for all turbine-generators, is 22.5% of the
guaranteed lump sum of $229,064,832 payable to the EPC Contractor for its
performance under the EPC Contract. We are also entitled to receive performance
liquidated damages of up to 22.5% of the $229,064,832 in the aggregate for all
turbine-generators from the EPC Contractor if one or more turbine-generators
cannot satisfy tests that measure their net power output and net heat rate,
among other things, against the guaranteed standards included in the EPC
Contract. The EPC Contract limits the aggregate amount of delay and performance
liquidated damages for all turbine-generators to 30% of the $229,064,832.
Certain liquidated damages are offset by any net revenue received by us from a
turbine-generator's operation prior to entering commercial operation. There can
be no assurance that any liquidated damage payments would be sufficient to pay
for any increased costs to pay interest during construction on the bonds, to
replace lost revenues or to pay liquidated damages to PECO if the completion of
our project is delayed or if our project does not operate as designed. Further,
if the EPC Contractor is required to pay liquidated damages as discussed above,
there can be no assurance that the EPC Contractor, its guarantor or the provider
of the EPC Contractor's payment and performance bond will have the financial
resources available to do so. See "SUMMARY OF PRINCIPAL PROJECT DOCUMENTS--EPC
Contract--Commercial Operation LDs" and --"Performance LDs."
THE AMOUNT THAT WE HAVE BUDGETED TO COVER INCREASED COSTS, THE AMOUNT OF OUR
INSURANCE COVERAGE AND OUR OTHER RESOURCES MAY BE INSUFFICIENT TO COVER
UNANTICIPATED COST OVERRUNS OR DELAYS IN ACHIEVING COMMERCIAL OPERATION.
We have included a contingency of approximately $12 million in our
construction budget to cover FORCE MAJEURE and other events that may give rise
to delays or cost overruns. The Independent Engineer has concluded that, based
on its experience, the amount of this contingency is comparable to the
contingencies of simple cycle projects at similar stages of development using
similar technologies with which it is familiar. There can be no assurance,
however, that the amount of the contingency and the proceeds of any delayed
opening insurance will be sufficient to pay for increased costs to pay interest
during construction on the bonds, or to replace lost revenues or to pay
liquidated damages to PECO resulting from any such events. In particular, we are
required to pay principal and interest due on the bonds without regard to any
FORCE MAJEURE events under the EPC Contract. Although the Independent Engineer
has assessed the construction schedule and the capabilities of the EPC
Contractor, there can be no assurance that the schedule for completion of the
turbine-generators will be met. See "APPENDIX B--Independent Engineer's Report."
The facility is currently scheduled to be completed on June 1, 2002, with
the first three turbine-generators scheduled to be operational on June 1, 2001.
While we anticipate receiving revenues from operation of the first three
turbine-generators, and have included the amount of these anticipated revenues
among our sources for payment of costs of our project (including interest on our
outstanding bonds) until the anticipated date of commercial operation of the
entire project, we cannot assure you that any or all of the turbine-generators
will be successfully and timely constructed, or that the amount of revenues that
we will receive from operation will be as projected. If the revenues are less
than we have projected, we would be required to use contingency funds and the
proceeds of any delayed opening insurance, if available, and there is no
assurance that the amount of these contingency funds and insurance proceeds
would be sufficient to make up the shortfall.
Prior to all turbine-generators becoming operational, the only sources
available to us to make payment on the bonds are the following:
- a portion of net proceeds from the issuance of the revenue bonds issued by
the Development Authority of Heard County which were purchased with the
proceeds of the bonds,
- any investment earnings on these proceeds,
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- revenues, if any, from the operation of the first three
turbine-generators,
- budgeted contingency funds,
- insurance proceeds, if any, and
- certain liquidated damages, if any such damages become payable under the
EPC Contract.
On the date of issuance of the bonds, the construction interest account,
created under the Indenture was funded with $37,499,000. This amount, together
with interest anticipated to be earned thereon and on invested construction fund
proceeds and $15,258,000 of the amounts anticipated to be derived from our
operating revenues from the first three turbine-generators, is expected to be
sufficient to pay the interest on the bonds through May 31, 2002. If the date of
commercial operation of the first three turbine-generators were delayed, or if
by reason of operational problems or otherwise the revenues from these
turbine-generators were less than projected, these sources might not be
sufficient to pay amounts due on the bonds through May 31, 2002. While the
construction budget includes a contingency amount, and while under certain
circumstances there may be liquidated damages or insurance proceeds available to
fund this shortfall, there is no assurance that these amounts would be available
or sufficient to permit the partnership to pay amounts due on the bonds.
Moreover, the achievement of operational status of the first three
turbine-generators does not guarantee that the final three turbine-generators
will achieve operational status on time, if at all. Until the final three
turbine-generators are operational, payment of interest on the bonds will remain
dependent on the funds available from the sources listed above. See
"Construction Risk" above.
DEPENDENCE ON OTHER THIRD PARTIES; CONTRACT RISKS
WE DEPEND ON ONE ENTITY TO PURCHASE ALL OF THE OPERATING OUTPUT OF THE
FACILITY.
Payments by PECO under the power purchase agreement represent our sole
source of revenue. Accordingly, our ability to pay amounts due on the bonds will
be significantly impaired if PECO stops making payments under the power purchase
agreement for any reason.
PECO is our sole customer, the sole recipient of the capacity and energy
output of the facility and the sole provider of natural gas and fuel oil
necessary to operate the facility. The viability of our project is subject to
the continued creditworthiness of PECO and its continued performance under the
power purchase agreement. Payments made by PECO will provide us with all of our
revenues during the term of the power purchase agreement. If PECO were to cease
fulfilling its obligations under the power purchase agreement, it is uncertain
whether we would be able to find another purchaser of the facility's output or
supplier of the facility's natural gas and fuel oil requirements. If another
purchaser were found, we cannot assure you that the price paid by that purchaser
and the cost of alternate fuel arrangements, if required, would enable us to pay
amounts due on the bonds. Because the facility is designed to operate as a
peaking facility, we will have higher total fuel costs than combined cycle
plants against which we may be competing in the event that the power purchase
agreement is terminated and the facility operates as a merchant plant or
otherwise. If PECO failed to make capacity, energy and the other payments
required under the power purchase agreement, PECO would be in default of the
power purchase agreement and our revenues would be adversely affected. In turn,
our ability to pay amounts due on the bonds would also be adversely affected.
The ability of PECO to meet its obligations under the power purchase
agreement will be dependent on PECO's financial condition generally. In the
event that PECO sells or otherwise transfers its power marketing business, PECO
may assign the power purchase agreement without our consent to the buyer or
transferee of that business if (A) the buyer or transferee has a senior
unsecured public debt rating by Moody's or S&P that is not lower than PECO's
comparable unsecured senior debt rating at the time of that transfer and (B) we
receive confirmation of the rating of that buyer or transferee after giving
effect to that buyer's or transferee's assumption of the power purchase
agreement. For a summary of the events of
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default under the power purchase agreement, see "SUMMARY OF PRINCIPAL PROJECT
DOCUMENTS--Power Purchase Agreement--TERMINATION, CURE AND EVENTS OF DEFAULT."
WE DEPEND UPON GPC FOR ELECTRIC INTERCONNECTION SERVICE.
We are relying on GPC to interconnect the facility to the Georgia Integrated
Transmission System, and GPC in turn is relying on its rights under its
bilateral contract with GTC (the "GITS Agreement") in order to perform this
service. The GITS Agreement terminates at the election of either party in 2012
or earlier upon the dissolution, liquidation or bankruptcy of either party. If
GPC's participation in the GITS should terminate during the life of our project,
we would attempt, if necessary, to negotiate terms with GTC under which the
facility would remain interconnected with GTC's transmission system. If GPC
fails to timely perform its obligations under the GPC Interconnection Agreement,
either because of disputes or defaults under the GITS Agreement or otherwise,
this could delay or impair the commercial operation of the facility. Such a
delay or impairment would result in an increase in costs and a loss of revenue,
which could impair our ability to pay amounts due on the bonds.
WE DEPEND ON A NUMBER OF OTHER ENTITIES TO CONSTRUCT, OPERATE AND MAINTAIN
OUR PROJECT.
We are highly dependent on many entities to, among other things:
- provide goods and services necessary for the facility to generate such
capacity and electric energy; and
- construct, operate and maintain our project.
If any entity upon whom we depend for the construction and operation of our
project were to breach its obligations to us, our ability to construct and
operate our project or to sell capacity and electric energy would be impaired.
This, in turn, could adversely affect our ability to pay amounts due on the
bonds. The other parties to our project documents have the right to terminate or
withhold payment or performance under these documents upon the occurrence of
certain events specified therein. In addition, if a party to a project document
were declared bankrupt or insolvent, this could impair that party's ability to
fulfill its obligations to us. This could adversely affect our ability to pay
amounts due on the bonds. See "SUMMARY OF PRINCIPAL PROJECT DOCUMENTS."
OPERATING RISK
THE OPERATION OF OUR PROJECT INVOLVES MANY RISKS--OPERATING RISK,
AVAILABILITY RISK, TECHNOLOGY RISK AND THE RISK OF EVENTS BEYOND OUR CONTROL.
The operation of power generation facilities like our project involves many
risks, including:
- the possibility of performing below expected levels of output or
efficiency,
- power shutdowns due to the breakdown or failure of equipment or processes,
- labor disputes,
- under-performance during facility testing,
- failure to operate the facility optimally and reliably,
- failure to meet permit requirements,
- catastrophic events such as fires, earthquakes, lightning, explosions,
floods or other similar occurrences affecting our project and
- inflation.
The failure of any one of the six turbine-generators could significantly
reduce revenues generated by the facility. This failure could also significantly
increase the operating expenses of the facility. This, in turn,
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would impair our ability to pay amounts due on the bonds. If we are unable to
meet our availability and efficiency targets to PECO, we will be required to pay
penalties, which will reduce our revenues, and could impact the amounts
available to pay amounts due on the bonds. Under the availability formulas in
the power purchase agreement, higher dispatch rates could make it more difficult
for the partnership to achieve its availability targets. In the summer months in
particular, the availability target for the facility is high, and if we failed
to meet it we would be required to pay penalties in significant amounts which
could impact our ability to pay amounts due on the bonds. See "SUMMARY OF
PRINCIPAL PROJECT DOCUMENTS."
THE INSURANCE WE HAVE OBTAINED MAY BE INADEQUATE.
Although we maintain insurance consistent with industry standards to protect
against certain operating risks and other risks, not all risks are insured or
insurable. There can be no assurance that this insurance coverage will be
available in the future on commercially reasonable terms or at commercially
reasonable rates. If certain operating risks occur, or, if there is a total or
partial loss of our project, there can be no assurance that the proceeds of the
applicable insurance policies will be adequate to cover our lost revenues or
increased expenses. See "SUMMARY DESCRIPTION OF PRINCIPAL FINANCING
DOCUMENTS--Common Agreement--Certain Covenants--INSURANCE."
REGULATORY RISKS
OUR BUSINESS IS SUBJECT TO SUBSTANTIAL REGULATIONS AND PERMITTING
REQUIREMENTS AND MAY BE ADVERSELY AFFECTED BY CHANGES IN THESE REGULATIONS OR
REQUIREMENTS.
There are many federal, state and local laws pertaining to power generation
designed to protect human health and the environment or to serve other aspects
of public policy. These laws impose numerous requirements on the construction,
ownership and operation of our project. If we fail to comply with these
requirements, we could be prevented from completing or operating our project.
Moreover, modifications to the facility to comply with these requirements could
involve a material expenditure of funds or an incurrence of additional
indebtedness to bring our project into compliance. Our business could also be
materially adversely affected by changes in existing law or the interpretation
of those laws. These changes can impose more restrictive requirements on our
project in a way that could cause us to be unable to pay amounts due on the
bonds. Among these laws is the federal Clean Air Act, which requires the State
of Georgia and the federal government to take regulatory actions that may affect
our business. There can be no assurance that we will or can satisfy all
requirements that may result from actions taken in response to the federal Clean
Air Act.
Certain substances are regulated by the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"). If any of these regulated
substances were discovered in the soil or groundwater of the facility site, we
could be responsible for the investigation and removal of these substances
regardless of the source of these hazardous substances.
We are responsible for obtaining and maintaining various permits and other
regulatory approvals required for the operation of our project. Most material
permits and other regulatory approvals currently required to construct our
project have been obtained and we expect to obtain all the material permits in
connection with the operation of any turbine-generator prior to the
turbine-generator reaching operational status, except where a later time is
prescribed by law. However, there can be no assurance that all these permits and
approvals will be obtained prior to the date they are needed. Any delay or
failure to obtain these permits and approvals could delay construction or
operation of our project or result in additional costs. The renewal, extension
or obtaining of permits and approvals for our project are subject to contest or
appeal under federal or state law. Our failure to comply with these permits and
approvals, or delay in obtaining or maintaining in full force and effect any
such permits and approvals, could prevent or impair our ability to pay amounts
due on the bonds. See "ENERGY REGULATION--Permit Status."
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FINANCING RISKS
IF WE DEFAULT ON THE BONDS, YOUR RECOURSE WILL BE LIMITED TO THE ASSETS AND
CASH FLOWS OF THE FACILITY.
We are solely responsible for paying amounts due on the bonds. We were
formed for the sole purpose of designing, financing, constructing, procuring,
owning, leasing and operating our project. We conduct no other business and own
no other significant assets except our interests in our project, our project
documents and other assets related to the leasing or operation of our project.
Other than the equity contribution of up to $35.5 million, our partners and
their affiliates have no obligation to contribute additional equity to us. Our
ability to pay amounts due on the bonds will be entirely dependent on our
ability to construct our project and to perform under the power purchase
agreement at levels which provide sufficient revenues, after the payment of our
operations and maintenance costs and repayments under any working capital
facility, to pay amounts due on the bonds and our other debt when due. The bonds
and permitted senior debt (other than payments in respect of the principal
amount of reimbursement obligations under the debt service reserve letter of
credit and the power purchase agreement letter of credit that, prior to a
Trigger Event or the conversion of these obligations into debt service reserve
term loans, debt service reserve bonds or power purchase agreement term loans,
will be made in a lower order of priority than payments of principal of the
bonds and other senior debt) will be paid out of the same funds without any
precedence over each other. Each is entitled to the benefit of the liens on the
collateral securing their repayment. Operating and maintenance expenses of the
facility and repayments under any working capital facility are generally payable
before debt service with respect to the bonds.
The bonds and our other senior debt are secured only by (1) our rights in
our project, (2) a lien on the partnership interests in the partnership and
(3) the revenue bonds issued by the Authority and the related lien on our
project assets owned by the Development Authority of Heard County and securing
its revenue bonds. In certain circumstances, the ability of the collateral agent
to foreclose on the collateral upon the occurrence of a Trigger Event or
otherwise under the financing documents will be subject to perfection and
priority issues and to practical problems associated with realization of the
security interest. We cannot assure you that, if we default on the payments due
on the bonds and you foreclose on and sell our project, you will receive
sufficient proceeds to pay all amounts that we owe you on the bonds. In
addition, there are certain assets comprising our project, such as permits, that
you may not be able to effectively foreclose upon without the consent of a third
party, such as a governmental authority. We cannot assure you that if you try to
foreclose on our assets, you will get all of the third party approvals necessary
to operate our project.
WE MAY INCUR ADDITIONAL DEBT, OR BE REQUIRED TO MAKE PAYMENTS TO REIMBURSE
DRAWS UNDER LETTERS OF CREDIT, THAT COULD ADVERSELY AFFECT YOU.
We are permitted to incur additional indebtedness under the Common
Agreement, including additional series of bonds, to pay for certain capital
improvements and expansions of the facility and for other purposes. Certain
types of this permitted indebtedness may rank equally in payment with the bonds
and could result in lower debt service coverage ratios and cash available to pay
amounts due on the bonds. In addition, this indebtedness would share in the
collateral that secures the bonds. This may reduce the benefits of the
collateral to you and your ability to control certain actions taken with respect
to the collateral.
We have arranged for a debt service reserve letter of credit to fund the
debt service reserve account. In addition, in order to secure our obligations
under the power purchase agreement, we have provided the power purchase
agreement letter of credit to PECO. If either letter of credit is drawn upon, we
will be required to reimburse the banks that provided it. The payment of
interest in respect of drawings on both the power purchase agreement letter of
credit and the debt service reserve letter of credit will be made at the same
level of priority as payments of interest in respect of the bonds. In certain
circumstances, payments of the principal amount of drawings under the debt
service reserve letter of credit and the power purchase agreement letter of
credit will be made at the same level of priority as payments on the principal
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amount of the bonds. There can be no assurance that the revenues of our project
or otherwise would be sufficient to cover these increases in debt service
payments. The banks providing the debt service reserve letter of credit and the
power purchase agreement letter of credit are secured ratably with the bonds by
a lien on and security interest in the collateral.
WE ARE RELYING ON PROJECTIONS OF THE FUTURE PERFORMANCE OF THE FACILITY, AND
THESE PROJECTIONS MAY NOT PROVE TO BE ACCURATE.
The report by R. W. Beck contains projections of our operating results based
on assumptions and forecasts of our ability to generate revenue and of our
expected costs. The assumptions made with respect to fuel cost (which are
relevant to us under the power purchase agreement if the facility is less
efficient than expected) and dispatch are based upon a market analysis prepared
by RDI. We have reviewed and accepted these projections on the basis of present
knowledge and assumptions that we believe to be reasonable. The financing of our
project has been structured on the basis of these assumptions and projections.
These assumptions and projections relate to our project's expected revenues and
expenses over the term of the bonds. R.W. Beck has formulated the assumptions
used in its report after performing its technical, environmental and economic
evaluation of our project. The report also contains other assumptions of
business and economic conditions generally. The report sets forth a discussion
of the many assumptions utilized in formulating the projections.
Arthur Andersen LLP, our independent auditors, have not reviewed the
Independent Engineer's Report and, accordingly, do not express an opinion or any
other form of assurance on it. You will not be provided with revised projections
or any summary of the differences between the projections and actual events. We
expressly disclaim any duty to update the Independent Engineer's Report under
any circumstances.
For purposes of preparing these projections, certain assumptions, in
addition to those mentioned above, were made with respect to material
contingencies and other matters that are not within our control. Accordingly, we
cannot accurately predict the outcome of these projections. These assumptions
and the other assumptions used in the projections are inherently subject to
significant uncertainties and actual results will differ, perhaps materially,
from those projected. Accordingly, the projections are not necessarily an
indication of our current value or future performance. Therefore, we assume no
responsibility for their accuracy or for the accuracy of the RDI market
analysis. No representation is made or intended, nor should any be inferred,
with respect to the likely existence of any particular future set of facts or
circumstances. Investors are cautioned not to place undue reliance on the
projections. If actual results are less favorable than those shown in the
projections or if the assumptions used in formulating these projections prove to
be incorrect, our ability to pay amounts due on the bonds may be materially
adversely affected. See "APPENDIX B--Independent Engineer's Report" and
"APPENDIX C--Independent Market Consultant's Report."
IF YOU DO NOT PROPERLY TENDER YOUR OLD BONDS, YOU WILL CONTINUE TO HOLD
UNREGISTERED OLD BONDS AND YOUR ABILITY TO TRANSFER OLD BONDS WILL BE ADVERSELY
AFFECTED
We will only issue new bonds in exchange for old bonds that are timely
received by the exchange agent together with all required documents, including a
properly completed and signed letter of transmittal, as described in this
prospectus. Therefore, you should allow sufficient time to ensure timely
delivery of the old bonds and you should carefully follow the instructions on
how to tender your old bonds. Neither we nor the exchange agent are required to
tell you of any defects or irregularities with respect to your tender of the old
bonds. If you do not tender your old bonds or if we do not accept your old bonds
because you did not tender your old bonds properly, then, after we consummate
the exchange offer, you will continue to hold old bonds that are subject to the
existing transfer restrictions and, except in certain limited
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circumstances, you will no longer have any registration rights with respect to
or be entitled to an increased interest rate on the old bonds. In addition:
- if you tender your old bonds for the purpose of participating in a
distribution of the new bonds, you will be required to comply with the
registration and prospectus delivery requirements of the Securities Act of
1933 in connection with any resale of the new bonds; and
- if you are a broker-dealer that receives new bonds for your own account in
exchange for old bonds that you acquired as a result of market-making
activities or any other trading activities, you will be required to
acknowledge that you will deliver a prospectus in connection with any
resale of those new bonds.
We have agreed that, for a period of not less than 180 days after the exchange
offer is consummated, we will make a prospectus available to any broker-dealer
for use in connection with any such resale.
After the exchange offer is consummated, if you continue to hold any old
bonds, you may have difficulty selling them because there will be less old bonds
outstanding. In addition, if a large amount of old bonds are not tendered or are
tendered improperly, the limited amount of new bonds that would be issued and
outstanding after we consummate the exchange offer could lower the market price
of the new bonds.
THERE IS NO EXISTING MARKET FOR THE NEW BONDS, AND WE CANNOT ASSURE YOU THAT
AN ACTIVE TRADING MARKET WILL DEVELOP.
The new bonds are a new issue of securities with no established trading
market. We do not intend to apply for listing of the new bonds on any national
securities exchange or for quotation of the new bonds on any automated dealer
quotation system. The liquidity of the trading market in the new bonds, and the
market price quoted for the new bonds, may be adversely affected by changes in
the overall market for these securities and by changes in our financial
performance or prospects or in the prospects for companies in our industry
generally. As a result, you cannot be sure that an active trading market will
develop for the new bonds. Moreover, even if a market for the new bonds does
develop, the new bonds could trade at a discount from their face amount. If a
market for the new bonds does not develop, you may be unable to sell your new
bonds for an extended period of time, if at all. Consequently, you may not be
able to liquidate your investment readily, and your lenders may not readily
accept the new bonds as collateral for loans.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
We have entered into an exchange and registration rights agreement with the
initial purchasers of the old bonds in which we agreed, under certain
circumstances, to file a registration statement relating to an offer to exchange
the old bonds for the new bonds. The registration statement of which this
prospectus forms a part was filed in compliance with this obligation. We also
agreed to use our reasonable best efforts to cause the exchange offer to be
consummated within 315 days following the original issuance of the old bonds.
The new bonds will have terms substantially identical to the old bonds except
that the new bonds will not contain terms with respect to transfer restrictions,
registration rights or an increased interest rate for failure to observe certain
obligations in the exchange and registration rights agreement. The old bonds
were issued on November 10, 1999.
Under the circumstances set forth below, we will use our reasonable best
efforts to cause the SEC to declare effective a shelf registration statement
with respect to the resale of the old bonds and keep the shelf registration
statement effective for up to two years after the effective date of the shelf
registration statement. These circumstances include:
- if pursuant to any changes in law, SEC rules or regulations or applicable
interpretations by the SEC staff do not permit us to effect the exchange
offer as contemplated by the exchange and registration rights agreement;
- if any old bonds validly tendered in the exchange offer are not exchanged
for new bonds within 315 days after the original issue of the old bonds;
or
- if the exchange offer is not available to any holder of the old bonds.
Each holder of old bonds that wishes to exchange old bonds for transferable
new bonds in the exchange offer will be required to make the following
representations:
- any new bonds will be acquired in the ordinary course of its business;
- it has no arrangement or understanding with any person to participate in
the distribution (within the meaning of the Securities Act of 1933) of the
new bonds; and
- it is not our "affiliate," as defined in Rule 405 of the Securities Act of
1933, or, if it is an affiliate, it will comply with the applicable
registration and prospectus delivery requirements of the Securities Act of
1933.
RESALE OF NEW BONDS
Based on interpretations of the SEC staff set forth in no-action letters
issued to unrelated third parties, we believe that new bonds issued in the
exchange offer in exchange for old bonds may be offered for resale, resold and
otherwise transferred by any new bondholder without compliance with the
registration and prospectus delivery provisions of the Securities Act of 1933,
if:
- that holder is not an "affiliate" of ours within the meaning of Rule 405
under the Securities Act of 1933;
- that new bonds are acquired in the ordinary course of the holder's
business; and
- the holder does not intend to participate in the distribution of those new
bonds.
Any holder who tenders in the exchange offer with the intention of
participating in any manner in a distribution of the new bonds:
- cannot rely on the position of the SEC staff enunciated in EXXON CAPITAL
HOLDINGS CORPORATION, MORGAN STANLEY & CO. INCORPORATED or similar
no-action letters; and
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- must comply with the registration and prospectus delivery requirements of
the Securities Act of 1933 in connection with a secondary resale
transaction of the new bonds.
This prospectus may be used for an offer to resell, for the resale or for
other re-transfer of new bonds only as specifically set forth in this
prospectus. With regard to broker-dealers, only broker-dealers that acquired the
old bonds as a result of market-making activities or other trading activities
may participate in the exchange offer. Each broker-dealer that receives new
bonds for its own account in exchange for old bonds, where those old bonds were
acquired by that broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of the new bonds. This prospectus may be used by
these broker-dealers for this purpose. Please read the "PLAN OF DISTRIBUTION"
section for more details regarding the transfer of new bonds.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept for exchange any old bonds
properly tendered and not properly withdrawn on or prior to the expiration date.
Old bonds may be tendered only in denominations of $100,000 and integral
multiples of $1,000 in excess thereof. We will issue $1,000 principal amount of
new bonds in exchange for each $1,000 principal amount of old bonds surrendered
under the exchange offer.
The form and terms of the new bonds will be substantially identical to the
form and terms of the old bonds except the new bonds will be registered under
the Securities Act of 1933, will not bear legends restricting their transfer and
will not provide for any increase in interest rate upon failure of the issuer to
fulfill its obligations under the exchange and registration rights agreement to
file, and cause to be effective, a registration statement. The new bonds will
evidence the same debt as the old bonds. The new bonds will be issued under and
entitled to the benefits of the same indenture that authorized the issuance of
the old bonds. Consequently, both series will be treated as a single class of
debt securities under that indenture.
As of the date of this prospectus, $275.0 million aggregate principal amount
of the old bonds are outstanding. This prospectus and the letter of transmittal
are being sent to all registered holders of old bonds. There will be no fixed
record date for determining registered holders of old bonds entitled to
participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of
the exchange and registration rights agreement, the applicable requirements of
the Securities Act of 1933 and the Securities Exchange Act of 1934 and the rules
and regulations of the SEC. Old bonds that are not tendered for exchange in the
exchange offer will remain outstanding and continue to accrue interest and will
be entitled to the rights and benefits those holders have under the indenture.
We will be deemed to have accepted for exchange properly tendered old bonds
when we have given oral or written notice of the acceptance to the exchange
agent. The exchange agent will act as agent for the tendering holders for the
purposes of receiving the new bonds from the partnership and delivering new
bonds to those holders. Subject to the terms of the exchange and registration
rights agreement, we expressly reserve the right to amend or terminate the
exchange offer, and not to accept for exchange any old bonds not previously
accepted for exchange, upon the occurrence of any of the conditions specified
below under the caption "--Conditions to the Exchange Offer."
Holders who tender old bonds in the exchange offer will not be required to
pay brokerage commissions or fees, or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of old bonds. We
will pay all charges and expenses, other than certain applicable taxes described
below, in connection with the exchange offer. It is important that you read the
"--Fees and Expenses" section below for more details regarding fees and expenses
incurred in the exchange offer.
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EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The exchange offer will expire at 5:00 p.m., New York City time on
, 2000, unless we extend it in our sole discretion. We do not
currently intend to extend the expiration date, although we reserve the right to
do so, and we have agreed to use our reasonable best efforts to commence and
complete the exchange offer promptly but no later than , 2000.
In order to extend the exchange offer, we will notify the exchange agent
orally or in writing of any extension. We will notify the registered holders of
old bonds of the extension no later than 9:00 a.m., New York City time, on the
business day after the previously scheduled expiration date.
We reserve the right, in our sole discretion:
- to delay accepting for exchange any old bonds or to extend the exchange
offer or to terminate the exchange offer and to refuse to accept old bonds
not previously accepted if any of the conditions set forth under
"--Conditions to the Exchange Offer" below have not been satisfied, by
giving oral or written notice of the delay, extension or termination to
the exchange agent; or
- subject to the terms of the exchange and registration rights agreement, to
amend the terms of the exchange offer in any manner.
Any delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice to the registered
holders of old bonds. If we amend the exchange offer in a manner that we
determine to constitute a material change, we will promptly disclose that
amendment in a manner reasonably calculated to inform the holders of old bonds
of the amendment. During any of these extensions, all old bonds previously
tendered will remain subject to the exchange offer, and we may accept them for
exchange unless they have been previously withdrawn. We will return any old
bonds that we do not accept for exchange for any reason without expense to their
tendering holder as promptly as practicable after the expiration or termination
of the exchange offer.
Without limiting the manner in which we may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the exchange offer, we will have no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by making a
timely release to a financial news service.
CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange any new bonds for, any old bonds, and we may
terminate the exchange offer as provided in this prospectus before accepting any
old bonds for exchange if in our reasonable judgment:
- the new bonds to be received will not be tradeable by the holder without
restriction under the Securities Act of 1933 or the Securities Exchange
Act of 1934 and without material restrictions under the blue sky or
securities laws of substantially all of the states of the United States;
- the exchange offer, or the making of any exchange by a holder of old
bonds, would violate applicable law or any applicable interpretation of
the SEC staff; or
- any action or proceeding has been instituted or threatened in any court or
by or before any governmental agency with respect to the exchange offer
that, in our judgment, would reasonably be expected to impair our ability
to proceed with the exchange offer.
In addition, we will not be obligated to accept for exchange the old bonds
of any holder that has not made:
- the representations described under "--Purpose and Effect of the Exchange
Offer" or "--Procedures for Tendering" below and "PLAN OF DISTRIBUTION"
and
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- such other representations as may be reasonably necessary under applicable
SEC rules, regulations or interpretations to make available to us an
appropriate form for registration of the new bonds under the Securities
Act of 1933.
The exchange offer is not conditioned upon any minimum aggregate principal
amount of old bonds being tendered for exchange.
These conditions are for our sole benefit and we may assert them regardless
of the circumstances that may give rise to them or waive them in whole or in
part at any or at various times in our sole discretion. If we fail at any time
to exercise any of the foregoing rights, that failure will not constitute a
waiver of that right. Each such right will be deemed an ongoing right that we
may assert at any time or at various times.
In addition, we will not accept for exchange any old bonds tendered, and
will not issue new bonds in exchange for any of those old bonds, if at that time
any stop order is threatened or in effect with respect to the registration
statement of which this prospectus constitutes a part or the qualification of
the indenture under the Trust Indenture Act of 1939.
PROCEDURES FOR TENDERING
Only a holder of old bonds may tender those old bonds in the exchange offer.
To tender in the exchange offer, a holder must:
- complete, sign and date the letter of transmittal, or a facsimile of the
letter of transmittal; have the signature on the letter of transmittal
guaranteed if the letter of transmittal so requires; and mail or deliver
the letter of transmittal or facsimile to the exchange agent on or prior
to the expiration date; or
- comply with DTC's Automated Tender Offer Program procedures described
below.
In addition, either:
- the exchange agent must receive old bonds along with the letter of
transmittal; or
- the exchange agent must receive, on or prior to the expiration date, a
timely confirmation of book-entry transfer of those old bonds into the
exchange agent's account at DTC according to the procedures for book-entry
transfer described below or a properly transmitted agent's message; or
- the holder must comply with the guaranteed delivery procedures described
below.
To be tendered effectively, the exchange agent must receive any physical
delivery of the letter of transmittal and other required documents at the
address set forth below under "--Exchange Agent" on or prior to the expiration
date.
The tender by a holder that is not withdrawn on or prior to the expiration
date will constitute an agreement between that holder and us in accordance with
the terms and subject to the conditions set forth in this prospectus and in the
letter of transmittal.
The method of delivery of old bonds, the letter of transmittal and all other
required documents to the exchange agent is at the holder's election and risk.
Rather than mail these items, we recommend that holders use an overnight or hand
delivery service. In all cases, holders should allow sufficient time to assure
delivery to the exchange agent on or prior to the expiration date. Holders
should not send the letter of transmittal or old bonds to us. Holders may
request their respective brokers, dealers, commercial banks, trust companies or
other nominees to effect the above transactions for them.
Any beneficial owner whose old bonds are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered holder promptly and instruct it to tender on the
owner's behalf. If that beneficial owner wishes to tender on its
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own behalf, it must, prior to completing and executing the letter of transmittal
and delivering its old bonds, either:
- make appropriate arrangements to register ownership of the old bonds in
that owner's name; or
- obtain a properly completed bond power from the registered holder of old
bonds.
The transfer of registered ownership may take considerable time and may not
be completed prior to the expiration date.
Signatures on a letter of transmittal or a notice of withdrawal described
below must be guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another "eligible institution" within the meaning of Rule 17Ad-15
under the Securities Exchange Act of 1934, unless the old bonds tendered
pursuant thereto are tendered:
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter of
transmittal; or
- for the account of an eligible institution.
If the letter of transmittal is signed by a person other than the registered
holder of any old bonds listed on the old bonds, those old bonds must be
endorsed or accompanied by a properly completed bond power. The bond power must
be signed by the registered holder as the registered holder's name appears on
the old bonds and an eligible institution must guarantee the signature on the
bond power.
If the letter of transmittal or any old bonds or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, those
persons should so indicate when signing. Unless waived by us, they should also
submit evidence satisfactory to us of their authority to deliver the letter of
transmittal.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's Automated Tender Offer
Program to tender. Participants in the program may, instead of physically
completing and signing the letter of transmittal and delivering it to the
exchange agent, transmit their acceptance of the exchange offer electronically.
They may do so by causing DTC to transfer the old bonds to the exchange agent in
accordance with its procedures for transfer. DTC will then send an agent's
message to the exchange agent. The term "agent's message" means a message
transmitted by DTC, received by the exchange agent and forming part of a
book-entry confirmation, to the effect that:
- DTC has received an express acknowledgment from a participant in its
Automated Tender Offer Program that is tendering old bonds that are the
subject of this book-entry confirmation;
- the participant has received and agrees to be bound by the terms of the
letter of transmittal (or, in the case of an agent's message relating to
guaranteed delivery, that the participant has received and agrees to be
bound by the applicable notice of guaranteed delivery); and
- the agreement may be enforced against that participant.
We will determine in our sole discretion all questions as to the validity,
form, eligibility (including time of receipt), acceptance of tendered old bonds
and withdrawal of tendered old bonds. Our determination will be final and
binding. We reserve the absolute right to reject any old bonds not properly
tendered or any old bonds the acceptance of which would, in the opinion of our
counsel, be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of tender as to particular old bonds. Our
interpretation of the terms and conditions of the exchange offer (including the
instructions in the letter of transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of old bonds must be cured within the time as we shall determine. Although we
intend to notify holders of defects or irregularities with respect to tenders of
old bonds, neither we, the
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<PAGE>
exchange agent nor any other person will incur any liability for failure to give
that notification. Tenders of old bonds will not be deemed made until those
defects or irregularities have been cured or waived. Any old bonds received by
the exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned to the exchange
agent without cost to the tendering holder, unless otherwise provided in the
letter of transmittal, as soon as practicable following the expiration date.
In all cases, we will issue new bonds for old bonds that we have accepted
for exchange under the exchange offer only after the exchange agent timely
receives:
- old bonds or a timely book-entry confirmation of those old bonds into the
exchange agent's account at DTC; and
- a properly completed and duly executed letter of transmittal and all other
required documents or a properly transmitted agent's message.
By signing the letter of transmittal or transmitting an acceptance of the
exchange offer through DTC, each tendering holder of old bonds will represent to
us that, among other things:
- any new bonds that the holder receives will be acquired in the ordinary
course of its business;
- the holder has no arrangement or understanding with any person or entity
to participate in the distribution of the new bonds;
- if the holder is not a broker-dealer, it is not engaged in and does not
intend to engage in the distribution of the new bonds;
- if the holder is a broker-dealer that will receive new bonds for its own
account in exchange for old bonds that were acquired as a result of
market-making activities, it will deliver a prospectus, as required by
law, in connection with any resale of those new bonds; and
- the holder is not our "affiliate," as defined in Rule 405 of the
Securities Act of 1933, or, if the holder is our affiliate, it will comply
with any applicable registration and prospectus delivery requirements of
the Securities Act of 1933.
BOOK-ENTRY TRANSFER
The exchange agent will establish an account with respect to the old bonds
at DTC for purposes of the exchange offer promptly after the date of this
prospectus. Any financial institution participant in DTC's system may make
book-entry delivery of old bonds by causing DTC to transfer those old bonds into
the exchange agent's account at DTC in accordance with DTC's procedures for
transfer. Holders of old bonds who are unable to deliver confirmation of the
book-entry tender of their old bonds into the exchange agent's account at DTC or
all other documents of transmittal to the exchange agent on or prior to the
expiration date must tender their old bonds according to the guaranteed delivery
procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders wishing to tender their old bonds but whose old bonds are not
immediately available or who cannot deliver their old bonds, the letter of
transmittal or any other required documents to the exchange agent or comply with
the applicable procedures under DTC's Automated Tender Offer Program on or prior
to the expiration date may tender if:
- the tender is made through an eligible institution;
40
<PAGE>
- on or prior to the expiration date, the exchange agent receives from the
eligible institution either a properly completed and duly executed notice
of guaranteed delivery (by facsimile transmission, mail or hand delivery)
or a properly transmitted agent's message and notice of guaranteed
delivery:
-- setting forth the name and address of the holder, any registered
number(s) of those old bonds and the principal amount of old bonds
tendered;
-- stating that the tender is being made thereby; and
-- guaranteeing that, within three New York Stock Exchange trading days
after the expiration date, the letter of transmittal (or facsimile
thereof) together with the old bonds or a book-entry confirmation, and
any other documents required by the letter of transmittal, will be
deposited by the eligible institution with the exchange agent; and
- the exchange agent receives the properly completed and executed letter of
transmittal (or facsimile thereof), as well as all tendered old bonds in
proper form for transfer or a book-entry confirmation, and all other
documents required by the letter of transmittal, within three New York
Stock Exchange trading days after the expiration date.
Upon request to the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their old bonds according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, holders of old bonds may
withdraw their tenders at any time on or prior to the expiration date.
For your withdrawal to be effective:
- the exchange agent must receive a written notice (which may be by
telegram, telex, facsimile transmission or letter) of withdrawal at one of
the addresses set forth below under "--Exchange Agent" or
- holders must comply with the appropriate procedures of DTC's Automated
Tender Offer Program.
Any notice of withdrawal must:
- specify the name of the person who tendered the old bonds to be withdrawn;
- identify the old bonds to be withdrawn (including the principal amount of
those old bonds); and
- where certificates for old bonds have been transmitted, specify the name
in which those old bonds were registered, if different from that of the
withdrawing holder.
If certificates for old bonds have been delivered or otherwise identified to
the exchange agent, then, prior to the release of those certificates, the
withdrawing holder must also submit:
- the serial numbers of the particular certificates to be withdrawn; and
- a signed notice of withdrawal with signatures guaranteed by an eligible
institution unless the holder is an eligible institution.
If old bonds have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn old bonds and
otherwise comply with DTC's procedures. We will determine all questions as to
the validity, form and eligibility (including time of receipt) of those notices,
and our determination will be final and binding on all parties. We will deem any
old bonds so withdrawn not to have been validly tendered for exchange for
purposes of the exchange offer. Any old bonds that have been tendered for
exchange but that are not exchanged for any reason will be returned to their
holder without cost to the
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<PAGE>
holder (or, in the case of old bonds tendered by book-entry transfer into the
exchange agent's account at DTC according to the procedures described above,
those old bonds will be credited to an account maintained with DTC for old
bonds) as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. Properly withdrawn old bonds may be
re-tendered by following one of the procedures described under "--Procedures for
Tendering" above at any time on or prior to the expiration date.
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as exchange agent for the
exchange offer. You should direct questions and requests for assistance,
requests for additional copies of this prospectus or of the letter of
transmittal and requests for the notice of guaranteed delivery to the exchange
agent addressed as follows:
For Overnight Delivery, Delivery by Hand or Delivery by Registered or
Certified Mail:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attn: William H. McDavid, General Counsel
By Facsimile Transmission (for eligible institutions only):
(212) 270-4288
Confirm facsimile by telephone only:
(212) 270-2611
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY OF THE LETTER OF TRANSMITTAL.
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, we may make additional solicitations by
telegraph, telephone or in person by our officers and regular employees and
those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses.
Our expenses in connection with the exchange offer include:
- SEC registration fees;
- fees and expenses of the exchange agent and the trustee;
- accounting and legal fees and printing costs; and
- related fees and expenses.
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<PAGE>
TRANSFER TAXES
We will pay all transfer taxes, if any, applicable to the exchange of old
bonds under the exchange offer. The tendering holder, however, will be required
to pay any transfer taxes (whether imposed on the registered holder or any other
person) if:
- certificates representing old bonds for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of old bonds
tendered;
- tendered old bonds are registered in the name of any person other than the
person signing the letter of transmittal; or
- a transfer tax is imposed for any reason other than the exchange of old
bonds under the exchange offer.
If satisfactory evidence of payment of those taxes is not submitted with the
letter of transmittal, the amount of those transfer taxes will be billed to that
tendering holder.
Holders who tender their old bonds for exchange will not be required to pay
any transfer taxes. However, holders who instruct us to register new bonds in
the name of, or request that old bonds not tendered or not accepted in the
exchange offer be returned to, a person other than the registered tendering
holder will be required to pay any applicable transfer tax.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of old bonds who do not exchange their old bonds for new bonds under
the exchange offer will remain subject to the restrictions on transfer
applicable to the old bonds:
- as set forth in the legend printed on the old bonds as a consequence of
the issuance of the old bonds pursuant to the exemptions from, or in
transactions not subject to, the registration requirements of the
Securities Act of 1933 and applicable state securities laws; and
- otherwise as set forth in the offering memorandum distributed in
connection with the private offering of the old bonds.
In general, you may not offer or sell the old bonds unless they are
registered under the Securities Act of 1933, or if the offer or sale is exempt
from registration under, or not subject to, the Securities Act of 1933 and
applicable state securities laws. Except as required by the exchange and
registration rights agreement, we do not intend to register resales of the old
bonds under the Securities Act of 1933. Based on interpretations of the SEC
staff, new bonds issued pursuant to the exchange offer may be offered for
resale, resold or otherwise transferred by their holders (other than any such
holder that is our "affiliate" within the meaning of Rule 405 under the
Securities Act of 1933) without compliance with the registration and prospectus
delivery provisions of the Securities Act of 1933, provided that the holders
acquired the new bonds in the ordinary course of the holders' business and the
holders have no arrangement or understanding with respect to the distribution of
the new bonds to be acquired in the exchange offer. Any holder who tenders in
the exchange offer for the purpose of participating in a distribution of the new
bonds:
- could not rely on the applicable interpretations of the SEC; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act of 1933 in connection with any secondary resale
transaction of the new bonds.
After the exchange offer is consummated, if you continue to hold any old
bonds, you may have difficulty selling them because there will be less old bonds
outstanding. In addition, if a large amount of old
43
<PAGE>
bonds are not tendered or are tendered improperly, the limited amount of new
bonds that would be issued and outstanding after we consummate the exchange
offer could lower the market price of the new bonds.
ACCOUNTING TREATMENT
We will record the new bonds in our accounting records at the same carrying
value as the old bonds, as reflected in our accounting records on the date of
exchange. Accordingly, we will not recognize any gain or loss for accounting
purposes in connection with the exchange offer. We will record the expenses of
the exchange offer as incurred.
OTHER
Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered old bonds in open market or
privately negotiated transactions, through subsequent exchange offers or
otherwise. We have no present plans to acquire any old bonds that are not
tendered in the exchange offer or to file a registration statement to permit
resales of any untendered old bonds.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the issuance of the new bonds. In
consideration for issuing the new bonds as contemplated in this prospectus, we
will receive in exchange old bonds in like principal amount, which will be
cancelled and as such will not result in any increase in our indebtedness.
The proceeds of the old bonds were used to purchase the Authority Bonds. The
proceeds of the Authority Bonds will fund the design, procurement, construction,
testing, commissioning and initial operation of our project and were used to pay
certain fees and expenses in connection with the offering of the old bonds.
ESTIMATED SOURCES AND USES OF FUNDS
We estimate the total cost of designing, financing, engineering, procuring,
constructing, testing and start-up of our project to be approximately
$330.6 million. The following table sets forth the estimated sources and uses of
funds in connection with the construction, financing and commencement of
commercial operation of our project, including the issuance of the bonds.
SOURCES OF FUNDS(1)
<TABLE>
<S> <C>
Principal amount of the old bonds........................... $275,000,000
Equity Contribution(2)...................................... 35,500,000
Revenues from operation of the Initial Units(3)............. 20,089,000
------------
TOTAL SOURCES OF FUNDS.................................... $330,589,000
============
</TABLE>
USES OF PROCEEDS
<TABLE>
<S> <C>
EPC Contract................................................ $229,065,000
Electric Interconnection Facilities......................... 1,000,000
Gas Supply Facilities....................................... 3,123,000
Spare Parts................................................. 3,649,000
Development Cost............................................ 7,000,000
Initial Working Capital..................................... 258,000
Project Management.......................................... 4,643,000
Legal & Financing........................................... 5,114,000
Net Interest During Construction(4)......................... 52,757,000
Expenses of operation of the Initial Units.................. 4,831,000
Contingencies............................................... 11,962,000
Other....................................................... 7,187,000
------------
TOTAL PROJECT COSTS....................................... $330,589,000
============
</TABLE>
- ------------------------
(1) This table does not include the provision of the debt service reserve letter
of credit or the power purchase agreement letter of credit.
(2) See "SUMMARY DESCRIPTION OF THE PRINCIPAL FINANCING DOCUMENTS--Equity
Contribution Agreement."
(3) Assumes occurrence of the date of commercial operation of the Initial Units
on June 1, 2001. A delay in the occurrence of this date would reduce this
amount. See "Risk Factors--Construction Risk."
(4) Interest during construction is $67,487,000 against which there has been
netted out $14,730,000 of projected interest income on unspent bond
proceeds. Reflects an interest rate of 9.50% on the bonds and that unspent
bond proceeds earn interest at an assumed 5% annual rate.
45
<PAGE>
SELECTED FINANCIAL INFORMATION
The selected financial information of the partnership set forth below has
been derived from, should be read in conjunction with, and is qualified in its
entirety by reference to, the financial statements of the partnership, including
the notes thereto, included elsewhere in this prospectus, which have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report thereon included elsewhere in this prospectus. These financial
statements have been prepared in accordance with generally accepted accounting
principles ("GAAP"). The partnership has been in the development stage since its
formation.
THE PARTNERSHIP
AS OF AUGUST 31, 1999
<TABLE>
<CAPTION>
ASSETS LIABILITIES AND PARTNERS' DEFICIT
<S> <C> <C> <C>
Land................. $89,334 CURRENT LIABILITIES
Payable to affiliate.......... $ 6,119,584
-----------
Total current liabilities..... $ 6,119,584
-----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' DEFICIT
Tenaska Georgia, Inc.......... $ (60,303)
Tenaska Georgia I, L.P........ (5,969,947)
-----------
Total partners' deficit....... (6,030,250)
------- -----------
Total assets......... Total liabilities and
$89,334 partners' deficit............. $ 89,334
======= ===========
</TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
Because we have not begun operations, we cannot calculate a ratio of
earnings to fixed charges.
MANAGEMENT OF THE PARTNERSHIP
Under our amended and restated partnership agreement (the "Partnership
Agreement"), TGI, as managing general partner, has the exclusive power and
authority to direct and manage our affairs and is responsible for our day-to-day
management, which includes administration of our project. TGILP is the limited
partner under the Partnership Agreement.
Certain actions by the partnership may be taken with a simple majority of
the general partners, based on their respective ownership interests. Examples of
these types of actions include:
- approving budgets, and
- entering into, amending or terminating material project contracts.
Dissolution of the partnership requires unanimous approval of the general
partners, based on their respective ownership interests. Removal of the managing
general partner requires unanimous approval of all partners, excluding the vote
of the managing general partner to be removed. Also, mergers, reorganizations
and the incurrence of debt require unanimous approval of the general partners.
46
<PAGE>
MANAGEMENT OF TENASKA GEORGIA, INC.
The following are officers of TGI:
HOWARD L. HAWKS, Chairman and Chief Executive Officer of Tenaska, Inc. has
served as Chairman, CEO and President of TGI since its formation in 1998. Prior
to forming Tenaska, Inc. in 1987, Mr. Hawks served in various management
positions at Enron Corp., formerly known as InterNorth Inc., for 21 years. He
served as president of three of its subsidiary groups, Northern Natural
Resources and Enron Development, Northern Liquid Fuels Group, and Northern
Plains Natural Gas Company. Mr. Hawks also serves on the board of the North
American Electric Reliability Council (NERC). He is a graduate of the University
of Nebraska, where he earned a Bachelor of Science degree in accounting and a
Master of Business Administration degree.
THOMAS E. HENDRICKS, Vice President of Business Development of
Tenaska, Inc., has served as Vice President of TGI since its formation. Prior to
co-founding Tenaska, Inc., Mr. Hendricks was an executive with Enron Corp. and
the Nebraska Public Power District. He served as general manager of Northern
Natural Resources and Enron Development, a subsidiary of Enron Corp.
Mr. Hendricks also serves on the Board of Trustees of the Western Systems
Coordinating Council. He graduated from the University of Nebraska-Lincoln with
a Bachelor of Science degree in chemical engineering.
RONALD N. QUINN, Vice President, Chief Financial Officer and Secretary of
Tenaska, Inc., is Vice President, CFO and Secretary of TGI. Prior to joining
Tenaska, Inc. in 1988, Mr. Quinn was employed by American Express Company as
Vice President of Business Development in the Information Services Division.
Mr. Quinn has also held various executive positions at Enron Corp. and at
Norwest Bank. Mr. Quinn earned a Bachelor of Science degree in business
administration and a Master of Business Administration degree from Creighton
University.
MICHAEL F. LAWLER, Vice President of Finance and Treasurer of
Tenaska, Inc., is Vice President and Treasurer of TGI. Prior to joining
Tenaska, Inc. in 1991, Mr. Lawler held positions as Senior Vice President,
Finance/Information Systems of Mercy Midlands; Owner and President of Missouri
Valley Natural Gas; Assistant Treasurer for InterNorth Inc., and as Controller
for Northern Propane Gas. Mr. Lawler earned a Bachelor of Science degree in
business administration from Creighton University and a Master of Business
Administration degree from the University of Iowa.
LARRY V. PEARSON, Vice President of Fuel Supply and Transportation for
Tenaska, Inc., serves as Vice President for TGI. Prior to joining Tenaska, Inc.
in 1988, Mr. Pearson was an executive at Enron Corp. for 15 years, where he held
various positions, including Senior Vice President, Enron Gas Supply; Vice
President, Gas Supply, Northern Natural Gas Company; and Vice President,
Regulatory Affairs, Northern Natural Gas Company. Mr. Pearson earned a Bachelor
of Science degree in mechanical engineering from the South Dakota School of
Mines and Technology and a Master of Business Administration degree from
Creighton University.
MICHAEL C. LEBENS, Vice President of Engineering for Tenaska, Inc., serves
as Vice President of TGI. Before joining Tenaska, Inc. in 1987, Mr. Lebens was
Director of Engineering for Enron Cogeneration Co. and Northern Natural
Resources, subsidiaries of Enron Corp. Mr. Lebens has also held positions at
Gibbs & Hill where he was Senior Mechanical Engineer and at Burns & McDonnell,
where he was responsible for mechanical design, specifications and engineering
estimates. Mr. Lebens earned his Bachelor of Science degree and a Master of
Science degree in mechanical engineering from the University of
Nebraska-Lincoln.
47
<PAGE>
AFFILIATE TRANSACTIONS
OPERATING & MAINTENANCE AGREEMENT
Certain operation and maintenance services for our project are provided by
the Operator, which is a wholly owned subsidiary of Tenaska, Inc. Pursuant to
the O&M Agreement, we will pay the Operator for approved expenses. The Operator
will receive a fixed fee of $75,000 for the Pre-Commercial Operating Period and
a potential incentive fee of not more than $75,000 during or prior to the
Pre-Commercial Operating Period. During the Commercial Operating Period (except
for the year 2003), the Operator will receive a monthly fixed fee of $18,750,
escalated annually, an annual availability bonus of not more than $75,000,
escalated annually, and a potential annual incentive fee of not more than
$100,000, escalated annually. The Operator is liable to pay us a negative annual
availability percentage fee of not more than $75,000, escalated annually, in the
event of substandard performance. For further description of the O&M Agreement,
see "SUMMARY OF PRINCIPAL PROJECT DOCUMENTS--O&M Agreement."
LAND ARRANGEMENTS
Tenaska, Inc. has (a) sold to us by limited warranty deed its interest in
101.29 acres of land located in Heard County, Georgia for a price of $616,100,
(b) leased 13.13 acres of land to us on a triple net basis for use as a material
and equipment laydown area, at a base rental rate of $1,094 per month and for a
term expiring on December 31, 2002, (c) granted us a perpetual non-exclusive
easement over an easement area of up to eighty feet in width for utilities and
access over Tenaska, Inc.'s property and through the GTC property, for purposes
of providing access to George Brown Road, in consideration for the payment of
$2,500 per acre of easement area, and (d) granted us a publicly recorded option
to acquire up to 8 acres of Tenaska, Inc.'s land for use by us or our successors
or assigns as an electric substation site for a purchase price of $6,500 per
acre, with an option exercise and closing period expiring December 31, 2001.
Following the transfer of Tenaska, Inc.'s interest in the 101.29 acres of
land, we granted Tenaska, Inc. a perpetual non-exclusive gas pipeline easement
and temporary construction easement across the same property in consideration
for the payment of $2,500 per acre of easement area. Thereafter, we transferred
our interest in the same 101.29 acres of land, and certain related easements, to
the Authority.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
GENERAL
We were formed on April 16, 1998, to develop, finance, construct, own or
lease, operate and maintain our project. Prior to the sale of the old bonds, we
were in the development stage and had no operating revenues and expenses. We
estimate the total cost of designing, financing, engineering, procuring,
constructing and commissioning our project to be approximately $330.6 million.
See "ESTIMATED SOURCES AND USES OF FUNDS."
EQUITY CONTRIBUTION
Our partners are obligated to contribute up to $35.5 million to the
partnership to fund the costs of developing, financing, constructing, testing
and initially operating our project. Each of our Partner's obligation will be
supported by an acceptable letter of credit or other acceptable credit support.
LIQUIDITY AND CAPITAL RESOURCES
We believe that the net proceeds from the sale of the old bonds, interest
income on the unspent portion thereof during the construction period,
anticipated revenues from the operation of the Initial Units and proceeds of the
equity contributions will be sufficient to:
- fund the engineering, procurement, construction, testing and commissioning
of our project,
- pay certain fees and expenses in connection with the financing and
development of our project, and
- pay the costs of developing, financing and initially operating our
project, including interest on the bonds.
In order to provide liquidity in the event of temporary cash flow
shortfalls, we are required to maintain an account that will contain an amount
equal to the principal and interest due on the bonds on the next scheduled
payment date. Our obligation to fund this account begins on June 1, 2002. The
maintenance of this balance will be done through cash funding, the issuance of a
letter of credit or a combination of both.
BUSINESS STRATEGY AND OUTLOOK
Our overall business strategy is to perform as agreed under our 29-year
Power Purchase Agreement with PECO and to maximize our revenues under the Power
Purchase Agreement by earning incentive payments available through achieving
certain availability and efficiency levels. We intend to cause our project to be
managed, operated and maintained in compliance with all applicable documents
relating to our project and all applicable legal requirements.
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<PAGE>
BUSINESS AND REGULATORY ENVIRONMENT
INTRODUCTION
In recent years, federal and state initiatives have further promoted the
development of competition in the sale of electricity and gas. On the federal
level, the Federal Energy Regulatory Commission has adopted a rule that
facilitates access to the nationwide transmission grid by utility and
non-utility purchasers of electricity and allows utilities subject to Federal
Energy Regulatory Commission jurisdiction to recover stranded costs. In
addition, proposals have been introduced in Congress to repeal the Public
Utility Holding Company Act of 1935. If the repeal of the Public Utility Holding
Company Act of 1935 were to occur, competitive advantages that independent power
producers have over certain regulated utilities may be reduced or eliminated.
COMPETITION
Pursuant to the Power Purchase Agreement, PECO is required to purchase all
of the facility's capacity up to "Contract Capacity" and, pursuant to its
request, the facility's energy. The Power Purchase Agreement generally prohibits
us from selling capacity or energy to third parties. Therefore, during the term
of the Power Purchase Agreement, competition from other capacity and energy
providers will become an issue only if PECO breaches its agreement and ceases to
purchase the facility's capacity and energy or the Power Purchase Agreement is
otherwise terminated or not performed in accordance with its terms.
EMPLOYEES
We have no employees and do not anticipate having any employees in the
future. Pursuant to our O&M Agreement with Tenaska Operations, Inc., Tenaska
Operations, Inc. will operate and maintain the facility. The direct labor
personnel and the plant operations management will be employees of Tenaska
Operations, Inc. Management oversight of Tenaska Operations, Inc. will be
provided by Tenaska, Inc. pursuant to a service agreement between Tenaska
Operations, Inc. and Tenaska, Inc.
LEGAL PROCEEDINGS
The partnership is not party to any legal proceedings.
ENERGY REGULATION
EXEMPT WHOLESALE GENERATOR STATUS
We intend to operate as an "exempt wholesale generator" commencing on and
after the date the Initial Units are operational. On June 7, 1999, we submitted
a filing with the Federal Energy Regulatory Commission for an Order Accepting
Initial Rate Schedule for Filing, Waiving Regulations, and Granting Blanket
Approvals. Federal Energy Regulatory Commission has accepted the filing, which
includes waivers of various regulatory requirements that apply to traditional
electric utilities, on July 28, 1999. On July 9, 1999, Federal Energy Regulatory
Commission certified the partnership as an "exempt wholesale generator."
An exempt wholesale generator is a public utility under the Federal Power
Act, and the partnership, when operating solely as an exempt wholesale
generator, would be subject to the jurisdiction of the Federal Energy Regulatory
Commission with respect to its wholesale electric rates and other matters. An
exempt wholesale generator must be engaged exclusively in the business of owning
or operating an eligible facility and selling electricity at wholesale. An
eligible facility is a generating facility that is used solely to produce
electricity exclusively for sale at wholesale. An exempt wholesale generator is
exempt from the Public Utility Holding Company Act of 1935 and no company would
become a holding company under the Public Utility Holding Company Act of 1935
due to its holding 10% or more of the voting securities or
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partnership interests in the partnership. There is no restriction on the
proportion of equity interest in an exempt wholesale generator that may be held
by electric utilities and electric utility holding companies. As an exempt
wholesale generator, the partnership's sale to PECO in the wholesale market will
be exempt from rate regulation as an electric utility under state law.
ENVIRONMENTAL REGULATION
We are required to comply with a number of statutes and regulations relating
to protection of the environment and the safety and health of the personnel
operating our project and the public during the operation of our project. Such
statutes and regulations include, among others, the regulation of air emissions,
water discharges, solid and hazardous waste disposal, hazardous materials
handling, petroleum storage, and safety and health standards, practices and
procedures applicable to the operation of the facility.
On September 24, 1998, the EPA issued a final rule to address regional
transport of ground-level ozone in the eastern United States through reductions
in nitrogen oxides ("NO(x)") in 23 jurisdictions in the east and midwest,
including Georgia (the "Rule"). In 1999 in a separate action, the Georgia
Environmental Protection Division proposed certain modifications to its state
implementation plan to address the Atlanta ozone non-attainment area. Those
proposed changes include limitations on NO(x) emissions in a 34-county area,
including Heard County. This proposed change is currently under review by state
and federal officials. The Rule set forth an annual NO(x) emissions budget for
each affected jurisdiction and required each such jurisdiction to submit a State
Implementation Plan ("SIP") demonstrating how it would meet its budget.
Depending upon how the SIP for Georgia would allocate the burden of compliance
with the Rule as between existing generating stations and new generating
stations (such as the facility) and how Georgia modifies its SIP to address the
Atlanta ozone non-attainment area, the cost of operating the facility could be
materially adversely affected. The United States Court of Appeals for the
District of Columbia Circuit on May 25, 1999 stayed indefinitely the deadline
for jurisdictions to submit their SIPs. We cannot predict how the court
challenge to the Rule will be resolved or whether the Rule will be repromulgated
in its original or in a modified form, or if there will ultimately be any change
to Georgia's regulations that adversely affect our project. Comprehensive
settlement discussions failed in August 1999, and the continuing litigation may
be protracted. We cannot predict the outcome of other pending litigation
concerning petitions by downwind states under Section 126 of the Clean Air Act
to mandate specific reductions at specific facilities in upwind states or of
other litigation about ozone standards which might indirectly affect matters
related to NO(x) SIP issues or how Georgia or the EPA may ultimately resolve
Atlanta's ozone non-attainment issues.
CLEAN WATER ACT. We are subject to a variety of state and federal
regulations governing existing and potential water and wastewater discharges
from the facility. Generally, federal regulations promulgated pursuant to the
Clean Water Act govern overall water and wastewater discharges, through National
Pollutant Discharge Elimination System permits. Under current provisions of the
Clean Water Act, existing permits must be renewed every five years, at which
time permit limits are subject to extensive review and can be modified to
account for changes in regulations. In addition, the permits have re-opener
clauses that can be used to modify a permit at any time. Amendments to the Clean
Water Act could be adopted, which would require us to pay for additional
monitoring requirements and toxicity reduction evaluations. The impact of any
such amendments is not expected to significantly affect our project.
CERCLA. The facility site may be investigated for potential environmental
contamination. Investigation prior to the purchase of the facility site revealed
no evidence of the release of CERCLA-listed substances nor the presence of any
significant soil contamination. CERCLA requires the cleanup of sites from which
there has been a release or threatened release of hazardous substances. In the
Phase I Environmental Site Assessment, the facility site was found to be
undeveloped with no evidence of recognized adverse environmental conditions.
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PERMIT STATUS
We have obtained all of the construction permits required to be obtained by
us to begin construction of the facility and expect to obtain all other
construction permits by the time required for timely completion of our project
on or before the date all six Units are scheduled to be operational. An Air
Quality Permit was granted by the Georgia Environmental Protection Division
("GEPD") on December 18, 1998 and amended on April 21, 1999. The Air Quality
Permit obtained by us included all state and federal new source review
requirements (Prevention of Significant Deterioration and Acid Rain Prevention
Program permitting requirements). The approval to operate will be incorporated
in the Title V permit when it is issued, as discussed below.
We have a permit from the United States Army Corps of Engineers ("USACE"),
Nationwide Permit ("NWP") No. 26, which permits a total of 2.08 acres of
wetlands to be filled at the facility site and the pipeline easement. Coverage
under NWP No. 26 places a 3-acre maximum wetland impact loss for the entire
project, including necessary fuel and electrical interconnections. A
pre-construction notification, including a wetlands mitigation plan was
submitted to the USACE in compliance with the requirements of NWP No. 26.
Coverage under the NWP was verified and the mitigation plan was approved by
USACE on April 21, 1999, subject to submission to and approval by the USACE of a
restrictive covenant consistent with the plan. The covenant was submitted to
USACE for approval and was recorded in accordance with the terms of the USACE
authorization.
Based upon final grading and drainage plans, we will file an application for
a Disturbance Permit with Heard County. Currently, there is no general National
Pollutant Discharge Elimination System permit available for storm water
discharges associated with construction activity such as ours in the State of
Georgia and the Georgia Environmental Protection Division (GEPD) has informed us
that it will not issue individual permits for such activities. Should a general
National Pollutant Discharge Elimination System permit become available, we
intend to file a Notice of Intent to be covered by such permit and to comply
with all applicable terms of the permit. We will otherwise comply with all
applicable federal and state requirements for control of storm water during
construction.
We are required to operate in compliance with EPA requirements regarding the
storage and transfer of petroleum fuel oil. We have received a National
Pollutant Discharge Elimination System permit to discharge wastewater to Hilly
Mill Creek through an outfall which we will construct.
The facility is subject to permitting under Title V of the Clean Air Act
Amendments of 1990 and applicable state regulations. The Title V permit has not
yet been issued. We will file a permit application for a Title V Permit within
12 months after the initial operation of any particular Unit.
GPC will be required to file the GPC Interconnection Agreement with the
Federal Energy Regulatory Commission and will be subject to acceptance or
rejection within 60 days of filing. We regard this as a routine filing and
expect that Federal Energy Regulatory Commission will accept the filing.
The renewal, extension or obtaining of permits and approvals for the
facility are and may be subject to contest or appeal under federal or state law.
See "RISK FACTORS--Regulatory Risks."
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DESCRIPTION OF THE NEW BONDS
GENERAL
The partnership issued the old bonds and will issue the new bonds pursuant
to the Indenture. The aggregate principal amount of the old bonds and new bonds
that may be outstanding at any one time will not exceed $275,000,000. The bonds
will mature on February 1, 2030 and will bear interest from their date of
issuance at 9.50% per annum. Except as described below, the new bonds will be
issued as fully registered bonds in authorized denominations of $100,000 and
integral multiples of $1,000 in excess thereof. Interest on the bonds will be
payable semi-annually in arrears on each February 1 and August 1, commencing
August 1, 2000 (each a "Scheduled Payment Date"), and at earlier redemption, to
the registered owners of the bonds (each a "Holder") as shown on the books for
the registration and transfer of the bonds kept at the designated corporate
trust office of the Trustee at the close of business on the fifteenth day next
preceding such Scheduled Payment Date. Payment of principal on the bonds will
begin on February 1, 2006 and thereafter will be payable on each Scheduled
Payment Date. Interest on the bonds will be computed on the basis of a 360-day
year consisting of twelve 30-day months.
PAYMENT OF PRINCIPAL AND INTEREST
So long as DTC or its nominee, Cede & Co., is the registered owner of the
Global Bonds (as defined below), payments of the principal of and premium, if
any, and interest thereon will be made directly to DTC or Cede & Co., as nominee
for DTC, in accordance with DTC's practices and procedures. Disbursements of
such payments to owners of beneficial interests in the Global Bonds are the
responsibility of the participants, as described below.
The principal of and premium, if any, and interest on each of the
Certificated Bonds (as defined below) will be payable by check mailed to the
address of the Holder of such Certificated Bond as such addresses appear in the
books maintained by the Trustee or, upon request by any Holder of $1 million or
more in aggregate principal amount of Certificated Bonds, by wire transfer to
such Holder, except for the payment of the final installment of principal
payable with respect thereto, which shall be made upon surrender of such bond at
the principal corporate trust office of the Trustee.
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SCHEDULED PRINCIPAL PAYMENTS
The principal of the bonds will be payable in semi-annual installments on
Scheduled Payment Dates commencing February 1, 2006 as follows:
<TABLE>
<CAPTION>
SCHEDULED PAYMENT DATE PAYMENT SCHEDULED PAYMENT DATE PAYMENT
- ---------------------- ------------ ---------------------- --------------
<S> <C> <C> <C>
February 1, 2006....................... $ 344,000 February 1, 2018....................... $ 5,844,000
August 1, 2006......................... 344,000 August 1, 2018......................... 5,844,000
February 1, 2007....................... 344,000 February 1, 2019....................... 6,532,000
August 1, 2007......................... 344,000 August 1, 2019......................... 6,532,000
February 1, 2008....................... 688,000 February 1, 2020....................... 6,875,000
August 1, 2008......................... 688,000 August 1, 2020......................... 6,875,000
February 1, 2009....................... 1,032,000 February 1, 2021....................... 7,219,000
August 1, 2009......................... 1,032,000 August 1, 2021......................... 7,219,000
February 1, 2010....................... 1,375,000 February 1, 2022....................... 7,563,000
August 1, 2010......................... 1,375,000 August 1, 2022......................... 7,563,000
February 1, 2011....................... 1,719,000 February 1, 2023....................... 8,250,000
August 1, 2011......................... 1,719,000 August 1, 2023 8,250,000
February 1, 2012....................... 2,407,000 February 1, 2024....................... 8,594,000
August 1, 2012......................... 2,407,000 August 1, 2024......................... 8,594,000
February 1, 2013....................... 3,094,000 February 1, 2025....................... 8,938,000
August 1, 2013......................... 3,094,000 August 1, 2025......................... 8,938,000
February 1, 2014....................... 3,438,000 February 1, 2026....................... 9,282,000
August 1, 2014......................... 3,438,000 August 1, 2026......................... 9,282,000
February 1, 2015....................... 4,125,000 February 1, 2027....................... 9,969,000
August 1, 2015......................... 4,125,000 August 1, 2027......................... 9,969,000
February 1, 2016....................... 4,469,000 February 1, 2028....................... 11,688,000
August 1, 2016......................... 4,469,000 August 1, 2028......................... 11,688,000
February 1, 2017....................... 5,157,000 February 1, 2029....................... 12,375,000
August 1, 2017......................... 5,157,000 August 1, 2029......................... 12,375,000
February 1, 2030....................... 12,358,000
------------
Total:................................. $275,000,000
============
</TABLE>
BOOK-ENTRY, DELIVERY, FORM AND TRANSFER
GLOBAL BONDS
The new bonds will be initially issued in the form of one or more permanent
global bonds (the "Global Bond"), which will be registered in the name of DTC or
a nominee of DTC and deposited on behalf of the purchasers of the old bonds
represented thereby with the Trustee as custodian for DTC.
The aggregate principal amount of the Global Bonds may from time to time be
increased or reduced by adjustments made in the records of the Trustee as
custodian for DTC.
Interests in the Global Bonds may be held in denominations of $100,000 and
integral multiples of $1,000 in excess thereof.
CERTIFICATED BONDS
Interests in the Global Bond will be exchangeable for bonds in certificated,
fully registered form without coupons in denominations of $100,000 and integral
multiples of $1,000 in excess thereof (i) (a) if DTC notifies the partnership
that it is unwilling or unable to continue as depository for such Global Bonds
or DTC ceases to be a "Clearing Agency" registered under the Exchange Act, and a
successor depository is
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not appointed by the partnership within 90 days, or (b) at the written request
of a majority of holders of beneficial interests in a Global Bond during an
Event of Default and (ii) if such exchange complies with the Indenture and the
rules and procedures of DTC and its nominee (the "Applicable Procedures").
REPLACEMENT EXCHANGE AND TRANSFER
If any bond at any time is mutilated, defaced, destroyed, stolen or lost,
such bond may be replaced at the cost of the applicant (including the reasonable
and duly documented fees and expenses of the partnership and the Trustee) upon
provision of evidence satisfactory to the Trustee and the partnership that such
bond was destroyed, stolen or lost, together with such indemnity as the Trustee
and the partnership may require. Mutilated or defaced bonds must be surrendered
before replacements will be issued.
CERTAIN BOOK-ENTRY PROCEDURES FOR THE GLOBAL BONDS
The descriptions of the operations and procedures of DTC set forth below are
provided solely as a matter of convenience. These operations and procedures are
solely within the control of the respective settlement systems and are subject
to change by them from time to time. The partnership takes no responsibility for
these operations or procedures, and investors are urged to contact the relevant
system or its participants directly to discuss these matters. DTC has advised
the partnership that it is (a) a limited purpose trust company organized under
the laws of the State of New York, (b) a "banking organization" within the
meaning of the New York Banking Law, (c) a member of the Federal Reserve System,
(d) a "clearing corporation" within the meaning of the Uniform Commercial Code,
as amended and (e) a "clearing agency" registered pursuant to Section 17A of the
Exchange Act. DTC was created to hold securities for its participants and
facilitates the clearance and settlement of securities transactions between
participants through electronic book-entry changes to the accounts of its
participants, thereby eliminating the need for physical transfer and delivery of
certificates. DTC's participants include securities brokers and dealers, banks
and trust companies, clearing corporations and certain other organizations.
Indirect access to DTC's system is also available to other entities such as
banks, brokers, dealers and trust companies (collectively, the "Indirect
Participants") that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. Investors who are not participants
may beneficially own securities held by or on behalf of DTC only through
participants or Indirect Participants.
The partnership expects that pursuant to procedures established by DTC
(a) DTC will credit the accounts of participants with an interest in the Global
Bond and (b) ownership of the bonds will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by DTC (with
respect to the interests of participants) and the records of participants and
the Indirect Participants (with respect to the interests of persons other than
participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Accordingly, the ability to transfer interests in the bonds represented by
the Global Bond to such persons may be limited. In addition, because DTC can act
only on behalf of its participants, who in turn act on behalf of persons who
hold interests through participants, the ability of a person having an interest
in bonds represented by the Global Bond to pledge or transfer such interest to
persons or entities that do not participate in DTC's system, or to otherwise
take actions in respect of such interest, may be affected by the lack of a
physical definitive security in respect of such interest. So long as DTC or its
nominee is the registered owner of the Global Bond, DTC or such nominee, as the
case may be, will be considered the sole owner or holder of the bonds
represented by the Global Bond for all purposes under the Indenture.
Except as provided above, owners of beneficial interests in the Global Bond
will not be entitled to have bonds represented by the Global Bond registered in
their names, will not receive or be entitled to receive physical delivery of
Certificated Bonds, and will not be considered the owners or holders thereof
under the Indenture for any purpose, including with respect to the giving of any
direction, instruction or approval to the Trustee thereunder. Accordingly, each
holder owning a beneficial interest in the Global
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Bond must rely on the procedures of DTC and, if such holder is not a participant
or an Indirect Participant, on the procedures of the participant through which
such holder owns its interest, to exercise any rights of a holder of bonds under
the Indenture or the Global Bond. The partnership understands that under
existing industry practice, in the event that the partnership requests any
action of holders of bonds, or a holder that is an owner of a beneficial
interest in the Global Bond desires to take any action that DTC, as the holder
of the Global Bond, is entitled to take, DTC would authorize the participants to
take such action and the participants would authorize holders owning through
such participants to take such action or would otherwise act upon the
instruction of such holders. Neither the partnership nor the Trustee will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of bonds by DTC, or for maintaining, supervising or
reviewing any records of DTC relating to such bonds.
Payments with respect to the principal of, and premium, if any, and interest
on, any bonds represented by the Global Bond registered in the name of DTC or
its nominee on the applicable record date will be payable by the Trustee to or
at the direction of DTC or its nominee in its capacity as the registered holder
of the Global Bond representing such bonds under the Indenture. Under the terms
of the Indenture, the partnership and the Trustee may treat the persons in whose
names the bonds, including the Global Bond, are registered as the owners thereof
for the purpose of receiving payment thereon and for any and all other purposes
whatsoever. Accordingly, neither the partnership nor the Trustee has or will
have any responsibility or liability for the payment of such amounts to owners
of beneficial interests in the Global Bond (including principal, premium, if
any, and interest). Payments by the participants and the Indirect Participants
to the owners of beneficial interests in the Global Bond will be governed by
standing instructions and customary industry practice and will be the
responsibility of the participants or the Indirect Participants and DTC.
Transfers between participants in DTC will be effected in accordance with DTC's
procedures, and will be settled in same-day funds.
OPTIONAL REDEMPTIONS
REDEMPTION AT THE OPTION OF THE PARTNERSHIP
At the option of the partnership, the bonds are subject to redemption prior
to the Stated Maturity thereof, in whole or in part, on any Business Day, at a
price equal to the Redemption Price plus the Make-Whole Premium.
BLOCKED DISTRIBUTIONS
Subject to certain exceptions and conditions, the bonds shall be redeemed,
in whole or in part, at any time on any Business Day, at a price equal to the
Redemption Price with monies from the Distribution Suspense Account received by
the Trustee from the Collateral Agent, provided such receipt is in accordance
with the Collateral Agency Agreement. See "SUMMARY DESCRIPTION OF PRINCIPAL
FINANCING DOCUMENTS--Collateral Agency Agreement--PARTNERSHIP DISTRIBUTION
FUND--Blocked Partner Distributions."
MANDATORY REDEMPTIONS
EVENT OF LOSS
Subject to certain exceptions and conditions, the bonds shall be redeemed,
in whole or in part, at a price equal to the Redemption Price with certain
monies from the Loss Proceeds Account received by the Trustee from the
Collateral Agent in connection with an Event of Loss or an Event of Eminent
Domain that has been determined in accordance with the Collateral Agency
Agreement to render all or a portion of the facility incapable of being rebuilt,
repaired or restored to permit operation of the facility or a portion thereof on
a commercially feasible basis. See "SUMMARY DESCRIPTION OF PRINCIPAL FINANCING
DOCUMENTS--Collateral Agency Agreement--LOSS PROCEEDS ACCOUNT."
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EXCESS LOSS PROCEEDS
Subject to certain exceptions and conditions, the bonds shall be redeemed,
in whole or in part, at a price equal to the Redemption Price with certain
monies from the Loss Proceeds Account received by the Trustee from the
Collateral Agent in the event that Loss Proceeds in excess of $1,000,000 remain
in the Loss Proceeds Account following the repair or restoration in respect of
which such Loss Proceeds were received. See "SUMMARY DESCRIPTION OF PRINCIPAL
FINANCING DOCUMENTS--Collateral Agency Agreement--LOSS PROCEEDS ACCOUNT."
ENERGY CONTRACT BUY-OUT
The bonds shall be redeemed, in whole or in part, at a price equal to the
Redemption Price with certain monies received by the Trustee from the Collateral
Agent from the Energy Contract Buy-Out Proceeds Sub-account if the partnership
receives either (i) the required payment from PECO in connection with a
termination by PECO of the Power Purchase Agreement on the 20(th) anniversary of
the date of commencement of the operating term of the Power Purchase Agreement,
or (ii) subject to certain exceptions and conditions, any cash payment from a
purchaser of capacity or energy (including under the Power Purchase Agreement,
other than as referred to in clause (i)), the effect of which is to result in
the termination or cancellation of, reduce future payments under, or change the
term of, the capacity or energy purchase contract between such purchaser and the
partnership; provided, however, that, in the case of cash payments referred to
in clause (ii), this provision shall be applicable only if the termination or
cancellation of, reduction of payments under, or change in term of, the related
capacity or energy purchase contract is certified by the partnership as not
voluntarily sought by the partnership, but into which the partnership is legally
or practically required to enter by force of law or regulation, or by an actual
or threatened condemnation, expropriation or other taking of our project, or by
an actual or threatened bankruptcy proceeding on the part of the purchaser of
the electricity or capacity under the subject contract or by an actual or
threatened termination of full performance on the part of such purchaser;
provided, further that, in the case of a threatened (a) condemnation,
expropriation or other taking, (b) bankruptcy proceeding or (c) termination of
full performance, such threat shall be express and in writing, and the
partnership shall have certified that such threat has resulted in the bonds
being placed on a negative credit watch or in a Rating Downgrade by either
Rating Agency, or, either Rating Agency shall have indicated that any such
threatened action should result in either the bonds being placed on a negative
credit watch or in a Rating Downgrade (each, an "Involuntary Buyout Event"). See
"SUMMARY DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency
Agreement--LOSS PROCEEDS ACCOUNT--ENERGY CONTRACT BUY-OUT."
EPC BUY-DOWN
Subject to certain exceptions and conditions, the bonds shall be redeemed,
in whole or in part, at a price equal to the Redemption Price with certain
monies received by the Trustee from the Collateral Agent from the EPC Buy-Down
Proceeds Sub-account pursuant to the Collateral Agency Agreement in connection
with an EPC Buy-Down that has been determined in accordance with the Collateral
Agency Agreement to render the facility incapable of being rebuilt, repaired or
restored in order to remedy the circumstances giving rise to the obligation of
the EPC Contractor to pay to an EPC Buy-Down. See "SUMMARY DESCRIPTION OF
PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--LOSS PROCEEDS
ACCOUNT--EPC BUY-DOWN."
SELECTION OF BONDS FOR REDEMPTION; EFFECT OF REDEMPTION
Bonds subject to redemption in part will be redeemed on a pro rata basis.
All bonds, or portions thereof, called for redemption will cease to bear
interest on the Redemption Date and will no longer be considered Outstanding,
provided that sufficient funds for their redemption are on deposit with the
Trustee on or prior to the Redemption Date.
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RATINGS
Moody's and S&P have assigned the bonds the ratings set forth above under
"THE PROJECT--The Offering--Ratings." There is no assurance that any such
ratings will remain in effect for any given period of time or that such ratings
will not be lowered, suspended or withdrawn entirely by the applicable Rating
Agency, if, in such Rating Agency's judgment, circumstances so warrant. Any such
lowering, suspension or withdrawal of any such ratings may have a material
adverse effect on the market price or marketability of the bonds.
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS
The following description of the security and sources of payment for the
bonds constitutes a summary thereof and should not be considered to be a full
statement of the provisions thereof and is qualified in its entirety by
reference to all provisions of the Financing Documents and complete reference to
this prospectus in its entirety.
The bonds are obligations solely of the partnership payable solely from, and
secured by the pledge of, the Indenture Collateral, as set forth in the
Indenture, and by the Collateral, as set forth in the other Security Documents.
The Indenture Collateral consists of the funds and accounts established under
the Indenture, the Debt Service Reserve Account established under the Collateral
Agency Agreement and any Debt Service Reserve Letter of Credit (other than to
the extent of the Debt Service Reserve Letter of Credit provider's right to
certain amounts thereunder). The rights of Holders with respect to the Indenture
Collateral and the Collateral are governed by the provisions of the Indenture
and the Collateral Agency Agreement. For the rights of the parties to the
Collateral Agency Agreement, see "SUMMARY DESCRIPTION OF PRINCIPAL FINANCING
DOCUMENTS--Collateral Agency Agreement."
The partnership's obligations under the bonds are nonrecourse to any of the
partners or affiliates (other than the partnership) or any shareholder, Partner,
officer, employee or director. Recourse on the bonds is limited to the
partnership, the Indenture Collateral and the Collateral.
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SUMMARY DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS
THE FOLLOWING SUMMARIES OF CERTAIN PROVISIONS OF THE INDENTURE, THE COMMON
AGREEMENT, THE COLLATERAL AGENCY AGREEMENT, THE DEBT SERVICE RESERVE LETTER OF
CREDIT REIMBURSEMENT AGREEMENT, THE POWER PURCHASE AGREEMENT LETTER OF CREDIT
REIMBURSEMENT AGREEMENT AND THE EQUITY CONTRIBUTION AGREEMENT DO NOT PURPORT TO
BE COMPLETE AND ARE SUBJECT TO, AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE
TO, ALL OF THE PROVISIONS FOR INSPECTION UPON WRITTEN REQUEST OF ANY POTENTIAL
INVESTOR (SUBJECT TO APPROPRIATE CONFIDENTIALITY RESTRICTIONS) TO THE
PARTNERSHIP. SEE "IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS." CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED IN THIS
PROSPECTUS HAVE THE MEANINGS ASCRIBED TO SUCH TERMS IN THE FINANCING DOCUMENTS.
INDENTURE
ACCOUNTS
The following accounts (the "Indenture Accounts") have been established by
the Trustee: the Bond Payment Account, including the Interest Sub-Account and
the Principal Sub-Account, the Redemption Account and the Construction Interest
Account. All amounts from time to time held in each Indenture Account shall be
held in the name of the Trustee subject to the lien and security interest
granted under the Indenture and in the custody of the Depositary Bank on behalf
of the Trustee.
BOND PAYMENT ACCOUNT
On the Date of Commercial Operation of the Final Units, the Bond Payment
Account will be funded from amounts transferred from the Construction Interest
Account pursuant to the Indenture, and from the Construction Fund established
pursuant to the Collateral Agency Agreement. Following the Date of Commercial
Operation of the Final Units, the Bond Payment Account will be funded from
amounts transferred from the Debt Service Fund and, if required, the Debt
Service Reserve Account pursuant to the Collateral Agency Agreement. See
"--Collateral Agency Agreement."
The Trustee shall deposit (i) all funds received by it for the payment of
interest on the bonds into the Interest Sub-Account for disbursement in
accordance with the Indenture and (ii) all funds received by it for the payment
of principal on the bonds into the Principal Sub-Account for disbursement in
accordance with the Indenture.
CONSTRUCTION INTEREST ACCOUNT
Prior to the Date of Commercial Operation of the Final Units, the Trustee
shall deposit all funds received by it for the payment of interest on the bonds
into the Construction Interest Account. The Trustee will disburse from the
Construction Interest Account the amount required to pay interest on the bonds
when due (whether on a Scheduled Payment Date or otherwise). On the Date of
Commercial Operation of the Final Units and upon the partnership's delivery to
the Collateral Agent and the Trustee of a Commercial Operation Certificate, the
Trustee shall transfer all funds remaining in the Construction Interest Account
to the Bond Payment Account for deposit in the Interest Sub-Account.
INTEREST SUB-ACCOUNT AND PRINCIPAL SUB-ACCOUNT
(a) The Trustee is authorized and directed to disburse from the Interest
Sub-Account, the amount required to pay interest on the bonds when due (whether
on a Scheduled Payment Date or otherwise).
(b) The Trustee is authorized and directed to disburse from the Principal
Sub-Account, the amount required to pay principal on the bonds when due (whether
on a Scheduled Payment Date or otherwise).
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REDEMPTION OF BONDS; NOTICE
NOTICE TO TRUSTEE
The election or requirement of the partnership to redeem any bonds, at any
time, will be evidenced by a written request of the partnership specifying the
principal amount of the bonds to be redeemed. If the partnership elects or is
required to redeem any bonds, the Trustee will determine the date on which such
redemption will occur (the "Redemption Date") which will be within 90 days of
its receipt of monies in respect of the event resulting in the partnership's
obligation or election to redeem the bonds.
NOTICE OF REDEMPTION
Notice of redemption will be given to the Holders of such series to be
redeemed at least 30 days but not more than 60 days prior to the Redemption
Date. All notices of redemption will state, among other things:
(a) the Redemption Date,
(b) the premium payable on redemption, if any,
(c) the portion of the principal amount of each bond to be redeemed,
(d) that on the Redemption Date interest on such bonds will cease to accrue
on and after said date,
(e) the place of payment where such bonds are to be surrendered for payment
of the amount in respect of such redemption,
(f) the record date and
(g) that the availability in the Redemption Account of an amount of
immediately available funds to pay such bonds in full is a condition
precedent to such redemption.
BONDS PAYABLE ON REDEMPTION DATE
The bonds or portions thereof to be redeemed will, on the Redemption Date,
become due and payable, and from and after such date such bonds or portions
thereof will cease to bear interest. Upon surrender of any such bond for
redemption, an amount in respect of such bond or portion thereof will be paid as
provided therein; PROVIDED, HOWEVER, that any payment of interest on any bond,
the Scheduled Payment Date of which is on or prior to the Redemption Date, will
be payable to the Holder of such bond registered as such at the close of
business on the record date according to the terms of such bond and the
Indenture.
Any notice of redemption shall be conclusively presumed to have been duly
given whether or not such notice is actually received by the Holder. No defect
in the notice with respect to any bond (whether in the form of notice or the
mailing thereof) shall affect the validity of the redemption proceedings for any
other bonds.
REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF COVENANTS
All representations and warranties by and all covenants of the partnership
set forth in the Common Agreement are incorporated by reference into the
Indenture as if set forth therein.
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EVENTS OF DEFAULT; REMEDIES
CERTAIN EVENTS
The following events constitute "Events of Default" under the Indenture:
(a) failure in the payment of principal of, premium, if any, or interest on
any bond when the same becomes due and payable, whether by scheduled maturity or
required prepayment or redemption or by acceleration or otherwise, and such
failure continues for more than 5 days following the due date for payment in the
case of principal, and more than 15 days following the due date for payment in
the case of interest or premium; or
(b) an Event of Default shall have occurred and be continuing under the
Common Agreement.
ENFORCEMENT OF REMEDIES
(a) Subject to subsections (c) and (d) below, if one or more Events of
Default has occurred and is continuing, then:
(i) in the case of an Event of Default described in clause (a) above,
the Trustee may, and at the direction of the Holders of not less than 25% in
aggregate principal amount of the Outstanding Bonds (the "One-Quarter
Holders") the Trustee shall, declare the entire principal amount of
Outstanding Bonds, all interest accrued and unpaid thereon, all premium (if
any) and other amounts payable in respect thereof, to be due and payable;
(ii) in the case of all other Events of Default other than a bankruptcy
event with respect to the partnership, such action described in the above
paragraph may be taken by the Holders of greater than 50% in an aggregate
principal amount of the Outstanding Bonds (the "Majority Holders"), by
written notice to the Trustee and the partnership, and the Trustee, by
written notice to the partnership; or
(iii) in the case of a bankruptcy event with respect to the partnership,
the entire principal amount of the Outstanding Bonds, all interest accrued
and unpaid thereon, all premium (if any) and other amounts payable in
respect thereof shall automatically become due and payable.
Within 30 days after the occurrence of an Event of Default which is known to
the Trustee, the Trustee will mail to each Holder notice of such Event of
Default. Except in the case of an Event of Default relating to failure to pay
principal of, premium, if any, or interest on any bond, the Trustee may withhold
such notice from the Holders if the Trustee in good faith determines that
withholding notice is in the interest of the Holders.
Notwithstanding the absence of direction from the Majority Holders directing
the Trustee to accelerate the maturity of the bonds, if one or more of the
Events of Default referred to in clause (a)(ii) immediately above has occurred
and is continuing, the Trustee may declare the entire principal amount of the
Outstanding Bonds, all interest accrued and unpaid thereon, and all premium (if
any) and other amounts payable under the bonds and the Indenture, if any, to be
due and payable, unless the Majority Holders direct the Trustee not to
accelerate the maturity of the bonds, if in the good faith exercise of its
discretion the Trustee determines that such action is necessary to protect the
interests of the Holders.
(b) At any time after the principal of the bonds has become due and payable
upon a declared acceleration, and before any judgment or decree for the payment
of the money so due, or any portion
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thereof, has been entered, the Majority Holders, by written notice to the
partnership and the Trustee, may rescind and annul such declaration and its
consequences if:
(i) there has been paid to or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue interest on the bonds;
(B) the principal of and premium (if any) on any bonds that have
become due (including overdue principal) other than by such declaration
of acceleration; and
(C) all sums paid or advanced by the Trustee and the reasonable
compensation, expenses, disbursements, and advances of the Trustee, its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the bonds that has become due solely by such acceleration, have been
cured or waived in accordance with the Indenture and the Collateral Agency
Agreement; provided that no such rescission or annulment will affect or
impair any subsequent Default or Event of Default.
(c) If an Event of Default has occurred and is continuing and an
acceleration has occurred, subject to, among other things, the Collateral Agency
Agreement, the Trustee may sell the Indenture Collateral as the Majority Holders
shall request, or, in the absence of such request, as the Trustee in its
discretion shall deem expedient in the interest of the Holders, at public or
private sale.
(d) Subject to the Collateral Agency Agreement, if an Event of Default has
occurred and is continuing and an acceleration has occurred, the Trustee may (as
the Majority Holders request) direct the Collateral Agent to take possession of
all Collateral and, pursuant to the Collateral Agency Agreement, to sell such
Collateral, as and to the extent permitted under the Collateral Agency
Agreement.
(e) All rights and remedies available to the Holders, or to the Trustee with
respect to the Collateral, or otherwise pursuant to the Security Documents, are
subject to the Collateral Agency Agreement, including the ability to enforce any
remedy and the limitations on the Trustee's ability to vote the interest
represented by the Outstanding Bonds.
APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any money collected or to be
applied by the Trustee after an Event of Default in respect of the bonds will be
applied to amounts owed with respect to all bonds on a pro rata basis and will
be applied ratably to the Holders in the following order from time to time, on
the date or dates fixed by the Trustee: (a) FIRST, to the payment of all amounts
due to the Trustee or any predecessor Trustee under the Indenture; (b) SECOND,
(i) in case the unpaid principal amount of the bonds has not become due, to the
payment of any overdue interest, in the order of the maturity of the payments
thereof, (ii) in case the unpaid principal amount of a portion of the bonds has
become due, first to the payment of accrued interest on all bonds in the order
of the maturity of the payments thereof, and next to the payment of the overdue
principal of and premium, if any, on all bonds then due or (iii) in case the
unpaid principal amount of all the bonds has become due, to the payment of the
whole amount then due and unpaid upon the bonds for principal, premium, if any,
and interest; and (c) THIRD, in case the unpaid principal amount of all the
bonds has become due, and all of the outstanding principal, premium, if any,
interest and other amounts owed in connection with bonds have been fully paid,
any surplus then remaining will be paid to the partnership, or to whomsoever may
be lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct.
AMENDMENTS AND SUPPLEMENTS
The partnership and the Trustee may amend or supplement the Indenture
without the consent of the Holders (i) to add additional covenants of the
partnership, to surrender rights conferred upon the partnership, or to confer
additional benefits upon the Holders, (ii) to increase the assets securing the
partnership's obligations under the Indenture, (iii) to provide for the issuance
of additional bonds, (iv) for any purpose not inconsistent with the terms of the
Indenture or to cure any ambiguity, defect or
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inconsistency, (v) to reflect any amendments required by a Rating Agency in
circumstances where confirmation of the Ratings is required under the Indenture
or (vi) to provide for the issuance of new bonds as contemplated by any
agreement entered into in connection with the issuance of additional bonds.
The Indenture may be otherwise amended or supplemented by the partnership
and the Trustee with the consent of the Majority Holders; PROVIDED, HOWEVER,
that no such amendment or supplement may, without the consent of Holders of all
then Outstanding Bonds, modify (a) the principal, premium (if any) or interest
payable upon any bonds, (b) the dates on which interest on or principal of any
bonds is paid, (c) the dates of maturity of any bonds, (d) the procedures for
amendment by a supplemental indenture, or (e) the grant of security interests
for the benefit of the bonds.
SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE
The partnership may terminate the Indenture by delivering all Outstanding
Bonds to the Trustee for cancellation and by paying all other sums payable under
the Indenture.
Legal and covenant defeasance will be permitted upon terms and conditions
customary for transactions of this nature.
TRUSTEE
There will at all times be a Trustee under the Indenture, which must be a
corporation which (i) has a combined capital and surplus of at least
$50 million, (ii) is subject to supervision or examination by a federal or state
or District of Columbia authority and (iii) has a corporate trust office in New
York, New York, each to the extent there is such an institution eligible and
willing to serve. The partnership agrees to indemnify and hold harmless the
Trustee in connection with the performance of its duties under the Indenture,
except for liability which results from the gross negligence or bad faith of the
Trustee.
The Trustee may resign at any time by giving written notice thereof to the
partnership. The Trustee may be removed at any time by act of the Majority
Holders, with notice thereof delivered to the Trustee and to the partnership.
The partnership will give notice of each resignation and removal of the Trustee
and each appointment of a successor Trustee to all Holders.
COMMON AGREEMENT
The partnership entered into a Common Agreement (the "Common Agreement")
with the Trustee, the Debt Service Reserve Letter of Credit Agent, the Power
Purchase Agreement Letter of Credit Agent, and the Collateral Agent. The Common
Agreement sets forth, among other things, the conditions precedent to the
Closing Date, events of default, representations and warranties of the
partnership and certain covenants of the partnership.
CERTAIN COVENANTS
Set forth below are certain affirmative and negative covenants of the
partnership contained in the Common Agreement.
USE OF PROCEEDS. The partnership used the proceeds from the sale of the
bonds to purchase the revenue bonds issued by the Development Authority of Heard
County, the proceeds of which will be used only to pay Project Costs.
REPORTING REQUIREMENTS. The partnership will provide to the Collateral
Agent, the Trustee, each Rating Agency and such other Senior Parties which so
request (a) (i) unaudited financial statements for each of the first three
quarters of each fiscal year (commencing with the quarter ending March 31, 2000)
and (ii) annual audited financial statements for each fiscal year (commencing
with the fiscal year ended December 31, 2000), (b) all other information in
respect of the partnership reasonably requested by either
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Rating Agency, (c) written notice of any Default or Event of Default or any
notice of any material litigation, claim or proceeding pending or to the best
knowledge of the partnership, threatened, involving or affecting the partnership
or our project, (d) a copy of the annual operating budget for each calendar year
after the Date of Commercial Operation and (e) quarterly Officer's Certificates
certifying that, as of such date, no Default or Event of Default has occurred
and is continuing, or, if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
COMPLIANCE WITH LAWS. The partnership will comply with all Applicable Laws
and Governmental Approvals applicable to it, and all other acts, rules,
regulations, permits, orders and requirements, except where non-compliance would
not reasonably be expected to result in a Material Adverse Effect.
GOVERNMENTAL APPROVALS; TITLE. The partnership will at all times
(a) obtain and maintain in full force and effect and comply with all
Governmental Approvals and other consents and approvals required at any time in
connection with its business, except where failure to take such action would not
reasonably be expected to result in a Material Adverse Effect and (b) preserve
and maintain good and marketable title or valid leasehold rights to its
properties and assets (subject to no liens other than Permitted Liens).
PERFORMANCE OF OBLIGATIONS. The partnership will perform and observe in all
respects the terms and provisions of each Project Document to which it is a
party, unless failure to so perform and observe would not reasonably be expected
to result in a Material Adverse Effect.
EWG STATUS. The partnership will at all times maintain its EWG status,
unless failure to maintain such status (a) would not cause a breach under or
forfeiture of the pricing or other material benefits of our project Documents or
(b) would not reasonably be expected to result in a Material Adverse Effect.
NATURE OF BUSINESS. The partnership will not at any time conduct any
activities other than those contemplated by our project and Financing Documents
and all activities related thereto.
AMENDMENTS TO PROJECT DOCUMENTS. The partnership will not amend, modify,
cancel or terminate any Project Document (other than change orders under the EPC
Contract and the Pipeline EPC Contract) or the Tax Agreement unless the
partnership certifies that such amendment, modification, termination or
cancellation would not reasonably be expected to result in a Material Adverse
Effect; provided that in the case of an amendment, modification, termination or
cancellation of the Power Purchase Agreement, each Rating Agency then rating the
bonds confirms in writing that such amendment, modification, termination or
cancellation would not result in a Rating Downgrade.
ADDITIONAL PROJECT DOCUMENTS. The partnership will not enter into any
Additional Project Document unless the partnership certifies in writing that the
transactions contemplated by such Additional Project Document would not
reasonably be expected to result in a Material Adverse Effect and either
(a) such certification is concurred with by the Independent Engineer or
(b) each Rating Agency then rating the bonds confirms in writing that the entry
into the Additional Project Document would not result in a Rating Downgrade;
provided that, the foregoing prohibition shall not apply (1) if PECO is not
performing under the Power Purchase Agreement, to any Additional Project
Document providing for short term capacity and energy sales, spot gas and
related transportation or (2) if the transactions contemplated by the Additional
Project Document, when taken together with all other Additional Project
Documents which are in effect and have not been so certified, do not exceed
$1,500,000 in any one calendar year.
INSURANCE. The partnership will maintain, with responsible and financially
sound insurance carriers, customary insurance in such amounts and with terms and
conditions in accordance with standard industry practice. All physical damage
and business interruption insurance policies of the partnership shall name the
Collateral Agent as loss payee and as additional insured, provided that unless
the Collateral Agent is exercising remedies, the consent of the partnership will
be required prior to any final adjustment upon an event of loss under such
policies.
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PROHIBITION ON FUNDAMENTAL CHANGES. The partnership will not enter into any
transaction of merger or consolidation, change its form of organization or its
business, liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution). The partnership will not sell, transfer, assign, hypothecate,
pledge, lease, sublease or otherwise dispose of (in one transaction or in a
series of transactions) any of its assets except (i) in the ordinary course of
business or (ii) if such asset is worn out, obsolete or no longer necessary or
useful in the operation of our project; provided, however, if the aggregate fair
market value of such worn out, obsolete, unnecessary or useless asset exceeds
$2,000,000, the partnership must certify in writing that such asset is worn out,
obsolete or no longer necessary or useful in the operation of our project;
provided further, this restriction does not apply to any property which is the
subject of the GPC Interconnection Agreement and the land on which such property
is to be located and related easements.
RESTRICTED PAYMENTS. The partnership will not make any declaration or
payment of distributions, dividends or other payments to any Person or make any
payments of principal or interest on any Affiliate Subordinated Debt from funds
in the Distribution Suspense Account, except as permitted under the Collateral
Agency Agreement or as permitted in accordance with "ESTIMATED SOURCES AND USES
OF FUNDS."
TRANSACTIONS WITH AFFILIATES. Except for transactions entered into pursuant
to our project and Financing Documents or the Partnership Agreement, the
partnership will not enter into any transaction or series of related
transactions with any Person (including any Affiliate of the partnership) on
terms less favorable to the partnership than those in comparable arms'-length
transactions.
LIMITATIONS ON DEBT. The partnership will not create or incur or suffer to
exist any Indebtedness except "Permitted Indebtedness," which is limited to the
following:
(i) the revenue bonds issued by the Development Authority of Heard
County, the Lease Agreement and the Guaranty;
(ii) the bonds;
(iii) Indebtedness incurred to finance in whole or in part the making of
capital improvements to our project required to maintain compliance with
Applicable Laws or our Project Documents; provided that, after giving effect
to the incurrence of such Indebtedness (A) an Authorized Officer of the
partnership certifies in writing and the Independent Engineer confirms as
reasonable (subject to customary assumptions and qualifications) that
(1) such capital improvements are reasonably expected to enable the
partnership to comply with such Applicable Laws or Project Documents, as the
case may be, and (2) the calculations of the partnership that demonstrate
that after giving effect to the incurrence of such Indebtedness the minimum
Projected Debt Service Coverage Ratio for (x) the next two consecutive
Semi-Annual Periods commencing with the Semi-Annual Period in which such
Indebtedness is incurred, taken as one annual period, and (y) each pair of
subsequent consecutive Semi-Annual Periods taken as a single annual period
through the Final Maturity Date, will not be less than 1.1 to 1.0, or
(B) each Rating Agency then rating the bonds provides written confirmation
that no Rating Downgrade will result from the incurrence of such
Indebtedness;
(iv) Indebtedness in an aggregate principal amount not to exceed
$15,000,000 incurred to finance in whole or in part the making of capital
improvements in respect of our project, other than those capital
improvements referenced in clause (iii) above; provided that, (A) no Event
of Default shall have occurred and be continuing and (B) each Rating Agency
then rating the bonds provides written confirmation that no Rating Downgrade
will result from such the incurrence of such Indebtedness;
(v) Indebtedness incurred under the Debt Service Reserve Letter of
Credit Reimbursement Agreement, any Working Capital Facility and the Power
Purchase Agreement Letter of Credit Reimbursement Agreement;
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(vi) Indebtedness in an aggregate principal amount not to exceed
$100,000 incurred in connection with the GPC Interconnection Agreement;
(vii) Subordinated Debt in an aggregate principal amount not to exceed
$20,000,000, in accordance with the requirements set forth herein; and
(viii) Other Indebtedness relating to our project in an aggregate
principal amount not to exceed $10,000,000, which may be used for Project
Costs, Operating and Maintenance Expenses and capital expenditures with
respect to our project.
LIMITATIONS ON LIENS. The partnership will not create or suffer to exist or
permit any Liens upon or with respect to any of its properties except "Permitted
Liens," which are limited to the following:
(i) Liens specifically permitted or required by, or created by, any
Security Document;
(ii) Liens to secure Permitted Indebtedness; provided that, the holder
of such Permitted Indebtedness, or a representative thereof, shall have
entered into the Collateral Agency Agreement; and provided, further that, in
the case of Liens to secure Permitted Indebtedness which constitutes
Subordinated Debt, the holders of Subordinated Debt shall not be permitted
to foreclose such Liens until all Senior Debt has been irrevocably paid in
full in cash;
(iii) Liens for taxes, assessments or governmental charges which are
either not yet due or which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves are established in
accordance with GAAP;
(iv) Liens in connection with worker's compensation, unemployment
insurance or other social security or pension obligations;
(v) mechanic's, workmen's, materialmen's, supplier's, construction or
other similar Liens arising in the ordinary course of business or incident
to the development, construction, operation and maintenance of our project;
(vi) servitudes, easements, rights-of-way, restrictions, minor defects
or irregularities in title and such other encumbrances or charges against
real property or interests therein as are of a nature generally existing
with respect to properties of a similar character and which do not in any
material way interfere with the use thereof or the business of the
partnership;
(vii) capital leases entered into by the partnership to the extent not
prohibited by the Common Agreement; and
(viii) other Liens incidental to the conduct of the partnership's
business or the ownership of properties and assets which were not incurred
in connection with the borrowing of money or the obtaining of advances or
credit (other than vendor's liens for accounts payable in the ordinary
course of business), and which do not in the aggregate materially impair the
use thereof in the operation of the partnership's business.
INSPECTION. The Senior Parties, the Independent Engineer and the Insurance
Consultant shall have the right to visit and inspect any of the properties of
the partnership, and to examine and make copies of the books of record and
accounts of the partnership and discuss the affairs, finances and accounts of
the partnership with, and be advised as to the same by, its officers, all at
such reasonable times and intervals, with reasonable notice prior to such
inspection, and to such reasonable extent as the Senior Parties may request.
CONSTRUCTION OF THE FACILITY. The partnership shall cause the construction
of the facility to be prosecuted and completed with diligence and continuity
(except for interruptions provided for in the EPC Contract or due to events of
FORCE MAJEURE, which events of FORCE MAJEURE the partnership shall use its
commercially reasonable efforts to mitigate), in a good and workmanlike manner
and in accordance with
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sound, generally accepted building and engineering practices, all material
Applicable Laws and Governmental Approvals and the EPC Contract. The partnership
shall at all times cause a complete set of the current and (when available)
as-built plans (and all supplements thereto) relating to the facility to be
maintained on the facility site or the EPC Contractor's offices and available
for inspection by the Independent Engineer and the Senior Parties.
CHANGE ORDERS. The partnership will not initiate or consent to any change
orders under the EPC Contract unless an Authorized Representative of the
partnership certifies that (i) such change order is reasonable and is consistent
with sound engineering practice, (ii) such change order could not reasonably be
expected to materially adversely affect the operation or reliability of our
project, and (iii) the implementation of such change order is not reasonably
expected to materially delay the Date of Commercial Operation of the Final
Units; PROVIDED that, unless the Independent Engineer has concurred in writing
with the certifications set forth in clauses (i), (ii) and (iii) above, such
change order shall not exceed $500,000 individually or, when aggregated with all
other change orders that have not been concurred with in writing or otherwise
approved or ratified by the Independent Engineer, $5,000,000.
ADDITIONAL COVENANTS
In addition to the covenants described above, the Common Agreement also
contains covenants of the partnership regarding:
(a) maintenance of existence,
(b) payment of taxes,
(c) maintenance of books and records, and
(d) delivery to the Trustee of all other information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act in order
to permit compliance by a Holder with Rule 144A in connection with a
resale of the bonds.
EVENTS OF DEFAULT; REMEDIES
The following events constitute "Events of Default" under the Common
Agreement:
(a) The occurrence of an event of default under the bonds, the Indenture,
the Power Purchase Agreement Letter of Credit Reimbursement Agreement, the Debt
Service Reserve Letter of Credit Reimbursement Agreement or a Working Capital
Facility;
(b) Any representation or warranty made by the partnership in the Common
Agreement, or any representation or warranty in any certificate or other
document furnished to the Senior Parties by or on behalf of the partnership
thereunder, proves to have been false or misleading in any material respect as
of the time made, confirmed or furnished and such fact, event or circumstance
that gave rise to such inaccuracy has resulted, or would reasonably be expected
to result, in a Material Adverse Effect and such fact, event or circumstance
continues to be uncured for 30 or more days from the date the partnership
obtains actual knowledge thereof; PROVIDED that, if the partnership commences
and diligently pursues efforts to cure such fact, event or circumstance within
such 30-day period and delivers written notice thereof to the Collateral Agent,
the partnership may continue to effect such cure and such misrepresentation will
not be deemed an Event of Default under the Common Agreement for an additional
60 days so long as the partnership is diligently pursuing such cure;
(c) The partnership fails to perform or observe any covenant or agreement
contained in the Common Agreement regarding maintenance of existence, insurance,
Governmental Approvals, restrictions on Indebtedness and Liens, Restricted
Payments, guarantees, disposition of assets, amendments to Project Documents,
entering into Additional Project Documents, fundamental changes or nature of
business, and
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such failure continues uncured for 30 or more days from the date the partnership
obtains actual knowledge thereof;
(d) The partnership fails to perform or observe any of its covenants
contained in the Common Agreement (other than those contained in (c) above) and
such failure continues uncured for 30 or more days from the date the partnership
obtains actual knowledge thereof; PROVIDED, HOWEVER, that if the partnership
commences and diligently pursues efforts to cure such default within such 30-day
period and delivers written notice thereof to the Collateral Agent, the
partnership may continue to effect such cure and such default will not be deemed
an Event of Default for an additional 60 days so long as the partnership is
diligently pursuing such cure;
(e) Certain events occur involving the voluntary or involuntary bankruptcy,
insolvency, receivership or reorganization of the partnership;
(f) Any Security Document ceases to be in full force and effect or any Lien
purported to be granted thereby with respect to any material Collateral ceases
to be a valid and perfected Lien in favor of the Collateral Agent for the
benefit of the Senior Parties on the Collateral described therein with the
priority purported to be created thereby and such cessation has resulted in a
Material Adverse Effect; PROVIDED, that the partnership has 30 days from the
date the partnership obtains actual knowledge thereof to cure such cessation (if
curable), or to furnish to the Collateral Agent all documents or instruments
required to cure any such cessation, if curable;
(g) Any material Project Document ceases to be valid and binding and in full
force and effect, any third party thereto denies that it has any liability or
obligation under any material Project Document and such third party ceases
performance thereunder, or any third party is in default under such Project
Document (subject to any applicable grace period), and in each case such
cessation or default has resulted or would reasonably be expected to result in a
Material Adverse Effect; PROVIDED that, no such event will be an Event of
Default if within 180 days from the occurrence of such event, the partnership
(i) causes the third party to confirm its obligations under such Project
Document and/or resume performance thereunder (as the case may be) or
(ii) enters into an alternate agreement which (A) contains substantially similar
terms and conditions or, if such terms and conditions are no longer available on
a commercially reasonable basis, the terms and conditions then available on a
commercially reasonable basis and (B) after giving effect to the agreement,
enables the partnership to maintain a minimum annual Projected Debt Service
Coverage Ratio equal to or greater than the lesser of (1) the minimum annual
Projected Debt Service Coverage Ratio which would have been in effect had
performance under the original Project Document continued and (2) 1.2 to 1.0;
PROVIDED, FURTHER that in the case of the Power Purchase Agreement, each Rating
Agency confirms that neither of such actions will result in a Rating Downgrade;
(h) The partners cease to collectively maintain Control of the partnership
unless each Rating Agency provides written confirmation that such cessation will
not result in a Rating Downgrade;
(i) The partnership fails to make any payment, or comply with any covenant,
in respect of any Indebtedness in an amount exceeding $10,000,000; PROVIDED that
such failure continues unwaived or uncured beyond any applicable grace period
and results in the acceleration of the maturity of such Indebtedness; and
(j) The entry of one or more final and non-appealable judgments for the
payment of money in excess of $10,000,000 against the partnership, which remain
unpaid or unstayed for 60 or more days.
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COLLATERAL AGENCY AGREEMENT
The partnership entered into the Collateral Agency and Intercreditor
Agreement (the "Collateral Agency Agreement") with the Collateral Agent, the
Trustee, the Authority Trustee, the Debt Service Reserve Letter of Credit Agent,
the Power Purchase Agreement Letter of Credit Agent and the Depositary Bank. The
Collateral Agency Agreement provides for, INTER ALIA, (a) the preservation and
administration of the Collateral, (b) the disposition of the Collateral among
the Senior Parties and (c) the exercise of certain rights, remedies and options
by the Senior Parties. See "DESCRIPTION OF THE BONDS--Security and Sources of
Payment for the bonds." The Chase Manhattan Bank, which acts as the Collateral
Agent for the Senior Parties, also acts as depositary bank with respect to
accounts of the partnership in which the Collateral Agent has been granted a
security interest. The partnership has no right of withdrawal under any Project
Fund (as defined below) except under certain circumstances to be set forth in
the Collateral Agency Agreement.
THE PROJECT FUNDS
The following funds and sub-accounts (collectively, the "Project Funds")
have been established by the partnership with the Collateral Agent and pledged
as security for the benefit of the Collateral Agent acting on behalf of the
Senior Parties:
(a) Construction Fund;
(b) Revenue Fund with the Loss Proceeds Account sub-account (including the
Energy Contract Buy-Out Proceeds Sub-account and the EPC Buy-Down
Proceeds Sub-account thereof);
(c) Operating Fund (including the Major Maintenance Sub-account thereof);
(d) Debt Service Fund with the Debt Service Reserve Account and Subordinated
Debt Account sub-accounts; and
(e) Partnership Distribution Fund with the Distribution Suspense Account and
Unrestricted Account sub-accounts.
All amounts deposited in the Project Funds will, at the written request and
direction of the partnership, be invested by the Collateral Agent in Permitted
Investments, except for amounts deposited in the Unrestricted Account.
The partnership may also establish up to two checking accounts in the
locality of our project or the principal executive office of the managing
general partner of the partnership (the "Local Accounts") which will also be
pledged as security for the benefit of the Collateral Agent acting on behalf of
the Senior Parties.
CONSTRUCTION FUND. Prior to the Date of Commercial Operation of the Final
Units, all revenues of the partnership, the net proceeds of the revenue bonds
issued by the Development Authority of Heard County, all earnings on such
proceeds, all equity contributions of the partners of the partnership, all Loss
Proceeds, all business interruption and delayed opening insurance proceeds and
all EPC Contract delay damages and performance damages, will be deposited in the
Construction Fund, and may be used only for payment of Project Costs, upon
presentation to the Collateral Agent of a complete and properly executed
requisition (the "Requisition") signed by the partnership (certain contents of
which shall be confirmed by the Independent Engineer). The Collateral Agent
shall apply the amounts in the Construction Fund to the payment, or
reimbursement, to the extent the same have been paid or satisfied by the
partnership, of Project Costs. Each Requisition shall be submitted to the
Collateral Agent no less than three Business Days in advance of the drawing date
and shall include the following:
(1) a certification that the proceeds will be used only for Project Costs;
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(2) a certification that the work performed to date has been performed in a
good and workmanlike manner and in accordance with our Project Document under
which such work has been performed;
(3) a statement that the remaining funds in the Construction Fund, together
with the equity commitments and other available sources, are reasonably expected
to be sufficient to complete our project according to the EPC Contract and the
Pipeline EPC Contract on or prior to the Scheduled Date of Commercial Operation
for the Final Units;
(4) a statement that the partnership reasonably expects that the facility
will be completed when required in order to prevent a termination of the Power
Purchase Agreement due to such delay;
(5) a statement that no Default or Event of Default has occurred and is
continuing;
(6) a statement that all proceeds of previous requisitions have been
properly applied and that the items for which amounts are being requested have
not been the subject of a previous requisition;
(7) a certification that the required insurance, material Governmental
Approvals and necessary Project Documents are in full force and effect;
(8) a certification that the representations in the Common Agreement
concerning organization and status of the partnership, no default under our
Project Documents and Financing Documents, violation of Governmental Approvals
or litigation that could reasonably be expected to result in a Material Adverse
Effect, continued exempt wholesale generator status and maintenance of required
insurance policies are true and correct in all material respects;
(9) a statement that, to the best of the partnership's knowledge, the
partnership is and the facility site is, in compliance with all environmental
laws, noncompliance with which could reasonably be expected to result in a
Material Adverse Effect; and
(10) a statement that there has not been any sale, forfeiture or loss of any
material amount of the Collateral and that the Collateral is not subject to any
Liens other than Permitted Liens.
Notwithstanding the foregoing, delayed opening or business interruption
insurance proceeds and EPC Contract delay damages paid with respect to a delay
in achieving commercial operation of one or more Units shall be applied first to
interest accruing during the period of such delay on the bonds (through transfer
to the Debt Service Fund), then to pay PECO any amount due and owing as
liquidated damages as a result of such delay, then to reimburse the Power
Purchase Agreement Letter of Credit provider for any unreimbursed drawing on the
Power Purchase Agreement Letter of Credit for Power Purchase Agreement delay
liquidated damages accruing with respect to such delay, then to pay other
Project Costs.
If the partnership cannot satisfy item (1), (4) or (6) above, the Collateral
Agent will not be required to release the funds from the Construction Fund in
respect of such Requisition until such clauses are satisfied. If the partnership
can satisfy those three items, but cannot satisfy any other item, and the
Requisition, certain contents of which are confirmed by the Independent
Engineer, (a) specifies and identifies the failure and the causes of the
failure, to satisfy the requirements of the requisition, and (b) certifies that
(i) there is no Bankruptcy Event with respect to the partnership and (ii) each
of the EPC Contract, the Power Purchase Agreement, the required insurance
policies and material Governmental Approvals needed for construction of our
project are in full force and effect, then the Collateral Agent will be required
to pay the requisition; provided that within fifteen (15) days of receipt of
such requisition, the Collateral Agent shall give notice to the Senior Parties
describing such failure and specifying that, unless the Collateral Agent shall
have received, by the second Business Day prior to the time of payment of
further requisitions containing any such specified failures, notice of objection
from the Required Senior Parties, the Collateral Agent shall continue to make
payment of such requisitions from available funds in the Construction Fund.
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Payments on Date of Commercial Operation. Not later than 10 days after
receipt by the Collateral Agent of a certificate of the partnership (the
"Commercial Operation Certificate") (the contents of which shall be confirmed in
writing by the Independent Engineer) certifying, among other things:
(i) that all conditions precedent to Date of Commercial Operation of
Final Units pursuant to the EPC Contract have occurred,
(ii) that, except as specified in such Commercial Operation Certificate,
all Project Costs have been paid, specifying the amount needed to pay such
remaining Project Costs,
(iii) that all necessary approvals and permits have been obtained for
initial operation of our project,
(iv) the amounts to be transferred from the Construction Fund in
accordance with the next succeeding paragraph, and
(v) that no Default or Event of Default has occurred and is continuing,
the Collateral Agent shall, upon receipt of a certificate of the Independent
Engineer confirming the statements made by the partnership in the Commercial
Operation Certificate and after retaining in the Construction Fund the amount,
if any, specified by the partnership as necessary to pay Project Costs which are
not then due and payable, transfer all remaining funds in the Construction Fund
by wire transfer to the following accounts and recipients in the following order
of priority:
FIRST, to the Operating Fund, an amount to the extent available, as
specified by the partnership but in any event, no less than one-month's
projected Operating and Maintenance Expenses;
SECOND, to the Debt Service Fund, an amount, to the extent available, as
specified by the partnership for funding of Accrued Senior Debt;
THIRD, to the Debt Service Reserve Account, an amount as specified by the
partnership equal to the Debt Service Reserve Required Balance less (i) the
amount of monies already on deposit in the Debt Service Reserve Account and
(ii) the amount available under of any Debt Service Reserve Letter of Credit;
and
FOURTH, to the Unrestricted Account of the Partnership Distribution Fund for
distribution without regard to any Distribution Conditions.
REVENUE FUND. The partnership will arrange for the direct payment of all
Available Cash Flow into the Revenue Fund. Any excess funds in any of the
Project Funds will be transferred to the Revenue Fund on the next succeeding
Funding Date.
OPERATING FUND AND LOCAL ACCOUNTS. The Operating Fund will be used to pay
Operating and Maintenance Expenses. The Local Accounts will also be used to pay
Operating and Maintenance Expenses.
Prior to any withdrawals from the Operating Fund and Local Accounts to pay
Operating and Maintenance Expenses, the partnership must certify that it does
not reasonably expect that the aggregate amount transferred with respect to
Operating and Maintenance Expenses in the applicable calendar year will exceed
125% of the amount budgeted therefor by the partnership unless the partnership
further certifies that such excess is necessary and reasonable. If monies in the
Operating Fund and the Local Accounts are insufficient on any day to make
payments with respect to Operating and Maintenance Expenses, then the Collateral
Agent will withdraw funds and pay such deficiency into the Operating Fund first
from the Revenue Fund, then from the Distribution Suspense Account, then from
the Partnership Distribution Fund, then from the Unrestricted Account and lastly
from the Subordinated Debt Account (to the extent funds are available in each
such Fund).
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DEBT SERVICE FUND. Funds in the Debt Service Fund will be utilized to make
interest and principal payments on the bonds, Debt Service Reserve Bonds, Debt
Service Reserve Letter of Credit Loans, Debt Service Reserve Term Loans, Power
Purchase Agreement Letter of Credit Loans, Power Purchase Agreement Term Loans
and Other Senior Debt. If monies in the Debt Service Fund are insufficient on
any date to make payments due with respect to the bonds, the Debt Service
Reserve Bonds, Debt Service Reserve Letter of Credit Loans, Debt Service Reserve
Term Loans, Power Purchase Agreement Letter of Credit Loans, Power Purchase
Agreement Term Loans or Other Senior Debt, then the Collateral Agent will
withdraw funds and pay such deficiency into the Debt Service Fund first from the
Distribution Suspense Account, then from the Partnership Distribution Fund, then
from the Unrestricted Account and then from the Subordinated Debt Account. If an
insufficient amount of monies remains on deposit in the Debt Service Fund
following the transfers in the preceding sentence, then distribution of monies
will be made ratably to the Persons entitled thereto in accordance with
paragraphs FOURTH, FIFTH and SIXTH under the heading "Priority of Payments" set
forth below.
SUBORDINATED DEBT ACCOUNT. Funds in the Subordinated Debt Account will be
utilized to pay principal, interest and other amounts (including fees) payable
on any Third Party Subordinated Debt.
DEBT SERVICE RESERVE ACCOUNT. Under the Collateral Agency Agreement, the
Debt Service Reserve Account was established for the benefit of the Holders. On
June 1, 2002, the partnership is required to initially fund the Debt Service
Reserve Account with cash and/or by providing the Collateral Agent with a Debt
Service Reserve Letter of Credit from one or more commercial banks or other
financial institutions whose long-term unsecured debt obligations are rated at
least "A-" by S&P and "A3" by Moody's. Any Debt Service Reserve Letter of Credit
will be issued pursuant to the Debt Service Reserve Letter of Credit
Reimbursement Agreement and will have terms substantially as described below.
See "--Debt Service Reserve Letter of Credit Reimbursement Agreement." On and
after June 1, 2002, the Debt Service Reserve Account may accumulate cash
deposits from (a) net interest earned on amounts deposited therein and
(b) amounts transferred from the Revenue Fund provided below under "--Priority
of Payments."
The sum of amounts available to be drawn under the Debt Service Reserve
Letter of Credit and all cash and Permitted Investments deposited in or credited
to the Debt Service Reserve Account will be required to equal the amount of the
principal and interest payment on the bonds on the next Scheduled Payment Date
plus, if a Debt Service Reserve Letter of Credit is in effect, six months
interest on the maximum amount under the Debt Service Reserve Letter of Credit
(the "Debt Service Reserve Required Balance"). Amounts on deposit in or credited
to the Debt Service Reserve Account will be available in the event the amounts
due with respect to principal of and interest on the bonds or, if a Debt Service
Reserve Letter of Credit is in effect, up to six months' interest on the
outstanding Debt Service Reserve Loans have been requisitioned and the amounts
withdrawn from the Revenue Fund, the Debt Service Fund, the Local Accounts, the
Distribution Suspense Account, the Partnership Distribution Fund and the
Subordinated Debt Account (as applicable) allocated thereto are insufficient to
pay, in full, all amounts so requisitioned, in which event the Collateral Agent
shall (a) withdraw the monies on deposit in the Debt Service Reserve Account
and/or draw on the Debt Service Reserve Letter of Credit (as determined by the
partnership) in an amount equal to the lesser of (x) the amount necessary to
make up such deficiency and (y) the sum of the monies on deposit in the Debt
Service Reserve Account and the monies available to be drawn under such Debt
Service Reserve Letter of Credit and (b) apply such monies to the payment of
amounts due with respect to the bonds or to pay such interest on Debt Service
Reserve Loans.
PARTNERSHIP DISTRIBUTION FUND. The Partnership Distribution Fund will be
funded from monies transferred from the Revenue Fund after all other amounts
then required have been paid as provided below under "--Priority of Payments."
The partnership may make distributions to the partners from the Partnership
Distribution Fund on each Scheduled Payment Date occurring at least six months
after the Date of Commercial Operation of the Final Units upon satisfaction of
the following conditions (such conditions, the "Distribution Conditions"):
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(a) (i) the amounts on deposit in the Debt Service Reserve Account equals or
exceeds the Debt Service Reserve Required Balance and (ii) the amount deposited
in the Major Maintenance Sub-account of the Operating Fund on the Funding Date
on which such distribution is proposed to be made equals or exceeds the Major
Maintenance Required Amount required to be deposited therein on such Funding
Date;
(b) no Default or Event of Default under the Common Agreement has occurred
and is continuing;
(c) the Debt Service Coverage Ratio for the preceding two Semi-Annual
Periods measured as one period (or, with respect to any date prior to the Date
of Commercial Operation of the Final Units, for the period since the Date of
Commercial Operation of the Final Units notwithstanding that such period does
not include any complete Semi-Annual Periods), measured as one annual period,
was equal to or greater than 1.2 to 1.0 for ordinary distributions or 1.15 to
1.0 for distributions in amounts equal to the tax liability of partners in
respect of partnership income, as certified by an Authorized Officer of the
partnership;
(d) the Projected Debt Service Coverage Ratio for the succeeding two
Semi-Annual Periods, measured as one annual period, will be equal to or greater
than 1.2 to 1.0, or 1.15 to 1.0 for distribution amounts equal to the tax
liability of partners in respect of partnership income, in each case as
certified by an Authorized Officer of the partnership;
(e) the partnership is not insolvent and will not be rendered insolvent by
such distribution; and
(f) the partnership has delivered a certificate to the Collateral Agent
(without written objection from it) certifying as to the satisfaction of each of
the Distribution Conditions required to be satisfied as of such date.
Payment of Affiliate Subordinated Debt, distributions to the Partners or to
the Unrestricted Account (as directed by the partnership) may be made on any
monthly Funding Date at least six months after the Date of Commercial Operation
of the Final Units on which the following conditions are satisfied in addition
to clauses (a), (b) and (e) above:
(a) the Debt Service Coverage Ratio for the preceding two Semi-Annual
Periods (or, with respect to any date prior to two complete Semi-Annual Periods
having occurred prior to the Date of Commercial Operation of the Final Units,
for the period since the Date of Commercial Operation of the Final Units
notwithstanding that such period does not include any complete Semi-Annual
Periods) measured as one annual period will be equal to or greater than 1.4 to
1.0 for ordinary distributions, as certified by an Authorized Officer of the
partnership;
(b) the Projected Debt Service Coverage Ratio for the succeeding two
Semi-Annual Periods (including the Semi-Annual Period containing the Funding
Date), measured as one annual period, will be equal to or greater than 1.4 to
1.0, as certified by an Authorized Officer of the partnership; and
(c) an Authorized Officer of the partnership certifies that sufficient cash
will be available for the next succeeding Scheduled Payment Date without drawing
on any funds available in the Debt Service Reserve Account, the Distribution
Suspense Account, the Partnership Distribution Fund, the Unrestricted Account,
the Subordinated Debt Account or any Working Capital Facility.
In the event that, on any Scheduled Payment Date, the Distribution
Conditions are not satisfied, monies in the Partnership Distribution Fund will
be transferred to the Distribution Suspense Account and will not be distributed
unless the situation set forth below applies or until the Distribution
Conditions are satisfied.
Blocked Partner Distributions. If monies cannot be distributed on any
Scheduled Payment Date because a Default or Event of Default has occurred and is
continuing or if the partnership has not met the required Debt Service Coverage
Ratios set forth above, then such monies will be deposited into the Distribution
Suspense Account and if such monies have not been withdrawn and distributed
within
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eighteen months of such Default, Event of Default or failure to meet required
Debt Service Coverage Ratios, the partnership may request that the Required
Senior Parties elect whether or not to use such funds to retire Senior Debt. If
the Required Senior Parties do not elect to retire Senior Debt, then such monies
will be deposited in the Unrestricted Account. If, upon request of the
partnership, the Required Senior Parties do elect to retire Senior Debt, such
monies will be transferred to the Revenue Fund and applied as set forth below
under "--Rights of Senior Parties to Certain Proceeds."
LOSS PROCEEDS ACCOUNT
Events of Loss. All Loss Proceeds will be paid directly into the Loss
Proceeds Account. If an Event of Loss occurs with respect to our project for
which the partnership receives Loss Proceeds less than or equal to $10,000,000,
the Collateral Agent will withdraw and transfer to the partnership the amount of
such Loss Proceeds requested by the partnership provided that the partnership
describes how such Loss Proceeds will be used and certifies that (a) no Event of
Default has occurred and is continuing, (b) our project can be rebuilt, repaired
or restored to permit operation of our project or a portion thereof on a
commercially feasible basis and (c) the Loss Proceeds, together with any other
amounts that are available to the partnership for such rebuilding, repair or
restoration are sufficient to permit such rebuilding, repair or restoration of
our project or a portion thereof, including the making of all required payments
of interest and principal on the partnership's Indebtedness during such
rebuilding, repair or restoration.
If an Event of Loss occurs with respect to our project for which the
partnership receives Loss Proceeds in excess of $10,000,000, the Collateral
Agent will withdraw and transfer to the partnership the amount of such Loss
Proceeds requested by the partnership in an Officer's Certificate of the
partnership; provided that (a) the Collateral Agent and the Independent Engineer
have received a certificate from the partnership (i) describing in reasonable
detail the nature of the repairs or restoration, (ii) stating the cost of such
repairs or restoration and the specific amount requested to be paid to the
partnership (or as otherwise directed by the partnership), the timing of such
payments and that such amount is requested to pay the cost thereof,
(iii) certifying that our project can be rebuilt, repaired or restored to permit
operation of our project or a portion thereof on a commercially feasible basis,
(iv) certifying that the Loss Proceeds, together with any other amounts that are
available to the partnership for such rebuilding, repair or restoration are
sufficient to permit such rebuilding, repair or restoration of the facility or a
portion thereof, including the making of all required payments of interest and
principal on the partnership's Indebtedness during such rebuilding, repair or
restoration and (v) certifying that the partnership will use its best efforts to
cause any repairs or restoration to be commenced and completed promptly and
diligently at its own cost and expense (including the use of funds on deposit in
the Loss Proceeds Account (other than any EPC Buy-Down proceeds and Energy
Contract Buy-Out proceeds)) and (b) the Independent Engineer shall have provided
the Collateral Agent a written certificate stating that, based on a reasonable
investigation, it believes that the certifications made by the partnership are
reasonable.
Excess Loss Proceeds. If (i) the partnership determines that our project or
a portion thereof cannot be rebuilt, repaired or restored in accordance with the
immediately preceding paragraph or (ii) Excess Loss Proceeds greater than
$1,000,000 remain in the Loss Proceeds Account, then the Collateral Agent shall
withdraw such unused Loss Proceeds and transfer such amounts to the Revenue Fund
for distribution by the Collateral Agent in accordance with the terms of the
Collateral Agency Agreement. See "--Rights of Senior Parties to Certain
Proceeds."
Energy Contract Buy-Out. All proceeds received by or on behalf of the
partnership in respect of an Energy Contract Buy-Out shall be deposited into the
Energy Contract Buy-Out Proceeds Sub-account. In the case of an Energy Contract
Buy-Out in connection with a termination by PECO of the Power Purchase Agreement
on the 20(th) anniversary of the date of commencement of the operating term of
the Power Purchase Agreement, the proceeds of such Energy Contract Buy-Out
("PECO Buy-Out Proceeds") up to an amount equal to the full amount of the
Redemption Price of the Outstanding Bonds shall be transferred by the Collateral
Agent to the Trustee for deposit in the Redemption Account under the Indenture
prior to
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any payment of such proceeds being made to any other Person. The Collateral
Agency Agreement provides that notwithstanding any other provisions regarding
priorities of payment in the Financing Documents, any PECO Buy-Out Proceeds
shall be first applied to the Redemption Price of the Outstanding Bonds and that
no holder of Senior Debt (other than the bonds) shall make any claim to or
against such PECO Buy-Out Proceeds until the Trustee has notified the Collateral
Agent that the holders of the bonds have received the Redemption Price. In the
event that any PECO Buy-Out Proceeds remain following such redemption and in the
event of any other Energy Contract Buy-Out (including any other Energy Contract
Buy-Out affecting the Power Purchase Agreement), so long as no Default or Event
of Default shall have occurred and be continuing and so long as the Rating
Agencies confirm that the following transfer will not result in a Rating
Downgrade, only proceeds of such events in excess of $10,000,000 shall be
distributed by the Collateral Agent in accordance with the terms of the
Collateral Agency Agreement and such $10,000,000 shall be transferred to the
Partnership Distribution Fund for distribution in accordance with the Collateral
Agency Agreement; provided that if the minimum Projected Debt Service Coverage
Ratio for each pair of subsequent consecutive two Semi-Annual Periods, taken as
a whole annual period, through the final Maturity Date is less than 1.5 to 1.0,
then only that portion of such $10,000,000 that would remain after sufficient
proceeds are applied to retire Senior Debt in order to achieve a minimum
Projected Debt Service Coverage Ratio of 1.5 to 1.0 for each pair of subsequent
consecutive Semi-Annual Periods, taken as a whole annual period, through the
final Maturity Date, shall be transferred to the Partnership Distribution Fund,
for distribution by the Collateral Agent in accordance with the terms of the
Collateral Agency Agreement. See "--Rights of Senior Parties to Certain
Proceeds."
EPC Buy-Down. All EPC Buy-Down amounts received by or on behalf of the
partnership shall be deposited into the EPC Buy-Down Proceeds Sub-account.
IF PROCEEDS ARE $10,000,000 OR LESS. If the partnership receives EPC
Buy-Down proceeds less than or equal to $10,000,000, the Collateral Agent shall
withdraw and transfer to the partnership (or as otherwise directed by the
partnership), the amount of such EPC Buy-Down proceeds requested by the
partnership in an Officer's Certificate of the partnership which shall also
describe how such EPC Buy-Down proceeds shall be used; provided that such
Officer's Certificate shall certify that (i) no Event of Default shall have
occurred and be continuing, (ii) the facility can be rebuilt, repaired or
restored in order to remedy the circumstance giving rise to the obligation of
the EPC Contractor under the EPC Contract to pay such EPC Buy-Down amounts and
(iii) the EPC Buy-Down proceeds, together with any other amounts that are
available to the partnership for such rebuilding, repair or restoration are
sufficient to permit such rebuilding, repair or restoration of the facility or a
portion thereof, including the making of all required payments of interest and
principal on the partnership's Indebtedness during such rebuilding, repair or
restoration. If the facility cannot be rebuilt, repaired or restored or if the
partnership cannot certify as to the conditions set out above, such EPC Buy-Down
proceeds shall be transferred to the Revenue Fund and used in accordance with
the terms of the Collateral Agency Agreement.
IF PROCEEDS EXCEED $10,000,000.
APPLICATION TO REBUILDING FACILITY. If the partnership receives EPC
Buy-Down proceeds in excess of $10,000,000, the Collateral Agent shall withdraw
and transfer to the partnership (or as otherwise directed by the partnership),
the amount of such EPC Buy-Down proceeds requested by the partnership in an
Officer's Certificate of the partnership; provided that (A) the Collateral Agent
and the Independent Engineer shall have received an Officer's Certificate of the
partnership and such Officer's Certificate shall (i) describe in reasonable
detail the nature of the rebuilding, repairs or restoration, (ii) state the cost
of such rebuilding, repair or restoration and the specific amount requested to
be paid to the partnership (or as otherwise directed by the partnership), the
timing of such payments and that such amount is requested to pay the cost
thereof, (iii) certify that the facility can be rebuilt, repaired or restored in
order to remedy the circumstance giving rise to the obligation of the EPC
Contractor under the EPC Contract to pay such EPC Buy-Down amounts and that the
EPC Buy-Down proceeds, together with any other amounts that are
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available to the partnership for such rebuilding, repair or restoration, are
sufficient to permit such rebuilding, repair or restoration of the facility or a
portion thereof, including the making of all required payments of interest and
principal on the partnership's Indebtedness during such rebuilding, repair or
restoration and (iv) certify that the partnership shall use its best efforts to
cause any repairs or restoration to be commenced and completed promptly and
diligently at its own cost and expense (including the use of funds on deposit in
the EPC Buy-Down Proceeds Sub-account), and (B) the Independent Engineer shall
have provided to the Collateral Agent a written certificate stating that, based
on a reasonable investigation, it believes that the certifications made by the
partnership are reasonable.
DISTRIBUTION TO SENIOR PARTIES. If with respect to EPC Buy-Down proceeds
subject to the immediately preceding paragraph, the partnership determines that
the facility or a portion thereof cannot be rebuilt, repaired or restored in
accordance with the provisions of the Collateral Agency Agreement, or excess EPC
Buy-Down Proceeds greater than $1,000,000 remain in the EPC Buy-Down Proceeds
Sub-account following the repair, restoration or rebuilding of the facility,
then, so long as the Rating Agencies confirm that the following transfer will
not result in a Rating Downgrade, only proceeds of such event in excess of
$10,000,000 shall be distributed by the Collateral Agent in accordance with the
terms of the Collateral Agency Agreement and such $10,000,000 shall be
transferred to the Partnership Distribution Fund, for distribution by the
Collateral Agent in accordance with the terms of the Collateral Agency
Agreement; provided that if the minimum Projected Debt Service Coverage Ratio
for each pair of subsequent consecutive two Semi-Annual Periods, taken as a
whole annual period, through the final Maturity Date is less than 1.5 to 1.0,
then only that portion of such $10,000,000 that would remain after sufficient
proceeds are applied to retire Senior Debt in order to achieve a minimum
Projected Debt Service Coverage Ratio of 1.5 to 1.0 for each pair of subsequent
consecutive Semi-Annual Periods, taken as a whole annual period, through the
Final Maturity Date, shall be transferred to the Partnership Distribution Fund,
for distribution by the Collateral Agent in accordance with the terms of the
Collateral Agency Agreement. See "--Rights of Senior Parties to Certain
Proceeds."
PRIORITY OF PAYMENTS
After the transfer specified above under "--Construction Fund--PAYMENTS ON
DATE OF COMMERCIAL OPERATION", upon receipt of a certificate from the
partnership (or a duly Authorized Officer for such purposes) detailing the
amounts to be paid, monies in the Revenue Fund (other than monies constituting
proceeds of an Energy Contract Buy-Out or an EPC Buy-Down, and except after the
declaration of a Trigger Event) will be transferred monthly by the Collateral
Agent into the following accounts in the Project Funds and in the following
order of priority:
FIRST, to the Operating Fund, an amount that, together with amounts already
on deposit in such fund and in the Local Accounts, will be sufficient to pay
Operations and Maintenance Expenses certified by the partnership to be due and
payable, or, in respect of the Major Maintenance Required Amount, required to be
reserved, prior to the next succeeding monthly Funding Date; provided that
amounts due and payable with respect to Operations and Maintenance Expenses
during the Funding Period will be transferred to the Local Accounts upon the
request of the partnership if the partnership certifies that it does not
reasonably expect that the aggregate amount transferred with respect to
Operating and Maintenance Expenses in any fiscal year will exceed 125% of the
amount specified in the annual operating budget for such fiscal year unless the
partnership further certified that such excess is necessary and reasonable;
SECOND, to the Working Capital Facility provider, an amount equal to the
amount of principal, interest, fees or other amounts due with respect to any
Working Capital Facility (including optionally payable principal amounts) prior
to the next succeeding Funding Date less the aggregate of the amounts previously
transferred on any prior Funding Date which remain on deposit in the Operating
Fund;
THIRD, to (a) the Trustee, the Depositary Agent, the Collateral Agent and
the Authority Trustee, for the payment of Trustee Claims, Depositary Agent
Claims, Collateral Agent Claims and Authority Trustee
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Claims, respectively, (b) to the Debt Service Reserve Letter of Credit Agent for
the payment of Debt Service Reserve Letter of Credit Agent Claims, (c) to the
Power Purchase Agreement Letter of Credit Agent for the payment of Power
Purchase Agreement Letter of Credit Agent Claims and (d) to the agents or
representatives of Other Senior Debt for the payment of Other Senior Debt Agent
Claims; provided that if funds in the Revenue Fund are insufficient to make the
payments specified in this paragraph THIRD, distribution of funds shall be made
ratably to the specified recipients;
FOURTH, to the Debt Service Fund an amount that equals (a) one-sixth of the
interest due or becoming due on the bonds on the next succeeding Scheduled
Payment Date, (b) one-sixth of the interest due or becoming due on any Other
Senior Debt on the next succeeding Scheduled Payment Date, (c) one-sixth of the
interest and letter of credit fees due or becoming due on any Debt Service
Reserve Bond, Debt Service Reserve Letter of Credit Loan and Debt Service
Reserve Term Loan on the next succeeding Scheduled Payment Date and
(d) one-sixth of the interest and letter of credit fees due or becoming due on
any Power Purchase Agreement Letter of Credit Loan and Power Purchase Agreement
Term Loan on the next succeeding Scheduled Payment Date; provided that any
transfers required pursuant to this priority FOURTH which were not made on the
prior Funding Date shall also be made as of the current Funding Date;
FIFTH, to the Debt Service Fund an amount that equals (a) one-sixth of the
principal and premium due or becoming due on the bonds on the next succeeding
Scheduled Payment Date, (b) one-sixth of the principal due or becoming due on
the Debt Service Reserve Bonds and Debt Service Reserve Term Loans on the next
succeeding Scheduled Payment Date, (c) one-sixth of the principal due or
becoming due on the Power Purchase Agreement Term Loans on the next succeeding
Scheduled Payment Date and (d) one-sixth of the principal due or becoming due on
any Other Senior Debt on the next succeeding Scheduled Payment Date; provided
that any transfers required pursuant to this priority FIFTH which were not made
on the prior Funding Date shall also be made as of the current Funding Date;
SIXTH, to the Debt Service Fund an amount that equals (a) one-sixth of any
other amount due or becoming due on the bonds on the next succeeding Scheduled
Payment Date, (b) one-sixth of any other amount due or becoming due under the
Debt Service Reserve Letter of Credit Reimbursement Agreement on the next
succeeding Scheduled Payment Date, (c) one-sixth of any other amount due or
becoming due on any Other Senior Debt on the next succeeding Scheduled Payment
Date and (d) one-sixth of any other amount due or becoming due under the Power
Purchase Agreement Letter of Credit Reimbursement Agreement on the next
succeeding Scheduled Payment Date (excluding the amount of principal due on such
Debt Service Reserve Letter of Credit Loans and Power Purchase Agreement Letter
of Credit Loans, which is provided for under priority SEVENTH and EIGHTH,
respectively, below and excluding amounts provided for under priorities THIRD,
FOURTH and FIFTH above); provided that any transfers required pursuant to this
priority SIXTH which were not made on the prior Funding Date shall also be made
as of the current Funding Date;
SEVENTH, to the Debt Service Reserve Letter of Credit Agent, to the extent
of available cash, an amount equal to the outstanding principal amount of any
Debt Service Reserve Letter of Credit Loans that have not been converted into
Debt Service Reserve Bonds or Debt Service Reserve Term Loans, and then to the
Debt Service Reserve Account an amount such that the total amount available to
be drawn on the Debt Service Reserve Letter of Credit together with any cash or
permitted investments already deposited in or credited to the Debt Service
Reserve Account equals the Debt Service Reserve Required Balance;
EIGHTH, to the Power Purchase Agreement Letter of Credit Agent, to the
extent of available cash, an amount equal to the outstanding principal amount of
any Power Purchase Agreement Letter of Credit Loans that have not been converted
into Power Purchase Agreement Term Loans;
NINTH, during the Letter of Credit Sweep Period (as defined below), to the
Debt Service Reserve Letter of Credit Agent and the Power Purchase Agreement
Letter of Credit Agent, on a ratable basis, to the extent of available cash, an
amount equal to the outstanding Debt Service Reserve Bonds, Debt Service Reserve
Term Loans and Power Purchase Agreement Term Loans outstanding on such date;
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TENTH, to the Subordinated Debt Account, an amount that will be sufficient
to pay principal, interest and other amounts (including fees) certified by the
partnership to be due and payable on any Third Party Subordinated Debt prior to
the next succeeding Funding Date; and
ELEVENTH, if and to the extent there are amounts remaining in the Revenue
Fund, to the Partnership Distribution Fund.
Monies will be transferred from the Debt Service Fund on each Funding Date
to pay amounts due on Permitted Indebtedness in accordance with priorities
FOURTH, FIFTH and SIXTH above. In the event that monies in the Debt Service Fund
are insufficient to make the transfers for each of the purposes set forth in
priorities FOURTH, FIFTH and SIXTH above, in the full amount required by such
priorities, the monies available shall be distributed ratably for each such
purpose in such order or based on the amounts due for each purpose in such order
or priority.
APPLICATION OF AVAILABLE CASH TO PREPAY DEBT SERVICE RESERVE LOANS AND POWER
PURCHASE AGREEMENT LOANS; APPLICATION OF CASH COLLATERAL RELEASED BY PECO
The partnership, on any date after February 1, 2012, may furnish to the
Collateral Agent an Letter of Credit Sweep Notice, which shall be irrevocable if
and to the extent it so provides, and which shall authorize and direct the
Collateral Agent, on each Funding Date during a period (the "Letter of Credit
Sweep Period") commencing on the date specified in such Notice and continuing
until the Letter of Credit Sweep Termination Date, to pay to the Debt Service
Reserve Letter of Credit Agent or the Power Purchase Agreement Letter of Credit
Agent, as applicable, for application to the ratable prepayment of Debt Service
Reserve Bonds, Debt Service Reserve Term Loans and Power Purchase Agreement Term
Loans that may be outstanding on such Funding Date, all available cash up to the
outstanding amount of such Debt Service Reserve Bonds, Debt Service Reserve Term
Loans and Power Purchase Agreement Term Loans, after application of proceeds
from the Revenue Fund in accordance with paragraphs FIRST through EIGHTH of the
Flow of Funds set forth above (and assuming the application of such proceeds to
the payment of Senior Debt (to the extent allocable thereto) and other amounts
on the next Scheduled Payment Date).
In the event of an Energy Contract Buy-Out resulting from a termination by
PECO of the Power Purchase Agreement on the 20(th) anniversary of the
commencement of the operating term of the Power Purchase Agreement, as provided
in the Power Purchase Agreement, after the receipt by the partnership and/or the
Collateral Agent of the PECO Buy-Out Proceeds, and the transfer thereof by the
Collateral Agent to the Trustee for deposit in the Redemption Fund of the
amounts required to be so transferred, any amount of cash collateral then held
by PECO as a result of a drawing under the Power Purchase Agreement Letter of
Credit shall, upon release by PECO, be transferred to the Power Purchase
Agreement Letter of Credit Agent for application to the prepayment of the Power
Purchase Agreement Term Loan made as a result of such drawing, notwithstanding
any other provisions regarding priorities of payment in the Financing Documents.
Any excess amounts after such application shall be transferred to the Collateral
Agent for deposit into the Revenue Fund for distribution pursuant to the
Collateral Agency Agreement.
INVESTMENT OF MONIES
Amounts on deposit in the Project Funds (other than in the Unrestricted
Account) will, at the written request and direction of the partnership, be
invested by the Collateral Agent in Permitted Investments. Such investments will
generally mature in such amounts and not later than such times as may be
necessary to provide monies when needed to make payments as provided in the
Collateral Agency Agreement. Net interest or gain received from such investments
will be applied as provided in the Collateral Agency Agreement. So long as an
outstanding balance will remain in any of the accounts of the Project Funds, the
Collateral Agent will provide the partnership with monthly statements showing
the amount of all deposits made to, the net investment income or gain received
and collected for, all disbursements from and the amount then available in each
such account of the Project Funds.
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EVENTS OF DEFAULT UNDER THE COLLATERAL AGENCY AGREEMENT
EVENTS OF DEFAULT; TRIGGER EVENTS. Each of the following constitutes an
event of default (a "Trigger Event") under the Collateral Agency Agreement:
(a) an Event of Default under the Indenture and an acceleration of all
indebtedness issued thereunder, (b) an Event of Default under the Debt Service
Reserve Letter of Credit Reimbursement Agreement and an acceleration of all
indebtedness incurred thereunder, (c) an Event of Default under the Power
Purchase Agreement Letter of Credit Reimbursement Agreement and an acceleration
of all indebtedness incurred thereunder, (d) an event of default under a Working
Capital Facility and an acceleration of all indebtedness issued thereunder, or
(e) an event of default under any other Senior Debt instrument and an
acceleration of all of the Indebtedness issued thereunder provided such
Indebtedness is in an aggregate principal amount in excess of $10 million; and,
in each case, the Collateral Agent has, upon direction from the Required Senior
Parties, declared such event to be a Trigger Event.
Upon the occurrence and continuance of a Trigger Event, the Collateral Agent
will exercise, by the direction of the Required Senior Parties, such rights and
remedies with respect to the Collateral as are granted to it under the
Collateral Agency Agreement, the Security Documents and Applicable Law.
No Senior Party has any right to (a) take any action with respect to the
Collateral independent of the Collateral Agent or (b) direct the Collateral
Agent to take any action in respect of the Collateral other than in accordance
with the Collateral Agency Agreement.
EXERCISE OF REMEDIES AND APPLICATION OF PROCEEDS. Pursuant to the
Collateral Agency Agreement, the affirmative vote of 51% of the Combined
Exposure (in each case, the "Required Senior Parties") is sufficient to direct
certain actions of the Collateral Agent, including the exercise of remedies
following a Trigger Event (as defined above); PROVIDED that, for purposes of
directing such actions, the Trustee will be entitled to vote on all matters
under the Collateral Agency Agreement according to the aggregate principal
amount of the Outstanding Bonds in respect of which it has received votes from
Holders subject, however, in all events, to the terms and provisions of the
Indenture.
If a Trigger Event has occurred and is continuing and upon a written request
of the Required Senior Parties, the Collateral Agent is authorized to take any
and all actions and to exercise any and all rights, remedies and options and
which the Required Senior Parties direct it to take, including realization and
foreclosure on the Collateral.
Except with respect to PECO Buy-Out Proceeds, which shall be applied as
described in "--The Project Funds--LOSS PROCEEDS ACCOUNT--Energy Contract
Buy-Out," the non-cash proceeds of any sale, disposition or other realization or
foreclosure by the Collateral Agent upon the Collateral or any portion thereof
will be held by the Collateral Agent for the benefit of the Senior Parties until
sold or otherwise converted into cash. Cash proceeds will be transferred to the
Revenue Fund, and the Collateral Agent will distribute them in the order of
priority to:
(a) the Debt Service Fund for payment to the Collateral Agent, the Authority
Trustee, the Debt Service Reserve Letter of Credit Agent, the Power Purchase
Agreement Letter of Credit Agent, the Depositary Bank, the Other Senior Debt
Agent and the Trustee, ratably, an amount equal to all Collateral Agent Claims,
Authority Trustee Claims, Debt Service Reserve Letter of Credit Agent Claims,
Power Purchase Agreement Letter of Credit Agent Claims, Depositary Agent Claims,
Other Senior Debt Agent Claims and Trustee Claims, respectively, due and owing
to such parties under the Financing Documents,
(b) the Debt Service Fund for payment to the Senior Parties, ratably, an
amount equal to the unpaid amount of all Senior Debt constituting principal,
interest and any fees due,
(c) the Debt Service Fund for payment to the Senior Parties, ratably, an
amount equal to all other unpaid amounts;
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(d) to the Subordinated Debt Account for payment to the holders of Third
Party Subordinated Debt, ratably, an amount equal to the unpaid amount of all
Third Party Subordinated Debt due; and
(e) to the partnership or to whomever a court of competent jurisdiction may
direct any surplus.
At the time the Collateral Agent is to make a distribution pursuant to
clause (b) in the immediately preceding paragraph, the Collateral Agent will
deposit into a separate interest-bearing trust account an amount equal to the
then outstanding amount of the Debt Service Reserve Letter of Credit (which
outstanding amount of the Debt Service Reserve Letter of Credit will be
calculated after giving effect to the redemption of bonds from such distribution
made pursuant to clause (b) above). The Collateral Agent will hold the monies in
such account until receipt of a written notice or notices from the Debt Service
Reserve Letter of Credit Agent to the effect that either (x) the Collateral
Agent has made a drawing on the Debt Service Reserve Letter of Credit, which
notice will specify the amount or amounts of such drawings, or (y) the Debt
Service Reserve Letter of Credit has expired or terminated. Upon receipt of
notice as specified in (x) above, the Collateral Agent will distribute to the
Debt Service Reserve Letter of Credit Agent an amount equal to such drawing's
proportionate share of the Debt Service Reserve Letter of Credit collateralized
by such account specified in the notice. Upon receipt of notice as specified in
(y) above, the Collateral Agent will distribute from the relevant separate
account (in accordance with clauses (b), (c), (d) and (e) above and without
regard to this paragraph) to the appropriate Persons an amount equal to the
balance in such account.
At the time the Collateral Agent is to make a distribution pursuant to
clause (b) in the second preceding paragraph, the Collateral Agent will deposit
into a separate interest-bearing trust account an amount equal to the then
outstanding amount of the Power Purchase Agreement Letter of Credit (which
outstanding amount of the Power Purchase Agreement Letter of Credit will be
calculated after giving effect to the redemption of bonds from such distribution
made pursuant to clause (b) above). The Collateral Agent will hold the monies in
such account until receipt of a written notice or notices from the Power
Purchase Agreement Letter of Credit Agent to the effect that either (x) the
Collateral Agent has made a drawing on the Power Purchase Agreement Letter of
Credit, which notice will specify the amount or amounts of such drawings, or
(y) the Power Purchase Agreement Letter of Credit has expired or terminated.
Upon receipt of notice as specified in (x) above, the Collateral Agent will
distribute to the Power Purchase Agreement Letter of Credit Agent an amount
equal to such drawing's proportionate share of the Power Purchase Agreement
Letter of Credit collateralized by such account specified in the notice. Upon
receipt of notice as specified in (y) above, the Collateral Agent will
distribute from the relevant separate account (in accordance with clauses (b),
(c), (d) and (e) above and without regard to this paragraph) to the appropriate
Persons an amount equal to the balance in such account.
RIGHTS OF SENIOR PARTIES TO CERTAIN PROCEEDS
Except for the PECO Buy-Out Proceeds, cash proceeds deposited in the Revenue
Fund under "--The Project Funds--LOSS PROCEEDS ACCOUNT--Events of Loss," "--The
Project Funds--LOSS PROCEEDS ACCOUNT--EPC Buy-Down," "--The Project Funds--LOSS
PROCEEDS ACCOUNT--Energy Contract Buy-Out" and cash to be deposited in the
Revenue Fund under "--The Project Funds--PARTNER DISTRIBUTION FUND--Blocked
Partner Distributions" shall be used by the Collateral Agent for distribution in
the order of priority to:
(a) the Debt Service Fund for payment, ratably, to the Collateral Agent, the
Authority Trustee, the Debt Service Reserve Letter of Credit Agent, the Power
Purchase Agreement Letter of Credit Agent, the Depositary Bank, the Other Senior
Debt Agent and the Trustee, ratably, an amount equal to all Collateral Agent
Claims, Authority Trustee Claims, Debt Service Reserve Letter of Credit Agent
Claims, Power Purchase Agreement Letter of Credit Agent Claims, Depositary Agent
Claims, Other Senior Debt Agent Claims and Trustee Claims, respectively, due and
owing to such parties under the Financing Documents;
(b) the Debt Service Fund for payment to the Senior Parties, ratably, an
amount equal to the unpaid amount of all Senior Debt constituting principal,
interest and any fees due;
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(c) the Debt Service Fund for payment to the Senior Parties, ratably, an
amount equal to all other unpaid amounts;
(d) to the Subordinated Debt Account for payment to the holders of
Subordinated Debt, ratably, an amount equal to the unpaid amount of all
Subordinated Debt due; and
(e) to the partnership or to whomever a court of competent jurisdiction may
direct any surplus.
At the time the Collateral Agent is to make a distribution pursuant to
clause (b) in the immediately preceding paragraph, the Collateral Agent will
deposit into a separate interest-bearing trust account in an amount equal to the
then outstanding amount of the Debt Service Reserve Letter of Credit (which
outstanding amount of the Debt Service Reserve Letter of Credit will be
calculated after giving effect to the redemption of bonds from such distribution
made pursuant to clause (b) above). The Collateral Agent will hold the monies in
such account until receipt of a written notice or notices from the Debt Service
Reserve Letter of Credit Agent to the effect that either (x) the Collateral
Agent has made a drawing on the Debt Service Reserve Letter of Credit, which
notice will specify the amount or amounts of such drawings, or (y) the Debt
Service Reserve Letter of Credit has expired or terminated. Upon receipt of
notice as specified in (x) above, the Collateral Agent will distribute to the
Debt Service Reserve Letter of Credit Agent an amount equal to such drawing's
proportionate share of the Debt Service Reserve Letter of Credit collateralized
by such account specified in the notice. Upon receipt of notice as specified in
(y) above, the Collateral Agent will distribute from the relevant separate
account (in accordance with clauses (b), (c), (d) and (e) above and without
regard to this paragraph) to the appropriate Persons an amount equal to the
balance in such account.
At the time the Collateral Agent is to make a distribution pursuant to
clause (b) in the second preceding paragraph, the Collateral Agent will deposit
into a separate interest-bearing trust account an amount equal to the then
outstanding amount of the Power Purchase Agreement Letter of Credit (which
outstanding amount of the Power Purchase Agreement Letter of Credit will be
calculated after giving effect to the redemption of bonds from such distribution
made pursuant to such clause (b)). The Collateral Agent will hold the monies in
such account until receipt of a written notice or notices from the Power
Purchase Agreement Letter of Credit Agent to the effect that either (x) the
Collateral Agent has made a drawing on the Power Purchase Agreement Letter of
Credit, which notice will specify the amount or amounts of such drawings, or
(y) the Power Purchase Agreement Letter of Credit has expired or terminated.
Upon receipt of notice as specified in (x) above, the Collateral Agent will
distribute to the Power Purchase Agreement Letter of Credit Agent an amount
equal to such drawing's proportionate share of the Power Purchase Agreement
Letter of Credit collateralized by such account specified in the notice. Upon
receipt of notice as specified in (y) above, the Collateral Agent will
distribute from the relevant separate account (in accordance with clauses (b),
(c), (d) and (e) above and without regard to this paragraph) to the appropriate
Persons an amount equal to the balance in such account.
CERTAIN RIGHTS OF COLLATERAL AGENT
Neither the Collateral Agent nor any of its agents or affiliates will be
liable for action lawfully taken by in or in connection with the Collateral
Agency Agreement except for gross negligence or willful misconduct. The Senior
Parties agree to indemnify the Collateral Agent from and against any
liabilities, obligations, costs or expenses incurred by or asserted against the
Collateral Agent in its capacity arising out of the Collateral Agency Agreement.
The Collateral Agent may resign as Collateral Agent upon 30 days' notice to
the Senior Parties and may be removed at any time with or without cause by the
Required Senior Parties (as defined below), with any such resignation or removal
to become effective only upon the appointment of a successor Collateral Agent.
Whenever the Collateral Agent deems it necessary, the Collateral Agent may take
action to appoint another bank or trust company to act as an additional
collateral agent of all or any part of the Collateral.
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Each Person replacing any of the Senior Parties and each Person (or trustee
or agent thereof) providing Senior Debt to the partnership will be required to
become a party to the Collateral Agency Agreement, which will be amended to the
extent necessary to accommodate the replacement or addition of such Persons.
AMENDMENTS AND WAIVERS
Any amendment, modification, supplement, consent or waiver of any provision
of the Collateral Agency Agreement, the Common Agreement or any Security
Document requires the written consent of the Collateral Agent, acting at the
direction of the Required Senior Parties. If any consent or direction of the
Required Secured Parties is necessary in order for the Collateral Agent to
exercise any rights or remedies under any of the Security Documents or the
Collateral Agency Agreement, or to amend, modify or supplement, give any consent
under, or waive any provision of, any of the Security Documents, the Common
Agreement or the Collateral Agency Agreement, and if any such exercise of rights
or remedies, or any such amendment, modification, supplement, consent or waiver
(either alone or together with each then effective amendment, modification,
supplement, consent or waiver not previously approved by the Power Purchase
Agreement Letter of Credit Agent or the Debt Service Reserve Letter of Credit
Agent, as the case may be) could reasonably be expected to have a material
adverse effect on the Power Purchase Agreement Letter of Credit Agent or the
Debt Service Reserve Letter of Credit Agent (which material adverse effect is
materially different from the effect with respect to other Senior Parties), the
Collateral Agent shall not accept such consent or direction from the Required
Senior Parties unless the Power Purchase Agreement Letter of Credit Agent or the
Debt Service Reserve Letter of Credit Agent, as the case may be, shall have
received written notice of such proposed consent or direction at least fifteen
days prior to the effectiveness thereof, and the Power Purchase Agreement Letter
of Credit Agent or the Debt Service Reserve Letter of Credit Agent, as the case
may be, shall have approved such amendment, modification or supplement, consent
or waiver (which approval shall not be unreasonably withheld).
DEBT SERVICE RESERVE LETTER OF CREDIT REIMBURSEMENT AGREEMENT
The Toronto-Dominion Bank (the "Debt Service Reserve Letter of Credit
Issuer"), pursuant to a Debt Service Reserve Letter of Credit and Reimbursement
Agreement (the "Debt Service Reserve Letter of Credit Reimbursement Agreement"),
has agreed to provide the Debt Service Reserve Letter of Credit for the account
of the partnership in an amount up to $16 million to be held by the Collateral
Agent to serve as a debt service reserve facility for our project. The Financing
Documents require that the Debt Service Reserve Account be funded in an amount
equal to the Debt Service Reserve Required Balance on or before June 1, 2002.
The Collateral Agent shall have the right to make drawings on the Debt
Service Reserve Letter of Credit beginning on June 1, 2002. The Collateral Agent
may make drawings under the Debt Service Reserve Letter of Credit upon the
occurrence of the following events: (i) there being insufficient monies in the
Bond Payment Account on any interest payment date or principal payment date to
pay interest or principal then due (after application of funds from the Debt
Service Reserve Account); (ii) upon receipt of a notice from the partnership
that the long-term debt rating of such Debt Service Reserve Letter of Credit
Issuer is less than "A-" as determined by S&P or "A3" as determined by Moody's
(collectively, the "Required Rating") and the Debt Service Reserve Letter of
Credit has not been replaced within the time period specified therein;
(iii) upon receipt of a notice from the Debt Service Reserve Letter of Credit
Agent that the Debt Service Reserve Letter of Credit will not be extended or
replaced by the close of business on the day 45 days prior to its stated
expiration date; (iv) if, subsequent to June 1, 2002, moneys transferred to the
Debt Service Reserve Letter of Credit Agent from the Revenue Account are
insufficient to repay the interest on any Debt Service Reserve Letter of Credit
Loans; and (v) a termination of the Debt Service Reserve Letter of Credit or the
occurrence of a Trigger Event. The Collateral Agent will apply the proceeds of
each such drawing: (a) in the case of clauses (i) and (iv) of the preceding
sentence, to
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payment of the relevant obligation and (b) in the case of clauses (ii),
(iii) and (v) of the preceding sentence, to the Debt Service Reserve Account
until there shall be deposited therein an aggregate amount equal to the Debt
Service Reserve Required Balance.
Subject to the conditions of drawing, the Debt Service Reserve Letter of
Credit will mature, expire, or terminate on the earlier to occur of (i) seven
years from the date of issuance of the Debt Service Reserve Letter of Credit and
(ii) the occurrence of a Debt Service Reserve Letter of Credit Event of Default;
provided, however, that the Debt Service Reserve Letter of Credit shall not be
terminated upon the occurrence of a Debt Service Reserve Letter of Credit Event
of Default without the Debt Service Reserve Letter of Credit Agent first giving
the Collateral Agent and the Trustee written notice thereof at least 60 days
prior to such termination during which period the Collateral Agency shall be
entitled to draw on such Debt Service Reserve Letter of Credit as described
above under "Collateral Agency Agreement--The Project Funds--DEBT SERVICE
RESERVE ACCOUNT." The Debt Service Reserve Letter of Credit Agent shall also
provide a copy of such written notice to the partnership at the time such notice
is given to the Collateral Agent and the Trustee.
The partnership shall have the right to terminate or reduce the Debt Service
Reserve Letter of Credit upon the receipt by the Debt Service Reserve Letter of
Credit Agent of notice from the Trustee consenting to such termination or
reduction.
The amount available for the drawing under the Debt Service Reserve Letter
of Credit will be reduced upon (i) making draws thereunder, (ii) the reduction
of the Debt Service Reserve Required Balance and (iii) certain deposits in cash
in the Debt Service Reserve Account.
DEBT SERVICE RESERVE LETTER OF CREDIT LOANS
Except as otherwise provided below, each Drawing on the Debt Service Reserve
Letter of Credit shall constitute the making by the Debt Service Reserve Letter
of Credit provider of a loan to the partnership (a "Debt Service Reserve Letter
of Credit Loan"). The partnership shall pay interest on the unpaid principal
amount of each outstanding Debt Service Reserve Letter of Credit Loan from the
date such Debt Service Reserve Letter of Credit Loan is made until such
principal amount has been repaid in full at a rate set forth in the Debt Service
Reserve Letter of Credit Reimbursement Agreement.
The partnership shall pay the interest on any Debt Service Reserve Letter of
Credit Loan out of cash available in the Revenue Account at the same level in
the flow of funds as interest on other Senior Debt and shall repay the principal
amount of any Debt Service Reserve Letter of Credit Loans out of cash available
in the Revenue Account after payment of debt service on all Senior Debt other
than principal of Debt Service Reserve Letter of Credit Loans. Each Debt Service
Reserve Letter of Credit Loan will mature five years after the date such Debt
Service Reserve Letter of Credit Loan is made (a "Debt Service Reserve Letter of
Credit Loan Maturity Date").
Unless the Debt Service Reserve Letter of Credit is not extended or replaced
or unless there has been a Debt Service Reserve Letter of Credit Event of
Default as described below in this summary, amounts available for drawing under
the Debt Service Reserve Letter of Credit shall be reinstated immediately to the
extent of any reimbursement of principal of Debt Service Reserve Letter of
Credit Loans (but not Debt Service Reserve Bonds or Debt Service Reserve Term
Loans).
NON-REPLACEMENT OF DEBT SERVICE RESERVE LETTER OF CREDIT
If the Debt Service Reserve Letter of Credit is not replaced at least
45 days prior to its stated maturity date, or the credit rating of the Debt
Service Reserve Letter of Credit Issuer is less than the Required Rating and the
partnership does not within 45 days replace the Debt Service Reserve Letter of
Credit with a letter of credit issued by a financial institution which meets the
Required Rating, the Collateral Agent will draw on the Debt Service Reserve
Letter of Credit (such drawing on the Debt Service Reserve Letter
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of Credit due to non-replacement of the Debt Service Reserve Letter of Credit, a
"Debt Service Reserve Term Loan") in an amount equal to the lesser of (i) the
amount available to be drawn under such letter of credit and (ii) the difference
between (x) the Debt Service Reserve Required Balance and (y) amounts then on
deposit in the Debt Service Reserve Account, and will deposit such drawing into
the Debt Service Reserve Account. A Debt Service Reserve Term Loan will amortize
pursuant to a "mortgage-style" amortization schedule and the maturity date of
any Debt Service Reserve Term Loan shall be 10 years after the date such loan is
made. Interest on and principal of any Debt Service Reserve Term Loan will be
paid, respectively, at the same levels as interest on and principal of the
bonds.
CONVERSION INTO DEBT SERVICE RESERVE BONDS
If by the date 30 months after the making of a Debt Service Reserve Letter
of Credit Loan, the partnership shall have failed to repay at least 50% of the
original amount of such Debt Service Reserve Letter of Credit Loan, or if by the
Debt Service Reserve Letter of Credit Loan Maturity Date of such Debt Service
Reserve Letter of Credit Loan the partnership shall have failed to repay such
Debt Service Reserve Letter of Credit Loan in full, then from and after the
applicable date, such Debt Service Reserve Letter of Credit Loan may, at the
option of the Debt Service Reserve Letter of Credit Loan Provider, be converted
into a new security (a "Debt Service Reserve Bond") having a principal amount
equal to the remaining principal amount of the Debt Service Reserve Letter of
Credit Loan so converted. Each Debt Service Reserve Bond shall be amortized on
the same amortization schedule as the bonds and mature on the same maturity date
as the bonds. Interest on and principal of any Debt Service Reserve Bond will be
paid, respectively at the same levels as interest on and principal of the bonds.
COVENANTS
The covenants of the partnership contained in the Common Agreement shall be
incorporated by reference (with appropriate substitution of parties) in the Debt
Service Reserve Letter of Credit Reimbursement Agreement as if set forth in full
in the Debt Service Reserve Letter of Credit Reimbursement Agreement.
DEBT SERVICE RESERVE LETTER OF CREDIT EVENTS OF DEFAULT
Each of the following shall be an event of default (a "Debt Service Reserve
Letter of Credit Event of Default") under the Debt Service Reserve Letter of
Credit Reimbursement Agreement: (i) any principal of any Debt Service Reserve
Loan is not paid in full within 5 days after the due date thereof; (ii) any
other amount due under the Debt Service Reserve Letter of Credit Reimbursement
Agreement or any related promissory note is not paid in full within 15 days
after the due date thereof; or (iii) an Event of Default under the Common
Agreement shall occur and be continuing.
REMEDIES
Upon the occurrence and during the continuation of a Debt Service Reserve
Letter of Credit Event of Default, at the request of the Banks holding 66 2/3
percent or more of the Debt Service Reserve Letter of Credit commitments (the
"Required Debt Service Reserve Letter of Credit Banks"), the Debt Service
Reserve Letter of Credit Provider may (i) after notice as required in the
Financing Documents, terminate the Debt Service Reserve Letter of Credit,
(ii) declare all amounts owing under the Debt Service Reserve Letter of Credit
Reimbursement Agreement and any related promissory note to be forthwith due and
payable (including amounts not yet advanced under the Debt Service Reserve
Letter of Credit, which shall upon being so advanced be and become immediately
due and payable), whereupon such obligations shall become and be due and
payable, without presentment, demand or protest; (iii) terminate the ability of
the partnership to cause the reinstatement of the stated amount of the Debt
Service Reserve Letter of Credit through the reimbursement of drawings; and
(iv) terminate the ability of the partnership to continue any Debt Service
Reserve Loans as, or to convert Debt Service Reserve Loans to, Eurodollar Rate
Loans;
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provided, that the Debt Service Reserve Letter of Credit Agent shall not have
the right to exercise any other remedies except in accordance with the
provisions of the Collateral Agency Agreement.
POWER PURCHASE AGREEMENT LETTER OF CREDIT REIMBURSEMENT AGREEMENT
The Toronto-Dominion Bank (the "Power Purchase Agreement Letter of Credit
Issuer"), pursuant to a Power Purchase Agreement Letter of Credit and
Reimbursement Agreement (the "Power Purchase Agreement Letter of Credit
Reimbursement Agreement"), has agreed pursuant to the terms of the Power
Purchase Agreement to provide the Power Purchase Agreement Letter of Credit for
use by the partnership in connection with our project.
The Power Purchase Agreement Letter of Credit Issuer issued the Power
Purchase Agreement Letter of Credit on the date of issuance of the bonds, for
the account of the partnership in the amount of $15,000,000, which amount shall
be increased by $10,000,000 on April 1 of the Start Year for the Initial Units
and in favor of PECO. PECO may make drawings under the Power Purchase Agreement
Letter of Credit if (i) the partnership has failed to pay PECO certain
liquidated damages payable under the Power Purchase Agreement, (ii) the
partnership has failed to pay availability adjustments under the Power Purchase
Agreement, (iii) the expiry date of the Power Purchase Agreement Letter of
Credit is to occur and it has not been renewed or replaced by an acceptable
credit support; or the Power Purchase Agreement Letter of Credit is terminated
as described below.
Subject to the conditions of drawing, the Power Purchase Agreement Letter of
Credit will mature, expire or terminate on the earlier to occur of (i) seven
years from the date of issuance of the Power Purchase Agreement Letter of
Credit; and (ii) the occurrence of a Power Purchase Agreement Letter of Credit
Event of Default; provided, however, that the Power Purchase Agreement Letter of
Credit shall not be terminated upon the occurrence of a Power Purchase Agreement
Letter of Credit Event of Default without the Power Purchase Agreement Letter of
Credit Agent first giving the Collateral Agent and PECO written notice thereof
at least 60 days prior to such termination. The Power Purchase Agreement Letter
of Credit Agent shall also provide a copy of such written notice to the
partnership at the time such notice is given to the Collateral Agent and the
Power Purchaser.
The partnership shall have the right to terminate or reduce the Power
Purchase Agreement Letter of Credit upon the receipt by the Power Purchase
Agreement Letter of Credit Agent of notice from PECO consenting to such
termination or reduction.
POWER PURCHASE AGREEMENT LETTER OF CREDIT LOANS
Except as otherwise provided herein, each Drawing on the Power Purchase
Agreement Letter of Credit shall constitute the making by the Power Purchase
Agreement Letter of Credit provider of a loan (a "Power Purchase Agreement
Letter of Credit Loan"). The partnership shall pay interest on the unpaid
principal amount of each outstanding Power Purchase Agreement Letter of Credit
Loan from the date such Power Purchase Agreement Letter of Credit Loan is made
until such principal amount has been repaid in full at rates established in the
Power Purchase Agreement Letter of Credit Reimbursement Agreement. The
partnership shall pay the interest on any Power Purchase Agreement Letter of
Credit Loan out of cash available in the Revenue Account at the same level in
the flow of funds as interest on other Senior Debt and shall repay the principal
amount of any Power Purchase Agreement Letter of Credit Loans out of cash
available in the Revenue Account after payment of debt service on all Senior
Debt and principal of Power Purchase Agreement Letter of Credit Loans. Each
Power Purchase Agreement Letter of Credit Loan will mature five years after the
date such Power Purchase Agreement Letter of Credit Loan is made (the "Power
Purchase Agreement Letter of Credit Loan Maturity Date").
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CONVERSION INTO POWER PURCHASE AGREEMENT TERM LOANS
If by the date 30 months after the making of a Power Purchase Agreement
Letter of Credit Loan, the partnership shall have failed to repay the amount of
such Power Purchase Agreement Letter of Credit Loan, then from and after the
applicable date, such Power Purchase Agreement Letter of Credit Loan may, at the
option of the Power Purchase Agreement Letter of Credit Agent, be converted into
a new security (a "Power Purchase Agreement Term Loan") having a principal
amount equal to the remaining principal amount of the Power Purchase Agreement
Letter of Credit Loan so converted. Each Power Purchase Agreement Term Loan
shall be amortized over a period of five years from the date of such conversion
to a Power Purchase Agreement Term Loan and shall be amortized based on
mortgage-style amortization payments of principal and interest. Interest on and
principal of any Power Purchase Agreement Term Loan will be paid, respectively,
at the same levels as interest on and principal of the bonds.
NON-REPLACEMENT OF POWER PURCHASE AGREEMENT LETTER OF CREDIT
If the Power Purchase Agreement Letter of Credit is not extended or replaced
at least 10 days prior to its termination date, PECO is permitted to draw on the
Power Purchase Agreement Letter of Credit in amount equal to the amount
available to be drawn under such letter of credit. Such drawing shall be funded
as a Power Purchase Agreement Term Loan, which will amortize pursuant to a
"mortgage-style" amortization schedule. The maturity date of any Power Purchase
Agreement Term Loan shall be 5 years after the date such loan is made. Interest
on and principal of any Power Purchase Agreement Term Loan will be paid,
respectively, at the same levels as interest on and principal of the bonds.
COVENANTS
The covenants of the partnership contained in the Common Agreement shall be
incorporated by reference (with appropriate substitution of parties) in the
Power Purchase Agreement Letter of Credit Reimbursement Agreement as if set
forth in full in the Power Purchase Agreement Letter of Credit Reimbursement
Agreement.
POWER PURCHASE AGREEMENT LETTER OF CREDIT EVENTS OF DEFAULT
Each of the following shall be an event of default (a "Power Purchase
Agreement Letter of Credit Event of Default") under the Power Purchase Agreement
Letter of Credit Reimbursement Agreement: (i) any principal of any Power
Purchase Agreement Loans is not paid in full within 5 days after the due date
thereof; (ii) any amount due under the Power Purchase Agreement Letter of Credit
Reimbursement Agreement or any related promissory note is not paid in full
within 15 days after the due date thereof; and (iii) an "Event of Default" under
the Common Agreement shall occur and be continuing.
REMEDIES
Upon the occurrence and during the continuation of a Power Purchase
Agreement Letter of Credit Event of Default, at the request of the Banks holding
66 2/3 percent or more of the Power Purchase Agreement Letter of Credit
commitments (the "Required Power Purchase Agreement Letter of Credit Banks"),
the Power Purchase Agreement Letter of Credit Agent may (i) terminate the Power
Purchase Agreement Letter of Credit, (ii) declare all amounts owing under the
Power Purchase Agreement Letter of Credit Reimbursement Agreement and any
related promissory note to be forthwith due and payable (including amounts not
yet advanced under the Power Purchase Agreement Letter of Credit, which shall
upon being so advanced be and become immediately due and payable), whereupon
such obligations shall become and be due and payable, without presentment,
demand or protest; (iii) terminate any ability of the partnership to cause the
reinstatement of the stated amount of the Power Purchase Agreement Letter of
Credit through the reimbursement of drawings; and (iv) terminate the ability of
the partnership to
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continue Power Purchase Agreement Loans as or to convert Power Purchase
Agreement Loans to Eurodollar Rate loans; provided, that the Power Purchase
Agreement Letter of Credit Agent shall not have the right to exercise any other
remedies except in accordance with the provisions of the Collateral Agency
Agreement.
EQUITY CONTRIBUTION AGREEMENT
Pursuant to an Equity Contribution Agreement entered into by and among TGI,
TGILP, each other Partner of the partnership listed as a Contributing Partner
thereunder, the partnership, and the Collateral Agent, each Contributing Partner
will contribute equity to the partnership from time to time during the
construction period (each an "Equity Contribution") at the request of the
Collateral Agent, if the amounts then on deposit in the Construction Fund are
insufficient to make the transfers required to pay our Project Costs as
specified in the Collateral Agency Agreement. The obligation of each
Contributing Partner to make its Equity Contributions is supported by a
Contributing Partner Support Instrument or Support Instruments in the aggregate
amount of such Contributing Partner's Equity Contribution Commitment. The
obligation of each Contributing Partner to make Equity Contributions will not at
any time cause (i) the total amount of Equity Contributions made by such
Contributing Partner to exceed such Contributing Partner's Equity Contribution
Commitment, and (ii) the aggregate amount of the Contributing Partners' Equity
Contributions to exceed $35,500,000. All Equity Contributions will be deposited
in the Construction Fund and applied to pay or reimburse the partnership for the
payment of our Project Costs, whether matured or unmatured, in accordance with
the Financing Documents.
The Equity Contribution Agreement also provides that if either (i) an Event
of Default under the Common Agreement or (ii) any Contributing Partner Event of
Default, has occurred and is continuing on or prior to the Date of Commercial
Operation of the Final Units, the Collateral Agent is authorized to make a
drawing under such Contributing Partner's Support Instrument or Support
Instruments, in an amount equal to such Contributing Partner's Equity
Contribution Commitment less its Equity Contribution made up to such date. Any
such Equity Contribution following the occurrence and continuation of an Event
of Default or any Contributing Partner Event of Default will be deposited in the
Construction Fund and will be applied in accordance with the Collateral Agency
Agreement.
Pursuant to the Equity Contribution Agreement, on the Date of Commercial
Operation of the Final Units, the Collateral Agent shall draw under each
Contributing Partner's Support Instrument or Support Instruments an amount equal
to each Contributing Partner's percentage of the Remaining Required Equity
Contribution and the remaining "excess" equity committed but unfunded will be
canceled; PROVIDED that, the partnership delivers an Officer's Certificate to
the Collateral Agent on such date certifying that:
(i) the Date of Commercial Operation of the Final Units has occurred;
(ii) all other amounts due and payable under the Equity Contribution
Agreement have been paid or escrowed or otherwise provided for as of such
date;
(iii) no Default or Event of Default under the Common Agreement or any
other Financing Document has occurred and is continuing on and as of such
date; and
(iv) the Debt Service Reserve Account is fully funded on and as of such
date to the extent required under the Collateral Agency Agreement.
CONSENTS TO ASSIGNMENTS
In connection with the collateral assignment of contract rights held by the
partnership, including rights under our Project Documents, the Collateral Agent
received an executed consent to assignment from
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certain of the third parties party to such Project Documents. In each such
consent, the applicable third party has, in respect of our Project Documents to
which it is a party, among other matters:
(i) consented to the collateral assignment thereof to the Collateral
Agent on behalf of the Senior Parties,
(ii) agreed to pay all amounts, if any, receivable by the partnership
thereunder directly into the Revenue Fund created under the Collateral
Agency Agreement,
(iii) agreed to certain matters concerning the exercise of remedies by
the Collateral Agent upon an Event of Default under the Collateral Agency
Agreement, and
(iv) agreed to the exercise by the Senior Parties of certain cure rights
with respect to our Project Documents.
AUTHORITY DEED TO SECURE DEBT
The Authority entered into the Deed to Secure Debt, Security Agreement and
Assignment of Rents and Leases with the Authority Trustee and granted a security
interest to the Authority Trustee in all of the Authority's right, title and
interest in and to all of the real property interests (including fee interests,
easement interests and leasehold interests, if any) of the Authority to the
Leased Property, together with, but not limited to, leases and licenses of the
premises, improvements, renewals and replacements of, and additions to the
Leased Property and modifications, extensions and renewals of the Lease
Agreement. The rents, issues and profits of the premises, together with all
leases and other documents evidencing such rents, issues and profits, now or
hereafter in effect, were assigned by the Authority to the Authority Trustee,
but such Security Deed and said assignment shall be subject and subordinate to
the Lease so long as there shall not exist a default under the Lease or the
Authority Indenture.
SECURITY AGREEMENT
The partnership entered into the Assignment and Security Agreement (the
"Security Agreement") with the Collateral Agent for the benefit of the Senior
Parties granting a continuing Lien on and a security interest in all of the
partnership's personal property interests including, but not limited to, all
receivables, equipment, contracts, contract rights, Eminent Domain Proceeds,
Insurance Proceeds, amounts held in any account of the partnership (excluding
the Unrestricted Account), Governmental Approvals (to the extent permitted by
their terms and by Applicable Law), general intangibles and all other personal
property of the partnership, including all products and proceeds thereof.
Pursuant to the terms of the Security Agreement, upon the occurrence and
during the continuance of a Trigger Event, the Collateral Agent may, subject to
the terms of the Collateral Agency Agreement, take possession of the Collateral
or any portion thereof covered by the Security Agreement.
Net Proceeds from any collection, recovery, receipt, appropriation,
realization or sale with respect to the Collateral shall be applied in
accordance with the Collateral Agency Agreement.
PLEDGE AGREEMENTS
Pursuant to the General Partner Pledge and Security Agreement and the
Limited Partner Pledge and Security Agreement entered into by TGI and TGILP,
respectively, in favor of the Collateral Agent, each of TGI and TGILP pledged to
the Collateral Agent, for its benefit and the benefit of the Senior Parties, a
security interest in (i) all of its general or limited, as the case may be,
partnership interests in the partnership, whether now owned or hereafter
acquired, (ii) the right to receive all monies and property representing a
distribution in respect of the property described in the preceding clause (i),
whether now owned or hereafter acquired, and (iii) all proceeds, products and
accessions of and to any of the property described in the preceding clauses
(i) and (ii), whether now owned or hereafter acquired.
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PARTNERSHIP DEED TO SECURE DEBT
The partnership entered into the Deed to Secure Debt, Assignment of Rents
and Leases and Security Agreement with the Collateral Agent and granted a
security interest to the Collateral Agent for the benefit of the Senior Parties
in all of the partnership's right, title and interest in and to all of the real
property interests (including fee interests, easement interests and leasehold
interests, if any) of the partnership under the Lease and the other related real
property rights and interests. All of the partnership's right, title and
interest in and to all Real Property Leases and Income were assigned by the
partnership to the Collateral Agent.
ROLE OF THE INDEPENDENT ENGINEER
R. W. Beck, Inc. currently serves as the Independent Engineer in accordance
with the Common Agreement.
Pursuant to a professional services agreement (the "Independent Engineer
Agreement") with the partnership, the Independent Engineer's responsibilities
include, but are not limited to, (i) providing an independent assessment, during
the start-up and performance testing phase of our project, of the initial
operation of our project and the completion of the EPC Contract, and
(ii) monitoring and confirming the successful completion of our project.
Under the Common Agreement and the Collateral Agency Agreement, the
Independent Engineer is responsible for confirming the reasonableness of certain
statements and projections required to be provided by certain parties,
including, but not limited to, (i) the cost of and the feasibility of
rebuilding, repairing or restoring the facility following an Event of Loss,
(ii) under certain circumstances, the calculation of Projected Debt Service
Coverage Ratios, and (iii) the base case projections for our project.
The Collateral Agent shall, at the request of the Required Senior Parties,
remove the Independent Engineer if at any time the existing Independent Engineer
becomes incapable of acting or is, or is reasonably likely to be, adjudged
bankrupt or insolvent or a receiver is appointed for, or any public officer
shall take charge or control of, the Independent Engineer or its property or its
affairs for the purpose of rehabilitation, conservation or liquidation, and
shall appoint a successor Independent Engineer from those engineers then listed
on a schedule to the Common Agreement. Within thirty days of receipt by the
Collateral Agent of a written notification from the partnership to the effect
that the Independent Engineer has failed to carry out its obligations in a
timely manner, the Collateral Agent shall, unless directed by the Required
Senior Parties not to do so, remove the Independent Engineer and appoint a
successor Independent Engineer from those engineers then listed on a schedule to
the Common Agreement; PROVIDED, however, that in the event that a Third Party
Engineer (as defined below) determines that the failure of the existing
Independent Engineer to carry out its obligations in a timely manner has
resulted or could reasonably be expected to result in a Material Adverse Effect,
the partnership shall have the unilateral right to remove the Independent
Engineer and appoint a successor Independent Engineer from those successor
engineers then listed on a schedule to the Common Agreement; and PROVIDED,
further, that the Independent Engineer so appointed shall not be such Third
Party Engineer. The partnership shall pay for all services performed by the
Independent Engineer and its reasonable and documented costs and expenses
related thereto.
THIRD PARTY ENGINEER DISPUTE RESOLUTION
If the partnership and the Independent Engineer are in dispute in respect of
a notice, plan, report, certificate or budget and they are unable to resolve the
dispute within seven days of the Independent Engineer expressing its
disagreement with, or failing when requested by the partnership to approve,
confirm, concur in or consent to, such notice, plan, report, certificate or
budget, a single independent engineer (the "Third Party Engineer") shall be
designated to consider and decide the issues raised by such dispute. The
selection of such Third Party Engineer shall be made from the list of engineers
described
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below. The partnership shall designate the Third Party Engineer from such list
not later than the third day following the expiration of the seven day period
described above and such designation, subject to acceptance thereof by the Third
Party Engineer so designated, shall become effective ten Business Days after
notice is given by the partnership to the Collateral Agent of the selection of a
Third Party Engineer unless the Collateral Agent, acting at the direction of the
Required Senior Parties, gives notice of their disagreement with such
designation within such ten Business Day period, in which event the partnership
shall select another Third Party Engineer pursuant to the foregoing procedure.
In the event the designated Third Party Engineer shall decline the assignment,
the foregoing procedure shall apply to designation of an alternative Third Party
Engineer. Within three days of the acceptance of a Third Party Engineer, each of
the partnership and the Independent Engineer shall submit to the Third Party
Engineer a notice setting forth in detail such Person's position in respect of
the issues in dispute. Such notice shall include supporting documentation, if
appropriate.
The Third Party Engineer shall complete all proceedings and issue his
decision with regard to the issues in dispute as promptly as reasonably
possible, but in any event within ten days of the date on which he is designated
as Third Party Engineer, unless the Third Party Engineer reasonably determines
that additional time is required in order to give adequate consideration to the
issues raised. In such case the Third Party Engineer shall state in writing his
reasons for believing that additional time is needed and shall specify the
additional period required, which period shall not exceed ten days without the
partnership's agreement.
If the Third Party Engineer determines that the concerns set forth in the
Independent Engineer's notice are valid, he shall so state and shall state the
corrective actions to be taken by the partnership. In such case, the partnership
shall promptly take such actions. The partnership shall thereafter bear all
costs which may arise from actions taken pursuant to the Third Party Engineer's
decision. If the Third Party Engineer determines that the concerns set forth in
the Independent Engineer's notice are not valid, he shall so state and shall
state the appropriate actions, if any, to be taken by the partnership. In such
case, the partnership shall take such actions, if any, and for purposes of the
Common Agreement, the Independent Engineer shall be deemed to have approved,
confirmed, concurred in or consented to the notice, plan, report, certificate or
budget in dispute. The decision of the Third Party Engineer shall be final and
non-appealable. The partnership shall bear all reasonable and documented costs
incurred by the Third Party Engineer in connection with this dispute resolution
mechanism.
The Third Party Engineer shall be chosen from the list of qualified
engineers set forth in a schedule to the Common Agreement. At any time either
the partnership or the Collateral Agent, acting at the direction of the Required
Senior Parties, may remove a particular engineer from the list by obtaining the
other's consent to such removal (such consent not to be unreasonably withheld,
conditioned or delayed). However, no name or names may be removed from the list
if such removal would leave the list without at least two names, unless,
concurrently therewith, the parties agree to the addition of one or more names
to such list (such agreement not to be unreasonably withheld, conditioned or
delayed).
During January of each year, each of the partnership and the Collateral
Agent shall review the current list of Third Party Engineers and the partnership
shall give notice to the Collateral Agent and the Collateral Agent, acting at
the direction of the Required Senior Parties, shall give notice to the
partnership of any proposed additions to the list and any intended deletions.
Intended deletions shall automatically become effective thirty days after notice
is received by the other unless written objection is made by such other person
within thirty days and provided that such deletions do not leave the list
without at least two names. Proposed additions to the list shall automatically
become effective thirty days after notice is received by the other person unless
written objection is made by such other person within thirty days. By mutual
agreement between the partnership and the Collateral Agent, acting at the
direction of five percent (5%) of the Combined Exposure, a new name or names may
be added to the list of Third Party Engineers at any time.
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SUMMARY OF PRINCIPAL PROJECT DOCUMENTS
THE FOLLOWING ARE SUMMARIES OF THE MATERIAL TERMS OF CERTAIN PRINCIPAL
AGREEMENTS RELATED TO OUR PROJECT AND SHOULD NOT BE CONSIDERED TO BE A FULL
STATEMENT OF THE TERMS AND PROVISIONS OF SUCH AGREEMENTS. ACCORDINGLY, THE
FOLLOWING SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO EACH
AGREEMENT. COPIES OF EACH AGREEMENT ARE AVAILABLE FOR INSPECTION AS DESCRIBED
ABOVE UNDER "IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS."
UNLESS OTHERWISE STATED, ANY REFERENCE IN THIS PROSPECTUS TO ANY AGREEMENT SHALL
MEAN SUCH AGREEMENT AND ALL SCHEDULES, EXHIBITS AND ATTACHMENTS THERETO AS
AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED AND IN EFFECT AS OF THE DATE HEREOF.
CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED IN THIS PROSPECTUS HAVE
THE MEANINGS GIVEN THEM IN THE RESPECTIVE PROJECT DOCUMENTS.
POWER PURCHASE AGREEMENT
The partnership and PECO have entered into the Power Purchase Agreement for
the sale to PECO of all the electric energy and capacity (up to Contract
Capacity) produced by the facility and all ancillary products or services
available from the facility (except for any ancillary services that are required
to be furnished as a requirement of the GPC Interconnection Agreement or by
order of a regulatory body).
COMMERCIAL OPERATION. The Initial Units are scheduled to achieve Power
Purchase Agreement Commercial Operation on June 1, 2001 and the Final Units are
scheduled to achieve Commercial Operation on June 1, 2002.
For each Unit that is not in Power Purchase Agreement Commercial Operation
by the scheduled date, the partnership is required to pay PECO liquidated
damages as its exclusive remedy. The partnership shall be required to pay
$25,000 for each day of delay for each Unit for the first 15 days, $50,000 for
each day after 15 days through to 30 days; and $66,667 for each day thereafter
up to an aggregate amount of $8,000,000 per Unit and $25,000,000 in the
aggregate. The partnership may be excused from paying liquidated damages for up
to twelve months for delays, against which, at that time, business interruption
insurance is not customarily obtained by independent power companies with gas
fired power production facilities in the U.S.
OPERATING TERM AND TERMINATION OPTIONS. The operating term commences on the
Date of Commercial Operation and ends on the 29(th) anniversary thereof (the
"Operating Term"). PECO may terminate the Power Purchase Agreement on the 20(th)
anniversary of the Date of Commercial Operation by giving one year's prior
notice of such termination and paying the partnership $175,000,000.
If all the Initial Units or all the Final Units are not in Power Purchase
Agreement Commercial Operation by the 365(th) day following the applicable
scheduled Commercial Operation date for such Units ("Delay Termination Date"),
PECO may, at any time until all such Units are in Power Purchase Agreement
Commercial Operation, terminate the Power Purchase Agreement with respect to all
such Units. If PECO terminates its obligations with respect to the Initial Units
before the Final Units have achieved Power Purchase Agreement Commercial
Operation, the partnership has the right to terminate the Power Purchase
Agreement at any time prior to the Final Units achieving Power Purchase
Agreement Commercial Operation.
The Delay Termination Dates for the Initial Units and the Final Units are
subject to adjustment for events of force majeure (up to twelve months unless at
the end of such period two-thirds of the Units required to achieve Power
Purchase Agreement Commercial Operation at the end of such period are in Power
Purchase Agreement Commercial Operation, then an additional six months
adjustment is available). However, no adjustment will be made to the Delay
Termination Date for the Initial Units if the event of force majeure commences
after the scheduled Date of Commercial Operation for such Units.
Following the Date of Commercial Operation, PECO may terminate the Power
Purchase Agreement, if the Summer Availability Percentage (see Availability
Calculation below) is less than 67% for two consecutive Contract Years and the
capacity test conducted during such second Contract Year is less than
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550 MW. In such event, PECO's only entitlement to damages will be to recover any
accrued amounts owed to PECO as of the date of such termination including, but
not limited to, any Availability Adjustment payable.
PAYMENTS. For each month of the Operating Term, PECO shall pay the
following amounts:
(i) Reservation Payments being the product of (i) the number of Units
that have achieved Power Purchase Agreement Commercial Operation, (ii) Unit
Capacity, (iii) the reservation rate for such Contract Year as set forth in
the Power Purchase Agreement, and (iv) 1000.
(ii) Energy Payments being the sum of (a) the product of the total
amount of Delivered Energy received by PECO during that month to the extent
that such energy was generated by Units fired by fuel oil and the fuel oil
energy rate applicable for that Contract Year (as set forth in the Power
Purchase Agreement), (b) the product of the total amount of Delivered Energy
received by PECO during that month to the extent that energy was generated
by Units fired by natural gas and the gas energy rate applicable for that
Contract Year (as set forth in the Power Purchase Agreement), and (c) sum of
(x) any Replacement Energy Payments (see below).
(iii) Excess Run Time Payment being a payment in respect of each Unit
which (a) delivers energy fired on gas for longer than 16 consecutive hours
equal to the sum of the product of the Delivered Energy produced during such
period and $2.00/MWh, or (b) delivers energy fired on fuel oil for longer
than 13 consecutive hours equal to the product of Delivered Energy produced
during such period and $3.00/MWh.
(iv) Start Charges at a rate of $11,000 (to escalate by 3% each year)
for each firing of a Unit in response to a request for energy by PECO (a
"Start").
(v) Standby Mode Charge of $10 for each hour or part thereof for each
Unit in standby mode during Non-Summer Months.
(vi) Fuel Tax Payments being a payment by one party to the other with
respect to taxes imposed by the State of Georgia on fuel delivered to the
facility. If the partnership is responsible for filing and paying taxes on
fuel delivered to the facility, PECO shall pay to the partnership PECO's
Fuel Tax Obligation (see below). However, if PECO is responsible for the
filing and payment of such taxes the partnership shall reimburse PECO for
the positive difference (if any) between the total amount of such taxes
shown due on the tax return and PECO's Fuel Tax Obligation but if such
difference is negative, PECO shall make a payment to the partnership equal
to such negative difference. PECO's Fuel Tax Obligation shall equal the sum
of the products of (a) the sum of (i) 6% and (ii) one-half the difference
between (1) the tax rate applicable to sales and/or use tax on fuel in Heard
County and (2) 6%, (but if fuel becomes exempt from the sales tax, the rate
shall be 3%) and (b) the sum of (i) the volume of natural gas delivered to
the facility times (ii) the Daily Index Citation, or such other price
accepted for the purpose and (A) the volume of fuel oil as delivered to the
facility times (B) the value of such fuel oil as determined in accordance
with Georgia tax law or such other price for such fuel oil accepted for the
purpose.
(vii) Replacement Energy Payments being the sum, for all days of the
month, of (i) the product of (a) the total amount of replacement energy
delivered per day and (b) the sum of (A) the gas energy rate (as set forth
in the Power Purchase Agreement) and (B) the product of the index-based gas
price for such day and $0.03 per MMMBtu and 11.1 MMBTU/MWh, and (ii) any
Start Charges that PECO would have incurred had the replacement energy been
delivered from the facility, less (iii) any unmitigated damages incurred by
PECO to any fuel supplier as a result of the partnership's failure to
fulfill an energy request from the facility.
(viii) Availability Adjustments (see below).
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Other payments detailed in the Power Purchase Agreement are:
(i) Reimbursement by the partnership to PECO for any payments made to
third parties for power to start-up a single Unit in excess of the cost of
procuring 10 MW of capacity and 2 MWh of energy or a total of 30 MW of
capacity and 6 MWh of energy to start-up three Units simultaneously.
(ii) The Fuel Adjustment Payment is a payment to be made for each
Contract Year in which the facility is operated during the Summer Months at
Base Unit Output for at least 2000 Unit hours. The Summer Months Base Heat
Rate is the quotient of (i) the total amount of natural gas consumed by the
facility during the Base Unit Output Hours divided by (ii) the total amount
of Delivered Energy during such hours. If the Summer Months Base Heat Rate
is greater than 10.8 MMBTU/MWh and less than 11.3 MMBTU/MWh, neither party
shall owe the other party a Fuel Adjustment Payment. If the Summer Months
Base Heat Rate is greater than 11.3 MMBTU/MWh, the partnership shall make a
Fuel Adjustment Payment to PECO equal to the sum of the products for each
day of (A) the Daily Index Citation times (B) the positive difference
between the Summer Months Base Heat Rate and 11.3 MMBTU/MWh times (C) the
Delivered Energy during such day. If the Summer Months Base Heat Rate is
less than 10.8 MMBTU/MWh, PECO shall make a Fuel Adjustment Payment to the
partnership equal to the sum of the products for each day of (A) the Daily
Index Citation, times (B) the positive difference between 10.8 MMBTU/MWh and
the Summer Months Base Heat Rate, times (C) the Delivered Energy during such
day.
AVAILABILITY ADJUSTMENTS. The partnership is to endeavor in good faith to
cause the facility to achieve a Summer Availability Percentage of at least 97%
during the Summer Months and an Annual Availability Percentage of at least 97%.
(i) AVAILABILITY PENALTIES. The Summer Availability Percentage is calculated
at the end of the Summer Months and equals the quotient of Summer Output divided
by Summer Potential where Summer Output equals the sum of Hourly Output for all
Summer Peak Hours and Summer Potential equals the sum of Hourly Potential for
all Summer Peak Hours. If the Summer Availability Percentage is less than 87.0%,
the partnership shall pay to PECO a Summer Availability Adjustment equal to the
product of (i) the positive difference between 97% and the Summer Availability
Percentage and (ii) 3.34% of the Reservation Payment for that Contract Year. The
partnership shall make payment by offsetting all amounts payable by PECO to the
partnership during subsequent months until the amount is offset.
The Annual Availability Percentage is calculated at the end of each Contract
Year and equals the quotient of Annual Output divided by Annual Potential where
Annual Output equals the sum of Summer Output and Non-Summer Output. Non-Summer
Output equals the sum of Hourly Output for all Non-Summer Peak Hours and Annual
Potential equals the sum of Summer Potential and Non-Summer Potential.
Non-Summer Potential equals the sum of Hourly Potential for all Non-Summer Peak
Hours.
For each hour of each year, Hourly Output and Hourly Potential are
determined by categorizing such hour into one of the following categories:
(i) If (A) Delivered Energy during such hour varies above or below the
energy request by more than the specified tolerance and (B) the facility
delivers 0 MWh during the immediately preceding hour, Hourly Output shall
equal Delivered Energy and Hourly Potential shall equal the energy request.
(ii) If (A) Delivered Energy for such hour varies above or below the
energy request by an amount equal to or less than the specified tolerance
and (B) the facility produced 0 MWh during the immediately preceding hour,
Hourly Output and Hourly Potential shall both equal the "Required
Potential," being either the contract capacity for each Summer Peak Hour or
the product of Unit capacity and the number of Units on the Unit Call
Schedule for each Non Summer Peak Hour.
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(iii) If (A) Delivered Energy for such hour varies above or below the
energy request by more than the specified tolerance and (B) the facility is
reduced to 0 MW during such hour pursuant to an energy request, Hourly
Output shall equal Delivered Energy and Hourly Potential shall equal the
energy request for such hour.
(iv) If (A) Delivered Energy for such hour varies above or below the
energy request by less than the specified tolerance and (B) the facility is
reduced to 0 MW during such hour pursuant to an energy request, Hourly
Output and Hourly Potential shall both equal the energy request for such
hour.
(v) If (A) Delivered Energy for such hour varies above or below the
energy request by more than the specified tolerance and (B) the facility
produced more than 0 MWh during the immediately preceding hour, Hourly
Output shall equal Delivered Energy and Hourly Potential shall equal
Required Potential.
(vi) If (A) Delivered Energy for such hour varies above or below the
energy request by an amount equal to or less than the specified tolerance,
and (B) the facility produced more than 0 MWh during the immediately
preceding hour, Hourly Output and Hourly Potential shall equal Required
Potential.
(vii) If (A) the energy request for an hour is 0 MW but (B) Delivered
Energy is equal to or greater than 1 MWh, Hourly Output shall be 0 MWh and
Hourly Potential shall equal Required Potential.
(viii) If (A) the energy request for an hour is 0 MW and (B) Delivered
Energy is 0 MWh, Hourly Output and Hourly Potential shall equal Required
Potential.
(ix) If (A) the energy request for an hour is greater than 0 MWh but
(B) the ability to deliver or consume fuel to or at the facility is
prohibited due to a state or federal prohibition on fuel delivery or
consumption, Hourly Output and Hourly Potential shall equal Delivered
Energy. If 0 MWh of energy can be delivered due to such prohibition, the
hour will not be included in calculating Availability Percentages.
(x) If PECO elects Peak Availability Option #1 and then requests less
than the number of Unit hours of energy that it is entitled to request from
Units required to be on the Unit Call Schedule during the Non-Summer Months
of such year ("Maximum Available Energy Hours"), the difference between the
Maximum Available Energy Hours and the number of actual MWhs requested by
PECO in such Non-Summer Peak Hours of the Non-Summer Months shall be
credited to the partnership at full contract capacity for the purpose of
calculating the Annual Availability Adjustment.
If the Annual Availability Percentage is less than 97.0% but greater than
76.9%, the partnership shall owe PECO an Annual Availability Adjustment equal to
the product of (i) the positive difference between 97.0% and the Annual
Availability Percentage and (ii) 3.34% of the Reservation Payments for that
Contract Year. But if the Annual Availability Percentage is less than or equal
to 76.9%, the partnership shall owe PECO an Annual Availability Adjustment equal
to the sum of (A) 66.8% of the Reservation Payments for that Contract Year and
(B) the product of (a) the positive difference between 76.9% and Annual
Availability and (b) 0.432% of the Reservation Payments for that Contract Year.
However, the Annual Availability Adjustment for any Contract Year is capped at
the Reservation Payments for that Contract Year.
At the end of the Summer Months of each Contract Year, PECO shall calculate
the "Accrued Availability Adjustment," which shall be the Summer Availability
Adjustment for the first Contract Year, and the sum of Annual Availability
Adjustments which have not been fully rebated to PECO and any Summer
Availability Adjustment owed to PECO for all other Contract Years. At such time
the partnership shall make Availability Adjustment payments to PECO as follows:
if the Accrued Availability Adjustment is less than the available amount of the
Acceptable Credit Support provided by the partnership, the
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amounts payable shall be offset against payments from PECO; and if the Accrued
Availability Adjustment exceeds the available amount of the Acceptable Credit
Support, the partnership shall pay to PECO an amount equal to such excess over
the available amount of the Acceptable Credit Support and payment of the
remaining Accrued Availability Adjustment will be made by offsetting all amounts
payable by PECO to the partnership during subsequent months, until the amount of
payments and offsets by the partnership equals the Accrued Availability
Adjustment.
At the end of each Contract Year, the parties will make Availability
Adjustment payments to each other as follows: if the amount of the Summer
Availability Adjustment that has been paid exceeds the Annual Availability
Adjustment which has not been rebated or otherwise paid to PECO, PECO shall make
payment of such difference to the partnership; and if the Annual Availability
Adjustment exceeds the amount of the Summer Availability Adjustment that has
been paid, the partnership shall make payment to PECO of such difference by
offsetting all amounts against amounts payable by PECO, provided that if there
is any Accrued Availability Adjustment for the preceding Contract Years which
has not been rebated to PECO, PECO shall offset its payment obligation against
such Accrued Availability Adjustment. Any Availability Adjustment payable to
PECO at the end of the Operating Term shall be paid by wire transfer.
(ii) AVAILABILITY INCENTIVE. At the end of the Summer Months, if the Summer
Availability Percentage exceeds 97%, PECO will pay to the partnership the
"Availability Incentive Payment" calculated as follows. If the Summer
Availability Percentage exceeds 97% but the Peak Days Availability is less than
99%, the Availability Incentive Payment shall equal the product of (A) the
positive difference between the Summer Availability Percentage and 97%,
(B) 100, and (C) $150,000. If the Summer Availability Percentage exceeds 97% and
the Peak Days Availability is 99% or greater, the Availability Incentive Payment
shall equal the product (A) the positive difference between the Summer
Availability Percentage and 97%, (B) 100, and (C) $500,000. The "Peak Days
Availability" is calculated in respect of the availability of the facility in
the five days during the Summer Months with the highest On-Peak Energy Prices
for such period. The availability is calculated as the sum of all Hourly Output
results for the Summer Peak Hours during those five days divided by the sum of
all Hourly Potential such hours during such days.
METERING FACILITIES. PECO shall pay to the partnership 56% of the total
amount that the partnership is required to pay Transco with respect to the
installation of the natural gas metering facilities, capped at $784,000.
TESTING CONTRACT CAPACITY. The partnership shall provide PECO with its
declaration of capacity for the first Contract Year no later than the scheduled
date of Power Purchase Agreement Commercial Operation for the Initial Units.
Each subsequent Contract Year (except for last) the partnership shall conduct a
capacity test of Units in commercial operation, after which the partnership
shall declare capacity for the immediately following Contract Year. If the
declared level exceeds the most recent capacity test result, PECO may request a
capacity test during the following May and if such test is less than that
declared, the capacity for the immediately following Contract Year shall equal
the most recent capacity test result.
The partnership's declared capacity for the first Contract Year must not be
less than the product of 150 MW and the number of Units that are in commercial
operation. For the second Contract Year, capacity declared by the partnership
shall be not less than 875 MW and not more than 950 MW (with such amounts
reduced pro rata if less than six Units are in commercial operation). Capacity
declared by the partnership for Contract Years after the second Contract Year
must be not less than 875 MW and within 50 MW of the then current capacity based
on six Units being in commercial operation, with minimum and maximum Contract
Capacity adjusted for the number of Units actually in commercial operation.
EXCLUSIVITY. The partnership shall sell all of the capacity and all of the
energy generated by the facility during the Operating Term, net of that required
for operation, to PECO at the point of delivery. PECO will purchase such energy
and capacity provided it is delivered pursuant to an energy request and in
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amounts, with respect to an hour, within the greater of 1% of such energy
request and 2MWhs ("Energy Delivery Tolerance"). However, at any time when an
event of default by PECO is continuing, the partnership may enter into
agreements with terms of up to thirty days to sell capacity and/or energy to
other parties. The net revenue from such sales will be credited against amounts
payable by PECO to the partnership.
MAINTENANCE. The partnership shall cause the completion of all scheduled
maintenance for each major item of equipment between March 15(th) and
May 15(th) or between October 1(st) and November 30(th) each year. However,
twice during the Operating Term, the partnership may, following one years'
advance notice, extend these periods to March 1(st) to May 31(st) and
October 1(st) to November 30(th).
On or before April 1(st) of each year, the partnership is to provide PECO
with a plan for scheduled outages for the next five years. The scheduled outages
for the immediately following year shall be binding on the partnership but
merely estimates for the other years. The start date or end date of a scheduled
outage may be shifted up to seven days following notice to PECO provided that
the end date of such scheduled outage does not occur after the specific periods
permitted for such outages.
If a scheduled outage extends beyond the specific period permitted for such
outage, such outage will be deemed a Forced Outage when calculating the
Availability Percentages unless PECO states in response to a written request by
the partnership for such a statement that it would not have dispatched such
Units during the extension. The partnership shall not be entitled to require any
supporting documentation from PECO if PECO is unwilling to provide such a
statement. If the facility cannot fulfill an energy request due to a forced
outage, the partnership shall have the right, with at least 6 hours prior
notice, to request PECO to accept and purchase replacement energy.
OPERATION. On or before April 15 of the first year of operation for the
Initial Units, and each year during the Operating Term, PECO shall elect Peak
Availability Option #1 whereby PECO shall be entitled to request energy for
16 hours of each day of the Summer Months or Peak Availability Option #2 whereby
PECO shall be entitled to request energy (A) for 20 hours on each Monday through
Friday, and (B) for 16 hours on each Saturday and Sunday. If PECO elects Peak
Availability Option # 1, PECO shall be required to place Units on the Unit Call
Schedule from the facility during the Non- Summer Months for a minimum of the
lesser of 2091 Unit hours, or the number of hours allowed by the air permit.
During the Summer Peak Hours and the Non-Summer Peak Hours of December,
January and February, the partnership shall make all Units in commercial
operation available for dispatch by PECO. The partnership shall make 4 Units
available for dispatch by PECO during the Non-Summer Peak Hours in the Shoulder
Months, unless only the Initial Units or Final Units have reached commercial
operation, in which case the partnership shall make 2 Units available. The
partnership shall provide PECO with an Availability Schedule.
PECO shall provide the partnership with a Unit Call Schedule for each Unit
for each day. PECO must place all Units in commercial operation on the Unit Call
Schedule for each Summer Peak Hour but is not required to place all Units in
commercial operation on the Unit Call Schedule during each day of December,
January and February. PECO may place up to four Units in commercial operation on
the Unit Call Schedule during each day of the Shoulder Months. PECO may
designate the number of Units to be in standby mode during each day of the Non-
Summer Months.
FUEL. PECO is solely responsible for procuring and transporting the fuel.
PECO shall maintain all fuel oil delivery permits. The partnership takes title
to all fuel at the delivery point.
BILLING. Each day during the Operating Term, PECO will give to the
partnership a daily confirmation letter confirming all the information needed to
calculate the Annual Output and Annual Potential for each hour of such day. The
partnership countersigns the letter but if there is a dispute the parties are to
use good faith effort to resolve the dispute within 5 days. An escrow account
shall be established and the
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disputed amount shall be paid into said account if either party disputes a
statement. Amounts expected to exceed $7,500,000 shall not be subject to
arbitration. Interest shall be paid upon amounts not paid when due. See "Power
Purchase Agreement Disputed Payments Agreement" below.
After the end of each month, the partnership shall deliver to PECO a monthly
statement detailing the information from the daily confirmation letter and all
other information necessary to calculate the payment. At the end of the Summer
Months and the Contract Year, PECO shall give to the partnership a statement
showing the Availability Adjustment and any Availability Incentive Payment.
TERMINATION, CURE AND EVENTS OF DEFAULT. If any event of default is not
cured within the relevant cure period or if any party wrongfully repudiates the
Power Purchase Agreement and fails to withdraw such repudiation, then the other
party may immediately terminate the Power Purchase Agreement. However, PECO
agrees not to terminate the Power Purchase Agreement pursuant to a default by
the partnership until it first provides written notice of such default to the
financial institutions and affords the financial institutions an opportunity to
cure.
The partnership's events of default include the following: abandonment of
the construction of the facility for any period in excess of 60 consecutive
days, abandonment of the operation of the facility for any period in excess of
10 consecutive days; a material breach of the partnership's representations,
warranties or covenants; various bankruptcy related events; or any other
material breach by the partnership of any material provision. However, the
failure of the partnership to deliver the amount of energy requested or to have
the number of Units available on the Availability Schedule in accordance with
the Power Purchase Agreement or of the facility to achieve an expected heat
rate, do not constitute events of default.
PECO's events of default include the following: failure to make any payment
to the partnership when due, provided, however, that the failure by PECO to make
payments due to the partnership up to an aggregate limit of $7,500,000 do not
constitute an event of default if such amount is disputed in good faith and is
deposited by PECO into an escrow account; a material breach of any of PECO's
representations or warranties; various bankruptcy related events; or any other
material breach by PECO of any material provision. See "Power Purchase Agreement
Disputed Payments Agreement" below.
For the partnership abandonment defaults, the partnership has fifteen days
from the receipt of such notice to cure. For all other partnership and PECO
defaults (except for a payment default by PECO), the defaulting party has sixty
days from the receipt of such notice to cure such default, provided that if the
default cannot be cured within the said sixty days, the defaulting party may
provide the non-defaulting party with a plan for the appropriate actions which
the defaulting party must diligently pursue.
The financial institutions are permitted to cure non-monetary defaults by
the partnership within 75 days and monetary defaults within 30 days in each case
after receipt of such notice or of the termination of the partnership's right to
cure, whichever is later. In addition, the financial institutions may cure by
assuming, or causing the assumption of the partnership's rights and obligations
under the Power Purchase Agreement, however, no transfer of rights can take
place if such entity, in PECO's reasonable judgment, (i) does not possess a
satisfactory level of experience in electric power facility operations or
(ii) is one of three parties which PECO is permitted to name as a competitor.
The party assuming the Power Purchase Agreement has forty-five days from the
effective date of such assumption to cure the material breach or default or if
the default is a non-monetary default or such longer period as is required so
long as the party who assumes the Power Purchase Agreement has commenced and is
diligently pursuing appropriate action to cure such default.
However, the above cure periods are limited to twelve months if the default
is a non-monetary default (except that the partnership or the financial
institutions may extend cure rights beyond twelve months by posting an
additional $10,000,000 in credit support), or four months if the default is a
monetary default, from the date of written notice of the default to the
financial institutions.
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PECO shall not be entitled to assert any termination rights in respect of a
failure to have Units on the Availability Schedule, failure to achieve the
expected heat rate or failure to comply with an energy request. In such event,
PECO's exclusive remedy is to recover Availability Adjustments and Fuel
Adjustment Payments. This limitation on damages only applies to failures that
cause the partnership to be unable to deliver amounts of energy that are or may
be requested by PECO and not to any other material breach of any material
provision independent of shortages in the amount of energy delivered or
available for delivery.
ASSIGNMENT. Neither party may assign the Power Purchase Agreement without
the prior written consent of the other but if PECO sells or otherwise transfers
its power marketing business, PECO may assign the Power Purchase Agreement
without the partnership's consent if (i) the buyer or transferee has a senior
unsecured public debt rating by Moody's or Standard & Poor's or a successor
thereof that is not lower than PECO's comparable unsecured Senior Debt rating at
the time of such transfer and (ii) such rating organization shall have confirmed
that such rating shall remain in effect following the buyer's or transferee's
assumption of the Power Purchase Agreement. The Power Purchase Agreement may not
be transferred to any purchaser of the facility upon foreclosure by, any party
which is (i) a Competitor or (ii) in PECO's reasonable judgment does not possess
a satisfactory level of experience in electric power facility operations.
LIMITATIONS OF LIABILITY AND INDEMNIFICATION. Neither party shall hold the
other liable for any claims and expenses on account of bodily injury to the
personnel of or damage to property, occurring in connection with a party's
performance under the Power Purchase Agreement except for any liability or loss
because of bodily injury or property damage arising out of or in connection with
PECO's or the partnership's, respective performance of the Power Purchase
Agreement; except that neither shall be obligated to indemnify the other for
injury or damage caused by the negligence or willful misconduct of the other
party.
The partnership releases PECO, its successors and assigns from all claims
from any force majeure (but not from damages otherwise recoverable under the
Power Purchase Agreement), operation of the facility in parallel with local
utility's electrical systems, transfer, transmission, use or disposition of
energy delivered prior to its delivery to PECO at the applicable delivery point,
transportation, handling, use, or disposition of all fuel to be fired at the
facility after it is delivered to the partnership at the delivery point. PECO
releases the partnership and its successors from all claims resulting from any
force majeure (but not from damages otherwise recoverable under the Power
Purchase Agreement), operation of the facility in parallel with the local
utility's electric systems, transfer, transmission, use or disposition of energy
after it is delivered to PECO at the applicable delivery point; interruption,
suspension or curtailment of delivery of power to the local utility' electric
systems caused by the local utility' electric systems; or transportation,
handling, use, or disposition of all fuel to be fired at the facility prior to
it being delivered to the partnership.
DISPUTE RESOLUTION. In the case of a dispute between parties as to the
selection of an alternative publication or index as a basis for the Daily Gas
Price, capacity and tests or the monthly statement, a single arbitrator will
resolve the dispute. The arbitrator will be chosen jointly by the parties and,
after each of the parties independently presents a "final offer" with supporting
rationale, the arbitrator will select either the position of the partnership or
PECO. If the parties fail to choose an arbitrator one will be chosen by the AAA
in accordance with the Commercial Arbitration Rules of the AAA. Arbitration
proceedings will be resolved within 30 days after the appointment of the
arbitrator. If, after 30 days, a decision has not been made either party can
void the appointment of the arbitrator and elect to have a new arbitrator
appointed.
COVENANTS. The partnership covenants to: comply with all material
Applicable Laws; use prudent utility practice to maximize satisfaction of energy
requests and to end any forced outage; promptly comply with procedures to obtain
access to insurance proceeds if there is a casualty; ensure that the O&M
contractor is not when the contract is entered into, a Competitor and that the
O&M contract contains a
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covenant that the O&M contractor shall not undertake the sale, brokering or
marketing of electrical energy or capacity and any affiliate of the O&M
Contractor (that is not an affiliate of the partnership) shall not conduct
business in the ordinary course from the same offices used by an affiliate of
the O&M contractor that is engaging in the sale, brokering or marketing of
electrical energy or capacity; use commercially reasonable efforts to maintain
the air permit without any adverse modification; and at no cost, act in good
faith to assist PECO with the maintenance of permits regarding fuel oil delivery
and to notify PECO of any proposal to modify such permits. The partnership also
covenants: not to consent to modifications to the air permit that adversely
affect certain rights of the partnership, unless the failure to so agree, would
result in adverse effects at least as severe as those resulting from the
modification; and until termination and except as specifically provided with
respect to replacement energy, not to negotiate with any other party with
respect to the purchase of any fuel for the facility or the sale of any capacity
and energy or ancillary products to be produced by the facility.
PECO covenants to: enter into a consent to assignment to the financing
institutions and to provide an opinion of counsel, request energy in good faith
and to cooperate with the partnership to limit dispatch of the facility at
levels that are not economically efficient, provided that PECO shall not be
required to incur any economic loss or cost in avoiding dispatch at uneconomic
levels. PECO at the partnership's sole cost, will cooperate with its efforts to
claim and benefit from any pollution allowances or credits related to the
facility.
The parties covenant to: cooperate in good faith in all reasonable respects
in matters involving the construction of the facility, the interconnection
facilities, and the metering equipment, and in the operation of thereof; act, in
all reasonable respects, in good faith toward the other and when dealing with
governmental regulatory bodies.
SECURITY. The partnership shall maintain acceptable credit support or cash
collateral of $15,000,000 to be delivered on the earlier to occur of financial
closing or January 1, 2000 and an additional $10,000,000 to be delivered on
April 1, 2001. Up to the full $25,000,000 of total acceptable credit support may
be drawn upon by PECO if the partnership has failed to pay amounts due under the
Power Purchase Agreement.
FORCE MAJEURE. "Force Majeure," as used in the Power Purchase Agreement,
includes, but is not restricted to, failure or threat of failure of facilities
(excluding such causes by the partnership or the EPC Contractor's failure to
comply with Prudent Utility Practice), flood, earthquake, storm, fire,
lightning, Acts of God, explosions etc. A party is not required to settle any
strike, lockout, workout stoppage, etc. Force majeure shall not include changes
in market conditions, lack of finances, or an inability to accept power due to
transmission constraints. Each party releases the other from any and all claims,
loses, harm resulting from any force majeure. Dates established under the Power
Purchase Agreement will be adjusted, within specific limits, due to the extent a
party is not able to meet such date due to a force majeure.
CHOICE OF LAW. The Power Purchase Agreement is governed by and construed in
accordance with the laws of the State of Georgia, regardless of the conflicts of
laws provisions of such laws.
CONFIDENTIALITY. The parties agree to keep all information relating to the
Power Purchase Agreement confidential except for disclosure to certain parties
after receipt of a confidentiality agreement, and except for disclosures as
required by any law. The partnership shall keep confidential notices of energy
requests and any intra-day adjustments of energy to be delivered from the power
marketing groups of (a) Tenaska, Inc. (b) any affiliate of Tenaska, Inc. or
(c) any partners. However, the partnership may, after the bill for such month
has been issued, provide to the partners information on the aggregate amount of
energy delivered to each delivery point.
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POWER PURCHASE AGREEMENT DISPUTED PAYMENTS AGREEMENT
The partnership and PECO have agreed to the form of the Power Purchase
Agreement Disputed Payments Agreement which would be entered into among the
partnership, PECO and the Collateral Agent in the event of a Power Purchase
Agreement dispute. The following is a summary of the terms provided in this
form.
ESTABLISHMENT OF THE ACCOUNT. The Collateral Agent agrees to accept all
amounts and Permitted Investments received or held by the Collateral Agent
pursuant to the Disputed Payments Agreement and to promptly deposit into the
Power Purchase Agreement Disputed Payments Account. The Power Purchase Agreement
Disputed Payments Account is in the name of the Collateral Agent for the benefit
of the Senior Parties and all amounts in the account, and the Permitted
Investments, registered in the name of the Collateral Agent or credited to
another account maintained by and in the name of the Collateral Agent. Unless
specially endorsed to the Collateral Agent, no amounts or other property
credited to the Power Purchase Agreement Disputed Payments Account will be
registered in the name of or payable to the partnership or PECO. All of the
partnership's rights, title and interest, in and to such amounts and Permitted
Investments held in or credited to the Power Purchase Agreement Disputed
Payments Account constitute a part of the Collateral and not part of the
Indebtedness.
SECURITY INTEREST. As collateral security for the prompt payment and
performance of the partnership's obligations owing to any of the Senior Parties
under the Financing Documents, the partnership transfers and grants to the
Collateral Agent a lien on and security interest in and to all of the
partnership's rights under the Power Purchase Agreement Disputed Payments
Account and all investments, Permitted Investments, all security entitlements
and any other property at any time deposited in or credited to the Power
Purchase Agreement Disputed Payments Account.
The Collateral Agent has the right to debit the Power Purchase Agreement
Disputed Payments Account to the extent of any and all fees owing to the
Collateral Agent directly related to the Collateral or the Collateral Agent's
duties. If the Collateral Agent obtains a security interest in the Collateral or
any security entitlement credited thereto, the Collateral Agent such security
interest subordinated to the security interest of the Senior Parties.
The Collateral Agent's powers are not affected by the bankruptcy of the
partnership or PECO or the lapse of time. The obligations of the Collateral
Agent continue until the termination of the Financing Documents.
DOMINION AND CONTROL OF THE ACCOUNT, FUNDS, AND PERMITTED INVESTMENTS. The
Collateral Agent has exclusive possession of and sole control and dominion over
the Power Purchase Agreement Disputed Payments Account. The partnership and PECO
have no right to withdrawal amounts from the Power Purchase Agreement Disputed
Payments Account, but merely to direct and authorize the Collateral Agent to
deposit and withdraw funds from the Power Purchase Agreement Disputed Payments
Account.
Pending disbursement of funds held in the Power Purchase Agreement Disputed
Payments Account such funds are to be invested and reinvested in Permitted
Investments at the risk and expense of the partnership and PECO. The Collateral
Agent will follow the instructions of authorized officers of the partnership and
PECO, but shall not be liable for any loss resulting from investments made in
accordance with instructions from the partnership or PECO. If the Collateral
Agent is not so instructed, amounts on deposit in the Power Purchase Agreement
Disputed Payments Account will be invested and reinvested in Permitted
Investments and then liquidated at the risk of the partnership and PECO.
Interest paid or other earnings made on Permitted Investments are to be credited
to the Power Purchase Agreement Disputed Payments Account. The Collateral Agent
is not liable for any loss, except if such loss is the result of gross
negligence or willful misconduct or for special, indirect or consequential loss
or damage of any kind whatsoever.
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If cash is required to be disbursed, and no cash is available in the Power
Purchase Agreement Disputed Payments Account, the Collateral Agent is authorized
to cause Permitted Investments to be liquidated into cash in such manner the
Collateral Agent deems reasonable.
DISTRIBUTION FROM THE ACCOUNT. Upon receipt of a withdrawal certificate
stating that (i) PECO and the partnership have reached a satisfactory resolution
of their dispute with respect to the Power Purchase Agreement Disputed Payments,
or (ii) an arbitration award or court order has been issued with respect to the
Power Purchase Agreement Disputed Payments, the Collateral Agent shall transfer
the relevant amount of the Power Purchase Agreement Disputed Payment, together
with any interest on or earnings from Permitted investments, to the Revenue
Account if for the account of the partnership or to such accounts as designated
by PECO if for the account of PECO. PECO shall promptly deposit all Power
Purchase Agreement Disputed Payments into the Power Purchase Agreement Disputed
Payments Account at the time it disputes any amount.
EXPENSES; INDEMNIFICATION; FEES. The partnership agrees to pay all of the
Collateral Agent's out-of-pocket expenses, and agrees to indemnify the
Collateral Agent from and against all claims, losses, liabilities and expenses
resulting from the Power Purchase Agreement Disputed Payments Agreement.
GOVERNING LAW. The Power Purchase Agreement Disputed Payments Account is
governed by and construed in accordance with the laws of the State of New York,
regardless of the conflicts of laws provisions of such laws.
EPC CONTRACT
The partnership and the EPC Contractor are parties to an Engineering,
Procurement and Construction Agreement on a fixed-price basis, which provides
for the EPC Contractor to perform services in connection with the design,
engineering, procurement, site preparation, civil works, construction, start-up,
training and testing, and to provide all materials, equipment (excluding
operational spare parts), machinery, tools, construction fuels, utilities,
labor, transportation, administration and other services and items
(collectively, the "Work") for the facility.
SCOPE OF WORK. The EPC Contractor shall furnish the design and engineering
for the facility and the facility site, including the preparation of all
technical and design drawings and plans, with design and engineering that meet
the requirements of the EPC Contract and are prepared and implemented in
accordance with Applicable Laws, Applicable Insurance Policies and Good Utility
Practice. In addition, the EPC Contractor shall:
(i) furnish all labor, supervision, construction utilities, and tools
necessary to procure for, construct, direct and support start-up of the
facility;
(ii) correct all Work that fails to conform to the requirements of the
EPC Contract and any Defects relating to the facility or the Work in
accordance with the EPC Contract;
(iii) be solely responsible for dealing with, coordinating and handling
all communications, negotiations and resolutions of disputes concerning all
Equipment or other matters related to the Work with all Subcontractors and
Lower-tier Subcontractors and bear full responsibility for any part of the
Work accomplished by Subcontractors and Lower-tier Subcontractors and for
the acts and omissions of Subcontractors and Lower-tier Subcontractors;
(iv) replace or repair any inadequate, nonconforming, damaged or
defective Equipment or Work during construction;
(v) supervise and direct the Work;
(vi) bear responsibility for keeping the Work on schedule;
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(vii) make timely status reports to the partnership;
(viii) pay Subcontractor in a timely manner;
(ix) bear sole responsibility for and have control over Subcontractors,
labor, construction means, materials, material suppliers, methods,
techniques, sequences, and procedures as well as supervising and directing
all portions of the Work;
(x) bear responsibility for carrying out its obligations so that each of
the Units and the facility operate safely and in compliance with all
Applicable Laws and in full satisfaction of all operating requirements set
forth in the EPC Contract;
(xi) procure all Equipment, and provide the partnership with a list of
spare parts for such Equipment, whereupon the partnership shall purchase all
such spare parts prior to Commercial Operation of the Final Units (risk of
loss will remain with the EPC Contractor for spare parts until they are
delivered to the Operator at or before the Commercial Operation date of the
final Unit);
(xii) as part of the Guaranteed Lump Sum Price, secure and pay for all
necessary permits, except for any Department of Energy permits, zoning,
subdivisions or similar permits, and those environmental permits described
in the EPC Contract;
(xiii) complete the Work in a good and workmanlike manner in accordance
with the construction practices used by a prudent construction contractor,
so to enable the partnership, without modification of the Work, to meet its
Power Purchase Agreement obligations;
(xiv) provide engineers to support the partnership's operator training
program; and
(xv) bear responsibility for all site preparation for the facility site.
Notwithstanding the preceding two sentences, the EPC Contractor shall have
no greater responsibility to the partnership for compliance with Applicable Laws
with respect to Equipment supplied or services performed pursuant to the Turbine
Contract, than General Electric has to the EPC Contractor, as assignee of the
Turbine Contract, for such Equipment supplied and service performed pursuant to
the Turbine Contract.
GUARANTEED LUMP SUM PRICE AND PAYMENT. The partnership shall pay the EPC
Contractor for its performance of the EPC Contract a Guaranteed Lump Sum Price,
which includes payments made under the Turbine Contract and the EPC Contractor's
Fixed Price, subject to adjustment in accordance with the EPC Contract. The EPC
Contractor shall use reasonable efforts to consume not more than a certain
specified amount of fuel during the performance of the Work through the date of
Commercial Operation of the last Unit to achieve Commercial Operation. The EPC
Contractor is responsible for the payment of all sales and use taxes with
respect to any purchases made by the EPC Contractor in order to perform the
Work, except as otherwise provided in the EPC Contract.
The Guaranteed Lump Sum Price shall be invoiced and paid on a monthly basis.
The EPC Contractor shall submit to the partnership a report of the progress and
status of the Work on a monthly basis. The partnership will pay General
Electric, either directly or jointly with the EPC Contractor, the amount due
under the Turbine Contract. All amounts paid to General Electric by the
partnership shall be credited against the Turbine Contract portion of the
Guaranteed Lump Sum Price. The partnership will also pay the respective vendors
of the Designated Equipment, either directly or jointly with the EPC Contractor,
the amount due under the Designated Contracts.
The partnership will have twenty-five days to approve each invoice and pay
the EPC Contractor a progress payment, not including any amounts due pursuant to
the Turbine Contract or Designated Contracts, of ninety-five percent (95%) of
the amount specified in such invoice to be due to the EPC Contractor, not
including any amounts due pursuant to the Turbine or the Designated Contracts,
the remaining five percent (5%) of such amount to be Retainage. Additionally,
the partnership has the right to
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withhold 150% of the amount of any lien filed against the facility or the
facility site from the monthly progress payments, until such lien is removed.
All progress payments are subject to deductions by the partnership for:
(i) overpayments;
(ii) liquidated damages due the partnership under the EPC Contract;
(iii) such amount as the partnership reasonably determines to be the
cost of remedying any defective, nonconforming or nonperformed Work;
(iv) amounts subject to good faith disputes;
(v) the cost of any loss or damage to the partnership caused by the EPC
Contractor; and
(vi) any amounts due to the partnership or other indemnified parties
pursuant to the EPC Contract indemnification provisions. In the event of a
dispute, the parties shall continue to perform under the EPC Contract, and
shall resolve such dispute in good faith in accordance with the provisions
set forth in the EPC Contract.
CHANGE ORDERS. After receipt of notice from the EPC Contractor of an
Unforeseen Condition which will increase or decrease the cost of the Work or the
facility by more than $40,000 or cause a delay in the Scheduled Date of
Commercial Operation, the partnership shall issue a change order adjusting the
Guaranteed Lump Sum Price or extending the Scheduled Date of Commercial
Operation, as appropriate. The total dollar amount for all Change Orders due to
Unforeseen Conditions shall not exceed $1,500,000. In addition, if a change in
the law or in any applicable insurance policy materially changes the Work and
materially increases or decreases the EPC Contractor's cost of performance under
the EPC Contract, a change in the Work or Scheduled Date of Commercial Operation
of a Unit may be approved by the partnership.
There shall be no extension of the Scheduled Date of Commercial Operation of
a Unit except as a result of partnership Caused Delay, a Force Majeure event, or
a Change Order where the EPC Contractor: (i) demonstrates that such delay, event
or order will proximately cause the EPC Contractor to fail to achieve Commercial
Operation by the Scheduled Date of Commercial Operation and specifies the number
of days of expected delay; (ii) demonstrates that it will use all reasonable
efforts to maintain the Scheduled Date of Commercial Operation; and
(iii) explains the specific actions it will take to work around or mitigate the
impact of the delay, event or order on the Scheduled Date of Commercial
Operation. Unless otherwise agreed, in the event of a partnership Caused Delay,
a Force Majeure event or Change Order, the Scheduled Date of Commercial
Operation shall be extended by the number of days specified by the EPC
Contractor as set forth in clause (i).
If the partnership fails to obtain permits or licenses identified in the EPC
Contract when required, or fails to maintain such permits or licenses in force
(unless such failure is caused by the EPC Contractor), the partnership shall
have ten days in which to cure such failure, and if the partnership does not
cure such failure, the EPC Contractor shall be entitled to a Change Order to the
extent that such failure materially increases the EPC Contractor's cost of
performance, or entitles the EPC Contractor to an extension of the Scheduled
Date of Commercial Operation. To the extent any Change Order affects the
Equipment or services furnished under the Turbine Contract, General Electric
must approve such Change Order.
PARTNERSHIP'S RESPONSIBILITY. The partnership shall, at its own expense:
(i) provide, "as is," the facility site described in the EPC Contract;
(ii) apply for and obtain the permits and licenses necessary in the
prosecution of the Work or the operation of the facility as listed in the
EPC Contract;
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(iii) pay all taxes associated with income or earned surplus generated
by the facility or facility site, as well as all real property taxes or
personal property taxes levied on the Equipment, facility, facility site and
all components thereof;
(iv) be responsible for the portion of sales and use taxes as provided
in the EPC Contract;
(v) provide access to the facility site so as to allow Contractor to
perform the Work;
(vi) furnish qualified operating and maintenance personnel to operate
and maintain the facility;
(vii) provide start-up and operating fuels, turbine lube oil for
flushing and initial fill, bulk CO(2) and hydrogen for generator purge and
cooling, bulk CO(2) and FM 200 for the turbine fire protection systems, and
bulk water treatment chemicals;
(viii) pay for any start-up power off the permanent auxiliary
transformer for the permanent Equipment;
(ix) make available spare parts in accordance with the EPC Contract;
(x) provide and pay for tools, materials and supplies for normal
maintenance of the System after the partnership issues a Certificate of
Mechanical Completion for such System;
(xi) provide sufficient water (excluding water used for construction)
and access to wastewater disposal to permit normal and continuous operation
of the facility;
(xii) supply certain tools, backfeed power, water supply, and natural
gas supply;
(xiii) provide for acceptance of electric power when necessarily
requested by the EPC Contractor; and
(xiv) use reasonable efforts to operate the facility after the Date of
Commercial Operation so as to permit the EPC Contractor to expeditiously
complete the Work.
PARTNERSHIP'S REVIEW. The partnership has the right throughout the term of
the EPC Contract to review and to designate others (including the Independent
Engineer) to review all Drawings and to inspect Work at all stages at the
facility site, the EPC Contractor's premises and the Subcontractors' premises.
The EPC Contractor shall afford reasonable access to the facility site to the
Independent Engineer, and to others designated by the partnership, for the
necessary servicing, maintaining, modifying, or upgrading of the land or
facilities located thereon.
DESIGN AND OPERATING REQUIREMENT. The EPC Contractor shall meet all the
requirements and specifications applicable to the Work in accordance with the
Power Purchase Agreement and the Interconnection Agreements, and the facility
shall be designed and constructed so as to meet or exceed the PECO Test
requirements.
WARRANTIES.
ENGINEERING, DESIGN AND PERFORMANCE WARRANTIES. The EPC Contractor warrants
to the partnership that:
(i) the Work, the facility and the engineering and design of the
facility will meet the requirements of the EPC Contract and be in accordance
with Applicable Laws, Applicable Insurance Policies and Good Utility
Practice;
(ii) it will use best efforts to obtain Subcontractor warranties of
specified durations running in favor of the partnership;
(iii) the performance of certain Equipment will meet or exceed the
performance requirements set forth in the EPC Contract;
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(iv) the Systems will be designed and constructed so as not to interfere
with or limit the performance of the Equipment to meet the requirements set
forth in the EPC Contract; and
(v) the Units and the facility will meet the EPC Contract's specified
performance warranties.
EQUIPMENT WARRANTIES. The EPC Contractor warrants to the partnership that:
(i) all Equipment will be new, in strict accordance with specifications,
Applicable Laws and Good Utility Practice, free of Defects in material and
workmanship, be Year 2000 compliant and suitable for use under the climatic
and range of operating conditions as set forth in the EPC Contract;
(ii) the facility will be fit for the intended purposes as described in
the EPC Contract;
(iii) it will execute, submit and otherwise fulfill all obligations
connected with Subcontractor warranty documents; and
(iv) for the length of the warranty period set forth in the EPC
Contract, administer, litigate and process any disputes, disagreements or
claims with the person issuing such warranty concerning the breach thereof;
cooperating with and allowing the partnership to participate in all
decisions which materially affect the partnership or the operation of the
facility. The warranties of the EPC Contractor with respect to Work or
Equipment supplied pursuant to the Turbine Contract will be the same as the
warranties provided pursuant to the Turbine Contract, including the warranty
limitation set forth in the Turbine Contract concerning "collateral damage"
as defined therein, provided that if the EPC Contractor recovers all or part
of the costs of such "collateral damage" from General Electric under any
other provision of the Turbine Contract, the EPC Contractor shall, to the
extent of such recovery, be responsible for correcting such "collateral
damage."
OTHER WARRANTIES. The EPC Contractor warrants:
(i) during all Acceptance Testing, (A) that when operating the
combustion turbines in accordance with manufacturers' requirements, that the
hourly average air emissions for each Unit and the facility as a whole will
not exceed the values set forth in the permits attached to the EPC Contract,
(B) the facility's water discharge during operation will meet the
requirements of the EPC Contract, and (C) the operation of the Units and the
facility will meet the applicable noise emission requirements set forth in
the EPC Contract;
(ii) the facility will be designed and completed in a manner such that
operation of the facility will not result in a revocation or suspension of
its status as an EWG; and
(iii) upon transfer of title, the partnership will have title to all
Work free and clear of claims and liens of all Persons (other than the
interest of the Authority pursuant to the offering of the bonds).
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Except as otherwise provided in the EPC Contract, the EPC Contractor is
obligated for all warranties described above for each Unit for periods specified
in the EPC Contract. The warranties of General Electric under the Turbine
Contract apply to defects that appear prior to Substantial Completion and during
certain periods specified in the Turbine Contract. Where any item of Equipment
supplied by General Electric is used with more than one Unit, the warranty on
such item is for the same period as the warranty on the Unit with which it is
first used. Subject to certain overall limitations (as described below in
LIMITATION OF LIABILITIES), the Warranty Period for a Unit will be extended on a
day-for-day basis for any period of time in excess of ten days that a Unit is
not capable of operating due solely to a warranty claim attributable to General
Electric. The number of days of Warranty Period extension will be counted as
those days in excess of ten between (i) the date the Unit is removed from
service, or unable to return to service, solely due to a warranty nonconformity
for which General Electric is responsible; and (ii) the date the corrective work
is complete and the EPC Contractor advises General Electric that the Unit is
available for return to service.
The EPC Contractor is obligated for the warranty period from the date of
Commercial Operation of the last Unit on certain equipment which enters service
with the Initial Units. All partnership warranties under the Turbine Contract
will be assigned to the partnership immediately following Commercial Operation.
The warranties and remedies for each warranted item described above will be
inoperative with respect to a Defect in such warranted item if: (i) such Defect
in such warranted item is caused by the partnership's failure to operate and
maintain the warranted item in conformance with applicable operating and
maintenance instructions or in accordance with generally accepted operating
practices of the electric power producing industry; (ii) the warranted item is
materially altered without the written consent of the EPC Contractor and the
alteration causes such Defect in such warranted item; or (iii) the EPC
Contractor requests operating and maintenance data from the partnership with
respect to a defective warranted item and the partnership fails to provide the
EPC Contractor with reasonable access to it. The EPC Contractor shall have no
warranty responsibility for: (i) any repairs, adjustments, alterations,
replacement or maintenance that may be required resulting from normal corrosion,
erosion or wear and tear; or (ii) any Defect in a computer program or portion
thereof, which has been modified (excluding revisions typically allowed by the
manufacturer) without the written consent of the EPC Contractor. The limitations
set forth above shall not limit or modify the warranties set forth in the
Turbine Contract. With respect to all warranties and rewarranties made by
General Electric pursuant to the Turbine Contract, all of which are incorporated
by reference into the EPC Contract, the EPC Contractor has the primary, separate
and direct obligation to the partnership for such warranties and rewarranties;
provided, however, that as between the partnership and the EPC Contractor, the
EPC Contractor does not have the benefit of any conditions, exclusions or
exceptions to such warranties and rewarranties under the Turbine Contract or the
EPC Contract which arise as a result of the actions or failures to act of the
EPC Contractor (including actions or failures to act of Subcontractors other
than General Electric and Lower-tier Subcontractors), including any breach by
the EPC Contractor of the standards of performance set forth for Buyer in the
Turbine Contract or for the EPC Contractor in the EPC Contract.
PARTNERSHIP'S RIGHT TO CURE WORK AND SET OFF. If the EPC Contractor fails,
refuses or neglects to make any required payment related to the Work or perform
any of its obligations and fails to commence in good faith and with due
diligence to remedy any such non-payment or non-performance within 72 hours
after notification, the partnership may make such payment or perform such act at
the expense of the EPC Contractor. The partnership has the right to set off any
claim of the partnership for liability of the EPC Contractor arising under the
EPC Contract against any debt or obligation of the partnership to the EPC
Contractor arising under the EPC Contract.
MECHANICAL COMPLETION; FUNCTIONAL TESTING. Mechanical Completion shall be
achieved when the EPC Contractor determines that a particular System, Unit or
Phase:
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(i) has been assembled, constructed or completed in accordance with the
Drawings;
(ii) has successfully passed checkout and System Testing for Mechanical
Completion (including functional testing of all components of the System)
and necessary non-performance testing;
(iii) is sufficiently identified, including all records or other
documents pertaining to the assembly or construction of the System; and
(iv) is ready for Functional Testing.
After the EPC Contractor notifies the partnership in writing that the
System, Unit or Phase is mechanically complete ("Notice of Mechanical
Completion"), the partnership shall set forth either (i) an indication that the
particular System, Unit or Phase appears to be mechanically complete, except for
Punch List items ("Mechanical Completion"); or (ii) rejection of the particular
System, Unit or Phase as mechanically complete. Upon receipt by the EPC
Contractor of the partnership's rejection, it shall take immediate action and
proceed with due diligence and in good faith to remedy the conditions described
in such rejection. Such procedure shall be repeated until Mechanical Completion
of the facility has been achieved.
Functional Testing of a Unit or a critical System may proceed upon Notice of
Mechanical Completion of such Unit or System and verification by the partnership
that Functional Testing may proceed, provided that such critical System shall
have its control systems tested for efficient operation prior to the
commencement of such Functional Testing. Prior to the commencement of Functional
Testing, the EPC Contractor shall complete and the partnership shall approve all
written operating procedures, maintenance manuals and operator training as set
forth in the EPC Contract.
Notwithstanding the issuance of a Certificate of Mechanical Completion by
the partnership with respect to a System or a Unit, prior to Commercial
Operation, the operation and maintenance of the System or Unit shall be under
the direction and control of the EPC Contractor through the its start-up
manager. On the date on which Commercial Operation of a Unit occurs, control of
the operation and maintenance of the Unit and risk of loss to such Unit shall
transfer from the EPC Contractor to the partnership.
ACCEPTANCE TESTING. The EPC Contractor will develop specific test
procedures and submit them at least 90 days prior to the start of Acceptance
Testing to the partnership and the Independent Engineer for review and, if
necessary, revision. Before Acceptance Testing begins, each of the Unit's
systems must have achieved Mechanical Completion (with the exception of Punch
List items), and all Functional Testing must have been performed. The Unit must
also be available for normal and continuous operation, all necessary permits
must have been obtained, and each Unit's CEMS instrumentation must have been
calibrated. The partnership, the Construction Lender, the Independent Engineer,
PECO and others will be notified before Acceptance Testing begins and given the
opportunity to witness the tests.
The Acceptance Testing will entail testing by the partnership to confirm
that each Unit and the facility meet its requirements under the EPC Contract, as
well as PECO Tests to confirm that the partnership's obligations under the Power
Purchase Agreement can be met. The net power output and the net heat rate will
be measured for the entire facility, as well as for each Unit. Emissions tests
will be performed to determine whether each Unit complies with air permit
requirements.
The EPC Contractor remains liable for liquidated damages for each Unit until
that Unit passes each of the previously mentioned tests and is ready for
Commercial Operation. However, the EPC Contractor will not be liable for
additional schedule liquidated damages for a Unit, provided the following are
satisfied: (i) the EPC Contractor notifies the partnership that although the
Unit has not met the net power output and net heat rate guarantees, it passed
each of the other tests and has achieved the Interim Performance Requirements
for net power output and net heat rate; (ii) corrective actions and retesting of
the Unit will not interfere with the normal and continuous operation of the Unit
during the 180 days after
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notice; and (iii) the EPC Contractor immediately pays liquidated damages for any
delay up to the date of notice plus liquidated damages for performance based on
the results of the most recent tests, subject to deferral of some or all of the
performance liquidated damages to the extent that there is a deferral of
performance liquidated damages under the Turbine Contract.
Upon satisfaction of the foregoing conditions the EPC Contractor will use
all reasonable efforts to ensure that the Unit will achieve the Unit Output
Requirement and the Unit Heat Rate Requirements, while satisfying the CEMS
Requirements (i) until the Unit Output Requirement and the Unit Heat Rate
Requirements have been achieved while satisfying the CEMS Requirements and/or
(ii) until the later of (a) the 181(st) day after notice was given and (b) the
end of the first two consecutive non-peak months after the date notice was
given, whichever occurs first (the "Retest Period"). If, by the end of the
Retest Period, the Unit satisfies the CEMS Requirements, and improvement in the
net power output and net heat rate for such Unit is achieved, the partnership is
required to refund any liquidated damages paid relating to that improvement. If,
by the 181(st) day, CEMS Requirements are met but the Unit Output Requirement
and Unit Heat Rate Requirements for such Unit are not, the partnership may
terminate retesting, and liquidated damages will be determined based on the most
recent test results.
The EPC Contractor is required to pay modified liquidated damages if, due to
the EPC Contractor's changes, adjustments, or retesting, a Unit is not available
to the partnership for normal and continuous operation during the Retest or any
Extension Period, except during off peak months, when the EPC Contractor will
not be required to pay such damages.
The partnership may direct the EPC Contractor to require General Electric to
continue remediation and testing activities under the Turbine Contract until the
earlier of (i) the EPC Contractor's achievement of the Unit Output Requirement
and the Unit Heat Rate Requirements and (ii) the expiration of the retesting
period.
COMMERCIAL OPERATION. A Unit will not be deemed ready for Commercial
Operation unless it has satisfied the requirements of (a):
(i) the Unit Output Requirement and Unit Heat Rate Requirement;
(ii) the Unit Availability Test;
(iii) the Demonstration Tests; and
(iv) air permit compliance requirements, as measured by CEMS
instrumentation during Acceptance Testing, and (b) is available for normal
and continuous operation and capable of delivering the electric output of
the Unit at the Interconnection Points for electric power transmission.
After a Unit achieves Commercial Operation, the partnership will issue the
EPC Contractor a certificate of Commercial Operation for that Unit.
FINAL ACCEPTANCE. Before Final Acceptance of the facility, the EPC
Contractor must demonstrate that each of the Units satisfies the Emissions Tests
and any Demonstration Tests. If any Unit fails such tests, the EPC Contractor
will make adjustments until the partnership is satisfied. The partnership will
issue a Certificate of Final Acceptance evidencing that all Work has been
completed except for the Combustion Turbine Evaporative Cooler Test or any Punch
List items (with a total estimated cost of less than $150,000) after:
(i) each Unit has achieved Commercial Operation;
(ii) all retesting for any Unit, if applicable, is terminated;
(iii) all requirements for all Units have been achieved; and
(iv) the Work is complete.
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COMMERCIAL OPERATION LDS. The EPC Contractor is required to pay liquidated
damages ("Commercial Operation LDs") of (i) $40,000 per Unit, per day for the
first 14 days elapsing after the Scheduled Date of Commercial Operation for that
Unit until the Unit achieves Commercial Operation; (ii) $65,000 per Unit, per
day for days 15-30 after the Scheduled Date of Commercial Operation for that
Unit until the Unit achieves Commercial Operation; and (iii) $82,000 per Unit,
per day for the 31(st) day after the Scheduled Date of Commercial Operation for
that Unit until either Commercial Operation for the Unit is achieved. The
aggregate liability of the EPC Contractor for liquidated damages for Commercial
Operation LDs shall not exceed 22.5% of the Guaranteed Lump Sum Price.
Liquidated damages will be offset by any net revenue received by the partnership
from the applicable Unit's operation prior to the Commercial Operation of that
Unit.
The amount of Commercial Operation LDs payable by the EPC Contractor may be
reduced if and to the extent that the delays are due to failure by General
Electric to perform under the Turbine Contact. The methodology for computing
these reductions, and the amounts of liquidated damages provided for under the
Turbine Contract that would be taken into account in computing such reductions,
are as follows:
(i) The total Commercial Operation LDs accrued by the EPC Contractor,
prior to any reduction, shall be multiplied by a fraction, the numerator of
which is the number of days of delay in which the Units do not achieve
Commercial Operation by the Scheduled Dates of Commercial Operation and for
which the performance of General Electric under the Turbine Contract is the
primary cause of such delay and the denominator of which is the total number
of days of delay in which the Units do not achieve Commercial Operation by
the Scheduled Dates of Commercial Operation (the "Turbine Portion of
Commercial Operation LDs"). The difference, if any, between the total
Commercial Operation LDs accrued by the EPC Contractor and the Turbine
Portion of Commercial Operation LDs shall be the "Non-Turbine Portion of
Commercial Operation LDs." The EPC Contractor shall provide reasonable
evidence to the partnership to support the number of days of delay in which
the Units do not achieve Commercial Operation by the Scheduled Dates of
Commercial Operation and for which the performance of General Electric under
the Turbine Contract is the primary cause of such delay.
(ii) If the Turbine Portion of Commercial Operation LDs is less than or
equal to the aggregate liquidated damages which accrue under the Turbine
Contract in the event of delay in the Delivery (as defined in the Turbine
Contract) or Shipment (as defined in the Turbine Contract) of one or more of
the Units (as defined in the Turbine Contract), or delay in achieving
Commercial Operation (as defined in the Turbine Contract) of one or more
such Units ("Schedule Liquidated Damages"), as limited by the General
Electric Cap, the EPC Contractor shall be responsible for the full amount of
the Commercial Operation LDs.
(iii) If the Turbine Portion of Commercial Operation LDs is greater than
the aggregate Schedule Liquidated Damages which accrue under the Turbine
Contract, the Commercial Operation LDs shall be reduced to an amount which
is equal to the aggregate Schedule Liquidated Damages which accrue under the
Turbine Contract and such amount shall be added to the Non-Turbine Portion
of Commercial Operation LDs to determine the total amount of Commercial
Operation LDs.
The total Schedule Liquidated Damages which may become due from General
Electric to the EPC Contractor under the Turbine Contract is calculated as
follows:
(a) for each full day that Shipment or Delivery (as applicable) of a Unit
occurs after the Guaranteed Date for a Unit, Twenty Thousand Dollars ($20,000)
per day per Unit for days one (1) through fourteen (14) and Forty Thousand
Dollars ($40,000) per day per Unit for days beyond the fourteenth (14th) day;
plus
(b) for each full day that General Electric's failure to comply with the
requirements of the Turbine Contract is the primary cause of one or more days
that a Unit does not achieve Commercial Operation by
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the Scheduled Date of Commercial Operation for such Unit, Thirty Thousand
Dollars ($30,000) per day for days one (1) through fourteen (14) and Fifty
Thousand Dollars ($50,000) per day for days beyond the fourteenth (14th) day.
In addition to the foregoing Schedule Liquidated Damages, if, despite the
efforts of the EPC Contractor to mitigate the effects of late Shipment or
Delivery, late Shipment or Delivery of a Unit is the primary cause of a delay of
any day the Unit does not achieve Commercial Operation by the Scheduled Date of
Commercial Operation for such Unit (excluding the first thirty (30) days of late
Shipment or Delivery which are deemed to have no effect on the achievement of
Commercial Operation), General Electric will pay additional Schedule Liquidated
Damages to the EPC Contractor in accordance with the higher schedule of damages
set forth in (b) above, except that in determining the amount of any additional
Schedule Liquidated Damages for delay after the first thirty (30) days, the
liquidated damages paid by General Electric under (a) with respect to each day
of delay shall reduce the amount of liquidated damages due for such
corresponding day of delay in achieving Commercial Operation.
The obligations of General Electric to pay Schedule Liquidated Damages for
delay of Commercial Operation are contingent upon: (i) General Electric having a
minimum time period of thirty-one (31) days after each of Units #1, #4, #5 and
#6 is Mechanically Complete and twenty-seven (27) days after each of Units #2
and #3 is Mechanically Complete for inspecting the Unit and its installation,
the performance of pre-testing, startup, commissioning, correction of discovered
problems, tuning, verification that the Unit is in proper adjustment and
condition to begin Acceptance Testing and the performance of Acceptance Testing
by the EPC Contractor (extended for any time periods when General Electric
reasonably needs to perform services or tests on a Unit and does not have access
and availability to such Unit consistent with the Contractor's EPC project
schedule), provided that General Electric must notify the EPC Contractor, in
writing, if General Electric believes that it has not had the access to such
Unit which it reasonably needs and the EPC Contractor has 24 hours in which to
cure the problem by providing access to General Electric. If, prior to
Commercial Operation of a Unit, General Electric recommends repair activities
for a Unit which the EPC Contractor has the responsibility to perform, General
Electric will not be charged for liquidated damages for delay in achieving
Commercial Operation of the Unit for any period of time which is longer than the
normal period of time which would be required to accomplish such repairs or for
any period of time after such repairs are completed which is longer than
reasonably necessary to prepare the Unit for testing or retesting.
PERFORMANCE LDS. Each Unit must produce and deliver for sale the Commercial
Operation Output, or the EPC Contractor will be subject to $300 per KW in
liquidated damages for each KW that net power output of a Unit is less than
156,410 KW as measured in the most recent Performance Test. For the purposes of
final determination of Commercial Operation Output liquidated damages, the
Commercial Operation Output of the six Units will be aggregated, and the EPC
Contractor will be subject to liquidated damages of $300 per KW for each KW that
the aggregate is less than 938,460 KW.
Each Unit must operate at the Commercial Operation Net Heat Rate or less, or
the EPC Contractor will be subject to liquidated damages of $5,860 per BTU/KW-HR
for each BTU/KW-HR that Commercial Net Heat Rate exceeds 10,683 BTU/KW-HR (HHV)
when operating on natural gas plus $950 per BTU/ KW-HR for each BTU/KW-HR that
Commercial Net Heat Rate exceeds 10,821 BTU/KW-HR (HHV) when operating on fuel
oil as measured in the most recent Performance Tests. Final determination of
Commercial Net Heat Rate liquidated damages will be based upon the average
Commercial Net Heat Rate of all six Units.
FURTHER LIMITATIONS. The EPC Contractor warrants the net power output of
the facility will be at least 891,540 KW and the net heat rate of each Unit will
be less than 11,217 BTU/KW-HR (HHV) when operating on natural gas and 11, 362
BTU/KW-HR (HHV) when operating on fuel oil (the "Performance Minimums"). If the
six Units attain the Performance Minimums, liquidated damages are the
partnership's
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sole remedy. The maximum liability of the EPC Contractor for liquidated damages
for Performance LDs is capped at 22.5% of the Guaranteed Lump Sum Price.
The aggregate amount of Commercial Operation LDs and Performance LDs under
the EPC Contract is capped at a maximum of 30% of the Guaranteed Lump Sum Price.
The EPC Contractor is not liable to the partnership for replacement power, or
for any consequential, indirect, special or incidental damages in connection
with the EPC Contract except for: (i) willful misconduct, gross negligence or
fraud by the EPC Contractor or any Subcontractor; (ii) tortious interference by
the EPC Contractor or any Subcontractor; and (iii) third party claims for
personal injury, death or damage to property, including strict liability or tort
liability. The partnership is not liable to the EPC Contractor or any
Subcontractor for any losses or damages caused by loss of profit or any
consequential damages in connection with the EPC Contract. The EPC Contractor's
total liability for damages resulting from performance or breach of the EPC
Contract are capped at the Guaranteed Lump Sum Price.
INSURANCE. The EPC Contractor's insurance certificates and underlying
policies required or purchased pursuant to the EPC Contract must provide
30 days advance written notice be given to the partnership and the Construction
Lender before any material change in, termination or cancellation of any
insurance policy. From the date on which the Work is to commence until the Date
of Commercial Operation of the Final Units, the EPC Contractor and all
Subcontractors must maintain and provide the required insurance coverages.
The EPC Contractor is required to maintain the following insurance policies
at all times while performing the Services: Worker's Compensation, Commercial
General Liability, Comprehensive Automobile Liability, and Excess Umbrella
Liability. The partnership will maintain and provide All Risk Builders' Risk
insurance.
Prior to any transfer of risk of loss to the partnership, the partnership is
not accountable or responsible for any loss or damage to any part of the
facility, facility site or the Work, except for: (i) the partnership's
intentional, wrongful or negligent acts, and (ii) "collateral damage" as defined
in the Turbine Contract caused by Equipment supplied by General Electric under
the Turbine Contract which is not covered by insurance and for which General
Electric is not responsible, and then only to the extent such loss or damage is
not covered by the All Risk Builders' Risk policy. Except for the All Risk
Builders' Risk insurance and Ocean/Transit/Air insurance, prior to Commercial
Operation, all risk of loss or damage to the Units will be borne by the EPC
Contractor. On the date of Commercial Operation of a Unit, the partnership will
assume the risk of loss or damage to that Unit. On the date of Commercial
Operation of the final Unit, the partnership will assume the risk of loss or
damage to the facility, facility site, and the Work.
FORCE MAJEURE. A "Force Majeure Event" means any act or event that prevents
or delays the affected party from performing its obligations (other than the
payment of money) under the EPC Contract, or complying with any conditions
required to be complied with under the EPC Contract if such act or event is
beyond the control of and not the fault of the affected party or any
Subcontractor, and the affected party has been unable by the exercise of due
diligence to overcome or mitigate the effects of such act or event.
If either party is rendered wholly or partly unable to perform its
obligations because of a Force Majeure Event, that party will be excused from
whatever performance is affected by the Force Majeure Event to the extent so
affected; PROVIDED that:
(i) the non-performing party gives the other party prompt notice,
describing the particulars of the occurrence and when the party anticipates
it will be able to resume performance;
(ii) the suspension of performance is of no greater scope and of no
longer duration than is reasonably required by the Force Majeure Event;
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(iii) the non-performing party uses all reasonable efforts to limit
delays and remedy the inability to perform during and after the Force
Majeure Event;
(iv) when the non-performing party is able to resume performance of its
obligations, that party gives the other written notice and promptly resumes
performance; and
(v) unless the Force Majeure Event proximately causes a change in the
ability of the EPC Contractor to achieve Commercial Operation by the
Scheduled Date of Commercial Operation, there will be no extension of the
Scheduled Date of Commercial Operation.
If an Excusable Delay under the Turbine Contract causes a delay in delivery,
for which General Electric is not liable, the EPC Contractor will not be liable
for the same delay in delivery.
A time extension will be granted in such instance, PROVIDED that the EPC
Contractor promptly notifies the partnership, the delay is beyond the control of
the EPC Contractor, and was not caused by an act or failure to act by the EPC
Contractor, its employees, agents or Subcontractors.
If one or more Force Majeure Events cause more than 45 aggregated days of
delay, the partnership shall reimburse the EPC Contractor, beginning with the
46(th) day for its out-of-pocket costs actually and necessarily incurred,
including demobilization, remobilization, insurance, stand-by and escalation
costs. The partnership retains all rights to terminate the EPC Contract.
INDEMNIFICATION. The EPC Contractor shall defend, protect, indemnify, and
hold harmless the partnership, the partners, Construction Lender, Independent
Engineer and PECO, their stockholders, officers, directors, agents, servants,
employees, and others (the "Indemnitees") from and against any damages, losses
or expenses arising in favor of any person arising from claims and/or causes of
action of every kind and character. However, no Indemnitee shall be indemnified
for damages, losses or expenses arising out of the negligence of that
Indemnitee.
The EPC Contractor shall indemnify and hold the partnership harmless from
and against any and all loss, cost, expense, liability and damage incurred by
the partnership arising from Subcontractor liens or Lower-tier Subcontractor
liens filed against the facility site.
The EPC Contractor is not obligated to indemnify the partnership for any
infringement, actual or alleged, attributable to any Equipment supplied, or
services rendered by General Electric beyond the obligation of General Electric
to indemnify the EPC Contractor.
AUTHORIZATION TO PROCEED. The Authorization to Proceed, given to the EPC
Contractor on November 10, 1999, grants the EPC Contractor the authority to
proceed with performance.
Solely for the purpose of determining the Scheduled Date of Commercial
Operation for any Unit and dates for the partnership's obligation pursuant to
the EPC Contract, the Authorization to Proceed Date shall be deemed to be the
later of: (i) the date on which the Authorization to Proceed was actually
delivered to the EPC Contractor, and (ii) 113 days after September 10, 1999 (the
date on which the Limited Notice to Proceed was delivered to the EPC
Contractor).
TERMINATION
TERMINATION SUBSEQUENT TO AUTHORIZATION TO PROCEED. Following the issuance
of the Authorization to Proceed, the partnership may terminate the EPC Contract
for convenience. Termination, for any reason other than the EPC Contractor's
default (as described below), entitles the EPC Contractor solely to receive
reimbursement from the partnership of an amount equal to the sum of: (x) that
portion of the Guaranteed Lump Sum Price applicable to the Work performed to the
date of termination which has not been previously paid (including applicable
Retainage) (y) the reasonable out-of-pocket costs actually and necessarily
incurred by the EPC Contractor in withdrawing its equipment and personnel from
the facility
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site and (z) the actual, reasonable and necessary costs incurred by the EPC
Contractor in terminating those contracts, not assumed by the partnership, with
Subcontractors pertaining to the Work.
TERMINATION BY PARTNERSHIP ON EPC CONTRACTOR'S DEFAULT. The EPC Contractor
is in default if it:
(i) fails to timely perform the Work;
(ii) fails to supply enough properly skilled workers, or proper materials or
Subcontractors to timely perform the Work;
(iii) fails to make payment (not reasonably in dispute) to Subcontractors for
materials or labor in accordance with their agreements pertaining to
the Work, unless the subject of a reasonable dispute and no resulting
liens are filed;
(iv) is in violation or breach of any Applicable Laws, Applicable Insurance
Policies;
(v) fails to comply promptly with rejection notices or notices to correct
Defects;
(vi) causes or permits any repudiation, lapse or cancellation of performance
security;
(vii) fails to commence Work promptly following Authorization to Proceed;
(viii) assigns the EPC Contract in violation of the terms of the EPC Contract;
(ix) fails to pay liquidated damages when due; or
(x) otherwise materially breaches the EPC Contract.
If the EPC Contractor (a) does not cure any default under (i) through
(x) above within thirty (30) days after notice or, if the default is such that
it cannot be cured within such period of time and the EPC Contractor does not
promptly commence and diligently pursue action which is calculated to cure such
default within a reasonable period of time and achieve such cure within ninety
(90) days after such notice or (b) fails to achieve Commercial Operation within
one hundred eighty (180) days after the Scheduled Date of Commercial Operation,
the partnership has right to terminate the EPC Contract.
Whenever the EPC Contract is terminated for the EPC Contractor's default,
(i) the partnership may, without prejudice to any other rights or remedies,
(a) take possession of the facility site, the Equipment, and all other materials
for use by the partnership to complete the Work, (b) mandate assignment by the
EPC Contractor of other contracts or subcontracts to the partnership or its
designee for Work, and (c) finish the Work by whatever reasonable method the
partnership, in its absolute discretion, deems expedient, (ii) the EPC
Contractor shall not be entitled to receive further payment and (iii) the EPC
Contractor shall also be liable to the partnership for the additional costs of
debt service (from and after the date of termination), plus all costs and
expenses reasonably incurred and damages sustained (subject to certain
exceptions set forth in the EPC Contract) by the partnership.
TERMINATION FOR INSOLVENCY BY EITHER PARTY. Either party may terminate the
EPC Contract by written notice to the other party if certain events of
bankruptcy occurs, as described in the EPC Contract.
SUSPENSION BY EPC CONTRACTOR. If the partnership fails to timely pay the
EPC Contractor any undisputed amounts due pursuant to the terms of the EPC
Contract following receipt of written notice, and fails to remedy such default
within fifteen (15) days from the receipt of such notice, the EPC Contractor has
the right to suspend the Work. If the EPC Contractor elects to suspend the Work
and such suspension is subsequently removed and the Work is continued by the EPC
Contractor, the Guaranteed Lump Sum Price will be increased by an amount equal
to the increase, if any, in the reasonable and necessary cost actually incurred
by the EPC Contractor. If the EPC Contractor suspends performance of Work, the
Scheduled Date of Commercial Operation shall be extended on a day-for-day basis
by Change Order for the number of days of delay caused by the suspension. The
partnership shall have the right to cure at any time during suspension,
provided, however, if the partnership has not cured such default within
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seventy-five (75) days after such suspension, the EPC Contractor has the right
to terminate the EPC Contract. In such an event, the EPC Contractor shall be
paid the reasonable and necessary costs actually incurred and resulting directly
from such suspension by the EPC Contractor, but only to the extent that such
costs are over and above those incurred and included in the Guaranteed Lump Sum
Price, plus those amounts described above as being available to Contractor in
the event of a termination by the partnership subsequent to the Authorization to
Proceed. The EPC Contractor shall also remain subject to the certain obligations
as provided in the EPC Contract.
TERMINATION BY EPC CONTRACTOR. If the partnership fails to timely pay the
EPC Contractor any undisputed amounts due pursuant to the terms of the EPC
Contract following receipt of written notice, and fails to remedy such default
within thirty (30) days from the receipt of such notice, the EPC Contractor has
the right to terminate the EPC Contract.
SUSPENSION OF WORK. The partnership has the right (without prejudice to its
other right to terminate the EPC Contract) to suspend Work for convenience upon
giving seven days prior notice to the EPC Contractor ("Suspension Notice")
following the issuance of the Authorization to Proceed or any Limited Notice to
Proceed. Seven days after receipt of a Suspension Notice, the EPC Contractor
shall suspend performance of all Work and notify Subcontractors of such
suspension, and the Scheduled Date of Commercial Operation will be extended on a
day-for-day basis by Change Order for the number of days of delay caused by such
suspension.
During such suspension period (which begins seven days after the receipt of
the Suspension Notice), the partnership and the EPC Contractor (i) shall not be
required to take further action regarding performance, (ii) shall cooperate in
good faith to maintain the commitments of Subcontractors and Lower-tier
Subcontractors and (iii) the EPC Contractor shall not incur any obligation or
liability, whether financial, performance or otherwise for which the partnership
shall be liable.
ASSIGNMENT. The partnership may assign any or all of its rights under the
EPC Contract to an Affiliate of Tenaska, Inc. or an entity in which an Affiliate
of Tenaska, Inc. has an ownership interest, provided such assignee has adequate
resources (as determined by the EPC Contractor in the exercise of its reasonable
judgment) to fulfill those obligations of the partnership which are assigned,
and any defaults of the partnership existing at such time are cured.
Notwithstanding any provision in the EPC Contract to the contrary, the
partnership and the partnership's assignee, if applicable, have the absolute
right, without the consent of the EPC Contractor, to assign the EPC Contract or
any rights reserved by the partnership after assignment, to the Collateral Agent
and its successors for collateral security purposes.
All subcontracts shall be written and assignable to the partnership without
the need for the Subcontractors' consents.
If the EPC Contract is suspended or terminated, the partnership has the
right to require the EPC Contractor to assign all of the EPC Contractor's
rights, titles, and interests in and to any of the EPC Contractor's outstanding
subcontracts. The EPC Contractor may not assign any benefits or obligations
under the EPC Contract, nor may it assign the Turbine Contract without the
partnership's prior written consent.
LIMITATION OF LIABILITIES. To the extent that General Electric is excused
from liability with respect to any Unit (as defined in the Turbine Contract),
the EPC Contractor shall also be excused from liability with respect to such
Unit after the occurrence of certain events or after the date specified in the
Turbine Contract, provided that the foregoing shall not excuse the EPC
Contractor with respect to any liability which arises out of the acts or
omissions of the EPC Contractor, Subcontractors (other than General Electric) or
Lower-tier Subcontractors under the EPC Contract.
Notwithstanding any provision to the contrary in the EPC Contract, the EPC
Contractor shall not be liable to the partnership for consequential damages of
any kind arising from the acts or omissions of, or breach of contract by,
General Electric under the Turbine Contract to the extent that General Electric
is not liable to the EPC Contractor for such consequential damages under the
Turbine Contract.
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PARTNERSHIP RESERVED RIGHTS UNDER THE TURBINE CONTRACT.
SCOPE OF WORK. The EPC Contractor, with the written agreement of the
partnership, shall reject any nonconforming or defective Equipment supplied
under the Turbine Contract and require correction, repair or replacement of such
Equipment by General Electric, provided that the partnership shall have the
right to direct the EPC Contractor to reject any nonconforming or defective
Equipment supplied under the Turbine Contract and to direct the EPC Contractor
to require correction, repair or replacement of such Equipment by General
Electric. The EPC Contractor shall not change or amend the Turbine Contract,
without the written consent of the partnership. The partnership and the EPC
Contractor will cooperate with each other in connection with the assignment of
rights under the Turbine Contract to the EPC Contractor so as to permit the
partnership to retain such rights in the Turbine Contract as are necessary such
that no sales or use tax is required to be paid upon the purchase of the
Equipment supplied under the Turbine Contract, and for such purpose the
partnership and the EPC Contractor will take such actions as are reasonably
necessary to obtain such result, including providing for the transfer of title
to any Equipment supplied under the Turbine Contract directly from General
Electric to the partnership and the remittance of payments for all Equipment
under the Turbine Contract directly by the partnership to General Electric.
GUARANTEED LUMP SUM PRICE AND PAYMENT. At the request of the partnership,
the EPC Contractor shall dispute amounts otherwise due to General Electric under
the Turbine Contract in accordance with the rights of Buyer set forth in the
Turbine Contract and, as between the partnership and the EPC Contractor, the
partnership shall have the same right to withhold payment to General Electric as
is provided to Buyer in the Turbine Contract and shall not, as a result of
withholding such payments, be in breach of the EPC Contract.
CHANGE ORDERS. The partnership has the right to negotiate directly with
General Electric regarding the approval of any Change Order issued under the EPC
Contract, to the extent that such Change Order affects the Equipment or services
furnished under the Turbine Contract.
TERMINATION BY THE EPC CONTRACTOR; SUSPENSION OF THE TURBINE CONTRACT. In
the event the EPC Contractor terminates the EPC Contract, it shall give the
partnership fifteen days' notice of its intent to terminate the Turbine
Contract. If the partnership does not require the EPC Contractor to assign the
Turbine Contract to the partnership within such period, the EPC Contractor has
the right to terminate the Turbine Contract. Upon such termination, the
partnership will pay to General Electric any amounts due to General Electric
pursuant to the Turbine Contract, subject to compliance with the procedures set
forth in the EPC Contract.
O&M AGREEMENT
PARTIES. The parties to the O&M Agreement are the partnership and the
Operator.
OVERVIEW. The O&M Agreement provides for initial startup support during
turnover, testing, operation, maintenance and management of the facility and the
performance of other defined services by the Operator. The partnership has
agreed to pay the Operator a possible incentive fee, a fixed management fee and
an availability adjustment fee.
TERM AND TERMINATION. Unless sooner terminated, the primary term of the O&M
Agreement is 29 years from the Date of Commercial Operation.
SCOPE OF SERVICES. During the pre-Commercial Operating Period, the Operator
has agreed, among other things, to:
(a) Provide the services of a plant manager and a project manager;
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(b) Review the EPC Contractor's planning and facility engineering design
with regard to facility reliability, availability and maintainability and
review design manuals, system descriptions, tool lists, spare parts lists,
training programs, and operation methodology of the facility;
(c) Prepare the pre-commercial operating budget 9 months prior to the
scheduled date of Power Purchase Agreement Commercial Operation;
(d) Perform routine maintenance and scheduled maintenance actions on
facility systems and equipment as they are turned over to the Operator;
(e) Prepare a maintenance plan for the facility to include planning for
scheduled outages, handling of forced outages, preventive and predictive
maintenance philosophy;
(f) Prepare lists of the initial inventory of tools and spare parts to
be purchased for maintenance and repair of the facility and its equipment;
(g) Recruit, hire, transfer, or otherwise obtain qualified personnel;
and
(h) Procure, for the account of the partnership, all materials,
equipment, chemicals, supplies, services, and parts required for daily
operation and maintenance of the facility in accordance with the
partnership-approved pre-commercial operating budget.
During the Commercial Operating Period, the Operator has agreed, among other
things, to continue applicable services of the Pre-Commercial Operating Period
and to:
(a) Prepare annual operating budgets in accordance with the O&M
Agreement. Report to the partnership monthly on the status of the operating
budget and process budget variance reports, as required. To the extent that
the Operator has the information, the Operator will meet the requirements of
the partnership for providing information to the Senior Parties regarding
the operation of the facility as set forth in the Common Agreement;
(b) Perform or arrange for all maintenance required on all facility
systems and equipment;
(c) Arrange for scheduled inspections and overhauls on major equipment
items in accordance with the Long Term Service Agreement and other
maintenance schedules;
(d) Prepare and submit periodic reports relative to daily operation and
maintenance of the facility including environmental compliance records,
maintenance and repair status, facility operating data, and any other
information reasonably requested by the partnership; and
(e) Comply with all Applicable Laws.
REPORTS. The Operator is required to submit to the partnership, on a
monthly basis, reports on (a) the hourly, daily and weekly electric energy
generated and exported from the facility; (b) the hourly, daily and weekly fuel
consumption; (c) daily and weekly reports on makeup water received and pipeline
status; and (e) weekly and monthly consumption of chemicals for water treatment
plant. The Operator is also required to submit to the partnership, on a monthly
basis performance test results, emission data in support of federal and state
and local reporting requirements, wastewater effluent data in support of
federal, state and local permits, maintenance reports, and any other report
regarding the operation of the facility reasonably requested by the partnership
or required by the Power Purchase Agreement.
FACILITY MAINTENANCE. Within 90 days after Commercial Operation, the
Operator, with the approval of the partnership, will furnish PECO with a
long-term preventative maintenance program for each major item of equipment
constituting a part of the facility. This maintenance program can be altered,
with the approval of the partnership, from time to time by reason of later
manufacturers' releases pertaining to major items of equipment of the facility
and facility operating experience.
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BUDGET. Ninety days prior to the scheduled date of Power Purchase Agreement
Commercial Operation and after the date of commercial operation and at least
120 days prior to the effective date of each annual budget, the Operator will
submit to the partnership, for approval, a budget, which will include the
information required by the Common Agreement. The budget will be for all
reimbursable costs to be incurred in the operation of the facility. The
partnership and the Operator will use all reasonable efforts to resolve all
budget differences. If, with respect to any operating year, the partnership and
the Operator do not resolve all budget differences, the most recently approved
operating budget (escalated by three and one-half percent (3.5%)), without
regard to amounts budgeted for extraordinary or non-recurring items, but
including all costs for the Long Term Parts and Long Term Service Contract and
all contingency funds, will be applicable until an operating budget is approved
for such operating year.
COMPENSATION. During the Pre-Commercial Operating Period, the Operator will
invoice the partnership the amount of $75,000 to cover all costs of overhead
during the Pre-Commercial Operating Period. In addition, during the Commercial
Operating Period (other than calendar year 2003), the partnership will pay to
the Operator an annual fixed management fee of $225,000 (subject to escalation)
at the rate of $18,750 per month.
During or prior to the Pre-Commercial Operating Period, the partnership and
the Operator will mutually agree upon the incentive criteria for the Operator to
earn an incentive fee during the pre-Commercial Operating Period. The maximum
value of the incentive fee during the Pre-Commercial Operating Period is
$75,000. Annually during the Commercial Operating Period, the Operator can earn
an incentive fee to be paid on the basis of the partnership's assessment of the
Operator's performance against mutually agreed upon incentive criteria. The
maximum value of the incentive fee to be earned for the first full year of the
Commercial Operating Period and each subsequent year of the O&M Agreement is
$100,000 for each such period. The incentive fee will be invoiced at 5% each
month and if 60% of the incentive fee is not earned in any year, then the
unearned portion shall be returned to the partnership.
An availability adjustment will be paid for each contract year during the
Commercial Operating Period. The availability adjustment will vary with the
Operator's performance in maintaining the annual availability percentage for the
facility during the contract year and may result in a payment being made to the
Operator or by the Operator. The annual availability percentage for the contract
year is determined based on the availability percentage under the Power Purchase
Agreement, with certain adjustments.
TERMINATION. The partnership may terminate the O&M Agreement upon the
occurrence of certain events including, but not limited to, the sale or other
disposition of the facility, material defaults or violations of law and certain
bankruptcy events. The Operator may terminate the O&M Agreement in the event
that the partnership becomes bankrupt, fails to pay amounts when due, or for a
material breach. Payment defaults are to be remedied within 15 days and
non-payment defaults are to be remedied within 15 days unless a longer period is
reasonable.
If a project agreement is terminated and the partnership elects to terminate
the operation of the facility, it may do so on 30 days notice to the Operator
and payment of the Operator's direct costs reasonably incurred in withdrawing
personnel and damages, attorney fees and expenses reasonably incurred in
terminating contracts entered into by the Operator.
The Operator may elect to terminate the O&M Agreement if 20% or more of
equity interest in the partnership is transferred during any 6 month period of
the O&M Agreement or an affiliate of Tenaska, Inc. ceases to be the managing
partner of the partnership.
ASSIGNMENT. Other than the partnership's assignment to the Collateral
Agent, neither party will assign its interest in the O&M Agreement without the
prior consent of the other. If the Operator obtains the partnership's consent to
assignment, a full release will be given.
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GOVERNING LAW. The O&M Agreement is governed by the law of the State of
Georgia, excluding conflict of law rules that may call for the law of another
jurisdiction to be applied.
GPC INTERCONNECTION AGREEMENT
PARTIES. The parties to the GPC Interconnection Agreement are the
partnership and GPC.
OVERVIEW. The GPC Interconnection Agreement (the "GPC Interconnection
Agreement") provides for the direct interconnection of the partnership's
electric generation facilities with the Georgia Integrated Transmission System.
The Georgia Integrated Transmission System is a contractual joint use
arrangement applicable to the transmission systems owned by GPC, GTC and two
other owners of electric transmission systems in Georgia. The term of GPC's
participation in Georgia Integrated Transmission System will end in 2012 if
either GPC or GTC gives notice of termination, and such term can end prior to or
after such date upon the occurrence of an insolvency of, or default by, either
GPC or GTC. The point of interconnection ("Interconnection Point") on the
Georgia Integrated Transmission System is on a part of the Georgia Integrated
Transmission System that is owned by GTC.
TERM AND TERMINATION. The GPC Interconnection Agreement continues for an
indefinite term, and is subject to termination by mutual agreement of the
parties, through regulatory proceedings before the Federal Energy Regulatory
Commission, or by either party to the GPC Interconnection Agreement if the other
party has breached any of its material obligations and has not cured (or begun
taking diligent actions to cure) such breach within thirty days following
written notice of such breach. In addition, GPC could disconnect the facility in
the event of a breach by the partnership of the material terms and conditions of
the GPC Interconnection Agreement, in the event that any representation or
warranty made by the partnership under the GPC Interconnection Agreement shall
prove false or misleading, or if the partnership should become the subject of
insolvency proceedings.
INTERCONNECTION. The partnership is responsible for the design, procurement
and installation of the facilities necessary for GPC to provide interconnection
service to the partnership (the "Interconnection Facilities"). As a consequence
of the GPC Interconnection Agreement, the scope of work by the EPC Contractor
has been amended by a change order to include the design, procurement and
installation of these Interconnection Facilities. The GPC Interconnection
Agreement requires that such facilities conform to Good Utility Practices,
defined as the practices, methods and acts engaged in or approved by a
significant portion of the electric utility industry or any other practices,
methods and acts which, in the exercise of reasonable judgment in the light of
facts known at the time a decision was made, could have been expected to
accomplish the desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition and that such facilities conform
to the requirements of GPC's transmission system. Prior to commercial operation
of the facility, the partnership is required to convey such facilities to GPC at
no cost. In the event that GPC incurs any tax liability as a result of such
transfer, the partnership is required to reimburse GPC for the amount of such
liability.
GPC's obligations under the GPC Interconnection Agreement are dependent upon
its securing and retaining necessary easements and similar rights, as well as
permits and equipment, for meeting its obligations, and GPC is obligated only to
use reasonable efforts to secure and obtain these rights, permits and equipment.
The partnership is required to reimburse GPC for all costs and expenses incurred
by GPC in connection with the planning, design, construction, installation,
testing, inspection, ownership, operation and maintenance of the Interconnection
Facilities.
COSTS. The partnership is required to reimburse GPC for all costs and
expenses incurred by or on behalf of GPC in connection with its activities with
respect to the Interconnection Facilities. GPC is required to develop and
provide to the partnership an estimate of all such costs. GPC is required to
obtain the partnership's consent prior to proceeding with the planning,
construction and installation of the Interconnection Facilities. Such costs are
trued-up periodically after the actual costs and expenses are
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known, but not less often than annually. The partnership is required to
reimburse GPC monthly for one-twelfth of the estimated annual costs of operating
and maintaining the Interconnection Facilities, and such estimate would be
trued-up within a reasonable period of time after actual costs and expenses are
known, but not less often than annually. In addition, the partnership is
responsible for any cost incurred by GPC as a result of any disconnection or
reconnection caused by the partnership's negligence or by force majeure. Also,
the partnership is required to pay GPC a monthly administration charge of $5,000
per month, and GPC reserves the right to seek a revision of this amount through
a filing with the Federal Energy Regulatory Commission.
RIGHTS OF WAY AND ACCESS. The facility site is contiguous to the
Interconnection Point on the Georgia Integrated Transmission System. The
partnership is required to convey to GPC any and all necessary rights of way and
easements for the purpose of providing interconnection service under the GPC
Interconnection Agreement. Tenaska is also required to convey to GPC such rights
of way for transmission and distribution lines and easements for such
transformer substations across the partnership's property as may be required for
rendering service to the partnership and to others who may economically be
served from such lines and substations, provided that such conveyance does not
materially and adversely affect the partnership's use of its property.
TEMPORARY DISCONNECTION OF PARTNERSHIP'S FACILITIES. GPC could direct that
the facility be temporarily disconnected from the Georgia Integrated
Transmission System (i) during an Emergency, defined as a condition or situation
associated with the transmission and distribution of electricity, including
voltage abnormalities, that, in the sole reasonable judgment of GPC, adversely
affects or is eminently likely to adversely affect: (A) public health, life or
property; (B) GPC's employees, agents or property; or (C) GPC's ability to
maintain safe, adequate, and continuous electric service to its customers and
the customers of any member of the North American Electric Reliability Counsel;
(ii) the operation and output of the facility do not comply with the terms of
the GPC Interconnection Agreement (whether or not the partnership has commenced
actions to cure such non-compliance); (iii) if a hazardous condition exists on
the facility site or in the facility's equipment that could reasonably be
expected to adversely affect the safe and reliable operation of the Georgia
Integrated Transmission System; (iv) if the partnership has modified the
interconnection equipment or interconnection protective devices in a manner that
could reasonably be expected to adversely affect the safe and reliable operation
of the Georgia Integrated Transmission System; (v) if GPC determines it is
necessary to temporarily disconnect the facility in order to perform work on or
inspect or test any part of the Interconnection Facilities or the Georgia
Integrated Transmission System; (vi) in the event of tampering with or
unauthorized use of, GPC equipment or (vii) if the partnership fails to pay in
full the undisputed amounts billed by GPC under the GPC Interconnection
Agreement.
OPERATION AND MAINTENANCE. Following commencement of commercial operation
of the facility, GPC shall be responsible for determining the need for, design,
construction, installation, operation, maintenance and testing of any equipment
that may be required for interconnection service in a manner consistent with
Good Utility Practices.
The partnership is required to operate and maintain the facility in
accordance with Good Utility Practices and to comply with certain fire and
safety codes and other applicable code requirements in the same manner as
required by GPC for generating plants owned and operated by GPC. In addition,
the partnership is required to comply with certain interconnection procedures to
be attached as Appendix A to the GPC Interconnection Agreement in the same
manner as required for generating plants owned or operated by GPC.
The partnership is responsible for ensuring that its actual generation
matches its scheduled delivery, on an integrated hourly basis, to the Georgia
Integrated Transmission System at the Interconnection Point. The GPC
Interconnection Agreement requires that the partnership make arrangements for
the supply of energy and/or capacity when there is a difference between actual
generation and the scheduled delivery.
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However, generator backup service arrangements will not be required if the
facility is "electrically located" in a control area other than Southern
Companies' control area. In addition, the partnership is not required to make
arrangements for generator backup services as contemplated by the GPC
Interconnection Agreement if generator backup service is offered under the
Southern Companies' Open Access Transmission Tariff and each transmission
customer receiving electric power from the facility is required by Federal
Energy Regulatory Commission to purchase such service. Under the Power Purchase
Agreement, PECO is responsible for scheduling deliveries of generation from the
facility and for arranging for any required generator back-up services. PECO, as
the party arranging for transmission of electricity generated by the facility,
would determine in which control area the facility is electrically located.
CREDIT SUPPORT. The partnership is obligated to maintain a letter of credit
for GPC's benefit during the term of the GPC Interconnection Agreement in the
amount of $100,000 or other acceptable credit support as security for the
partnership's obligations under the GPC Interconnection Agreement.
REPRESENTATIONS AND COVENANTS. Tenaska is required to represent, among
other things, (i) that it is a duly organized and validly existing Delaware
limited partnership; (ii) that the GPC Interconnection Agreement has been duly
authorized by all necessary action and does not require any additional consent
or approval; (iii) that the execution and delivery of the GPC Interconnection
Agreement, does not conflict and shall not conflict with any other agreement;
(iv) that the GPC Interconnection Agreement is a binding obligation of the
partnership; and (v) that there is no pending or threatened litigation against
the partnership which purports to affect the GPC Interconnection Agreement.
In addition, the partnership covenants (i) that at all times during the GPC
Interconnection Agreement, it will pay all charges, taxes and fees assessed
against the facility or against the partnership through GPC by reason of the
sale or purchase of electricity by the partnership and (ii) that it will
maintain certain specified insurance.
FORCE MAJEURE. The parties are excused from performing their obligations
under the GPC Interconnection Agreement and are not liable for damages to the
extent that they are unable to perform or are prevented from performing by Force
Majeure, which includes circumstances that are beyond the reasonable control of
the affected party and are not caused by such party's fault; provided that Force
Majeure does not include the inability to meet a legal requirement or the change
in a legal requirement or a site specific strike or other labor dispute. The
affected party is required to use its reasonable best efforts to remedy its
inability to perform as soon as practical and to resume performance of its
obligations as soon as reasonably practicable following cessation of the force
majeure event.
INDEMNIFICATION. The partnership is required to indemnify GPC and certain
related parties against all injury or damage resulting from (i) defects or
events on the partnership's side of the Interconnection Point; (ii) negligence
(including strict liability) or intentional wrongful acts or destruction of
GPC's and certain related party's property by the partnership, its agents or
representatives and (iii) misuse, damage or destruction to GPC (and certain
related parties' property by the partnership, its agents or representatives,
whether or not such damage or loss resulted from concurrent or contributory
negligence of the indemnified persons); and (iv) any claims, actions and
liability arising from damage or injury to property or person due in whole or in
part to the installation, maintenance or operation of any electrical equipment
on the partnership's premises or arising out of or in any way connected with the
service furnished or to be furnished to the partnership. GPC agrees to indemnify
the partnership and certain related parties against loss or damage incurred by
the sole negligence of GPC in performing its obligations under the GPC
Interconnection Agreement or GPC's failure to abide by the provisions of the GPC
Interconnection Agreement.
LIMITATION OF LIABILITY. Neither party is liable to the other for
incidental, punitive, special, indirect, or consequential damages, including
loss of profits due to service interruptions, regardless of the fault of the
defaulting party.
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REGULATORY FILINGS. The GPC Interconnection Agreement is subject to
approval by any governmental authorities (including Federal Energy Regulatory
Commission) having jurisdiction over the matters provided for in such agreement.
The GPC Interconnection Agreement provides that nothing in the GPC
Interconnection Agreement is to be construed as affecting the right of either
party to unilaterally make application to any applicable governmental authority
(including Federal Energy Regulatory Commission) for a change in terms and
conditions or for termination under Applicable Law.
DELIVERY AND MEASUREMENT OF ELECTRIC ENERGY. The facility is required to
maintain a nominal operating frequency of 60 hertz, and the partnership may be
required to assist in supporting system frequency if requested by GPC. The
partnership is required when delivering power to the Georgia Integrated
Transmission System to operate its generation to meet the voltage schedule,
provided that the partnership could not be required to hold voltage schedule if
so doing would require it to produce more than the maximum amount of MVARS than
it is capable of producing.
ASSIGNMENT. The partnership is not permitted to assign the GPC
Interconnection Agreement or any of its rights or interests or obligations
thereunder; provided that if the partnership is not in default or breach of the
GPC Interconnection Agreement, then upon prior written notice to GPC, the
partnership could collaterally assign its rights, interests and obligations
under the GPC Interconnection Agreement to its lender or an agent on behalf of
its lenders providing financing or refinancing for the design, construction or
operation of the facility (a "Permitted Financing Assignee") provided that the
partnership remains fully liable for its obligations under the GPC
Interconnection Agreement. At no time could there be more than one Permitted
Financing Assignee. A Permitted Financing Assignee is not entitled to foreclose
or exercise its rights and remedies with respect to any such collateral
assignment unless the purchaser at foreclosure, purchaser in lieu of foreclosure
or similar purchaser or transferee ("Purchaser in Foreclosure") has
(i) executed and delivered to GPC and is in compliance with an agreement in form
and substance acceptable to GPC under which the Purchaser in Foreclosure assumes
and agrees to perform then outstanding and thereafter arising obligations of the
partnership under the GPC Interconnection Agreement and (ii) established to
GPC's reasonable satisfaction that such Purchaser in Lieu of Foreclosure has all
licenses, permits and approvals and financial and technical wherewithal as may
be required to execute, deliver and perform such agreement. The partnership may
assign the GPC Interconnection Agreement to third parties under similar
conditions.
GPC could at any time without notice to or consent from the partnership or
any other person, including, without limitation, any Permitted Financing
Assignee, assign, encumber or transfer its rights and obligations under the GPC
Interconnection Agreement to its indentured trustee, any of its affiliates or
any successor owner or operator of the Georgia Integrated Transmission System.
GOVERNING LAW. The GPC Interconnection Agreement is governed by the laws of
the State of Georgia, without giving effect to conflict of law principles.
PIPELINE EPC CONTRACT
The partnership and Willbros Engineers, Inc. (the "Pipeline Contractor") are
parties to a Fixed Price Engineering, Procurement and Construction Contract
effective September 23, 1999 (the "Pipeline EPC Contract") on a turnkey basis,
which provides for the Pipeline Contractor to perform services in connection
with the design, engineering, equipment and materials procurement, construction,
start-up, training, and testing of the Pipeline (collectively, the "Work").
SCOPE OF WORK. The Pipeline Contractor shall (a) furnish the design and
engineering for the Pipeline, including the preparation of all Drawings, with
design and engineering that meet the requirements of the Pipeline EPC Contract
and that are prepared and implemented in accordance with all Applicable Laws;
(b) provide and implement purchasing, construction, expediting, inspection, and
testing in accordance with the Pipeline EPC Contract and all Applicable Laws
(together with all services related thereto) as required
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by the Pipeline EPC Contract or as may be necessary to provide the partnership
with the Pipeline meeting all specifications and standards set forth in the
Pipeline EPC Contract; (c) provide all labor, equipment, procurement of
equipment, (together with all services provided or to be provided by the
Pipeline Contractor) necessary to fulfill its obligations to provide the
Pipeline; (d) perform all change orders; and (e) perform the Work in accordance
with all of its representations, covenants and warranties as set forth in the
Pipeline EPC Contract.
PARTNERSHIP RESPONSIBILITIES. The partnership shall furnish the Pipeline
Contractor with all right-of-way easements, and the Pipeline Contractor shall be
required to obtain all other construction permits. The partnership shall also
furnish the Pipeline Contractor with basic design criteria and process
descriptions as a basis for the Pipeline Contractor's performance of the Work.
If the partnership has not furnished the Pipeline Contractor with all
right-of-way easements necessary for the Pipeline by January 1, 2000, then the
Pipeline Contractor shall be entitled to an extension of the Scheduled
Completion Date (as defined below) by up to one day for each day until all such
right-of-way easements are obtained by the partnership.
COMMENCEMENT AND COMPLETION OF THE WORK. Upon execution of the Pipeline EPC
Contract, the Pipeline Contractor shall commence performance of the Work and
shall achieve Substantial Completion by September 1, 2000, subject to any
extensions permitted in accordance with the Pipeline EPC Contract ("Scheduled
Completion Date").
LIQUIDATED DAMAGES. The Pipeline Contractor shall pay to the partnership
liquidated damages in the amount of five thousand dollars for each full day or
part thereof that Substantial Completion is not achieved after the Liquidated
Damages Date, with a maximum cap of forty days. The Liquidated Damages Date
shall be the later of (a) the Scheduled Completion Date, as extended in the
event of a force majeure (as defined below) and (b) November 20, 2000. Subject
to the right of the partnership to terminate the Pipeline EPC Contract,
liquidated damages shall be the sole and exclusive liability of the Pipeline
Contractor for any delay in achieving the Scheduled Completion Date.
NO REPRESENTATIONS TO THE PIPELINE CONTRACTOR. The Pipeline Contractor
acknowledges that it has, by examination, satisfied itself as to (i) the nature
and location of the worksite on which the Work is to be performed; (ii) the
character, quantity and kind of (a) materials and conditions to be encountered
and (b) equipment, tools, machinery, supplies, manpower and other items needed
to perform the Work; and (iii) all other matters which may affect the
performance of the Work.
The Pipeline Contractor is responsible for all worksite preparation,
provision of drainage and drainage structures, removal of debris, and all
necessary investigation, analysis, testing and determination concerning the
condition, contents or integrity of the subsurface, underground and/or soils of
the worksite. In performing worksite preparation, the Pipeline Contractor is
responsible for and assumes the cost of any construction, engineering or
structural conditions (except those caused by the presence of hazardous
materials which were present prior to the execution of the Pipeline EPC Contract
("Pre-existing Hazardous Materials"), archaeological remains or artifacts).
LIENS. The final payment to the Pipeline Contractor under the Pipeline EPC
Contract shall not become due until the Pipeline Contractor delivers to the
partnership a complete release and waiver of all claims for taxes, liens, or
attachments arising out of the performance of the Work, and/or, at the
partnership's sole option, receipts showing the discharge thereof.
INDEMNIFICATION. The Pipeline Contractor shall indemnify and hold the
partnership, the partners, any affiliates of the partnership, the Construction
Lender, the Independent Engineer, and the directors, officers, shareholders,
partners, employees and agents thereof (the "Indemnitees") harmless from any
liability, loss and expense arising from injury or death to persons or damage to
property, to the extent that such loss, injury, death or damage is directly
attributable to the negligence or willful misconduct of the
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Pipeline Contractor or any subcontractor, or breach of the Pipeline EPC Contract
by the Pipeline Contractor, in the performance of the Work. The Pipeline
Contractor will not indemnify the Indemnitees for their own acts of negligence
or willful misconduct.
In no event shall the Pipeline Contractor or an Indemnitee, be responsible
for any special, indirect or consequential damages suffered by the other, as the
case may be, arising out of the Work or the Pipeline EPC Contract.
ENVIRONMENTAL MATTERS. During construction, the Pipeline Contractor shall
not contaminate ground water, in any manner, including by spilling Hazardous
Materials. All spills or releases of Hazardous Materials caused by the Pipeline
Contractor or any subcontractor shall be properly disposed of and/or remedied by
the Pipeline Contractor, at the Pipeline Contractor's expense; PROVIDED that,
the Pipeline Contractor is not responsible for the disposal or remediation of
Hazardous Materials which were present at any particular worksite prior to the
commencement of Work by the Pipeline Contractor at such particular worksite.
Notwithstanding the foregoing, the Pipeline Contractor is responsible for the
disposal and remediation of any spills or releases of Hazardous Materials which
result from damage or injury to underground tanks or pipelines located on the
worksite caused by the Pipeline Contractor, but only to the extent that the
Pipeline Contractor was aware or should have been aware, using standard industry
practices, of the existence of such pipeline or tank.
INSURANCE. The Pipeline Contractor shall maintain, and shall cause each
authorized subcontractor to maintain, the insurance set forth in the Pipeline
EPC Contract.
SECURITY FOR PERFORMANCE. In accordance with the terms of the Pipeline EPC
Contract, the Pipeline Contractor's obligations under the Pipeline EPC Contract
have been guaranteed by its parent company, Willbros Group, Inc., a Panama
corporation.
In lieu of retainage, the Pipeline Contractor shall deliver to the
partnership an irrevocable letter of credit in the amount of $232,620 issued by
a bank or other financial institution acceptable to the partnership in the form
attached to the Pipeline EPC Contract.
TERMINATION OF THE PIPELINE EPC CONTRACT.
TERMINATION BY THE PARTNERSHIP FOR BREACH OF THE PIPELINE EPC CONTRACT. In
the event that the Pipeline Contractor (i) fails to (a) diligently perform the
Work, (b) make such progress in the performance of the Work as may be required
to coordinate with, or to prevent delay in the performance of, other operations
of the partnership that are necessary in the performance of the Pipeline EPC
Contract, or (c) perform in any material way the Work in accordance with the
Pipeline EPC Contract or otherwise be in material breach of the Pipeline EPC
Contract; (ii) abandons the performance of the Work or any significant portion
thereof; or (iii) becomes insolvent, commits any act of bankruptcy or makes an
assignment for the benefit of creditors, the partnership shall have the right,
without prejudice to any other right or remedy, upon fifteen days written notice
to the Pipeline Contractor, unless such breach is cured prior to the expiration
of such notice period, or if such breach cannot reasonably be cured within such
period, cure is commenced within such period and diligently pursued to
completion, to terminate the Work and enter upon and take over the worksite and
all machinery, equipment, tools, supplies and other items found thereon or
enroute thereto, and may perform or cause to be performed the Work in such a
manner as to complete the performance contemplated by the Pipeline EPC Contract
in whatever reasonable manner the partnership may deem expedient.
TERMINATION BY THE PARTNERSHIP FOR CONVENIENCE. The partnership may, at any
time, in its sole and exclusive discretion, by written notice to the Pipeline
Contractor, instruct the Pipeline Contractor to postpone or abandon the Work, in
whole or in part, or terminate the Pipeline EPC Contract.
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TERMINATION BY THE PIPELINE CONTRACTOR FOR DEFAULT. The partnership shall
be in default to the Pipeline Contractor if the partnership fails to pay in a
timely manner any undisputed amounts due pursuant to the terms of the Pipeline
EPC Contract following receipt by the partnership from the Pipeline Contractor
of a written notice of such default. The partnership shall be allowed thirty
days from receipt of a notice of default to remedy such default after which the
Pipeline Contractor may immediately terminate the Pipeline EPC Contract by
written notice to the partnership.
WORKMANSHIP AND MATERIAL WARRANTIES. Notwithstanding the other provisions
in the Pipeline EPC Contract regarding workmanship and material warranties, the
Pipeline Contractor shall remedy any defects in the Work which appear within two
years from the date of Substantial Completion in accordance with the remedy
provisions of the Pipeline EPC Contract.
Unless otherwise approved in writing by the partnership, the Pipeline
Contractor shall use its best efforts to include in all subcontracts entered
into under the Pipeline EPC Contract a warranty of materials, equipment and
workmanship extending to the partnership and the Pipeline Contractor which shall
provide that defects in materials, equipment and workmanship which may appear
within two years from the date of acceptance of the subcontractor's Work shall
be repaired at the subcontractor's expense.
REMEDIES. The partnership shall notify the Pipeline Contractor in writing
within fifteen days of discovery by the partnership of any defects in the Work;
PROVIDED that, any delay by the partnership beyond such fifteen days shall
relieve the Pipeline Contractor from liability only to the extent of any
additional expense which may arise as the direct result of such delay. At no
additional cost, the Pipeline Contractor shall proceed promptly to take such
action relating to its Work as is necessary to cause its Work to comply with the
warranties specified in the Pipeline EPC Contract, and shall take such steps
pursuant to the provisions of the Pipeline EPC Contract regarding workmanship
and material warranties to enforce subcontractor or vendor warranties.
TITLE. The title to all materials and consumables to be used in connection
with the performance of the Work shall transfer to the partnership upon delivery
of the same to the worksite, and title to all Work, completed or in the course
of construction, shall be in the partnership but the ownership thereof shall not
absolve the Pipeline Contractor from liability for loss or damage to the same,
nor from any other duty or responsibility for the same as provided in the
Pipeline EPC Contract. Upon transfer of title to the partnership, the
partnership shall have title free and clear of claims and liens of all persons
(subject to the statutory lien rights of the Pipeline Contractor until payment
for the Work has been received by the Pipeline Contractor).
RISK OF LOSS. On the date of Substantial Completion, the partnership shall
assume the care, custody and control of the Pipeline, including risk of loss or
damage to the Pipeline and the Work.
INVOICING AND PAYMENT. The Pipeline Contractor shall submit to the
partnership a monthly written invoice based on the percentage of completion of
individual bid items set forth in a list attached to the EPC Pipeline Contract
along with any appropriate supporting documentation. The partnership shall pay
the Pipeline Contractor the amount due under the invoice, within twenty-five
days of the receipt of the invoice. In the event of a dispute as to a portion of
an invoice, the partnership will make timely payment of the undisputed portion
and will withhold the disputed portion until the same is resolved. Compensation
shall be paid to the Pipeline Contractor for the performance of the Work
according to a fixed price schedule attached to the Pipeline EPC Contract.
FORCE MAJEURE. The partnership and the Pipeline Contractor shall give
prompt written notice to the other, as the case may be, of any event or
situation arising from circumstances beyond their reasonable control or which
could not have been reasonably foreseen and which, by the exercise of due
diligence, such party is unable to prevent or overcome, that render the
performance of the Work impossible ("force majeure"). It is the duty of the
party claiming force majeure to prove all the elements of force majeure
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including (i) specific action taken to work around or mitigate the impact,
(ii) specific event dates, durations and logic to support the claim, and
(iii) specific cause for the claim of force majeure and to provide written
documentation of such proof to the other party as soon as reasonably possible.
The Pipeline Contractor shall not be entitled to increase the fixed price on
account of an event of force majeure until it has established the existence of
more than twenty five days (on a cumulative basis) of delays actually caused by
force majeure.
DISPUTES. In the event of a dispute between the partnership and the
Pipeline Contractor with respect to the interpretation of, or the performance
required by, the Pipeline EPC Contract, including any dispute which may result
in a claim (a "Dispute"), the parties shall make a good faith attempt to resolve
the Dispute; PROVIDED that, the provisions of the Pipeline EPC Contract
governing Disputes shall not override, delay or in any way prevent termination
of the Pipeline EPC Contract by the partnership or the Pipeline Contractor
pursuant to the provisions of the Pipeline EPC Contract governing termination.
During such attempted Dispute resolution, except as otherwise provided in the
Pipeline EPC Contract, the parties shall continue to proceed diligently and in
good faith in accordance with the terms of the Pipeline EPC Contract. In the
event a Dispute is not resolved within sixty days following the date of the
Dispute Notice, thereafter either party, in its sole discretion, may invoke
litigation. During any litigation which arises out of a Dispute, all parties
will continue to proceed in accordance with the terms of the Pipeline EPC
Contract without prejudice to the rights of the partnership or the Pipeline
Contractor to terminate as provided therein.
ASSIGNMENT. The Pipeline Contractor shall not assign, subcontract or
otherwise transfer the obligations or the benefits of the Pipeline EPC Contract
without the prior written consent of the partnership.
GOVERNING LAW. The Pipeline EPC Contract is governed by and construed
according to the laws of the State of Texas excluding their conflict of laws
provisions.
THE GAS INTERCONNECT AGREEMENT
The partnership and Transcontinental Gas Pipe Line Corporation ("Transco")
are parties to the Transcontinental Gas Pipe Line Corporation Interconnect,
Reimbursement and Operating Agreement (the "Gas Interconnect Agreement"), which
provides for Transco to construct and operate a natural gas delivery point to
the partnership and associated meter station on Transco's mainline in Heard
County, Georgia (the "Tenaska Meter Station").
GENERAL PROVISIONS FOR CONSTRUCTION. As soon as reasonably practicable
after the execution of the Gas Interconnect Agreement and prepayment by the
partnership, which occurred on December 27, 1999, Transco will begin engineering
design and material procurement for the Tenaska Meter Station, and Transco shall
provide for a target in-service date for Transco's Facilities nine months from
the date that the partnership made the prepayment to Transco.
In order to establish the interconnection between the natural gas facilities
of Transco and the partnership, each of Transco and the partnership shall
design, construct, own, operate and maintain certain facilities (individually,
"Transco's Facilities" and "Customer's Facilities" and, collectively, the
"Interconnection").
Subject to the terms and conditions of the Gas Interconnect Agreement,
Transco will construct the Tenaska Meter Station pursuant to the automatic
authorizations provisions of the Federal Energy Regulatory Commission ("Federal
Energy Regulatory Commission") regulations, and in compliance with certain other
specifications issued by the American Gas Association.
Transco's data acquisition and communications equipment shall be integrated
with the meter station and associated facilities and shall provide for
electronic flow measurement and an electric signal that is
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proportional to the flow rate. The partnership shall not make repairs,
adjustments or modifications to that equipment without the prior written consent
of Transco.
The designated point of tie-in and ownership change between Transco's
Facilities and the partnership's Facilities at the Interconnection shall be
located at the isolating flange immediately downstream of Transco's meter tube
outlet header. Transco shall own such flange and all facilities upstream
thereof, and the partnership shall own all facilities downstream of such flange.
Transco and the partnership shall each be responsible for the cathodic
protection of their respective facilities.
Transco shall acquire the necessary land rights for the Tenaska Meter
Station subject to review by the partnership, which review shall not be
unreasonably withheld.
Upon request by Transco, the partnership shall procure and install, at its
sole cost and expense, the electric utility service required to operate the
Tenaska Meter Station, including the station lighting, communication equipment
and associated facilities. The installation of such equipment shall be scheduled
at a time agreeable to Transco and the partnership.
Transco's pressure and transportation service obligations for deliveries to
the partnership at the Tenaska Meter Station shall be governed by the
transportation service agreements between Transco and the partnership and
Transco's Federal Energy Regulatory Commission Gas Tariff.
REIMBURSEMENT. The partnership shall reimburse Transco for all costs,
expenses, overheads and, if applicable, AFUDC incurred by Transco pursuant to
the Gas Interconnect Agreement.
After execution of the Gas Interconnect Agreement and prior to commencement
of engineering design and material procurement by Transco, the partnership paid
Transco $1,208,000 (the estimated total reimbursable cost under the Gas
Interconnect Agreement) on December 27, 1999, and Transco shall credit this
amount as a prepayment toward the actual reimbursable costs. The total amount
due Transco shall be increased to the extent necessary to reimburse Transco for
the income tax effect of all payments to Transco for Transco's Facilities.
All costs will be accumulated and recorded in accordance with the Federal
Energy Regulatory Commission's Uniform System of Accounts. The partnership,
after fifteen (15) days notice in writing to Transco, shall have the right
during normal business hours to audit, at the partnership's own expense, all
books and records of Transco relating to Transco's construction of the
facilities described in the Gas Interconnect Agreement. The partnership shall
have one (1) year after the date of receipt of the detailed cost listing
described above in which to make such an audit. After such one (1) year period,
the partnership's right to audit shall expire and Transco's records shall be
presumed to be correct.
OPERATION AND MAINTENANCE. Transco and the partnership shall operate and
maintain their respective facilities in accordance with sound and prudent
practices existing in the pipeline industry and in compliance with all valid and
Applicable Laws, orders, directives, rules and regulations of governmental
authorities having jurisdiction.
Transco shall be responsible for the custody transfer of gas at the
Interconnection and shall provide two (2) electric signals at the
Interconnection from Transco's data acquisition equipment that is proportional
to the flow rate. Such signals will include temperature, pressure, Btu content,
gas quality and flow data.
The quality and measurement of gas delivered to the partnership at the
Interconnection shall be in accordance with Transco's currently effective
Federal Energy Regulatory Commission Gas Tariff, as amended from time to time.
The partnership's facilities shall be operated by the partnership at
pressures which are lower than Transco's daily operating pressures at the
Tenaska Meter Station.
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If the partnership, in Transco's sole opinion reasonably exercised, fails to
comply with any provision of the Gas Interconnect Agreement, Transco shall have
the right, upon reasonable notification to the partnership and subject to any
necessary regulatory authorizations, to suspend the flow of gas through the
Interconnection. The partnership shall reimburse Transco for any costs incurred
as a result of such suspension of gas flow. Transco shall not be required to
resume gas flow through the Interconnection until the partnership has corrected,
in Transco's sole opinion, the area(s) of noncompliance with the Gas
Interconnect Agreement.
INDEMNIFICATION; DAMAGES. Transco shall hold harmless, defend and indemnify
the partnership, its agents, partners, officers, directors, stockholders,
lenders, representatives and employees (collectively, "Partnership Indemnified
Parties") from and against any and all claims, actions, settlements,
liabilities, losses, costs, damages, fines, judgments, demands and expenses
(including, without limitation, attorney fees) (collectively "Claims") for
injury to or death of persons or damage to or loss of property incurred by or
asserted against any of the Partnership Indemnified Parties which are
(1) caused by the activities of, or due to the placement of materials by,
Transco, its agents, affiliates, officers, directors, representatives,
employees, contractors or subcontractors, and/or (2) otherwise resulting from
the actions or omissions of Transco, its parent and affiliated companies, and
its and their respective agents, officers, directors, representatives,
employees, contractors or subcontractors arising out of, relating to or incident
to the performance of the Gas Interconnect Agreement. Notwithstanding the
foregoing, Transco shall not be required to indemnify the Partnership
Indemnified Parties for any environmental claims which are attributable to the
condition of the land upon which the Interconnection is constructed or from
activities by any party other than Transco, its parent and affiliated companies,
and their respective agents, officers, directors, representatives, employees,
contractors or subcontractors on or with respect to such land.
The partnership shall hold harmless, defend and indemnify Transco, its
parent and affiliated companies, and its and their respective agents, officers,
directors, stockholders, lenders, representatives and employees (collectively
"Transco Indemnified Parties") from and against all claims for injury to or
death of persons or damage to or loss of property incurred by or asserted
against any of the Transco Indemnified Parties which are (1) caused by
activities of, or due to the placement of materials by, the partnership, its
agents, affiliates, officers, directors, representatives, employees, contractors
or subcontractors, and/or (2) otherwise resulting from the actions or omissions
of the partnership, its agents, affiliates, officers, directors,
representatives, employees, contractors or subcontractors arising out of,
relating to or incident to the performance of the Gas Interconnect Agreement.
Without limitation of the foregoing, if damage occurs to either party's
pipeline for which the other party shall be obligated to indemnify such party
under the Gas Interconnect Agreement, Transco or the partnership, as the case
may be, shall (1) reimburse the other party for all reasonable costs and
expenses incurred to repair the damage and replace any lost natural gas, and
(2) hold harmless, defend and indemnify the Transco Indemnified Parties or the
Partnership Indemnified Parties, as the case may be, from and against all claims
resulting from any inability by Transco or the partnership, as the case may be,
to render service obligations to its customers. The method of repair,
replacement, remediation and other remedies shall be at the sole discretion of
the party whose pipeline was damaged.
INSURANCE. Each of Transco and the partnership are required to maintain
certain insurance policies in accordance with the Gas Interconnect Agreement.
Under the partnership's general liability and automobile liability policies,
Transco, its parent, subsidiary and affiliated companies will be named as
additional insureds.
TERM. The Gas Interconnect Agreement was effective on August 18, 1999 and
shall continue in force and effect unless and until terminated (i) upon default
by either party in the performance of any provision, condition or requirement
therein, by the other party, unless such default is cured within sixty
(60) days;
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(ii) upon the occurrence and continuance of certain bankruptcy events; and
(iii) by mutual agreement of the parties in writing.
Termination of the Gas Interconnect Agreement shall not relieve either party
from any obligation accruing or accrued prior to the date of such termination,
nor shall such termination deprive a party not in default of any remedy
otherwise available to it.
Upon termination of the Gas Interconnect Agreement, Transco shall have the
right to abandon all or a portion of the Tenaska Meter Station in place. Transco
shall use all reasonable efforts to salvage any equipment reimbursed by the
partnership and refund the recovered amount to the partnership.
GOVERNING LAW. The Gas Interconnect Agreement and any claims thereunder
shall be governed by the laws of the State of Texas, excluding any conflicts of
law rules that might require the application of the laws of another
jurisdiction.
WATER AGREEMENT
OVERVIEW. The partnership and the Heard County Water Authority are parties
to the Water Agreement. The Water Agreement provides for the partnership to
receive potable water at the 350 gallons per minute (504,000 gallons per day)
(the "Committed Amount"). Under normal circumstances, the partnership will be
expected to take a base quantity of $20,000 worth of water per year, and is
obligated to pay the Heard County Water Authority at least $20,000 per year
commencing after the Date of Commercial Operation, regardless of how much water
is actually used.
The Heard County Water Authority may not add customers or sell unused
capacity which would deny or tend to deny the partnership the Committed Amount.
While not obligated to supply the partnership any water in excess of the
Committed Amount, the Heard County Water Authority may elect to supply such
excess amount. If the partnership anticipates that it will need water in excess
of 100 gallons per minute, it must make reasonable efforts to give the Heard
County Water Authority notice.
If the Heard County Water Authority contracts to provide water with a
non-governmental entity involved in the generation of energy or governmental
entity reselling water to users involved in the generation of energy at terms
more favorable than those in the Water Agreement, it is obligated to give the
partnership the benefit of the better terms, refunding any excess charges
incurred by the partnership.
TERM AND TERMINATION. The term of the Water Agreement is for 30 years after
the first date the partnership purchases water under the Water Agreement (the
"Water Term"). The partnership may terminate the Water Agreement if it decides
to abandon its plan to build a power plant on the facility site. The
partnership's obligations are subject to closing on the land purchase and lease
by the Authority to the partnership of the facility site, both of which have
occurred.
The Heard County Water Authority may terminate the Water Agreement upon
failure by the partnership to obtain financing for the construction of the
facility or execute the Lease Agreement by December 31, 1999. However, the
partnership may pay a non-refundable extension fee of $100,000 to extend the
date to June 30, 2000. The Heard County Water Authority may also terminate the
Water Agreement if the partnership (i) fails to begin Commercial Operation by
April 1, 2002, (ii) the partnership files a voluntary petition for bankruptcy,
or (iii) a receiver is appointed for the partnership and not dismissed within
180 days after appointment. If the partnership fails to pay its invoices after
60 days notice is given to both it and its Lenders, the Heard County Water
Authority has the right to terminate the Water Agreement by giving written
notice of termination.
ACCOUNTING FOR THE WATER. The Heard County Water Authority must own,
install, test, calibrate, adjust, operate and maintain a metering station to
measure and record the quantity of water purchased by the partnership. The
partnership will pay the Heard County Water Authority $15,000 for the purchase
and installation of the necessary equipment, and has the right to choose the
equipment purchased by the Heard
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County Water Authority. However, if the cost of purchase and installation
exceeds $15,000, and the partnership has specified equipment with a greater cost
than that selected by the Heard County Water Authority, the partnership will pay
the Heard County Water Authority the difference in price.
If the partnership requests a copy of regulatory and chemical analysis
reports on the water as submitted to any governmental authority, the Heard
County Water Authority will provide it.
RATES, INVOICING AND PAYMENT. The partnership paid the Heard County Water
Authority $500,000 in consideration for the services and commitments of the
Heard County Water Authority. If the Heard County Water Authority enters into
any agreements with any person (other than a municipality or government agency
that does not resell the water) at a rate or capacity exceeding 230 gallons per
minute or 331, 200 gallons per day at a rate lower than that charged to the
partnership, with an upfront cost of less than $500,000 or on terms more
favorable than as specified in the Water Agreement, then such rates or cost
shall be reduced pro rata or the partnership shall have the benefit of such
terms.
The partnership will pay $1.57 per 1,000 gallons of water (1999), subject to
an annual cost of living adjustment (the "Contract Rate"). The annual rates will
be calculated by multiplying the initial rate by a fraction, the numerator of
which is the Consumer Price Index as reported for December of the previous year
and the denominator of which is the Consumer Price Index as reported for
December, 1999. If the Heard County Water Authority is required by law to make
capital improvements to comply with environmental statutes, rules or
regulations, the partnership will, in addition to the Consumer Price Index
increase, pay the increase in water rates attributable to such improvements as
charged to all Heard County water users.
If the Heard County Water Authority agrees to sell the partnership water in
excess of its Commiteed Amount, the partnership shall pay $2.00 per 1,000
gallons for the water exceeding the 504,000 gallons per day. This rate is
subject to the same annual adjustments as the Contract Rate.
Invoices are to be submitted to the partnership by the fifth day of each
month, and the partnership must remit payment by the 15(th) day of the same
month. Failure to pay within 10 days of notification of default for failure to
pay charges will result in a 10% penalty on the unpaid amount. Disputed amounts
paid to the Heard County Water Authority will bear 10% interest from the date of
payment until the date of the refund.
INTERRUPTION OF SERVICE. The Heard County Water Authority may not interrupt
its provision of water to the facility for necessary scheduled maintenance
unless it has given at least 5 days prior notice. Whenever possible,
interruptions will be scheduled during a shut-down of the facility.
FORCE MAJEURE. Events of force majeure include drought, storm, earthquakes
and other natural calamities, as well as acts by third parties beyond the Heard
County Water Authority's control. These events excuse the Heard County Water
Authority from delivering water to the partnership, so long as it notifies the
partnership as soon as practicable, and the Heard County Water Authority's
suspension of performance is no longer than necessary to remedy its inability to
perform with reasonable dispatch.
ASSIGNMENT AND DELEGATION. Neither party may assign its rights or interests
or delegate its obligations under the Water Agreement to any party other than an
affiliate or subsidiary without the written permission of its counterparty. This
does not restrict the partnership's right to assign or transfer its rights,
titles and interests or to delegate its duties and obligations to any Lender.
TAXES. Each party will pay its own taxes with respect to the activities of
generation, transportation, delivery, sale, emission, disposal, or use of water.
INDEMNIFICATION. Under the Water Agreement, both parties agree to release,
defend, indemnify and hold harmless the other for damages arising out of its own
negligent acts or omissions in connection with
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the Water Agreement. In the event that both parties are negligent and their
negligence contributes to the cause of a third party's claim, each party will be
responsible and liable in proportion to its own negligence.
WAIVER OF SUBROGATION. Both parties agree to waive and release all rights
of subrogation against the other party and its affiliates, owners, employees and
representatives for any loss or damage that would be covered by the following
insurance policies, regardless of any policy limits: primary commercial general
liability, excess commercial general liability, and automobile liability.
SOVEREIGN IMMUNITY. The Heard County Water Authority agrees to waive and
not raise any defense of sovereign immunity it may have in connection with the
Water Agreement or its performance under it.
LEASE AGREEMENT
Pursuant to the Lease Agreement, dated as of November 1, 1999, the Authority
leases to the partnership, subject to Permitted Liens, the facility, facility
site, certain related infrastructure facilities and related easements and those
items of machinery, equipment and related property required under the Lease to
be acquired and/or installed in the facility or on the facility site or
easements (the "Leased Property").
TERM. The Lease will terminate no earlier than the date of payment in full
of the revenue bonds issued by the Development Authority of Heard County.
RENTS. On or before February 1 and August 1 in each year, commencing
August 1, 2000, until payment in full of the revenue bonds issued by the
Development Authority of Heard County, the partnership shall pay or cause to be
paid to the Collateral Agent, for the account of the Authority and the Authority
Trustee, as rents, a sum equal to the amount payable on such date as principal
and redemption premium (if any) and interest on the revenue bonds issued by the
Development Authority of Heard County, as provided in the Authority Indenture,
and shall also pay, or cause to be paid, as additional rents, certain fees and
expenses of the Authority (which may be retained by the Authority or paid by the
Authority to Heard County) and certain fees and expenses of the Trustee.
TITLE TO THE LEASED PROPERTY. Upon the request of the partnership, the
Authority will join, where necessary, in any proceeding to protect and defend
its title in and to the Leased Property; PROVIDED that, the partnership shall
pay the entire cost of any such proceeding or reimburse the Authority therefor
and indemnify and hold harmless the Authority from any cost or liability.
QUIET ENJOYMENT. The Authority warrants and covenants that it will defend
the partnership in the quiet enjoyment and peaceable possession of the leased
land and all appurtenances thereto, from all claims of all persons acting by,
through or under the Authority, throughout the term of the Lease. In addition,
the Authority will not take or cause another party to take any action to
interfere with the partnership's peaceful and quiet enjoyment of the Leased
Property.
AGREEMENT TO EXECUTE AMENDMENT TO LEASE AND RELEASE FROM SECURITY DEED. The
Authority and the partnership agree that (i) certain items of personal property
may be acquired by the partnership and conveyed to the Authority or acquired
directly by the Authority from time to time, (ii) in accordance with the terms
of the Lease, items of leased equipment and/or portions of the leased land may
be removed or released from the Lease, and (iii) easements and certain other
rights of way across the leased land may be granted by the partnership in
accordance with the Lease.
The Authority agrees, at the request of the partnership, to execute an
amendment to the Lease in the form attached to the Lease, without further action
on its part unless further action is otherwise required under the Lease, and the
equipment or property added or released thereby shall become subject to or be
released from the Lease. In connection with any amendment to the Lease providing
for the removal of leased equipment or the release of leased land, the Authority
shall execute and deliver such amendments,
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releases and/or termination statements as may be necessary to release the lien
on such leased equipment or leased land created under the Security Deed between
the Authority and the Authority Trustee.
DISBURSEMENTS FROM THE CONSTRUCTION FUND. In the Authority Indenture, the
Authority has authorized and directed the Authority Trustee to designate the
Collateral Agent as agent for the Authority Trustee with respect to the
disbursement of moneys from the Construction Fund in accordance with the
provisions of the Collateral Agency Agreement for the payment of all Project
Costs.
GRANTING AND RELEASE OF EASEMENTS; AMENDING OR MODIFYING EASEMENTS. Subject
to the provisions of the Collateral Agency Agreement and the Common Agreement,
the partnership may (i) cause to be granted easements, licenses, rights-of-way
and other rights or privileges in the nature of easements with respect to any
property included in the Leased Property and such grant will be free from the
lien or security interests created by the Authority Indenture or the Lease, or
(ii) cause to be amended, modified or released existing easements, licenses,
rights-of-way and other rights or privileges in the nature of easements, held
with respect to any property included in the Leased Property with or without
consideration. The Authority agrees that it shall execute and deliver and will
cause the Authority Trustee to execute and deliver any instrument necessary or
appropriate to confirm and grant, amend, modify or release any such easement,
license, right-of-way or other right or privilege in accordance with the terms
of the Lease.
RELEASE OF CERTAIN LAND. Notwithstanding any other provision of the Lease,
but subject to the provisions of the Collateral Agency Agreement and the Common
Agreement, the Authority and the partnership reserve the right by mutual
agreement to amend the Lease for the purpose of effecting the release and
removal from the Lease of (i) any unimproved part of the leased land (on which
neither the facility nor any leased equipment is located but on which parking,
transportation, utility facilities or other support facilities may be located)
on which the Authority proposes to construct improvements for lease under
another and different lease agreement, (ii) any part of the leased land with
respect to which the Authority proposes to convey a fee or other title to a
railroad or other public body or quasi-public body or to a public utility in
order that transportation facilities or services by rail, water, road or other
means or utility services for the Leased Property, for the benefit of the
partnership may be provided, increased or improved or (iii) that portion of the
leased land and related facilities constituting or relating to the electric
switchyard.
ENVIRONMENTAL INDEMNIFICATION. The partnership shall indemnify, hold
harmless, and defend the Authority, its officers, directors, agents, and
employees from and against any and all claims, losses, damages, expenses, causes
of action, lawsuits, government regulatory enforcement actions, and liability
asserted against the Authority arising out of alleged or actual Environmental
Contamination (as defined below) arising from the partnership's leasing and
operation of the Leased Property.
Environmental Contamination means damages to persons or property or
violations of state or federal environmental laws or regulations arising out of
the partnership's operations at the Leased Property with respect to, but not
limited to, air emissions, water effluent discharges, and waste generation,
transportation, storage, disposal, or the handling of hazardous materials.
CONVEYANCE OF LEASED PROPERTY BY AUTHORITY SECURITY DEED. The Authority has
(i) conveyed its title in and to that portion of the Leased Property consisting
of real property and granted a security interest in that portion of the Leased
Property consisting of personal property to the Authority Trustee by the
Authority Security Deed between the Authority and the Authority Trustee, and
(ii) assigned, pledged and created a security interest in the property secured
by the terms of the Authority Indenture, as security for the payment of the
principal of and the interest on the revenue bonds issued by the Development
Authority of Heard County, but such Security Deed and said assignment and pledge
shall be subject and subordinate to the Lease so long as there shall not exist a
default under the Lease or the Authority Indenture.
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EVENTS OF DEFAULT. The Lease provides that the existence of a Trigger Event
under the Collateral Agency Agreement shall be an Event of Default under the
Lease.
REMEDIES ON DEFAULT. If an Event of Default has occurred and is continuing,
the Authority or the Authority Trustee, as provided in the Authority Indenture,
may, with the written consent of the Collateral Agent, or shall, upon the
written direction of the Collateral Agent, take certain remedial steps
including, but not limited to (a) declare all installments of rent payable under
the Lease for the remainder of the term of the Lease to be immediately due and
payable, whereupon the same shall become immediately due and payable;
(b) re-enter and take possession of the Leased Property without terminating the
Lease and without any liability to the Authority for such entry and
repossession, and sublease the Leased Property for the account of the
partnership, holding the partnership liable for the difference in the rents and
other amounts payable by such sublessee in such subleasing and the rents and
other amounts payable by the partnership under the Lease; and (c) terminate the
Lease, exclude the partnership from possession of the Leased Property and use
its best efforts to lease the Leased Property to another for the account of the
partnership, holding the partnership liable for all rent and other payments due
up to the effective date of such leasing.
Any amounts collected pursuant to any such remedial action shall be paid and
applied in accordance with the provisions of the Collateral Agency Agreement and
after payment in full of the revenue bonds issued by the Development Authority
of Heard County and the payment of any costs occasioned by an Event of Default
under the Lease, and subject to the provisions of and the lien and security
interest created under the Security Agreement, and, subject to the provisions of
the Collateral Agency Agreement, any excess moneys in the bond fund under the
Authority Indenture shall be returned to the partnership as an overpayment of
rent.
The Authority will not exercise any remedies without the consent of the
Collateral Agent and the Authority will grant any consents or waivers or take
any other actions under the Lease (subject to such actions being consistent with
the terms of the Lease and provisions of law applicable to the Authority) upon
the direction of the Collateral Agent.
OPTIONS TO TERMINATE THE LEASE TERM. At any time prior to payment in full
of the revenue bonds issued by the Development Authority of Heard County, the
partnership may terminate the Lease giving the Authority and the Authority
Trustee notice in writing of such termination and by paying to the Authority
Trustee (or providing for its benefit) an amount which, when added to the funds
in the bond fund under the Authority Indenture, will be sufficient to pay,
retire and/or redeem all of the outstanding revenue bonds issued by the
Development Authority of Heard County in accordance with the provisions of the
Authority Indenture and, in case of redemption, making arrangements satisfactory
to the Authority Trustee for the giving of the required notice of redemption.
At any time after payment in full of the revenue bonds issued by the
Development Authority of Heard County, the partnership may terminate the Lease
by giving the Authority notice in writing of such termination and such
termination shall forthwith become effective.
Upon any such termination of the Lease, the partnership shall purchase and
the Authority shall sell the Authority's right, title and interest in the Leased
Property to the partnership for the amount and under the terms set forth in the
Lease.
CONVEYANCE. Upon any succession of the partnership to ownership of the
Leased Property pursuant to the Lease (including pursuant to any purchase or the
exercise of any option to purchase granted therein), the Authority will, in
accordance with the terms of the Lease, deliver to the partnership the quitclaim
deed in the form attached to the Lease or similar documents satisfactory to the
partnership, conveying to the partnership title in and to the property with
respect to which such obligation or option was exercised, subject to (i) liens
and encumbrances (if any) to which such title in and to said property was
subject when conveyed to the Authority, (ii) liens and encumbrances created by
the partnership, or to the
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creation or suffering of which the partnership consented in writing, or
resulting from the failure of the partnership to perform or observe any of the
agreements on its part contained in the Lease; and (iii) Permitted Liens other
than the Authority Indenture, the Authority Security Deed and the Lease.
SUCCESSION RIGHTS OF THE PARTNERSHIP. The Authority and the partnership
agree that, whether or not the option to purchase the Leased Property has been
exercised, the partnership shall be entitled to succeed to the ownership of the
Leased Property upon and after the payment in full of the revenue bonds issued
by the Development Authority of Heard County.
SECURITY INTEREST OF THE PARTNERSHIP. The Authority grants to the
partnership a security interest in and lien upon any amounts realized upon the
foreclosure sale or exercise of other remedies under the Authority Security Deed
between the Authority and the Authority Trustee, and such amounts shall, after
satisfaction of the indebtedness described therein, be paid to the Collateral
Agent, on behalf of the partnership, for application in accordance with the
terms of the Collateral Agency Agreement.
AD VALOREM TAXATION AGREEMENT
OVERVIEW. The parties to the Ad Valorem Taxation Agreement ("Tax
Agreement") are the Board of Commissioners of Heard County (the
"Commissioners"), the Board of Tax Assessors of Heard County (the "Board") and
the partnership. The parties agree that the facility will not be subject to ad
valorem taxation because it will be owned by the Authority, but that the
partnership's leasehold interest will be subject to ad valorem taxes. The Tax
Agreement sets forth how the partnership's interest under the Lease Agreement
will be valued before the completion of construction, and for the 20 year period
following the year in which the facility is completed.
CONSTRUCTION OF THE FACILITY. Until January 1 of the year after the
construction of the facility is complete and revenue generating operations
commence, there will be no value to the Lease Agreement, and no real property or
personal property taxes on the facility or the facility site.
COMPLETION OF CONSTRUCTION. In the year following the completion of the
facility and the commencement of revenue generating operations and for the next
20 years, ad valorem taxes will be computed based on the hypothetical amount of
the cumulative principal reduction of the outstanding bond indebtedness incurred
for engineering, procurement or construction costs (the "Cumulative Principal
Reduction"), as if it were amortized by equal quarterly payments of principal
and interest at a rate of 6% per year over a period of 20 years. The
amortization will be calculated in the following manner:
Amount of Investment. The amount of bond proceeds invested in the
engineering, procurement or construction costs in leased land and equipment will
be determined.
Cumulative Principal Reduction. On January 1 of each of the 20 years,
the amount of Cumulative Principal Reduction will be computed for the leased
land and buildings, and leased equipment. Depreciation of the leased property
will be taken into account by multiplying the Cumulative Principal Reduction by
a stated factor (the "Depreciation Factors").
Taxable Property Value. The Cumulative Principal Reduction will be
multiplied by the Depreciation Factors and 40%. The product will then be
multiplied by the Heard County millage rate to determine that year's ad valorem
tax.
REPAIRS AND REPLACEMENT. Repairs and Replacement of leased equipment will
not affect their valuation for tax purposes.
EXPANSION OF THE FACILITY. If after completion of the facility, any leased
buildings or equipment are purchased as part of an expansion of the facility,
taxes will be computed on those buildings and equipment following the same
methodology set forth for the initial facility.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of the material United States federal income
tax consequences of participating in the exchange offer and owning and disposing
of new bonds and, insofar as it relates to matters of law or legal conclusions,
constitutes the opinion of Winthrop, Stimson, Putnam & Roberts. Except where
noted, this discussion deals only with old bonds acquired upon original
issuance, and new bonds issued in exchange therefor, in each case held as
capital assets. It does not address all aspects of United States federal income
taxation that may be relevant to particular holders in light of their
circumstances or status, nor does it address any United States income tax
consequences to holders that may be subject to special tax rules, such as
financial institutions, insurance companies, dealers in securities or
currencies, tax-exempt organizations, persons that hold old bonds, or that will
hold new bonds, as part of a straddle, hedge, conversion or constructive sale
transaction, persons who mark to market their securities, or persons who have a
functional currency other than the United States dollar. In addition, this
discussion does not address any aspect of state, local or foreign taxation. This
section is based on the Internal Revenue Code of 1986, as amended, its
legislative history, existing and proposed regulations thereunder, and published
rulings and court decisions, all as currently in effect and all subject to
change at any time, possibly with retroactive effect.
As used in this discussion, the term "United States Holder" means a
beneficial owner of an old bond or new bond that is, for United States federal
income tax purposes:
- a citizen or resident of the United States,
- a corporation, or other entity treated as a corporation for United States
federal income tax purposes, created or organized in or under the laws of
the United States or any State of the United States or the District of
Columbia,
- an estate the income of which is subject to United States federal income
tax regardless of its source, or
- a trust the administration of which is subject to the primary supervision
of a court in the United States and for which one or more United States
persons have the authority to control all substantial decisions.
If a partnership holds old bonds or new bonds, the tax treatment of a partner
will generally depend upon the status of the partner and the activities of the
partnership. Partners of partnerships holding old bonds or new bonds should
consult their tax advisors. As used in this discussion, the term "Non-United
States Holder" means a beneficial owner of an old bond or a new bond that is not
a United States Holder.
YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR CONCERNING THE UNITED STATES
FEDERAL, STATE AND LOCAL, AS WELL AS FOREIGN, TAX CONSEQUENCES TO YOU, IN LIGHT
OF YOUR PARTICULAR SITUATION, OF PARTICIPATING IN THE EXCHANGE OFFER AND OWNING
AND DISPOSING OF NEW BONDS.
THE EXCHANGE OFFER
An exchange of old bonds for new bonds pursuant to the exchange offer will
not be a taxable event for United States federal income tax purposes.
Accordingly, a holder will not recognize gain or loss upon receipt of a new bond
in exchange for an old bond, the new bond will have the same issue price as the
old bond in exchange for which it was issued, and a holder will have the same
adjusted tax basis and holding period in the new bond as it had in the old bond
immediately before the exchange.
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UNITED STATES HOLDERS
PAYMENTS OF INTEREST
Stated interest on a new bond will be taxable to a United States holder as
ordinary income at the time it is received or accrued in accordance with the
United States holder's regular method of accounting for United States federal
income tax purposes.
MARKET DISCOUNT
If a United States holder purchased an old bond for less than its stated
redemption price at maturity, the difference will be treated as "market
discount" for United States federal income tax purposes, unless the difference
is less than a specified DE MINIMIS amount. Under the market discount rules, the
United States holder will be required to treat any gain on the sale, exchange,
redemption or other disposition of the new bond received in exchange for the old
bond as ordinary income to the extent of the market discount that has not
previously been included in income and that is treated as having accrued on the
old bond or the new bond at the time of the disposition. In addition, the United
States holder may be required to defer, until the maturity or earlier
disposition of the new bond, the deduction of all or a portion of the interest
expense on any indebtedness incurred or continued to purchase or carry the old
bond or new bond.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition of the old bond to the maturity date of the new
bond unless the United States holder elects to accrue under a constant yield
method. A United States holder may elect to include market discount in income
currently as it accrues (either ratably or under a constant yield method), in
which case the rule described above regarding deferral of interest deductions
will not apply. This election to include market discount in income currently,
once made, applies to all market discount obligations held or subsequently
acquired by the United States holder on or after the first day of the first
taxable year to which the election applies and may not be revoked without the
consent of the Internal Revenue Service ("IRS").
AMORTIZABLE BOND PREMIUM
A United States holder that purchased an old bond for an amount greater than
its stated redemption price at maturity will be considered to have purchased the
old bond at a "premium." A United States holder generally may elect to amortize
the premium over the remaining term of the new bond received in exchange for the
old bond under a constant yield method. The amount amortized in any year will be
treated as a reduction of the United States holder's interest income from the
new bond. Bond premium on a new bond held by a United States holder that does
not make such an election will decrease the gain or increase the loss otherwise
recognized on disposition of the new bond. The election to amortize premium on a
constant yield method, once made, applies to all debt obligations held or
subsequently acquired by the United States holder on or after the first day of
the first taxable year to which the election applies and may not be revoked
without the consent of the IRS.
SALE, EXCHANGE, RETIREMENT AND OTHER DISPOSITION OF NEW BONDS
Upon the sale, exchange, retirement or other taxable disposition of a new
bond, a United States holder will recognize gain or loss equal to the difference
between the amount realized on such disposition (less any accrued but unpaid
interest, which will be taxable as ordinary income) and the United States
holder's adjusted tax basis in the new bond. Except as described above with
respect to market discount, such gain or loss will be capital gain or loss and
will be long-term capital gain or loss if the old bond and the new bond have, in
the aggregate, been held for more than one year. Generally, for noncorporate
United States holders, long-term capital gains are subject to United States
federal income taxation at reduced rates. The deductibility of capital losses is
subject to limitations. A United States holder's adjusted tax basis in a new
bond received in exchange for an old bond will, in general, be the cost of the
old bond to the
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United States holder, increased by any market discount previously included in
income and reduced by any amortized premium.
NON-UNITED STATES HOLDERS
PAYMENTS OF INTEREST
Subject to the discussion of backup withholding below, stated interest on a
new bond received or accrued by a non-United States holder will generally be
considered "portfolio interest" and will generally not be subject to United
States federal income tax or withholding tax, as long as the non-United States
holder:
- does not conduct a trade or business in the United States with respect to
which the interest is effectively connected,
- does not actually or constructively own a 10 percent or greater interest
in the capital or profits of the partnership,
- is not a "controlled foreign corporation" with respect to which the
partnership is a "related person" within the meaning of Section 864(d)(4)
of the Code,
- is not a bank whose receipt of the interest is described in
Section 881(c)(3)(A) of the Code, and
- provides an appropriate statement, signed under penalties of perjury,
certifying that such holder is a non-United States holder and providing
such holder's name and address. If the information provided in this
statement changes, the non-United States holder must provide notice within
30 days of such change.
If such interest were not portfolio interest, then it would be subject to
United States federal income and withholding tax at a rate of 30% unless reduced
or eliminated pursuant to an applicable income tax treaty.
SALE, EXCHANGE, RETIREMENT AND OTHER DISPOSITION OF NEW BONDS
A non-United States holder generally will not be subject to United States
federal income tax on any gain realized on the sale, exchange, retirement or
other disposition of a new bond unless (i) such gain is effectively connected
with the conduct by the holder of a United States trade or business or (ii) in
the case of an individual holder, the holder is present in the United States for
183 days or more during the taxable year in which such gain is realized and
certain other conditions exist.
INFORMATION REPORTING AND BACKUP WITHHOLDING
A United States holder (other than an "exempt recipient," including a
corporation and certain other persons who, when required, demonstrate their
exempt status) may be subject to backup withholding at a rate of 31% on, and to
information reporting requirements with respect to, payments of principal of, or
interest on, and to proceeds from the sale, exchange or retirement of, new
bonds. Backup withholding will apply to a United States holder only if such
holder fails to furnish a correct taxpayer identification number or
certification of exempt status, fails to report dividend and interest income in
full, or fails to certify that such holder has provided a correct taxpayer
identification number and is not subject to backup withholding. The backup
withholding tax is not an additional tax and may be credited against a United
States holder's regular United States federal income tax liability or refunded
by the IRS where applicable.
Information reporting and backup withholding generally do not apply to
payments of interest to a non-United States holder if the certification
described above under "non-United States holders--Payments of Interest" is
received, provided the payor does not have actual knowledge that the holder is a
United States person. Payments of principal and interest made to the beneficial
owner of a new bond by or
136
<PAGE>
through the foreign office of a custodian, nominee or other agent acting on
behalf of the beneficial owner, and payment of the proceeds of a sale, exchange
or other disposition of a new bond by the foreign office of a broker, generally
will not be subject to backup withholding. However, if the custodian, nominee,
other agent or broker is a United States person, a controlled foreign
corporation for United States federal income tax purposes, or a foreign person
50% or more of whose gross income is effectively connected with a United States
trade or business for a specified three-year period, information reporting will
be required with respect to these payments unless the custodian, nominee, other
agent or broker has in its records documentary evidence that the beneficial
owner is not a United States person and certain conditions are met or the
beneficial owner otherwise establishes an exemption. Payments by a United States
office of a custodian, nominee, other agent or broker are subject to both backup
withholding and information reporting unless the beneficial owner certifies as
to its non-United States holder status under penalties of perjury or otherwise
establishes an exemption.
Income tax regulations that are generally effective for payments made after
December 31, 2000, subject to certain transition rules, modify in some respects
the backup withholding and information reporting rules. In general, these
regulations do not significantly alter the substantive requirements of these
rules, but unify current procedures and forms and clarify reliance standards.
You should consult your own tax advisor regarding these regulations.
137
<PAGE>
PLAN OF DISTRIBUTION
Until , 2000, all dealers effecting transactions in the new
bonds, whether or not participating in this distribution, may be required to
deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
Each broker-dealer that receives new bonds for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of those new bonds. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new bonds received in exchange for old bonds only
where those old bonds were acquired as a result of market-making activities or
other trading activities. The partnership has agreed that, for a period of
180 days from the date on which the exchange offer is consummated, they will
make this prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with any such resale.
The partnership has not receive any proceeds from any sale of new bonds by
broker-dealers. New bonds received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the new bonds or a combination of such methods of
resale, at prices related to such prevailing market prices or at negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any new bonds. Any
broker-dealer that resells new bonds that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of those new bonds may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933 and any profit on
any such resale of new bonds and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act of 1933. The letter of transmittal states that by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act of
1933.
For a period of 180 days from the date on which the exchange offer is
consummated, the partnership will promptly send additional copies of this
prospectus and any amendment or supplement to this prospectus to any
broker-dealer that requests those documents in the letter of transmittal. The
partnership has agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for holders of the bonds) other than
commissions or concessions of any broker-dealers and will indemnify the holders
of the bonds (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act of 1933.
CERTAIN ERISA CONSIDERATIONS
ANY EMPLOYEE BENEFIT PLAN THAT PROPOSES TO PURCHASE THE BONDS SHOULD CONSULT
WITH ITS COUNSEL WITH RESPECT TO THE POTENTIAL CONSEQUENCES OF SUCH INVESTMENT
UNDER THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AND THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE
CODE.
ERISA and the Code impose certain requirements on employee benefit plans and
certain other retirement plans and arrangements, including individual retirement
accounts and annuities, that are subject to ERISA or the Code (all of which are
hereinafter referred to as "ERISA Plans") and on persons who are fiduciaries
with respect to such ERISA Plans. A person who exercises discretionary authority
or control with respect to the management or assets of an ERISA Plan will be
considered a fiduciary of such ERISA Plan under ERISA. In accordance with
ERISA's general fiduciary standards, before investing in the bonds, an ERISA
Plan fiduciary should determine whether such an investment is permitted under
the governing ERISA Plan instruments and is appropriate for the ERISA Plan in
view of its overall investment policy and the composition and diversification of
its portfolio. Other provisions of ERISA and the Code
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<PAGE>
prohibit certain transactions involving the assets of such ERISA Plan and
persons who have certain specified relationships to the ERISA Plan ("parties in
interest" within the meaning of ERISA or "disqualified persons" within the
meaning of the Code). Thus, such ERISA Plan fiduciary considering an investment
in the bonds should also consider whether such an investment may constitute or
give rise to a prohibited transaction under ERISA or the Code and whether an
administrative exemption may be applicable to such investment.
An ERISA Plan fiduciary considering the purchase of the bonds should consult
its tax and/or legal advisors regarding the availability, if any, of exemptive
relief from any potential prohibited transaction and other fiduciary issues and
their potential consequences. Each purchaser acquiring the bonds with the assets
of an ERISA Plan with respect to which the partnership, an initial purchaser, or
any party related thereto is a party in interest or a disqualified person shall
be deemed to have represented that a statutory or an administrative exemption
from the prohibited transaction rules under Section 406 of ERISA and
Section 4975 of the Code is applicable to such purchaser's acquisition and
holding of the bonds.
LITIGATION
There is no litigation of any nature pending or threatened against the
partnership as of the date of this prospectus affecting our project, or
contesting or affecting the validity of the bonds or any proceedings of the
partnership taken with respect to the authorization, issuance, sale or delivery
of the bonds, or the pledge or the application of any monies or the security
provided for the payment of the bonds, or the existence or powers of the
partnership.
LEGAL MATTERS
The validity of the new bonds will be passed upon for us by Winthrop,
Stimson, Putnam & Roberts, New York, New York, our special New York counsel to
the partnership.
EXPERTS
The financial statements for the partnership at August 31, 1999 and for the
eight-months then ended included in this prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
R. W. Beck has prepared the Independent Engineer's Report that is included
as Appendix B to this prospectus. The Independent Engineer's Report has been
included in this prospectus in reliance upon the conclusions therein and upon R.
W. Beck's experience in the review of the design, development, construction and
operation of electric generation projects, including those similar to this
project.
RDI has prepared the Independent Market Consultant's Report that is included
as Appendix C to this prospectus. The Independent Market Consultant's Report has
been included in this prospectus in reliance upon the conclusions therein and
upon the authority of RDI as an expert in the analysis of power markets,
including future market demand, future market prices for electric energy and
capacity and related matters, for electric generating facilities.
MISCELLANEOUS
All estimates and assumptions herein are believed to be reasonable, but no
warranty, guaranty or other representation is made that such estimates or
assumptions will be realized or are correct. So far as any statements herein
involve matters of opinion, whether or not expressly so stated, they are
intended merely as such and not as representations of fact.
139
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Public Accountants.................... F-2
Financial Statements:Balance Sheet August 31, 1999.......... F-3
Statement of Operations for the Eight-Month Period Ended
August 31, 1999........................................... F-4
Statement of Partners' Deficit for the Eight-Month Period
Ended August 31, 1999..................................... F-5
Statement of Cash Flows for the Eight-Month Period Ended
August 31, 1999........................................... F-6
Notes to Financial Statements............................... F-7
</TABLE>
F-1
<PAGE>
[LOGO]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Tenaska Georgia Partners, L.P.:
We have audited the accompanying balance sheet of Tenaska Georgia Partners,
L.P. (a Delaware limited partnership in the development stage) as of August 31,
1999, and the related statements of operations, partners' deficit and cash flows
for the eight-month period ended August 31, 1999. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Tenaska Georgia Partners,
L.P. as of August 31, 1999, and the results of its operations and its cash flows
for the eight-month period ended August 31, 1999, in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
Omaha, Nebraska,
October 7, 1999
(except with respect to the matters
discussed in Note 4, as to which the
date is November 4, 1999)
F-2
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
BALANCE SHEET--AUGUST 31, 1999
<TABLE>
<S> <C>
ASSETS
LAND........................................................ $ 89,334
-----------
Total assets............................................ $ 89,334
===========
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES:
Payable to affiliate...................................... $ 6,119,584
-----------
Total current liabilities............................... 6,119,584
-----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' DEFICIT:
Tenaska Georgia, Inc...................................... (60,303)
Tenaska Georgia I, L.P.................................... (5,969,947)
-----------
Total partners' deficit................................. (6,030,250)
-----------
Total liabilities and partners' deficit................. $ 89,334
===========
</TABLE>
The accompanying notes are an integral part of this balance sheet.
F-3
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
STATEMENT OF OPERATIONS
FOR THE EIGHT-MONTH PERIOD ENDED AUGUST 31, 1999
<TABLE>
<S> <C>
EXPENSES:
Start-up Costs:
Management fees and expenses............................ $ 3,189,951
Professional and consulting fees........................ 2,611,643
General and administrative expenses..................... 147,619
Other expenses.......................................... 81,037
-----------
Total expenses........................................ 6,030,250
-----------
NET LOSS TO PARTNERS ACCUMULATED DURING THE DEVELOPMENT
STAGE..................................................... $(6,030,250)
===========
</TABLE>
The accompanying notes are an integral part of this statement.
F-4
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
STATEMENT OF PARTNERS' DEFICIT
FOR THE EIGHT-MONTH PERIOD ENDED AUGUST 31, 1999
<TABLE>
<CAPTION>
TENASKA TENASKA
GEORGIA, INC. GEORGIA I, L.P. TOTAL
------------- --------------- -----------
<S> <C> <C> <C>
BALANCE, January 1, 1999................................ $ -- $ -- $ --
Net loss to partners accumulated during the
development stage................................... (60,303) (5,969,947) (6,030,250)
-------- ----------- -----------
BALANCE, August 31, 1999................................ $(60,303) $(5,969,947) $(6,030,250)
======== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
F-5
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
STATEMENT OF CASH FLOWS
FOR THE EIGHT-MONTH PERIOD ENDED AUGUST 31, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss to partners accumulated during the development
stage................................................... $(6,030,250)
Adjustments to reconcile net loss to partners accumulated
during the development stage to net cash from operating
activities-Increase in payable to affiliate............. 6,119,584
-----------
Total adjustments....................................... 6,119,584
-----------
Net cash provided by operating activities............... 89,334
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land.......................................... (89,334)
-----------
Net cash used in investing activities................... (89,334)
-----------
NET INCREASE IN CASH........................................ --
CASH, beginning of period................................... --
-----------
CASH, end of period......................................... $ --
===========
</TABLE>
The accompanying notes are an integral part of this statement.
F-6
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
Tenaska Georgia Partners, L.P. (the Limited Partnership) was formed on
April 16, 1998, to develop, finance, construct, lease, operate and maintain a
936 megawatt, natural gas-fired electric generation peaking facility (the
Facility) located in Heard County, Georgia. The Facility will generate electric
power for sale and the Limited Partnership expects to incur costs of
approximately $320,500,000 to complete the Facility. The Limited Partnership was
inactive prior to calendar year 1999 and commenced development activities during
such year. The Limited Partnership is scheduled to terminate December 31, 2050.
The following are the partners and their respective ownership interests and
their percentage share of net income or loss:
<TABLE>
<CAPTION>
PERCENTAGE INTEREST
PERCENTAGE INTEREST (FOR (FOR ALLOCATION OF NET
PARTNER EQUITY CONTRIBUTION PURPOSES) INCOME OR LOSS)
- ------- ----------------------------- ----------------------
<S> <C> <C>
Tenaska Georgia, Inc. (General)................... 1.00% 1.00%
Tenaska Georgia I, L.P. (Limited)................. 99.00 99.00
------ ------
100.00% 100.00%
====== ======
</TABLE>
The General and Limited Partners have committed to fund up to $35,500,000 of
equity and the Limited Partnership anticipates issuing bonds of approximately
$285,000,000 to fund construction of the Facility.
The day-to-day management of the affairs of the Limited Partnership,
including preparation and maintenance of the financial and other records and
books of account of the Limited Partnership and supervision of the ongoing
operations of the facilities, loan administration and activities of the Limited
Partnership, are the responsibility of the managing partner (Tenaska Georgia,
Inc.) subject to the direction of the Executive Review Committee. Tenaska
Georgia, Inc. does not have the authority to incur any obligations or
liabilities on behalf of the Limited Partnership, except as approved by the
Executive Review Committee.
USE OF ESTIMATES
The preparation of these financial statements required the use of certain
estimates by management in determining the Limited Partnership's assets,
liabilities, revenue and expenses. Actual results could differ from those
estimates.
FINANCIAL STATEMENT PRESENTATION
At August 31, 1999, the Limited Partnership was a development stage
enterprise as defined in Financial Accounting Standards Board Statement No. 7
"Accounting and Reporting by Development Stage Enterprises."
F-7
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
INCOME TAXES
The Limited Partnership has no liability for income taxes. ]Income is taxed
to the partners based on their proportionate share of the Limited Partnership's
taxable income. Therefore, no provision or liability for income taxes has been
included in the accompanying financial statements.
PAYABLE TO AFFILIATE
The Limited Partnership has a payable to an affiliate, Tenaska, Inc., for
all costs incurred since the commencement of development stage activities. These
costs relate to management fees, professional and consulting fees, and other
costs incurred to establish the Limited Partnership and obtain contracts
necessary to construct the Facility.
RISKS AND UNCERTAINTIES
The Limited Partnership has incurred losses from operations since its
inception and does not currently have any operating reserves. The Limited
Partnership must secure additional debt funding and equity capital and/or rely
on its affiliates in order to fund start-up costs and construction expenditures.
The Limited Partnership is also subject to several additional risks,
including but not limited to, risks associated with the cost and timely
construction of the Facility, the nature of and reliance on long-term
contractual obligations with various third parties, the ability to operate the
Facility in order to meet long-term contractual obligations, regulatory risks
and other uncertainties in the power industry.
START-UP COSTS
The Limited Partnership incurred start-up costs such as management fees,
professional and consulting fees, and other costs during the period. These items
were expensed in the accompanying statement of operations in accordance with the
AICPA's Statement of Position 98-5 "Reporting on the Costs of Start-Up
Activities."
2. TRANSACTIONS WITH AFFILIATES:
As of August 31, 1999, the Limited Partnership had a payable to Tenaska,
Inc. of $6,119,584. During the eight-month period ended August 31, 1999,
billings from Tenaska, Inc. to the Limited Partnership for development
activities were $6,119,584, of which $6,030,250 was expensed as start-up costs
and $89,334 was capitalized as land. The Limited Partnership expects to incur
approximately $13,100,000 in total development fees and costs for the project.
Included in this amount is a development fee payable to the General Partner on
the date long-term financing is obtained.
The Limited Partnership Agreement also provides for the payment of an annual
fee to the General Partner with an initial fee payable of $350,000 on the date
long-term financing is obtained and on each subsequent anniversary date
escalating 5 percent annually until the operation of the Facility terminates.
On September 10, 1999, the Limited Partnership entered into the Operations
and Maintenance Agreement (O&M Agreement) with an affiliate, Tenaska Operations,
Inc. (the Operator). The Operator is a wholly owned subsidiary of Tenaska, Inc
and will provide services for the start-up, commissioning,
F-8
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
2. TRANSACTIONS WITH AFFILIATES: (CONTINUED)
operation and maintenance of the Facility. The Operator will receive a fixed
fee, may receive an incentive fee, may receive an availability bonus or may pay
an availability penalty on an annual basis.
3. SIGNIFICANT CONTRACTS:
POWER PURCHASE AGREEMENT (PPA)
On August 24, 1999, the Limited Partnership entered into the PPA with PECO
Energy Co. (PECO) whereby PECO will purchase the entire net electric power
generated from the cogeneration plant for a term of 29 years commencing on the
commercial operation of the initial gas turbine units. The PPA provides for
certain fixed payments, an availability bonus, along with variable payments.
The Limited Partnership is to pay liquidated damages to PECO if commercial
operation is not achieved by specific dates which may be extended for certain
events. The aggregate liability for late completion of the Facility is limited
to $25,000,000.
The PPA provides PECO a contract termination option if the commercial
operation date is not achieved by the 365th day after the applicable scheduled
commercial operation date as may be extended for force majeure. Also, PECO has a
termination option if the Limited Partnership does not meet 67 percent annual
availability requirements for two consecutive years and the most recent capacity
test is less than 550 megawatts. Finally, the PPA provides PECO a termination
option for a shortened operating term after 20 years of commercial operation.
This termination option would require PECO to pay the Limited Partnership
$175,000,000. PECO will market the power through its Power Team division to
various customers. Also, PECO is responsible for supplying all the natural gas
and fuel oil necessary to fulfill the Limited Partnership's obligations under
the PPA.
ENGINEERING, PROCUREMENT AND CONSTRUCTION (EPC) AGREEMENTS
On September 15, 1999, the Limited Partner entered into an EPC agreement
with Zachry Construction Corporation (Zachry) to design, engineer, procure,
expedite and supply all labor, materials (including the gas turbines),
supervision and tools for the construction of the cogeneration plant for a total
guaranteed lump-sum price of $222,534,247. This EPC contract will be assigned to
the Limited Partnership on or prior to the date long-term financing is obtained.
On August 27, 1999, the Limited Partner entered into a contract with General
Electric Company (GE) for the purchase of six gas turbines. This turbine
contract will be assigned to Zachry on or prior to the date long-term financing
is obtained. Under the terms of the turbine contract, GE is scheduled to deliver
the six gas turbines beginning September 30, 2000, continuing through December
15, 2001. The first three gas turbine units are scheduled by the EPC to be
completed for commercial operation by June 1, 2001. The second three gas turbine
units are scheduled for commercial operation on June 1, 2002.
Zachry is to pay liquidated damages if commercial operation is not achieved
by specific dates or if the performance of the Facility does not meet minimum
contractual requirements. The aggregate liability for late completion and/or
performance shortfalls is limited to 30 percent of the guaranteed lump-sum
price.
F-9
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
(A DEVELOPMENT STAGE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
AUGUST 31, 1999
3. SIGNIFICANT CONTRACTS: (CONTINUED)
On September 23, 1999, the Limited Partnership entered into a separate
$2,300,000 EPC agreement with Willbros Engineers, Inc. to construct a natural
gas pipeline from the Facility to an interconnection point with a local utility.
LONG-TERM PARTS AND LONG-TERM SERVICE AGREEMENT (LTSA)
On June 24, 1999, Tenaska, Inc. entered into the LTSA with General Electric
International, Inc. (GEI), a wholly owned affiliate of GE, whereby GEI will
provide maintenance services, cover major parts replacement and repair,
inspection, and overhaul services for the gas turbines. The Limited Partnership
will pay GEI an initial fee of $110,000 in January 2001 and $3,600,000 for the
initial supply of spare parts for the gas turbines. This LTSA will be assigned
to the Limited Partnership on or prior to the date long-term financing is
obtained.
4. EVENTS OCCURRING SUBSEQUENT TO THE ORIGINAL DATE OF REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS:
Subsequent to October 7, 1999, the Limited Partnership revised the costs it
expects to incur to complete the Facility to approximately $310,500,000 and
reduced the amount of bonds the Limited Partnership anticipates issuing to fund
construction of the Facility to approximately $275,000,000. These revisions are
based on changes in negotiations related to obtaining long-term financing.
Subsequent to October 7, 1999, the Limited Partnership revised the amount of
development costs it expects to incur for the Project to approximately
$7,000,000, and expects no development fees to be paid to the General Partner.
Subsequent to October 7, 1999, the Limited Partnership Agreement was amended
and restated whereby payment of an annual fee to the General Partner for
$599,000 commences on January 1, 2010, and on each subsequent anniversary date
escalating at 5 percent annually until the operation of the Facility terminates.
Subsequent to October 7, 1999, change orders were placed in the EPC
agreement with Zachry which revised the total guaranteed lump-sum price from
$222,534,247 to $229,064,832.
F-10
<PAGE>
APPENDIX A: DEFINED TERMS
Capitalized terms used but not defined in the foregoing shall have the following
meanings:
"ACCEPTABLE CREDIT SUPPORT" means with respect to the Power Purchase
Agreement, (a) one or more letters of credit issued by one or more domestic or
foreign banks whose long term debt is rated at the Closing Date at least BBB+ or
the equivalent by S&P or Moody's or any successor Rating Agency, provided, that
if Acceptable Credit Support is issued prior to the Closing Date, then for the
period prior to the Closing Date such Acceptable Credit Support may be issued by
The First National Bank of Omaha, provided, that its long term debt is rated on
the date of issuance of the letter of credit no lower than BBB- or the
equivalent) or (b) a guaranty or several guaranties issued by parties or by
other creditworthy parties reasonably satisfactory to PECO.
"ACCEPTABLE LETTER OF CREDIT" means with respect to the Equity Contribution
Agreement, one or more irrevocable letters of credit in the form attached to the
Equity Contribution Agreement, issued to Collateral Agent as named beneficiary
and for the account of a Contributing Partner or an Affiliate thereof other than
the partnership, in an initial stated amount equal to the Contributing Partner's
Support Amount on the date of issuance of such letter of credit, issued by a
domestic or foreign commercial bank whose outstanding senior unsecured long-term
debt is rated at least A--or the equivalent by S&P or Moody's.
"ACCEPTABLE GUARANTY" means a guaranty in the form attached to the Equity
Contribution Agreement, in favor of the Collateral Agent, guaranteeing the
obligations of a Contributing Partner to make all of the Equity Contributions
required to be made by such Contributing Partner under the Equity Contribution
Agreement, entered into, executed and delivered by the parent company or other
Affiliate of such Contributing Partner, which parent company or other Affiliate
(i) is rated Investment Grade by S&P and Moody's, and (ii) has net worth of not
less than $100,000,000.
"ACCRUED SENIOR DEBT" means, on the date on which the Commercial Operation
Certificate is delivered, the amount at least equal to principal, interest and
letter of credit fees on all Senior Debt due and payable on the Scheduled
Payment Date immediately succeeding the date of such Commercial Operation
Certificate multiplied by a fraction (a) the numerator of which is the number of
complete months since the immediately preceding Scheduled Payment Date and
(b) the denominator of which is six.
"ADDITIONAL PROJECT DOCUMENT" means (i) any material contract or undertaking
entered into by the partnership after the Closing Date relating to the sale of
electricity from the project or to capital improvements for, operation or
maintenance of, the project and (ii) any consent or security instrument entered
into by the partnership or any other relevant party in connection with an
Additional Project Document.
"AFFILIATE" means, with respect to any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
such Person. For purposes of this definition, the term "control" (including the
correlative meanings of the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of securities or
partnership or other ownership interests or by contract or otherwise.
Notwithstanding the foregoing, each Person owning, directly or indirectly, 10%
or more of the partnership interests in the partnership shall be deemed to be an
Affiliate of the partnership.
"AFFILIATE SUBORDINATED DEBT" means Indebtedness (including any note or
other instrument evidencing the same) advanced by Affiliates of the partnership
which has been subordinated to the Senior Debt, on the terms and conditions
substantially in the form of the subordination provisions set forth in the
Collateral Agency Agreement.
A-1
<PAGE>
"APPLICABLE LAW" means with respect to any Person, property or matter, any
of the following applicable thereto: any statute, law, regulation, ordinance,
rule, judgment, rule of common law, order, decree, Governmental Approval,
approval, concession, grant, franchise, license, agreement, directive,
guideline, policy, requirement, or other governmental restriction or any similar
form of decision of, or determination by, or any interpretation or
administration of any of the foregoing, by any Governmental Authority, whether
in effect as of the date of the Common Agreement or thereafter and in each case
as amended (including, without limitation, any pertaining to land use or zoning
restrictions).
"AUTHORITY" means the Development Authority of Heard County, Georgia.
"AUTHORITY BONDS" means the $275,000,000 Taxable Industrial Development
Revenue Bonds (Tenaska Georgia Partners, L.P. Project), Series 1999, issued by
the Authority pursuant to the Authority Indenture.
"AUTHORITY INDENTURE" means that certain Indenture of Trust, dated as of
November 1, 1999, between the Authority and The Chase Manhattan Bank, as trustee
thereunder.
"AUTHORITY SECURITY DEED" means the Deed to Secure Debt, Security Agreement
and Assignment of Rents and leases, dated as of November 1, 1999, by and between
the Authority and the Authority Trustee, as amended from time to time.
"AUTHORITY TRUSTEE" means The Chase Manhattan Bank, its successors and
assigns, in its capacity as trustee under the Authority Indenture.
"AUTHORITY TRUSTEE CLAIMS" means all obligations of the partnership, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities and
indemnities under the Authority Indenture or the Lease Agreement.
"AUTHORIZATION TO PROCEED" means the order given to the EPC Contractor
granting it the authority to proceed with performance pursuant to all provisions
of the EPC Contract.
"AUTHORIZED OFFICER" or "AUTHORIZED REPRESENTATIVE" means (a) in the case of
any corporation or limited liability company, the chief executive officer, the
president, the chief financial officer, a vice president, the treasurer or an
assistant treasurer of such corporation or limited liability company and (b) in
the case of any general or limited partnership, any Person authorized by the
executive review committee (or such other Person that is responsible for the
management of such partnership) to take the applicable action on behalf of such
partnership or any officer (with a title specified in clause (a) above) or
Authorized Officer of such partnership's managing general partner (or such other
Person that is responsible for the management of such managing general partner).
"AVAILABILITY ADJUSTMENTS" means Summer Availability Adjustments and Annual
Availability Adjustments.
"AVAILABILITY PERCENTAGES" means the Summer Availability Percentage and the
Annual Availability Percentage.
"AVAILABILITY SCHEDULE" means the information provided in writing by the
partnership listing for each hour of the applicable day in Summer Months and
Non-Summer Months (i) the number of Units available to deliver energy, (ii) the
partnership's good faith estimate of maximum available output from the facility
per Unit, and (iii) the number of Units available which are in fuel oil capable
mode.
"AVAILABILITY TEST" shall have the meaning given to that term in the EPC
Contract.
"BASE UNIT OUTPUT" means a mode of facility operation during which (i) each
Unit in operation during such hour is operated entirely on natural gas for the
entire hour, and (ii) each operating Unit generates energy for the entire hour
at an output equal to or greater than Unit Capacity for such Contract Year less
5 MW.
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"BOND PAYMENT ACCOUNT" means the account so designated, established and
created pursuant to the Indenture.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or legal holiday
in the State of New York, or a day on which banking institutions chartered by
the State of New York, or the United States, are legally required or authorized
to close.
"CASH DEPOSIT" means as of any date, a cash deposit to a Contributing
Partner Support Account in the amount equal to all or a portion of the
Contributing Partner's Support Amount as of such date.
"CASH FLOW AVAILABLE FOR DEBT SERVICE" means, in respect of a specified
period, (i) all Revenues deposited in the Revenue Fund, if such specified period
occurred prior to the date of determination or (ii) all Revenues projected to be
deposited in the Revenue Fund during such period if such specified period is to
occur subsequent to the date of determination less amounts paid, or projected to
be paid, as applicable, in respect of Operating and Maintenance Expenses,
Collateral Agent Claims, Depositary Bank Claims, Trustee Claims, Authority
Trustee Claims, Power Purchase Agreement Letter of Credit Agent Claims and Debt
Service Reserve Letter of Credit Agent Claims, and under a Working Capital
Facility during such period.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, as amended.
"CERTIFICATED BONDS" means a bond issued in certificate form to a Person
other than DTC.
"CLOSING DATE" means the date of issuance and delivery of the bonds.
"CODE" means, the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency and Intercreditor
Agreement, dated as of November 1, 1999, among the partnership, the Authority
Trustee, the Trustee, the Debt Service Reserve Letter of Credit Agent, the Power
Purchase Agreement Letter of Credit Agent, the Collateral Agent and the
Depositary Bank.
"COLLATERAL AGENT" means The Chase Manhattan Bank, its successors and
assigns in its capacity as collateral agent under the Collateral Agency
Agreement and the other Financing Documents to which it is a party.
"COLLATERAL AGENT CLAIMS" means all obligations of the partnership, now or
hereafter existing, to pay fees, costs, expenses, liabilities and indemnities to
the Collateral Agent pursuant to the Financing Documents.
"COMBINED EXPOSURE" means, as of any date of calculation, the sum
(calculated without duplication) of the following, to the extent the same is
held by or represented by a Senior Party: (i) the aggregate principal amount of
all Outstanding Bonds; (ii) the maximum amount available to be drawn under the
Debt Service Reserve Letter of Credit (taking into account, without duplication,
in the case of the Debt Service Reserve Letter of Credit, the maximum amount
which may become available to be drawn in the future by reason of an increase in
the Debt Service Reserve Required Balance); (iii) the maximum amount available
to be drawn as of such date under the Power Purchase Agreement Letter of Credit;
(iv) the maximum amount available to be drawn under a Working Capital Facility;
(v) the amount, without duplication, of any unreimbursed drawing under a Working
Capital Facility, the Debt Service Reserve Letter of Credit and the Power
Purchase Agreement Letter of Credit; (vi) the aggregate amount of all undrawn
financing commitments under the documents governing Other Senior Debt, which the
creditors party thereto have no right to terminate; and (vii) the amount,
without duplication, of any unreimbursed drawing under the documentation
governing such Other Senior Debt.
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"COMMERCIAL OPERATING PERIOD" means the period of commercial operation of
the project as further defined in the O&M Agreement.
"COMMERCIAL OPERATION" means, with respect to a Unit, that it has passed
each of the following tests: (i) Functional Testing, (ii) the Demonstration
Tests, (iii) PECO Tests, and (iv) the Availability Test, each in accordance with
the EPC Contract.
"COMMERCIAL OPERATION CERTIFICATE" has the meaning set forth under "SUMMARY
DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--The
Project Funds--CONSTRUCTION FUND."
"COMMITTED AMOUNT" means the amount of water available for purchase by the
partnership, which the Water Authority has committed to sell to the partnership
pursuant to the Water Agreement.
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings, Common
Representations, Warranties, Covenants and Other Terms, dated as of November 1,
1999, among the partnership, the Trustee, the Debt Service Reserve Letter of
Credit Agent, the Power Purchase Agreement Letter of Credit Agent and the
Collateral Agent.
"COMPETITOR" means any entity which is on a list of three maintained by PECO
which cannot be amended without first providing 90 days prior written notice.
The designation of each competitor is conditioned on PECO having determined in
good faith that such Person is a competitor of PECO in the sale, brokering or
marketing of electrical energy or capacity and (i) the sale or transfer of the
facility to such Competitor would be detrimental to PECO's competitive interests
in the sale, brokering or marketing of electrical energy and capacity or
(ii) the operation or maintenance of the facility by such Competitor would be
detrimental to PECO's competitive interests in the sale, brokering or marketing
of electrical energy and capacity.
"CONSTRUCTION FUND" has the meaning ascribed to that term under "SUMMARY
DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--The
Project Funds--CONSTRUCTION FUND."
"CONSTRUCTION INTEREST ACCOUNT" means the account so designated, established
and created under the Indenture. See "SUMMARY DESCRIPTION OF PRINCIPAL FINANCING
DOCUMENTS--Indenture--Accounts--CONSTRUCTION INTEREST ACCOUNT."
"CONTRACT CAPACITY" means the capacity of the facility, expressed in MWs, to
be purchased by PECO in accordance with the Power Purchase Agreement.
"CONTRACT YEAR" means the period beginning on the Date of Commercial
Operation ending on the next May 31, each one-year period thereafter during the
Operating Term, and the period from the last June 1 during the Operating Term
until the last day of the Operating Term.
"CONTRIBUTING PARTNER" means each Partner listed as a Contributing Partner
under the Equity Contribution Agreement.
"CONTRIBUTING PARTNER'S EQUITY CONTRIBUTION COMMITMENT" means, as to any
Contributing Partner, on any date, the aggregate amount such Contributing
Partner's commitment to contribute equity to the partnership.
"CONTRIBUTING PARTNER EVENT OF DEFAULT" means, as to any Contributing
Partner, any of the following events shall occur and be continuing:
(a) such Contributing Partner shall fail to make or cause to be made any
Equity Contribution when required under the Equity Contribution Agreement;
(b) a bankruptcy event in respect of such Contributing Partner shall
have occurred and be continuing; or
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(c) the Equity Contribution Agreement shall at any time for any reason
cease to be valid and binding and in full force and effect or the validity
or enforceability thereof shall be contested by any party thereto or any
party thereto (other than the Collateral Agent) shall deny that it has any
liability or obligation thereunder.
"CONTRIBUTING PARTNER SUPPORT ACCOUNT" means, as to any Contributing
Partner, an account established by the Collateral Agent upon the request of such
Contributing Partner, into which the proceeds of drawings upon such Contributing
Partner's Support Instrument shall be deposited as provided under the Equity
Contribution Agreement.
"CONTRIBUTING PARTNER SUPPORT AMOUNT" means, as to any Contributing Partner,
as of any date, such Contributing Partner's Equity Contribution Commitment,
reduced by all Equity Contributions made by such Contributing Partner prior to
such date.
"CONTRIBUTING PARTNER SUPPORT INSTRUMENT" means, as to any Contributing
Partner, an Acceptable Letter of Credit, (ii) a Cash Deposit with Support
Account Documentation as set forth in the Equity Contribution Agreement,
(iii) an Acceptable Guaranty or (iv) a Contributing Partner Substitute Support
Instrument, in each case provided by or in support of the obligations of such
Contributing Partner.
"CPI" means the Consumer Price Index published by the Bureau of Labor
Statistics of the United States Department of Labor.
"DAILY GAS PRICE" means the amount in $/MMBtu equal to the daily midpoint of
the Daily Index Citation.
"DAILY INDEX CITATION" means for a day the citation labeled "Transco, St.
85" as published by Gas Daily for such day. If the Gas Daily index for "Transco,
St. 85" ceases to be published, such index shall be replaced by such other
comparable index mutually agreed upon by the parties, or failing such mutual
agreement, by an index as determined by arbitration. In the event that the Daily
Index Citation is not published for the day on which the natural gas is
purchased, the published index citation for the immediately preceding day for
which an index citation is published shall be used.
"DATE OF COMMERCIAL OPERATION" means the date not earlier than June 1, 2001,
on which the Initial Units have achieved Power Purchase Agreement Commercial
Operation.
"DATE OF COMMERCIAL OPERATION OF THE FINAL UNITS" means the date not earlier
than June 1, 2002 on which all the Final Units have achieved Power Purchase
Agreement Commercial Operation.
"DEBT SERVICE" means, without duplication, all principal, interest, premium
(if any) and letter of credit fees due with respect to the bonds and all other
Permitted Indebtedness due during such period.
"DEBT SERVICE COVERAGE RATIO" means for any period the ratio of (a) Cash
Flow Available for Debt Service for such period to (b) Debt Service (other than
Debt Service for Subordinated Debt) for such period.
"DEBT SERVICE FUND" means the Debt Service Fund so designated, established
and created under the Collateral Agency Agreement for the benefit of the Senior
Parties.
"DEBT SERVICE RESERVE ACCOUNT" means the account under the Debt Service Fund
established pursuant to the terms of the Collateral Agency Agreement into which
monies are to be deposited as set forth under the heading "SUMMARY DESCRIPTION
OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--The Project
Funds--Debt Service Fund--DEBT SERVICE RESERVE ACCOUNT."
"DEBT SERVICE RESERVE BONDS" has the meaning specified under "SUMMARY
DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Debt Service Reserve Letter of
Credit Reimbursement Agreement--Conversion into Debt Service Reserve Bonds."
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<PAGE>
"DEBT SERVICE RESERVE LETTER OF CREDIT" or "DEBT SERVICE RESERVE LOC" means
a letter of credit provided by the partnership to the Collateral Agent from a
financial institution rated at least "A-" by S&P and "A3" by Moody's in respect
of all or a portion of the Debt Service Reserve Required Balance.
"DEBT SERVICE RESERVE LETTER OF CREDIT AGENT" means initially, The
Toronto-Dominion Bank and any other financial institution acting as the agent
for the Debt Service Reserve Letter of Credit Issuer and the Debt Service
Reserve Letter of Credit Banks under the Debt Service Reserve Letter of Credit
Reimbursement Agreement.
"DEBT SERVICE RESERVE LETTER OF CREDIT AGENT CLAIMS" means all obligations
of the partnership, now or hereafter existing, to pay administrative fees,
costs, expenses, liabilities and indemnities under the Debt Service Reserve
Letter of Credit Reimbursement Agreement.
"DEBT SERVICE RESERVE LETTER OF CREDIT BANK" means each bank or financial
institution that becomes party to the Debt Service Reserve Letter of Credit
Reimbursement Agreement.
"DEBT SERVICE RESERVE LETTER OF CREDIT EVENT OF DEFAULT" means an "Event of
Default" under the Debt Service Reserve Letter of Credit Reimbursement
Agreement.
"DEBT SERVICE RESERVE LETTER OF CREDIT ISSUER" means initially, The
Toronto-Dominion Bank or any other financial institution providing the Debt
Service Reserve Letter of Credit pursuant to the Debt Service Reserve Letter of
Credit Reimbursement Agreement.
"DEBT SERVICE RESERVE LETTER OF CREDIT LOAN" means each drawing, and "DEBT
SERVICE RESERVE LETTER OF CREDIT LOANS" means all drawings, by the Collateral
Agent under the Debt Service Reserve Letter of Credit.
"DEBT SERVICE RESERVE LETTER OF CREDIT REIMBURSEMENT AGREEMENT" means the
Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as of
the Closing Date, among the partnership, the Debt Service Reserve Letter of
Credit Issuer, the Debt Service Reserve Letter of Credit Agent and the Debt
Service Reserve Letter of Credit Banks or another agreement providing for the
issuance of a Debt Service Reserve Letter of Credit.
"DEBT SERVICE RESERVE LOANS" means, individually or collectively, Debt
Service Reserve Bonds, Debt Service Reserve Term Loans and Debt Service Reserve
Letter of Credit Loans.
"DEBT SERVICE RESERVE TERM LOAN" means a loan resulting from a conversion of
a Debt Service Reserve Letter of Credit Loan to a Debt Service Reserve Term Loan
or a draw on the Debt Service Reserve Letter of Credit after the occurrence of a
Step-up Event.
"DEBT SERVICE RESERVE REQUIRED BALANCE" means the amount equal to the next
succeeding semi-annual scheduled payment of principal and interest due and
payable on Outstanding Bonds plus, if a Debt Service Reserve Letter of Credit is
to be provided, an amount corresponding to six months of interest on the maximum
amount of such Debt Service Reserve Letter of Credit, as established by the
partnership and the Debt Service Reserve Letter of Credit Agent pursuant to the
Debt Service Reserve Letter of Credit Reimbursement Agreement.
"DEBT TERMINATION DATE" means the date on which all Finance Liabilities,
other than contingent liabilities and obligations which are unasserted at such
date, have been paid and satisfied in full and all Finance Commitments have been
terminated.
"DEFAULT" means an event or condition that, with the giving of notice, lapse
of time, or failure to satisfy certain specified conditions, or any combination
thereof, would become an Event of Default.
"DELAY TERMINATION DATE OF THE INITIAL UNITS" means June 1, 2002, as such
date may be extended in accordance with the Power Purchase Agreement.
"DELAY TERMINATION DATE OF THE FINAL UNITS" means June 1, 2003, as such date
may be extended in accordance with the Power Purchase Agreement.
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"DELIVERED ENERGY" for a period of time shall mean the amount of energy
expressed in MWh (rounded to the nearest whole MWh, with 0.50 MWh's being
rounded to the next highest MWh) delivered to PECO at the applicable points of
delivery during such period pursuant to an energy request.
"DEMONSTRATION TEST" shall have the meaning given to that term in the EPC
Contract.
"DEPOSITARY BANK" means The Chase Manhattan Bank, as depositary bank under
the Collateral Agency Agreement or any successor thereto pursuant to the terms
thereof.
"DEPOSITARY BANK CLAIMS" means all obligations of the partnership, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities and
indemnities to the Depositary Bank under the Financing Documents
"DEPRECIATION FACTORS" means the stated factor used in calculating
depreciation as set forth in the Tax Agreement.
"DISTRIBUTION CONDITIONS" has the meaning set forth under "SUMMARY
DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--The
Project Funds--PARTNERSHIP DISTRIBUTION FUND."
"DISTRIBUTION SUSPENSE ACCOUNT" means the account under the Partnership
Distribution Fund established pursuant to the terms of the Collateral Agency
Agreement into which monies are to be deposited as set forth under the heading
"SUMMARY DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency
Agreement--The Project Funds--PARTNERSHIP DISTRIBUTION FUND."
"DTC" means The Depository Trust Company, having a principal office at 55
Water Street, New York, New York, 10041-0099, together with any Person
succeeding thereto by merger, consolidation or acquisition of all or
substantially all of its assets, including substantially all of its securities
payment and transfer operations.
"EMCON" is the environmental consulting firm to the partnership.
"EMINENT DOMAIN PROCEEDS" means all proceeds in respect of any action to
condemn, seize or appropriate all or any part of the project.
"ENERGY CONTRACT BUY-OUT" means any cash payment by a purchaser of capacity
and/or energy, including by PECO, the effect of which is to result in the
termination or cancellation of, reduce future payments under, or change the term
of, the purchase contract between such purchaser and the partnership.
"ENERGY CONTRACT BUY-OUT PROCEEDS SUB-ACCOUNT" means the sub-account of the
Loss Proceeds Account established by the Collateral Agent pursuant to the
Collateral Agency Agreement into which all proceeds received by or on behalf of
the partnership in respect of an Energy Contract Buy-Out are to be deposited.
"ENERGY DELIVERY TOLERANCE" means, with respect to an hour, the greater of
1% of the energy request or 2 MWhs.
"ENERGY PAYMENTS" mean the monthly energy payments payable by PECO to the
partnership pursuant to the Power Purchase Agreement.
"EPA" means the U.S. Environmental Protection Agency.
"EPC BUY-DOWN" means any cash payment by the EPC Contractor or the EPC
Guarantor, or by the issuer of any performance bond securing the performance by
the EPC Contractor of the EPC Contract, in respect of performance liquidated
damages paid in accordance with the EPC Contract and no longer subject to refund
to the EPC Contractor due to subsequent enhanced facility performance, all in
accordance with the EPC Contract.
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"EPC BUY-DOWN PROCEEDS SUB-ACCOUNT" means the sub-account of the Revenue
Fund established by the Collateral Agent pursuant to the Collateral Agency
Agreement into which all proceeds received on behalf of the partnership in
respect of an EPC Buy-Down are to be deposited.
"EPC CONTRACT" means the Engineering, Procurement and Construction
Agreement, dated September 15, 1999, as amended, between the partnership (as
assignee of TGILP) and the EPC Contractor.
"EPC CONTRACTOR" means Zachry Construction Corporation, a Delaware
corporation.
"EPC GUARANTOR" means H.B. Zachry Company, a Delaware corporation.
"EQUITY CONTRIBUTION" means an equity contribution required to be made by
each Contributing Partner under the Equity Contribution Agreement.
"EQUITY CONTRIBUTION AGREEMENT" means the Equity Contribution Agreement,
dated as of November 1, 1999, among the Contributing Partners, the partnership
and the Collateral Agent pursuant to which the Contributing Partners will agree
to contribute to the partnership equity aggregating up to $35.5 million from
time to time prior to the Date of Commercial Operation of the Final Units.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA PLAN" means an employee benefit plan and certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
that are subject to ERISA or the Code.
"ESA" means the Phase I Environmental Site Assessment conducted by EMCON
with respect to the facility site.
"EVENT OF DEFAULT" or "EVENT OF DEFAULT" means, (a) with respect to the
Financing Documents, an "Event of Default" under the Common Agreement and
(b) with respect to the various Project Documents, the meaning ascribed to such
term in the various summaries of such Project Documents.
"EVENT OF EMINENT DOMAIN" means any compulsory transfer or taking, or
transfer under threat of compulsory transfer or taking, of a material part of
the project by any governmental authority or any Person acting with the
authority thereof for more than six months, unless such transfer or taking is
being contested by the partnership in good faith.
"EVENT OF LOSS" means any event of damage, destruction, condemnation,
seizure or appropriation of all or any part of the project.
"EXCESS LOSS PROCEEDS" means any excess Loss Proceeds on deposit in the Loss
Proceeds Account after the partnership has delivered to the Collateral Agent a
certificate certifying that the Event of Loss in respect of which such Loss
Proceeds were received has been fully repaired or restored.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time.
"EXCHANGE REGISTRATION STATEMENT" shall mean a registration statement
relating to an offer to exchange in accordance with the Exchange and
Registration Rights Agreement.
"EXEMPT WHOLESALE GENERATOR" or "EWG" means an "exempt wholesale generator"
as defined in Section 32(a)(1) of PUHCA.
"FACILITY" means the 936 megawatt (nominal summer rating) natural gas-fired
simple-cycle electric generating plant to be financed, constructed, procured,
engineered and operated by the partnership and located in Heard County, Georgia.
"FACILITY SITE" means the land and other real property leased under the
Lease Agreement.
"FERC" means the Federal Energy Regulatory Commission, or any successor
thereto.
"FINAL ACCEPTANCE" shall have the meaning given to that term in the EPC
Contract.
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"FINAL UNITS" means the second three Units scheduled to be placed into Power
Purchase Agreement Commercial Operation.
"FINANCE COMMITMENT" means any commitment pursuant to any of the Financing
Documents (or any other similar agreement entered into by the partnership with
respect to the incurrence of Permitted Indebtedness (other than the bonds, the
Debt Service Reserve Letter of Credit, the Power Purchase Agreement Letter of
Credit and Subordinated Debt)) to provide credit to the partnership.
"FINANCE LIABILITIES" means all Indebtedness, liabilities and obligations of
the partnership (including, but not limited to, principal, interest, fees,
reimbursement obligations, penalties, indemnities and legal and other expenses,
whether due after acceleration or otherwise) to the Senior Parties (of
whatsoever nature and howsoever evidenced) under or pursuant to the Indenture,
the bonds, the Debt Service Reserve Letter of Credit Reimbursement Agreement,
the Power Purchase Agreement Letter of Credit Reimbursement Agreement, any
Working Capital Facility, any other Senior Debt, and any other Financing
Document (or any other similar agreement entered into by the partnership with
respect to the incurrence of Other Senior Debt), to the extent arising on or
prior to the Debt Termination Date, in each case, direct or indirect, primary or
secondary, fixed or contingent, now or hereafter arising out of or relating to
any such agreements.
"FINANCING DOCUMENTS" means, collectively, the bonds, the Indenture, the
Debt Service Reserve Letter of Credit Reimbursement Agreement and any evidence
of indebtedness thereunder entered into, the Power Purchase Agreement Letter of
Credit Reimbursement Agreement and any evidence of indebtedness issued
thereunder, the Collateral Agency Agreement, any Working Capital Facility, the
Equity Contribution Agreement and the Security Documents.
"FORCE MAJEURE," with respect to the various Project Documents, has the
meaning set forth within the summary thereof contained under "SUMMARY OF
PRINCIPAL PROJECT DOCUMENTS."
"FUNCTIONAL TESTING" shall have the meaning given to that term in the EPC
Contract.
"FUNDING DATE" means the 23rd day of each month, or, if such day is not a
Business Day, the next succeeding Business Day.
"FUNDING PERIOD" means a period commencing on a Funding Date and ending on
the day preceding the next succeeding Funding Date.
"GAAP" means generally accepted accounting principles in the United States
as in effect from time to time.
"GAS INTERCONNECT AGREEMENT" means the Interconnect, Reimbursement and
Operating Agreement, dated as of August 18, 1999, between the partnership and
Transco.
"GENERAL ELECTRIC" means General Electric Company, a New York corporation.
"GENERAL PARTNER" means TGI and any other Person who becomes a general
partner of the partnership.
"GEPD" means the Georgia Environmental Protection Division.
"GLOBAL BOND" means the global bond issued to DTC or its nominee in
registered form representing all or a portion of the Bonds.
"GOVERNMENTAL APPROVALS" means all governmental approvals, authorizations,
consents, decrees, licenses, permits, waivers, privileges, filings, or
franchises with all Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means the government of any federal, state,
municipal or other political subdivision in which the project is located, and
any other government or political subdivision thereof exercising jurisdiction
over the project or any party to any of the Project Documents, including all
agencies and instrumentalities of such governments and political subdivisions.
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"GPC" means Georgia Power Company, a Georgia corporation.
"GPC INTERCONNECTION AGREEMENT" means the Interconnection Agreement, dated
October 19, 1999, by and between GPC and the partnership.
"GTC" means the Georgia Transmission Corporation.
"GUARANTY" means the guarantee by the partnership of the Authority's
obligations on the Authority Bonds.
"GUARANTEED LUMP SUM PRICE" has the meaning set forth under "SUMMARY OF
PRINCIPAL PROJECT DOCUMENTS--EPC Contract--GUARANTEED LUMP SUM PRICE AND
PAYMENT."
"HOLDER" means, with respect to any bond, the Person in whose name such bond
is registered in the securities register; provided that the partnership or any
Affiliate thereof shall not be deemed a Holder with respect to any matter under
the Indenture or any other Financing Document requiring a vote of the Holders.
"INDEBTEDNESS" of any Person means, at any date, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments
(excluding "deposit only" endorsements on checks payable to the order of such
Person), (c) all obligations of such Person to pay the deferred purchase price
of property or services (except accounts payable and similar obligations arising
in the ordinary course of business shall not be included as Indebtedness),
(d) all obligations of such Person as lessee under capital leases to the extent
required to be capitalized on the books of such Person in accordance with GAAP
and (e) all obligations of others of the type referred to in clause (a) through
(d) above guaranteed by such Person, whether or not secured by a lien or other
security interest on any asset of such Person.
"INDENTURE" means the Indenture of Trust, dated as of November 1, 1999,
among the partnership, the Depositary Bank and the Trustee.
"INDEPENDENT CONSULTANTS" means, collectively, the Independent Engineer and
RDI.
"INDEPENDENT ENGINEER" means R. W. Beck, Inc., its successors and assigns or
such other independent engineer as may be appointed in accordance with the terms
of the Common Agreement.
"INDEPENDENT ENGINEER'S REPORT" means the Independent Engineer's Report
attached to this Offering Circular as Appendix B.
"INDEPENDENT MARKET CONSULTANT'S REPORT" means the Independent Market
Consultant's attached to this Offering Circular as Appendix C.
"INDIRECT PARTICIPANTS" means a Person that clears through or maintains a
custodial relationship with a Participant, directly or indirectly.
"INITIAL PURCHASERS" means, collectively, Goldman, Sachs & Co. and TD
Securities (USA) Inc.
"INITIAL UNITS" means the first three Units scheduled to be placed into
Power Purchase Agreement Commercial Operation.
"INSURANCE CONSULTANT" means Marsh U.S.A., Inc.
"INSURANCE PROCEEDS" means all proceeds in respect of any property insurance
policy (other than proceeds of business interruption insurance or delayed
opening insurance) covering the partnership or the project.
"INTEREST SUB-ACCOUNT" means the account so designated, established and
created under the Indenture into which amounts are to be deposited in respect of
interest payments due on the bonds, described under "SUMMARY OF PRINCIPAL
FINANCING DOCUMENTS--The Indenture--Accounts."
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"INVOLUNTARY BUYOUT EVENT" means the Energy Contract Buy-Out which is
provided for in the Power Purchase Agreement and any Energy Contract Buy-Out
which is certified by the partnership as not voluntarily sought by the
partnership, but into which the partnership is contractually, legally or
practically required to enter by contract, force of law or regulation, or by an
actual or threatened condemnation, expropriation or other taking of the project,
or by an actual or threatened bankruptcy proceeding on the part of the purchaser
of the capacity and/or energy under the subject contract or by an actual or
threatened termination of full performance on the part of such purchaser;
provided that in the case of a threatened (a) condemnation, expropriation or
other taking, (b) bankruptcy proceeding or (c) termination of full performance,
such threat shall be express and in writing, and the partnership shall have
certified that such threat has resulted in the bonds being placed on a negative
credit watch or in a Rating Downgrade by either Rating Agency, or, either Rating
Agency shall have indicated that any such threatened action should result in
either the bonds being placed on a negative credit watch or a Rating Downgrade.
"ISSUER" means the partnership, its successors and assigns.
"LEASE AGREEMENT" means the Lease Agreement, dated as of November 1, 1999,
between the Authority and the partnership pursuant to which the partnership has
agreed to lease from the Authority the facility, the facility site and certain
related infrastructure facilities and easements on the terms and conditions set
forth thereunder.
"LETTER OF CREDIT SWEEP NOTICE" means a notice by the partnership, furnished
to the Collateral Agent no earlier than February 1, 2012, directing and
authorizing the Collateral Agent to apply available cash to the prepayment of
Debt Service Reserve Bonds, Debt Service Reserve Term Loans and Power Purchase
Agreement Term Loans, in accordance with the provisions of the Collateral Agency
Agreement.
"LETTER OF CREDIT SWEEP PERIOD" means the period commencing on the
commencement date specified by the partnership in the Letter of Credit Sweep
Notice, and ending on the Letter of Credit Sweep Termination Date.
"LETTER OF CREDIT SWEEP TERMINATION DATE" means the earliest of the
following dates: (i) the date of receipt by the Collateral Agent of notice from
the partnership stating that the partnership had not received any notice from
PECO of its intention to exercise its early termination right under the Power
Purchase Agreement prior to the close of business on the date 365 days before
the 20(th) anniversary of the Date of Commercial Operation, in accordance with
Section 3.06 of the Power Purchase Agreement, (ii) the date of receipt by the
Collateral Agent of notice from the partnership stating that the partnership had
not received from PECO prior to the close of business on the date 30 days before
such 20(th) anniversary a letter of credit complying with the provisions of
Section 3.06 of the Power Purchase Agreement, (iii) the date of receipt by the
Collateral Agent of the $175,000,000 of proceeds from PECO, and (iv) if and to
the extent that the Letter of Credit Sweep Notice permits the partnership to
revoke the same, receipt by the partnership of a notice from the partnership
revoking its Letter of Credit Sweep Notice.
"LIEN" means any mortgage, pledge, hypothecation, assignment, mandatory
deposit arrangement with any Person owning Indebtedness of such Person,
encumbrance, lien (statutory or other), preference, priority or other security
agreement of any kind or nature whatsoever which has the substantial effect of
constituting a security interest, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same effect as any of the foregoing and the filing of any
financing statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction, domestic or foreign.
"LIMITED PARTNER" means TGILP and any other Person who becomes a limited
partner in the partnership.
"LOCAL ACCOUNTS" has the meaning ascribed to that term under "SUMMARY
DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--The
Project Funds."
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"LOSS PROCEEDS" means, individually and collectively, any Insurance Proceeds
and Eminent Domain Proceeds.
"LOSS PROCEEDS ACCOUNT" means the sub-account of the Revenue Fund
established by the Collateral Agent pursuant to the terms of the Collateral
Agency Agreement into which monies are deposited as set forth under the heading
"SUMMARY DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency
Agreement--The Project Funds--LOSS PROCEEDS ACCOUNT."
"MAJORITY HOLDERS" has the meaning ascribed to that term under "SUMMARY
DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Indenture--EVENTS OF DEFAULTS;
REMEDIES."
"MAJOR MAINTENANCE SUB-ACCOUNT" means the sub-account of the Operating Fund
established by the Collateral Agent pursuant to the terms of the Collateral
Agency Agreement.
"MAJOR MAINTENANCE REQUIRED AMOUNT" means, for any Funding Period following
termination of the initial long-term parts and service contract covering the
Units described in the Independent Engineer's Report in the event that such
contract is not replaced with an agreement similar in scope to such contract, an
amount equal to the amount that would have been required to be paid by the
partnership under such contract during such Funding Period using the same
escalation formulas and indices provided for in such contract had such contract
remained in effect, as such amount may be adjusted by the partnership with the
written consent of the Independent Engineer.
"MAKE WHOLE PREMIUM" means an amount equal to the Discounted Present Value
calculated for any bond subject to redemption less the unpaid principal amount
of such Initial Bond; PROVIDED that the Redemption Premium shall not be less
than zero. For purposes of this definition, the "DISCOUNTED PRESENT VALUE" of
any bond subject to redemption shall be equal to the discounted present value of
all principal and interest payment scheduled to become due in respect of such
bond after the date of such redemption, calculated using a discount rate equal
to the sum of (i) the yield to maturity on the United States treasury security
having an average life equal to the remaining average life of such bond and
trading in the secondary market at the price closest to par and (ii) 50 basis
points; PROVIDED, HOWEVER, that if there is no United States treasury security
having an average life equal to the remaining average life of such bond, such
discount rate shall be calculated using a yield to maturity interpolated or
extrapolated on a straight-line basis (rounding to the nearest month, if
necessary) from the yields to maturity for two (2) United States treasury bonds
having average lives most closely corresponding to the remaining average life of
such bond and trading in the secondary market at the price closest to par.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, operations, properties, assets, or condition (financial or otherwise)
of the partnership, (ii) the validity or priority of the Liens on the
Collateral, (iii) the ability of the partnership to observe and perform its
obligations under the Indenture, the bonds or any of the other Financing
Documents to which it is a party, or (iv) the ability of the partnership to
perform its material obligations under the Project Documents; provided that in
the case of clause (iv), if each Rating Agency then rating the bonds shall
provide written confirmation within sixty (60) days after the event or action in
question that such event or action would not result in a Rating Downgrade, then
this clause (iv) shall not be applicable.
"MATURITY DATE" means, with respect to any bond, the date on which the
principal of such bond or an installment of principal becomes due and payable as
herein or therein provided, whether at stated maturity, acceleration, redemption
or otherwise.
"MOODY'S" means Moody's Investor Services, Inc., a corporation organized and
existing under the laws of the State of Delaware, its successors and assigns.
"NON-RENEWAL EVENT" means, with respect to any Power Purchase Agreement
Letter of Credit, such Power Purchase Agreement Letter of Credit has not been
extended or replaced within ten days prior to the stated expiration date
thereof.
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"NON-SUMMER MONTHS" means Shoulder Months and Winter Months.
"NON-SUMMER PEAK HOUR" means with respect to a Unit each of the one hour
periods during the Non-Summer Months in which (i) PECO makes an energy request
for at least the minimum load, or (ii) such Unit is on the Unit Call Schedule.
"NPDES" means the National Pollutant Discharge Elimination System.
"OFFICER'S CERTIFICATE" means a certificate that has been signed by an
Authorized Officer of the partnership.
"O&M AGREEMENT" means the Operating and Maintenance Agreement, dated as of
September 10, 1999, as amended, between the partnership and the Operator.
"ON-PEAK ENERGY PRICE" means, for a day, the arithmetic average of the
entries for "Daily Price Indexes On-Peak" (measured in $/MWh) corresponding to
the price citations corresponding to the regional labels of "SERC," "Into TVA,"
"Into Entergy," and "Florida-Georgia Border," as published in Daily Price
Report, a McGraw-Hill publication, PROVIDED, that if such publication or any of
such citations, shall cease to be currently available the parties shall endeavor
in good faith to select an alternative publication or alternate citations, as
the case may be, and failing such an agreed selection the alternative
publication or alternative citations will be determined by arbitration or such
other publication mutually agreed in writing by the parties.
"ONE-QUARTER HOLDERS" means Holders holding, in the aggregate, greater than
twenty-five percent (25%) principal amount of the Outstanding Bonds.
"OPERATING BUDGET" means the annual budget for the project, as prepared by
the partnership.
"OPERATING AND MAINTENANCE EXPENSES" means all actual cash maintenance and
operation costs to be incurred and paid with respect to the facility in any
particular period, including franchise, sales, property and other similar taxes
(but not taxes on or measured by net income), payments under the Tax Agreement,
payments for the supply and transportation of fuels, insurance, consumables,
payments under any lease, payments pursuant to the Project Documents (including
payments under the O&M Agreement), repair and replacement costs for equipment
included in the facility, legal fees and expenses paid by the partnership in
connection with the management, maintenance or operation of the facility, fees
paid in connection with obtaining, transferring, maintaining or amending any
Governmental Approvals, employee salaries, wages and other employment-related
costs and general and administrative expenses (including, after 2009, the annual
fee payable in accordance with the Partnership Agreement), all fees, expenses
and other payments due to all indemnities and other arrangements providing for
the payment of amounts to the initial purchasers of the old bonds, independent
consultants, their counsel and employees in connection with the Indebtedness of
the partnership (but excluding transaction costs associated with the offering
and issuance of bonds), and expenses related to maintaining with the Rating
Agencies a credit rating for the bonds, but exclusive in all cases of
(i) non-cash charges, including depreciation or obsolescence charges or reserves
therefor, amortization of intangibles or other bookkeeping entries of a similar
nature, (ii) interest charges and (iii) all commitment fees, underwriting fees
and other similar fees due and payable in connection with Indebtedness of the
partnership. In the event that the initial long-term parts and service contract
covering the Units described in the Independent Engineer's Report is terminated
and not replaced with an agreement similar in scope to such contract, Operating
and Maintenance Expenses shall also include an amount equal to the Major
Maintenance Required Amount for the relevant period, which amount shall be
deposited in the Major Maintenance Sub-account of the Operating Fund.
"OPERATING FUND" means the Fund so designated, established and created under
the Collateral Agency Agreement.
"OPERATING TERM" means the period beginning on the Date of Commercial
Operation and ending on the 29(th) anniversary thereof, unless terminated
earlier as provided in the Power Purchase Agreement.
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"OPERATOR" means Tenaska Operations, Inc., a Delaware corporation.
"OTHER SENIOR DEBT" means all Senior Debt, except (i) the Authority Bonds,
the Lease and the Guaranty, (ii) the bonds and (iii) Indebtedness incurred under
the Debt Service Reserve Letter of Credit Reimbursement Agreement, the Power
Purchase Agreement Letter of Credit Reimbursement Agreement and any Working
Capital Facility and (iv) any Subordinated Debt.
"OTHER SENIOR DEBT AGENT CLAIMS" means, as to the agent or representative in
respect of any Other Senior Debt, all obligations of the partnership, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities and
indemnities under the documentation relating to such Other Senior Debt.
"OUTSTANDING BONDS" or "OUTSTANDING" when used in connection with any bond,
means, as of the time in question, all bonds authenticated and delivered under
the Indenture, except (a) bonds theretofore cancelled or required to be
cancelled pursuant to the Indenture, (b) bonds for which provision for payment
shall have been made pursuant to the Indenture and (c) bonds in substitution for
which other bonds have been authenticated and delivered pursuant to the
Indenture.
"PARTICIPANT" means a participant in DTC.
"PARTNER" means any Person owning a partnership interest in the partnership.
"PARTNERS" mean TGI and TGILP, and each other Partner added to the
partnership.
"PARTNERSHIP" means Tenaska Georgia Partners, L.P., a Delaware limited
partnership.
"PARTNERSHIP AGREEMENT" means the Amended and Restated Limited Partnership
Agreement, dated as of April 16, 1998, among TGILP and TGI, as the same may from
time to time be amended, modified or supplemented.
"PARTNERSHIP DISTRIBUTION FUND" means the Fund so designated, established
and created under the Collateral Agency Agreement.
"PARTNERSHIP SECURITY DEED" means the Deed to Secure Debt, Security
Agreement and Assignment of Rents and Leases, dated as of November 1, 1999, by
and between the partnership and the Collateral Agent, as amended from time to
time.
"PEAK DAYS AVAILABILITY" means a measurement of the facility's availability
during the five highest-priced days of the Summer Months of each year of the
Power Purchase Agreement contract term, as calculated pursuant to the Power
Purchase Agreement.
"PECO" means PECO Energy Company, a Pennsylvania corporation.
"PECO BUY-OUT PROCEEDS" means the proceeds of the cash payment required to
be made under the Power Purchase Agreement in connection with a termination by
PECO of the Power Purchase Agreement on the 20(th)anniversary of the Date of
Commercial Operation.
"PECO TESTS" shall have the meaning given to that term in the EPC Contract.
"PERMITTED INDEBTEDNESS" has the meaning ascribed to that term under
"SUMMARY DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Common Agreement--Certain
Covenants--LIMITATIONS ON DEBT."
"PERMITTED INVESTMENTS" shall mean, as to any Person: (a) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six (6) months from the date of acquisition by such Person; (b) time deposits
and certificates of deposit, with maturities of not more than six (6) months
from the date of acquisition by such Person, of any international commercial
bank of recognized standing having capital and surplus in excess of $500,000,000
and having a rating on its commercial paper of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the
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equivalent thereof by Moody's; (c) commercial paper issued by any Person, which
commercial paper is rated at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody's and matures not more than six
(6) months after the date of acquisition by such Person; (d) investments in
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (a) and (b) above;
(e) SEC-registered money market mutual funds conforming to Rule 2a-7 of the
Investment Company Act of 1940 in effect in the United States, that invest
primarily in direct obligations issued by the United States Treasury and
repurchase obligations backed by those obligations, and rated in the highest
category by S&P and Moody's; and (f) any dollar investment which the Collateral
Agent agrees in writing shall constitute a dollar-denominated Permitted
Investment; PROVIDED that, with respect to amounts on deposit in the Local
Accounts, the dollar amount set forth in clause (b) hereof shall equal
$250,000,000 and the references to both S&P and Moody's and the respective
ratings thereof in clauses (b), (c) and (e) shall not be applicable.
"PERMITTED LIENS" has the meaning ascribed to that term under "SUMMARY
DESCRIPTION OF PRINCIPAL FINANCING DOCUMENTS--Common Agreement--Certain
Covenants--LIMITATIONS ON LIENS."
"PERSON" means any individual, sole proprietorship, corporation,
partnership, limited liability company, joint venture, trust, unincorporated
association, governmental authority or any other entity.
"PIPELINE EPC CONTRACT" means the Fixed Price Engineering, Procurement and
Construction Contract, effective September 23, 1999, between the partnership and
Willbros Engineers, Inc., a Delaware corporation.
"POWER PURCHASE AGREEMENT" or "POWER PURCHASE AGREEMENT" means the Power
Purchase Agreement, dated as of August 24, 1999, between the partnership and
PECO.
"POWER PURCHASE AGREEMENT COMMERCIAL OPERATION" of a Unit shall be deemed to
be achieved at 00:01 hours on the day next following the day (i) such Unit has
been declared to have a generating capacity of at least 150 MW if such Unit is
one of the Initial Units or at least 146 MW if such Unit is one of the Final
Units, (ii) the Unit shall be capable of producing energy through "firing" with
natural gas, (iii) interconnection of the Unit and the delivery point shall have
been achieved, (iv) sufficient gas supply facilities and interconnection
facilities shall be in operation to accept capacity from all Units which are in
commercial operation and (v) the partnership shall have delivered written notice
to PECO that such Unit is placed in commercial operation provided that, in the
case of the Initial Units, such date may not be earlier than June 1, 2001, and
in the case of the Final Units, such date may not be earlier than June 1, 2002.
"POWER PURCHASE AGREEMENT LOANS" means, individually or collectively, Power
Purchase Agreement Term Loans and Power Purchase Agreement Letter of Credit
Loans.
"POWER PURCHASE AGREEMENT LETTER OF CREDIT" means the letter of credit
provided by the Power Purchase Agreement Letter of Credit Issuer to be issued as
security for PECO in connection with the Power Purchase Agreement.
"POWER PURCHASE AGREEMENT LETTER OF CREDIT AGENT" means initially, The
Toronto-Dominion Bank and any other financial institution acting as the agent
for the Power Purchase Agreement Letter of Credit Issuer and Power Purchase
Agreement Letter of Credit Banks under the Power Purchase Agreement Letter of
Credit Reimbursement Agreement.
"POWER PURCHASE AGREEMENT LETTER OF CREDIT AGENT CLAIMS" means all
obligations of the partnership, now or hereafter existing, to pay administrative
fees, costs, expenses, liabilities and indemnities under the Power Purchase
Agreement Letter of Credit Reimbursement Agreement.
"POWER PURCHASE AGREEMENT LETTER OF CREDIT BANK" means each bank or
financial institution that becomes party to the Power Purchase Agreement Letter
of Credit Reimbursement Agreement.
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"POWER PURCHASE AGREEMENT LETTER OF CREDIT ISSUER" means initially, The
Toronto-Dominion Bank or any other financial institution providing the Power
Purchase Agreement Letter of Credit pursuant to a Power Purchase Agreement
Letter of Credit Reimbursement Agreement.
"POWER PURCHASE AGREEMENT LETTER OF CREDIT LOAN" means a loan resulting from
the drawing on the Power Purchase Agreement Letter of Credit, other than a Power
Purchase Agreement Term Loan.
"POWER PURCHASE AGREEMENT LETTER OF CREDIT REIMBURSEMENT AGREEMENT" means
the Power Purchase Agreement Letter of Credit and Reimbursement Agreement, dated
as of the Closing Date, among the partnership, the Power Purchase Agreement
Letter of Credit Issuer, the Power Purchase Agreement Letter of Credit Agent and
Power Purchase Agreement Letter of Credit Banks or another reimbursement
agreement providing for the issuance of a Power Purchase Agreement Letter of
Credit.
"POWER PURCHASE AGREEMENT TERM LOAN" means a loan resulting from a
conversion of a Power Purchase Agreement Letter of Credit Loan to a Power
Purchase Agreement Term Loan or draw on the Power Purchase Agreement Letter of
Credit after the occurrence of a Non-Renewal Event.
"PRE-COMMERCIAL OPERATING PERIOD" has the meaning ascribed to that term in
the O&M Agreement.
"PRINCIPAL SUB-ACCOUNT" means the account so designated, established and
created under the Indenture into which funds in the Construction Fund are
deposited in accordance with the priority described under "SUMMARY DESCRIPTION
OF PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--The Project
Funds--CONSTRUCTION FUND."
"PROJECT" means the facility together with the Project Documents,
governmental approvals relating to the facility or the Project Documents and any
other item relating to the facility, including any improvements to, and the
operation of, the facility and all activities related thereto.
"PROJECT COSTS" means all costs of developing, financing, constructing,
testing and initial operation (through Power Purchase Agreement Commercial
Operation of the Final Units) of the facility, including but not limited to:
(i) all amounts payable under the Project Documents including any contractor
bonuses, site acquisition and preparation costs, costs of acquisition and
construction of fuel handling and processing equipment, any electric
interconnection and transmission upgrade costs payable by the partnership, all
water interconnection costs payable by the partnership and all gas
interconnection and pipeline costs payable by the partnership; (ii) all
development costs, which shall be paid to, or as designated by, the partnership;
(iii) all other project-related costs, including but not limited to insurance
costs, fees and expenses payable pursuant to the O&M Agreement and expenses to
complete the construction and financing of the project, including any project
management costs and costs related to the acquisition of all necessary
easements; (iv) start-up and testing costs and initial working capital costs;
(v) initial reserve fund requirements; (vi) fees and costs payable during
construction with respect to any Debt Service Reserve Letter of Credit and any
other letters of credit or security provided under any Project Document;
(vii) payments in respect of the Tax Agreement; (viii) the amount required to
cash collaterize the obligations of the partnership in respect of the security
provided under the GPC Interconnection Agreement; (ix) payments to the Power
Purchase Agreement Letter of Credit Issuer in respect of amounts advanced under
the Power Purchase Agreement Letter of Credit to make payments to PECO;
(x) legal and other transaction costs and financing-related fees; (xi) any other
out-of-pocket expenses related to the financing; and (xii) interest on the
bonds.
"PROJECTED DEBT SERVICE COVERAGE RATIO" for any period means, on any date of
determination, a projection of the Debt Service Coverage Ratio for the
applicable time period.
"PROJECT DOCUMENTS" shall mean, collectively, the Power Purchase Agreement,
EPC Contract, O&M Agreement, the initial long-term parts and service contract
covering the Units described in the Independent Engineer's Report, GPC
Interconnection Agreement, the Gas Interconnect Agreement, the Pipeline EPC
Contract, the Turbine Contract, Water Agreement, and the Lease Agreement.
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"PROJECT FUNDS" means, collectively, the Construction Fund, the Debt Service
Fund, the Operating Fund, the Revenue Fund and the Partnership Distribution
Fund, including all accounts and sub-accounts thereof.
"RATING AGENCIES" means either of Moody's or S&P or if either shall cease to
rate securities of the type equivalent to the bonds, another nationally
recognized rating agency.
"RATING DOWNGRADE" means a lowering or withdrawal by a Rating Agency of its
then current credit rating of the bonds.
"REDEMPTION DATE" means, with respect to the bonds, any date established
pursuant to the Indenture (or any supplemental indenture) (as the case may be)
for the redemption of such bonds.
"REDEMPTION ACCOUNT" has the meaning set forth in the Indenture.
"REDEMPTION PRICE" means, with respect to the bonds, the principal amount
thereof to be redeemed in whole or in part, payable upon redemption thereof
pursuant to the Indenture, plus accrued interest thereon to the Redemption Date.
"REMAINING REQUIRED EQUITY CONTRIBUTION" means the amount required as of the
Date of Commercial Operation of the Final Units to pay the required amounts in
accordance with the Collateral Agency Agreement, less the aggregate of the
amounts then on deposit in or credited to the Construction Fund.
"REQUIRED RATING" means a rating of at least "A-" by S&P and "A3" by
Moody's.
"REQUIRED SENIOR PARTIES" means the affirmative vote of 51% of the Combined
Exposure.
"REQUISITION" has the meaning set forth under "SUMMARY DESCRIPTION OF
PRINCIPAL FINANCING DOCUMENTS--Collateral Agency Agreement--The Project
Funds--CONSTRUCTION FUND."
"RESERVATION PAYMENT" shall have the meaning ascribed to that term under the
Power Purchase Agreement.
"RESTRICTED PAYMENT" means, with respect to any Person, (a) the declaration
or payment of distributions, dividends or any other payment made in cash,
property, obligations or other securities or (b) any payment of the principal of
or interest on any Affiliate Subordinated Debt, in each case from cash,
investments, securities or other funds from time to time in the Distribution
Suspense Account.
"REVENUE FUND" means the Fund so designated, established and created under
the Collateral Agency Agreement.
"REVENUES" means the partnership's revenues or income calculated on a cash
basis and received pursuant to the terms of the relevant Project Documents,
including, without limitation, proceeds of an Event of Loss, proceeds of any EPC
Buy-Down and proceeds of any Energy Contract Buy-Out not required to be used to
redeem the Senior Debt, the proceeds of any draws with respect to any Working
Capital Facility and refunds or returns of any amounts previously paid for
Operating and Maintenance Expenses of the partnership; any income from the
investment of monies in any fund pursuant to the Collateral Agency Agreement and
any income received as holder of the Authority Bonds; PROVIDED that for purposes
of calculating any Debt Service Coverage Ratio, "Revenues" shall not include
draws with respect to any Working Capital Facility or any proceeds of any Event
of Loss, EPC Buy-Down or Energy Contract Buy-Out.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's, a Division of The McGraw Hill Companies, and
its successors.
"SCHEDULED DATE OF COMMERCIAL OPERATION" means June 1, 2001, subject to any
extension of such date in accordance with the EPC Contract.
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"SCHEDULED DATE OF COMMERCIAL OPERATION FOR THE FINAL UNITS"means June 1,
2002, subject to any extension of such date in accordance with the EPC Contract.
"SCHEDULED PAYMENT DATE" means, with respect to any bond, each February 1
and August 1, commencing August 1, 2000.
"SEC" means the United States Securities and Exchange Commission or, if at
any time such Commission is not existing and performing the duties now assigned
to it under Applicable Law, the body performing such duties at such time.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY AGREEMENT" means the Partnership Assignment and Security
Agreement, dated as of the Closing Date between the partnership and the
Collateral Agent.
"SECURITY DOCUMENTS" means, collectively, the Indenture, the Lease
Agreement, the Authority Bonds, the Guaranty, the General Partner Pledge and
Security Agreement and the Limited Partner Pledge and Security Agreement, the
Security Agreement, the Collateral Agency Agreement, the Partnership Security
Deed, the Authority Security Deed and each Third Party Consent.
"SEMI-ANNUAL PERIOD" means a period commencing on a Scheduled Payment Date
and ending on the day preceding the next Scheduled Payment Date; provided that
the first Semi-Annual Period shall mean the period commencing on the Closing
Date and ending on the day preceding the first Scheduled Payment Date.
"SENIOR DEBT" means Permitted Indebtedness other than Subordinated Debt and
indebtedness described in clause (vi) of the definition of Permitted
Indebtedness.
"SENIOR PARTIES" means collectively, the Trustee, the Collateral Agent, the
Debt Service Reserve Letter of Credit Agent, the Power Purchase Agreement Letter
of Credit Agent, a Working Capital Agent, any holder of Senior Debt (other than
the bonds) and any other Person that becomes a secured party under any Security
Document.
"SERC" means Southeastern Electric Reliability Council.
"SHELF REGISTRATION" shall have the meaning set forth in the Exchange and
Registration Rights Agreement.
"SHELF REGISTRATION STATEMENT" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
"SHOULDER MONTHS" means October, November, March, April and May.
"STATED MATURITY" means, when used with respect the bonds or any installment
of principal thereof or payment of interest thereon, the date specified in such
bond as the fixed date on which such bond or all such installment of principal
or payment of interest is due and payable.
"STEP-UP EVENT" means in respect of any Debt Service Reserve Letter of
Credit, (i) such Debt Service Reserve Letter of Credit has not been extended or
replaced within 45 days prior to the stated expiration date of such Debt Service
Reserve Letter of Credit or (ii) the credit rating of the Debt Service Reserve
Letter of Credit Provider is less than the Required Rating and such Debt Service
Reserve Letter of Credit has not been replaced within 45 days of the failure to
satisfy the requirements of the Required Rating with a replacement letter of
credit issued by an issuer that satisfies the requirements of the Required
Rating and, in each case, the Collateral Agent has drawn on such Debt Service
Reserve Letter of Credit in an amount sufficient to fund the Debt Service
Reserve Account up to the Debt Service Reserve Required Balance.
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"SUBORDINATED DEBT" means, individually and collectively, Third Party
Subordinated Debt and Affiliate Subordinated Debt.
"SUBORDINATED DEBT ACCOUNT" means the sub-account of the Debt Service Fund
established by the Collateral Agent pursuant to the Collateral Agency Agreement.
"SUBSTITUTE SUPPORT INSTRUMENT" means, as to any Contributing Partner,
(i) an Acceptable Letter of Credit, (ii) a Cash Deposit with Support Account
Documentation as set forth in the Equity Contribution Agreement, or (iii) an
Acceptable Guaranty, in each case provided by or in support of the obligations
of such Contributing Partner.
"SUMMER MONTHS" means June, July, August and September.
"SUMMER PEAK HOURS" has the meaning ascribed to that term in the Power
Purchase Agreement.
"SUPPORT ACCOUNT DOCUMENTATION" means documentation in form and substance
reasonably satisfactory to the Collateral Agent which (i) grants the Collateral
Agent, for the benefit of the Senior Parties, a security interest in any Cash
Deposit or other amounts deposited in the Contributing Partner Support Account
and (ii) contains the agreement of such Contributing Partner to transfer
additional cash to the Contributing Partner Support Account in the event that
the aggregate market value of the Permitted Investments (plus any cash deposits)
in such Contributing Partner Support Account is, at any time, less than such
Contributing Partner's Support Amount.
"TAX AGREEMENT" means the Ad Valorem Taxation Agreement, dated July 30,
1999, among the partnership, the Board of Commissioners of Heard County and the
Board of Tax Assessors of Heard County.
"TGI" means Tenaska Georgia, Inc., a Delaware corporation.
"TGILP" means Tenaska Georgia I, L.P., a Delaware limited partnership.
"THIRD PARTY ENGINEER" means a single independent engineer designated
pursuant to the Common Agreement from a pre-established list to consider and
decide a dispute between the partnership and the Independent Engineer.
"THIRD PARTY SUBORDINATED DEBT" means Indebtedness (and each note or other
instrument evidencing the same) advanced by Persons who are not Affiliates of
the partnership which has been subordinated to the Senior Debt, on the terms and
conditions substantially in the form of the subordination provisions set forth
in the Collateral Agency Agreement.
"TRANSACTION DOCUMENTS" means the Project Documents and the Financing
Documents.
"TRANSCO" means Transcontinental Gas Pipe Line Corporation.
"TRIGGER EVENT" means (a) an Event of Default under the Indenture and an
acceleration of all indebtedness issued thereunder, (b) an Event of Default
under the Debt Service Reserve Letter of Credit Reimbursement Agreement and an
acceleration of all indebtedness incurred thereunder, (c) an Event of Default
under the Power Purchase Agreement Letter of Credit Reimbursement Agreement and
an acceleration of all indebtedness incurred thereunder or (d) an event of
default under any other Senior Debt instrument and an acceleration of all of the
Indebtedness issued thereunder in an aggregate principal amount in excess of
$10 million; provided that, in each case, the Collateral Agent has, upon
direction from the Required Senior Parties, declared such event to be a "Trigger
Event."
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
all as the same shall be amended from time to time.
"TRUSTEE" means The Chase Manhattan Bank, its successors and assigns, in its
capacity as trustee under the Indenture.
A-19
<PAGE>
"TRUSTEE CLAIMS" means all obligations of the partnership, now or hereafter
existing, to pay administrative fees, costs, expenses, liabilities and
indemnities under the Indenture.
"TURBINE CONTRACT" means the Contract for Purchase, dated August 27, 1999
between General Electric and the partnership, as assignee of TGILP.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code of the
jurisdiction the law of which governs the contract in which such term is used.
"UNIT" means one of the six General Electric PG7241 (FA) heavy-duty single
shaft gas turbine-generators, nominal 175 MW ratings at ISO conditions (59(o)F,
sea level) purchased by the partnership pursuant to the Turbine Contract.
"UNIT CALL SCHEDULE" means with respect to a Unit, the schedule detailing
the hours of the following day in which such Unit is requested to be available
in accordance with the dispatch principles set forth in the Power Purchase
Agreement and detailing during which hours, if any, during the following day
such Unit is to be in a standby mode.
"UNIT CAPACITY" means for the first year the greater of (i) Contract
Capacity divided by the number of Units that are in commercial operation or
(ii) 150 MW, and for each year thereafter the greater of (i) Contract Capacity
divided by six (6) or (ii) 146 MW.
"UNITED STATES ALIEN HOLDER" mean any beneficial owner of a bond that is not
a United States holder.
"UNRESTRICTED ACCOUNT" means an account established by the partnership which
shall be funded with amounts withdrawn from the Partnership Distribution Fund
and otherwise available to the partnership.
"USACE" means the United States Army Corps of Engineers.
"WATER AUTHORITY" means the Heard County Water Authority.
"WATER AGREEMENT" means the Water Purchase Agreement, dated February 25,
1999, between the partnership and the Water Authority.
"WATER TERM" means the period of time lasting 30 years from the
partnership's first purchase of water pursuant to the Water Agreement.
"WINTER MONTHS" means December, January, and February.
"WORKING CAPITAL AGENT" means any financial institution serving as agent
under a Working Capital Facility and provider of amounts available thereunder.
"WORKING CAPITAL FACILITY" means a working capital facility in an amount up
to $10,000,000 used for the payment of Operating and Maintenance Expenses in
connection with the project.
"WORKING CAPITAL FACILITY PROVIDER" means the provider of the Working
Capital Facility.
A-20
<PAGE>
APPENDIX B
INDEPENDENT ENGINEER'S REPORT
TENASKA GEORGIA FACILITY
[LOGO]
<PAGE>
APPENDIX B
INDEPENDENT ENGINEER'S REPORT
TENASKA GEORGIA FACILITY
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
PROJECT PARTICIPANTS........................................ B-2
The Sponsor............................................... B-2
The EPC Contractor........................................ B-2
The Operator.............................................. B-3
LTSA Provider............................................. B-3
THE PROJECT................................................. B-3
The Facility Site......................................... B-4
Subsurface Conditions................................... B-6
Environmental Site Assessment........................... B-7
Description of the Facility............................... B-8
Mechanical Equipment and Systems........................ B-8
Environmental Systems and Control Equipment............. B-8
Structural.............................................. B-9
Electrical and Control Systems.......................... B-9
Off-Site Requirements................................... B-10
Review of Technology...................................... B-11
7FA Production Problems and Status...................... B-13
Summary................................................. B-14
Heat Rate and Output...................................... B-14
Heat Rate............................................... B-14
Output.................................................. B-14
Summary................................................. B-15
Availability.............................................. B-15
Operating Experience.................................... B-15
Availability Under the PPA.............................. B-16
Summary................................................. B-17
Estimated Useful Life of the Facility..................... B-17
Construction Schedule..................................... B-17
Performance Guarantees and Acceptance Tests............... B-18
Performance Guarantees.................................. B-18
Functional Testing...................................... B-19
Acceptance Testing...................................... B-19
Owner Tests............................................. B-19
PECO Tests.............................................. B-20
Summary................................................. B-21
Liquidated Damages........................................ B-21
Status of Permits and Approvals........................... B-22
Corps Permit............................................ B-22
Air Permit.............................................. B-22
Stormwater Discharge Permit............................. B-23
Pending Changes in Regulations.......................... B-23
</TABLE>
B-i
<PAGE>
APPENDIX B
INDEPENDENT ENGINEER'S REPORT
TENASKA GEORGIA FACILITY
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
THE FINANCING OF THE PROJECT................................ B-24
Facility Construction Cost................................ B-24
Sources and Uses of Funds................................. B-25
PROJECTED OPERATING RESULTS................................. B-26
Annual Operating Revenues................................. B-26
Reservation Payments.................................... B-26
Energy Payments......................................... B-26
Replacement Energy Payment.............................. B-26
Start Charges........................................... B-26
Miscellaneous Charges................................... B-27
Availability Incentive Payment.......................... B-27
Availability Adjustments Payments....................... B-27
Fuel Adjustment Payments................................ B-27
Annual Operating Expenses................................. B-27
Fuel Cost............................................... B-27
Operation and Maintenance Expenses...................... B-27
Other Expenses.......................................... B-29
Annual Debt Service....................................... B-29
Debt Service Coverage..................................... B-29
Sensitivity Analyses...................................... B-30
Summary Comparison of Projected Operating Results......... B-30
Liquidated Damages Analyses............................... B-31
PRINCIPAL CONSIDERATIONS AND ASSUMPTIONS USED IN THE
PROJECTION OF OPERATING RESULTS........................... B-31
CONCLUSIONS................................................. B-32
EXHIBITS
EXHIBIT B-1 Base Case.................................. B-35
EXHIBIT B-2 Sensitivity Case A--Reduced Availability... B-39
EXHIBIT B-3 Sensitivity Case B--Increased Heat Rate.... B-43
EXHIBIT B-4 Sensitivity Case C--Increased Operating
Expenses............................................... B-47
EXHIBIT B-5 Sensitivity Case D--Increased Inflation.... B-51
EXHIBIT B-6 Sensitivity Case E--Reduced Contract
Capacity............................................... B-55
EXHIBIT B-7 Sensitivity Case F--Zero Dispatch.......... B-59
EXHIBIT B-8 Sensitivity Case G--Increased Capacity
Factor................................................. B-59
</TABLE>
COPYRIGHT -C- 1999, R.W. BECK, INC.
ALL RIGHTS RESERVED
B-ii
<PAGE>
November 3, 1999
Tenaska Georgia Partners, L.P.
1044 N. 115 Street
Suite 400
Omaha, Nebraska 68154-4446
SUBJECT: INDEPENDENT ENGINEER'S REPORT ON THE TENASKA GEORGIA FACILITY
Ladies and Gentlemen:
Presented herein is the report (the "Report") of our review and analysis of
the Tenaska Georgia 936 megawatt ("MW") simple-cycle plant being developed in
Heard County, Georgia (the "Facility"). The Facility includes dual fuel
combustion turbine generators ("CTGs") guaranteed at 156.4 MW each at the
guarantee point when firing natural gas. The Facility will be leased by Tenaska
Georgia Partners, L.P. (the "Partnership") and operated by Tenaska
Operations, Inc. (the "Operator") under the terms of an Operations and
Maintenance Agreement dated September 10, 1999 (the "O&M Agreement").
The Facility is to be comprised of six simple-cycle General Electric ("GE")
Frame 7FA CTGs and associated auxiliary equipment with a combined rating of 936
MW when firing natural gas, and 983 MW when firing No. 2 oil. The Facility is to
be constructed on a 101-acre tract of land in Heard County, Georgia (the
"Facility Site"). The Facility is being designed and constructed by Zachry
Construction Corporation (the "EPC Contractor") pursuant to a fixed price
engineering, procurement and construction contract (the "EPC Contract"). The
major maintenance of the CTGs is to be performed by General Electric
International, Inc. ("GE International") under the Long Term Parts and Long Term
Service Contract dated June 24, 1999 (the "LTSA").
The Partnership has developed the Facility and will transfer the Facility
Site and the Facility under development to the Development Authority of Heard
County, GA (the "Authority"). The Authority will then lease it back to the
Partnership, which will construct, commission, operate and maintain it on behalf
of the Authority. Construction, testing, start-up and initial operation of the
Facility will be funded through the issuance by the Partnership of $275,000,000
in aggregate principal amount of 9.50% Senior Secured Bonds Due 2030 (the
"Bonds"). The proceeds from the sale of the Bonds will be used to purchase an
equal amount of the Authority's Taxable Industrial Development Revenue Bonds,
Series 1999 (Tenaska Georgia Partners, L.P. Project). The proceeds from the sale
of the Bonds to the Partnership will be placed in a construction fund and,
together with equity contributions from the Partnership and net operating
revenues from the Facility's operations prior to commercial operation of the
Final Units, as described later herein, will be used to: (1) pay the costs of
development, construction, start-up, testing, and initial operation of the
Facility; (2) pay the interest on the Bonds until June 1, 2002; and (3) pay
certain financing costs.
The Partnership has executed a 29-year Power Purchase Agreement with PECO
Energy Company ("PECO") dated August 24, 1999 (the "PPA") under which it will
sell electrical capacity and energy on a dispatchable basis. Under the terms of
the PPA, natural gas and No. 2 fuel oil will be supplied by PECO to the Gas
Delivery Point and the Fuel Oil Unloading Facilities, respectively. Natural gas
will be delivered to the Facility Site by a lateral which will be constructed
and leased by the Partnership.
During the preparation of our Report, we have reviewed the executed
agreements related to the construction and operation of the Facility and to
which the Partnership is a party. The agreements which we have reviewed set
forth the obligations of each of the parties with respect to the construction
and operation of the Facility. As Independent Engineer, we have made no
determination as to the validity and enforceability of these agreements;
however, for the purposes of this Report, we have assumed these agreements will
be fully enforceable in accordance with their terms and that all parties will
comply with the provisions of their respective agreements.
B-1
<PAGE>
In addition, we have reviewed: (1) the design criteria (the "Scope of
Work"), which is part of the EPC Contract, and preliminary general engineering
plans and specifications for the Facility; (2) the status of permits and
approvals; (3) major permits, permit applications, and environmental site
assessment reports; (4) the projected levels of production of the Facility;
(5) the projected operation and maintenance expenses; (6) the projected
revenues; and (7) the construction costs and schedule. Based on our review, we
have prepared a projection of revenues, expenses, and debt service coverage
ratios on the Bonds (the "Projected Operating Results").
During the course of our review of the Facility, we have visited and made
general observations of the Facility Site. The general field observations were
visual, above-ground examinations of selected areas, which we deemed adequate to
comment on the existing condition of the Facility Site and which were not in the
detail which would be necessary to reveal conditions with respect to geological
or environmental conditions, or the conformance with agreements, codes, permits,
rules, or regulations of any party having jurisdiction with respect to the
Facility.
Certain analyses relied upon for the purposes of this Report, specifically
those related to the economic dispatch of electric energy, were performed by
others and relied upon by us. The projections for electric energy and economic
dispatch were prepared by Resource Data International, Inc. ("RDI"), whose
report is included as Appendix C to the Offering Circular.
PROJECT PARTICIPANTS
The sponsors, contractors, vendors and other service providers responsible
for the development, design, construction, and operation of the Facility are
discussed below. Construction will be performed pursuant to the EPC Contract by
the EPC Contractor. Under the terms of the EPC Contract, the EPC Contractor will
be responsible for the performance of all subcontractors and all vendors
providing equipment for the Facility, except for the natural gas lateral
pipeline, to be constructed by Willbros Engineers, Inc. under a fixed price
contract. Under the O&M Agreement, the Operator will manage the performance of
GE International under the LTSA and all other subcontractors which it engages
related to the operation of the Facility. Based on our review, we are of the
opinion that the EPC Contractor, the Operator, and GE International have
previously demonstrated the capability to perform their responsibilities under
the EPC Contract, the O&M Agreement, and the LTSA, respectively.
THE SPONSOR
Tenaska Inc. ("Tenaska") is an energy project development and management
services organization specializing in independent power generation, electricity
and natural gas marketing and natural gas supply and transportation systems.
Tenaska's affiliates have approximately 4,900 MW of energy-related projects in
operation, construction, and development throughout the United States and
internationally. Tenaska is headquartered in Omaha, Nebraska with additional
offices in Arlington, Texas and Calgary, Alberta.
THE EPC CONTRACTOR
The EPC Contractor is responsible for the EPC Contract, which includes the
design, engineering, procurement, construction, start-up, and testing of the
Facility in accordance with the EPC Contract. The EPC Contractor, a subsidiary
of H.B. Zachry Company ("Zachry"), has contracted with Utility Engineering to
perform the engineering, design, and procurement specifications for the
Facility. Both Zachry and Utility Engineering independently have extensive
experience on similar projects, to engineer, procure, and construct power plant
projects. The EPC Contractor has experience on similar projects both
domestically and internationally.
Included in the EPC Contractor's design-construct portfolio are: (1) the
Tenaska IV Texas Partners, Ltd. Plant, a 263 MW gas-fired combined cycle
cogeneration facility in Cleburne, Texas, which utilizes one Westinghouse 501F
CTG, a three pressure level, supplementary fired HRSG, and a Westinghouse
B-2
<PAGE>
reheat steam turbine; (2) the Tenaska Gateway Generating Station, a 845 MW
combined cycle facility located in Rusk County, Texas, which utilizes three GE
7FA CTGs, three pressure supplemental fired HRSGs, and a GE reheat steam
turbine; (3) the E.I. Mid-Georgia Kathleen Project, a 250 MW combined cycle
cogeneration facility in Georgia which utilized two Westinghouse 501D5A CTGs
with dry low NO(X) combustors, a 100 MW non-reheat MHI steam turbine generator
and two Nooter/Erikson HRSGs; and (4) the Batesville Combined Cycle Project, an
837 MW combined cycle facility in Batesville, Mississippi, which utilizes three
Westinghouse 501F CTGs, three pressure level, reheat, supplementary fired
Nooter/ Erikson HRSGs, and ABB Power Generation reheat steam turbines.
THE OPERATOR
The Operator, organized under Delaware law, is a wholly owned subsidiary of
Tenaska and was formed to provide operations and maintenance services to
electric generating facilities owned and managed by affiliates of Tenaska. The
Operator has been designated as the operations and maintenance contractor for
the Facility.
The Operator will provide personnel, procedures, training, administrative,
management, and professional and technical services necessary for the start-up,
commissioning, operation and maintenance of the Facility. In performing its
responsibilities, the Operator will rely upon the experience of its personnel
which have related experience in every aspect of power generation, including
with architects, engineers, manufacturers, and electric generating companies.
Currently, Tenaska manages and administers third-party operation and maintenance
contracts with North American Energy Services, a subsidiary of Illinova, which
provides manpower for the operation and maintenance services for the Paris (223
MW), Ferndale (245 MW), and Cleburne (263 MW) combined cycle cogeneration
plants. The Operator has contracts to operate the Frontier (830 MW) and Gateway
(845 MW) combined cycle plants. The Facility is to be Tenaska's sixth facility
for which it will be responsible.
LTSA PROVIDER
GE International is a wholly-owned affiliate of General Electric Company and
will be the LTSA provider. Its principal office is in Wilmington, Delaware. GE
International has provided operating and maintenance services under contracts
similar to the LTSA worldwide. GE International currently has over 1,500
employees engaged in over 100 contracts in 22 countries. It reports that it has
a current capacity under contracts like the LTSA of 16,860 MW and total
contracted capacity for operating and maintenance services of 27,335 MW. These
contracts include 87 GE Frame 7s, 35 GE Frame 6s, and 13 GE Frame 9s, for a
total of 135 combustion turbines totaling 21,183 MW.
THE PROJECT
This section describes the Facility Site and the environmental site studies,
the equipment and systems, the technology, the reliability and availability, the
estimated useful life, the construction schedule, the performance guarantees and
tests, and the status of permits and approvals for the Facility.
The Facility is to be comprised of six natural gas-fired simple-cycle CTGs
(each a "Unit") and will sell electrical capacity and energy to PECO under the
PPA. The Facility will be constructed in two phases. The first phase includes
CTG Units 1, 2, and 3 (the "Initial Units"), and the second phase includes CTG
Units 4, 5, and 6 (the "Final Units"). The CTGs installed by the EPC Contractor
under the EPC Contract will be capable of net electrical output at the operating
conditions defined in the EPC Contract as summarized in Table 1 and discussed in
greater detail in other sections of this Report.
B-3
<PAGE>
TABLE 1
CTG NET ELECTRICAL OUTPUT
(MW)
<TABLE>
<CAPTION>
NATURAL NO. 2 FUEL OIL
OPERATING CONDITION GAS FUEL WITH WATER INJECTION
- ------------------- -------- --------------------
<S> <C> <C>
Guarantee Point(1)................................ 943 992
Summer(2)......................................... 928 978
Winter(3)......................................... 1,082 1,113
</TABLE>
- ------------------------
(1) At 94 DEG.F dry bulb, 74 DEG.F wet bulb and no degradation.
(2) At 95 DEG.F dry bulb, 78 DEG.F wet bulb and no degradation.
(3) At 20 DEG.F dry bulb, 60 DEG.F wet bulb and no degradation.
The GE Frame 7FA CTGs will be equipped with dry low-NO(X)("DLN") combustors
to control the formation of oxides of nitrogen. Electric generators will be
rated at 18 kV and deliver electricity to the 500 kV switching substation
through three winding step-up transformers. Support auxiliary systems are to be
provided as required to ensure safe, reliable operation.
The Facility's process and potable water needs will be supplied by the Heard
County Water Authority (the "HCWA") via a connection to the local HCWA water
supply system. The Facility will be interconnected for natural gas with
Transcontinental Gas Pipe Line Corporation's ("Transco") natural gas pipeline
system. Sanitary waste will be disposed of in an on-site septic system. Process
wastewaters and stormwater are to be treated as necessary and discharged to
Hilly Mill Creek.
THE FACILITY SITE
The Facility, shown in Figure B-1, is to be constructed on a tract of
approximately 101 acres of land located about 9 miles northeast of Franklin, in
Heard County, Georgia, less than one half mile from the Coweta County line. The
Partnership has advised that Tenaska has purchased the Facility Site and
additional property adjacent to the Facility Site. The Partnership will purchase
the Facility Site from Tenaska simultaneously with the issuance of the Bonds.
The Partnership will also have the option to purchase from Tenaska an additional
parcel of approximately 8 acres for construction of the 500 kV switchyard.
Approximately 46 acres of the Facility Site will be developed for construction
of the Facility and an additional three-acre portion will be used for
construction of the gas pipeline. The remaining 52 acres, consisting of three
parcels on the south and southwest sides of the Facility Site, will be left
undeveloped as part of a wetlands mitigation plan. In accordance with the
conditions of its wetlands permit, the Partnership will file restrictive
covenants with Heard County for the portion of the Facility Site needed to
satisfy the wetland mitigation plan. This will occur after title to the land is
transferred to the Partnership and transferred by the Partnership to the
Authority.
In addition to the Facility Site, the Partnership will also secure rights to
other surrounding property to support construction of the Facility and the
lateral gas pipeline that is to connect the Facility to the Transco mainline. On
the north and northeast side of the Facility Site, the Partnership will obtain
an 80-foot wide permanent access easement from Tenaska for the access road to
the Facility from George Brown Road. To provide additional construction parking
and lay-down space, the Partnership will also obtain a temporary lease from
Tenaska for a 13-acre parcel of land on the north side of George Brown Road at
the intersection with Joe Stephens Road. For construction of the lateral gas
pipeline connecting the Facility to the Transco mainlines approximately one mile
south of the Facility Site, the Partnership will obtain permanent easements for
the remaining length of the pipeline, and temporary construction easements for
installation of the pipeline.
B-4
<PAGE>
The Facility Site is bordered on north and east by forested land owned by
Tenaska. A 500 kV electrical transmission line also runs in a right of way
adjacent to the east side of the Facility Site from north to south. Beyond the
Tenaska property on the north is George Brown Road, and on the east is light
residential property. Farther east of the Facility Site is Joe Stephens Road.
Forested land, wetlands and tributaries of Hilly Mill Creek border the Facility
Site on the south and southwest. To the west are forest, light residential
property and Hilly Mill Creek.
The Facility Site consists of forested land with slightly rolling topography
and a general slope down towards the wetlands on the southwest. Existing grade
elevations vary from El 800 ft in the northeast portion of the Facility Site to
El 765 ft in the south and southwest portions of the Facility Site. The Facility
is to be constructed in the northern portion of the Facility Site, west of the
500 kV transmission line.
The principal access to the Facility will be by road. The Facility Site is
approximately 40 miles southwest of Atlanta, Georgia, which is the nearest major
city with an airport. From Atlanta, access to the Facility Site is obtained by
following Interstate Highway 85 south to Georgia State Highway 34 west through
Newnan, Georgia. Approximately 10 miles west of Newnan just before the Heard
County line, turn north on Joe Stephens Road for approximately 1.4 miles and
then west on George Brown Road approximately 900 feet where a new access drive
will be constructed southwest from George Brown Road to the Facility Site. Joe
Stephens Road is a paved road, and George Brown Road is currently a gravel road,
which will be widened and paved by Heard County to serve the Facility.
Construction was in progress on the George Brown Road improvements when we
visited the Facility Site.
B-5
<PAGE>
FIGURE B-1
TENASKA GEORGIA FACILITY
FACILITY LAYOUT
INSERT SEPARATE PDF FILE OVER THIS PAGE
B-6
<PAGE>
A flood plain evaluation was prepared by Rindt-McDuff Associates, Inc. of
Marietta, Georgia ("Rindt-McDuff") and documented in its letter dated
September 30, 1999. Rindt-McDuff's evaluation is based on data obtained from the
Heard County Planning and Zoning Department, which consists of the Department of
Housing and Urban Development Federal Insurance Administration Flood Hazard
Boundary Maps Dated April 6, 1976 (the "HUD Maps"), and the Facility layout and
existing site topographical survey information provided by the Partnership.
Rindt-McDuff notes that a small area of the western portion of the Facility
comprising the earthen dike that serves as a containment for the fuel oil tank
appears to protrude into the shaded area designated as a special flood hazard
area on the HUD Maps, which the Federal Emergency Management Agency designated
as Zone A, within the 100-year flood plain, by issuing a special notice letter
in October 1986. However, at that time FEMA did not do any additional hydraulic
studies or analyses to refine the boundaries of the shaded area or to establish
what the actual 100-year flood water levels would be. Based on their review of
the surface elevations shown on the existing site topographic survey, which
shows that the portion of the Facility in question is located on an area of the
Facility Site that is elevated significantly above the tributary of Hilly Mill
Creek, Rindt-McDuff concluded that the approximate flood boundary shown on the
HUD Maps was in error in this area and certified that the proposed construction
will not result in any conflict with the 100-year floodplain.
SUBSURFACE CONDITIONS
We have reviewed an EMCON ("EMCON") report titled "PRELIMINARY GEOTECHNICAL
EVALUATION HEARD COUNTY GEORGIA POWER GENERATION FACILITY HEARD COUNTY,
GEORGIA", and dated June 1998 (the "Subsurface Report"). The Subsurface Report
is included as Attachment IV to Exhibit A of the EPC Contract. The subsurface
investigation performed by EMCON for the Facility Site included 10 soil borings
drilled up to 65 feet deep, two percolation tests, and laboratory tests on soil
samples taken during the drilling. The Subsurface Report includes a site
location plan, boring location plan, boring logs, and laboratory test results.
The report also contains an analysis of the data obtained in the field,
recommendations for suitable foundation types, allowable soil bearing pressures,
and some recommendations for construction activities including impacts of the
apparent high groundwater table and suitability of the onsite materials for use
as structural fill.
The boring location plan shows the boring locations superimposed on a layout
of the Facility. This layout is not referenced to survey coordinates or to
existing property boundaries or landmarks and some revisions have been made to
the layout since 1998. The EPC Contract Exhibits also contain drawing
0990947-000S001, Rev C, which presents the layout of the equipment and
structures to be constructed. Based on the shape of the site, the latest layout
of the equipment, and the switchyard layout in relation to the existing overhead
transmission line, it appears that the soil borings were drilled in the general
area of the major equipment and structures that are to be constructed.
The boring logs presented in the Subsurface Report indicate that the soils
underlying the Facility Site are comprised of several layers of soil most of
which are sand with varying amounts of silt, clay and traces of mica. The
density of the sand layers varies and does not always increase with depth in the
upper layers.
The groundwater table was encountered in all of the borings and water levels
were measured during drilling of the borings and 24 hours later. The 24-hour
groundwater level reading varied from 1 foot-5 inches to 12 feet 3 inches below
the ground surface. The groundwater level will vary seasonally, but it appears
that groundwater will be encountered in the excavations and dewatering will be
required.
In the Subsurface Report, EMCON provides foundation design and construction
criteria. EMCON indicates that shallow spread footing foundations can be used to
support lightly loaded structures. EMCON also notes that with some subsurface
improvement consisting of over-excavating and backfilling with several feet of
structural fill, the allowable bearing pressure could be improved enough to
support equipment generating dynamic loads. EMCON notes that this excavation and
filling would require dewatering. EMCON does not discuss the anticipated
settlements associated with the allowable bearing
B-7
<PAGE>
capacities for shallow foundations. Settlement analysis will have to be
performed by the EPC Contractor and the results included in the EPC Contractor's
civil and structural design criteria described below. Based on the borings, the
latter recommendation and particularly the depth of over-excavation and filling
are dependent on the specific location and extent of the foundation and must be
confirmed prior to construction. EMCON also provides a discussion of pile-type
deep foundations that would be acceptable for the support of heavily loaded
foundations.
The EPC Contract technical appendices reference the Subsurface Report and
indicate that the foundation design described in that preliminary report may be
used for preliminary design, but that the EPC Contractor shall obtain a final
geotechnical report from a qualified firm for the design of the foundations. The
EPC Contractor is also required to develop civil and structural design criteria
based upon the final geotechnical report.
The EPC Contract technical appendices also include basic foundation design
criteria including allowable settlements and require that the CTG foundation
support mats shall be designed to meet the total and differential settlement
established by the manufacturer if it is more stringent than the criteria in the
EPC Contract.
Under the terms of the EPC Contract, the Partnership shares some
responsibility for subsurface risk, but this risk is limited. As found in most
EPC Contracts with which we are familiar, the EPC Contractor is not responsible
for additional costs or schedule delays due to the discovery of pre-existing
hazardous materials, archeological remains or artifacts. The EPC Contractor is
also required to notify the Partnership if unforeseen conditions are encountered
that increase the cost or schedule required to complete the work such as:
(1) subsurface conditions of an unusual nature differing materially from those
represented in the preliminary Subsurface Report included in the EPC Contract;
(2) rock excavation requiring blasting; or (3) the existence of man-made
obstructions which must relocated. The Partnership's liability for valid claims
for unforeseen conditions is limited to $1,500,000 regardless of the actual cost
to the EPC Contractor, and the time for submitting claims for unforeseen
conditions is also limited in relation to construction progress. Under the terms
of the EPC Contract, the EPC Contractor is to take into account the
recommendation in the Subsurface Report and the EPC Contract design criteria.
Based on our review, we are of the opinion that, provided that, as required
by the EPC Contract, the EPC Contractor takes into account the recommendations
in the Subsurface Report and in the EPC Contract design criteria regarding site
development, subsurface conditions and foundations during design and
construction of the Facility, the Facility Site is suitable for construction and
operation of the Facility.
ENVIRONMENTAL SITE ASSESSMENT
We have reviewed four environmental reports for the Facility Site and one
for the lay-down area prepared by EMCON for the Partnership, regarding
assessment of potential site contamination issues, including: (1) the "PHASE I
ENVIRONMENTAL SITE ASSESSMENT" of an approximately 74-acre tract, dated May 12,
1998; (2) the "PHASE I ENVIRONMENTAL SITE ASSESSMENT" of an approximately
54-acre tract, dated August 25, 1999; (3) the "PHASE I ENVIRONMENTAL SITE
ASSESSMENT" of an approximately 13-acre tract, dated July 20, 1999; (4) the
"PHASE I ENVIRONMENTAL SITE ASSESSMENT" of an approximately 15-acre tract, dated
October 6, 1998; and (5) the "PHASE I ENVIRONMENTAL SITE ASSESSMENT" of an
approximately 3-acre tract, dated September 27, 1999. EMCON's investigations of
these properties consisted of a site reconnaissance, review of historical data,
review of relevant government agency files and environmental databases, and
interviews with persons knowledgeable about the sites. EMCON conducted
additional site reconnaissance of the 74-, 54-, 13-, and 15-acre tracts on
September 24, 1999 during their property inspection of the 3-acre tract. All of
the properties are currently undeveloped, wooded properties, containing minor
amounts of residential-type debris, also with shingles, concrete, and wire
fencing found at the 74-acre site. With the exception of the 54-acre and 3-acre
tracts, evidence of former site use for agricultural production was observed in
historical aerial photos. A residential structure formerly existed on the
74-acre tract. No
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evidence of soil staining, chemical storage or underground storage tanks were
encountered by EMCON on any of the properties. Surrounding properties generally
consist of wooded or residential areas, and EMCON's report did not indicate any
potential environmental impacts to the properties from off-site sources. EMCON
concluded that its reviews encountered no adverse environmental conditions on
any of the properties.
Based upon our review of the environmental site assessments conducted by
EMCON for the Facility Site and the construction lay-down area, we are of the
opinion that the investigations appear to have been conducted in a manner
consistent with industry standards, using comparable industry protocols for
similar studies with which we are familiar. Although we have not conducted an
independent assessment of the Facility Site, the conclusions reached by EMCON
appear to be supported by the data we have reviewed.
DESCRIPTION OF THE FACILITY
MECHANICAL EQUIPMENT AND SYSTEMS
The major mechanical equipment and systems include six simple cycle dual
fuel GE PG7241 FA CTGs equipped with GE's DLN-2.6 combustors. The GE PG7241 FA
is a 3,600-rpm heavy duty CTG nominally rated at 171.7 MW at ISO conditions and
designated to serve the 60 Hz power generation needs for utility and industrial
service. For this particular application, in a new and clean condition, each CTG
Unit will be guaranteed at 156.4 MW net by the EPC Contractor when firing
natural gas at operating conditions of 94 DEG.F dry bulb and 74 DEG.F wet bulb
ambient and site elevation of 785 feet. Evaporative coolers will be located at
the inlet of each compressor section to maintain rated unit output and will only
operate when the ambient temperature is 60 DEG.F or greater. The cooling medium
will be fresh water with demineralized water backup. The minimum efficiency of
the coolers will be 85 percent at 95 DEG.F ambient dry bulb and 78 DEG.F wet
bulb. Water from the coolers will discharge to a 300,000-gallon retention pond.
The CTG inlet air system also includes filtration and silencing. There is also a
natural gas heating system. Other systems provided include starting, lubrication
and hydraulic, cooling water, fuel and offline and online water wash.
Natural gas will be the primary fuel with low sulfur No. 2 fuel oil used for
backup. A 165,000-barrel No. 2 fuel oil storage tank will be provided to meet
the PPA requirement that fuel oil be stored sufficient for oil-fired operation
at contract capacity for 16 hours of each day for five consecutive days. Fuel
oil deliveries will be made by truck. Unloading systems with pumps capable of
unloading four trucks simultaneously and up to six trucks per hour are included.
Water for the Facility will be of potable quality, will be provided from the
HCWA and stored in a 2,000,000-gallon Fresh Water Storage Tank. The bottom
200,000 gallons of the Fresh Water Storage Tank will be reserved as fire
protection water. Demineralized water will be produced onsite using
self-contained mobile demineralizer units which will be regenerated offsite.
Demineralized water for water wash and injection for NO(X)control when firing
No. 2 oil will be stored onsite in a 7,000,000-gallon demineralized water tank.
Process equipment areas will be curbed with drains directed to sumps where
sump pumps will deliver the water collected to an oil/water separator. Sanitary
wastewater will be discharged to a septic tank and field. Fire protection
systems will meet applicable National Fire Protection Association ("NFPA")
Standard 850, Recommended Practice for Fire Protection for Electric Generating
Plants. The fire protection water system will include a fire water loop with
hose stations, deluge sprinkler systems at the main and auxiliary transformers
and dry pipe sprinkler systems in the warehouse and maintenance areas, and
portable fire extinguishers. A diesel engine driven and an electric motor driven
fire pump drawing water from the Fresh Water Storage Tank will be provided as
well as an electric motor driven jockey pump. A foam system will be provided at
the No. 2 fuel oil storage tank. Fire detection equipment and protective
signaling system, including a main fire alarm annunciator panel in the control
room, will be provided. Fire extinguishing systems for the CTGs will be
provided.
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Other mechanical systems will be conventional in nature for operation and
safety and consist of compressor wash, heating/ventilation and air conditioning
for Facility buildings, two compressed air systems, lubricating oil, cooling
water and hoists.
ENVIRONMENTAL SYSTEMS AND CONTROL EQUIPMENT
The CTGs are to be equipped with GE's latest version of its DLN combustors,
the DLN-2.6, which are guaranteed to control NO(X) emissions to 15 ppm when
burning natural gas. "Dry" means that no water or steam is injected for NO(X)
emissions control during gas firing. These combustors require water injection to
control NO(X) emissions to 42 ppm when firing No.2 oil.
Sulfur dioxide and particulate matter are controlled by use of natural gas
and very low sulfur distillate oil for fuels. Carbon monoxide and volatile
organic compound emissions are controlled by the inherent combustion efficiency
of the CTGs.
Continuous emissions monitoring systems ("CEMS") will monitor NO(X), O(2)
and flow from each CTG. All CTG emissions guaranteed by GE are at least as
stringent as the Facility's Air Permit requirements. Plant noise is controlled
by acoustic enclosures for noisy equipment and silencers in the CTG air inlets
and exhaust stacks.
Plant process wastewaters, consisting primarily of evaporative cooler
blowdown and process area drains, are collected, treated for potential oil
removal as needed, and discharged to an unnamed tributary to Hilly Mill Creek.
Sanitary waste is disposed of in an on-site septic system. Stormwater is
directed offsite to the creek via a retention pond and a biofiltration swale.
STRUCTURAL
The major Facility equipment, which consists mainly of the CTGs, is to be
designed for outdoor installation and furnished with weathertight enclosures
where required. The only major building to be constructed is a multi-purpose
building that will include spaces for administration, control, personnel
facilities, maintenance and warehousing. The construction type for the building
is specified as steel frame or pre-engineered metal structure with insulated
metal siding and roofing.
The EPC Contract technical appendices include references to national codes
and standards that will govern the structural design of the Facility, including
the Standard Building Code ("SBC") promulgated by the Southern Building Code
Congress International ("SBCCI"), and also require compliance with local codes.
The technical appendices indicate that the seismic risk zone for the Facility
Site is Zone 2A as determined from the Uniform Building Code ("UBC"). The
technical appendices also include supplemental design criteria for structural
loading not commonly provided in codes and standards.
ELECTRICAL AND CONTROL SYSTEMS
Electricity is generated at 18 kV by each of the six CTGs and stepped up to
500 kV in three three-winding generator step-up ("GSU") transformers, one per
pair of CTGs, for interconnection with the 500 kV Georgia Integrated
Transmission System ("GITS"). Each CTG has a generator circuit breaker
interposed between the generator and its respective GSU winding to isolate and
protect the generator and the Facility in the event of an electrical fault. The
connection between the generators, generator breakers, and GSU transformer is
made with isolated phase bus duct. The isolated phase bus duct for one of each
pair of generators is tapped between the generator breaker and GSU transformer
to provide a source of station service power from the generators or via backfeed
from the 500 kV system. Appropriate protective relaying systems are included in
the zones created by the GSU transformer, the generators and 4,160 V station
service systems.
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Station service power from the three taps is fed to a 4.16 kV switchgear bus
through three 18-4.16 kV auxiliary transformers. The bus is connected to the
transformers through circuit breakers and split into three sections by two bus
tie circuit breakers. This allows for auxiliary power to be supplied to more
than one bus section from one of the auxiliary transformers in the event that
one of the transformers is out of service.
The 4,160 V system is used to provide power to motors greater than 300
horsepower ("hp") and step-down transformers which feed the 480 V switchgear.
The 4,160 V motors and the CTG static start excitation transformers are fed via
medium-voltage motor controllers. The 4,160/480 V step-down transformers are fed
via circuit breakers.
The 480 V system consists of drawout-type switchgear fed from the step-down
transformers and feeds the motor control centers ("MCCs") associated with the
CTGs (supplied with the CTGs), water treatment systems, and balance of plant
systems, which contain motor starters for motors in the 1/2 to 250 hp range. The
480 V bus will include a connection point for a temporary 1,000 kW diesel
generator. A battery and charger system provides 125 V dc power for switchgear
control and the UPS system. Lower voltage ac systems, lighting, grounding and
plant wiring systems are addressed in the EPC Contract conceptual design.
The Facility uses a distributed control system ("DCS") to provide integrated
control of the various project elements from the Facility's control room. The
DCS will process most major balance of plant instrument and control loops
through a programmable logic controller and also communicate with the
proprietary Mark V control systems supplied with each of the CTGs. Where the DCS
communicates with these remote control systems over a redundant ethernet data
highway, it provides control functionality from the DCS console, but the
operational processing is accomplished within the remote system. The DCS is
equipped with multiple operator workstations and redundant processors in order
to provide the required level of control system reliability.
Every organization in the country is faced with a potential problem on
January 1, 2000 when the calendars on the millions of computers and
microprocessors in the country change from the year 99 to 00 and certain other
dates (for example, but not limited to, Leap Year and 9/9/99), (the "Y2K
Issue"). It is unclear at this time how extensive the Y2K Issue may be, but
organizations should be reviewing their systems and undertaking whatever
remediation is required. The Y2K Issue occurs when computers or microcomputers
which use two-digit years misinterpret the year 2000 to be "00", zero, 1900, or
some other erroneous date. Some embedded software or hardware does not recognize
the year 2000 as a Leap Year or recognize 9/9/99 as an error code. It is
uncertain what action will be initiated by computers or microprocessors which
are programmed (software or firm-ware) with these instructions. The Y2K Issue
has the potential to affect any computer system, including hardware that is
microprocessor based, software, and databases at, among other places,
administration/office facilities, electric generating power plants, and
transmission and distribution systems. The Y2K Issue has the potential to impact
the Facility as well as organizations other than the Facility, the continued
performance which is also critical to the Facility. These other organizations
may be located either "upstream" or "downstream" of the Facility.
Under the terms of the EPC Contract, GE is to provide equipment which
already has features that accommodate the change in dates without the Y2K Issue.
While this mitigates the date problem for the Facility, it does not mitigate the
Y2K Issue for other organizations upstream or downstream from the Facility which
might impact the operation of the Facility. The Facility is not scheduled to be
in commercial operation until the summer of 2001. It would be anticipated that,
by that time, the Y2K issue would be identified and, if not corrected, then
mitigative actions would be underway.
Evaluation of the actual status of the Facility, as well as other entities
with whom the Partnership has business or operational relations, relative to the
Y2K Issue is well beyond the scope of this Report. We have not been engaged to
conduct, and in fact have not conducted, any independent evaluation or on-site
testing of the aforesaid entities in any way to independently ascertain the
actual hardware and software
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status. We caution that it is entirely possible that presently unknown
conditions could arise which lead to significant operational and/or
administrative problems, and that these problems could have an adverse impact on
the Facility.
OFF-SITE REQUIREMENTS
ELECTRICAL INTERCONNECTION
The Facility will be connected to the GITS 500 kV system at a ring bus
switching station to be constructed on or adjacent to the Facility Site. The
switching station will include three circuit breakers to tap the transmission
line running through the Facility Site from Plant Wansley to Fortson and provide
connection to the high voltage terminals of the three GSU transformers for CTG
Units 1 through 6.
The electrical interconnection service will be supplied by Georgia Power
Company ("GPC") under an interconnection agreement between the Partnership and
GPC. The Partnership shall design, procure, and install all facilities needed
for GPC to provide interconnection service. The Partnership shall convey, at no
cost, such facilities to GPC. GPC shall have no obligation to pay the
Partnership any wheeling or other charges for electric power and/or energy
transferred through the Partnership's equipment. The Partnership shall pay GPC a
monthly administration fee of $5,000 for all costs and expenses incurred by GPC.
NATURAL GAS INTERCONNECTION
The Facility will be interconnected with Transco's interstate natural gas
pipeline system. PECO is responsible for providing fuel to the Facility, and
will contract with natural gas and fuel oil suppliers, as well as with Transco
to arrange delivery of fuel to the Facility. The interconnection and metering
station is to be constructed and operated under the terms of the Transco's
Interconnect, Reimbursement and Operating Agreement between Transco and the
Partnership dated August 18, 1999 (the "Transco Agreement"). Construction of a
pipeline lateral approximately 1 mile long is required to connect the Facility
to two of Transco's 36 inch lines, which are both located south of the Facility
Site. Under the terms of the Transco Agreement, Transco is responsible for
design, construction, operation and maintenance, and ownership of the
interconnection facilities on its side of the pipeline insulating flange at the
interconnection. These facilities include piping, gas metering and remote
transmission facilities and installation of pipeline tees for connection to the
new lateral pipeline to the Facility. Under the terms of the Transco Agreement,
the Partnership must reimburse Transco for 100 percent of the actual Transco
costs for the interconnection facilities provided by Transco. PECO will pay
Tenaska up to $784,000, or 56 percent of the cost, whichever is less, as PECO's
obligation for the installation of the natural gas metering facility. Transco
has estimated the total amount to be reimbursed to be $1,570,400. In addition,
the Partnership is responsible for the construction and operation of the
interconnection facilities on its side of the pipeline insulating flange
including the lateral pipeline, and pressure reduction station. The Partnership
has entered into a fixed price EPC contract with Willbros Engineers, Inc., dated
September 23, 1999, to construct the lateral pipeline and pressure reducing
station. The Partnership's interconnection facilities are required to be
designed for a pressure equal to or greater than the 800 pounds per square inch
gauge ("psig") maximum operating pressure at the Transco metering station.
WATER SUPPLY INTERCONNECTION
Under a Water Purchase Agreement dated February 25, 1999, water will be
supplied to the Facility by the HCWA. The HCWA obtains and treats water taken
from the Centralhatchee Creek. The HCWA will supply approximately 500,000
gallons per day. The Partnership will reimburse the HCWA for the cost to
construct a metering station at the border of the Facility Site.
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REVIEW OF TECHNOLOGY
In general, the Facility will utilize equipment common in the industry and
with substantial operating history. The GE Frame 7FA CTGs (model PG 7241FA) to
be installed at the Facility represent a mature combustion turbine technology
with over 1 million hours of fleet-wide operating experience. The GE Frame 7F/FA
combustion turbine family is a two bearing machine. There is a single rotor
comprised of a compressor section and a turbine section. Each section consists
of a series of discs or wheels and spacers held together with tie bolts. The
following discussion presents an overview of the technical development of the GE
Frame 7 combustion turbine.
The Frame 7FA technology represents advances made by GE since the
introduction of the Frame 7F machine in June of 1987. With advancements in
component cooling, materials, and associated increases in firing temperatures,
the Frame 7F unit has been uprated and the improved unit is now designated as
the Frame 7FA. Within the Frame 7FA designation there has been additional subset
designations of uprates, such as the Model PG7241FA, to be utilized at the
Facility. The Model PG7241FA has a 2,420 DEG.F firing temperature compared to
2400 DEG.F on the earlier Model PG7231FA, a compressor pressure ratio of 14.9 to
1 and a simple-cycle efficiency of 36.2 percent.
GE's approach to combustion turbine development has traditionally followed
the philosophy of evolution of designs, use of geometric scaling, and strong
reliance on pre-production development. The result of the evolution of designs
is a family of axial-flow compressors improved in several discrete steps that
allow retention of the proven reliability of existing designs. As an example,
the Frame 7 combustion turbine has been improved in performance through seven
models, the A, B, C, E, EA, and F; and now the FA machine. GE has historically
applied scaling of both compressors and turbines in the development of its
combustion turbine product line.
The progressive step towards the Frame 7F was taken by increasing compressor
air flow and firing temperature resulting in an increase in the ISO base rating
from 83,500 kW to 159,000 kW. The 7F design has a compression ratio higher than
the 7E's, and retains GE's bolted-disk rotor construction, but without the 7E's
mid-bearing, replaced by the simpler 2-bearing system.
The design of GE's 7F/FA combustion turbine is supported by a three-phase
test program prototypical of the evolution of GE combustion turbines: Phase I,
where accessory systems are tested for performance and individual components are
tested in support of design activities; Phase II, where the entire machine is
tested to verify the design assumptions; and finally Phase III, where a
full-load on-line operating test is conducted on an electric utility system.
The first 7F combustion turbine testing was performed during the winter and
spring of 1990 at Virginia Power Corporation's Chesterfield No. 7 combined cycle
power station. Based on these favorable results including experience at a firing
temperature of 2,350 DEG.F, GE uprated the unit to its current "FA" model with
minor design modifications. These modifications consisted of raising the firing
temperature to 2,400 DEG.F and then to 2,420 DEG.F, closing the first stage
nozzle to raise the pressure ratio in order to maintain the same exhaust
temperature, adjusting the cooling flows to retain design life and opening up
the inlet guide vanes. The structural design was modified to improve
productability and inspectability. In addition, metallurgical changes were made
to the turbine shaft and third stage turbine wheel based on lower than expected
temperatures experienced with the 7F units located at the Chesterfield Station.
Shaft cooling was also added to the 7FA turbine rotor.
A partial list of completed and planned GE 7FA installations is presented in
Table 2.
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TABLE 2
FRAME 7FA INSTALLATION TABLE
<TABLE>
<CAPTION>
ACTUAL/PLANNED
COMMERCIAL CUSTOMER STATION COUNTRY QUANTITY OPERATION DATE
- ------------------- --------------------- -------- -------- ----------------
<S> <C> <C> <C> <C>
Florida Power & Light.............................. Martin USA 4 1992
Chubu Electric Power............................... Chita Japan 3 1992
Hartwell Energy.................................... Oglethorpe USA 2 1993
Tiger Bay Co-gen................................... Fort Mead USA 1 1993
Sithe Energies/Independence........................ Independence USA 4 1993
Chubu Electric Power............................... Kawagoe Japan 4 1993
PSI Energy......................................... Wabash USA 1 1994
Baltimore Gas & Electric........................... Perryman USA 1 1994
Portland General Electric.......................... Coyote Springs USA 1 1994
Kansai Electric Power.............................. Hemeji Japan 3 1994
Energy National.................................... Crockett USA 1 1994
Chubu Electric Power............................... Kawagoe Japan 2 1994
Korea Electric Power............................... Seo Inchon Korea 8 1995
Hermiston Generating, LP........................... Hermiston USA 2 1995
Chubu Electric Power............................... Kawagoe Japan 1 1995
Tampa Electric..................................... Polk USA 1 1995
Public Service of Colorado......................... Fort St. Vrain USA 1 1995
Chuba Electric Power............................... Chita Japan 1 1995
Compania Samalayuca................................ Samalayuca Mexico 1 1996
Cogentrix/Clark Co................................. River Road, Clark Co. USA 1 1996
Chubu Electric Power............................... Shin-Nagoya Japan 3 1996
POSCO.............................................. Kwangyang Korea 2 1997
Kyushu Electric Power.............................. Shin Aita Japan 3 1997
Compania Samalayuca................................ Samalayuca Mexico 2 1997
Chubu Electric Power............................... Shin-Nagoya Japan 3 1997
Exxon.............................................. Exxon-Baton Rouge USA 1 1997
Empresa Pub Medellin............................... Puerto Nare Columbia 2 1997
Public Service of Colorado......................... Ft. St. Vrain USA 1 1998
SkyGen............................................. DePere USA 1 1998
Gilbert Energy..................................... Mustang USA 2 1998
Carolina Power & Light............................. Asheville USA 1 1998
Occidental Chemical................................ Ingleside USA 2 1998
CSW Energy......................................... Frontera USA 2 1998
Korea Electric Power............................... Pusan Korea 2 1999
City of Tallahassee *.............................. Purdom USA 1 1999
SEI................................................ State Line USA 2 1999
SEI................................................ Neenah USA 2 1999
City of San Antonio *.............................. Braunig USA 2 1999
City of Jacksonville............................... Kennedy USA 1 1999
Elwood Energy...................................... Elwood USA 4 1999
Duke Energy *...................................... Maine Independence USA 2 1999
Duke Energy *...................................... Hidalgo USA 2 1999
Carolina Power & Light *........................... Lee USA 4 1999
Carolina Power & Light............................. Asheville USA 1 1999
Alabama Power...................................... Barry USA 2 1999
Bechtel/Gregory *.................................. Gregory USA 2 1999
Tenaska Frontier Gen Partner....................... Tenaska Frontier USA 3 2000
Southern Company................................... Theodore USA 1 2000
Sonat Energy Services.............................. Cataula USA 2 2000
SEI................................................ Ohio USA 2 2000
SEI................................................ Cape Cod USA 2 2000
SkyGen*............................................ RockGen USA 3 2000
Mississippi Power.................................. Daniels USA 4 2000
Korea Electric Power............................... Pusan Korea 6 2000
City of Jacksonville............................... Northside USA 2 2000
Alabama Power...................................... SELCO USA 1 2000
Florida Power & Light Company*..................... Ft. Myers USA 6 2000
Bucksport Energy/Champion*......................... Bucksport Energy USA 1 2000
City of Jacksonville............................... Northside USA 1 2001
SkyGen*............................................ Broad River USA 3 2001
SkyGen*............................................ Pine Bluff USA 1 2001
</TABLE>
- ------------------------------
* Model PG7241FA
7FA PRODUCTION PROBLEMS AND STATUS
The first series of GE Frame 7FA combustion turbines experienced three types
of problems since being introduced. These are: (1) compressor issues;
(2) turbine rotor flexibility issues; and (3) DLN-2
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combustor flashback. GE has been able to correct the compressor and turbine
rotor problems, but has not yet completely resolved the combustor flashback
issue.
COMPRESSOR ISSUES
The rotor for the Frame 7FA combustion turbines is a series of discs and
spacers held together axially with tie-bolts and is supported at each end by
bearings. The compressor section of the rotor utilizes 15 tie-bolts. In an
isolated event, compressor wheel slippage occurred on one Frame 7FA unit. This
was caused by insufficient and uneven tensioning of the tie-bolts. The solution
was a matter of changing the tension to a level which was consistent with GE's
previous experience with the older Frame 7E technology units and to require a
sequence in tensioning. In another isolated event, one Frame 7FA unit
experienced a compressor blade rub resulting from out of tolerance components.
Early compressor related issues associated with insufficient and uneven
tensioning and also manufacturing and assembly defects in the rotor compressor
section tie bolts have been resolved.
In 1998, vibration level changes were reported by five users of the Frame
7FA combustion turbine and the 50 cycle Frame 9FA version of the 7FA. Inspection
has revealed cracking in the seventeenth stage wheel of the compressor rotor on
the five units. GE commissioned a task force to determine the root cause of the
cracking and the subsequent countermeasures required. Findings indicate the
problem emanated from handling damage which occurred during stacking operations
that was acted on by thermal stresses generated during cold starts. GE observed
that the characteristic of successful fleet leaders is reducing the number of
unit trips and the number of hot starts. Because the Frame 7 F/FA rotors are
supported only at each end, the rotor is subjected to greater sag due to gravity
than the three bearing design used on the Frame 7E, resulting in higher stress
and strain levels if not cooled properly. The problem is exacerbated at start-up
and shut-down when stress and strain on the rotor are highest. GE issued revised
operating recommendations to address the issue. Subsequently, GE undertook a
broad rotor redesign that is used for the current FA product line that includes
the Facility's CTGs. These rotor modifications, GE reports, allow operation
without hold times or starting modification recommendations.
TURBINE ISSUES
Because the Frame 7 F/FA rotors are only supported at each end, large
centrifugal forces and rotor sag have caused cracks and distress of the rotor
components between the second and third stage wheels of the turbine section.
Incidents of cracks were found in the upper web area and bolt circle of the
turbine 2-3 spacer and 23 incidents of stage 3 wheel fatigue were observed. GE
identified the problem to be the flexibility of these components. In addition,
as a result of the rotor flexibility a rub was observed in this area. This
problem was more severe on the GE 9FA combustion turbine than the 7FA. GE
corrected the 2-3 spacer problem by installing a "Generation 4" all inconel
turbine rotor with a redesigned stiffer spacer subassembly beginning in
June 1995. No turbine section rotor problems have been observed with the
Generation 4 turbine section rotor modification.
DLN-2.6 COMBUSTION SYSTEM
GE has been developing DLN combustor technology since at least the early
1990s. Improvements over the decade have included control over a wider load
range, greater flexibility of operation, and progressively lower NO(X) emission
rates.
The DLN-2.6 is the latest version of this technology. The DLN 2.6 combustion
system technology developed by GE regulates the distribution of fuel to a
multi-nozzle premix combustor arrangement to maintain unit load and fuel split
for optimal emissions. It has six fuel nozzles per combustion can, five in the
periphery and one central, and offers standard NO(X) emission guarantees of 15
ppm when firing gas over a range of approximately 50 percent to 100 percent
load. The DLN 2.6 fuel system operation is fully automated, sequencing the
combustion system through a number of staging modes prior to reaching full
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load. The primary controlling parameter for fuel staging is the calculated
combustion reference temperature. Other DLN 2.6 operation-influencing parameters
available to the operator are inlet guide vane ("IGV") temperature control and
the use of inlet bleed heat.
Flashback has occurred in some Frame 7FAs, and to a greater degree in Frame
9FA combustors. It is often referred to as humming. Flashback occurs when the
flame pattern becomes unstable and moves backward into the fuel nozzle thus
overheating the nozzle tip. GE has formed a task force to identify all of the
causes of flashback and to determine solutions to the problem. Flashback can be
detected by an increase in NO(X) emissions, combustor dynamics and a spread in
the turbine exhaust temperature profile. GE reports that, when a flashback
happens, a reduction in combustion turbine load stops the occurrence. GE has
tested various combustor configurations to reduce the risk of flashback. GE has
selected a DLN fuel--air-staged combustor design and is equipping all of its
current and future Frame 7FA units with this design, including the Facility. GE
is recommending that its on-site monitoring service be installed to assist the
user in monitoring the occurrence of flashback, and the LTSA provides for this
service. GE can then alert the customer if a flashback incident has occurred so
that corrective action can be taken.
Condensation of liquid hydrocarbons in gas fuel have been identified as one
cause of flashback. Therefore, it is incumbent on the power plant operator to
monitor the gas fuel supply to ascertain that it is meeting the requirements of
the GE gas fuel specification. To mitigate this potential problem, the
Facility's design incorporates a heater in the gas supply line to be used if
necessary to raise the temperature of the incoming fuel gas above the liquid
dewpoint before the gas enters the feed lines to the individual CTGs.
SUMMARY
Based on our review, we are of the opinion that the technology proposed for
the Facility is a sound and proven method of electric generation. If operated
and maintained consistent with generally accepted industry practices, the
Facility should be capable of passing the Acceptance Tests pursuant to the EPC
Contract and meeting the requirements of the PPA and the current environmental
permits. Further, the Facility has adequately provided for all off-site
requirements, including fuel supply and transportation, water supply, wastewater
disposal, and electrical interconnection.
Based on our review, we are of the opinion that the proposed method of
design, construction and operation of the Facility has been developed in
accordance with generally accepted industry practices and has taken into
consideration the current environmental, license and permit requirements that
the Facility must meet.
HEAT RATE AND OUTPUT
HEAT RATE
The EPC Contract guarantees a Facility net heat rate of 10,683 Btu/kWh (HHV)
or less when operated on natural gas and 10,821 Btu/kWh (HHV) or less when
operated on fuel oil when measured in performance tests in accordance with the
EPC Contract Exhibit D. The basis for any corrections to the as-tested values
are 94 DEG.F dry bulb, 74 DEG.F wet bulb, 14.29 psia and 0.95 power factor.
There is an instrument measurement uncertainty, or deadband, of plus or
minus1.5 percent on the guaranteed heat rates. Accounting for the potential
impact of the 1.5 percent tolerance, the equivalent net heat rates are 10,843
Btu/kWh (HHV) for gas and 10,983 Btu/kWh (HHV) for oil.
Adjusting the GE guaranteed heat rate on gas for measurement uncertainty,
commercial operation conditions, non-recoverable equipment degradation
(fouling), and using the specified summer performance parameters and the
expected dispatch scenario developed by RDI, we have projected the levelized
average net plant heat rate to be approximately 11,088 Btu/kWh (HHV).
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OUTPUT
The PPA sets forth the terms and conditions under which PECO will purchase
the capacity and net electric output from the Facility for a term of 29 years,
commencing on the Commercial Operation of the Initial Units. The PPA provides
that, except for limited circumstances, PECO shall be the exclusive recipient of
all capacity, energy and ancillary services or products available from the
Facility, at a level equal to the Contract Capacity established for the
Facility. The Contract Capacity will be established and declared by the
Partnership each Contract Year following a Capacity Test, and shall be within
the following limits: (1) for the first Contract Year, Contract Capacity shall
equal the product of 150 MW and the number of Units that have achieved
Commercial Operation; (2) for the second Contract Year, Contract Capacity shall
be between 875 MW and 950 MW, based on all Units having achieved Commercial
Operation; and (3) for Contract Years thereafter, Contract Capacity shall be no
less than 875 MW and no greater than within 50 MW of the then-current Contract
Capacity based on six Units having achieved Commercial Operation, up to a
maximum of 950 MW.
The EPC Contract guarantees that the Facility shall deliver for sale at
least 938,460 kW when measured by the Performance Tests, though the output must
be adjusted for transformer losses, auxiliary loads, and balance of plant
restrictions. The basis for any corrections to the as-tested output are 94 DEG.F
dry bulb, 74 DEG.F wet bulb, 14.29 psia and 0.95 power factor.
There is an instrument measurement uncertainty, or deadband, of plus or
minus1 percent on the guaranteed output. Accounting for the potential impact of
the 1 percent tolerance, auxiliary loads and losses, and adjustments for
commercial operation, fouling, and non-recoverable equipment degradation, we
have projected the levelized average net plant output to be approximately 908
MW.
SUMMARY
For the purposes of the Projected Operating Results, we are of the opinion
that if designed, constructed, operated and maintained as currently proposed,
the Facility should be capable of operating in a peaking operation mode and of
achieving an average annual output of 908 MW, and an average annual net plant
heat rate of 11,088 Btu/kWh (HHV). The average annual output of 908 MW is within
the range where neither party shall owe a penalty or adjustment under the PPA.
The average annual net plant heat rate of 11,088 Btu/kWh (HHV) is within the
range where neither party shall owe a Fuel Adjustment Payment under the PPA.
AVAILABILITY
OPERATING EXPERIENCE
As of June 1999 GE reported that over 130 combustion turbines that
incorporate "F" (7F and 9F) technology have in excess of 2 million hours of
firing time logged. Projects presently using or expected to use the Frame 7FA
are listed in Table 2. The first Frame 7F units, which were delivered to
Virginia Power's Chesterfield Power Station, now have more than 37,500 hours of
service. As of June 1999, the 7 F/FA fleet has accumulated more than
1.35 million operating hours. We have reviewed data provided by GE that
indicates that there are units in the fleet that are subject to daily start-stop
duty with a duty cycle of approximately 15 hours per start. These units have a
total of 1,200 to 1,500 starts with between 23,000 and 25,000 hours of fired
operation. This data indicates that the fleet has significant operating history.
In early 1997, GE initiated a survey of fleet performance of their operating
"F" technology units as measured by customers. GE surveyed all units that had
been in regular commercial service for at least one year. GE requested operating
data by annual increments and did not include any year's data that represented
less than 10 months of reported operation. These criteria were intended to lead
to more representative reliability and availability statistics as they include
all maintenance and inspection protocols and exclude partial-year operations. On
the basis of these selection criteria, GE sent out questionnaires to
B-17
<PAGE>
all 16 of the qualifying sites covering 42 combustion gas turbines and 97
unit-years of operation. A total of 12 sites with 31 combustion gas turbines
responded to the survey and, of these 3 sites, representing six Frame 9F
machines, turned out not to meet the full selection criteria. The remaining
sample included 9 sites representing 25 Frame 7F/FA gas turbines. Table 3
summarizes the performance reported by GE for these 25 Frame 7F/FA combustion
gas turbines which are considered to represent the reliability and availability
performance for the fleet.
While there is no operating experience with the PG 7241FA, there is
experience with its predecessors, the PG 7231FA and the PG 7221FA. The
difference between the PG 7231FA and the PG 7241FA include an increase in the
firing temperature from 2,400 DEG.F to 2,420 DEG.F, additional use of thermal
barrier coatings to maintain parts life, and the use of cloth-metal seals
between the nozzle and diaphragm blocks. GE documents report that 35 PG 7241FA
units are on order for shipment in 1999 and 2000.
TABLE 3
FRAME 7 F/FA
FLEET PERFORMANCE
<TABLE>
<CAPTION>
YEAR UNIT AVAILABILITY STARTING RELIABILITY
- ---- ----------------- --------------------
<S> <C> <C>
1993........ 95.0% 97.4%
1994........ 93.1% 96.7%
1995........ 90.2% 99.1%
1996........ 95.1% 99.4%
1997........ 93.0% 96.0%
</TABLE>
The decrease in unit availability during 1995 was primarily a result of the
unit outages taken to rectify the rotor spacer problem discussed previously.
As indicated in Table 3, the unit availability and starting reliability for
the surveyed units have been high. We would expect similar performance for the
Frame 7FAs being installed at the Facility, providing the operation and
maintenance of the CTG is in accordance with GE's recommended practices. The
unit availability presented here should not be confused with the availability
under the PPA as explained below.
AVAILABILITY UNDER THE PPA
Each Contract Year, PECO will designate one of two Peak Availability Options
which will establish the hours of the day in which PECO may issue Energy
Requests from the Facility during Summer Months, designated as June through
September. Under Peak Availability Option #1, PECO shall be entitled to request
energy from the Facility for sixteen hours of each day during Summer Months.
Under Peak Availability Option #2, PECO shall be entitled to request energy from
the Facility for twenty hours on each Monday through Friday, and for sixteen
hours of each Saturday and Sunday during Summer Months.
PECO is required to provide the Partnership each day with a Unit Call
Schedule, which will indicate a schedule detailing the hours of the following
day in which a Unit will be requested by PECO to be available for dispatch,
pursuant to an Availability Schedule provided to PECO by the Partnership. During
all Summer Months, the Partnership shall make all Units available for dispatch
by PECO, and PECO shall place all Units on the Unit Call Schedule for each
Summer Peak Hour for the following day. During all Winter Months, designated as
December, January and February, the Partnership shall make all Units available
for dispatch by PECO, and PECO may place up to all of the Units on the Unit Call
Schedule for each following day of the Winter Months. For all other months of
the year, the Partnership shall make four Units available for dispatch by PECO,
and PECO may place up to four Units on the Unit Call Schedule for the following
day. PECO may also place Units available pursuant to the preceding seasonal
criteria in a Standby Mode during each day of the Non-Summer Months.
B-18
<PAGE>
If PECO requests Peak Availability Option #1, it is required to place Units
on the Unit Call Schedule during Non-Summer Months for a minimum of the lesser
of 2,091 Unit Hours, or the number of Unit Hours during Non-Summer Months
allowed pursuant to the Air Permit. The effect of this clause is to produce an
equivalent amount of Unit-hours that Units are placed on the Unit Call Schedule
each Contract Year under either Peak Availability Option, which are then used to
determine adherence to the Facility's targeted Availability Percentages under
the PPA.
Energy can be requested by PECO, subject to a minimum load for each Unit of
90 MW when fired by natural gas, and 95 MW when fired by No. 2 fuel oil. If a
Unit is called upon by PECO pursuant to the daily Unit Call Schedule, the
Partnership shall cause the Unit to deliver Unit Capacity on a continuous basis
within 60 minutes if the Unit is in Cold Shutdown status, or within 30 minutes
if the Unit is in Hot Shutdown status. The Facility will be capable of starting
no more than three Units simultaneously.
Contractual availability under the PPA will be determined on the basis of
credited hourly output from the Facility compared to the hourly potential output
from the Facility, which is specified under a variety of operating and dispatch
conditions in the PPA, during all hours Units are placed on the Unit Call
Schedule by PECO. With certain exceptions during Unit start-up and shut down
hours and certain other conditions, the credited hourly output of the Units
during each Contract Year will equal: (1) either the hourly energy delivered to
PECO or the Units' hourly Contract Capacity, provided PECO has dispatched the
Units during such hours and the delivered energy is within a specified tolerance
band, or (2) the Units' hourly Contract Capacity each hour the Units are on the
Unit Call Schedule and no energy is dispatched from said Units during such
hours. The hourly potential output from the Facility will be, with certain
exceptions during Unit start-up and shut-down periods and certain other
conditions, equal to: (1) either the hourly Contract Capacity of the Facility
during Summer Months, or (2) the hourly Unit Capacity during Non-Summer Months
times the number of Units on the Unit Call Schedule during such Non-Summer
Months. Each year, the Summer Availability Percentage will be calculated at the
end of the Summer Months as the credited Summer Output divided by the Summer
Potential output during all hours of the Summer Months. At the end of each
Contract Year, the Annual Availability Percentage will be calculated as the
actual Annual Output divided by the Annual Potential output during all hours of
the Contract Year. The Partnership shall endeavor to cause the Facility to
achieve Summer Availability Percentages and Annual Availability Percentages of
at least 97 percent throughout the term of the PPA. PECO will compensate the
Partnership for achieving a Summer Availability Percentage in excess of
97 percent and the Partnership will compensate PECO for failing to achieve an
Annual Availability Percentage of at least 97 percent. The Partnership will
compensate PECO at the end of each Summer Season if the Summer Availability
Percentage is less than 87 percent. Any compensation paid during a contract year
will be subtracted from any Partnership obligation as a result of the Annual
Availability Percentage for the year being less than 97 percent.
The Summer and Annual Availability Percentages calculated for the Facility
pursuant to the PPA are based on the actual energy deliveries from the Facility
to PECO, compared to the potential energy deliveries that could have occurred to
PECO over the entire requisite Summer Peak hour period of each contract year.
Reductions in Availability Percentages occur only as a result of shortfalls in
energy deliveries from the Facility when requested by PECO. During hours when
Units are placed on the Unit Call Schedule and energy is not requested by PECO,
all such Units are deemed to be 100 percent available under the PPA. Therefore,
at low annual capacity factors, the Summer and Annual Availability Percentages
calculated under the PPA may be considerably higher than the actual availability
of the Facility calculated using more traditional methods.
For example, if the Facility is dispatched at a 4 percent annual capacity
factor, which is representative of the relatively low annual capacity factors
projected by RDI over the term of the Bonds, and the Facility actually had one
of its six Units out of service during the entire time energy was requested by
PECO, the actual Facility availability would be 83.33 percent. However, the
Annual Availability Percentage calculated
B-19
<PAGE>
pursuant to the PPA would be 97.5 percent, which is within the contractual range
of the PPA, and no penalty payments would occur to PECO under this example.
SUMMARY
Based on the projected levels of dispatch, we are of the opinion that the
Facility should be capable of achieving a Summer Availability Percentage of
98 percent and an Annual Availability Percentage of 97 percent, both as defined
in the PPA. The Annual Availability Percentage of 97 percent is the level
required to avoid reductions in the reservation payments under the PPA.
ESTIMATED USEFUL LIFE OF THE FACILITY
The EPC Contract requires the Facility to be designed and constructed in
accordance with recognized codes and standards typical of central power stations
in the United States. We have reviewed the list of qualified vendors and the
configuration of systems proposed for the Facility as well as the proposed
general plans for operating and maintaining the Facility. On the basis of this
review and assuming: (1) the Facility is designed, constructed, operated, and
maintained as proposed by the Partnership, the EPC Contractor, and the Operator;
(2) all equipment is operated in accordance with manufacturer's recommendations;
(3) all required renewals and replacements are made on a timely basis; and
(4) natural gas and water used by the Facility are within the expected range
with respect to quantity and quality, we are of the opinion that the Facility
should have a useful life extending beyond the term of the Bonds.
CONSTRUCTION SCHEDULE
We have reviewed Exhibit F of the EPC Contract that presents a summary level
computer generated bar chart schedule dated August 2, 1999 (the "Project
Schedule"). The Project Schedule was prepared by the EPC Contractor representing
its summary level plan to complete the Facility in accordance with the terms and
conditions of the EPC Contract. The Project Schedule is grouped into the major
areas of project planning, engineering, construction, plant start-up and
commercial operation. Within these larger categories the EPC Contractor is
planning its work by CTG unit which supports the completion requirements of the
EPC Contract.
Major milestones to be completed by the EPC Contract identified in the
Project Schedule include Limited Notice to Proceed (September 10, 1999), Execute
EPC Contract (September 10, 1999), Mechanical Completion Unit 1 (March 14,
2001), Mechanical Completion Unit 2 (May 9, 2001), Mechanical Completion Unit 3
(May 9, 2001), Mechanical Completion Unit 4 (February 25, 2002), Mechanical
Completion Unit 5 (March 26, 2002), Mechanical Completion Unit 6 (April 14,
2002), Commercial Operation Units 1, 2 & 3 (June 1, 2001), Commercial Operation
Units 4, 5 & 6 (June 1, 2002) and Project Completion July 1, 2002. A key
milestone identified in the Project Schedule is Mobilize for Construction
(April 17, 2000).
The EPC Contract identifies the dates by which the Partnership must provide
certain items to support the Project Schedule. According to the EPC Contract:
the Partnership is required to provide backfeed power from the electrical
interconnection point no later than 14 months after Authorization to Proceed
("ATP"); the Partnership is required to provide a water supply of 432,000
gallons per day no later than 12 months following ATP; and the Partnership is
required to provide the natural gas supply no later than 13 months following
ATP. The Partnership issued a Limited Notice to Proceed to the EPC Contractor on
September 10, 1999 allowing the EPC Contractor to commence engineering,
procurement with acceptable cancellation terms and construction planning
activities. The EPC Contractor reports that currently it is performing its
duties in accordance with the Limited Notice-to-Proceed including engineering,
procurement, project planning, and support General Electric Order Definition
meetings. The EPC Contractor reported that it is preparing to conduct its
geotechnical analysis of the Facility Site. No on-site work has commenced at
this time.
B-20
<PAGE>
Based on our review and assuming the absence of events such as delivery
delays, labor difficulties, unusually adverse weather conditions, force majeure
events, the discovery of underground obstructions or hazardous materials or
wastes not previously known, or other abnormal events that are prejudicial to
normal construction or installation, we are of the opinion that, based on a
Limited Notice-to-Proceed of September 10, 1999, the scheduled Commercial
Operation Dates of June 1, 2001 for the Initial Units and June 1, 2002 for the
Final Units are achievable using generally accepted project and construction
management practices.
PERFORMANCE GUARANTEES AND ACCEPTANCE TESTS
PERFORMANCE GUARANTEES
Under the terms of the EPC Contract, the EPC Contractor guarantees the
performance of each CTG Unit with respect to net electrical output, net heat
rate, and exhaust emission levels. The guarantees and the conditions under which
these are guaranteed are summarized in Tables 5 and 6.
In addition, near-field and far-field noise guarantees are provided. The
near-field guarantee is 90 dBA at one meter from equipment and the far-field
guarantee is 58 dBA at 1,200 ft from the nearest unit with all units and other
noise sources, such as ventilation systems, operating.
TABLE 5
PERFORMANCE GUARANTEES AND CONDITIONS(1)
NEW & CLEAN CONDITIONS
<TABLE>
<CAPTION>
FUEL
----------------------------
GUARANTEE NATURAL GAS DISTILLATE OIL
- --------- ----------- --------------
<S> <C> <C>
Net Unit Output (kW)................................. 156,410 N/A
Net Unit Heat Rate (HHV)(Btu/kWh).................... 10,683 10,821
</TABLE>
- ------------------------
(1) Subject to measurement uncertainty deadband not to exceed plus or minus1.0
percent on net plant output and plus or minus1.5 percent on net unit heat
rate; test results adjusted to 94 DEG.F dry bulb and 74 DEG.F wet bulb
ambient temperature; and evaporative coolers in service.
The Performance Guarantees are further based on the design natural gas
composition in the EPC Contract, and the net power measured at the high side of
each step-up transformer with the utility kilowatt hour meter(s).
The EPC Contract guarantees that stack emissions of each Unit will comply
with the Facility's Air Permit. Although the Air Permit's limits vary, in some
cases with load, the principal limits are presented in Table 6.
TABLE 6
AIR PERMIT EMISSIONS LIMITS (FULL LOAD)
<TABLE>
<CAPTION>
FUEL
----------------------------
LOAD LEVEL AND EMISSION NATURAL GAS DISTILLATE OIL
- ----------------------- ----------- --------------
<S> <C> <C>
AT BASE LOAD TO 50% LOAD
NO(X) (ppm @ 15% O(2)).................................... 15 42
CO (ppm).................................................. 15 20
PM(10) (lb/MMBtu)......................................... 0.010 0.013
VOC (lb/MMBtu)............................................ 0.003 0.005
Opacity (%)............................................... 10 20
</TABLE>
B-21
<PAGE>
FUNCTIONAL TESTING
Functional Testing consists of operational tests of systems performed after
Mechanical Completion occurs. The tests are to verify that the controls are
tested and tuned and that the systems work properly and are ready for normal and
continuous operation. Functional Testing requirements for each Unit must be
satisfied prior to commencement of Acceptance Testing.
ACCEPTANCE TESTING
In order to demonstrate that the Facility meets or exceeds the performance
guarantees, the EPC Contract requires the EPC Contractor to successfully
complete a series of tests defined as the Owner Tests and the PECO Tests.
Acceptance Testing must be satisfactorily completed before the EPC Contractor
can achieve Commercial Operation for the Facility.
OWNER TESTS
The Owner Tests consists of the following six tests:
(1) PERFORMANCE TESTS
Performance Test will be conducted to measure net power output and net
heat rate of each Unit including Integrated Plant Systems Tests for the
entire Facility.
(2) INTEGRATED PLANT SYSTEMS TESTS
Three Integrated Plant Systems Tests will be performed to demonstrate
that the Facility is not limited in its capability to produce the Commercial
Operation Output of 938,460 kW:
- Phase I--Units 1, 2 and 3 operating simultaneously
- Phase II--Units 4, 5 and 6 operating simultaneously
- Final--All six units operating simultaneously
(3) DEMONSTRATION TESTS
Demonstration tests to be performed to confirm certain Facility and
system capabilities are as follows:
- Gas Turbine Fuel Oil Firing
Each CTGs shall operate for one hour at base load while fired
100 percent with fuel oil without any combustion system or gas turbine
temperature alarms.
- Gas Turbine Fuel Switching
Each CTG will switch from natural gas to fuel oil and back to natural
gas.
- Gas Turbine Startup and Startup Durations
Each CTG, when on turning gear, must be able to reach base load output
within 30 minutes of start initiation when firing natural gas and fuel
oil
- CTG Response Characteristics
Each CTG must achieve a loading/unloading rate of no less than
8.3 percent of base load output per minute between 0-100 percent of
base load on either fuel.
- Generators Leading/Lagging Operation
Each CTG must operate at each power factor constant limit of 0.95
leading to 0.85 lagging for a period of one hour.
- Minimum Load Operation
B-22
<PAGE>
Each CTG must operate stable at a power output of 50 percent of base
load for a duration of two hours.
- Automatic Generation Control
Automatic generation control must be demonstrated for the entire
Facility and individual CTGs from 50 percent base load to maximum
output.
(4) EMISSIONS TESTS
During the Performance Tests, Gas Turbine Fuel Oil Firing Tests, Minimum
Load Tests, Unit Availability Tests and Unit Capacity Tests, each unit must
be operated within the Air Permit limits for emissions. This will be
determined by monitoring NO(X) emissions using the Facility's CEM systems
after calibration.
A Source Emissions Test conducted on each unit in accordance with a
protocol approved by the Georgia Department of Natural Resources ("GA DNR")
will demonstrate compliance with the Air Permit. The CEM systems will be
demonstrated to be in compliance with state and federal requirements in
accordance with a protocol to be approved by the GA DNR. The Source
Emissions Tests and CEMS demonstrations are required for Final Acceptance,
but not for Commercial Operation.
Noise audits for each Phase will be conducted to verify compliance with
noise guarantees. Satisfactory demonstration with both Phases in full load
operation is a requirement of Final Completion.
(5) UNIT AVAILABILITY TEST
Each Unit must operate with a 99 percent availability for 12 consecutive
hours per day over a period of 2 consecutive days or if the unit cannot run
due to reasons beyond the EPC Contractor's control, 99 percent availability
for 40 hours.
(6) PLANT AVAILABILITY TEST
The Facility must operate with a 99 percent availability for 12
consecutive hours per day over a period of 2 consecutive days.
PECO TESTS
The PECO tests are used to determine the net electrical output capability of
the Facility and the effectiveness of each evaporative cooler.
(1) UTILITY CAPACITY TEST
After the completion of each phase, two 1-hour tests will be performed
to determine the net electrical output capability of the Facility to be used
in establishing Contract Capacity in the PPA. The Phase I and II Integrated
Plant Systems Tests described above may be considered to be the Phase I and
II PECO Tests.
(2) EVAPORATIVE COOLER EFFECTIVENESS TESTING
As part of the Utility Capacity Test, tests will be performed to
determine the effectiveness of each evaporative cooler, but only when the
dry bulb temperature exceeds 60 DEG.F and there is a minimum of 10 DEG.F
difference between the wet bulb and dry bulb temperatures. The coolers must
maintain at least 85 percent effectiveness for a duration of one hour.
B-23
<PAGE>
SUMMARY
Based on our review, we are of the opinion that, given the range of dispatch
factors projected by RDI, which is typical of peaking operation, and the
requirements of the PPA, the Acceptance Tests and guarantees included in the EPC
Contract are adequate to estimate the future performance of the Facility.
LIQUIDATED DAMAGES
Liquidated damages ("LDs") are available under the EPC Contract in the event
that the EPC Contractor is unable to meet schedule milestones, or unable to
successfully complete the Acceptance Testing.
Schedule LDs, available in the event the EPC Contractor fails to achieve
Commercial Operation of a Unit by the Scheduled Date of Commercial Operation for
such Unit, consist of the sum of the following amounts: $40,000 per Unit for
each full day or part thereof by which the Commercial Operation of any such Unit
is delayed up to and including the 14(th) day after the Scheduled Commercial
Operation Date for such Unit; $65,000 per Unit for each full day or part thereof
by which the Commercial Operation of any such Unit is delayed beyond the 14(th)
day and up to and including the 30(th) day after the Scheduled Commercial
Operation Date for such Unit; and $82,000 per Unit for each full day or part
thereof by which the Commercial Operation of any such Unit is delayed beyond the
30(th) day after the Scheduled Commercial Operation Date for such Unit. Such LDs
will be offset by any net revenues received by the Partnership from the
operation of such affected Units during the period that the LDs apply, prior to
their respective Commercial Operation Dates. The aggregate LDs for delays in
Unit completion are limited to a maximum of 22.5 percent of the Guaranteed Lump
Sum price of the EPC Contract, or approximately $51,539,587. These LDs may be
limited to the damages available to the EPC Contractor from GE to the extent
that the delay is caused primarily due to GE's failure to perform. GE will be
obligated to pay damages to the EPC Contractor (1) for unexcused late delivery
of the Units and (2) if the performance of the Units is not as required under
the GE Turbine Contract. GE will also issue certain warranties in connection
with the performance of the Units. For additional discussion, please refer to
the section of the Offering Circular entitled "Summary of Principal Project
Documents, EPC Contract".
Under the PPA, the Partnership is obligated to pay LDs to PECO for failure
of a Unit to achieve its Scheduled Date of Commercial Operation in amounts equal
to: (1) $25,000 per Unit for each full day or part thereof by which the
Commercial Operation of any such Unit is delayed up to and including the 14(th)
day after the Scheduled Commercial Operation Date for such Unit; (2) $50,000 per
Unit for each full day or part thereof by which the Commercial Operation of any
such Unit is delayed beyond the 14(th) day and up to and including the 30(th)
day after the Scheduled Commercial Operation Date for such Unit; and
(3) $66,667 per Unit for each full day or part thereof by which the Commercial
Operation of any such Unit is delayed beyond the 30(th) day after the Scheduled
Commercial Operation Date for such Unit. The aggregate amount of LDs payable by
the Partnership to PECO shall not exceed $8,000,000 per Unit and $25,000,000 in
the aggregate.
Performance LDs are available in the event that the EPC Contractor fails to
meet the guaranteed net power output ("Commercial Operation Output") of at least
938,460 kW for the Facility, and 156,410 kW for each Unit ("Unit Output
Requirement"), when measured during the Performance Tests. Output performance
LDs are set at $300 for each kilowatt by which the demonstrated Commercial
Operation Output and Unit Output Requirements fall below these guaranteed
values. The aggregate LDs for reduced Facility and Unit output are limited to a
maximum of 22.5 percent of the Guaranteed Lump Sum price of the EPC Contract, or
approximately $51,539,587.
Performance LDs are also available in the event that the EPC Contractor
fails to meet the guaranteed Commercial Operation Net Heat Rates of 10,683
Btu/kWh or less when operated on natural gas and 10,821 Btu/kWh when operated on
fuel oil, both when measured during the Performance Tests. Net Heat Rate LDs are
set at $5,860 per Btu/kWh for each Btu/kWh by which the demonstrated net heat
rate of the
B-24
<PAGE>
Facility or any Unit exceeds the Commercial Net Heat Rate when operated on
natural gas, plus $950 per Btu/kWh by which the demonstrated net heat rate of
the Facility or any Unit exceeds the Commercial Net Heat Rate when operated on
fuel oil. The aggregate LDs for increased Plant and Unit net heat rates are
limited to a maximum of 22.5 percent of the Guaranteed Lump Sum price of the EPC
Contract, or approximately $51,539,587.
The aggregate liability of the EPC Contractor for liquidated damages under
the EPC Contract for delays in Commercial Operation, Commercial Operation Output
and Commercial Operation Net Heat Rate is limited to 30 percent of the
Guaranteed Lump Sum Price under the EPC Contract price, or approximately
$68,719,450.
STATUS OF PERMITS AND APPROVALS
The Facility must be designed, constructed and operated in accordance with
applicable environmental laws, regulations and codes. On the basis of our
review, we are of the opinion that the Partnership has received the key
environmental permits and approvals required from the various federal, state,
and local agencies, that are currently necessary to construct the Facility.
While not all the required permits and approvals have been issued, including
some which cannot be obtained until the Facility is ready to operate, we are not
aware of any technical circumstances that would prevent the issuance of the
remaining permits. Certain permits related to construction require detailed
design drawings for their application, are the EPC Contractor's responsibility,
and are procedural in nature.
The status of key permits and approvals for the construction and operation
of the Facility is presented in Table 7. Additional information is provided
following the table, where necessary for completeness or clarification.
TABLE 7
STATUS OF KEY PERMITS AND APPROVALS
<TABLE>
<CAPTION>
PERMIT OR APPROVAL FOR AGENCY STATUS REMARKS
- ------------------ --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
FEDERAL
Determination Exempt Wholesale Federal Energy Approved 7/9/99
Generator status Regulatory Commission
Authorization under Filling and U.S. Army Corps of Authorized 4/21/99 see text
Nationwide Permit disturbance of Engineers ("Corps")
No. 26 wetlands
Approval of Facility Oil storage U.S. Environmental Plan submittal not
Response Plan Protection Agency required until tank
("EPA") is filled.
STATE
Air Permit Construction and GA DNR Issued 12/18/98
initial operation of
a source of air
pollution
Title V Operating Operation of a major GA DNR Application required
Permit source of air within 12 months
pollution after start of
operations
Stormwater discharge Construction GA DNR Not available--see EPC Contractor
permit stormwater discharge text responsibility
NPDES Permit Discharge of GA DNR Issued 7/9/99, Renewal application
wastewater expires 6/30/04 due 1/9/04
LOCAL
Zoning Approval Facility Heard County Obtained June 8, 1998
Disturbance Permit Facility Site grading Heard County Detailed grading EPC Contractor
plans, necessary for responsibility
application, in
progress
</TABLE>
B-25
<PAGE>
CORPS PERMIT
As a condition of the Corps' authorization under Nationwide Permit No. 26,
the Partnership is required to obtain Corps approval of certain restrictive
covenants for parcels of land related to the approved wetlands mitigation plan.
The Partnership has indicated its intent to obtain this Corps approval in
adequate time to comply with the further requirement to register the covenants
with the property deeds within 60 days of commencing construction in the
wetlands. We know of no technical reason why this approval should not be
attainable.
AIR PERMIT
The Air Permit includes emission limits, operating restrictions, testing
requirements, and monitoring and reporting requirements. Principal emission
limits are described in Table 6 herein. No. 2 fuel oil is limited to
0.05 percent (by weight) sulfur content and the Facility is limited to use of
57 million gallons of No. 2 fuel oil per 12-month period. The average
utilization of the Facility shall not exceed 3,066 hrs/unit/ year.
These limits and operating restrictions and the testing, monitoring and
recording requirements are similar to the requirements of air permits for other
facilities with which we are familiar.
STORMWATER DISCHARGE PERMIT
Disturbance of greater than five acres for construction would require a
Construction Stormwater NPDES Permit. The EPA has delegated authority for
administering this permit program to the GA DNR, which has issued a General
Permit covering construction activities throughout the State of Georgia.
However, we understand that this General Permit has been appealed, and that
until these appeals are settled, GA DNR is neither issuing authorizations under
the General Permit or individual construction stormwater permits. The
Partnership has received a letter from the GA DNR indicating that it will
consider the Partnership in compliance provided it implements all of the
technical requirements of the General Permit.
PENDING CHANGES IN REGULATIONS
There are two pending changes in the GA DNR's air pollution regulations
which, when and if finalized, may have an effect on operation of the Facility.
SIP CHANGE
The Atlanta, GA area is not attaining the National Ambient Air Quality
Standard for ozone. In order to achieve that standard in the coming years, GA
DNR has proposed a change to its State Implementation Plan ("SIP") comprised of
a series of regulatory changes affecting stationary sources, including power
plants, and mobile sources. The focus of this SIP Change is reductions in
emissions of NO(X) and volatile organic compounds ("VOC"), which are pollutants
involved in the formation of ozone, in northern Georgia.
This SIP Change must be submitted to the EPA for approval. We have not
reviewed the SIP Change in detail. The Partnership indicated that there are
reasons to believe that the SIP Change, in its current form, is not approvable
by the EPA, in which case the process could start over during 2000. A first
attempt at a SIP Change to address the same non-attainment issue was rejected by
EPA in 1998.
The SIP Change may be modified at any step in this process; therefore it is
uncertain what, if any, impact the SIP Change may have when it is finally
implemented. However, a general observation can be made. As the Facility has
been issued its Air Permit, it is likely that most, if not all, of the
regulations changes in the SIP Change will not be applicable; i.e., the Facility
will be "grandfathered" from most of the requirements. The permitted emission
rates for the Facility are, in general, below the targeted emission
B-26
<PAGE>
rates for new sources in the proposed SIP Change. If implemented as currently
proposed, there would be little, if any, impact expected on Facility operations.
EPA SIP CALL
As numerous eastern states have had a persistent ozone attainment problem,
part of which is due to transport of ozone precursors from adjacent states, EPA,
in September 1998, issued a rule calling for 22 states, including GA, to prepare
and submit revisions to their SIPs to provide for further reduction of emissions
of NO(X) commencing with the 2003 ozone season (May-September) (the "SIP Call").
Under the EPA rules, the affected states were to submit these SIP revisions by
September 1999. However, on May 26, 1999, the U.S. Circuit Court of Appeals for
the District of Columbia stayed the effect of the SIP Call, pending resolution
of challenges brought by various entities; thus, states were not required to
submit revised SIPs by the September 1999 deadline. This action places in doubt
the scope, timing and content of the EPA mandate to further reduce NO(X)
emissions, and will likely delay implementation of the NO(X) reductions and
cap-and-trade program envisioned by the EPA.
In general, the EPA SIP Call envisioned a regional NO(X) cap-and-trade
system similar to the national SO(2) emissions allowance program in effect under
Title IV of the Clean Air Act. Each state would be assigned a NO(X) emissions
cap for the ozone season, and would implement regulations (referred to as the
"NO(X) Budget Rule") distributing these allowances and requiring each affected
source to hold allowances for its actual ozone season NO(X) emissions each year.
If a facility were to emit more NO(X) than its allocation, it would have to
obtain additional allowances on the open market. If it emitted less, it might be
able to sell the excess allowances. This system was to go into effect for the
2003 ozone season.
Prior to the Circuit Court decision, the GA DNR had developed a draft of
"Main Principles for Utilities," a preliminary concept for allowance allocation
for the years 2003 and beyond. This methodology would assign allowances for the
years 2003-2007 to existing units using an undefined method, although EPA
guidance would suggest it would be based on actual fuel use during some
historical baseline period multiplied by an emission factor of 0.15 lb/MMBtu.
For units permitted after 1995 (i.e., not operating during the initial
baseline period), including the Facility, allowances for the period 2003-2007
would be allocated on a first-come, first-served basis from a 900 tons per
season ("tps") set-aside pool, and would be based on a nominal NO(X) emission
rate of 0.04 lbs/ MMBtu, the maximum heat input capacity of the unit, and an
assumed capacity factor of 20 percent, or 734 hrs/season. For the Facility, this
would be approximately 154 tps. The Partnership expects actual NO(X) emissions
from the Facility to be somewhat less than 154 tps. Excess allowances could be
sold.
Beginning with the 2008 ozone season, the Facility would be considered an
existing unit and would share in the allocation of the cap based on whatever
scheme is adopted. EPA guidance suggests an allocation scheme based on actual
seasonal NO(X) emissions during a baseline period that is shortly before the
date of the allocation and a factor in pounds of NO(X) per MWh or MMBtu.
If, in fact, the EPA prevails and the SIP Call goes forward, the exact
allocations of allowances for year 2003 and beyond will not be specifically
known for some time. For the purposes of the Projected Operating Results, we
have conservatively assumed that:
- a NO(X) budget rule with a cap-and-trade system will be in place by 2003,
- the Facility will only be allocated half the allowances necessary for the
Facility's expected NO(X) emissions, and
- allowances will cost $1,400/ton in 1995 dollars, which is comparable to
the price of recent trades of NO(X) allowances in the Northeast where such
a trading system went into effect this year, and will escalate at the rate
of inflation.
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<PAGE>
THE FINANCING OF THE PROJECT
FACILITY CONSTRUCTION COST
The EPC Contract includes a "Guaranteed Lump Sum Price" of $229,064,832 (the
"EPC Contract Price"). The EPC Contract Price includes the EPC Contractor's
fixed price for labor and material and the cost of the GE Turbine Contract.
Additionally, $302,000 is included in the Total Construction Cost for late scope
changes which are anticipated to be added to the EPC Contract Scope. The EPC
Contractor's estimate which serves as the basis of the EPC Contract Price is
based on the Partnership's Request for Proposal, preliminary design drawings,
preliminary site plans and general arrangement drawings, and quotes the EPC
Contractor obtained from manufacturers, suppliers, vendors and subcontractors
with whom the EPC Contractor is familiar. A Tenaska affiliate executed an
agreement with GE for the supply of the CTGs and will assign the agreement to
the Partnership upon issuance of the Bonds. The Partnership will immediately
assign the agreement to the EPC Contractor.
The EPC Contract stipulates that if the Authorization to Proceed ("ATP") is
not issued by July 1, 2000, the EPC Contract Price shall be escalated per
Exhibit P. Should the ATP not be issued by December 31, 2000, the EPC Contractor
may request that the EPC Contract Price may be renegotiated.
The Partnership has estimated other construction costs of $31,262,000 (the
"Other Construction Costs"), as shown in Table 8, and together with the EPC
Contract Price and Scope Changes is the Total Construction Cost. The Other
Construction Costs includes $11,962,000 of project contingency (the "Project
Contingency"). The Partnership's Project Contingency budget falls in a range of
project contingency that we would anticipate based on the contingency
requirements of other similar projects with which we are familiar. The
Partnership prepared its budgets for electrical, gas and water interconnection
costs based on estimates provided by the entities that will be responsible for
completing the interconnection work. The Partnership estimated its project
management, insurance, start-up and contingency budgets based on its experience
on other similar projects and its estimated project specific requirements of the
Facility. The Partnership's estimate for spare parts is based on the recommended
spare parts as provided in Exhibit I of the LTSA.
B-28
<PAGE>
TABLE 8
TOTAL CONSTRUCTION COST(1)
($000)
<TABLE>
<S> <C>
EPC Contract Price.......................................... $229,065
Scope Changes............................................. 302
--------
Total EPC Price........................................... $229,367
Other Construction Costs
O&M Mobilization Costs.................................... $ 110
Electrical Interconnection Costs.......................... 1,000
GPC Monthly Fees.......................................... 158
Gas Interconnection Costs................................. 3,123
Heard County Water Authority.............................. 515
Land...................................................... 712
Project Management Costs.................................. 4,643
Insurance (Builder's Risk/Marine/Liability)............... 1,350
Sales Tax................................................. 1,000
Spare Parts............................................... 3,649
Start-up Costs............................................ 3,040
Project Contingency....................................... 11,962
--------
Subtotal--Other Construction Costs........................ $ 31,262
Total Construction Cost..................................... $260,629
</TABLE>
- ------------------------
(1) As estimated by the Partnership.
Based on our review, we are of the opinion that the estimates which serve as
the basis for the EPC Contract Price and the Total Construction Cost were
prepared in accordance with generally accepted engineering and estimating
practices and methods. The EPC Contract Price and the Total Construction Cost,
including Project Contingency, are comparable to the costs of simple cycle
projects at similar stages of development utilizing similar technologies with
which we are familiar.
SOURCES AND USES OF FUNDS
The estimated sources and uses of funds in connection with the Financing of
the Facility, including the issuance of Bonds, as estimated by the Partnership
based on interest and reinvestment rate assumptions provided by Goldman,
Sachs & Co. and TD Securities (collectively, the "Initial Purchasers"), are
summarized in Table 9.
B-29
<PAGE>
TABLE 9
ESTIMATED SOURCES AND USES(1)
($000)
<TABLE>
<S> <C>
Sources of Funds
Gross Proceeds of the Bonds............................... $275,000
Equity Contribution....................................... 35,500
Revenue from Operations of the Initial Units.............. 20,089
--------
Total Sources of Funds.................................... $330,589
Uses of Funds
Total Construction Cost................................... $260,629
Development Costs......................................... 7,000
Financing Fees and Costs.................................. 5,114
Interest During Construction(2)........................... 52,757
Expenses from Operations of the Initial Units............. 4,831
Working Capital........................................... 258
--------
Total Uses of Funds......................................... $330,589
</TABLE>
- ------------------------
(1) As estimated by the Partnership.
(2) Based on an interest rate of 9.50 percent on the Bonds and assumes that
unspent proceeds earn interest income at a rate of 5.0 percent per year, as
estimated by the Initial Purchasers.
Based on our review, we are of the opinion that, based upon the interest and
reinvestment rates as estimated by the Initial Purchasers and the total uses of
funds as estimated by the Partnership, the principal amount of the Bonds, when
combined with the equity from the Partnership, PPA revenue during the
construction period from the Initial Units, and interest income during the
construction period, should be sufficient to fund the Total Construction Cost
and interest on the Bonds through May 31, 2002.
PROJECTED OPERATING RESULTS
We have reviewed estimates and projections of electric generating capacity,
fuel consumption and operating costs for the Facility as made available to us by
the Partnership. On the basis of such data, we have prepared the Projected
Operating Results. The Projected Operating Results are presented herein for each
calendar year beginning on June 1, 2002, the expected Commercial Operation Date
of the entire Facility, and ending on February 1, 2030, the scheduled maturity
of the Bonds. Revenues will be derived from the sale of electrical capacity and
energy to PECO under the PPA. Expenses for the Facility consist primarily of
fixed and variable operations and maintenance expenses, based on our review of
projected operating and maintenance expenses provided by the Partnership. Debt
service on the Bonds has been estimated by the Initial Purchasers. Projected
sources of revenues and expenses have been set forth in the Projected Operating
Results presented in Exhibit B-1. The Projected Operating Results are based on
current contractual commitments as described herein and have been prepared using
assumptions and considerations set forth in this Report and the footnotes to
Exhibit B-1.
ANNUAL OPERATING REVENUES
Under the pricing provisions of the PPA, the Partnership will receive
several different revenue streams from PECO and may incur incentive and/or
penalty payments for certain operational conditions. The term of the PPA
commences on the date of Commercial Operation and ends on the 29(th) anniversary
of Commercial Operation (the "Operating Term"). PECO may terminate the PPA on
the 20(th) anniversary of Commercial Operation upon payment to the Partnership
of $175,000,000. For the purposes of the Projected Operating Results, we have
assumed that PECO would purchase electricity from the Facility
B-30
<PAGE>
under the terms of the PPA for the full Operating Term. The payment streams and
incentive and penalty provisions under the PPA are determined as follows:
RESERVATION PAYMENTS
Reservation payments will be calculated monthly as the product of (1) a
reservation rate, in dollars per kilowatt per month, (2) the number of Units in
Commercial Operation, (3) the Unit capacity, and (4) 1,000. The annual
reservation rates are specified in Exhibit 8.02 to the PPA, and increase from
$3.50/kW-mo for the first Contract Year to $6.00/kW-mo during the 29(th)
Contract Year.
ENERGY PAYMENTS
Energy payments will be calculated monthly as the product of (1) the total
amount of delivered energy from the Facility received by PECO, and (2) either a
gas energy rate or fuel oil energy rate, depending on the fuel used to generate
such delivered energy. The annual gas energy rates and fuel oil energy rates are
specified in Exhibit 8.03 to the PPA, and increase from $0.16/MWh for the first
Contract Year to $0.56/MWh during the 29(th) Contract Year for the gas energy
rate, and from $1.06/MWh for the first Contract Year to $1.46/MWh during the
29(th) Contract Year for the fuel oil energy rate.
REPLACEMENT ENERGY PAYMENT
Replacement energy payments will equal the aggregate replacement fuel cost
incurred each month by the Facility.
START CHARGES
Start charges will be calculated monthly as the product of (1) the number of
starts requested by PECO and (2) a start charge, equal to $11,000 for each start
during the first Contract Year, escalating by 3 percent per year thereafter.
MISCELLANEOUS CHARGES
PECO may also incur miscellaneous charges through excess run time payments
and standby mode charges.
AVAILABILITY INCENTIVE PAYMENT
If the Summer Availability Percentage for each Contract Year exceeds
97 percent, but the Peak Days Availability (determined as the Facility
Availability Percentage calculated during the five days during the immediately
preceding Summer Period with the highest On-Peak Energy Prices) is below
99 percent, PECO shall pay to the Partnership $150,000 for each percentage point
the Summer Availability Percentage exceeds 97 percent. If the Summer
Availability Percentage for each Contract Year exceeds 97 percent and the Peak
Days Availability exceeds 99 percent, PECO shall pay to the Partnership $500,000
for each percentage point the Summer Availability Percentage exceeds
97 percent, up to a maximum of $1,500,000 for each Contract Year.
AVAILABILITY ADJUSTMENTS PAYMENTS
If the Summer Availability Percentage is less than 87 percent, the
Partnership shall pay PECO an amount equal to 3.34 percent of the total
reservation payments for such Contract Year for each percentage point the Summer
Availability Percentage is below 97 percent. If the Annual Availability
Percentage is greater than 76.9 percent but less than 97 percent, the
Partnership shall pay PECO an amount equal to 3.34 percent of the total
reservation payments for such Contract Year for each percentage point the
B-31
<PAGE>
Annual Availability Percentage is below 97 percent. Amounts paid to PECO under
the Summer Availability Adjustment will be credited against amounts due under
the Annual Availability Adjustment. If the Annual Availability Percentage is
below 76.9 percent, the Partnership shall pay PECO an amount equal to
66.8 percent of the total reservation payments for such Contract Year plus
0.432 percent of the total reservation payments for such Contract Year for each
percentage point the Annual Availability Percentage is below 76.9 percent. As
mentioned previously, based on the projected level of dispatch, the Facility
should be capable of achieving a Summer Availability Percentage of 98 percent
and an Annual Availability Percentage of 97 percent, as defined in the PPA.
FUEL ADJUSTMENT PAYMENTS
For each Contract Year in which the Facility is operated during the summer
months at Base Unit Output for at least 2,000 Unit Hours, if the Summer Months
Base Heat Rate is greater than 11,300 Btu/ kWh, the Partnership shall pay PECO a
fuel adjustment payment for the difference between the actual heat rate and
11,300 Btu/kWh multiplied by the Daily Index Citation gas price. If the actual
Summer Months Base Heat Rate is less than 10,800 Btu/kWh, PECO shall pay a fuel
adjustment payment to the Partnership based on the difference between 10,800
Btu/kWh and the actual Summer Months Base Heat Rate multiplied by the Daily
Index Citation gas price.
The operating revenues under the PPA, as shown in the Base Case Projected
Operating Results are based on: (1) an average annual Contract Capacity level of
908,000 kW; (2) a Summer Availability Percentage equal to 98 percent and an
annual Peak Days Availability average less than 99 percent but greater than
97 percent; (3) an Annual Availability Percentage equal to 97 percent; (4) net
annual capacity factors and number of Unit Starts as estimated by RDI; and
(5) an average annual Facility net heat rate of 11,088 Btu/kWh.
ANNUAL OPERATING EXPENSES
FUEL COST
The Partnership will incur no annual fuel-related costs or charges during
the term of the PPA provided PECO remains the exclusive recipient of all
capacity and energy generated by the Facility, except for the fuel payment
adjustment, if any. For the purposes of calculating an Efficiency Adjustment
under the PPA, RDI has projected the price of fuel for the Facility.
OPERATION AND MAINTENANCE EXPENSES
The Operator is responsible for operation and maintenance of the Facility.
The Facility has negotiated and executed the O&M Agreement with the Operator for
the administration, operation and maintenance of the Facility, including
providing initial start-up support during the pre-commissioning period. Tenaska
has executed, and will assign to the Partnership, an LTSA with GE International
for the long-term maintenance of the CTGs.
The Partnership's estimate of operating and maintenance expenses includes
provisions for labor, repair and maintenance, including renewals and
replacements, utilities, and consumables. The Partnership has also included a
provision for operating and maintenance contingency beginning in 2004. For the
purposes of the Projected Operating Results, we have assumed that any
extraordinary repair costs prior to 2004 will be covered by the EPC Contractor
or GE under their warranties pursuant to the EPC Contract and the GE Turbine
Contract, respectively.
The Partnership will pay the Operator a fixed management fee, an incentive
fee, and, potentially, an availability bonus. There is also a corresponding
availability penalty. Pursuant to the O&M Agreement, the fixed management fee is
$225,000 in 1999 dollars, except during 2003 for which the fee has been waived.
In addition, the Facility will reimburse the Operator for operations and
maintenance expenses based on an
B-32
<PAGE>
annual budget agreed to by the Operator and the Partnership. The O&M Agreement
provides for incentive payments by the Partnership for Contract Availability and
other mutually agreed upon incentive criteria. We have also included the
administration fee under the interconnection agreement with GPC. We have assumed
that, except as noted above, all O&M costs will increase at the rate of general
inflation of 2.5 percent per year.
OPERATIONS AND MAINTENANCE AGREEMENT
The O&M Agreement has a term commensurate with that of the PPA, and
establishes the terms and conditions to which Operator will perform management
and operating services including providing initial start-up support prior to the
Date of Commercial Operation.
The Operator will provide personnel, procedures, training and
administrative, management, and professional/technical services necessary for
the safe and reliable start-up, commissioning, operation and maintenance of the
Facility. The Operator will warrant that the services performed by the Operator
and/or its subcontractors and suppliers shall be done in a good and workmanlike
manner in accordance with Prudent Utility Practice and standard industry
practice and in accordance with Facility manuals.
The structure of the O&M Agreement is a cost reimbursable plus fee basis. In
addition to cost reimbursement, the Partnership will pay the Operator an annual
fixed management fee of $225,000 during the first Contract Year, escalated
thereafter at the rate of inflation. Under the terms of the O&M Agreement, there
will be no fixed management fee during 2003. In addition, the Operator is
eligible to earn an incentive fee which shall be paid on the basis of the
Partnership's assessment of the Operator's performance against mutually agreed
upon incentive criteria. The maximum value of the incentive fee to be earned
during the first Contract Year is $100,000, adjusted annually thereafter at a
rate of 3.5 percent per year beginning on January 1, 2001. The Operator is also
subject to an Availability Adjustment bonus, or penalty for each Contract Year
on the basis of the Facility's Annual Availability Percentage. The bonus and
penalty amounts are $25,000 per 1 percent above or below a 97 percent Annual
Availability Percentage threshold, respectively; both the bonus and penalty fees
are subject to an initial maximum annual amount of $75,000, escalating each year
at an annual rate of 3.5 percent, beginning on January 1, 2001. During the
pre-commissioning period the Partnership will pay the Operator a fixed
management fee of $75,000 and an incentive fee of up to $75,000.
LONG TERM PARTS AND LONG TERM SERVICE CONTRACT
The Initial Term of the LTSA shall expire upon the earlier of:
(1) completion of the first Major Inspection of each Unit; or (2) thirty years
after the Performance Start Date for each Unit. The Partnership has the option
to extend the term of the LTSA for any or all of the Units through the next
major inspection interval.
The LTSA covers planned and unplanned maintenance, technical advisory,
diagnostic, spare parts, major parts replacement, parts repair, and inspection
and overhaul services. In conjunction with the LTSA, GE International will
provide availability guarantees on a long-term basis for the turbine generators.
Under the terms of the LTSA, the Partnership will initially pay GE
International a monthly fixed charge per Unit throughout the initial term of the
LTSA. In addition, the Facility will incur a Factored Start charge for starts in
excess of 24 starts per Unit during any calendar year, and will incur a Factored
Fired Hour Adjustment charge for fired hours in excess of a base amount of
sixteen Factored Fired Hours per Factored Start per Unit. All rates and charges
under the LTSA are based on 2001 dollars and will escalate at 3 percent per year
through January 31, 2011, and then will escalate based on a composite index made
up of 40 percent Materials Index and 60 percent U.S. Labor Index beginning with
payments due on or after February 1, 2011.
B-33
<PAGE>
Under the LTSA, GE International will guarantee an Annual Availability
Percentage, calculated in accordance with terms which are similar to the terms
of the PPA. If the Annual Availability Percentage in a given year is greater
than the guaranteed percentage, the Partnership shall pay a bonus for each
percentage point exceeding the guaranteed percentage. If the Annual Availability
Percentage in a given year is less than the guaranteed percentage, GE
International shall pay a penalty for each percentage point below the guaranteed
percentage. There is a maximum amount to be paid by either party under these
provisions based on February 1, 2001 dollars, escalated at 3 percent per year
thereafter.
Based on our review, we are of the opinion that the methodology used by the
Partnership in preparing the operation and maintenance cost estimate for the
Facility, including the provision for major maintenance provided by the LTSA, is
reasonable.
OTHER EXPENSES
We have also included other expenses as estimated by the Partnership. These
expenses include the Partnership management fee and the cost of insurance,
property taxes and certain home office costs. Under the terms of the Partnership
Agreement, the payment of the Partnership's management fee will be waived
through 2009.
ANNUAL DEBT SERVICE
Based on information provided by the Initial Purchasers, we have included an
amount for the total annual debt service payments on the principal amount of the
Bonds of $275,000,000. Interest has been included at an annual interest rate on
the Bonds of approximately 9.50 percent as reported by the Initial Purchasers.
Principal payments and interest payments are due each February 1 and August 1 of
each year, with principal payments commencing on February 1, 2006. Deposits into
the Debt Service Fund are to be made to the Trustee in monthly installments over
the six months prior to the due date. Interest is assumed to be paid from the
proceeds of the Bonds and from operating revenues obtained during the period
between the Commercial Operation Dates of the Initial and Final Units until
June 1, 2002, the expected Commercial Operation Date of the Final Units.
Under the terms of the Collateral Agency and Intercreditor Agreement, total
letter-of-credit fees are included in the definition of debt service for
coverage calculation purposes. A Debt Service Reserve Account is to be
established pursuant to the Indenture for the purpose of funding any shortfalls
in the payment of principal and interest on the Bonds. A Debt Service Reserve
Account letter-of-credit will be put in place on June 1, 2002. The Debt Service
Reserve Account requirement will change over time and will be equal to the next
scheduled semi-annual debt service payment for the remainder of the term of the
Bonds plus six months' interest on any draws on the letter-of-credit, up to a
maximum Debt Service Reserve Account letter-of-credit amount of $16,000,000. For
the purposes of estimating the Debt Service Reserve Account requirement, the
Partnership has assumed annual draws on the letter-of-credit equal to the next
scheduled semi-annual debt service payment and an interest rate equal to the
rate on the Bonds. In addition, the Partnership is required to establish up to a
$25,000,000 letter-of-credit to be used as Acceptable Credit Support required
under the PPA, and is also allowed to establish a $10,000,000 Working Capital
Line of Credit in connection with the Facility. For the purposes of estimating
the letter-of-credit fees, the Partnership has assumed that it will establish a
Working Capital Line of Credit in the amount of $5,000,000. Fees on the Working
Capital Line of Credit and letter-of-credit facilities and on any unused amounts
have been included based on various rates provided by the Partnership. For the
purposes of the Projected Operating Results, we have assumed that there will be
no draws on any of the letters-of-credit or the Working Capital Line of Credit.
B-34
<PAGE>
DEBT SERVICE COVERAGE
On the basis of our studies and analyses of the Facility and the assumptions
set forth in this Report, we are of the opinion that, for the Base Case
Projected Operating Results for the Facility, the projected revenues under the
PPA are adequate to pay annual operating and maintenance expenses (including
provisions for major maintenance as provided by the LTSA) and other operating
expenses and provide an annual debt service coverage ratio of at least 1.30
times the annual debt service requirement on the Bonds and a weighted average
debt service coverage ratio of 1.49 times the annual debt service requirement
over the term of the Bonds. The weighted average debt service coverage ratio has
been calculated as the total net operating revenues divided by the total debt
service over the term of the Bonds. Annual debt service coverages for the term
of the Bonds are presented in Exhibit B-1.
SENSITIVITY ANALYSES
Due to the uncertainties necessarily inherent in relying on assumptions and
projections, it should be anticipated that certain circumstances and events may
differ from those assumed and described herein and that such will affect the
results of our Base Case Projected Operating Results for the Facility. In order
to demonstrate the impact of certain circumstances on the Base Case Projected
Operating Results, certain sensitivity analyses have been developed. It should
be noted that other examples could have been considered and those presented are
not intended to reflect the full extent of possible impact on the Facility. The
sensitivities are not presented in any particular order with regard to the
likelihood of any case actually occurring. In addition, no assurance can be
given that all relevant sensitivities have been presented, that the level of
each sensitivity is the appropriate level for testing purposes, or that only one
(rather than a combination of more than one) of such variations or sensitivities
could impact the Facility in the future.
These sensitivity analyses present the Projected Operating Results assuming,
respectively, that: (a) the Facility availability is reduced by 5 percentage
points, which results in a reduction in the Summer Availability and Annual
Availability Percentages under the PPA of approximately 1 percentage point;
(b) the heat rate of the Facility increases by 5 percent over that assumed in
the Base Case; (c) operating and maintenance expenses increase by 10 percent
over those assumed in the Base Case; (d) the rate of general inflation is
increased to 6 percent per year; (e) the Contract Capacity levels to PECO are
reduced to the minimum contractual value of 875,000 kW each year; (f) the
Facility operates at a "zero dispatch" level annually; and (g) the annual
capacity factors and annual number of Unit starts of the Facility are twice
those assumed in the Base Case. The sensitivity analyses are presented as
Exhibits B-2 through B-8 to this Report. For the purposes of sensitivity cases
(e), and (f), we have assumed there would be no changes in annual maintenance
costs or periodic maintenance activities under the LTSA.
SUMMARY COMPARISON OF PROJECTED OPERATING RESULTS
A summary of the debt service coverages on the Bonds for the Base Case
Projected Operating Results and each sensitivity case is presented in Table 10.
B-35
<PAGE>
TABLE 10
PROJECTED DEBT SERVICE COVERAGE
<TABLE>
<CAPTION>
BASE CASE SENSITIVITY CASES
--------- ----------------------------------------------------------------------------------
A B C D E F G
------------ --------- --------- --------- -------- -------- ---------
YEAR INCREASED REDUCED INCREASED
ENDING REDUCED INCREASED OPERATING INCREASED CONTRACT ZERO CAPACITY
DEC 31, AVAILABILITY HEAT RATE EXPENSES INFLATION CAPACITY DISPATCH FACTORS
------- ------------ --------- --------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2002....................... 1.33 1.29 1.33 1.32 1.32 1.28 1.23 1.34
2003....................... 1.30 1.26 1.30 1.29 1.28 1.25 1.24 1.30
2004....................... 1.31 1.27 1.31 1.29 1.28 1.26 1.25 1.32
2005....................... 1.34 1.29 1.33 1.31 1.30 1.28 1.28 1.35
2006....................... 1.35 1.30 1.33 1.32 1.30 1.29 1.28 1.36
2010....................... 1.35 1.30 1.33 1.31 1.27 1.29 1.28 1.36
2015....................... 1.40 1.35 1.39 1.37 1.25 1.34 1.33 1.41
2020....................... 1.51 1.46 1.51 1.48 1.28 1.45 1.43 1.52
2025....................... 1.72 1.66 1.72 1.68 1.31 1.65 1.62 1.74
2029....................... 1.99 1.92 1.99 1.94 1.39 1.90 1.86 2.01
Minimum.................... 1.30 1.26 1.30 1.29 1.18 1.25 1.23 1.30
Average.................... 1.49 1.44 1.48 1.45 1.28 1.42 1.40 1.50
</TABLE>
LIQUIDATED DAMAGES ANALYSES
We have performed a series of analyses to estimate the impact on the average
debt service coverage ratio if the EPC Contractor fails to pass certain
performance tests and there is a long-term performance deficiency over the term
of the Bonds. In these analyses, we have assumed that, if performance liquidated
damages are paid to the Partnership by the EPC Contractor, the total damages
payment will be used to redeem the principal of the Bonds on pro rata basis.
These analyses have been performed to demonstrate the sufficiency of the
performance liquidated damages to maintain debt service coverage at the level
projected in the Base Case Projected Operating Results. These analyses assume
that: (1) the deficiency would exist in all units; and (2) that the maximum
aggregate liquidated damages of 22.5 percent of the EPC Contract Price would be
available to pay the damages associated with that deficiency and such damages
would be used to repay the debt, assumed for our purposes to be only the Bonds,
on a pro rata basis. Under the terms of the Collateral Agency and Intercreditor
Agreement, in the event that the average debt service coverage ratio is
projected to exceed 1.50, all or a portion of the liquidated damage payments
would not be used to repay the debt. Based on the projected average debt service
coverage ratio in the Base Case Projected Operating Results, we have assumed
that the entire liquidated damages payment would be used to repay the Bonds.
Based on these analyses, we are of the opinion that, if the EPC Contractor
pays the Partnership performance liquidated damages due to a failure to achieve
the Guaranteed Net Electrical Output and Guaranteed Net Heat Rate, then the
weighted average debt service coverage ratio over the term of the Bonds is
projected to remain generally at the same level as in the Base Case Projected
Operating Results for deficiencies in Guaranteed Net Electrical Output and
Guaranteed Net Heat Rate equivalent to the Performance Minimums under the EPC
Contract.
PRINCIPAL CONSIDERATIONS AND ASSUMPTIONS
USED IN THE PROJECTION OF OPERATING RESULTS
In the preparation of this Report and the opinions that follow, we have made
certain assumptions with respect to conditions which may exist or events which
may occur in the future. While we believe these assumptions to be reasonable for
the purpose of this Report, they are dependent upon future events, and actual
conditions may differ from those assumed. In addition, we have used and relied
upon certain
B-36
<PAGE>
information provided to us by sources which we believe to be reliable. While we
believe the use of such information and assumptions to be reasonable for the
purposes of our Report, we offer no other assurances with respect thereto and
some assumptions may vary significantly due to unanticipated events and
circumstances. To the extent that actual future conditions differ from those
assumed herein or provided to us by others, the actual results will vary from
those projected herein. This Report summarizes our work up to the date of the
Report. Thus, changed conditions occurring or becoming known after such date
could affect the material presented to the extent of such changes.
The principal considerations and assumptions made by us in developing the
Base Case Projected Operating Results and the principal information provided to
us by others include the following:
1. As Independent Engineer, we have made no determination as to the
validity and enforceability of any contract, agreement, rule, or regulation
applicable to the Facilities and their operations. However, for purposes of
this Report, we have assumed that all such contracts, agreements, rules, and
regulations will be fully enforceable in accordance with their terms and
that all parties will comply with the provisions of their respective
agreements.
2. Our review of the design of the Facility was based on information
provided by the Partnership.
3. The Operator will maintain the Facility in accordance with good
engineering practice, will perform all required major maintenance in a
timely manner, and will not operate the equipment to cause it to exceed the
equipment manufacturers' recommended maximum ratings.
4. The Operator will employ qualified and competent personnel and will
generally operate the Facility in a sound and businesslike manner.
5. The Facility will identify and implement solutions to the Y2K Problem
in a manner which will not impact the projected net revenues of the
Facility.
6. Inspections, overhauls, repairs and modifications are planned for and
conducted in accordance with manufacturers' recommendations, and with
special regard for the need to monitor certain operating parameters to
identify early signs of potential problems.
7. All licenses, permits and approvals, and permit modifications
necessary to operate the Facility have been, or will be, obtained on a
timely basis and any changes in required licenses, or permits and approvals
will not require reduced operation of, or increased costs to, the Facility.
8. The CPI and general inflation will increase at an average annual rate
of 2.5 percent per year.
9. The performance of the Facility will be as assumed in the Projected
Operating Results.
10. The Facility will sell the quantities of electricity under the PPA
as projected in the dispatch analyses performed by RDI. PECO will purchase
electricity from the Facility under the terms of the PPA for the full
Operating Term.
11. In the event the Facility experiences an Efficiency Adjustment, the
price of fuel for the Facility will be as projected by the RDI.
12. The non-fuel operating and maintenance expenses will be consistent
with the information provided by the Partnership, and will increase
thereafter at the assumed change in the general inflation rate, except for
certain expenses under the LTSA and O&M Agreement, as described in the
Report, and property taxes and certain fees, which are based on a schedule
provided by the Partnership.
13. Any extraordinary repair costs prior to 2004 will be covered by the
EPC Contract or GE under their warranties pursuant to the EPC Contract and
GE Turbine Contract, respectively.
B-37
<PAGE>
14. There will be no additional capital improvements to the Facility
other than those assumed in the Projected Operating Results.
15. The Debt Service Reserve Account requirements will be provided for
through a letter of credit.
16. The principal amount of the Bonds will be $275,000,000 and the
annual interest rate will be 9.50 percent, as reported by the Initial
Purchasers. The amortization schedule of the Bonds will be as reported by
the Initial Purchasers.
17. If performance liquidated damages are paid to the Partnership by the
EPC Contractor, the total damages payment will be used to repay the debt,
assumed to be only the Bonds, on a pro rata basis.
CONCLUSIONS
Set forth below are the principal opinions which we have reached regarding
our review of the Facility. For a complete understanding of the estimates,
assumptions, and calculations upon which these opinions are based, the Report
should be read in its entirety. On the basis of our studies, analyses, and
investigations of the Facility and the assumptions set for in this Report, we
are of the opinion that:
1. The EPC Contractor, the Operator, and GE International have
previously demonstrated the capability to perform their responsibilities
under the EPC Contract, the O&M Agreement, and the LTSA, respectively.
2. Provided that, as required by the EPC Contract, the EPC Contractor
takes into account the recommendations in the Subsurface Report and in the
EPC Contract design criteria regarding site development, subsurface
conditions, and foundations during design and construction of the Facility,
the Facility Site is suitable for construction and operation of the
Facility.
3. Based upon our review of the environmental site assessments conducted
by EMCON for the Facility Site and the construction lay-down area, the
investigations appear to have been conducted in a manner consistent with
industry standards, using comparable industry protocols for similar studies
with which we are familiar. Although we have not conducted an independent
assessment of the Facility Site, the conclusions reached by EMCON appear to
be supported by the data we have reviewed.
4. The technology proposed for the Facility is a sound and proven method
of electric generation. If operated and maintained consistent with generally
accepted industry practices, the Facility should be capable of passing the
Acceptance Tests pursuant to the EPC Contract and meeting the requirements
of the PPA and the current environmental permits. Further, the Facility has
adequately provided for all off-site requirements, including fuel supply and
transportation, water supply, wastewater disposal, and electrical
interconnection.
5. The proposed method of design, construction and operation of the
Facility has been developed in accordance with generally accepted industry
practices and has taken into consideration the current environmental,
license and permit requirements that the Facility must meet.
6. If designed, constructed, operated and maintained as currently
proposed, the Facility should be capable of operating in a peaking operation
mode and of achieving an average annual output of 908 MW, and an average
annual net plant heat rate of 11,088 Btu/kWh (HHV). The average annual
output of 908 MW is within the range where neither party shall owe a penalty
or adjustment under the PPA. The average annual net plant heat rate of
11,088 Btu/kWh (HHV) is within the range where neither party shall owe a
Fuel Adjustment Payment under the PPA.
B-38
<PAGE>
7. Based on the projected level of dispatch, the Facility should be
capable of achieving a Summer Availability Percentage of 98 percent and an
Annual Availability Percentage of 97 percent, both as defined in the PPA.
The Annual Availability Percentage of 97 percent is the level required to
avoid reductions in the reservation payments under the PPA.
8. The Facility should have a useful life extending beyond the term of
the Bonds.
9. Assuming the absence of events such as delivery delays, labor
difficulties, unusually adverse weather conditions, force majeure events,
the discovery of underground obstructions or hazardous materials or wastes
not previously known, or other abnormal events that are prejudicial to
normal construction or installation, based on a Limited Notice-to-Proceed of
September 10, 1999, the scheduled Commercial Operation Dates of June 1, 2001
for the Initial Units and June 1, 2002 for the Final Units are achievable
using generally accepted project and construction management practices.
10. Given the range of dispatch factors projected by RDI, which is
typical of peaking operation, and the requirements of the PPA, the
Acceptance Tests and guarantees included in the EPC Contract are adequate to
estimate the future performance of the Facility.
11. The Partnership has received the key environmental permits and
approvals required from the various federal, state, and local agencies, that
are currently necessary to construct the Facility. While not all the
required permits and approvals have been issued, including some which cannot
be obtained until the Facility is ready to operate, we are not aware of any
technical circumstances that would prevent the issuance of the remaining
permits.
12. The estimates which serve as the basis for the EPC Contract Price
and the Total Construction Cost were prepared in accordance with generally
accepted engineering and estimating practices and methods. The EPC Contract
Price and the Total Construction Cost, including Project Contingency, are
comparable to the costs of simple cycle projects at similar stages of
development utilizing similar technologies with which we are familiar.
13. Based upon the interest and reinvestment rates as estimated by the
Initial Purchasers and the total uses of funds as estimated by the
Partnership, the principal amount of the Bonds, when combined with the
equity from the Partnership, PPA revenue during the construction period from
the Initial Units, and interest income during the construction period,
should be sufficient to fund the Total Construction Cost and interest on the
Bonds through May 31, 2002.
14. The methodology used by the Partnership in preparing the operation
and maintenance cost estimate for the Facility, including the provision for
major maintenance provided by the LTSA, is reasonable.
15. For the Base Case Projected Operating Results for the Facility, the
projected revenues under the PPA are adequate to pay annual operating and
maintenance expenses (including provisions for major maintenance as provided
by the LTSA) and other operating expenses and provide an annual debt service
coverage ratio of at least 1.30 times the annual debt service requirement on
the Bonds and a weighted average debt service coverage ratio of 1.49 times
the annual debt service requirement over the term of the Bonds.
16. If the EPC Contractor pays the Partnership performance liquidated
damages due to a failure to achieve the Guaranteed Net Electrical Output and
Guaranteed Net Heat Rate, then the weighted average debt service coverage
ratio over the term of the Bonds is projected to remain generally at the
same level as in the Base Case Projected Operating Results for deficiencies
in Guaranteed Net Electrical Output and Guaranteed Net Heat Rate equivalent
to the Performance Minimums under the EPC Contract.
Respectfully Submitted,
/s/ R. W. BECK, INC.
B-39
<PAGE>
EXHIBIT B-1
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
BASE CASE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(1) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0% 3.0% 4.0% 5.0% 5.0% 5.0% 6.0%
Unit Starts Year (7).................. 181 181 272 363 454 454 454 544
Energy Generation (MWh)............... 159,082 159,082 238,622 318,163 397,704 397,704 397,704 477,245
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 22,246 38,327 39,353 40,624 41,523 42,158 42,703 43,757
Unit Startup Charges.................. $ 1,921 1,979 3,057 4,198 5,405 5,567 5,734 7,088
Energy Payments....................... $ 27 29 43 60 80 84 87 110
Availability Incentive Adjustment
(11)................................ $ 87 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 24,282 40,485 42,603 45,032 47,158 47,959 48,674 51,105
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 914 1,622 2,057 2,152 2,251 2,308 2,364 2,472
Capital Expenditures.................. $ 32 55 57 58 59 61 62 64
Major Maintenance (17)................ $ 1,559 2,477 3,502 4,583 5,727 5,895 6,068 7,348
Operator Fee, Incentive and Bonus
(18)................................ $ 202 107 366 376 386 397 408 420
Home Office Expenses (19)............. $ 422 742 761 780 799 819 840 861
Insurance............................. $ 224 394 404 414 424 435 446 457
Property and Other Taxes.............. $ 52 142 189 305 339 365 382 391
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 3,405 5,539 7,336 8,669 9,985 10,280 10,569 12,014
NET OPERATING REVENUES ($000)........... $ 20,877 34,945 35,267 36,364 37,173 37,679 38,105 39,091
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.33 1.30 1.31 1.34 1.35 1.36 1.34 1.35
AVERAGE DEBT COVERAGE (21).............. 1.49
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0%
Unit Starts Year (7).................. 454 454
Energy Generation (MWh)............... 397,704 397,704
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 45,109 46,671
Unit Startup Charges.................. 6,084 6,266
Energy Payments....................... 95 99
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 51,438 53,186
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,486 2,546
Capital Expenditures.................. 66 67
Major Maintenance (17)................ 6,430 6,591
Operator Fee, Incentive and Bonus
(18)................................ 431 444
Home Office Expenses (19)............. 1,480 1,532
Insurance............................. 468 480
Property and Other Taxes.............. 429 416
------- -------
Total Operating Expenses.............. 11,790 12,077
NET OPERATING REVENUES ($000)........... 39,648 41,110
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.35 1.37
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-40
<PAGE>
EXHIBIT B-1
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
BASE CASE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0% 4.0% 4.0% 3.0% 3.0% 3.0% 2.0%
Unit Starts per Year (7).............. 454 454 363 363 272 272 272 181
Energy Generation (MWh)............... 397,704 397,704 318,163 318,163 238,622 238,622 238,622 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 48,287 49,749 50,784 51,674 52,655 53,953 55,542 57,558
Unit Startup Charges.................. $ 6,454 6,648 5,478 5,642 4,358 4,489 4,624 3,175
Energy Payments....................... $ 103 107 92 95 74 79 81 57
Availability Incentive Adjustment
(11)................................ $ 150 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 54,994 56,654 56,504 57,561 57,237 58,671 60,397 60,940
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 2,612 2,676 2,687 2,754 2,764 2,837 2,907 2,917
Capital Expenditures.................. $ 69 71 72 74 76 78 80 82
Major Maintenance (17)................ $ 6,756 6,924 5,843 5,990 4,821 4,943 5,066 3,773
Operator Fee, Incentive and Bonus
(18)................................ $ 456 469 482 496 510 524 539 555
Home Office Expenses (19)............. $ 1,586 1,642 1,701 1,762 1,824 1,890 1,958 2,030
Insurance............................. $ 492 504 517 530 543 557 571 585
Property and Other Taxes.............. $ 497 532 569 693 735 803 851 900
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 12,467 12,819 11,871 12,300 11,273 11,632 11,973 10,843
NET OPERATING REVENUES ($000)........... $ 42,527 43,836 44,633 45,262 45,964 47,039 48,424 50,098
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.37 1.39 1.40 1.40 1.41 1.43 1.46 1.51
AVERAGE DEBT COVERAGE (21).............. 1.49
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0%
Unit Starts per Year (7).............. 181 181
Energy Generation (MWh)............... 159,082 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 57,113 55,479
Unit Startup Charges.................. 3,270 3,368
Energy Payments....................... 59 62
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 60,592 59,059
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,991 3,064
Capital Expenditures.................. 84 86
Major Maintenance (17)................ 3,868 3,965
Operator Fee, Incentive and Bonus
(18)................................ 570 586
Home Office Expenses (19)............. 2,103 2,180
Insurance............................. 600 615
Property and Other Taxes.............. 1,127 1,183
------- -------
Total Operating Expenses.............. 11,342 11,679
NET OPERATING REVENUES ($000)........... 49,249 47,380
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.51 1.49
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-41
<PAGE>
EXHIBIT B-1
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
BASE CASE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(1)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(Kw)(3).................... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the
PPA (%)(4)................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the
PPA (%)(5)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)....... 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Unit Starts per Year (7)..... 181 181 181 181 181 181 181 181 0
Energy Generation (MWh)...... 159,082 159,082 159,082 159,082 159,082 159,082 159,082 159,082 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9)..... 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges
($/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges......... $ 3,470 3,574 3,681 3,791 3,905 4,022 4,143 4,267 0
Energy Payments.............. $ 65 68 72 75 78 81 84 89 0
Availability Incentive
Adjustment (11)............ $ 150 150 150 150 150 150 150 150 12
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ $ 0 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 58,773 59,053 60,844 63,299 64,978 66,932 68,455 69,473 5,461
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 3,141 3,220 3,300 3,384 3,467 3,555 3,643 3,734 306
Capital Expenditures......... $ 88 90 93 95 97 100 102 105 9
Major Maintenance (17)....... $ 4,064 4,165 4,270 4,377 4,487 4,598 4,713 4,831 349
Operator Fee, Incentive and
Bonus (18)................. $ 603 620 638 656 674 694 713 734 63
Home Office Expenses (19).... $ 2,261 2,344 2,431 2,522 2,616 2,713 2,815 2,922 253
Insurance.................... $ 630 646 662 678 695 713 731 749 64
Property and Other Taxes..... $ 1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 12,396 12,672 12,960 13,257 13,560 13,878 14,201 14,540 1,161
NET OPERATING REVENUES
($000)....................... $ 46,377 46,381 47,884 50,042 51,418 53,055 54,254 54,933 4,299
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.47 1.50 1.59 1.72 1.82 1.85 1.86 1.99 1.92
AVERAGE DEBT COVERAGE (21)..... 1.49
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-42
<PAGE>
FOOTNOTES TO EXHIBIT B-1
1. Represents seven months beginning June 1, 2002 and one month in year 2030.
2. Projected net summer installed capacity, as estimated by the Partnership.
3. Projected average amount of Contract Capacity to be declared each year by
the Partnership and purchased each year by PECO, as defined in the PPA.
4. Projected average Summer Availability for the months of June through
September, as defined in the PPA.
5. Projected average Annual Availability, as defined in the PPA.
6. Annual capacity factors based on dispatch projections developed by RDI
through 2020, and the Partnership thereafter.
7. Projected number of Unit Starts, based on dispatch projections and
projections of the average duration of each Unit Startup developed by RDI.
8. Net plant heat rate assumed to average 11,088 Btu/kWh throughout the term of
the Bonds, including an allowance for degradation, as estimated by the
Partnership.
9. Based on estimates prepared by Blue Chip Economic Indicators.
10. Pursuant to the terms of the PPA. The annual reservation and energy payments
are specified each year in the PPA. The annual start-up payments are based
on an initial value of $11,000 in 2001, escalating at an annual rate of
3 percent thereafter.
11. Pursuant to PPA, and equal to $150,000 for each percentage point the Summer
Availability exceeds 97 percent if the Summer Availability Percentage for
each Contract Year exceeds 97 percent and the Peak Days Availability is
below 99 percent, and equal to $500,000 for each percentage point the Summer
Availability Percentage exceeds 97 percent if the Summer Availability
Percentage for each Contract Year exceeds 97 percent and the Peak Days
Availability exceeds 99 percent, up to a maximum of $1,500,000 each Contract
Year.
12. Pursuant to the PPA, and equal to a payment by the Partnership to PECO, if
the Summer Availability Percentage if less than 87 percent, of 3.34 percent
of the total reservation payments for that Contract Year for each percentage
point the Summer Availability Percentage is less than 97 percent.
13. Pursuant to the PPA, and equal to a payment by the Partnership to PECO, if
the Annual Availability Percentage is greater than 76.9 percent but less
than 97 percent, of 3.34 percent of the total reservation payments for that
Contract Year for each percentage point the Annual Availability Percentage
is below 97 percent. If the Annual Availability Percentage is below
76.9 percent, the Partnership shall pay PECO an amount equal to
66.8 percent of the total reservation payments for such Contract Year plus
0.432 percent of the total reservation payments for such Contract Year for
each percentage point the Annual Availability Percentage is below
76.9 percent.
14. Pursuant to the PPA, and equal to: (1) a payment to PECO by the Partnership
for the difference between the actual Summer Months Base Heat Rate and
11,300 Btu/kWh, if the Summer Months Base Heat Rate is greater than 11,300
Btu/kWh; or (2) a payment from PECO to the Partnership for the difference
between 10,800 Btu/kWh and the actual Summer Months Base Heat Rate if the
actual Summer Months Base Heat Rate is less than 10,800 Btu/kWh. Payments
are equal to the applicable difference in heat rates multiplied by the Daily
Index Citation gas price.
15. All non-fuel operating expenses are as projected by the Partnership, and
assumed to increase at the general rate of inflation, except for certain
expenses under the LTSA and O&M Agreement, as described in the Report, and
property taxes and certain fees, which are based on a schedule provided by
the Partnership.
16. Includes operating contingency beginning in 2004 based on the assumption
that the cost of any extraordinary repairs will be covered by the EPC
Contractor and GE under their warranties pursuant to the EPC Contract and
the GE Turbine Contract, respectively.
17. Includes payments to GE International under the LTSA, non-turbine
maintenance costs, and preventative maintenance costs. LTSA payments include
monthly fixed charges and availability bonus or penalty payments per
percentage point the Annual Availability Percentage exceeds or is below a
guaranteed percentage during any calendar year, both subject to a maximum
annual amount. Payment rates are based on 2001 dollars and are assumed to
escalate at 3 percent per year through January 31, 2011 and at the rate of
general inflation thereafter.
18. Sum of the annual fixed management fee of $225,000 during the first Contract
Year, the incentive fee assumed to equal $100,000 the first Contract Year,
and the Operator Availability bonus or penalty, equal to $25,000 per
1 percent above or below a 97 percent Annual Availability Percentage
threshold. The fixed management fee is assumed to escalate at the general
rate of inflation. The other expenses escalate each year at an annual rate
of 3.5 percent, beginning on January 1, 2001. Under the terms of the O&M
Agreement, the fixed management fee has been waived by the Operator for
2003.
B-43
<PAGE>
19. Includes Partnership management fee under the Partnership Agreement
beginning in 2010.
20. Based on the principal amount of the Bonds of $275,000,000 at an interest
rate as reported by the Initial Purchasers of 9.50 percent, with semi-annual
payments due each February 1 and August 1. Interest has been funded from
proceeds of the Bonds and from the operating revenues from the Initial Units
through June 1, 2002.
21. Average debt service coverage is equal to the sum of cash available for debt
service over the term of the Bonds divided by total debt service over the
term of the Bonds.
22. The Debt Service Reserve Account requirement is assumed to be satisfied with
a letter-of-credit. The Debt Service Reserve Account requirement is equal to
the scheduled principal and interest payments for the next scheduled payment
date over the term of the Bonds plus six months' interest on any draws on
the letter-of-credit, up to a maximum Debt Service Reserve Account
letter-of-credit amount of $16,000,000. For the purposes of estimating the
Debt Service Reserve Account requirement, the Partnership has assumed annual
draws on the letter-of-credit equal to the next scheduled semi-annual debt
service payment and an interest rate equal to the rate on the Bonds.
23. The Working Capital Line of Credit is assumed to be established in the
amount of $5,000,000, as estimated by the Partnership.
B-44
<PAGE>
EXHIBIT B-2
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY A--REDUCED AVAILABILITY
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(1) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Annual Availability under the PPA
(%)(5).............................. 96.0% 96.0% 96.0% 96.0% 96.0% 96.0% 96.0% 96.0%
Capacity Factor (%)(6)................ 2.0% 2.0% 3.0% 4.0% 5.0% 5.0% 5.0% 6.0%
Unit Starts per Year (7).............. 181 181 272 363 454 454 454 544
Energy Generation (MWh)............... 159,082 159,082 238,622 318,163 397,704 397,704 397,704 477,245
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 22,246 38,327 39,353 40,624 41,523 42,158 42,703 43,757
Unit Startup Charges.................. $ 1,921 1,979 3,057 4,198 5,405 5,567 5,734 7,088
Energy Payments....................... $ 27 29 43 60 80 84 87 110
Availability Incentive Adjustment
(11)................................ $ 0 0 0 0 0 0 0 0
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ (743) (1,280) (1,314) (1,357) (1,387) (1,408) (1,426) (1,461)
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 23,451 39,055 41,139 43,526 45,621 46,400 47,098 49,493
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 914 1,622 2,057 2,152 2,251 2,308 2,364 2,472
Capital Expenditures.................. $ 32 55 57 58 59 61 62 64
Major Maintenance (17)................ $ 1,439 2,265 3,283 4,358 5,495 5,657 5,822 7,095
Operator Fee, Incentive and Bonus
(18)................................ $ 187 80 338 347 356 366 376 387
Home Office Expenses (19)............. $ 422 742 761 780 799 819 840 861
Insurance............................. $ 224 394 404 414 424 435 446 457
Property and Other Taxes.............. $ 52 142 189 305 339 365 382 391
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 3,270 5,300 7,089 8,415 9,723 10,010 10,291 11,727
NET OPERATING REVENUES ($000)........... $ 20,181 33,755 34,049 35,111 35,898 36,390 36,807 37,766
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.29 1.26 1.27 1.29 1.30 1.31 1.30 1.31
AVERAGE DEBT COVERAGE (21).............. 1.44
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 97.0% 97.0%
Annual Availability under the PPA
(%)(5).............................. 96.0% 96.0%
Capacity Factor (%)(6)................ 5.0% 5.0%
Unit Starts per Year (7).............. 454 454
Energy Generation (MWh)............... 397,704 397,704
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 45,109 46,671
Unit Startup Charges.................. 6,084 6,266
Energy Payments....................... 95 99
Availability Incentive Adjustment
(11)................................ 0 0
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... (1,507) (1,559)
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 49,782 51,478
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,486 2,546
Capital Expenditures.................. 66 67
Major Maintenance (17)................ 6,169 6,323
Operator Fee, Incentive and Bonus
(18)................................ 397 409
Home Office Expenses (19)............. 1,480 1,532
Insurance............................. 468 480
Property and Other Taxes.............. 429 416
------- -------
Total Operating Expenses.............. 11,495 11,773
NET OPERATING REVENUES ($000)........... 38,287 39,705
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.30 1.32
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-45
<PAGE>
EXHIBIT B-2
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY A--REDUCED AVAILABILITY
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Annual Availability under the PPA
(%)(5).............................. 96.0% 96.0% 96.0% 96.0% 96.0% 96.0% 96.0% 96.0%
Capacity Factor (%)(6)................ 5.0% 5.0% 4.0% 4.0% 3.0% 3.0% 3.0% 2.0%
Unit Starts per Year (7).............. 454 454 363 363 272 272 272 181
Energy Generation (MWh)............... 397,704 397,704 318,163 318,163 238,622 238,622 238,622 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 48,287 49,749 50,784 51,674 52,655 53,953 55,542 57,558
Unit Startup Charges.................. $ 6,454 6,648 5,478 5,642 4,358 4,489 4,624 3,175
Energy Payments....................... $ 103 107 92 95 74 79 81 57
Availability Incentive Adjustment
(11)................................ $ 0 0 0 0 0 0 0 0
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ (1,613) (1,662) (1,696) (1,726) (1,759) (1,802) (1,855) (1,922)
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 53,232 54,843 54,658 55,686 55,328 56,719 58,392 58,868
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 2,612 2,676 2,687 2,754 2,764 2,837 2,907 2,917
Capital Expenditures.................. $ 69 71 72 74 76 78 80 82
Major Maintenance (17)................ $ 6,479 6,639 5,549 5,688 4,509 4,622 4,736 3,433
Operator Fee, Incentive and Bonus
(18)................................ $ 420 431 443 456 468 481 494 509
Home Office Expenses (19)............. $ 1,586 1,642 1,701 1,762 1,824 1,890 1,958 2,030
Insurance............................. $ 492 504 517 530 543 557 571 585
Property and Other Taxes.............. $ 497 532 569 693 735 803 851 900
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 12,154 12,496 11,538 11,957 10,919 11,268 11,597 10,456
NET OPERATING REVENUES ($000)........... $ 41,077 42,347 43,120 43,729 44,409 45,451 46,795 48,412
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.32 1.34 1.35 1.35 1.37 1.38 1.41 1.46
AVERAGE DEBT COVERAGE (21).............. 1.44
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 97.0% 97.0%
Annual Availability under the PPA
(%)(5).............................. 96.0% 96.0%
Capacity Factor (%)(6)................ 2.0% 2.0%
Unit Starts per Year (7).............. 181 181
Energy Generation (MWh)............... 159,082 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 57,113 55,479
Unit Startup Charges.................. 3,270 3,368
Energy Payments....................... 59 62
Availability Incentive Adjustment
(11)................................ 0 0
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... (1,908) (1,853)
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 58,534 57,056
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,991 3,064
Capital Expenditures.................. 84 86
Major Maintenance (17)................ 3,517 3,604
Operator Fee, Incentive and Bonus
(18)................................ 522 536
Home Office Expenses (19)............. 2,103 2,180
Insurance............................. 600 615
Property and Other Taxes.............. 1,127 1,183
------- -------
Total Operating Expenses.............. 10,944 11,267
NET OPERATING REVENUES ($000)........... 47,590 45,789
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.46 1.44
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-46
<PAGE>
EXHIBIT B-2
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY A--REDUCED AVAILABILITY
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(L)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(kW)(3).................... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the
PPA (%)(4)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Annual Availability under the
PPA (%)(5)................. 96.0% 96.0% 96.0% 96.0% 96.0% 96.0% 96.0% 96.0% 96.0%
Capacity Factor (%)(6)....... 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Unit Starts per Year (7)..... 181 181 181 181 181 181 181 181 0
Energy Generation (MWh)...... 159,082 159,082 159,082 159,082 159,082 159,082 159,082 159,082 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9)..... 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges
($/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges......... $ 3,470 3,574 3,681 3,791 3,905 4,022 4,143 4,267 0
Energy Payments.............. $ 65 68 72 75 78 81 84 89 0
Availability Incentive
Adjustment (11)............ $ 0 0 0 0 0 0 0 0 0
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ $ (1,840) (1,846) (1,902) (1,980) (2,032) (2,093) (2,140) (2,170) (182)
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 56,783 57,058 58,792 61,169 62,796 64,689 66,165 67,153 5,266
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 3,141 3,220 3,300 3,384 3,467 3,555 3,643 3,734 306
Capital Expenditures......... $ 88 90 93 95 97 100 102 105 9
Major Maintenance (17)....... $ 3,692 3,782 3,876 3,970 4,068 4,167 4,269 4,374 153
Operator Fee, Incentive and
Bonus (18)................. $ 552 567 583 599 615 633 650 668 35
Home Office Expenses (19).... $ 2,261 2,344 2,431 2,522 2,616 2,713 2,815 2,922 253
Insurance.................... $ 630 646 662 678 695 713 731 749 64
Property and Other Taxes..... $ 1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 11,973 12,236 12,510 12,793 13,083 13,385 13,694 14,016 936
NET OPERATING REVENUES
($000)....................... $ 44,810 44,822 46,282 48,375 49,713 51,303 52,471 53,137 4,330
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.43 1.45 1.54 1.66 1.76 1.79 1.80 1.92 1.94
AVERAGE DEBT COVERAGE (21)..... 1.44
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-47
<PAGE>
FOOTNOTES TO EXHIBIT B-2
The footnotes to Exhibit B-2 are the same as the footnotes for Exhibit B-1,
except:
4. The projected average Summer Availability for the months of June through
September, as defined in the PPA, is assumed to be 1 percentage point lower
than in the Base Case due to an increase in the Facility forced outage rate
of 5 percentage points, and no liquidated damage payments are due from the
EPC Contractor.
5. The projected average Annual Availability, as defined in the PPA, is assumed
to be 1 percentage point lower than in the Base Case due to an increase in
the Facility forced outage rate of 5 percentage points, and no liquidated
damage payments are due from the EPC Contractor.
B-48
<PAGE>
EXHIBIT B-3
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY B--INCREASED HEAT RATE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(L) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0% 3.0% 4.0% 5.0% 5.0% 5.0% 6.0%
Unit Starts per Year (7).............. 181 181 272 363 454 454 454 544
Energy Generation (MWh)............... 159,082 159,082 238,622 318,163 397,704 397,704 397,704 477,245
Net Plant Heat Rate (Btu/kWh)(8)...... 11,642 11,642 11,642 11,642 11,642 11,642 11,642 11,642
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 22,246 38,327 39,353 40,624 41,523 42,158 42,703 43,757
Unit Startup Charges.................. $ 1,921 1,979 3,057 4,198 5,405 5,567 5,734 7,088
Energy Payments....................... $ 27 29 43 60 80 84 87 110
Availability Incentive Adjustment
(11)................................ $ 87 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 (311) (403) (430) (456) (586)
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 24,282 40,485 42,603 44,722 46,754 47,529 48,219 50,519
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 914 1,622 2,057 2,152 2,251 2,308 2,364 2,472
Capital Expenditures.................. $ 32 55 57 58 59 61 62 64
Major Maintenance (17)................ $ 1,559 2,477 3,502 4,583 5,727 5,895 6,068 7,348
Operator Fee, Incentive and Bonus
(18)................................ $ 202 107 366 376 386 397 408 420
Home Office Expenses (19)............. $ 422 742 761 780 799 819 840 861
Insurance............................. $ 224 394 404 414 424 435 446 457
Property and Other Taxes.............. $ 52 142 189 305 339 365 382 391
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 3,405 5,539 7,336 8,669 9,985 10,280 10,569 12,014
NET OPERATING REVENUES ($000)........... $ 20,877 34,945 35,267 36,053 36,770 37,249 37,649 38,506
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.33 1.30 1.31 1.33 1.33 1.34 1.33 1.33
AVERAGE DEBT COVERAGE (21).............. 1.48
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0%
Unit Starts per Year (7).............. 454 454
Energy Generation (MWh)............... 397,704 397,704
Net Plant Heat Rate (Btu/kWh)(8)...... 11,642 11,642
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 45,109 46,671
Unit Startup Charges.................. 6,084 6,266
Energy Payments....................... 95 99
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ (502) (515)
------- -------
Total Operating Revenues.............. 50,936 52,672
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,486 2,546
Capital Expenditures.................. 66 67
Major Maintenance (17)................ 6,430 6,591
Operator Fee, Incentive and Bonus
(18)................................ 431 444
Home Office Expenses (19)............. 1,480 1,532
Insurance............................. 468 480
Property and Other Taxes.............. 429 416
------- -------
Total Operating Expenses.............. 11,790 12,077
NET OPERATING REVENUES ($000)........... 39,146 40,595
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.33 1.35
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-49
<PAGE>
EXHIBIT B-3
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY B--INCREASED HEAT RATE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0% 4.0% 4.0% 3.0% 3.0% 3.0% 2.0%
Unit Starts per Year (7).............. 454 454 363 363 272 272 272 181
Energy Generation (MWh)............... 397,704 397,704 318,163 318,163 238,622 238,622 238,622 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,642 11,642 11,642 11,642 11,642 11,642 11,642 11,642
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/KW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 48,287 49,749 50,784 51,674 52,655 53,953 55,542 57,558
Unit Startup Charges.................. $ 6,454 6,648 5,478 5,642 4,358 4,489 4,624 3,175
Energy Payments....................... $ 103 107 92 95 74 79 81 57
Availability Incentive Adjustment
(11)................................ $ 150 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ (527) (541) (443) (454) 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 54,467 56,114 56,061 57,107 57,237 58,671 60,397 60,940
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 2,612 2,676 2,687 2,754 2,764 2,837 2,907 2,917
Capital Expenditures.................. $ 69 71 72 74 76 78 80 82
Major Maintenance (17)................ $ 6,756 6,924 5,843 5,990 4,821 4,943 5,066 3,773
Operator Fee, Incentive and Bonus
(18)................................ $ 456 469 482 496 510 524 539 555
Home Office Expenses (19)............. $ 1,586 1,642 1,701 1,762 1,824 1,890 1,958 2,030
Insurance............................. $ 492 504 517 530 543 557 571 585
Property and Other Taxes.............. $ 497 532 569 693 735 803 851 900
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 12,467 12,819 11,871 12,300 11,273 11,632 11,973 10,843
NET OPERATING REVENUES ($000)........... $ 42,000 43,295 44,190 44,807 45,964 47,039 48,424 50,098
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.35 1.37 1.38 1.39 1.41 1.43 1.46 L51
AVERAGE DEBT COVERAGE (21).............. 1.48
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0%
Unit Starts per Year (7).............. 181 181
Energy Generation (MWh)............... 159,082 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,642 11,642
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/KW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 57,113 55,479
Unit Startup Charges.................. 3,270 3,368
Energy Payments....................... 59 62
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 60,592 59,059
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,991 3,064
Capital Expenditures.................. 84 86
Major Maintenance (17)................ 3,868 3,965
Operator Fee, Incentive and Bonus
(18)................................ 570 586
Home Office Expenses (19)............. 2,103 2,180
Insurance............................. 600 615
Property and Other Taxes.............. 1,127 1,183
------- -------
Total Operating Expenses.............. 11,342 11,679
NET OPERATING REVENUES ($000)........... 49,249 47,380
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.51 1.49
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-50
<PAGE>
EXHIBIT B-3
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY B--INCREASED HEAT RATE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(1)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(kW)(3).................... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the
PPA (%)(4)................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the
PPA (%)(5)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)....... 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Unit Starts per Year (7)..... 181 181 181 181 181 181 181 181 0
Energy Generation (MWh)...... 159,082 159,082 159,082 159,082 159,082 159,082 159,082 159,082 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,642 11,642 11,642 11,642 11,642 11,642 11,642 11,642 11,642
COMMODITY PRICES
General Inflation (%)(9)..... 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges
(S/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges......... $ 3,470 3,574 3,681 3,791 3,905 4,022 4,143 4,267 0
Energy Payments.............. $ 65 68 72 75 78 81 84 89 0
Availability Incentive
Adjustment (11)............ $ 150 150 150 150 150 150 150 150 12
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ $ 0 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 58,773 59,053 60,844 63,299 64,978 66,932 68,455 69,473 5,461
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 3,141 3,220 3,300 3,384 3,467 3,555 3,643 3,734 306
Capital Expenditures......... $ 88 90 93 95 97 100 102 105 9
Major Maintenance (17)....... $ 4,064 4,165 4,270 4,377 4,487 4,598 4,713 4,831 349
Operator Fee, Incentive and
Bonus (18)................. $ 603 620 638 656 674 694 713 734 63
Home Office Expenses (19).... $ 2,261 2,344 2,431 2,522 2,616 2,713 2,815 2,922 253
Insurance.................... $ 630 646 662 678 695 713 731 749 64
Property and Other Taxes..... $ 1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 12,396 12,672 12,960 13,257 13,560 13,878 14,201 14,540 1,161
NET OPERATING REVENUES ($000).. $ 46,377 46,381 47,884 50,042 51,418 53,055 54,254 54,933 4,299
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.47 1.50 1.59 1.72 1.82 1.85 1.86 1.99 1.92
AVERAGE DEBT COVERAGE (21)..... 1.48
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-51
<PAGE>
FOOTNOTES TO EXHIBIT B-3
The footnotes to Exhibit B-3 are the same as the footnotes for Exhibit B-1,
except:
8. Net Plant Heat Rates are assumed to be 5 percent higher than those assumed
in the Base Case and no liquidated damage payments are due from the EPC
Contractor.
B-52
<PAGE>
EXHIBIT B-4 TENASKA
GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY C--INCREASED OPERATING EXPENSES
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(1) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0% 3.0% 4.0% 5.0% 5.0% 5.0% 6.0%
Unit Starts per Year (7).............. 181 181 272 363 454 454 454 544
Energy Generation (MWh)............... 159,082 159,082 238,622 318,163 397,704 397,704 397,704 477,245
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 22,246 38,327 39,353 40,624 41,523 42,158 42,703 43,757
Unit Startup Charges.................. $ 1,921 1,979 3,057 4,198 5,405 5,567 5,734 7,088
Energy Payments....................... $ 27 29 43 60 80 84 87 110
Availability Incentive Adjustment
(11)................................ $ 87 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 24,282 40,485 42,603 45,032 47,158 47,959 48,674 51,105
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 1,003 1,785 2,262 2,367 2,475 2,538 2,599 2,718
Capital Expenditures.................. $ 35 61 63 64 65 67 68 70
Major Maintenance (17)................ $ 1,585 2,592 3,713 4,899 6,152 6,334 6,518 7,924
Operator Fee, Incentive and Bonus
(18)................................ $ 222 118 403 414 425 437 449 462
Home Office Expenses (19)............. $ 465 816 836 857 879 901 924 946
Insurance............................. $ 247 433 444 455 467 478 490 503
Property and Other Taxes.............. $ 57 156 208 336 373 402 420 430
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 3,613 5,960 7,929 9,391 10,836 11,156 11,469 13,053
NET OPERATING REVENUES ($000)........... $ 20,668 34,525 34,674 35,642 36,322 36,802 37,206 38,051
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.32 1.29 1.29 1.31 1.32 1.32 1.31 1.32
AVERAGE DEBT COVERAGE (21).............. 1.45
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0%
Unit Starts per Year (7).............. 454 454
Energy Generation (MWh)............... 397,704 397,704
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 45,109 46,671
Unit Startup Charges.................. 6,084 6,266
Energy Payments....................... 95 99
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 51,438 53,186
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,733 2,802
Capital Expenditures.................. 73 74
Major Maintenance (17)................ 6,908 7,081
Operator Fee, Incentive and Bonus
(18)................................ 474 488
Home Office Expenses (19)............. 1,629 1,685
Insurance............................. 515 528
Property and Other Taxes.............. 472 458
------- -------
Total Operating Expenses.............. 12,804 13,116
NET OPERATING REVENUES ($000)........... 38,635 40,070
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.31 1.33
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-53
<PAGE>
EXHIBIT B-4
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY C--INCREASED OPERATING EXPENSES
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0% 4.0% 4.0% 3.0% 3.0% 3.0% 2.0%
Unit Starts per Year (7).............. 454 454 363 363 272 272 272 181
Energy Generation (MWh)............... 397,704 397,704 318,163 318,163 238,622 238,622 238,622 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 48,287 49,749 50,784 51,674 52,655 53,953 55,542 57,558
Unit Startup Charges.................. $ 6,454 6,648 5,478 5,642 4,358 4,489 4,624 3,175
Energy Payments....................... $ 103 107 92 95 74 79 81 57
Availability Incentive Adjustment
(11)................................ $ 150 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 54,994 56,654 56,504 57,561 57,237 58,671 60,397 60,940
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 2,871 2,942 2,957 3,030 3,042 3,119 3,198 3,208
Capital Expenditures.................. $ 76 78 79 81 84 86 88 90
Major Maintenance (17)................ $ 7,257 7,439 6,245 6,401 5,112 5,240 5,371 3,945
Operator Fee, Incentive and Bonus
(18)................................ $ 502 516 530 546 561 576 593 611
Home Office Expenses (19)............. $ 1,745 1,807 1,871 1,938 2,007 2,079 2,154 2,232
Insurance............................. $ 541 555 569 583 598 612 628 643
Property and Other Taxes.............. $ 547 585 626 762 809 883 936 990
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 13,539 13,921 12,877 13,341 12,213 12,595 12,967 11,719
NET OPERATING REVENUES ($000)........... $ 41,455 42,733 43,627 44,221 45,024 46,076 47,430 49,221
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.33 1.35 1.36 1.37 1.39 1.40 1.43 1.48
AVERAGE DEBT COVERAGE (21).............. 1.45
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0%
Unit Starts per Year (7).............. 181 181
Energy Generation (MWh)............... 159,082 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 57,113 55,479
Unit Startup Charges.................. 3,270 3,368
Energy Payments....................... 59 62
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 60,592 59,059
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 3,290 3,373
Capital Expenditures.................. 92 95
Major Maintenance (17)................ 4,043 4,144
Operator Fee, Incentive and Bonus
(18)................................ 627 645
Home Office Expenses (19)............. 2,314 2,399
Insurance............................. 660 676
Property and Other Taxes.............. 1,240 1,301
------- -------
Total Operating Expenses.............. 12,267 12,632
NET OPERATING REVENUES ($000)........... 48,325 46,427
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.48 1,46
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-54
<PAGE>
EXHIBIT B-4
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY C--INCREASED OPERATING EXPENSES
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(1)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(kW)(3).................... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the
PPA (%)(4)................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the
PPA (%)(5)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)....... 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Unit Starts per Year (7)..... 181 181 181 181 181 181 181 181 0
Energy Generation (MWh)...... 159,082 159,082 159,082 159,082 159,082 159,082 159,082 159,082 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9)..... 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges
($/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges......... $ 3,470 3,574 3,681 3,791 3,905 4,022 4,143 4,267 0
Energy Payments.............. $ 65 68 72 75 78 81 84 89 0
Availability Incentive
Adjustment (11)............ $ 150 150 150 150 150 150 150 150 12
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ $ 0 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 58,773 59,053 60,844 63,299 64,978 66,932 68,455 69,473 5,461
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 3,454 3,542 3,629 3,720 3,815 3,910 4,007 4,108 335
Capital Expenditures......... $ 97 99 102 105 107 110 112 116 10
Major Maintenance (17)....... $ 4,248 4,354 4,463 4,574 4,689 4,806 4,926 5,050 383
Operator Fee, Incentive and
Bonus (18)................. $ 663 682 702 722 741 763 784 807 69
Home Office Expenses (19).... $ 2,487 2,578 2,674 2,773 2,877 2,985 3,097 3,214 278
Insurance.................... $ 693 710 728 746 765 784 804 824 70
Property and Other Taxes..... $ 1,770 1,746 1,723 1,700 1,676 1,654 1,632 1,612 129
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 13,412 13,711 14,022 14,340 14,670 15,013 15,363 15,730 1,274
NET OPERATING REVENUES
($000)....................... $45,3.61 45,343 46,822 48,959 50,308 51,920 53,092 53,743 4,187
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.44 1.46 1.56 1.68 1.78 1.81 1.82 1.94 1.87
AVERAGE DEBT COVERAGE (21)..... 1.45
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-55
<PAGE>
FOOTNOTES TO EXHIBIT B-4
The footnotes to Exhibit B-4 are the same as the footnotes for Exhibit B-1,
except:
15. Non-fuel related operating and maintenance costs assumed to be 10 percent
higher than that assumed in the Base Case.
B-56
<PAGE>
EXHIBIT B-5
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY D--INCREASED INFLATION RATE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(1) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97,0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0% 3.0% 4.0% 5.0% 5.0% 5.0% 6.0%
Unit Starts per Year (7).............. 181 181 272 363 454 454 454 544
Energy Generation (MWh)............... 159,082 159,082 238,622 318,163 397,704 397,704 397,704 477,245
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 22,246 38,327 39,353 40,624 41,523 42,158 42,703 43,757
Unit Startup Charges.................. $ 1,921 1,979 3,057 4,198 5,405 5,567 5,734 7,088
Energy Payments....................... $ 27 29 43 60 80 84 87 110
Availability Incentive Adjustment
(11)................................ $ 87 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 24,282 40,485 42,603 45,032 47,158 47,959 48,674 51,105
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 1,010 1,864 2,443 2,648 2,866 3,039 3,220 3,485
Capital Expenditures.................. $ 35 63 67 71 75 80 84 90
Major Maintenance (17)................ $ 1,597 2,569 3,619 4,730 5,906 6,109 6,320 7,641
Operator Fee, Incentive and Bonus
(18)................................ $ 217 107 412 434 457 482 507 535
Home Office Expenses (19)............. $ 459 833 883 936 992 1,052 1,115 1,182
Insurance............................. $ 248 451 478 506 537 569 603 639
Property and Other Taxes.............. $ 52 142 189 305 339 365 382 391
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 3,618 6,029 8,091 9,630 11,172 11,696 12,231 13,963
NET OPERATING REVENUES ($000)........... $ 20,664 34,455 34,512 35,402 35,986 36,262 36,444 37,142
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.32 1.28 1.28 1.30 1.30 1.30 1.28 1.28
AVERAGE DEBT COVERAGE (21).............. 1.28
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0%
Unit Starts per Year (7).............. 454 454
Energy Generation (MWh)............... 397,704 397,704
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 6.00 6.00
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 45,109 46,671
Unit Startup Charges.................. 6,084 6,266
Energy Payments....................... 95 99
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 51,438 53,186
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 3,618 3,837
Capital Expenditures.................. 95 101
Major Maintenance (17)................ 6,765 7,171
Operator Fee, Incentive and Bonus
(18)................................ 563 594
Home Office Expenses (19)............. 1,852 1,957
Insurance............................. 678 718
Property and Other Taxes.............. 429 416
------- -------
Total Operating Expenses.............. 14,001 14,794
NET OPERATING REVENUES ($000)........... 37,438 38,392
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.27 1.28
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-57
<PAGE>
EXHIBIT B-5
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY D--INCREASED INFLATION RATE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0% 4.0% 4.0% 3.0% 3.0% 3.0% 2.0%
Unit Starts per Year (7).............. 454 454 363 363 272 272 272 181
Energy Generation (MWh)............... 397,704 397,704 318,163 318,163 238,622 238,622 238,622 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 48,287 49,749 50,784 51,674 52,655 53,953 55,542 57,558
Unit Startup Charges.................. $ 6,454 6,648 5,478 5,642 4,358 4,489 4,624 3,175
Energy Payments....................... $ 103 107 92 95 74 79 81 57
Availability Incentive Adjustment
(11)................................ $ 150 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 54,994 56,654 56,504 57,561 57,237 58,671 60,397 60,940
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 4,066 4,312 4,472 4,741 4,918 5,211 5,526 5,725
Capital Expenditures.................. $ 107 113 120 127 135 143 151 160
Major Maintenance (17)................ $ 7,601 8,057 7,106 7,533 6,374 6,755 7,161 5,671
Operator Fee, Incentive and Bonus
(18)................................ $ 626 660 695 734 774 815 860 908
Home Office Expenses (19)............. $ 2,067 2,185 2,309 2,440 2,580 2,726 2,881 3,045
Insurance............................. $ 761 807 856 907 961 1,019 1,080 1,145
Property and Other Taxes.............. $ 497 532 569 693 735 803 851 900
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 15,725 16,665 16,127 17,175 16,476 17,472 18,510 17,554
NET OPERATING REVENUES ($000)........... $ 39,269 39,989 40,377 40,387 40,761 41,199 41,887 43,386
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.26 1.26 1.26 1.25 1.25 1.25 1.26 1.31
AVERAGE DEBT COVERAGE (21).............. 1.28
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0%
Unit Starts per Year (7).............. 181 181
Energy Generation (MWh)............... 159,082 159,082
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 6.00 6.00
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 57,113 55,479
Unit Startup Charges.................. 3,270 3,368
Energy Payments....................... 59 62
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 60,592 59,059
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 6,070 6,434
Capital Expenditures.................. 170 180
Major Maintenance (17)................ 6,010 6,372
Operator Fee, Incentive and Bonus
(18)................................ 957 1,010
Home Office Expenses (19)............. 3,219 3,402
Insurance............................. 1,214 1,286
Property and Other Taxes.............. 1,127 1,183
------- -------
Total Operating Expenses.............. 18,767 19,867
NET OPERATING REVENUES ($000)........... 41,825 39,192
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.28 1.23
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-58
<PAGE>
EXHIBIT B-5
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY D--INCREASED INFLATION RATE
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(1)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(kW)(3).................... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the
PPA (%)(4)................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the
PPA (%)(5)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)....... 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Unit Starts per Year (7)..... 181 181 181 181 181 181 181 181 0
Energy Generation (MWh)...... 159,082 159,082 159,082 159,082 159,082 159,082 159,082 159,082 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9)..... 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
Electricity Prices (10)
Reservation Charges
($/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges......... $ 3,470 3,574 3,681 3,791 3,905 4,022 4,143 4,267 0
Energy Payments.............. $ 65 68 72 75 78 81 84 89 0
Availability Incentive
Adjustment (11)............ $ 150 150 150 150 150 150 150 150 12
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ $ 0 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 58,773 59,053 60,844 63,299 64,978 66,932 68,455 69,473 5,461
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 6,821 7,231 7,665 8,125 8,610 9,129 9,674 10,256 865
Capital Expenditures......... $ 191 202 215 227 241 256 271 287 25
Major Maintenance (17)....... $ 6,753 7,158 7,589 8,044 8,527 9,037 9,580 10,155 772
Operator Fee, Incentive and
Bonus (18)................. $ 1,065 1,124 1,187 1,252 1,321 1,395 1,472 1,554 137
Home Office Expenses (19).... $ 3,596 3,801 4,017 4,246 4,489 4,745 5,016 5,303 468
Insurance.................... $ 1,364 1,445 1,532 1,624 1,722 1,825 1,934 2,050 181
Property and Other Taxes..... $ 1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 21,399 22,548 23,770 25,063 26,434 27,891 29,431 31,070 2,565
NET OPERATING REVENUES
($000)....................... $ 37,374 36,506 37,073 38,236 38,544 39,041 39,024 38,403 2,896
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.19 1.18 1.23 1.31 1.36 1.36 1.34 1.39 1.29
AVERAGE DEBT COVERAGE (21)..... 1.28
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-59
<PAGE>
FOOTNOTES TO EXHIBIT B-5
The footnotes to Exhibit B-5 are the same as the footnotes for Exhibit B-1,
except:
9. General inflation is assumed to escalate at a rate of 6.0 percent per year,
rather than 2.5 percent per year, as assumed in the Base Case.
B-60
<PAGE>
EXHIBIT B-6
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY E--REDUCED CONTRACT CAPACITY
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(1) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 875,000 875,000 875,000 875,000 875,000 875,000 875,000 875,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0% 3.0% 4.0% 5.0% 5.0% 5.0% 6.0%
Unit Starts per Year (7).............. 181 181 272 363 454 454 454 544
Energy Generation (MWh)............... 153,300 153,300 229,950 306,600 383,250 383,250 383,250 459,900
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 21,438 36,934 37,923 39,148 40,014 40,626 41,151 42,166
Unit Startup Charges.................. $ 1,921 1,979 3,057 4,198 5,405 5,567 5,734 7,088
Energy Payments....................... $ 26 28 41 58 77 80 84 106
Availability Incentive Adjustment
(11)................................ $ 87 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 23,473 39,091 41,171 43,554 45,646 46,423 47,119 49,510
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 914 1,622 2,057 2,152 2,251 2,308 2,364 2,472
Capital Expenditures.................. $ 32 55 57 58 59 61 62 64
Major Maintenance (17)................ $ 1,559 2,477 3,502 4,583 5,727 5,895 6,068 7,348
Operator Fee, Incentive and Bonus
(18)................................ $ 202 107 366 376 386 397 408 420
Home Office Expenses (19)............. $ 422 742 761 780 799 819 840 861
Insurance............................. $ 224 394 404 414 424 435 446 457
Property and Other Taxes.............. $ 52 142 189 305 339 365 382 391
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 3,405 5,539 7,336 8,669 9,985 10,280 10,569 12,014
NET OPERATING REVENUES ($000)........... $ 20,068 33,551 33,835 34,885 35,661 36,144 36,550 37,496
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.28 1.25 1.26 1.28 1.29 1.30 1.29 1.30
AVERAGE DEBT COVERAGE (21).............. 1.42
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 875,000 875,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0%
Unit Starts per Year (7).............. 454 454
Energy Generation (MWh)............... 383,250 383,250
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 43,470 44,975
Unit Startup Charges.................. 6,084 6,266
Energy Payments....................... 92 96
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 49,796 51,487
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,486 2,546
Capital Expenditures.................. 66 67
Major Maintenance (17)................ 6,430 6,591
Operator Fee, Incentive and Bonus
(18)................................ 431 444
Home Office Expenses (19)............. 1,480 1,532
Insurance............................. 468 480
Property and Other Taxes.............. 429 416
------- -------
Total Operating Expenses.............. 11,790 12,077
NET OPERATING REVENUES ($000)........... 38,006 39,410
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.29 1.31
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-61
<PAGE>
EXHIBIT B-6
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY E--REDUCED CONTRACT CAPACITY
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 875,000 875,000 875,000 875,000 875,000 875,000 875,000 875,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 5.0% 5.0% 4.0% 4.0% 3.0% 3.0% 3.0% 2.0%
Unit Starts per Year (7).............. 454 454 363 363 272 272 272 181
Energy Generation (MWh)............... 383,250 383,250 306,600 306,600 229,950 229,950 229,950 153,300
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2,50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 46,533 47,941 48,939 49,796 50,741 51,993 53,524 55,466
Unit Startup Charges.................. $ 6,454 6,648 5,478 5,642 4,358 4,489 4,624 3,175
Energy Payments....................... $ 100 103 89 92 71 76 78 55
Availability Incentive Adjustment
(11)................................ $ 150 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 53,237 54,842 54,656 55,680 55,320 56,708 58,376 58,846
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 2,612 2,676 2,687 2,754 2,764 2,837 2,907 2,917
Capital Expenditures.................. $ 69 71 72 74 76 78 80 82
Major Maintenance (17)................ $ 6,756 6,924 5,843 5,990 4,821 4,943 5,066 3,773
Operator Fee, Incentive and Bonus
(18)................................ $ 456 469 482 496 510 524 539 555
Home Office Expenses (19)............. $ 1,586 1,642 1,701 1,762 1,824 1,890 1,958 2,030
Insurance............................. $ 492 504 517 530 543 557 571 585
Property and Other Taxes.............. $ 497 532 569 693 735 803 851 900
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 12,467 12,819 11,871 12,300 11,273 11,632 11,973 10,843
NET OPERATING REVENUES ($000)........... $ 40,769 42,024 42,785 43,380 44,048 45,076 46,404 48,004
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.31 1.33 1.34 1.34 1.35 1.37 1.40 1.45
AVERAGE DEBT COVERAGE (21).............. 1.42
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 875,000 875,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 2.0% 2.0%
Unit Starts per Year (7).............. 181 181
Energy Generation (MWh)............... 153,300 153,300
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 55,038 53,463
Unit Startup Charges.................. 3,270 3,368
Energy Payments....................... 57 60
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 58,515 57,041
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,991 3,064
Capital Expenditures.................. 84 86
Major Maintenance (17)................ 3,868 3,965
Operator Fee, Incentive and Bonus
(18)................................ 570 586
Home Office Expenses (19)............. 2,103 2,180
Insurance............................. 600 615
Property and Other Taxes.............. 1,127 1,183
------- -------
Total Operating Expenses.............. 11,342 11,679
NET OPERATING REVENUES ($000)........... 47,172 45,362
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.45 1.42
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-62
<PAGE>
EXHIBIT B-6
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY E--REDUCED CONTRACT CAPACITY
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(1)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(kW)(3).................... 875,000 875,000 875,000 875,000 875,000 875,000 875,000 875,000 875,000
Summer Availability under the
PPA (%)(4)................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the
PPA (%)(5)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)....... 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Unit Starts per Year (7)..... 181 181 181 181 181 181 181 181 0
Energy Generation (MWh)...... 153,300 153,300 153,300 153,300 153,300 153,300 153,300 153,300 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9)..... 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges
($/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 53,086 53,253 54,871 57,129 58,634 60,401 61,749 62,606 5,250
Unit Startup Charges......... $ 3,470 3,574 3,681 3,791 3,905 4,022 4,143 4,267 0
Energy Payments.............. $ 63 66 69 72 75 78 81 86 0
Availability Incentive
Adjustment (11)............ $ 150 150 150 150 150 150 150 150 12
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ $ 0 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 56,769 57,043 58,771 61,142 62,764 64,651 66,123 67,109 5,263
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 3,141 3,220 3,300 3,384 3,467 3,555 3,643 3,734 306
Capital Expenditures......... $ 88 90 93 95 97 100 102 105 9
Major Maintenance (17)....... $ 4,064 4,165 4,270 4,377 4,487 4,598 4,713 4,831 349
Operator Fee, Incentive and
Bonus (18)................. $ 603 620 638 656 674 694 713 734 63
Home Office Expenses (19).... $ 2,261 2,344 2,431 2,522 2,616 2,713 2,815 2,922 253
Insurance.................... $ 630 646 662 678 695 713 731 749 64
Property and Other Taxes..... $ 1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 12,396 12,672 12,960 13,257 13,560 13,878 14,201 14,540 1,161
NET OPERATING REVENUES
($000)....................... $ 44,373 44,371 45,811 47,885 49,204 50,774 51,922 52,569 4,101
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.41 1.43 1.52 1.65 1.74 1.77 1.78 1.90 1.83
AVERAGE DEBT COVERAGE (21)..... 1.42
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-63
<PAGE>
FOOTNOTES TO EXHIBIT B-6
The footnotes to Exhibit B-6 are the same as the footnotes for Exhibit B-1,
except:
3. The projected levels of Contract Capacity to be declared each year by the
Partnership, and purchased each year by PECO, as defined in the PPA, are
assumed to equal the minimum amount of Contract Capacity allowed under the
PPA.
B-64
<PAGE>
EXHIBIT B-7
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY F--ZERO DISPATCH
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(L) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Unit Starts per Year (7).............. 0 0 0 0 0 0 0 0
Energy Generation (MWh)............... 0 0 0 0 0 0 0 0
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 22,246 38,327 39,353 40,624 41,523 42,158 42,703 43,757
Unit Startup Charges.................. $ 0 0 0 0 0 0 0 0
Energy Payments....................... $ 0 0 0 0 0 0 0 0
Availability Incentive Adjustment
(11)................................ $ 87 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 22,334 38,477 39,503 40,774 41,673 42,308 42,853 43,907
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 884 1,550 1,929 1,978 2,027 2,078 2,129 2,183
Capital Expenditures.................. $ 32 55 57 58 59 61 62 64
Major Maintenance (17)................ $ 1,189 2,096 2,158 2,219 2,282 2,347 2,413 2,481
Operator Fee, Incentive and Bonus
(18)................................ $ 202 107 366 376 386 397 408 420
Home Office Expenses (19)............. $ 422 742 761 780 799 819 840 861
Insurance............................. $ 224 394 404 414 424 435 446 457
Property and Other Taxes.............. $ 52 142 189 305 339 365 382 391
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 3,005 5,086 5,864 6,130 6,316 6,502 6,680 6,857
NET OPERATING REVENUES ($000)........... $ 19,329 33,391 33,639 34,644 35,357 35,806 36,173 37,050
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.23 1.24 1.25 1.28 1.28 1.29 1.27 1.28
AVERAGE DEBT COVERAGE (21).............. 1.40
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 0.0% 0.0%
Unit Starts per Year (7).............. 0 0
Energy Generation (MWh)............... 0 0
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 45,109 46,671
Unit Startup Charges.................. 0 0
Energy Payments....................... 0 0
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 45,259 46,821
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,239 2,293
Capital Expenditures.................. 66 67
Major Maintenance (17)................ 2,553 2,617
Operator Fee, Incentive and Bonus
(18)................................ 431 444
Home Office Expenses (19)............. 1,480 1,532
Insurance............................. 468 480
Property and Other Taxes.............. 429 416
------- -------
Total Operating Expenses.............. 7,666 7,849
NET OPERATING REVENUES ($000)........... 37,593 38,972
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.28 1.29
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-65
<PAGE>
EXHIBIT B-7
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY F--ZERO DISPATCH
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PRA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Unit Stains per Year (7).............. 0 0 0 0 0 0 0 0
Energy Generation (MWh)............... 0 0 0 0 0 0 0 0
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 48,287 49,749 50,784 51,674 52,655 53,953 55,542 57,558
Unit Startup Charges.................. $ 0 0 0 0 0 0 0 0
Energy Payments....................... $ 0 0 0 0 0 0 0 0
Availability Incentive Adjustment
(11)................................ $ 150 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 48,437 49,899 50,934 51,824 52,805 54,103 55,692 57,708
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 2,352 2,410 2,469 2,531 2,592 2,661 2,727 2,794
Capital Expenditures.................. $ 69 71 72 74 76 78 80 82
Major Maintenance (17)................ $ 2,682 2,749 2,817 2,889 2,960 3,035 3,111 3,188
Operator Fee, Incentive and Bonus
(18)................................ $ 456 469 482 496 510 524 539 555
Home Office Expenses (19)............. $ 1,586 1,642 1,701 1,762 1,824 1,890 1,958 2,030
Insurance............................. $ 492 504 517 530 543 557 571 585
Property and Other Taxes.............. $ 497 532 569 693 735 803 851 900
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 8,134 8,377 8,627 8,975 9,240 9,548 9,837 10,134
NET OPERATING REVENUES ($000)........... $ 40,303 41,522 42,307 42,849 43,565 44,555 45,855 47,574
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.30 1.31 1.32 1.33 1.34 1.35 1.38 1.44
AVERAGE DEBT COVERAGE (21).............. 1.40
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PRA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 0.0% 0.0%
Unit Stains per Year (7).............. 0 0
Energy Generation (MWh)............... 0 0
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 57,113 55,479
Unit Startup Charges.................. 0 0
Energy Payments....................... 0 0
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 57,263 55,629
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,864 2,934
Capital Expenditures.................. 84 86
Major Maintenance (17)................ 3,268 3,350
Operator Fee, Incentive and Bonus
(18)................................ 570 586
Home Office Expenses (19)............. 2,103 2,180
Insurance............................. 600 615
Property and Other Taxes.............. 1,127 1,183
------- -------
Total Operating Expenses.............. 10,616 10,934
NET OPERATING REVENUES ($000)........... 46,647 44,695
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.43 1.40
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-66
<PAGE>
EXHIBIT B-7
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY F--ZERO DISPATCH
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(L)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(kW)(3).................... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the
PPA (%)(4)................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the
PPA (%)(5)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)....... 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Unit Starts per Year (7)..... 0 0 0 0 0 0 0 0 0
Energy Generation (MWh)...... 0 0 0 0 0 0 0 0 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9)..... 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges
($/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges......... $ 0 0 0 0 0 0 0 0 0
Energy Payments.............. $ 0 0 0 0 0 0 0 0 0
Availability Incentive
Adjustment (11)............ $ 150 150 150 150 150 150 150 150 12
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ $ 0 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 55,238 55,411 57,091 59,433 60,995 62,829 64,228 65,117 5,461
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 3,008 3,084 3,160 3,241 3,321 3,405 3,489 3,576 306
Capital Expenditures......... $ 88 90 93 95 97 100 102 105 9
Major Maintenance (17)....... $ 3,434 3,519 3,608 3,698 3,791 3,885 3,982 4,082 349
Operator Fee, Incentive and
Bonus (18)................. $ 603 620 638 656 674 694 713 734 63
Home Office Expenses (19).... $ 2,261 2,344 2,431 2,522 2,616 2,713 2,815 2,922 253
Insurance.................... $ 630 646 662 678 695 713 731 749 64
Property and Other Taxes..... $ 1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 11,633 11,890 12,158 12,435 12,718 13,014 13,316 13,633 1,161
NET OPERATING REVENUES
($000)....................... $ 43,605 43,521 44,933 46,998 48,277 49,815 50,912 51,484 4,299
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.39 1.40 1.49 1.62 1.71 1.74 1.75 1.86 1.92
AVERAGE DEBT COVERAGE (21)..... 1.40
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-67
<PAGE>
FOOTNOTES TO EXHIBIT B-7
The footnotes to Exhibit B-7 are the same as the footnotes for Exhibit B-1,
except:
6. The annual capacity factors are assumed to be zero each Contract Year.
B-68
<PAGE>
EXHIBIT B-8
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY G--INCREASED CAPACITY FACTORS
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2002(1) 2003 2004 2005 2006 2007 2008 2009
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 4.0% 4.0% 6.0% 8.0% 10.0% 10.0% 10.0% 12.0%
Unit Starts per Year (7).............. 363 363 544 726 907 907 907 1,089
Energy Generation (MWh)............... 318,163 318,163 477,245 636,326 795,408 795,408 795,408 954,490
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 42.00 42.21 43.34 44.74 45.73 46.43 47.03 48.19
Unit Start Up Rates ($/Start)....... $ 11,330 11,670 12,020 12,381 12,752 13,135 13,529 13,934
Energy Charges ($/MWh).............. $ 0.17 0.18 0.18 0.19 0.20 0.21 0.22 0.23
OPERATING REVENUES ($000)
Reservation Payments.................. $ 22,246 38,327 39,353 40,624 41,523 42,158 42,703 43,757
Unit Startup Charges.................. $ 3,842 3,957 6,114 8,396 10,810 11,135 11,469 14,175
Energy Payments....................... $ 54 57 86 121 159 167 175 220
Availability Incentive Adjustment
(11)................................ $ 87 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 26,230 42,491 45,703 49,291 52,642 53,610 54,497 58,302
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 945 1,694 2,185 2,327 2,474 2,537 2,598 2,761
Capital Expenditures.................. $ 32 55 57 58 59 61 62 64
Major Maintenance (17)................ $ 3,353 4,325 6,357 8,504 10,774 11,094 11,423 13,967
Operator Fee, Incentive and Bonus
(18)................................ $ 202 107 366 376 386 397 408 420
Home Office Expenses (19)............. $ 422 742 761 780 799 819 840 861
Insurance............................. $ 224 394 404 414 424 435 446 457
Property and Other Taxes.............. $ 52 142 189 305 339 365 382 391
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 5,229 7,459 10,318 12,764 15,256 15,708 16,159 18,921
NET OPERATING REVENUES ($000)........... $ 21,000 35,032 35,385 36,527 37,386 37,902 38,338 39,380
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $275,000 275,000 275,000 275,000 274,714 274,026 273,052 271,391
Annual Principal.................... $ 0 0 0 286 688 974 1,661 2,349
Annual Interest..................... $ 15,240 26,125 26,125 26,125 26,081 26,016 25,907 25,733
Letter of Credit Fees................. $ 429 735 735 738 810 812 819 825
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 15,669 26,860 26,860 27,149 27,579 27,802 28,388 28,907
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.34 1.30 1.32 1.35 1.36 1.36 1.35 1.36
AVERAGE DEBT COVERAGE (21).............. 1.50
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 7,982 13,683 13,683 13,833 14,020 14,136 14,439 14,708
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2010 2011
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 10.0% 10.0%
Unit Starts per Year (7).............. 907 907
Energy Generation (MWh)............... 795,408 795,408
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 49.68 51.40
Unit Start Up Rates ($/Start)....... 14,353 14,783
Energy Charges ($/MWh).............. 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments.................. 45,109 46,671
Unit Startup Charges.................. 12,167 12,532
Energy Payments....................... 191 199
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 57,617 59,552
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 2,733 2,800
Capital Expenditures.................. 66 67
Major Maintenance (17)................ 12,111 12,414
Operator Fee, Incentive and Bonus
(18)................................ 431 444
Home Office Expenses (19)............. 1,480 1,532
Insurance............................. 468 480
Property and Other Taxes.............. 429 416
------- -------
Total Operating Expenses.............. 17,718 18,153
NET OPERATING REVENUES ($000)........... 39,899 41,399
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 269,042 266,005
Annual Principal.................... 3,036 4,010
Annual Interest..................... 25,494 25,189
Letter of Credit Fees................. 893 900
------- -------
Total Debt Service.................... 29,423 30,099
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.36 1.38
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 14,943 15,293
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-69
<PAGE>
EXHIBIT B-8
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY G--INCREASED CAPACITY FACTORS
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2012 2013 2014 2015 2016 2017 2018 2019
- ------------------------ -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6)................ 10.0% 10.0% 8.0% 8.0% 6.0% 6.0% 6.0% 4.0%
Unit Starts per Year (7).............. 907 907 726 726 544 544 544 363
Energy Generation (MWh)............... 795,408 795,408 636,326 636,326 477,245 477,245 477,245 318,163
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... $ 53.18 54.79 55.93 56.91 57.99 59.42 61.17 63.39
Unit Start Up Rates ($/Start)....... $ 15,227 15,683 16,154 16,638 17,138 17,652 18,181 18,727
Energy Charges ($/MWh).............. $ 0.26 0.27 0.29 0.30 0.31 0.33 0.34 0.36
OPERATING REVENUES ($000)
Reservation Payments.................. $ 48,287 49,749 50,784 51,674 52,655 53,953 55,542 57,558
Unit Startup Charges.................. $ 12,908 13,295 10,955 11,284 8,717 8,978 9,248 6,350
Energy Payments....................... $ 207 215 185 191 148 157 162 115
Availability Incentive Adjustment
(11)................................ $ 150 150 150 150 150 150 150 150
Summer Availability Adjustment (12)... $ 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13)... $ 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)............ $ 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues.............. $ 61,552 63,409 62,074 63,299 61,670 63,238 65,102 64,173
OPERATING EXPENSES ($000)(15)
Fuel.................................. $ 0 0 0 0 0 0 0 0
Operations (16)....................... $ 2,871 2,943 2,906 2,978 2,935 3,013 3,088 3,041
Capital Expenditures.................. $ 69 71 72 74 76 78 80 82
Major Maintenance (17)................ $ 12,724 13,042 10,859 11,132 8,774 8,994 9,219 6,611
Operator Fee, Incentive and Bonus
(18)................................ $ 456 469 482 496 510 524 539 555
Home Office Expenses (19)............. $ 1,586 1,642 1,701 1,762 1,824 1,890 1,958 2,030
Insurance............................. $ 492 504 517 530 543 557 571 585
Property and Other Taxes.............. $ 497 532 569 693 735 803 851 900
-------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses.............. $ 18,695 19,203 17,106 17,665 15,397 15,859 16,306 13,804
NET OPERATING REVENUES ($000)........... $ 42,856 44,206 44,967 45,634 46,273 47,379 48,796 50,369
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. $261,995 256,609 250,135 242,688 234,151 224,641 213,755 201,495
Annual Principal.................... $ 5,385 6,474 7,448 8,536 9,510 10,885 12,260 13,349
Annual Interest..................... $ 24,775 24,231 23,600 22,859 22,032 21,096 20,029 18,832
Letter of Credit Fees................. $ 901 933 933 933 965 965 965 965
-------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service.................... $ 31,062 31,638 31,981 32,329 32,508 32,946 33,255 33,146
TRANSFERS FROM DSRF..................... $ 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.38 1.40 1.41 1.41 1.42 1.44 1.47 1.52
AVERAGE DEBT COVERAGE (21).............. 1.50
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. $ 15,797 16,000 16,000 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23)................ $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
<CAPTION>
YEAR ENDING DECEMBER 31, 2020 2021
- ------------------------ -------- --------
<S> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2)............................. 936,000 936,000
PPA Contract Capacity (kW)(3)......... 908,000 908,000
Summer Availability under the PPA
(%)(4).............................. 98.0% 98.0%
Annual Availability under the PPA
(%)(5).............................. 97.0% 97.0%
Capacity Factor (%)(6)................ 4.0% 4.0%
Unit Starts per Year (7).............. 363 363
Energy Generation (MWh)............... 318,163 318,163
Net Plant Heat Rate (Btu/kWh)(8)...... 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9).............. 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr)....... 62.90 61.10
Unit Start Up Rates ($/Start)....... 19,289 19,867
Energy Charges ($/MWh).............. 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments.................. 57,113 55,479
Unit Startup Charges.................. 6,541 6,737
Energy Payments....................... 118 124
Availability Incentive Adjustment
(11)................................ 150 150
Summer Availability Adjustment (12)... 0 0
Annual Availability Adjustment (13)... 0 0
Efficiency Adjustment (14)............ 0 0
------- -------
Total Operating Revenues.............. 63,922 62,490
OPERATING EXPENSES ($000)(15)
Fuel.................................. 0 0
Operations (16)....................... 3,117 3,193
Capital Expenditures.................. 84 86
Major Maintenance (17)................ 6,777 6,947
Operator Fee, Incentive and Bonus
(18)................................ 570 586
Home Office Expenses (19)............. 2,103 2,180
Insurance............................. 600 615
Property and Other Taxes.............. 1,127 1,183
------- -------
Total Operating Expenses.............. 14,378 14,790
NET OPERATING REVENUES ($000)........... 49,544 47,700
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance................. 188,146 174,109
Annual Principal.................... 14,036 14,724
Annual Interest..................... 17,547 16,198
Letter of Credit Fees................. 965 964
------- -------
Total Debt Service.................... 32,549 31,885
TRANSFERS FROM DSRF..................... 0 0
ANNUAL DEBT SERVICE COVERAGE............ 1.52 1.50
AVERAGE DEBT COVERAGE (21)..............
DEBT SERVICE RESERVE ACCOUNT
LOC (22).............................. 16,000 16,000
WORKING CAPITAL LOC (23)................ 5,000 5,000
</TABLE>
B-70
<PAGE>
EXHIBIT B-8
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
SENSITIVITY G--INCREASED CAPACITY FACTORS
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, 2022 2023 2024 2025 2026 2027 2028 2029 2030(L)
- ------------------------ -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity
(kW)(2).................... 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity
(kW)(3).................... 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the
PPA (%)(4)................. 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the
PPA (%)(5)................. 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97,0%
Capacity Factor (%)(6)....... 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Unit Starts per Year (7)..... 363 363 363 363 363 363 363 363 0
Energy Generation (MWh)...... 318,163 318,163 318,163 318,163 318,163 318,163 318,163 318,163 0
Net Plant Heat Rate
(Btu/kWh)(8)............... 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9)..... 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges
($/kW-yr)................ $ 60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates
($/Start)................ $ 20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh)..... $ 0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments......... $ 55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges......... $ 6,939 7,147 7,362 7,582 7,810 8,044 8,286 8,534 0
Energy Payments.............. $ 130 137 143 150 156 162 169 178 0
Availability Incentive
Adjustment (11)............ $ 150 150 150 150 150 150 150 150 12
Summer Availability
Adjustment (12)............ $ 0 0 0 0 0 0 0 0 0
Annual Availability
Adjustment (13)............ so 0 0 0 0 0 0 0 0
Efficiency Adjustment (14)... $ 0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Revenues..... $ 62,307 62,695 64,596 67,165 68,961 71,035 72,683 73,829 5,461
OPERATING EXPENSES ($000)(15)
Fuel......................... $ 0 0 0 0 0 0 0 0 0
Operations (16).............. $ 3,274 3,356 3,439 3,527 3,614 3,706 3,797 3,892 306
Capital Expenditures......... $ 88 90 93 95 97 100 102 105 9
Major Maintenance (17)....... $ 7,120 7,298 7,481 7,668 7,860 8,056 8,257 8,464 349
Operator Fee, Incentive and
Bonus (18)................. $ 603 620 638 656 674 694 713 734 63
Home Office Expenses (19).... $ 2,261 2,344 2,431 2,522 2,616 2,713 2,815 2,922 253
Insurance.................... $ 630 646 662 678 695 713 731 749 64
Property and Other Taxes..... $ 1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Operating Expenses..... $ 15,585 15,941 16,310 16,691 17,080 17,486 17,899 18,331 1,161
NET OPERATING REVENUES
($000)....................... $ 46,722 46,754 48,286 50,473 51,881 53,550 54,783 55,498 4,299
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance........ $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal........... $ 15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest............ $ 14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees........ $ 964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------- ------- -------
Total Debt Service........... $ 31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF............ $ 0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE... 1.49 1.51 1.61 1.74 1.83 1.87 1.88 2.01 1.92
AVERAGE DEBT COVERAGE (21)..... 1.50
DEBT SERVICE RESERVE ACCOUNT
LOC (22)..................... $ 15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23)....... $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
B-71
<PAGE>
FOOTNOTES TO EXHIBIT B-8
The footnotes to Exhibit B-8 are the same as the footnotes for Exhibit B-1,
except:
6. The annual capacity factors are assumed to be twice those assumed in the
Base Case.
7. The projected number of Unit Starts each Contract Year are assumed to be
twice those assumed in the Base Case.
B-72
<PAGE>
APPENDIX C
SOUTHEAST U.S. POWER MARKET ANALYSIS
NOVEMBER 3, 1999
PREPARED BY:
Resource Data International, Inc.
1320 Pearl St., Suite 300
Boulder, CO 80302
(303) 444-7788
PREPARED FOR:
Tenaska Georgia Partners, L.P.
1044 N. 115th Street
Omaha, NE 68154-4446
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Executive Summary........................................... 1
Summary of Findings....................................... 1
Introduction................................................ 4
Overview Of Study Methodology............................. 4
Report Outline............................................ 4
Methodology Overview........................................ 5
Energy Market Model....................................... 6
Capacity Price Model...................................... 7
Base Case Assumptions....................................... 9
Existing Supply........................................... 9
New Generation............................................ 13
Cost of New Generation Technologies....................... 15
Nuclear Generating Assumptions............................ 16
Demand Assumptions........................................ 17
Industry Restructuring in Georgia......................... 18
Inflation Assumptions..................................... 19
Transmission Capacity and Pricing......................... 19
Coal Price Forecast....................................... 19
Regional Ozone Transport Rule............................. 21
Gas Price Forecast........................................ 22
Electricity Price Escalation Rates Beyond 2020............ 24
Base Case Price Forecast.................................... 26
Comparison to Current Market Prices....................... 27
Energy Price Forecast..................................... 29
Capacity Price Forecast................................... 30
Tenaska Georgia Partners Operations....................... 32
Sensitivity Analysis........................................ 35
Energy Prices............................................. 37
Capacity Prices........................................... 40
Capacity Factors.......................................... 44
Appendix A: Gas Market Issues in the Southeast Region....... 46
Gas Supply................................................ 46
Gas Transportation........................................ 46
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Gas Demand................................................ 47
Appendix B: Nuclear License Expiration Dates in Serc........ 49
Appendix C: Detailed Monthly Capacity Factors--Base Case.... 50
Appendix D: Hourly Profit Analysis.......................... 51
Appendix E: Fuel Switching Analysis......................... 52
Appendix F: High Start-up Cost Scenario..................... 54
Scenario Results.......................................... 54
Appendix G: Low Load Scenario............................... 58
Scenario Results.......................................... 58
Appendix H: Regional Ozone Transport Rule................... 63
</TABLE>
ii
<PAGE>
EXECUTIVE SUMMARY
Resource Data International, Inc. (RDI) has prepared this independent
assessment of the Southeast United States electricity market (covering the
states of Georgia, Florida, the Carolinas, Alabama, Tennessee, Mississippi,
Louisiana, Kentucky, and Virginia) and the economic competitiveness of the
Tenaska Georgia Power Project (Project or Tenaska Georgia Partners Project)
under development by Tenaska Georgia Partners, L.P. The market study provides an
assessment of the long-term market opportunities, including capacity and energy
prices expected to be received by generators in the region for the period 2000
through 2030.
PECO Energy has signed a purchase power agreement (PPA) with Tenaska Georgia
Partners to sell the output from this Project. Although the majority of this
report includes an analysis of power markets in the southeastern United States,
RDI's analysis was performed primarily to develop an economic dispatch profile
for the Project as well as to analyze the attractiveness of the PPA to PECO
Energy.
This report includes a prediction of market clearing prices and dispatch
profiles for the Project under the "Base" scenario and alternative scenarios.
The report also describes the key assumptions and the methodology used in
developing this assessment. Finally, the report addresses the attractiveness of
the project to both Tenaska and PECO Energy.
The base analytical tools utilized for this study were the Inter-Regional
Electric Market Model (IREMM) and an integrated capacity price model. IREMM is a
sophisticated production simulation model that simulates the Eastern
Interconnection bulk power supply system on an hourly basis for each year within
the time horizon of the forecast. The capacity price model is integrated with
IREMM and calculates the additional revenue required for maintenance of adequate
capacity reserves. Using these models, RDI forecasts the energy and capacity
price, and unit dispatch for the Project.
SUMMARY OF FINDINGS
The following represents the conclusions and key findings of RDI's
assessment of this project:
i. The Project represents a low cost, highly competitive and much needed
peaking resource for the growing Southeastern power market. The total
capacity of the project is equal to only one percent of the capacity
required in the Southeastern power market by the year 2020.
ii. The Project has many strong competitive advantages such as:
a. Direct access to additional power markets beyond Georgia via relatively
strong transmission links into the TVA, Virginia/Carolina, and Southwest
Power Pool markets.
b. State of the art generation technology which is ideal for serving peak
electricity loads.
c. Ready access to competitively priced gas supply from a diversified range
of sources through an extensive interstate gas pipeline transmission
system.
iii. As noted above, PECO Energy (PECO) has entered into a long term mutually
acceptably priced Power Purchase Agreement (PPA) with the Project. PECO is
very active in U.S. wholesale power markets nationally and also in the
Southeast U.S.
a. Due to recent price spikes and the curtailment of firm contract
deliveries, control or ownership of a physical asset in the Southeast has
become a source of strategic advantage to marketers such as PECO. Such an
asset allows the marketer to ensure delivery of firm power. This provides
both an advantage in marketing the power (as the purchaser is less likely
to enter into a contract with a seller that does not have control of
physical assets) and in avoiding liquidated damage payments in the event
of a transmission curtailment or other loss of power supplies.
C-1
<PAGE>
b. The optionality embedded in peaking power plants plays an integral role
in the portfolio of power marketers like PECO.
iv. It is expected that PECO will operate the project only during summer peak
hours when electricity prices are highest. It is expected that the project
will achieve monthly summer capacity factors of 7 to 18%, averaging
approximately 4% on an annual basis during the 20 year forecast period.
Based on RDI's assumptions regarding price and electricity demand growth for
the period 2020-2030, RDI expects that the project's utilization will
continue to trend down slightly throughout that period.
v. The technical capability of the Project to start up and shut down quickly
should allow PECO to select operating hours in which revenues and
profitability can be maximized.
vi. The cost of capacity and energy to PECO Energy under the PPA remains below
the market price forecast under both RDI's base and downside cases,
confirming the economic attractiveness of the PPA to PECO.
C-2
<PAGE>
INTRODUCTION
Resource Data International, Inc. (RDI) has prepared this independent
assessment of the Southeast United States electricity market (covering the
states of Georgia, Florida, the Carolinas, Alabama, Tennessee, Mississippi,
Louisiana, Kentucky, and Virginia) and the economic competitiveness of the
Tenaska Georgia Power Project (Project or Tenaska Georgia Partners Project)
under development by Tenaska Georgia Partners, L.P. The market study provides an
assessment of the long-term market opportunities, including capacity and energy
prices expected to be received by generators in the region for the period 2000
through 2030.
PECO Energy has signed a purchase power agreement (PPA) with Tenaska Georgia
Partners to sell the output from this Project. RDI's market analysis was
performed primarily to develop an economic dispatch profile for the Project as
well as to analyze the attractiveness of the power purchase contract to PECO
Energy.
OVERVIEW OF STUDY METHODOLOGY
The base analytical tools utilized for this study were the Inter-Regional
Electric Market Model (IREMM) and an integrated capacity price model. IREMM is a
sophisticated production simulation model that simulates the Eastern
Interconnection bulk power supply system on an hourly basis for each year within
the time horizon of the forecast. The capacity price model is integrated with
IREMM and calculates the additional revenue required for maintenance of adequate
capacity reserves. Using these models, Resource Data International (RDI)
forecasts the economy energy price, unit dispatch, and capacity price for the
southeastern United States (U.S.). A forecast was developed for multiple
scenarios in order to understand market dynamics and project risks.
REPORT OUTLINE
This study is organized into several sections. The previous section
summarizes the study's key findings. The next section describes the methodology
and models used for the study. The fourth section describes the base case
assumptions. The fifth section describes the base case results. The sixth and
final section provides an analysis of the results from alternative scenarios.
Supporting analyses and additional sensitivities are provided in several
Appendices.
METHODOLOGY OVERVIEW
In general, there are three different pricing models that are prominently
used to describe competitive wholesale markets. These models are as follows:
- RESERVE REQUIREMENT MODEL: In this model, a reserve requirement is imposed
on each load serving entity (LSE) in proportion to its load. To meet this
requirement, the load serving entity must enter into contracts with
generators or procure its obligation through a "capacity exchange" that is
operated by a central clearing house, such as an Independent System
Operator (ISO). In such a model, a generator will receive two separate
payment streams. The first stream is an energy price that is determined by
the hourly interaction of supply and demand in the spot market. The second
stream is the capacity price that is determined by the separately run
capacity auction. This stream could be determined on a monthly, seasonal,
or annual basis. Such a market is currently operating in the
Pennsylvania-New Jersey-Maryland Interconnection (PJM), the New York Power
Pool (NYPP), and the New England Power Pool (NEPOOL).
- EXPLICIT CAPACITY ADDER MODEL: This model is similar to the reserve
requirement model in that market rules dictate that capacity will be
priced separately. One difference between these models is that, in an
explicit capacity adder model, retail suppliers do not have an obligation
to secure capacity. Also, the "capacity premium" is calculated on an
hourly basis rather than on a monthly or
C-3
<PAGE>
annual basis. The explicit capacity adder model is currently employed in
the United Kingdom (U.K.) electricity market. In this model, all
generators submit bids to a central clearing exchange, specifying how much
power they are willing to commit at a given price during the next
24 hours. Generators have the potential to earn revenues from two
different payment streams. The first payment stream is received for actual
kilowatt-hour sales into a central power exchange (or spot market). This
price is determined by the bid of the highest cost unit selected to supply
power during each hour. This price is commonly referred to as the system
marginal price. The second payment stream is commonly referred to as the
capacity payment. This additional payment is equal to the value of lost
load multiplied by the loss of load probability. It is paid to all
generators available during the hour. The value of lost load is determined
administratively by the central pool. The loss of load probability is a
function of the forecast demand and the amount of generation available to
meet that demand.
- ENERGY ONLY MODEL: In this model, the hourly price of electricity is
determined purely through the interaction of supply and demand without the
interference of administratively determined installed reserve requirements
or a separate capacity payment. In the other two model structures, the
hourly price in the spot market is always set by the highest cost unit (on
a variable cost basis) dispatched to meet demand (assuming no participant
can exert market power). The key distinction of the energy only model is
that during some peak hours of demand, the price would instead be set by
the marginal cost of an outage to customers. If regulators could estimate
precisely the value of lost load on an hourly basis and customers could
curtail demand, the energy only model market would result in pricing that
is very similar to the explicit capacity adder model. Moreover, if a
regulator precisely predicted the reserve requirement found in the energy
only model, the reserve requirement and energy only models would achieve
similar annual prices for electricity.
In theory, each of these model structures result in similar prices on an
annual basis. Also, a mix of these market structures can exist. For instance, in
an energy only market bilateral transactions will exist between generators and
marketers where capacity and energy may be priced separately.
ENERGY MARKET MODEL
RDI employs an analytical approach that is based on the reserve requirement
model. First, RDI simulates the interaction of the energy market using IREMM.
This model performs many of the functions typically associated with electric
power production simulation programs such as marginal cost dispatching and
maintenance scheduling.
IREMM's methodology relies on the following concepts:
INCREMENTAL PRODUCTION COST The incremental cost of production is the cost
of producing an additional MWh of energy. To minimize costs, an efficient
dispatch center will dispatch its lowest cost generating units first. In the
bulk power market, a profit-maximizing company will produce energy as long as
its incremental cost of production is less than the additional revenue obtained
from the sale of that energy. Thus, if it can sell energy externally for more
than its incremental cost of production, the company will continue to produce
after its own load has been met. On the other hand, if the company can buy the
energy it needs to meet its load for less than the cost of its own generation,
the company will maximize profit by making the purchase.
LIMITS OF MARKET POWER To the extent that the selling company believes it
has market power, it may elect to withhold surplus power from the market until
the purchase price is maximized. In such a situation, the seller would receive a
higher price, but may sell less energy. Thus, the seller faces the risk that
profits may not be maximized. If a seller with perceived market power withholds
energy to wait for a higher price, it will lose potential customers if, in the
meantime, customers successfully find lower prices from alternative suppliers.
C-4
<PAGE>
SUPPLY AND DEMAND Initially, units are dispatched to meet each individual
company's internal load. Once these loads are served with their available
resources, the quantities of surplus energy available for sale and the
quantities of displaceable energy can be calculated at various price levels.
From these prices and quantities, IREMM develops supply and demand curves for
each company. Energy supply and demand are balanced on an hourly basis.
MARKET CLEARING PRICES The basic premise of IREMM is that market forces
exist and determine prevailing bulk power prices. Together with the cost of
transmitting energy between any two companies, the interactions of the supply
and demand functions determine the market clearing prices. These market prices
represent a spatial equilibrium where supply and demand are satisfied
simultaneously. Market clearing prices emerge as each system attempts to
maximize its "gains," defined as the sum of profits on sales and savings on
purchases.
Important outputs from the IREMM model that are used in this analysis
include:
- Hourly energy market prices for the Southern Company region, where Tenaska
Georgia Partner's proposed project will be located,
- Unit specific capacity factors for Tenaska Georgia Partner's project,
- Calculations of reserve margins for the Southeast Electric Reliability
Council (SERC), and
- Calculations of the amount of new capacity added to the grid in each year
in SERC.
CAPACITY PRICE MODEL
During the next step of the modeling process, RDI incorporates the results
from IREMM into a capacity price-forecasting model. The resulting capacity price
is calculated as: the amount of additional revenue required to keep enough
generation available to meet demand plus the reserve requirement. Each power
plant in a region is ranked according to the plant's operating profit--taking
into account only spot market revenues and variable operating costs. Consider a
hypothetical low cost coal plant. Such a plant is likely to achieve a
contribution margin as high as $50 per kW-yr (energy market revenues less
variable fuel and O&M). Accordingly, this plant covers its cash operating costs
from energy market revenues alone. Assuming perfect competitive conditions, its
bid into the capacity market will be close to zero.
Next, consider a combustion turbine. This plant will achieve only a small
contribution margin in the energy market since it only runs economically a few
hours of the year because of its higher operating cost. When it does run, it is
normally the price setting unit, receiving only its short-run marginal costs.
Therefore, it must recover the rest of its cash costs from the capacity market
if it is going to continue to be financially viable. It is this break-even
figure that determines the bid price of each generator in the capacity market.
The capacity price model makes two additional calculations. First, the model
calculates the break-even costs (including annualized investment costs and
return on equity) for new generating technologies. If the break even price for a
new plant is lower than the market clearing price of capacity, then the model
adds new capacity to the grid and the energy market model is run again. The type
of capacity added in each year is determined by the overall profitability of
competing generation technologies. Second, the model determines which plants
cannot recover their cash costs from the market. Typically, these plants are
retired.
Any new retirements or capacity additions resulting from the capacity price
model are put back into the IREMM model, and the model is re-run. This process
is continued until a converged solution is reached.
C-5
<PAGE>
The IREMM and capacity price model are used in this study to analyze the
period from 2000 to 2020. Beyond 2020, escalation rates were developed to
forecast electricity prices through 2030. The assumptions driving the escalation
rates are described below in the Assumptions section of the report.
To summarize, the overall modeling approach accounts for the factors that
affect all markets: supply, demand, transport capability, and ownership
concentration. Ultimately, the model ensures that prices reach a level that
enables all generators within the required reserve margin to recover their cash
operating costs(1). New capacity is built only if and when it is profitable to
do so. Selecting the mix of capacity additions that result in the lowest overall
prices while still maintaining generator profitability minimizes overall costs.
- ------------------------
(1) After a power plant is built, cash operating costs include fuel, operation
and maintenance expenses, and capital replacement costs that are required to
keep the plant operating and available. Before a power plant is built, cash
costs include these costs as well as investment costs and a return on
capital.
C-6
<PAGE>
BASE CASE ASSUMPTIONS
This section provides a detailed accounting of the factors driving the base
case forecast.
For this analysis, RDI modeled the entire Eastern Interconnection. This
report, however, focuses primarily on the SERC which includes states located in
the southeast United States.
EXISTING SUPPLY
The supply curves constructed by RDI for this analysis were built on a unit
by unit basis. The unit data used are based on the annual EIA-411 reports
supplied to the Department of Energy via the regional councils of the North
American Electric Reliability Council (NERC), and from RDI's proprietary
databases. RDI also verified the EIA-411 report by utilizing integrated resource
plans and RDI's internal databases. Key assumptions relating to generating units
were as follows:
- UNIT RATINGS The EIA-411 report was used to determine the summer and
winter capacity ratings of each unit on the grid.
- PRIMARY AND ALTERNATE FUEL TYPES For non-coal burning plants, RDI
determined each type of fuel that can be used at a generating unit from
EIA-411 reports. Each month the relative price of alternate fuels is
compared to the primary fuel and the least expensive fuel is selected.
Coal fired plants are treated separately and are discussed later in the
report.
- AVAILABILITY The availability statistics for all non-nuclear units were
obtained from aggregate NERC/ GADS statistics by prime mover type. The
equivalent availability factor (EAF)(2) and the equivalent forced outage
rate(3) (EFOR) were used to calculate the scheduled outage factor (SOF) to
determine the maintenance period for each unit. Average 1996 availability
factors and forced outage rates are shown in Table 1. Availability
statistics for nuclear units are based on an engineering and statistical
analysis performed by RDI.
TABLE 1: 1998 AVERAGE AVAILABILITY STATISTICS
<TABLE>
<CAPTION>
EAF EFOR
-------- --------
<S> <C> <C>
STEAM TURBINES.............................................. 82% 7.0%
GAS TURBINES................................................ 83% 4.9%
</TABLE>
- HEAT RATES Heat rate information was obtained from RDI's POWERdat
information system, based on a combination of EIA-411 and EIA-860
information.
- NON-FUEL VARIABLE O&M: Variable O&M costs affect the dispatch price of
individual units. Variable O&M calculations vary across utilities. It is
RDI's opinion that this variation occurs primarily because utilities have
never had profit incentives that motivate them to fully understand their
cost structure. A few utilities do not include a variable O&M adder in
dispatch decisions. One RDI client assumes that 20% of its total non-fuel
O&M is variable. Another client uses a variable O&M of $1 per MWh at one
coal-fired power plant and $2 per MWh at another coal fired power plant
because the second plant must pay the local water utility for its water
supplies. This same client dispatches its gas turbine assuming a variable
O&M of $3 per MWh. For this analysis, RDI assumes a variable O&M of $1.2
per MWh for all steam turbines(4) and $10 per MWh for all gas turbines.
This assumption is discussed in greater detail in the new technologies
section of the report. The higher O&M cost for a gas turbine is intended
to reflect the additional start-up costs such units
- ------------------------
(2) EAF is the percentage of hours in the year that a unit is available to
operate.
(3) EFOR is the percentage of hours in the year in which a plant will incur an
unplanned outage.
(4) This estimate is based upon analysis performed by an engineering
consulting firm in a previous RDI project.
C-7
<PAGE>
typically incur. Units with scrubbers are assigned an additional $1 per
MWh charge based on information reported in the EIA-767 form by utilities.
- FIXED O&M: Fixed O&M calculations for individual plants were based on data
filed with the Energy Information Administration. For each plant and prime
mover type, the fixed O&M was calculated as follows:
Fixed O&M = Total Non-Fuel O&M less (Assumed Variable O&M
($/MWh) X Generation (MWh))
If power plant rents were greater than 20% of total non-fuel O&M, then
power plant rents were subtracted from total non-fuel O&M for purposes of
calculating fixed O&M. In many instances, sale-leaseback expenses are
reported as an operating cost associated with the plant. Because these
expenses would have to be paid whether or not the plant is shutdown, it is
not appropriate to consider these expenses when analyzing a plant's cash
costs. Also, since there can be significant year to year swings in O&M
expenses due to major overhauls or other major non-recurring costs, RDI
averaged fixed O&M expenses from 1995 through 1997.
The above approach was used to estimate fixed O&M expenses for all utility
owned generation. However, actual power plant O&M cost information is not
publicly available for non-utility owned plants. For non-utility coal
units, it is assumed that fixed O&M expenses equal $15 per kW. Based on
previous work for independent power companies, RDI believes this is a
reasonable assumption. For NUG units that have contracts guaranteeing a
fixed price for their output, it was not necessary to make any assumptions
regarding fixed O&M.
- REPLACEMENT CAPITAL COSTS: Since generating assets are assumed to maintain
operations over the forecast horizon (unless it is uneconomic to do so),
it is also assumed that replacement capital would have to be invested to
keep the plant in service. It is also necessary to include replacement
capital costs in the model because many utilities account for operating
expenses as capital expenses to increase their ratebase. The cost of
replacement capital in this analysis is based on the historic information
and trends shown in Figure 1. It is largely consistent with replacement
cost information presented in numerous utility Integrated Resource Plans
as well.
FIGURE 1: UTILITY ANNUAL CAPITAL ADDITIONS ($/KW-YR)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COST OF CAPITAL ADDITIONS
<S> <C> <C> <C> <C>
STEAM NUCLEAR HYDRO OTHER
1988 6.5 10.75 3
1989 7 36.5 8.75 2
1990 7.5 35 9 3
1991 9 28.5 9 7
1992 9.5 25 10 4.5
1993 10 25.5 9.5 4.5
1994 15 22.5 9.5 3.5
1995 10 20 8 8
</TABLE>
C-8
<PAGE>
OVERVIEW OF SOUTHEAST Supply The southeast U.S. is one of the fastest
growing electricity markets in the country. Electric power supply in the region
is dominated by five utilities (see Figure 2). Together these five utilities
account for 77% of the 150,000 MW in this market. Within the Southeast ownership
is even more concentrated. In Alabama and Georgia, two companies control 75% of
the generating assets.
FIGURE 2: SOUTHEAST MARKET SHARE (% OF TOTAL CAPACITY)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SOUC 20%
<S> <C>
TVA 20%
ENTR 20%
DUPC 12%
DOMRES 10%
CPLC 7%
OTHER 16%
</TABLE>
In 1997, 55.8% of the electricity in the region was generated by coal
plants, 32.6% by nuclear plants, and 4.9% by hydro plants. The remaining 6.8%
was generated with gas or oil. Less than 4% of the electricity in the region is
supplied by non-utility generators. Most of the non-utility capacity is
concentrated in the Carolinas and Virginia and supplies power under long-term
contracts that do not expire until after 2005.
Currently the southeast U.S. is dominated by baseload capacity with nuclear
and coal supplying the majority of the electricity in the region. Unlike many
other regions of the country, the performance of nuclear plants has been well
above industry norms, typically achieving capacity factors higher than 85%. RDI
considers it unlikely that any nuclear plants in this region will be retired
before their licenses expire. It is important to note that much of the excess
coal-fired capacity in the region has also been diminished by load growth. Over
the past five years, coal-fired capacity factors have increased from 60% to
almost 70%. At this capacity factor level, most excess coal-fired capacity
exists only during the off-peak hours.
C-9
<PAGE>
FIGURE 3: SERC CAPACITY FACTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPACITY FACTORS PRIMARY FUEL
<S> <C> <C> <C> <C>
COAL OIL-L/GAS URAN WATER
1994 59.09 20.14 82.83 24.52
1995 62.29 22.73 87.51 20.01
1996 63.41 17.34 87.41 21.88
1997 65.88 16.03 87.33 20.92
1998 67.76 18.50 92.23 23.01
</TABLE>
NEW GENERATION
Except for those announced merchant plant or utility projects that RDI
considers likely to be seen to completion, future capacity additions are added
only as they are economically justified. RDI considers a project likely to be
seen to completion if it has signed a purchase power agreement for its output,
if construction has already begun, or if it has secured financing. There are
also a few projects that RDI considers likely due to knowledge obtained from
sources close to the development process.
There is currently a substantial amount of building activity among competing
suppliers in the Southeast. Table 2 shows RDI's base case forecast of merchant
plant additions.
Enron Capital & Trade Resources (Enron) is developing three projects in
Mississippi. In New Albany (Union County) Enron is building a 390 MW combustion
turbine plant consisting of six 65 MW turbines. The New Albany plant will be
ready for the 1999 summer peaking season. In Caledonia (Lowndes County), just
north of Columbus, Enron will bring a 475 MW combustion turbine plant online in
June 1999 as well(5). In Fulton (Itawamba County) a 260 MW combustion turbine
unit is schedule to come online in the summer of 2000. In Tennessee Enron is
pursuing a plant near Brownsville (Haywood County). This 475 MW unit will be
ready in June of 2000. These projects will most likely be used to meet Enron's
supply obligations with the Tennessee Valley Authority.
Alabama Power is constructing a cogeneration facility in Theodore (Mobile
County), Alabama. The plant will supply 207 MW of electricity to meet Alabama's
reserve margin requirements and steam to Degussa Corp. and Phenolchemie. The
Theodore cogeneration plant will begin operation in June of 2001. In Rockingham
County, North Carolina, Dynegy Power is developing an 800 MW combustion turbine
plant which has a start-up date of June 2000. The Southeastern Electric
Development Company intends to construct a 100 MW combustion turbine in Lee
County, Alabama, which is expected to supply power by January 2001.
- ------------------------
(5) Enron's projects that were scheduled to begin operation in the summer of
1999 have actually begun operation. These facilities did not begin
operation until after the study had commenced.
C-10
<PAGE>
Sonat Energy Services and Calpine Corp. are developing a combustion turbine
project in Cataula (Harris County) north of Columbus, Georgia. This 680 MW unit
is expected to begin operation in June of 2000. In Thomaston (Upson County),
Georgia, Sonat Energy Services broke ground on March 25, 1999 for the
construction of a 680 MW combustion turbine plant consisting of four turbines.
The Thomaston plant will be operational in June of 2000, when the sales contract
with Georgia Power goes into effect.
Outside of SERC, in the SPP region, we have included two new plants. The
first is a combined cycle power plant developed by LS Power in Batesville
(Panola County), Mississippi. This 837 MW plant will start up in January of
2000. Also in Mississippi is the "Red Hills" steam plant project, which
Tractabel Power is developing near Chester (Choctaw county) and which is
expected to be producing electricity in December 2000. This coal-fired plant has
a purchase power agreement with the Tennessee Valley Authority
Two power projects pursued by Carolina Power and Light (CP&L) in North
Carolina, one near Cleveland (Rowan county) and another in Hamlet (Richmond
county) were not considered in the base case since the go-or-no-go decision for
these plants will not be made until the fall of 1999 according to a spokesperson
for CP&L.
TABLE 2: ASSUMED MERCHANT PLANT ADDITIONS IN SERC
<TABLE>
<CAPTION>
SIZE AND ON-LINE
NAME DEVELOPER TECHNOLOGY DATE
---- ----------------------------------- ------------- --------
<S> <C> <C> <C>
New Albany, MS.................... Enron Capital & Trade Resources 390 MW CT Jun-99
Caledonia, MS..................... Enron Capital & Trade Resources 475 MW CT Jun-99
Fulton, MS........................ Enron Capital & Trade Resouces 260 MW CT Jun-00
Brownsville, TN................... Enron Capital & Trade Resources 475 MW CT Jun-00
Theodore, AL...................... Alabama Power 207 MW CG Jun-01
Rockingham, NC.................... Dynegy Power 800 MW CT Jun-01
Lee County, AL.................... Southeast Elec Dev 100 MW CT Jun-01
Cataula, GA....................... Sonat Energy Services/Calpine Corp. 680 MW CT Jun-01
Thomaston, GA..................... Sonat Energy Services 680 MW CT Jun-00
----------------------------------- ----------- ------
Total Capacity.................... 4,067 MW
</TABLE>
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<PAGE>
The projects listed in Table 2 represent the projects that at the time this
report commenced were deemed most likely to be brought on-line by RDI(6). RDI's
base case forecast presented in this report projects that 80,700 MW of new
capacity will be needed in the region over the forecast horizon. To the extent
that any one of the projects listed in Table 2 is not brought on-line as
anticipated, the need for capacity in the region will likely be filled by
another project.
COST OF NEW GENERATION TECHNOLOGIES
The cost of new generation technologies has been determined through RDI's
work with other developers and a review of publicly available documents. These
assumptions are shown in Table 3. In an effort to decrease heat rates and
increase efficiency, combustion turbine (CT) technology has made substantial
technological progress in the last five years. Improvements in performance have
come at the price of higher O&M costs due to technical problems with the new
technology. The industry is currently in a consolidation phase, in which these
technologies will likely mature. Since turbine technology is already highly
sophisticated, RDI does not expect major improvements in heat rates or
efficiencies in the future. Our base case assumption is that the heat rates of
turbines will improve by 5% by 2010. The most substantial technological
improvements in the economics of CT's will most likely result from lower fixed
and variable O&M costs due to better materials and design. The reduction of
start-up costs is one possible area for improvements. However, existing units
will also likely benefit from the same improvements when these units are
upgraded with new technology during scheduled overhauls of the turbines.
The variable O&M for combustion turbines is based upon a combination of
information supplied by Tenaska Georgia Partners and RDI analysis. Tenaska
Georgia Partner's indicated that their start-up cost will be approximately
$10,000 per start-up. RDI's analysis (described later in the report) indicates
that the plant will operate at full output levels for an average of
approximately 6.5 hours during each start-up. Spreading the start-up costs
across the average output during each start-up results in an average cost of
approximately $10 per MWh.
TABLE 3: COST OF NEW TECHNOLOGIES
<TABLE>
<CAPTION>
COMBINED CYCLE COMBUSTION TURBINE COAL PLANT
--------------- ------------------ ----------
<S> <C> <C> <C>
Construction Period......................... 2 Years 1 Years 3 Years
Initial capital costs ($/KW)................ 525 325 900
Variable O&M ($/MWH)........................ 1.5 10* 1.5
Fixed O&M ($/KW-YR)......................... 15 5 20
Availability factor......................... 92% 95% 88%
Heat rate................................... 6,900 10,900 9,000
</TABLE>
- ------------------------
* Variable O&M for combustion turbines consists primarily of start-up costs.
Other financial assumptions are as follows:
Debt Financing: 60%
Cost of Debt: 8%
Cost of Equity: 15%
Marginal Income Tax Rate: 37%
Depreciation Schedule: MACRS
NUCLEAR GENERATING ASSUMPTIONS
Beginning in the year 2010, operating licenses for nuclear plants in the
U.S. will expire. The Nuclear Regulatory Commission (NRC) will have to consider
whether or not to extend any of the 40-year operating
- ------------------------
(6) Since commencement of the report, Sonat has abandoned the development of
its Cataula project.
C-12
<PAGE>
licenses of the reactors. Baltimore Gas and Electric (BG&E) is the first nuclear
operator to pursue a license extension for its Calvert Cliffs nuclear station
and the re-licensing process is being carefully watched by other nuclear
operators. It is estimated that for as little as $10-50 per kW a nuclear plant
can be upgraded to operate 20 years beyond its current 40-year licensing period.
The construction of other baseload capacity could not even be conceived at this
price. Because of these economics and possible political decisions related to
the Kyoto Protocol(7), there will be substantial pressure on the NRC to
re-license nuclear plants in the coming years.
Figure 4 shows the decline of total nuclear generating capacity in SERC, if
all nuclear plants in the area were to retire at the end of their license
periods. If all plants closed at the end of their license periods, from 2010
through 2030 an average of 1,200 MW per year of base load capacity would have to
be replaced by other generating facilities. However, three of the nuclear
operators in SERC are already considering applying for an extension of their
operating licenses. Southern Nuclear Operating Corp. is aggressively pursuing
the renewal of its operating licenses for Hatch units 1 and 2. Duke Energy is
considering extending the life of its three Oconee units, whose operating
licenses will expire in 2013 and 2014. And finally, Virginia Power is
considering the same step for its two reactors in Surry, where operating
licenses expire in 2012 and 2013, as well for its North Anna stations, where the
licenses are now scheduled to run out in 2018 and 2020. If these operators are
successful in their efforts, then 7,550 MW or 30% of the region's nuclear
(baseload) generating capacity would remain in service over the forecast
horizon. A list of all regional nuclear units and their license expirations is
included in Appendix B.
For the base case scenario, RDI assumes that none of the 26 GW of nuclear
capacity in SERC will retire during the forecast horizon (through 2020). Because
of the enormous financial upside of keeping a nuclear plant running, RDI expects
that all nuclear operators in SERC will follow the example of Southern, Duke,
and Virginia Power and will file for an extension of their operating licenses.
RDI expects that the NRC will grant operating life extensions for all plants
except for nuclear units which have had serious problems. None of these
"problem" plants are located in SERC.
- ------------------------
(7) The Kyoto Protocol, if implemented in its current form, would require the
U.S. to significantly reduce its carbon dioxide emissions. Nuclear
generation technologies are one of the few electric generation technologies
that emit no carbon dioxide.
C-13
<PAGE>
FIGURE 4: TOTAL NUCLEAR GENERATING CAPACITY IN SERC IF UNITS RETIRE WHEN
THEIR LICENSES EXPIRE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
2008 25.78
<S> <C>
2009 25.78
2010 25.10
2011 25.10
2012 24.29
2013 21.80
2014 18.22
2015 18.22
2016 16.29
2017 15.46
2018 13.76
2019 13.76
2020 11.74
2021 8.64
2022 7.70
2023 6.57
2024 5.44
2025 5.44
2026 3.45
2027 2.29
2028 2.29
2029 1.12
2030 1.12
2031 1.12
2032 1.12
2033 1.12
2034 1.12
2035 -
2036 -
</TABLE>
DEMAND ASSUMPTIONS
The load growth scenario for this study was developed from RDI's own demand
forecast and the FERC 714. The FERC 714 report contains hourly load information.
This information is utilized to simulate hourly chronological demand in IREMM.
Both population and economic growth set the stage for strong electric sales
growth in recent history. In the first half of the 1990s, actual electricity
sales increased at an average rate of 2.9% per year. Weather-normalized sales
growth is estimated at 3.25% annually.
RDI believes that a combination of both strong population and economic
growth will maintain a weather-normalized electricity growth rate of up to 2.25%
annually through 2005 (see Figure 5). After 2005, this growth rate slows
significantly, approaching 1.5% by 2009. Overall, electricity demand in the
region is expected to grow faster than the national average.
A small amount of the demand in each region represents interruptible demand.
RDI includes this demand in its forecast of peak demand. To model this demand,
RDI includes the interruptible demand as a peaking resource. That is, we
represent it as actual capacity with a very high marginal cost so that this
resource would be dispatched during the highest peak demand conditions.
C-14
<PAGE>
FIGURE 5: AVERAGE ANNUAL DEMAND GROWTH
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TIME PERIOD AVERAGE ANNUAL GROWTH RATE
<S> <C>
1999-2005 2.3%
2005-2010 1.5%
2010-2015 2.0%
2015-2020 2.0%
</TABLE>
INDUSTRY RESTRUCTURING IN GEORGIA
Georgia is moving toward deregulation at a more conservative pace than other
states. Georgia is a member of the twenty-three-state coalition called the "Low
Cost Electricity States". In December of 1998, these states presented Congress
with an initiative requesting the ability to determine whether electricity
deregulation was appropriate on a state-by-state basis without a federal
mandate.
Pending any federal restructuring mandate, the Georgia Legislature passed an
initiative to study the impacts of competition in January 1998. The Georgia
Public Service Commission staff is conducting the study. Nevertheless, all
indications are that Georgia is still several years from independently
considering legislation that would open their electricity markets to direct
access.
INFLATION ASSUMPTIONS
It is anticipated that reduced government deficits and continued and
sustained low interest rates will be the primary precursors to continued low
inflation over the forecast horizon. RDI assumes that inflation will average
2.5% per year over the forecast horizon.
TRANSMISSION CAPACITY AND PRICING
The transmission system of Georgia has relatively strong transmission links
into the TVA, Virginia/ Carolina, and the Southwest Power Pool markets. This
provides the project with access to major electricity markets beyond Georgia.
Only one major transmission constraint affects the ability to market power from
a project in Georgia. This transmission constraint is the interconnection
between Georgia and Florida (3,600 MW of transfer capability).
Most other interconnections are very strong and do not frequently become
constrained. In fact, RDI analysis of historic daily electricity prices reveals
that the Entergy and Cinergy hubs are the two most closely correlated hubs in
the country. The correlation coefficient for these two hubs during the past year
was 94%.
We also assume that transmission tariffs will be set at $2.50 per MWh for
non-firm transactions based on analysis of Open Access Same Time Information
System (OASIS) data.
C-15
<PAGE>
COAL PRICE FORECAST
Coal and gas prices, in conjunction with capacity supply and demand
balances, are the driving factors that determine market clearing prices in
electricity markets. For this analysis, RDI developed plant specific coal price
forecasts. These forecasts reflect RDI's analysis of coal supply and demand,
Clean Air Act Compliance strategies, contract expiration dates, and the impact
of railroad mergers. Overall, RDI believes that the following factors will push
average coal prices lower (in 1999 dollars):
- Average coal mine productivity in the West will increase as longwall
mining technology is improved in Colorado and Utah, and as surface mining
operations in Wyoming install larger scale haulage, more efficient
overburden coal stripping equipment, and improved mine planning and
maintenance efficiency.
- Numerous coal contracts will expire or "rollover" during the next fifteen
years. As these contracts are replaced or renegotiated, coal consumers
will likely receive price reductions resulting from productivity
improvements and general oversupply conditions. New contracts being
entered into are of substantially shorter duration, almost always less
than five years. The elimination of long-term contracts will result in a
more volatile, commodity-like pricing environment where the primary factor
determining sales success is price.
- Premium quality, eastern low-sulfur coal will see supply constraints in
the forecast period due to reserve depletion and additional mining
regulations. However, declining demand for this product due to declining
export coal markets, and the continued encroachment of lower cost western
coals will prevent run-ups in the price of eastern coal.
- Restructuring of electricity markets will put increasing pressure on coal
suppliers to reduce contract prices and offer innovative pricing schemes.
Of all of the regions of the U.S., RDI expects that SERC coal-fired power
plants will experience the greatest nominal price growth in the country
(although prices will still decline in constant dollars). One factor
contributing to this price growth is the higher cost of low sulfur coals
required to meet Phase 2 emission standards. A second factor relates to the fact
that utilities in the Southeast must pay much higher coal transportation costs
than utilities in other regions of the country. Since transportation costs are
expected to escalate more rapidly than coal mining costs, plants with a large
transportation component in their delivered fuel costs will experience higher
price growth. Figure 6 shows RDI's average delivered coal price for select
markets that affect this analysis.
C-16
<PAGE>
FIGURE 6: FORECAST DELIVERED COAL PRICES (CONSTANT 1999 $/MMBTU)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FORECAST DELIVERED COAL PRICES (1999 $/MMBTU)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
AEP 1.16 1.16 1.16 1.16 1.16 1.12 1.08 1.08 1.06 1.05 1.04 1.03
APS 1.04 1.08 1.01 1.01 0.99 0.97 0.96 0.95 0.93 0.92 0.91 0.91
CAPCO 1.21 1.20 1.18 1.16 1.17 1.17 1.16 1.15 1.14 1.13 1.12 1.12
ECARSR 1.07 1.07 1.05 1.05 1.04 1.03 1.02 1.00 0.99 0.97 0.97 0.96
STHRN 1.18 1.16 1.15 1.14 1.13 1.12 1.11 1.11 1.10 1.09 1.09 1.08
TVA 0.98 0.97 0.96 0.95 0.95 0.94 0.93 0.92 0.91 0.90 0.90 0.89
VACAR 0.98 0.97 0.96 0.95 0.95 0.94 0.93 0.92 0.91 0.90 0.90 0.89
</TABLE>
SULFUR ALLOWANCE PRICES Another factor affecting coal plant variable costs
is the cost of sulfur allowances. In general, these costs do not have a
substantial impact on electricity prices. However, they do play a role in
determining individual plant dispatch. They also influence off-peak prices.
RDI's base case forecast is shown in Figure 7. At $100 per ton, the sulfur
allowance causes an increase of approximately $1 per MWh in dispatch prices,
depending upon the sulfur quality of the coal consumed at the plant. Over the
forecast horizon, we expect allowance prices to continue to increase in value.
This increase is driven primarily by Phase II compliance strategies, increased
coal generation due to general load growth, and increased coal generation caused
by the retirement of nuclear plants in some regions of the country.
After 2009 RDI projects a sharp increase in allowance prices. This increase
results from implementation of Phase III of the Clean Air Act Amendments. Phase
III of the Clean Air Act calls for substantial reductions of sulfur emissions,
driving up the price of an allowance.
C-17
<PAGE>
FIGURE 7: SULFUR ALLOWANCE FORECAST (1999 $)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SO2 ALLOWANCE PRICES IN 1999 DOLLARS
<S> <C>
NOMINAL 1999$
1999 193
2000 251
2001 226
2002 238
2003 245
2004 232
2005 234
2006 235
2007 248
2008 250
2009 252
2010 280
2011 283
2012 288
2013 288
2014 296
2015 296
</TABLE>
REGIONAL OZONE TRANSPORT RULE
The Environmental Protection Agency (EPA) is currently pursuing the
implementation of new environmental regulations that seek to reduce the
formation of ozone during the summer months. EPA originally proposed that these
rules would go into effect in May of 2003. However, the United States Court of
Appeals for the District of Columbia Circuit recently remanded the rules to
EPA(8). EPA has appealed this court decision. If EPA does not win its appeal,
there is a possibility that the implementation of these new regulations could be
delayed and that the rules themselves could also change. In this analysis, RDI
has assumed that these new rules will go into effect in May of 2003 as
originally proposed. With May 1, 2003 as the start date for compliance
regardless of court rulings related to specific rules, there is little to no
time for affected sources to await the outcome of pending litigation--orders for
emission control equipment must be placed soon. Many of RDI's own clients are
currently pursuing implementation plans assuming that they must comply by 2003.
A more detailed history and background on the regional ozone transport rules is
provided in Appendix H.
RDI assumed in this analysis that companies will install NO(x) control
equipment to reduce their emissions to levels that are consistent with the
predetermined state budgets described in Appendix H. In making these
assumptions, RDI ran an optimization model for each state that determines the
least cost control plan given all of the NO(x) reduction opportunities in the
state. Typically, these compliance options result in coal plants incurring
additional costs of $20 to $80 per kW in 2002 or 2003. Furthermore, the variable
operating costs of all plants that install additional control equipment were
escalated during the May to September time frame in each year after 2002 to
reflect the additional costs of operating the NO(x) reduction equipment.
Depending on the level of emissions reductions required at a plant, these costs
range from $1 to $2.50 per MWh.
- ------------------------
(8) American Trucking Association, Inc. et al, Petitioners vs. the United
States Environmental Protection Agency, Respondent, et. al., Intervenors,
United States Court of Appeals for the District of Columbia Circuit (No.
97-1440).
C-18
<PAGE>
It is important to note that RDI did not model the implications of a NO(x)
allowance trading scheme. If an allowance trading regime were implemented, it
would be advantageous to Tenaska Georgia Partner's project. Such a scheme would
tend to increase the marginal cost of coal-fired generation by $2 to $5 per MWh,
depending upon NO(x) allowance prices and the NO(x) emission rate of the coal
fired plant. Because it emits less NO(x) per megawatt hour of output, a new
combustion turbine would not face as steep an increase in marginal costs.
GAS PRICE FORECAST
In this section we present the key findings of RDI's gas price forecast for
the Southeast. A detailed discussion of the underlying assumptions can be found
in Appendix A.
- Table 4 shows RDI's base case gas price forecast. In general, Henry Hub
prices are expected to increase from $2.06 per mmBtu in 2000 to $2.18 per
mmBtu in 2004 in 1999 dollars. After 2004, prices stay relatively constant
until the 2007 to 2010 period when upward pressure on gas acquisition
costs and substantial new gas demand from combined-cycle power plants
throughout North America begin to force prices up at a rate of 2 to 3% per
year. The basis differential between the Georgia region and Henry Hub is
expected to increase from $0.19 per mmBtu in 2000 to $0.26 per mmBtu in
2010 as excess pipeline capacity becomes more fully utilized.
- Gas supply prices in the region are tied to the fortunes of producers in
the Gulf of Mexico. Recent forecasts show a wide range of variation in
expected supply from the gulf. RDI forecasts Gulf offshore supplies to
reach 7 trillion cubic feet (Tcf) by 2010, from current levels of
approximately 5 Tcf.
- Deregulation of the gas market has created a great deal of short-term
price volatility, but the 10 year trend at Henry Hub has remained within
the $1.50 to $2.50 per mmBtu price range. RDI does not expect the level of
volatility to diminish as short-term imbalances between gas supply and
demand will continue to occur. It is RDI's expectation that the long-term
supply price trend will not surpass $2.50 at Henry Hub during the forecast
horizon. Forecast gas prices are escalated at the rate of inflation after
2010.
- The price sensitivity of the electric generation and industrial sectors is
one factor that keeps a ceiling on the price of gas. As long as
alternative fuel options are available to these customers at a reasonable
cost fuel switching will put downward pressure on gas prices.
- This forecast reflects the fact that large gas transmission additions from
Canada will alter the dynamics of the U.S. market. The Alliance expansion
in late 2000 is expected to unlock low cost supplies from Alberta. This
will drive down delivered gas prices in the Midwest and push Gulf Coast
supplies back, decreasing basis differentials between Illinois and the
Gulf. The expansion of Maritimes & Northeast into the New England area
could put further downward pressure on gas prices. This phenomenon is
responsible for the Henry Hub forecast price of $2.06 per mmBtu in 2000.
- Regional pipeline expansions will also play a role in market pricing.
Additions from the Midwest to the Northeast are expected to cause slightly
lower utilization on Transcontinental Pipeline (Transco) flows into the
Northeast. Still, growing gas demand in the Southeast will keep pipe
utilization high in the winter months. RDI forecasts that current capacity
on Transco will be insufficient to meet seasonal load by 2006 at which
time additional expansion from Alabama to Georgia will be necessary.
However, Transco has already taken several steps to alleviate any
potential pipeline capacity shortages. First, Transco has pursued
development of a project referred to as Southcoast. This pipeline
expansion project, scheduled to be completed in 2001, would increase
pipeline capacity by 600 MMcfd in the Alabama and Georgia region. This
capacity expansion alone would create enough new pipeline capacity to
satisfy demand through the next decade. Another project,
C-19
<PAGE>
referred to as Cumberland, would increase Transco's pipeline capacity by
another 200 MMcfd in Northern Georgia.
TABLE 4: NATURAL GAS PRICE FORECASTS, HENRY HUB AND SOUTHERN REGIONS
(1999 $)
<TABLE>
<CAPTION>
HENRY HENRY TO HENRY TO HENRY TO
YEAR HUB STHRN TVA VACAR STHRN TVA VACAR
- ---- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000.................................. $2.06 $2.25 $2.32 $2.39 $0.19 $0.26 $0.33
2001.................................. $2.15 $2.33 $2.39 $2.45 $0.18 $0.24 $0.30
2002.................................. $2.12 $2.31 $2.37 $2.43 $0.19 $0.25 $0.31
2003.................................. $2.16 $2.37 $2.44 $2.50 $0.21 $0.27 $0.34
2004.................................. $2.18 $2.41 $2.47 $2.52 $0.23 $0.29 $0.35
2005.................................. $2.19 $2.41 $2.48 $2.55 $0.22 $0.29 $0.36
2006.................................. $2.20 $2.44 $2.51 $2.57 $0.24 $0.31 $0.38
2007.................................. $2.26 $2.51 $2.58 $2.65 $0.24 $0.32 $0.39
2008.................................. $2.32 $2.58 $2.65 $2.72 $0.26 $0.33 $0.40
2009.................................. $2.35 $2.67 $2.71 $2.74 $0.33 $0.36 $0.40
2010.................................. $2.41 $2.66 $2.75 $2.83 $0.26 $0.34 $0.42
</TABLE>
Note: Except for the Henry Hub price forecast, prices reflect prices for gas
delivered to the burner-tip of the power plant. Prices after 2010 are escalated
at the rate of inflation.
ELECTRICITY PRICE ESCALATION RATES BEYOND 2020
After 2020, RDI applied escalation rates to projected prices through 2030.
It is RDI's opinion that the escalation rate on a long-term forecast should be
based on an analysis of the factors that drive the long run marginal cost. In
the case of electricity markets, the long run marginal cost is driven by fuel
costs, the conversion efficiency of a new plant, the capital cost of
constructing a new combined cycle facility, and the operating and maintenance
expense of a new plant.
FUEL COSTS In our analysis we have made the assumption that beyond 2010 gas
prices will escalate at the rate of inflation. We believe that this assumption
should also hold beyond the 2020 time frame. The fuel cost of a new combined
cycle facility is also influenced by the conversion efficiency of a plant,
typically referred to as the heat rate. Over the past decade turbine efficiency
has made dramatic improvements. For instance, according to data filed with the
Energy Information Administration, one plant that began operation in 1993
achieved a heat rate of 8,000 btu/kWh last year. Two plants that came on-line in
1996 and 1997 achieved heat rates of 7,100 btu/kWh--an improvement of 11%. This
analysis assumes that plants built in 2000 will have an average heat rate of
6,900. We further assume that by 2010 technological improvements will result in
heat rates that decrease to 6,300 btu/kWh.
Future improvements in heat rates beyond 6,300 btu/kWh are extremely
unlikely. An analysis conducted by P.J. Dechamps found that the theoretical
maximum efficiency that could ever be achieved by a combined cycle facility is
58.33%(9)--which translates into a heat rate of 5,850 btu/kWh. His analysis
assumed that such a plant could only achieve this efficiency under idealized
conditions. In practice, an actual plant never operates in idealized conditions
and typically achieves a heat rate that is 5% higher than the idealized heat
rate. Based on that study, the maximum efficiency that combined cycle plants
could achieve is 6,140 btu/kWh. RDI therefore concludes that our 2010 heat rate
assumptions should remain in place for the 2020 to 2030 time frame. This
assumption is just 3% higher than the actual maximum efficiency determined by
the P.J. Dechamps study. Moreover, the increased capital and operating costs
that might be required to achieve this level of efficiency are likely to
outweigh the fuel cost reductions caused by the slight improvement in
efficiency.
- ------------------------
(9) P.J. Dechamps, TRANSACTIONS OF THE ASME, Vol. 120, April 1998
C-20
<PAGE>
Therefore, with constant heat rates and gas prices increasing at the rate of
inflation, we conclude that a reasonable escalation rate for the fuel price of a
new plant should be the rate of inflation (2.5%).
CAPITAL AND OPERATING COSTS This analysis assumes that the cost of
constructing a new combined cycle plant in a greenfield site will decrease from
$525 per kW in 1999 to $430 per kW in 2020 (in constant dollars). This change in
cost is predicated on the assumption that the cost of a new power plant will
increase at a rate of 1.5% per year, rather than at the rate of inflation. We do
not have any justification for assuming that turbine prices can decrease in
constant dollar terms indefinitely and feel that our assumptions between 2000
and 2020 are already fairly aggressive. This is especially true when
consideration is given to the fact that we have assumed the efficiencies of
plants will improve AND the cost of constructing new facilities will also
decrease. We therefore recommend that for the 2020 to 2030 time frame it is
assumed that both capital costs and operation and maintenance costs are assumed
to increase at the rate of inflation.
Given our assumptions regarding fuel prices, we estimate that fuel costs
comprise 58% of the cost of a new combined cycle plant, operating and
maintenance costs comprise another 12%, and capital expenses comprise the
remaining 30%. Since each of these factors is assumed to increase at the cost of
inflation (2.5%), the weighted average escalation rate of the cost of a new
combined cycle facility is also 2.5%, or the rate of inflation. This escalation
rate is therefore applied to the price forecast for the 2022 to 2030 time
period.
C-21
<PAGE>
BASE CASE PRICE FORECAST
Table 5 shows RDI's base case annual electricity price forecast for the
Southern Companies market--the market area in which the Tenaska Georgia
Partner's project will be built.
Energy prices are summarized according to the parameters established by the
contract for the output of power from the Tenaska Georgia Partners' plant. That
is, "Summer" months are June through September. "Contract" hours refer to the
peak hours of the day as defined by the contract--6 am to 10 p.m. Capacity
prices are presented in this table as an average year round price. A methodology
for allocating capacity prices to certain hours of the year is discussed below.
The defining characteristic of the Southeast electricity market is a
shortage of capacity. In other words, electricity prices in the region already
reflect the long-run marginal cost of adding new capacity to the grid. Over the
forecast horizon, therefore, electricity prices are driven primarily by the
factors that determine the long run marginal cost of electricity. The first of
these factors is gas prices. From the period 2000 to 2010 the major factor
driving annual price growth of approximately 4% (in nominal dollars) is
increasing gas prices. In particular, gas prices drive the growth in energy
price projections. The price growth caused by projected increases in gas prices
is diminished, however, by projected reductions in the construction cost of new
generating facilities. This factor causes capacity prices to decline in real
dollar terms. One other factor that pushes prices up slightly during the first
decade of the forecast is the cost of complying with new NO(x)regulations. These
regulations are to be implemented in 2003. The cost of operating the equipment
that reduces NO(x) emissions contributes slightly to the 7% increase in energy
prices in 2003.
After 2010, electricity prices rise at a rate slightly less than the rate of
inflation. Declining prices in real dollar terms are driven by two factors.
First, RDI's gas price forecast assumes that gas prices will escalate at the
rate of inflation after 2010. Second, RDI has also assumed that all capacity
additions after 2010 would have more advanced technologies than those added in
the earlier years of the forecast. The presence of these more efficient units
(both peaking and baseload) has a dampening effect on prices during all hours in
the later years of the forecast as these units penetrate the grid.
TABLE 5: BASE CASE ELECTRICITY PRICE FORECAST
(NOMINAL $ UNLESS STATED)
<TABLE>
<CAPTION>
BASE CASE ENERGY PRICES ($/MWH)
-----------------------------------------------------------------
WINTER MONTHS SUMMER MONTHS
------------------- ------------------- TOTAL
HOURS OF DAY ANNUAL CAPACITY TOTAL PRICE
----------------------------------------- YR ROUND PRICE PRICE PRICE $/MWH
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION $/KW-YR $/MWH (1999 $)
- ---- -------- -------- -------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000........ 24.02 17.99 22.31 18.49 21.55 -- 46.46 30.39 29.65
2001........ 24.81 18.32 23.44 18.90 22.38 3.9% 47.26 31.37 29.86
2002........ 25.69 18.54 24.57 19.49 23.26 3.9% 47.97 32.39 30.07
2003........ 28.00 19.79 26.19 20.24 24.84 6.8% 48.69 34.10 30.90
2004........ 28.89 20.06 27.69 21.01 25.93 4.4% 49.82 35.41 31.30
2005........ 30.22 20.45 29.26 21.86 27.19 4.8% 50.56 36.81 31.74
2006........ 31.59 21.22 30.45 22.55 28.29 4.0% 52.11 38.20 32.14
2007........ 32.74 21.80 32.15 23.54 29.61 4.7% 52.38 39.57 32.48
2008........ 33.69 22.41 33.53 24.61 30.75 3.9% 53.65 40.96 32.80
2009........ 35.66 23.54 35.02 25.76 32.25 4.9% 55.04 42.72 33.38
2010........ 36.46 24.15 36.38 26.80 33.35 3.4% 55.13 43.84 33.41
<CAPTION>
REAL
ANNUAL
PRICE
YEAR ESCALATION
- ---- ----------
<S> <C>
2000........ --
2001........ 0.7%
2002........ 0.7%
2003........ 2.5%
2004........ 1.2%
2005........ 1.2%
2006........ 1.1%
2007........ 0.9%
2008........ 0.8%
2009........ 1.4%
2010........ 0.1%
</TABLE>
C-22
<PAGE>
<TABLE>
<CAPTION>
BASE CASE ENERGY PRICES ($/MWH)
-----------------------------------------------------------------
WINTER MONTHS SUMMER MONTHS
------------------- ------------------- TOTAL
HOURS OF DAY ANNUAL CAPACITY TOTAL PRICE
----------------------------------------- YR ROUND PRICE PRICE PRICE $/MWH
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION $/KW-YR $/MWH (1999 $)
- ---- -------- -------- -------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2011........ 37.27 24.71 37.12 27.46 34.07 2.2% 55.84 44.70 33.23
2012........ 38.37 25.45 37.56 28.15 34.74 2.0% 57.27 45.64 33.11
2013........ 38.83 25.92 38.32 28.86 35.40 1.9% 58.20 46.47 32.89
2014........ 39.64 26.71 38.91 29.59 36.08 1.9% 58.85 47.28 32.64
2015........ 40.97 27.63 39.92 30.37 37.12 2.9% 59.61 48.46 32.64
2016........ 41.49 28.10 40.84 31.09 37.86 2.0% 60.38 49.35 32.43
2017........ 42.36 28.80 41.70 31.96 38.71 2.2% 61.46 50.40 32.32
2018........ 43.49 29.65 42.43 32.68 39.54 2.2% 62.26 51.39 32.15
2019........ 44.17 30.30 43.47 33.43 40.40 2.2% 63.17 52.42 31.99
2020........ 45.07 31.19 44.32 34.37 41.28 2.2% 64.30 53.52 31.86
2021........ 45.42 32.21 43.79 34.81 41.30 0.1% 65.08 53.68 31.18
2022........ 46.55 33.02 44.88 35.68 42.33 2.5% 66.71 55.03 31.18
2023........ 47.72 33.84 46.01 36.57 43.39 2.5% 68.38 56.40 31.18
2024........ 48.91 34.69 47.16 37.48 44.48 2.5% 70.09 57.81 31.18
2025........ 50.13 35.55 48.34 38.42 45.59 2.5% 71.84 59.26 31.18
2026........ 51.38 36.44 49.54 39.38 46.73 2.5% 73.63 60.74 31.18
2027........ 52.67 37.35 50.78 40.37 47.90 2.5% 75.47 62.26 31.18
2028........ 53.99 38.29 52.05 41.37 49.10 2.5% 77.36 63.81 31.18
2029........ 55.34 39.25 53.35 42.41 50.32 2.5% 79.29 65.41 31.18
2030........ 56.72 40.23 54.69 43.47 51.58 2.5% 81.28 67.04 31.18
<CAPTION>
REAL
ANNUAL
PRICE
YEAR ESCALATION
- ---- ----------
<S> <C>
2011........ -0.4%
2012........ -0.3%
2013........ -0.5%
2014........ -0.5%
2015........ 0.0%
2016........ -0.4%
2017........ -0.2%
2018........ -0.3%
2019........ -0.3%
2020........ -0.2%
2021........ -1.3%
2022........ 0.0%
2023........ 0.0%
2024........ 0.0%
2025........ 0.0%
2026........ 0.0%
2027........ 0.0%
2028........ 0.0%
2029........ 0.0%
2030........ 0.0%
</TABLE>
- ------------------------
* Assumes a 60% load factor based on SERC summer load factor for 1999 as
reported in EIA-411
COMPARISON TO CURRENT MARKET PRICES
RDI's price forecast for the year 2000 is slightly lower than historic
wholesale prices in the region. According to price information collected by
Megawatt Daily, the average round the clock price at the Southern hub in 1998
was $33 per MWh or approximately 10% higher than RDI's base case forecast for
the year 2000.
Comparison to the current forward curve is more difficult because there is
not yet a liquid forward curve (i.e. heavily traded futures contract) in the
southeast U.S. However, based on the best available information, it appears that
RDI's forecast is substantially below the forward price curve as well. The two
most liquid trading hubs that are close to Georgia are Entergy and TVA. The
Entergy hub in late April was trading at $47 per MWh for delivery during the
next year. The TVA hub was trading at $52 per MWh for delivery during the next
year. Again, this price is substantially higher than RDI's comparable forecast
price of $35 per MWh for peak prices during 2000.
The current forward price curve appears to capture uncertainty related to
last summer's price spikes in the Midwest. It is RDI's belief that those price
spikes were driven by a confluence of events. Those specific events are unlikely
to occur simultaneously in the future. First, in ECAR and MAIN nearly 23% of the
capacity in the region was unavailable during June. Moreover, during the week of
the price spikes, almost 4,000 MW of nuclear capacity was forced off line.
Second, temperatures reached abnormally high levels and loads were substantially
higher than anticipated. Third, problems in one area of the transmission system
quickly became problems in other market areas as tight supply/demand conditions
limited the ability of utilities to shift generation to meet load. These shifts
began to cause overloads on the transmission system, which resulted in the need
for line loading relief. RDI's forecast does not reflect the uncertainty created
by last years price spikes because RDI's forecast does not consider low
probability
C-23
<PAGE>
events. However, it is important to note that while the specific conditions that
caused the Midwest price spikes are not likely to occur simultaneously in the
future, over the life of the project the market will periodically encounter
conditions that will result in temporary price spikes.
CONVERTING RDI'S FORECAST TO COMPARABLE FORWARD PRICES RDI forecasts
wholesale market prices as two separate components--energy and capacity. These
two components, when added together, comprise the total value of electricity.
The energy price represents the spot price of non-firm power. The capacity price
represents the premium that must be paid to assure firm supply or to acquire
electricity supply during times of shortages.
Energy prices are projected in terms of dollars per megawatt hour. Capacity
prices are projected first in dollars per kilowatt year, then allocated to a
specified number of hours to obtain values in dollars per megawatt hour. For
example, a capacity price of $52 per kW-yr, when allocated over 100% of the
8,760 hours in a year is equivalent to $5.90 per MWh. If the average energy
price over the year is $20.00 per MWh, then the average price of firm power over
the year is $25.90 per MWh. This is the value of firm baseload power.
On an hourly basis, capacity has a value of zero in the vast majority of
hours. These include all hours in non-peak months, weekends, and off-peak hours
of every day. Even some prices during on-peak hours of peak months will have a
capacity value of zero. Capacity has a non-zero value in only 10% or fewer of
the hours of the year. A capacity price of $52 per kW-yr, when allocated over
10% of the hours in a year, is equivalent to $59 per MWh. If energy prices are,
say, $5.00 per MWh higher on average during peaking hours than the all-hours
average, then the total price of firm peaking power is $84 per MWh
($20 + $5 + $59).
Total firm prices show a sharply pronounced seasonal profile. One place to
observe this is in futures prices. Futures prices typically reflect little value
for capacity during nine of the 12 forward months. The fundamental concept
underlying capacity prices is reliability. Capacity prices are highest in hours,
days, and months when the risk of curtailment owing to a generating capacity
shortfall is highest. Studies of hourly loss-of-load-probability (LOLP) show
that almost all of the hours with non-zero LOLP are concentrated in only two or
three months of the year.
Figure 8 shows RDI's base case forecast using a methodology approximating
the forward curve observed on a NYMEX contract. The annual value of capacity was
assumed to be allocated 5% to May, 15% to June, 30% to July, 30% to August, 15%
to September, and 5% to October. This assumption was based on observed
historical spot market prices and current futures prices, in the absence of a
LOLP study specific to this region. Again, current prices for summer delivery
are greater than $100 per MWh, compared to RDI's price projections of $70 per
MWh.
C-24
<PAGE>
FIGURE 8: YEAR 2000 MONTHLY FORECAST FOR ON-PEAK PRICES (NOMINAL $/MWH)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
YEAR 2000 MONTHLY TOTAL ON-PEAK PRICES (CAPACITY & ENERGY)
<S> <C> <C>
Monthly Energy Capacity
Jan 22.33 -
Feb 21.04 -
Mar 21.12 -
Apr 24.50 -
May 21.26 7.54
Jun 22.78 22.61
Jul 23.57 45.22
Aug 24.38 45.22
Sep 21.85 22.61
Oct 24.81 7.54
Nov 23.37 -
Dec 20.74 -
</TABLE>
ENERGY PRICE FORECAST
Figure 9 summarizes energy prices by time of day and by contract period, as
described above.
FIGURE 9: AVERAGE ANNUAL PRICES BY TIME PERIOD (NOMINAL $ PER MWH)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ENERGY PRICES IN $/MWH
<S> <C> <C> <C> <C>
YEAR SUMMER CONT SUMMER OFF WINTER CONT WINTER OFF
2000 24.02 17.99 22.31 18.49
2001 24.81 18.32 23.44 18.90
2002 25.69 18.54 24.57 19.49
2003 28.00 19.79 26.19 20.24
2004 28.89 20.06 27.69 21.01
2005 30.22 20.45 29.26 21.86
2006 31.59 21.22 30.45 22.55
2007 32.74 21.80 32.15 23.54
2008 33.69 22.41 33.53 24.61
2009 35.66 23.54 35.02 25.76
2010 36.46 24.15 36.38 26.80
2011 37.27 24.71 37.12 27.46
2012 38.37 25.45 37.56 28.15
2013 38.83 25.92 38.32 28.86
2014 39.64 26.71 38.91 29.59
2015 40.97 27.63 39.92 30.37
2016 41.49 28.10 40.84 31.09
2017 42.36 28.80 41.70 31.96
2018 43.49 29.65 42.43 32.68
2019 44.17 30.30 43.47 33.43
2020 45.07 31.19 44.32 34.37
2021 45.42 32.21 43.79 34.81
2022 46.55 33.02 44.88 35.68
2023 47.72 33.84 46.01 36.57
2024 48.91 34.69 47.16 37.48
2025 50.13 35.55 48.34 38.42
2026 51.38 36.44 49.54 39.38
2027 52.67 37.35 50.78 40.37
2028 53.99 38.29 52.05 41.37
2029 55.34 39.25 53.35 42.41
2030 56.72 40.23 54.69 43.47
</TABLE>
The movement of energy prices over the forecast period is driven by four
market dynamics. First, increasing gas prices push energy prices higher. Second,
general demand growth increases the need to run higher cost
resources--particularly in the early years of the forecast. Third, the Clean Air
Act requirements for NO(x) emission standards are assumed to take effect in
2003. This contributes to a 7% increase in
C-25
<PAGE>
average energy prices in 2003. Finally, new gas fired peaking capacity in the
region displaces the existing less efficient fossil generation dampening price
growth.
CAPACITY PRICE FORECAST
SUPPLY/DEMAND BALANCE Over the past decade electricity demand has grown
rapidly in the southeast U.S. This rapid demand growth, however, has not been
met by an equal amount of supply growth, resulting in a tightening of markets.
If substantial amounts of new capacity are not built soon, the region will
suffer shortages and much higher electricity prices than currently forecast by
RDI. Even with RDI's projections for merchant plant additions, reserve margins
in the region are likely to fall to 13% by 2000. Another 3,816 MW of new
capacity additions beyond RDI's merchant plant projections of 5,000 MW will be
required in 2001 to maintain a 15% reserve margin. It is this shortage of
capacity that pushes RDI's capacity price projections to a level that supports
the profitable additions of new capacity.
It should also be noted that it is currently more profitable to build a
combustion turbine than it is to build a combined cycle plant in the Southeast.
While the region as a whole requires significant capacity additions, it does not
require baseload resources. Currently more than 80% of the capacity in the
region consists of coal-fired, nuclear, or hydro baseload facilities. Of the
peaking capacity, a majority is concentrated in Southern Mississippi and is
owned by Entergy. The fact that the region as a whole has a load factor of
60%(10) indicates there is too much baseload capacity. As a result, a combined
cycle plant is currently not competitive in the region.
- ------------------------
(10) Load factor is a measure of the peak demand in a region to the hourly
average demand throughout the year.
C-26
<PAGE>
FIGURE 10: PERCENTAGE OF BASELOAD VS. PEAKING CAPACITY IN SERC
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BASELOAD CAPACITY 20%
<S> <C>
PEAKING CAPACITY 80%
</TABLE>
CAPACITY ADDITIONS Table 6 contains a summary of capacity additions for the
base case. These numbers include the new capacity explicitly added by RDI as
discussed in the Base Case Assumptions section (Merchant Plant Additions), the
Tenaska Georgia Partners project, and incremental capacity added by IREMM. Over
the next decade more than 35,000 MW of new capacity additions are likely to be
required in the region. Another 15,000 to 30,000 MW will also be required in
neighboring regions. If this new capacity is not added, prices may rise
substantially higher than forecast by RDI. However, it is RDI's expectation that
developers will respond to the price signals sent by the market and that these
new capacity additions will be made.
TABLE 6: FORECAST CAPACITY ADDITIONS IN SERC (MW)
<TABLE>
<CAPTION>
CURRENT CAPACITY
VINTAGE CURRENT ADVANCED ADVANCED TOTAL PRICE
YEAR CT'S VINTAGE CC'S CT'S CC'S ADDITIONS $/KW-YR
- ---- --------- ------------ -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
2000............................. 3,760 -- -- -- 3,760 46.46
2001............................. 3,220 1,350 -- -- 4,570 47.26
2002............................. 1,851 599 -- -- 2,450 47.97
2003............................. 2,971 1,272 -- -- 4,243 48.69
2004............................. 3,581 1,534 -- -- 5,115 49.82
2005............................. 2,956 1,266 -- -- 4,222 50.56
2006............................. 1,707 731 -- -- 2,438 52.11
2007............................. 2,084 893 -- -- 2,977 52.38
2008............................. 796 1,859 -- -- 2,655 53.65
2009............................. 745 1,741 -- -- 2,486 55.04
2010............................. 1,151 2,687 -- -- 3,838 55.13
2011............................. -- -- 430 3,880 4,310 55.84
2012............................. -- -- 418 3,779 4,197 57.27
2013............................. -- -- 321 2,905 3,226 58.20
2014............................. -- -- 265 2,389 2,654 58.85
2015............................. -- -- 880 2,055 2,935 59.61
2016............................. -- -- 1,132 2,643 3,775 60.38
2017............................. -- -- 1,154 2,695 3,849 61.46
2018............................. -- -- 1,150 2,685 3,835 62.26
2019............................. -- -- 1,174 2,741 3,915 63.17
2020............................. -- -- 1,198 2,797 3,995 64.30
2021............................. -- -- 1,576 3,679 5,255 65.08
------ ------ ----- ------ ------ -----
TOTAL............................ 24,822 13,932 9,698 32,248 80,700
</TABLE>
C-27
<PAGE>
TENASKA GEORGIA PARTNERS OPERATIONS
MONTHLY CAPACITY FACTORS Forecast monthly utilization is summarized in
Table 7. Detailed monthly capacity factors are included in Appendix C. RDI's
base case forecast shows July and August capacity factors ranging from 7% to
18%. In 2003, the first full year that all 900 MW are on-line, the plant
achieves capacity factors of 8% and 9% in July and August, respectively. By the
middle years of the forecast (2007-2012) the plant is achieving capacity factors
of 10% to 18% in the summer months and is also being dispatched in off-peak
months. The plant's utilization is reduced somewhat in the later years of the
forecast, due to the addition of advanced peaking capacity technologies after
2010 and significant new combined cycle plant additions.
TABLE 7: FORECAST MONTHLY CAPACITY FACTORS FOR THE TENASKA GEORGIA PROJECT
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003..................... 0% 1% 0% 0% 1% 5% 8% 9% 3%
2005..................... 1% 1% 1% 0% 3% 11% 13% 14% 4%
2010..................... 2% 1% 1% 0% 4% 11% 15% 18% 6%
2015..................... 1% 1% 1% 0% 3% 8% 12% 14% 6%
2020..................... 0% 0% 0% 0% 2% 4% 9% 7% 2%
--- --- --- --- --- --- --- --- ---
AVG 2000-2021............ 1% 1% 1% 0% 3% 8% 11% 13% 4%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003..................... 0% 0% 0% 2%
2005..................... 3% 0% 1% 4%
2010..................... 3% 2% 2% 5%
2015..................... 1% 0% 0% 4%
2020..................... 0% 0% 0% 2%
--- --- --- ---
AVG 2000-2021............ 2% 1% 1% 4%
</TABLE>
In the early years of the forecast, the project competes in peak hours with
existing peaking technologies and new combustion turbines of the same vintage.
These include both the other merchant capacity explicitly added to the model and
expansion units added implicitly by IREMM. For the most part, current vintage
combustion turbines compete favorably against the peaking units that currently
operate in the market. However, after 2010, the project (and other combustion
turbines) must also compete against peaking units with advanced technology.
Because the advanced combustion turbines have improved heat rates, they will
move ahead of the project and other current vintage combustion turbines in the
dispatch order. This causes the projected capacity factors after 2010 to
decrease.
C-28
<PAGE>
Figure 11 shows the forecast of annual capacity factors for new combustion
turbines of both current vintage and advanced technologies in SERC.
FIGURE 11: FORECAST ANNUAL CAPACITY FACTOR FOR A NEW CT IN SERC
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL CAPACITY FACTORS FOR NEW COMBUSTION TURBINES
<S> <C> <C> <C>
CURRENT VINTAGE ADVANCED TECH AVERAGE
2001 1%
2002 1%
2003 2%
2004 2%
2005 3%
2006 3%
2007 3%
2008 3%
2009 4%
2010 4%
2011 4% 8% 4%
2012 4% 8% 4%
2013 3% 7% 3%
2014 3% 6% 3%
2015 3% 6% 3%
2016 2% 6% 3%
2017 2% 6% 3%
2018 2% 5% 3%
2019 2% 5% 3%
2020 2% 5% 3%
2021 1% 4% 2%
</TABLE>
The forecast capacity factors are similar to the capacity factors achieved
by relatively recent gas turbine additions. For instance, over the past three
years the annual capacity factor at the Lincoln Combustion Turbines owned by
Duke Power (construction was finished in 1996) has ranged from 1.4% to 5%. The
5% capacity factor was achieved in 1998 when more than 20% of the capacity in
the region was out of service and temperatures reached record levels. RDI's
capacity factors are lower than 5% due to two reasons. First, RDI's forecast is
based upon normalized weather conditions so it does not reflect the abnormal
temperatures of recent years. Second, substantial new capacity additions reduce
capacity factors for all peaking power plants in the early years of the
forecast.
START-UP PROFILE Table 8 summarizes plant start-up data for the Tenaska
Georgia Partners' project. These figures represent the number of times any unit
at the facility is called upon by the model in the subject month. The plant is
called on during most weekdays in the months of June, July and August through
2010. Start-ups in all months are reduced somewhat in the later years of the
forecast.
C-29
<PAGE>
TABLE 8: PROJECTED MONTHLY START-UPS FOR SELECT YEARS--
TENASKA GEORGIA PARTNER'S PROJECT
START-UPS BY MONTH
<TABLE>
<CAPTION>
YR JAN FEB MAR APR MAY JUN JUL AUG SEP
- -- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003..................... -- 1 1 -- 3 9 11 15 5
2005..................... 3 2 3 -- 5 13 15 17 7
2010..................... 3 2 3 -- 6 15 17 20 9
2015..................... 2 2 2 -- 5 12 14 17 9
2020..................... -- -- -- -- 5 9 11 10 4
<CAPTION>
YR OCT NOV DEC TOTAL
- -- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003..................... -- -- 1 46
2005..................... 5 1 2 73
2010..................... 6 7 3 91
2015..................... 2 2 2 69
2020..................... 1 -- -- 40
</TABLE>
AVERAGE DURATION OF START-UPS
<TABLE>
<CAPTION>
YR JAN FEB MAR APR MAY JUN JUL AUG SEP
- -- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003..................... -- 5.0 4.0 -- 5.0 5.4 6.9 6.4 5.8
2005..................... 4.0 4.5 4.0 -- 5.0 7.0 7.3 6.9 6.7
2010..................... 5.0 4.5 4.0 -- 5.8 6.7 7.5 7.7 6.1
2015..................... 3.0 4.0 4.0 -- 5.4 6.8 7.5 7.3 5.8
2020..................... -- -- -- -- 3.8 5.1 6.5 6.4 5.3
<CAPTION>
YR OCT NOV DEC TOTAL
- -- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003..................... -- -- 4.0 6.0
2005..................... 6.4 4.0 4.5 6.4
2010..................... 6.2 3.3 4.3 6.4
2015..................... 6.5 3.0 4.0 6.4
2020..................... 7.0 -- -- 5.7
</TABLE>
The average run time per start-up is over six hours in almost all years
analyzed and approaches 6.5 hours in the middle years of the forecast. In summer
months, the average run time for each start-up is higher than the average annual
value. For peaking units, the number of start-ups in any month is a function of
both the level of demand in the region and the amount of capacity available to
meet that demand. Thus, the model may call upon a peaking unit in non-peaking
months if other resources are off-line for maintenance. However, in the years
examined, the run times in those months are shorter in duration.
C-30
<PAGE>
SENSITIVITY ANALYSIS
The base case scenario provides an estimate of the most likely future energy
and capacity prices. However, prices are subject to change as fundamental market
forces change. Two of the key forces affecting the price forecast are future
fuel prices and the overall supply/demand balance in the region. To gauge the
sensitivity of the base case forecast to changes in market dynamics, RDI
considered three main additional scenarios and one scenario which was designed
solely to gauge the impact of technological improvements on capacity prices. The
additional scenarios were:
- LOW GAS PRICES--gas prices 20% lower than the base case.
- 12% REQUIRED RESERVE MARGIN--There is a great amount of uncertainty
concerning the level of required reserves in a deregulated market. In the
base case, it was assumed that a 15% reserve margin would be maintained in
the Southeast. In the sensitivity analysis, RDI reduced the level of
required reserves to 12%.
- OVERBUILD--assumes that an additional 9,000 MW (7,500 MW CT/1,500 MW CC)
of merchant capacity will be added to the grid by June 2001. RDI assumed
in the base case that 5,000 MW of new merchant capacity will be built by
2002. This figure includes the Tenaska Georgia Partners' project. There is
currently another 6,000 MW of merchant capacity that has been proposed for
the Southeast that RDI did not include in its model. Much of the capacity
not included by RDI in the base case either faces significant development
hurdles or is in the very early stages of development. However, in this
scenario we assumed that all of this 6,000 MW of capacity is built. RDI
also assumed that developers will bring an additional 3,000 MW of capacity
on-line by 2001. Therefore, in total, this scenario assumes that 14,000 MW
of capacity will be built by 2002. To put this number into perspective,
during the past decade only 15,000 MW of new capacity was added to SERC's
grid.
- TECHNOLOGICAL IMPROVEMENT--assumes that the cost of building new capacity
decreases 2% in each of the first 10 years of the forecast and 1% for the
remainder of the forecast. The base case assumes a constant 1%
improvement. Energy prices remain the same as in the base case. The
results of this scenario are only discussed in the section on capacity
prices below.
C-31
<PAGE>
Table 9 summarizes price results by scenario. More detail is provided in the
discussion below.
TABLE 9: PRICE RESULTS--SENSITIVITY ANALYSIS (NOMINAL $)
<TABLE>
<CAPTION>
LOW FUEL OVERBUILD 12% RESERVE
----------------------------------------- ------------------------------------------ -------------------
ENERGY ENERGY ENERGY
$/ CAPACITY TOTAL $/ % CHG $/ CAPACITY TOTAL $/ % CHG $/ CAPACITY
YEAR MWH $/KW-YR MWH* BASE MWH $/KW-YR MWH* BASE MWH $/KW-YR
---- -------- -------- -------- -------- ------ ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000........... 20.41 46.46 29.25 (3.8)% 21.52 26.58 26.57 (12.6)% 21.62 46.36
2001........... 20.93 47.26 29.93 (4.6)% 22.30 15.38 25.22 (19.6)% 22.62 47.05
2002........... 21.63 47.77 30.72 (5.2) 23.18 18.33 26.67 (17.6)% 23.54 47.67
2003........... 22.88 48.59 32.13 (5.8)% 24.96 48.59 34.21 0.3 % 25.13 48.49
2004........... 23.67 49.92 33.17 (6.3)% 26.06 49.52 35.48 0.2 % 26.24 49.42
2005........... 24.61 50.36 34.19 (7.1)% 27.31 50.46 36.91 (0.3)% 27.49 50.76
2006........... 25.48 51.31 35.24 (7.8)% 28.43 51.81 38.29 0.2 % 28.45 51.31
2007........... 26.51 52.68 36.53 (7.7)% 29.81 51.98 39.70 0.3 % 29.58 52.18
2008........... 27.33 53.75 37.55 (8.3)% 30.92 52.75 40.95 0.0 % 30.78 53.35
2009........... 28.43 54.24 38.75 (9.3)% 32.38 54.24 42.70 (0.1)% 32.35 54.34
2010........... 29.27 55.83 39.89 (9.0)% 33.55 54.63 43.94 0.2 % 33.24 54.93
2011........... 29.75 56.34 40.47 (9.5)% 34.24 55.74 44.84 0.3 % 33.98 55.54
2012........... 30.19 57.67 41.16 (9.8)% 34.89 56.87 46.71 0.1 % 34.66 57.37
2013........... 30.60 57.90 41.62 (10.4)% 35.58 57.80 46.58 0.2 % 35.33 58.20
2014........... 31.13 58.75 42.31 (10.5)% 36.27 58.65 47.43 0.3 % 36.04 58.75
2015........... 31.90 59.41 42.30 (10.9)% 37.30 59.21 48.57 0.2 % 36.94 59.51
2016........... 32.41 60.58 43.94 (11.0)% 38.01 60.26 49.47 0.3 % 37.50 60.08
2017........... 33.06 61.36 44.74 (11.2)% 38.88 61.16 50.51 0.2 % 38.32 61.16
2018........... 33.74 62.06 45.54 (11.4)% 39.74 62.06 61.55 0.3 % 39.16 61.86
2019........... 34.35 63.27 46.39 (11.5)% 40.60 63.07 52.60 0.3 % 40.00 63.07
2020........... 35.00 64.40 47.26 (11.7)% 41.48 64.00 53.65 0.3 % 40.82 64.00
2021........... 34.92 65.16 47.32 (11.9)% 41.49 54.74 53.80 0.2 % 40.85 64.78
2022........... 36.79 66.79 48.50 (11.9)% 42.52 66.36 55.15 0.2 % 41.87 66.36
2023........... 35.69 68.46 49.71 (11.9)% 43.59 68.02 56.53 0.2 % 42.92 68.02
2024........... 37.61 70.17 50.96 (11.9)% 44.68 69.72 57.94 0.2 % 43.99 69.72
2025........... 38.55 71.93 52.23 (11.9)% 45.79 71.46 59.39 0.2 % 45.09 71.46
2026........... 39.51 73.72 53.54 (11.9)% 45.94 73.25 60.87 0.2 % 46.21 73.25
2027........... 40.50 75.57 54.88 (11.9)% 46.11 75.08 62.40 0.2 % 47.37 75.08
2028........... 41.51 77.46 56.25 (11.9)% 49.31 76.96 63.96 0.2 % 48.55 76.96
2029........... 42.55 79.39 57.65 (11.9)% 50.55 78.88 65.55 0.2 % 49.77 78.88
2030........... 43.61 81.38 59.10 (11.9)% 51.81 80.85 67.19 0.2 % 51.01 80.85
<CAPTION>
12% RESERVE
-------------------
TOTAL $/ % CHG
YEAR MWH* BASE
---- -------- --------
<S> <C> <C>
2000........... 30.44 0.2 %
2001........... 31.58 0.6 %
2002........... 32.61 0.7 %
2003........... 34.36 0.7 %
2004........... 35.64 0.7 %
2005........... 37.15 0.9 %
2006........... 38.21 0.0 %
2007........... 39.51 (0.2)%
2008........... 40.93 (0.1)%
2009........... 42.69 (0.1)%
2010........... 43.69 (0.3)%
2011........... 44.55 (0.3)%
2012........... 45.57 (0.1)%
2013........... 46.41 (0.1)%
2014........... 47.22 (0.1)%
2015........... 48.26 (0.4)%
2016........... 48.93 (0.8)%
2017........... 49.96 (0.9)%
2018........... 50.93 (0.6)%
2019........... 52.00 (0.8)%
2020........... 52.99 (1.0)%
2021........... 53.17 (1.0)%
2022........... 54.49 (1.0)%
2023........... 55.66 (1.0)%
2024........... 57.25 (1.0)%
2025........... 58.68 (1.0)%
2026........... 60.15 (1.0)%
2027........... 61.65 (1.0)%
2028........... 63.20 (1.0)%
2029........... 64.78 (1.0)%
2030........... 86.40 (1.0)%
</TABLE>
- ------------------------------
* Assumes a 60% load factor based on SEPC summer load factor for 1999 as
reported in BA-411.
ENERGY PRICES
In general this analysis indicates that energy prices are not sensitive to
changes in reserve margins, or to an overbuild scenario. As shown in Table 10
energy prices significantly depart from the base case forecast only in the low
fuel scenario. During many hours of the year, gas-fired generation sets the
price of energy. During these hours, any reduction in gas prices, therefore,
reduces energy prices. This reduction in energy prices is due to the role that
gas-fired generation plays in setting electricity prices during many hours of
the year.
C-32
<PAGE>
TABLE 10: ENERGY PRICE RESULTS--SENSITIVITY ANALYSES (NOMINAL $/MWH)
<TABLE>
<CAPTION>
BASE CASE LOW FUEL OVERBUILD 12% RESERVE
---------------------- --------------------------------- --------------------------------- ---------
YR ROUND ANNUAL YR ROUND ANNUAL % YR ROUND ANNUAL % YR ROUND
AVE PRICE AVE PRICE CHG AVE PRICE CHG AVE
YEAR $/MWH ESCALATION $/MWH ESCALATION BASE $/MWH ESCALATION BASE $/MWH
---- --------- ---------- --------- ---------- -------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000........... 21.56 -- 20.41 -- 5.3 % 21.52 -- (0.2)% 21.02
2001........... 22.38 3.8% 20.93 2.6 % (6.5)% 22.30 3.6% (0.4)% 22.62
2002........... 23.26 3.9% 21.83 3.3 % (7.0)% 23.18 4.0% (0.3)% 23.54
2003........... 24.84 6.8% 22.88 5.8 % (7.9)% 24.95 7.7% 0.5 % 25.13
2004........... 25.93 4.4% 23.67 3.4 % (0.7)% 26.06 4.4% 0.5 % 26.24
2005........... 27.19 4.8% 24.61 3.9 % (9.5)% 27.31 4.8% 0.4 % 27.49
2006........... 28.29 4.0% 25.46 3.5 % (9.9)% 28.43 4.1% 0.5 % 28.45
2007........... 29.61 4.7% 26.51 4.1 % (10.5)% 29.81 4.8% 0.7 % 29.58
2008........... 30.75 3.9% 27.33 3.1 % (11.1)% 30.92 3.7% 0.6 % 30.78
2009........... 32.25 4.9% 28.43 4.1 % (11.8)% 32.36 4.7% 0.4 % 32.35
2010........... 33.30 3.4% 20.27 2.9 % (12.2)% 35.55 3.6% 0.6 % 33.24
2011........... 34.01 2.2% 29.75 1.6 % (12.7)% 34.24 2.1% 0.5 % 33.50
2012........... 34.74 2.0% 30.19 1.5 % (15.1)% 34.89 1.0% 0.4 % 34.66
2013........... 35.40 1.9% 30.60 1.4 % (13.5)% 35.50 2.0% 0.5 % 35.33
2014........... 36.08 1.9% 31.13 1.7 % (13.7)% 36.27 1.9% 0.5 % 36.04
2015........... 37.12 2.9% 31.90 2.5 % (14.1)% 37.30 2.8% 0.5 % 36.94
2016........... 37.86 2.0% 32.41 1.6 % (14.4)% 38.01 1.9% 0.4 % 37.50
2017........... 38.71 2.2% 33.06 2.0 % (14.6)% 38.88 2.3% 0.4 % 38.32
2018........... 39.54 2.2% 33.74 2.0 % (14.7)% 39.74 2.2% 0.5 % 39.16
2019........... 40.40 2.2% 34.35 1.8 % (15.0)% 40.60 2.2% 0.5 % 40.00
2020........... 41.28 2.2% 35.00 1.9 % (15.2)% 41.48 2.1% 0.5 % 40.82
2021........... 41.30 0.1% 34.92 (0.2)% 15.4 % 41.49 0.0% 0.4 % 40.85
<CAPTION>
12% RESERVE
---------------------
ANNUAL %
PRICE CHG
YEAR ESCALATION BASE
---- ---------- --------
<S> <C> <C>
2000........... -- 0.3 %
2001........... 4.6% 1.1 %
2002........... 4.1% 1.2 %
2003........... 6.8% 1.2 %
2004........... 4.4% 1.2 %
2005........... 4.8% 1.1 %
2006........... 3.5% 0.6 %
2007........... 4.0% (0.1)%
2008........... 4.1% 0.1 %
2009........... 5.1% 0.3 %
2010........... 2.7% (0.3)%
2011........... 2.2% (0.3)%
2012........... 2.0% (0.2)%
2013........... 2.0% (0.2)%
2014........... 2.0% (0.1)%
2015........... 2.5% (0.5)%
2016........... 1.5% (0.9)%
2017........... 2.2% (1.0)%
2018........... 2.2% (1.0)%
2019........... 2.1% (1.0)%
2020........... 2.0% (1.1)%
2021........... 0.1% (1.1)%
</TABLE>
In the low fuel scenario, a 20% reduction in gas prices results in energy
prices that are 5 to 10% below the base case results in the early years of the
forecast because decreased fuel costs for the marginal units results in
decreased market clearing prices. As shown in Table 11, energy prices are 10 to
15% below the price results for the base case in the later years of the
forecast. There is a greater differential in the later years of the forecast
because gas-fired units are on the margin in more hours during those years.
C-33
<PAGE>
TABLE 11: ENERGY PRICE RESULTS LOW--FUEL SCENARIO (NOMINAL $/MWH)
<TABLE>
<CAPTION>
LOW FUEL ENERGY PRICES ($/MWH)
-----------------------------------------
SUMMER MONTHS WINTER MONTHS
------------------- -------------------
HOURS OF DAY ANNUAL %
------------------- YR ROUND PRICE CHG
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION BASE
- ---- -------- -------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000............................... 22.34 17.60 20.95 18.15 20.41 -- (5.3)%
2001............................... 22.88 17.76 21.67 18.37 20.93 2.6 % (6.5)%
2002............................... 23.59 18.03 22.54 18.83 21.63 3.3 % (7.0)%
2003............................... 25.43 19.39 23.74 19.46 22.88 5.8 % (7.0)%
2004............................... 26.07 19.51 24.86 19.95 23.67 3.4 % (8.7)%
2005............................... 27.13 19.75 26.03 20.50 24.61 3.9 % (9.5)%
2006............................... 28.25 20.32 26.98 21.04 25.48 3.5 % (9.9)%
2007............................... 29.20 20.67 28.38 21.63 26.51 4.1 % (10.5)%
2008............................... 30.13 20.95 29.34 22.22 27.33 3.1 % (11.1)%
2009............................... 31.63 21.72 30.47 22.95 28.43 4.1 % (11.8)%
2010............................... 32.32 22.07 31.59 23.53 29.27 2.9 % (12.2)%
2011............................... 32.91 22.38 32.06 23.99 29.75 1.6 % (12.7)%
2012............................... 33.71 22.92 32.33 24.33 30.19 1.5 % (13.1)%
2013............................... 33.92 23.10 32.87 24.81 30.60 1.4 % (13.5)%
2014............................... 34.51 23.62 33.37 25.35 31.13 1.7 % (13.7)%
2015............................... 35.56 24.30 34.11 25.88 31.90 2.5 % (14.1)%
2016............................... 35.87 24.50 34.79 26.39 32.41 1.6 % (14.4)%
2017............................... 36.60 25.23 35.44 26.92 33.06 2.0 % (14.6)%
2018............................... 37.55 25.92 36.04 27.44 33.74 2.0 % (14.7)%
2019............................... 38.01 26.18 36.85 27.91 34.35 1.8 % (15.0)%
2020............................... 38.66 26.71 37.50 28.65 35.00 1.9 % (15.2)%
2021............................... 38.83 27.34 37.01 28.88 34.92 (0.2)% (15.4)%
2022............................... 39.81 28.02 37.94 29.60 35.79 2.5 % (15.4)%
2023............................... 40.81 28.72 36.88 30.34 36.69 2.5 % (15.4)%
2024............................... 41.83 29.44 39.86 31.10 37.61 2.5 % (15.4)%
2025............................... 42.87 30.18 40.85 31.88 38.55 2.5 % (15.4)%
2026............................... 43.94 30.93 41.87 32.68 39.51 2.5 % (15.4)%
2027............................... 45.04 31.70 42.92 33.49 40.50 2.5 % (15.4)%
2028............................... 46.17 32.50 43.99 43.33 41.51 2.5 % (15.4)%
2029............................... 47.32 33.31 45.09 35.19 42.55 2.5 % (15.4)%
2030............................... 46.50 34.14 46.22 36.07 43.61 2.5 % (15.4)%
</TABLE>
Table 12 and Table 13 summarize energy price results from the overbuild and
12% reserve margin scenarios. Energy prices in these scenarios closely track
those from the base case. This is due to the fact that although the supply and
demand balance of capacity in the region has been changed, load in almost all
hours of the year is met with resources with identical characteristics to those
in the base case. As a result, the marginal price of producing electricity in a
given hour is close to that in the base case.
C-34
<PAGE>
TABLE 12: ENERGY PRICE RESULTS--OVERBUILD SCENARIO (NOMINAL $/MWH)
<TABLE>
<CAPTION>
OVERBUILD ENERGY PRICES ($/MWH)
-----------------------------------------
SUMMER MONTHS WINTER MONTHS
------------------- -------------------
HOURS OF DAY ANNUAL %
------------------- YR ROUND PRICE CHG
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION BASE
- ---- -------- -------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000................................ 23.89 17.99 22.30 18.49 21.52 -- (0.2)%
2001................................ 24.33 18.25 23.50 18.92 22.30 3.6% (0.4)%
2002................................ 25.37 18.49 24.59 19.47 23.18 4.0% (0.3)%
2003................................ 27.89 19.76 26.50 20.29 24.96 7.7% 0.5 %
2004................................ 28.90 20.05 27.95 21.04 26.06 4.4% 0.5 %
2005................................ 30.26 20.46 29.47 21.92 27.31 4.8% 0.4 %
2006................................ 31.61 21.20 30.73 22.62 28.43 4.1% 0.5 %
2007................................ 32.82 21.77 32.51 23.62 29.81 4.8% 0.7 %
2008................................ 33.79 22.39 33.83 24.67 30.92 3.7% 0.6 %
2009................................ 35.68 23.51 35.26 25.84 32.38 4.7% 0.4 %
2010................................ 36.62 24.12 36.70 26.88 33.55 3.6% 0.6 %
2011................................ 37.41 24.70 37.38 27.54 34.24 2.1% 0.5 %
2012................................ 38.39 25.44 37.82 26.22 34.69 1.9% 0.4 %
2013................................ 38.94 25.92 38.65 28.90 35.58 2.0% 0.5 %
2014................................ 39.72 26.69 39.25 29.61 36.27 1.9% 0.5 %
2015................................ 41.10 27.61 40.23 30.42 37.30 2.8% 0.5 %
2016................................ 41.58 28.10 41.10 31.11 38.01 1.9% 0.4 %
2017................................ 42.41 28.79 42.04 31.95 38.88 2.4% 0.4 %
2018................................ 43.62 29.54 42.78 32.70 39.74 2.2% 0.5 %
2019................................ 44.31 30.31 43.81 33.45 40.60 2.2% 0.5 %
2020................................ 45.13 31.21 44.70 34.34 41.48 2.1% 0.5 %
2021................................ 45.56 32.21 44.09 34.85 41.49 0.0% 0.4 %
2022................................ 46.70 33.01 45.19 35.72 42.52 2.5% 0.4 %
2023................................ 47.87 33.84 46.32 36.62 43.59 2.5% 0.4 %
2024................................ 49.07 34.69 47.48 37.53 44.68 2.5% 0.4 %
2025................................ 50.29 35.55 48.67 38.47 45.79 2.5% 0.4 %
2026................................ 51.55 36.44 49.88 39.43 46.94 2.5% 0.4 %
2027................................ 52.84 37.35 51.13 40.42 48.11 2.5% 0.4 %
2028................................ 54.16 38.29 52.41 41.43 49.31 2.5% 0.4 %
2029................................ 55.51 39.24 53.72 42.46 50.55 2.5% 0.4 %
2030................................ 56.90 40.22 55.06 43.52 51.81 2.5% 0.4 %
</TABLE>
C-35
<PAGE>
TABLE 13: ENERGY PRICE RESULTS--12% RESERVE MARGIN SCENARIO (NOMINAL $/MWH)
<TABLE>
<CAPTION>
12% RESERVE ENERGY PRICES ($/MWH)
----------------------------------------------------
SUMMER MONTHS WINTER MONTHS
------------------- -------------------
HOURS OF DAY ANNUAL %
----------------------------------------- YR ROUND PRICE CHG
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION BASE
- ---- -------- -------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000................................ 24.02 17.98 22.30 18.50 21.62 * 0.3 %
2001................................ 25.12 18.34 23.75 18.94 22.62 4.6% 1.1 %
2002................................ 26.07 18.60 24.92 19.53 23.54 4.1% 1.2 %
2003................................ 28.35 19.81 26.60 20.27 25.13 6.8% 1.2 %
2004................................ 29.29 20.11 28.05 21.08 26.24 4.4% 1.2 %
2005................................ 30.54 20.49 29.67 21.98 27.49 4.8% 1.1 %
2006................................ 31.81 21.27 30.64 22.58 28.45 3.5% 0.6 %
2007................................ 32.74 21.79 32.11 23.55 29.58 4.0% (0.1)%
2008................................ 33.78 22.43 33.51 24.63 30.78 4.1% 0.1 %
2009................................ 35.86 23.53 35.08 25.76 32.35 5.1% 0.3 %
2010................................ 36.45 24.02 36.24 26.63 33.24 2.7% (0.3)%
2011................................ 37.28 24.65 36.97 27.35 33.98 2.2% (0.3)%
2012................................ 38.33 25.36 37.46 28.03 34.66 2.0% (0.2)%
2013................................ 38.82 25.88 38.25 28.75 36.33 2.0% (0.2)%
2014................................ 39.60 26.69 38.87 29.47 36.04 2.0% (0.1)%
2015................................ 40.81 27.57 39.66 30.24 35.94 2.5% (0.5)%
2016................................ 41.17 26.00 40.32 30.87 37.50 1.5% (0.9)%
2017................................ 42.00 28.67 41.18 31.73 38.32 2.2% (1.0)%
2018................................ 43.15 29.48 41.91 32.41 39.16 2.2% (1.0)%
2019................................ 43.78 30.16 42.85 33.23 40.00 2.1% (1.0)%
2020................................ 44.61 31.12 43.71 34.15 40.82 2.0% (1.1)%
2021................................ 44.96 32.11 43.13 34.68 40.85 0.1% (1.1)%
2022................................ 46.08 32.91 44.21 35.55 41.87 2.5% (1.1)%
2023................................ 47.23 33.73 45.32 36.44 42.92 2.5% (1.1)%
2024................................ 48.41 34.58 46.45 37.35 43.99 2.5% (1.1)%
2025................................ 49.62 35.44 47.61 38.28 45.09 2.5% (1.1)%
2026................................ 50.87 36.33 48.80 39.24 46.21 2.5% (1.1)%
2027................................ 52.14 37.24 50.02 40.22 47.37 2.5% (1.1)%
2028................................ 53.44 38.17 51.27 41.22 48.55 2.5% (1.1)%
2029................................ 54.78 39.12 52.55 42.25 49.77 2.5% (1.1)%
2030................................ 56.15 40.10 53.87 43.31 51.01 2.5% (1.1)%
</TABLE>
CAPACITY PRICES
Capacity price results from the sensitivity scenarios are summarized in
Table 14 and Figure 12. Capacity prices are sensitive to fluctuations in the
cost of building new technologies, future demand growth, and the amount of new
capacity that enters the market. Because SERC requires significant new capacity
additions, only very large changes in the supply/demand balance and
technological improvements lowering the cost of new capacity result in
significant deviations from the base case capacity price forecast.
C-36
<PAGE>
TABLE 14: CAPACITY PRICE RESULTS--SENSITIVITY ANALYSES (NOMINAL $/KW-YR)
<TABLE>
<CAPTION>
CAPACITY PRICE $ KW-YR % CHG FROM BASE
---------------------------------------------------- ----------------------------------------------------
BASE LOW 12% OVER TECH BASE LOW 12% OVER TECH
YEAR CASE FUEL RESERVE BUILD IMPROVE CASE FUEL RESERVE BUILD IMPROVE
- ---- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000................. 46.46 46.46 46.36 26.58 46.46 -- 0.0 % (0.2)% (42.8)% 0.0 %
2001................. 47.26 47.26 47.06 15.38 46.79 -- 0.0 % (0.4)% (67.5)% (1.0)%
2002................. 47.97 47.77 47.67 18.33 47.02 -- (0.4)% (0.6)% (61.8)% (2.0)%
2003................. 48.69 48.59 48.49 48.59 47.26 -- (0.2)% (0.4)% (0.2)% (2.9)%
2004................. 49.82 49.92 49.42 49.52 47.89 -- 0.2 % (0.8)% (0.6)% (3.9)%
2005................. 50.56 50.36 50.76 50.46 48.12 -- (0.4)% 0.4 % (0.2)% (4.8)%
2006................. 52.11 51.31 51.31 51.81 49.16 -- (1.5)% (1.5)% (0.6)% (5.7)%
2007................. 52.38 52.68 52.18 51.98 48.90 -- 0.6 % (0.4)% (0.8)% (6.6)%
2008................. 53.65 53.75 53.35 52.75 49.64 -- 0.2 % (0.6)% (1.7)% (7.5)%
2009................. 55.04 54.24 54.34 54.24 50.48 -- (1.5)% (1.3)% (1.5)% (8.3)%
2010................. 55.13 55.83 54.93 54.63 50.02 -- 1.3 % (0.4)% (0.9)% (9.3)%
2011................. 55.84 56.34 55.54 55.74 50.66 -- 0.9 % (0.5)% (0.2)% (9.3)%
2012................. 57.27 57.67 57.37 56.87 51.95 -- 0.7 % 0.2 % (0.7)% (9.3)%
2013................. 58.20 57.90 58.20 57.80 52.80 -- (0.5)% 0.0 % (0.7)% (9.3)%
2014................. 58.85 58.75 58.75 58.65 53.39 -- (0.2)% (0.2)% (0.3)% (9.3)%
2015................. 59.61 59.41 59.51 59.21 54.07 -- (0.3)% (0.2)% (0.7)% (9.3)%
2016................. 60.38 60.58 60.08 60.28 54.77 -- 0.3 % (0.5)% (0.2)% (9.3)%
2017................. 61.46 61.36 61.16 61.16 55.76 -- (0.2)% (0.5)% (0.5)% (9.3)%
2018................. 62.26 62.06 61.86 62.06 56.48 -- (0.3)% (0.6)% (0.3)% (9.3)%
2019................. 63.17 63.27 63.07 63.07 57.31 -- 0.2 % (0.2)% (0.2)% (9.3)%
2020................. 64.30 64.40 64.00 64.00 58.33 -- 0.2 % (0.5)% (0.5)% (9.3)%
2021................. 65.08 65.16 64.78 64.74 59.04 -- 0.1 % (0.5)% (0.5)% (9.3)%
2022................. 66.71 66.79 66.40 66.36 60.52 -- 0.1 % (0.5)% (0.5)% (9.3)%
2023................. 68.38 68.46 68.06 68.02 62.03 -- 0.1 % (0.5)% (0.5)% (9.3)%
2024................. 70.09 70.17 69.76 69.72 63.58 -- 0.1 % (0.5)% (0.5)% (9.3)%
2025................. 71.84 71.93 71.51 71.46 65.17 -- 0.1 % (0.5)% (0.5)% (9.3)%
2026................. 73.63 73.72 73.29 73.25 66.80 -- 0.1 % (0.5)% (0.5)% (9.3)%
2027................. 75.47 75.57 75.13 75.08 68.47 -- 0.1 % (0.5)% (0.5)% (9.3)%
2028................. 77.36 77.46 77.00 76.96 70.18 -- 0.1 % (0.5)% (0.5)% (9.3)%
2029................. 79.29 79.39 78.93 78.88 71.93 -- 0.1 % (0.5)% (0.5)% (9.3)%
2030................. 81.28 81.38 80.90 80.85 73.73 -- 0.1 % (0.5)% (0.5)% (9.3)%
</TABLE>
- ------------------------
* Assumes a 60% load factor based on SERC summer load factor for 1999 as
reported in EIA-411
As a result of the region's tight capacity situation, the only significant
sensitivities in the capacity price forecasts are seen in the overbuild scenario
and in the technological improvement scenario. In the overbuild scenario,
capacity prices drop over 60% from the base case in the early years of the
forecast. In the technological improvements scenario, capacity prices gradually
deviate from the base case forecast by an additional 1% per year in each of the
first 10 years of the forecast.
C-37
<PAGE>
FIGURE 12: CAPACITY PRICE RESULTS--SENSITIVITY ANALYSES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPACITY PRICES ($/KW-YR)
<S> <C> <C> <C> <C> <C>
BASE CASE LOW FUEL 12% RESERVE OVERBUILD TECH IMPROVE
2000 46.46 46.46 46.36 26.58 46.46
2001 47.26 47.26 47.06 15.38 46.79
2002 47.97 47.77 47.67 18.33 47.02
2003 48.69 48.59 48.49 48.59 47.26
2004 49.82 49.92 49.42 49.52 47.89
2005 50.56 50.36 50.76 50.46 48.12
2006 52.11 51.31 51.31 51.81 49.16
2007 52.38 52.68 52.18 51.98 48.90
2008 53.65 53.75 53.35 52.75 49.64
2009 55.04 54.24 54.34 54.24 50.48
2010 55.13 55.83 54.93 54.63 50.02
2011 55.84 56.34 55.54 55.74 50.66
2012 57.27 57.67 57.37 56.87 51.95
2013 58.20 57.90 58.20 57.80 52.80
2014 58.85 58.75 58.75 58.65 53.39
2015 59.61 59.41 59.51 59.21 54.07
2016 60.38 60.58 60.08 60.28 54.77
2017 61.46 61.36 61.16 61.16 55.76
2018 62.26 62.06 61.86 62.06 56.48
2019 63.17 63.27 63.07 63.07 57.31
2020 64.30 64.40 64.00 64.00 58.33
2021 65.08 65.16 64.78 64.74 59.04
2022 66.71 66.79 66.40 66.36 60.52
2023 68.38 68.46 68.06 68.02 62.03
2024 70.09 70.17 69.76 69.72 63.58
2025 71.84 71.93 71.51 71.46 65.17
2026 73.63 73.72 73.29 73.25 66.80
2027 75.47 75.57 75.13 75.08 68.47
2028 77.36 77.46 77.00 76.96 70.18
2029 79.29 79.39 78.93 78.88 71.93
2030 81.28 81.38 80.90 80.85 73.73
</TABLE>
The overbuild scenario merely accelerates the addition of capacity that is
forecast in the base case. This is best illustrated by a comparison between
capacity additions in the base case and capacity additions in the overbuild
scenario as shown in Table 15.
TABLE 15: CAPACITY ADDITIONS--BASE CASE VS. OVERBUILD SCENARIO
<TABLE>
<CAPTION>
BASE CASE CUMMULATIVE RESERVE OVERBUILD CUMMULATIVE RESERVE
YEAR ADDITIONS* ADDITIONS MARGIN ADDITIONS* ADDITIONS MARGIN
- ---- ---------- ----------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
2000............................. 3,760 3,760 13% 7,510** 7,510 16%
2001............................. 4,570 8,330 15% 6,007** 13,517 19%
2002............................. 2,450 10,780 15% 450 13,967 17%
2003............................. 4,243 15,023 15% 1,060 15,027 15%
2004............................. 5,115 20,138 15% 5,118 20,145 15%
2005............................. 4,222 24,360 15% 4,226 24,371 15%
</TABLE>
- ------------------------
* Includes Merchant plants explicity added and incremental capacity added by
IREMM
** Also includes capacity added for Overbuild scenario
Table 15 shows that cumulative capacity additions in the overbuild scenario
are well ahead of those in the base case by the end of 2001. In the overbuild
scenario, the reserve margin rises to 19% by 2001. As a result, it becomes
uneconomic to build new capacity. Due to over capacity conditions, capacity
additions in the overbuild scenario slow in 2002 and 2003. By the end of 2003,
cumulative capacity additions match those of the base case. As a result, market
prices recover by 2003 as demand increases and the reserve margin falls back to
15%. From 2003 onward, the overbuild scenario results closely track base case
results. Moreover, it bears mentioning that assuming an additional 9,000 MW of
capacity will come on line before June 2001 is, in RDI's view, a very aggressive
assumption.
The overbuild scenario indicates that one of the primary risks to the
profitability of a new peaking unit is aggressive overbuilding in a region.
Employing the capacity price allocation methodology described above, total
on-peak prices in 2000 would be significantly lower in the overbuild scenario
than in the base
C-38
<PAGE>
case. Figure 13 shows that the total price for August 2000 is forecast to reach
39.37 $/MWh in the overbuild scenario. RDI's total price forecast for
August 2000 in the base case approaches 70 $/MWh. This implies that if the
market were to overbuild capacity in the early years of the forecast, price
volatility would be dampened--limiting the opportunity for operators of peaking
units to capitalize on price spikes in a few hours of the year. Still, if over
building did occur, the market would likely react to the over-saturation by not
adding capacity until 2003 when the capacity market is brought back into
equilibrium. It is even possible that the market might not react until price
spikes occur, signaling the need for new demand. In such a case, prices could
spike higher than forecast by RDI in 2003 or 2004.
FIGURE 13: TOTAL PRICE OF FIRM POWER--OVERBUILD SCENARIO (2000)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL PRICE OF FIRM POWER (CAPACITY & ENERGY) $/MWH
<S> <C> <C>
ENERGY CAPACITY
JAN 21.85 -
FEB 20.53 -
MAR 20.51 -
APR 24.64 -
MAY 22.83 1.85
JUN 25.54 5.54
JUL 26.51 11.08
AUG 28.29 11.08
SEP 24.00 5.54
OCT 26.02 1.85
NOV 23.62 -
DEC 20.45 -
</TABLE>
It is RDI's opinion that over the next several years it is not likely that
there will be an overbuilding of capacity in the Southeast U.S. To date only
5,000 MW of new announced capacity additions appear likely to be built by 2002.
To maintain a level of capacity reserves that will prevent very sharp price
spikes in the market, at least another 5,000 MW of new capacity will need to be
developed, permitted, financed, and constructed by 2002. Overbuilding would
require even more new capacity additions. With new power plant development in
other regions of the country creating a significant demand for turbines,
developers will likely find it both expensive and difficult to acquire enough
turbines to meet this level of demand in such a short-time frame.
Beyond 2002, there is a chance that over the course of 30 years the region
may sometimes experience over-capacity. During these periods the value of firm
capacity may be diminished as shown in the over-build sensitivity analysis.
However, we also believe that price dips will be followed by price spikes as
shortages are likely to occur as well. Over the duration of the 30-year
contract, average future electricity prices should approximate the long run
marginal cost of electricity.
It is also important to note that two dynamics in the Southeast electricity
market are likely to diminish the potential for over-building. The first dynamic
is related to ownership concentration in the region. One of the keys to
commodity pricing is the asset ownership concentration in a region. High
concentration of asset ownership should provide pricing discipline in the
Southeast U.S. The top five companies in the Southeast control 70% of the
generating capacity. Within Alabama and Georgia, 75% of the generation assets
are controlled by only two companies. In the event of an overbuild scenario,
these large companies will have significant economic incentives to temporarily
close a portion of their generation facilities to increase the value of their
other facilities that remain open. Such a high concentration of ownership is
C-39
<PAGE>
likely to moderate the downward price impacts of an overbuild scenario. A second
dynamic is the rapid demand growth in the region. Robust demand growth serves to
mitigate the potential for over-building because excess supplies can more
quickly be absorbed by the market.
The second primary risk to combustion turbine profitability is demonstrated
in the technological improvement scenario. While the impact of technological
improvements is initially small, it is cumulative and becomes quite significant
by the middle years of the forecast. Due to the on-going nature of its effect on
capacity prices, the technological improvement scenario would reduce capacity
prices and consequently the profitability of the Tenaska Georgia Partner's
project.
CAPACITY FACTORS
The sensitivity analyses also provide insight on how changes in these
assumptions affect the Tenaska Georgia Partners project's utilization. Capacity
factors of peaking turbines will be most sensitive to changes in the
supply/demand balance in the region, the type of capacity added to the grid, and
improvements in peaking technology.
Figure 14 shows forecast capacity factors for the month of August in select
years of the forecast. Except in the overbuild scenario, the project's
utilization closely tracks base case results. Capacity factors in the overbuild
scenario are lower than the base case because there is a surplus of capacity
resulting from the overbuild. Capacity factors remain lower than the base case
throughout the forecast period because 1,500 additional megawatts of baseload
capacity is added in the early years of the overbuild scenario that is not added
in the base case. The additional baseload capacity moves all peaking capacity
back on the supply curve throughout the forecast period. Lower capacity factors
in the overbuild scenario indicate that the Tenaska Georgia Partner's project
would operate during substantially less hours if additional combined cycle
capacity is added to the region.
FIGURE 14: FORECAST AUGUST CAPACITY FACTORS--TENASKA GEORGIA PARTNER'S
PROJECT (SELECT YEARS)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AUGUST CAPACITY FACTORS
<S> <C> <C> <C> <C>
Base Case Low Fuel Overbuild 12% Reserve
2003 9% 9% 8% 11%
2005 14% 13% 7% 15%
2010 18% 16% 13% 17%
2015 14% 14% 5% 14%
2020 7% 8% 4% 8%
</TABLE>
Detailed monthly capacity factor results for all scenarios are included in
Appendix C.
C-40
<PAGE>
APPENDIX A:
GAS MARKET ISSUES IN THE SOUTHEAST REGION
This appendix examines gas supply, demand, and transportation issues in the
southeast region.
GAS SUPPLY
The southeast U.S. is primarily dependent on gas supplies from the Gulf
region, both onshore and offshore. The onshore regions of Louisiana,
Mississippi, and Alabama are mature production areas. New exploration in the
region will be required to maintain current production levels. The primary area
of interest from a supply expansion perspective is the Gulf of Mexico offshore.
The offshore region currently accounts for almost one-quarter of the
nation's gas supply with production above 5 Tcf per year. Recently, many
industry experts have begun to raise concerns about the rate at which producing
wells on the shelf of the Gulf of Mexico decline. Shelf production is currently
represents approximately 80% of total Gulf production. Decline rates are
expected to reach 45% by 2001, resulting in the need for substantial amounts of
drilling to replace existing production. Given the economics of the region, more
drilling is likely to translate into higher commodity prices. RDI forecasts that
over 1,300 well completions per year will have to occur in 2000 to satisfy
demand. By 2010, 1,700 well completions per year will be required.
It is RDI's view that the gas industry will be able to sustain the increased
gas production levels that will be required in the Gulf region. It is likely
that the deep-water and Eastern (Mobile Bay, Destin) areas of the Gulf will
sustain the majority of gas supply growth over the long term. RDI projects
annual production from the gulf to reach 7 Tcf (19 Bcfd) by 2010. Even though
drilling costs are expected to decline through 2010 as a result of technological
innovation, the increased depth of drilling and complexity of the formations
explored drives RDI's gas price forecast upward after 2006.
One other supply issue of concern is gas processing capacity in the
southeast. Processing facilities are currently near full utilization. Therefore
growth in gas supply from the Gulf will have to be met with increases in
processing capacity, tending to increase prices.
GAS TRANSPORTATION
The Southeast region currently has limited pipeline capacity. RDI estimates
that about 3.5 Bcfd can enter Transco pipeline at the Georgia border. Average
utilization is around 85% at this crossing point, which indicates that overall
capacity is fairly tight into Georgia on Transco. RDI's modeling indicates that
summertime utilization falls into the 65% range. RDI expects that capacity
utilization will tighten through 2006 at which time expansions will be
necessary. However, Transco has already taken several steps to alleviate any
potential pipeline capacity shortages. First, Transco has pursued development of
a project referred to as Southcoast. This pipeline expansion project, scheduled
to be completed in 2001, would increase pipeline capacity by 600 MMcfd in the
Alabama and Georgia region. This capacity expansion alone would create enough
new pipeline capacity to satisfy demand through the next decade. Another
project, referred to as Cumberland, would increase Transco's pipeline capacity
by another 200 MMcfd in Northern Georgia.
Other pipeline expansions are also forecast during the 2000 to 2010 period.
Several major expansions are forecast for Florida Gas Transmission (FGT) at
Mobile Bay, Alabama. One other major project includes a new pipeline called
Palmetto which is proposed for the Carolinas.
One controversial project included in the RDI forecast is an expansion from
the offshore Gulf to Florida. RDI's forecast includes a 600 MMcfd expansion from
the Gulf as an alternative to continued expansions of FGT. In March 1999
Williams' Buccaneer project was joined by a competing project sponsored by
Coastal called Gulfstream. The State of Florida is very protective of its
coastal waters, and either one of these projects would have to pass stringent
environmental reviews. The state has adamantly
C-A-1
<PAGE>
opposed offshore pipes on the coast of Florida in the past. On the other hand,
the economic rationale for building the system is strong. As gas drilling
operations move further east from the Mobile Bay area into the Destin Dome
region at the tip of the Florida panhandle and as gas demand for electric
generation surges in Florida, an offshore pipeline into Florida linking these
areas of supply and demand has compelling economic logic.
One other gas transportation issues of note is that final FERC decisions on
short term capacity are still lingering. It is possible that a FERC decision
could result in auctions that might free up pipe capacity as portions of firm
transportation contracts are offered back to the market for short time periods.
GAS DEMAND
Gas demand in the Southeast is anchored by strong industrial gas demand.
Weather conditions in the region are generally mild so swings in residential and
commercial demand are minimal. Electric sector gas demand currently plays a very
small role in the region, but growth in this sector will generate the bulk of
new demand. Although electric generation will be extremely important to demand
growth, the high levels of population and economic growth will also contribute
to future demand growth.
Figure APP-1 shows projected gas demand by year and sector for the State of
Georgia. Electric generation demand is expected to increase at an annual average
rate of 160% per year as demand for this sector grows from a value very close to
zero. By 2010 annual demand is expected to reach 500 Bcf. Residential and
commercial demand is forecast to increase at a rate of 2.3% per year. RDI
expects total U.S. annual gas consumption to reach 30 Tcf in 2011, of which
electric generation demand will be about 9 Tcf, inclusive of grid connected
cogeneration.
One final factor affecting markets in Georgia is the introduction of
competition for gas supply at the residential customer level. By the end of the
year Atlanta Gas Light will have completely exited the merchant function. So far
customer response to choice has been mild, but now customers will have to choose
a supplier or be assigned to a marketer. This arrangement has given rise to a
number of unique marketing ploys. For example Columbia Gas Marketing is using
Amway distributors. Unbundling is not expected to change demand dramatically,
but it should cause an increase in the number of gas marketers holding pipe
capacity into Georgia. Potentially, this could increase the liquidity of the
secondary market for transmission capacity.
FIGURE APP-1: NATURAL GAS DEMAND FORECAST FOR GEORGIA
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NATURAL GAS DEMAND IN BILLIONS OF CUBIC FEET
<S> <C> <C> <C>
BCF ELECTRIC GENERATION INDUSTRIAL RESIDENTIAL-COMMERCIAL
1998 9 175 192
1999 4 177 203
2000 28 177 210
2001 38 180 213
2002 52 180 218
2003 70 182 222
2004 91 181 227
2005 106 183 232
2006 119 185 238
2007 135 190 242
2008 155 191 244
2009 172 191 247
2010 203 196 249
</TABLE>
C-A-2
<PAGE>
APPENDIX B:
NUCLEAR LICENSE EXPIRATION DATES IS SERC
<TABLE>
<CAPTION>
OPERATING
CAPACITY LICENSE
OPERATOR PLANT STATE M/W EXP. DATE
-------- --------------------------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C>
CP&L................................. Brunswick 1 NC 813 September 8, 2016
CP&L................................. Brunswick 2 NC 810 December 27, 2014
CP&L................................. Harris 1 NC 860 October 24, 2026
CP&L................................. Robinson 2 SC 683 July 31, 2010
Duke................................. Catawba 1 SC 1,129 December 6, 2024
Duke................................. Catawba 2 SC 1,129 February 24, 2026
Duke................................. McGuire 1 NC 1,129 June 12, 2021
Duke................................. McGuire 2 NC 1,129 March 3, 2023
Duke................................. Oconee 1 SC 846 February 6, 2013
Duke................................. Oconee 2 SC 846 October 6, 2013
Duke................................. Oconee 3 SC 846 July 19, 2014
SCANA................................ Summer 1 SC 942 August 6, 2022
Southern............................. Edwin I. Hatch 1 GA 813 August 6, 2014
Southern............................. Edwin I. Hatch 2 GA 813 June 13, 2018
Southern............................. Joseph M. Farley 1 AL 824 June 25, 2017
Southern............................. Joseph M. Farley 2 AL 854 March 31, 2021
Southern............................. Vogtie 1 GA 1,164 January 16, 2027
Southern............................. Vogtie 2 GA 1,164 February 9, 2029
TVA.................................. Browns Ferry 2 AL 1,116 June 28, 2014
TVA.................................. Browns Ferry 3 AL 1,110 July 2, 2016
TVA.................................. Sequoyah 1 TN 1,119 September 17, 2020
TVA.................................. Sequoyah 2 TN 1,119 September 15, 2021
TVA.................................. Watts Par 1 TN 1,122 November 9, 2035
Virginia Power....................... North Anna 1 VA 893 April 1, 2018
Virginia Power....................... North Anna 2 VA 897 August 21, 2020
Virginia Power....................... Surry 1 VA 801 May 25, 2012
Virginia Power....................... Surry 2 VA 801 January 29, 2013
</TABLE>
C-B-1
<PAGE>
APPENDIX C:
DETAILED MONTHLY CAPACITY FACTORS--BASE CASE
<TABLE>
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
------------------------------
JAN FEB MAR APR MAY JUN JUL AUG
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2001................................. -- -- -- -- -- 9 17 21
2002................................. -- 3 1 -- 5 11 41 42
2003................................. -- 5 1 -- 8 31 57 63
2004................................. 2 6 -- -- 18 38 62 78
2005................................. 9 7 8 -- 22 70 86 91
2006................................. 9 6 10 5 24 73 90 110
2007................................. 12 6 6 -- 24 78 93 111
2008................................. 10 10 11 -- 27 75 93 112
2009................................. 12 8 11 4 26 78 94 118
2010................................. 11 6 9 -- 25 72 98 120
2011................................. 11 10 10 1 24 68 89 105
2012................................. 10 8 8 2 24 72 96 114
2013................................. 8 7 8 -- 24 60 88 104
2014................................. 7 5 8 2 20 51 78 87
2015................................. 5 4 4 -- 22 51 79 92
2016................................. 5 5 2 -- 18 54 79 82
2017................................. 5 5 5 -- 18 33 80 68
2018................................. -- -- -- -- 16 35 72 73
2019................................. -- -- -- -- 15 30 67 65
2020................................. -- -- -- -- 14 27 57 49
2021................................. -- -- -- -- 2 20 47 40
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
SEP OCT NOV DEC TOTAL
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
2001................................. 4 -- -- 3 54
2002................................. 12 3 -- 6 124
2003................................. 18 -- -- 3 186
2004................................. 16 6 -- 8 234
2005................................. 29 19 3 6 349
2006................................. 41 17 2 6 393
2007................................. 39 23 15 12 419
2008................................. 40 18 16 9 421
2009................................. 49 36 9 8 453
2010................................. 40 20 15 11 428
2011................................. 45 21 13 11 408
2012................................. 49 24 6 7 420
2013................................. 33 15 13 6 366
2014................................. 31 19 5 6 319
2015................................. 36 5 2 3 303
2016................................. 22 4 -- 2 273
2017................................. 20 6 -- 5 245
2018................................. 28 2 -- -- 226
2019................................. 15 2 -- -- 194
2020................................. 13 2 -- -- 162
2021................................. 4 -- -- -- 113
</TABLE>
<TABLE>
<CAPTION>
MONTHLY CAPACITY FACTORS
------------------------
JAN FEB MAR APR MAY JUN JUL AUG SEP
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001...................... 0% 0% 0% 0% 0% 3% 5% 6% 1%
2002...................... 0% 1% 0% 0% 1% 2% 6% 6% 2%
2003...................... 0% 1% 0% 0% 1% 5% 8% 9% 3%
2004...................... 0% 1% 0% 0% 3% 6% 9% 12% 2%
2005...................... 1% 1% 1% 0% 3% 11% 13% 14% 4%
2006...................... 1% 1% 1% 1% 4% 11% 13% 16% 6%
2007...................... 2% 1% 1% 0% 4% 12% 14% 17% 6%
2008...................... 1% 2% 2% 0% 4% 12% 14% 17% 6%
2009...................... 2% 1% 2% 1% 4% 12% 14% 18% 8%
2010...................... 2% 1% 1% 0% 4% 11% 15% 18% 6%
2011...................... 2% 2% 1% 0% 4% 10% 13% 16% 7%
2012...................... 1% 1% 1% 0% 4% 11% 14% 17% 8%
2013...................... 1% 1% 1% 0% 4% 9% 13% 16% 5%
2014...................... 1% 1% 1% 0% 3% 8% 12% 13% 5%
2015...................... 1% 1% 1% 0% 3% 8% 12% 14% 6%
2016...................... 1% 1% 0% 0% 3% 8% 12% 12% 3%
2017...................... 1% 1% 1% 0% 3% 5% 12% 10% 3%
2018...................... 0% 0% 0% 0% 2% 5% 11% 11% 4%
2019...................... 0% 0% 0% 0% 2% 5% 10% 10% 2%
2020...................... 0% 0% 0% 0% 2% 4% 9% 7% 2%
2021...................... 0% 0% 0% 0% 0% 3% 7% 6% 1%
--- --- --- --- --- --- --- --- ---
AVERAGE................... 1% 1% 1% 0% 3% 8% 11% 13% 4%
<CAPTION>
MONTHLY CAPACITY FACTORS
OCT NOV DEC AVG
-------- -------- -------- --------
<S> <C> <C> <C> <C>
2001...................... 0% 0% 1% 2%
2002...................... 0% 0% 1% 2%
2003...................... 0% 0% 0% 2%
2004...................... 1% 0% 1% 3%
2005...................... 3% 0% 1% 4%
2006...................... 3% 0% 1% 5%
2007...................... 3% 2% 2% 5%
2008...................... 3% 2% 1% 5%
2009...................... 5% 1% 1% 6%
2010...................... 3% 2% 2% 5%
2011...................... 3% 2% 2% 5%
2012...................... 4% 1% 1% 5%
2013...................... 2% 2% 1% 5%
2014...................... 3% 1% 1% 4%
2015...................... 1% 0% 0% 4%
2016...................... 1% 0% 0% 3%
2017...................... 1% 0% 1% 3%
2018...................... 0% 0% 0% 3%
2019...................... 0% 0% 0% 2%
2020...................... 0% 0% 0% 2%
2021...................... 0% 0% 0% 1%
--- --- --- ---
AVERAGE................... 2% 1% 1% 4%
</TABLE>
* Assumes 450 MW on line in June, 2001 and 450 MW on line in June, 2002
C-C-1
<PAGE>
SUMMARY
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003...................... 0% 1% 0% 0% 1% 5% 8% 9% 3%
2005...................... 1% 1% 1% 0% 3% 11% 13% 14% 4%
2010...................... 2% 1% 1% 0% 4% 11% 15% 18% 6%
2015...................... 1% 1% 1% 0% 3% 8% 12% 14% 6%
2020...................... 0% 0% 0% 0% 2% 4% 9% 7% 2%
--- --- --- --- --- --- --- --- ---
AVG 2000-2021............. 1% 1% 1% 0% 3% 8% 11% 13% 4%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003...................... 0% 0% 0% 2%
2005...................... 3% 0% 1% 4%
2010...................... 3% 2% 2% 5%
2015...................... 1% 0% 0% 4%
2020...................... 0% 0% 0% 2%
--- --- --- ---
AVG 2000-2021............. 2% 1% 1% 4%
</TABLE>
REVISED START-UPS
<TABLE>
<CAPTION>
YR JAN FEB MAR APR MAY JUN JUL AUG SEP
- -- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003..................... 0% 1% 0% 0% 1% 5% 8% 9% 3%
2005..................... 1% 1% 1% 0% 3% 11% 13% 14% 4%
<CAPTION>
YR OCT NOV DEC TOTAL
- -- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003..................... 0% 0% 0% 2.4%
2005..................... 3% 0% 1% 4.4%
</TABLE>
C-C-2
<PAGE>
APPENDIX C:
DETAILED MONTHLY CAPACITY FACTORS--LOW FUEL SCENARIO
<TABLE>
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
------------------------------
YEAR JAN FEB MAR APR MAY JUN JUL AUG
- ---- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2001................................. -- -- -- -- -- 9 20 25
2002................................. -- 3 -- -- 6 22 50 42
2003................................. -- 6 -- -- 11 35 58 63
2004................................. 4 6 2 -- 17 52 70 86
2005................................. 8 8 10 -- 20 60 81 87
2006................................. 11 9 10 7 23 60 86 105
2007................................. 13 6 10 3 23 79 98 110
2008................................. 9 6 9 2 24 76 93 111
2009................................. 9 9 9 1 25 74 97 117
2010................................. 14 9 7 2 24 80 95 109
2011................................. 13 10 9 4 24 78 92 109
2012................................. 9 9 8 5 24 70 93 110
2013................................. 6 7 6 2 24 66 85 100
2014................................. 7 6 7 1 22 56 82 97
2015................................. 6 6 4 -- 24 52 82 95
2016................................. 4 5 1 -- 18 53 75 84
2017................................. 3 2 3 -- 18 38 66 68
2018................................. 5 2 1 -- 18 47 72 81
2019................................. 3 -- -- -- 18 27 58 64
2020................................. -- -- -- -- 14 22 56 52
2021................................. -- -- -- -- 4 14 47 40
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
YEAR SEP OCT NOV DEC TOTAL
- ---- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
2001................................. 5 -- -- 3 62
2002................................. 12 1 -- 5 141
2003................................. 22 1 -- 6 202
2004................................. 19 5 -- 6 267
2005................................. 26 6 9 11 326
2006................................. 39 8 3 8 369
2007................................. 37 26 15 11 431
2008................................. 46 26 13 9 424
2009................................. 51 19 1 8 420
2010................................. 43 28 18 7 436
2011................................. 46 33 8 6 432
2012................................. 50 25 3 9 415
2013................................. 38 20 7 8 369
2014................................. 39 18 1 6 342
2015................................. 37 12 -- 6 324
2016................................. 28 4 -- 6 278
2017................................. 21 8 -- 2 229
2018................................. 35 3 -- 3 267
2019................................. 12 2 -- 3 187
2020................................. 14 2 -- -- 160
2021................................. 2 -- -- -- 107
</TABLE>
<TABLE>
<CAPTION>
MONTHLY CAPACITY FACTORS
------------------------
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001...................... 0% 0% 0% 0% 0% 3% 6% 7% 2%
2002...................... 0% 1% 0% 0% 2% 3% 7% 6% 2%
2003...................... 0% 1% 0% 0% 2% 5% 9% 9% 3%
2004...................... 1% 1% 0% 0% 3% 8% 10% 13% 3%
2005...................... 1% 1% 1% 0% 3% 9% 12% 13% 4%
2006...................... 2% 1% 1% 1% 3% 9% 13% 16% 6%
2007...................... 2% 1% 1% 0% 3% 12% 15% 16% 6%
2008...................... 1% 1% 1% 0% 4% 12% 14% 17% 7%
2009...................... 1% 1% 1% 0% 4% 11% 14% 17% 8%
2010...................... 2% 1% 1% 0% 4% 12% 14% 16% 7%
2011...................... 2% 2% 1% 1% 4% 12% 14% 16% 7%
2012...................... 1% 1% 1% 1% 4% 11% 14% 16% 8%
2013...................... 1% 1% 1% 0% 4% 10% 13% 15% 6%
2014...................... 1% 1% 1% 0% 3% 9% 12% 14% 6%
2015...................... 1% 1% 1% 0% 4% 8% 12% 14% 6%
2016...................... 1% 1% 0% 0% 3% 8% 11% 13% 4%
2017...................... 0% 0% 0% 0% 3% 6% 10% 10% 3%
2018...................... 1% 0% 0% 0% 3% 7% 11% 12% 5%
2019...................... 0% 0% 0% 0% 3% 4% 9% 10% 2%
2020...................... 0% 0% 0% 0% 2% 3% 8% 8% 2%
2021...................... 0% 0% 0% 0% 1% 2% 7% 6% 0%
--- --- --- --- --- --- --- --- ---
AVERAGE................... 1% 1% 1% 0% 3% 8% 11% 13% 5%
<CAPTION>
MONTHLY CAPACITY FACTORS
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2001...................... 0% 0% 1% 3%
2002...................... 0% 0% 1% 2%
2003...................... 0% 0% 1% 3%
2004...................... 1% 0% 1% 3%
2005...................... 1% 1% 2% 4%
2006...................... 1% 0% 1% 5%
2007...................... 4% 2% 2% 5%
2008...................... 4% 2% 1% 5%
2009...................... 3% 0% 1% 5%
2010...................... 4% 3% 1% 6%
2011...................... 5% 1% 1% 5%
2012...................... 4% 0% 1% 5%
2013...................... 3% 1% 1% 5%
2014...................... 3% 0% 1% 4%
2015...................... 2% 0% 1% 4%
2016...................... 1% 0% 1% 4%
2017...................... 1% 0% 0% 3%
2018...................... 0% 0% 0% 3%
2019...................... 0% 0% 0% 2%
2020...................... 0% 0% 0% 2%
2021...................... 0% 0% 0% 1%
--- --- --- ---
AVERAGE................... 2% 1% 1% 4%
</TABLE>
C-C-3
<PAGE>
SUMMARY
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003...................... 0% 1% 0% 0% 2% 5% 9% 9% 3%
2005...................... 1% 1% 1% 0% 3% 9% 12% 13% 4%
2010...................... 2% 1% 1% 0% 4% 12% 14% 16% 7%
2015...................... 1% 1% 1% 0% 4% 8% 12% 14% 6%
2020...................... 0% 0% 0% 0% 2% 3% 8% 8% 2%
--- --- --- --- --- --- --- --- ---
AVG....................... 1% 1% 1% 0% 3% 8% 11% 13% 5%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003...................... 0% 0% 1% 3%
2005...................... 1% 1% 2% 4%
2010...................... 4% 3% 1% 6%
2015...................... 2% 0% 1% 4%
2020...................... 0% 0% 0% 2%
--- --- --- ---
AVG....................... 2% 1% 1% 4%
</TABLE>
C-C-4
<PAGE>
APPENDIX C:
DETAILED MONTHLY CAPACITY FACTORS--OVERBUILD SCENARIO
<TABLE>
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
------------------------------
YEAR JAN FEB MAR APR MAY JUN JUL AUG
- ---- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2001................................. -- -- -- -- -- 2 8 13
2002................................. 1 3 -- -- 6 12 42 46
2003................................. -- 8 -- -- 10 22 36 54
2004................................. 3 8 -- -- 22 -- 49 46
2005................................. 7 2 6 -- 13 42 23 44
2006................................. 8 6 6 3 10 33 52 100
2007................................. -- 12 -- 3 5 16 37 63
2008................................. 8 9 -- -- 9 4 23 40
2009................................. 7 7 -- 5 10 65 91 107
2010................................. 3 8 8 -- 15 49 74 88
2011................................. -- 2 3 2 28 18 62 62
2012................................. 6 6 6 6 20 39 39 75
2013................................. 7 5 9 1 16 44 75 86
2014................................. 7 4 -- -- -- -- 16 17
2015................................. 3 -- -- -- 12 12 25 31
2016................................. 1 1 3 -- -- 1 55 57
2017................................. -- 6 4 -- 14 31 52 63
2018................................. 2 -- 3 -- 10 20 27 24
2019................................. -- 2 -- -- 8 15 37 37
2020................................. -- 4 1 -- 9 15 30 29
2021................................. -- -- -- -- 7 23 74 61
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
YEAR SEP OCT NOV DEC TOTAL
- ---- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
2001................................. 3 -- -- 2 28
2002................................. 17 6 -- 6 139
2003................................. 6 4 7 8 155
2004................................. 19 -- 8 10 165
2005................................. 11 12 -- 6 166
2006................................. 10 21 1 10 260
2007................................. 24 24 -- 6 190
2008................................. 9 5 13 10 130
2009................................. -- 21 1 6 320
2010................................. 19 14 18 13 309
2011................................. 43 10 4 10 244
2012................................. 30 16 6 10 259
2013................................. 30 13 12 -- 298
2014................................. 6 -- 2 6 58
2015................................. 8 -- -- -- 91
2016................................. 24 5 -- 1 148
2017................................. 25 9 -- 2 206
2018................................. 7 3 -- 2 98
2019................................. 9 2 -- -- 110
2020................................. 8 2 -- -- 98
2021................................. 5 -- -- -- 170
</TABLE>
<TABLE>
<CAPTION>
MONTHLY CAPACITY FACTORS
------------------------
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001...................... 0% 0% 0% 0% 0% 1% 2% 4% 1%
2002...................... 0% 1% 0% 0% 2% 2% 6% 7% 3%
2003...................... 0% 1% 0% 0% 1% 3% 5% 8% 1%
2004...................... 0% 1% 0% 0% 3% 0% 7% 7% 3%
2005...................... 1% 0% 1% 0% 2% 6% 3% 7% 2%
2006...................... 1% 1% 1% 0% 1% 5% 8% 15% 2%
2007...................... 0% 2% 0% 0% 1% 2% 6% 9% 4%
2008...................... 1% 1% 0% 0% 1% 1% 3% 6% 1%
2009...................... 1% 1% 0% 1% 1% 10% 14% 16% 0%
2010...................... 0% 1% 1% 0% 2% 8% 11% 13% 3%
2011...................... 0% 0% 0% 0% 4% 3% 9% 9% 7%
2012...................... 1% 1% 1% 1% 3% 6% 6% 11% 5%
2013...................... 1% 1% 1% 0% 2% 7% 11% 13% 5%
2014...................... 1% 1% 0% 0% 0% 0% 2% 3% 1%
2015...................... 0% 0% 0% 0% 2% 2% 4% 5% 1%
2016...................... 0% 0% 0% 0% 0% 0% 8% 9% 4%
2017...................... 0% 1% 1% 0% 2% 5% 8% 9% 4%
2018...................... 0% 0% 0% 0% 1% 3% 4% 4% 1%
2019...................... 0% 0% 0% 0% 1% 2% 6% 6% 1%
2020...................... 0% 1% 0% 0% 1% 2% 4% 4% 1%
2021...................... 0% 0% 0% 0% 1% 4% 11% 9% 1%
--- --- --- --- --- --- --- --- ---
AVERAGE................... 0% 1% 0% 0% 2% 3% 7% 8% 2%
<CAPTION>
MONTHLY CAPACITY FACTORS
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2001...................... 0% 0% 1% 1%
2002...................... 1% 0% 1% 2%
2003...................... 1% 1% 1% 2%
2004...................... 0% 1% 1% 2%
2005...................... 2% 0% 1% 2%
2006...................... 3% 0% 1% 3%
2007...................... 4% 0% 1% 2%
2008...................... 1% 2% 1% 2%
2009...................... 3% 0% 1% 4%
2010...................... 2% 3% 2% 4%
2011...................... 1% 1% 1% 3%
2012...................... 2% 1% 1% 3%
2013...................... 2% 2% 0% 4%
2014...................... 0% 0% 1% 1%
2015...................... 0% 0% 0% 1%
2016...................... 1% 0% 0% 2%
2017...................... 1% 0% 0% 3%
2018...................... 0% 0% 0% 1%
2019...................... 0% 0% 0% 1%
2020...................... 0% 0% 0% 1%
2021...................... 0% 0% 0% 2%
--- --- --- ---
AVERAGE................... 1% 1% 1% 2%
</TABLE>
C-C-5
<PAGE>
SUMMARY
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003...................... 0% 1% 0% 0% 1% 3% 5% 8% 1%
2005...................... 1% 0% 1% 0% 2% 6% 3% 7% 2%
2010...................... 0% 1% 1% 0% 2% 8% 11% 13% 3%
2015...................... 0% 0% 0% 0% 2% 2% 4% 5% 1%
2020...................... 0% 1% 0% 0% 1% 2% 4% 4% 1%
--- --- --- --- --- --- --- --- ---
AVG 2000-2021............. 0% 1% 0% 0% 2% 3% 7% 8% 2%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003...................... 1% 1% 1% 2%
2005...................... 2% 0% 1% 2%
2010...................... 2% 3% 2% 4%
2015...................... 0% 0% 0% 1%
2020...................... 0% 0% 0% 1%
--- --- --- ---
AVG 2000-2021............. 1% 1% 1% 2%
</TABLE>
C-C-6
<PAGE>
APPENDIX C:
DETAILED MONTHLY CAPACITY FACTOR--12% RESERVE SCENARIO
<TABLE>
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
------------------------------
JAN FEB MAR APR MAY JUN JUL AUG
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2001................................. -- -- -- -- -- 10 17 24
2002................................. 1 3 2 -- 5 17 42 49
2003................................. 3 6 3 -- 14 38 60 74
2004................................. 3 7 2 -- 21 42 68 85
2005................................. 11 14 12 2 25 76 88 100
2006................................. 10 10 10 8 25 73 91 115
2007................................. 12 6 9 -- 26 77 92 111
2008................................. 11 10 11 2 27 73 94 111
2009................................. 12 8 13 2 26 78 97 118
2010................................. 14 9 12 -- 30 72 93 112
2011................................. 11 9 12 2 27 69 85 100
2012................................. 7 8 8 2 24 69 95 113
2013................................. 8 6 8 -- 25 59 86 102
2014................................. 11 6 11 -- 20 53 77 86
2015................................. 5 6 6 -- 24 49 78 93
2016................................. 5 5 5 1 19 53 78 80
2017................................. 2 5 5 -- 18 34 74 69
2018................................. -- 3 1 -- 18 32 72 74
2019................................. -- 6 -- -- 14 29 65 64
2020................................. -- -- -- -- 13 29 58 56
2021................................. -- -- -- -- -- 20 48 40
<CAPTION>
TENASKA GEORGIA POWER PARTNERS
MONTHLY PLANT GENERATION (GWH)
SEP OCT NOV DEC TOTAL
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
2001................................. 4 -- -- 3 58
2002................................. 16 6 -- 6 147
2003................................. 24 7 2 6 237
2004................................. 24 10 3 9 274
2005................................. 34 27 18 10 417
2006................................. 44 19 5 7 417
2007................................. 41 20 13 12 419
2008................................. 42 18 21 9 429
2009................................. 52 41 13 12 472
2010................................. 43 28 22 9 444
2011................................. 44 18 12 9 398
2012................................. 46 19 6 7 404
2013................................. 31 13 14 6 358
2014................................. 35 17 5 6 327
2015................................. 34 6 2 5 308
2016................................. 25 4 -- 3 278
2017................................. 19 6 1 5 238
2018................................. 28 2 -- -- 230
2019................................. 16 2 -- 2 198
2020................................. 13 3 -- 1 173
2021................................. 4 -- -- -- 112
</TABLE>
<TABLE>
<CAPTION>
MONTHLY CAPACITY FACTORS
------------------------------------------------------------------------------------------------
JAN FEB MAR APR MAY JUN JUL AUG SEP
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001...................... 0% 0% 0% 0% 0% 3% 5% 7% 1%
2002...................... 0% 1% 1% 0% 1% 3% 6% 7% 2%
2003...................... 0% 1% 0% 0% 2% 6% 9% 11% 4%
2004...................... 0% 1% 0% 0% 3% 6% 10% 13% 4%
2005...................... 2% 2% 2% 0% 4% 12% 13% 15% 5%
2006...................... 1% 2% 1% 1% 4% 11% 14% 17% 7%
2007...................... 2% 1% 1% 0% 4% 12% 14% 17% 6%
2008...................... 2% 2% 2% 0% 4% 11% 14% 17% 6%
2009...................... 2% 1% 2% 0% 4% 12% 14% 18% 8%
2010...................... 2% 1% 2% 0% 4% 11% 14% 17% 7%
2011...................... 2% 1% 2% 0% 4% 11% 13% 15% 7%
2012...................... 1% 1% 1% 0% 4% 11% 14% 17% 7%
2013...................... 1% 1% 1% 0% 4% 9% 13% 15% 5%
2014...................... 2% 1% 2% 0% 3% 8% 11% 13% 5%
2015...................... 1% 1% 1% 0% 4% 8% 12% 14% 5%
2016...................... 1% 1% 1% 0% 3% 8% 12% 12% 4%
2017...................... 0% 1% 1% 0% 3% 5% 11% 10% 3%
2018...................... 0% 0% 0% 0% 3% 5% 11% 11% 4%
2019...................... 0% 1% 0% 0% 2% 4% 10% 10% 2%
2020...................... 0% 0% 0% 0% 2% 4% 9% 8% 2%
2021...................... 0% 0% 0% 0% 0% 3% 7% 6% 1%
--- --- --- --- --- --- --- --- ---
AVERAGE................... 1% 1% 1% 0% 3% 8% 11% 13% 5%
<CAPTION>
MONTHLY CAPACITY FACTORS
------------------------------
OCT NOV DEC AVG
-------- -------- -------- --------
<S> <C> <C> <C> <C>
2001...................... 0% 0% 1% 3%
2002...................... 1% 0% 1% 2%
2003...................... 1% 0% 1% 3%
2004...................... 1% 0% 1% 3%
2005...................... 4% 3% 1% 5%
2006...................... 3% 1% 1% 5%
2007...................... 3% 2% 2% 5%
2008...................... 3% 3% 1% 5%
2009...................... 6% 2% 2% 6%
2010...................... 4% 3% 1% 6%
2011...................... 3% 2% 1% 5%
2012...................... 3% 1% 1% 5%
2013...................... 2% 2% 1% 5%
2014...................... 3% 1% 1% 4%
2015...................... 1% 0% 1% 4%
2016...................... 1% 0% 0% 4%
2017...................... 1% 0% 1% 3%
2018...................... 0% 0% 0% 3%
2019...................... 0% 0% 0% 3%
2020...................... 0% 0% 0% 2%
2021...................... 0% 0% 0% 1%
--- --- --- ---
AVERAGE................... 2% 1% 1% 4%
</TABLE>
C-C-7
<PAGE>
SUMMARY
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003...................... 0% 1% 0% 0% 2% 6% 9% 11% 4%
2005...................... 2% 2% 2% 0% 4% 12% 13% 15% 5%
2010...................... 2% 1% 2% 0% 4% 11% 14% 17% 7%
2015...................... 1% 1% 1% 0% 4% 8% 12% 14% 5%
2020...................... 0% 0% 0% 0% 2% 4% 9% 8% 2%
AVG 2000-2021............. 1% 1% 1% 0% 3% 8% 11% 13% 5%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003...................... 1% 0% 1% 3%
2005...................... 4% 3% 1% 5%
2010...................... 4% 3% 1% 6%
2015...................... 1% 0% 1% 4%
2020...................... 0% 0% 0% 2%
AVG 2000-2021............. 2% 1% 1% 4%
</TABLE>
DIFFERENCE
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003................... 0% 0% 0% 0% 1% 1% (1)% (1)% 1%
2005................... 0% 0% 1% 0% 0% (1)% (1)% 0% 1%
2010................... 0% 0% 0% 0% 0% (1)% (1)% (2)% 0%
2015................... 0% 1% 0% 0% 0% 0% (1)% 0% 0%
2020................... 0% 0% 0% 0% 0% 1% 1% 1% 1%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003................... 0% 0% 0% 0%
2005................... (1)% 0% 1% 0%
2010................... 0% 0% 0% 0%
2015................... 1% 0% 0% 0%
2020................... 0% 0% 0% 0%
</TABLE>
C-C-8
<PAGE>
APPENDIX D:
HOURLY PROFIT ANALYSIS
RDI performed an analysis of the average profits achieved by the Tenaska
Georgia Partner's project in select years of the forecast. The analysis was
performed for the years 2003 (the first full year in which the entire plant is
on line), 2005, 2010, 2015 and 2020. In each of these years, RDI compared the
market price recorded by IREMM to the dispatch cost of the plant in each hour
for which any unit at the plant was called upon to run. This analysis was used
to derive profits achieved from the energy market. To determine total
contributions to fixed costs, RDI further included revenues received from the
capacity market.
Table APP-2 summarizes the results of the hourly profit analysis on an
annual basis. Tables showing the results of the analysis summarized on a monthly
basis are attached within the following pages of Appendix D. In the monthly
tables, the annual capacity price is allocated to each month according to the
methodology described in the report above(11). That is, the annual price was
allocated only to the following months: May (5%); June (15%); July (30%); August
(30%); September (15%); and October (5%).
APP-2: HOURLY PROFIT ANALYSIS--ANNUAL SUMMARY
<TABLE>
<CAPTION>
TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT.
------------------------------ ------------------- ------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
YEAR GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003.................. 186 8,051 43.19 39.83 626 3.36 48.69 43,819 44,445
2005.................. 349 15,259 43.70 42.53 411 1.18 50.56 45,504 45,915
2010.................. 428 22,401 52.31 51.65 280 0.65 55.13 49,621 49,901
2015.................. 303 17,837 58.83 58.19 195 0.64 59.61 53.646 53,841
2020.................. 162 10,738 66.23 65.62 99 0.61 64.30 57,868 57,967
</TABLE>
APPENDIX D: HOURLY PROFIT ANALYSIS - 2003
BASE CASE SCENARIO
<TABLE>
<CAPTION>
TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT.
------------------------------ ------------------- ------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2003 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... -- -- -- 42.68 -- -- -- -- --
FEB................... 5 225 46.41 41.78 22 4.63 -- -- 22
MAR................... 1 36 42.08 40.68 1 1.40 -- -- 1
APR................... -- -- -- 39.78 -- -- -- -- --
MAY................... 8 343 40.39 39.48 8 0.91 2.43 2,191 2,199
JUN................... 31 1,248 40.24 39.48 24 0.76 7.30 6,573 6,596
JUL................... 57 2,405 42.40 39.78 149 2.62 14.61 13,146 13,294
AUG................... 63 2,864 45.57 39.78 364 5.79 14.61 13,146 13,510
SEP................... 18 777 42.35 39.78 47 2.57 7.30 6,573 6,620
OCT................... -- -- -- 40.08 -- -- 2.43 2,191 2,191
NOV................... -- -- -- 41.48 -- -- -- -- --
DEC................... 3 152 46.48 43.18 11 3.30 -- -- 11
--- ------ ----- ----- --- ---- ----- ------ ------
2003 TOTAL............ 186 8,051 43.19 39.83 626 3.36 48.69 43,819 44,445
</TABLE>
- ------------------------
(11) Pages 27-29.
C-D-1
<PAGE>
APPENDIX D: HOURLY PROFIT ANALYSIS - 2005
BASE CASE SCENARIO
<TABLE>
<CAPTION>
TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT.
------------------------------ ------------------- ------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2005 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... 9 418 46.07 45.40 6 0.67 -- -- 6
FEB................... 7 306 46.08 44.50 10 1.58 -- -- 10
MAR................... 8 356 44.08 43.30 6 0.78 -- -- 6
APR................... -- -- -- 42.40 -- -- -- -- --
MAY................... 22 922 42.76 42.00 16 0.76 2.53 2,275 2,292
JUN................... 70 2,961 42.09 42.00 6 0.09 7.58 6,826 6,832
JUL................... 86 3,736 43.37 42.40 83 0.97 15.17 13,651 13,735
AUG................... 91 4,076 44.84 42.40 222 2.44 15.17 13,651 13,873
SEP................... 29 1,247 43.74 42.40 38 1.34 7.58 6,826 6,864
OCT................... 19 815 42.89 42.70 4 0.19 2.53 2,275 2,279
NOV................... 3 128 44.63 44.20 1 0.43 -- -- 1
DEC................... 6 294 48.84 46.00 17 2.84 -- -- 17
--- ------ ----- ----- --- ---- ----- ------ ------
2005 TOTAL............ 349 15,259 43.70 42.53 411 1.18 50.56 45,504 45,915
</TABLE>
APPENDIX D: HOURLY PROFIT ANALYSIS - 2010
BASE CASE SCENARIO
<TABLE>
<CAPTION>
TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT.
------------------------------ ------------------- ------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2010 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... 11 635 55.73 55.18 6 0.55 -- -- 6
FEB................... 6 361 58.29 53.98 27 4.31 -- -- 27
MAR................... 9 467 52.86 52.48 3 0.38 -- -- 3
APR................... -- -- -- 51.38 -- -- -- -- --
MAY................... 25 1,301 51.35 50.98 9 0.37 2.76 2,481 2,490
JUN................... 72 3,701 51.05 50.98 5 0.07 8.27 7,443 7,448
JUL................... 98 5,084 51.88 51.38 49 0.50 16.54 14,886 14,935
AUG................... 120 6,305 52.42 51.38 125 1.04 16.54 14,886 15,011
SEP................... 40 2,081 52.01 51.38 25 0.63 8.27 7,443 7,469
OCT................... 20 1,043 51.78 51.68 2 0.10 2.76 2,481 2,483
NOV................... 15 799 53.97 53.58 6 0.39 -- -- 6
DEC................... 11 624 57.99 55.88 23 2.11 -- -- 23
--- ------ ----- ----- --- ---- ----- ------ ------
2010 TOTAL............ 428 22,401 52.31 51.65 280 0.65 55.13 49,621 49,901
</TABLE>
C-D-2
<PAGE>
APPENDIX D: HOURLY PROFIT ANALYSIS - 2015
BASE CASE SCENARIO
<TABLE>
<CAPTION>
TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT.
------------------------------ ------------------- ------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2015 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... 5 309 62.94 62.39 3 0.55 -- -- 3
FEB................... 4 235 62.50 61.09 5 1.41 -- -- 5
MAR................... 4 265 59.71 59.39 1 0.32 -- -- 1
APR................... -- -- -- 58.09 -- -- -- -- --
MAY................... 22 1,281 58.22 57.69 12 0.53 2.98 2,682 2,694
JUN................... 51 2,935 57.69 57.69 0 0.00 8.94 8,047 8,047
JUL................... 79 4,647 58.82 58.09 58 0.73 17.88 16,094 16,152
AUG................... 92 5,459 59.07 58.09 90 0.98 17.88 16,094 16,184
SEP................... 36 2,108 58.55 58.09 17 0.46 8.94 8,047 8,063
OCT................... 5 297 58.76 58.49 1 0.27 2.98 2,682 2,684
NOV................... 2 122 61.02 60.69 1 0.33 -- -- 1
DEC................... 3 179 65.91 63.29 7 2.62 -- -- 7
--- ------ ----- ----- --- ---- ----- ------ ------
2015 TOTAL............ 303 17,837 58.83 58.19 195 0.64 59.61 53,646 53,841
</TABLE>
APPENDIX D: HOURLY PROFIT ANALYSIS - 2020
BASE CASE SCENARIO
<TABLE>
<CAPTION>
TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT.
------------------------------ ------------------- ------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2020 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... -- -- -- 70.64 -- -- -- -- --
FEB................... -- -- -- 69.14 -- -- -- -- --
MAR................... -- -- -- 67.24 -- -- -- -- --
APR................... -- -- -- 65.74 -- -- -- -- --
MAY................... 14 915 65.38 65.24 2 0.14 3.21 2,893 2,895
JUN................... 27 1,734 65.27 65.24 1 0.03 9.64 8,680 8,681
JUL................... 57 3,818 66.53 65.74 46 0.79 19.29 17,360 17,406
AUG................... 49 3,270 66.67 65.74 45 0.93 19.29 17,360 17,406
SEP................... 13 862 66.07 65.74 4 0.33 9.64 8,680 8,684
OCT................... 2 138 66.64 66.24 1 0.40 3.21 2,893 2,894
NOV................... -- -- -- 68.64 -- -- -- -- --
DEC................... -- -- -- 71.54 -- -- -- -- --
--- ------ ----- ----- --- ---- ----- ------ ------
2020 TOTAL............ 162 10,738 66.23 65.62 99 0.61 64.30 57,868 57,967
</TABLE>
C-D-3
<PAGE>
APPENDIX E:
FUEL SWITCHING ANALYSIS
Pursuant to this report, RDI examined how the Tenaska Georgia Partners
project's profitability would be affected if it were forced to switch to fuel
oil during peak gas demand periods due to a lack of availability of natural gas.
This analysis was performed for the select years: 2003 (the first full year in
which the entire plant is on line), 2005, 2010, 2015 and 2020.
METHODOLOGY RDI analyzed peak periods of gas pipeline capacity in the
southeast. This analysis determined that if the Tenaska Georgia Partners project
would be forced to switch to fuel oil due to gas pipeline capacity constraints,
that interruption would most likely to occur in the months of January and
February. RDI made two further assumptions:
- the project would be forced to burn fuel oil for the entire month; and
- the project would be a price taker in the market.
RDI employed the same methodology described in Appendix D to determine the
effect of fuel switching on the project's profitability in the select years.
This analysis took into account two scenarios. First, RDI examined a scenario
where the plant would not be dispatched if it became uneconomic due to fuel
switching. The second scenario assumed that the plant would be dispatched as if
it had not switched fuels (i.e. the plant would be dispatched as it would in the
base case even if it became uneconomic due to fuel switching.)
RESULTS The results of the fuel switching analysis are summarized on an
annual basis below in Table APP-3 and on a monthly basis in the tables attached
to this Appendix.
The fuel switching analysis indicates that if the Tenaska Georgia Partners
project were forced to switch to fuel oil in the months of January and February,
it would never be economically dispatched in the years examined. This is due to
the significantly higher fuel oil forecast for the region.
However, in both scenarios considered, fuel switching has only a minor
impact on the overall profitability of the project. First, the months of January
and February are months in which the plant does not achieve high capacity
factors in the base case forecast. So, in the scenario in which the plant is not
dispatched, the revenues foregone from the energy market are relatively small.
If the plant is required to run despite being uneconomic, the losses sustained
in January and February are largely offset by energy market profits achieved in
later months, and by contributions to fixed costs from the capacity market.
Moreover, RDI's profitability analysis (outlined in Appendix D) demonstrates
that the project's profitability is largely dependent on its revenue
contributions from the capacity market. Fuel switching will not impact revenue
from the capacity market unless the plant is not able to generate. As shown in
Table APP-3, total contributions to fixed costs are not impacted by more than
one percent in any year analyzed in both fuel-switching scenarios.
TABLE APP--3 FUEL SWITCHING ANALYSIS--ANNUAL SUMMARY
<TABLE>
<CAPTION>
FUEL SWITCHING SCENARIO
BASE CASE ASSUMING NO DISPATCH
- ----------------------------------------------------- -----------------------------------------
ENERGY PROFIT CONT. ENERGY PROFIT CONT. %
------------------- FIXED ------------------- FIXED CHG
AVE COSTS AVG COSTS FROM
YEAR ($000) /MWH ($000) ($000) $/MWH ($000) BASE
---- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2003................. 626 3.36 44,445 603 3.24 44,422 -0.1%
2005................. 411 1.18 45,915 395 1.13 45,898 0.0%
2010................. 280 0.65 49,901 247 0.58 49,868 -0.1%
2015................. 195 0.64 53,841 187 0.62 53,833 0.0%
2020................. 99 0.61 57,967 99 0.61 57,967 0.0%
<CAPTION>
FUEL SWITCHING SCENARIO
ASSUMING PLANT DISPATCHED
- --------------------- -----------------------------------------
ENERGY PROFIT CONT. %
------------------- FIXED CHG
AVG COSTS FROM
YEAR ($000) $/MWH ($000) BASE
---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003................. 548 2.94 44,367 -0.2%
2005................. 157 0.45 45,661 -0.6%
2010................. (13) (0.03) 49,608 -0.5%
2015................. (16) (0.05) 53,630 -0.4%
2020................. 99 0.61 57,967 0.0%
</TABLE>
C-E-1
<PAGE>
APPENDIX E: FUEL SWITCHING ANALYSIS - 2003
<TABLE>
<CAPTION>
BASE CASE SCENARIO
------------------------------------------------------------------------------------------ TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT
------------------------------ ------------------- --------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2003 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 42.68 -- -- -- -- --
FEB.................. 5 225 46.41 41.78 22 4.63 -- -- 22
MAR.................. 1 36 42.08 40.68 1 1.40 -- -- 1
APR.................. -- -- -- 39.78 -- -- -- -- --
MAY.................. 8 343 40.39 39.48 8 0.91 2.43 2,191 2,199
JUN.................. 31 1,248 40.24 39.48 24 0.76 7.30 6,573 6,596
JUL.................. 57 2,405 42.40 39.78 149 2.62 14.61 13,146 13,294
AUG.................. 63 2,864 45.57 39.78 364 5.79 14.61 13,146 13,510
SEP.................. 18 777 42.35 39.78 47 2.57 7.30 6,573 6,620
OCT.................. -- -- -- 40.08 -- -- 2.43 2,191 2,191
NOV.................. -- -- -- 41.48 -- -- -- -- --
DEC.................. 3 152 46.48 43.18 11 3.30 -- -- 11
--- ------ ----- ----- --- ---- ----- ------ ------
2003 TOTAL........... 186 8,051 43.19 39.83 626 3.36 48.69 43,819 44,445
<CAPTION>
FUEL SWITCHING SCENARIO--ASSUMINGOPLANT DISPATCHED CONT.
ENERGY REVENUE ENERGY PROFIT
------------------------------ ------------------- CAPACITY FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2003 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 42.68 -- -- -- -- --
FEB.................. 5 225 46.41 41.78 22 4.63 -- -- 22
MAR.................. 1 36 42.08 40.68 1 1.40 -- -- 1
APR.................. -- -- -- 39.78 -- -- -- -- --
MAY.................. 8 343 40.39 39.48 8 0.91 2.43 2,191 2,199
JUN.................. 31 1,248 40.24 39.48 24 0.76 7.30 6,573 6,596
JUL.................. 57 2,405 42.40 39.78 149 2.62 14.61 13,146 13,294
AUG.................. 63 2,864 45.57 39.78 364 5.79 14.61 13,146 13,510
SEP.................. 18 777 42.35 39.78 47 2.57 7.30 6,573 6,620
OCT.................. -- -- -- 40.08 -- -- 2.43 2,191 2,191
NOV.................. -- -- -- 41.48 -- -- -- -- --
DEC.................. 3 152 46.48 43.18 11 3.30 -- -- 11
--- ------ ----- ----- --- ---- ----- ------ ------
2003 TOTAL........... 186 8,051 43.19 39.83 626 3.36 48.69 43,819 44,445
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 57.84 -- -- -- -- --
FEB.................. -- -- -- 57.84 -- -- -- -- --
MAR.................. 1 36 42.08 40.68 1 1.40 -- -- 1
APR.................. -- -- -- 39.78 -- -- -- -- --
MAY.................. 8 343 40.39 39.48 8 0.91 2.43 2,191 2,199
JUN.................. 31 1,248 40.24 39.48 24 0.76 7.30 6,573 6,596
JUL.................. 57 2,405 42.40 39.78 149 2.62 14.61 13,146 13,294
AUG.................. 63 2,864 45.57 39.78 364 5.79 14.61 13,146 13,510
SEP.................. 18 777 42.35 39.78 47 2.57 7.30 6,573 6,620
OCT.................. -- -- -- 40.08 -- -- 2.43 2,191 2,191
NOV.................. -- -- -- 41.48 -- -- -- -- --
DEC.................. 3 152 46.48 43.18 11 3.30 -- -- 11
--- ----- ----- ----- ------ ------ ----- ------ ------
2003 TOTAL........... 182 7,826 43.10 39.78 603 3.24 48.69 43,819 44,422
JAN.................. -- -- -- 57.84 -- -- -- -- --
FEB.................. 5 225 46.41 57.84 (55) (11.43) -- -- (55)
MAR.................. 1 36 42.08 40.68 1 1.40 -- -- 1
APR.................. -- -- -- 39.78 -- -- -- -- --
MAY.................. 8 343 40.39 39.48 8 0.91 2.43 2,191 2,199
JUN.................. 31 1,248 40.24 39.48 24 0.76 7.30 6,573 6,596
JUL.................. 57 2,405 42.40 39.78 149 2.62 14.61 13,146 13,294
AUG.................. 63 2,864 45.57 39.78 364 5.79 14.61 13,146 13,510
SEP.................. 18 777 42.35 39.78 47 2.57 7.30 6,573 6,620
OCT.................. -- -- -- 40.08 -- -- 2.43 2,191 2,191
NOV.................. -- -- -- 41.48 -- -- -- -- --
DEC.................. 3 152 46.48 43.18 11 3.30 -- -- 11
--- ----- ----- ----- ------ ------ ----- ------ ------
2003 TOTAL........... 186 8,051 43.19 40.25 548 2.94 48.69 43,819 44,367
</TABLE>
C-E-2
<PAGE>
APPENDIX E: FUEL SWITCHING ANALYSIS - 2005
<TABLE>
<CAPTION>
BASE CASE SCENARIO
-------------------------------------------------------------------------------------- TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT
------------------------------ ------------------- -------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2005 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... 9 418 46.07 45.40 6 0.67 -- -- 6
FEB................... 7 306 46.08 44.50 10 1.58 -- -- 10
MAR................... 8 356 44.08 43.30 6 0.78 -- -- 6
APR................... -- -- -- 42.40 -- -- -- -- --
MAY................... 22 922 42.76 42.00 16 0.76 2.53 2,275 2,292
JUN................... 70 2,961 42.09 42.00 6 0.09 7.58 6,826 6,832
JUL................... 86 3,736 43.37 42.40 83 0.97 15.17 13,651 13,735
AUG................... 91 4,076 44.84 42.40 222 2.44 15.17 13,651 13,873
SEP................... 29 1,247 43.74 42.40 38 1.34 7.58 6,826 6,864
OCT................... 19 815 42.89 42.70 4 0.19 2.53 2,275 2,279
NOV................... 3 128 44.63 44.20 1 0.43 -- -- 1
DEC................... 6 294 48.84 46.00 17 2.84 -- -- 17
--- ------ ----- ----- --- ---- ----- ------ ------
2005 TOTAL............ 349 15,259 43.70 42.53 411 1.18 50.56 45,504 45,915
<CAPTION>
FUEL SWITCHING SCENARIO--ASSUMINGOPLANT DISPATCHED CONT.
ENERGY REVENUE ENERGY PROFIT
------------------------------ ------------------- CAPACITY FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2005 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... 9 418 46.07 45.40 6 0.67 -- -- 6
FEB................... 7 306 46.08 44.50 10 1.58 -- -- 10
MAR................... 8 356 44.08 43.30 6 0.78 -- -- 6
APR................... -- -- -- 42.40 -- -- -- -- --
MAY................... 22 922 42.76 42.00 16 0.76 2.53 2,275 2,292
JUN................... 70 2,961 42.09 42.00 6 0.09 7.58 6,826 6,832
JUL................... 86 3,736 43.37 42.40 83 0.97 15.17 13,651 13,735
AUG................... 91 4,076 44.84 42.40 222 2.44 15.17 13,651 13,873
SEP................... 29 1,247 43.74 42.40 38 1.34 7.58 6,826 6,864
OCT................... 19 815 42.89 42.70 4 0.19 2.53 2,275 2,279
NOV................... 3 128 44.63 44.20 1 0.43 -- -- 1
DEC................... 6 294 48.84 46.00 17 2.84 -- -- 17
--- ------ ----- ----- --- ---- ----- ------ ------
2005 TOTAL 349 15,259 43.70 42.53 411 1.18 50.56 45,504 45,915
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN................... -- -- -- 61.20 -- -- -- -- --
FEB................... -- -- -- 61.20 -- -- -- -- --
MAR................... 8 356 44.08 43.30 6 0.78 -- -- 6
APR................... -- -- -- 42.40 -- -- -- -- --
MAY................... 22 922 42.76 42.00 16 0.76 2.53 2,275 2,292
JUN................... 70 2,961 42.09 42.00 6 0.09 7.58 6,826 6,832
JUL................... 86 3,736 43.37 42.40 83 0.97 15.17 13,651 13,735
AUG................... 91 4,076 44.84 42.40 222 2.44 15.17 13,651 13,873
SEP................... 29 1,247 43.74 42.40 38 1.34 7.58 6,826 6,864
OCT................... 19 815 42.89 42.70 4 0.19 2.53 2,275 2,279
NOV................... 3 128 44.63 44.20 1 0.43 -- -- 1
DEC................... 6 294 48.84 46.00 17 2.84 -- -- 17
--- ------ ----- ----- ---- ------ ----- ------ ------
2005 TOTAL............ 333 14,535 43.59 42.41 395 1.13 50.56 45,504 45,898
JAN................... 9 418 46.07 61.20 (137) (15.12) -- -- (137)
FEB................... 7 306 46.08 61.20 (100) (15.12) -- -- (100)
MAR................... 8 356 44.08 43.30 6 0.78 -- -- 6
APR................... -- -- -- 42.40 -- -- -- -- --
MAY................... 22 922 42.76 42.00 16 0.76 2.53 2,275 2,292
JUN................... 70 2,961 42.09 42.00 6 0.09 7.58 6,826 6,832
JUL................... 86 3,736 43.37 42.40 83 0.97 15.17 13,651 13,735
AUG................... 91 4,076 44.84 42.40 222 2.44 15.17 13,651 13,873
SEP................... 29 1,247 43.74 42.40 38 1.34 7.58 6,826 6,864
OCT................... 19 815 42.89 42.70 4 0.19 2.53 2,275 2,279
NOV................... 3 128 44.63 44.20 1 0.43 -- -- 1
DEC................... 6 294 48.84 46.00 17 2.84 -- -- 17
--- ------ ----- ----- ---- ------ ----- ------ ------
2005 TOTAL 349 15,259 43.70 43.25 157 0.45 50.56 45,504 45,661
</TABLE>
C-E-3
<PAGE>
APPENDIX E: FUEL SWITCHING ANALYSIS - 2010
<TABLE>
<CAPTION>
BASE CASE SCENARIO
------------------------------------------------------------------------------------------ TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT
------------------------------ ------------------- --------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2010 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. 11 635 55.73 55.18 6 0.55 -- -- 6
FEB.................. 6 361 58.29 53.98 27 4.31 -- -- 27
MAR.................. 9 467 52.86 52.48 3 0.38 -- -- 3
APR.................. -- -- -- 51.38 -- -- -- -- --
MAY.................. 25 1,301 51.35 50.98 9 0.37 2.76 2,481 2,490
JUN.................. 72 3,701 51.05 50.98 5 0.07 8.27 7,443 7,448
JUL.................. 98 5,084 51.88 51.38 49 0.50 16.54 14,886 14,935
AUG.................. 120 6,305 52.42 51.38 125 1.04 16.54 14,886 15,011
SEP.................. 40 2,081 52.01 51.38 25 0.63 8.27 7,443 7,469
OCT.................. 20 1,043 51.78 51.68 2 0.10 2.76 2,481 2,483
NOV.................. 15 799 53.97 53.58 6 0.39 -- -- 6
DEC.................. 11 624 57.99 55.88 23 2.11 -- -- 23
--- ------ ----- ----- --- ---- ----- ------ ------
2010 TOTAL 428 22,401 52.31 51.65 280 0.65 55.13 49,621 49,901
<CAPTION>
FUEL SWITCHING SCENARIO--ASSUMINGOPLANT DISPATCHED CONT.
ENERGY REVENUE ENERGY PROFIT
------------------------------ ------------------- CAPACITY FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2010 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. 11 635 55.73 55.18 6 0.55 -- -- 6
FEB.................. 6 361 58.29 53.98 27 4.31 -- -- 27
MAR.................. 9 467 52.86 52.48 3 0.38 -- -- 3
APR.................. -- -- -- 51.38 -- -- -- -- --
MAY.................. 25 1,301 51.35 50.98 9 0.37 2.76 2,481 2,490
JUN.................. 72 3,701 51.05 50.98 5 0.07 8.27 7,443 7,448
JUL.................. 98 5,084 51.88 51.38 49 0.50 16.54 14,886 14,935
AUG.................. 120 6,305 52.42 51.38 125 1.04 16.54 14,886 15,011
SEP.................. 40 2,081 52.01 51.38 25 0.63 8.27 7,443 7,469
OCT.................. 20 1,043 51.78 51.68 2 0.10 2.76 2,481 2,483
NOV.................. 15 799 53.97 53.58 6 0.39 -- -- 6
DEC.................. 11 624 57.99 55.88 23 2.11 -- -- 23
--- ------ ----- ----- --- ---- ----- ------ ------
2010 TOTAL........... 428 22,401 52.31 51.65 280 0.65 55.13 49,621 49,901
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 71.44 -- -- -- -- --
FEB.................. -- -- -- 71.44 -- -- -- -- --
MAR.................. 9 467 52.86 52.48 3 0.38 -- -- 3
APR.................. -- -- -- 51.38 -- -- -- -- --
MAY.................. 25 1,301 51.35 50.98 9 0.37 2.76 2,481 2,490
JUN.................. 72 3,701 51.05 50.98 5 0.07 8.27 7,443 7,448
JUL.................. 98 5,084 51.88 51.38 49 0.50 16.54 14,886 14,935
AUG.................. 120 6,305 52.42 51.38 125 1.04 16.54 14,886 15,011
SEP.................. 40 2,081 52.01 51.38 25 0.63 8.27 7,443 7,469
OCT.................. 20 1,043 51.78 51.68 2 0.10 2.76 2,481 2,483
NOV.................. 15 799 53.97 53.58 6 0.39 -- -- 6
DEC.................. 11 624 57.99 55.88 23 2.11 -- -- 23
--- ------ ----- ----- ---- ------ ----- ------ ------
2010 TOTAL 411 21,406 52.12 51.52 247 0.58 55.13 49,621 49,868
JAN.................. 11 635 55.73 71.44 (179) (15.72) -- -- (179)
FEB.................. 6 361 58.29 71.44 (81) (13.16) -- -- (81)
MAR.................. 9 467 52.86 52.48 3 0.38 -- -- 3
APR.................. -- -- -- 51.38 -- -- -- -- --
MAY.................. 25 1,301 51.35 50.98 9 0.37 2.76 2,481 2,490
JUN.................. 72 3,701 51.05 50.98 5 0.07 8.27 7,443 7,448
JUL.................. 98 5,084 51.88 51.38 49 0.50 16.54 14,886 14,935
AUG.................. 120 6,305 52.42 51.38 125 1.04 16.54 14,886 15,011
SEP.................. 40 2,081 52.01 51.38 25 0.63 8.27 7,443 7,469
OCT.................. 20 1,043 51.78 51.68 2 0.10 2.76 2,481 2,483
NOV.................. 15 799 53.97 53.58 6 0.39 -- -- 6
DEC.................. 11 624 57.99 55.88 23 2.11 -- -- 23
--- ------ ----- ----- ---- ------ ----- ------ ------
2010 TOTAL........... 428 22,401 52.31 52.34 (13) (0.03) 55.13 49,621 49,608
</TABLE>
C-E-4
<PAGE>
APPENDIX E: FUEL SWITCHING ANALYSIS - 2015
<TABLE>
<CAPTION>
BASE CASE SCENARIO
------------------------------------------------------------------------------------------ TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT
------------------------------ ------------------- --------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2015 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. 5 309 62.94 62.39 2.7 0.55 -- -- 3
FEB.................. 4 235 62.50 61.09 5.3 1.41 -- -- 5
MAR.................. 4 265 59.71 59.39 1.4 0.32 -- -- 1
APR.................. -- -- -- 58.09 -- -- -- -- --
MAY.................. 22 1,281 58.22 57.69 11.6 0.53 2.98 2,682 2,694
JUN.................. 51 2,935 57.69 57.69 0.2 0.00 8.94 8,047 8,047
JUL.................. 79 4,647 58.82 58.09 58.0 0.73 17.88 16,094 16,152
AUG.................. 92 5,459 59.07 58.09 90.1 0.98 17.88 16,094 16,184
SEP.................. 36 2,108 58.55 58.09 16.5 0.46 8.94 8,047 8,063
OCT.................. 5 297 58.76 58.49 1.3 0.27 2.98 2,682 2,684
NOV.................. 2 122 61.02 60.69 0.7 0.33 -- -- 1
DEC.................. 3 179 65.91 63.29 7.1 2.62 -- -- 7
--- ------ ----- ----- ----- ---- ----- ------ ------
2015 TOTAL........... 303 17,837 58.83 58.19 195.0 0.64 59.61 53,646 53,841
<CAPTION>
FUEL SWITCHING SCENARIO--ASSUMINGOPLANT DISPATCHED CONT.
ENERGY REVENUE ENERGY PROFIT
------------------------------ ------------------- CAPACITY FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2015 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. 5 309 62.94 62.39 2.7 0.55 -- -- 3
FEB.................. 4 235 62.50 61.09 5.3 1.41 -- -- 5
MAR.................. 4 265 59.71 59.39 1.4 0.32 -- -- 1
APR.................. -- -- -- 58.09 -- -- -- -- --
MAY.................. 22 1,281 58.22 57.69 11.6 0.53 2.98 2,682 2,694
JUN.................. 51 2,935 57.69 57.69 0.2 0.00 8.94 8,047 8,047
JUL.................. 79 4,647 58.82 58.09 58.0 0.73 17.88 16,094 16,152
AUG.................. 92 5,459 59.07 58.09 90.1 0.98 17.88 16,094 16,184
SEP.................. 36 2,108 58.55 58.09 16.5 0.46 8.94 8,047 8,063
OCT.................. 5 297 58.76 58.49 1.3 0.27 2.98 2,682 2,684
NOV.................. 2 122 61.02 60.69 0.7 0.33 -- -- 1
DEC.................. 3 179 65.91 63.29 7.1 2.62 -- -- 7
--- ------ ----- ----- ----- ---- ----- ------ ------
2015 TOTAL........... 303 17,837 58.83 58.19 195.0 0.64 59.61 53,646 53,841
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 86.22 -- -- -- -- --
FEB.................. -- -- -- 86.22 -- -- -- -- --
MAR.................. 4 265 59.71 59.39 1.4 0.32 -- -- 1
APR.................. -- -- -- 58.09 -- -- -- -- --
MAY.................. 22 1,281 58.22 57.69 11.6 0.53 2.98 2,682 2,694
JUN.................. 51 2,935 57.69 57.69 0.2 0.00 8.94 8,047 8,047
JUL.................. 79 4,647 58.82 58.09 58.0 0.73 17.88 16,094 16,152
AUG.................. 92 5,459 59.07 58.09 90.1 0.98 17.88 16,094 16,184
SEP.................. 36 2,108 58.55 58.09 16.5 0.46 8.94 8,047 8,063
OCT.................. 5 297 58.76 58.49 1.3 0.27 2.98 2,682 2,684
NOV.................. 2 122 61.02 60.69 0.7 0.33 -- -- 1
DEC.................. 3 179 65.91 63.29 7.1 2.62 -- -- 7
--- ------ ----- ----- ------ ------ ----- ------ ------
2015 TOTAL........... 295 17,293 58.72 58.08 187.0 0.62 59.61 53,646 53,833
JAN.................. 5 309 62.94 86.22 (114.2) (23.27) -- -- (114)
FEB.................. 4 235 62.50 86.22 (89.0) (23.72) -- -- (89)
MAR.................. 4 265 59.71 59.39 1.4 0.32 -- -- 1
APR.................. -- -- -- 58.09 -- -- -- -- --
MAY.................. 22 1,281 58.22 57.69 11.6 0.53 2.98 2,682 2,694
JUN.................. 51 2,935 57.69 57.69 0.2 0.00 8.94 8,047 8,047
JUL.................. 79 4,647 58.82 58.09 58.0 0.73 17.88 16,094 16,152
AUG.................. 92 5,459 59.07 58.09 90.1 0.98 17.88 16,094 16,184
SEP.................. 36 2,108 58.55 58.09 16.5 0.46 8.94 8,047 8,063
OCT.................. 5 297 58.76 58.49 1.3 0.27 2.98 2,682 2,684
NOV.................. 2 122 61.02 60.69 0.7 0.33 -- -- 1
DEC.................. 3 179 65.91 63.29 7.1 2.62 -- -- 7
--- ------ ----- ----- ------ ------ ----- ------ ------
2015 TOTAL........... 303 17,837 58.83 58.89 (16.2) (0.05) 59.61 53,646 53,630
</TABLE>
C-E-5
<PAGE>
APPENDIX E: FUEL SWITCHING ANALYSIS - 2020
<TABLE>
<CAPTION>
BASE CASE SCENARIO
------------------------------------------------------------------------------------------ TOTAL
ENERGY REVENUE ENERGY PROFIT CAPACITY CONT
------------------------------ ------------------- --------------------- FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2020 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 70.64 -- -- -- -- --
FEB.................. -- -- -- 69.14 -- -- -- -- --
MAR.................. -- -- -- 67.24 -- -- -- -- --
APR.................. -- -- -- 65.74 -- -- -- -- --
MAY.................. 14 915 65.38 65.24 2.0 0.14 3.21 2,893 2,895
JUN.................. 27 1,734 65.27 65.24 0.8 0.03 9.64 8,680 8,681
JUL.................. 57 3,818 66.53 65.74 45.6 0.79 19.29 17,360 17,406
AUG.................. 49 3,270 66.67 65.74 45.5 0.93 19.29 17,360 17,406
SEP.................. 13 862 66.07 65.74 4.3 0.33 9.64 8,680 8,684
OCT.................. 2 138 66.64 66.24 0.8 0.40 3.21 2,893 2,894
NOV.................. -- -- -- 68.64 -- -- -- -- --
DEC.................. -- -- -- 71.54 -- -- -- -- --
--- ------ ----- ----- ---- ---- ----- ------ ------
2020 TOTAL........... 162 10,738 66.23 65.62 99.0 0.61 64.30 57,868 57,967
<CAPTION>
FUEL SWITCHING SCENARIO--ASSUMINGOPLANT DISPATCHED CONT.
ENERGY REVENUE ENERGY PROFIT
------------------------------ ------------------- CAPACITY FIXED
GEN AVG DISPATCH AVG PRICE REV COSTS
2020 GWH ($ 000) $/MWH $/MWH ($ 000) $/MWH $/KW-MTH ($ 000) ($ 000)
- ---- -------- -------- -------- ----------- -------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 70.64 -- -- -- -- --
FEB.................. -- -- -- 69.14 -- -- -- -- --
MAR.................. -- -- -- 67.24 -- -- -- -- --
APR.................. -- -- -- 65.74 -- -- -- -- --
MAY.................. 14 915 65.38 65.24 2.0 0.14 3.21 2,893 2,895
JUN.................. 27 1,734 65.27 65.24 0.8 0.03 9.64 8,680 8,681
JUL.................. 57 3,818 66.53 65.74 45.6 0.79 19.29 17,360 17,406
AUG.................. 49 3,270 66.67 65.74 45.5 0.93 19.29 17,360 17,406
SEP.................. 13 862 66.07 65.74 4.3 0.33 9.64 8,680 8,684
OCT.................. 2 138 66.64 66.24 0.8 0.40 3.21 2,893 2,894
NOV.................. -- -- -- 68.64 -- -- -- -- --
DEC.................. -- -- -- 71.54 -- -- -- -- --
--- ------ ----- ----- ---- ---- ----- ------ ------
2020 TOTAL........... 162 10,738 66.23 65.62 99.0 0.61 64.30 57,868 57,967
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JAN.................. -- -- -- 99.48 -- -- -- -- --
FEB.................. -- -- -- 99.48 -- -- -- -- --
MAR.................. -- -- -- 67.24 -- -- -- -- --
APR.................. -- -- -- 65.74 -- -- -- -- --
MAY.................. 14 915 65.38 65.24 2.0 0.14 3.21 2,893 2,895
JUN.................. 27 1,734 65.27 65.24 0.8 0.03 9.64 8,680 8,681
JUL.................. 57 3,818 66.53 65.74 45.6 0.79 19.29 17,360 17,406
AUG.................. 49 3,270 66.67 65.74 45.5 0.93 19.29 17,360 17,406
SEP.................. 13 862 66.07 65.74 4.3 0.33 9.64 8,680 8,684
OCT.................. 2 138 66.64 66.24 0.8 0.40 3.21 2,893 2,894
NOV.................. -- -- -- 68.64 -- -- -- -- --
DEC.................. -- -- -- 71.54 -- -- -- -- --
--- ------ ----- ----- ---- ------ ----- ------ ------
2020 TOTAL........... 162 10,738 66.23 65.62 99.0 0.61 64.30 57,868 57,967
JAN.................. -- -- -- 99.48 -- -- -- -- --
FEB.................. -- -- -- 99.48 -- -- -- -- --
MAR.................. -- -- -- 67.24 -- -- -- -- --
APR.................. -- -- -- 65.74 -- -- -- -- --
MAY.................. 14 915 65.38 65.24 2.0 0.14 3.21 2,893 2,895
JUN.................. 27 1,734 65.27 65.24 0.8 0.03 9.64 8,680 8,681
JUL.................. 57 3,818 66.53 65.74 45.6 0.79 19.29 17,360 17,406
AUG.................. 49 3,270 66.67 65.74 45.5 0.93 19.29 17,360 17,406
SEP.................. 13 862 66.07 65.74 4.3 0.33 9.64 8,680 8,684
OCT.................. 2 138 66.64 66.24 0.8 0.40 3.21 2,893 2,894
NOV.................. -- -- -- 68.64 -- -- -- -- --
DEC.................. -- -- -- 71.54 -- -- -- -- --
--- ------ ----- ----- ---- ------ ----- ------ ------
2020 TOTAL........... 162 10,738 66.23 65.62 99.0 0.61 64.30 57,868 57,967
</TABLE>
C-E-6
<PAGE>
APPENDIX F:
HIGH START-UP COST SCENARIO
As a supplement to this report, RDI examined the sensitivities of market
prices and the project's capacity factors to changes in start-up costs. For this
scenario, variable O&M (the bulk of which consists of start-up costs) for all
new combustion turbines was increased to 15 $/MWh. In the base case, variable
O&M for new combustion turbines (including the Tenaska Georgia Partners project)
was assumed to be 10 $/MWh.
Summary tables showing detailed price and capacity factor results are
attached to this Appendix.
SCENARIO RESULTS
ENERGY PRICES Energy price results for the high start-up cost scenario are
summarized in Table APP-4. Energy prices gradually deviate from the base case in
the early years of the forecast as peaking units set prices in more hours of the
year. By 2007, prices in the high start-up case are 4% higher than in the base
case and remain approximately 4% higher for the rest of the forecast period.
TABLE APP-4 ENERGY PRICE RESULTS--HIGH START-UP COST SCENARIO (NOMINAL $)
<TABLE>
<CAPTION>
HIGH START-UP COST ENERGY PRICES ($/MWH)
-----------------------------------------------------
SUMMER MONTHS WINTER MONTHS
------------------- -------------------
HOURS OF DAY ANNUAL %
------------------- YR ROUND PRICE CHG
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION BASE
- ---- -------- -------- -------- -------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000........................................... 24.50 17.98 22.46 18.47 21.73 -- 0.8%
2001........................................... 25.32 18.30 23.68 18.88 22.61 4.1% 1.0%
2002........................................... 26.45 18.51 25.04 19.44 23.65 4.6% 1.7%
2003........................................... 28.98 19.78 26.83 20.22 25.37 7.3% 2.1%
2004........................................... 30.03 20.04 28.62 20.98 26.64 5.0% 2.7%
2005........................................... 31.69 20.42 30.41 21.83 28.08 5.4% 3.3%
2006........................................... 33.25 21.15 31.82 22.52 29.31 4.4% 3.6%
2007........................................... 34.54 21.74 33.83 23.50 30.82 5.1% 4.1%
2008........................................... 35.65 22.33 35.20 24.59 31.99 3.8% 4.0%
2009........................................... 37.78 23.43 36.68 25.74 33.53 4.8% 4.0%
2010........................................... 38.64 24.11 38.25 26.85 34.75 3.6% 4.2%
2011........................................... 39.51 24.67 38.92 27.40 35.43 2.0% 4.0%
2012........................................... 40.57 25.38 39.32 28.14 36.09 1.8% 3.9%
2013........................................... 41.06 25.87 40.14 28.91 36.79 1.9% 3.9%
2014........................................... 41.91 26.69 40.77 29.72 37.52 2.0% 4.0%
2015........................................... 43.41 27.58 41.77 30.39 38.57 2.8% 3.9%
2016........................................... 43.89 28.05 42.69 31.10 39.30 1.9% 3.8%
2017........................................... 44.92 28.78 43.68 31.98 40.25 2.4% 4.0%
2018........................................... 46.14 29.56 44.38 32.79 41.10 2.1% 3.9%
2019........................................... 46.82 30.24 45.52 33.50 42.01 2.2% 4.0%
2020........................................... 47.81 31.15 46.39 34.49 42.93 2.2% 4.0%
2021........................................... 48.03 32.23 45.45 34.86 42.71 -0.5% 3.4%
2022........................................... 49.23 33.03 46.58 35.73 43.78 2.5% 3.4%
2023........................................... 50.46 33.86 47.75 36.62 44.88 2.5% 3.4%
2024........................................... 51.73 34.71 48.94 37.54 46.00 2.5% 3.4%
2025........................................... 53.02 35.57 50.16 38.47 47.15 2.5% 3.4%
2026........................................... 54.35 36.46 51.42 39.44 48.33 2.5% 3.4%
2027........................................... 55.70 37.38 52.70 40.42 49.53 2.5% 3.4%
2028........................................... 57.10 38.31 54.02 41.43 50.77 2.5% 3.4%
2029........................................... 58.52 39.27 55.37 42.47 52.04 2.5% 3.4%
2030........................................... 59.99 40.25 56.76 43.53 53.34 2.5% 3.4%
</TABLE>
- ------------------------------
* Assumes a 60% load factor
C-F-1
<PAGE>
CAPACITY PRICES Capacity price results for the high start-up cost scenario
are shown in Figure App-2. Capacity prices in the high start-up cost scenario
are two to four percent lower (approximately .30 $/MWh assuming a 60% load
factor) than capacity prices in the base case in the later years of the forecast
because higher average energy prices translate to greater contributions to fixed
costs for new combustion turbines.
FIGURE APP-2 CAPACITY PRICE RESULTS--HIGH START-UP COST SCENARIO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPACITY PRICES IN $/KW-YR
<S> <C> <C>
BASE HIGH START-UP
2000 46.46 46.36
2001 47.26 47.26
2002 47.97 47.97
2003 48.69 48.49
2004 49.82 49.52
2005 50.56 50.46
2006 52.11 51.11
2007 52.38 52.08
2008 53.65 52.85
2009 55.04 53.74
2010 55.13 54.63
2011 55.84 54.44
2012 57.27 55.27
2013 58.2 56.10
2014 58.85 57.05
2015 59.61 57.71
2016 60.38 58.78
2017 61.46 59.76
2018 62.26 60.56
2019 63.17 61.57
2020 64.3 62.50
2021 65.08 63.64
2022 66.71 66.36
2023 68.38 68.02
2024 70.09 69.72
2025 71.84 71.46
2026 73.63 73.25
2027 75.47 75.08
2028 77.36 76.96
2029 79.29 78.88
2030 81.28 80.85
</TABLE>
CAPACITY FACTORS Table APP-5 summarizes forecast monthly capacity factors
for select years of the forecast. As shown in Figure APP-3, the higher dispatch
costs associated with greater start-up costs would have only a minimal impact on
the project's summer capacity factors. A detailed table showing monthly capacity
factors for each year of the forecast accompanies this Appendix.
TABLE APP-5 MONTHLY CAPACITY FACTORS--SELECT YEARS
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT
- ---- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003................. 0% 1% 0% 0% 1% 5% 8% 9% 3% 0%
2005................. 1% 1% 1% 0% 3% 9% 11% 13% 4% 3%
2010................. 2% 1% 2% 0% 4% 11% 14% 16% 6% 4%
2015................. 1% 1% 1% 0% 3% 8% 13% 14% 5% 1%
2020................. 0% 0% 0% 0% 2% 4% 8% 8% 2% 0%
--- --- --- --- --- --- --- --- --- ---
Avg 2000-2021........ 1% 1% 1% 0% 3% 8% 11% 12% 4% 2%
<CAPTION>
YEAR NOV DEC AVG
- ---- -------- -------- --------
<S> <C> <C> <C>
2003................. 0% 1% 1%
2005................. 0% 1% 3%
2010................. 3% 1% 5%
2015................. 0% 1% 4%
2020................. 0% 0% 3%
--- --- ---
Avg 2000-2021........ 1% 1% 4%
</TABLE>
FIGURE APP-3 MONTHLY CAPACITY FACTORS--SELECT YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AUGUST CAPACITY FACTORS - SELECT YEARS
<S> <C> <C>
BASE CASE HIGH START-UP
2003 9% 9%
2005 14% 13%
2010 18% 16%
2015 14% 14%
2020 7% 8%
</TABLE>
C-F-2
<PAGE>
APPENDIX F:
DETAILED MONTHLY CAPACITY FACTORS--
HIGH START-UP COST SCENARIO
MONTHLY PLANT GENERATION (GWH)
TENASKA GEORGIA POWER PARTNERS
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001..................... -- -- -- -- -- 6 16 22 5
2002..................... -- 3 -- -- 3 10 41 37 11
2003..................... -- 6 2 -- 7 34 51 57 19
2004..................... 5 6 2 -- 11 52 55 67 15
2005..................... 6 9 6 -- 18 59 76 89 23
2006..................... 6 6 7 5 22 64 81 101 36
2007..................... 12 9 6 -- 28 76 91 105 38
2008..................... 11 9 9 1 28 73 91 107 42
2009..................... 11 11 12 6 24 69 92 109 45
2010..................... 14 8 11 -- 26 73 95 110 40
2011..................... 12 8 8 2 27 70 89 105 47
2012..................... 6 8 11 4 24 70 96 114 46
2013..................... 9 7 7 -- 21 56 81 93 32
2014..................... 6 4 6 2 19 46 74 82 32
2015..................... 6 5 8 -- 23 53 86 95 35
2016..................... 4 6 2 -- 18 43 77 81 24
2017..................... 6 5 5 -- 18 44 79 75 30
2018..................... 2 -- 2 -- 13 33 80 81 30
2019..................... 2 -- -- -- 15 39 68 71 17
2020..................... 2 -- -- -- 14 29 55 53 11
2021..................... -- -- -- -- 5 26 46 40 3
<CAPTION>
YEAR OCT NOV DEC TOTAL
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2001..................... -- -- 1 50
2002..................... -- -- 4 109
2003..................... -- -- 8 184
2004..................... 1 1 7 222
2005..................... 18 3 6 313
2006..................... 14 2 6 350
2007..................... 23 14 7 409
2008..................... 14 18 10 413
2009..................... 38 8 7 432
2010..................... 24 20 6 427
2011..................... 22 3 8 401
2012..................... 27 9 8 423
2013..................... 11 12 6 335
2014..................... 17 2 6 296
2015..................... 9 1 5 326
2016..................... 5 -- 6 266
2017..................... 7 -- 5 274
2018..................... 2 -- 2 245
2019..................... 2 -- 2 216
2020..................... 2 -- 1 167
2021..................... -- -- -- 120
</TABLE>
C-F-3
<PAGE>
MONTHLY CAPACITY FACTORS
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001....................... 0% 0% 0% 0% 0% 2% 5% 7% 2%
2002....................... 0% 1% 0% 0% 1% 2% 6% 6% 2%
2003....................... 0% 1% 0% 0% 1% 5% 8% 9% 3%
2004....................... 1% 1% 0% 0% 2% 8% 8% 10% 2%
2005....................... 1% 1% 1% 0% 3% 9% 11% 13% 4%
2006....................... 1% 1% 1% 1% 3% 10% 12% 15% 6%
2007....................... 2% 1% 1% 0% 4% 12% 14% 16% 6%
2008....................... 2% 1% 1% 0% 4% 11% 14% 16% 6%
2009....................... 2% 2% 2% 1% 4% 11% 14% 16% 7%
2010....................... 2% 1% 2% 0% 4% 11% 14% 16% 6%
2011....................... 2% 1% 1% 0% 4% 11% 13% 16% 7%
2012....................... 1% 1% 2% 1% 4% 11% 14% 17% 7%
2013....................... 1% 1% 1% 0% 3% 9% 12% 14% 5%
2014....................... 1% 1% 1% 0% 3% 7% 11% 12% 5%
2015....................... 1% 1% 1% 0% 3% 8% 13% 14% 5%
2016....................... 1% 1% 0% 0% 3% 7% 11% 12% 4%
2017....................... 1% 1% 1% 0% 3% 7% 12% 11% 5%
2018....................... 0% 0% 0% 0% 2% 5% 12% 12% 5%
2019....................... 0% 0% 0% 0% 2% 6% 10% 11% 3%
2020....................... 0% 0% 0% 0% 2% 4% 8% 8% 2%
2021....................... 0% 0% 0% 0% 1% 4% 7% 6% 0%
-- -- -- -- -- -- -- -- --
Average.................... 1% 1% 1% 0% 3% 8% 11% 12% 4%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2001....................... 0% 0% 0% 2%
2002....................... 0% 0% 1% 2%
2003....................... 0% 0% 1% 2%
2004....................... 0% 0% 1% 3%
2005....................... 3% 0% 1% 4%
2006....................... 2% 0% 1% 4%
2007....................... 3% 2% 1% 5%
2008....................... 2% 3% 1% 5%
2009....................... 6% 1% 1% 5%
2010....................... 4% 3% 1% 5%
2011....................... 3% 0% 1% 5%
2012....................... 4% 1% 1% 5%
2013....................... 2% 2% 1% 4%
2014....................... 3% 0% 1% 4%
2015....................... 1% 0% 1% 4%
2016....................... 1% 0% 1% 3%
2017....................... 1% 0% 1% 3%
2018....................... 0% 0% 0% 3%
2019....................... 0% 0% 0% 3%
2020....................... 0% 0% 0% 2%
2021....................... 0% 0% 0% 2%
-- -- -- --
Average.................... 2% 1% 1% 4%
</TABLE>
SUMMARY
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003....................... 0% 1% 0% 0% 1% 5% 8% 9% 3%
2005....................... 1% 1% 1% 0% 3% 9% 11% 13% 4%
2010....................... 2% 1% 2% 0% 4% 11% 14% 16% 6%
2015....................... 1% 1% 1% 0% 3% 8% 13% 14% 5%
2020....................... 0% 0% 0% 0% 2% 4% 8% 8% 2%
-- -- -- -- -- -- -- -- --
Avg 2000-2021.............. 1% 1% 1% 0% 3% 8% 11% 12% 4%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003....................... 0% 0% 1% 2%
2005....................... 3% 0% 1% 4%
2010....................... 4% 3% 1% 5%
2015....................... 1% 0% 1% 4%
2020....................... 0% 0% 0% 2%
-- -- -- --
Avg 2000-2021.............. 2% 1% 1% 4%
</TABLE>
C-F-4
<PAGE>
APPENDIX F:
TENASKA GEORGIA POWER PROJECT--
HIGH START-UP COST PRICE FORECAST RESULTS
<TABLE>
<CAPTION>
HIGH START-UP COST ENERGY PRICES ($/MWH)
----------------------------------------------------
SUMMER MONTHS WINTER MONTHS
------------------- -------------------
HOURS OF DAY ANNUAL % CAPACITY %
------------------- YR ROUND PRICE CHG PRICE CHG
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION BASE $/KW-YR BASE
- ---- -------- -------- -------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000 24.50 17.98 22.46 18.47 21.73 -- 0.8% 46.36 -0.2%
2001 25.32 18.30 23.68 18.88 22.61 4.1% 1.0% 47.26 0.0%
2002 26.45 18.51 25.04 19.44 23.65 4.6% 1.7% 47.97 0.0%
2003 28.98 19.78 26.83 20.22 25.37 7.3% 2.1% 48.49 -0.4%
2004 30.03 20.04 28.62 20.98 26.64 5.0% 2.7% 49.52 -0.6%
2005 31.69 20.42 30.41 21.83 28.08 5.4% 3.3% 50.46 -0.2%
2006 33.25 21.15 31.82 22.52 29.31 4.4% 3.6% 51.11 -1.9%
2007 34.54 21.74 33.83 23.50 30.82 5.1% 4.1% 52.08 -0.6%
2008 35.65 22.33 35.20 24.59 31.99 3.8% 4.0% 52.85 -1.5%
2009 37.78 23.43 36.68 25.74 33.53 4.8% 4.0% 53.74 -2.4%
2010 38.64 24.11 38.25 26.85 34.75 3.6% 4.2% 54.63 -0.9%
2011 39.51 24.67 38.92 27.40 35.43 2.0% 4.0% 54.44 -2.5%
2012 40.57 25.38 39.32 28.14 36.09 1.8% 3.9% 55.27 -3.5%
2013 41.06 25.87 40.14 28.91 36.79 1.9% 3.9% 56.10 -3.6%
2014 41.91 26.69 40.77 29.72 37.52 2.0% 4.0% 57.05 -3.1%
2015 43.41 27.58 41.77 30.39 38.57 2.8% 3.9% 57.71 -3.2%
2016 43.89 28.05 42.69 31.10 39.30 1.9% 3.8% 58.78 -2.6%
2017 44.92 28.78 43.68 31.98 40.25 2.4% 4.0% 59.76 -2.8%
2018 46.14 29.56 44.38 32.79 41.10 2.1% 3.9% 60.56 -2.7%
2019 46.82 30.24 45.52 33.50 42.01 2.2% 4.0% 61.57 -2.5%
2020 47.81 31.15 46.39 34.49 42.93 2.2% 4.0% 62.50 -2.8%
2021 48.03 32.23 45.45 34.86 42.71 -0.5% 3.4% 63.64 -2.2%
2022 49.23 33.03 46.58 35.73 43.78 2.5% 3.4% 66.36 -0.5%
2023 50.46 33.86 47.75 36.62 44.88 2.5% 3.4% 68.02 -0.5%
2024 51.73 34.71 48.94 37.54 46.00 2.5% 3.4% 69.72 -0.5%
2025 53.02 35.57 50.16 38.47 47.15 2.5% 3.4% 71.46 -0.5%
2026 54.35 36.46 51.42 39.44 48.33 2.5% 3.4% 73.25 -0.5%
2027 55.70 37.38 52.70 40.42 49.53 2.5% 3.4% 75.08 -0.5%
2028 57.10 38.31 54.02 41.43 50.77 2.5% 3.4% 76.96 -0.5%
2029 58.52 39.27 55.37 42.47 52.04 2.5% 3.4% 78.88 -0.5%
2030 59.99 40.25 56.76 43.53 53.34 2.5% 3.4% 80.85 -0.5%
<CAPTION>
TOTAL REAL
TOTAL PRICE ANNUAL %
PRICE $/MWH* PRICE CHG
YEAR $/MWH* (1999$) ESCALATION BASE
- ---- -------- -------- ---------- --------
<S> <C> <C> <C> <C>
2000 30.55 29.81 -- 0.5%
2001 31.60 30.08 0.9% 0.7%
2002 32.77 30.43 1.2% 1.2%
2003 34.59 31.34 3.0% 1.4%
2004 36.06 31.87 1.7% 1.8%
2005 37.68 32.49 1.9% 2.4%
2006 39.04 32.84 1.1% 2.2%
2007 40.72 33.42 1.8% 2.9%
2008 42.04 33.67 0.7% 2.6%
2009 43.75 34.18 1.5% 2.4%
2010 45.14 34.41 0.7% 3.0%
2011 45.79 34.05 -1.0% 2.4%
2012 46.60 33.81 -0.7% 2.1%
2013 47.46 33.59 -0.6% 2.1%
2014 48.38 33.40 -0.6% 2.3%
2015 49.54 33.37 -0.1% 2.2%
2016 50.48 33.18 -0.6% 2.3%
2017 51.62 33.10 -0.2% 2.4%
2018 52.62 32.92 -0.5% 2.4%
2019 53.72 32.78 -0.4% 2.5%
2020 54.82 32.64 -0.4% 2.4%
2021 54.82 31.84 -2.4% 2.1%
2022 56.41 31.97 0.4% 2.5%
2023 57.82 31.97 0.0% 2.5%
2024 59.26 31.97 0.0% 2.5%
2025 60.74 31.97 0.0% 2.5%
2026 62.26 31.97 0.0% 2.5%
2027 63.82 31.97 0.0% 2.5%
2028 65.41 31.97 0.0% 2.5%
2029 67.05 31.97 0.0% 2.5%
2030 68.73 31.97 0.0% 2.5%
</TABLE>
- ------------------------
* Assumes a 60% load factor
C-F-5
<PAGE>
APPENDIX G:
LOW LOAD SCENARIO
As a supplement to this report, RDI examined the sensitivities of market
prices and the project's capacity factors to a regional decrease in demand. For
this scenario, a uniform demand growth rate of 1.5% was assumed throughout the
forecast period. Load growth assumptions in the base case are presented in
Figure 5. A comparison to assumed demand growth in the base case is presented in
Figure App-4.
FIGURE APP-4: LOAD GROWTH ASSUMPTIONS--BASE CASE VS. LOW LOAD SCENARIO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PEAK DEMAND IN BASE CASE V. LOW LOAD SCENARIO (GW)
<S> <C> <C>
BASE LOW LOAD
2000 39.42 39.42
2001 40.16 40.01
2002 40.85 40.61
2003 42.35 41.22
2004 44.27 41.84
2005 45.47 42.47
2006 46.25 43.11
2007 46.66 43.75
2008 47.18 44.41
2009 48.25 45.07
2010 49.75 45.75
2011 51.56 46.44
2012 53.19 47.13
2013 53.92 47.84
2014 54.46 48.56
2015 54.86 49.29
2016 55.79 50.03
2017 56.74 50.78
2018 57.71 51.54
2019 58.69 52.31
2020 59.68 53.10
</TABLE>
Summary tables showing detailed price and capacity factor results are
attached to this Appendix.
SCENARIO RESULTS
ENERGY PRICES Energy price results for the low load scenario are summarized
in Table App-6. Energy prices are approximately 3% lower than the base case
forecast from 2005-2012 because the decrease in demand diminishes the need for
higher cost resources. From 2013-2021, energy prices are approximately 2% than
base case prices.
C-G-1
<PAGE>
TABLE APP-6 ENERGY PRICE RESULTS--LOW LOAD SCENARIO (NOMINAL $)
<TABLE>
<CAPTION>
LOW LOAD ENERGY PRICES ($/MWH)
----------------------------------------------------
SUMMER MONTHS WINTER MONTHS
------------------- -------------------
HOURS OF DAY ANNUAL %
------------------- YR ROUND PRICE CHG
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION BASE
- ---- -------- -------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000......................................... 23.98 17.98 22.34 18.47 21.55 -- 0.0%
2001......................................... 24.70 18.28 23.42 18.87 22.34 3.6% -0.2%
2002......................................... 25.64 18.51 24.51 19.41 23.20 3.9% -0.2%
2003......................................... 27.62 19.70 25.85 20.07 24.55 5.8% -1.2%
2004......................................... 28.22 19.89 26.93 20.65 25.33 3.2% -2.3%
2005......................................... 29.36 20.22 28.27 21.39 26.41 4.3% -2.9%
2006......................................... 30.80 20.94 29.40 22.03 27.47 4.0% -2.9%
2007......................................... 32.02 21.45 31.13 22.93 28.80 4.8% -2.7%
2008......................................... 33.09 22.00 32.47 23.86 29.92 3.9% -2.7%
2009......................................... 34.95 23.11 33.87 24.91 31.34 4.7% -2.8%
2010......................................... 35.77 23.74 35.24 25.96 32.44 3.5% -2.7%
2011......................................... 36.52 24.32 36.02 26.64 33.18 2.3% -2.6%
2012......................................... 37.50 25.09 36.52 27.26 33.84 2.0% -2.6%
2013......................................... 38.00 25.52 37.32 28.06 34.53 2.1% -2.4%
2014......................................... 38.77 26.31 37.97 28.86 35.26 2.1% -2.3%
2015......................................... 40.20 27.22 38.97 29.62 36.30 3.0% -2.2%
2016......................................... 40.65 27.63 39.98 30.42 37.08 2.1% -2.1%
2017......................................... 41.62 28.46 40.90 31.28 37.99 2.5% -1.9%
2018......................................... 42.85 29.31 41.71 32.05 38.90 2.4% -1.6%
2019......................................... 43.49 29.91 42.79 32.90 39.78 2.3% -1.5%
2020......................................... 44.45 30.88 43.74 33.72 40.71 2.3% -1.4%
2021......................................... 44.76 31.70 43.11 34.18 40.65 -0.1% -1.6%
2022......................................... 45.88 32.49 44.18 35.03 41.67 2.5% -1.6%
2023......................................... 47.02 33.31 45.29 35.91 42.71 2.5% -1.6%
2024......................................... 48.20 34.14 46.42 36.81 43.78 2.5% -1.6%
2025......................................... 49.40 34.99 47.58 37.73 44.87 2.5% -1.6%
2026......................................... 50.64 35.87 48.77 38.67 45.99 2.5% -1.6%
2027......................................... 51.90 36.76 49.99 39.64 47.14 2.5% -1.6%
2028......................................... 53.20 37.68 51.24 40.63 48.32 2.5% -1.6%
2029......................................... 54.53 38.62 52.52 41.64 49.53 2.5% -1.6%
2030......................................... 55.90 39.59 53.83 42.69 50.77 2.5% -1.6%
</TABLE>
CAPACITY SUPPLY AND DEMAND The largest effect the low load scenario has on
the market is that 25% less new capacity will be required over the forecast
horizon. A comparison of capacity additions in the low load scenario to those in
the base case is presented in Table App-7.
C-G-2
<PAGE>
TABLE APP-7: CAPACITY ADDITIONS--BASE CASE VS. LOW LOAD SCENARIO
<TABLE>
<CAPTION>
CAP ADDITIONS (MW) CAPACITY PRICES $/KW-YR
----------------------------------------- ------------------------------------
CHG FROM % %
BASE LOW BASE CHG BASE LOW CHG
YEAR CASE LOAD (MW) BASE CASE LOAD BASE
- ---- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000.................................. 3,760 3,760 -- 0.0% 46.46 46.26 -0.4%
2001.................................. 4,570 3,782 788 -17.2% 47.26 47.26 0.0%
2002.................................. 2,450 1,717 733 -29.9% 47.97 47.77 -0.4%
2003.................................. 2,243 2,224 2,019 -17.6% 48.69 48.39 -0.6%
2004.................................. 5,115 2,336 2,779 -54.3% 49.82 49.42 -0.8%
2005.................................. 4,222 2,476 1,746 -41.4% 50.56 50.16 -0.8%
2006.................................. 2,438 2,335 103 -4.2% 52.11 51.01 -2.1%
2007.................................. 2,977 2,660 317 -10.6% 52.36 51.78 -1.1%
2008.................................. 2,655 2,368 287 -10.8% 53.65 52.75 -1.7%
2009.................................. 2,486 2,450 36 -1.4% 53.04 53.64 -2.5%
2010.................................. 3,828 2,439 1,399 -36.5% 55.13 52.09 -5.5%
2011.................................. 4,310 2,624 1,686 -39.1% 55.84 54.34 -2.7%
2012.................................. 4,197 2,894 1,303 -31.0% 57.25 55.07 -3.8%
2013.................................. 3,226 3,088 138 -4.3% 58.20 56.10 -3.6%
2014.................................. 2,654 2,885 (231) 8.7% 58.85 56.95 -3.2%
2015.................................. 2,935 2,714 221 -7.5% 59.61 57.81 -3.0%
2016.................................. 3,775 2,754 1,021 -27.0% 60.38 58.88 -2.5%
2017.................................. 3,849 2,793 1,056 -27.4% 61.46 59.76 -2.8%
2018.................................. 3,835 2,746 1,089 -28.4% 62.26 60.56 -2.7%
2019.................................. 3,915 2,786 1,129 -28.8% 63.17 61.57 -2.5%
2020.................................. 3,995 2,829 1,166 -29.2% 64.30 62.60 -2.8%
2021.................................. 5,255 4,054 1,201 -22.0% 65.08 63.04 -2.2%
------ ------ ------ ------ ----- ----- ----
Total................................. 80,700 60,714 19,986 -24.8%
</TABLE>
Even with lower growth projections, the results of the low load scenario
continue to indicate a strong need for capacity in the region. For this reason,
capacity prices in the low load scenario are only two to four percent lower than
the base case in the later years of the forecast (approximately .30 $/MWh
assuming a 60% load factor). This supports the proposition that regional
capacity prices are only likely to be affected by very large changes in the
regional supply and demand balance. Capacity price results for the high start-up
cost scenario are shown in Figure App-5.
FIGURE APP-5 CAPACITY PRICE RESULTS--LOW LOAD SCENARIO
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CAPACITY PRICES IN $/KW-YR
<S> <C> <C>
BASE LOW LOAD
2000 46.46 46.26
2001 47.26 47.26
2002 47.97 47.77
2003 48.69 48.39
2004 49.82 49.42
2005 50.56 50.16
2006 52.11 51.01
2007 52.38 51.78
2008 53.65 52.75
2009 55.04 53.64
2010 55.13 52.09
2011 55.84 54.34
2012 57.27 55.07
2013 58.2 56.10
2014 58.85 56.95
2015 59.61 57.81
2016 60.38 58.88
2017 61.46 59.76
2018 62.26 60.56
2019 63.17 61.57
2020 64.3 62.50
2021 65.08 63.64
</TABLE>
C-G-3
<PAGE>
CAPACITY FACTORS Table App-8 summarizes forecast monthly capacity factors
for select years of the forecast. As shown in Figure App-6. A detailed table
showing monthly capacity factors for each year of the forecast accompanies this
Appendix. Capacity factors are lower in the low load scenario than in the base
case because decreased demand reduces the amount the market relies on peaking
capacity.
TABLE APP-8 MONTHLY CAPACITY FACTORS--SELECT YEARS
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003....................... 0% 1% 0% 0% 2% 4% 7% 8% 2%
2005....................... 1% 1% 1% 0% 2% 7% 10% 9% 2%
2010....................... 0% 1% 1% 0% 3% 9% 11% 14% 2%
2015....................... 0% 1% 0% 0% 2% 4% 9% 9% 3%
2020....................... 0% 0% 0% 0% 1% 3% 6% 5% 0%
Avg 2000-2021.............. 0% 1% 0% 0% 2% 5% 0% 9% 2%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003....................... 0% 0% 1% 2%
2005....................... 0% 0% 1% 2%
2010....................... 0% 1% 1% 4%
2015....................... 0% 0% 1% 2%
2020....................... 0% 0% 0% 2%
Avg 2000-2021.............. 0% 0% 1% 3%
</TABLE>
FIGURE APP-6: MONTHLY CAPACITY FACTORS--SELECT YEARS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AUGUST CAPACITY FACTORS - SELECT YEARS
<S> <C> <C>
BASE CASE LOW LOAD
2003 9% 8%
2005 14% 9%
2010 18% 14%
2015 14% 9%
2020 7% 5%
</TABLE>
C-G-4
<PAGE>
APPENDIX G:
DETAILED MONTHLY CAPACITY FACTORS--
LOW LOAD SCENARIO
MONTHLY PLANT GENERATION (GWH)
TENASKA GEORGIA POWER PARTNERS
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001...................... -- -- -- -- -- 7 17 21 4
2002...................... -- 3 1 -- 3 11 39 42 12
2003...................... -- 6 1 -- 11 27 50 51 14
2004...................... -- 6 -- -- 12 19 49 55 8
2005...................... 4 6 4 -- 16 47 64 60 15
2006...................... 1 6 4 -- 18 50 66 79 25
2007...................... 7 6 2 -- 20 53 77 87 22
2008...................... 6 6 8 -- 21 57 79 88 23
2009...................... 6 6 4 -- 20 58 74 91 32
2010...................... 2 6 4 -- 20 56 75 94 13
2011...................... 3 6 2 -- 19 46 63 65 20
2012...................... 2 6 2 -- 20 46 72 85 25
2013...................... 3 3 -- -- 17 38 69 71 8
2014...................... 2 6 -- -- 14 31 57 55 8
2015...................... -- 6 -- -- 15 28 61 62 18
2016...................... 1 -- -- -- 12 32 57 57 9
2017...................... 1 4 -- -- 11 20 56 41 6
2018...................... -- -- -- -- 10 23 51 52 12
2019...................... -- 3 -- -- 10 20 49 45 3
2020...................... -- -- -- -- 4 17 42 33 3
2021...................... -- -- -- -- -- 15 40 18 --
<CAPTION>
YEAR OCT NOV DEC TOTAL
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2001...................... -- -- 3 52
2002...................... 3 -- 6 120
2003...................... 1 -- 6 167
2004...................... 2 -- 7 158
2005...................... 2 2 6 226
2006...................... 1 -- 6 256
2007...................... 1 4 11 290
2008...................... 6 6 6 306
2009...................... 9 -- 6 306
2010...................... 2 4 10 286
2011...................... 2 4 6 236
2012...................... 2 -- 6 266
2013...................... 1 3 6 219
2014...................... 3 2 6 184
2015...................... -- -- 4 194
2016...................... -- -- 3 171
2017...................... -- -- 6 145
2018...................... -- -- -- 148
2019...................... -- -- 3 133
2020...................... -- -- -- 99
2021...................... -- -- -- 73
</TABLE>
C-G-5
<PAGE>
MONTHLY CAPACITY FACTORS
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2001........................... 0% 0% 0% 0% 0% 2% 5% 6% 1%
2002........................... 0% 1% 0% 0% 1% 2% 6% 6% 2%
2003........................... 0% 1% 0% 0% 2% 4% 7% 8% 2%
2004........................... 0% 1% 0% 0% 2% 3% 7% 8% 1%
2005........................... 1% 1% 1% 0% 2% 7% 10% 9% 2%
2006........................... 0% 1% 1% 0% 3% 8% 10% 12% 4%
2007........................... 1% 1% 0% 0% 3% 8% 11% 13% 3%
2008........................... 1% 1% 1% 0% 3% 9% 12% 13% 4%
2009........................... 1% 1% 1% 0% 3% 9% 11% 14% 5%
2010........................... 0% 1% 1% 0% 3% 9% 11% 14% 2%
2011........................... 0% 1% 0% 0% 3% 7% 9% 10% 3%
2012........................... 0% 1% 0% 0% 3% 7% 11% 13% 4%
2013........................... 0% 0% 0% 0% 3% 6% 10% 11% 1%
2014........................... 0% 1% 0% 0% 2% 5% 9% 8% 1%
2015........................... 0% 1% 0% 0% 2% 4% 9% 9% 3%
2016........................... 0% 0% 0% 0% 2% 5% 9% 9% 1%
2017........................... 0% 1% 0% 0% 2% 3% 8% 6% 1%
2018........................... 0% 0% 0% 0% 1% 4% 8% 8% 2%
2019........................... 0% 0% 0% 0% 1% 3% 7% 7% 0%
2020........................... 0% 0% 0% 0% 1% 3% 6% 5% 0%
2021........................... 0% 0% 0% 0% 0% 2% 6% 3% 0%
-- -- -- -- -- -- --- --- --
Average........................ 0% 1% 0% 0% 2% 5% 9% 9% 2%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2001........................... 0% 0% 1% 2%
2002........................... 0% 0% 1% 2%
2003........................... 0% 0% 1% 2%
2004........................... 0% 0% 1% 2%
2005........................... 0% 0% 1% 2%
2006........................... 0% 0% 1% 3%
2007........................... 0% 1% 2% 3%
2008........................... 1% 1% 1% 4%
2009........................... 1% 0% 1% 4%
2010........................... 0% 1% 1% 4%
2011........................... 0% 1% 1% 4%
2012........................... 0% 0% 1% 3%
2013........................... 0% 0% 1% 3%
2014........................... 0% 0% 1% 3%
2015........................... 0% 0% 1% 2%
2016........................... 0% 0% 0% 2%
2017........................... 0% 0% 1% 2%
2018........................... 0% 0% 0% 2%
2019........................... 0% 0% 0% 2%
2020........................... 0% 0% 0% 2%
2021........................... 0% 0% 0% 1%
-- -- -- --
Average........................ 0% 0% 1% 3%
</TABLE>
SUMMARY
<TABLE>
<CAPTION>
YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP
- ---- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2003........................... 0% 1% 0% 0% 2% 4% 7% 8% 2%
2005........................... 1% 1% 1% 0% 2% 7% 10% 9% 2%
2010........................... 0% 1% 1% 0% 3% 9% 11% 14% 2%
2015........................... 0% 1% 0% 0% 2% 4% 9% 9% 3%
2020........................... 0% 0% 0% 0% 1% 3% 6% 5% 0%
-- -- -- -- -- -- --- --- --
Avg 2000-2021.................. 0% 1% 0% 0% 2% 5% 9% 9% 2%
<CAPTION>
YEAR OCT NOV DEC AVG
- ---- -------- -------- -------- --------
<S> <C> <C> <C> <C>
2003........................... 0% 0% 1% 2%
2005........................... 0% 0% 1% 2%
2010........................... 0% 1% 1% 4%
2015........................... 0% 0% 1% 2%
2020........................... 0% 0% 0% 2%
-- -- -- --
Avg 2000-2021.................. 0% 0% 1% 3%
</TABLE>
C-G-6
<PAGE>
APPENDIX G:
TENASKA GEORGIA POWER PROJECT--
LOW LOAD PRICE FORECAST RESULTS
<TABLE>
<CAPTION>
LOW LOAD ENERGY PRICES ($/MWH)
----------------------------------------------------
SUMMER MONTHS WINTER MONTHS
------------------- -------------------
HOURS OF DAY ANNUAL % CAPACITY %
------------------- YR ROUND PRICE CHG PRICE CHG
YEAR CONTRACT OFF CONTRACT OFF AVG ESCALATION BASE $/KW-YR BASE
- ---- -------- -------- -------- -------- -------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000........ 23.98 17.98 22.34 18.47 21.55 -- 0.0% 46.26 -0.4%
2001........ 24.70 18.28 23.42 18.87 22.34 3.6% -0.2% 47.26 0.0%
2002........ 25.64 18.51 24.51 19.41 23.20 3.9% -0.2% 47.77 -0.4%
2003........ 27.62 19.70 25.85 20.07 24.55 5.8% -1.2% 48.39 -0.6%
2004........ 28.22 19.89 26.93 20.65 25.33 3.2% -2.3% 49.42 -0.8%
2005........ 29.36 20.22 28.27 21.39 26.41 4.3% -2.9% 50.16 -0.8%
2006........ 30.80 20.94 29.40 22.03 27.47 4.0% -2.9% 51.01 -2.1%
2007........ 32.02 21.45 31.13 22.93 28.80 4.8% -2.7% 51.78 -1.1%
2008........ 33.09 22.00 32.47 23.86 29.92 3.9% -2.7% 52.75 -1.7%
2009........ 34.95 23.11 33.87 24.91 31.34 4.7% -2.8% 53.64 -2.5%
2010........ 35.77 23.74 35.24 25.96 32.44 3.5% -2.7% 52.09 -5.5%
2011........ 36.52 24.32 36.02 26.64 33.18 2.3% -2.6% 54.34 -2.7%
2012........ 37.50 25.09 36.52 27.26 33.84 2.0% -2.6% 55.07 -3.8%
2013........ 38.00 25.52 37.32 28.06 34.53 2.1% -2.4% 56.10 -3.6%
2014........ 38.77 26.31 37.97 28.86 35.26 2.1% -2.3% 56.95 -3.2%
2015........ 40.20 27.22 38.97 29.62 36.30 3.0% -2.2% 57.81 -3.0%
2016........ 40.65 27.63 39.98 30.42 37.08 2.1% -2.1% 58.88 -2.5%
2017........ 41.62 28.46 40.90 31.28 37.99 2.5% -1.9% 59.76 -2.8%
2018........ 42.85 29.31 41.71 32.05 38.90 2.4% -1.6% 60.56 -2.7%
2019........ 43.49 29.91 42.79 32.90 39.78 2.3% -1.5% 61.57 -2.5%
2020........ 44.45 30.88 43.74 33.72 40.71 2.3% -1.4% 62.50 -2.8%
2021........ 44.76 31.70 43.11 34.18 40.65 -0.1% -1.6% 63.64 -2.2%
2022........ 45.88 32.49 44.18 35.03 41.67 2.5% -1.6% 66.36 -0.5%
2023........ 47.02 33.31 45.29 35.91 42.71 2.5% -1.6% 68.02 -0.5%
2024........ 48.20 34.14 46.42 36.81 43.78 2.5% -1.6% 69.72 -0.5%
2025........ 49.40 34.99 47.58 37.73 44.87 2.5% -1.6% 71.46 -0.5%
2026........ 50.64 35.87 48.77 38.67 45.99 2.5% -1.6% 73.25 -0.5%
2027........ 51.90 36.76 49.99 39.64 47.14 2.5% -1.6% 75.08 -0.5%
2028........ 53.20 37.68 51.24 40.63 48.32 2.5% -1.6% 76.96 -0.5%
2029........ 54.53 38.62 52.52 41.64 49.53 2.5% -1.6% 78.88 -0.5%
2030........ 55.90 39.59 53.83 42.69 50.77 2.5% -1.6% 80.85 -0.5%
<CAPTION>
TOTAL REAL
TOTAL PRICE ANNUAL %
PRICE $/MWH* PRICE CHG
YEAR $/MWH* (1999$) ESCALATION BASE
- ---- -------- -------- ---------- --------
<S> <C> <C> <C> <C>
2000........ 30.36 29.62 -- -0.1%
2001........ 31.33 29.82 0.7% -0.1%
2002........ 32.29 29.99 0.6% -0.3%
2003........ 33.75 30.58 2.0% -1.0%
2004........ 34.73 30.70 0.4% -1.9%
2005........ 35.95 31.00 1.0% -2.3%
2006........ 37.18 31.28 0.9% -2.7%
2007........ 38.65 31.73 1.4% -2.3%
2008........ 39.96 32.00 0.9% -2.4%
2009........ 41.54 32.45 1.4% -2.8%
2010........ 42.36 32.28 -0.5% -3.4%
2011........ 43.52 32.36 0.2% -2.6%
2012........ 44.32 32.15 -0.7% -2.9%
2013........ 45.21 31.99 -0.5% -2.7%
2014........ 46.09 31.82 -0.5% -2.5%
2015........ 47.30 31.86 0.1% -2.4%
2016........ 48.28 31.73 -0.4% -2.2%
2017........ 49.36 31.65 -0.3% -2.1%
2018........ 50.42 31.54 -0.3% -1.9%
2019........ 51.49 31.43 -0.4% -1.8%
2020........ 52.60 31.32 -0.3% -1.7%
2021........ 52.76 30.65 -2.1% -1.7%
2022........ 54.29 30.77 0.4% -1.3%
2023........ 55.65 30.77 0.0% -1.3%
2024........ 57.04 30.77 0.0% -1.3%
2025........ 58.47 30.77 0.0% -1.3%
2026........ 59.93 30.77 0.0% -1.3%
2027........ 61.43 30.77 0.0% -1.3%
2028........ 62.96 30.77 0.0% -1.3%
2029........ 64.54 30.77 0.0% -1.3%
2030........ 66.15 30.77 0.0% -1.3%
</TABLE>
- ------------------------
* Assumes a 60% load factor
C-G-7
<PAGE>
APPENDIX H:
REGIONAL OZONE TRANSPORT RULE
In September 1998, the EPA finalized the regional ozone transport rule.
Similar to the goal of the Ozone Transport Commission's (OTC) nitrous oxide
(NO(X)) program, which began May 1, 1999, this rulemaking establishes summertime
NO(X) emissions budgets for twenty-two states and the District of Columbia.
Included within this program are all of the states participating in the OTC
trading program except for Maine, New Hampshire, and Vermont. Unlike the
state-driven OTC program, however, the NO(X) State Implementation Plant (SIP)
call marks the first time the EPA has REQUIRED states to reduce the emissions of
ozone precursors to assist with ozone mitigation in other downwind states.
The process for evaluating ozone transport over an area extending past the
Northeast Ozone Transport Region began in March 1995 with the establishment of
the Ozone Transport Assessment Group (OTAG). This workgroup was composed of the
thirty-seven eastern most states and the District of Columbia as well as the EPA
and other interested stakeholders including industry and environmental groups.
The goal of this workgroup was "to identify and recommend a strategy to reduce
transported ozone and its precursors, which, in combination with other measures,
will enable attainment and maintenance of the ozone standard in the OTAG region.
A number of criteria were to be considered in selecting a strategy, including
but not limited to, "cost-effectiveness, feasibility, and impacts on ozone
levels."(12) OTAG completed its work and issued recommendations in June 1997.
Despite reaching conclusions by majority vote, the group remained sharply
divided over the findings and recommendations. Overall, the OTAG membership
concluded that ozone and its precursors could travel over long distances and
recognized transport of 150, 300, and as far as 500 miles, in some cases. The
group made broad recommendations for future atmospheric modeling and specific
recommendations for several sectors. For the utility sector, OTAG concluded that
EPA should require utility NO(X) controls that fall into the range between
existing reductions planned under the Clean Air Act Amendments of 1990 (CAAA90)
and the less stringent of 85% reduction or 0.15 lb/mmBtu, and that EPA should
assist states with complying with the existing National Ambient Air Quality
Standards (NAAQS).
Once OTAG completed its work, EPA immediately began the process of
developing the ozone transport rule resulting in a proposal that was released in
November 1997 and the final rule in September 1998. In this rulemaking, EPA
found, based on OTAG air quality modeling as well as additional modeling
performed by EPA, that NO(X) emissions from sources in the 23 jurisdictions
significantly contribute to non-attainment of the ozone NAAQS in one or more
downwind states throughout the eastern U.S. EPA cites section 110(a)(2)(D) of
the CAAA90 as the authority to control NO(X) emissions in states that are found
to be significant contributors to transport. Section 110(a)(2)(D) authorizes EPA
to require these states to develop adequate emission control programs to prevent
their emissions from significantly contributing to non-attainment, or
interfering with maintenance, in one or more downwind states.
The rule requires that the affected states adopt adequate control programs
to meet the prescribed NO(X) emissions budgets and to submit these regulations
to EPA for review by September 1999(13). The control programs are to then be
implemented by May 1, 2003. Although EPA established a summertime emission
budget for each state under this rulemaking, EPA does not have the authority to
mandate the specific controls or the specific sources that the states should
regulate to achieve the budgets. Each state has the flexibility to develop its
own control strategy. However, the economics of pollution control and the
politics associated with regulating certain types of sources, such as
automobiles, suggest that states are
- ------------------------
(12) Ozone Transport Assessment Group, Executive Report; July 1997
(13) The United States Court of Appeal recently remanded the rules regarding
the state's filings of State Implimentation plans. This ruling is currently
under appeal, but if the appeal is not successful the implementation of the
program could be delayed.
C-H-1
<PAGE>
likely to get most of the required reductions from electric generating units and
from other large stationary sources used by industrial sectors.
EPA developed individual state emissions budgets for this rulemaking by
determining the amount of NO(X) emissions that each state would have after
applying what EPA determined to be "highly cost-effective controls." To perform
the budget calculation, EPA projected the 1995/1996 baseline emissions data for
each state out to the year 2007. For fossil fuel fired electricity generating
units greater than 25 MW, EPA multiplied the 2007 projected heat input by a 0.15
lb/mmBtu emissions rate to determine this sector's budget contribution to the
overall state budget. See Table App-9. EPA also assumed emissions reductions for
three other source categories: large industrial boilers and turbines (greater
than 250 mmBtu/hr), stationary combustion engines, and cement kilns. EPA
calculated a flat percentage reduction from the 2007 projected emissions to
establish the budget contribution for these categories. The reductions are 60%,
90%, and 30%, respectively. To establish the remainder of the state budgets, EPA
calculated the projected 2007 emissions for all other source categories, which
includes projections for reductions required by other parts of the CAAA90 but
does not assume any additional controls.
TABLE APP-9: REGIONAL OZONE TRANSPORT RULE EMISSION BUDGETS
<TABLE>
<CAPTION>
BUDGET CONTRIBUTION FOR
STATE ELECTRIC GENERATING UNITS
- ----- -------------------------
<S> <C>
Alabama................................................ 29,051
Connecticut............................................ 2,583
Delaware............................................... 3,523
District of Columbia................................... 207
Georgia................................................ 30,255
Illinois............................................... 32,045
Indiana................................................ 49,020
Kentucky............................................... 36,753
Maryland............................................... 14,807
Massachusetts.......................................... 15,033
Michigan............................................... 28,165
Missouri............................................... 23,923
New Jersey............................................. 10,863
New York............................................... 30,273
North Carolina......................................... 31,394
Ohio................................................... 49,468
Pennsylvania........................................... 52,000
Rhode Island........................................... 1,118
South Carolina......................................... 16,290
Tennesses.............................................. 25,386
Virginia............................................... 18,258
West Virginia.......................................... 26,439
Wisconsin.............................................. 17,972
</TABLE>
Although EPA does not have the authority under Title I to mandate that
states control certain sources, EPA did strongly recommend a specific control
strategy. Very similar to the OTC NO(X) trading program, EPA recommended that
states implement a regional emission trading program designed for large electric
generating units and industrial sources. To facilitate the establishment of the
trading program, EPA adopted a model trading rule as a part of the regional
ozone transport rule. The model rule is very close in purpose and design to the
model rule used in the OTC trading program. States that wish to participate in
the regional trading program need to adopt a state regulation that is consistent
with the model rule.
C-H-2
<PAGE>
The regional ozone transport rule is being legally challenged by a variety
of states, companies, and associations representing companies. At the same time,
a number of states, companies, and environmental groups are intervening in the
litigation on behalf of EPA. (See Table App-10 for a list of litigating
parties.) Although cases were filed in several courts throughout the region
affected by the rule, it is likely that all of the cases will be transferred to
the D.C. Circuit court. The deadline has now expired for the filing of
additional cases and intervention. Based on the current schedule, oral arguments
for the case will probably be heard in the fall of 1999. Although a variety of
issues are included in the litigation, the case centers around two key issues.
The first is whether EPA has the legal authority under Section 110(a)(2)(D) of
the CAAA90 to mandate that the affected states meet the specific emissions
budgets. And if EPA does have the authority, the second issue is whether the
levels of control are more stringent than necessary to significantly mitigate
the transport of ozone between states outside of the Northeast Ozone Transport
Region. EPA appears to be on track to continue with implementation of the
regional ozone transport ruling as originally adopted, unless the court were to
force a delay in the schedule.
TABLE APP-10: SELECTIVE LIST OF PARTIES IN THE REGIONAL OZONE TRANSPORT RULE
LITIGATION
<TABLE>
<CAPTION>
PETITIONERS INTERVENORS IN SUPPORT OF EPA
- ----------- -------------------------------------
<S> <C>
Alabama.................................................. Connecticut
Indiana.................................................. Maine
Kansas................................................... Massachusetts
Michigan................................................. New Hampshire
North Carolina........................................... New York
Ohio..................................................... Pennsylvania
South Carolina........................................... Rhode Island
West Virginia............................................ Vermont
Midwest and Southeast Utilities.......................... East and Northeast Electric Utilities
Interstate Natural Gas Assoc. of America................. Natural Resource Defense Council
United Mine Workers of America........................... New England Council
Virginia Chamber of Commerce.............................
</TABLE>
C-H-3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Limited Partnership Agreement of Tenaska Georgia Partners, L.P. (the
"partnership") provides that the partnership will indemnify its general partner
and any of its officers or directors to the extent permitted by the laws of the
State of Delaware and may indemnify certain other persons as authorized by the
Delaware Revised Uniform Limited Partnership Act (the "Partnership Act").
Section 17-108 of the Partnership Act provides as follows:
"Subject to such standards and restrictions, if any, as are set forth
in its partnership agreement, a limited partnership may, and shall have
power to, indemnify and hold harmless any Partner or other person from
and against any and all claims and demands whatsoever."
The Partnership Agreement provides that neither the partnership nor any
partner shall be liable for any debt, obligation or liability of any other
partner (the "incurring partner") incurred either before or after execution of
the Partnership Agreement, except for those debts, obligations or liabilities
expressly assumed in writing by the partnership or other partner under and
pursuant to the terms and conditions of the Partnership Agreement, and each
incurring partner hereby indemnifies and agrees to hold harmless the partnership
and each other partner from all debts, obligations and liabilities of the
incurring partner not so assumed by the partnership or such other partner. In
addition, Section 7.2(e) of the Partnership Agreement provides as follows:
"To the extent the provisions of this Section 7.2(e) are not in
contravention of requirements of law which cannot be modified by agreement
of the Partners, the Partnership shall indemnify and save harmless the
Representatives and Alternative Representatives of the ERC, the Managing
Partner, any Partner performing services pursuant to Section 8.1, and
Affiliates, directors and officers of any of the foregoing (as required by
and to the full extent permitted by the [Partnership] Act) against all
actions, claims, demands, costs and liabilities arising out of the good
faith acts (or good faith failure to act) of such Persons within the scope
of their authority in the course of the Partnership's business or pursuant
to this Agreement, and such Persons shall not be liable for any obligations,
liabilities or commitments incurred by or on behalf of the Partnership as a
result of any such acts or failure to act even though caused or alleged to
be caused by the negligence or fault of any such Person or its agents, and
even though any such claim, cause of action, or suit is based upon or
alleged to be based upon the strict liability of such Person or its agents
against the consequences of their own negligence; provided, however, such
indemnification shall not apply to any Person to the extent that their
action or inaction constitutes willful misconduct, fraud, or gross
negligence resulting in a material loss or injury to the Partnership."
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3.1 Amended and Restated Partnership Agreement of Tenaska
Georgia Partners, L.P., dated as of October 29, 1999,
between Tenaska Georgia, Inc. and Tenaska Georgia I, L.P.
4.1 Indenture of Trust, dated as of November 1, 1999, among the
partnership, the Trustee and the Depositary Bank.
4.2 Collateral Agency and Intercreditor Agreement, dated as of
November 1, 1999, among the partnership, the Trustee, the
Authority Trustee, the Collateral Agent, the Debt Service
Reserve Letter of Credit Provider, the Power Purchase
Agreement Letter of Credit Provider and the Depositary Bank.
4.3 Form of bonds, dated November 10, 1999, evidencing 9.50%
Senior Secured Bonds of the partnership due 2030 in the
principal amount of $275,000,000.
4.4 Assignment and Security Agreement, dated as of November 1,
1999, between the partnership and the Collateral Agent.
4.5 General Partner Pledge and Security Agreement, dated as of
November 1, 1999, between Tenaska Georgia, Inc. and the
Collateral Agent.
4.6 Limited Partner Pledge and Security Agreement, dated as of
November 1, 1999, between Tenaska Georgia I, L.P. and the
Collateral Agent.
4.7 Exchange and Registration Rights Agreement, dated as of
November 10, 1999, between the partnership and the initial
purchasers of the old bonds.
4.8 Leasehold Deed to Secure Debt, Assignment of Rents and
Leases and Security Agreement dated as of November 10, 1999
by the partnership to the Collateral Agent.
4.9 Consent and Agreement, dated as of November 10, 1999, among
the Power Purchaser, the Collateral Agent and the
partnership.
4.10 Consent and Agreement, dated as of November 10, 1999, among
the Georgia Power Company, the Collateral Agent and the
partnership.
4.11 Consent and Agreement, dated as of November 10, 1999, among
the Zachry Construction Corporation, the Collateral Agent
and the partnership (with respect to the EPC Contract).
4.12 Consent and Agreement, dated as of November 10, 1999, among
H.B. Zachry Company, the Collateral Agent and the
partnership.
4.13 Consent and Agreement, dated as of November 10, 1999, among
Tenaska Operations, Inc., the Collateral Agent and the
partnership (with respect to the Operations & Maintenance
Agreement).
4.14 Consent and Agreement, dated as of November 10, 1999, among
Heard County Water Authority, the Collateral Agent and the
partnership.
4.15 Consent and Agreement, dated as of November 10, 1999, among
Transcontinental Gas Pipe Line Corporation, the Collateral
Agent and the partnership.
4.16 Consent and Agreement, dated as of November 10, 1999, among
General Electric Company, the Collateral Agent and the
partnership.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.17 Consent to Assignment, dated as of November 10, 1999, among
Willbros Engineers, Inc., the Collateral Agent and the
partnership.
4.18 Consent to Assignment, dated as of November 10, 1999, among
Willbros Group, Inc., the Collateral Agent and the
partnership.
4.19 Indenture of Trust, dated as of November 1, 1999, between
The Development Authority of Heard County, Georgia ("DAHC")
and The Chase Manhattan Bank, as Trustee.
4.20 Authority Bonds, dated November 10, 1999, evidencing
$275,000,000 Taxable Industrial Development Revenue Bonds,
Series 1999, issued by the Authority pursuant to the
Authority Indenture.
4.21 Lease Agreement, dated as of November 1, 1999, between the
partnership and The Development Authority of Heard County,
Georgia.
4.22 Deed to Secure Debt, Security Agreement and Assignment of
Rents and Leases, dated as of November 1, 1999 by DAHC in
favor of the DAHC Trustee.
4.23 Guaranty Agreement, dated as of November 1, 1999, between
the partnership and the DAHC Trustee for DAHC Bonds.
4.24 Debt Service Reserve Letter of Credit and Reimbursement
Agreement, dated as of November 10, 1999, among the
partnership, the DSR LOC Provider and the Banks named
therein.
4.25 Equity Contribution Agreement, dated as of November 1, 1999,
among the partnership, the Contributing Partners and the
Collateral Agent.
4.26 Agreement as to Certain Undertakings, Common
Representations, Warranties, Covenants and Other Terms,
dated as of November 1, 1999, among the partnership, the
Trustee, the DSR LOC Agent, the Power Purchase Agreement LOC
Agent and the Collateral Agent.
4.27 Power Purchase Agreement Letter of Credit.
4.28 Tenaska Georgia I, L.P. Letter of Credit.
4.29 Tenaska Georgia, Inc. Letter of Credit.
5.1 Opinion of Winthrop, Stimson, Putnam & Roberts regarding the
legality of the new bonds.
8.1 Opinion of Winthrop, Stimson, Putnam & Roberts regarding tax
matters.
10.1 H.B. Zachry Company Guaranty of Obligation dated as of
October 22, 1999 made by H.B. Zachry Company in favor of the
partnership
10.2 EPC Contractor Performance Bond and Payment Bond
10.3* Power Purchase Agreement, dated August 24, 1999, between the
partnership and the Power Purchaser.
10.4* Engineering, Procurement and Construction Agreement, dated
as of September 15, 1999 (the "EPC Contract"), as amended,
between the partnership (as assignee of Tenaska Georgia I,
L.P.) and the EPC Contractor.
10.4.1* First Amendment, dated as of October 8, 1999, to the
Engineering, Procurement and Construction Agreement between
the partnership (as assignee of Tenaska Georgia I, L.P.) and
the EPC Contractor.
10.4.2 Option 5--Substation Switchyard, exercised by the
partnership on October 20, 1999.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.4.3 Agreement for Assignment and Assumption of EPC Contract to
the partnership, dated November 10, 1999, between Tenaska
Georgia I, L.P. and the partnership.
10.5 Guaranty of Obligation, dated as of September 23, 1999,
between Willbros Group, Inc. and the partnership.
10.6 Operations and Maintenance Agreement, dated as of September
10, 1999, as amended, between the partnership and Tenaska
Operations, Inc.
10.6.1 Amendment, dated as of October 26, 1999, to the Operations
and Maintenance Agreement, between the partnership and
Tenaska Operations, Inc.
10.6.2 Second Amendment, dated as of November 4, 1999, to the
Operations and Maintenance Agreement, between the
partnership and Tenaska Operations, Inc.
10.7 Interconnection Agreement, dated as of October 19, 1999,
between the partnership and Georgia Power Company.
10.8* Fixed Price Engineering, Procurement and Construction
Services Agreement, dated September 23, 1999 (the "Pipeline
EPC Contract"), between the partnership and Willbros
Engineers, Inc.
10.9 Interconnect, Reimbursement and Operating Agreement, dated
as of August 18, 1999, between the partnership and the
Transcontinental Gas Pipe Line Corporation.
10.10 Water Purchase Agreement, dated February 25, 1999, between
the partnership and the Heard County Water Authority.
10.11 Contract for Purchase, dated as of August 27, 1999, between
General Electric and the partnership, as assignee of Tenaska
Georgia I, L.P.
10.11.1 Agreement for Assignment and Assumption of Turbine Contract
to the partnership, dated as of November 10, 1999, between
Tenaska Georgia I, L.P. and the partnership.
10.11.2 Agreement for Assignment and Assumption of Turbine Contract
to the partnership, dated as of November 10, 1999, between
Zachry Construction Corporation and the partnership.
10.12 Ground Lease, dated as of November 10, 1999 between the
partnership and Tenaska Georgia, Inc.
10.13 Short Form Ground Lease Agreement, dated November 10, 1999
between the partnership and Tenaska Georgia, Inc.
10.14 Access and Utility Easement Agreement, dated November 10,
1999 between the partnership and Tenaska Georgia, Inc.
10.15 Electric Substation Site Option Agreement, dated November
10, 1999 between the partnership and Tenaska Georgia, Inc.
10.16 Natural Gas Pipeline Right-of-Way, dated November 2, 1999
between the partnership and Great Northern Nekoosa
Corporation.
10.17 Perpetual Right-of-Way and Easement Agreement, dated
November 1, 1999 between the partnership and Charles
Goodson.
10.18 Perpetual Right-of-Way and Easement Agreement, dated
November 1, 1999 between the partnership and Tenaska
Georgia, Inc.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.19 Construction Easement Agreement, dated October 8, 1999
between the partnership and Inland Paperboard and Packaging,
Inc.
10.20 Easement Agreement, dated November 2, 1999 among the
partnership, Susan Lynn Payne and Robert Charles Payne.
10.21 Non-Interference and Cross Indemnity Agreement, dated as of
November 10, 1999 between Tenaska Georgia, Inc. and the
partnership.
10.22 Power Purchase Agreement Letter of Credit and the
Reimbursement Agreement, dated as of November 10, 1999,
among the partnership, the Power Purchase Agreement LOC
Provider and the Banks named therein.
10.23 Agreement Regarding Ad Valorem Taxation, dated as of July
30, 1999, among the partnership, the Board of Commissioners
of Heard County, and the Board of Tax Assessors of Heard
County.
12.1 Statement regarding ratio of earnings to fixed charges.
23.1 Consent of Winthrop, Stimson, Putnam & Roberts (included in
Exhibits 5.1 and 8.1 to this Registration Statement).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of R.W. Beck, Inc.
23.4 Consent of Resource Data International, Inc.
24.1 Power-of-Attorney (contained on the signature page of this
Registration Statement).
25.1 Statement of Eligibility and Qualification on Form T-1 of
The Chase Manhattan Bank.
27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal.
99.2 Form of Letter to Clients.
99.3 Form of Letter to Registered Holders and DTC Participants.
99.4 Form of Notice of Guaranteed Delivery.
99.5 Form of Instruction to Registered Holders.
</TABLE>
- ------------------------
* The Registrant has requested confidential treatment for certain information
identified in this exhibit.
(b) Financial Statement Schedules
Financial statement schedules are not included as the required information
is inapplicable or is presented in the financial statements or the notes
thereto.
ITEM 22. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of
II-5
<PAGE>
any action, suit or proceeding) is asserted by any such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether or not such indemnification is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska
on the 31st day of January, 2000.
<TABLE>
<S> <C> <C>
TENASKA GEORGIA PARTNERS, L.P.
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
a Delaware corporation, as General Partner
of Tenaska Georgia Partners, L.P.
By: /s/ MICHAEL F. LAWLER
-----------------------------------------
Michael F. Lawler
VICE PRESIDENT OF FINANCE AND TREASURER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<C> <C> <S>
By: /s/ HOWARD L. HAWKS
----------------------------------------
Name: Howard L. Hawks
Title: Director--Tenaska Georgia, Inc.
Date: January 31, 2000
By: /s/ THOMAS E. HENDRICKS
----------------------------------------
Name: Thomas E. Hendricks
Title: Director--Tenaska Georgia, Inc.
Date: January 31, 2000
By: /s/ RONALD N. QUINN
----------------------------------------
Name: Ronald N. Quinn
Title: Director--Tenaska Georgia, Inc.
Date: January 31, 2000
By: /s/ JOHN T. REED
----------------------------------------
Name: John T. Reed
Title: Director--Tenaska Georgia, Inc.
Date: January 31, 2000
</TABLE>
II-7
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Michael F. Lawler and Jerry K. Crouse, or
either of them, as his true and lawful attorneys and agents, to do any and all
acts and things in his name and on his behalf in any and all capacities,
including as an individual or as an officer or director authorized to act on
behalf of an entity, and to execute any and all instruments for him and in his
name in the capacity indicated below, which said attorneys and agents, or either
of them, may deem necessary or advisable to enable Tenaska Georgia Partners,
L.P. to comply with the Securities Act of 1933 and any rules, regulations and
requirements of the SEC in connection with this registration statement,
including specifically, but without limitation, power and authority to sign for
him in his name in the capacity indicated below, any and all amendments
(including post-effective amendments) hereto; and each such person does hereby
ratify and confirm all that said attorneys and agents, or either of them, shall
do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ HOWARD L. HAWKS Director, Tenaska Georgia, Inc. January 31, 2000
- -----------------------------------
Howard L. Hawks
/s/ THOMAS E. HENDRICKS Director, Tenaska Georgia, Inc. January 31, 2000
- -----------------------------------
Thomas E. Hendricks
/s/ RONALD N. QUINN Director, Tenaska Georgia, Inc. January 31, 2000
- -----------------------------------
Ronald N. Quinn
/s/ JOHN T. REED Director, Tenaska Georgia, Inc. January 31, 2000
- -----------------------------------
John T. Reed
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3.1 Amended and Restated Partnership Agreement of Tenaska
Georgia Partners, L.P., dated as of October 29, 1999,
between Tenaska Georgia, Inc. and Tenaska Georgia I, L.P.
4.1 Indenture of Trust, dated as of November 1, 1999, among the
partnership, the Trustee and the Depositary Bank.
4.2 Collateral Agency and Intercreditor Agreement, dated as of
November 1, 1999, among the partnership, the Trustee, the
Authority Trustee, the Collateral Agent, the Debt Service
Reserve Letter of Credit Provider, the Power Purchase
Agreement Letter of Credit Provider and the Depositary Bank.
4.3 Form of bonds, dated November 10, 1999, evidencing 9.50%
Senior Secured Bonds of the partnership due 2030 in the
principal amount of $275,000,000.
4.4 Assignment and Security Agreement, dated as of November 1,
1999, between the partnership and the Collateral Agent.
4.5 General Partner Pledge and Security Agreement, dated as of
November 1, 1999, between Tenaska Georgia, Inc. and the
Collateral Agent.
4.6 Limited Partner Pledge and Security Agreement, dated as of
November 1, 1999, between Tenaska Georgia I, L.P. and the
Collateral Agent.
4.7 Exchange and Registration Rights Agreement, dated as of
November 10, 1999, between the partnership and the initial
purchasers of the old bonds.
4.8 Leasehold Deed to Secure Debt, Assignment of Rents and
Leases and Security Agreement dated as of November 10, 1999
by the partnership to the Collateral Agent.
4.9 Consent and Agreement, dated as of November 10, 1999, among
the Power Purchaser, the Collateral Agent and the
partnership.
4.10 Consent and Agreement, dated as of November 10, 1999, among
the Georgia Power Company, the Collateral Agent and the
partnership.
4.11 Consent and Agreement, dated as of November 10, 1999, among
the Zachry Construction Corporation, the Collateral Agent
and the partnership (with respect to the EPC Contract).
4.12 Consent and Agreement, dated as of November 10, 1999, among
H.B. Zachry Company, the Collateral Agent and the
partnership.
4.13 Consent and Agreement, dated as of November 10, 1999, among
Tenaska Operations, Inc., the Collateral Agent and the
partnership (with respect to the Operations & Maintenance
Agreement).
4.14 Consent and Agreement, dated as of November 10, 1999, among
Heard County Water Authority, the Collateral Agent and the
partnership.
4.15 Consent and Agreement, dated as of November 10, 1999, among
Transcontinental Gas Pipe Line Corporation, the Collateral
Agent and the partnership.
4.16 Consent and Agreement, dated as of November 10, 1999, among
General Electric Company, the Collateral Agent and the
partnership.
4.17 Consent to Assignment, dated as of November 10, 1999, among
Willbros Engineers, Inc., the Collateral Agent and the
partnership.
4.18 Consent to Assignment, dated as of November 10, 1999, among
Willbros Group, Inc., the Collateral Agent and the
partnership.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.19 Indenture of Trust, dated as of November 1, 1999, between
The Development Authority of Heard County, Georgia ("DAHC")
and The Chase Manhattan Bank, as Trustee.
4.20 Authority Bonds, dated November 10, 1999, evidencing
$275,000,000 Taxable Industrial Development Revenue Bonds,
Series 1999, issued by the Authority pursuant to the
Authority Indenture.
4.21 Lease Agreement, dated as of November 1, 1999, between the
partnership and The Development Authority of Heard County,
Georgia.
4.22 Deed to Secure Debt, Security Agreement and Assignment of
Rents and Leases, dated as of November 1, 1999 by DAHC in
favor of the DAHC Trustee.
4.23 Guaranty Agreement, dated as of November 1, 1999, between
the partnership and the DAHC Trustee for DAHC Bonds.
4.24 Debt Service Reserve Letter of Credit and Reimbursement
Agreement, dated as of November 10, 1999, among the
partnership, the DSR LOC Provider and the Banks named
therein.
4.25 Equity Contribution Agreement, dated as of November 1, 1999,
among the partnership, the Contributing Partners and the
Collateral Agent.
4.26 Agreement as to Certain Undertakings, Common
Representations, Warranties, Covenants and Other Terms,
dated as of November 1, 1999, among the partnership, the
Trustee, the DSR LOC Agent, the Power Purchase Agreement LOC
Agent and the Collateral Agent.
4.27 Power Purchase Agreement Letter of Credit.
4.28 Tenaska Georgia I, L.P. Letter of Credit.
4.29 Tenaska Georgia, Inc. Letter of Credit.
5.1 Opinion of Winthrop, Stimson, Putnam & Roberts regarding the
legality of the new bonds.
8.1 Opinion of Winthrop, Stimson, Putnam & Roberts regarding tax
matters.
10.1 H.B. Zachry Company Guaranty of Obligation dated as of
October 22, 1999 made by H.B. Zachry Company in favor of the
partnership
10.2 EPC Contractor Performance Bond and Payment Bond
10.3* Power Purchase Agreement, dated August 24, 1999, between the
partnership and the Power Purchaser.
10.4* Engineering, Procurement and Construction Agreement, dated
as of September 15, 1999 (the "EPC Contract"), as amended,
between the partnership (as assignee of Tenaska Georgia I,
L.P.) and the EPC Contractor.
10.4.1* First Amendment, dated as of October 8, 1999, to the
Engineering, Procurement and Construction Agreement between
the partnership (as assignee of Tenaska Georgia I, L.P.) and
the EPC Contractor.
10.4.2 Option 5--Substation Switchyard, exercised by the
partnership on October 20, 1999.
10.4.3 Agreement for Assignment and Assumption of EPC Contract to
the partnership, dated November 10, 1999, between Tenaska
Georgia I, L.P. and the partnership.
10.5 Guaranty of Obligation, dated as of September 23, 1999,
between Willbros Group, Inc. and the partnership.
10.6 Operations and Maintenance Agreement, dated as of September
10, 1999, as amended, between the partnership and Tenaska
Operations, Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.6.1 Amendment, dated as of October 26, 1999, to the Operations
and Maintenance Agreement, between the partnership and
Tenaska Operations, Inc.
10.6.2 Second Amendment, dated as of November 4, 1999, to the
Operations and Maintenance Agreement, between the
partnership and Tenaska Operations, Inc.
10.7 Interconnection Agreement, dated as of October 19, 1999,
between the partnership and Georgia Power Company.
10.8* Fixed Price Engineering, Procurement and Construction
Services Agreement, dated September 23, 1999 (the "Pipeline
EPC Contract"), between the partnership and Willbros
Engineers, Inc.
10.9 Interconnect, Reimbursement and Operating Agreement, dated
as of August 18, 1999, between the partnership and the
Transcontinental Gas Pipe Line Corporation.
10.10 Water Purchase Agreement, dated February 25, 1999, between
the partnership and the Heard County Water Authority.
10.11 Contract for Purchase, dated as of August 27, 1999, between
General Electric and the partnership, as assignee of Tenaska
Georgia I, L.P.
10.11.1 Agreement for Assignment and Assumption of Turbine Contract
to the partnership, dated as of November 10, 1999, between
Tenaska Georgia I, L.P. and the partnership.
10.11.2 Agreement for Assignment and Assumption of Turbine Contract
to the partnership, dated as of November 10, 1999, between
Zachry Construction Corporation and the partnership.
10.12 Ground Lease, dated as of November 10, 1999 between the
partnership and Tenaska Georgia, Inc.
10.13 Short Form Ground Lease Agreement, dated November 10, 1999
between the partnership and Tenaska Georgia, Inc.
10.14 Access and Utility Easement Agreement, dated November 10,
1999 between the partnership and Tenaska Georgia, Inc.
10.15 Electric Substation Site Option Agreement, dated November
10, 1999 between the partnership and Tenaska Georgia, Inc.
10.16 Natural Gas Pipeline Right-of-Way, dated November 2, 1999
between the partnership and Great Northern Nekoosa
Corporation.
10.17 Perpetual Right-of-Way and Easement Agreement, dated
November 1, 1999 between the partnership and Charles
Goodson.
10.18 Perpetual Right-of-Way and Easement Agreement, dated
November 1, 1999 between the partnership and Tenaska
Georgia, Inc.
10.19 Construction Easement Agreement, dated October 8, 1999
between the partnership and Inland Paperboard and Packaging,
Inc.
10.20 Easement Agreement, dated November 2, 1999 among the
partnership, Susan Lynn Payne and Robert Charles Payne.
10.21 Non-Interference and Cross Indemnity Agreement, dated as of
November 10, 1999 between Tenaska Georgia, Inc. and the
partnership.
10.22 Power Purchase Agreement Letter of Credit and the
Reimbursement Agreement, dated as of November 10, 1999,
among the partnership, the Power Purchase Agreement LOC
Provider and the Banks named therein.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.23 Agreement Regarding Ad Valorem Taxation, dated as of July
30, 1999, among the partnership, the Board of Commissioners
of Heard County, and the Board of Tax Assessors of Heard
County.
12.1 Statement regarding ratio of earnings to fixed charges.
23.1 Consent of Winthrop, Stimson, Putnam & Roberts (included in
Exhibits 5.1 and 8.1 to this Registration Statement).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of R.W. Beck, Inc.
23.4 Consent of Resource Data International, Inc.
24.1 Power-of-Attorney (contained on the signature page of this
Registration Statement).
25.1 Statement of Eligibility and Qualification on Form T-1 of
The Chase Manhattan Bank.
27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal.
99.2 Form of Letter to Clients.
99.3 Form of Letter to Registered Holders and DTC Participants.
99.4 Form of Notice of Guaranteed Delivery.
99.5 Form of Instruction to Registered Holders.
</TABLE>
- ------------------------
* The Registrant has requested confidential treatment for certain information
identified in this exhibit.
<PAGE>
Exhibit 3.1
TENASKA GEORGIA PARTNERS, L.P.
LIMITED PARTNERSHIP AGREEMENT
October 29, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
Article 1 - Parties to this Agreement
1.1 Parties......................................................................................1
Article 2 - Definitions..................................................................................2
2.1 Certain Defined Terms........................................................................2
2.2 Other Defined Terms..........................................................................9
2.3 Construction.................................................................................9
2.4 References...................................................................................9
Article 3 - Formation of the Partnership; Other Related Matters
3.1 Formation...................................................................................10
3.2 Name........................................................................................10
3.3 Sole Purpose................................................................................10
3.4 Representations and Warranties Concerning Formation of Partnership..........................10
3.5 Offices.....................................................................................11
3.6 Power and Authority.........................................................................11
3.7 Regulatory Status of the Partnership........................................................11
3.8 Filings.....................................................................................11
3.9 Term........................................................................................12
3.10 Limitation on Liability of Partners.........................................................12
3.11 No Partner Responsible for Other Partner's Commitments......................................12
Article 4 - Capitalization of the Partnership and Partnership Budgets
4.1 Capitalization of the Partnership...........................................................13
4.2 Construction Equity Contributions; Equity Guarantees........................................13
4.3 Development Funds...........................................................................13
4.4 Project Guarantees..........................................................................13
4.5 Additional Capital..........................................................................14
4.6 Partnership Budgets.........................................................................15
Article 5 - Reimbursement and Development Funds and Distribution of
Unspent Contingency
5.1 Reimbursement of Development Funds..........................................................17
5.2 Annual Fee..................................................................................17
5.3 Distribution of Unspent Contingency.........................................................17
Article 6 - Allocations of Income, Profits and Losses and Distributions of
Cash and Assets
6.1 Income, Profits and Losses..................................................................19
<PAGE>
6.2 Distributions...............................................................................19
Article 7 - Management of the Partnership
7.1 Managing Partner............................................................................20
7.2 Executive Review Committee..................................................................21
7.3 Actions Requiring Fifty-One Percent (51%) Approval or
Consent of the ERC..........................................................................23
7.4 Actions Requiring Ninety Percent (90%) Approval or Consent
of the ERC..................................................................................24
7.5 Actions Requiring Unanimous Approval or Consent of the
General Partners............................................................................25
7.6 Actions Requiring Unanimous Approval or Consent of the Partners.............................25
Article 8 - Services From Partners Other Than the Managing Partner
8.1 Services Requested From Partners Other Than the Managing Partner............................26
8.2 Billing Statement Deadline..................................................................26
8.3 Payment Deadline............................................................................26
8.4 Failure to Make Payment.....................................................................26
8.5 Examination of Books and Records............................................................26
Article 9 - Accounting and Taxation
9.1 Location of Records.........................................................................27
9.2 Books of Account............................................................................27
9.3 Annual Financial Statements and Tax Information.............................................27
9.4 Interim Financial Statements................................................................27
9.5 Taxation....................................................................................28
9.6 Governmental Reports........................................................................28
9.7 Inspection of Facilities and Records........................................................28
9.8 Deposit and Withdrawal of Funds.............................................................28
Article 10 - Transfers of Partnership Interests
10.1 Permitted Transfers........................................................................29
10.2 Withdrawal of Transferor Partner...........................................................30
10.3 Effect of Prohibited Transfers.............................................................30
10.4 Transfers under a Security Interest........................................................30
10.5 Tax Election...............................................................................30
10.6 Pledge of Partnership Interests............................................................30
Article 11 - Admission of Additional Partners
11.1 Permitted Admissions.......................................................................31
11.2 Effect of Prohibited Admission.............................................................31
<PAGE>
Article 12 - Default and Withdrawal Provisions
12.1 Default Provisions; Withdrawal of Defaulting Partner.......................................32
12.2 Cure Period Distributions..................................................................33
12.3 Automatic Withdrawal.......................................................................33
12.4 General Withdrawal Provisions..............................................................34
Article 13 - Termination of the Partnership
13.1 Voluntary Dissolution......................................................................37
13.2 Automatic Dissolution......................................................................37
13.3 Avoidance of Dissolution...................................................................37
13.4 Winding Down and Liquidation...............................................................38
13.5 Continuance of Partnership.................................................................38
Article 14 - Miscellaneous Provisions
14.1 Effect of Agreement........................................................................39
14.2 Notices....................................................................................39
14.3 Further Assurances.........................................................................40
14.4 Applicable Law and Jurisdiction............................................................40
14.5 Counterparts...............................................................................41
14.6 Headings...................................................................................41
14.7 Waiver.....................................................................................41
14.8 Partition..................................................................................41
14.9 Laws and Regulatory Bodies.................................................................41
14.10 Waiver of Consequential and Punitive Damages...............................................41
14.11 Partnership Opportunity....................................................................42
14.12 Article and Section Numbers................................................................42
14.13 Confidentiality Provisions.................................................................42
14.14 Reference to Money.........................................................................44
14.15 Severability...............................................................................44
14.16 Agency.....................................................................................44
14.17 Materiality................................................................................44
14.18 Prior Agreements...........................................................................44
14.19 Binding Effect.............................................................................45
</TABLE>
APPENDICES
APPENDIX A Partnership Percentages
APPENDIX B Standard Billing Practices
APPENDIX C Representatives and Alternate Representatives to the ERC
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (the
"Agreement") of Tenaska Georgia Partners, L.P. (the "Partnership") is entered
into by and between Tenaska Georgia, Inc. and Tenaska Georgia I, L.P. effective
October 29, 1999.
In consideration of the mutual covenants hereinafter set forth, the
Parties hereby agree as follows:
ARTICLE 1
PARTIES TO THIS AGREEMENT
1.1 PARTIES. The Parties to this Agreement are as follows:
(a) Tenaska Georgia, Inc. ("TENASKA GP"), a corporation organized under
the laws of the State of Delaware, with its principal offices and
address at 1044 North 115 Street, Suite 400, Omaha, NE 68154, which is
a "General Partner" (as defined in Section 2.1) in the Partnership; and
Tenaska Georgia I, L.P. ("TENASKA LP"), a limited partnership organized
under the laws of the State of Delaware, with its principal offices and
address at 1044 North 115 Street, Suite 400, Omaha, NE 68154, which is
a "Limited Partner" (as defined in Section 2.1) in the Partnership.
<PAGE>
PARTNERSHIP AGREEMENT
Page 2
ARTICLE 2
DEFINITIONS
2.1 Unless otherwise required by the context, the terms defined in this
Article 2 shall, for all purposes of this Agreement, have the
respective meanings set forth below:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6
Del. C. 1953, Section 17-101 et. seq.), as amended from time to time.
"ADDITIONAL CAPITAL" means any capital advances, equity
contribution(s), or loans made by the Partners to the Partnership other
than the advance or contribution of Development Funds or Construction
Equity Contributions.
"ADDITIONAL PARTNER" means a Partner admitted to the Partnership
pursuant to and in accordance with the provisions of this Agreement
after the Effective Date.
"AFFILIATE" means any Person that directly or indirectly controls, is
controlled by, or is under common control with, any Person. For the
purposes of this definition, (a) a Person which has a right to vote
directly or indirectly more than 50% of the voting interests of a
Partner shall be deemed to be in control of such Partner, (b) a Partner
which has a right to vote directly or indirectly more than 50% of the
voting interests of a Person shall be deemed to be in control of such
Person, (c) a Person which has voting interests which are more than 50%
owned or controlled by a direct or indirect Parent of a Partner shall
be deemed to be under common control with such Partner, (d) a Person
which has voting interests which are more than 50% owned by more than
50% of the direct or indirect owners of a Partner shall be deemed to be
under common control with such Partner, and (e) the Partnership shall
not be deemed to be an Affiliate of any Partner.
"AGREEMENT" means this limited partnership agreement of Tenaska Georgia
Partners, L.P., as amended, modified, supplemented, renewed, extended
or restated from time to time, and any and all Appendices attached
hereto.
"ALTERNATE REPRESENTATIVE" means an alternate member of the ERC
designated by each General Partner pursuant to the provisions of
Section 7.2(a).
"BUDGET ITEMS" means revenues, expenses, capital expenditures, cash
calls and distributions.
"BUSINESS DAY" means any day upon which national banks are open for
business in Omaha, Nebraska.
<PAGE>
PARTNERSHIP AGREEMENT
Page 3
"CAPACITY UPGRADE" means any capital improvements associated with
increasing the electrical output capacity of the Project which are
economically advantageous to the Partnership; provided such
improvements do not include the installation of additional electric
generator(s) beyond the Project's then current design.
"CERTIFIED PUBLIC ACCOUNTANTS" means Arthur Andersen LLP or such other
firm of independent public accountants hereafter selected from time to
time by the ERC pursuant to Section 7.3(j).
"CHAIRMAN" means the Chairman of the ERC as provided for in Section
7.2(b).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency and
Intercreditor Agreement among the Partnership, the Development
Authority of Heard County, Georgia, The Chase Manhattan Bank, in its
capacities as Trustee, Depositary Bank and Collateral Agent as defined
therein, and the agents under certain ancillary agreements described
therein as the DSR LOC Reimbursement Agreement and the PPA LOC
Reimbursement Agreement, including any amendments, modifications,
supplements, extensions, restatements or other changes thereto from
time to time.
"COMMERCIAL OPERATION DATE" means the "Scheduled Date of Commercial
Operation for the Final Units", as such term is defined in the Power
Purchase Agreement.
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings,
Common Representations, Warranties, Covenants and Other Terms among the
Partnership, The Chase Manhattan Bank, in its capacities as Trustee,
Depositary Bank and Collateral Agent as defined therein, and the agents
under certain ancillary agreements described therein as the DSR LOC
Reimbursement Agreement and the PPA LOC Reimbursement Agreement,
including any amendments, modifications, supplements, extensions,
restatements or other changes thereto from time to time.
"CONFIDENTIAL INFORMATION" has the meaning provided in Section
14.13(d).
"CONSTRUCTION EQUITY CONTRIBUTIONS" means collectively the Equity
Contributions which the Partners are required to make to the
Partnership pursuant to the Equity Contribution Agreement.
"CONSTRUCTION EQUITY CONTRIBUTIONS DATE" means the earlier of (i) the
date or dates required by the Equity Contribution Agreement or (ii) the
date or dates otherwise approved by the ERC.
"CONSTRUCTION PERIOD" means the period beginning on the date of
Financial Closing and ending on the Commercial Operation Date.
<PAGE>
PARTNERSHIP AGREEMENT
Page 4
"CONTRIBUTE" or "CONTRIBUTED" has the meaning provided in Section 4.5.
"CURE PERIOD" has the meaning provided in Section 12.1(a).
"DEFAULT AFFILIATE" has the meaning provided in Section 12.1(a).
"DEFAULT NOTICE" has the meaning provided in Section 12.1(a).
"DEFAULTING PARTNER" means a Partner which is in default as provided
for in Section 12.1(a).
"DEVELOPMENT FUNDS" means funds advanced by the Partners to the
Partnership pursuant to Section 4.3 (and any funds expended by any
Partner, or Affiliate thereof, on behalf of the Project prior to the
Effective Date as the case may be) to fund the cost of the time
charges, expenses, expenditures, commitment fees and deposits,
cancellation fees and deposits, and other fees and deposits incurred,
expended or accrued by the Partnership or any Partner or Affiliate
thereof on behalf of the Partnership and included in the Partnership
Budget for the Development Period.
"DEVELOPMENT PERIOD" means the period beginning on the Effective Date
and ending on the date of Financial Closing.
"EFFECTIVE DATE" means April 16, 1998.
"EFFICIENCY UPGRADE" means any capital improvements associated with
improving the heat rate for the then existing combustion gas turbine
equipment of the Project which are economically advantageous to the
Partnership.
"ELECTING PARTNER" has the meaning provided in Section 12.4(b).
"ELECTION PERIOD" has the meaning provided in Section 12.4(a).
"ELECTION RESULTS NOTICE" has the meaning provided in Section 12.4(b).
"EQUITY CONTRIBUTION AGREEMENT" means the Equity Contribution Agreement
among the contributing Partners, the Partnership and The Chase
Manhattan Bank, as Collateral Agent, including any amendments,
modifications, supplements, extensions, restatements or other changes
thereto from time to time.
"EQUITY CONTRIBUTIONS" means collectively the contribution of
Construction Equity Contributions and/or Additional Capital by a
Partner to the equity of the Partnership pursuant to Article 4.
<PAGE>
PARTNERSHIP AGREEMENT
Page 5
"EQUITY GUARANTEE" means a form of surety or guarantee provided by each
Partner, or Affiliate thereof, in the form as required by the Senior
Parties to support the obligation to make Construction Equity
Contributions.
"EQUITY OWNERSHIP PERCENTAGE" means the percentage for each Partner as
set forth in Column A of Appendix A, as such may be in effect from time
to time and as such may be modified pursuant to the terms of this
Agreement.
"EXECUTIVE REVIEW COMMITTEE" OR "ERC" means the executive management
committee of the Partnership as further provided for in Section 7.2.
"EXEMPT WHOLESALE GENERATOR" OR "EWG" means an entity that meets the
requirements of an exempt wholesale generator pursuant to Section 32 of
PUHCA.
"FEDERAL FUNDS RATE" shall mean, for any day, a per annum rate equal to
the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day by the Federal Reserve
Bank of New York. The Federal Funds Rate shall be adjusted daily to
reflect any change in such rate. Interest shall be calculated on the
basis of a 360 day year for the actual number of days elapsed.
"FERC" means the Federal Energy Regulatory Commission, or its
successor.
"FINANCING" means the financing arrangement by and between the
Partnership and the Senior Parties to fund the cost of developing,
constructing, owning or leasing, and operating the Project as more
fully described in the Common Agreement.
"FISCAL YEAR" means the calendar year, or portion of a calendar year as
may be the case in the first and last year of the Partnership's term of
existence, or such other period as may be approved by the ERC.
"FINANCIAL CLOSING" means the date when the Senior Parties have
acknowledged, either in writing or by allowing loan draws, that the
Partnership has satisfied all conditions precedent to drawdown on funds
available for Financing.
"GAAP" means Generally Accepted Accounting Principles as pronounced
from time to time by the Financial Accounting Standards Board.
"GENERAL PARTNER" means Tenaska GP and any other Person which is
admitted to the Partnership as a general partner pursuant to and in
accordance with this Agreement.
"INTEREST RATE" means the lesser of (a) prime lending rate quoted by
The Chase Manhattan Bank for loans having a maturity of ninety (90)
days or less as reported in THE WALL
<PAGE>
PARTNERSHIP AGREEMENT
Page 6
STREET JOURNAL on the first Business Day of each calendar quarter plus
eight hundred (800) basis points or (b) the highest rate allowed by
applicable law.
"LIMITED PARTNER" means TENASKA LP and any other Person admitted to the
Partnership as a limited partner pursuant to and in accordance with
this Agreement.
"MANAGING PARTNER" means TENASKA GP, or a substitute Managing Partner
as the case may be pursuant to Section 7.1(b).
"MATERIAL CONTRACT" means any written agreement entered into, or
contemplated to be entered into, by the Partnership which obligates the
Partnership to expend more than five hundred thousand dollars
($500,000); EXCLUDING, however, agreements related to the ordinary
day-to-day business activities of the Partnership, including but not
limited to agreements related to insurance, spare parts, chemical
supplies, day-to-day or month-to-month fuel management, or short-term
cash management.
"NON-ELECTING PARTNER" has the meaning provided in Section 12.4(b).
"OPERATING PERIOD" means the period which begins immediately after the
"Date of Commercial Operation" as such term is defined in the Power
Purchase Agreement and continues until the Partnership is terminated,
dissolved and liquidated in accordance with this Agreement.
"PARENT" means any Person which owns directly or indirectly more than
fifty percent (50%) of the outstanding voting stock of a Partner or
other form of voting equity interests in a Partner.
"PARTIES" has the meaning provided in Section 1.
"PARTNER" means each of the Parties executing this Agreement, and any
Additional Partner which is admitted to the Partnership pursuant to and
in accordance with this Agreement.
"PARTNERSHIP" means the Delaware limited partnership named Tenaska
Georgia Partners, L.P. formed as of April 16, 1998 and existing
pursuant to the provisions of this Agreement.
"PARTNERSHIP BUDGETS" means collectively the capital and operating
budgets for the Partnership which are established pursuant to Section
4.6 and which include (i) the budget for the Development Funds
incurred, expended or accrued prior to the Effective Date and the
Development Funds to be incurred, expended or accrued during the
Development Period (the "Partnership Budget for the Development
Period"), (ii) the budget for construction costs and Development Funds
to be incurred, expended or accrued during the Construction Period (the
"Partnership Budget for the Construction Period"), and (iii) the
operating plan budget for each Fiscal Year which reflects Budget
<PAGE>
PARTNERSHIP AGREEMENT
Page 7
Items expected to be incurred, expended, accrued or realized during the
Operating Period.
"PARTNERSHIP INTEREST" means a Partner's equity interest in the
Partnership comprised of the Partnership Percentages associated with
such equity interest and any other rights, title and obligations
associated with such equity interest that may exist pursuant to this
Agreement.
"PARTNERSHIP PERCENTAGES" means collectively a Partner's Equity
Ownership Percentage and Voting Interest Percentage as set forth in
Appendix A as such may be in effect from time to time and as such may
be modified pursuant to the terms of this Agreement.
"PERMITTED TRANSFER" has the meaning provided in Section 10.1.
"PERSON" means an individual, corporation, limited liability company,
voluntary association, joint stock company, business trust,
partnership, agency or other entity.
"PLEDGE AGREEMENTS" means collectively the Partner Pledge and Security
Agreement made by each of the Partners in favor of The Chase Manhattan
Bank, as Collateral Agent, and provided as additional security for the
Senior Debt, including any amendments, modifications, supplements,
extensions, restatements or other changes to any of the foregoing from
time to time.
"POWER PURCHASE AGREEMENT" means the "Power Purchase Agreement" by and
between the Partnership and PECO Energy Company dated August 24, 1999,
providing for the sale and purchase of the electrical output of the
Project, as thereafter amended, modified, supplemented, renewed,
extended or restated from time to time.
"PRIMARY TERM" has the meaning provided in Section 3.9.
"PROJECT" means the real, personal and mixed property (whether tangible
or intangible), comprising the approximately 936 MW gas-fired
simple-cycle electric generating plant located in Heard County, Georgia
which is to be owned or leased and operated by the Partnership for the
generation and sale of electric power.
"PROJECT CONTRACT" means any agreement relating to the Project to which
the Partnership is a party.
"PROJECT COSTS" means the sum of Development Funds, construction costs
and all other costs and expenditures incurred, expended or accrued by
the Partnership, or by any Partner or Affiliate thereof on behalf of
the Partnership, in connection with the development, financing,
testing, construction and initial operation of the Project which are
set forth in the Partnership Budget for the Construction Period.
<PAGE>
PARTNERSHIP AGREEMENT
Page 8
"PROJECT GUARANTEES" means guarantees or surety instruments provided to
or on behalf of the Partnership (which may be in the form of corporate
guarantees, letters-of-credit, cash escrows, security deposits or other
forms acceptable to the Person(s) requiring such guarantees or surety
instruments) to cover any surety and guarantee requirements as may be
required as part of the development, construction and/or operation of
the Project.
"PRUDENT GENERATOR PRACTICES" means any of the practices, methods and
acts engaged in or approved by a significant portion of the independent
power industry in the United States during the relevant time period, or
any of the practices, methods and acts which, in the exercise of
reasonable judgment in the light of the facts known at the time the
decision was made, could have been expected to accomplish the desired
result at the lowest reasonable cost consistent with good business
practices, reliability, safety and expedition. Prudent Generator
Practices is not intended to be limited to the optimum practice, method
or act to the exclusion of all others, but rather to be within a
spectrum of acceptable practices, methods and acts, having due regard
for, among other things, manufacturers' warranties, contractual
obligations, the requirements or guidance of governmental authorities
of competent jurisdiction, applicable laws, applicable North American
Electric Reliability Council (or similar or successor organizations)
policies, the requirements of insurers, and the requirements of the
Power Purchase Agreement.
"PRUDENT OPERATING COSTS" means, collectively, those costs and
expenditures which are incurred, expended or accrued in connection with
(i) the operation of the Project in accordance with Prudent Generator
Practices, (ii) a Capacity Upgrade, and/or (iii) an Efficiency Upgrade.
"PUHCA" means the Public Utility Holding Company Act of 1935 and any
regulations promulgated thereunder, and any successor laws and
regulations.
"REPLACEMENT GUARANTEE" has the meaning provided in Section 12.4(a).
"REPRESENTATIVE" means a member of the ERC designated by a General
Partner pursuant to the provisions of Section 7.2(a).
"SENIOR DEBT" has the meaning provided in the Common Agreement.
"SENIOR PARTIES" means holders of Senior Debt.
"STANDARD BILLING PRACTICES" means the rate and methodology as
calculated and set forth in Appendix B.
"TRANSFER" has the meaning provided in Section 10.1.
"UNSPENT CONTINGENCY" means the aggregate amount of funds transferred
to the Partnership Distribution Fund (as defined in the Collateral
Agency Agreement) pursuant
<PAGE>
PARTNERSHIP AGREEMENT
Page 9
to Section 3.2 of the Collateral Agency Agreement which are (or have
met all of the conditions for being) transferred to, or as directed by,
the Partnership pursuant to the Collateral Agency Agreement.
"VOTING INTEREST PERCENTAGE" means the Voting Interest Percentage, as
applicable, for each Partner as set forth in Column B of Appendix A, as
such may be in effect from time to time and as such may be modified
pursuant to the terms of this Agreement.
"WEIGHTED VOTING INTEREST" means each eligible ERC member's vote
weighted by multiplying the Voting Interest Percentage of the General
Partner it represents by the percentage determined by dividing the
Voting Interest Percentage of the General Partner it represents by the
aggregate Voting Interest Percentages of all the General Partners
represented in such vote of ERC members which are eligible to vote,
with each ERC member's voting eligibility determined pursuant to
Section 7.2(d).
"WITHDRAWAL INTEREST" has the meaning provided in Section 12.4(a).
"WITHDRAWAL NOTICE" has the meaning provided in Section 12.1(a) or
12.3.
"WITHDRAWN PARTNER" means a Partner which has become withdrawn from the
Partnership pursuant to this Agreement.
"WITHDRAWN PARTNER OBLIGATIONS" has the meaning provided in Section
12.4(a).
2.2 OTHER DEFINED TERMS. Other capitalized terms used in this Agreement
and not defined in Section 2.1 shall have the meanings indicated
throughout this Agreement.
2.3 CONSTRUCTION. The words "HEREOF", "HEREIN", "HERETO", and "HEREUNDER",
and words of similar import, when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement. Whenever the context requires, the gender of all words used
herein shall include the masculine, feminine and neuter, and the number
of all words shall include the singular and plural.
2.4 REFERENCES. Unless otherwise specified, references in this Agreement to
"SECTIONS", "SUBSECTIONS", "ARTICLES", or "APPENDICES" refer to the
sections, subsections or articles in this Agreement or to the
appendices attached to this Agreement, respectively.
<PAGE>
PARTNERSHIP AGREEMENT
Page 10
ARTICLE 3
FORMATION OF THE PARTNERSHIP;
OTHER RELATED MATTERS
3.1 FORMATION. The Partnership was formed on April 16, 1998 pursuant to the
Act.
3.2 NAME. The name of the Partnership shall be Tenaska Georgia Partners,
L.P. and all business of the Partnership shall be conducted in such
name or such other name as the ERC shall approve. The Managing Partner
shall execute, file and amend, or cause the General Partners to
execute, file and amend, limited partnership certificates with such
governmental authorities as may be necessary in connection with the
business of the Partnership.
3.3 SOLE PURPOSE. The sole purpose of the Partnership shall be to plan,
design, develop, finance, construct, own or lease, operate and maintain
the Project and conduct any activities reasonably related thereto. The
Partnership shall be authorized to engage in other activities only as
approved by the unanimous consent of the General Partners pursuant to
Section 7.5(c) and only to the extent permitted by the Common Agreement
as long as any Senior Debt is outstanding.
3.4 REPRESENTATIONS AND WARRANTIES CONCERNING FORMATION OF PARTNERSHIP.
Each Partner represents and warrants to the other Partners and to the
Partnership that:
(a) at the time of its admission to the Partnership, the execution and
delivery of this Agreement, the formation or continuation of the
Partnership, as the case may be, with respect to such Partner, and the
performance of its obligations hereunder will not (i) contravene or
conflict with the charter, by-laws, limited liability company agreement
or partnership agreement of such Partner, (ii) contravene, conflict
with or constitute a default under any indenture, mortgage, instrument
or other agreement of such Partner, or (iii) contravene, conflict with
or constitute a default in respect of any order of any court,
commission or governmental agency applicable to such Partner;
(b) the execution and delivery of this Agreement has been duly
authorized and this Agreement, when executed and delivered by such
Partner, will be its valid and binding agreement, enforceable in
accordance with the terms hereof, except as enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights generally and except as
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); and
(c) it is a corporation, limited liability company, or partnership, as
the case may be, duly organized, validly existing and in good standing
under the laws of the jurisdiction of
<PAGE>
PARTNERSHIP AGREEMENT
Page 11
its creation, and will do or cause to be done for as long as it is a
Partner, all things necessary to continue such status.
3.5 OFFICES. The principal offices of the Partnership shall be located at
1044 North 115 Street, Suite 400, Omaha, Nebraska 68154, or at such
other place as the ERC may, from time to time, determine. The
registered office of the Partnership in the State of Delaware is at
1013 Centre Road, Wilmington, Delaware 19805, and the name of the
registered agent for service of process in such state is Corporation
Service Company, or such other registered office and/or registered
agent as the ERC may, from time to time, determine. Written notice of
any change in such offices shall be given to each Partner by the
Managing Partner.
3.6 POWER AND AUTHORITY. The Partnership shall be empowered to do any and
all acts and things necessary, appropriate, proper, advisable,
incidental to or convenient for the furtherance and accomplishment of
the purposes and business described in this Article 3 and for the
protection and benefit of the Partnership. The Partnership shall have
the power and authority to plan, develop, design, secure permits and
regulatory approvals, finance, construct, own or lease, and operate the
Project. In addition, the Partnership shall have the power and
authority to own or lease the property on which the Project is located
and to receive assignment of various documents relating to the
development, construction and operation of the Project. The Partnership
also shall have the authority to enter into and perform its obligations
under the Common Agreement and all other Transaction Documents (as
defined in the Common Agreement) to which it is a party. The Managing
Partner is hereby authorized to execute, deliver and perform the Common
Agreement and all other Transaction Documents on behalf of the
Partnership notwithstanding any other provision of this Agreement.
3.7 REGULATORY STATUS OF THE PARTNERSHIP. The Partnership shall seek a
determination from the FERC that the Partnership is an Exempt Wholesale
Generator (EWG) and thereafter shall register such determination with
the Georgia Public Utility Commission. The Partnership shall also seek
to have FERC authorize the Partnership to sell power under a
market-based rate schedule under Section 205 of the Federal Power Act.
Each Partner agrees to cooperate with the Partnership in all reasonable
and necessary ways to ensure that the Partnership does not lose its EWG
status and to ensure that the Partnership and each Partner does not
become a holding company under PUHCA. Each Partner further agrees to
refrain from activities which would threaten to cause, or would cause,
loss or revocation of the Partnership's EWG status or cause the
Partnership or any Partner to become a holding company under PUHCA.
3.8 FILINGS.
(a) The Managing Partner shall take any and all actions reasonably
necessary to register and maintain the status of the Partnership as a
limited partnership under the laws of the State of Delaware and any
other states or jurisdictions in which the Partnership
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PARTNERSHIP AGREEMENT
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engages in business and otherwise to qualify the Partnership to engage
in business in all such jurisdictions. The Managing Partner shall cause
amendments to the certificate of limited partnership of the Partnership
to be filed whenever required by the Act and/or such other laws. The
Managing Partner is hereby authorized to execute such amendments on
behalf of the Partnership and the Partners.
(b) Upon the dissolution of the Partnership, the Managing Partner shall
promptly execute and cause to be filed a certificate of cancellation in
accordance with the Act and other filings required under the laws of
any other states or jurisdictions in which the Partnership conducts
business.
3.9 TERM. The term of the Partnership commenced on the filing of a
certificate of limited partnership with the Secretary of State in the
State of Delaware, and shall continue until December 31, 2050 (the
"Primary Term"), subject to the earlier winding up and liquidation of
the Partnership and its business under Article 13 following an event of
dissolution described in Article 13.
3.10 LIMITATION ON LIABILITY OF PARTNERS. No Limited Partner shall have any
personal liability for Partnership losses, deficits, liabilities or
obligations, such Limited Partner's obligations being only to the
Partnership for the amount contributed or committed to be contributed
by such Limited Partner to the capital of the Partnership in accordance
with this Agreement. Subject to the provisions of applicable law, no
General Partner shall be liable to third persons for Partnership
losses, deficits, liabilities or obligations, except as otherwise
expressly agreed to in writing by such General Partner or as otherwise
expressly provided for in this Agreement, unless the assets of the
Partnership shall first be exhausted. In the event that the
Partnership's assets are exhausted, each General Partner's share of the
Partnership losses, deficits, liabilities or obligations shall be
limited to the ratio of its Equity Ownership Percentage to the total
Equity Ownership Percentages of all General Partners. The General
Partners shall have the right of contribution against each other to
give effect to the foregoing. The General Partners shall not have any
personal liability for repayment of the capital contributions of any
Limited Partner.
3.11 NO PARTNER RESPONSIBLE FOR OTHER PARTNER'S COMMITMENTS. Neither the
Partnership nor any Partner shall be liable for any debt, obligation or
liability of any other Partner (the "incurring Partner") incurred
either before or after execution of this Agreement, except for those
debts, obligations or liabilities expressly assumed in writing by the
Partnership or other Partner under and pursuant to the terms and
conditions of this Agreement, and each incurring Partner hereby
indemnifies and agrees to hold harmless the Partnership and each other
Partner from all debts, obligations and liabilities of the incurring
Partner not so assumed by the Partnership or such other Partner.
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PARTNERSHIP AGREEMENT
Page 13
ARTICLE 4
CAPITALIZATION OF THE PARTNERSHIP
AND PARTNERSHIP BUDGETS
4.1 CAPITALIZATION OF THE PARTNERSHIP. Each Partner hereby commits to
contribute, provide or advance to the Partnership the Equity
Guarantees, Equity Contributions, Development Funds, and Project
Guarantees as described in this Article 4. Except to the extent
expressly provided in this Article 4, the Partners shall not be
obligated to advance, contribute, loan or provide any Additional
Capital to the Partnership.
4.2 CONSTRUCTION EQUITY CONTRIBUTIONS; EQUITY GUARANTEES.
(a) CONSTRUCTION EQUITY CONTRIBUTIONS. On each Construction Equity
Contributions Date, each Partner shall contribute to the Partnership
Construction Equity Contributions in an amount equal to its Equity
Ownership Percentage multiplied by the aggregate amount of Construction
Equity Contributions required to be contributed by all of the Partners
on such Construction Equity Contributions Date pursuant to the Equity
Contribution Agreement.
(b) EQUITY GUARANTEES. On the earlier of (i) the date of Financial
Closing, (ii) the date otherwise required by the Senior Parties, or
(iii) the date otherwise approved by the ERC, each Partner shall
provide to the Partnership or the Senior Parties an Equity Guarantee in
an amount equal to its Equity Ownership Percentage multiplied by the
aggregate amount of Construction Equity Contributions required to be
contributed by all of the Partners pursuant to the Equity Contribution
Agreement.
4.3 DEVELOPMENT FUNDS. Each Partner commits that it will advance
Development Funds to the Partnership as requested by the Managing
Partner, subject to the Partnership Budget. Within seven (7) days after
receipt of a written request from the Managing Partner, each Partner
shall advance Development Funds in an amount equal to its Equity
Ownership Percentage multiplied by the aggregate amount of such
Development Funds requested to be advanced by all of the Partners,
subject to the Partnership Budget.
4.4 PROJECT GUARANTEES. Each Partner commits that it will provide Project
Guarantees to or on behalf of the Partnership as requested by the
Managing Partner, subject to ERC approval or as otherwise required
under a Project Contract. Within seven (7) days after receipt of a
written request from the Managing Partner, each Partner shall provide
Project Guarantees to or on behalf of the Partnership in an amount
equal to its Equity Ownership Percentage multiplied by the aggregate
amount of Project Guarantees required to be provided by all of the
Partners, subject to ERC approval or as required under a Project
Contract.
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PARTNERSHIP AGREEMENT
Page 14
4.5 ADDITIONAL CAPITAL. Additional Capital for Prudent Operating Costs
shall be obtained by the Partnership, or contributed, advanced, loaned
or otherwise provided (collectively, "Contribute" or "Contributed", as
the case may be) by the Partners, as set forth in this Section 4.5. Any
Additional Capital for other than Prudent Operating Costs shall require
ERC approval pursuant to Section 7.3(b).
(a) Upon the Managing Partner's determination that Prudent Operating
Costs are required, then, notwithstanding that the Partnership Budget
may not include such Prudent Operating Costs, the Managing Partner is
hereby authorized to incur, expend or accrue such Prudent Operating
Costs. To the extent that Partnership cash reserves are inadequate to
fund such Prudent Operating Costs, the Managing Partner is hereby
authorized: first, to obtain such funds through credit facilities from
third parties on commercially reasonable terms and secured by
Partnership assets; and second, to the extent such third party credit
facilities are unavailable, to request such funds be Contributed by the
Partners, in whatever form the Managing Partner so elects in its sole
discretion.
(b) A Partner shall have the right to decline to Contribute requested
funds for Prudent Operating Costs in its sole discretion. Within seven
(7) days after receipt of the written request from the Managing Partner
for such funds, each Partner shall advise the Partnership of its
election to Contribute, or of its election NOT to Contribute, the
requested funds for Prudent Operating Costs. Partners which so elect to
Contribute such requested funds for Prudent Operating Costs are
referred to individually as a "Contributing Partner" and collectively
as the "Contributing Partners". Partners which decline (including by
failure to timely advise the Partnership of an election to Contribute)
to Contribute such requested funds for Prudent Operating Costs are
referred to individually as a "Non-Contributing Partner" and
collectively as the "Non-Contributing Partners".
(c) Within seven (7) days after receipt of the written request from the
Managing Partner for such funds, the Contributing Partners shall each
Contribute requested funds for Prudent Operating Costs, or if the
Managing Partner specifically requests, the Contributing Partners shall
each provide credit facilities or other credit support for Prudent
Operating Costs, in each case in an amount equal to the Contributing
Partner's pro rata share of such requested funds (based on the
proportion which its Equity Ownership Percentage represents of the
aggregate Equity Ownership Percentages of all Contributing Partners).
(d) In the event that funding pursuant to this Section 4.5 is
Contributed by some but not all of the Partner(s), then each
Contributing Partner is hereby assigned (pro rata, based on the
proportion which each Contributing Partner's Equity Ownership
Percentage represents of the aggregate Equity Ownership Percentages of
all Contributing Partners) all payments and/or distributions from the
Partnership that would otherwise be made to the Non-Contributing
Partners pursuant to this Agreement, including but not limited to
Sections 5.1, 5.2, 5.3, 5.4 or 6.2, until (i) the Contributing
Partner(s) have been repaid the
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PARTNERSHIP AGREEMENT
Page 15
sums which it or they have Contributed to the Partnership for Prudent
Operating Requirements in the place of the Non-Contributing Partners,
plus (ii) interest at the Interest Rate on such sums from the date such
sums were Contributed until the date the Contributing Partner(s) have
been repaid in full.
(e) In the event that funding pursuant to this Section 4.5 is made by
some but not all of the Partners and is made in the form of credit
facilities or other credit support provided by a Contributing Partner,
then each Contributing Partner is hereby assigned (pro rata, based on
the proportion which each Contributing Partner's Equity Ownership
Percentage represents of the aggregate Equity Ownership Percentages of
all Contributing Partners) all payments and/or distributions from the
Partnership that would otherwise be made to the Non-Contributing
Partners pursuant to this Agreement, including but not limited to
Sections 5.1, 5.2, 5.3, 5.4 or 6.2, until (i) the Contributing Partners
have been compensated to date for such credit facilities or other
credit support (to the extent not drawn on) for the duration of that
support at an annual rate, equal to the Interest Rate less the Federal
Funds Rate, multiplied by the total amount of such commitment and (ii)
the Contributing Partners have been reimbursed to date for any draws on
such credit facilities or other credit support plus interest at the
Interest Rate on such sums from the date drawn.
4.6 PARTNERSHIP BUDGETS. Expenditures made by or on behalf of the
Partnership shall be limited to the total amounts reflected in each
Partnership Budget unless otherwise authorized by this Agreement or by
the ERC, and shall not be subject to monthly, yearly, line item or
other intermittent amounts if so reflected; provided, however, that the
Managing Partner shall undertake in good faith to manage the day-to-day
Partnership operations within such monthly, yearly, line item or other
intermittent amounts to the fullest extent reasonably practicable.
(a) DEVELOPMENT PERIOD. The Partnership Budget for the Development
Period shall be as approved by the ERC.
(b) CONSTRUCTION PERIOD. The Partnership Budget for the Construction
Period shall be the budget for Project Costs as approved by the Senior
Parties and included as part of the Common Agreement.
(c) OPERATING PERIOD. The Partnership Budget for the initial Fiscal
Year of the Operating Period shall be as approved by the ERC. For each
succeeding Fiscal Year during the Operating Period, a proposed
Partnership Budget shall be prepared by the Managing Partner for each
Fiscal Year during the Operating Period and submitted to the ERC for
its approval on or before the 15th day of the third calendar month
preceding each Fiscal Year. The ERC shall undertake in good faith to
approve such proposed Partnership Budget, with such modifications
thereto, if any, as the ERC may deem appropriate, prior to the
commencement of each Fiscal Year. In the event that the ERC does not in
any Fiscal Year approve a proposed Partnership Budget, with such
modifications thereto, if any, as the ERC may deem appropriate, prior
to and for the ensuing Fiscal Year, or if no
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PARTNERSHIP AGREEMENT
Page 16
Partnership Budget is proposed, then a Partnership Budget which
includes and reflects the following items shall automatically be deemed
approved by the ERC (and for all purposes of this Agreement shall be
considered a Partnership Budget approved by the ERC) and become the
effective Partnership Budget on January 1 of the ensuing Fiscal Year
and shall remain in effect during such ensuing Fiscal Year unless and
until the ERC thereafter approves a different Partnership Budget for
such ensuing Fiscal Year:
(i) Budget Items which are directly related, based upon or
connected with Project Contracts, in amounts equal to that
reflected for such Budget Items under such Project Contracts
for the ensuing Fiscal Year;
(ii) annually recurring Budget Items which are not directly related
to, based upon or connected with Project Contracts, in amounts
equal to that reflected for such Budget Items in the
Partnership Budget for the then current Fiscal Year,
annualized if the then current Fiscal Year is a partial year,
and escalated by four percent (4%); and
(iii) non-recurring or extraordinary Budget Items in amounts based
on the long-term maintenance program for the Project including
scheduled outages.
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PARTNERSHIP AGREEMENT
Page 17
ARTICLE 5
REIMBURSEMENT OF DEVELOPMENT FUNDS
AND DISTRIBUTION OF UNSPENT CONTINGENCY
5.1 REIMBURSEMENT OF DEVELOPMENT FUNDS. Upon Financial Closing, all
Development Funds advanced by the Partners, either pursuant to the
Partnership Budget or otherwise as approved by the ERC, shall be
reimbursable, due and payable to the Partners on a pro rata basis based
on the percentages determined by dividing the amount of Development
Funds that each Partner has advanced to the Partnership by the
aggregate amount of Development Funds advanced by all of the Partners.
Such reimbursements shall be paid out of and from the initial drawdown
of funds from the Financing; and if sufficient funds are not available
out of the initial drawdown of funds from the Financing to reimburse in
full all of the Development Funds due and owing to the Partners, the
remaining amount of such Development Funds due to be reimbursed to the
Partners shall be paid out of the subsequent drawdown of funds from the
Financing; and if sufficient funds are not available out of such
subsequent drawdowns, then out of and from the first available cash of
the Partnership before any distributions are made to the Partners
pursuant to Sections 5.2, 5.3 or 6.2. Any Development Funds not
previously reimbursed shall be reimbursed upon liquidation of the
Partnership.
5.2 ANNUAL FEE. The Partnership shall pay an Annual Fee to TENASKA GP, or
its designee, throughout the life of the Project as part of the
operations and maintenance expense of the Project. The initial Annual
Fee shall be three hundred fifty thousand dollars ($350,000) and shall
be due and payable on the date of Financial Closing; thereafter the
Annual Fee shall escalate at five percent (5%) per annum, and shall be
due and payable on January 1 of each subsequent calendar year following
the date of Financial Closing until the Project is terminated. As an
accommodation to the Financing, TENASKA GP hereby waives payment of the
Annual Fee during the Construction Period and through 2009 of the
Operating Period. As a result, the Annual Fee in an amount equal to
five hundred ninety-eight thousand six hundred eighteen dollars and
seventy-eight cents ($598,618.78) shall commence being due and payable
to TENASKA GP or its designee on January 1, 2010 and such amount shall
thereafter escalate at five percent (5%) per annum, and continue to be
due and payable on January 1 of each subsequent calendar year until the
Project is terminated.
5.3 DISTRIBUTION OF UNSPENT CONTINGENCY. Subject to the Common Agreement,
an amount equal to the Unspent Contingency, if any, shall be
distributed to TENASKA GP and TENASKA LP as a return of capital on the
earliest date or dates that the funds constituting such Unspent
Contingency are transferred to or at the direction of the Partnership
pursuant to the Collateral Agency Agreement. The Unspent Contingency,
if any, shall be distributed to TENASKA GP and TENASKA LP in accordance
with their
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PARTNERSHIP AGREEMENT
Page 18
respective Equity Ownership Percentages. Any Unspent Contingency not
previously distributed shall be distributed upon liquidation of the
Partnership.
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PARTNERSHIP AGREEMENT
Page 19
ARTICLE 6
ALLOCATIONS OF INCOME, PROFITS AND LOSSES
AND DISTRIBUTIONS OF CASH AND ASSETS
6.1 INCOME, PROFITS AND LOSSES. Except as otherwise provided in this
Agreement, all revenue, expense and capital items including, but not
limited to, income and expenses from operations, interest income and
expense, insurance settlements, cash received from or paid for
transactions of a capital nature such as refinancing or sale or
purchase of assets, debt service, depreciation, amortization, federal,
state and local taxes, if any, paid by the Partnership, tax adjustment
and preference items related to the calculation of federal, state and
local alternative minimum tax, if applicable, and federal, state and
local tax credits shall be allocated among the Partners in accordance
with each Partner's respective Equity Ownership Percentage.
6.2 DISTRIBUTIONS. Subject to Article 5 and the terms of the Common
Agreement, the Partnership shall seek to maximize cash distributions to
the Partners. Except as otherwise provided in this Agreement,
distributions of cash or other assets of the Partnership (to the extent
that such cash or assets are not required for operations) shall be made
to the Partners (other than a Defaulting Partner or Withdrawn Partner)
as prescribed in such aggregate amounts and at such times as shall be
recommended by the Managing Partner and as are permitted pursuant to
the provisions of the Common Agreement, unless such distributions would
violate or result in a default under any agreement of the Partnership
or applicable law. Except as otherwise provided in this Agreement, all
distributions of cash or other assets shall be made to the Partners in
accordance with each Partner's respective Equity Ownership Percentage.
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PARTNERSHIP AGREEMENT
Page 20
ARTICLE 7
MANAGEMENT OF THE PARTNERSHIP
7.1 MANAGING PARTNER.
(a) The day-to-day management, operations, affairs and business of the
Partnership shall be the responsibility of the Managing Partner which
shall have the authority to do all things necessary to carry out its
responsibilities as provided in this Agreement; subject, however, to
certain consent or approval requirements of the ERC or the Partners as
specifically provided in this Agreement. The Managing Partner shall
report fully to the ERC at each meeting of the ERC. Except as otherwise
specifically provided in this Agreement, no Partner shall have
authority to act for or assume any obligation or responsibility on
behalf of the Partnership without the prior grant of authority,
direction or approval from the Managing Partner.
(b) For "cause" and only for "cause", and subject to Section 7.2(d),
upon the unanimous vote of the General Partners, excluding the vote of
the Managing Partner and any Partner which is an Affiliate of the
Managing Partner, the Managing Partner may be removed as Managing
Partner. For the purpose of this Section 7.1(b), "cause" shall mean (i)
the material breach by Managing Partner of any of its obligations under
this Agreement which result in material loss or injury to the
Partnership and which is not cured within thirty (30) days after the
Managing Partner has received written notice of such breach, or (ii)
any action or inaction by the Managing Partner which constitutes
willful misconduct, fraud, or gross negligence by the Managing Partner
and which results in material loss or injury to the Partnership. In the
event that the Managing Partner is to be removed, the removal shall not
be effective until a substitute Managing Partner has been appointed.
Subject to Section 7.2(d), a substitute Managing Partner, which shall
be a General Partner of the Partnership, shall be appointed only upon
approval by the ERC, with the Representative or Alternate
Representative of the Managing Partner that is to be removed, and of
any General Partner which is an Affiliate of the Managing Partner that
is to be removed, having a vote in such appointment; provided, however,
if a substitute Managing Partner has not been appointed within one
hundred eighty (180) days after the date that the initial vote of the
ERC was taken to appoint a substitute Managing Partner and during such
one hundred eighty (180) day period the Representative or Alternate
Representative of the Managing Partner that is to be removed, or of any
General Partner which is an Affiliate of the Managing Partner that is
to be removed, has not cast an affirmative vote for any proposed
substitute Managing Partner, the Representative or Alternate
Representative of the Managing Partner that is to be removed, and of
any General Partner which is an Affiliate of the Managing Partner that
is to be removed, shall NOT have a vote in appointing its substitute
Managing Partner. The right to remove the Managing Partner under this
Section 7.1(b) shall be exercised by providing the Managing Partner
with a written notice which specifies the "cause" for which the
Managing Partner
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PARTNERSHIP AGREEMENT
Page 21
is to be removed. Such written notice must be provided to the Managing
Partner within thirty (30) days after the date such "cause" for removal
has become known to any General Partner. If the Managing Partner does
not receive such written notice within such time period, the Managing
Partner may not be removed in respect of such "cause" for removal which
has become known to a General Partner.
(c) The Partnership shall reimburse the Managing Partner in accordance
with the Standard Billing Practices for all reasonable time charges,
expenses and costs it incurs in managing the operations, affairs and
business of the Partnership, subject to the Partnership Budget in
effect from time to time. Each Partner shall, at its own expense, have
the right at all times during normal business hours to examine the
books and records of the Managing Partner to the extent necessary to
verify the accuracy of any statement, charge, computation or demand
made by the Managing Partner under or pursuant to this Section 7.1(c).
Such right may be exercised through any agent or employee of such
examining Partner or by an independent public accountant, attorney or
other consultant so designated by such examining Partner subject to the
confidentiality provisions set forth in Section 14.13.
7.2 EXECUTIVE REVIEW COMMITTEE.
(a) The Executive Review Committee ("ERC") shall have the primary
authority in respect of the material affairs, policies and decisions of
the Partnership pursuant to this Section 7.2 and as provided in
Sections 7.3 and 7.4 and as may otherwise be provided in this
Agreement. The members of the ERC shall be one Representative of each
General Partner, designated from time to time by each such General
Partner by written notice to each other General Partner and the
Partnership. By like notice, each General Partner may designate an
Alternate Representative which shall have authority to act in the
absence of its Representative. By execution of this Agreement, each
General Partner hereby gives notice to each other General Partner and
the Partnership that its Representative and Alternate Representative
designees are as set forth in Appendix C. A General Partner may at any
time, by written notice to all other General Partners and to the
Partnership, remove its Representative or Alternate Representative
designees from the ERC by designating a new Representative and/or
Alternate Representative. The designees set forth in Appendix C shall
serve in such capacity until such time as their respective successors
are designated. Any participation or action (including the execution of
any documents) by an Alternate Representative of a General Partner
shall be deemed to be the act of the Representative of such General
Partner for which such Alternate Representative is permitted to act
without any evidence of the absence or unavailability of such
Representative.
(b) The Chairman of the ERC shall be the Representative of the Managing
Partner or, in the absence of such Representative, the Alternate
Representative of the Managing Partner. There shall be a secretary of
the ERC which shall be selected by the Managing Partner. The Person
selected may or may not be a member of the ERC.
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PARTNERSHIP AGREEMENT
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(c) The Chairman shall preside at all meetings of the ERC. The ERC
shall meet quarterly in person or by teleconference call. Special ERC
meetings may be called at the request of any General Partner. All
meetings of the ERC shall be held upon not less than seven (7) days
prior written notice from the Partnership to each General Partner; and
in the event a special ERC meeting is requested by a General Partner,
the notice shall set forth with particularity the purpose of such
special ERC meeting. All notices for ERC meetings shall set forth the
time, the place, and the manner in which the ERC meeting is to be held.
Attendance or participation by an ERC Representative or Alternate
Representative at an ERC meeting shall constitute a waiver of any
required notice of such ERC meeting. Written minutes for each ERC
meeting shall be recorded by the secretary of the ERC and provided to
the members of the ERC for approval no later than two (2) weeks prior
to the next scheduled quarterly ERC meeting.
(d) Subject to this Section 7.2(d) and except as otherwise provided by
this Agreement, the ERC shall act upon the affirmative vote, approval
or consent of fifty-one percent (51%) of the Weighted Voting Interests
of the General Partners represented on the ERC. Any action that may be
taken by the ERC may be taken without a notice and/or a meeting of the
ERC if written consents setting forth such action are signed by ERC
Representatives or Alternate Representatives which have sufficient
Weighted Voting Interests to have approved the action if a meeting of
the ERC had been held. Any action that may be taken by the Partners
(whether the General Partners, the Limited Partners, or all Partners,
as the case may be) may be taken without a notice and/or a meeting of
such Partners if written consents setting forth such action are signed
by the Partners whose approval or consent would have been sufficient to
have approved the action if a meeting of such Partners had been held.
Notwithstanding any provision in this Agreement to the contrary, no
Defaulting Partner, nor its Representative or Alternate Representative
on the ERC, if applicable, shall be eligible to vote on, consent to,
approve or participate in matters or actions before the ERC or the
Partners for so long as it is a Defaulting Partner.
(e) To the extent the provisions of this Section 7.2(e) are not in
contravention of requirements of law which cannot be modified by
agreement of the Partners, the Partnership shall indemnify and save
harmless the Representatives and Alternative Representatives of the
ERC, the Managing Partner, any Partner performing services pursuant to
Section 8.1, and Affiliates, directors and officers of any of the
foregoing (as required by and to the full extent permitted by the Act)
against all actions, claims, demands, costs and liabilities arising out
of the good faith acts (or good faith failure to act) of such Persons
within the scope of their authority in the course of the Partnership's
business or pursuant to this Agreement, and such Persons shall not be
liable for any obligations, liabilities or commitments incurred by or
on behalf of the Partnership as a result of any such acts or failure to
act even though caused or alleged to be caused by the negligence or
fault of any such Person or its agents, and even though any such claim,
cause of action, or suit is based upon or alleged to be based upon the
strict liability of such Person or its agents against the consequences
of their own negligence; provided,
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PARTNERSHIP AGREEMENT
Page 23
however, such indemnification shall not apply to any Person to the
extent that their action or inaction constitutes willful misconduct,
fraud, or gross negligence resulting in a material loss or injury to
the Partnership.
7.3 ACTIONS REQUIRING FIFTY-ONE PERCENT (51%) APPROVAL OR CONSENT OF THE
ERC. Subject to Section 7.2(d) and except as otherwise provided herein,
the approval or consent of fifty-one percent (51%) of the Weighted
Voting Interests of the General Partners represented on the ERC shall
be necessary before any of the following actions can be taken by or on
behalf of the Partnership:
(a) establishing, amending or modifying a Partnership Budget, except as
provided in Section 4.6;
(b) requesting the Partners to contribute or advance Additional Capital
or to provide credit facilities or other credit support, except as
permitted without ERC approval under Section 4.5;
(c) making, incurring, issuing or assuming any of the following (a
"Disbursement or Obligation") in each case involving a dollar amount of
more than five hundred thousand dollars ($500,000): making any
expenditure; lending or borrowing money; incurring any expense;
executing agreements; or incurring, assuming or guaranteeing any
obligation, or contracting for indebtedness or other liability, or
securing the same by mortgage, deed of trust, or other lien or
encumbrance; EXCEPT when any such Disbursement or Obligation is
made, incurred, issued or assumed pursuant to (i) any Material Contract
which has been approved by the ERC, (ii) any applicable Partnership
Budget approved by the ERC, (iii) Section 4.5 as permitted thereunder
without ERC approval, or (iv) the ordinary day-to-day business
activities of the Partnership, including but not limited to agreements
related to insurance, spare parts, chemical supplies, day-to-day or
month-to-month fuel management, or short-term cash management;
provided, however, that the Partnership shall not incur any
indebtedness for borrowed money to the extent that such incurrence is
prohibited by the Financing Documents (as such term is defined in the
Common Agreement);
(d) entering into or terminating any Material Contract, materially
amending any Material Contract, or amending any agreement that is not a
Material Contract when such amendment would have the effect of causing
such agreement to become a Material Contract; EXCEPT when such Material
Contract, terminations thereof, amendments thereto, or other above
described amendments are required with respect to Prudent Operating
Costs;
(e) selling, exchanging, leasing, abandoning, mortgaging, pledging or
otherwise disposing of or transferring assets (a "transfer") in each
case having a fair market value of more than five hundred thousand
dollars ($500,000); EXCEPT for (i) any transfer which relates to
property covered by liens and encumbrances granted pursuant to a deed
of trust
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PARTNERSHIP AGREEMENT
Page 24
or other security documents executed in connection with the Common
Agreement, (ii) any transfer which relates to the sale of parts and
equipment inventory in the ordinary course of business, (iii) the sale
or other disposition of assets which are replaced by assets of an
equivalent or greater value or which have become obsolete and are of no
further value to the operation of the Project, or (iv) any transfer
which relates to Prudent Operating Costs;
(f) bringing, defending or otherwise engaging in any actions at law or
in equity, or under alternative forms of dispute resolution including
without limitation arbitration and mediation, on behalf of the
Partnership by or against third parties (each of the foregoing, a
"Legal Proceeding"), or consenting to or entering into a judgment or
settlement of any Legal Proceeding, when any Legal Proceeding involves
the expense, expenditure, loaning or borrowing by the Partnership of
more than five hundred thousand dollars ($500,000), EXCEPT when such
expense, expenditure, loaning or borrowing of funds is made pursuant to
any applicable Partnership Budget approved by the ERC;
(g) engaging in any transaction, or entering into any agreement, with
any Partner (or Affiliate thereof) for goods or services in connection
with the conduct of the Partnership's business; EXCEPT when (i) such
transaction or agreement is effectuated on terms and conditions that
are no less favorable to the Partnership than would be available in a
bona fide arm's-length transaction or agreement with a Person that is
not an Affiliate, or (ii) such transaction or agreement is otherwise
for goods or services provided by a Partner pursuant to provisions set
forth in this Agreement;
(h) establishing or materially amending material Partnership tax
policies and determining material Partnership tax elections EXCEPT
pursuant to the Code;
(i) establishing or materially amending material Partnership accounting
policies EXCEPT in accordance with GAAP;
(j) replacing the Certified Public Accountants;
(k) disclosing to any third party any Confidential Information obtained
directly or indirectly from the Partnership, any other Partner, or any
Affiliate thereof EXCEPT in compliance with the requirements of Section
14.13;
(l) appointing a substitute Managing Partner as provided in Section
7.1(b);
(m) approving the relief of any obligations under this Agreement of a
transferor Partner in the event of a Permitted Transfer which is
effectuated under a security interest as provided in Section 10.4; or
(n) approving the extension of a Cure Period as provided in Section
12.1(a).
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PARTNERSHIP AGREEMENT
Page 25
7.4 ACTIONS REQUIRING NINETY PERCENT (90%) APPROVAL OR CONSENT OF THE ERC.
Subject to Section 7.2(d) and except as otherwise provided herein, the
approval or consent of ninety percent (90%) of the Weighted Voting
Interests of the General Partners represented on the ERC shall be
necessary before any of the following actions may be taken by or on
behalf of the Partnership:
(a) causing the Partnership to merge or consolidate with or into any
other Person;
(b) taking any action which would cause the Partnership NOT to be
recognized as a partnership for federal income tax purposes, EXCEPT
when such action is required by law; or
(c) taking any action which would cause the Partnership NOT to be
recognized as an Exempt Wholesale Generator (EWG), or cause the
Partnership or any Partner to become a holding company under PUHCA,
EXCEPT when such action is required by law.
7.5 ACTIONS REQUIRING UNANIMOUS APPROVAL OR CONSENT OF THE GENERAL
PARTNERS. Subject to Section 7.2(d) and except as otherwise provided
herein, the unanimous approval or consent of the General Partners shall
be necessary before any of the following actions may be taken by or on
behalf of the Partnership:
(a) electing to dissolve or wind-up the Partnership or to take any
action that would have such result;
(b) commencing a voluntary proceeding in bankruptcy in the name of the
Partnership, or seeking the protection of any federal or state
bankruptcy or insolvency law or debtor relief statute;
(c) changing the nature of the Partnership's business; or
(d) removing the Managing Partner for "cause" as provided in Section
7.1(b).
7.6 ACTIONS REQUIRING UNANIMOUS APPROVAL OR CONSENT OF THE PARTNERS.
Subject to Section 7.2(d) and except as otherwise provided herein, the
unanimous approval or consent of the Partners shall be necessary before
any of the following actions can be taken by or on behalf of the
Partnership:
(a) admitting Additional Partners, except in the event the Additional
Partner is admitted pursuant to Article 10 or pursuant to Section
12.4(c); or
(b) making any amendment to this Agreement; provided, however, that if
such amendment would not adversely modify the rights or obligations of
any Partner, then only the unanimous approval or consent of the General
Partners shall be required.
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PARTNERSHIP AGREEMENT
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ARTICLE 8
SERVICES FROM PARTNERS
OTHER THAN THE MANAGING PARTNER
8.1 SERVICES REQUESTED FROM PARTNERS OTHER THAN THE MANAGING PARTNER. If
the Managing Partner requests another Partner, or an Affiliate thereof,
to perform services for the Partnership not otherwise specifically
provided for in this Agreement, such Partner shall be reimbursed in
accordance with the Standard Billing Practices.
8.2 BILLING STATEMENT DEADLINE. Partners, or their Affiliates, which
perform services for the Partnership pursuant to Section 8.1, shall, on
or before the fifteenth (15th) day of each calendar month, render a
statement to the Managing Partner itemizing the costs and expenses
incurred during the previous calendar month for which reimbursement is
sought.
8.3 PAYMENT DEADLINE. The amount invoiced on the statement pursuant to
Section 8.2 shall be paid on or before twenty-five (25) days following
the calendar month in which such services were rendered and the costs
and expenses were incurred or fifteen (15) days after receipt of the
statement, whichever is later.
8.4 FAILURE TO MAKE PAYMENT. Should there be a failure to make a timely
payment of any amount to be reimbursed to a Partner or Affiliate
thereof pursuant to this Article 8, interest shall accrue on any
overdue amount until such principal amount and interest thereon are
paid at a per annum rate equal to the lesser of: (i) the posted prime
lending rate of The Chase Manhattan Bank, plus two hundred (200) basis
points, or (ii) the maximum rate allowed by law.
8.5 EXAMINATION OF BOOKS AND RECORDS. Each Partner shall, at its own
expense, have the right at all times during normal business hours to
examine the books and records of a Partner to the extent necessary to
verify the accuracy of any statement, charge, computation or demand
made by such Partner under or pursuant to this Article 8. Such right
may be exercised through any agent or employee of such Partner or by an
independent public accountant, attorney or other consultant so
designated by such Partner subject to the confidentiality provisions
set forth in Section 14.13.
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PARTNERSHIP AGREEMENT
Page 27
ARTICLE 9
ACCOUNTING AND TAXATION
9.1 LOCATION OF RECORDS. The books of account for the Partnership shall be
kept and maintained at the principal office of the Partnership or at
such other place as the Managing Partner shall determine.
9.2 BOOKS OF ACCOUNT. The books of account and financial statements for the
Partnership shall be:
(a) maintained and prepared on an accrual basis in accordance with
GAAP; and
(b) audited by the Certified Public Accountants at the end of each
Fiscal Year.
9.3 ANNUAL FINANCIAL STATEMENTS AND TAX INFORMATION. As soon as practicable
following the end of each Fiscal Year of the Partnership, the Managing
Partner shall cause to be prepared and delivered to the Partners:
(a) an income statement and a statement of changes in financial
position for such Fiscal Year, a balance sheet and a statement of each
Partner's capital account as of the end of such Fiscal Year, together
with a report thereon of the Certified Public Accountants;
(b) federal, state and local income tax returns and such other
accounting, tax information and schedules, including but not limited to
the Schedule K-1 for each Partner, as shall be necessary for the
preparation by each Partner of its income tax return for such Fiscal
Year, on or before the thirty-first (31st) day of the third (3rd)
calendar month after the end of each Fiscal Year; and
(c) an estimate of Partnership taxable income or loss, as shall be
necessary for each Partner to make its estimated income tax payment(s),
if any, due for such Fiscal Year, on or before January 15 of each
calendar year.
9.4 INTERIM FINANCIAL STATEMENTS. As soon as practicable after the end of
each calendar quarter, the Managing Partner shall cause to be prepared
and delivered to each Partner, with an appropriate certificate of the
Person authorized to prepare the same:
(a) an income statement and a statement of changes in financial
position for such quarter (including sufficient information to permit
the Partners to calculate their tax accruals), for the portion of the
Fiscal Year then ended;
(b) a balance sheet and a statement of each Partner's capital account
as of the end of such quarter; and
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PARTNERSHIP AGREEMENT
Page 28
(c) a statement comparing the actual financial results of the
Partnership for such quarter and the portion of the Fiscal Year then
ended, with the budgeted or forecasted pro forma projections for such
respective periods.
9.5 TAXATION. The parties intend that the Partnership shall be treated as a
partnership for federal and state (and local, if applicable) tax
purposes. The Partnership's federal and state (and local if applicable)
income tax returns shall be prepared by the Certified Public
Accountants subject to review by the Managing Partner. All of the
material Partnership elections for federal and state (and local if
applicable) income tax purposes shall be determined by the ERC, except
those specifically reserved by the Code to be made by the individual
Partners.
9.6 GOVERNMENTAL REPORTS. The Managing Partner shall prepare and file, or
cause to be prepared and filed, all reports prescribed by any
commission or governmental agency having jurisdiction of the Project.
9.7 INSPECTION OF FACILITIES AND RECORDS. Each Partner shall, at its own
expense, have the right at all times during normal business hours to
inspect the Project facilities and to audit or examine the books and
records of the Partnership. Such right may be exercised through any
agent or employee of such Partner or by an independent public
accountant, attorney or other consultant so designated by such Partner
subject to the confidentiality provisions set forth in Section 14.13.
9.8 DEPOSIT AND WITHDRAWAL OF FUNDS. Subject to the Common Agreement, funds
of the Partnership shall be deposited in such recognized and reputable
banks, depositories, or other financial institutions, in the account of
the Partnership, as shall be designated from time to time by the
Managing Partner. All withdrawals from any such depository shall be
made subject to the provisions of this Agreement and shall be made only
by check, wire transfer, debit memorandum or other written instruction.
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PARTNERSHIP AGREEMENT
Page 29
ARTICLE 10
TRANSFERS OF PARTNERSHIP INTERESTS
10.1 PERMITTED TRANSFERS. A Partner shall be permitted to transfer, assign,
or pledge ("Transfer") all or any part of its Partnership Interest to
another Person provided that such Transfer is first in compliance with
all of the following conditions (a "Permitted Transfer"); provided,
however, notwithstanding anything herein to the contrary, no provision
of this Agreement, other than Section 10.1(c)(i), shall prohibit any
Transfers pursuant to the terms of the Pledge Agreements:
(a) the Transfer will NOT adversely affect the financial and operating
integrity of the Partnership;
(b) the Transfer will NOT result in a termination of the Partnership
under Section 708 of the Code;
(c) the Transfer will NOT (i) cause revocation or loss of the
Partnership's EWG status, or cause the Partnership, any Partner,
Parent, or Affiliate thereof to become a holding company under PUHCA or
(ii) be in conflict with any other law or regulation which would
otherwise adversely affect the financial and operating integrity of the
Partnership;
(d) the transferor Partner has provided written notice, ten (10) days
prior to effectuating any Transfer, to the Partnership and the other
Partners of its intent to Transfer all or any part of its Partnership
Interest to a specified transferee;
(e) the transferee assumes by operation of law or express agreement
with the Partnership, in form and substance reasonably satisfactory to
the Partnership, all of the obligations of the transferor Partner under
this Agreement to the extent the transferor Partner is transferring all
or any part of its obligations under this Agreement;
(f) in the event the transferee is to be admitted to the Partnership as
an Additional Partner, such transferee is admitted in compliance with
Article 11;
(g) the transferor Partner is NOT a Defaulting Partner at the time of
the Transfer;
(h) the Transfer is NOT prohibited by and will not cause a default
under the terms of any material Project Contract of the Partnership,
including but not limited to the Common Agreement, and if required the
proposed Transfer has been approved and consented to by any third party
from which approval or consent is required under a material Project
Contract of the Partnership; and
(i) such Transfer is in compliance with all applicable requirements of
law, including
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PARTNERSHIP AGREEMENT
Page 30
but not limited to any applicable securities laws.
10.2 WITHDRAWAL OF TRANSFEROR PARTNER. In the event of a Permitted Transfer
where the transferor Partner Transfers all of its Partnership Interest,
the transferor Partner shall become a Withdrawn Partner effective on
the date such Permitted Transfer is effectuated.
10.3 EFFECT OF PROHIBITED TRANSFERS. Any proposed Transfer of a Partnership
Interest by a Partner which is prohibited by this Article 10 shall not
be permitted, and in the event a Transfer is erroneously effectuated
and later found not to conform with the requirements of this Article
10, such Transfer shall be void and shall not be recognized by the
Partnership, and the Partner which attempted to effectuate such
prohibited Transfer shall remain liable for all of its obligations
under this Agreement. Nothing in this Agreement shall be deemed to
limit any rights or remedies that the Partnership or any other Partner
may have against a transferor Partner in the event of a prohibited
Transfer.
10.4 TRANSFERS UNDER A SECURITY INTEREST. In the event of a Permitted
Transfer where a transferee becomes a substituted Additional Partner by
operation of a Transfer made in foreclosure or other enforcement of a
security interest pledged by a Partner, such Permitted Transfer and
such transferee shall be subject to all of the terms and provisions of
this Agreement, and the transferor Partner shall not be relieved of any
of its obligations under this Agreement without the prior approval or
consent of the ERC, excluding the vote of the Representative or
Alternate Representative of the transferor Partner and of any Partner
which is an Affiliate of the transferor Partner.
10.5 TAX ELECTION. In the event that a Partnership Interest is transferred
or assigned as permitted by this Article 10, the Partnership shall, at
the request of the transferee, make an election pursuant to Section 754
of the Code.
10.6 PLEDGE OF PARTNERSHIP INTERESTS. If the Partnership Interests are
pledged, or otherwise assigned as a security interest, the transferee
shall become a partner of the Partnership only in the manner and event
and to the extent expressly provided in the agreement effecting such
pledge or assignment or by operation of law.
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PARTNERSHIP AGREEMENT
Page 31
ARTICLE 11
ADMISSION OF ADDITIONAL PARTNERS
11.1 PERMITTED ADMISSIONS. Persons which are to be admitted to the
Partnership pursuant to Section 7.6(a), Article 10 or Section 12.4(c)
may be admitted as Additional Partners of the Partnership if such
admission is first in compliance with all of the following conditions:
(a) such admission will NOT adversely affect the financial and
operating integrity of the Partnership;
(b) such admission would NOT result in a termination of the Partnership
under Section 708 of the Code;
(c) such admission would NOT cause revocation or loss of the
Partnership's EWG status, or cause the Partnership, any Partner,
Parent, or Affiliate thereof to become a holding company under PUHCA or
be in conflict with any other law or regulation which would otherwise
adversely affect the financial and operating integrity of the
Partnership;
(d) such Person which is to be admitted as an Additional Partner has
executed a counterpart of this Agreement, and assumes by operation of
law or express agreement with the Partnership, in form and substance
reasonably satisfactory to the Partnership, all of its share of
applicable obligations under this Agreement;
(e) such admission is NOT prohibited by and will not cause a default
under the terms of any material Project Contract of the Partnership,
including but not limited to the Common Agreement, and if required the
proposed admission has been approved and consented to by any third
party from which approval or consent is required under a material
Project Contract of the Partnership; and
(f) such admission is in compliance with all applicable requirements of
law, including but not limited to any applicable securities laws.
11.2 EFFECT OF PROHIBITED ADMISSION. Any proposed admission of an Additional
Partner which is prohibited by this Article 11 shall not be permitted,
and in the event an admission of an Additional Partner is erroneously
effectuated and later found not to conform with the requirements of
this Article 11, such admission shall be void and shall not be
recognized by the Partnership. Nothing in this Agreement shall be
deemed to limit any rights or remedies that the Partnership or any
other Partner may have in the event of a prohibited admission of an
Additional Partner.
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PARTNERSHIP AGREEMENT
Page 32
ARTICLE 12
DEFAULT AND WITHDRAWAL PROVISIONS
12.1 DEFAULT PROVISIONS; WITHDRAWAL OF DEFAULTING PARTNER.
(a) In the event any Partner defaults in any of its monetary
obligations provided for in this Agreement (a "Defaulting Partner"),
the Partnership shall have the right to provide the Defaulting Partner
written notice of such default (a "Default Notice") and the Partnership
and each non-defaulting Partner shall be provided a copy of such
Default Notice. Each Default Notice shall set forth with specificity
the nature and the amount of the monetary obligation the Defaulting
Partner has failed to perform. If the Defaulting Partner does not cure
such monetary default, all Affiliate(s) of a Defaulting Partner which
are also Partner(s) in the Partnership (a "Default Affiliate") shall be
jointly and severally obligated with the Defaulting Partner to perform
the monetary obligations which the Defaulting Partner has not
performed. If such monetary default shall continue uncured by the
Defaulting Partner and/or any Default Affiliate(s) thereof for a period
of ten (10) days after the date the Default Notice is given or for such
extended cure period as may be approved by vote of the ERC (the "Cure
Period"), excluding the vote of the Defaulting Partner and any Default
Affiliate(s) thereof, then (i) the Defaulting Partner and all Default
Affiliate(s) thereof shall be deemed to have withdrawn from the
Partnership effective as of the day the Default Notice was given, (ii)
such Defaulting Partner and all Default Affiliate(s) thereof shall
thereafter be Withdrawn Partner(s) in accordance with the applicable
provisions of this Agreement, and (iii) each non-defaulting Partner
shall be provided notice from the Partnership (a "Withdrawal Notice")
that such Defaulting Partner and all Default Affiliate(s) thereof have
become a Withdrawn Partner(s).
(b) After the receipt of a Default Notice and prior to the curing of
any such monetary default or the withdrawal of the Defaulting Partner
and all Default Affiliate(s) thereof as provided in Section 12.1(a),
the Defaulting Partner and all Default Affiliate(s) thereof shall
continue to be Partner(s) until the expiration of the Cure Period and
shall continue to be obligated to contribute all funds and perform all
obligations required of the Defaulting Partner and any Default
Affiliate(s) thereof under this Agreement.
(c) If, within the Cure Period following a monetary default, the
Defaulting Partner or any Default Affiliate thereof cures such default,
it shall be deemed as if the default had not occurred and the
Defaulting Partner and any Default Affiliate(s) thereof shall lose no
rights under this Agreement. A Defaulting Partner or Default Affiliate
thereof shall be deemed to have cured all defaults under this Section
12.1 when it has made all payments and provided all guarantees then due
or overdue within the Cure Period.
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PARTNERSHIP AGREEMENT
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(d) A Withdrawn Partner's withdrawal from the Partnership pursuant to
this Section 12.1 is not an exclusive remedy and shall not affect any
rights and remedies against the Defaulting Partner and any Default
Affiliate(s) thereof which the Partnership and/or the remaining
Partners may have at law and in equity (including, but not limited to,
the right to seek specific performance of those obligations that
continue uncured by such Withdrawn Partner) as a result of such
Withdrawn Partner's default of its monetary obligations under this
Agreement. Further, it is expressly agreed that if a Partner becomes a
Withdrawn Partner pursuant to this Section 12.1, it shall remain liable
for all of its obligations under this Agreement.
(e) In the event any Partner defaults in any of its non-monetary
obligations provided for in this Agreement, the Partnership and any
other Partner that is not also in default pursuant to this Agreement
shall have the right to pursue any rights and remedies against the
Defaulting Partner and any Default Affiliate(s) thereof which they may
have at law and in equity (including, but not limited to, the right to
seek specific performance) as a result of such Partner's default of its
non-monetary obligations under this Agreement.
12.2 CURE PERIOD DISTRIBUTIONS. In the event a Partner is in monetary
default pursuant to Section 12.1 and reimbursements, payments or
distributions are made pursuant to this Agreement, including but not
limited to Sections 5.1, 5.2, 5.3, 5.4 or 6.2, during any Cure Period,
the amount of such reimbursements, payments or distributions that would
otherwise be payable to the Defaulting Partner and any Default
Affiliate(s) thereof shall be reflected in the respective capital
accounts of the Defaulting Partner and any Default Affiliate(s)
thereof, but shall not be distributed to the Defaulting Partner and any
Default Affiliate(s) thereof unless and until such default is cured by
the Defaulting Partner or any Default Affiliate(s) thereof before the
end of the Cure Period. If the monetary default is not cured before the
end of the Cure Period, the reimbursements, payments or distributions
previously reflected in the respective capital accounts of the
Defaulting Partner and any Default Affiliate(s) thereof and
attributable to the period after the effective date of withdrawal of
the Defaulting Partner and any Default Affiliate(s) thereof shall be
removed from such Withdrawn Partners' capital accounts and the amount
so removed shall lapse as a reimbursement, payment or distribution
obligation, and shall NOT be an amount owed to such Withdrawn
Partners by the Partnership, and shall be reallocated to and
distributed to the remaining Partners in proportion to their respective
Equity Ownership Percentages, after the reallocation of Partnership
Percentages as provided in Section 12.4.
12.3 AUTOMATIC WITHDRAWAL. In addition to those instances where withdrawal
is deemed to occur under this Agreement, upon the happening of any of
the following events with respect to a Partner, such Partner and all
Affiliate(s) thereof which are also Partners, shall automatically
become a Withdrawn Partner or Withdrawn Partners, as the case may be,
and promptly following receipt of notice of the happening of any such
event the Partnership shall provide notice of such withdrawal (a
"Withdrawal Notice") to all other Partners:
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PARTNERSHIP AGREEMENT
Page 34
(a) the entry by a court of competent jurisdiction of a decree or order
for relief, unstayed on appeal or otherwise and in effect for ninety
(90) days, in respect of such Partner, in an involuntary case under the
federal bankruptcy laws, or any such order adjudicating such Partner as
bankrupt or insolvent under any other applicable bankruptcy, insolvency
or liquidation law;
(b) the entry by a court of competent jurisdiction of a decree or order
appointing a receiver, custodian, assignee, trustee, liquidator,
sequestrator or other similar official of such Partner or of any
substantial part of the property of such Partner, or ordering the
winding down or liquidation of its affairs, and the continuance of any
such decree or order unstayed on appeal or otherwise and in effect for
ninety (90) days, or the commencement by such Partner of a voluntary
case under the federal bankruptcy laws, or under any other bankruptcy
or insolvency law, seeking reorganization, liquidation, arrangement,
adjustment or composition of such Partner under the bankruptcy laws or
any similar statute;
(c) the consenting by such Partner to the appointment of, or taking
possession by, a receiver, assignee, custodian, trustee, liquidator,
sequestrator, or other similar official of it, or of any substantial
part of its property, or the taking of corporate or partnership action
by such Partner in furtherance of any such action;
(d) the filing of a certification of dissolution of the Partner under
the laws of the jurisdiction of its incorporation or formation which
cannot be cured or the entering of a final non-appealable order
dissolving that Partner by any court of competent jurisdiction; or
(e) any event which shall make it unlawful for that Partner to be a
Partner in the Partnership.
12.4 GENERAL WITHDRAWAL PROVISIONS.
(a) Upon a Partner becoming a Withdrawn Partner pursuant to this
Agreement, unless otherwise provided in this Agreement and without
jeopardizing the Partnership's or any Partner's rights under Sections
12.1(d) or 12.1(e), each remaining Partner shall have seven (7) days
after being provided a Withdrawal Notice by the Partnership (the
"Election Period") to provide the Partnership with a written notice of
its commitment and guarantee (a "Replacement Guarantee") that it will
succeed to, perform and fulfill a pro rata portion of the Withdrawn
Partner's obligations under this Agreement, including but not limited
to any obligation to advance Development Funds, provide Equity
Guarantees, contribute Construction Equity Contributions, provide
Project Guarantees, and contribute Additional Capital (collectively,
the "Withdrawn Partner Obligations") and succeed to a pro rata share of
such Withdrawn Partner's Partnership Interest (the "Withdrawal
Interest"). The term "pro rata" as used in this Section 12.4 is in the
proportion which the remaining
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PARTNERSHIP AGREEMENT
Page 35
Partner's Partnership Percentage represents of the remaining Partners'
Partnership Percentages in effect at the time, or some other basis as
otherwise agreed to by all of such remaining Partners which elect to
provide a Replacement Guarantee.
(b) After the expiration of the Election Period, the Partnership shall
provide written notice to the remaining Partners indicating the amount
of Replacement Guarantees, if any, it has received (the "Election
Results Notice"). If a Partner fails to provide a Replacement Guarantee
on a timely basis as provided in this Section 12.4, it shall be deemed
to have elected NOT to provide such Replacement Guarantee. If any
Partner has elected not to provide a Replacement Guarantee (a
"Non-Electing Partner") for its pro rata share within the Election
Period, each Partner which did elect within the Election Period to
provide a Replacement Guarantee (an "Electing Partner") shall have two
(2) Business Days following provision of the Election Results Notice to
provide the Partnership with an additional Replacement Guarantee for
its pro rata share (based on the Partnership Percentages of the
Electing Partners) of the Replacement Guarantee not provided by such
Non-Electing Partner. Additional two (2) Business Day election rounds
shall be held among the Electing Partners from the previous election
round(s) until the Electing Partners have elected to provide
Replacement Guarantees for one hundred percent (100%) of the Withdrawn
Partner Obligations or until there are no further Electing Partners
eligible to elect to provide such Replacement Guarantees.
(c) After the last election round, to the extent the remaining Partners
have NOT elected to provide Replacement Guarantees for one hundred
percent (100%) of the Withdrawn Partner Obligations, it shall be deemed
that all of the remaining Partners have elected to be Non-Electing
Partners, and the Managing Partner may elect to admit Additional
Partner(s), subject to Article 11, who provide Replacement Guarantee(s)
for 100% of the Withdrawn Partner Obligations and succeed to the
Withdrawal Interest. In the event the Managing Partner elects not to
admit or is unsuccessful in its efforts to admit Additional Partner(s)
pursuant to this Section 12.4(c), TENASKA GP or its designee shall have
the right, but not the obligation, to provide such Replacement
Guarantee and succeed to the Withdrawal Interest.
(d) A Partner which has become a Withdrawn Partner pursuant to any
provision of this Agreement shall not be entitled to payment or
distribution of any positive balance in its capital account, nor shall
such Withdrawn Partner be entitled to reimbursement of any Equity
Contributions or Development Funds contributed and/or advanced prior to
the date of its withdrawal.
(e) If a Partner has become a Withdrawn Partner pursuant to any
provision of this Agreement, any Equity Guarantees and/or Project
Guarantees which it provided prior to the date of its withdrawal shall
be released to such Withdrawn Partner only after they have been
replaced pursuant to Section 10.1(e) or this Section 12.4, or if not
replaced pursuant to Section 10.1(e) or this Section 12.4, only after
such time as such Equity Guarantees and/or Project Guarantees are no
longer required by the Project, the
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PARTNERSHIP AGREEMENT
Page 36
Partnership, any Person which is a party to a Project Contract, or the
Senior Parties in accordance with this Agreement.
(f) Any Partner which has become a Withdrawn Partner pursuant to any
provision of this Agreement shall have only those rights specifically
set forth in this Agreement and such Partner's status and rights as a
Partner shall automatically terminate as of the date of withdrawal.
(g) Except pursuant to Section 13.2, withdrawal by one or more Partners
as described in this Article 12 shall not effect a dissolution of the
Partnership.
(h) The Partnership may set off any amounts owed to a Partner which has
become withdrawn or is deemed to have withdrawn from the Partnership
against amounts owed to the Partnership by such Withdrawn Partner.
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PARTNERSHIP AGREEMENT
Page 37
ARTICLE 13
TERMINATION OF THE PARTNERSHIP
13.1 VOLUNTARY DISSOLUTION. Subject to the other terms and conditions of
this Agreement, the Partnership shall not be subject to dissolution,
except as provided in Sections 7.5(a) and 13.2, during the Primary
Term. Just prior to the end of the Primary Term, the Managing Partner
shall, if required, properly file documents with the State of Delaware,
and each calendar year thereafter, to extend the existence of the
Partnership from year to year; provided, however, that a Partner may
elect to dissolve the Partnership and terminate this Agreement after
expiration of the Primary Term by giving the other Partners written
notice of such election not less than four (4) months prior to the date
such dissolution is to take effect.
13.2 AUTOMATIC DISSOLUTION. The Partnership shall be automatically, and
without notice, dissolved upon the happening of any of the following
events (no event other than those hereinafter listed shall cause or
result in the automatic dissolution of the Partnership):
(a) the transfer of all, or substantially all, of the Partnership's
business and assets to any successor entity;
(b) the sale or abandonment of all, or substantially all, of the
Partnership's business and assets;
(c) any event which shall make it unlawful or impossible for the
business of the Partnership to be carried on, or for the Partners to
carry it on in the form of a Partnership; provided, however, that
dissolution will not occur until expiration of the cure period, if any,
approved by the ERC, or that amount of time allowed by law for a cure,
during which time the Partnership will take all reasonable action to
seek a remedy and continue operations;
(d) the bankruptcy or insolvency of the sole remaining General Partner;
provided, however, that dissolution will not occur if, within ninety
(90) calendar days after such bankruptcy or insolvency of the sole
remaining General Partner, all remaining Limited Partners agree in
writing to continue the business of the Partnership and to admit one or
more General Partners.
13.3 AVOIDANCE OF DISSOLUTION. In the event that all Partners but one
withdraw from the Partnership, the remaining Partner may act to admit
an Additional Partner as a General Partner or Limited Partner, as the
case may be, prior to the date of withdrawal of the penultimate Partner
so as to avoid dissolution of the Partnership. In the event that all
Limited Partners withdraw from the Partnership, the remaining General
Partner(s) may act to admit an Additional Partner that is a Limited
Partner, or convert a portion of their
<PAGE>
PARTNERSHIP AGREEMENT
Page 38
Partner Interest(s) to that of a Limited Partner, prior to the date of
withdrawal of the last Limited Partner, so as to avoid dissolution as a
limited partnership.
13.4 WINDING DOWN AND LIQUIDATION. Prior to the Partnership being dissolved
pursuant to the provisions of Sections 13.l or 13.2, the Managing
Partner shall be bound by the terms and conditions of this Agreement
for the purpose of winding down the business of the Partnership and
liquidating its assets in an orderly manner; provided, however, the
Partnership shall engage in no new business during the period of such
winding down. Any distribution of assets upon such winding down and
liquidation shall be in accordance with Section 6.2. No dissolution of
the Partnership shall relieve a Partner from any obligation accruing or
accrued to the date of such dissolution.
13.5 CONTINUANCE OF PARTNERSHIP. Except as provided in Sections 13.l and
13.2, it is understood and agreed by each of the Partners that the
relationship of Partnership among them is intended to continue without
interruption until such relationship is either specifically dissolved
by the approval of the General Partners pursuant to Section 7.5(a), or
by the occurrence of any event specified in Sections 13.1 or 13.2 as an
event of dissolution, and each Partner waives and releases, to the
extent permitted by law, its right to dissolve or obtain dissolution of
the Partnership in any other manner or for any other reason. If,
notwithstanding the foregoing, the Partnership may at any time be
deemed by operation of law, notwithstanding Sections 13.1 or 13.2, to
be dissolved (for example, upon the bankruptcy or withdrawal of a
Partner), each of the Partners hereby covenants and agrees with the
other Partners as follows:
(a) the business and affairs of the Partnership shall continue without
interruption and be carried out by a new partnership (the "Successor
Partnership");
(b) the partners of the Successor Partnership shall be the Persons who
were Partners hereunder at the time of such dissolution;
(c) the Successor Partnership and the partners thereof shall be
governed by the terms of this Agreement as if the Successor Partnership
were the Partnership;
(d) each of the Partners covenants and agrees to execute such further
agreements, including (without limitation) notes, novations and
accommodations, as may be necessary to continue the business of the
Partnership and to protect and perfect any lien or security interest
granted by the Partnership; and
(e) as used in this Section 13.5, the term "Partnership", at any point
in time, shall mean the Partnership originally formed pursuant to this
Agreement or the Successor Partnership which at such time is continuing
the business and affairs of the Partnership originally so formed.
<PAGE>
PARTNERSHIP AGREEMENT
Page 39
ARTICLE 14
MISCELLANEOUS PROVISIONS
14.1 EFFECT OF AGREEMENT. This Agreement may be amended, restated or
supplemented only as provided in Section 7.6(b).
14.2 NOTICES.
(a) All notices, consents, approvals, designations, directions,
requests or other communications (collectively, "Notices") given
pursuant to this Agreement shall be given in writing and delivered by
registered or certified mail or sent by facsimile. Each Notice
delivered by registered or certified mail, return receipt requested,
shall be deemed given and received on the date of delivery as shown on
the return receipt; or if delivery is attempted at the applicable
address set forth in Section 14.2(b), or other address if changed
pursuant to Section 14.2(b), and the Notice is returned, Notice shall
be deemed given and received on the date the delivery was attempted.
Each Notice delivered by facsimile shall be deemed given and received
on the date that such transmission has been successfully completed as
shown on the facsimile confirmation records maintained by the sending
party.
(b) Unless otherwise notified by the Partnership or by a Partner,
Notices shall be provided at the following addresses:
IF TO THE PARTNERSHIP:
Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, NE 68154
Attention: Mark T. Mowat
Tel. 402/691-9520
Fax: 402/691-9550
IF TO TENASKA GP:
Tenaska Georgia, Inc.
1044 North 115th Street, Suite 400
Omaha, NE 68154
Attention: Mark T. Mowat
Tel. 402/691-9520
Fax: 402/691-9550
<PAGE>
PARTNERSHIP AGREEMENT
Page 40
IF TO TENASKA LP:
Tenaska Georgia I, L.P.
1044 North 115th Street, Suite 400
Omaha, NE 68154
Attention: Mark T. Mowat
Tel. 402/691-9520
Fax: 402/691-9550
The Partnership and any Partner may change its address for the receipt
of Notices at any time by giving written notice thereof to the
Partnership and the Partners.
(c) Any Partner may waive any notice to which such Partner is entitled
pursuant to this Agreement by executing a written waiver of such
notice, unless otherwise waived pursuant to the terms of this
Agreement.
14.3 FURTHER ASSURANCES. Each of the Partners agrees to execute and deliver
all such other and additional instruments and documents and to do such
other acts and things as may be reasonably necessary more fully to
effectuate this Partnership and carry on the Partnership business in
accordance with this Agreement.
14.4 APPLICABLE LAW AND JURISDICTION.
(a) The Partners hereby irrevocably designate, appoint and empower the
Managing Partner as agent to receive for and on behalf of the
Partnership, service of process. The Partners further agree that such
service of process may be made on the Managing Partner by personal
service of a copy of the summons and complaint or other legal process
in any such legal suit, action or proceeding, or by other method of
service provided for under the applicable laws of the State of
Delaware, and the Managing Partner is hereby authorized to accept such
service for and on behalf of the Partnership, and to admit service with
respect thereto.
(b) Upon service of process being made on the Managing Partner, a copy
of the summons and complaint or other legal process shall be sent by
the Managing Partner to the other Partners. Service upon the Managing
Partner shall be deemed to be personal service on the Partnership and
shall be legal and binding upon the Partnership for all purposes,
notwithstanding any failure of the Managing Partner to send copies of
such legal process or any failure on the part of the other Partners to
receive the same.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware. With respect to any claim of
any Person arising out of this Agreement, (a) each Partner irrevocably
submits to the exclusive jurisdiction of the federal courts located in
the State of Delaware (unless such federal courts lack subject matter
jurisdiction, in which case each Partner irrevocably submits to the
exclusive
<PAGE>
PARTNERSHIP AGREEMENT
Page 41
jurisdiction of the state courts located in the State of Delaware), and
(b) each Partner irrevocably waives any objection which it may have at
any time to the venue of any suit, action or proceeding arising out of
or relating to this Agreement brought in any such courts and
irrevocably waives any claim that such suit, action or proceeding is
brought in an inconvenient forum, and further irrevocably waives the
right to object, with respect to such claim, suit or proceeding brought
in any such court, that such court does not have jurisdiction over such
Partner.
(d) All Partnership Interests shall be governed by and determined to be
a security under Article 8 of the Uniform Commercial Code as adopted in
the State of Delaware and in the State of New York.
14.5 COUNTERPARTS. This Agreement may be executed in counterparts (including
counterparts provided for the execution by an Additional Partner), each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14.6 HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of
this Agreement.
14.7 WAIVER. No waiver by any Person of any default by any Partner or
Partners in the performance of any provision, condition or requirement
herein shall be deemed to be a waiver of, or in any manner release of,
said Partner or Partners from performance of any other provision,
condition or requirement herein; nor shall such waiver be deemed to be
a waiver of, or in any manner a release of, said Partner or Partners
from future performance of the same provision, condition or
requirement. Any delay or omission of any Partner to exercise any right
hereunder shall not impair the exercise of any such right, or any like
right, accruing to it thereafter. No waiver of a right created by this
Agreement by one or more Partners shall constitute a waiver of such
right by the other Partners except as may otherwise be required by law
with respect to Persons not parties hereto. The failure of one or more
Partners to perform its or their obligations hereunder shall not
release the other Partners from the performance of such obligations.
14.8 PARTITION. Each of the Partners expressly and irrevocably waives and
releases any right it may have to partition Partnership assets during
the existence of the Partnership and any period of liquidation and
winding down of the Partnership.
14.9 LAWS AND REGULATORY BODIES. This Agreement and the obligations of the
Partners hereunder are subject to all applicable laws, rules, orders
and regulations of governmental authorities having jurisdiction.
14.10 WAIVER OF CONSEQUENTIAL AND PUNITIVE DAMAGES. NO PARTY TO THIS
AGREEMENT SHALL BE LIABLE TO ANY OTHER PARTY FOR INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES RESULTING FROM OR ARISING OUT OF THIS
AGREEMENT.
<PAGE>
PARTNERSHIP AGREEMENT
Page 42
14.11 PARTNERSHIP OPPORTUNITY. Nothing in this Agreement shall prohibit any
Partner, Affiliate thereof, or any of such Partners' or Affiliates'
officers, directors, shareholders, or employees from becoming a party
to any agreement or from participating in any business transaction,
whether present or future, which is not directly in competition with
the business purpose of the Partnership; provided, however, nothing in
this Section 14.11 shall relieve any Partner from its express and
implied duties to the Partnership; provided further, however, that no
Partner, Representative, or Alternate Representative may enter into any
agreement with any Person that would impair such Partner's ability to
carry out its obligations as provided in this Agreement. No Partner,
Affiliate thereof, or any of such Partners' or Affiliates' officers,
directors, shareholders, or employees shall under any circumstances be
obligated or bound to offer or present to the Partnership any business
opportunity offered to such Partner, Affiliate, officers, directors,
shareholders, or employees as a prerequisite to the acquisition of or
investment in such business opportunity by any of them.
14.12 ARTICLE AND SECTION NUMBERS. Unless otherwise indicated, references to
article and section numbers are to articles and sections of this
Agreement.
14.13 CONFIDENTIALITY PROVISIONS.
(a) Each Partner, and Affiliates thereof, shall treat as confidential,
and not disclose to any third party (excluding Agents, as defined in
Section 14.13(b)) not authorized by the ERC to receive such
Confidential Information, any Confidential Information obtained
directly or indirectly from the Partnership, any other Partner, or any
Affiliate thereof.
(b) Each Partner, and Affiliates thereof, shall limit disclosure of
Confidential Information obtained directly or indirectly from the
Partnership, any other Partner, or any Affiliate thereof, to only those
employees, officers, agents, advisors, consultants, representatives and
Affiliates (each an "Agent" and collectively the "Agents") of the
disclosing Partner, or Affiliates thereof, who need to know such
Confidential Information in connection with the Partner's investment in
the Project and/or for the purposes of the Partnership's business. Each
Partner shall take such reasonable and prudent steps and precautionary
measures as are required to ensure compliance with this Section 14.13
by those Agents to whom such Partner or an Affiliate thereof discloses
Confidential Information obtained directly or indirectly from the
Partnership, any other Partner, or any Affiliate thereof.
(c) The Partners agree that no adequate remedy at law exists for a
material breach or threatened material breach of any of the provisions
of this Section 14.13, the continuation of which unremedied will cause
the Partnership and the other Partners to suffer irreparable harm.
Accordingly, the Partners agree that the injured Partnership and/or
Partners shall be entitled, in addition to other remedies which may be
available to them, to immediate injunctive relief from any material
breach of any of the provisions of this
<PAGE>
PARTNERSHIP AGREEMENT
Page 43
Section 14.13 and to specific performance of their rights hereunder, as
well as to any other remedies available at law or in equity.
(d) "Confidential Information" shall consist of all information, in
whatever form and whether oral or written, disclosed by the
Partnership, any Partner, or any Affiliate thereof, (by or through
their respective representatives) which relates to the Project
(including information disclosed prior to the Effective Date),
including but not limited to information of a technical, political,
commercial, legal or financial nature together with all analyses,
compilations, forecasts, studies, notes, summaries, tapes, recordings,
documents, agreements (whether executed or in draft form), and other
data developed by the Partnership, any Partner, or Affiliate thereof
(by or through their respective representatives). Confidential
Information shall NOT include:
(i) information which was already in the possession of the
receiving party, or Affiliate thereof, at the time it obtained
such Confidential Information hereunder;
(ii) information which the receiving party, or Affiliate thereof,
was or is lawfully entitled outside of this Agreement, and not
subject to an obligation of confidentiality or other legal,
contractual or fiduciary obligation in favor of the disclosing
Person;
(iii) information which was or is in the public domain;
(iv) information which was, is or becomes generally available to
the public other than as a result of a disclosure by the
receiving party or Affiliate thereof;
(v) information which was, is or becomes available to the
receiving party, or Affiliate thereof, from a Person other
than the Partnership, any Partner or Affiliate thereof, which
Person did not acquire such information subject to the
confidentiality requirements of this Section 14.13, and did
not acquire such information subject to an obligation of
confidentiality or other legal, contractual or fiduciary
obligation in favor of the disclosing Person; and
(f) If a receiving party, or Affiliate thereof, is requested or becomes
legally compelled (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or
similar process) to disclose any Confidential Information of another
disclosing party, or Affiliate thereof, such receiving party agrees
that it or its Affiliate shall provide the disclosing Person with
prompt written notice of such request, including identifying
information about the legal proceeding and the parties thereto, so that
the disclosing party, or Affiliate thereof, may seek a protective order
or other appropriate remedy and/or waive compliance with the provisions
of this Agreement. In the event that such protective order or other
remedy is not obtained, the receiving party agrees that it or its
Affiliate shall furnish only that portion of the Confidential
Information which is legally required and shall exercise reasonable
efforts to obtain reliable
<PAGE>
PARTNERSHIP AGREEMENT
Page 44
assurances that confidential treatment shall be accorded to the
Confidential Information which is disclosed in such manner.
(g) If a receiving party, or Affiliate thereof, must disclose
Confidential Information of a disclosing party, or Affiliate thereof,
in order to enforce the provisions of this Agreement, then the
receiving party, or Affiliate thereof, shall be entitled to disclose
only such portion of the Confidential Information which is necessary
for such enforcement and shall exercise reasonable efforts to obtain
reliable assurances that confidential treatment shall be accorded to
the Confidential Information which is disclosed in such manner.
(h) Upon any Partner becoming a Withdrawn Partner, such Withdrawn
Partner shall be obligated to promptly return and will cause its Agents
to deliver all written Confidential Information which it has received
to the Partnership; and such Withdrawn Partner shall be obligated to
promptly destroy and will cause its Agents to destroy any and all
copies of such Confidential Information. Notwithstanding the return or
destruction of such Confidential Information, the Withdrawn Partner and
its Affiliates shall continue to be bound by the confidentiality
requirements of this Section 14.13.
(i) The obligations of the Parties pursuant to this Section 14.13 shall
survive the termination of this Agreement for a period of five (5)
years.
14.14 REFERENCE TO MONEY. All references in this Agreement to, and
transactions hereunder in, money shall be to or in Dollars of the
United States of America.
14.15 SEVERABILITY. Should any provision of this Agreement be deemed in
contradiction with the laws of any jurisdiction in which it is to be
performed or unenforceable for any reason, such provision shall be
deemed null and void, but this Agreement shall remain in force in all
other respects. Should any provision of this Agreement be or become
ineffective because of changes in applicable laws or interpretations
thereof or should this Agreement fail to include a provision that is
required as a matter of law, the validity of the other provisions of
this Agreement shall not be affected thereby. If such circumstances
arise, the parties hereto shall negotiate in good faith appropriate
modifications to this Agreement to reflect those changes that are
required by law.
14.16 AGENCY. Nothing contained in this Agreement will be construed to
authorize any party to act as the general agent of any other party or
of the Partnership, except in its relation to the business of the
Partnership as permitted in this Agreement.
14.17 MATERIALITY. The term "material" as used in this Agreement, except when
used in the context of the defined term Material Contract, shall mean
any action, amount, change, or matter which will or may have a
substantial adverse effect on the rights and/or obligations of the
Partnership.
14.18 PRIOR AGREEMENTS. This Agreement and its attached Appendices which are
incorporated
<PAGE>
PARTNERSHIP AGREEMENT
Page 45
herein by this reference, constitute the entire agreement of the
Parties with respect to the subject matter hereof, amend and restate
the Limited Partnership Agreement dated effective as of April 16, 1998,
as previously amended, between the Parties, and cancel and supersede
any prior agreements and understandings of the Parties with respect to
such subject matter. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Parties with respect to such subject matter
other than those set forth in this Agreement.
14.19 BINDING EFFECT. Except as otherwise expressly provided herein to the
contrary, this Agreement shall be binding upon and shall benefit the
Parties signatory hereto and their respective successors and assigns.
<PAGE>
PARTNERSHIP AGREEMENT
Page 46
IN WITNESS WHEREOF, the Partners have caused this Agreement to be
executed by their respective duly authorized officers on this 29th day of
October, 1999.
TENASKA GEORGIA, INC.
By: /S/
--------------------------
Name: Ronald N. Quinn
Title: Vice President
TENASKA GEORGIA I, L.P.
By: Tenaska Georgia, Inc., its Managing General Partner
By: /S/
--------------------------
Name: Jerry K. Crouse
Title: Vice President
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX A
PARTNERSHIP PERCENTAGES
COLUMN A COLUMN B
EQUITY VOTING
OWNERSHIP INTEREST
PERCENTAGE PERCENTAGE
TENASKA GP 1.00% 100.00%
TENASKA LP 99.00% 0.00%
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX B
ACTIVITIES TO BE UNDERTAKEN BY THE MANAGING PARTNER
STANDARD BILLING PRACTICES
PROJECT DEVELOPMENT AND MANAGEMENT
The Managing Partner shall implement activities on behalf of the Partnership in
connection with the following, subject to ERC approval as required under the
Agreement, and by way of example but without limitation, in regard to the
development and construction of the Project:
1.0 Project Economics and Pro Formas
2.0 Site Development
2.1 Site Control
2.2 Easements
2.3 Geotechnical and Hydrology Reports
2.4 Environmental Audit
2.5 Tax Abatements
3.0 Permits
3.1 Environmental Impact Report
3.2 FERC
3.3 PUC Order(s)
3.4 Air Permit(s)
3.5 Water Supply
3.6 Waste Water Discharge
3.7 TNRCC
3.7 Zoning
3.8 Other
4.0 Project Contracts
4.1 Power Purchase Agreement
4.2 Fuel Supply Agreement(s)
4.3 Fuel Transportation Agreement(s)
4.4 Interconnection Agreements
4.5 EPC Contract
4.6 O&M Contract
4.7 Long-Term Service Agreement(s)
4.8 Financing and Related Agreement(s)
<PAGE>
5.0 Construction of Facility
5.1 Specifications and Scope
5.2 EPC Administration and Management
5.2 Equipment Procurement
5.3 Construction Insurance
5.4 Oversight and Field Management
5.5 Startup Activities/Testing
6.0 Financing Activities
6.1 Construction Loan Agreement and Closing Documentation
6.2 Long-Term Loan Agreement and Closing Documentation
6.3 Equity Agreements and Closing Documents
6.4 Legal Opinions
7.0 Risk Management
7.1 Development/Proposal of Risk Management Policies
7.2 Development/Proposal of Insurance Program
7.3 Health & Safety Policies
PARTNERSHIP ADMINISTRATION
The Managing Partner shall implement activities on behalf of the Partnership in
connection with the following, subject to ERC approval as required under the
Agreement, and by way of example but without limitation, in regard to the
day-to-day administrative and record keeping activities of the Partnership:
1.0 Project Administration
1.1 Project Accounting
1.2 Loan Administration
1.3 Reports to Lenders
1.4 Reports and Filings with Regulatory and/or Government Agencies
1.5 Reports to ERC and Partners
1.6 Contract Management
2.0 Partnership Administration
2.1 Partnership Accounting
2.2 ERC and Partner Meeting Minutes and Records
2.3 Reports to the ERC and/or the Partners
2.4 Tax Reporting and Compliance Activities
2.5 Government Reporting and Compliance Activities
<PAGE>
3.0 Public Relations
3.1 Legislative Lobbying
3.2 Press Release Drafting
3.3 Community Relations and Promotions
STANDARD BILLING PRACTICES
Time charges, out-of-pocket costs, and third party expenditures incurred by the
Managing Partner in carrying out the activities as provided in this Agreement
shall be reimbursed as provided in the Agreement, subject to the Partnership
Budget as approved by the ERC, in accordance with the Standard Billing Practices
which shall be as follows:
(i) an hourly billing rate shall be charged for the time charges for all
professional employees of a Partner and its Affiliates, equal to a rate
of $162.20 per hour (1999) which shall be escalated on January 1 of
each calendar year at a per annum rate of four percent (4%);
(ii) an amount equal to one hundred percent (100%) of all costs and
expenditures incurred for travel, marketing, and services provided by
non-internal third parties (i.e. for legal, financial, accounting,
engineering services, etc.) shall be charged; and
(iii) an amount equal to one hundred fifty percent (150%) of all charges made
by a Partner's internal independent contractor consultants that occupy
its office space to provide services to such Partner shall be charged.
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
APPENDIX C
REPRESENTATIVES AND ALTERNATE
REPRESENTATIVES TO THE ERC
Until the Partnership and each other General Partner is notified in writing of
any change, the General Partners designate the following Persons as
Representatives and Alternate Representatives to the ERC pursuant to Section
7.2(a):
TENASKA GP Representative - Howard L. Hawks
Alternate Representative - Ronald N. Quinn
Alternate Representative - Mark T. Mowat
Alternate Representative - Darrell Bevelhymer
<PAGE>
Exhibit 4.1
EXECUTION COPY
TRUST INDENTURE
among
TENASKA GEORGIA PARTNERS, L.P.,
as Issuer,
THE CHASE MANHATTAN BANK,
as Depositary Bank,
and
THE CHASE MANHATTAN BANK,
as Trustee
---------------------------------------------
Dated as of November 1, 1999
---------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND CONSTRUCTION;
INDENTURE TO CONSTITUTE CONTRACT; AGENCY
<S> <C> <C>
Section 1.1 Defined Terms..................................................................................2
Section 1.2 Principles of Construction.....................................................................6
Section 1.3 Indenture to Constitute Contract...............................................................6
Section 1.4 Conflict with Trust Indenture Act..............................................................6
ARTICLE II
THE BONDS
Section 2.1 Authorization, Amount, Terms and Issuance of Bonds.............................................6
Section 2.2 Authorization and Terms of the Initial Bonds...................................................6
Section 2.3 Additional Bonds...............................................................................8
Section 2.4 Record Dates..................................................................................10
Section 2.5 Form of Bonds.................................................................................10
Section 2.6 Maintenance of Offices and Agencies...........................................................12
Section 2.7 Transfer and Exchange of Bonds................................................................14
Section 2.8 Execution.....................................................................................20
Section 2.9 Authentication and Delivery...................................................................21
Section 2.10 Mutilated, Destroyed, Lost or Stolen Bonds....................................................21
Section 2.11 Temporary Bonds...............................................................................22
Section 2.12 Cancellation and Destruction of Surrendered Bonds.............................................22
Section 2.13 Officers' Certificates and Opinions of Counsel................................................22
Section 2.14 Form of Certificates and Opinions Delivered to Trustee........................................23
Section 2.15 Delivery of Certificates to Rating Agencies...................................................23
ARTICLE III
REDEMPTION OF BONDS
Section 3.1 Redemption at the Option of the Partnership or the Holders....................................24
Section 3.2 Mandatory Redemption..........................................................................24
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 3.3 Redemption Account............................................................................25
Section 3.4 Notice of Redemption..........................................................................25
Section 3.5 Bonds Payable on Redemption Date..............................................................26
Section 3.6 Selection of Bonds to be Redeemed.............................................................27
Section 3.7 Bonds Redeemed in Part........................................................................27
ARTICLE IV
COVENANTS
Section 4.1 Covenants.....................................................................................28
ARTICLE V
ACCOUNTS AND PROJECT REVENUES
Section 5.1 Establishment of Indenture Accounts...........................................................28
Section 5.2 Payments into Construction Interest Account; Application of Monies in
Construction Interest Account.................................................................28
Section 5.3 Payments into Bond Payment Account............................................................28
Section 5.4 Application of Funds in Interest Sub-Account and Principal Sub-Account........................29
Section 5.5 Investment of Monies in the Accounts..........................................................29
Section 5.6 Monies to be Held in Trust....................................................................29
Section 5.7 Dominion and Control..........................................................................29
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties................................................................30
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
Section 7.1 Events of Default.............................................................................30
Section 7.2 Remedies Upon an Event of Default.............................................................30
Section 7.3 Judicial Proceedings Instituted by Trustee....................................................32
Section 7.4 Control by Holders............................................................................34
Section 7.5 Waiver of Defaults and Events of Default......................................................34
Section 7.6 Limitation on Suits by Holders................................................................34
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
Section 7.7 Undertaking to Pay-Court Costs................................................................35
Section 7.8 Unconditional Right to Receive Payment........................................................35
Section 7.9 Application of Monies Collected by Trustee....................................................35
Section 7.10 Waiver of Appraisement, Valuation, Stay and Right to Marshalling..............................36
Section 7.11 Remedies Cumulative; Delay or Omission Not Waiver.............................................37
Section 7.12 The Collateral Agency Agreement...............................................................37
ARTICLE VIII
ACTS OF HOLDERS
Section 8.1 Acts of Holders...............................................................................37
Section 8.2 Purposes for Which Holders' Meeting May Be Called.............................................39
Section 8.3 Call of Meetings by Trustee...................................................................39
Section 8.4 The Partnership and Holders May Call Meeting..................................................40
Section 8.5 Persons Entitled to Vote at Meeting...........................................................40
Section 8.6 Determination of Voting Rights: Conduct and Adjournment of Meeting............................40
Section 8.7 Counting Votes and Recording Action of Meeting................................................41
Section 8.8 Bonds Owned by Certain Persons Deemed Not Outstanding.........................................41
Section 8.9 Right of Revocation of Action Taken; Acts of Holders Binding..................................42
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Amendments and Supplements to Indenture Without Consent of Holders............................42
Section 9.2 Amendments and Supplements to Indenture With Consent of Holders...............................43
Section 9.3 Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel.................43
Section 9.4 Effect of Supplemental Indentures.............................................................43
Section 9.5 Reference in Bonds to Supplemental Indentures.................................................43
ARTICLE X
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 10.1 Satisfaction and Discharge of Indenture.......................................................44
Section 10.2 Defeasance....................................................................................44
Section 10.3 Survival of Obligations.......................................................................47
Section 10.4 Application of Trust Money....................................................................47
Section 10.5 Unclaimed Monies..............................................................................47
</TABLE>
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<TABLE>
<S> <C> <C>
Section 10.6 Indemnity for US Government Obligations.......................................................47
Section 10.7 Reinstatement.................................................................................47
ARTICLE XI
THE TRUSTEE
Section 11.1 Certain Duties and Responsibilities of Trustee................................................48
Section 11.2 Certain Rights of Trustee.....................................................................49
Section 11.3 Notice of Default.............................................................................50
Section 11.4 Not Responsible for Recitals or Issuance of Bonds.............................................50
Section 11.5 May Hold Bonds................................................................................51
Section 11.6 Monies Held in Trust..........................................................................51
Section 11.7 Compensation; Reimbursement; Indemnification..................................................51
Section 11.8 Eligibility...................................................................................51
Section 11.9 Resignation and Removal; Appointment of Successor.............................................52
Section 11.10 Acceptance of Appointment by Successor Trustee................................................53
Section 11.11 Merger Conversion or Succession to Business...................................................53
Section 11.12 Authorization.................................................................................54
Section 11.13 Consequential Damages.........................................................................54
ARTICLE XII
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 12.1 Names and Addresses of Holders................................................................54
ARTICLE XIII
THE DEPOSITARY BANK
Section 13.1 Procedures Governing Indenture Accounts.......................................................54
Section 13.2 Appointment of Depositary Bank; Powers and Immunities.........................................55
Section 13.3 Reliance by Depositary Bank...................................................................56
Section 13.4 Court Orders..................................................................................57
Section 13.5 Resignation or Removal........................................................................57
Section 13.6 Expenses; Indemnification; Fees...............................................................58
</TABLE>
ARTICLE XIV
MISCELLANEOUS PROVISIONS
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<TABLE>
<S> <C> <C>
Section 14.1 Third Party Beneficiaries.....................................................................58
Section 14.2 Severability..................................................................................58
Section 14.3 Substitute Notice.............................................................................58
Section 14.4 Notice to Rating Agencies.....................................................................58
Section 14.5 Notices.......................................................................................58
Section 14.6 Successors and Assigns........................................................................59
Section 14.7 Section Headings..............................................................................59
Section 14.8 Counterparts..................................................................................59
Section 14.9 Governing Laws; Submission to Jurisdiction....................................................59
Section 14.10 Legal Holidays................................................................................60
Section 14.11 Limitation of Liability.......................................................................60
Section 14.12 Entire Agreement..............................................................................60
Section 14.13 Survival......................................................................................61
Section 14.14 All Payments in US Dollars....................................................................61
</TABLE>
<TABLE>
<S> <C>
SCHEDULE I AMORTIZATION OF PRINCIPAL
SCHEDULE II ACCOUNT INFORMATION
SCHEDULE III NOTICE ADDRESSES
EXHIBIT A FORM OF FACE OF SECURITY
EXHIBIT B FORM OF TERMS AND CONDITIONS OF BONDS
EXHIBIT C FORM OF TRANSFER
EXHIBIT D FORM OF TRANSFER RESTRICTION LEGEND
EXHIBIT E FORM OF RULE 144A TRANSFER CERTIFICATE
EXHIBIT F FORM OF RULE 144A EXCHANGE CERTIFICATE
EXHIBIT G FORM OF REGULATION S TRANSFER CERTIFICATE
EXHIBIT H FORM OF RULE 144 TRANSFER CERTIFICATE
EXHIBIT I FORM OF ACCREDITED INVESTOR TRANSFER CERTIFICATE
EXHIBIT J FORM OF REGULATION S EXCHANGE CERTIFICATE
EXHIBIT K FORM OF ACCREDITED INVESTOR EXCHANGE CERTIFICATE
</TABLE>
<PAGE>
TRUST INDENTURE
This TRUST INDENTURE, dated as of November 1, 1999 (this "Indenture"),
among TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership (the
"Partnership"), The Chase Manhattan Bank, a bank organized and duly existing
under the laws of New York, as trustee (in such capacity, together with its
successors in such capacity, the "Trustee"), and The Chase Manhattan Bank, a
bank organized and duly existing under the laws of New York, as depositary bank
(in such capacity, together with its successors in such capacity, the
"Depositary Bank").
W I T N E S S E T H:
WHEREAS, the Partnership proposes to develop, construct and operate a
nominally rated 936 MW natural gas fired simple-cycle electric generating plant
in Heard County, Georgia (the "Project");
WHEREAS, the Partnership has duly authorized the creation of bonds,
debentures, promissory notes or other evidences of indebtedness to be issued in
one or more series (the "Bonds") up to such principal amount or amounts as may
from time to time be authorized in accordance with the terms of this Indenture;
and the Partnership has duly authorized the execution and delivery of this
Indenture to secure the Bonds and to provide for the authentication and delivery
thereof by the Trustee;
WHEREAS, the Partnership wishes to secure the payment of the principal
of, premium, if any, and interest on all the Bonds authenticated and delivered
under this Indenture and issued by the Partnership and the performance of the
covenants therein and herein contained and to mortgage, pledge and assign
substantially all of its assets, including the proceeds of the sale of the Bonds
to the Trustee pursuant to this Indenture;
WHEREAS, all obligations of the Partnership under this Indenture shall
be secured as set forth in this Indenture and the other Security Documents; and
WHEREAS, all acts necessary to make this Indenture and the other
Security Documents valid instruments, in accordance with its and their terms,
have been done.
NOW, THEREFORE, in consideration of the premises and of the purchase of
the Bonds by the Holders thereof, and in order to secure the payment of the
principal of and premium, if any, and interest on all the Bonds from time to
time Outstanding and the performance of the covenants therein and herein
contained and to declare the terms and conditions on which such Bonds are
secured, the Partnership has granted certain security interests as provided in
the other Security Documents and hereby grants, bargains, mortgages, sells,
releases, conveys, assigns, transfers, pledges, sets over and confirms to the
Trustee, and grants to the Trustee a security interest in, all right, title and
interest of the Partnership in and to the Indenture Accounts (including any and
all funds contained therein or hereafter delivered to the Trustee for deposit
therein), including, in each case, all funds received and the right to receive
funds thereunder;
<PAGE>
TO HAVE AND TO HOLD all the same with all privileges and appurtenances
hereby given, granted, pledged and assigned or agreed or intended so to be, unto
the Trustee, and its successors in such trust and to it and its assigns forever;
IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and
security of the Holders from time to time of all Outstanding Bonds;
PROVIDED, HOWEVER, that if the right, title and interest of the Trustee
in and to the Indenture Accounts shall have ceased, terminated and become void
in accordance with Article X hereof, then and in that case, subject to the
provisions of Article X, this Indenture and the estate and rights hereby granted
shall cease, terminate and be void, and the Trustee shall cancel and discharge
this Indenture and execute and deliver to the Partnership such instruments as
the Partnership shall require to evidence the discharge hereof; otherwise this
Indenture shall be and remain in full force and effect; and
THE PARTIES HEREBY COVENANT AND AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS AND CONSTRUCTION;
INDENTURE TO CONSTITUTE CONTRACT; AGENCY
Section 1.1 Defined Terms. (a) For all purposes of this Agreement,
capitalized terms used but not otherwise defined herein shall have the meaning
set forth in Appendix A to the Common Agreement.
(b) The following terms shall have the following respective
meanings:
"Act" when used with respect to any Holder, shall have the meaning
given that term in Section 8.1 (Acts of Holders).
"Accredited Investors" shall have the meaning given to that term in
Section 2.5.4 (Bonds Sold to Institutional Accredited Investors).
"Additional Bonds" shall mean Bonds issued, authenticated and delivered
in accordance with the provisions of Section 2.3 hereof.
"Agent Members" shall have the meaning given to that term in Section
2.5.5(a) (Depositary).
"Applicable Procedures" shall have the meaning given to that term in
Section 2.7.2(a) (Transfers and Exchanges of Global Bonds and Beneficial
Interests Therein).
"Authenticating Agent" shall have the meaning given to that term in
Section 2.6.2 (Authenticating Agent).
"Authorized Agent" shall have the meaning given to that term in Section
2.6.3(a) (Authorized Agents Generally).
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"Bond Register" shall have the meaning given to that term in Section
2.6.1(a) (Registrar and Paying Agent).
"Certificated Bonds" shall mean a Bond issued in certificated form to a
Person other than the Depositary.
"Covenant Defeasance Option" shall have the meaning given to that term
in Section 10.2(a)(ii) (Defeasance).
"Defeasance Deposit" shall have the meaning given to that term in
Section 10.2(d) (Defeasance).
"Depositary Bank" shall have the meaning given to that term in the
preamble to this Indenture.
"DTC Letter of Representations" shall mean the Letter of
Representations, dated the date hereof, among the Partnership, DTC and the
Trustee.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated November 10, 1999, between the Partnership
and the Initial Purchasers.
"Executive Review Committee" shall mean the executive review committee
of the Partnership.
"Federal Bankruptcy Code" shall mean Title 11 of the United States
Code, as amended from time to time.
"Global Bonds" shall have the meaning given to such term in Section
2.5.3 (Bonds Sold Pursuant to Regulation S).
"Indenture Accounts" shall have the meaning given to that term in
Section 5.1 (Establishment of Indenture Accounts).
"Indenture Collateral" shall have the meaning given to that term in
Section 7.2 (Remedies Upon an Event of Default).
"Initial Bond" or "Initial Bonds" shall mean any of the $275,000,000
Tenaska Georgia Partners, L.P. 9.50% Senior Secured Bonds Due 2030, issued by
the Partnership.
"Involuntary Buy-Out Event" shall mean any Energy Contract Buy-Out
which is provided for in the Purchase Agreement and any Energy Contract Buy-Out
which is certified by the Partnership as not voluntarily sought by the
Partnership, but into which the Partnership is legally or practically required
to enter by force of law or regulation, or by an actual or threatened
condemnation, expropriation or other taking of the Project, or by an actual or
threatened bankruptcy proceeding on the part of the purchaser of the electricity
or capacity under the subject contract or by an actual or threatened termination
of full performance on the part of such purchaser; provided that in the case of
a threatened (a) condemnation, expropriation or other taking, (b) bankruptcy
proceeding or (c) termination of full performance, such threat shall be
3
<PAGE>
express and in writing, and the Partnership shall have certified that such
threat has resulted in the Bonds being placed on a negative credit watch or in a
Rating Downgrade by either Rating Agency, or, either Rating Agency shall have
indicated that any such threatened action should result in either the Bonds
being placed on a negative credit watch or a Rating Downgrade.
"Legal Defeasance Option" shall have the meaning given to that term in
Section 10.2(a)(i) (Defeasance).
"Make-Whole Premium" shall mean an amount equal to the Discounted
Present Value calculated for any Initial Bond subject to redemption pursuant to
Article 3 (Redemption of Bonds) less the unpaid principal amount of such Initial
Bond; provided that the Make-Whole Premium shall not be less than zero. For
purposes of this definition, the "Discounted Present Value" of any Initial Bond
subject to redemption pursuant to Article 3 (Redemption of Bonds) shall be equal
to the discounted present value of all principal and interest payments scheduled
to become due in respect of such Initial Bond after the date of such redemption,
calculated using a discount rate equal to the sum of (i) the yield to maturity
on the United States treasury security having an average life equal to the
remaining average life of such Initial Bond and trading in the secondary market
at the price closest to par and (ii) 50 basis points; provided, however, that if
there is no United States treasury security having an average life equal to the
remaining average life of such Initial Bond, such discount rate shall be
calculated using a yield to maturity interpolated or extrapolated on a
straight-line basis (rounding to the nearest month, if necessary) from the
yields to maturity for two (2) United States treasury Bonds having average lives
most closely corresponding to the remaining average life of such Initial Bond
and trading in the secondary market at the price closest to par.
"Majority Holders" shall mean Holders holding greater than fifty
percent (50%) in aggregate principal amount of the Outstanding Bonds.
"Non-Recourse Person" shall have the meaning given to that term in
Section 14.11 (Limitation of Liability).
"One Hundred Percent Holders" shall mean Holders holding one hundred
percent (100%) in aggregate principal amount of the Outstanding Bonds.
"One-Quarter Holders" shall mean Holders holding greater than
twenty-five percent (25%) in aggregate principal amount of the Outstanding
Bonds.
"Paying Agent" shall have the meaning given to that term in Section
2.6.1(b) (Registrar and Paying Agent).
"Proceeding" shall have the meaning given to that term in Section 7.3.4
(Trustee May File Proofs of Claim; Appointment of Trustee as Attorney-in-Fact in
Judicial Proceedings).
"Qualified Institutional Buyer" shall mean a "qualified institutional
buyer" within the meaning of Rule 144A.
"Redemption Date" shall mean any date for redemption of Bonds
established pursuant to Article 3 (Redemption of Bonds).
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<PAGE>
"Redemption Account" shall have the meaning given to that term in
Section 3.3 (Redemption Account).
"Redemption Price" shall mean an amount equal to the sum of (i) the
principal amount of Bonds being redeemed pursuant to Article 3 (Redemption of
Bonds) and (ii) all interest accrued thereon to the Redemption Date.
"Registrar" shall have the meaning given to that term in Section
2.6.1(a) (Registrar and Paying Agent).
"Regular Record Date" shall mean, (i) with respect to each Scheduled
Payment Date except a Scheduled Payment Date in connection with an optional or
mandatory redemption, the fifteenth (15th) day of the month, whether or not a
Business Day, immediately preceding such Scheduled Payment Date, and (ii) with
respect to each Scheduled Payment Date in connection with an optional or
mandatory redemption, the fifteenth (15th) day, whether or not a Business Day,
preceding such Scheduled Payment Date.
"Regulation S Restricted Period" shall mean, with respect to any Bond,
the period of forty (40) consecutive days beginning on and including the first
day after the later of (i) the day on which such Bond is first offered to
Persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the closing date of the offering of such Bond.
"Restricted Global Bond" shall have the meaning given to that term in
Section 2.5.2 (Bonds Sold Pursuant to Rule 144A).
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Special Record Date" shall have the meaning given to that term in
Section 2.4 (Record Dates).
"Supplemental Indenture" shall mean an indenture supplemental to this
Indenture entered into by the Partnership and the Trustee for the purpose of
establishing, in accordance with this Indenture, the title, form and terms of
Additional Bonds.
"Transfer Restriction Legend" shall mean a legend substantially in the
form of Exhibit D.
"Trustee" shall mean The Chase Manhattan Bank, its successors and
assigns, in its capacity as trustee under the Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
"US Government Obligations" shall mean direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States (including any agency or instrumentality thereof) for the payment
of which the full faith and credit of the United States is pledged and which are
not callable at the issuer's option.
5
<PAGE>
All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meaning assigned to them
therein.
Section 1.2 Principles of Construction. For all purposes of this
Agreement, the principles of construction set forth in Section 1.1 (Definitions
and Principles of Construction) of the Common Agreement shall apply.
Section 1.3 Indenture to Constitute Contract. In consideration of the
purchase and acceptance of any or all of the Bonds by those who shall hold the
same from time to time, the provisions of this Indenture shall be part of the
contract of the Partnership with the Holders of the Bonds, and shall be deemed
to be and shall constitute contracts between the Partnership, the Trustee and
the Holders from time to time of the Bonds. The provisions, covenants and
agreements herein set forth to be performed by or on behalf of the Partnership
shall be for the equal and ratable benefit, protection and security of the
Holders of any and all of the Bonds. All of the Bonds, regardless of the time or
times of their issuance or maturity, shall be of equal rank without preference,
priority or distinction of any of the Bonds over any other except as expressly
provided in or pursuant to this Indenture.
Section 1.4 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision shall be deemed to apply in this
Indenture as so modified or to be excluded, as the case may be.
ARTICLE II
THE BONDS
Section 2.1 Authorization, Amount, Terms and Issuance of Bonds. (a)
Bonds may be issued hereunder from time to time. No Bonds may be issued under
this Indenture except in accordance with this Article 2. The maximum principal
amount of Bonds which may be issued hereunder is not limited. The Bonds shall be
issued in denominations of $100,000 or any amount in excess thereof that is an
integral multiple of $1,000.
(b) "CUSIP" or "ISIN" numbers (if then generally in use) may
be printed on the Bonds and, if so, the Trustee shall use CUSIP or ISIN numbers
in notices of redemption as a convenience to Holders. Neither the Partnership
nor the Trustee shall have any responsibility for any defect in the CUSIP or
ISIN number that appears on any bond, check, advice of payment or redemption
notice, and any such document may contain a statement to the effect that CUSIP
or ISIN numbers have been assigned by an independent service for convenience of
reference and that neither the Partnership nor the Trustee shall be liable for
any inaccuracy in such numbers. The Partnership shall promptly notify the
Trustee of any change in CUSIP or ISIN numbers with respect to the Bonds.
Section 2.2 Authorization and Terms of the Initial Bonds. (a) The
Initial Bonds to be issued under this Indenture are hereby created and the
Partnership may issue the Initial Bonds
6
<PAGE>
upon execution of this Indenture. The Initial Bonds shall (i) be known and
designated as the "Tenaska Georgia Partners, L.P. 9.50% Senior Secured Bonds
Due 2030", (ii) be substantially in the form set forth in Exhibit A and (iii)
contain substantially the terms and conditions set forth in Exhibit B. The
Trustee shall, at the Partnership's written request, authenticate the Initial
Bonds and deliver them as specified in such request.
(b) The Initial Bonds shall be dated as of the Closing Date, shall be
issued in the aggregate principal amount set forth below and shall have a stated
maturity date and bear interest as set forth below; provided that the interest
rate of the Initial Bonds that are not transferable without restriction under
the Securities Act may be increased pursuant to the terms and provisions of the
Exchange and Registration Rights Agreement. To the extent there is an interest
rate increase pursuant to the immediately preceding sentence, such increased
rate shall cease to accrue according to the terms and provisions of the Exchange
and Registration Rights Agreement. Notice of the occurrence and cessation of any
increased interest rate and the date, if any, that a Registration Statement is
declared effective shall be set forth in an Officer's Certificate of the
Partnership delivered to the Trustee and the Depositary Bank within ten (10)
Business Days after the Partnership has obtained knowledge of such event.
Initial Bonds subsequently issued pursuant to Section 2.7 (Transfer and Exchange
of Bonds) shall be dated as of the date of authentication thereof.
<TABLE>
<CAPTION>
Interest Rate Stated Maturity Date Principal Amount
--------------------- ---------------------------- -------------------------
<S> <C> <C>
9.50% February 1, 2030 $275,000,000
</TABLE>
(c) Interest on the Initial Bonds shall accrue from the
Closing Date and shall be paid semi-annually in arrears on each February 1 and
August 1, commencing August 1, 2000 and concluding on the final Maturity Date
for the Initial Bonds. Interest on the Initial Bonds shall be computed on the
basis of a three hundred sixty (360) day year consisting of twelve (12) thirty
(30) day months.
(d) Principal of the Initial Bonds shall be paid in an amount,
and on the Scheduled Payment Dates, as set forth on Schedule I hereto.
(e) The principal of, premium (if any) and interest on the
Initial Bonds shall be payable in immediately available funds and in such coin
or currency of the United States which, at the respective dates of payment
thereof, is legal tender for the payment of public and private debts. Payment of
principal of, premium (if any) and interest on any Initial Security shall be
made (i) by check or draft drawn on a bank having an office located in the
United States and mailed on the relevant Scheduled Payment Date to the Person in
whose name such Initial Bond is registered at the close of business on the
Regular Record Date immediately preceding such Scheduled Payment Date, at such
Person's address as it appears on the Bond Register, or (ii) by wire transfer to
an account maintained by such Person in the continental United States if the
Trustee shall have received written notice from such Person requesting such wire
transfer and providing the appropriate wire transfer information at least
fifteen (15) days prior to the relevant Regular Record Date; provided, however,
that if and to the extent there shall be a default in the payment of principal,
premium (if any) or interest due with respect to any Initial Bond on any
Scheduled Payment Date, such defaulted interest and/or principal shall be paid
to the Holder in whose name such Initial Bond is registered at the close of
business on the Special Record Date
7
<PAGE>
determined by the Trustee as provided in Section 2.4 (Record Dates). The
Partnership shall pay any administrative costs imposed by banks in connection
with the making of payments by wire transfer.
Section 2.3 Additional Bonds. (a) Additional Bonds may, upon
satisfaction of the conditions set forth in this Section 2.3, be issued in the
amounts and for the purposes permitted herein. All Additional Bonds shall (i)
rank pari passu with the Initial Bonds in all respects (except, with respect to
allocation of funds received in connection with any mandatory redemption under
Section 3.2(a)(iii) (Mandatory Redemption) to the extent the funds received by
the Trustee represent PECO Buy-Out Proceeds, which proceeds shall be applied to
the redemption of the Initial Bonds prior to being applied to the redemption of
any Additional Bonds), (ii) be secured by the Collateral as set forth in the
Security Documents and (iii) be secured by the Indenture Collateral as set forth
herein. All Additional Bonds shall bear such date or dates, bear such interest
rate or rates, have such maturity dates, redemption dates and redemption
premiums, be in such form and be issued at such prices as approved in writing by
the Partnership.
(b) Upon (i) satisfaction of the applicable conditions set
forth in this Section 2.3, (ii) the execution and delivery of an appropriate
Supplemental Indenture in compliance with clause (d) of this Section 2.3, (iii)
the execution and delivery of appropriate supplements, amendments or
modifications to or of the Financing Documents (in respect of which the consent
of the Trustee and the Holders shall not be required; provided, however, if such
supplements, amendments or modifications change the rights or obligations of the
Trustee, as determined by the Trustee in its sole discretion, the prior written
consent of the Trustee shall be required in connection with any such
supplements, amendments or modifications) and (iv) receipt by the Trustee of an
Officer's Certificate from the Partnership confirming that all conditions
precedent to the issuance of Additional Bonds or incurrence of Permitted
Indebtedness, as applicable, set forth in this Agreement and the Common
Agreement have been satisfied or waived, the Partnership shall execute
Additional Bonds and deliver them to the Trustee, and the Trustee, upon the
written request of the Partnership, shall authenticate such Additional Bonds and
deliver them to the purchasers thereof as may be directed by the Partnership in
writing; provided, however, that, notwithstanding anything to the contrary
contained herein, no Additional Bonds shall be issued hereunder without the
written consent of the Partnership.
(c) Upon the issuance of any Additional Bonds, the Partnership
shall promptly provide the Trustee with a revised Schedule I to this Indenture
that will provide for the payment of principal on such Additional Bonds.
(d) Prior to the issuance of Additional Bonds hereunder, the
following shall be established in one or more Supplemental Indentures:
(i) the title of the Additional Bonds (which shall
distinguish the Additional Bonds from all other Bonds) and the form or
forms of such Bonds;
(ii) any limit upon the aggregate principal amount of
the Additional Bonds that may be authenticated and delivered under this
Indenture (except for Additional Bonds authenticated and delivered upon
registration of transfer of, or in
8
<PAGE>
exchange for, or in lieu of, other Bonds and except for Additional
Bonds that are deemed never to have been authenticated and delivered
hereunder);
(iii) the date or dates on or as of which the
Additional Bonds shall be dated;
(iv) the date or dates on which the principal of the
Additional Bonds is payable the amounts of principal payable on such
date or dates and the Regular Record Date for the determination of
Holders to whom principal is payable;
(v) the rate or rates at which the Additional Bonds
shall bear interest or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue,
the scheduled payment dates on which such interest shall be payable
(which shall correspond to the Scheduled Payment Dates set forth
herein) and the Regular Record Date for the determination of Holders to
whom interest is payable;
(vi) the place or places where (A) the principal of,
premium (if any), and interest on the Additional Bonds shall be
payable, (B) Additional Bonds may be surrendered for registration of
transfer or exchange and (C) notices and demands to or upon the
Partnership in respect of the Additional Bonds and this Indenture may
be served;
(vii) the price or prices at which, the period or
periods within which and the terms and conditions upon which the
Additional Bonds may be redeemed, in whole or in part, at the option of
the Partnership;
(viii) the obligation (if any) of the Partnership to
redeem, purchase or repay Additional Bonds pursuant to any sinking fund
or analogous provision or at the option of a Holder thereof and the
price or prices at which, the period or periods within which and the
terms and conditions upon which Additional Bonds shall he redeemed,
purchased or repaid, in whole or in part, pursuant to such obligations;
(ix) if other than denominations of $100,000 and any
integral multiple of $1,000 in excess thereof, the denominations in
which Additional Bonds shall be issuable;
(x) the restrictions or limitations (if any) on the
transfer or exchange of the Additional Bonds;
(xi) the obligation (if any) of the Partnership to
file a registration statement with respect to the Additional Bonds or
to exchange the Additional Bonds for Bonds registered pursuant to the
Securities Act;
(xii) any trustees, authenticating agents, paying
agents, warrant agents, transfer agents or registrars with respect to
the Additional Bonds; and
(xiii) any other terms of the Additional Bonds (which
terms shall not contravene the provisions of this Indenture) including
any terms related to the redemption
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of the Additional Bonds; provided that such terms shall be no more
favorable to the Holders of Additional Bonds than the corresponding
terms contained herein.
Section 2.4 Record Dates. The Person in whose name any Bond is
registered at the close of business on any Regular Record Date with respect to
any Scheduled Payment Date shall be entitled to receive the principal, premium
(if any) and/or interest payable on such Scheduled Payment Date notwithstanding
the cancellation of such Bond upon any transfer or exchange thereof subsequent
to such Regular Record Date and prior to such Scheduled Payment Date; provided,
however, that if and to the extent there is a default in the payment of the
principal, premium (if any) and/or interest due on such Scheduled Payment Date,
such defaulted principal, premium (if any) and/or interest shall be paid to the
Persons in whose names Outstanding Bonds are registered at the close of business
on a subsequent date (each such date, a "Special Record Date"), which shall not
be less than five (5) days preceding the date of payment of such defaulted
principal, premium (if any) and/or interest, established by a notice mailed by
the Trustee to the registered owners of the Bonds in accordance with Section
14.5(b) (Notices) not less than fifteen (15) days prior to the Special Record
Date or, if the Special Record Date is less than fifteen (15) days after die
applicable Scheduled Payment Date, such shorter period.
Section 2.5 Form of Bonds.
2.5.1 Form Generally. The Initial Bonds and the Trustee's
certificate of authentication thereon shall be substantially in the form set
forth in Exhibit A and shall contain substantially the terms and conditions set
forth in Exhibit B, which exhibits are hereby incorporated in and expressly made
a part of this Indenture. The Initial Bonds shall be issued in fully registered
form, without interest coupons. Additional Bonds shall be in the form and shall
contain the terms established in one or more Supplemental Indentures. Any Bond
may have such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have imprinted
or otherwise reproduced thereon such legends or endorsements, not inconsistent
with the provisions of this Indenture, as may be required to comply with
Applicable Law or with any rules or regulations pursuant thereto, or with any
rules of any securities exchange or to conform to general usage, all as may be
determined by the officers executing such Bond with the approval of the Trustee,
such determination and approval to be evidenced by the execution and
authentication thereof. The Bonds shall be numbered, lettered or otherwise
distinguished in such manner or in accordance with such plan as the officers
executing the Bonds may determine with the approval of the Trustee, as evidenced
by the execution and authentication thereof. Certificated Bonds may be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Certificated
Bonds with the approval of the Trustee, as evidenced by the execution and
authentication thereof.
2.5.2 Bonds Sold Pursuant to Rule 144A. The Bonds offered and
sold in their initial distribution in reliance on Rule 144A to Qualified
Institutional Buyers shall be issued in the form of a permanent global bond (the
"Restricted Global Bond") (which may be represented by more than one
certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate), duly executed by
the Partnership and authenticated by the Trustee as hereinafter provided. The
Restricted Global Bond shall be registered in the name of the Depositary or its
nominee and deposited with the Trustee, at its
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principal corporate trust office, as custodian for the Depositary on behalf of
the purchasers of the Bonds represented thereby.
2.5.3 Bonds Sold Pursuant to Regulation S. The Bonds offered
and sold in their initial distribution in reliance on Regulation S shall be
issued in the form of a permanent global bond (the "Regulation S Global Bond"
and, together with the Restricted Global Bond, the "Global Bonds") (which may be
represented by more than one certificate, if so required by the Depositary's
rules regarding the maximum principal amount to be represented by a single
certificate), duly executed by the Partnership and authenticated by the Trustee
as hereinafter provided. The Regulation S Global Bond shall be registered in the
name of the Depositary or its nominee and deposited with the Trustee, at its
corporate trust office, as custodian for the Depositary for credit to the
respective accounts of The Euroclear System ("Euroclear") and Cedel Bank, S.A.
("Cedel"). Prior to the termination of the Regulation S Restricted Period,
beneficial interests in the Regulation S Global Bond may be held only through
Euroclear and Cedel.
2.5.4 Bonds Sold to Institutional Accredited Investors. The
Bonds offered and sold in their initial distribution in reliance on an exemption
from registration under the Securities Act (other than Rule 144A or Regulation
S) to institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act ("Accredited Investors") shall be issued in
certificated, fully registered form without coupons and in denominations of
$100,000 and integral multiples of $1,000 in excess thereof (the "Certificated
Bonds"), duly executed by the Partnership and authenticated by the Trustee as
hereinafter provided.
2.5.5 Depository. (a) The Partnership hereby appoints DTC to
act as depositary (in such capacity, together with its successors in such
capacity, the "Depositary") with respect to the Global Bonds. The Trustee shall
act as custodian of the Global Bonds for the Depositary. So long as the
Depositary or its nominee, Cede & Co., is the registered owner of the Global
Bonds, it shall be considered the Holder of the Bonds represented thereby for
all purposes hereunder and under the Global Bonds, and neither any members of,
or participants in the Depositary ("Agent Members") nor any other Persons on
whose behalf Agent Members may act shall have any rights hereunder with respect
to the Global Bonds or under the Global Bonds. Notwithstanding the foregoing,
nothing herein shall prevent the Partnership, the Trustee or any agent of the
Partnership or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or its nominee, as the
case may be, or impair, as between the Depositary, its Agent Members and any
other Person on whose behalf an Agent Member may act, the operation of customary
practices of such Persons governing the exercise of the rights of a Holder of
any Bond.
(b) The Partnership may remove or replace DTC or any successor
as Depositary for any reason upon thirty (30) days' notice to DTC or such
successor. The Holders shall have no right to a depositary for the Bonds.
(c) Notwithstanding any other provision of this Indenture or
the Bonds, so long as DTC or its nominee is the registered owner of the Bonds:
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(i) the provisions of the DTC Letter of
Representations shall control over the provisions of this Indenture
with respect to the matters covered thereby;
(ii) presentation of Bonds to the Trustee at redemption
or at maturity shall be deemed made to the Trustee when the right to
exercise ownership rights in the Bonds through DTC or Agent Members is
transferred by DTC on its books; and
(iii) DTC may present notices, approvals, waivers or
other communications required or permitted to be made by Holders under
this Indenture on a fractionalized basis on behalf of some or all of
those Persons entitled to exercise ownership rights in the Bonds
through DTC or Agent Members.
Section 2.6 Maintenance of Offices and Agencies.
2.6.1 Registrar and Paying Agent. (a) The Partnership shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
(the "Registrar") where Bonds may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Partnership in respect of
the Bonds or under this Indenture may be served. The Partnership shall cause a
register for the registration of the Bonds and of their transfer and exchange
(the "Bond Register") to be kept at the office of the Registrar. The Partnership
hereby initially appoints the Trustee at its principal corporate trust office as
Registrar, and the Trustee hereby accepts such appointment.
(b) There shall at all times be maintained in the Borough of
Manhattan, The City of New York, and in such other places of payment, if any, as
shall be specified for the Bonds in a related Supplemental Indenture, an office
or agency (the "Paying Agent") where Bonds may be presented for payment of
principal, premium (if any) and interest. The Partnership hereby initially
appoints the Trustee at its principal corporate trust office as Paying Agent,
and the Trustee hereby accepts such appointment.
(c) Whenever the Partnership shall appoint a Paying Agent
other than the Trustee, it shall cause, prior to such appointment, each such
Paying Agent to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 2.6.1, that such Paying Agent shall:
(i) hold all sums held by such Paying Agent for the
payment of the principal of, premium (if any) or interest on the Bonds
in trust for the benefit of the Holders or the Trustee,
(ii) give the Trustee within five (5) days thereafter
written notice of any default by the Partnership (or any other obligor
upon the Bonds) in the making of any such payment of principal, premium
(if any) or interest; and
(iii) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
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(d) Notwithstanding any other provision this Indenture, any
payment required to be made to or received or held by the Trustee may, to the
extent authorized by written instructions of the Trustee, be made to or received
or held by any Paying Agent for the account of the Trustee.
(e) The Partnership shall give prompt written notice to the
Trustee of the location, and any change in the location, of the Registrar and
Paying Agent. If at any time the Partnership shall fail to maintain a Registrar
and/or Paying Agent or shall fail to furnish the Trustee with the location
thereof, presentation or surrender of Bonds for registration of transfer or
exchange or for payment may be made or served at the principal corporate trust
office of the Trustee.
2.6.2 Authenticating Agent. At any time when any Bonds remain
Outstanding, the Trustee may appoint an authenticating agent or agents (each an
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Bonds issued upon original issuance, exchange,
registration of transfer or partial redemption thereof or pursuant to Section
2.10 (Mutilated, Destroyed, Lost or Stolen Bonds), and Bonds so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder (it
being understood that wherever reference is made in this Indenture to the
authentication and delivery of Bonds by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent).
If an appointment of an Authenticating Agent shall be made pursuant to this
Section 2.6.2, the Bonds may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of authentication in the
following form:
This Bond is one of the Bonds referred to in the within-mentioned
Indenture.
Trustee
By:
Authorized Officer
2.6.3 Authorized Agents Generally. (a) Any Registrar, Paying
Agent or Authenticating Agent (each an "Authorized Agent") shall (i) be a
corporation organized and doing business under the laws of the United States, of
any state or territory thereof or of the District of Columbia, (ii) be
authorized under such laws to act as Registrar, Paying Agent or Authenticating
Agent, as the case may be, (iii) be subject to supervision or examination by
federal, state, territorial or District of Columbia authority and (iv) either
(A) have a combined capital and surplus of at least $50,000,000 or (B) have a
combined capital and surplus of at least $10,000,000 and be a wholly-owned
subsidiary of a corporation having a combined capital and surplus of at least
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to Applicable Law or to the requirements of said supervising
or examining authority, then for purposes of this Section 2.6.3, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent
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report of condition so published. If at any tune an Authorized Agent shall cease
to be eligible in accordance with the provisions of this Section 2.6.3, it shall
resign immediately in the manner and with the effect hereinafter specified in
clause (c) of this Section 2.6.3.
(b) Any corporation into which any Authorized Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any Authorized
Agent shall be a party, or any corporation succeeding to all or substantially
all of the corporate agency or corporate trust business of any Authorized Agent,
shall be the successor of such Authorized Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Section 2.6.3,
without the execution and filing of any instrument or any further act on the
part of any of the parties hereto or such Authorized Agent or successor
corporation.
(c) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee and the Partnership. The
Partnership may, and at the request of the Trustee shall, terminate the agency
of any Authorized Agent by giving written notice of such termination to such
Authorized Agent and to the Trustee. Upon the resignation or termination of any
Authorized Agent or in case at any time any Authorized Agent shall cease to be
eligible to hold its position under this Section 2.6.3 (when, in either case, no
other Authorized Agent performing the functions of such former Authorized Agent
shall have been appointed), the Partnership (or the Trustee in the case of any
Authenticating Agent) shall promptly appoint one or more qualified successor
Authorized Agents approved by the Trustee to perform the functions of the
Authorized Agent which has resigned or whose agency has been terminated or who
shall have ceased to be eligible under this Section 2.6.3. The Partnership (or
the Trustee in the case of any Authenticating Agent) shall give written notice
of any such appointment to all Holders in the manner provided in Section 14.5(b)
(Notices).
(d) The Partnership shall pay to each Authorized Agent from
time to time reasonable compensation for its services hereunder.
Section 2.7 Transfer and Exchange of Bonds. Unless and until a Bond is
transferred or exchanged pursuant to an effective registration statement under
the Securities Act, the provisions set forth in this Section 2.7 shall apply to
the transfer and exchange of such Bond.
2.7.1 Transger and Exchange Generally. (a) The Bonds are
transferable only upon the surrender thereof for registration of transfer. When
a Bond is presented to the Registrar with a duly executed instrument of
assignment and transfer substantially in the form of Exhibit C, the Registrar
shall register the transfer as requested if such transfer complies with the
provisions hereof. Prior to the due presentation for registration of transfer of
any Bond, the Person in whose name such Bond is registered shall be treated as
the absolute owner of such Bond for the purpose of receiving payment of
principal of, premium (if any) and interest on such Bond (whether or not such
payment is overdue) and for all other purposes whatsoever, notwithstanding any
notice to the contrary. Registration of transfer of any Bond by the Registrar
shall be deemed to be an acknowledgment of such transfer by the Partnership.
(b) When Bonds are presented to the Registrar with a written
request to exchange such Bonds for Bonds of any authorized denominations and of
a like aggregate
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principal amount, the Registrar shall make the exchange as requested if such
exchange complies with the provisions of this Section 2.7.1.
(c) Following any request for transfer or exchange of one or
more Bonds made in compliance with clause (a) or (b), as the case may be, of
this Section 2.7.1, the Partnership shall execute, and the Trustee shall
authenticate and deliver, one or more new Bonds of a like principal amount and
in such authorized denominations as may be requested. No service charge shall be
made for any registration of transfer or exchange of Bonds, but the Partnership
may require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges that may be imposed in connection with any transfer or
exchange of Bonds; provided, however, that no such requirement of payment shall
apply to exchanges made pursuant to Section 2.11 (Temporary Bonds) or Section
9.5 (Reference in Bonds to Supplemental Indentures).
(d) Transfers or exchanges of the Global Bonds and beneficial
interests therein shall be subject to the provisions of Section 2.7.2 (Transfers
and Exchanges of the Global Bonds and Beneficial Interests Therein) and the
rules of the Depositary. Transfers or exchanges of Certificated Bonds shall be
subject to the provisions of Section 2.7.3 (Transfers and Exchanges of
Certificated Bonds).
(e) Except as otherwise provided herein, the Global Bonds and
each Certificated Bond shall bear the Transfer Restriction Legend. By its
acceptance of any Bond bearing the Transfer Restriction Legend, whether upon
original issuance or subsequent transfer, each Holder of such a Bond
acknowledges the restrictions on transfer of such Bond set forth in this
Indenture and in the Transfer Restriction Legend and agrees that it will
transfer such Bond only as provided in this Indenture. Upon the specific written
request of a Holder to remove the Transfer Restriction Legend, the Registrar
shall authenticate and deliver a Bond with an equivalent principal amount not
bearing the Transfer Restriction Legend if there is provided to the Partnership
evidence reasonably satisfactory to the Partnership (which may, at the
Partnership's request, include an Opinion of Counsel) that neither the Transfer
Restriction Legend nor the restrictions on transfer set forth therein are
required to ensure compliance with the Securities Act. Upon a written request
for the registration of transfer or exchange of a Bond bearing the Transfer
Restriction Legend pursuant to an effective registration statement under the
Securities Act and in accordance with any applicable securities laws of any
state of the United States, the Registrar shall authenticate and deliver a Bond
with an equivalent principal amount not bearing the Transfer Restriction Legend.
If the Transfer Restriction Legend has been removed from a Bond as provided in
this clause (e), the transfer of such Bond shall not be subject to the
restrictions on transfer set forth in the Transfer Restriction Legend, and no
other Bond issued in exchange for all or any part of such Bond shall bear the
Transfer Restriction Legend unless the Partnership has reasonable cause to
believe that such other Bond is a "restricted security" within the meaning of
Rule 144 and instructs the Registrar in writing to cause the Transfer
Restriction Legend to appear thereon.
(f) All Bonds issued upon any transfer or exchange pursuant to
the terms hereof shall be the valid obligations of the Partnership, evidencing
the same debt, and shall be entitled to the same benefits under this Indenture
as the Bonds surrendered upon such transfer or exchange.
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2.7.2 Transfers and Exchanges of the Global Bonds and
Beneficial Interests Therein (a) Subject to cluases (b) through (i) of this
Section 2.7.2, transfers of the Global Bonds shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their respective
nominees. So long as the Global Bonds remain outstanding and are held by or on
behalf of the Depositary, transfers and exchanges of beneficial interests in the
Global Bonds shall be made in accordance with the provisions of this Section
2.7.2 and in accordance with the rules and procedures of the Depositary to the
extent applicable (the "Applicable Procedures").
(b) No restrictions shall apply with respect to the transfer
or registration of transfer of (i) a beneficial interest in the Restricted
Global Bond to a transferee that takes delivery in the form of a beneficial
interest in the Restricted Global Bond or (ii) a beneficial interest in the
Regulation S Global Bond to a transferee that takes delivery in the form of a
beneficial interest in the Regulation S Global Bond; provided that any transfer
described in this clause (b) shall be made in accordance with the Applicable
Procedures. The Trustee shall not be deemed to have knowledge of such transfers.
(c) Any transfer of a beneficial interest in the Restricted
Global Bond to a transferee that will take delivery in the form of a beneficial
interest in the Regulation S Global Bond prior to the termination of the
Regulation S Restricted Period shall be registered, subject to the Applicable
Procedures, only in accordance with this clause (c). At any time prior to the
termination of the Regulation S Restricted Period, upon (i) receipt by the
Registrar of (A) instructions given in accordance with the Applicable Procedures
from the Depositary or its nominee on behalf of an owner of a beneficial
interest in the Restricted Global Bond to transfer such beneficial interest to a
Person that will take delivery in the form of a beneficial interest in the
Regulation S Global Bond, (B) a written order of the Depositary or its nominee
given in accordance with the Applicable Procedures containing account and other
information with respect to such transfer and (C) a certificate of the
transferor of the beneficial interest in the Restricted Global Bond
substantially in the form of Exhibit G and (ii) satisfaction of all other
applicable conditions imposed by this Indenture and the Applicable Procedures,
the Registrar shall (1) reflect in the Bond Register a decrease in the principal
amount of the Restricted Global Bond and an increase in the principal amount of
the Regulation S Global Bond, each such adjustment to be equal to the beneficial
interest transferred pursuant to this clause (c) and (2) instruct the Depositary
to make the corresponding adjustment to its records and debit the account of the
appropriate Agent Members in accordance with the Applicable Procedures.
(d) Any transfer of a beneficial interest in the Restricted
Global Bond to a transferee that will take delivery in the form of a beneficial
interest in the Regulation S Global Bond subsequent to the termination of the
Regulation S Restricted Period shall be registered, subject to the Applicable
Procedures, only in accordance with this clause (d). At any time subsequent to
the termination of the Regulation S Restricted Period, upon (i) receipt by the
Registrar of (A) instructions given in accordance with the Applicable Procedures
from the Depositary or its nominee on behalf of an owner of a beneficial
interest in the Restricted Global Bond to transfer such beneficial interest to a
Person that will take delivery in the form of a beneficial interest in the
Regulation S Global Bond, (B) a written order of the Depositary or its nominee
given in accordance with the Applicable Procedures containing account and other
information with respect to such transfer and (C) a certificate of the
transferor of the beneficial
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interest in the Restricted Global Bond substantially in the form of Exhibit G
(if transfer is made in reliance on Regulation S) or Exhibit H (if transfer is
made in reliance on Rule 144) and (ii) satisfaction of all other conditions
imposed by the Applicable Procedures, the Registrar shall (1) reflect in the
Bond Register a decrease in the principal amount of the Restricted Global Bond
and an increase in the principal amount of the Regulation S Global Bond, each
such adjustment to equal the principal amount of the beneficial interest
transferred pursuant to this clause (d), and (2) instruct the Depositary to make
the corresponding adjustment to its records and debit and credit the accounts of
the appropriate Agent Members in accordance with the Applicable Procedures.
(e) Any transfer of a beneficial interest in the Regulation S
Global Bond to a transferee that will take delivery in the form of a beneficial
interest in the Restricted Global Bond, either prior or subsequent to the
termination of the Regulation S Restricted Period, shall be registered, subject
to the Applicable Procedures, only in accordance with this clause (e). At any
time upon (i) receipt by the Registrar of (A) instructions given in accordance
with the Applicable Procedures from the Depositary or its nominee on behalf of
an owner of a beneficial interest in the Regulation S Global Bond to transfer
such beneficial interest to a Person that will take delivery in the form of a
beneficial interest in the Restricted Global Bond, (B) a written order of the
Depositary or its nominee given in accordance with the Applicable Procedures
containing account and other information with respect to such transfer and (C) a
certificate of the transferor of the beneficial interest in the Regulation S
Global Bond substantially in the form of Exhibit E and (ii) satisfaction of all
other conditions imposed by and the Applicable Procedures, the Registrar shall
(1) reflect in the Bond Register a decrease in the principal amount of the
Regulation S Global Bond and an increase in the principal amount of the
Restricted Global Bond, each such adjustment to equal the principal amount of
the beneficial interest transferred pursuant to this clause (e), and (2)
instruct the Depositary to make the corresponding adjustment to its records and
debit and credit the accounts of the appropriate Agent Members in accordance
with the Applicable Procedures.
(f) Any transfer of a beneficial interest in the Restricted
Global Bond to a transferee that will take delivery in the form of one or more
Certificated Bonds shall be registered, subject to the Applicable Procedures,
only in accordance with this clause (f). At any time upon (i) receipt by the
Registrar of (A) instructions given in accordance with the Applicable Procedures
from the Depositary or its nominee on behalf of an owner of a beneficial
interest in the Restricted Global Bond to transfer such beneficial interest to a
Person that will take delivery in the form of one or more Certificated Bonds,
(B) a written order of the Depositary or its nominee given in accordance with
the Applicable Procedures containing account and other information with respect
to such transfer and (C) a certificate of such Person substantially in the form
of Exhibit I, and (ii) satisfaction of all other applicable conditions imposed
by this Indenture and the Applicable Procedures, (1) the Registrar shall (x)
reflect in the Bond Register a decrease in the principal amount of the
Restricted Global Bond in an amount equal to the beneficial interest transferred
pursuant to this clause (f) and (y) instruct the Depositary to make the
corresponding adjustment to its records and debit the account of the appropriate
Agent Member in accordance with the Applicable Procedures, and (2) the
Partnership shall execute and the Trustee shall authenticate and deliver to or
on behalf of such Person one or more Certificated Bonds of like tenor and amount
bearing the Transfer Restriction Legend.
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(g) Any transfer of a beneficial interest in the Regulation S
Global Bond to a transferee that will take delivery in the form of one or more
Certificated Bonds prior to the termination of the Regulation S Restricted
Period shall be registered, subject to the Applicable Procedures, only in
accordance with this clause (g). At any time prior to the termination of the
Regulation S Restricted Period, upon (i) receipt by the Registrar of (A)
instructions given in accordance with the Applicable Procedures from the
Depositary or its nominee on behalf of an owner of a beneficial interest in the
Regulation S Global Bond to transfer such beneficial interest to a Person that
will take delivery in the form of one or more Certificated Bonds, (B) a written
order of the Depositary or its nominee given in accordance with the Applicable
Procedures containing account and other information with respect to such
transfer and (C) a certificate of such Person substantially in the form of
Exhibit I and (ii) satisfaction of all other conditions imposed by the
Applicable Procedures, (1) the Registrar shall (x) reflect in the Bond Register
a decrease in the principal amount of the Regulation S Global Bond in an amount
equal to the beneficial interest transferred pursuant to this clause (g) and (y)
instruct the Depositary to make the corresponding adjustment to its records and
debit the account of the appropriate Agent Member in accordance with the
Applicable Procedures, and (2) the Partnership shall execute and the Trustee
shall authenticate and deliver to or on behalf of such Person one or more
Certificated Bonds of like tenor and amount bearing the Transfer Restriction
Legend.
(h) At such time as all interests in the Restricted Global
Bond have been transferred for Certificated Bonds or interests in the Regulation
S Global Bond or cancelled, the Restricted Global Bond shall be cancelled by the
Trustee.
(i) Notwithstanding any contrary provision contained herein,
Certificated Bonds shall be issued in exchange for the beneficial interests in a
Global Bond if at any time: (i) the Partnership advises the Trustee in writing
that the Depositary is unwilling or unable to continue as depositary for such
Global Bond or is no longer eligible to act as such and in each case a successor
depositary is not appointed by the Partnership within ninety (90) days of
receipt by the Partnership of notice of such inability; (ii) the Partnership, at
its option, elects to terminate the book-entry system through the Depositary
with respect to such Global Bond; or (iii) after the occurrence of an Event of
Default, beneficial owners holding interests representing a majority of the
aggregate principal amount of Bonds represented by such Global Bond advise the
Trustee in writing through the Depositary that the continuation of a book-entry
system through the Depositary is no longer in such beneficial owners' best
interests. Upon the occurrence of any of the events set forth in clauses (i)
through (iii) immediately above, the Trustee, upon receipt of written notice
thereof and a list of all Persons that hold a beneficial interest in such Global
Bond, shall notify, through the appropriate Agent Members at the expense of the
Partnership, all Persons that hold a beneficial interest in such Global Bond of
the issuance of Certificated Bonds. Upon surrender by the Trustee, as custodian
for the Depositary, of such Global Bond and receipt from the Depositary of
instructions for re-registration, the Partnership shall execute and the Trustee,
upon the written instructions of (A) in the case of the events set forth in
clauses (i) and (ii) immediately above, the Partnership, or (B) in the case of
the events set forth in clause (iii) immediately above, beneficial owners
holding interests representing a majority of the aggregate principal amount of
Bonds represented by such Global Bond, authenticate and deliver Certificated
Bonds bearing the Transfer Restriction Legend. Certificated Bonds issued in
exchange for beneficial interests in such Global Bond pursuant to this clause
(i) shall be
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registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from Agent Members or otherwise, shall
instruct the Trustee.
2.7.3 Transfers and Exchanges of Certificated Bonds. (a)
Any transfer of a Certificated Bond bearing the Transfer Restriction Legend
to a transferee that takes delivery in the form of one or more Certificated
Bonds shall be registered only in accordance with this clause (a). Upon (i)
surrender of any Certificated Bond bearing the Transfer Restriction Legend at
the office of the Registrar, together with (A) an executed instrument of
assignment and transfer of such Certificated Bond substantially in the form
of Exhibit C and (B) a certificate of the transferee of such Certificated
Bond substantially in the form of Exhibit I and (ii) satisfaction of all
other applicable conditions imposed by this Indenture, (1) the Trustee shall
register such transfer and (2) the Partnership shall execute and the Trustee
shall authenticate and deliver in the name of the transferee one or more
Certificated Bonds of any authorized denomination in the same aggregate
principal amount and of the same maturity as the transferred Certificated
Bond, each such new Certificated Bond bearing the Transfer Restriction
Legend; provided, however, that Certificated Bonds so delivered shall not be
required to bear the Transfer Restriction Legend if there is provided to the
Partnership evidence reasonably satisfactory to the Partnership (which may,
at the Partnership's request, include an Opinion of Counsel) that neither the
Transfer Restriction Legend nor the restrictions on transfer set forth
therein are required to ensure compliance with the Securities Act.
(b) Any transfer of a Certificated Bond not bearing the
Transfer Restriction Legend to a transferee that takes delivery in the form of
one or more Certificated Bonds shall be registered only in accordance with this
clause (b). Upon (i) surrender of any Certificated Bond not bearing the Transfer
Restriction Legend at the office of the Registrar, together with an executed
instrument of assignment and transfer of such Certificated Bond substantially in
the form of Exhibit C, and (ii) satisfaction of all other applicable conditions
imposed by this Indenture, (A) the Trustee shall register such transfer and (B)
the Partnership shall execute and the Trustee shall authenticate and deliver in
the name of the transferee one or more Certificated Bonds of any authorized
denomination in the same aggregate principal amount and of the same maturity as
the transferred Certificated Bond. Each such new Certificated Bond may at the
request of the transferee, but shall not be required to, bear the Transfer
Restriction Legend.
(c) Any transfer of a Certificated Bond bearing the Transfer
Restriction Legend to a transferee that takes delivery in the form of a
beneficial interest in a Global Bond shall be registered only in accordance with
this clause (c). Upon (i) surrender of any Certificated Bond bearing the
Transfer Restriction Legend at the office of the Registrar, together with (A) an
executed instrument of assignment and transfer of such Certificated Bond
substantially in the form of Exhibit C, (B) written instructions from the
transferor that such Certificated Bond shall be registered in the name of the
Depositary or its nominee and (C) a certificate of the transferor of such
Certificated Bond substantially in the form of Exhibit G (if the transferee will
take delivery in the form of a beneficial interest in the Regulation S Global
Bond) or Exhibit E (if the transferee will take delivery in the form of a
beneficial interest in the Restricted Global Bond), and (ii) satisfaction of all
other applicable conditions imposed by this Indenture and the Applicable
Procedures, the Registrar shall (x) register such transfer and cancel such
Certificated Bond, (y) reflect in the Bond Register an increase in the
appropriate Global Bond in an amount equal to the Certificated Bond transferred
pursuant to this clause (c) and (z) instruct the
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Depositary to make the corresponding adjustment to its records and credit the
account of the appropriate Agent Member in accordance with the Applicable
Procedures.
(d) Any transfer of a Certificated Bond not bearing the
Transfer Restriction Legend to a transferee that takes delivery in the form of a
beneficial interest in a Global Bond shall be registered only in accordance with
this clause (d). Upon (i) surrender of a Certificated Bond not bearing the
Transfer Restriction Legend at the office of the Registrar, together with (A) an
executed instrument of assignment and transfer of such Certificated Bond
substantially in the form of Exhibit C and (B) written instructions from the
transferor that such Certificated Bond shall be registered in the name of the
Depositary or its nominee, and (ii) satisfaction of all other applicable
conditions imposed by this Indenture and the Applicable Procedures, the
Registrar shall (x) register such transfer and cancel such Certificated Bond,
(y) reflect in the Bond Register an increase in the Global Bond in an amount
equal to the Certificated Bond transferred pursuant to this clause (d) and (z)
instruct the Depositary to make the corresponding adjustment to it's records and
credit the account of the appropriate Agent Member in accordance with the
Applicable Procedures.
(e) Any exchange of a Certificated Bond for one or more
Certificated Bonds in different authorized denominations shall be registered
only in accordance with this clause (e). Upon (i) surrender of a Certificated
Bond at the office of the Registrar, together with a written request to exchange
such Certificated Bond for one or more Certificated Bonds in different
authorized denominations, and (ii) satisfaction of all other applicable
conditions imposed by this Indenture, (A) the Registrar shall register such
exchange and (B) the Partnership shall execute and the Trustee shall
authenticate and deliver in the name of the registered owner one or more
Certificated Bonds in any authorized denomination with the same aggregate
principal amount and maturity date.
(f) Any exchange of a Certificated Bond for a beneficial
interest in a Global Bond shall be registered only in accordance with this
clause (f). Upon (i) surrender of a Certificated Bond at the office of the
Registrar, together with (A) a written request to exchange such Certificated
Bond for a beneficial interest in a Global Bond, (B) written instructions from
the registered owner that such Certificated Bond shall be registered in the name
of the Depositary or its nominee and (C) a certificate of the registered owner
of such Certificated Bond substantially in the form of Exhibit G (if the
Certificated Bond is being exchanged for a beneficial interest in the Regulation
S Global Bond) or Exhibit E (if the Certificated Bond is being exchanged for a
beneficial interest in the Restricted Global Bond) and (ii) satisfaction of all
other applicable conditions imposed by this Indenture and the Applicable
Procedures, the Registrar shall (x) register such exchange and cancel such
Certificated Bond, (y) reflect in the Bond Register an increase in the
Restricted Global Bond in an amount equal to the Certificated Bond exchanged
pursuant to this clause (f) and (z) instruct the Depositary to make the
corresponding adjustment to its records and credit the account of the
appropriate Agent Member in accordance with the Applicable Procedures.
Section 2.8 Execution. (a) The Bonds shall be executed by an Authorized
Officer of the Partnership and shall be attested by an Authorized Officer of the
Partnership. Typographical and other minor errors or defects in any signature
executing or purporting to execute the Bonds
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shall not affect the validity or enforceability of any Bond that has been duly
authenticated and delivered by the Trustee.
(b) Any Bond executed pursuant to clause (a) of this Section
2.8 may be issued and shall be authenticated by the Trustee, notwithstanding
that any officer signing such Bond or whose facsimile signature appears thereon
shall have ceased to hold office at the time of issuance or authentication or
shall not have held office at the date of such Bond.
Section 2.9 Authentication and Delivery. A Bond, or any exchange,
transfer or replacement thereof, shall not be valid for any purpose until an
Authorized Officer of the Trustee manually signs the certificate of
authentication on such Bond substantially in the form set forth in Exhibit A.
Subject to the requirements set forth in this Section 2.9, such authentication
shall be conclusive proof that such Bond has been duly authenticated and
delivered under this Indenture and that the Holder thereof is entitled to the
benefit of the trust hereby created. The Trustee shall, in accordance with a
written order of the Partnership signed by two Authorized Officers, authenticate
the Bonds at the initial issuance thereof and deliver them to the purchaser
thereof upon payment to the Trustee of the purchase price therefor. Any Bonds
subsequently issued under this Indenture may, in accordance with a written order
of the Partnership signed by two Authorized Officers, be authenticated by the
Trustee or any Authenticating Agent appointed by the Trustee, and such
authentication shall, for all purposes of this Indenture, be deemed to be the
authentication of and delivery by the Trustee.
Section 2.10 Mutilated, Destroyed, Lost or Stolen Bonds. (a) If any
Bond shall become mutilated, the Partnership shall execute, and the Trustee
shall authenticate and deliver, a new Bond of like tenor, maturity and
denomination in exchange and substitution for the Bond so mutilated, but only
upon surrender to the Trustee of such mutilated Bond for cancellation, and the
Partnership or the Trustee may require reasonable indemnity therefor. If any
Bond shall be reported lost, stolen or destroyed, evidence as to the ownership
and the loss, theft or destruction thereof shall be submitted to the Trustee. If
such evidence shall be satisfactory to both the Trustee and the Partnership and
indemnity satisfactory to both shall be given, the Partnership shall execute,
and thereupon the Trustee shall authenticate and deliver, a new Bond of like
tenor, maturity and denomination. The cost (including the reasonable and duly
documented fees and expenses of the Partnership and Trustee) of providing any
substitute Bond under the provisions of this Section 2.10 shall be borne by the
Holder for whose benefit such substitute Bond is provided. If any such
mutilated, lost, stolen or destroyed Bond shall have matured or be about to
mature, the Partnership may, with the consent of the Trustee, pay to the Holder
thereof the principal amount of such Bond upon the maturity thereof and
compliance with the aforesaid conditions by such Holder, without the issuance of
a substitute Bond therefor, and likewise pay to the Holder the amount of the
unpaid interest, if any, which would have been paid on a substitute Bond had one
been issued.
(b) Every substitute Bond issued pursuant to this Section 2.10
shall constitute an additional contractual obligation of the Partnership,
whether or not the Bond alleged to have been mutilated, destroyed, lost or
stolen shall be at any time enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionally with any and all other
Bonds duly issued hereunder.
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(c) All Bonds shall be held and owned upon the express
condition that the foregoing provisions are, to the extent permitted by
Applicable Law, exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all other
rights and remedies with respect thereto.
Section 2.11 Temporary Bonds. Pending preparation of definitive Bonds,
the Partnership may issue, and upon a written order of the Partnership signed by
two Authorized Officers the Trustee shall authenticate and deliver, in lieu of
definitive Bonds, one or more temporary printed or typewritten Bonds in the form
recited in this Indenture, in any authorized denomination. If temporary Bonds
are issued, the Partnership shall cause definitive Bonds to be prepared without
unreasonable delay. The Trustee shall, in accordance with a written order of the
Partnership signed by two Authorized Officers, authenticate and deliver
definitive Bonds in exchange for and upon surrender of an equal principal amount
of temporary Bonds, without charge to the Holder of such Bonds. Until so
exchanged, temporary Bonds shall in all respects be entitled to the same rights,
remedies, security and other benefits under this Indenture as definitive Bonds.
Sectin 2.12 Cancellation and Destruction of Surrendered Bonds. All
Bonds surrendered for payment, redemption or registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. The Partnership may at any time deliver to the Trustee
for cancellation any Bonds previously authenticated and delivered hereunder
which the Partnership may have acquired in any manner whatsoever. The Trustee
(and no one else) shall cancel all Bonds surrendered for payment, redemption or
registration of transfer or exchange, and all Bonds surrendered for cancellation
by the Partnership. All canceled Bonds held by the Trustee shall be disposed of
in accordance with the customary procedures of the Trustee in effect from time
to time. No Bonds shall be authenticated in lieu of or in exchange for any Bonds
canceled as provided in this Section 2.12, except as expressly permitted by this
Indenture.
Section 2.13 Officers' Certificates and Opinions of Counsel. (a) Except
as otherwise expressly provided in this Indenture, upon any application or
request by the Partnership to the Trustee that the Trustee take any action under
any provision of this Indenture, the Partnership shall furnish to the Trustee
(i) an Officer's Certificate stating that all conditions precedent (if any)
provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (if any) have been complied with;
provided, however, that, in the case of any particular application or request as
to which the furnishing of documents, certificates or opinions is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.
(b) Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each Authorized Representative
signing such certificate or opinion has read such covenant or
condition;
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(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
Authorized Representative, such examination or investigation has been
made as is necessary to enable each such individual to express an
informed opinion as to whether such covenant or condition has been
complied with;
(iv) a statement as to whether, in the opinion of each
such Authorized Representative, such condition or covenant has been
complied with; and
(v) in the case of an Officer's Certificate of the
Partnership, a statement that no Default or Event of Default has
occurred and is continuing (unless such Officer's Certificate relates
to a Default or Event of Default).
Section 2.14 Form of Certificates and Opinions Delivered to Trustee.
(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons may certify or give an opinion as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents. Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but shall not be required to, be
consolidated and form one instrument.
(b) Any Officer's Certificate or opinion of an Authorized
Representative of the Partnership may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows or has reason to believe that the certificate or
opinion of or representations by such counsel with respect to the matters upon
which such Officer's Certificate or opinion of such officer is based are
erroneous.
(c) Any certificate of counsel or Opinion of Counsel may be
based, insofar as it relates to factual matters, information with respect to
which is in the possession of the Partnership, upon a certificate or opinion of,
or representations by, an Authorized Representative of the Partnership, unless
such counsel knows or in the exercise of reasonable care should know that the
certificate or opinion of or representations by such Authorized Representative
with respect to the matters upon which such certificate or such Opinion of
Counsel is based are erroneous. Any Opinion of Counsel stated to be based on
another Opinion of Counsel shall be accompanied by such other Opinion of
Counsel.
Section 2.15 Delivery of Certificates to Rating Agencies. The Trustee
shall deliver to the Rating Agencies copies of all certificates and opinions
delivered to the Trustee by the Partnership pursuant to this Indenture; provided
that the Trustee shall have no liability with respect to any information
contained therein or omitted therefrom.
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ARTICLE III
REDEMPTION OF BONDS
Section 3.1 Redemption at the Option of the Partnership or the Holders.
(a) The Bonds shall be redeemed at the option of the Partnership, in whole or in
part, at any time on any Business Day, at a price equal to the Redemption Price
plus the Make-Whole Premium.
(b) The Bonds shall be redeemed, in whole or in part, at any
time on any Business Day, at a price equal to the Redemption Price with monies
from the Distribution Suspense Account received by the Trustee from the
Collateral Agent, provided such receipt is in accordance with Section 3.9(b)
(Partnership Distribution Fund) of the Collateral Agency Agreement.
(c) If the Partnership elects to redeem the Bonds pursuant to
clause (a) of this Section 3.1 or is permitted to do so in accordance with
clause (b) of this Section 3.1, it shall deliver to the Trustee, at least thirty
(30) days prior to the date upon which notice of redemption is required to be
given to the Holders pursuant to Section 3.4 (Notice of Redemption) (unless a
shorter notice period shall be satisfactory to the Trustee), an Officer's
Certificate specifying the Redemption Date upon which such redemption shall
occur and the principal amount of Bonds to be redeemed.
Section 3.2 Mandatory Redemption. (a) (i) The Bonds shall be redeemed,
in whole or in part, at a price equal to the Redemption Price if the Partnership
or the Collateral Agent receives Loss Proceeds in connection with an Event of
Loss or an Event of Eminent Domain that has been determined in accordance with
Section 3.7(c) of the Collateral Agency Agreement to render all or a portion of
the Project incapable of being rebuilt, repaired or restored to permit operation
of the Project or a portion thereof on a commercially feasible basis. All Loss
Proceeds received by the Trustee from the Collateral Agent pursuant to Section
3.7(d) of the Collateral Agency Agreement with respect to such Event of Loss or
Event of Eminent Domain shall be applied by the Trustee to the redemption of the
Bonds in accordance with this Article 3.
(ii) The Bonds shall be redeemed, in whole or in
part, at a price equal to the Redemption Price if Excess Loss Proceeds in
excess of $1,000,000 remain in the Loss Proceeds Account. All Excess Loss
Proceeds received by the Trustee from the Collateral Agent pursuant to Section
3.7(d) of the Collateral Agency Agreement shall be applied by the Trustee to the
redemption of the Bonds in accordance with this Article 3.
(iii) The Initial Bonds shall be redeemed, in whole
or in part, at a price equal to the Redemption Price if an Energy Contract
Buy-Out occurs which is an Involuntary Buy-Out Event. All PECO Buy-Out Proceeds
(as defined in the Collateral Agency Agreement) received by the Trustee from the
Collateral Agent from the Energy Contract Buy-Out Proceeds Sub-account pursuant
to Section 3.7(e) of the Collateral Agency Agreement shall be applied by the
Trustee to the redemption of the Initial Bonds in accordance with this Article
3.
(iv) Except as provided in clause (iii) above, the
Bonds shall be redeemed, in whole or in part, at a price equal to the
Redemption Price if an Energy Contract
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Buy-Out occurs which is an Involuntary Buy-Out Event. Except as provided in
clause (iii) above, all proceeds of an Energy Contract Buy-Out which is an
Involuntary Buy-Out Event received by the Trustee from the Collateral Agent from
the Energy Contract Buy-Out Proceeds Sub-account pursuant to Section 3.7(e) of
the Collateral Agency Agreement shall be applied by the Trustee to the
redemption of the Bonds in accordance with this Article 3.
(v) The Bonds shall be redeemed, in whole or in part,
at a price equal to the Redemption Price with amounts received by the
Trustee from the Collateral Agent from the EPC Buy-Down Proceeds Sub-account
pursuant to Section 3.7(f) of the Collateral Agency Agreement in connection with
an EPC Buy-Down that has been determined in accordance with Section 3.18 of the
Collateral Agency Agreement to render the Project incapable of being rebuilt,
repaired or restored in order to remedy the circumstances giving rise to the
obligation of the EPC Contractor to pay such EPC Buy-Down. All proceeds of an
EPC Buy-Down received by the Trustee from the Collateral Agent from the EPC
Buy-Down Proceeds Sub-account pursuant to Section 3.7(f) of the Collateral
Agency Agreement in connection with an EPC Buy-Down shall be applied by the
Trustee to the redemption of the Bonds in accordance with this Article 3.
Except as provided in clause (iii) above, the Initial Bonds and any Additional
Bonds shall be redeemed on a pro rata basis in accordance with the aggregate
amount of principal outstanding on such Bonds (except to the extent that the
Supplemental Indenture providing for the issuance of Additional Bonds provides
that such Additional Bonds are to be redeemed on less than a pro rata basis).
(b) If the Partnership is required to redeem the Bonds in
accordance with this Section 3.2, it shall deliver to the Trustee, immediately
upon the occurrence of the event resulting in such obligation to redeem, an
Officer's Certificate specifying the principal amount of Bonds to be redeemed.
Upon receipt of such Officer's Certificate, the Trustee shall determine the
Redemption Date for such redemption, which Redemption Date shall be within
ninety (90) days following its receipt of monies from the Collateral Agent in
respect of the event giving rise to the Bonds being subject to redemption.
Section 3.3 Redemption Account. Upon receipt from the Partnership of an
Officer's Certificate in respect of a redemption of Bonds pursuant to this
Article 3, the Trustee shall establish a non-interest bearing special purpose
trust fund (the "Redemption Account"), which shall at all times be in the
exclusive possession of, and under the exclusive dominion and control of, the
Trustee. At least one Business Day prior to the Redemption Date for any
redemption of Bonds pursuant to this Article 3, the Partnership shall deposit or
cause to be deposited in the Redemption Account an amount (in immediately
available funds) sufficient to redeem on such Redemption Date the Bonds called
for redemption in accordance with this Article 3.
Section 3.4 Notice of Redemption. (a) Notice of redemption shall be
given in the manner provided in Section 14.5(b) (Notices) to the Holders of any
Bonds to be redeemed pursuant to this Article 3 at least thirty (30) days but
not more than sixty (60) days prior to the Redemption Date for such redemption.
All notices of redemption shall state the following:
(i) the Redemption Date;
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(ii) the Redemption Price and any applicable Make-Whole
Premium;
(iii) if less than all Outstanding Bonds are to be
redeemed, the identification of the particular Bonds to be redeemed and
the aggregate principal amount of Bonds to be redeemed;
(iv) in the case of Bonds to be redeemed in part, the
principal amount of such Bonds to be redeemed and a statement to the
effect that after the Redemption Date, upon surrender of such Bonds,
new Bonds in the aggregate principal amount equal to the unredeemed
portion thereof will be issued;
(v) the name and address of the Paying Agent;
(vi) that Bonds called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price and any
applicable Make-Whole Premium;
(vii) that on the Redemption Date the Redemption Price
and any applicable Make-Whole Premium will become due and payable upon
each Bond to be redeemed or portion thereof, and that (unless the
Partnership shall default in the payment of the Redemption Price and
such Make-Whole Premium) interest thereon shall cease to accrue on and
after said date;
(viii) a statement to the effect that the availability in
the Redemption Account on the Redemption Date of an amount of
immediately available funds to pay the Redemption Price and any
applicable Make-Whole Premium in full is a condition precedent to the
redemption;
(ix) the record date;
(x) the paragraph of the Bonds pursuant to which the
Bonds are being redeemed; and
(xi) the CUSIP number, if any, relating to the Bonds
being redeemed.
(b) Notice of redemption of Bonds to be redeemed at the
election of the Partnership pursuant to Section 3.1 (Redemption at the Option of
the Partnership) shall be given by the Partnership or, at the Partnership's
written request by the Trustee, by the Trustee in the name and at the expense of
the Partnership. Notice of a mandatory redemption pursuant to Section 3.2
(Mandatory Redemption) shall be given by the Trustee in the name and at the
expense of the Partnership. Any notice of redemption given in accordance with
this Section 3.4 shall be conclusively presumed to have been duly given whether
or not the Holder actually receives such notice. In any case, failure to give
such notice as herein provided or any defect in the notice given to a Holder of
any Bond designated for redemption in whole or in part shall not affect the
validity of the proceedings for the redemption of any other Bonds.
Section 3.5 Bonds Payable on Redemption Date. Upon the giving of notice
pursuant to Section 3.4 (Notice of Redemption) and the satisfaction of the
conditions, if any, set forth in such notice, the Bonds or portions thereof
called for redemption in such notice shall become due
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and payable on the Redemption Date and at the Redemption Price (plus any
applicable Make-Whole Premium) specified in such notice, and from and after the
Redemption Date (unless the Partnership shall default in the payment of such
Bonds at the Redemption Price plus any applicable Make-Whole Premium) such Bonds
or portions thereof shall cease to bear interest. Upon surrender of any such
Bond for redemption in accordance with such notice, such Bond or portions
thereof shall be paid and redeemed by the Partnership at the Redemption Price
therefor plus any applicable Make-Whole Premium; provided, however, that any
payment of interest on any Bond, the Scheduled Payment Date of which is on or
prior to the Redemption Date shall be payable to the Holder of such Bond
registered as such at the close of business on the relevant Regular Record Date
in accordance with the terms of this Indenture and such Bond.
Section 3.6 Selection of Bonds to be Redeemed. If less than all the
Bonds are to be redeemed pursuant to this Article 3, the Trustee shall, subject
to Section 3.2(a)(iii), redeem the Bonds on a pro rata basis among the
Outstanding Bonds not previously called for redemption in whole. The Trustee
shall notify the Partnership promptly of the Bonds selected for redemption and,
in the case of any Bonds selected for partial redemption, the principal amount
thereof to be redeemed.
Section 3.7 Bonds Redeemed in Part. (a) For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to the
redemption of Bonds shall relate, in the case of any Bonds redeemed or to be
redeemed only in part, to the portion of the principal amount of such Bonds that
has been, or is to be, redeemed.
(b) Any Bond that is to be redeemed only in part shall be
surrendered at the place of payment therefor and, upon such surrender, the
Partnership shall execute, and the Trustee shall authenticate and make available
for delivery to the Holder of such Bond (at the expense of the Partnership), a
new Bond, of any authorized denomination requested by such Holder and of like
tenor and in aggregate principal amount equal to and in exchange for the
remaining unpaid principal amount of the surrendered Bond.
(c) Upon any partial redemption of Bonds in accordance with
this Article 3, the scheduled principal amortization of the Bonds as set forth
on Schedule I shall be reduced by an amount equal to the product of (i) the
scheduled principal amortization of the Bonds then in effect and (ii) a
fraction, the numerator of which is equal to the principal amount of the
Outstanding Bonds to be redeemed and the denominator of which is the principal
amount of the Outstanding Bonds immediately prior to such redemption. In
connection with any such partial redemption, the Partnership shall furnish the
Trustee with an Officer's Certificate setting forth the amortization schedule
for the remaining Bonds after giving effect to such redemption. Notwithstanding
any other provision of this Indenture, if any Bond called for redemption shall
not be paid upon surrender thereof for redemption, the principal of such Bond
shall, until paid or provided for, bear interest from the date fixed for
redemption at the interest rate specified in such Bond.
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ARTICLE IV
COVENANTS
Section 4.1 Covenants. The Partnership hereby covenants and agrees that
for so long as any Bonds are outstanding hereunder, the Partnership shall
observe and perform all of the covenants of the Partnership contained in Article
V of the Common Agreement (which covenants are incorporated herein by reference
as if fully set forth herein).
ARTICLE V
ACCOUNTS AND PROJECT REVENUES
Section 5.1 Establishment of Indenture Accounts. The following accounts
(collectively, together with the Redemption Account, the "Indenture Accounts")
are hereby established and created by the Partnership in the name of the
Trustee:
(a) the Bond Payment Account; and
(b) the Construction Interest Account.
The following subaccounts of the Bond Payment Account are hereby
established and created with the Trustee:
(i) the Interest Sub-Account;
(ii) the Principal Sub-Account.
Section 5.2 Payments into Construction Interest Account; Application of
Monies in Construction Interest Account. (a) The Construction Interest Account
shall be funded with monies transferred by the Collateral Agent pursuant to
Section 3.1 of the Collateral Agency Agreement to the Trustee for deposit in the
Construction Interest Account.
(b) The Trustee is hereby authorized and directed to disburse
from the Construction Interest Account the amount required to pay interest on
the Bonds when due (whether on a Scheduled Payment Date or otherwise).
(c) On the Date of Commercial Operation of the Final Units and
upon the Partnership's delivery to the Collateral Agent and the Trustee of the
Commercial Operation Certificate specified in Section 3.2 of the Collateral
Agency Agreement, the Trustee shall transfer all monies remaining in the
Construction Interest Account to the Bond Payment Account for deposit in the
Interest Sub-Account of such Bond Payment Account.
Section 5.3 Payments into Bond Payment Account. The Bond Payment
Account shall be funded (i) on the Date of Commercial Operation of the Final
Units from monies transferred by the Trustee from the Construction Interest
Account pursuant to Section 5.2 of this Indenture, (ii) on the Date of
Commercial Operation of the Final Units, from monies transferred to the Trustee
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from the Construction Fund pursuant to Section 3.2 of the Collateral Agency
Agreement, (iii) following the Date of Commercial Operation of the Final Units,
from monies transferred by the Collateral Agent from the Debt Service Fund
pursuant to Section 3.5 of the Collateral Agency Agreement, and (iv) as and when
required, after taking into account the transfers referred to in (i), (ii) and
(iii) above, from monies transferred by the Collateral Agent from the Debt
Service Reserve Account pursuant to the Collateral Agency Agreement. The Trustee
shall (x) deposit all monies received by it for the payment of interest on the
Bonds into the Interest Sub-Account for disbursement in accordance with Section
5.4 of this Indenture and (y) deposit all monies received by it for the payment
of principal on the Bonds into the Principal Sub-Account for disbursement in
accordance with Section 5.4 of this Indenture.
Section 5.4 Application of Funds in Interest Sub-Account and Principal
Sub-Account. The Trustee is hereby authorized and directed to disburse from (i)
the Interest Sub-Account of the Bond Payment Account, the amount required to pay
interest on the Bonds when due (whether on a Scheduled Payment Date or
otherwise) and (ii) the Principal Sub-Account of the Bond Payment Account, the
amount required to pay principal on the Bonds when due (whether on a Scheduled
Payment Date or otherwise).
Section 5.5 Investment of Monies in the Accounts. (a) Amounts deposited
in the Bond Payment Account (and each subaccount thereof), and the Construction
Interest Account, at the written request and direction of the Partnership, shall
be invested by the Trustee in Permitted Investments. Such investments shall
mature in such amounts and not later than such times as may be necessary to
provide monies when needed to make payments from such monies as provided in this
Indenture. Net interest or gain received from such investments shall remain in
the Construction Interest Account or the Bond Payment Account, as the case may
be, pending application as provided in this Indenture. Absent written
instructions from the Partnership, the Trustee shall invest the amounts held in
the Bond Payment Account (and each Sub-Account thereof), and the Construction
Interest Account in Permitted Investments described in clause (a) of such
definition.
(b) So long as an outstanding balance shall remain in the
Construction Interest Account, the Trustee shall provide the Partnership and the
Independent Engineer with monthly statements showing the amount of all receipts,
the net investment income or gain received and collected, all disbursements and
the amount then available in the Construction Interest Account.
Section 5.6 Monies to be Held in Trust. All monies required to be
deposited with or paid to the Trustee for the account of the Indenture Accounts
under any provision of this Indenture and all investments made therewith, and
all monies of this Indenture and all investments made therewith, and all monies
withdrawn from the Indenture Accounts and held by the Trustee or any Paying
Agent, shall be held in the name of the Trustee subject to the lien and security
interest granted under this Indenture and in the custody of the Depositary Bank
on behalf of the Trustee.
Section 5.7 Dominion and Control. The Partnership hereby transfers,
assigns and sets over all of its right, title and interest in and to all amounts
deposited or held in any Indenture Account under this Indenture and grants the
Trustee (acting on behalf of the Holders of the Bonds) a continuing security
interest in, a continuing lien upon and sole dominion and control over such
Indenture Accounts. The Partnership shall not have the right to withdraw monies
from any Indenture Account hereunder.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties. The Partnership hereby
makes for the benefit of the Trustee all of the representations and warranties
of the Partnership contained in Article IV of the Common Agreement (which
covenants are incorporated herein by reference as if fully set forth herein).
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
Section 7.1 Events of Default. The term "Event of Default," whenever
used herein, shall mean any of the following events (whatever the reason for
such event and whether it shall be voluntary or involuntary or shall come about
or be affected by operation of law, or be pursuant to or in compliance with any
Applicable Law), and any such event shall continue to be an Event of Default if
and for so long as it shall not have been remedied:
(a) the Partnership shall fail to pay any principal of,
premium (if any) or interest on any Bond when the same becomes due and payable,
whether by scheduled maturity or required prepayment or redemption or by
acceleration or otherwise and such failure continues for (i) more than five (5)
days following the due date for payment in the case of principal or (ii) more
than fifteen (15) days following the due date for payment in the case of
interest or premium; or
(b) an Event of Default under the Common Agreement shall occur
and be continuing.
Section 7.2 Remedies Upon an Event of Default. (a) Subject to the
Collateral Agency Agreement, if one or more Events of Default shall have
occurred and be continuing, then:
(i) in the case of an Event of Default described in
Section 7.1(a) (Events of Default), (A) the One-Quarter Holders may, by
written notice to the Trustee and the Partnership or (B) the Trustee
may, by written notice to the Partnership, notwithstanding the absence
of direction from the One-Quarter Holders if in the good faith exercise
of its discretion the Trustee determines that such action is necessary
to protect the interests of the Holders, declare a principal amount of
Outstanding Bonds, all interest accrued and unpaid thereon, all premium
(if any) and other amounts payable in respect thereof, to be due and
payable, whereupon the same shall become immediately due and payable
without presentment, demand, protest or further notice of any kind, all
of which are hereby waived;
(ii) subject to clause (iii) below, in the case of all other
Events of Default described in Section 7.1 (Events of Default), (A) the
Majority Holders may, by written notice to the Trustee and the
Partnership, or (B) the Trustee may, by written notice to the
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Partnership, notwithstanding the absence of direction from the Majority
Holders, unless the Majority Holders direct the Trustee not to exercise
remedies under this clause (ii), if in the good faith exercise of its
discretion the Trustee determines that such action is necessary to
protect the interests of the Holders, declare the entire principal
amount of the Outstanding Bonds, all interest accrued and unpaid
thereon, all premium (if any) and all other amounts payable in respect
thereof, to be due and payable, whereupon the same shall become
immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby waived;
(iii) in the case of an Event of Default described in
clause (e) or (f) of Section 6.1 (Events of Default) of the Common
Agreement, the entire principal amount of the Outstanding Bonds, all
interest accrued and unpaid thereon, all premium (if any) and all other
amounts payable in respect thereof shall automatically become due and
payable without presentment, demand, protest or notice of any kind, all
of which are hereby waived.
(b) Subject to the Collateral Agency Agreement, at any time
after the principal of all or a portion of the Bonds shall have become due and
payable upon a declared acceleration as provided in this Section 7.2, and before
any judgment or decree for the payment of the money so due, or any portion
thereof, shall be entered, the Majority Holders, by written notice to the
Trustee and the Partnership, may rescind and annul such declaration and its
consequences if:
(i) there shall have been paid to or deposited with
the Trustee a sum sufficient to pay:
(A) all overdue interest on such Bonds;
(B) the principal of and premium (if any) on the
Bonds that have become due other than by such declaration of
acceleration; and
(C) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and
counsel; and
(ii) all Events of Default, other than the nonpayment
of principal of the Bonds that has become due solely by such
acceleration, have been cured or waived as provided in Section 7.5
(Waiver of Past Defaults and Events of Default), provided that no such
rescission shall affect any subsequent Default or Event of Default or
impair any right consequent thereon.
If any Event of Default shall have occurred and be continuing
and an acceleration shall have occurred pursuant to Section 7.2,
subject to the provisions of Sections 7.2, 7.4, 7.12, 11.2, and 11.7,
the Trustee may sell, without recourse, for cash, or credit or for
other property, for immediate or future delivery, and for such price or
prices and on such terms as the Trustee in its discretion may
determine, the collateral securing the Bonds referred to in the
Granting Clause (for the purposes of Article VII, Article IX and
Article XI, the "Indenture Collateral") as an entirety, or in such
portions as the Holders of a
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majority in aggregate principal amount of the Bonds then Outstanding
shall request by an Act of Holders, or, in the absence of such request,
as the Trustee in its discretion shall deem expedient in the interest
of the Holders, at public or private sale.
Section 7.3 Judicial Proceedings Instituted by Trustee.
7.3.1 Collection of Indebtedness; Trustee Entitled to Bring
Suit. Subject to the Collateral Agency Agreement, if an Event of Default shall
have occurred and be continuing, then the Trustee, in its own name and as
trustee of an express trust, subject to Section 5.2 (Remedies Upon Event of
Default), shall be entitled and empowered to institute any suits, actions or
other proceedings at law and in equity or otherwise for the collection of the
sums due and unpaid in respect of the Bonds, and may prosecute such claim or
proceeding to judgment or final decree, and may enforce any such judgment or
final decree and collect the monies adjudged or decreed to be payable in any
manner provided by Applicable Law, whether before or after or during the
pendency of any proceedings for the enforcement of any of the Trustee's rights
or the rights of the Holders under this Indenture, and such power of the Trustee
shall not be affected by any sale hereunder or by the exercise of any other
right, power or remedy for the enforcement of the provisions of this Indenture.
7.3.2 Trustee May Recover Unpaid Debt After Sale of Indenture
Collateral. In the case of a sale of the Collateral and the application of the
proceeds of such sale to the payment of Indebtedness under this Indenture, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
and empowered to institute any suits, actions or other proceedings at law and in
equity or otherwise to enforce payment of, and to receive all amounts remaining
due and unpaid upon, all or any of the Bonds for the benefit of the Holders
thereof, and upon any other portion of the Bonds remaining unpaid, with interest
at the rates specified in the respective Bonds on the overdue principal thereof,
premium (if any) and interest thereon (to the extent the payment of such
interest is legally enforceable).
7.3.3 Recovery of Judgment Does Not Affect Rights. No recovery
of any judgment or final decree by the Trustee and no levy of any execution
under any such judgment upon any of the Indenture Collateral, or upon any other
property, shall in any manner or to any extent affect any rights, powers or
remedies of the Trustee, or any Liens, rights, powers or remedies of the
Holders, but all such Liens, rights, powers or remedies shall continue
unimpaired as before.
7.3.4 Trustee May File Proofs of Claim; Appointment of Trustee
as Attorney-in-Fact in Judicial Proceedings. (a) The Trustee, in its own name,
as trustee of an express trust or as attorney-in-fact for the Holders, or in any
one or more of such capacities (irrespective of whether the principal of the
Bonds shall then be due and payable is therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand for
the payment of overdue principal, premium (if any) or interest), shall be
entitled and empowered to (i) file such proofs of claim and other papers or
documents and take any other actions authorized under the Trust Indenture Act as
necessary or advisable in order to have the claims of the Trustee and of the
Holders (whether such claims be based upon the provisions of the Bonds or of
this Indenture) allowed in any judicial proceeding (including, without
limitation, any equity, receivership, insolvency, bankruptcy, liquidation,
readjustment or reorganization) relating
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to the Partnership or any other obligor on the Bonds (within the meaning of the
Trust Indenture Act), the creditors of the Partnership or any such obligor, the
Indenture Collateral or any other property of the Partnership or such obligor
(each such proceeding, for purposes of this Section 7.3.4 a "Proceeding") and
(ii) collect and receive any monies or other property payable or deliverable on
any such claims and distribute the same. Any receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
(b) The Trustee is hereby irrevocably appointed (and the
successive respective Holders of the Bonds, by taking and holding the same,
shall be conclusively deemed to have so appointed the Trustee) the true and
lawful attorney-in-fact of the respective Holders, with authority to:
(i) make and file in the names of the Holders (subject
to deduction from any such claims of the amounts of any claims filed by
any of the Holders themselves) any claim, proof of claim or amendment
thereof, debt, proof of debt or amendment thereof, petition or other
document in any Proceeding, and receive payment of any amounts
distributable on account thereof;
(ii) execute any and all papers and documents and do
and perform any and all acts and things for and on behalf of the
Holders as may be necessary or advisable in order to have the
respective claims of the Trustee and the Holders against the
Partnership or any other obligor on the Bonds (within the meaning of
the Trust Indenture Act), the Indenture Collateral or any other
property of the Partnership or such obligor allowed in any Proceeding;
and
(iii) receive payment of or on account of such claims
and debt,
(c) No provision of this Indenture shall be deemed to give the
Trustee any right to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Bonds or the rights of any Holder, to vote in respect of the claim
of any Holder in any Proceeding or to otherwise change or waive in any way the
rights of any Holder in any Proceeding: provided, however, that the Trustee may,
subject to the Collateral Agency Agreement and Applicable Law, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar official
and be a member of a creditors' or other similar committee.
(d) Any monies collected by the Trustee under this Section
7.3.4, shall be applied as provided in Section 7.9 (Application of Monies
Collected by Trustee).
7.3.5 Trustee Need Not Have Possession of Bonds. All proofs of
claim, rights of action and rights to assert claims under this Indenture or
under any of the Bonds may be enforced by the Trustee without the possession of
the Bonds or the production thereof at any trial or other proceedings instituted
by the Trustee. In any proceedings brought by the Trustee (and
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any proceedings involving the interpretation of any provision of this Indenture
or the Bonds to which the Trustee shall be a party), the Trustee shall be held
to represent all of the Holders and it shall not be necessary to make any such
Holders parties to such proceedings.
7.3.6 Suit to be Brought for the Ratable Benefit of Holders.
Subject to the other provisions of this Indenture, any suit, action or other
proceeding at law, in equity or otherwise which shall be instituted by the
Trustee under any of the provisions of this Indenture or the Bonds shall be for
the equal, ratable and common benefit of all of the Holders.
7.3.7 Restoration of Rights and Remedies. In case the Trustee
shall have instituted any proceeding to enforce any right, power or remedy under
this Indenture or the Bonds by foreclosure, entry or otherwise and such
proceedings shall have been determined adversely to the Trustee, then and in
every such case the Partnership and the Trustee shall be restored to their
former positions hereunder, and all rights, powers and remedies of the Trustee
and the Holders shall continue as if no such proceeding had been instituted.
Section 7.4 Control by Holders. The Majority Holders shall have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; provided that (i) such
direction shall not be in conflict with any rule of law or with this
Indenture, (ii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction and (iii) subject to
Section 11.1 (Certain Duties and Responsibilities of Trustee), the Trustee
need not follow any such direction if doing so would in its reasonable
discretion either involve it in personal liability or be unduly prejudicial
to Holders not joining in such direction, it being understood that, subject
to Section 11.1 (Certain Duties and Responsibilities of Trustee), the Trustee
shall have no obligation to make any determination with respect to any such
conflict, personal liability or undue prejudice.
Section 7.5 Waiver of Defaults and Events of Default. The Majority
Holders may on behalf of the Holders of all Bonds waive any Default or Event
of Default and its consequences, except that only the One Hundred Percent
Holders may waive a Default or Event of Default in respect of a covenant or
provision hereof that under Section 9.2 (Amendments and Supplements to
Indenture with Consent of Holders) cannot be modified or amended without the
consent of the Holder of each Outstanding Bond affected. Upon any waiver of
any Default pursuant to this Section 7.5, such Default shall cease to exist
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent
right in respect thereof.
Section 7.6 Limitation on Suits by Holders. (a) Subject to the other
provisions of this Article 7, a Holder shall not have the right to institute any
suit, action or proceeding at law or in equity or otherwise for the foreclosure
of the Lien on this Indenture for the appointment of a receiver or for the
enforcement of any other remedy under or upon this Indenture, unless:
(i) such Holder shall have previously given written
notice to the Trustee of a continuing Event of Default;
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(ii) Holders representing the percentage of
aggregate principal amount of Outstanding Bonds needed to initiate the
exercise of remedies shall have requested the Trustee in writing to
institute such suit, action or proceeding:
(iii) the Trustee shall have refused or neglected
to institute any such suit, action or proceeding for sixty (60) days
after receipt of such notice by the Trustee; and
(iv) no direction inconsistent with such written
request has been given to the Trustee during such sixty (60) day period
by the Majority Holders.
(b) It is understood and intended that one or more of the
Holders shall not have any right in any manner whatsoever hereunder or under the
Bonds to (i) surrender, impair, waive, affect, disturb or prejudice the Lien of
this Indenture on any property subject thereto or the rights of any other
Holders, (ii) obtain or seek to obtain priority or preference over any other
Holders or (iii) enforce any right under this Indenture, except in the manner
herein provided and for the equal ratable and common benefit of all of the
Holders.
Section 7.7 Undertaking to Pay-Court Costs. All parties to this
Indenture, and each Holder by its acceptance of a Bond, shall be deemed to have
agreed that any court may in its discretion require, in any suit for the
enforcement of any right or remedy hereunder, or in any suit against the Trustee
for any action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section 7.7 shall not apply to (a) any suit
instituted by the Trustee, (b) any suit instituted by a Holder or group of
Holders holding in the aggregate more than ten percent (10%) in principal amount
of the Outstanding Bonds or (c) any suit instituted by a Holder pursuant to
Section 7.8 (Unconditional Right to Receive Payment) for the enforcement of the
payment of the principal of, premium (if any) or interest on any Bond on or
after the respective due dates expressed in such Bond.
Section 7.8 Unconditional Right to Receive Payment. Notwithstanding any
other provision of this Indenture (other than Section 7.5(a) (Waiver of Defaults
and Events of Default)), the right of any Holder to receive payment of the
principal of, premium (if any) or interest on any Bond on or after the
respective due dates expressed in such Bond (or, in the case of redemption, on
the Redemption Date fixed for such Bond), or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 7.9 Application of Monies Collected by Trustee. Any money
collected by the Trustee pursuant to this Article 7 in respect of the Bonds,
together with any other monies which may then be held by the Trustee under any
of the provisions of this Indenture as security for the Bonds (other than monies
at the time required to be held for the payment of specific Bonds at their
stated maturities or at a time fixed for the redemption thereof) shall be
applied in the following order from time to time, on the date or dates fixed by
the Trustee and, in the case of a distribution of such monies on account of
principal, premium (if any) or interest, upon
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presentation of the Outstanding Bonds, and stamping thereon of payment, if only
partially paid, or upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee or any predecessor
Trustee under Section 11.7 (Compensation; Reimbursement;
Indemnification);
SECOND: In case the unpaid principal amount of the Outstanding Bonds
shall not have become due, to the payment of any interest in default,
in the order of the maturity of the payments thereof;
THIRD: In case the unpaid principal amount of a portion of the
Outstanding Bonds shall have become due, first to the payment of
accrued interest on all Outstanding Bonds in the order of the maturity
of the payments thereof, and next to the payment of the unpaid
principal and premium, if any, on all Bonds then due;
FOURTH: In case the unpaid principal amount of all the Outstanding
Bonds shall have become due, to the payment of the whole amount then
due and unpaid upon the Outstanding Bonds for principal, premium, if
any, and interest;
FIFTH: In case the unpaid principal amount of all of the Outstanding
Bonds shall have become due, and all of the principal, premium, if any,
interest and other amounts owed in connection with the Outstanding
Bonds shall have been indefeasibly paid in full in cash or cash
equivalents, any surplus then remaining shall be paid to the
Partnership, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct;
provided, however, that all payments in respect of the Bonds to be made pursuant
to priorities "SECOND" through "FOURTH" of this Section 7.9 shall be made
ratably to the Holders of Bonds entitled thereto, without discrimination or
preference, based upon the ratio of (x) the unpaid principal amount of the Bonds
in respect of which such payments are to be made that are held by each such
Holder and (y) the unpaid principal amount of all Outstanding Bonds.
Section 7.10 Waiver of Appraisement, Valuation, Stay and Right to
Marshalling. To the full extent it may lawfully do so, the Partnership, for
itself and for any other Person who may claim through or under it, hereby:
(a) agrees that neither it nor any such Person will set up,
plead, claim or in any manner whatsoever take advantage of, any appraisal,
valuation, stay, extension or redemption laws, now or hereafter in force in any
jurisdiction which may delay, prevent or otherwise hinder (i) the performance or
enforcement or foreclosure of this Indenture or the Bonds, (ii) the sale of the
Indenture Collateral, (iii) the sale of any of the Indenture Collateral or (iv)
the putting of the purchaser or purchasers thereof into possession of the
Collateral immediately after the sale thereof:
(b) waives the benefit or advantage of any appraisal,
valuation, stay, extension or redemption laws, now or hereafter in force in any
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(c) consents and agrees that the Indenture Collateral may be
sold by the Trustee, as an entirety or in parts; and
(d) waives and releases all rights to have the Collateral
marshaled upon any foreclosure, sale or other enforcement of this Indenture.
Section 7.11 Remedies Cumulative; Delay or Omission No Waiver. Each and
every right, power and remedy herein specifically given to the Trustee shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised, subject to the Collateral Agency
Agreement, from time to time and as often and in such order as may be deemed
expedient by the Trustee, and the exercise or commencement of the exercise of
any right, power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy, and no
delay or omission by the Trustee in the exercise of any right, power or remedy
or in the pursuance of any remedy shall impair any such right, power or remedy
or be construed to be a waiver of any default on the part of the Partnership or
be an acquiescence therein.
Section 7.12 The Collateral Agency Agreement. (a) Simultaneously with
the execution and delivery of this Indenture, the Trustee shall enter into the
Collateral Agency Agreement acting for itself and on behalf of all Holders of
the Outstanding Bonds and all future Holders of any of the Bonds.
(b) Notwithstanding any other provision of this Indenture, all
rights, powers and remedies available to the Trustee and the Holders, and all
future Holders, with respect to the Collateral shall be subject to the
Collateral Agency Agreement. In the event of any conflict or inconsistency
between the terms and provisions of this Indenture and the terms and provisions
of the Collateral Agency Agreement, the terms and provisions of the Collateral
Agency Agreement shall govern and control.
(c) In the event that the Trustee is called upon by the
Collateral Agent to participate in any intercreditor vote pursuant to the
Collateral Agency Agreement, the Trustee shall duly convene a meeting of any
Holders in accordance with Article 8 (Acts of Holders) to canvass the Holders as
to the vote to be cast. The Trustee shall vote in any intercreditor vote only in
accordance with instructions issued by the Holders at such meeting, and in
accordance with the percentages of Outstanding Bonds required to take action
under this Indenture. In the event of the failure of any Holder to issue voting
instructions to the Trustee prior to the expiration of the decision period in
respect of the subject intercreditor decision, the Trustee shall refrain from
voting on such intercreditor decision with respect to the Bonds held by such
Holder.
ARTICLE VIII
ACTS OF HOLDERS
Section 8.1 Acts of Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders
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(collectively, an "Act" of such Holders, which term also shall refer to the
instruments or record evidencing or embodying the same), including any Act for
which a specified percentage of the principal amount of the Bonds is required,
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent duly appointed in
writing or, alternatively, may be embodied in and evidenced by the record of
Holders of Bonds voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders duly called and held in
accordance with the provisions of this Article 8, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
are delivered to the Trustee and, when specifically required herein, to the
Partnership. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Partnership, if made in the
manner provided in this Section 8.1. Any record of any meeting of Holders shall
be proved in the manner set forth in Section 8.7 (Counting Votes and Recording
Action of Meeting).
(a) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the certificate of any public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer, and where such execution is by
an officer of a corporation, association or partnership, on behalf of such
corporation, association or partnership, such certificate or affidavit shall
also constitute sufficient proof of such officer's authority. The fact and date
of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(b) The principal amount and serial numbers of Bonds held by
any Person, and the date or dates of holding the same, shall be proved by the
Bond Register and the Trustee shall not be affected by notice to the contrary.
(c) Any Act by the Holder of any Bond (i) shall bind every
future Holder of the same Bond and the Holder of every Bond issued upon the
transfer thereof or the exchange therefor or in lieu thereof, whether or not
notation of such action is made upon such Bond and (ii) shall be valid
notwithstanding that such Act is taken in connection with the transfer of such
Bond to any other Person, including the Partnership or any Affiliate thereof.
(d) Until such time as written instruments shall have been
delivered with respect to the requisite percentage of principal amount of Bonds
for the Act contemplated by such instruments, any such instrument executed and
delivered by or on behalf of a Holder of Bonds may be revoked with respect to
any or all of such Bonds by written notice by such Holder (or its duly appointed
agent) or any subsequent Holder (or its duly appointed agent), proven in the
manner in which such instrument was proven unless such instrument is by its
terms expressly irrevocable. In determining whether the requisite percentage or
a majority in principal amount of Holders of Bonds has joined in any Act of
Holders, (i) the percentage of Holders of Bonds voting and (ii) the mariner in
which such Holders of Bonds have voted shall be as notified to the Trustee by
the Partnership.
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(e) Bonds authenticated and delivered after any Act of Holders
may, and shall if required by the Trustee, bear a notation in form approved by
the Trustee as to any action taken by such Act of Holders. If the Partnership
shall so determine, new Bonds so modified as to conform, in the opinion of the
Trustee and the Partnership, to such action, may be prepared and executed by the
Partnership and authenticated and delivered by the Trustee in exchange for
Outstanding Bonds, each at no cost to the Holders of such Bonds.
(f) The Partnership may by a resolution of its Executive
Review Committee, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to sign any instrument evidencing or
embodying an Act of Holders. Promptly after any record date is set pursuant to
this clause (g), the Partnership, at its own expense, shall cause notice of such
record date to be given to the Trustee in writing and to each Holder of Bonds in
the manner set forth in Section 14.5(b) (Notices). If a record date is fixed,
those Persons who were Holders at such record date (or their duly appointed
agents), and only those Persons, shall be entitled to sign any such instrument
evidencing or embodying an Act of Holders or to revoke any such instrument
previously signed, whether or not such Persons continue to he Holders after such
record date. No such instrument shall be valid or effective if signed more than
ninety (90) days after such record date, and may be revoked as provided in
clause (e) of this Section 8.1.
Section 8.2 Purposes for Which Holders' Meeting Msy Be Called. A
meeting of Holders may be called at any time and from time to time pursuant to
this Article 8 for any of the following purposes;
(a) to give any notice to the Partnership or to the Trustee,
or to give any directions to the Trustee, or to waive or to consent co the
waiving of any default hereunder and its consequences:
(b) to remove the Trustee and appoint a successor Trustee
pursuant to Article 11 (The Trustee);
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to Article 11 (Supplemental Indentures);
(d) to canvass the Holders as to the vote to be cast by the
Trustee in any intercreditor vote pursuant to the Collateral Agency Agreement;
or
(e) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of the Bonds
under any other provision of this Indenture or under Applicable Law.
Section 8.3 Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Holders of Bonds for any of the purposes set forth in Section
8.2 (Purposes for Which Holders' Meeting May be Called) to be in the Borough of
Manhattan, The City of New York, as the Trustee shall determine. Notice of every
meeting of Holders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given by
the Trustee, in the manner provided in Section 14.5(b) (Notices), not less than
twenty (20) nor more than one hundred eighty (180) days prior to the date fixed
for the meeting, to the Holders of the Bonds.
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Sectopm 8.4 The Partnership and Holders May Call Meeting. In case the
Partnership, pursuant to an appropriate Partnership action, or the Holders of at
least ten percent (10%) in aggregate principal amount of the Outstanding Bonds
shall have requested the Trustee to call a meeting of Holders of Bonds, by
written request setting forth in general terms the action proposed to be taken
at the meeting, and the Trustee shall not have mailed notice of such meeting
within twenty (20) days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Partnership
or the Holders or Bonds in the amount above specified may determine the time and
place in the Borough of Manhattan, The City of New York, for such meeting and
may call such meeting to take any action authorized in Section 8.2 (Purposes for
Which Holders' Meeting May be Called) by giving notice thereof as provided in
Section 14.5(b) (Notices).
Section 8.5 Persons Entitled to Vote at Meeting. To be entitled to vote
at any meeting of Holders, a Person shall be (a) a Holder of one or more Bonds
with respect to which such meeting is being held or (b) a Person appointed by an
instrument in writing as proxy for the Holder or Holders of such Bonds by a
Holder of one or more such Bonds. The only Persons who shall be entitled to be
present or to speak at any meeting of Holders shall be the Persons entitled to
vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Partnership and its counsel.
Section 8.6 Determination of Voting Rights: Conduct and Adjournment of
Meeting.
(a) Notwithstanding any other provision of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders, in regard to proof of the holding of Bonds and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 8.1 (Acts
of Holders) or other proof. Except as otherwise permitted or required by any
such regulations, the holding of Bonds shall be proved in the manner specified
in Section 8.1 (Acts of Holders) and the appointment of any proxy shall be
proved in the manner specified in said Section 8.1 (Acts of Holders) or by
having the signature of the Person executing the proxy witnessed or guaranteed
by any bank, banker, trust company or firm satisfactory to the Trustee.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Partnership or by Holders as provided in Section 8.4 (The Partnership and
Holders May Call Meeting), in which case the Partnership or the Holders calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Holders of a majority in principal amount of the Bonds
represented at the meeting and entitled to vote.
(c) Subject to the provisions of Section 6.8 (Bonds Owned by
Certain Persons Deemed Not Outstanding), at any meeting each Holder of a Bond or
a proxy shall be entitled to one vote for each $100,000 principal amount of
Bonds held or represented by it; provided,
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however, that no vote shall be cast or counted at any meeting in respect of any
Bond challenged as not Outstanding and ruled by the chairman of the meeting to
be not Outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Bonds held by him or Instruments in writing as aforesaid
duly designating him as the Person to vote on behalf of other Holders of Bonds.
Any meeting of Holders duly called pursuant to Section 8.3 (Call of Meetings by
Trustee) or Section 8.4 (The Partnership and Holders May Call Meeting) may be
adjourned from time to time, and the meeting may be held as so adjourned without
further notice. At any meeting, the presence of Persons holding or representing
Bonds with respect to which such meeting is being held in an aggregate principal
amount sufficient to take action upon the business for the transaction of which
such meeting was called shall be necessary to constitute a quorum; provided,
however, that if less than a quorum shall be present at any meeting, the Persons
holding or representing a majority of the Bonds represented at the meeting may
adjourn such meeting with the same effect, for all intents and purposes, as
though a quorum had been present.
Section 8.7 Counting Votes and Recording Action of Meeting. The vote
upon any resolution submitted to any meeting of Holders of Bonds shall be by
written ballots on which shall be subscribed the signatures of the Holders of
Bonds or of their representatives by proxy and the serial numbers and principal
amounts of the Bonds held or represented by them. The permanent chairman of the
meeting shall appoint two (2) inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken at such meeting and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section 8.3 (Call
of Meetings by Trustee). The record shall show the serial numbers of the Bonds
voting in favor of or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Partnership and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
Section 8.8 Bonds Owned by Certain persons Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal
amount of Bonds have concurred in any request, demand, authorization,
direction, notice, consent, waiver or other act under this Indenture, Bonds
which are owned by the Partnership, the Partners or any of their respective
Affiliates shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Bonds for which the Trustee has received written
notice of such ownership as conclusively evidenced by the Bond Register shall
be so disregarded. The Partnership shall furnish the Trustee, upon its
reasonable request, with an Officer's Certificate listing and identifying all
Bonds, if any, known by the Partnership to be owned or held by or for the
account of any of the above-described Persons, and the Trustee shall be
entitled to accept such Officer's Certificate as conclusive evidence of the
facts therein set forth and of the fact that the Bonds not listed therein are
Outstanding for the purpose of any
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such determination. Bonds so owned which have been pledged in good faith may
be regarded as Outstanding for the purposes of this Section 8.8 if the
pledgee shall establish to the satisfaction of the Trustee that the pledgee
has the right to vote such Bonds and that the pledgee is not an Affiliate of
the Partnership or any Partner.
Section 8.9 Right of Revocation of Action Taken; Acts of Holders
Binding. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.1 (Acts of Holders), of the taking of any action by the
Holders of the percentage in aggregate principal amount of the Bonds specified
in this Indenture in connection with such action, any Holder of a Bond the
serial number of which is shown by the evidence to be included in the Bonds the
Holders of which have consented to such action may, by filing written notice
with the Trustee and upon proof of holding as provided in Section 8.1 (Acts of
Holders), revoke such action so far as concerns such Bond. Except as aforesaid,
any such action taken by the Holder of any Bond shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Bond, and of any
Bond issued in exchange therefor or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Bond or any Bond issued in
exchange therefor or in place thereof. Any action taken by the Holders of the
percentage in aggregate principal amount of the Bonds specified in this
Indenture in connection with such action shall be conclusively binding upon the
Partnership, the Trustee and the Holders of all the Bonds affected by such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1 Amendments and Supplements to Indenture Without Consent of
Holders. This Indenture may be amended or supplemented by the Partnership and
the Trustee at any time and from time to time without the consent of the Holders
by a Supplemental Indenture authorized by a resolution of the Executive Review
Committee of the Partnership filed with, and in form satisfactory to, the
Trustee, solely for one or more of the following purposes:
(a) to add additional covenants of the Partnership, to
surrender any right or power herein conferred upon the Partnership or to confer
upon the Holders any additional rights, remedies, benefits, powers or
authorities that may lawfully be conferred;
(b) in increase the assets securing the Partnership's
obligations under this Indenture;
(c) to provide for the issuance of Additional Bonds on the
conditions set forth in Section 2.3 (Additional Bonds);
(d) for any purpose not inconsistent with the terms of this
Indenture to cure any ambiguity or to correct or supplement any provision
contained herein or in any Supplemental Indenture which may be defective or
inconsistent with any other provision contained herein or in any Supplemental
Indenture;
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(e) in connection with, and to reflect, any amendments to the
provisions hereof required by the Rating Agencies in circumstances where
confirmation of the Ratings are required under the Indenture in connection with
the issuance of Additional Bonds or the taking of other actions by the
Partnership; provided, however, that such amendments are not, in the judgment of
the Trustee, to the prejudice of the Trustee or the Holders; or
(f) to provide for the issuance of exchange Bonds as
contemplated by any agreement entered into in connection with the issuance of
Additional Bonds.
Section 9.2 Amendments and Supplements to Indenture With Consent of
Holders. This Indenture may be amended or supplemented by the Partnership and
the Trustee at any time and from time to time, with the consent of the Majority
Holders, for the purpose of adding any mutually agreeable provisions to or
changing in any manner or eliminating any of the provisions of, this Indenture,
except with respect to (a) the principal, premium (if any) or interest payable
upon any Bonds, (b) the dates on which interest on or principal of any Bonds is
paid, (c) the dates of maturity of any Bonds, (d) this Article 9 (Supplemental
Indentures) and (e) the grant of security interests for the benefit of the
Bonds. The matters of this Indenture described in clauses (a) through (e) of the
preceding sentence may be amended or supplemented by the Partnership and the
Trustee at any time and from time to time only with the consent of the One
Hundred Percent Holders. Notice of any such amendment shall be given by the
Partnership to any Rating Agency then maintaining a Rating for the Bonds.
Section 9.3 Trustee Authorized to Join in Amendments and Supplements;
Reliance on Counsel. The Trustee is authorized to join with the Partnership in
the execution and delivery of any Supplemental Indenture or amendment permitted
by this Article 7 and in so doing shall be fully protected in relying upon an
Opinion of Counsel stating that such Supplemental Indenture or amendment is so
permitted and has been duly authorized by the Partnership and that all things
necessary to make it a valid and binding agreement have been done.
Section 9.4 Effect of Supplemental Indentures. Upon the execution of
any Supplemental Indenture under this Article 9, this Indenture shall be
modified in accordance therewith, and such Supplemental Indenture shall form a
part of this Indenture for all purposes, and every Holder of Bonds therefor or
thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.5 Reference in Bonds to Supplemental Indentures. Bonds
authenticated and delivered after the execution of any Supplemental Indenture
pursuant to this Article 9 may, and shall if required by the Partnership or the
Trustee, bear a notation in form approved by the Partnership and the Trustee as
to any matter provided for in such Supplemental Indenture and, in such case,
suitable notation may he made upon Outstanding Bonds after proper presentation
and demand. If the Partnership or the Trustee shall so determine, new Bonds so
modified as to conform, in the opinion of the Partnership and the Trustee, to
any such Supplemental Indenture may be prepared and executed by the Partnership
and authenticated and delivered by the Trustee in exchange for Outstanding
Bonds, each at the expense of the Partnership.
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ARTICLE X
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 10.1 Satisfacction and Discharge of Indenture. (a) Except as
set forth in Section 10.3 (Survival of Obligations), this Indenture shall cease
to be of further effect and the Trustee, on written demand and at the expense of
the Partnership, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(i) either:
(A) all Bonds theretofore authenticated and delivered
(other than (1) Bonds which have been destroyed, lost or
stolen and which have been replaced or paid as set forth in
Section 2.10 (Mutilated, Destroyed, Lost or Stolen Bonds) and
(2) Bonds deemed to have been paid in accordance with clause
(B) immediately below) have been delivered to the Trustee for
cancellation; or
(B) (1) all Bonds not theretofore delivered to the
Trustee for cancellation (x) have become due and payable, (y)
shall become due and payable within one year or (z) are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of
the Partnership and (2) the Partnership shall have deposited
or caused to be deposited with the Trustee as trust funds in
trust an amount sufficient to pay when due at maturity or upon
redemption all principal of, premium (if any), interest on and
other amounts in respect of such Bonds not theretofore
delivered to the Trustee for cancellation.
(ii) the Partnership shall have paid or caused to he
paid all other sums due and payable by it hereunder; and
(iii) the Partnership shall have delivered to the
Trustee an Officer's Certificate and an Opinion of Counsel, each
stating that (A) all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied
with and (B) the satisfaction and discharge of this Indenture pursuant
to this Section 10.1 shall not be deemed to be, and shall not result
in, a taxable event with respect to the Holders for purposes of United
States federal income taxation.
Section 10.2 Defeasance. (a) Subject to clause (d) of this Section
10.2, Section 10.3 (Survival of Obligations) and Section 10.7 (Reinstatement),
the Partnership may at any time terminate:
(i) all of its obligations under the Bonds and this
Indenture (the "Legal Defeasance Option"); or
(ii) (A) its obligations under any provision of
Article 4 (Covenants) hereunder (except with respect to Section
5.1(d) (Maintenance of Existence; Compliance with Applicable Laws)
of the Common Agreement) and (B) the operation of clauses (c)
(except with respect to Section 5.1(d) (Maintenance of Existence,
Compliance with
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Applicable Laws) of the Common Agreement), (d), (h) and (j) of
Section 6.1 (Events of Default) of the Common Agreement (the
"Covenant Defeasance Option");
provided that the Partnership may exercise the Legal Defeasance Option
notwithstanding the prior exercise of the Covenant Defeasance Option.
(b) If the Partnership elects to exercise the Legal Defeasance
Option and all applicable conditions set forth in clause (d) of this Section
10.2 are satisfied, payment of the Bonds may not be accelerated because of any
Event of Default. If the Partnership elects to exercise the Covenant Defeasance
Option and all applicable conditions set forth in clause (d) of this Section
10.2 are satisfied, payment of the Bonds may not be accelerated because of an
Event of Default specified in clause (c) (except with respect to Section 5.1(d)
(Maintenance of Existence; Compliance with Applicable Laws) of the Common
Agreement), (d), (h) and (j) of Section 6.1 (Events of Default) of the Common
Agreement.
(c) If the Partnership elects to exercise the Legal Defeasance
Option or the Covenant Defeasance Option and all applicable conditions set forth
in clause (d) of this Section 10.2 are satisfied, the Trustee shall, upon
request of the Partnership, acknowledge in writing the discharge of such
obligations that the Partnership terminates pursuant to this Section 10.2.
(d) The Partnership may exercise its Legal Defeasance Option
or its Covenant Defeasance Option only if the following conditions are
satisfied:
(i) the Partnership irrevocably deposits (such
deposit, the "Defeasance Deposit") in trust with the Trustee monies or
US Government Obligations for the payment of principal of, premium (if
any) and interest on the Bonds to the Final Maturity Date thereof or
the Redemption Date therefor, as the case may be;
(ii) the Partnership delivers to the Trustee a
certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and
interest when due and without reinvestment of the deposited US
Government Obligations plus any deposited monies without investment
will provide cash at such times and in such amounts as will be
sufficient to pay principal, premium (if any) and interest when due on
all the Bonds to the Final Maturity Date thereof or the Redemption Date
therefor, as the case may be;
(iii) ninety one (91) days pass after the Defeasance
Deposit is made and no Default or Event of Default described in clause
(e) or (f) of Section 6.1 (Events of Default) of the Common Agreement
shall occur during the ninety one (91) day period and be continuing at
the end of such period; provided, however, that the foregoing condition
need not be satisfied if at the time of the Defeasance Deposit the
Partnership delivers to the Trustee an Opinion of Counsel to the effect
that, or a court should hold that, such deposit would not constitute a
preference that could be avoided under Section 547 of the Federal
Bankruptcy Code, notwithstanding that ninety one (91) days have not
passed since the date of the Defeasance Deposit;
(iv) no Default or Event of Default (other than a
Default or Event of Default resulting from the incurrence of
Indebtedness all or a portion of the proceeds of
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which will be used to defease the Bonds) shall have occurred and be
continuing on the date of and after giving effect to the Defeasance
Deposit,
(v) the Defeasance Deposit does not constitute a
default under any other agreement binding on the Partnership;
(vi) the Partnership delivers to the Trustee an Opinion
of Counsel to the effect that, or a court should hold that, the trust
resulting from the Defeasance Deposit does not constitute, or is
qualified as, a regulated investment company under the Investment
Company Act of 1940, as amended from time to time;
(vii) in the case of the Legal Defeasance Option, the
Partnership shall have delivered to the Trustee an Opinion of Counsel
to the effect that, or a court should hold that, the Holders will not
recognize income, gain or loss for United States federal income tax
purposes as a result of such defeasance and will be subject to United
States federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had
not occurred, which Opinion of Counsel shall be based upon an Internal
Revenue Service ruling or a change in the applicable United States
federal income tax law or United States Treasury regulations since the
Closing Date;
(viii) in the case of the Covenant Defeasance Option, the
Partnership shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders will not recognize income, gain or loss
for United States federal income tax purposes as a result of such
defeasance and will be subject to United States federal income tax
purposes on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred; and
(ix) the Partnership delivers to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Bonds as
contemplated in this Section 10.2 have been complied with;
provided, however, that, notwithstanding the foregoing provisions of this
Section 10.2, the conditions set forth in clauses (ii), (iii), (iv), (v), (vi),
(vii) and (viii) need not be satisfied so long as, at the time the Partnership
makes the Defeasance Deposit, (1) no Default under clause (a) of Section 5.1
(Events of Default) hereof shall have occurred and be continuing on the date of
and after giving effect to the Defeasance Deposit, (2) no Default under clause
(e) or (f) of Section 6.1 (Events of Default) of the Common Agreement shall have
occurred and be continuing on the date of and after giving effect to the
Defeasance Deposit, and (3) either (x) a notice of redemption has been mailed
pursuant to Section 3.4 (Notice of Redemption) providing for redemption of all
the Bonds not more than forty (40) days after such mailing and the provisions of
Article 3 (Redemption of Bonds) with respect to such redemption shall have been
complied with or (y) the Final Maturity Date of the Bonds will occur within
forty (40) days. If the conditions set forth in the foregoing proviso are
satisfied, the Partnership shall be deemed to have exercised the Covenant
Defeasance Option.
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Section 10.3 Survival of Obligations. Notwithstanding (a) the
satisfaction and discharge of this Indenture pursuant to Section 10.1
(Satisfaction and Discharge of Indenture) or (b) any defeasance pursuant to
Section 10.2 (Defeasance), the obligations of the Partnership and the Trustee
under this Article 10 and under Section 2.5 (Form of Bonds), Section 2.6
(Maintenance of Offices and Agencies), Section 2.7 (Transfer and Exchange of
Bonds), Section 2.10 (Mutilated, Destroyed, Lost or Stolen Bonds), Article 11
(The Trustee) and Section 12.1 (Names and Addresses of Holders) shall survive.
Section 10.4 Application of Trust Money. (a) The Trustee shall hold in
trust all monies and US Government Obligations deposited with it pursuant to
this Article 10 and shall apply such deposited monies and the monies derived
from such US Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of the principal of, premium (if any) and
interest the Bonds.
(b) The Trustee and the Paying Agent shall deliver or pay to
the Partnership from time to time upon request by the Partnership any monies or
U.S. Government Obligations deposited with it pursuant to this Article 10 which,
in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof required to effect defeasance pursuant to this
Article 8 with respect to the Outstanding Bonds.
Section 10.5 Unclaimed Monies. Monies deposited with the Trustee
pursuant to this Article 10 which remain unclaimed two years following the date
payment thereof becomes due shall, at the request of the Partnership, if at such
time no Event of Default shall have occurred and be continuing, be paid to the
Partnership, and the Holders of the Bonds for which such deposit was made shall
thereafter be limited to a claim against the Partnership; provided, however,
that the Trustee, prior to making payment to the Partnership pursuant to this
Section 10.5, may, at the expense of the Partnership, cause a notice to be
published once in a newspaper or financial journal of general circulation in the
Borough of Manhattan, The City of New York, stating that the monies remaining
unclaimed will be returned to the Partnership after a specified date.
Section 10.6 Indemnity for US Government Obligations. The Partnership
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed or assessed against US Government Obligations deposited pursuant to this
Article 10 or the principal and interest received with respect to such US
Government Obligations, other than any such tax, fee or other charge that by law
is for the account of the Holders of the Outstanding Bonds.
Section 10.7 Reinstatement. If the Trustee or the Paying Agent is
unable to apply any monies or US Government Obligations in accordance with this
Article 10 by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Partnership's obligations under this Indenture and the Bonds shall be revived
and reinstated as though no deposit of monies or US Government Obligations shall
have occurred pursuant to this Article 10 until such time as the Trustee or the
Paying Agent is permitted to apply such monies or US Government Obligations in
accordance with this Article 10; provided, however, that, if the Partnership has
made any payment of principal of, premium or interest on any Bonds following the
reinstatement of its obligations, the Partnership shall be
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subrogated to the rights of the Holders of such Bonds to receive such payment
from the monies or US Government Obligations held by the Trustee or the Paying
Agent.
ARTICLE XI
THE TRUSTEE
Section 11.1 (a) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, provided, however, that, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether they conform to the
requirements of this Indenture.
(b) Subject to the Collateral Agency Agreement, in case an
Event of Default has occurred and is continuing, the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own grossly negligent action, its own
grossly negligent omissions, or its own willful misconduct, except that:
(i) this clause (c) shall not be construed to limit
the effect of clause (a) of this Section 11.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by one or more Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was grossly
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the Collateral Agency Agreement or the direction of the
Majority Holders relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture;
and
(iv) no provision or this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
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reasonable grounds for believing that repayment of such funds or
reasonable indemnity against such risk or liability is not assured to
it.
(d) Whether or not herein or therein expressly so provided,
every provision of this Indenture and the other Financing Documents to which it
is a party relating to the conduct or affecting the liability of or affording
protection to the Trustee (and its officers, directors, employees, agents,
successors and assigns) shall be subject to the provisions of this Section 11.1
and, notwithstanding anything to the contrary, the Collateral Agency Agreement.
(e) The Trustee shall not be responsible for insuring the
Project or for collecting any insurance monies and shall have no responsibility
for the financial, physical or other condition of the Project.
Section 11.2 Certain Rights of Trustee. (a) The Trustee may rely and
shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, notice, other evidence of Indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Partnership shall be
sufficiently evidenced by a written instrument signed by an Authorized Officer
of the Partnership and any resolution of the Board of Directors of the
Partnership shall be sufficiently evidenced by a copy thereof certified by the
secretary of such Board of Directors;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting to take any action hereunder, the Trustee (unless
other evidence is herein specifically prescribed to be relied upon) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel selected by it and
the advice or opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity (reasonably acceptable
to such Trustee) against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, notice, other evidence of Indebtedness or other paper or document;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed in good faith by it
hereunder;
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(h) the Trustee shall be under no obligation to take any
action pursuant to any request or direction, if it shall receive conflicting
requests or directions from any party so authorized; provided that the Trustee
inform such parties as to the existence of conflicting requests or directions;
(i) the Trustee shall be under no obligation to take any
action which is discretionary with the Trustee under this Indenture or any other
Financing Document; and
(j) the Trustee shall have no responsibility with respect to
the recording, re-recording, filing or re-filing under the laws of any
jurisdiction of this Indenture or any other Security Document, or any document
or statement that may be recorded, re-recorded, filed or re-filed under any such
laws to perfect or protect the security interests created by or pursuant to this
Indenture, any other Security Document or any other document or to the payment
of fees, charges, or taxes in connection therewith or to give any notice
thereof.
Section 11.3 Notice of Default. (a) If payment on any Bond is not made
when it becomes due and payable, the Trustee shall promptly notify the
Partnership that it has failed to make such payment. Within thirty (30) days
after the occurrence of an Event of Default of which the Trustee has actual
knowledge, the Trustee shall give to all Holders, in the manner provided for in
Section 14.5(b) (Notices), notice of such Event of Default, unless such Event of
Default shall have been cured or waived; provided, however, that, except in the
case of an Event of Default in respect of payment of the principal of, premium,
if any, or interest on any Bond, the Trustee shall be protected in withholding
such notice if the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
(b) Except as otherwise expressly provided herein, the Trustee
shall not be bound to ascertain or inquire as to the performance or observance
of any of the terms, conditions, covenants or agreements herein, or of any other
documents executed in connection with the Bonds, or as to the existence of an
event of default thereunder, and shall not be deemed to have notice of an Event
of Default unless and until a Responsible Officer of the Trustee shall have (i)
been notified in writing in accordance with the terms hereof or (ii) shall have
received notice thereof from the Collateral Agent pursuant to Section 6.2
(Rights of the Collateral Agent) of the Collateral Agency Agreement. The
occurrence of either clause (i) or clause (ii) shall constitute for purposes of
this Indenture "actual knowledge" on behalf of the Trustee.
(c) The Trustee shall give to all Holders any notices received
by it pursuant to the Collateral Agency Agreement (other than those specifically
for the Trustee only and those which the Trustee determines should not, in the
interests of the Holders, be given to the Holders).
Section 11.4 Not Responsible for Recitals or Issuance of Bonds. The
recitals, representations, warranties, and other statements contained herein, in
the other Financing Documents, and in the Bonds, except the Trustee's
certificate of authentication, shall be taken as the statements of the
Partnership, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or any of the other Financing Documents or of the Bonds. The Trustee
shall not be accountable for the use or application by the Partnership of the
Bonds or the proceeds of the issuance and sale thereof.
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Section 11.5 May Hold Bonds. The Trustee or any other agent of the
Partnership, in its individual or any other capacity, may become the owner or
pledgee of Bonds and may deal with the Partnership with the same rights it would
have if it were not Trustee or such other agent.
Section 11.6 Monies Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by Applicable Law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Partnership.
Section 11.7 Compensation; Reimbursement; Indemnification. (a) The
Partnership hereby agrees:ent; Indemnification.
(i) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder or in connection
with the Financing Documents (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of
an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture or in connection with
the Financing Documents (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its gross
negligence or bad faith; and
(iii) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
(b) All indemnifications and releases from liability granted
hereunder to the Trustee shall extend to its officers, directors, employees,
agents, successors and assigns.
(c) The rights of the Trustee and the obligations of the
Partnership under this SECTION 11.7 shall survive the resignation or removal of
the Trustee, the payment of the Bonds and the satisfaction, discharge or
termination of this Indenture.
Section 11.8 Eligibility. There shall at all times be a Trustee
hereunder which shall (a) be a corporation organized and doing business under
the laws of the United States, of any state or territory thereof or of the
District of Columbia, (b) be authorized under such laws to exercise corporate
trust powers, (c) be subject to supervision or examination by federal, state,
territorial or District of Columbia authority, (d) have a combined capital and
surplus of at least $50,000,000 and (e) have a corporate trust office in the
Borough of Manhattan, The City of New York, to the extent there is such an
institution eligible and willing to serve. If such corporation publishes reports
of condition at least annually, pursuant to Applicable Law or to the
requirements of said supervising or examining authority, then for purposes of
this Section 11.8, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the
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Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.8, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article 11. None of the Partnership, any other
obligor upon the Bonds or any Affiliate of any of the foregoing shall serve as
Trustee hereunder.
Section 11.9 Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article 11 shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 11.10 (Acceptance of Appointment by Successor Trustee).
(b) The Trustee may resign at any time by giving written
notice thereof to the Partnership. If the instrument of acceptance by a
successor Trustee required by Section 11.10 (Acceptance of Appointment by
Successor Trustee) shall not have been delivered to the Trustee within thirty
(30) days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Majority Holders delivered to the Trustee and the Partnership.
(d) If at any time any of the following shall occur:
(i) the Trustee shall cease to be eligible under
Section 11.8 (Eligibility) and shall fail to resign after written
request therefor by the Partnership or by any Holder of a Bond; or
(ii) the Trustee shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (A) the Partnership by a resolution of its Executive
Review Committee may remove the Trustee, or (B) any Holder who has been a bona
fide Holder of a Bond for at least six (6) months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of action, or if a vacancy shall occur in the office of Trustee for
any reason, the Partnership, by a resolution of its Executive Review
Committee, shall promptly appoint a successor Trustee and shall comply with
the applicable requirements of Section 11.10 (Acceptance of Appointment by
Successor Trustee). If, within thirty (30) days after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor
Trustee is appointed by Act of the Majority Holders delivered to the
Partnership and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with
the applicable requirements of Section 11.10 (Acceptance of Appointment by
Successor Trustee), become the successor Trustee with respect to the Bonds
and to that extent supersede the successor Trustee appointed by the
Partnership. If no successor Trustee shall have been so appointed by the
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Partnership or the Holders and have accepted appointment in the manner required
by Section 11.10 (Acceptance of Appointment by Successor Trustee), any Holder
who has been a bona fide Holder of a Bond for at least six (6) months may, on
behalf of itself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Partnership shall, at its own expense, give notice of
each resignation and each, removal of the Trustee and each appointment of a
successor Trustee to all Holders in the manner provided in Section 14.5(b)
(Notices). Each notice required to be given pursuant to this Section 11.9(f)
shall include the name of the successor Trustee and the address of its principal
corporate trust office.
Section 11.10 Acceptance of Appointment by Successor Trustee. (a) In
case of the appointment hereunder of a successor Trustee, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the Partnership
and to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; provided that, on the request of the Partnership or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) Upon request of the Collateral Agent, the Collateral Agent
or the Partnership, any successor Trustee shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor Trustee
all such rights, powers and trusts under the other Financing Documents to which
the Trustee is a party.
(c) Upon request of any successor Trustee, the Partnership
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in clause (a) of this Section 11.10.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article 11.
Section 11.11 Merger Conversion or Succession to Business. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article 11,
without the execution and filing of any instrument or any further act on the
part of any of the parties hereto. In case any Bonds shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Bonds so authenticated with the same effect
as if such successor Trustee had itself authenticated such Bonds.
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Section 11.12 Authorization. The Trustee is hereby authorized to
execute, deliver and perform on behalf of the Holders, the Collateral Agency
Agreement and each of the other Financing Documents to which the Trustee is or
is intended to be a party, and each Holder agrees to be bound by all of the
agreements of the Trustee contained therein.
Section 11.13 Consequential Damages. Anything in this Indenture to the
contrary notwithstanding, in no event shall the Trustee be liable under or in
connection with this Indenture for indirect, special, incidental or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Trustee
and regardless of the form of action.
ARTICLE XII
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 12.1 Names and Addresses of Holders. (a) If the Trustee is at
any time not the Registrar, the Partnership shall furnish or cause to be
furnished to the Trustee:
(i) Semi-Annually, not more than fifteen (15) days
after each Regular Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of
such Regular Record Date; and
(ii) at such other times as the Trustee may request in
writing, within thirty (30) days after the receipt by the Partnership
of any such request, a list of similar form and content as of a date
not more than fifteen (15) days prior to the time such list is
furnished.
(b) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in clause (a) of this Section
12.1 and the names and addresses of Holders received by the Trustee in its
capacity as Registrar. The Trustee may destroy any list furnished to it as
provided in clause (a) of this Section 12.1 upon receipt of a new list so
furnished.
ARTICLE XIII
THE DEPOSITARY BANK
Section 13.1 Procedures Governing Indenture Accounts. (a) The
Depositary Bank hereby agrees to act as such and to accept all cash, payments,
other amounts (including any instruments in respect thereof) and Permitted
Investments to be delivered to or held by the Depositary Bank pursuant to the
terms of this Indenture, and to promptly deposit all such amounts and Permitted
Investments into the Indenture Accounts established hereunder in accordance with
the terms hereof. The Depositary Bank shall hold and safeguard the Indenture
Accounts during the term of this Indenture and shall treat the cash, payments,
other amounts and Permitted Investments, and all rights related thereto, now or
hereafter deposited in or credited to the Indenture Accounts as "financial
assets" (as defined in Section 8-102(a)(9) of the UCC),
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pledged by the Partnership to the Trustee for the benefit of the Holders, to be
held by the Depositary Bank, acting as a "securities intermediary" (as defined
in the UCC).
(b) The Indenture Accounts and sub-accounts established
pursuant to Section 5.1 (Establishment of Indenture Accounts) shall be in the
name of the Trustee, for the benefit of the Holders, for purposes of granting
the Trustee, on behalf of the Holders, a security interest therein in accordance
with this Indenture. The Trustee shall be the entitlement holder with respect to
such of the Indenture Collateral consisting of securities entitlements for
purposes of the UCC. All amounts and Permitted Investments from time to time
held in each Indenture Account shall be (a) registered in the name of the
Trustee, for the benefit of the Holders, (b) held in the custody of the
Depositary Bank for the purposes and on the terms set forth in this Indenture
and (c) endorsed to the Trustee or credited to another account maintained in the
name of Trustee. All such amounts shall constitute a part of the Indenture
Collateral and shall not constitute payment of any Indebtedness or any other
obligation of the Partnership until applied as hereinafter provided.
(c) Each of the Indenture Accounts shall at all times be in
the exclusive possession of, and under the exclusive dominion and control of,
the Depositary Bank acting at the written direction of the Trustee. The
Partnership agrees that its rights to monies held in the Indenture Accounts are
subject to and controlled by the terms of this Indenture. In no case will any
amounts or Permitted Investments deposited in or credited to any Indenture
Account be registered in the name of the Partnership, payable to the order of
the Partnership or specially endorsed to the Partnership except to the extent
the foregoing have been specially endorsed to the Trustee or in blank.
(d) The Depositary Bank hereby agrees that it will comply with
"entitlement orders" (within the meaning of Section 8-102(a)(8) of the UCC,
including, without limitation, any notification to the Depositary Bank directing
transfer of redemption of any securities or other financial assets in any
Indenture Account) issued by the Trustee and relating to any Indenture Account
without the requirement of further consent by the Partnership or any other
Person. The Depositary Bank hereby represents that it has not entered into, and,
hereby agrees that until the termination of this Indenture, it will not enter
into, any agreement with any other Person (other than the Partnership) relating
to the Indenture Accounts (or the amounts and Permitted Investments deposited
therein or credited thereto) pursuant to which it has agreed to comply with
entitlement orders made by such Person. The Depositary Bank hereby represents
that it has not entered into any other agreement with the Partnership or the
Trustee purporting to limit or condition the obligation of the Depositary Bank
to comply with entitlement orders as set forth in this Section 13.1(d). The
Trustee agrees that it shall not issue entitlement orders in any circumstances
which are not permitted by this Indenture.
Section 13.2 Appointment of Depositary Bank; Powers and Immunities. (a)
The Depositary Bank may execute any of its duties under this Indenture by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining hereto.
(b) The Trustee on behalf of the Holders under this Indenture
hereby appoints the Depositary Bank to act as depositary bank and "securities
intermediary" hereunder with such
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powers as are expressly delegated to the Depositary Bank by the terms of this
Indenture. The Depositary Bank shall not have any duties or responsibilities
except those expressly set forth in this Indenture. Without limiting the
generality of the foregoing, the Depositary Bank shall take all actions as the
Trustee shall direct it to perform in accordance with the express provisions of
this Indenture or as the Trustee may otherwise direct it to perform in
accordance with the provisions of this Indenture. Notwithstanding anything to
the contrary contained herein, the Depositary Bank shall not be required to take
any action which is contrary to this Indenture or applicable law. Neither the
Depositary Bank nor any of its Affiliates shall be responsible to any Holder for
any recitals, statements, representations or warranties made by the Partnership
contained in this Indenture or in any certificate or other document referred to
or provided for in, or received by any Holder under, the Indenture for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Indenture or any other document referred to or provided for herein or
therein or for any failure by the Partnership to perform its obligations
hereunder or thereunder. The Depositary Bank shall not be required to ascertain
or inquire as to the performance by the Partnership of any of its or their
obligations under this Indenture or any other document or agreement contemplated
hereby or thereby. The Depositary Bank shall not be (a) required to initiate or
conduct any litigation or collection proceeding hereunder or under any other
Security Document or (b) responsible for any action taken or omitted to be taken
by it hereunder (except for its own gross negligence or willful misconduct) or
in connection with any other Security Document. Except as otherwise provided
under this Indenture, the Depositary Bank shall take action under this Indenture
only as it shall be directed in writing by the Trustee. Whenever in the
administration of this Indenture the Depositary Bank shall deem it necessary or
desirable that a factual matter be proved or established in connection with the
Depositary Bank taking, suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof is herein specifically
prescribed) may be deemed to be conclusively proved or established by a
certificate of any Authorized Officer of the Partnership, or the Trustee, if
appropriate. The Depositary Bank shall have the right at any time to seek
instructions concerning the administration of this Indenture from the Trustee or
any court of competent jurisdiction. The Depositary Bank shall have no
obligation to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder.
Section 13.3 Reliance by Depositary Bank. The Depositary Bank shall be
entitled to rely upon and shall not be bound to make any investigation into the
facts or matters stated in any Officer's Certificate of the Partnership, the
Trustee's or any other notice or other document (including any cable, telegram,
telecopy or telex) believed by it to be genuine and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice or statement of
legal counsel, independent accountants and other experts selected by the
Depositary Bank and shall have no liability for its actions taken thereupon,
unless due to the Depositary Bank's willful misconduct or gross negligence.
Without limiting the foregoing, the Depositary Bank shall be required to make
payments to the Holders only as set forth herein. The Depositary Bank shall be
fully justified in failing or refusing to take any action under this Indenture
(i) if such action would, in the reasonable opinion of the Depositary Bank, be
contrary to Applicable Law or the terms of this Indenture, (ii) if such action
is not specifically provided for in this Indenture, it shall not have received
any such advice or concurrence of the Trustee as it deems appropriate or (iii)
if, in connection with the taking of any such action that would constitute an
exercise of remedies under this Indenture (whether such action is or is intended
to be an action of the Depositary Bank or the Trustee), it shall not first be
indemnified to its satisfaction by the Holders against any and
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all liability and expense which may be incurred by reason of taking or
continuing to take any such action. The Depositary Bank shall in all cases be
fully protected in action, or in refraining from acting, under this Indenture in
accordance with a request of the Trustee, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Holders.
Section 13.4 Court Orders. The Depositary Bank is hereby authorized, in
its exclusive discretion, to obey and comply with all writs, orders, judgments
or decrees issued by any court or administrative agency affecting any money,
documents or things held by the Depositary Bank. The Depositary Bank shall not
be liable to any of the parties hereto or any other Holder, their successors,
heirs or personal representatives by reason of the Depositary Bank's compliance
with such writs, orders, judgments or decrees notwithstanding that such writ,
order, judgment or decree is later reversed, modified, set aside or vacated.
Section 13.5 Resignation of Removal. Subject to the appointment and
acceptance of a successor Depositary Bank as provided below, the Depositary Bank
may resign at any time by giving thirty (30) days prior written notice thereof
to the Trustee and the Partnership, provided that in the event the Depositary
Bank is also the Trustee, it must also at the same time resign as Trustee. The
Depositary Bank may be removed at any time with cause by the Trustee. Except
during the continuation of a default or event of default under this Indenture,
the Partnership shall have the right to remove the Depositary Bank upon thirty
(30) days prior written notice to the Holders with or without cause, effective
upon the appointment of a successor Depositary Bank under this Section 13.5,
which is reasonably acceptable to the Trustee. In the event that the Depositary
Bank shall decline to take any action without first receiving adequate indemnity
from the Partnership, the Holders or the Trustee, as the case may be and, having
received an indemnity, shall continue to decline to take such action, the
Trustee shall be deemed to have sufficient cause to remove the Depositary Bank.
In the event that the Depositary Bank is also the Trustee, the Trustee shall
have the right to remove the Depositary Bank with or without cause. Upon any
such resignation or removal, the Trustee shall have the right to appoint a
successor Depositary Bank, which Depositary Bank (except during the continuation
of a default or event of default under this Indenture) shall be reasonably
acceptable to the Partnership. If no successor Depositary Bank shall have been
appointed by the Trustee and shall have accepted such appointment within thirty
(30) days after the retiring Depositary Bank's giving of notice of resignation
or removal of the retiring Depositary Bank, then (i) the retiring Depositary
Bank may petition a court of competent jurisdiction for the appointment of a
successor Depositary Bank or (ii) the retiring Depositary Bank may appoint a
successor Depositary Bank, which shall be a bank or trust company reasonably
acceptable to the Trustee and the Partnership. Upon the acceptance of any
appointment as Depositary Bank hereunder by the successor Depositary Bank, (a)
such successor Depositary Bank shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Depositary Bank
and shall be discharged from its duties and obligations hereunder and (b) the
retiring Depositary Bank shall promptly transfer all Indenture Accounts within
its possession or control to the possession or control of the successor
Depositary Bank and shall execute and deliver such notices, instructions and
assignments as may be necessary or desirable to transfer the rights of the
Depositary Bank with respect to the Indenture Accounts to the successor
Depositary Bank. After the retiring Depositary Bank's resignation or removal
hereunder as Depositary Bank, the provisions of this Article 7 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Depositary Bank.
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Section 13.6 Expenses; Indeminification; Fees. (a) The Partnership
agrees to pay or reimburse all reasonable out-of-pocket expenses of the
Depositary Bank (including reasonable fees and expenses for legal services) in
respect of, or incident to, the execution, administration or enforcement of any
of the provisions of this Indenture or in connection with any amendment, waiver
or consent relating to this Indenture. The obligations contained in this Section
13.6 shall survive the termination of this Indenture or the resignation or
removal of the Depositary Bank.
(b) The Partnership agrees to indemnify the Depositary Bank in
its capacity as such, and, in their capacity as such, its officers, directors,
shareholders, controlling persons, employees, agents and servants (each an
"Indemnified Depositary Bank Party") from and against any and all claims,
losses, liabilities and expenses (including the reasonable fees and expenses of
counsel) arising out of or resulting from this Indenture (including, without
limitation, performance under or enforcement of this Indenture, but excluding
any such claims, losses or liabilities resulting from the Indemnified Depositary
Bank Party's gross negligence or willful misconduct). This indemnity shall
survive the termination of this Indenture, and the resignation or removal of the
Depositary Bank.
(c) On the Closing Date, and on each anniversary of the
Closing Date to and including the Debt Termination Date, the Partnership shall
pay the Depositary Bank an annual fee in an amount mutually agreed on by the
Partnership and the Depositary Bank.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1 Third Party Beneficiaries. Except as provided in Section
14.6 (Successors and Assigns), nothing in this Indenture or in the Bonds,
express or implied, shall give or be construed to give any Person, other than
the parties hereto and the Holders of the Bonds, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 14.2 Severability. In case any provision in or obligation under
this Indenture or the Bonds shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any
jurisdiction, shall not in any way be affected or impaired thereby.
Section 14.3 Substitute Notice. If for any reason it shall be
impossible to make publication of any notice required hereby in a newspaper or
financial journal of general circulation in the Borough of Manhattan, The City
of New York, then such publication or other notice in lieu thereof as shall be
made with the approval of the Trustee shall constitute a giving of such notice.
Section 14.4 Notices to Rating Agencies. Upon the occurrence of any
Event of Default of which a Responsible Officer of the Trustee has actual
knowledge hereunder, the Trustee shall promptly given notice thereof to each of
the Rating Agencies.
Section 14.5 Notices. (a) Except as otherwise expressly provided
herein, (i) all notices and other communications provided for hereunder shall be
provided in writing (including
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telegraphic, telex, facsimile or cable communication) and shall be sent by
telecopy, telex, telegraph or cable with the original of such communication
dispatched by registered airmail (or, if inland, registered first-class mail)
with postage prepaid to the Partnership, the Trustee, the Collateral Agent and
the Rating Agencies at their respective addresses specified on Schedule III
hereto, or at such other address as shall be designated by such Person in a
written notice to the other parties hereto and (ii) all such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, cabled or
sent by overnight courier, be effective seven (7) days after being deposited in
the mails in the manner as aforesaid, when delivered to the telegraph company or
cable company (if inland), one (1) day or (if overseas) three (3) days after
delivery to a courier in the manner as aforesaid, as the case may be, or when
sent by telex (with the correct answer back) or telecopier (after confirmation
of receipt).
(b) Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder, at its address as it appears in the Bond Register, not later than
the latest date (if any) and not earlier than the earliest date (if any)
prescribed for the giving of such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders, and
any notice that is mailed in the matter herein provided shall be conclusively
presumed to have been duly given.
Section 14.6 Successors and Assigns. All of the covenants, promises and
agreements in this Indenture by or on behalf of the Partnership or the Trustee
shall bind and inure to the benefit of their respective successors and assigns,
regardless of whether so expressed.
Section 14.7 Section Headings. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Indenture.
Section 14.8 Counterparts. This Indenture may be executed in any number
of counterparts, all of which, taken together, shall constitute one and the same
instrument and any of the parties hereto may execute this Indenture by signing
any such counterpart.
Section 14.9 Governing Laws; Submission to Jurisdiction. (a) This
Indenture is a contract made under the laws of the State of New York of the
United States and shall for all purposes be governed by and construed in
accordance with the laws of such State without regard to the conflict of law
rules thereof (other than Section 5-1401 of the New York General Obligations
Law).
(b) Any legal action or proceeding against the Partnership
with respect to this Indenture may be brought in the courts of the State of New
York in the County of New York or of the United States for the Southern District
of New York and, by execution and delivery of this
59
<PAGE>
Indenture, the Partnership here by irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Partnership agrees that a judgment, after exhaustion of
all available appeals, in any such action or proceeding shall be conclusive and
binding upon the Partnership, and may be enforced in any other jurisdiction, by
a suit upon such judgment, a certified copy of which shall be conclusive
evidence of the judgment. The Partnership irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Partnership, at its address referred to in Section 14.5(a)
(Notices), such service to become effective thirty (30) days after such mailing.
Nothing herein shall affect the right of the Trustee or any other Person to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Partnership in any other
jurisdiction.
(c) The Partnership hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Indenture in the courts referred to in clause (b) above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 14.10 Legal Holidays. If any date for the payment of principal
of, premium (if any) or interest on the Bonds is not a Business Day, such
payment shall be due on the first Business Day thereafter.
Section 14.11 Limitation of Liability. (a) The obligations of the
Partnership hereunder are solely the obligations of the Partnership and no
recourse shall be had against any Partner, employee, officer, director,
Affiliate, agent or servant of the Partnership (each a "Non-Recourse Person")
with respect to the Bonds or this Indenture, any of the obligations of the
Partnership hereunder or any obligation of the Partnership for the payment of
any amount payable hereunder for any claim based on, arising out of or relating
to the Bonds or this Indenture; provided, however, that nothing in this Section
14.11 shall be deemed to affect or diminish (a) the obligations of any such
Non-Recourse Person under any Transaction Document to which it is party, (b) the
rights and remedies of the Trustee and the Holders against any such Non-Recourse
Person under any Transaction Document to which any such Non-Recourse Person is a
party or (c) the rights and remedies of the Trustee and the Holders with respect
to the Collateral.
(b) Anything in this Indenture to the contrary
notwithstanding, in no event shall the Trustee (or its officers, directors,
employees, agents, successors and assigns) be liable under or in connection with
this Indenture for any special, indirect or consequential loss or damage of any
kind whatsoever, including lost profits, whether or not the likelihood of such
loss or damage was known to the Trustee and regardless of the form of action.
Section 14.12 Entire Agreement. This Indenture, together with any other
agreements executed in connection herewith, is intended by the parties hereto as
a final expression of their agreement as to the matters covered hereby and is
intended as a complete and exclusive statement of the terms and conditions
hereof.
60
<PAGE>
Section 14.13 Survival. The representations and warranties of the
Partnership contained herein shall survive the execution and delivery of this
Indenture.
Section 14.14 All Payments in US Dollars. All payments under this
Indenture or the Bonds shall be made exclusively in United States dollars.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first above written.
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Managing General Partner
By: /s/ Michael F. Lawler
------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK
as Trustee
By: /s/ Annette M. Marsula
------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
61
<PAGE>
SCHEDULE I
AMORTIZATION OF PRINCIPAL
<TABLE>
<CAPTION>
SCHEDULED PAYMENT DATE PAYMENT SCHEDULED PAYMENT DATE PAYMENT
<S> <C> <C> <C>
February 1, 2006 $ 344,000 February 1, 2018 $ 5,844,000
August 1, 2006 344,000 August 1, 2018 5,844,000
February 1, 2007 344,000 February 1, 2019 6,532,000
August 1, 2007 344,000 August 1, 2019 6,532,000
February 1, 2008 688,000 February 1, 2020 6,875,000
August 1, 2008 688,000 August 1, 2020 6,875,000
February 1, 2009 1,032,000 February 1, 2021 7,219,000
August 1, 2009 1,032,000 August 1, 2021 7,219,000
February 1, 2010 1,375,000 February 1, 2022 7,563,000
August 1, 2010 1,375,000 August 1, 2022 7,563,000
February 1, 2011 1,719,000 February 1, 2023 8,250,000
August 1, 2011 1,719,000 August 1, 2023 8,250,000
February 1, 2012 2,407,000 February 1, 2024 8,594,000
August 1, 2012 2,407,000 August 1, 2024 8,594,000
February 1, 2013 3,094,000 February 1, 2025 8,938,000
August 1, 2013 3,094,000 August 1, 2025 8,938,000
February 1, 2014 3,438,000 February 1, 2026 9,282,000
August 1, 2014 3,438,000 August 1, 2026 9,282,000
February 1, 2015 4,125,000 February 1, 2027 9,969,000
August 1, 2015 4,125,000 August 1, 2027 9,969,000
February 1, 2016 4,469,000 February 1, 2028 11,688,000
August 1, 2016 4,469,000 August 1, 2028 11,688,000
February 1, 2017 5,157,000 February 1, 2029 12,375,000
August 1, 2017 5,157,000 August 1, 2029 12,375,000
February 1, 2030 12,358,000
============
Total: $275,000,000
</TABLE>
Schedule I-1
<PAGE>
Schedule II
ACCOUNT INFORMATION
<TABLE>
<CAPTION>
ACCOUNT NAME ACCOUNT NO.
<S> <C>
Bond Payment Account C29522
Principal Sub-account C26522-B
Interest Sub-account C29522-A
Construction Interest Account C29523
Redemption Account C29521
</TABLE>
Schedule II-1
<PAGE>
SCHEDULE III
NOTICE ADDRESSES
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Tenaska Georgia Partners, L.P.
1044 N. 115th Street
Suite 400
Omaha, Nebraska 68154-4446
Attention: Legal Counsel
Schedule III-1
<PAGE>
EXHIBIT A
FORM OF FACE OF SECURITY
THIS SECURITY IS A RESTRICTED GLOBAL BOND WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS HELD BY THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE
FOR BONDS HELD BY A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR
BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY
BE MADE EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS RESTRICTED GLOBAL BOND IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO THE PARTNERSHIP OR ITS AGENT FOR EXCHANGE OR PAYMENT,
AND ANY DEFINITIVE SECURITY IS ISSUED IN THE NAME OR NAMES AS DIRECTED IN
WRITING BY DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE BEARER HEREOF, DTC, HAS AN
INTEREST HEREIN.
THE BONDS EVIDENCED BY THIS GLOBAL BOND HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT") OR ANY
STATE SECURITIES LAWS, AND SUCH BONDS OR ANY INTEREST OR PARTICIPATION THEREIN
MAY NOT BE RE-OFFERED, SOLD, PLEDGED, ASSIGNED, TRANSFERRED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS BOND (OR ANY PREDECESSOR OF SUCH
BOND) EXCEPT (A) BY THE INITIAL INVESTOR (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
Exhibit A-1
<PAGE>
THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND (13) BY SUBSEQUENT
INVESTORS, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
Exhibit A-2
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
____% Senior Secured Bonds Due ____
CUSIP Number: _______________
Principal Amount: $_____________
Maturity Date: ______________
Issue Date: ______________
Interest Rate: ______________
Registered Holder: ______________
TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership (the
"Partnership", which term includes any successor or assign under the Indenture
referred to below), for value received hereby promises to pay to ____________,
or its registered assigns, on each Scheduled Payment Date, the principal sum
corresponding to such Scheduled Payment Date set forth on the Schedule I of the
Indenture multiplied by a fraction the numerator of which is the Outstanding
amount of the Principal Amount set forth above and the denominator of which is
the Outstanding amount of all Bonds issued under the Indenture, or on such
earlier date as the entire principal hereof may become due in accordance with
the provisions hereof, and to pay interest in arrears on February 1 and August
1, commencing _____________, on said principal sum at the rate of ____% per
annum. Interest shall accrue from and including the most recent date to which
interest has been paid or duly provided for, from _____________ until payment of
said principal sum has been made or duly provided for. The interest payable on
any such Scheduled Payment Date will, subject to certain conditions set forth
herein, be paid to the person in whose name this Bond is registered at the end
of the fifteenth day next preceding each Scheduled Payment Date. Such payments
shall be made exclusively in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
The statements in the legend set forth above, if any, are an integral
part of the terms of this Bond and by acceptance hereof the holder of this Bond
agrees to be subject to and bound by the terms and provisions set forth in such
legend, if any.
REFERENCE IS MADE TO THE FURTHER PROVISIONS SET FORTH UNDER THE TERMS
AND CONDITIONS OF THE BONDS ENDORSED ON THE REVERSE HEREOF. SUCH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Bond
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Exhibit A-3
<PAGE>
IN WITNESS WHEREOF, the Partnership has caused this instrument to be
duly executed.
Dated: _________________
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc., its
Managing General Partner
By:
------------------------------
Name:
Title:
This is one of the Bonds described in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
------------------------------
Authorized Officer
Exhibit A-4
<PAGE>
EXHIBIT B
FORM OF TERMS AND CONDITIONS OF BONDS
Principal Amount: $_______________
Interest Rate: _____%
Payment Dates: February 1 and August 1
(commencing ______________)
Minimum Denominations: US$100,000 and integral multiples of
$1,000 in excess thereof.
Other Terms:
1. General. This Bond is one of a duty authorized issue of debt Bonds
(the "Bonds") of Tenaska Georgia Partners, L.P. (the "Partnership") issued
pursuant to an Indenture (the "Indenture") dated as of November 1, 1999, between
the Partnership and The Chase Manhattan Bank, as Trustee. All capitalized terms
used but not otherwise defined herein shall have the meanings given to such
terms in the Indenture. The holders of the Bonds will be entitled to the
benefits of, be bound by, and be deemed to have notice of, all of the provisions
of the Indenture. A copy of the Indenture is on file and may be inspected at the
corporate trust office of the Trustee in The City of New York, at the offices of
the paying agents listed at the foot of this Bond and at the principal office of
the Partnership set forth in Section 18 (Indentures) hereto.
2. Payments and Paying Agencies. (a) All payments on this Bond shall be
made exclusively in immediately available funds and in such coin or currency of
the United States of America which, at the time of payment, is legal tender for
the payment of public and private debts.
(b) The Person in whose name any Bond is registered at the
close of business on any Regular Record Date with respect to any Scheduled
Payment Date shall be entitled to receive the principal, premium (if any) and/or
interest payable on such Scheduled Payment Date notwithstanding the cancellation
of such Bond upon any transfer or exchange thereof, subsequent to such Regular
Record Date and prior to such Scheduled Payment Date; provided however, that if
and to the extent there is a default in the payment of the principal, premium
(if any) and/or interest due on such Scheduled Payment Date, such defaulted
principal, premium if any) and/or interest shall be paid to the Persons in whose
names Outstanding Bonds are registered at the close of business on a subsequent
date (each such date, a "Special Record Date"), which shall not be less than
five (5) days preceding the date of payment of such defaulted principal,
premium, if any) and/or interest, established by a notice mailed by the Trustee
to the registered owners of the Bonds in accordance with Section 14.5(b)
(Notices) of the Indenture not less than fifteen (15) days prior to the Special
Record Date.
Exhibit B-1
<PAGE>
(c) If any date for the payment of principal of, premium (if
any) or interest on the Bonds is not a Business Day, such payment shall be due
on the first Business Day thereafter. Any payment made on such next succeeding
business day shall have the same force and effect as if made on the date on
which such payment is due, and no interest shall accrue for the period after
such date.
(d) Interest shall be calculated on the basis of a 360-day
year of twelve 30-day months.
3. Amendments and Supplements to Indenture. (a) Without Consent of
Holders. The Indenture may be amended or supplemented by the Partnership and
the Trustee at any time and from time to time, without the consent of the
Holders by a Supplemental Indenture authorized by a resolution of the
Executive Review Committee of the Partnership filed with, and in form
satisfactory to, the Trustee, solely for one or more of the following purposes:
(i) to add additional covenants of the Partnership, to
surrender any right or power herein conferred upon the Partnership or
to confer upon the Holders any additional rights, remedies, benefits,
powers or authorities that may lawfully be conferred;
(ii) to increase the assets securing the Partnership's
obligations under the Indenture;
(iii) to provide for the issuance of Additional Bonds
on the conditions set forth in Section 2.3 (Additional Bonds) of the
Indenture;
(iv) for any purpose not inconsistent with the terms of
the Indenture to cure any ambiguity or to correct or supplement any
provision contained herein or in any Supplemental Indenture which may
be defective or inconsistent with any other provision contained herein
or in any Supplemental Indenture;
(v) in connection with, and to reflect, any amendments
to the provisions hereof required by the Rating Agencies in
circumstances where confirmation of the Ratings are required under the
Indenture in connection with the issuance of Additional Bonds or the
taking of other actions by the Partnership; provided, however, that
such amendments are not, in the judgment of the Trustee, to the
prejudice of the Trustee or the Holders; or
(vi) to provide for the issuance of exchange Bonds as
contemplated by any agreement entered into in connection with the
issuance of Additional Bonds.
(b) With Consent of Holders. The Indenture may be amended or
supplemented by the Partnership and the Trustee at any time and from time to
time, with the consent of the Majority Holders, for the purpose of adding any
mutually agreeable provisions to or changing in any manner or eliminating any of
the provisions of, the Indenture, except with respect to (a) the principal,
premium (if any) or interest payable upon any Bonds, (b) the dates on which
interest on or principal of any Bonds is paid, (c) the dates of maturity of any
Bonds, (d) Article 9 (Supplemental Indentures) of the Indenture and (e) the
grant of security interests for the benefit
Exhibit B-2
<PAGE>
of the Bonds. The matters of the Indenture described in clauses (a) through (e)
of the preceding sentence may be amended or supplemented by the Partnership and
the Trustee at any time and from time to time only with the consent of the One
Hundred Percent Holders. Notice of any such amendment shall be given by the
Partnership to any Rating Agency then maintaining a Rating for the Bonds.
4. Replacement, Exchange and Transfer of Bonds. (a) If any Bond shall
become mutilated, the Partnership shall execute, and the Trustee shall
authenticate and deliver, a new Bond of like tenor, maturity and denomination in
exchange and substitution for the Bond so mutilated, but only upon surrender to
the Trustee of such mutilated Bond for cancellation, and the Partnership or the
Trustee may require reasonable indemnity therefor. If any Bond shall be reported
lost, stolen or destroyed evidence as to the ownership and the loss, theft or
destruction thereof shall be submitted to the Trustee. It such evidence shall be
satisfactory to both the Trustee and the Partnership and indemnity satisfactory
to both shall be given, the Partnership shall execute, and thereupon the Trustee
shall authenticate and deliver, a new Bond of like tenor, maturity and
denomination. The cost of providing any substitute Bond under the provisions of
Section 2.10 (Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall
be borne by the Holder for whose benefit such substitute Bond is provided. If
any such mutilated, lost, stolen or destroyed Bond shall have matured or be
about to mature, the Partnership may, with the consent of the Trustee, pay to
the Holder thereof the principal amount of such Bond upon the maturity thereof
and compliance with the aforesaid conditions by such Holder, without the
issuance (of a substitute Bond therefor, and likewise pay to the Holder the
amount of the unpaid interest, if any, which would have been paid on a
substitute Bond had one been issued.
(b) Every substitute Bond issued pursuant to Section 2.10
(Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall constitute
an additional contractual obligation of the Partnership, whether or not the Bond
alleged to have been mutilated, destroyed, lost or stolen shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionally with any and all other Bonds duly issued
hereunder.
(c) All Bonds shall be held and owned upon the express
condition that the foregoing provisions are, to the extent permitted by
Applicable Law, exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Bonds, and shall preclude any and all other
rights and remedies with respect thereto
5. Trustee. For a description of the duties and the immunities and
rights of the Trustee under the Indenture, reference is made to the Indenture,
and the obligations of the Trustee to the holder hereof are subject to such
immunities and rights.
6. Paying Agents; Transfer Agents; Registrars. The Partnership has
initially appointed the Trustee as paving agent, transfer agents and registrar.
The Partnership may, subject to the terms of the Indenture, at any time appoint
additional or other paving agents, transfer agents and registrars and terminate
the appointment thereof, provided, that while the Bonds are Outstanding the
Partnership will maintain offices or agencies for payment of principal of and
interest on this Bond as herein provided in the Borough of Manhattan, The City
of New York. Notice of any such termination or appointment and of any change in
the office through
Exhibit B-3
<PAGE>
which any paying agent, transfer agent or registrar will act will be promptly
given in the manner described in Section 8 (Notices) hereof.
7. Enforcement. (a) Subject to the provisions of Article 7 (Events of
Default; Remedies) of the Indenture, a Holder shall not have the right to
Institute any suit, action or proceeding at law or in equity or otherwise for
the appointment of a receiver or for the enforcement of any other remedy under
or upon this Indenture, unless:
(i) such Holder shall have previously given written
notice to the Trustee a continuing Event of Default;
(ii) Holders representing the percentage of aggregate
principal amount of Outstanding Bonds needed to initiate the exercise
of remedies shall have requested the Trustee in writing to institute
such suit, action or proceeding;
(iii) the Trustee shall have refused or neglected to
institute any such suit, action or proceeding for sixty (60) days after
receipt of such notice by the Trustee; and
(iv) no direction inconsistent with such written
request has been given to the Trustee during such sixty (60) day period
by the Majority Holders.
(b) It is understood and intended that one or more of the Holders shall
not have any right in any manner whatsoever hereunder or under the Bonds to (i)
surrender, impair, waive, affect, disturb or prejudice the Lien of the Indenture
on any property subject thereto or the rights of any other Holders, (ii) obtain
or seek to obtain priority or preference over any other Holders or (iii) enforce
any right under the Indenture, except in the manner provided herein or in the
Indenture and for the equal, ratable and common benefit of all or the Holders.
8. Notices. Notices shall be mailed to Holders at their registered
addresses. Notice sent by first class mail, postage prepaid, shall be deemed to
have been given on the date of such mailing. In addition, the Partnership will
cause all such other publications of such notices as may be required from time
to time by Applicable Law.
9. Redemption at the Option of the Partnership. The Bonds are, under
certain conditions, subject to redemption at the option of the Partnership as
set forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
10. Redemption at the Option of the Holders. The Bonds are, under
certain conditions, subject to redemption at the option of the Holders as set
forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
11. Mandatory Redemption. The Bonds are subject to mandatory redemption
under certain circumstances as set forth in Section 3.2 (Mandatory Redemption)
of the Indenture.
12. Authentication. This Bond shall not be valid for any purpose until
an Authorized Representative of the Trustee manually signs the certificate of
authentication hereon substantially in the form set forth in Exhibit A to the
Indenture.
Exhibit B-4
<PAGE>
13. Governing Law. This Bond is a contract made under the laws of the
State of New York of the United States and shall for all purposes be governed by
and construed in accordance with the laws of such State without regard to the
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law).
14. Warranty by Issuer. Subject to Section 12 (Authentication) hereof,
the Partnership hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened precedent to the
creation and issuance of this Bond, and to constitute the same a legal, valid
and binding obligation of the Partnership enforceable in accordance with its
terms, have been done and performed and have happened in due and strict
compliance with all Applicable Laws.
15. Trustee Dealings with the Partnership. Subject to certain
limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Bonds and
may otherwise deal with and collect obligations owed to it by the Partnership or
its Affiliates and may otherwise deal with the Partnership or its Affiliates
with the same rights it would have it if were not Trustee.
16. No Recourse Against Others. A director, officer, employee, partner,
affiliate, agent, servant or stockholder, as such, of the Partnership or the
Trustee shall not have any liability for any obligations of the Partnership
under the Bonds or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Bond, each Holder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Bonds.
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Partnership has
caused CUSIP numbers to be printed on the Bonds and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Bond holders. No
representation made as to the accuracy of such numbers either as printed on the
Bonds or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. Indentures. The Partnership will furnish to any Holder upon written
request and without charge a copy of the Indenture. Requests may be made to:
Tenaska Georgia Partners, L.P., 1044 North 115 Street, Suite 400, Omaha,
Nebraska 68154, Attention: Managing General Partner.
19. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (Tenants in Common), TEN ENT (Tenants by
the Entireties), JT TEN (Joint Tenants with Rights of Survivorship and not as
Tenants in Common), CUST (Custodian), and U/G/M/A (Uniform Gift to Minors Act).
20. Descriptive Headings. The descriptive headings appearing in these
Terms and Conditions are for convenience of reference only and shall not alter,
limit or define the provisions thereof.
Exhibit B-5
<PAGE>
EXHIBIT C
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby transfers to
-----------------------------------------------------------
-----------------------------------------------------------
(PRINT NAME AND ADDRESS OF TRANSFEREE)
U.S. $__________principal amount of this Bond and all rights with
respect thereto, and irrevocably constitutes and appoints
______________________as attorney to transfer this Bond on the books kept for
registration thereof, with full power of substitution.
Dated:
-------------------------------- --------------------------------
Signed:
--------------------------------
Note:
(i) The signature on this transfer form must
correspond to the name as it appears on the face of this Bond.
(ii) A representative of the Holder should state the
capacity in which he or she signs (e.g., executor).
(iii) The signature of the person effecting the transfer
shall conform to any list of duly authorized specimen signatures
supplied by the registered holder or shall he certified by a bank which
is a member of the Medallion Program or in such other manner as the
Paying Agent, acting in its capacity as transfer agent or the Trustee,
acting in its capacity as Registrar, may require.
Exhibit C-1
<PAGE>
EXHIBIT D
FORM OF TRANSFER RESTRICTION LEGEND
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) EXCEPT
(A) BY THE INITIAL INVESTOR (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE)
OR (4) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND (B) BY
SUBSEQUENT INVESTORS, AS SET FORTH IN (A) ABOVE AND, IN
ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
Exhibit D-1
<PAGE>
EXHIBIT E
FORM OF RULE 144A TRANSFER CERTIFICATE
[Date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 1,
1999, between Tenaska Georgia Partners, L.P., as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Indenture or Rule 144A, as the
case may be.
[Insert the following paragraph for any transfer made pursuant to Section
2.7.2(f) (Transfers and Exchanges of the Restricted Global Bond and Beneficial
Interests Therein):
This certificate relates to US$ 275,000,000 principal amount of Bonds
which are held in the form of a beneficial interest in the Restricted Global
Bond (CUSIP No. ______________ ) with the Depositary in the name of [insert name
of transferor] (the "Transferor"). The Transferor has requested a transfer of
such beneficial interest for one or more Certificated Bonds to be registered in
the name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to Section
2.7.2(e) (Transfers and Exchanges of the Restricted Global Bond and Beneficial
Interests Therein):
This certificate relates to US$ 275,000,000 principal amount of Bonds
which are held in the form of a beneficial interest in the Regulation S Global
Bond (CUSIP No. ______________ ) with the Depositary in the name of [insert name
of transferor] (the "Transferor"). The Transferor has requested a transfer of
such beneficial interest in the Restricted Global Bond to be registered in the
name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to Section
2.7.3(c) transfers and Exchanges of Certificated Bonds):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of one or more Certificated Bonds registered in the
name of [insert name of transferor (the "Transferor"). The Transferor has
requested a transfer of such Certificated Bonds for a beneficial interest in the
Restricted Global Bond (CUSIP No. _____________ ) to be held [with the
Depositary in the name of [insert name of Transferee] (the "Transferee").]
In connection with such request for transfer and in respect of such
Bonds, the Transferor does hereby certify that such transfer is being effected
in accordance with the transfer restrictions set forth in the Indenture and the
Bonds and pursuant to and in accordance with Rule 144A, and accordingly the
Transferor does hereby certify:
Exhibit E-1
<PAGE>
(1) the Transferee is a person that the Transferor and any
person acting on behalf of the Transferor reasonably believe is purchasing such
Bonds for its own account, or for one or more accounts with respect to which the
Transferee exercises sole investment discretion, and the Transferee and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A;
(2) the Transferor and any person acting on its behalf has
taken reasonable steps to ensure that the Transferee is aware that the
Transferor may be relying on Rule 144A in connection with the transaction; and
(3) the transaction satisfies all other requirements of Rule
144A and of any applicable Bonds laws of any state of the United States or any
other jurisdiction.
You and the Partnership are entitled to rely upon this certificate and
are irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
Name:
Title:
Exhibit E-2
<PAGE>
EXHIBIT F
FORM OF RULE 144A EXCHANGE CERTIFICATE
[Date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 1,
1999, between Tenaska Georgia Partners, L.P., as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Indenture or Rule 144A, as the
case may be.
This certificate relates to US$ __________ principal amount of Bonds
which are held in the form of Certificated Bonds in the name of [insert name of
holder] (the "Holder"). The Holder has requested an exchange of such
Certificated Bonds for a beneficial interest in the Restricted Global Bond
(CUSIP No. _____________ ) to be held with the Depositary in the name of the
Holder.
In connection with such request for exchange and in respect of such
Bonds, the Holder does hereby certify that it is a "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act.
You and the Partnership are entitled to rely upon this certificate and
are irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
----------------------------------
Name:
Title:
Exhibit F-1
<PAGE>
EXHIBIT G
FORM OF REGULATION S TRANSFER CERTIFICATE
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 1, 1999
between Tenaska Georgia Partners, L.P., as Issuer and The Chase Manhattan Bank,
as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Indenture or Regulation S, as the
case may be.
[Insert the following paragraph for any transfer made pursuant to Section
[2.7.2(c)] [2.7.2(d)] (Transfers and Exchanges of Global Bonds and Beneficial
Interests Therein):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of a beneficial interest in the Restricted Global
Bond (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for a beneficial interest in the Regulation S Global Bond
(CUSIP No.__________) to be held [[include the following for any transfer made
pursuant to Section 2.7.2(c)]with [Euroclear] [Cedel] (Common Code
No.__________)] through the Depositary in the name of [insert name of
transferee] (the "Transferee").]
[(Insert the following paragraph for any transfer made pursuant to Section
2.7.3(c) (Transfers and Exchanges of Certificated Bonds):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of one or more Certificated Bonds registered in the
name of [insert name of transferor) (the "Transferor"). The Transferor has
requested a transfer of such Certificated Bonds for a beneficial interest in the
Regulation S Global Bond (CUSIP No.__________) to be held [with [Euroclear]
[Cedel]] through the Depositary in the name of [insert name of transferee] (the
"Transferee").]
In connection with such request for transfer and in respect of such
Bonds, the Transferor does hereby certify that such transfer is being effected
in accordance with the transfer restrictions set forth in the Indenture and the
Bonds and pursuant to and in accordance with Regulation S, and accordingly the
Transferor does hereby certify:
(1) the offer of such Bonds was not made to a person in
the United States;
(2) either (a) at the time the buy order for such Bonds was
originated, the Transferee was outside the United States or the
Transferor and any person acting on its behalf reasonably believed that
the Transferee was outside the United States or (b) the
G-1
<PAGE>
transaction was executed in, or through the facilities of, a designated
offshore securities market and neither the Transferor nor any person
acting on its behalf knew that the transaction was pre-arranged with a
buyer in the United States,
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or 904(b) of
the Securities Act, as applicable, and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
[Add the following for transfers made during the Regulation S Restricted Period:
In addition, (A) if the provisions of Rule 903(c)(3) or Rule 904(c)(1)
of the Securities Act are applicable to the transaction, the Transferor hereby
certifies that the transfer is being made in accordance with the requirements of
Rule 903(c)(3) or Rule 904(c)(1), as the case may be, and (B) upon completion of
the transaction, the Transferee will hold the transferred beneficial interest
through Euroclear or Cedel.]
You and the Partnership are entitled to rely upon this certificate and
are irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
Name:
Title:
G-2
<PAGE>
EXHIBIT H
FORM OF RULE 144 TRANSFER CERTIFICATE
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 1, 1999
between Tenaska Georgia Partners, L.P., as issuer and The Chase Manhattan Bank
as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Indenture or Rule 144, as the
case may be.
[Insert the following paragraph for any transfer made pursuant to Section
2.7.2(c) (Transfers and Exchanges of Global Bonds and Beneficial Interests
Therein):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of a beneficial interest in the Restricted Global
Bond (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for a beneficial interest in the Regulation S Global Bond
(CUSIP No.__________) to be held with the Depositary in the name of [insert name
of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to Section
2.7.2(f) (Transfers and Exchanges of Global Bonds and Beneficial Interests
Therein):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of a beneficial interest in the Restricted Global
Bond (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for one or more Certificated Bonds to be registered in the
name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to Section
2.7.2(g) (Transfers and Exchanges of Global Bonds and Beneficial Interests
Therein):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of a beneficial interest in the Regulation S Global
Bond (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for one or more Certificated Bonds to be registered in the
name of [insert name of transferee] (the "Transferee").]
In connection with such request for transfer and in respect of such
Bonds, the Transferor does hereby certify that such transfer has been effected
in accordance with the transfer
H-1
<PAGE>
restrictions set forth in the Indenture and the Bonds, and that the Bonds are
being transferred in a transaction permitted by Rule 144 under the Securities
Act.
You and the Partnership are entitled to rely upon this certificate and
are irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby,
[Name of Transferor]
By:
Name:
Title:
H-2
<PAGE>
EXHIBIT I
FORM OF ACCREDITED INVESTOR TRANSFER CERTIFICATE
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 1, 1999
between Tenaska Georgia Partners, L.P., as Issuer and The Chase Manhattan Bank,
as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Indenture or Regulation D, as the
case may be.
[Insert the following paragraph for any transfer made pursuant to Section
2.7.2(f) (Transfers and Exchanges of Global Bonds and Beneficial Interests
Therein):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of a beneficial interest in the Restricted Global
Bond (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for a beneficial interest in one or more Certificated Bonds
(CUSIP No.__________) to be held with the Depositary in the name of [insert name
of transferee] (the "Transferee"].
[Insert the following paragraph for any transfer made pursuant to Section
2.7.2(g) (Transfers and Exchanges of Global Bonds and Beneficial Interests
Therein):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of a beneficial interest in the Regulation S Global
Bond (CUSIP No.__________) with the Depositary in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest for one or more Certificated Bonds to be registered in the
name of [insert name of transferee] (the "Transferee").]
[Insert the following paragraph for any transfer made pursuant to Section
2.7.3(a) (Transfers and Exchanges of Global Bonds and Beneficial Interests
Therein):
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of one or more Certificated Bonds registered in the
name of [insert name of transferor] (the "Transferor"). The Transferor has
requested a transfer of such Certificated Bonds for one or more Certificated
Bonds to be registered in the name of [insert name of transferee] (the
"Transferee").]
The undersigned represents and warrants to you that:
I-1
<PAGE>
(1) We are an institutional "accredited investor" (as defined
in Rule 501(a)(1). (2), (3) or (7) of Regulation D under the Securities
Act of 1933, as amended from time to time (the "Securities Act"))
purchasing for our own account or for the account of such an
institutional "accredited investor", and we are acquiring the Bonds not
with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act or other applicable
securities law and we have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of our investment in the Bonds and invest in or purchase
securities similar to the Bonds in the normal course of our business.
We and any accounts for which we are acting are each able to bear the
economic risk of our investment.
(2) We understand and acknowledge that the Bonds have not been
registered under the Securities Act or any other applicable securities
law and unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Bonds to offer, sell or
otherwise transfer such Bonds prior to the date which is two (2) years
after the later of the date of original issue and the last date on
which the Partnership or any Affiliate of the Partnership was the owner
of such Bonds (or any predecessor thereto) (such later date, the
"Resale Restriction Termination Date") only (a) if we are initial
investors in the Bonds, (i) to the Partnership, (ii) pursuant to a
registration statement which has been declared effective under the
Securities Act, (iii) in a transaction complying with the requirements
of Rule 144A under the Securities AM to a Person we reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A (a
"Qualified Institutional Buyer") that purchases for its own account or
for the account of a Qualified Institutional Buyer and to whom notice
is given that the transfer is being made in reliance on Rule 144A, (iv)
pursuant to offers and sales that occur outside of the United States
within the meaning of Regulation S under the Securities Act, or (v)
pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available), and (b) if we are
subsequent investors in the Bonds, (i) as set forth in clause (a)
immediately above and (ii) to an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2) (3) or (7) of Regulation D
under the Securities Act that is purchasing the Bonds for its own
account or for the account of such an institutional "accredited
investor", in each case, in a transaction involving a minimum purchase
price of US$250,000 for such Bonds, subject in each of the foregoing
cases to any requirement of law that the disposition of our property or
the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Bonds is proposed to be made pursuant to clause
(b)(ii) immediately above prior to the Resale Restriction Termination
Date, the transferor shall deliver to the Partnership and the Trustee a
letter from the transferee substantially in the form of this letter,
which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501
(a)(l), (2), (3) or (7) of Regulation D under the Securities Act and
that it is acquiring such Bonds for investment purposes and not for
distribution in violation of the Securities Act. We acknowledge that
the Partnership and the Trustee reserve the right prior to any offer,
sale or other transfer of the Bonds pursuant to clause (a)(iv), (a)(v)
or (b)(ii) immediately above prior to the
I-2
<PAGE>
Resale Restriction Termination Date to require the delivery of an
opinion of counsel, certifications and/or other information
satisfactory to the Partnership and the Trustee.
(3) We are acquiring the Bonds purchased by us for our own
account or for one or more accounts as to each of which we exercise
sole investment discretion.
You and the Partnership are entitled to rely upon this certificate and
are irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferee]
By:
Name:
Title:
I-3
<PAGE>
EXHIBIT J
FORM OF REGULATION S EXCHANGE CERTIFICATE
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 1,
1999, between Tenaska Georgia Partners, L.P., as Issuer, and The Chase Manhattan
Bank, as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Indenture or Regulation S, as the
case may be.
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of Certificated Bonds in the name of [insert name of
holder] (the "Holder"). The Holder has requested an exchange of such
Certificated Bonds for a beneficial interest in the Regulation S Global Bond
(CUSIP No.__________) to be held with [[Euroclear] [Cedel] through] the
Depositary in the name of the Holder.
In connection with such request for exchange and in respect of such
Bonds, the Holder does hereby certify that it acquired such Bonds in accordance
with the transfer restrictions set forth in the Indenture and the Bonds and
pursuant to and in accordance with Regulation S under the Securities Act.
You and the Partnership are entitled to rely upon this certificate and
are irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
Name:
Title:
J-I
<PAGE>
EXHIBIT K
FORM OF ACCREDITED INVESTOR EXCHANGE CERTIFICATE
[date]
[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of November 1, 1999
between Tenaska Georgia Partners, L.P., as Issuer, and The Chase Manhattan Bank,
as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given to such terms in the Indenture or Regulation D, as the
case may be.
This certificate relates to US$__________ principal amount of Bonds
which are held in the form of Certificated Bonds in the name of [insert name of
holder] (the "Holder"). The Holder has requested an exchange of such
Certificated Bonds for a beneficial interest in the IAI Global Bond (CUSIP No.
___) to be held with the Depositary in the name of the Holder.
In connection with such request for exchange and in respect of such
Bonds, the Holder does hereby certify that it is an institutional "accredited
investor" (as defined in Rule 50l(a)(1), (2), (3) or (7) of Regulation D.
You and the Partnership are entitled to rely upon this certificate and
are irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Name of Transferor]
By:
Name:
Title:
Exhibit H-1
<PAGE>
Exhibit 4.2
EXECUTION COPY
- --------------------------------------------------------------------------------
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
Dated as of November 1, 1999
among
TENASKA GEORGIA PARTNERS, L.P.,
THE TORONTO-DOMINION BANK,
as the PPA LOC Agent,
THE TORONTO-DOMINION BANK,
as the DSR LOC Agent,
THE CHASE MANHATTAN BANK,
as the Trustee,
THE CHASE MANHATTAN BANK,
as the Authority Trustee,
THE CHASE MANHATTAN BANK,
as the Collateral Agent,
and
THE CHASE MANHATTAN BANK as the
Depositary Bank.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
<TABLE>
<CAPTION>
ARTICLE I
DEFINED TERMS; PRINCIPLES OF CONSTRUCTION
<S> <C> <C>
Section 1.1 Defined Terms..............................................................2
Section 1.2 Principles of Construction.................................................5
ARTICLE II
REPORTING REQUIREMENTS; PROCEDURES GOVERNING ACCOUNTS
Section 2.1 Procedures Governing Funds.................................................5
Section 2.2 Establishment of Funds and Sub-accounts....................................6
Section 2.3 Security Interest..........................................................7
Section 2.4 Termination................................................................8
ARTICLE III
THE FUNDS
Section 3.1 Construction Fund..........................................................8
Section 3.2 Payments on Commercial Operation Date.....................................10
Section 3.3 Revenue Fund..............................................................11
Section 3.4 Operating Fund............................................................16
Section 3.5 Debt Service Fund.........................................................16
Section 3.6 Debt Service Reserve Account..............................................17
Section 3.7 Loss Proceeds Account.....................................................19
Section 3.8 Subordinated Debt Account.................................................22
Section 3.9 Partnership Distribution Fund.............................................22
Section 3.10 Withdrawals from the Funds on the Debt Termination Date...................23
Section 3.11 Investments...............................................................23
Section 3.12 Receipt of Proceeds by the Partnership....................................24
Section 3.13 Benefit of Accounts.......................................................24
Section 3.14 Information...............................................................24
Section 3.15 Accounts Generally........................................................25
Section 3.16 Depositary Bank Obligations Limited.......................................25
Section 3.17 Trigger Events............................................................25
Section 3.18 Exercise of Remedies - Loss Proceeds......................................25
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ARTICLE IV
ADMINISTRATION OF THE COLLATERAL
<S> <C> <C>
Section 4.1 Administration of the Collateral..........................................26
Section 4.2 Priority of Security Interests............................................27
ARTICLE V
EVENTS OF DEFAULT; TRIGGER EVENTS
Section 5.1 Exercise of Rights........................................................27
Section 5.2 Actions Upon A Trigger Event..............................................28
Section 5.3 Exercise of Remedies and Application of Proceeds..........................29
Section 5.4 Receipt of Money or Proceeds..............................................30
Section 5.5 Additional Senior Parties.................................................31
ARTICLE VI
COLLATERAL AGENT; RELATIONS AMONG SENIOR PARTIES
Section 6.1 Appointment and Duties of Collateral Agent................................31
Section 6.2 Rights of Collateral Agent................................................32
Section 6.3 Lack of Reliance on the Collateral Agent..................................34
Section 6.4 Indemnification; Bankruptcy...............................................34
Section 6.5 Resignation or Removal of the Collateral Agent............................35
Section 6.6 Documents.................................................................36
Section 6.7 Authorization.............................................................36
Section 6.8 Additional Collateral Agents..............................................37
Section 6.9 Power of Attorney from Senior Parties.....................................39
Section 6.10 Rights of Senior Parties..................................................39
Section 6.11 Amendments and Waivers....................................................39
ARTICLE VII
THE DEPOSITARY BANK
Section 7.1 Appointment of Depositary Bank; Powers and Immunities.....................40
Section 7.2 Reliance by Depositary Bank...............................................41
Section 7.3 Court Orders..............................................................41
Section 7.4 Resignation or Removal....................................................41
Section 7.5 Expenses; Indemnification; Fees...........................................42
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VIII
MISCELLANEOUS
<S> <C> <C>
Section 8.1 Direction to Collateral Agent.............................................43
Section 8.2 Action by Collateral Agent................................................43
Section 8.3 Amendments, Waiver........................................................43
Section 8.4 Transfers.................................................................43
Section 8.5 Severability..............................................................43
Section 8.6 Notices...................................................................43
Section 8.7 Successors and Assigns....................................................45
Section 8.8 Counterparts..............................................................45
Section 8.9 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial...........45
Section 8.10 No Impairments of Other Rights............................................46
Section 8.11 Headings..................................................................46
Section 8.12 Termination...............................................................46
Section 8.13 Entire Agreement..........................................................46
Section 8.14 Execution in Lieu of Agent................................................46
Section 8.15 Conflicts with Other Security Documents...................................46
Section 8.16 Scope of Duties; Limits on Liability......................................46
Section 8.17 Benefit of Agreement......................................................46
Section 8.18 Cumulative Remedies.......................................................46
Section 8.19 Time of Day; English Language.............................................47
Section 8.20 Notice of Adverse Claim...................................................47
Section 8.21 No Recourse...............................................................47
</TABLE>
Exhibit A.........Form of Designation Letter
Exhibit B.........Form of Subordination Provisions
Exhibit 3.1.......Form of Requisition
Schedule I........Accounts
iii
<PAGE>
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this "AGREEMENT") dated
as of November 1, 1999 among Tenaska Georgia Partners, L.P., a Delaware limited
partnership (the "PARTNERSHIP"), The Toronto-Dominion Bank, acting as agent on
behalf of the DSR LOC Banks under the DSR LOC Reimbursement Agreement (in such
capacity together with its successors and assigns, the "DSR LOC AGENT"), The
Toronto-Dominion Bank, acting as agent on behalf of the PPA LOC Banks under the
PPA LOC Reimbursement Agreement (in such capacity together with its successors
and assigns, the "PPA LOC AGENT"), The Chase Manhattan Bank, acting in its
capacity as the trustee under the Indenture (in such capacity together with its
successors and assigns, the "TRUSTEE"), The Chase Manhattan Bank, acting in its
capacity as the trustee under the Authority Indenture (in such capacity together
with its successors and assigns, the "AUTHORITY TRUSTEE"), The Chase Manhattan
Bank, acting in its capacity as the depositary bank (in such capacity together
with its successors and assigns, the "DEPOSITARY BANK"), and The Chase Manhattan
Bank, acting in its capacity as the collateral agent appointed hereunder for the
Senior Parties (in such capacity together with its successors and assigns, the
"COLLATERAL AGENT").
W I T N E S S E T H:
WHEREAS, the Partnership proposes to develop, construct and operate a
nominally rated 936 MW (nominal summer rating) natural gas fired simple-cycle
electric generating plant in Heard County, Georgia (the "Project");
WHEREAS, the Partnership has determined that the most feasible method
of financing the Project is for the Partnership to issue Bonds for that purpose;
WHEREAS, in order to, among other things, provide financing of the
costs associated with the development, construction and start-up of the Project,
the Partnership has determined to issue Bonds pursuant to the Indenture
initially in the aggregate principal amount of $275,000,000;
WHEREAS, the Collateral Agent, the Partnership and others are entering
into the Security Documents, pursuant to which the Collateral Agent, acting on
behalf of the Senior Parties, will obtain a continuing Lien on and perfected
Security Interest in the Collateral;
WHEREAS, in order to satisfy certain requirements of the Partnership
under the Financing Documents, the Partnership may incur Permitted Indebtedness
as permitted under the Common Agreement in connection with (i) the issuance of
the DSR LOC by the DSR LOC Agent pursuant to the DSR LOC Reimbursement
Agreement, (ii) the issuance of the PPA LOC by the PPA LOC Agent pursuant to the
PPA LOC Reimbursement Agreement, (iii) the issuance by the Authority of the
Authority Bonds, (iv) the issuance by the Partnership of its Guaranty of the
Authority Bonds, and (v) its entry into the Lease Agreement with respect to the
Authority Bonds;
WHEREAS, under the terms of the Common Agreement, the Partnership may
incur additional Permitted Indebtedness which will be secured by the Collateral;
WHEREAS, the parties hereto desire to enter into this Agreement to set
forth their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by
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the respective parties hereto under the above described documents, (b) the
priority of their respective Security Interests created by the Security
Documents and (c) the appointment of the Collateral Agent as the collateral
agent for the Senior Parties and as the entitlement holder of Collateral
consisting of securities entitlements for purposes of Article 8 of the UCC; and
WHEREAS, (a) the Partnership desires to grant to the Collateral Agent,
acting on behalf of the Senior Parties, a Lien on and security interest in,
among other things, the Funds established pursuant to this Agreement and (b) the
Collateral Agent desires to appoint the Depositary Bank as depositary bank to
hold and administer money deposited in the various Funds established pursuant to
this Agreement and funded with, among other things, proceeds of certain
insurance and revenues generated and distributed to the Partnership.
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby covenant and agree as follows:
ARTICLE I
DEFINED TERMS; PRINCIPLES OF CONSTRUCTION
Section 1.1 DEFINED TERMS. (a) For all purposes of this Agreement,
capitalized terms used but not otherwise defined herein shall have the meaning
set forth in Appendix A to the Common Agreement.
(b) The following terms shall have the following respective
meanings:
"ACCRUED SENIOR DEBT" shall mean, on the date on which the Commercial
Operation Certificate is delivered, the amount at least equal to principal,
interest and letter of credit fees on all Senior Debt due and payable on the
Scheduled Payment Date immediately succeeding the date of such Commercial
Operation Certificate multiplied by a fraction (a) the numerator of which is the
number of complete months since the immediately preceding Scheduled Payment Date
and (b) the denominator of which is six.
"ADDITIONAL COLLATERAL AGENT" shall have the meaning given to that term
in SECTION 6.8(A) (Additional Collateral Agent.)
"AGREEMENT" shall mean this Agreement in its entirety.
"ARREARAGES" shall have the meaning specified in SECTION 5.4 (Receipt
of Money or Proceeds).
"AUTHORITY TRUSTEE CLAIMS" means all obligations of the Partnership,
now or hereafter existing, to pay administrative fees, costs, expenses,
liabilities and indemnities under the Authority Indenture and the Lease
Agreement.
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"COLLATERAL AGENT CLAIMS" shall mean all obligations of the
Partnership, now or hereafter existing, to pay fees, costs, expenses,
liabilities and indemnities to the Collateral Agent pursuant to SECTIONS 6.2(E)
(Rights of Collateral Agent) and 6.4 (Indemnification; Bankruptcy) hereof and
the other Financing Documents.
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings,
Common Representations, Warranties, Covenants and Other Terms dated as of
November 1, 1999, among the Partnership, the Trustee, the DSR LOC Agent, the PPA
LOC Agent and the Collateral Agent.
"DAMAGES" shall have the meaning specified in SECTION 6.4(B)
(Indemnification; Bankruptcy).
"DEBT TERMINATION DATE" shall mean the date on which all Finance
Liabilities, other than contingent liabilities and obligations which are
unasserted at such date, have been paid and satisfied in full and all Finance
Commitments have been terminated.
"DEPOSITARY BANK CLAIMS" means all obligations of the Partnership, now
or hereafter existing to pay administrative fees, costs, expenses, liabilities
and indemnities to the Depositary Bank under the Indenture and the Collateral
Agency Agreement.
"DESIGNATION LETTER" shall mean any letter executed and delivered
pursuant to SECTION 5.5 (Additional Senior Parties) hereof and substantially in
the form of EXHIBIT A hereto.
"DSR LOC AGENT CLAIMS" means all obligations of the Partnership, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities and
indemnities under the DSR LOC Reimbursement Agreement.
"ENERGY CONTRACT BUY-OUT PROCEEDS SUB-ACCOUNT" means the sub-account of
the Revenue Fund established by the Collateral Agent pursuant to SECTION 2.2
(Establishment of Funds and Sub-accounts) of the Collateral Agency Agreement.
"EVENT OF DEFAULT" shall mean an "event of default" under the Common
Agreement.
"EXCESS LOSS PROCEEDS" means any excess Loss Proceeds on deposit in the
Loss Proceeds Account after the Partnership has delivered to the Collateral
Agent a certificate certifying that the Event of Loss in respect of which such
Loss Proceeds were received has been fully repaired or restored.
"FINANCE COMMITMENT" shall mean any commitment pursuant to any of the
Financing Documents (or any other similar agreement entered into by the
Partnership with respect to the incurrence of Permitted Indebtedness (other than
the Bonds, the DSR LOC, the PPA LOC and Subordinated Debt)) to provide credit to
the Partnership.
"FINANCE LIABILITIES" shall mean all Indebtedness, liabilities and
obligations of the Partnership (including, but not limited to, principal,
interest, fees, reimbursement obligations, penalties, indemnities and legal and
other expenses, whether due after acceleration or otherwise) to the Senior
Parties (of whatsoever nature and howsoever evidenced) under or pursuant to the
Indenture, the Bonds, the DSR LOC Reimbursement Agreement, the PPA LOC
Reimbursement
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Agreement, a Working Capital Facility, and any other Financing Document (or any
other similar agreement entered into by the Partnership with respect to the
incurrence of Permitted Indebtedness (other than Subordinated Debt)), to the
extent arising on or prior to the Debt Termination Date, in each case, direct or
indirect, primary or secondary, fixed or contingent, now or hereafter arising
out of or relating to any such agreements.
"FUNDS" shall have the meaning given to that term in SECTION 2.2
(Establishment of Funds and Sub-accounts) hereof.
"INITIAL BONDS" shall have the meaning given to that term in the
Indenture.
"INDEMNIFIED PARTY" shall have the meaning specified in SECTION 6.4
(Indemnification; Bankruptcy).
"MAJOR MAINTENANCE REQUIRED AMOUNT" means, for any Funding Period
following termination of the LTSA in the event that the LTSA is not replaced
with an agreement similar in scope to the LTSA, an amount that would have been
required to be paid to GE International during such Funding Period using the
same escalation formulas and indices provided for in the LTSA had the LTSA
remained in effect, as such amount may be adjusted by the Partnership with the
written consent of the Independent Engineer.
"OTHER SENIOR DEBT" means all Permitted Indebtedness, except Permitted
Indebtedness set forth in clause (i), (ii), (v), (vi) and (vii) of Section
5.2(a) (Permitted Indebtedness) of the Common Agreement.
"OTHER SENIOR DEBT AGENT CLAIMS" means, as to the agent or
representative in respect of any Other Senior Debt, all obligations of the
Partnership, now or hereafter existing, to pay administrative fees, costs,
expenses, liabilities and indemnities under the documentation relating to such
Other Senior Debt.
"OUTSTANDING" shall have the meaning given to that term in the
Indenture.
"PECO BUY-OUT PROCEEDS" means all proceeds received by or on behalf of
the Partnership in respect of an Energy Contract Buy-Out in connection with a
termination by PECO of the PPA on the 20th anniversary of the date of
commencement of the operating term of the PPA.
"PPA LOC AGENT CLAIMS" means all obligations of the Partnership, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities and
indemnities under the PPA LOC Reimbursement Agreement.
"SECURITY INTEREST" shall mean any perfected and enforceable Lien on
the Collateral granted to the Collateral Agent pursuant to the requirements of
any applicable Financing Document.
"TRIGGER EVENT DATE" shall have the meaning set forth in SECTION 5.3(A)
(Exercise of Remedies and Application of Proceeds).
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"TRUSTEE CLAIMS" means all obligations of the Partnership, now or
hereafter existing, to pay administrative fees, costs, expenses, liabilities and
indemnities under the Indenture.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
"WORKING CAPITAL AGENT CLAIMS" means all obligations of the
Partnership, now or hereafter existing, to pay administrative fees, costs,
expenses, liabilities and indemnities under a Working Capital Facility.
For all purposes of this Agreement, the principles of construction set
forth in SECTION 1.1 (Definitions; Construction) of the Common Agreement shall
apply.
ARTICLE II
REPORTING REQUIREMENTS; PROCEDURES GOVERNING ACCOUNTS
Section 2.1 PROCEDURES GOVERNING FUNDS. (a) The Depositary Bank hereby
agrees to act as such and to accept all cash, payments, other amounts (including
any instruments in respect thereof) and Permitted Investments to be delivered to
or held by the Depositary Bank pursuant to the terms of this Agreement, and to
promptly deposit all such amounts and Permitted Investments into the Funds
established hereunder in accordance with the terms hereof. The Depositary Bank
shall hold and safeguard the Funds during the term of this Agreement and shall
treat the cash, payments, other amounts and Permitted Investments, and all
rights related thereto, now or hereafter deposited in or credited to the Funds
as "financial assets" (as defined in Section 8-102(a)(9) of the UCC), pledged by
the Partnership to the Collateral Agent for the benefit of the Senior Parties,
to be held by the Depositary Bank, acting as a "securities intermediary" (as
defined in the UCC).
(b) The Funds and sub-accounts established pursuant to SECTION
2.2 (Establishment of Funds and Sub-accounts) shall be in the name of the
Collateral Agent, for the benefit of the Senior Parties, for purposes of
granting the Collateral Agent, on behalf of the Senior Parties, a security
interest therein in accordance with the Security Documents (with the exception
of funds held on deposit in the Local Accounts). The Collateral Agent shall be
the entitlement holder with respect to such of the Collateral consisting of
securities entitlements for purposes of the UCC. All amounts and Permitted
Investments from time to time held in each Fund shall be (a) registered in the
name of the Collateral Agent, for the benefit of the Senior Parties, (b) held in
the custody of the Depositary Bank for the purposes and on the terms set forth
in this Agreement and the other Financing Documents and (c) endorsed to the
Collateral Agent or credited to another account maintained in the name of
Collateral Agent. All such amounts shall constitute a part of the Collateral and
shall not constitute payment of any Indebtedness or any other obligation of the
Partnership until applied as hereinafter provided.
(c) Each of the Funds shall at all times be in the exclusive
possession of, and under the exclusive dominion and control of, the Depositary
Bank acting at the written direction of the Collateral Agent (with the exception
of funds held on deposit in the Local Accounts). The
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Partnership agrees that its rights to monies held in the Funds are subject to
and controlled by the terms of this Agreement. In no case will any amounts or
Permitted Investments deposited in or credited to any Fund be registered in the
name of the Partnership, payable to the order of the Partnership or specially
endorsed to the Partnership except to the extent the foregoing have been
specially endorsed to the Collateral Agent or in blank. The Partnership agrees
that the Funds, sub-accounts and the Local Accounts established hereto shall be
the only deposit accounts of the Partnership.
(d) The Depositary Bank hereby agrees that it will comply with
"entitlement orders" (within the meaning of Section 8-102(a)(8) of the UCC,
including, without limitation, any notification to the Depositary Bank directing
transfer or redemption of any securities or other financial assets in any Fund)
issued by the Collateral Agent and relating to any Fund without the requirement
of further consent by the Partnership or any other Person. The Depositary Bank
hereby represents that it has not entered into, and, hereby agrees that until
the termination of each of the Financing Documents, it will not enter into, any
agreement with any other Person (other than the Partnership) relating to the
Funds (or the amounts and Permitted Investments deposited therein or credited
thereto) pursuant to which it has agreed to comply with entitlement orders made
by such Person. The Depositary Bank hereby represents that it has not entered
into any other agreement with the Partnership or the Collateral Agent purporting
to limit or condition the obligation of the Depositary Bank to comply with
entitlement orders as set forth in this SECTION 2.1(D). The Collateral Agent
agrees that it shall not issue entitlement orders in any circumstances which are
not permitted by this Agreement.
Section 2.2 ESTABLISHMENT OF FUNDS AND SUB-ACCOUNTS. The Collateral
Agent hereby establishes with the Depositary Bank the following funds (the
"FUNDS") in the form of non-interest bearing accounts and sub-accounts thereof
(and each such Fund or sub account shall be a "securities account" as such term
is defined in Section 8-501(a) of the UCC), which shall be maintained at all
times in accordance with SECTION 2.1 Procedures Governing Funds) until the
termination of this Agreement:
(i) Construction Fund;
(ii) Revenue Fund;
(iii) Operating Fund;
(iv) Debt Service Fund; and
(v) Partnership Distribution Fund
The following sub-accounts are hereby established and created within
the Revenue Fund:
(i) Loss Proceeds Account;
(ii) Energy Contract Buy-Out Proceeds Sub-account
(established and created as a sub-account within the Loss Proceeds
Account); and
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(iii) EPC Buy-Down Proceeds Sub-account (established and
created as a sub-account within the Loss Proceeds Account).
The Major Maintenance Sub-account is hereby established and created within the
Operating Fund.
The following two sub-accounts are hereby established and created
within the Debt Service Fund:
(i) Debt Service Reserve Account; and
(ii) Subordinated Debt Account.
The following sub-accounts are hereby established and created within
the Partnership Distribution Fund:
(i) Distribution Suspense Account; and
(ii) Unrestricted Account.
Certain additional sub-accounts within certain of the Funds may be
established and created from time to time in accordance with this Agreement.
The Partnership may also establish up to two checking accounts in the
locality of the Project or the principal executive office of the managing
general partner of the Partnership (the "LOCAL Accounts") which may be funded by
amounts transferred in accordance with the terms hereof which shall be included
in the definition of "Funds" for all purposes of the Financing Documents other
than the provisions set forth in SECTION 2.1 (Procedures Governing Funds)
requiring each Fund to be established by the Collateral Agent with the
Depositary Bank.
Section 2.3 SECURITY INTEREST. (a) As collateral security for the
prompt and complete payment and performance when due of all obligations of the
Partnership owing to any Senior Party, the Partnership hereby pledges, assigns,
hypothecates and transfers to the Collateral Agent for the benefit of the Senior
Parties, and grants to the Collateral Agent a Lien on and Security Interest in
and to (i) each Fund and (ii) all cash, investments and securities at any time
on deposit in any Fund, including all income or gain earned thereon. The
Depositary Bank shall not change the name or account number of the foregoing
Funds or sub-accounts without the prior written consent of the Collateral Agent
and the Partnership.
(b) The Collateral Agent hereby waives any right of set-off or
recoupment that it may have or obtain with respect to the Funds or any amounts
or Permitted Investments deposited therein or credited thereto other than any
right of set-off or recoupment it may exercise on behalf of the Senior Parties.
(c) Notwithstanding any provision herein to the contrary, each
Senior Party hereby acknowledges and agrees that all funds held by the Trustee
in accordance with the Indenture are held for the benefit of the Holders and
that the Trustee shall hold such funds solely for the benefit of such Holders.
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(d) Notwithstanding any provision herein to the contrary, each
Senior Party hereby acknowledges and agrees that all funds held in the Debt
Service Reserve Account by the Collateral Agent in accordance with this
Agreement are held for the benefit of the Trustee (on behalf of the Holders) and
that the Collateral Agent shall hold such funds solely for the benefit of such
Persons.
(e) Notwithstanding any provision herein to the contrary, each
Senior Party hereby acknowledges and agrees that any DSR LOC held by the
Collateral Agent in accordance with this Agreement is held for the benefit of
the Trustee (on behalf of the Holders) and for the benefit of the DSR LOC Agent
to the extent of its interest in such DSR LOC and that the Collateral Agent
shall hold such letter of credit (and the proceeds thereof) solely for the
benefit of such Persons.
(f) Notwithstanding any provision herein to the contrary, each
Senior Party hereby acknowledges and agrees that any PECO Buy-Out Proceeds held
in the Energy Contract Buy-Out Proceeds Sub-account are held for the benefit of
the Trustee (on behalf of the Holders) until such time as there shall be no
Initial Bonds Outstanding under the Indenture. Each Senior Party (other than the
Trustee) agrees to make no claim to or against such PECO Buy-Out Proceeds until
the Trustee has notified the Collateral Agent that the Initial Bonds are no
longer Outstanding under the Indenture. With respect to its claim on PECO
Buy-Out Proceeds, the Trustee agrees to notify the Collateral Agent at such time
as there shall be no longer any Initial Bonds Outstanding under the Indenture.
SECTION 2.4 TERMINATION. The rights and powers granted herein to the
Collateral Agent, granted in order to perfect the Collateral Agent's security
interest in the Funds, are coupled with an interest and will be affected neither
by the bankruptcy of the Partnership or the Authority nor by the lapse of time.
The obligations of the Collateral Agent hereunder shall continue in effect until
the termination of this Agreement pursuant to SECTION 8.12 (Termination).
ARTICLE III
THE FUNDS
Section 3.1 CONSTRUCTION FUND. (a) Prior to the Date of Commercial
Operation of the Final Units, the following amounts shall be deposited into the
Construction Fund: (i) the proceeds of the sale of the Authority Bonds remaining
following the Initial Disbursement and the deposit of funds into the
Construction Interest Account in accordance with the Indenture, (ii) all Project
Revenues received by the Partnership, (iii) any income from the investment of
the monies in any Fund pursuant to SECTION 3.11 (Investments), (iv) all equity
contributions of the Contributing Partners to the Partnership, (v) all Loss
Proceeds, (vi) all proceeds from any delayed opening or business interruption
insurance and (vii) all EPC Contract delay damages and performance damages.
(b) On the Closing Date, upon receipt by the Collateral Agent
of a complete and properly executed requisition substantially in the form of
Exhibit 3.1 (a "Requisition") signed by an Authorized Representative of the
Partnership (the contents of which shall be confirmed by the Independent
Engineer to the extent set forth in such Requisition), the Collateral
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Agent shall apply the amount on deposit in the Construction Fund to the payment,
or reimbursement, to the extent the same have been paid or satisfied by the
Partnership, of Project Costs in accordance with such Requisition.
(c) Monthly after the Closing Date, or as frequently as may
reasonably be necessary, the Partnership may submit a Requisition to disburse
monies from the Construction Fund; PROVIDED, that each Requisition (except for
any Requisition with respect to the initial drawing on the Closing Date) shall
be submitted to the Collateral Agent no less than three (3) Business Days in
advance of the drawing date and shall include a certificate of an Authorized
Officer including the following: (i) a certification that the proceeds thereof
shall be used solely to pay Project Costs in accordance with the Common
Agreement; (ii) a certification that work performed to date has been
satisfactorily performed in a good and workmanlike manner and pursuant to and in
accordance with the terms and conditions of the Project Document under which
such work has been performed; (iii) a statement that undisbursed funds on
deposit in the Construction Fund, together with funds available under the Equity
Contribution Agreement and all other available sources of funds, are reasonably
expected to be sufficient to complete the Project according to the EPC Contract
and the Pipeline EPC Contract on or prior to the Scheduled Date of Commercial
Operation for the Final Units; (iv) a statement that the Partnership reasonably
expects that the Facility will be completed when required in order to prevent a
termination of the PPA due to delay; (v) a statement that no Default or Event of
Default under the Common Agreement has occurred and is continuing; (vi) a
statement that proceeds of all prior Requisitions have been expended or applied
pursuant to the provisions of the Financing Documents and that the items for
which amounts are requested in the subject Requisition have not been the basis
for a previous Requisition (other than as an Estimated Project Cost (as defined
in such Requisition)); (vii) a certification that all required insurance
policies, material Governmental Approvals and necessary Project Documents are in
full force and effect; (viii) a certification that the representations set forth
in Sections 4.1(a), 4.1(e), 4.1(f), 4.1(g), 4.1(k) and 4.1(q) of the Common
Agreement are true and correct in all material respects; (ix) a statement that
the Partnership is and the Facility Site is, to the best of the Partnership's
knowledge, in compliance with all Environmental Laws affecting the Facility Site
or the Facility, the noncompliance with which could reasonably be expected to
result in a Material Adverse Effect and (x) a statement that there has not been
any sale, forfeiture or loss of any material amount of the Collateral and the
Collateral is not subject to any Liens other than Permitted Liens. Subject to
the remaining provisions of this Section 3.1, upon receipt of a properly
delivered Requisition, the Collateral Agent shall transfer funds from the
Construction Fund in accordance with such Requisition.
(d) If the Partnership cannot satisfy the requirements of
clauses (i), (iv) or (vi) of Section 3.1(c), the Collateral Agent shall not
release funds from the Construction Fund in respect of such Requisition until
such clauses are satisfied. If the Partnership cannot satisfy clauses (ii),
(iii), (v), (vii), (viii), (ix) or (x) of Section 3.1(c), but the Collateral
Agent receives a Requisition signed by the Partnership (i) specifying and
identifying the failure, and the causes for the failure, to satisfy the
requirements of such clauses (ii), (iii), (v), (vii), (viii), (ix) or (x) of
Section 3.1(c) and (ii) certifying that (A) the requirements of clauses (i),
(iv) and (vi) of Section 3.1(c) are satisfied (which shall be confirmed by the
Independent Engineer to the extent set forth in such Requisition), (B) there
exists no Bankruptcy Event in respect of the Partnership, and (C) each of the
EPC Contract, the Power Purchase Agreement, required insurance policies and
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material Governmental Approvals required by the Transaction Documents for
construction of the Facility is in full force and effect (which shall be
confirmed by the Independent Engineer), then the Collateral Agent shall disburse
funds in accordance with such Requisition. Within fifteen (15) days of receipt
of such Requisition, the Collateral Agent shall give notice to the Senior
Parties describing such failure and specifying that, unless the Required Senior
Parties give notice to the Collateral Agent of their objection to payment of
further Requisitions containing any such specified failures, the Collateral
Agent shall continue to make payment of such Requisitions from available funds
in the Construction Fund, unless the Collateral Agent shall have received, by
the second Business Day prior to the date of payment stated in such Requisition,
notice of objection from the Required Senior Parties.
(e) Notwithstanding the foregoing, the Collateral Agent will
not release funds from the Construction Fund in respect of a requisition if a
Trigger Event shall have occurred and be known to the Collateral Agent and be
continuing until the Collateral Agent determines that such Trigger Event is no
longer continuing or the Required Senior Parties give instructions to the
Collateral Agent as to application of such funds.
(f) If on the date that the Collateral Agent receives a
Requisition pursuant to Section 3.1(c) or (d) there are insufficient monies in
the Construction Fund to fully satisfy the uses of funds set forth in such
Requisition, the Collateral Agent shall, and is hereby directed to, on the date
such Requisition is so received deliver a written notice in accordance with the
Equity Contribution Agreement requesting an Equity Contribution in accordance
with Section 2 of the Equity Contribution Agreement. The Collateral Agent shall
apply the proceeds of such Equity Contribution in accordance with the provisions
of Section 3.1 (Construction Fund) and the remaining provisions hereof.
(g) In the event that there shall have been deposited into the
Construction Fund amounts representing proceeds of delayed opening or business
interruption insurance, if any, or delay damages in respect of the EPC Contract,
the Partnership and each Senior Party agree that such amounts shall be
requisitioned FIRST to pay Project Costs identified in clause (xii) of the
definition thereof for the period of the delay in respect of which such proceeds
or damages were received, SECOND to pay Project Costs identified in clause (ix)
of the definition thereof and then, to pay other Project Costs.
Section 3.2 PAYMENTS ON COMMERCIAL OPERATION DATE. Not later than ten
(10) days after receipt by the Collateral Agent of an Officer's Certificate (the
"Commercial Operation Certificate") certifying that (i) all conditions precedent
to the occurrence of the Date of Commercial Operation of the Final Units
pursuant to the EPC Contract have been satisfied, (ii) except as stated in such
Commercial Operation Certificate, all labor and services required to acquire and
complete the Facility have been paid for, (iii) the amount, if any, required for
the payment of any remaining portion of the Project Costs not then due or
payable (or, pursuant to the Transaction Documents, being contested) shall be
retained in the Construction Fund until such Project Costs become due and
payable or uncontested, as the case may be, (iv) all permits, licenses, consents
and approvals required on such date by Governmental Authorities for the initial
operation of the Facility have been obtained, (v) the amounts to be transferred
from the Construction Fund in accordance with Section 3.1 (Construction Fund)
and (vi) no Default or Event of Default under the Common Agreement has occurred
and is continuing, the Collateral
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Agent shall, upon receipt of a certificate of the Independent Engineer
confirming the statements made by the Partnership in the Commercial Operation
Certificate and after retaining in the Construction Fund the amount, if any,
specified by the Partnership pursuant to clause (iii) above as necessary to pay
Project Costs which are not then due and payable (or which are being contested),
transfer all remaining funds in the Construction Fund (plus, to the extent
necessary, any amounts available under and pursuant to the Equity Contribution
Agreement to fund FIRST through THIRD below) by wire transfer in accordance with
such Commercial Operation Certificate to the following accounts and recipients
in the following order of priority:
FIRST, to the Operating Fund, an amount to the extent available, as
specified by the Partnership in the Commercial Operation Certificate but in any
event, no less than one-month's Operating and Maintenance Expenses;
SECOND, to the Debt Service Fund, an amount, to the extent available,
as specified by the Partnership in the Commercial Operation Certificate for
funding of Accrued Senior Debt;
THIRD, to the Debt Service Reserve Account, an amount as specified by
the Partnership equal to the Debt Service Reserve Required Balance less (i) the
amount of monies already on deposit in the Debt Service Reserve Account and (ii)
the stated amount of any DSR LOC; and
FOURTH, to the Unrestricted Account of the Partnership Distribution
Fund or (as directed by the Partnership), any remaining amounts.
Section 3.3 REVENUE FUND. (a) After the Date of Commercial Operation of
the Final Units, the following amounts shall be deposited into the Revenue Fund:
(i) all Project Revenues received by the Partnership, (ii) any income from the
investment of the monies in any Fund pursuant to SECTION 3.11 (Investments),
(iii) any proceeds from the sale of assets by the Partnership in accordance with
SECTION 5.2(E) (Fundamental Changes; Sale of Assets) of the Common Agreement,
(iv) all proceeds from any business interruption insurance and delayed opening
insurance, (v) proceeds of Subordinated Debt, (vi) any proceeds of Additional
Bonds issued under the Indenture or a supplemented indenture thereto and (vii)
certain amounts specified hereunder to be withdrawn from other Funds or
sub-accounts. The Partnership shall instruct all parties at any time paying
material amounts of Project Revenues to the Partnership, and shall use all
commercially reasonable efforts to cause all such parties to agree, to make all
payments of such Project Revenues into the Revenue Fund. The Partnership shall
certify to the Collateral Agent, as to the parties (and to the extent known, the
amounts) that will make payments into the Revenue Fund, and shall promptly
notify the Collateral Agent in writing if it is aware of any refusal or failure
by any such party to make such payments into the Revenue Fund and shall deliver
any and all Project Revenues received by the Partnership to the Collateral Agent
for deposit to the Revenue Fund as promptly as possible. Any excess amounts in
any of the Funds will be transferred to the Revenue Fund on the next succeeding
Funding Date as directed by the Partnership.
(b) WITHDRAWALS FROM THE REVENUE FUND. Provided that no
Trigger Event has occurred and is continuing, the Partnership hereby irrevocably
authorizes the Collateral Agent, on each Funding Date, to make withdrawals and
transfers of moneys to the extent then available in the Revenue Fund and not
segregated for any specific purpose as provided in this SECTION 3.1,
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upon the delivery of an Officer's Certificate of the Partnership to the
Collateral Agent at least three (3) Business Days prior to a scheduled Funding
Date setting forth the amounts to be withdrawn, transferred or segregated
pursuant to this clause (b), in the following order of priority:
(i) FIRST: Withdraw and transfer to the Operating Fund
the amount set forth in such Officer's Certificate of the Partnership
and certified by such Officer's Certificate to be the amounts payable
for Operating and Maintenance Expenses due and payable, or, in respect
of the Major Maintenance Required Amount, required to be reserved in
the Major Maintenance Sub-account, at any time during the Funding
Period beginning on such Funding Date, less the aggregate of the
amounts previously transferred on any prior Funding Date for Operating
and Maintenance Expenses which remain on deposit in the Operating Fund
or Local Accounts on such date; PROVIDED that amounts due and payable
with respect to Operations and Maintenance Expenses during the Funding
Period shall be transferred to the Local Accounts if so directed by the
Partnership; PROVIDED, FURTHER, that the Partnership shall deliver an
Officer's Certificate to the Collateral Agent certifying as to the
amount of any balance in the Local Accounts and further certifying that
the Partnership does not reasonably expect that the aggregate amount
transferred with respect to Operating and Maintenance Expenses for the
applicable fiscal year shall exceed 125% of the amount specified in the
Operating Budget for such fiscal year unless the Partnership further
certifies that such excess is necessary and reasonable;
(ii) SECOND: After making the withdrawals specified in
clause (i), if a Working Capital Facility shall be in effect, withdraw
and transfer to the Working Capital Agent the amount set forth in the
Officer's Certificate of the Partnership for payment to the Working
Capital Agent an amount equal to the principal of, interest on and fees
(including up-front and commitment fees, if any) due and payable
(including optionally payable principal amounts) at any time during the
Funding Period commencing on such Funding Date with respect to Working
Capital Loans under any Working Capital Facility less the aggregate of
the amounts previously transferred for such purpose on any prior
Funding Date which remain on deposit in the Operating Fund;
(iii) THIRD: After making the withdrawals specified in
clauses (i) and (ii), withdraw and transfer (A) to the Trustee, the
Depositary Bank, the Collateral Agent and the Authority Trustee, the
amount set forth in the Officer's Certificate of the Partnership for
the payment of Trustee Claims, Depositary Bank Claims, Collateral Agent
Claims and Authority Trustee Claims, respectively, (B) to the DSR LOC
Agent, the amount set forth in the Officer's Certificate of the
Partnership for the payment of DSR LOC Agent Claims, (C) to the PPA LOC
Agent, the amount set forth in the Officer's Certificate of the
Partnership for the payment of PPA LOC Agent Claims and (D) to the
agents or representatives of Other Senior Debt, the amount set forth in
the Officer's Certificate of the Partnership for the payment of the
Other Senior Debt Agent Claims; PROVIDED that if funds in the Revenue
Fund are insufficient to make the payments specified in this paragraph
THIRD, distribution of funds shall be made ratably to the specified
recipients;
(iv) FOURTH: After making the withdrawals specified in
clauses (i), (ii) and (iii), withdraw and transfer to the Debt Service
Fund the amount set forth in the Officer's
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Certificate of the Partnership for payment, without duplication, of the
sum of (A) one-sixth of the interest due and payable with respect to
the Bonds on the next succeeding Scheduled Payment Date (unless such
Funding Date is also a Scheduled Payment Date in which case the amount
transferred shall equal the excess of the total amount of interest due
and payable on the Bonds on such Scheduled Payment Date less the
amounts already transferred to the Debt Service Fund for such purpose),
(B) one-sixth of the interest and letter of credit fees due and payable
with respect to any DSR Bond, DSR LOC Loan and DSR Term Loan on the
next succeeding Scheduled Payment Date (unless such Funding Date is
also a Scheduled Payment Date in which case the amount transferred
shall equal the excess of the total amount of interest and letter of
credit fees due and payable on the DSR Bonds, DSR LOC Loans and DSR
Term Loans on such Scheduled Payment Date less the amounts already
transferred to the Debt Service Fund for such purpose), (C) one-sixth
of interest due and payable with respect to Other Senior Debt on the
next succeeding Scheduled Payment Date (unless such Funding Date is
also a Scheduled Payment Date in which case the amount transferred
shall equal the excess of the total amount of interest due and payable
on the Other Senior Debt on such Scheduled Payment Date less the
amounts already transferred to the Debt Service Fund for such purpose)
and (D) one-sixth of the interest and letter of credit fees due and
payable with respect to any PPA LOC Loan and PPA Term Loan on the next
succeeding Scheduled Payment Date (unless such Funding Date is also a
Scheduled Payment Date in which case the amount transferred shall equal
the excess of the total amount of interest and letter of credit fees
due and payable on the PPA LOC Loans and PPA Term Loans on such
Scheduled Payment Date less the amounts already transferred to the Debt
Service Fund for such purpose); PROVIDED that any transfers required
pursuant to this priority FOURTH which were not made on the prior
Funding Date because the amounts in the Revenue Fund were insufficient
to make such transfers shall also be made as of the current Funding
Date;
(v) FIFTH: After making the withdrawals specified in
clauses (i), (ii), (iii) and (iv) withdraw and transfer to the Debt
Service Fund the amount set forth in the Officer's Certificate of the
Partnership for payment, without duplication, of the sum of (A)
one-sixth of the principal and premium, if any, due and payable with
respect to the Bonds on the next succeeding Scheduled Payment Date
(unless such Funding Date is also a Scheduled Payment Date in which
case the amount transferred shall equal the excess of the total amount
of principal and premium, IF ANY, due and payable on the Bonds on such
Scheduled Payment Date less the amounts transferred to the Debt Service
Fund for such purpose), (B) one-sixth of the principal due and payable
with respect to any DSR Bonds and DSR Term Loans on the next succeeding
Scheduled Payment Date (unless such Funding Date is also a Scheduled
Payment Date in which case the amount transferred shall equal the
excess of the total amount of principal due and payable on such DSR
Bonds and DSR Term Loans on such Scheduled Payment Date less the
amounts transferred to the Debt Service Fund for such purpose), (C)
one-sixth of the principal due and payable with respect to any PPA Term
Loan on the next succeeding Scheduled Payment Date (unless such Funding
Date is also a Scheduled Payment Date in which case the amount
transferred shall equal the excess of the total amount of principal due
and payable on such PPA Term Loans on such Scheduled Payment Date less
the amounts transferred to the Debt Service Fund for such purpose), and
(D) one-sixth of the principal due and payable with respect to any
Other Senior Debt on the next succeeding Scheduled
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Payment Date (unless such Funding Date is also a Scheduled Payment Date
in which case the amount transferred shall equal the excess of the
total amount of principal due and payable on such Other Senior Debt on
such Scheduled Payment Date less the amounts transferred to the Debt
Service Fund for such purpose); PROVIDED that any transfers required
pursuant to this priority FIFTH which were not made on the prior
Funding Date because the amounts in the Revenue Fund were insufficient
to make such transfers shall also be made as of the current Funding
Date;
(vi) SIXTH: After making the withdrawals specified in
clauses (i), (ii), (iii), (iv) and (v) withdraw and transfer to the
Debt Service Fund the amount set forth in the Officer's Certificate of
the Partnership for payment, without duplication, of the sum of (A)
one-sixth of any other amounts due and payable with respect to the
Bonds on the next succeeding Scheduled Payment Date (unless such
Funding Date is also a Scheduled Payment Date in which case the amount
transferred shall equal the excess of the total amount of all other
amounts due with respect to the Bonds on such Scheduled Payment Date
less the amounts already transferred to the Debt Service Fund for such
purpose), (B) one-sixth of any other amounts due and payable under the
DSR LOC Reimbursement Agreement on the next succeeding Scheduled
Payment Date (unless such Funding Date is also a Scheduled Payment Date
in which case the amount transferred shall equal the excess of the
total amount of all other amounts due under the DSR LOC Reimbursement
Agreement on such Scheduled Payment Date less the amounts already
transferred to the Debt Service Fund for such purpose), (C) one-sixth
of any other amounts due and payable with respect to any Other Senior
Debt on the next succeeding Scheduled Payment Date (unless such Funding
Date is also a Scheduled Payment Date in which case the amount
transferred shall equal the excess of the total amount of all other
amounts due and payable on such Other Senior Debt on such Scheduled
Payment Date less the amounts transferred to the Debt Service Fund for
such purpose), and (D) one-sixth of any other amounts due and payable
under the PPA LOC Reimbursement Agreement (unless such Funding Date is
also a Scheduled Payment Date in which case the amount transferred
shall equal the excess of the total amount of all other amounts due and
payable under the PPA LOC Reimbursement Agreement on such Scheduled
Payment Date less the amounts transferred to the Debt Service Fund for
such purpose); PROVIDED that any transfers required pursuant to this
priority SIXTH which were not made on the prior Funding Date because
the amounts on deposit in the Revenue Fund were insufficient to make
such transfers shall also be made as of the current Funding Date and
PROVIDED, further, that there shall be excluded from amounts specified
in this priority SIXTH the amount of principal due on such DSR LOC
Loans and PPA LOC Loans which is provided for under Priority SEVENTH
and EIGHTH, respectively, below, and excluding amounts provided for
under priorities THIRD, FOURTH and FIFTH above;
(vii) SEVENTH: After making the withdrawals and transfers
specified in clauses (i), (ii), (iii), (iv), (v) and (vi), withdraw and
transfer, first, to the DSR LOC Agent, to the extent of cash available
after such withdrawals and transfers, an amount equal to the
outstanding principal amount of any DSR LOC Loans that have not been
converted into DSR Bonds or DSR Term Loans and second, to the Debt
Service Reserve Account, the amount necessary to fund the Debt Service
Reserve Account up to the Debt Service Reserve Required Balance (after
taking into account any amounts remaining
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available to be drawn under the DSR LOC after giving effect to the
reinstatement thereof by reason of the payment of such DRS LOC Loans);
PROVIDED, HOWEVER, that if on any Funding Date amounts available for
drawing under the DSR LOC are not being reinstated for the payments to
be made to the DSR LOC Agent and funds in the Revenue Fund are
insufficient to make the payments specified in this paragraph SEVENTH
on such Funding Date, distribution of funds shall be made ratably to
the specified recipients based on the amount due in respect of the
outstanding principal amount of such DSR LOC Loans compared to the
amount by which the Debt Service Reserve Required Balance exceeds the
sum of the amount on deposit in the Debt Service Reserve Account and
the amount available to be drawn on the DSR LOC on such date;
(viii) EIGHTH: After making the withdrawals and transfers
specified in clauses (i), (ii), (iii), (iv), (v), (vi) and (vii),
withdraw and transfer to the PPA LOC Agent, to the extent of available
cash, an amount equal to the outstanding principal of any PPA LOC Loans
that have not been converted into PPA Term Loans;
(ix) NINTH: During the LOC Sweep Period, after making the
withdrawals and transfers specified in clauses (i), (ii), (iii), (iv),
(v), (vi), (vii) and (viii), withdraw and transfer to the DSR LOC Agent
and the PPA LOC Agent, on a ratable basis, to the extent of available
cash, an amount equal to the outstanding amount of DSR Bonds, DSR Term
Loans and PPA Term Loans on such Funding Date;
(x) TENTH: After making the withdrawals and transfers
specified in clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii)
and (ix), withdraw and transfer to the Subordinated Debt Account the
amount set forth in the Officer's Certificate of the Partnership for
payment, without duplication of principal, interest and other amounts
(including fees) due and payable at any time during the Funding Period
commencing on such Funding Date with respect to any Third Party
Subordinated Debt; and
(xi) ELEVENTH: After making the withdrawals and transfers
specified in clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (viii),
(ix) and (x), transfer to the Partnership Distribution Fund the
balance, if any, remaining in the Revenue Fund.
(c) PREPAYMENT OF DSR LOANS AND PPA LOANS. The Partnership, on
any date after January 31, 2012, may furnish to the Collateral Agent an LOC
Sweep Notice, which shall be irrevocable if and to the extent it so provides,
and which shall authorize and direct the Collateral Agent, on each Funding Date
during a period (the "LOC Sweep Period") commencing on the date specified in
such Notice and continuing until the LOC Sweep Termination Date, to pay to the
DSR LOC Agent or the PPA LOC Agent, as applicable, for application to the
ratable prepayment of DSR Bonds, DSR Term Loans and PPA Term Loans (if any) that
may be outstanding on such Funding Date, all available cash up to the
outstanding amount of such DSR Bonds, DSR Term Loans and PPA Term Loans, after
application of proceeds from the Revenue Fund in accordance with paragraphs
FIRST through EIGHTH of Section 3.3(b) above (and assuming the application of
such proceeds to the payment of Senior Debt (to the extent allocable thereto)
and other amounts on the next Scheduled Payment Date).
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(d) APPLICATION OF CASH COLLATERAL RELEASED BY PECO. In the
event of an Energy Contract Buy-Out resulting from a termination by PECO of the
PPA on the 20th anniversary of the commencement of the operating term of the
PPA, as provided in the PPA, after the receipt by the Partnership and/or the
Collateral Agent of the PECO Buy-Out Proceeds, and the transfer thereof by the
Collateral Agent to the Trustee for deposit in the Redemption Fund of the
amounts required to be so transferred, any amount of cash collateral then held
by PECO as a result of a drawing under the PPA LOC shall, upon release by PECO,
be transferred to the PPA LOC Agent for application to the prepayment of the PPA
Term Loan made as a result of such drawing, notwithstanding any other provision
set forth in Section 3.3(b) above. Any excess amounts after such application
shall be transferred to the Collateral Agent for deposit into the Revenue Fund
in accordance with Section 3.3(a).
Section 3.4 OPERATING FUND. Monies on deposit in the Operating Fund
shall be used for the payment of Operating and Maintenance Expenses. On any date
after the Date of Commercial Operation of the Final Units that amounts for the
payment of such expenses are due and payable and have been requisitioned in
accordance with SECTION 3.1(B) (I) (Withdrawals from the Revenue Fund), the
Collateral Agent shall, upon the request of the Partnership, withdraw the monies
on deposit in the Operating Fund and remit such monies to the Partnership (or as
otherwise directed by the Partnership) for the payment of such Operating and
Maintenance Expenses. If monies in the Operating Fund (including the Major
Maintenance Sub-Account) and the Local Accounts are insufficient on any date to
make such payments with respect to Operations and Maintenance Expenses, then the
Collateral Agent shall withdraw funds and pay such deficiency into the Operating
Fund first from the Revenue Fund, then from the Distribution Suspense Account,
then from the Partnership Distribution Fund, then from the Unrestricted Account,
and lastly from the Subordinated Debt Account (to the extent funds are available
in each such Fund or Account.
Section 3.5 DEBT SERVICE FUND. (a) Monies on deposit in the Debt
Service Fund shall be used for the payment of principal, interest, premium, if
any, and any other amounts due and payable on the Bonds, DSR Bonds, DSR LOC
Loans, DSR Term Loans, PPA LOC Loans, PPA Term Loans and Other Senior Debt and
interest, fees and any other amounts (other than principal) due and payable on
any DSR LOC Loans or PPA LOC Loans or under the DSR LOC Reimbursement Agreement
or the PPA LOC Reimbursement Agreement (other than DSR LOC Agent Claims and PPA
LOC Agent Claims). On any date that such amounts are due and payable and have
been requisitioned in accordance with SECTION 3.3(B) (IV) - (VI) (Withdrawals
from the Revenue Fund), the Collateral Agent shall withdraw the monies on
deposit in the Debt Service Fund and remit such monies to the Persons entitled
thereto for the payment of such principal, interest, premium, if any and other
expense.
(b) If monies in the Debt Service Fund are insufficient on any
date to make any required payment when due of principal, interest, premium, if
any, and any other amounts due and payable on the Bonds, DSR Bonds, DSR LOC
Loans, DSR Term Loans, PPA LOC Loans, PPA Term Loans and Other Senior Debt and
interests fees and any other amounts (other than principal) due and payable on
any DSR LOC Loans or PPA LOC Loans or under the DSR LOC Reimbursement Agreement
or the PPA LOC Reimbursement Agreement (other than DSR LOC Agent Claims and PPA
LOC Agent Claims), then the Collateral Agent shall withdraw funds and pay such
deficiency first from the Distribution Suspense Account, then from the
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Partnership Distribution Fund, then from the Unrestricted Account and then from
the Subordinated Debt Account (in each case to the extent funds are available in
each such Fund). If an insufficient amount of monies remains on deposit in the
Debt Service Fund following the transfers in the preceding sentence, then
distribution of monies shall be made ratably to the Persons entitled thereto in
accordance with the order of priorities set forth in clauses (iv), (v) and (vi)
of SECTION 3.3 (Revenue Fund).
Section 3.6 DEBT SERVICE RESERVE ACCOUNT. (a) On or before June 1,
2002, the Partnership shall (A) deposit an amount of monies into the Debt
Service Reserve Account and/or (B) deliver to the Collateral Agent a DSR LOC in
an aggregate amount equal to the Debt Service Reserve Required Balance as in
effect on June 1, 2002.
(b) A determination as to the monies held in the Debt Service
Reserve Account and/or the aggregate maximum amount at the time available to be
drawn under any DSR LOC delivered in respect of the Debt Service Reserve
Required Balance shall be made by the Partnership prior to each Funding Date and
immediately following any withdrawal of amounts in the Debt Service Reserve
Account pursuant to clause (c) below. As soon as practicable after making any
such determination, the Partnership shall deliver to the Collateral Agent an
Officer's Certificate of the Partnership setting forth such determination, and
the Collateral Agent shall confirm such determination.
(c) On any day on which the amounts on deposit in the Debt
Service Fund in respect of the amount due with respect to the Bonds, together
with the amounts withdrawn from the Revenue Fund, the Major Maintenance
Sub-account of the Operating Fund, the Local Accounts, the Distribution Suspense
Account, the Partnership Distribution Fund, the Unrestricted Account and the
Subordinated Debt Account (as applicable) allocated thereto, are insufficient to
pay, in full, all amounts so requisitioned, the Collateral Agent shall, subject
to paragraph (d) below (i) withdraw the monies on deposit in the Debt Service
Reserve Account and/or draw on the DSR LOC (in a proportion as instructed in
writing by the Partnership) in an amount equal to the lesser of (x) the amount
necessary to make up such deficiency and (y) the sum of the monies on deposit in
the Debt Service Reserve Account and the monies available to be drawn under such
DSR LOC and (ii) apply such monies to the payment of principal, premium (if any)
or interest then due with respect to the Bonds.
(d) On any date on which the amounts on deposit in the Debt
Service Fund for the payment of interest due and payable in respect of DSR Loans
are insufficient to provide for such payment, the Collateral Agent, upon receipt
of a certificate of the DSR LOC Agent notifying the Collateral Agent of the
existence, and setting forth the amount, of such shortfall, within two (2)
Business Days of receipt of such certificate shall draw on the DSR LOC in an
amount equal to the amount of such shortfall and transfer such amount to the DSR
LOC Agent in payment (in whole or part) of such interest on such DSR Loans.
Notwithstanding the foregoing, in no event shall any draw on the DSR LOC under
this Section 3.6(d) individually or in the aggregate with all other such draws
less draws previously reimbursed exceed an amount (the "Interest Portion")
corresponding to six (6) months of interest on the maximum stated amount of the
DSR LOC, as established by the Partnership and the DSR LOC Agent pursuant to the
DSR LOC Reimbursement Agreement; PROVIDED, HOWEVER, that to the extent amounts
available to be drawn under the DSR LOC have been reinstated due to
reimbursement of prior draws on the
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DSR LOC, draws on the DSR LOC under this Section 3.6(d) may equal (in aggregate
with all other such draws) the sum of (x) the Interest Portion plus (y) an
amount equal to the aggregate amount of all reinstatements of amounts available
to be drawn under the DSR LOC allocable to prior reinstatements of draws on the
DSR LOC under this Section 3.6(d) (such allocation shall be determined by
multiplying the aggregate amount of prior reimbursements of draws by a fraction,
the numerator of which is the aggregate amount of drawings under the DSR LOC
described in this paragraph and the denominator of which is the aggregate amount
of drawings under the DSR LOC for all purposes).
(e) Thirty (30) days after receipt of notice from the DSR LOC
Agent that the long-term debt of the DSR LOC Issuer is rated less than the
Required Rating, PROVIDED that the DSR LOC has not been replaced by a
replacement DSR LOC issued by a new DSR LOC Issuer satisfying the requirements
of the Required Rating, the Collateral Agent shall deliver to the DSR LOC Agent
on such date (i) a draft on such DSR LOC in an amount equal to the lesser of (x)
the excess (if any) of (A) the then current Debt Service Reserve Required
Balance over (B) the amount on deposit in the Debt Service Reserve Account plus
the aggregate amount available to be drawn under any other outstanding DSR LOC
which is not at such time being drawn upon by the Collateral Agent and (y) the
maximum amount available to be drawn under such DSR LOC and (ii) an appropriate
certificate with respect thereto if required by such DSR LOC. The Collateral
Agent shall deposit the monies received from the DSR LOC Issuer in payment of
such draft in the Debt Service Reserve Account to be applied in accordance with
this SECTION 3.6.
(f) If the Collateral Agent receives a written notice from the
DSR LOC Agent substantially in the form of Annex 2 to the DSR LOC, stating that
the DSR LOC shall be terminated on the date specified in such notice (which
termination date shall be no sooner than sixty (60) days following the giving of
such notice), the Collateral Agent shall, within three (3) Business Days of
receipt of such notice, draw on the DSR LOC in an amount equal to the amount
necessary to fund the Debt Service Reserve Account up to the Debt Service
Reserve Required Balance (calculated without aggregating therewith the amount
available to be drawn under the DSR LOC), whereupon the Collateral Agent shall
deposit the proceeds of such drawing in the Debt Service Reserve Account, and
the DSR LOC shall thereupon automatically terminate.
(g) If a Trigger Event shall have occurred and be continuing
and the Collateral Agent has received the written request of the Required Senior
Parties and such notice has not been rescinded, then the Collateral Agent, upon
receipt of an Officer's Certificate of the Partnership setting forth the Debt
Service Reserve Required Balance (calculated without aggregating therewith the
amount available to be drawn under the DSR LOC), shall draw on the DSR LOC in an
amount equal to the amount necessary to fund the Debt Service Reserve Account up
to the Debt Service Reserve Required Balance (calculated as described in the
immediately preceding parenthetical clause), whereupon the Collateral Agent
shall distribute the proceeds of such drawing, together with other amounts
available in the Debt Service Reserve Account, to the Trustee, and the DSR LOC
shall thereupon automatically terminate. The failure of the Collateral Agent to
receive the written request of the Required Senior Parties shall not limit the
rights or obligations of the Collateral Agent otherwise provided for herein.
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(h) The amount available for drawing under the DSR LOC will be
reduced upon (i) the making of drawings thereunder and (ii) the making of direct
deposits of cash or Permitted Investments in the Debt Service Reserve Account by
the Partnership; PROVIDED, HOWEVER, that any reduction in the amount available
for drawing pursuant to clause (ii) shall be made only at the election of the
Partnership.
(i) The Partnership hereby authorizes the Collateral Agent to
return the DSR LOC to the DSR LOC Agent in connection with any assignment or
substitution of such DSR LOC pursuant to the DSR LOC Reimbursement Agreement.
(j) At any time, the Partnership may satisfy its obligation to
maintain in the Debt Service Reserve Account an amount at least equal to the
Debt Service Reserve Required Balance by (i) depositing an amount of monies
(which may represent the proceeds of Subordinated Debt) into the Debt Service
Reserve Account, (ii) delivering to the Collateral Agent a DSR LOC or (iii) a
combination of (i) and (ii). In the event that the amount of monies on deposit
in the Debt Service Reserve Account together with the amount available under any
DSR LOC exceeds the Debt Service Reserve Required Balance (such amount, the
"Excess DSR Balance"), the Collateral Agent shall, upon the written request of
the Partnership either (a) deliver to the DSR LOC Issuer and the DSR LOC Agent a
notice reducing the amount available under the DSR LOC by an amount equal to the
Excess DSR Balance or (b) transfer an amount equal to the Excess DSR Balance
from the Debt Service Reserve Account to the Unrestricted Account of the
Partnership Distribution Fund.
Section 3.7 LOSS PROCEEDS ACCOUNT. (a) All Loss Proceeds shall be paid
directly into the Loss Proceeds Account. If any Loss Proceeds are received by or
on behalf of the Partnership, such Loss Proceeds shall be received in trust for
the Collateral Agent, segregated from the other funds of the Partnership and
immediately paid to the Collateral Agent for deposit into the Loss Proceeds
Account. Amounts held in the Loss Proceeds Account shall be applied solely for
the payment of the costs of rebuilding, repair or restoration of the Project or
as otherwise set forth below.
(b) If an Event of Loss shall have occurred with respect to
the Project for which the Partnership receives Loss Proceeds less than or equal
to $10,000,000, the Collateral Agent shall withdraw and transfer to the
Partnership (or as otherwise directed by the Partnership) the amount of such
Loss Proceeds requested by the Partnership in an Officer's Certificate of the
Partnership which shall also describe how such Loss Proceeds shall be used;
PROVIDED that such Officer's Certificate shall certify that (i) no Event of
Default shall have occurred and be continuing, (ii) the Project can be rebuilt,
repaired or restored to permit operation of the Project or a portion thereof on
a commercially feasible basis and (iii) the Loss Proceeds, together with any
other amounts that are available to the Partnership for such rebuilding, repair
or restoration, are sufficient to permit such rebuilding, repair or restoration
of the Project or a portion thereof, including the making of all required
payments of interest and principal on the Partnership's Indebtedness during such
rebuilding, repair or restoration.
(c) If an Event of Loss shall have occurred with respect to
the Project for which the Partnership receives Loss Proceeds in excess of
$10,000,000, the Collateral Agent shall withdraw and transfer to the Partnership
(or as otherwise directed by the Partnership) the
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amount of such Loss Proceeds requested by the Partnership in an Officer's
Certificate of the Partnership; PROVIDED that (A) the Collateral Agent and the
Independent Engineer shall have received an Officer's Certificate of the
Partnership and such Officer's Certificate shall (i) describe in reasonable
detail the nature of the rebuilding, repair or restoration, (ii) state the cost
of such rebuilding, repair or restoration and the specific amount requested to
be paid to the Partnership (or as otherwise directed by the Partnership), the
timing of such payments and that such amount is requested to pay the cost
thereof, (iii) certify that the Project can be rebuilt, repaired or restored to
permit operation of the Project or a portion thereof on a commercially feasible
basis, (iv) certify that the Loss Proceeds, together with any other amounts that
are available to the Partnership for such rebuilding, repair or restoration are
sufficient to permit such rebuilding, repair or restoration of the Project or a
portion thereof, including the making of all required payments of interest and
principal on the Partnership's Indebtedness during such rebuilding, repair or
restoration, and (v) certify that the Partnership shall use its best efforts to
cause any repairs or restoration to be commenced and completed promptly and
diligently at its own cost and expense (including the use of funds on deposit in
the Loss Proceeds Account (other than any Energy Contract Buy-Out proceeds or
EPC Buy-Down proceeds)) and (B) the Independent Engineer shall have provided to
the Collateral Agent a written certificate stating that, based on a reasonable
investigation, it believes that the certifications made by the Partnership are
reasonable.
(d) If (i) the Partnership determines that the Project or a
portion thereof cannot be rebuilt, repaired or restored in accordance with the
provisions of SECTION 3.7(C) above or (ii) Excess Loss Proceeds greater than
$1,000,000 remain in the Loss Proceeds Account, then the Collateral Agent shall
withdraw such unused Loss Proceeds and transfer such amounts to the Revenue Fund
which such proceeds shall be distributed by the Collateral Agent in accordance
with the terms of SECTION 3.18 (Exercise of Remedies - Loss Proceeds) hereof.
(e) In the event of an Energy Contract Buy-Out, all proceeds
received by or on behalf of the Partnership in respect of such Energy Contract
Buy-Out shall be deposited into the Energy Contract Buy-Out Proceeds
Sub-account. In the case of an Energy Contract Buy-Out in connection with a
termination by PECO of the PPA on the 20th anniversary of the date of
commencement of the operating term of the PPA, the PECO Buy-Out Proceeds up to
an amount equal to the principal amount of the Outstanding Initial Bonds plus
interest accrued thereon to the date of redemption shall be transferred by the
Collateral Agent to the Trustee for deposit in the Redemption Fund under the
Indenture prior to any payment of any PECO Buy-Out Proceeds being made to any
other holder of Senior Debt or any other Person. In the case of any other Energy
Contract Buy-Out (including any other Energy Contract Buy-Out affecting the PPA)
or in the event that any PECO Buy-Out Proceeds remain following the redemption
of all Outstanding Initial Bonds, so long as no Default or Event of Default
shall have occurred and be continuing, and so long as the Partnership certifies
to the Collateral Agent that the Rating Agencies have confirmed that the
following transfer will not result in a Rating Downgrade, if the minimum
Projected Debt Service Coverage Ratio for each pair of subsequent consecutive
two Semi-Annual Periods, taken as a whole annual period, through the Final
Maturity Date exceeds 1.5 to 1.0, then only proceeds of such events in excess of
$10,000,000 shall be distributed by the Collateral Agent in accordance with the
terms of Section 3.18 (Exercise of Remedies - Loss Proceeds) hereof and such
$10,000,000 shall be transferred to the Revenue Fund; PROVIDED that that portion
of such $10,000,000 that would remain after sufficient proceeds therefrom are
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applied to retire Senior Debt in order to achieve a minimum Projected Debt
Service Coverage Ratio of 1.5 to 1.0 for each pair of subsequent consecutive
Semi-Annual Periods, taken as a whole annual period, through the Final Maturity
Date, shall be transferred to the Revenue Fund.
(f) (i) All EPC Buy-Down proceeds received by or on behalf of
the Partnership shall be deposited into the EPC Buy-Down Proceeds
Sub-account. If the Partnership receives EPC Buy-Down proceeds less
than or equal to $10,000,000, the Collateral Agent shall withdraw and
transfer to the Partnership (or as otherwise directed by the
Partnership) the amount of such EPC Buy-Down proceeds requested by the
Partnership in an Officer's Certificate of the Partnership which shall
also describe how such EPC-Buy-Down proceeds shall be used; PROVIDED
that such Officer's Certificate shall certify that (i) no Event of
Default shall have occurred and be continuing, (ii) the Facility can be
rebuilt, repaired or restored in order to remedy the circumstance
giving rise to the obligation of the EPC Contractor under the EPC
Contract to pay such EPC Buy-Down amounts and (iii) the EPC Buy-Down
proceeds, together with any other amounts that are available to the
Partnership for such rebuilding, repair or restoration are sufficient
to permit such rebuilding, repair or restoration of the Facility or a
portion thereof, including the making of all required payments of
interest and principal on the Partnership's Indebtedness during such
rebuilding, repair or restoration. If the Facility cannot be rebuilt,
repaired or restored in accordance with this Section 3.7(f)(i) or if
the Partnership cannot certify as to the other conditions set forth in
this Section 3.7(f)(i), such EPC Buy-Down proceeds shall be transferred
to the Revenue Fund and applied in accordance with Section 3.3(b)
hereof.
(ii) If the Partnership receives EPC Buy-Down proceeds in
excess of $10,000,000, the Collateral Agent shall withdraw and transfer
to the Partnership (or as otherwise directed by the Partnership) the
amount of such EPC Buy-Down proceeds requested by the Partnership in an
Officer's Certificate of the Partnership; PROVIDED that (A) the
Collateral Agent and the Independent Engineer shall have received an
Officer's Certificate of the Partnership and such Officer's Certificate
shall (i) describe in reasonable detail the nature of the rebuilding,
repairs or restoration, (ii) state the cost of such rebuilding, repair
or restoration and the specific amount requested to be paid to the
Partnership (or as otherwise directed by the Partnership), the timing
of such payments and that such amount is requested to pay the cost
thereof, (iii) certify that the Facility can be rebuilt, repaired or
restored in order to remedy the circumstance giving rise to the
obligation of the EPC Contractor under the EPC Contract to pay such EPC
Buy-Down amounts and the EPC Buy-Down proceeds, together with any other
amounts that are available to the Partnership for such rebuilding,
repair or restoration, are sufficient to permit such rebuilding, repair
or restoration of the Facility or a portion thereof, including the
making of all required payments of interest and principal on the
Partnership's Indebtedness during such rebuilding, repair or
restoration and (iv) certify that the Partnership shall use its best
efforts to cause any repairs or restoration to be commenced and
completed promptly and diligently at its own cost and expense
(including the use of funds on deposit in the EPC Buy-Down Proceeds
Sub-account), and (B) the Independent Engineer shall have provided to
the Collateral Agent a written certificate stating that, based on a
reasonable investigation, it believes that the certifications made by
the Partnership are reasonable.
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(iii) If with respect to EPC Buy-Down proceeds subject to
clause (f)(ii) above, the Partnership determines that the Facility or a
portion thereof cannot be rebuilt, repaired or restored in accordance
with the provisions of SECTION 3.7(F)(II), or excess EPC Buy-Down
proceeds greater than $1,000,000 remain in the EPC Buy-Down proceeds
Sub-account following the repair, restoration or rebuilding of the
Facility, then so long as the Partnership certifies to the Collateral
Agent that the Rating Agencies have confirmed that the following
transfer of EPC Buy-Down proceeds will not result in a Rating
Downgrade, if the minimum Projected Debt Service Coverage Ratio for
each pair of subsequent consecutive two Semi-Annual Periods, taken as a
whole annual period, through the Final Maturity Date exceeds 1.5 to
1.0, then only proceeds of such event in excess of $10,000,000 shall be
distributed by the Collateral Agent in accordance with the terms of
SECTION 3.18(C) (Exercise of Remedies-Loss Proceeds) hereof and such
$10,000,000 shall be transferred to the Revenue Fund; PROVIDED that
that portion of such $10,000,000 that would remain after sufficient
proceeds therefrom are applied to retire Senior Debt in order to
achieve a minimum Projected Debt Service Coverage Ratio of 1.5 to 1.0
for each pair of subsequent consecutive Semi-Annual Periods, taken as a
whole annual period, through the Final Maturity Date, shall be
transferred to the Revenue Fund.
Section 3.8 SUBORDINATED DEBT ACCOUNT. After the first Scheduled
Payment Date on the Bonds, monies on deposit in the Subordinated Debt Account
shall be used for the payment of principal, interest and other amounts
(including fees) due and payable on any Third Party Subordinated Debt. On any
date that such amounts are due and payable and have been requisitioned in
accordance with SECTION 3.3(B)(VIII) (Withdrawals from the Revenue Fund), the
Collateral Agent shall withdraw the monies on deposit in the Subordinated Debt
Account and remit such monies to the Persons entitled thereto for the payment of
such principal, interest and other amounts (including fees). If, on the Funding
Date immediately following the Funding Date in which such monies were deposited
into the Subordinated Debt Account, such monies remain on deposit in the
Subordinated Debt Account, such monies shall be withdrawn and transferred to the
Revenue Fund and shall be used as set forth herein.
Section 3.9 PARTNERSHIP DISTRIBUTION FUND. (a) The Partnership
Distribution Fund will be funded pursuant to SECTION 3.3(B) (Withdrawals from
the Revenue Fund). At least eight (8) Business Days prior to any Scheduled
Payment Date which occurs at least six months following the Date of Commercial
Operation of the Final Units on which the Distribution Conditions are satisfied,
the Partnership shall deliver an Officer's Certificate to the Collateral Agent
certifying as such, PROVIDED that so long as the Collateral Agent shall not have
received a written objection from the Required Senior Parties within five (5)
Business Days prior to such Scheduled Payment Date, the Collateral Agent shall
withdraw and transfer from the Partnership Distribution Fund to the Unrestricted
Account (as directed by the Partnership), or as otherwise directed by the
Partnership, monies on deposit in the Partnership Distribution Fund for use for
the repayment of any Affiliate Subordinated Debt or as distributions or other
lawfully permitted uses thereof.
(b) On any Scheduled Payment Date occurring at least six
months after the Date of Commercial Operation of the Final Units on which any of
the Distribution Conditions are not satisfied, the Collateral Agent shall
withdraw and transfer from the Partnership Distribution Fund to the Distribution
Suspense Account monies on deposit in the Partnership Distribution Fund until
such time as the requirements of clause (a) above are satisfied, at which
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time the Collateral Agent shall withdraw and transfer such monies to the
Partnership Distribution Fund for distribution in accordance with the terms
thereof. If monies have been deposited in the Distribution Suspense Account in
accordance with the immediately preceding sentence due to the Partnership's
failure to satisfy the conditions set forth in clauses (i) and (ii) of the
definition of the term "Distribution Conditions", and such monies have not been
withdrawn and transferred to the Partnership Distribution Fund within eighteen
(18) months after the Scheduled Payment Date on which such monies were deposited
in the Distribution Suspense Account, then the Partnership may, by written
notice to the Senior Parties, request that the Required Senior Parties elect
whether or not to use such funds to retire Senior Debt. If the Required Senior
Parties do not elect to use such funds to retire Senior Debt, then the
Collateral Agent shall withdraw and transfer such funds from the Distribution
Suspense Account to the Unrestricted Account (as directed by the Partnership),
or as otherwise directed by the Partnership, for use for the repayment of any
Affiliate Subordinated Debt or as distributions or other lawfully permitted uses
thereof. At any time that monies on deposit in any of the other Funds or
sub-accounts are not sufficient to make the payments specified in SECTION 3.3(B)
(Withdrawals from the Revenue Fund) or are not equal to the required balance of
such Fund or sub-account, then monies on deposit in the Distribution Suspense
Account shall be withdrawn and transferred to the Revenue Fund for application
in accordance with such SECTION 3.3(B).
(c) At least eight (8) Business Days prior to any Monthly
Distribution Date on which the Monthly Distribution Conditions are satisfied,
the Partnership shall deliver an Officer's Certificate certifying as such,
PROVIDED that so long as the Collateral Agent shall not have received a written
objection from the Required Senior Parties within five (5) Business Days prior
to such Funding Date, the Collateral Agent shall withdraw and transfer from the
Partnership Distribution Fund to the Partnership or the Unrestricted Account (as
directed by the Partnership), or as otherwise directed by the Partnership,
monies on deposit in the Partnership Distribution Fund for use for the repayment
of any Affiliated Subordinated Debt or as distributions or other lawfully
permitted uses thereof, including repayment of any Subordinated Debt.
(d) Withdrawals from the Unrestricted Account shall be
permitted at any time without restriction upon written instruction given to the
Collateral Agent by the Partnership (which may be in the form of a standing
instruction).
Section 3.10 WITHDRAWALS FROM THE FUNDS ON THE DEBT TERMINATION DATE.
Upon the occurrence of the Debt Termination Date and the termination of this
Agreement, the Collateral Agent shall withdraw the balances outstanding in each
Fund and transfer to the Partnership, or as directed by the Partnership, all
remaining amounts in the Funds.
Section 3.11 INVESTMENTS. (a) Pending the application of funds in any
of the Funds or sub-accounts (other than the Unrestricted Account) in accordance
with this ARTICLE 3, such funds may be invested and reinvested in Permitted
Investments denominated in Dollars and liquidated (at the risk and expense of
the Partnership), in accordance with written instructions given to the
Collateral Agent by the Partnership (except upon the occurrence and during the
continuance of an Event of Default during which such funds shall be invested and
reinvested in Permitted Investments with maturities no longer than a week).
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(b) If and when cash is required for disbursement in
accordance with this ARTICLE 3, the Collateral Agent is authorized, to the
extent necessary to make disbursements required pursuant to this ARTICLE 3, to
cause Permitted Investments to be sold or otherwise liquidated into cash in
accordance with written instructions from the Partnership; PROVIDED that in the
absence of timely receipt of such instructions, the Collateral Agent shall sell
or otherwise liquidate Permitted Investments as it shall, in good faith, deem
necessary. The Collateral Agent shall not be liable for any loss resulting from
such liquidation except to the extent such loss results solely from the gross
negligence or willful misconduct of the Collateral Agent. All such liquidations
shall be binding on the Partnership.
(c) The Collateral Agent shall not be required to take any
action with respect to investing the funds in any Fund or sub-account in the
absence of written instructions by the Partnership. The Collateral Agent shall
not be liable for any loss resulting from any investment in any Cash Equivalent
or the sale or redemption thereof except to the extent such loss results solely
from the gross negligence or willful misconduct of the Collateral Agent, it
being understood and agreed that in no event shall the Collateral Agent be
liable for any loss resulting from any investment, or any sale or redemption
thereof, made in accordance with written instructions received from the
Partnership.
(d) All funds in each and all investments in Permitted
Investments made in respect thereof, shall be held by the Depositary Bank in
accordance with Section 2.1 hereof and the interests of the Partnership therein
shall constitute part of the security subject to the pledge and security
interests created by the Security Documents.
Section 3.12 RECEIPT OF PROCEEDS BY THE PARTNERSHIP. The Partnership
agrees that forthwith upon the receipt by it of any Project Revenues or any
other proceeds related to the Project or of any check, draft, note, trade
acceptance or other instrument constituting Project Revenues or any other
proceeds related to the Project it will hold the same in precisely the form
received, in trust for the Collateral Agent, and will forthwith, and without any
notice or demand whatsoever, pay, endorse, transfer and deliver the same to the
Collateral Agent.
Section 3.13 BENEFIT OF ACCOUNTS. All right, title and interest in and
to the Funds and the monies in the Funds and investments made with monies from
the Funds shall be vested in the Collateral Agent for the benefit of the Senior
Parties until payment and performance in full of all of the Senior Debt and,
upon payment in full of all the Senior Debt, shall be vested in the Partnership.
Amounts deposited in the Funds shall be applied by the Collateral Agent as
provided in this Agreement and the other Security Documents, as applicable.
Section 3.14 INFORMATION. The Depositary Bank shall (i) (x) on a
monthly basis provide the Partnership and each Senior Party and (y) within five
(5) Business Days after receipt of any written request by the Partnership, the
Authority or any Senior Party, provide the Partnership, the Authority or such
Senior Party, as the case may be, with (a) fund balance statements in respect of
each of the Funds and sub-accounts, including all deposits, withdrawals and
transfers from and to such Funds and sub-accounts and (b) such information as
the Partnership, the Authority or such Senior Party, as the case may be, may
specify regarding all Funds, Permitted Investments (including, without
limitation, categories, amounts, maturities and issuers) and any other
investments made by the Collateral Agent pursuant hereto and regarding amounts
available in
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the Funds and (ii) upon the written request and at the expense of the
Partnership, arrange with the Partnership for a mutually convenient time for an
Authorized Officer or an Authorized Representative of the Partnership's auditors
to attend the office of the Collateral Agent to examine and take copies of
records relating to and instruments evidencing the Permitted Investments and
other investments made by the Collateral Agent pursuant hereto.
Section 3.15 ACCOUNTS GENERALLY. Except as specifically set forth in
this ARTICLE 3, the Partnership shall have no right of withdrawal in respect of
any of the Funds. Neither the Partnership nor the Authority shall make, attempt
to make or consent to the making of any withdrawal or transfer from any Fund
except in strict adherence to this Agreement. The Partnership and the Authority
acknowledge and agree that dominion and control of each of the Funds shall at
all times reside with the Depositary Bank on behalf of the Collateral Agent for
the benefit of the Senior Parties.
Section 3.16 DEPOSITARY BANK OBLIGATIONS LIMITED. The obligations of
the Depositary Bank under this ARTICLE 3 shall be limited to making the
withdrawals, retentions and transfers specified herein; the Depositary Bank
shall have no obligation to the Partnership or any third party to make any
payment for which the appropriate Fund does not contain sufficient funds.
Section 3.17 TRIGGER EVENTS. Notwithstanding anything in this Agreement
to the contrary, but subject to the exercise of remedies pursuant to this
Agreement, upon the occurrence of any Trigger Event all amounts on deposit in
the Funds shall, at the written direction of the Collateral Agent, acting
pursuant to this Agreement, be paid in accordance with the terms of ARTICLE 5 of
this Agreement to the payment of the Senior Debt.
Section 3.18 EXERCISE OF REMEDIES -- LOSS PROCEEDS. (a) If the
determination is made pursuant to Section 3.7 above that all or a portion of the
Project is incapable of being rebuilt, repaired or restored to permit operation
on a commercially feasible basis in the case of Loss Proceeds, or to remedy the
circumstances giving rise to the obligation of the EPC Contractor to pay EPC
Buy-Down amounts in the case of EPC Buy-Down proceeds or if Energy Contract
Buy-Out proceeds are not otherwise applied in accordance with the provisions of
this Agreement, all such Loss Proceeds, EPC Buy-Down proceeds or Energy Contract
Buy-Out proceeds, as the case may be, received by the Collateral Agent shall be
distributed by the Collateral Agent within five (5) Business Days of receipt in
the following order of priorities:
(i) to the Debt Service Fund for payment to the
Authority Trustee, the Collateral Agent, the DSR LOC Agent, the PPA LOC
Agent, the Depositary Bank, any agent or representative of Other Senior
Debt, and the Trustee, ratably, an amount equal to all Authority
Trustee Claims, Collateral Agent Claims, DSR LOC Agent Claims, PPA LOC
Agent Claims, Depositary Bank Claims, Other Senior Debt Agent Claims
and Trustee Claims, respectively, due and owing to such parties under
the Financing Documents and this Agreement;
(ii) to the Debt Service Fund for payment to the Senior
Parties, ratably, an amount equal to the unpaid amount of all Senior
Debt constituting principal, interest, premium, if any, and fees due
and owing to the Senior Parties by the Partnership;
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(iii) to the Debt Service Fund for payment to the Senior
Parties, ratably, an amount equal to all other unpaid amounts then due
and payable in respect of all Senior Debt owed to such Senior Parties;
(iv) to the Subordinated Debt Account for payment to the
holders of Third Party Subordinated Debt, ratably, an amount equal to
the unpaid amount of all Third Party Subordinated Debt then due and
owing to such holders; and
(v) to the Partnership (or its successors or assigns)
or to holders of Affiliate Subordinated Debt or to whomever a court of
competent jurisdiction may direct, any surplus remaining after giving
effect to clauses (i), (ii), (iii) and (iv) above.
At the time the distribution is to be made pursuant to clause (ii)
above, the Collateral Agent shall set aside available monies (on a ratable basis
with such distribution) in a separate interest-bearing trust account in an
amount up to the then outstanding aggregate amount of the DSR LOC and the PPA
LOC (which outstanding aggregate amount of the DSR LOC shall be calculated after
giving effect to the redemption of Bonds from such distribution in clause (ii)
above). Upon a subsequent draw on the DSR LOC or the PPA LOC, as the case may
be, the Collateral Agent shall as soon as practicable transfer monies from the
separate account to the DSR LOC Agent or the PPA LOC Agent, as the case may be,
up to the amount so drawn, to the extent not reimbursed, on such DSR LOC or PPA
LOC. Upon an expiration or termination of the DSR LOC or the PPA LOC, as the
case may be, monies in such separate account collateralizing such DSR LOC or
such PPA LOC, as the case may be, shall be released and applied as set forth
above in clauses (ii), (iii) and (iv) above.
(b) The proceeds of any sale, disposition or other realization
with respect to Collateral held for the benefit of some but not all of the
Senior Parties, if applicable, shall be applied to the payment of obligations
owed to the parties for whose benefit the specific Collateral was held.
ARTICLE IV
ADMINISTRATION OF THE COLLATERAL
Section 4.1 ADMINISTRATION OF THE COLLATERAL. (a) The Collateral Agent
shall hold the Collateral and any Lien thereon for the benefit of the Senior
Parties pursuant to the terms of this Agreement, the Security Documents and any
other Financing Document to which the Collateral Agent is a party. The
Collateral Agent shall administer the Collateral in the manner contemplated by
the Security Documents and the other Financing Documents to which the Collateral
Agent is a party and shall apply the balances from time to time held in the
Funds in the manner provided in this Agreement and the other Financing Documents
to which the Collateral Agent is a party. The Collateral Agent shall exercise
such rights and remedies with respect to the Collateral as are granted to it
under the Security Documents, the other Financing Documents and Applicable Law.
Except as otherwise expressly provided herein, no Senior Party and no class or
classes thereof shall have any right to direct the Collateral Agent to take any
action in respect of the Collateral and no Senior Party shall have any right to
sell, exchange or otherwise deal with
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any property at any time pledged, assigned or mortgaged to secure the Senior
Debt or take action with respect to the Collateral independently of the
Collateral Agent.
(b) The Collateral Agent shall have no responsibility with
respect to the recording, re-recording, filing, or refiling under the laws of
any jurisdiction under this Agreement, the other Financing Documents, or any
other document or statement that may be required or permitted to be recorded,
re-recorded, filed or re-filed under any such laws to perfect or protect the
security interests created by or pursuant to the Security Documents, or the
payment of any fees or taxes in connection therewith.
Section 4.2 PRIORITY OF SECURITY INTERESTS. (a) Each Senior Party
agrees that the Security Interest of each Senior Party in any Collateral ranks
and shall rank equally in priority with the Security Interest of the other
Senior Parties in the same Collateral. Each Senior Party agrees that the Funds
established under the Indenture are for the sole benefit of the Trustee acting
on behalf of the Holders.
(b) Notwithstanding anything to the contrary in clause (a),
the priorities specified in this Agreement with respect to (i) the Collateral,
(ii) all proceeds of the Collateral (including without limitation all Loss
Proceeds to the extent received by the Collateral Agent after giving effect to
the limitations and deductions permitted under the Indenture and this Agreement
with respect to such proceeds) and (iii) all amounts and funds retained in
accordance with this Agreement, in each case are applicable irrespective of any
statement to the contrary in any Financing Document or any other agreement, the
time or order or method of attachment or perfection of Liens, the time or order
of filing of financing statements, or the giving or failure to give notice of
the acquisition or expected acquisition of purchase money or other security
interests and to the extent not provided for in this Agreement, the rights and
priorities of the Senior Parties shall be determined in accordance with
Applicable Law.
ARTICLE V
EVENTS OF DEFAULT; TRIGGER EVENTS
Section 5.1 EXERCISE OF RIGHTS. So long as any Finance Liabilities
remain outstanding, each of the Senior Parties hereby acknowledges and agrees as
follows:
(a) The Collateral Agent shall administer the Collateral in
the manner contemplated by the Security Documents and this Agreement and only
upon the occurrence and continuance of a Trigger Event (subject to the
requirement that the Collateral Agent shall have received written notice
pursuant to SECTION 5.2(A) (Actions Upon a Trigger Event hereof)), the
Collateral Agent shall exercise, upon the written instruction of, and on behalf
of, the Required Senior Parties in accordance with the terms and provisions of
this ARTICLE 5, such rights and remedies with respect to the Collateral as are
granted to it under this Agreement, the Security Documents and Applicable Law.
(b) No Senior Party and no class or classes of Senior Parties
shall have any right, other than in accordance with the terms and provisions of
this ARTICLE 5, to (i) sell, exchange, release, not perfect and otherwise deal
with any property at any time pledged,
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assigned or mortgaged to secure the Finance Liabilities, (ii) exercise or
refrain from exercising any rights to direct the Collateral Agent to take any
action in respect of the Collateral, or (iii) take any other action with respect
to the Collateral (A) independently of the Collateral Agent or (B) other than to
direct the Collateral Agent to take action in accordance with the terms and
provisions of this ARTICLE 5. Subject to SECTION 6.7 (Authorization) hereof, any
of the Senior Parties may, at any time and from time to time (i) amend in any
manner any outstanding Financing Documents to which they are a party in
accordance with the terms thereof, (ii) release anyone liable in any manner
under or in respect of such Senior Party's Finance Liabilities in accordance
with the terms of the Financing Documents to which they are a party and (iii)
apply any sums from time to time received for payment or satisfaction of such
Senior Party's Finance Liabilities except as otherwise provided in SECTION 5.4
(Receipt of Money or Proceeds) hereof.
(c) Each Senior Party hereby agrees that upon the request of
the Collateral Agent it will give the Collateral Agent notice of the aggregate
amount of outstanding Indebtedness owed by the Partnership to such Senior Party
under the applicable Financing Documents and any other information that the
Collateral Agent may reasonably request.
Section 5.2 ACTIONS UPON A TRIGGER EVENT. So long as any Finance
Liability remains outstanding, the following provisions shall apply:
(a) Each Senior Party hereby agrees to give each other Senior
Party and the Collateral Agent written notice of the occurrence of an Event of
Default under such Senior Party's Financing Documents and of the occurrence of
an acceleration under such Senior Party's Financing Documents wherein such
Senior Party's Finance Liabilities have been declared to be or have
automatically become due and payable earlier than the scheduled maturity thereof
and such notice shall set forth the aggregate amount of Finance Liabilities that
have been so accelerated under such Financing Documents, in each case as soon as
practicable after the occurrence thereof; PROVIDED, HOWEVER, that the failure to
provide such notice shall not limit or impair the rights of the Senior Parties
hereunder or under any of the other Financing Documents.
(b) The Partnership hereby agrees that if a Trigger Event
shall have occurred and is continuing, the Collateral Agent is hereby
irrevocably authorized and empowered to act as the attorney-in-fact for the
Partnership with respect to the giving of any instructions or notices under this
Agreement; PROVIDED, HOWEVER, that if a Bankruptcy Event set forth in the Common
Agreement or any other Financing Document in respect of the Partnership has
caused the Trigger Event, the Collateral Agent shall automatically and
irrevocably be authorized and empowered to act as the attorney-in-fact for the
Partnership with respect to the giving of such instructions or notices. The
Collateral Agent hereby agrees that, upon the written request of the Required
Senior Parties, it shall give such notices and instructions under this Agreement
to the Depositary Bank. The Depositary Bank hereby agrees that it shall accept
such notices and instructions from the Collateral Agent.
Section 5.3 EXERCISE OF REMEDIES AND APPLICATION OF PROCEEDS.
Notwithstanding the provisions of ARTICLE 3 (The Funds) of this Agreement, so
long as any Finance Liability remains outstanding to more than one Senior Party,
the following provisions shall apply:
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(a) If a Trigger Event shall have occurred and be continuing
(subject to the requirement that the Collateral Agent shall have received
written notice pursuant to SECTION 5.2(A) (Actions Upon a Trigger Event)
hereof), upon the written request of the Required Senior Parties, the Collateral
Agent, on behalf of the Senior Parties, shall give the Depositary Bank a written
notice that a Trigger Event has occurred (the date of such notice, the "TRIGGER
EVENT DATE") and direct the Depositary Bank to render an accounting of the
current balance of each Fund and of any other monies of the Partnership and the
Authority administered by such Depositary Bank. No Senior Party shall be deemed
to have knowledge or notice of the occurrence of any Event of Default until such
Senior Party has received a written notice of such Event of Default from the
Partnership or any other Person for whom such Senior Party is acting as agent or
trustee.
(b) If a Trigger Event shall have occurred and be continuing
(subject to the requirement that the Collateral Agent shall have received
written notice pursuant to SECTION 5.2(A) (Actions Upon a Trigger Event)
hereof), and only in such event, upon the written request of the Required Senior
Parties, the Collateral Agent shall be authorized to take any and all actions
and to exercise any and all rights, remedies and options which it may have under
the Security Documents and which the Required Senior Parties direct it to take
under this Agreement, including realization and foreclosure on the Collateral;
PROVIDED, HOWEVER, that if a Bankruptcy Event set forth in the Common Agreement
or any other Financing Document in respect of the Partnership or the Authority
has caused the Trigger Event, the Collateral Agent shall automatically be
authorized to take such action without the written request of the Required
Senior Parties.
(c) The proceeds of any sale, disposition or other realization
or foreclosure by the Collateral Agent upon the Collateral or any portion
thereof pursuant to the Security Documents shall be governed by this SECTION
5.3(C). Any non-cash proceeds resulting from such liquidation of the Collateral
shall be held by the Collateral Agent for the benefit of the Senior Parties
until later sold or otherwise converted into cash, at which time the Collateral
Agent shall apply such cash in accordance with the next sentence of this SECTION
5.3(C). The Collateral Agent shall transfer any cash proceeds net of reasonable
expenses resulting from liquidation of the Collateral to the Revenue Fund which
proceeds shall be distributed by the Collateral Agent in accordance with the
terms and provisions of this Agreement in the following order of priority:
(i) to the Debt Service Fund for payment to the
Collateral Agent, the Authority Trustee, the DSR LOC Agent, the PPA LOC
Agent, the Depositary Bank, any agent or representative of Other Senior
Debt, and the Trustee, ratably, an amount equal to all Collateral Agent
Claims, Authority Trustee Claims, DSR LOC Agent Claims, PPA LOC Agent
Claims, Depositary Bank Claims, Other Senior Debt Agent Claims and
Trustee Claims, respectively, due and owing to such parties under the
Financing Documents and this Agreement;
(ii) to the Debt Service Fund for payment to the Senior
Parties, ratably, an amount equal to the unpaid amount of all Senior
Debt constituting principal, interest, premium, if any, and fees due
and owing to the Senior Parties by the Partnership;
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(iii) to the Debt Service Fund for payment to the Senior
Parties, ratably, an amount equal to all other unpaid amounts then due
and payable in respect of all Senior Debt owed to such Senior Parties;
(iv) to the Subordinated Debt Account for payment to the
holders of Third Party Subordinated Debt, ratably, an amount equal to
the unpaid amount of all Third Party Subordinated Debt due and owing to
such holders; and
(v) to the Partnership (or its successors or assigns) or
to holders of Affiliate Subordinated Debt or to whomever a court of
competent jurisdiction may direct, any surplus remaining after giving
effect to clauses (i), (ii), (iii) and (iv) above.
At the time the distribution is to be made pursuant to clause (ii)
above, the Collateral Agent shall set aside available monies (on a ratable basis
with such distribution) in a separate interest-bearing trust account in an
amount up to the then outstanding aggregate amount of the DSR LOC and the PPA
LOC (which outstanding aggregate amount of the DSR LOC shall be calculated after
giving effect to the redemption of Bonds from such distribution in clause (ii)
above). Upon a subsequent draw on the DSR LOC or the PPA LOC, as the case may
be, the Collateral Agent shall as soon as practicable transfer monies from the
separate account to the DSR LOC Agent or the PPA LOC Agent, as the case may be,
up to the amount so drawn, to the extent not reimbursed, on such DSR LOC or PPA
LOC. Upon an expiration or termination of the DSR LOC or the PPA LOC, as the
case may be, monies in such separate account collateralizing such DSR LOC or
such PPA LOC, as the case may be, shall be released and applied as set forth
above in clauses (ii), (iii), (iv) and (v) above.
(d) The proceeds of any sale, disposition or other realization
with respect to Collateral held for the benefit of some but not all of the
Senior Parties, if applicable, shall be applied to the payment of obligations
owed to the parties for whose benefit the specific Collateral was held.
Section 5.4 RECEIPT OF MONEY OR PROCEEDS. The Senior Parties and the
Collateral Agent hereby agree that if, at any time during the term of this
Agreement, any Senior Party receives any payment or distribution of assets of
the Partnership of any kind or character, whether monies or cash proceeds
resulting from liquidation of the Collateral, other than in accordance with the
terms of this Agreement, the Senior Party shall hold such payment or
distribution in trust for the benefit of the Senior Parties and shall
immediately remit such payment or distribution to the Collateral Agent and the
Collateral Agent shall deposit such monies or proceeds in the Revenue Fund for
application or distribution, as the case may be, in accordance with the terms of
this Agreement. If any Senior Party shall certify in writing to the Collateral
Agent that any Senior Debt in respect of which such Senior Party is the trustee
or agent has not been paid when due and after the giving of any applicable
notice or the passage of any applicable grace period (such amount referred to
herein as "ARREARAGES"), then in any such event, and upon the written request of
such Senior Party, the Collateral Agent shall make demand for payment of such
Arrearages where such demand may be made by the terms thereof.
Section 5.5 ADDITIONAL SENIOR PARTIES. Each Person replacing any of the
Senior Parties and each Person (or trustee or agent thereof) providing Senior
Debt to the Partnership shall, upon
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execution of a Designation Letter, become a party to this Agreement, and any
person which executes and delivers a counterpart to this Agreement or is
designated as a Senior Party pursuant to the terms of a Designation Letter,
shall become a party hereto, shall be bound by and subject to the terms and
conditions hereof and the covenants, stipulations and agreements contained
herein.
ARTICLE VI
COLLATERAL AGENT; RELATIONS AMONG SENIOR PARTIES
Section 6.1 APPOINTMENT AND DUTIES OF COLLATERAL AGENT. (a) Each of the
Senior Parties and the Authority Trustee hereby designates and appoints The
Chase Manhattan Bank to act as the Collateral Agent under this Agreement and the
other Financing Documents to which the Collateral Agent is a party, and each of
the Senior Parties and the Authority Trustee hereby authorize the Collateral
Agent to take such actions on its behalf under the provisions of this Agreement
and the other Financing Documents to which the Collateral Agent is a party and
to exercise such powers and perform such duties as are expressly delegated to
the Collateral Agent by the terms of this Agreement and the other Financing
Documents to which the Collateral Agent is a party, together with such other
powers as are reasonably incidental thereto. The execution of this Agreement by
the Collateral Agent shall be deemed an acceptance by the Collateral Agent of
the appointment made under this SECTION 6.1 and an agreement to act as agent on
behalf of the Senior Parties and the Authority Trustee. Notwithstanding any
provision to the contrary elsewhere in this Agreement and the other Financing
Documents to which the Collateral Agent is a party, the Collateral Agent shall
not have any duties or responsibilities, except those expressly set forth in
this Agreement and the other Financing Documents to which the Collateral Agent
is a party, or any fiduciary relationship with any Senior Party, and no implied
covenants, functions or responsibilities shall be read into this Agreement or
any other Financing Document to which the Collateral Agent is a party or
otherwise exist against the Collateral Agent. The Collateral Agent shall not be
liable for any action taken or omitted to be taken by it hereunder or under any
other Financing Document to which the Collateral Agent is a party, or in
connection herewith or therewith, or in connection with the Collateral, unless
caused by its gross negligence or willful misconduct.
(b) The Senior Parties hereby authorize the Collateral Agent
to appoint The Chase Manhattan Bank to act as the Depositary Bank under this
Agreement. The Senior Parties hereby authorize and empower the Collateral Agent
to remove and replace the Depositary Bank pursuant to the terms and conditions
of SECTION 7.4 (Resignation or Removal) of this Agreement and to direct such
Depositary Bank according to the terms of this Agreement.
(c) Notwithstanding anything to the contrary in this Agreement
or any other Financing Document to which the Collateral Agent is a party, the
Collateral Agent shall not exercise any rights or remedies under this Agreement
(except as set forth in the proviso to SECTION 5.2(B) (Actions Upon a Trigger
Event)) or any other Financing Document to which the Collateral Agent is a party
or give any consent under this Agreement or any other Financing Document to
which the Collateral Agent is a party or enter into any agreement amending,
modifying, supplementing or waiving any provision of this Agreement or any other
Financing Document to which the Collateral Agent is a party unless it shall have
been directed to do so in
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writing by the Required Senior Parties; PROVIDED, HOWEVER, that the Collateral
Agent shall consent to the release of Collateral contemplated by the Financing
Documents, and shall enter into any amendments, waivers or supplements with
respect to the Financing Document to which the Collateral Agent is a party to
the extent not inconsistent with the provisions of the other Financing Documents
and which would not result in a Material Adverse Effect (as evidenced by an
Officer's Certificate signed by an Authorized Officer of the Partnership); and
PROVIDED FURTHER that the Collateral Agent shall have the right to amend this
Agreement without having been so directed by the Required Senior Parties solely
for the purpose of preserving or protecting the Lien on and Security Interest in
the Funds granted to the Collateral Agent thereunder.
Section 6.2 RIGHTS OF COLLATERAL AGENT. (a) The Collateral Agent may
execute any of its duties under this Agreement or any other Financing Document
to which the Collateral Agent is a party by or through agents or
attorneys-in-fact and shall be entitled to rely on advice of counsel selected by
it concerning all matters pertaining to such duties.
(b) Neither the Collateral Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall (i) be
liable for any action lawfully taken or omitted to be taken by it under or in
connection with this Agreement or any other Financing Document to which the
Collateral Agent is a party (except for its gross negligence or willful
misconduct) or (ii) be responsible in any manner to any of the Senior Parties
for any recitals, statements, representations or warranties made by the
Partnership contained in this Agreement or any other Financing Document to which
the Collateral Agent is a party or in any certificate, report, statement or
other document referred to or provided for in, or received by the Collateral
Agent under or in connection with this Agreement or any other Financing Document
to which the Collateral Agent is a party or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Financing Document to which the Collateral Agent is a party or for any
failure of the Partnership to perform its obligations hereunder or thereunder.
The Collateral Agent shall not be under any obligation to any Senior Party to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Financing
Document to which the Collateral Agent is a party, or to inspect the properties,
books or records of the Partnership.
(c) The Collateral Agent and its employees, agents,
attorneys-in-fact, and affiliates shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice or statements of legal counsel (including, without
limitation, counsel to the Partnership), independent accountants and other
experts selected by the Collateral Agent. In connection with any request of the
Required Senior Parties, the Collateral Agent shall be fully protected in
relying on a certificate of any Person, signed by an Authorized Officer of such
Person, setting forth the amount owed by the Partnership, to such Person as of
the date of such certificate, which certificate shall state that the Person
signing such certificate is an Authorized Officer of such Person and shall state
specifically the Financing Document and provision thereof pursuant to which the
Collateral Agent is being directed to act. The Collateral Agent shall be
entitled to rely, and shall be fully protected in relying on such certificate.
The Collateral Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other
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Financing Document to which the Collateral Agent is a party (i) if such action
would, in the reasonable opinion of the Collateral Agent, be contrary to law or
the terms of this Agreement or the other Financing Documents, (ii) if such
action is not specifically provided for in this Agreement or such other
Financing Document, it shall not have received any such advice or concurrence of
the Required Senior Parties as it deems appropriate or, (iii) if, in connection
with the taking of any such action that would constitute an exercise of remedies
under this Agreement or such other Financing Document, it shall not first be
indemnified to its satisfaction by the Senior Parties (other than the Trustee
(in its individual capacity), the Collateral Agent (in its individual capacity),
the Depositary Bank (in its individual capacity) or any other agent or trustee
under any of the Financing Documents (in its individual capacity)) against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Financing Document to which the Collateral Agent is a party in
accordance with a written request of the Required Senior Parties (to the extent
that the Required Senior Parties are expressly authorized to direct the
Collateral Agent to take or refrain from taking such action), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Senior Parties.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect knowledge or notice of the occurrence of any
Event of Default unless and until an Authorized Officer of the Collateral Agent
has received a written notice or a certificate from the Senior Parties or the
Partnership stating that an Event of Default has occurred and describing such
event. The Collateral Agent shall have no obligation whatsoever either prior to
or after receiving such notice or certificate to inquire whether an Event of
Default has in fact occurred and shall be entitled to rely conclusively, and
shall be fully protected in so relying, on any such notice or certificate so
furnished to it. In the event that the Collateral Agent receives such a notice
of or certificate regarding the occurrence of an event referred to in clauses
(a) through (d) of the definition of "Trigger Event," the Collateral Agent shall
give notice thereof to the Senior Parties. The Collateral Agent shall take such
action with respect to such Trigger Event as so requested pursuant to SECTIONS
5. 1 (Exercise of Rights), 5.2 (Actions Upon a Trigger Event) and 5.3 (Exercise
of Remedies and Application of Proceeds) hereof. The agreements in this Section
shall survive the payment or satisfaction in full of the Finance Liabilities and
the resignation or removal of the Collateral Agent or the termination of this
Agreement.
(e) The Partnership shall pay to the Collateral Agent upon
demand the amount of any and all reasonable out-of-pocket expenses, including
the reasonable fees and expenses of its counsel (and any local counsel) and of
any experts, agents (including the Depositary Bank), and attorneys-in-fact,
which the Collateral Agent may incur in connection with (i) the acceptance or
administration of this Agreement and the other Financing Documents to which the
Collateral Agent is a party, (ii) the custody or preservation of, or the sale
of, collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement (whether through negotiations, legal proceedings or
otherwise) of any of the rights of the Collateral Agent or the Senior Parties
hereunder or under the other Financing Documents to which the Collateral Agent
is a party or (iv) the failure by the Partnership to perform or observe any of
the provisions hereof or of any of the other Financing Documents to which the
Collateral Agent is a party.
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(f) Notwithstanding any other provision of this Agreement to
the contrary, the Collateral Agent shall be under no obligation to take any
action pursuant to any request or direction of any party hereto if it shall
receive conflicting instructions from another party; provided that the
Collateral Agent shall inform such parties of the conflict.
(g) The Collateral Agent shall not be under any obligation to
take any action which is discretionary with the Collateral Agent pursuant to
this Agreement or in any other Financing Document.
Section 6.3 LACK OF RELIANCE ON THE COLLATERAL AGENT. Each of the
Senior Parties expressly acknowledges that neither the Collateral Agent nor any
of its officers, directors, employees, agents or attorneys-in-fact has made any
representations or warranties to it and that no act by the Collateral Agent
hereinafter taken, including, without limitation, any review of the Project or
of the affairs of the Partnership, shall be deemed to constitute any
representation or warranty by the Collateral Agent to any Senior Party. Each
Senior Party represents to the Collateral Agent that it has, independently and
without reliance upon the Collateral Agent or any other Senior Party, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Project and the
Partnership. Each Senior Party also represents that it will, independently and
without reliance upon the Collateral Agent or any other Senior Party, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Project, the Authority
and the Partnership. Except for notices, reports and other documents expressly
required to be furnished to the Senior Parties by the Collateral Agent
hereunder, the Collateral Agent shall not have any duty or responsibility to
provide any Senior Party with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Project, the Partnership which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents or attorneys-in-fact.
Section 6.4 INDEMNIFICATION; BANKRUPTCY. (a) The Senior Parties
severally agree to indemnify the Collateral Agent and its agents and
attorneys-in-fact, each in its capacity as such (to the extent not reimbursed by
the Partnership and without limiting the obligation of the Partnership to do
so), ratably according to the aggregate amounts of their respective Finance
Liabilities on the date the activities giving rise to the Collateral Agent's
demand for indemnification occurred, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time be
imposed on, incurred by or asserted against the Collateral Agent in its capacity
as such in any way relating to or arising out of this Agreement or the other
Financing Documents to which the Collateral Agent is a party, or the performance
of its duties as Collateral Agent hereunder or thereunder or any action taken or
omitted by the Collateral Agent in its capacity as such under or in connection
with any of the foregoing (including, but not limited to, any claim that the
Collateral Agent is the owner or operator of any of the Project and liable as
such pursuant to any Environmental Laws); PROVIDED that the Senior Parties shall
not be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions,
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judgments, suits, costs, expenses or disbursements to the extent that any of the
foregoing result from the Collateral Agent's gross negligence or willful
misconduct. The agreements in this SECTION 6.4(A) shall survive the payment or
satisfaction in full of the Finance Liabilities and the resignation or removal
of the Collateral Agent or the termination of this Agreement.
(b) Without limiting the obligations of the Partnership under
any other Financing Document, the Partnership indemnifies the Collateral Agent
and each other Senior Party and, in their capacity as such, their officers,
directors, shareholders, controlling persons, employees, agents and servants
(each an "INDEMNIFIED PARTY") from and against any and all claims, damages,
losses, liabilities, obligations, penalties, actions, causes of action,
judgments, suits, costs, expenses or disbursements (including, without
limitation, reasonable attorneys' and consultants' fees and expenses)
(collectively "DAMAGES") of any kind or nature whatsoever which may at any time
be imposed on, incurred by or asserted against any Indemnified Party (or which
may be claimed against any Indemnified Party by any Person) by reason of, in
connection with or in any way relating to or arising out of any Transaction
Document, the Collateral or any other documents or transactions in connection
with or relating thereto (including, without limitation, Damages in connection
with the presence, release or threatened release of Environmentally Regulated
Materials at, on, under, to or from the Project or any disposal sites to which
wastes from the Project have been taken), unless due to the gross negligence or
willful misconduct of such Indemnified Party. The Partnership further shall,
upon demand by any Indemnified Party, pay to such Indemnified Party all
reasonable costs and expenses incurred by such Indemnified Party in enforcing
any rights under any of the Transaction Documents, including reasonable fees and
expenses of counsel. The agreements in this SECTION 6.4(B) shall survive the
payment or satisfaction in full of the Finance Liabilities and the resignation
or removal of the Collateral Agent or the termination of this Agreement.
(c) The Senior Parties hereby agree that, except upon the
written consent of the Required Senior Parties, (i) no Senior Party shall
authorize the Partnership to commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to the
Partnership or debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect in any jurisdiction or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of the
Partnership or to consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against the Partnership to make a general assignment for the benefit
of any Senior Party or any other creditor of the Partnership, and (ii) none of
the Senior Parties shall commence or join with any other Person (other than upon
the written consent of the Required Senior Parties) in commencing any proceeding
against the Partnership under any bankruptcy, reorganization, liquidation or
insolvency law or statute now or hereafter in effect in any jurisdiction.
Section 6.5 RESIGNATION OR REMOVAL OF THE COLLATERAL AGENT. The
Collateral Agent may resign as Collateral Agent upon thirty (30) days' notice to
the Senior Parties and may be removed at any time with or without cause by the
Required Senior Parties, with any such resignation or removal to become
effective only upon the appointment of a successor Collateral Agent under this
SECTION 6.5. If no successor Collateral Agent shall have been so appointed
within thirty (30) days, the resigning Collateral Agent may petition any court
of competent jurisdiction for the appointment of a new Collateral Agent. If the
Collateral Agent shall resign or
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be removed as Collateral Agent by the Required Senior Parties then the Required
Senior Parties shall (and if no such successor shall have been appointed within
thirty (30) days of the Collateral Agent's resignation or removal, the
Collateral Agent may) appoint a successor agent for the Senior Parties, which
successor agent shall, unless an Event of Default has occurred and is
continuing, be reasonably acceptable to the Partnership, whereupon such
successor agent shall succeed to the rights, powers and duties of the Collateral
Agent, and the term "Collateral Agent" shall mean such successor agent effective
upon its appointment, and except as provided in SECTION 6.4(A) AND (B)
(Indemnification, Bankruptcy) the former Collateral Agent's rights, powers and
duties as Collateral Agent shall be terminated, without any other or further act
or deed on the part of such former Collateral Agent (except that the resigning
Collateral Agent shall deliver all Collateral then in its possession to the
successor Collateral Agent) or any of the other Senior Parties. After any
retiring Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral Agent.
Section 6.6 DOCUMENTS. The Collateral Agent will forward promptly after
the Collateral Agent's receipt thereof (and will use its best efforts to forward
within five (5) Business Days of such receipt) to each Senior Party (a) a copy
of each document furnished to the Collateral Agent for such Senior Party under
the Financing Documents and (b) any notice delivered to the Collateral Agent
pursuant to any Third Party Consent. The Collateral Agent will forward to each
Senior Party, promptly upon such Senior Party's written request therefor, a copy
of any other document furnished to the Collateral Agent under any Financing
Document to which the Collateral Agent is a party.
Section 6.7 AUTHORIZATION. (a) The Collateral Agent is hereby
authorized by each Senior Party, for itself and as a Senior Party (i) to
execute, deliver and perform each of the Financing Documents to which the
Collateral Agent and/or the Senior Parties are or are intended to be a party and
(ii) subject to the terms of the Financing Documents, to draw on, or otherwise
act under any letter of credit or guarantee delivered to the Collateral Agent
for the benefit of the Senior Parties and each of the other Senior Parties
agrees to be bound by all the agreements of the Collateral Agent contained in,
and all of the terms and conditions of, the Financing Documents for which the
Collateral Agent is acting as its agent hereunder.
(b) Without the prior written consent of, or direction from,
each of the Senior Parties, the Collateral Agent shall not (i) consent to any
modification, supplement or waiver (other than to cure any ambiguity, defect or
inconsistency, or to make a change which does not adversely affect the legal
rights of any Senior Party) under any of the Financing Documents to which the
Collateral Agent is a party, (ii) release any Collateral or otherwise terminate
any Lien under any Financing Document (except that the Collateral Agent may
release funds from the Funds in accordance with the terms and provisions of this
Agreement and shall release property sold or transferred by the Partnership in
compliance with Section 5.2(e)(ii) of the Common Agreement), (iii) consent to
any modification of this SECTION 6.7 , SECTION 6.11 (Certain Amendments) or of
the definition of Senior Debt or Senior Party, (iv) release any letter of
credit, guarantee or other instrument securing the obligations of any Person
under any Transaction Document or (v) consent to any Lien under any Security
Document securing obligations other than Senior Debt.
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(c) For the avoidance of doubt, nothing in this SECTION 6.7 of
this Agreement or elsewhere in this Agreement or in any other Financing Document
or other Transaction Document shall limit the obligations of the Partnership
under any of the Transaction Documents, including, without limitation, any
obligation of the Partnership to obtain any consent or approval of any of the
Senior Parties, obtained or required to be obtained by the Partnership prior to
any amendment of, modification or supplement to or waiver under any Financing
Document or other Transaction Document and the Collateral Agent shall not
consent to any amendment of, modification of or supplement to or waiver under
any Financing Document or other Transaction Document unless and until the
Partnership shall have first obtained all such required consents and approvals
and provided the Collateral Agent provides written certification of the same.
Section 6.8 ADDITIONAL COLLATERAL AGENTS. (a) Whenever the Collateral
Agent shall deem it necessary or prudent in order either to conform to any law
of any jurisdiction in which all or any part of the Collateral shall be situated
or to make any claim or bring any suit with respect to the Collateral, or the
Collateral Agent shall have been advised by counsel that it is so necessary or
prudent in the interests of the Senior Parties, the Collateral Agent shall take
such action (including, to the extent required, the execution and delivery of an
agreement supplemental hereto and such other instruments and agreements) as may
be necessary or proper to constitute another bank or trust company, or one or
more Persons approved by the Collateral Agent and, unless an Event of Default
has occurred and is continuing, reasonably acceptable to the Partnership, either
to act as an additional collateral agent of all or any part of the Collateral,
jointly with the Collateral Agent, or to act as a separate collateral agent or
trustee of all or any part of the Collateral (any such additional or separate
agent or trustee being herein called an "ADDITIONAL COLLATERAL AGENT"), in any
such case with such powers as may be granted pursuant to such action, and to
vest in such bank, trust company or Person as an Additional Collateral Agent any
property, title, right or power of the Collateral Agent deemed necessary or
advisable by the Collateral Agent, subject to the remaining provisions of this
SECTION 6.8. The Collateral Agent may execute, deliver and perform any deed,
conveyance, assignment or other instrument in writing as may be required by any
Additional Collateral Agent for more fully and certainly vesting in and
confirming to it, him or her any property, title, right or power which by the
terms of such agreement supplemental hereto is expressed to be conveyed or
conferred to or upon such Additional Collateral Agent.
(b) Each Additional Collateral Agent shall, to the extent
permitted by law, be appointed and act, and the Collateral Agent shall act,
subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred
or imposed upon the Collateral Agent in respect of the receipt,
custody, investment and payment of moneys shall be exercised solely by
the Collateral Agent;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Collateral Agent may be conferred or
imposed upon and exercised or performed by the Additional Collateral
Agent jointly with the Collateral Agent, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed, the Collateral Agent shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding
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of title to any part of the Collateral in any such jurisdiction) shall
be exercised and performed by such Additional Collateral Agent;
(iii) no power hereby given to, or with respect to which
it is hereby provided may be exercised by, any such Additional
Collateral Agent shall be exercised hereunder by such Additional
Collateral Agent except jointly with, or with the consent of, the
Collateral Agent;
(iv) such Additional Collateral Agent shall act only upon
and to the extent of written instructions from the Collateral Agent and
no other party, and the Additional Collateral Agent shall not be
required to take and shall not be responsible for taking any action as
Additional Collateral Agent under any Security Document or this
Agreement unless it has received such written instructions from the
Collateral Agent; and
(v) the Collateral Agent shall not be personally liable
by reason of any act or omission of any Additional Collateral Agent
hereunder, nor shall such Additional Collateral Agent be personally
liable by reason of any act or omission of the Collateral Agent or any
other Additional Collateral Agent hereunder.
If at any time the Collateral Agent shall deem it no longer necessary or prudent
in order to conform to any such law or take any such action or shall be advised
by counsel that it is no longer so necessary or prudent in the interest of
Senior Parties, the Collateral Agent shall execute and deliver an agreement
supplemental hereto and all other instruments and agreements necessary or proper
to remove any Additional Collateral Agent.
(c) Any Additional Collateral Agent may at any time by an
instrument in writing constitute the Collateral Agent its agent or
attorney-in-fact, with full power and authority, to the extent which may be
authorized by law, to do all acts and things and exercise all discretion which
it is authorized or permitted to do or exercise, for and in its behalf and in
its name. In case any such Additional Collateral Agent shall die, become
incapable of acting, resign or be removed, all the assets, property, rights,
powers, trusts, duties and obligations of such Additional Collateral Agent, so
far as permitted by law, shall vest in and be exercised by the Collateral Agent,
without the appointment of a new successor to such Additional Collateral unless
and until a successor is appointed in the manner hereinbefore provided.
(d) Any request, approval or consent in writing by the
Collateral Agent to any Additional Collateral Agent shall be sufficient warrant
to such Additional Collateral Agent to take such action as may be so requested,
approved or consented.
(e) Each Additional Collateral Agent appointed pursuant to
this SECTION 6.8 shall be subject to, and shall have the benefits of, the
provisions of this Agreement insofar as they apply to the Collateral Agent.
Section 6.9 POWER OF ATTORNEY FROM SENIOR PARTIES. Each Senior Party
hereby gives a power of attorney, coupled with an interest, to the Collateral
Agent, and appoints, makes, constitutes and designates the Collateral Agent its
true and lawful attorney-in-fact, subject to SECTION 6.7 (Authorization), to
consent on its behalf (in its capacity as a Senior Party) under the Transaction
Documents to the extent that the consent of the Collateral Agent or such Senior
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Party is required thereunder, and to take such actions on its behalf (in its
capacity as a Senior Party) under the provisions of such Transaction Documents
as are reasonably incidental thereto, to execute and deliver in the name of and
on behalf of such Senior Party, or in its own name, as the case may be, all
documents required to be executed by such Senior Party (in its capacity as such)
in connection therewith and to do, take and perform all and every act and thing
whatsoever requisite, proper or necessary to be done, in the exercise of any of
the rights and powers herein granted, as fully to all intents and purposes as
such Senior Party (in its capacity as such) might or could do, with full power
of substitution or revocation, hereby ratifying and confirming all that said
attorney-in-fact, or its substitute or substitutes, shall lawfully do or cause
to be done by virtue of this power of attorney and the rights and powers herein
granted; PROVIDED that the Collateral Agent shall not so consent or take such
other actions other than in accordance with this Agreement, and the Security
Documents. This SECTION 6.9 is to be construed and interpreted as a general
power of attorney coupled with an interest. The enumeration of specific items,
rights, acts or powers herein is not intended to, nor does it limit or restrict,
and is not to be construed or interpreted as limiting or restricting, the
general powers herein granted to said attorney-in-fact. The rights, power and
authority of said attorney-in-fact herein granted shall commence and be in full
force and effect as of the Closing Date, and such rights, powers and authority
shall remain in full force and effect thereafter until the Debt Termination
Date.
Section 6.10 RIGHTS OF SENIOR PARTIES. The Senior Parties and the
Collateral Agent (upon receipt of direction by the Secured Parties pursuant to
Section 6.1(c) hereof) may, at any time and from time to time, without any
consent of or notice to any providers of Subordinated Debt, (i) amend in any
manner any Security Document or any agreement under which any of the Finance
Liabilities is outstanding in accordance with the terms thereof, (ii) sell,
exchange, release, not perfect and otherwise deal with any property at any time
pledged, assigned or mortgaged to secure the Finance Liabilities in accordance
with the Security Documents, (iii) release anyone liable in any manner under or
in respect of the Finance Liabilities, (iv) exercise or refrain from exercising
any rights against the Partnership and others and (v) apply any sums from time
to time received to payment or satisfaction of the Finance Liabilities.
Section 6.11 AMENDMENTS AND WAIVERS. Any amendment, modification,
supplement, consent or waiver of any provision of this Agreement, the Common
Agreement or any other Security Document shall require the written consent of
the Collateral Agent acting at the direction of the Required Senior Parties.
Notwithstanding anything to the contrary in this Agreement or any Security
Document, if any consent or direction of the Required Secured Parties is
necessary in order for the Collateral Agent to exercise any rights or remedies
under any of the Security Documents or this Agreement, or to amend, modify or
supplement, give any consent under, or waive any provision of, any of the
Security Documents, the Common Agreement or this Agreement, and if any such
exercise of rights or remedies, or any such amendment, modification, supplement,
consent or waiver (either alone or together with each then effective amendment,
modification, supplement, consent or waiver not previously approved in
accordance with this paragraph by the PPA LOC Agent or the DSR LOC Agent, as the
case may be) could reasonably be expected to have a material adverse effect on
the PPA LOC Agent or the DSR LOC Agent (which material adverse effect is
materially different from the effect with respect to other Senior Parties), the
Collateral Agent shall not accept such consent or direction from the Required
Senior Parties unless the PPA LOC Agent or the DSR LOC Agent, as the case
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<PAGE>
may be, shall have received written notice of such proposed consent or direction
at least fifteen days prior to the effectiveness thereof, and the PPA LOC Agent
or the DSR LOC Agent, as the case may be, shall have approved such amendment,
modification or supplement, consent or waiver (which approval shall not be
unreasonably withheld).
ARTICLE II
THE DEPOSITARY BANK
Section 7.1 APPOINTMENT OF DEPOSITARY BANK; POWERS AND IMMUNITIES. (a)
The Depositary Bank may execute any of its duties under this Agreement by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining hereto.
(b) The Collateral Agent on behalf of the Senior Parties under
this Agreement hereby appoints the Depositary Bank to act as depositary bank and
"securities intermediary" hereunder with such powers as are expressly delegated
to the Depositary Bank by the terms of this Agreement. The Depositary Bank shall
not have any duties or responsibilities except those expressly set forth in this
Agreement. Without limiting the generality of the foregoing, the Depositary Bank
shall take all actions as the Collateral Agent shall direct it to perform in
accordance with the express provisions of this Agreement or as the Collateral
Agent may otherwise direct it to perform in accordance with the provisions of
this Agreement. Notwithstanding anything to the contrary contained herein, the
Depositary Bank shall not be required to take any action which is contrary to
this Agreement or applicable law. Neither the Depositary Bank nor any of its
Affiliates shall be responsible to any Senior Party for any recitals,
statements, representations or warranties made by the Partnership contained in
this Agreement or any other Financing Document or in any certificate or other
document referred to or provided for in, or received by any Senior Party under,
the Indenture, this Agreement or any other Financing Document for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other document referred to or provided for herein or therein or
for any failure by the Partnership to perform its obligations hereunder or
thereunder. The Depositary Bank shall not be required to ascertain or inquire as
to the performance by the Partnership of any of its or their obligations under
the Indenture, this Agreement, any other Financing Document or any other
document or agreement contemplated hereby or thereby. The Depositary Bank shall
not be (a) required to initiate or conduct any litigation or collection
proceeding hereunder or under any other Security Document or (b) responsible for
any action taken or omitted to be taken by it hereunder (except for its own
gross negligence or willful misconduct) or in connection with any other Security
Document. Except as otherwise provided under this Agreement, the Depositary Bank
shall take action under this Agreement only as it shall be directed in writing
by the Collateral Agent. Whenever in the administration of this Agreement the
Depositary Bank shall deem it necessary or desirable that a factual matter be
proved or established in connection with the Depositary Bank taking, suffering
or omitting to take any action hereunder, such matter (unless other evidence in
respect thereof is herein specifically prescribed) may be deemed to be
conclusively proved or established by a certificate of any Authorized Officer of
the Partnership, or the Collateral Agent, if appropriate. The Depositary Bank
shall have the right at any time to seek instructions concerning the
administration of this Agreement from the Collateral Agent or
40
<PAGE>
any court of competent jurisdiction. The Depositary Bank shall have no
obligation to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder. Regardless of any
provision in any other agreement, for purposes of the UCC, the State of New York
shall be deemed to be the jurisdiction of the Depositary Bank.
Section 7.2 RELIANCE BY DEPOSITIARY BANK. The Depositary Bank shall be
entitled to rely upon and shall not be bound to make any investigation into the
facts or matters stated in any Officer's Certificate of the Partnership, the
Independent Engineer's, the Collateral Agent's or any other notice or other
document (including any cable, telegram, telecopy or telex) believed by it to be
genuine and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice or statement of legal counsel, independent accountants
and other experts selected by the Depositary Bank and shall have no liability
for its actions taken thereupon, unless due to the Depositary Bank's willful
misconduct or gross negligence. Without limiting the foregoing, the Depositary
Bank shall be required to make payments to the Senior Parties only as set forth
herein. The Depositary Bank shall be fully justified in failing or refusing to
take any action under this Agreement (i) if such action would, in the reasonable
opinion of the Depositary Bank, be contrary to Applicable Law or the terms of
this Agreement, (ii) if such action is not specifically provided for in this
Agreement, it shall not have received any such advice or concurrence of the
Collateral Agent as it deems appropriate or (iii) if, in connection with the
taking of any such action that would constitute an exercise of remedies under
this Agreement (whether such action is or is intended to be an action of the
Depositary Bank or the Collateral Agent), it shall not first be indemnified to
its satisfaction by the Senior Parties (other than the Trustee (in its
individual capacity) or the Collateral Agent (in its individual capacity) or any
other agent or trustee under any of the Financing Documents (in their respective
individual capacities)) against any and all liability and expense which may be
incurred by reason of taking or continuing to take any such action. The
Depositary Bank shall in all cases be fully protected in action, or in
refraining from acting, under this Agreement in accordance with a request of the
Collateral Agent, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Senior Parties.
Section 7.3 COURT ORDERS. The Depositary Bank is hereby authorized, in
its exclusive discretion, to obey and comply with all writs, orders, judgments
or decrees issued by any court or administrative agency affecting any money,
documents or things held by the Depositary Bank. The Depositary Bank shall not
be liable to any of the parties hereto or any other Senior Party, their
successors, heirs or personal representatives by reason of the Depositary Bank's
compliance with such writs, orders, judgments or decrees notwithstanding that
such writ, order, judgment or decree is later reversed, modified, set aside or
vacated.
Section 7.4 RESIGNATION OR REMOVAL. Subject to the appointment and
acceptance of a successor Depositary Bank as provided below, the Depositary Bank
may resign at any time by giving thirty (30) days prior written notice thereof
to the Collateral Agent and the Partnership, PROVIDED that in the event the
Depositary Bank is also the Collateral Agent, it must also at the same time
resign as Collateral Agent. The Depositary Bank may be removed at any time with
cause by the Collateral Agent. Except during the continuation of a default or
event of default under any Financing Document, the Partnership shall have the
right to remove the Depositary Bank upon thirty (30) days prior written notice
to the Senior Parties with or without cause, effective upon the appointment of a
successor Depositary Bank under this SECTION 7.4, which is
41
<PAGE>
reasonably acceptable to the Collateral Agent. In the event that the Depositary
Bank shall decline to take any action without first receiving adequate indemnity
from the Partnership or the Senior Parties, as the case may be and, having
received an indemnity, shall continue to decline to take such action, the
Collateral Agent shall be deemed to have sufficient cause to remove the
Depositary Bank. In the event that the Depositary Bank is also the Trustee, the
Collateral Agent shall have the right to remove the Depositary Bank with or
without cause. Upon any such resignation or removal, the Collateral Agent shall
have the right to appoint a successor Depositary Bank, which Depositary Bank
(except during the continuation of a default or event of default under any
Financing Document) shall be reasonably acceptable to the Partnership. If no
successor Depositary Bank shall have been appointed by the Collateral Agent and
shall have accepted such appointment within thirty (30) days after the retiring
Depositary Bank's giving of notice of resignation or removal of the retiring
Depositary Bank, then (i) the retiring Depositary Bank may petition a court of
competent jurisdiction for the appointment of a successor Depositary Bank or
(ii) the retiring Depositary Bank may appoint a successor Depositary Bank, which
shall be a bank or trust company reasonably acceptable to the Collateral Agent
and the Partnership. Upon the acceptance of any appointment as Depositary Bank
hereunder by the successor Depositary Bank, (a) such successor Depositary Bank
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Depositary Bank and shall be discharged
from its duties and obligations hereunder and (b) the retiring Depositary Bank
shall promptly transfer all Funds within its possession or control to the
possession or control of the successor Depositary Bank and shall execute and
deliver such notices, instructions and assignments as may be necessary or
desirable to transfer the rights of the Depositary Bank with respect to the
Accounts to the successor Depositary Bank. After the retiring Depositary Bank's
resignation or removal hereunder as Depositary Bank, the provisions of this
ARTICLE 7 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Depositary Bank.
Section 7.5 EXPENSES; INDEMNIFICATION; FEES. (a) The Partnership agrees
to pay or reimburse all reasonable out-of-pocket expenses of the Depositary Bank
(including reasonable fees and expenses for legal services) in respect of, or
incident to, the execution, administration or enforcement of any of the
provisions of this Agreement or in connection with any amendment, waiver or
consent relating to this Agreement. The obligations contained in this SECTION
7.5 shall survive the termination of this Agreement or the resignation or
removal of the Depositary Bank.
(b) The Partnership agrees to indemnify the Depositary Bank in
its capacity as such, and, in their capacity as such, its officers, directors,
shareholders, controlling persons, employees, agents and servants (each an
"INDEMNIFIED DEPOSITARY BANK PARTY") from and against any and all claims,
losses, liabilities and expenses (including the reasonable fees and expenses of
counsel) arising out of or resulting from this Agreement (including, without
limitation, performance under or enforcement of this Agreement, but excluding
any such claims, losses or liabilities resulting from the Indemnified Depositary
Bank Party's gross negligence or willful misconduct). This indemnity shall
survive the termination of this Agreement, and the resignation or removal of the
Depositary Bank. This indemnity is extended in addition to, and not in
derogation or limitation of, the provisions of SECTION 6.4 (Indemnification;
Bankruptcy) of this Agreement.
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<PAGE>
(c) On the Closing Date, and on each anniversary of the
Closing Date to and including the Debt Termination Date, the Partnership shall
pay the Depositary Bank an annual fee in an amount mutually agreed on by the
Partnership and the Depositary Bank.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 DIRECTION TO COLLATERAL AGENT. Unless otherwise provided
herein, any instruction or direction given to the Collateral Agent with respect
to the transfer, withdrawal, deposit or payment of any funds under this
Agreement shall be in writing and shall state with specificity the dollar
amount, source and disposition of any such funds.
Section 8.2 ACTION BY COLLATERAL AGENT. Notwithstanding any provisions
to the contrary in this Agreement, if any transfer, withdrawal, deposit or
payment of any funds by the Collateral Agent, or any other action to be taken by
the Collateral Agent, under this Agreement is to be made or taken on a day which
is not a Business Day, such transfer, withdrawal, deposit, payment or other
action shall be made or taken on the next succeeding Business Day.
Section 8.3 AMENDMENTS, WAIVER. No amendment, modification or
supplement of this Agreement shall be effective unless such amendment,
modification or supplement was effected in accordance with this Agreement. Any
approval of an amendment to, or any waiver of any provision of, this Agreement
shall be effective only in the specific instance and for the specific purpose
for which such approval or waiver is given. No delay on the part of any Senior
Party in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial waiver by such Senior Party of any
right, power or remedy preclude any further exercise thereof, or the exercise of
any other right, power or remedy.
Section 8.4 TRANSFER. Any Senior Party may at any time assign,
transfer, grant or sell participations in its rights and interests under the
Security Documents, SUBJECT, HOWEVER, to the restrictions imposed on the
assignment, transfer, grant or sale of participation in the Senior Debt owing to
such Senior Party pursuant to the agreement giving rise to such Senior Debt or
any other agreement relating thereto.
Section 8.5 SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected and/or impaired thereby.
Section 8.6 NOTICES. Except as otherwise expressly provided herein, (a)
all notices and other communications provided for hereunder shall be provided in
writing (including telegraphic, telex, facsimile or cable communication) and
shall be sent by telecopy, telex, telegraph or cable with the original of such
communication dispatched by (if inland) overnight or (if overseas) international
courier and, if such courier service is not available, by registered airmail
(or, if inland, registered first-class mail) with postage prepaid to the
Partnership, the Senior Parties, the Depositary Bank and the Collateral Agent at
their respective addresses specified below or in any Designation Letter, or at
such other address as shall be designated by
43
<PAGE>
such Person in a written notice to the other parties hereto and (b) all such
notices and communications shall, when mailed, telegraphed, telexed, telecopied,
cabled or sent by overnight courier, be effective seven (7) days after being
deposited in the mail in the manner as aforesaid, when delivered to the
telegraph company or cable company (if inland), one (1) day or (if overseas)
three (3) days after delivery to a courier in the manner as aforesaid, as the
case may be, or when sent by telex (with the correct answer back) or telecopier
(after confirmation of receipt); provided however, that such notices directed to
the Collateral Agent shall be deemed delivered when actually received by the
Collateral Agent.
<TABLE>
<S> <C>
Collateral Agent: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Authority Trustee: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Trustee: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Depositary Bank: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
DSR LOC Agent: The Toronto-Dominion Bank
909 Fannin
Suite 1700
Houston, Texas 77010
Attention: Jeff Lents
PPA LOC Agent: The Toronto-Dominion Bank
909 Fannin
Suite 1700
Houston, Texas 77010
</TABLE>
44
<PAGE>
<TABLE>
<S> <C>
Attention: Jeff Lents
Partnership: Tenaska Georgia Partnership L.P.
1044 N. 115th Street, Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
</TABLE>
Section 8.7 SUCCESSORS AND ASSIGNS. All of the covenants, promises and
agreements in this Agreement by or on behalf of the respective parties hereto
shall bind and inure to the benefit of their respective successors and assigns,
regardless of whether so expressed.
Section 8.8 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, all of which, taken together, shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 8.9 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) This Agreement is a contract made under the laws of the State of New
York of the United States and shall for all purposes be governed by and
construed in accordance with the laws of such State without regard to the
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law).
(b) Any legal action or proceeding against the Partnership
with respect to this Agreement or any other Financing Document may be brought in
the courts of the State of New York in the County of New York or of the United
States for the Southern District of New York and, by execution and delivery of
this Agreement, the Partnership hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Partnership agrees that a judgment, after exhaustion of
all available appeals, in any such action or proceeding shall be conclusive and
binding upon the Partnership and may be enforced in any other jurisdiction, by a
suit upon such judgment, a certified copy of which shall be conclusive evidence
of the judgment. The Partnership irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Partnership at its address referred to in SECTION 8.6 (Notices) such service
to become effective thirty (30) days after such mailing. Nothing herein shall
affect the right of any Senior Party to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Partnership in any other jurisdiction.
(c) The Partnership hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Indenture in the courts referred to in clause (b) above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
(d) WITH REGARD TO THIS AGREEMENT, THE PARTNERSHIP, THE
AUTHORITY, EACH SENIOR PARTY, THE COLLATERAL AGENT AND THE DEPOSITARY BANK
HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.
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<PAGE>
Section 8.10 NO IMPAIRMENTS OF OTHER RIGHTS. Nothing in this Agreement
is intended or shall be construed to impair, diminish or otherwise adversely
affect any other rights the Senior Parties may have or may obtain against the
Partnership.
Section 8.11 HEADINGS. Headings herein are for convenience only and
shall not be relied upon in interpreting or enforcing this Agreement.
Section 8.12 TERMINATION. This Agreement shall remain in full force and
effect until the Debt Termination Date. Following the Debt Termination Date,
SECTIONS 6.4(A) AND (B) (Indemnification; Bankruptcy) shall remain in full force
and effect.
Section 8.13 ENTIRE AGREEEMENT. This Agreement, including the documents
referred to herein, embodies the entire agreement and understanding of the
parties hereto and supersedes all prior agreements and understandings of the
parties hereto relating to the subject matter herein contained.
Section 8.14 EXECUTION IN LIEU OF AGENT. To the extent that any of the
holders of Permitted Indebtedness incurred subsequent to the date hereof are not
represented by an agent that is a party to this Agreement, such holder of
Additional Permitted Indebtedness shall be permitted to execute this Agreement
and the Designation Letter on its own behalf in lieu of any agent on its behalf.
Section 8.15 CONFLICTS WITH OTHER SECURITY DOCUMENTS. Notwithstanding
any provision hereof, in the event of any conflict between the terms of this
Agreement and the other Security Documents, the provisions of this Agreement
shall control.
Section 8.16 SCOPE OF DUTIES, LIMITS ON LIABILITY. Without limiting any
other provision hereof, the duties and obligations of the Collateral Agent and
the Depositary Bank shall be determined solely by the express provisions of this
Agreement; neither the Collateral Agent nor the Depositary Bank shall be liable
except for the performance of such duties and obligations as are specifically
set forth herein. Anything in this Agreement to the contrary notwithstanding, in
no event shall the Collateral Agent or the Depositary Bank be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Collateral Agent or the
Depositary Bank, as the case may be, has been advised of the likelihood of such
loss or damage and regardless of the form of action.
Section 8.17 BENEFIT OF AGREEMENT. Nothing in this Agreement, expressed
or implied, shall give or be construed to give to any Person other than the
parties hereto and the Senior Parties any legal or equitable right, remedy or
claim under this Agreement, or under any covenant or provision therein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and the Senior Parties.
Section 8.18 CUMULATIVE REMEDIES. No failure to exercise, and no delay
in exercising, any right, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude or require any other or future exercise thereof or
the exercise of any other right, power or privilege. All rights, powers and
remedies granted to any party hereto and all other agreements, instruments and
documents
46
<PAGE>
executed in connection with this Agreement shall be cumulative, may be exercised
singly or concurrently and shall not be exclusive of any rights or remedies
provided by law.
Section 8.19 TIME OF DAY; ENGLISH LANGUAGE. All references herein to
any time of day shall be deemed to be references to New York City time, and all
notices, instruments and other documents required to be delivered hereunder
shall be in the English language.
Section 8.20 NOTICE OF ADVERSE CLAIM. Except for the claims and
interest of the Senior Parties in the Funds, the Collateral Agent does not know
of any claim to, or interest in, the Funds or in any "financial asset" (as
defined in SECTION 8-102(A) of the UCC) credited thereto. If any person asserts
any lien, encumbrance or adverse claim (including any writ, garnishment, warrant
of attachment, execution or similar process) against the Funds or in any
financial asset carried therein, the Collateral Agent will promptly notify the
Senior Parties and the Partnership thereof.
Section 8.21 NO RECOURSE. Notwithstanding any provisions to the
contrary in the Transaction Documents, there shall be no recourse against any
Affiliates, Partners, officers, directors, representatives or employees of the
Partnership (each, a "Non-Recourse Party") for any payment due hereunder or
under any other Transaction Document from the Partnership or for the performance
of any obligation of or breach of any representation or warranty made by the
Partnership under any of the Transaction Documents. The sole recourse of the
Trustee and any Holder for satisfaction of the obligations of the Partnership
under any of the Transaction Documents or for the performance of any obligation
of the Partnership under any of the Transaction Documents, or the breach of any
representation or warranty made by the Partnership under any of the Transaction
Documents, shall be against the Partnership and its respective assets, it being
expressly understood by the Trustee and Holders that such obligations of the
Partnership are obligations solely of such entity and that no such personal
liability shall attach to, or be incurred by, any Non-Recourse Party; PROVIDED,
that nothing contained in this Section 8.21 shall (i) impair in respect of the
Partnership, the validity of any Bonds or the Guaranty, prevent the taking of
any action permitted by law against the Partnership or its respective Affiliates
to realize upon the Collateral, or in any way affect or impair the rights of the
Trustee and the Holders to take any action permitted by law to realize upon the
Collateral, (ii) be deemed to release the Partnership or any respective
Affiliate thereof, or any past, present or future shareholder, partner, officer,
employee, director or agent of any thereof, from liability for its fraudulent
actions, fraudulent misrepresentations, gross negligence or willful misconduct
or (iii) limit or affect the obligations and liabilities of any Non-Recourse
Party in accordance with the terms of any other Transaction Document creating
such obligations and liabilities to which such Non-Recourse Party is a party.
47
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their duly authorized officers, all as of the date first
written above.
TENASKA GEORGIA PARTNERS, L.P.,
By: Tenaska Georgia, Inc., its
Managing General Partner
By: /S/ MICHAEL F. LAWLER
----------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE TORONTO-DOMINION BANK,
as PPA LOC Agent
By: /S/ WARREN FINLEY
----------------------------------
Name: Warren Finley
Title: Manager Credit
THE TORONTO-DOMINION BANK,
as DSR LOC Agent
By: /S/ WARREN FINLEY
----------------------------------
Name: Warren Finley
Title: Manager Credit
THE CHASE MANHATTAN BANK,
as Trustee
By: /S/ ANNETTE M. MARSULA
----------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
48
<PAGE>
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /S/ ANNETTE M. MARSULA
----------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
THE CHASE MANHATTAN BANK,
as the Depositary Bank
By: /S/ ANNETTE M. MARSULA
----------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
THE CHASE MANHATTAN BANK,
as the Authority Trustee
By: /S/ ANNETTE M. MARSULA
----------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
49
<PAGE>
Exhibit A to the
Collateral Agency Agreement
[FORM OF DESIGNATION LETTER]
[Date]
[Collateral Agent]
Re: Tenaska Georgia Partners, L.P.
Ladies and Gentlemen:
Reference is made to (i) the Collateral Agency and Intercreditor
Agreement (the "COLLATERAL AGENCY AGREEMENT") dated as of November 1, 1999,
among Tenaska Georgia Partners, L.P. (the "PARTNERSHIP"), the DSR LOC Agent, the
PPA LOC Agent, the Trustee, the Authority Trustee, the Depositary Bank, any
trustees or agents under any other Financing Documents and the Collateral Agent
and (ii) [Describe New Credit Documents]. Capitalized terms used herein and not
defined herein shall have the meanings set forth in APPENDIX A to the Agreement
as to Certain Undertakings, Common Representations, Warranties, Covenants and
Other Terms (the "COMMON AGREEMENT") dated as of November 1, 1999 between the
Partnership and the Senior Parties named therein.
The undersigned is the [Bank/Lender][agent for the [Banks] [Lenders]]
under the [New Credit Document].
The undersigned is delivering this Designation Letter pursuant to
SECTION 5.5 (Additional Senior Parties) of the Collateral Agency Agreement in
order to permit the undersigned [and the [Banks][Lenders] under the New Credit
Document] to become Senior Parties under the Collateral Agency Agreement and the
other Financing Documents and to benefit from the Collateral under the Financing
Documents in accordance with the terms of the Collateral Agency Agreement and
the other Financing Documents.
Attached hereto is a copy of the certificate to be delivered by the
Partnership.
The undersigned [on behalf of itself and the [Banks][Lenders]] accedes
to and agrees to be bound by all of the terms and provisions of the Collateral
Agency Agreement and the other Financing Documents. In furtherance thereof, the
undersigned [on behalf of itself and the [Banks][Lenders]] agrees to execute a
counterpart of the Collateral Agency Agreement.
Our address for notices is: [Insert Information]
Our wire
transfer instructions are: [Insert Information]
<PAGE>
We agree that any extensions of credit under the [New Credit Documents]
shall be deposited with the Depositary Bank, to the extent required by SECTION
3.3 (Revenue Fund) of the Intercreditor Agreement.
This Designation Letter may be executed in any number of counterparts,
each executed counterpart constituting an original but all counterparts together
constituting only one instrument.
THIS DESIGNATION LETTER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
[CREDITOR]
By:
-----------------------------------
Name:
Title:
Consented to by:
- ---------------------------------
as Collateral Agent
By:
------------------------------
Name:
Title:
2
<PAGE>
Exhibit B to the
Collateral Agency Agreement
FORM OF SUBORDINATION PROVISIONS
1.0 CERTAIN DEFINITIONS. All capitalized terms used herein and not
otherwise defined herein shall have the meaning assigned to such terms in the
Common Agreement. As used in these subordination provisions, the following terms
shall have the following respective meanings:
"INDEFEASIBLY PAID" means, with respect to the making of any payment on
or in respect of any Senior Claim, a payment of such Senior Claim in full which
is not subject to avoidance under Section 547 of the Bankruptcy Code or any
other law or equitable principle.
"JUNIOR CLAIMANT" means any Person who has advanced Subordinated Debt
to the Partnership.
"PROCEEDING" means any (a) insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Partnership, its property or its creditors as such,
(b) proceeding for any liquidation, dissolution or other winding-up of the
Partnership, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) assignment for the benefit of creditors of the
Partnership or (d) other marshalling of the assets of the Partnership.
"SENIOR CLAIMS" means (a) the principal of, and premium, if any, and
interest on, the Bonds (including, without limitation, any interest accruing
thereon at the legal rate after the commencement of any Proceeding and any
additional interest that would have accrued thereon but for the commencement of
such Proceeding), (b) all other indebtedness, obligations and liabilities of the
Partnership to the Trustee and Holders, whether now existing or hereafter
incurred or created, under or with respect to the Indenture and (c) all other
Permitted Indebtedness of the Partnership other than Subordinated Debt.
"SENIOR DEFAULT" means an event which, after notice or lapse of time or
both, would become a Senior Event of Default.
"SENIOR EVENT OF DEFAULT" means an "Event of Default" as such term is
defined in the Common Agreement or in any other agreement or instrument under
which any Senior Claim is outstanding.
"SUBORDINATED AGREEMENT" means any note, instrument or agreement
between the Partnership and any Junior Claimant evidencing any indebtedness
subordinated on the terms and conditions substantially in the form set forth
herein.
"SUBORDINATED AMOUNT" means any amount due and payable by the
Partnership to any Junior Claimant, pursuant to the terms of any Subordinated
Agreement.
<PAGE>
1.1 SUBORDINATION. The Subordinated Amount shall be and hereby is
expressly made subordinate and junior in right of payment to all Senior Claims
to the extent and in the manner provided in these subordination provisions.
These subordination provisions are made for the benefit of the holders of such
Senior Claims, and such holders are hereby made Obligees hereunder with the same
effect as if their names were written as such in these subordination provisions
and any such holder or all of them may proceed to enforce such provisions. All
Junior Claimants waive any and all notice of the creation or accrual of any such
Senior Claim and notice of proof of reliance upon these subordination provisions
by any holder of any Senior Claim. Moreover, all Junior Claimants agree to be
bound by these subordination provisions and the Senior Claims shall conclusively
be deemed to have been created, contracted or incurred in reliance upon these
subordination provisions and all dealings between the Partnership and the
holders of any such Senior Claims so arising shall be deemed to have been
consummated in reliance upon these subordination provisions.
1.2 SUBORDINATION IN THE EVENT OF CERTAIN DEFAULTS, ETC. (a) Upon the
happening of a Senior Default or a Senior Event of Default then, unless and
until such Senior Default or Senior Event of Default shall have been remedied or
waived or shall have ceased to exist, no direct or indirect payment (including
principal and interest) (in cash, property or Bonds or by set-off or otherwise)
shall be made or agreed to be made to a Junior Claimant who is an Affiliate of
the Partnership on account of any Subordinated Amount, or as a sinking fund for
any Subordinated Amount, or in respect of any redemption, retirement, purchase
or other acquisition of any of the Subordinated Amount.
(b) Upon the occurrence of a Senior Default or a Senior Event
of Default under SECTION 5.L(B-K) of the Common Agreement and for the
eighteen months following such Senior Default or a Senior Event of
Default, then, unless and until such Senior Default or Senior Event of
Default shall have been remedied or waived or shall have ceased to
exist, no direct or indirect payment (including principal and interest)
(in cash, property or Bonds or by set-off or otherwise) shall be made
or agreed to be made to a Junior Claimant who is not an Affiliate of
the Partnership on account of any Subordinated Amount. or as a sinking
fund for any Subordinated Amount, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Subordinated
Amount. Following such eighteen month period, such Junior Claimant who
is not an Affiliate of the Partnership may receive direct or indirect
payment of principal and interest (in cash, property or Bonds or by
set-off or otherwise) pursuant to Section 3.8 (Subordinated Debt
Account) of the Collateral Agency Agreement.
(c) Upon the occurrence of a Senior Default or a Senior Event
of Default under SECTION 5.1 (A) of the Common Agreement or any other
default in the payment of principal, interest or any other amount due
with respect to any Senior Claim, no direct or indirect payment
(including principal and interest) (in cash, property or Bonds or by
set-off or otherwise) shall be made or agreed to be made to any Junior
Claimant on account of any Subordinated Amount or as a sinking fund for
any Subordinated Amount, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Subordinated Amount until
all Senior Claims shall have been remedied, waived or shall have ceased
to exist.
2
<PAGE>
(d) The holders of the Senior Claims shall be entitled PRO
RATA in accordance with the priorities then existing among such holders
to vote all claims of any Junior Claimant in respect of such
Subordinated Amount in connection with any Proceeding. Notwithstanding
the foregoing, in the event that the holders of the Senior Claims shall
allow any Junior Claimant to retain the right to vote and otherwise act
in any Proceeding (including, without limitation, the right to vote to
accept or reject any plan of partial or complete liquidation.
reorganization, arrangement, composition or extension), such Junior
Claimant shall not vote with respect to any such plan or take any other
action in any way so as to contest (i) the validity of any liens or
security interests granted to, or for the benefit of, the holders of
any Senior Claims, (ii) the relative rights and duties of the holders
of the Senior Claims established in the Security Documents with respect
to such liens and security interests, or (iii) the enforceability of
the Security Documents or these subordination provisions.
(e) In connection with any Proceeding, all Junior Claimants
irrevocably authorize the holders of the Senior Claims, or any of them,
to demand, sue for, collect and receive all payments and distributions
to the extent required in Section 1.2(a), to give acquittance therefor
and to take such other actions as such holders of the Senior Claims may
deem necessary or advisable for the enforcement of these subordination
provisions. All Junior Claimants further agree duly and promptly to
take such action as may be requested at any time or from time to time
by the holders of the Senior Claims, to file appropriate proofs of
claim in respect of such Subordinated Amount and to execute and deliver
such powers of attorney, assignments or proofs of claim or other
instruments as may be requested by the holders of the Senior Claims,
all as may be necessary or advisable to enable such holders of the
Senior Claims to enforce any and all claims upon or in respect of the
Subordinated Amount and to receive any and all payments or
distributions to the extent required in Section 1.2(a).
1.3 TURNOVER OF IMPROPER PAYMENTS. If any payment or distribution of
any character or any security, whether in cash, Bonds or other property shall be
received by any Junior Claimant in contravention of any of the terms hereof
before all the Senior Claims (other than amounts not yet due and payable
pursuant to the indemnity provisions of the Security Documents, so long as no
claim has been made in respect of such indemnity) shall have been Indefeasibly
Paid, such payment or distribution or security shall be received in trust for
the benefit of and shall be paid over or delivered and transferred to, the
holders of the Senior Claims at the time outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Claims remaining unpaid, to the extent necessary to pay all such
Senior Claims in full. In the event of the failure of any Junior Claimant to
endorse or assign any such payment, distribution or security, each holder of any
Senior Claim is hereby irrevocably authorized to endorse or assign the same.
1.4 NO PREJUDICE OR IMPAIRMENT. (A) The rights under these
subordination provisions of the holders of any Senior Claims as against all
Junior Claimants shall remain in full force and effect without regard to, and
shall not be impaired or affected by:
(i) any act or failure to act on the part of the
Partnership; or
3
<PAGE>
(ii) any extension or indulgence in respect of any
payment of prepayment any Senior Claim or any part thereof or in
respect of any other amount payable to any holder of any Senior Claim;
or
(iii) any amendment, modification or waiver of, or
addition or supplement to, or deletion from, or compromise, release,
consent or other action in respect of, any of the terms of any Senior
Claim, any Transaction Document or any other agreement which may be
made relating to any Senior Claim; or
(iv) any exercise or non-exercise by the holder of any
Senior Claim of any right, power, privilege, or remedy under or in
respect of such Senior Claim, the Transaction Documents or these
subordination provisions or any waiver of any such right, power,
privilege or remedy or of any default in respect of such Senior Claim,
the Transaction Documents or these subordination provisions, or any
receipt by the holder of any Senior Claim of any security, or any
failure by such holder to perfect a security interest in, or any
release by such holder of, any security for the payment of such Senior
Claim; or
(v) any merger or consolidation of the Partnership or
any of its subsidiaries into or with any other person, or any sale,
lease or transfer of any or all of the assets of the Partnership or any
of its subsidiaries to any other person; or
(vi) absence of any notice to, or knowledge by, the
Junior Claimant of the existence or occurrence of any of the matters or
events set forth in the foregoing subdivisions (i) through (v); or
(vii) any other circumstance.
(B) All Junior Claimants unconditionally waive (i) notice of
any of the matters referred to in SECTION 1.4(A)(II) to the extent permitted by
law, all notices which may be required, whether by statute, rule of law or
otherwise, to preserve intact any rights of any holder of any Senior Claim
against the Partnership, including, without limitation, any demand, presentment
and protest, proof of notice of nonpayment under any Senior Claim or the
Transaction Documents, and notice of any failure on the part of the Partnership
to perform and comply with any covenant, agreement, term or condition of the
Senior Claims or the Transaction Documents, (iii) any right to the enforcement,
assertion or exercise by any holder of any Senior Claims of any right, power,
privilege or remedy conferred in such Senior Claims or the Transaction
Documents, or otherwise, (iv) any requirement of diligence on the part of any
holder of any of the Senior Claims, (v) any requirement on the part of any
holder of any Senior Claim to mitigate damages resulting from any default under
such Senior Claim or the Transaction Documents, and (vi) any notice of any sale,
transfer or other disposition of any Senior Claims by any holder thereof.
(C) The obligations of all Junior Claimants under these
subordination provisions shall continue to be effective, or be reinstated as the
case may be, if at any time any payment in respect of any Senior Claim, or any
other payment to any holder of any Senior Claim in its capacity as such, is
rescinded or must otherwise be restored or returned by the holder of such Senior
Claims upon the occurrence of any Proceeding, or upon or as a result of the
4
<PAGE>
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Partnership or any substantial part of its property, or
otherwise, all as though such payment had not been made.
1.5 SUBROGATION. No Junior Claimant shall have any subrogation or other
rights as the holder of a Senior Claim, and all Junior Claimants hereby waive
all such rights or subrogation and all rights of reimbursement or indemnity
whatsoever and all rights of recourse to any security for any Senior Claim,
until such time as all the Senior Claims shall be Indefeasibly Paid and all of
the obligations of the Partnership under the Senior Claims and the Transaction
Documents shall have been duly performed. From and after the time at which all
Senior Claims have been Indefeasibly Paid, the rights of the Junior Claimant
shall be subrogated to all rights of any holders of Senior Claims to receive any
further payments or distributions applicable to the Senior Claims until the
Subordinated Amount shall have been Indefeasibly Paid, and for the purposes of
such subrogation, no payment or distribution received by the holders of Senior
Claims of cash, Bonds or other property to which any Junior Claimant would have
been entitled except for these subordination provisions shall, as between the
Partnership and its creditors other than the holders of Senior Claims, on the
one hand, and any Junior Claimant, on the other, be deemed to be a payment or
distribution by the Partnership to or on account of the Senior Claims.
1.6 LEGEND ON JUNIOR CLAIMANTS' INSTRUMENTS. Each instrument evidencing
any Subordinated Amount including, without limitation, any Subordinated
Agreement, shall contain the following legend conspicuously noted on the fact
thereof: "THIS [NAME OF INSTRUMENT] IS SUBJECT TO THE SUBORDINATION PROVISIONS
SET FORTH IN THE [____AGREEMENT] DATED AS OF ____________, 19__ AMONG THE
[INSERT THE NAMES OF PARTIES]" and shall specifically state that a copy of these
subordination provisions is on file with the Partnership and is available for
inspection at the Partnership's offices.
1.7 LIMITATION ON ACTIONS. All Junior Claimants, by acceptance of the
Subordinated Agreement, agree and undertake that:
(a) Without the prior written consent of all holders of the
Senior Claim, no Junior Claimant shall (i) receive any payment in
respect of such Subordinated Amount provided that, so long as no Senior
Default or Senior Event of Default has occurred and is continuing, any
Junior Claimant may receive the Subordinated Amount in accordance with
the terms of any Subordinated Agreement), except subsequent to the
eighteen month period following the occurrence of such Senior Default
or Senior Event of Default, any Junior Claimant who is not an Affiliate
of the Partnership may receive payment of principal and interest on the
Subordinated Amount in accordance with SECTION 3.8 (Subordinated Debt
Account) of the Collateral Agency Agreement,(ii) accelerate, collect or
enforce all or any portion of the Subordinated Amount or (iii) take any
action to foreclose or realize upon any collateral securing the
Subordinated Amount or enforce any Subordinated Agreement. PROVIDED
that anything in these subordination provisions contained to the
contrary notwithstanding:
(i) Any Junior Claimant, may, but not more than one year
prior to the expiration of any applicable limitation period provided by
any applicable statute
5
<PAGE>
of limitation, commence and prosecute to judgment any action necessary
to enforce such Subordinated Amount against the Partnership, but no
Junior Claimant shall take any action to enforce or collect any
judgment so obtained or to enforce any lien of the Subordinated Amount
unless expressly permitted by these subordination provisions;
(ii) in the event that any Proceeding is commenced by or
against the Partnership, any Junior Claimant may appear as a party in
such action or proceeding and assert and perfect his rights with
respect to such Subordinated Amount provided that, in so acting, such
Junior Claimant shall recognize the rights of the holders of Senior
Claims under these subordination provisions, including, without
limitation, the right to vote the claim represented by such
Subordinated Amount to the extent necessary, to enforce these
subordination provisions.
(b) If any Junior Claimant, in violation of the provisions
herein set forth. shall commence, prosecute or participate in any suit,
action, case or proceeding against the Partnership, the Partnership may
interpose as a defense or plea the provisions set forth herein. and any
holder of any Senior Claim may intervene and interpose such defense or
plea in its own name or in the name of the Partnership, and shall, in
any event, be entitled to restrain the enforcement of the payment
provisions of any Subordinated Agreement in its own name or in the name
of the Partnership, as the case may be, in the same suit, action, case
or proceeding or in any independent suit, action, case or proceeding.
(c) No Junior Claimant will take, obtain or hold (or permit
anyone acting on its behalf to take, obtain or hold) any assets of the
Partnership, whether as a result of any administrative, legal or
equitable action, or otherwise, in violation of the provisions of these
Subordination provisions.
(d) Except as expressly provided in these subordination
provisions, without the Prior written consent of all holders of the
Senior Claims, no Junior Claimant will commence, prosecute or
participate in (i) any administrative, legal or equitable action
against the Partnership relating to the Subordinated Amount or (ii) any
other administrative, legal or equitable action relating to any
Subordinated Agreement.
6
<PAGE>
EXHIBIT 3.1
FORM OF REQUISITION
Requisition No.______
Date:______________
[COLLATERAL AGENT],
as Collateral Agent
[address]
[DEPOSITARY BANK],
as Depositary Bank
[address]
Reference is hereby made to the Collateral Agency and Intercreditor
Agreement, dated as of November 1, 1999, among Tenaska Georgia Partners, L.P.
(the "PARTNERSHIP"), The Toronto-Dominion Bank, as DSR LOC AGENT, The
Toronto-Dominion Bank, as PPA LOC AGENT, The Chase Manhattan Bank, as AUTHORITY
TRUSTEE, The Chase Manhattan Bank, as TRUSTEE, The Chase Manhattan Bank, as
DEPOSITARY BANK and The Chase Manhattan Bank, as COLLATERAL AGENT (as the same
may be amended, modified or supplemented from time to time, the "Collateral
Agency Agreement"). Each capitalized term used herein and not otherwise defined
herein shall have the meaning assigned to it in the Collateral Agency Agreement.
The Partnership hereby requests, pursuant to Section 3.1 of the
Collateral Agency Agreement, that the Collateral Agent make a disbursement from
the Construction Fund in the aggregate amount of $_________ (the "Partnership
Requested Disbursement").
The total funding to date from the Construction Fund is equal to
$__________.
The date that the Partnership Requested Disbursement is to be made is
________.
Proceeds of the Partnership Requested Disbursement shall be used as
follows:
<TABLE>
<S> <C>
- ------------------------------------------------------------- -------------------------------------
Cash to be Paid to EPC Contractor $
-------------------
- ------------------------------------------------------------- -------------------------------------
Cash to be Paid to GE $
-------------------
- ------------------------------------------------------------- -------------------------------------
Cash to be Paid to the Senior Parties $
-------------------
- ------------------------------------------------------------- -------------------------------------
Cash to be Paid to Trustee for deposit in the Construction
Interest Account $
-------------------
- ------------------------------------------------------------- -------------------------------------
Cash for Other Project Costs $
-------------------
- ------------------------------------------------------------- -------------------------------------
Total Funds in This Requisition $
-------------------
- ------------------------------------------------------------- -------------------------------------
Total Equity Funding to Date $
-------------------
- ------------------------------------------------------------- -------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------- -------------------------------------
Total Funding to Date $
-------------------
- ------------------------------------------------------------- -------------------------------------
</TABLE>
Cash disbursement instructions (including wire and account information) for the
Partnership Requested Disbursement are set forth in Annex 1 hereto.
The Partnership hereby certifies, in connection with this
Requisition, that:
(i) the proceeds of the Partnership Requested
Disbursements will be used solely to pay Project Costs in
accordance with the Common Agreement;
(ii) all work performed to date has been
satisfactorily performed in a good and workmanlike manner and
pursuant to and in accordance with the terms and conditions of
the Project Documents under which such work has been
performed;
(iii) undisbursed funds in the Construction Fund,
together with funds available under the Equity Contribution
Agreement and all other available sources of funds, are
reasonably expected to be sufficient to complete the Project
according to the EPC Contract and the Pipeline EPC Contract on
or prior to the Scheduled Date of Commercial Operation for the
Final Units;
(iv) the Partnership reasonably expects that the
Facility will be completed when required in order to prevent a
termination of the PPA due to delay;
(v) no Default or Event of Default under the Common
Agreement has occurred and is continuing;
(vi) proceeds of all prior Requisitions have been
expended or applied pursuant to provisions of the Financing
Documents and the items for which amounts are requested in
this Requisition have not been the basis for a previous
Requisition (other than as an Estimated Project Cost);
(vii) the insurance policies required pursuant to the
Common Agreement, the material Governmental Approvals required
to have been obtained as of the date of this Requisition, and
all necessary Project Documents are in full force and effect;
(viii) the Partnership and the Facility Site are, to
the best of the Partnership's knowledge, in compliance with
all environmental laws, noncompliance with which could be
reasonably expected to result in a Material Adverse Effect;
(ix) the representations set forth in Sections
4.1(a), 4.1(e), 4.1(f), 4.1(g), 4.1(k) and 4.1(q) of the
Common Agreement are true and correct in all material
respects; and
2
<PAGE>
(x) there has not been any sale, forfeiture or loss
of any material amount of the Collateral and the Collateral is
not subject to any Liens other than Permitted Liens; or
(A) We confirm the certifications set forth
in (i), (iv) and (vi) above;
(B) We are unable to confirm the following
certifications set forth above [(ii), (iii), (v), (vii),
(viii), (ix) or (x)] and a statement identifying the cause for
such failure is attached hereto;
(C) No Bankruptcy Event in respect of the
Partnership exists; and
(D) Each of the EPC Contract, the Power
Purchase Agreement, required insurance policies and material
Governmental Approvals required by the Transaction Documents
for construction of the Facility are in full force and effect.
[This Requisition is accompanied by the following items:
(a) if any amount of the Partnership Requested
Disbursement is to be applied to any payment under the EPC
Contract, a payment request under the EPC Contract (which
request is attached hereto), approved by the Partnership;
(b) if any amount of a Partnership Requested
Disbursement is to be applied to the payment of a Project Cost
other than the payment of interest, fees, expenses or other
costs required to be paid by the obligors under the Financing
Documents or the EPC Contract, a statement detailing such
amounts and describing the services rendered, together with
attached bills for individual Project Costs in excess of
$250,000, except for estimated amounts which represent a
Project Cost which as of the date of this Requisition is not
due and payable but which will become due and payable prior to
the next scheduled requested disbursement ("Estimated Project
Costs") and for which bills for such Estimated Project costs
will be attached to the next Requisition for individual
Project Costs in excess of $250,000; and
(c) bills for any Project Costs which as of the date
of the last Requisition were Estimated Project Costs and are
required pursuant to such last Requisition to be attached
hereto.]
3
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.,
By: Tenaska Georgia, Inc.,
Managing General Partner
By:
---------------------------------
Name:
Title:
The Collateral Agent hereby instructs the Depositary Bank to comply with the
foregoing requested disbursement.
[COLLATERAL AGENT], as Collateral Agent
By:
---------------------------------
Name:
Title:
4
<PAGE>
INDEPENDENT ENGINEER'S CONFIRMATION
The Chase Manhattan Bank
as Collateral Agent
450 West 33rd Street, 15th Floor
New York, New York 10001
Subject: Tenaska Georgia Project
R. W. Beck, Inc. (the "Independent Engineer") pursuant to the Collateral Agency
and Intercreditor Agreement, dated as of November 1, 1999, among Tenaska Georgia
Partners, L.P. (the "PARTNERSHIP"), The Toronto-Dominion Bank, as DSR LOC AGENT,
The Toronto-Dominion Bank, as PPA LOC AGENT, The Chase Manhattan Bank, as
AUTHORITY TRUSTEE, The Chase Manhattan Bank, as TRUSTEE, The Chase Manhattan
Bank, as DEPOSITARY BANK and The Chase Manhattan Bank, as COLLATERAL AGENT (as
the same may be amended, modified or supplemented from time to time, the
"Collateral Agency Agreement"), hereby makes the following statements as of
______.
Reference is made to the Partnership's Requisition Certificate No. _____ (the
"Requisition") dated__________ addressed to the Collateral Agent requesting that
a disbursement from the Construction Fund in the aggregate amount of $__________
be made.
1. We have read the provisions of the Collateral Agency Agreement as
it identifies the responsibilities of the Independent Engineer,
related to providing this Independent Engineer's Confirmation.
2. Each capitalized term used herein and not otherwise defined herein
shall have the meaning assigned to it in the Collateral Agency
Agreement
3. We hereby confirm that we have reviewed the Requisition and the
reports and documents attached thereto and other material
relating to the Project as we believed were necessary to
establish the accuracy of the technical aspects of this
Independent Engineer's Confirmation. Our review and observations
were performed in accordance with generally accepted engineering
practice and in accordance with the standards of care practiced
by leading independent and consulting engineers in performing
similar tasks on like projects. The confirmation contained herein
is made on the understanding and assumption that the Independent
Engineer has been provided true, correct, and complete
information as to the matters covered by the Requisition. On such
basis, we hereby confirm that to the best of our knowledge, based
on our review of the Requisition and such other technical review
and observation as was deemed appropriate, the matters certified
by the Partnership in paragraphs [(i), (ii). (iv) and
<PAGE>
(vi)] or [(A) and (D)] are true and correct regarding technical
aspects on the date hereof.
_____________, as Independent Engineer
BY:
-----------------------------------
Name:
Title:
BY:
-----------------------------------
Name:
Title:
2
<PAGE>
SCHEDULE I
FUNDS
<TABLE>
<CAPTION>
TRUST VISTA
ACCOUNT NAME ACCOUNT NO. ACCOUNT NO.
<S> <C> <C>
Construction Fund C29457 294570000
Revenue Fund C29458 294580000
Loss Proceeds Account C29458-A 294580001
Energy Contract Buy-Out Proceeds Sub-account C29458-B 294580002
EPC Buy-Down Proceeds Sub-account C29458-C 294580003
Operating Fund C29459 294590000
Major Maintenance Sub-Account C29459-A 294590001
Debt Service Fund C29460 294600000
Debt Service Reserve Account C29460-A 294600001
Subordinated Debt Account C29460-B 294600002
Partnership Distribution Fund C29461 294610000
Distribution Suspense Account C29461-A 294910001
Unrestricted Account C29461-B 294610002
</TABLE>
<PAGE>
Exhibit 4.3
THIS SECURITY IS A RESTRICTED GLOBAL BOND WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS HELD BY THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE
FOR BONDS HELD BY A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR
BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY
BE MADE EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS RESTRICTED GLOBAL BOND IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO THE PARTNERSHIP OR ITS AGENT FOR EXCHANGE OR PAYMENT,
AND ANY DEFINITIVE SECURITY IS ISSUED IN THE NAME OR NAMES AS DIRECTED IN
WRITING BY DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE BEARER HEREOF, DTC, HAS AN
INTEREST HEREIN.
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS BOND (OR ANY PREDECESSOR OF SUCH
BOND) EXCEPT (A) BY THE INITIAL INVESTOR (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND (B) BY SUBSEQUENT
INVESTORS, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
<PAGE>
RESTRICTED GLOBAL BOND
TENASKA GEORGIA PARTNERS, L.P.
9.50% Senior Secured Bonds Due 2030
CUSIP Number: 88031JAA4
Bond Number: R-1
Principal Amount: $200,000,000
Maturity Date: February 1, 2030
Issue Date: November 10, 1999
Interest Rate: 9.50%
Registered Holder: Cede & Co.
TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership (the
"Partnership", which term includes any successor or assign under the Indenture
referred to below), for value received hereby promises to pay to Cede & Co., or
its registered assigns, on each Scheduled Payment Date, the principal sum
corresponding to such Scheduled Payment Date set forth on the Schedule I of the
Indenture multiplied by a fraction the numerator of which is the Outstanding
amount of the Principal Amount set forth above and the denominator of which is
the Outstanding amount of all Bonds issued under the Indenture, or on such
earlier date as the entire principal hereof may become due in accordance with
the provisions hereof, and to pay interest in arrears on February 1 and August
1, commencing August 1, 2000, on said principal sum at the rate of 9.50% per
annum. Interest shall accrue from and including the most recent date to which
interest has been paid or duly provided for, from November 10, 1999 until
payment of said principal sum has been made or duly provided for. The interest
payable on any such Scheduled Payment Date will, subject to certain conditions
set forth herein, be paid to the person in whose name this Bond is registered at
the end of the fifteenth day next preceding each Scheduled Payment Date. Such
payments shall be made exclusively in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
The statements in the legend set forth above, if any, are an integral
part of the terms of this Bond and by acceptance hereof the holder of this Bond
agrees to be subject to and bound by the terms and provisions set forth in such
legend, if any.
REFERENCE IS MADE TO THE FURTHER PROVISIONS SET FORTH UNDER THE TERMS
AND CONDITIONS OF THE BONDS ENDORSED ON THE REVERSE HEREOF. SUCH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
AT THIS PLACE.
2
<PAGE>
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Bond
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Partnership has caused this instrument to be
duly executed.
Dated: November 10, 1999
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc., its
Managing General Partner
By: /s/ MICHAEL F. LAWLER
------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
This is one of the Bonds described in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ ANNETTE M. MARSULA
------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
3
<PAGE>
TERMS AND CONDITIONS OF BONDS
Principal Amount: $200,000,000
Interest Rate: 9.50%
Payment Dates: February 1 and August 1
(commencing August 1, 2000)
Minimum Denominations: US$100,000 and integral multiples of
$1,000 in excess thereof.
Other Terms:
1. General. This Bond is one of a duty authorized issue of debt Bonds
(the "Bonds") of Tenaska Georgia Partners, L.P. (the "Partnership") issued
pursuant to an Indenture (the "Indenture") dated as of November 1, 1999, between
the Partnership and The Chase Manhattan Bank, as Trustee. All capitalized terms
used but not otherwise defined herein shall have the meanings given to such
terms in the Indenture. The holders of the Bonds will be entitled to the
benefits of, be bound by, and be deemed to have notice of, all of the provisions
of the Indenture. A copy of the Indenture is on file and may be inspected at the
corporate trust office of the Trustee in The City of New York, at the offices of
the paying agents listed at the foot of this Bond and at the principal office of
the Partnership set forth in Section 18 (Indentures) hereto.
2. Payments and Paying Agencies. (a) All payments on this Bond shall be
made exclusively in immediately available funds and in such coin or currency of
the United States of America which, at the time of payment, is legal tender for
the payment of public and private debts.
(b) The Person in whose name any Bond is registered at the
close of business on any Regular Record Date with respect to any
Scheduled Payment Date shall be entitled to receive the principal,
premium (if any) and/or interest payable on such Scheduled Payment Date
notwithstanding the cancellation of such Bond upon any transfer or
exchange thereof, subsequent to such Regular Record Date and prior to
such Scheduled Payment Date; provided however, that if and to the
extent there is a default in the payment of the principal, premium (if
any) and/or interest due on such Scheduled Payment Date, such defaulted
principal, premium if any) and/or interest shall be paid to the Persons
in whose names Outstanding Bonds are registered at the close of
business on a subsequent date (each such date, a "Special Record
Date"), which shall not be less than five (5) days preceding the date
of payment of such defaulted principal, premium, if any) and/or
interest, established by a notice mailed by the Trustee to the
registered owners of the Bonds in accordance with Section 14.5(b)
(Notices) of the Indenture not less than fifteen (15) days prior to the
Special Record Date.
(c) If any date for the payment of principal of, premium (if
any) or interest on the Bonds is not a Business Day, such payment shall
be due on the first Business Day
4
<PAGE>
thereafter. Any payment made on such next succeeding business day shall
have the same force and effect as if made on the date on which such
payment is due, and no interest shall accrue for the period after such
date.
(d) Interest shall be calculated on the basis of a 360-day
year of twelve 30-day months.
3. Amendments and Supplements to Indenture. (a) Without Consent of
Holders. The Indenture may be amended or supplemented by the
Partnership and the Trustee at any time and from time to time, without
the consent of the Holders by a Supplemental Indenture authorized by a
resolution of the Executive Review Committee of the Partnership filed
with, and in form satisfactory to, the Trustee, solely for one or more
of the following purposes:
(i) to add additional covenants of the Partnership,
to surrender any right or power herein conferred upon the
Partnership or to confer upon the Holders any additional
rights, remedies, benefits, powers or authorities that may
lawfully be conferred;
(ii) to increase the assets securing the
Partnership's obligations under the Indenture;
(iii) to provide for the issuance of Additional Bonds
on the conditions set forth in Section 2.3 (Additional Bonds)
of the Indenture;
(iv) for any purpose not inconsistent with the terms
of the Indenture to cure any ambiguity or to correct or
supplement any provision contained herein or in any
Supplemental Indenture which may be defective or inconsistent
with any other provision contained herein or in any
Supplemental Indenture;
(v) in connection with, and to reflect, any
amendments to the provisions hereof required by the Rating
Agencies in circumstances where confirmation of the Ratings
are required under the Indenture in connection with the
issuance of Additional Bonds or the taking of other actions by
the Partnership; provided, however, that such amendments are
not, in the judgment of the Trustee, to the prejudice of the
Trustee or the Holders; or
(vi) to provide for the issuance of exchange Bonds as
contemplated by any agreement entered into in connection with
the issuance of Additional Bonds.
(b) With Consent of Holders. The Indenture may be amended or
supplemented by the Partnership and the Trustee at any time and from
time to time, with the consent of the Majority Holders, for the purpose
of adding any mutually agreeable provisions to or changing in any
manner or eliminating any of the provisions of, the Indenture, except
with respect to (a) the principal, premium (if any) or interest payable
upon any Bonds, (b) the dates on which interest on or principal of any
Bonds is paid, (c)
5
<PAGE>
the dates of maturity of any Bonds, (d) Article 9 (Supplemental
Indentures) of the Indenture and (e) the grant of security interests
for the benefit of the Bonds. The matters of the Indenture described in
clauses (a) through (e) of the preceding sentence may be amended or
supplemented by the Partnership and the Trustee at any time and from
time to time only with the consent of the One Hundred Percent Holders.
Notice of any such amendment shall be given by the Partnership to any
Rating Agency then maintaining a Rating for the Bonds.
4. Replacement, Exchange and Transfer of Bonds. (a) If any Bond shall
become mutilated, the Partnership shall execute, and the Trustee shall
authenticate and deliver, a new Bond of like tenor, maturity and denomination in
exchange and substitution for the Bond so mutilated, but only upon surrender to
the Trustee of such mutilated Bond for cancellation, and the Partnership or the
Trustee may require reasonable indemnity therefor. If any Bond shall be reported
lost, stolen or destroyed evidence as to the ownership and the loss, theft or
destruction thereof shall be submitted to the Trustee. It such evidence shall be
satisfactory to both the Trustee and the Partnership and indemnity satisfactory
to both shall be given, the Partnership shall execute, and thereupon the Trustee
shall authenticate and deliver, a new Bond of like tenor, maturity and
denomination. The cost of providing any substitute Bond under the provisions of
Section 2.10 (Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall
be borne by the Holder for whose benefit such substitute Bond is provided. If
any such mutilated, lost, stolen or destroyed Bond shall have matured or be
about to mature, the Partnership may, with the consent of the Trustee, pay to
the Holder thereof the principal amount of such Bond upon the maturity thereof
and compliance with the aforesaid conditions by such Holder, without the
issuance (of a substitute Bond therefor, and likewise pay to the Holder the
amount of the unpaid interest, if any, which would have been paid on a
substitute Bond had one been issued.
(b) Every substitute Bond issued pursuant to Section 2.10
(Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall
constitute an additional contractual obligation of the Partnership,
whether or not the Bond alleged to have been mutilated, destroyed, lost
or stolen shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and
proportionally with any and all other Bonds duly issued hereunder.
(c) All Bonds shall be held and owned upon the express
condition that the foregoing provisions are, to the extent permitted by
Applicable Law, exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Bonds, and shall preclude any and
all other rights and remedies with respect thereto
5. Trustee. For a description of the duties and the immunities and
rights of the Trustee under the Indenture, reference is made to the Indenture,
and the obligations of the Trustee to the holder hereof are subject to such
immunities and rights.
6. Paying Agents; Transfer Agents; Registrars. The Partnership has
initially appointed the Trustee as paying agent, transfer agents and registrar.
The Partnership may, subject to the terms of the Indenture, at any time appoint
additional or other paying agents, transfer agents and registrars and terminate
the appointment thereof, provided, that while the Bonds are Outstanding the
Partnership will maintain offices or agencies for payment of principal
6
<PAGE>
of and interest on this Bond as herein provided in the Borough of Manhattan, The
City of New York. Notice of any such termination or appointment and of any
change in the office through which any paying agent, transfer agent or registrar
will act will be promptly given in the manner described in Section 8 (Notices)
hereof.
7. Enforcement. (a) Subject to the provisions of Article 7 (Events of
Default; Remedies) of the Indenture, a Holder shall not have the right to
Institute any suit, action or proceeding at law or in equity or otherwise for
the appointment of a receiver or for the enforcement of any other remedy under
or upon this Indenture, unless:
(i) such Holder shall have previously given written
notice to the Trustee a continuing Event of Default;
(ii) Holders representing the percentage of aggregate
principal amount of Outstanding Bonds needed to initiate the
exercise of remedies shall have requested the Trustee in
writing to institute such suit, action or proceeding;
(iii) the Trustee shall have refused or neglected to
institute any such suit, action or proceeding for sixty (60)
days after receipt of such notice by the Trustee; and
(iv) no direction inconsistent with such written
request has been given to the Trustee during such sixty (60)
day period by the Majority Holders.
(b) It is understood and intended that one or more of the Holders shall
not have any right in any manner whatsoever hereunder or under the Bonds to (i)
surrender, impair, waive, affect, disturb or prejudice the Lien of the Indenture
on any property subject thereto or the rights of any other Holders, (ii) obtain
or seek to obtain priority or preference over any other Holders or (iii) enforce
any right under the Indenture, except in the manner provided herein or in the
Indenture and for the equal, ratable and common benefit of all or the Holders.
8. Notices. Notices shall be mailed to Holders at their registered
addresses. Notice sent by first class mail, postage prepaid, shall be deemed to
have been given on the date of such mailing. In addition, the Partnership will
cause all such other publications of such notices as may be required from time
to time by Applicable Law.
9. Redemption at the Option of the Partnership. The Bonds are, under
certain conditions, subject to redemption at the option of the Partnership as
set forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
10. Redemption at the Option of the Holders. The Bonds are, under
certain conditions, subject to redemption at the option of the Holders as set
forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
11. Mandatory Redemption. The Bonds are subject to mandatory redemption
under certain circumstances as set forth in Section 3.2 (Mandatory Redemption)
of the Indenture.
7
<PAGE>
12. Authentication. This Bond shall not be valid for any purpose until
an Authorized Representative of the Trustee manually signs the certificate of
authentication hereon substantially in the form set forth in Exhibit A to the
Indenture.
13. Governing Law. This Bond is a contract made under the laws of the
State of New York of the United States and shall for all purposes be governed by
and construed in accordance with the laws of such State without regard to the
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law).
14. Warranty by Issuer. Subject to Section 12 (Authentication) hereof,
the Partnership hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened precedent to the
creation and issuance of this Bond, and to constitute the same a legal, valid
and binding obligation of the Partnership enforceable in accordance with its
terms, have been done and performed and have happened in due and strict
compliance with all Applicable Laws.
15. Trustee Dealings with the Partnership. Subject to certain
limitations imposed by the Trust Indenture Act, the Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Bonds and may otherwise deal with and collect obligations owed to it by the
Partnership or its Affiliates and may otherwise deal with the Partnership or its
Affiliates with the same rights it would have it if were not Trustee.
16. No Recourse Against Others. A director, officer, employee, partner,
affiliate, agent, servant or stockholder, as such, of the Partnership or the
Trustee shall not have any liability for any obligations of the Partnership
under the Bonds or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Bond, each Holder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Bonds.
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Partnership has
caused CUSIP numbers to be printed on the Bonds and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Bond holders. No
representation made as to the accuracy of such numbers either as printed on the
Bonds or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. Indentures. The Partnership will furnish to any Holder upon written
request and without charge a copy of the Indenture. Requests may be made to:
Tenaska Georgia Partners, L.P., 1044 North 115 Street, Suite 400, Omaha,
Nebraska 68154, Attention: Managing General Partner.
19. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (Tenants in Common), TEN ENT (Tenants by
the Entireties), JT TEN (Joint Tenants with Rights of Survivorship and not as
Tenants in Common), CUST (Custodian), and U/G/M/A (Uniform Gift to Minors Act).
8
<PAGE>
20. Descriptive Headings. The descriptive headings appearing in these
Terms and Conditions are for convenience of reference only and shall not alter,
limit or define the provisions thereof.
9
<PAGE>
THIS SECURITY IS A RESTRICTED GLOBAL BOND WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS HELD BY THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE
FOR BONDS HELD BY A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR
BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY
BE MADE EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS RESTRICTED GLOBAL BOND IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO THE PARTNERSHIP OR ITS AGENT FOR EXCHANGE OR PAYMENT,
AND ANY DEFINITIVE SECURITY IS ISSUED IN THE NAME OR NAMES AS DIRECTED IN
WRITING BY DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE BEARER HEREOF, DTC, HAS AN
INTEREST HEREIN.
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS BOND (OR ANY PREDECESSOR OF SUCH
BOND) EXCEPT (A) BY THE INITIAL INVESTOR (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND (B) BY SUBSEQUENT
INVESTORS, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
<PAGE>
RESTRICTED GLOBAL BOND
TENASKA GEORGIA PARTNERS, L.P.
9.50% Senior Secured Bonds Due 2030
CUSIP Number: 88031JAA4
Bond Number: R-2
Principal Amount: $75,000,000
Maturity Date: February 1, 2030
Issue Date: November 10, 1999
Interest Rate: 9.50%
Registered Holder: Cede & Co.
TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership (the
"Partnership", which term includes any successor or assign under the Indenture
referred to below), for value received hereby promises to pay to Cede & Co., or
its registered assigns, on each Scheduled Payment Date, the principal sum
corresponding to such Scheduled Payment Date set forth on the Schedule I of the
Indenture multiplied by a fraction the numerator of which is the Outstanding
amount of the Principal Amount set forth above and the denominator of which is
the Outstanding amount of all Bonds issued under the Indenture, or on such
earlier date as the entire principal hereof may become due in accordance with
the provisions hereof, and to pay interest in arrears on February 1 and August
1, commencing August 1, 2000, on said principal sum at the rate of 9.50% per
annum. Interest shall accrue from and including the most recent date to which
interest has been paid or duly provided for, from November 10, 1999 until
payment of said principal sum has been made or duly provided for. The interest
payable on any such Scheduled Payment Date will, subject to certain conditions
set forth herein, be paid to the person in whose name this Bond is registered at
the end of the fifteenth day next preceding each Scheduled Payment Date. Such
payments shall be made exclusively in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
The statements in the legend set forth above, if any, are an integral
part of the terms of this Bond and by acceptance hereof the holder of this Bond
agrees to be subject to and bound by the terms and provisions set forth in such
legend, if any.
REFERENCE IS MADE TO THE FURTHER PROVISIONS SET FORTH UNDER THE TERMS
AND CONDITIONS OF THE BONDS ENDORSED ON THE REVERSE HEREOF. SUCH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
AT THIS PLACE.
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<PAGE>
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Bond
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Partnership has caused this instrument to be
duly executed.
Dated: November 10, 1999
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc., its
Managing General Partner
By: /s/ MICHAEL F. LAWLER
-----------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
This is one of the Bonds described in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ ANNETTE M. MARSULA
-----------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
3
<PAGE>
TERMS AND CONDITIONS OF BONDS
Principal Amount: $75,000,000
Interest Rate: 9.50%
Payment Dates: February 1 and August 1
(commencing August 1, 2000)
Minimum Denominations: US$100,000 and integral multiples of
$1,000 in excess thereof.
Other Terms:
1. General. This Bond is one of a duty authorized issue of debt Bonds
(the "Bonds") of Tenaska Georgia Partners, L.P. (the "Partnership") issued
pursuant to an Indenture (the "Indenture") dated as of November 1, 1999, between
the Partnership and The Chase Manhattan Bank, as Trustee. All capitalized terms
used but not otherwise defined herein shall have the meanings given to such
terms in the Indenture. The holders of the Bonds will be entitled to the
benefits of, be bound by, and be deemed to have notice of, all of the provisions
of the Indenture. A copy of the Indenture is on file and may be inspected at the
corporate trust office of the Trustee in The City of New York, at the offices of
the paying agents listed at the foot of this Bond and at the principal office of
the Partnership set forth in Section 18 (Indentures) hereto.
2. Payments and Paying Agencies. (a) All payments on this Bond shall be
made exclusively in immediately available funds and in such coin or currency of
the United States of America which, at the time of payment, is legal tender for
the payment of public and private debts.
(b) The Person in whose name any Bond is registered at the
close of business on any Regular Record Date with respect to any
Scheduled Payment Date shall be entitled to receive the principal,
premium (if any) and/or interest payable on such Scheduled Payment Date
notwithstanding the cancellation of such Bond upon any transfer or
exchange thereof, subsequent to such Regular Record Date and prior to
such Scheduled Payment Date; provided however, that if and to the
extent there is a default in the payment of the principal, premium (if
any) and/or interest due on such Scheduled Payment Date, such defaulted
principal, premium if any) and/or interest shall be paid to the Persons
in whose names Outstanding Bonds are registered at the close of
business on a subsequent date (each such date, a "Special Record
Date"), which shall not be less than five (5) days preceding the date
of payment of such defaulted principal, premium, if any) and/or
interest, established by a notice mailed by the Trustee to the
registered owners of the Bonds in accordance with Section 14.5(b)
(Notices) of the Indenture not less than fifteen (15) days prior to the
Special Record Date.
(c) If any date for the payment of principal of, premium (if
any) or interest on the Bonds is not a Business Day, such payment shall
be due on the first Business Day
4
<PAGE>
thereafter. Any payment made on such next succeeding business day shall
have the same force and effect as if made on the date on which such
payment is due, and no interest shall accrue for the period after such
date.
(d) Interest shall be calculated on the basis of a 360-day
year of twelve 30-day months.
3. Amendments and Supplements to Indenture (a) Without Consent of
Holders. The Indenture may be amended or supplemented by the
Partnership and the Trustee at any time and from time to time, without
the consent of the Holders by a Supplemental Indenture authorized by a
resolution of the Executive Review Committee of the Partnership filed
with, and in form satisfactory to, the Trustee, solely for one or more
of the following purposes:
(i) to add additional covenants of the Partnership,
to surrender any right or power herein conferred upon the
Partnership or to confer upon the Holders any additional
rights, remedies, benefits, powers or authorities that may
lawfully be conferred;
(ii) to increase the assets securing the
Partnership's obligations under the Indenture;
(iii) to provide for the issuance of Additional Bonds
on the conditions set forth in Section 2.3 (Additional Bonds)
of the Indenture;
(iv) for any purpose not inconsistent with the terms
of the Indenture to cure any ambiguity or to correct or
supplement any provision contained herein or in any
Supplemental Indenture which may be defective or inconsistent
with any other provision contained herein or in any
Supplemental Indenture;
(v) in connection with, and to reflect, any
amendments to the provisions hereof required by the Rating
Agencies in circumstances where confirmation of the Ratings
are required under the Indenture in connection with the
issuance of Additional Bonds or the taking of other actions by
the Partnership; provided, however, that such amendments are
not, in the judgment of the Trustee, to the prejudice of the
Trustee or the Holders; or
(vi) to provide for the issuance of exchange Bonds as
contemplated by any agreement entered into in connection with
the issuance of Additional Bonds.
(b) With Consent of Holders. The Indenture may be amended or
supplemented by the Partnership and the Trustee at any time and from
time to time, with the consent of the Majority Holders, for the purpose
of adding any mutually agreeable provisions to or changing in any
manner or eliminating any of the provisions of, the Indenture, except
with respect to (a) the principal, premium (if any) or interest payable
upon any Bonds, (b) the dates on which interest on or principal of any
Bonds is paid, (c)
5
<PAGE>
the dates of maturity of any Bonds, (d) Article 9 (Supplemental
Indentures) of the Indenture and (e) the grant of security interests
for the benefit of the Bonds. The matters of the Indenture described in
clauses (a) through (e) of the preceding sentence may be amended or
supplemented by the Partnership and the Trustee at any time and from
time to time only with the consent of the One Hundred Percent Holders.
Notice of any such amendment shall be given by the Partnership to any
Rating Agency then maintaining a Rating for the Bonds.
4. Replacement, Exchange and Transfer of Bonds. (a) If any Bond shall
become mutilated, the Partnership shall execute, and the Trustee shall
authenticate and deliver, a new Bond of like tenor, maturity and denomination in
exchange and substitution for the Bond so mutilated, but only upon surrender to
the Trustee of such mutilated Bond for cancellation, and the Partnership or the
Trustee may require reasonable indemnity therefor. If any Bond shall be reported
lost, stolen or destroyed evidence as to the ownership and the loss, theft or
destruction thereof shall be submitted to the Trustee. It such evidence shall be
satisfactory to both the Trustee and the Partnership and indemnity satisfactory
to both shall be given, the Partnership shall execute, and thereupon the Trustee
shall authenticate and deliver, a new Bond of like tenor, maturity and
denomination. The cost of providing any substitute Bond under the provisions of
Section 2.10 (Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall
be borne by the Holder for whose benefit such substitute Bond is provided. If
any such mutilated, lost, stolen or destroyed Bond shall have matured or be
about to mature, the Partnership may, with the consent of the Trustee, pay to
the Holder thereof the principal amount of such Bond upon the maturity thereof
and compliance with the aforesaid conditions by such Holder, without the
issuance (of a substitute Bond therefor, and likewise pay to the Holder the
amount of the unpaid interest, if any, which would have been paid on a
substitute Bond had one been issued.
(b) Every substitute Bond issued pursuant to Section 2.10
(Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall
constitute an additional contractual obligation of the Partnership,
whether or not the Bond alleged to have been mutilated, destroyed, lost
or stolen shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and
proportionally with any and all other Bonds duly issued hereunder.
(c) All Bonds shall be held and owned upon the express
condition that the foregoing provisions are, to the extent permitted by
Applicable Law, exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Bonds, and shall preclude any and
all other rights and remedies with respect thereto
5. Trustee. For a description of the duties and the immunities and
rights of the Trustee under the Indenture, reference is made to the Indenture,
and the obligations of the Trustee to the holder hereof are subject to such
immunities and rights.
6. Paying Agents; Transfer Agents; Registrars. The Partnership has
initially appointed the Trustee as paying agent, transfer agents and registrar.
The Partnership may, subject to the terms of the Indenture, at any time appoint
additional or other paying agents, transfer agents and registrars and terminate
the appointment thereof, provided, that while the Bonds are Outstanding the
Partnership will maintain offices or agencies for payment of principal
6
<PAGE>
of and interest on this Bond as herein provided in the Borough of Manhattan, The
City of New York. Notice of any such termination or appointment and of any
change in the office through which any paying agent, transfer agent or registrar
will act will be promptly given in the manner described in Section 8 (Notices)
hereof.
7. Enforcement. (a) Subject to the provisions of Article 7 (Events of
Default; Remedies) of the Indenture, a Holder shall not have the right to
Institute any suit, action or proceeding at law or in equity or otherwise for
the appointment of a receiver or for the enforcement of any other remedy under
or upon this Indenture, unless:
(i) such Holder shall have previously given written
notice to the Trustee a continuing Event of Default;
(ii) Holders representing the percentage of aggregate
principal amount of Outstanding Bonds needed to initiate the
exercise of remedies shall have requested the Trustee in
writing to institute such suit, action or proceeding;
(iii) the Trustee shall have refused or neglected to
institute any such suit, action or proceeding for sixty (60)
days after receipt of such notice by the Trustee; and
(iv) no direction inconsistent with such written
request has been given to the Trustee during such sixty (60)
day period by the Majority Holders.
(b) It is understood and intended that one or more of the Holders shall
not have any right in any manner whatsoever hereunder or under the Bonds to (i)
surrender, impair, waive, affect, disturb or prejudice the Lien of the Indenture
on any property subject thereto or the rights of any other Holders, (ii) obtain
or seek to obtain priority or preference over any other Holders or (iii) enforce
any right under the Indenture, except in the manner provided herein or in the
Indenture and for the equal, ratable and common benefit of all or the Holders.
8. Notices. Notices shall be mailed to Holders at their registered
addresses. Notice sent by first class mail, postage prepaid, shall be deemed to
have been given on the date of such mailing. In addition, the Partnership will
cause all such other publications of such notices as may be required from time
to time by Applicable Law.
9. Redemption at the Option of the Partnership. The Bonds are, under
certain conditions, subject to redemption at the option of the Partnership as
set forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
10. Redemption at the Option of the Holders. The Bonds are, under
certain conditions, subject to redemption at the option of the Holders as set
forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
11. Mandatory Redemption. The Bonds are subject to mandatory redemption
under certain circumstances as set forth in Section 3.2 (Mandatory Redemption)
of the Indenture.
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<PAGE>
12. Authentication. This Bond shall not be valid for any purpose until
an Authorized Representative of the Trustee manually signs the certificate of
authentication hereon substantially in the form set forth in Exhibit A-1 to the
Indenture.
13. Governing Law. This Bond is a contract made under the laws of the
State of New York of the United States and shall for all purposes be governed by
and construed in accordance with the laws of such State without regard to the
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law).
14. Warranty by Issuer. Subject to Section 12 (Authentication) hereof,
the Partnership hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened precedent to the
creation and issuance of this Bond, and to constitute the same a legal, valid
and binding obligation of the Partnership enforceable in accordance with its
terms, have been done and performed and have happened in due and strict
compliance with all Applicable Laws.
15. Trustee Dealings with the Partnership. Subject to certain
limitations imposed by the Trust Indenture Act, the Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Bonds and may otherwise deal with and collect obligations owed to it by the
Partnership or its Affiliates and may otherwise deal with the Partnership or its
Affiliates with the same rights it would have it if were not Trustee.
16. No Recourse Against Others. A director, officer, employee, partner,
affiliate, agent, servant or stockholder, as such, of the Partnership or the
Trustee shall not have any liability for any obligations of the Partnership
under the Bonds or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Bond, each Holder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Bonds.
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Partnership has
caused CUSIP numbers to be printed on the Bonds and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Bond holders. No
representation made as to the accuracy of such numbers either as printed on the
Bonds or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. Indentures. The Partnership will furnish to any Holder upon written
request and without charge a copy of the Indenture. Requests may be made to:
Tenaska Georgia Partners, L.P., 1044 North 115 Street, Suite 400, Omaha,
Nebraska 68154, Attention: Managing General Partner.
19. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (Tenants in Common), TEN ENT (Tenants by
the Entireties), JT TEN (Joint Tenants with Rights of Survivorship and not as
Tenants in Common), CUST (Custodian), and U/G/M/A (Uniform Gift to Minors Act).
8
<PAGE>
20. Descriptive Headings. The descriptive headings appearing in these
Terms and Conditions are for convenience of reference only and shall not alter,
limit or define the provisions thereof.
9
<PAGE>
THIS SECURITY IS A REGULATION S GLOBAL BOND WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS HELD BY THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE
FOR BONDS HELD BY A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR
BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY
BE MADE EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS REGULATION S GLOBAL BOND IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO THE PARTNERSHIP OR ITS AGENT FOR EXCHANGE OR PAYMENT,
AND ANY DEFINITIVE SECURITY IS ISSUED IN THE NAME OR NAMES AS DIRECTED IN
WRITING BY DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE BEARER HEREOF, DTC, HAS AN
INTEREST HEREIN.
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS BOND (OR ANY PREDECESSOR OF SUCH
BOND) EXCEPT (A) BY THE INITIAL INVESTOR (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO A REGISTRATION STATEMENT THAT HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND (B) BY SUBSEQUENT
INVESTORS, AS SET FORTH IN (A) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
<PAGE>
REGULATION S GLOBAL BOND
TENASKA GEORGIA PARTNERS, L.P.
9.50% Senior Secured Bonds Due 2030
CUSIP Number: U88020AA7
ISIN Number: USU88020AA77
Bond Number: R-3
Principal Amount: $0
Maturity Date: February 1, 2030
Issue Date: November 10, 1999
Interest Rate: 9.50%
Registered Holder: Cede & Co.
TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership (the
"Partnership", which term includes any successor or assign under the Indenture
referred to below), for value received hereby promises to pay to Cede & Co., or
its registered assigns, on each Scheduled Payment Date, the principal sum
corresponding to such Scheduled Payment Date set forth on the Schedule I of the
Indenture multiplied by a fraction the numerator of which is the Outstanding
amount of the Principal Amount set forth above and the denominator of which is
the Outstanding amount of all Bonds issued under the Indenture, or on such
earlier date as the entire principal hereof may become due in accordance with
the provisions hereof, and to pay interest in arrears on February 1 and August
1, commencing August 1, 2000, on said principal sum at the rate of 9.50% per
annum. Interest shall accrue from and including the most recent date to which
interest has been paid or duly provided for, from November 10, 1999 until
payment of said principal sum has been made or duly provided for. The interest
payable on any such Scheduled Payment Date will, subject to certain conditions
set forth herein, be paid to the person in whose name this Bond is registered at
the end of the fifteenth day next preceding each Scheduled Payment Date. Such
payments shall be made exclusively in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
The statements in the legend set forth above, if any, are an integral
part of the terms of this Bond and by acceptance hereof the holder of this Bond
agrees to be subject to and bound by the terms and provisions set forth in such
legend, if any.
REFERENCE IS MADE TO THE FURTHER PROVISIONS SET FORTH UNDER THE TERMS
AND CONDITIONS OF THE BONDS ENDORSED ON THE REVERSE HEREOF. SUCH FURTHER
PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH
AT THIS PLACE.
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<PAGE>
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Bond
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Partnership has caused this instrument to be
duly executed.
Dated: November 10, 1999
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc., its
Managing General Partner
By: /s/ MICHAEL F. LAWLER
------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
This is one of the Bonds described in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ ANNETTE M. MARSULA
------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
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<PAGE>
TERMS AND CONDITIONS OF BONDS
Principal Amount: $0
Interest Rate: 9.50%
Payment Dates: February 1 and August 1
(commencing August 1, 2000)
Minimum Denominations: US$100,000 and integral multiples of
$1,000 in excess thereof.
Other Terms:
1. General. This Bond is one of a duty authorized issue of debt Bonds
(the "Bonds") of Tenaska Georgia Partners, L.P. (the "Partnership") issued
pursuant to an Indenture (the "Indenture") dated as of November 1, 1999, between
the Partnership and The Chase Manhattan Bank, as Trustee. All capitalized terms
used but not otherwise defined herein shall have the meanings given to such
terms in the Indenture. The holders of the Bonds will be entitled to the
benefits of, be bound by, and be deemed to have notice of, all of the provisions
of the Indenture. A copy of the Indenture is on file and may be inspected at the
corporate trust office of the Trustee in The City of New York, at the offices of
the paying agents listed at the foot of this Bond and at the principal office of
the Partnership set forth in Section 18 (Indentures) hereto.
2. Payments and Paying Agencies. (a) All payments on this Bond shall be
made exclusively in immediately available funds and in such coin or currency of
the United States of America which, at the time of payment, is legal tender for
the payment of public and private debts.
(b) The Person in whose name any Bond is registered at the
close of business on any Regular Record Date with respect to any
Scheduled Payment Date shall be entitled to receive the principal,
premium (if any) and/or interest payable on such Scheduled Payment Date
notwithstanding the cancellation of such Bond upon any transfer or
exchange thereof, subsequent to such Regular Record Date and prior to
such Scheduled Payment Date; provided however, that if and to the
extent there is a default in the payment of the principal, premium (if
any) and/or interest due on such Scheduled Payment Date, such defaulted
principal, premium if any) and/or interest shall be paid to the Persons
in whose names Outstanding Bonds are registered at the close of
business on a subsequent date (each such date, a "Special Record
Date"), which shall not be less than five (5) days preceding the date
of payment of such defaulted principal, premium, if any) and/or
interest, established by a notice mailed by the Trustee to the
registered owners of the Bonds in accordance with Section 14.5(b)
(Notices) of the Indenture not less than fifteen (15) days prior to the
Special Record Date.
(c) If any date for the payment of principal of, premium (if
any) or interest on the Bonds is not a Business Day, such payment shall
be due on the first Business Day
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<PAGE>
thereafter. Any payment made on such next succeeding business day shall
have the same force and effect as if made on the date on which such
payment is due, and no interest shall accrue for the period after such
date.
(d) Interest shall be calculated on the basis of a 360-day
year of twelve 30-day months.
3. Amendments and Supplements to Indenture (a) Without Consent of
Holders. The Indenture may be amended or supplemented by the
Partnership and the Trustee at any time and from time to time, without
the consent of the Holders by a Supplemental Indenture authorized by a
resolution of the Executive Review Committee of the Partnership filed
with, and in form satisfactory to, the Trustee, solely for one or more
of the following purposes:
(i) to add additional covenants of the Partnership,
to surrender any right or power herein conferred upon the
Partnership or to confer upon the Holders any additional
rights, remedies, benefits, powers or authorities that may
lawfully be conferred;
(ii) to increase the assets securing the
Partnership's obligations under the Indenture;
(iii) to provide for the issuance of Additional Bonds
on the conditions set forth in Section 2.3 (Additional Bonds)
of the Indenture;
(iv) for any purpose not inconsistent with the terms
of the Indenture to cure any ambiguity or to correct or
supplement any provision contained herein or in any
Supplemental Indenture which may be defective or inconsistent
with any other provision contained herein or in any
Supplemental Indenture;
(v) in connection with, and to reflect, any
amendments to the provisions hereof required by the Rating
Agencies in circumstances where confirmation of the Ratings
are required under the Indenture in connection with the
issuance of Additional Bonds or the taking of other actions by
the Partnership; provided, however, that such amendments are
not, in the judgment of the Trustee, to the prejudice of the
Trustee or the Holders; or
(vi) to provide for the issuance of exchange Bonds as
contemplated by any agreement entered into in connection with
the issuance of Additional Bonds.
(b) With Consent of Holders. The Indenture may be amended or
supplemented by the Partnership and the Trustee at any time and from
time to time, with the consent of the Majority Holders, for the purpose
of adding any mutually agreeable provisions to or changing in any
manner or eliminating any of the provisions of, the Indenture, except
with respect to (a) the principal, premium (if any) or interest payable
upon any Bonds, (b) the dates on which interest on or principal of any
Bonds is paid, (c)
5
<PAGE>
the dates of maturity of any Bonds, (d) Article 9 (Supplemental
Indentures) of the Indenture and (e) the grant of security interests
for the benefit of the Bonds. The matters of the Indenture described in
clauses (a) through (e) of the preceding sentence may be amended or
supplemented by the Partnership and the Trustee at any time and from
time to time only with the consent of the One Hundred Percent Holders.
Notice of any such amendment shall be given by the Partnership to any
Rating Agency then maintaining a Rating for the Bonds.
4. Replacement, Exchange and Transfer of Bonds. (a) If any Bond shall
become mutilated, the Partnership shall execute, and the Trustee shall
authenticate and deliver, a new Bond of like tenor, maturity and denomination in
exchange and substitution for the Bond so mutilated, but only upon surrender to
the Trustee of such mutilated Bond for cancellation, and the Partnership or the
Trustee may require reasonable indemnity therefor. If any Bond shall be reported
lost, stolen or destroyed evidence as to the ownership and the loss, theft or
destruction thereof shall be submitted to the Trustee. It such evidence shall be
satisfactory to both the Trustee and the Partnership and indemnity satisfactory
to both shall be given, the Partnership shall execute, and thereupon the Trustee
shall authenticate and deliver, a new Bond of like tenor, maturity and
denomination. The cost of providing any substitute Bond under the provisions of
Section 2.10 (Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall
be borne by the Holder for whose benefit such substitute Bond is provided. If
any such mutilated, lost, stolen or destroyed Bond shall have matured or be
about to mature, the Partnership may, with the consent of the Trustee, pay to
the Holder thereof the principal amount of such Bond upon the maturity thereof
and compliance with the aforesaid conditions by such Holder, without the
issuance (of a substitute Bond therefor, and likewise pay to the Holder the
amount of the unpaid interest, if any, which would have been paid on a
substitute Bond had one been issued.
(b) Every substitute Bond issued pursuant to Section 2.10
(Mutilated, Destroyed, Lost or Stolen Bonds) of the Indenture shall
constitute an additional contractual obligation of the Partnership,
whether or not the Bond alleged to have been mutilated, destroyed, lost
or stolen shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and
proportionally with any and all other Bonds duly issued hereunder.
(c) All Bonds shall be held and owned upon the express
condition that the foregoing provisions are, to the extent permitted by
Applicable Law, exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Bonds, and shall preclude any and
all other rights and remedies with respect thereto
5. Trustee. For a description of the duties and the immunities and
rights of the Trustee under the Indenture, reference is made to the Indenture,
and the obligations of the Trustee to the holder hereof are subject to such
immunities and rights.
6. Paying Agents; Transfer Agents; Registrars. The Partnership has
initially appointed the Trustee as paying agent, transfer agents and registrar.
The Partnership may, subject to the terms of the Indenture, at any time appoint
additional or other paying agents, transfer agents and registrars and terminate
the appointment thereof, provided, that while the Bonds are Outstanding the
Partnership will maintain offices or agencies for payment of principal
6
<PAGE>
of and interest on this Bond as herein provided in the Borough of Manhattan, The
City of New York. Notice of any such termination or appointment and of any
change in the office through which any paying agent, transfer agent or registrar
will act will be promptly given in the manner described in Section 8 (Notices)
hereof.
7. Enforcement. (a) Subject to the provisions of Article 7 (Events of
Default; Remedies) of the Indenture, a Holder shall not have the right to
Institute any suit, action or proceeding at law or in equity or otherwise for
the appointment of a receiver or for the enforcement of any other remedy under
or upon this Indenture, unless:
(i) such Holder shall have previously given written
notice to the Trustee a continuing Event of Default;
(ii) Holders representing the percentage of aggregate
principal amount of Outstanding Bonds needed to initiate the
exercise of remedies shall have requested the Trustee in
writing to institute such suit, action or proceeding;
(iii) the Trustee shall have refused or neglected to
institute any such suit, action or proceeding for sixty (60)
days after receipt of such notice by the Trustee; and
(iv) no direction inconsistent with such written
request has been given to the Trustee during such sixty (60)
day period by the Majority Holders.
(b) It is understood and intended that one or more of the Holders shall
not have any right in any manner whatsoever hereunder or under the Bonds to (i)
surrender, impair, waive, affect, disturb or prejudice the Lien of the Indenture
on any property subject thereto or the rights of any other Holders, (ii) obtain
or seek to obtain priority or preference over any other Holders or (iii) enforce
any right under the Indenture, except in the manner provided herein or in the
Indenture and for the equal, ratable and common benefit of all or the Holders.
8. Notices. Notices shall be mailed to Holders at their registered
addresses. Notice sent by first class mail, postage prepaid, shall be deemed to
have been given on the date of such mailing. In addition, the Partnership will
cause all such other publications of such notices as may be required from time
to time by Applicable Law.
9. Redemption at the Option of the Partnership. The Bonds are, under
certain conditions, subject to redemption at the option of the Partnership as
set forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
10. Redemption at the Option of the Holders. The Bonds are, under
certain conditions, subject to redemption at the option of the Holders as set
forth in Section 3.1 (Redemption at the Option of the Partnership or the
Holders) of the Indenture.
11. Mandatory Redemption. The Bonds are subject to mandatory redemption
under certain circumstances as set forth in Section 3.2 (Mandatory Redemption)
of the Indenture.
7
<PAGE>
12. Authentication. This Bond shall not be valid for any purpose until
an Authorized Representative of the Trustee manually signs the certificate of
authentication hereon substantially in the form set forth in Exhibit A-2 to the
Indenture.
13. Governing Law. This Bond is a contract made under the laws of the
State of New York of the United States and shall for all purposes be governed by
and construed in accordance with the laws of such State without regard to the
conflict of law rules thereof (other than Section 5-1401 of the New York General
Obligations Law).
14. Warranty by Issuer. Subject to Section 12 (Authentication) hereof,
the Partnership hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened precedent to the
creation and issuance of this Bond, and to constitute the same a legal, valid
and binding obligation of the Partnership enforceable in accordance with its
terms, have been done and performed and have happened in due and strict
compliance with all Applicable Laws.
15. Trustee Dealings with the Partnership. Subject to certain
limitations imposed by the Trust Indenture Act, the Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Bonds and may otherwise deal with and collect obligations owed to it by the
Partnership or its Affiliates and may otherwise deal with the Partnership or its
Affiliates with the same rights it would have it if were not Trustee.
16. No Recourse Against Others. A director, officer, employee, partner,
affiliate, agent, servant or stockholder, as such, of the Partnership or the
Trustee shall not have any liability for any obligations of the Partnership
under the Bonds or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Bond, each Holder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Bonds.
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Partnership has
caused CUSIP numbers to be printed on the Bonds and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Bond holders. No
representation made as to the accuracy of such numbers either as printed on the
Bonds or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. Indentures. The Partnership will furnish to any Holder upon written
request and without charge a copy of the Indenture. Requests may be made to:
Tenaska Georgia Partners, L.P., 1044 North 115 Street, Suite 400, Omaha,
Nebraska 68154, Attention: Managing General Partner.
19. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (Tenants in Common), TEN ENT (Tenants by
the Entireties), JT TEN (Joint Tenants with Rights of Survivorship and not as
Tenants in Common), CUST (Custodian), and U/G/M/A (Uniform Gift to Minors Act).
8
<PAGE>
20. Descriptive Headings. The descriptive headings appearing in these
Terms and Conditions are for convenience of reference only and shall not alter,
limit or define the provisions thereof.
9
<PAGE>
Exhibit 4.4
EXECUTION COPY
================================================================================
ASSIGNMENT AND SECURITY AGREEMENT
Dated as of November 1, 1999
by
TENASKA GEORGIA PARTNERS, L.P.
to
THE CHASE MANHATTAN BANK,
as Collateral Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS................................................2
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTERESTS
2.1. ASSIGNMENT AND GRANT OF SECURITY INTEREST..................6
2.2. SECURITY INTEREST ABSOLUTE.................................7
2.3. POWER OF ATTORNEY..........................................7
ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. VALIDITY, PERFECTION AND PRIORITY OF LIEN..................9
3.2. NO LIENS; OTHER FINANCING STATEMENTS......................10
3.3. CHIEF EXECUTIVE OFFICE; NAME; RECORDS.....................11
3.4. FINANCING STATEMENTS......................................11
3.5. ADDITIONAL STATEMENTS AND SCHEDULES.......................11
3.6. WAREHOUSE RECEIPTS NON-NEGOTIABLE.........................11
ARTICLE IV
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
4.1. Maintenance of Insurance; Protection of Security Interest.12
4.2. Location of Inventory and Equipment.......................12
4.3. INVENTORY RECORDS.........................................12
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ARTICLE V
SPECIAL PROVISIONS CONCERNING RECEIVABLES,
CONTRACTS AND INSTRUMENTS
5.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES.................12
5.2. MAINTENANCE OF RECORDS; LEGENDING OF RECORDS..............13
5.3. MODIFICATION OF TERMS; NO PAYMENT TO PARTNERSHIP..........13
5.4. DIRECTION TO ACCOUNT DEBTORS, CONTRACTING PARTIES.........14
5.5. INSTRUMENTS...............................................14
ARTICLE VI
SPECIAL PROVISIONS CONCERNING CONTRACTS
6.1. SECURITY INTEREST IN CONTRACT RIGHTS......................14
6.2. FURTHER PROTECTION........................................15
6.3. LIABILITIES UNDER RECEIVABLES AND CONTRACTS...............15
6.4. REMEDIES..................................................16
ARTICLE VII
REMEDIES UPON OCCURRENCE OF A TRIGGER EVENT
7.1. REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT...........16
7.2. REMEDIES; DISPOSITION OF THE COLLATERAL...................18
7.3. WAIVER....................................................18
7.4. APPLICATION OF PROCEEDS; PARTNERSHIP LIABLE FOR
DEFICIENCY................................................20
7.5. NO WAIVER; REMEDIES CUMULATIVE............................20
7.6. DISCONTINUANCE OF PROCEEDINGS.............................20
ARTICLE VIII
MISCELLANEOUS
8.1. NOTICES...................................................21
8.2. AMENDMENT.................................................21
8.3. SUCCESSORS AND ASSIGNS....................................21
8.4. SURVIVAL..................................................21
8.5. HEADINGS DESCRIPTIVE......................................22
ii
<PAGE>
8.6. SEVERABILITY..............................................22
8.7. PARTNERSHIP'S DUTIES......................................22
8.8. CONTINUING SECURITY INTEREST..............................22
8.9. TERMINATION; RELEASE......................................22
8.10. REINSTATEMENT............................................22
8.11. COUNTERPARTS.............................................23
8.12. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL...............................................23
8.13. AUTHORITY OF COLLATERAL AGENT............................24
8.14. CONFLICT WITH COLLATERAL AGENCY AGREEMENT................24
8.15. INDEMNITIES AND EXPENSES.................................24
8.16. ENTIRE AGREEMENT.........................................24
SCHEDULE I - Filing Offices
SCHEDULE II - Instruments
iii
<PAGE>
ASSIGNMENT AND SECURITY AGREEMENT
ASSIGNMENT AND SECURITY AGREEMENT, dated as of November 1,
1999 (this "SECURITY AGREEMENT"), made by TENASKA GEORGIA PARTNERS, L.P., a
Delaware limited partnership (together with its successors and assigns, the
"PARTNERSHIP"), in favor of THE CHASE MANHATTAN BANK, as Collateral Agent and
grantee for the benefit of the Senior Parties or certain of them as provided in
the Collateral Agency Agreement.
W I T N E S S E T H:
WHEREAS, the Partnership proposes to develop, construct,
operate and maintain a 936 MW (nominal rating) natural gas-fired simple-cycle
electric generating plant in Heard County, Georgia (the "PROJECT").
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE").
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "AUTHORITY"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership.
WHEREAS, the Authority will issue its Industrial Development
Revenue Bonds (the "AUTHORITY BONDS") pursuant to a trust indenture, dated as of
November 1, 1999 between the Authority and The Chase Manhattan Bank, as
Authority Trustee (the "AUTHORITY INDENTURE").
WHEREAS, the Authority Bonds will be purchased by the
Partnership and pledged to the Collateral Agent, along with certain other
collateral to secure the obligations of the Partnership under the Bonds.
WHEREAS, in order to satisfy certain requirements of the
Partnership under the Financing Documents, the Partnership may incur
Indebtedness as permitted under the Common Agreement in connection with the
issuance of the DSR
<PAGE>
LOC by the DSR LOC Provider pursuant to the DSR LOC Reimbursement Agreement and
the PPA LOC by the PPA LOC Provider pursuant to the PPA LOC Reimbursement
Agreement.
WHEREAS, pursuant to the terms of the Common Agreement, the
Partnership may incur additional Permitted Indebtedness which will be secured by
the Collateral.
WHEREAS, to secure its obligations under the Financing
Documents, the Partnership is entering into this Security Agreement with the
Collateral Agent, pursuant to which the Collateral Agent, acting on behalf of
the Senior Parties or certain of them as provided in the Collateral Agency
Agreement, will obtain a continuing Lien on and perfected security interest in
the Collateral.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. (a) For all purposes of this
Security Agreement, capitalized terms used but not otherwise defined herein
shall have the meaning set forth in APPENDIX A to the Common Agreement.
(b) The following terms shall have the following respective
meanings unless the context otherwise requires. Such definitions shall be
equally applicable to the singular and plural forms of the terms defined.
Commercial terms used herein and not otherwise defined shall have the meaning
specified for such terms in the Uniform Commercial Code as in effect in the
State of New York.
"CHATTEL PAPER" shall mean "chattel paper" as such term is
defined in the Uniform Commercial Code as in effect in any relevant
jurisdiction.
"CONTRACT RIGHTS" shall have the meaning specified in SECTION
6.1 (Security Interest in Contract Rights).
"CONTRACTS" shall mean all contracts to which the Partnership
now is, or hereafter will be, bound, as a party, beneficiary or assignee,
including, without
<PAGE>
limitation, all of the Project Documents, including all exhibits thereto, and
all other instruments, agreements and documents executed and delivered with
respect to such contracts, all Third Party Consents, and all revenues, rentals,
Proceeds and other sums of money due and to become due from any of the
foregoing, as the same may be modified, supplemented or amended from time to
time in accordance with their terms.
"DOCUMENTS" shall mean "documents" as such term is defined in
the Uniform Commercial Code as in effect in any relevant jurisdiction.
"EQUIPMENT" shall mean "equipment" as such term is defined in
the Uniform Commercial Code as in effect in any relevant jurisdiction, now or
hereafter owned or leased by the Partnership and, in any event, shall include,
but shall not be limited to, all equipment used in connection with the Project,
all machinery, manufacturing equipment, data processing equipment, computers,
tools, office equipment, appliances, furniture, furnishings, fixtures, vehicles,
motor vehicles, and any manuals, instructions, blueprints, computer software and
similar items which relate to the above, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all improvements thereon and all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"EVENT OF DEFAULT" shall mean an "event of default" under the
Common Agreement.
"FIXTURES" shall mean "fixtures" as such term is defined in
the Uniform Commercial Code as in effect in any relevant jurisdiction and in any
event shall include all goods now or hereafter attached to, placed on, or
incorporated into the Site.
"GENERAL INTANGIBLES" shall mean "general intangibles" as such
term is defined in the Uniform Commercial Code as in effect in any relevant
jurisdiction, now or hereafter owned by the Partnership and shall include, but
not be limited to, all trademarks, trademark applications, trademark
registrations, tradenames, fictitious business names, business names, company
names, business identifiers, prints, labels, trade styles and service marks
(whether or not registered), including logos and/or designs, copyrights,
patents, patent applications, goodwill of the Partnership's business symbolized
by any of the foregoing, trade secrets, license rights, license agreements,
permits, franchises, and any rights to tax refunds to which the Partnership is
now or hereafter may be entitled.
<PAGE>
"INSTRUMENTS" shall mean "instruments" as such term is defined
in the Uniform Commercial Code as in effect in any relevant jurisdiction.
"INVENTORY" shall mean all of the inventory of the Partnership
of every type or description, including all "inventory" as such term is defined
in the Uniform Commercial Code as in effect in any relevant jurisdiction, now
owned or hereafter acquired and wherever located, including without limitation,
whether raw, in process or finished, all materials usable in processing the same
and all documents of title covering any inventory, including but not limited to
work in process, materials used or consumed in the Partnership's business, now
owned or hereafter acquired or manufactured by the Partnership and held for sale
in the ordinary course of its business; all present and future substitutions
therefor, parts and accessories thereof and all additions thereto; and all
proceeds thereof and products of such inventory in any form whatsoever.
"INVENTORY RECORDS" shall mean all books, records and other
property and General Intangibles at any time relating to the Inventory.
"OBLIGATIONS" shall mean, collectively, all Indebtedness,
liabilities and obligations of the Partnership (including, but not limited to,
principal, interest, fees, reimbursement obligations, penalties, indemnities and
legal and other expenses, whether due after acceleration or otherwise) to the
Senior Parties (of whatsoever nature and howsoever evidenced) under or pursuant
to the Indenture, the Bonds, the DSR LOC Reimbursement Agreement, the PPA LOC
Reimbursement Agreement, any Working Capital Line Facility, any Additional
Bonds, and any other Financing Document (or any other similar agreement entered
into by the Partnership with respect to the incurrence of Permitted Indebtedness
(other than Subordinated Debt)), to the extent arising on or prior to the Debt
Termination Date (as defined in the Collateral Agency Agreement), in each case,
direct or indirect, primary or secondary, fixed or contingent, now or hereafter
arising out of or relating to any such agreements.
"PROCEEDS" shall mean "proceeds" as such term is defined in
the Uniform Commercial Code as in effect in any relevant jurisdiction or under
other relevant law and, in any event, shall include, but not be limited to, (i)
any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to the Collateral Agent or the Partnership from time to time, and claims for
insurance, indemnity, warranty or guaranty effected or held for the benefit of
the Partnership, with respect to any of the Collateral, (ii) any and all
payments (in any form whatsoever) made or due and payable to the Partnership
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any person acting under color of
<PAGE>
Governmental Authority) and (iii) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"RECEIVABLES" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect in any relevant jurisdiction and in
any event shall include, but not be limited to, all of the Partnership's rights
to payment for goods (including, without limitation, electricity) sold or
leased, or services performed, by the Partnership, whether now in existence or
arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, contract rights (including any and all
rights to liquidated damage payments) security agreement, chattel paper, or
other evidence of indebtedness or security, together with (i) all security
pledged, assigned, hypothecated or granted to or held by the Partnership to
secure the foregoing, (ii) all of the Partnership's right, title and interest in
and to any goods (including, without limitation, electricity), the sale of which
gave rise thereto, (iii) all guarantees, warranties, endorsements,
indemnifications or collateral on, or of, any of the foregoing, (iv) all powers
of attorney for the execution of any evidence of indebtedness or security or
other writing in connection therewith, (v) all books, correspondence, credit
files, records, ledger cards, invoices, and other papers relating thereto,
including without limitation all similar information stored on a magnetic medium
or other similar storage device and other papers and documents in the possession
or under the control of the Partnership or any computer bureau from time to time
acting for the Partnership, (vi) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(vii) all credit information, reports and memoranda relating thereto, and (viii)
all other writings related in any way to the foregoing.
"SENIOR PARTIES" shall mean, collectively, the Trustee, the
Collateral Agent, the DSR LOC Provider, the PPA LOC Provider, a Working Capital
Line Facility Provider, and any holder of Senior Debt (other than the Bonds).
"SITE" shall mean that certain parcel described as that
certain 101.29 acres of land identified and described in that certain Leasehold
Deed to Secure Debt, Assignment of Rents and Leases and Security Agreement
executed by the Partnership, as Grantor, in favor of the Collateral Agent, as
Grantee, of even date herewith; situated in Heard County, Georgia, and all
easements, licenses and rights of way relating thereto.
<PAGE>
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTERESTS
SECTION 2.1. ASSIGNMENT AND GRANT OF SECURITY INTEREST. (a) As
security for the prompt and complete payment and performance when due of all of
the Obligations, the Partnership hereby grants to the Collateral Agent for
itself and for the benefit of the Senior Parties or certain of them as provided
in the Collateral Agency Agreement a continuing security interest of first
priority, in all of the Partnership's right, title and interest in, to and under
the following, in each case, whether now owned or existing or hereafter acquired
or arising, and wherever located: (i) all Receivables, (ii) all Inventory, (iii)
all Equipment, (iv) all General Intangibles, (v) all Contracts and all Contract
Rights, (vi) the Funds and all cash, investments and securities from time to
time held in any checking, savings, deposit or other account of the Partnership,
pROVIDED that the security interest in the Debt Service Reserve Account granted
herein to the Collateral Agent shall be solely for the benefit of the Trustee
acting on behalf of the Holders (and for the benefit of the DSR LOC Agent to the
extent of the Interest Portion thereof); (vii) all Governmental Approvals,
PROVIDED, that any Governmental Approval which by its terms or by operation of
law would become void, voidable, terminable or revocable if mortgaged, pledged
or assigned hereunder or if a security interest therein were granted hereunder
is expressly excepted and excluded from the Lien and the terms of this Security
Agreement to the extent necessary so as to avoid such voidness, voidability,
terminability or revocability, (viii) all Fixtures, including but not limited to
those now or hereafter attached to, placed on, or incorporated in the Site, (ix)
without limiting the generality of the foregoing, all other personal property,
goods, Instruments, Chattel Paper, Documents, credits, claims, demands and
assets of the Partnership whether now existing or hereafter acquired from time
to time (including but not limited to the Authority Bonds and the Partnership's
rights and benefits as a holder of the Authority Bonds under the Authority
Indenture, including in respect of the Authority Security Deed, the Authority's
interest in the Lease Agreement, the Guaranty and all other security held by the
Authority Trustee thereunder for the benefit of the holders of the Authority
Bonds), all rights to receive equity contributions, and all rights to Loss
Proceeds, but excluding the proceeds of third party liability insurance and
worker's compensation), and (x) any and all additions and accessions to any of
the foregoing, all improvements thereto, all substitutions and replacements
therefor and all products and Proceeds thereof (all of the above collectively,
the "COLLATERAL").
(b) The security interest granted to the Collateral Agent
pursuant to this Security Agreement extends to all Collateral of the kind which
is the subject of this Security Agreement which the Partnership may acquire at
any time during the
<PAGE>
continuation of this Security Agreement, whether such Collateral is in transit
or in the Partnership's, any Senior Party's, or any other Person's constructive,
actual or exclusive occupancy or possession.
SECTION 2.2. SECURITY INTEREST ABSOLUTE. All rights of the
Senior Parties and all security interests hereunder shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Indenture,
any other Financing Document, or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture, or any other
Financing Document;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Partnership or a third party
pledgor.
SECTION 2.3. POWER OF ATTORNEY. (a) The Partnership hereby
irrevocably constitutes and appoints the Collateral Agent, on behalf of the
Senior Parties, or any Person, officer or agent whom the Collateral Agent may
designate, as the Partnership's true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Partnership and in
the name of the Partnership or in its own name, at the Partnership's cost and
expense, to exercise at any time in the Collateral Agent's discretion all or any
of the following powers, in accordance and subject to the terms and conditions
of the Project Documents, which, being coupled with an interest, shall be
irrevocable until the Debt Termination Date (as defined in the Collateral Agency
Agreement):
(i) to receive, take, endorse, sign, assign and deliver, all
in the Collateral Agent's or the Partnership's name, any and all
checks, notes, drafts, and other documents or instruments relating to
the Collateral;
<PAGE>
(ii) to receive, open and dispose of all mail addressed to the
Partnership and to notify postal authorities to change the address for
delivery thereof to such address as the Collateral Agent designates;
(iii) to request from account debtors of the Partnership in
the Partnership's name or that of the Senior Parties or that of the
Collateral Agent's designee, information concerning the Receivables and
the amounts owing thereon;
(iv) to transmit to account debtors indebted on Receivables
notice of the Collateral Agent's interest therein;
(v) to notify account debtors indebted on Receivables to make
payment directly to the Collateral Agent;
(vi) to take or bring, in the Partnership's name or in the
Collateral Agent's name on behalf of the Senior Parties, all steps,
actions, suits or proceedings deemed by the Collateral Agent to be
necessary or desirable to enforce or effect collection of the
Receivables;
(vii) to prepare, sign and file any Uniform Commercial Code
financing statements or file this Security Agreement in the name of the
Partnership as debtor;
(viii) if the Partnership shall have failed to do so in a
timely manner, to take or cause to be taken all actions necessary to
perform or comply or cause performance or compliance with the covenants
of the Partnership contained in any Financing Document;
(ix) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral;
(x) to defend any suit, action or proceeding brought against
the Partnership with respect to any Collateral;
(xi) to settle, compromise or adjust any suit, action or
proceeding described in the preceding clause and, in connection
therewith, to give such discharges or releases as the Senior Parties
may deem appropriate;
<PAGE>
(xii) generally, to sell or transfer and make any agreement
with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Senior Parties were the absolute owner
thereof for all purposes, and to do, at the Senior Parties' option and
the Partnership's expense, at any time, or from time to time, all acts
and things which the Senior Parties deem necessary to protect, preserve
or realize upon the Collateral and the Liens of the Senior Parties
thereon;
(xiii) to execute, in connection with any foreclosure, any
endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(xiv) to exercise the Partnership's rights under any Contract
in accordance with SECTION 6.3 (Liability under Receivables and
Contracts) hereof;
PROVIDED, HOWEVER, that the Collateral Agent shall not exercise its powers under
clauses (ii), (iii), (vi), (ix), (x), (xi), (xii), (xiii) or (xiv) unless a
Trigger Event has occurred and is continuing and if so required pursuant to the
Collateral Agency Agreement.
(b) The Partnership hereby ratifies all that said attorney
shall lawfully do or cause to be done by virtue hereof. The Partnership hereby
acknowledges and agrees that in acting pursuant to this power-of-attorney the
Collateral Agent shall be acting in its own interest and in the interest of the
Senior Parties and the Partnership acknowledges and agrees that the Collateral
Agent and the Senior Parties shall have no fiduciary duties to the Partnership
and the Partnership hereby waives any claims to the rights of a beneficiary of a
fiduciary relationship hereunder.
ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Partnership hereby represents, warrants and covenants to
the Collateral Agent and the Senior Parties, which representations, warranties
and covenants shall survive execution and delivery of this Security Agreement,
as follows:
SECTION 3.1. VALIDITY, PERFECTION AND PRIORITY OF LIEN. (a)
The security interests in the Collateral granted hereunder to the Collateral
Agent for itself
<PAGE>
and the benefit of the Senior Parties or certain of them as provided in the
Collateral Agency Agreement constitute valid and continuing security interests
in the Collateral; and
(b) (i) financing statements naming the Partnership as
"debtor" and the Collateral Agent as "secured party" and describing the
Collateral having been filed in the filing offices set forth on Schedule I
hereto, (ii) the Instruments listed on Schedule II hereto and all Instruments
and Chattel Paper evidencing an amount of Receivables equal to or greater than
$5,000 individually or $20,000 in the aggregate, having been delivered to the
Collateral Agent, and (iii) all other Chattel Paper having been stamped to
indicate the security interest of the Collateral Agent for itself and the
benefit of the Senior Parties or certain of them as provided in the Collateral
Agency Agreement, the security interests in the Collateral granted hereunder to
the Collateral Agent for itself and the benefit of the Senior Parties or certain
of them as provided in the Collateral Agency Agreement, constitute perfected
security interests therein superior and prior to all Liens other than Permitted
Liens, rights or claims of all other Persons.
SECTION 3.2. NO LIENS; OTHER FINANCING STATEMENTS. (a) Except
for the Lien granted hereunder to the Collateral Agent for itself and the
benefit of the Senior Parties or certain of them as provided in the Collateral
Agency Agreement, the Partnership is, and as to all Collateral whether now
existing or hereafter acquired after the date hereof, the Partnership will
continue to be the owner of valid and marketable title in and to each item of
the Collateral free and clear of any and all Liens other than Permitted Liens
and the Partnership shall defend the Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein adverse to
the Collateral Agent or any Senior Party.
(b) Other than financing statements filed in connection
herewith, there is no financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Collateral, except (i) financing statements
filed in connection with Permitted Liens, and (ii) financing statements for
which proper termination statements have been delivered to the Collateral Agent
for filing. The Partnership will not execute or authorize to be filed in any
public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby to the Collateral Agent by the
Partnership and financing statements filed in respect of and covering Permitted
Liens.
<PAGE>
SECTION 3.3. CHIEF EXECUTIVE OFFICE; NAME; RECORDS. (a) The
chief executive office of the Partnership is located at 1044 North 115 Street,
Suite 400, Omaha, Nebraska 68154. The Partnership will not (i) move its chief
executive office, or (ii) change its name from, nor carry on business under any
name other than "Tenaska Georgia Partners, L.P.," unless it has complied with
the requirements of SECTION 3.3(B). The originals of all documents evidencing
all Contracts and Receivables of the Partnership, and the only original books of
accounts and records concerning the Collateral are, and will continue to be,
kept at, and controlled and directed (including, without limitation, for general
accounting purposes) from, such chief executive office, or at such new location
for such chief executive office as the Partnership may establish in accordance
with SECTION 3.3(B).
(b) The Partnership shall not establish a new location for its
chief executive office or change its name or the name under which it presently
conducts its business until (i) it has given to the Collateral Agent not less
than 60 days' prior written notice of its intention so to do, clearly describing
such new location or specifying such new name, as the case may be, and providing
such other information in connection therewith as the Collateral Agent may
reasonably request, and (ii) with respect to such new location or such new name,
as the case may be, the Partnership shall have taken all action, satisfactory to
the Collateral Agent, to maintain the security interest of the Collateral Agent
in the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect.
SECTION 3.4. FINANCING STATEMENTS. The Partnership agrees that
all necessary and appropriate recordings and filings will be effected in all
necessary and appropriate public offices so that the Lien created by the
Security Documents will at all times constitute a perfected Lien on and security
interest in the Collateral prior and superior to all other Liens other than
Permitted Liens all in accordance with the Uniform Commercial Code as enacted in
any and all relevant jurisdictions or any other Applicable Law. The Partnership
will pay any applicable filing fees and related expenses. The Partnership
authorizes the Collateral Agent to file any such financing statements without
the signature of the Partnership.
SECTION 3.5. ADDITIONAL STATEMENTS AND SCHEDULES. The
Partnership shall execute and deliver to the Collateral Agent, from time to
time, for its convenience in maintaining a record of the Collateral, such
written statements and schedules as the Collateral Agent may reasonably require,
designating, identifying or describing the Collateral.
SECTION 3.6. WAREHOUSE RECEIPTS NON-NEGOTIABLE. The
Partnership agrees that if any warehouse receipt or receipt in the nature of a
warehouse receipt or other Document is issued with respect to any of its
Inventory,
<PAGE>
such warehouse receipt or receipt in the nature thereof shall not be drawn in
such a manner as to be "negotiable" (as such term is used in Section 7-104 or
similar provision of the Uniform Commercial Code as in effect in any relevant
jurisdiction or under other Applicable Law).
ARTICLE IV
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
SECTION 4.1. MAINTENANCE OF INSURANCE; PROTECTION OF SECURITY
INTEREST. The Partnership shall carry with respect to the Collateral and its use
such insurance, if any, as shall be required under the Common Agreement.
SECTION 4.2. LOCATION OF INVENTORY AND EQUIPMENT. (a) All
Inventory and Equipment owned on the date hereof by the Partnership is located
on the Site (other than Equipment undergoing repairs). The Partnership agrees
that all Inventory and Equipment now held or subsequently acquired by it shall
be kept at (or shall be in transport to) the Site, or such new location as the
Partnership may establish in accordance with SECTION 4.2(B).
(b) The Partnership may establish a new location for Inventory
and Equipment only if (i) it shall have given to the Collateral Agent 60 days'
prior written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, and (ii) with respect to such new
location, it shall have taken all action necessary to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby
at all times fully perfected and in full force and effect.
SECTION 4.3. INVENTORY RECORDS. The Partnership shall
maintain, at its own cost and expense, satisfactory and complete Inventory
Records.
ARTICLE V
SPECIAL PROVISIONS CONCERNING RECEIVABLES,
CONTRACTS AND INSTRUMENTS
SECTION 5.1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. As of
the time when each of its Receivables arises, the Partnership shall be deemed to
have represented and warranted that such Receivable and all records, papers and
<PAGE>
documents relating thereto, if any, are genuine and in all respects what they
purport to be, and that all papers and documents, if any, relating thereto (i)
will (subject to dispute, return, replacement, settlement or compromise)
represent the genuine, legal, valid and binding obligation of the account debtor
evidencing indebtedness unpaid and owed by such account debtor arising out of
the performance of labor or services or the sale and delivery of the merchandise
listed therein, or both, (ii) will be the only original writings evidencing and
embodying such obligation of the account debtor named therein (other than copies
created for purposes other than general accounting purposes), (iii) will
(subject to dispute, return, replacement, settlement or compromise) evidence
true and valid obligations, enforceable in accordance with their respective
terms, not subject to the fulfillment of any contract or condition whatsoever
unless set forth in the writing and not subject to any defenses, set-offs or
counterclaims (except with respect to any such defenses, set-offs or
counterclaims which the other party in any Project Document may have in
connection with such Project Document) or stamp or other taxes, and not subject
to any provisions prohibiting the assignment contemplated hereunder, and (iv)
will be in compliance and will conform with all Applicable Laws.
SECTION 5.2. MAINTENANCE OF RECORDS; LEGENDING OF RECORDS. The
Partnership will keep and maintain at its own cost and expense satisfactory and
complete records of its Receivables, including, but not limited to, records of
all payments received and all credits granted thereon, and the Partnership will
make the same available to the Collateral Agent and the Senior Parties for
inspection at the Partnership's chief executive office, at the Partnership's own
cost and expense, at any and all reasonable times during normal business hours
upon demand. The Partnership shall, at its own cost and expense, deliver all
tangible evidence that the Collateral Agent may request of its Receivables
(including, without limitation, all documents evidencing the Receivables) and
books and records to the Collateral Agent or to its representatives (copies of
which evidence and books and records may be retained by the Partnership) at any
reasonable time during normal business hours upon the Collateral Agent's demand.
If a Trigger Event occurs and is continuing, and if the Collateral Agent so
directs, the Partnership shall legend in form and substance satisfactory to the
Collateral Agent, the Receivables, Chattel Paper and Contracts, as well as
books, records and documents of the Collateral Agent evidencing or pertaining to
the Receivables with an appropriate reference to the fact that the Receivables
and Contracts have been assigned to the Collateral Agent and that the Collateral
Agent has a security interest therein.
SECTION 5.3. MODIFICATION OF TERMS; NO PAYMENT TO PARTNERSHIP.
The Partnership shall not rescind or cancel any indebtedness evidenced by any
Receivable or make any adjustment with respect thereto, or extend or renew the
same, or compromise or settle any dispute, claim, suit or legal proceeding
relating
<PAGE>
thereto, or sell any Receivable or interest therein, without the prior
written consent of the Collateral Agent. The Partnership will duly fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables and will do nothing to impair the rights of the Collateral Agent in
the Receivables.
SECTION 5.4. DIRECTION TO ACCOUNT DEBTORS, CONTRACTING
PARTIES. (a) The Partnership agrees that the Collateral Agent may, at its
option, directly notify the account debtors or obligors with respect to any
Receivables and/or under any Project Documents to make payments with respect
thereto directly to it.
(b) Upon the occurrence of and during the continuance of a
Trigger Event, the Partnership agrees to be bound by any collection, compromise,
forgiveness, extension or other action taken by the Collateral Agent with
respect to the Receivables and/or Project Documents. Upon the occurrence of and
during the continuance of a Trigger Event, without notice to or assent by the
Partnership, the Collateral Agent may apply any or all amounts then in, or
thereafter deposited with it in accordance with the provisions of the Collateral
Agency Agreement. The reasonable costs and expenses (including reasonable
attorneys' fees) of collection, whether incurred by the Partnership or any
Senior Party, shall be borne by the Partnership.
SECTION 5.5. INSTRUMENTS. If any of the Receivables becomes
evidenced by an Instrument having a face value in excess of $5,000 and a
maturity of 30 days or longer, the Partnership shall promptly notify the
Collateral Agent thereof, and upon request by the Collateral Agent, within ten
(10) days, shall deliver such Instrument to the Collateral Agent appropriately
endorsed to the order of the Collateral Agent as further security hereunder.
Notwithstanding the foregoing, at such time that an Event of Default shall have
occurred and be continuing, or at such time as the Partnership shall own or
acquire Instruments which in the aggregate exceed $20,000, the Partnership,
within ten (10) days, shall deliver all Instruments to the Collateral Agent,
appropriately endorsed to the order of the Collateral Agent as further security
hereunder.
ARTICLE VI
SPECIAL PROVISIONS CONCERNING CONTRACTS
SECTION 6.1. SECURITY INTEREST IN CONTRACT RIGHTS. The
Partnership's grant, pursuant to SECTION 2.1 (Assignment and Grant of Security
Interest), to the Collateral Agent, of a security interest in all of its right,
title and
<PAGE>
interest in and to each and all of the Contracts and the contract rights
thereunder, includes, but is not limited to:
(i) all (A) rights to payment under any Contract and (B)
payments due and to become due under any Contract, in each case whether
as contractual obligations, damages or otherwise;
(ii) all of its claims, rights, powers, or privileges and
remedies under any Contract; and
(iii) all of its rights under any Contract to make
determinations, to exercise any election (including, but not limited
to, election of remedies) or option or to give or receive any notice,
consent, waiver or approval together with full power and authority with
respect to any Contract to demand, receive, enforce, collect or receipt
for any of the foregoing rights or any property the subject of any of
the Contracts, to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action which, in the
reasonable opinion of the Collateral Agent, may be necessary or
advisable in connection with any of the foregoing (the Contracts,
together with all of the foregoing in this SECTION 6.1, the "CONTRACT
RIGHTS");
PROVIDED, HOWEVER, that until the occurrence and continuance of a Trigger Event,
notwithstanding anything else herein to the contrary, the Partnership may,
subject to the terms and provisions of the Indenture, exclusively exercise all
of the Partnership's rights, powers, privileges and remedies under the
Contracts, other than the right to receive monies due or to become due under the
Contracts.
SECTION 6.2. FURTHER PROTECTION. The Partnership warrants and
forever shall defend the title to the Contract Rights against the claims and
demands of any Person and hereby grants the Collateral Agent full power and
authority, upon the occurrence or during the continuance of a Trigger Event to
take all actions as the Collateral Agent reasonably deems necessary or advisable
to effectuate the provisions set forth in this sentence.
SECTION 6.3. LIABILITIES UNDER RECEIVABLES AND CONTRACTS.
Anything herein to the contrary notwithstanding (including, without limitation,
the grant of any rights to the Collateral Agent) the Partnership shall remain
liable under each of the Receivables and Contracts to observe and perform all of
the conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms of any agreement giving rise to each such
Receivable or Contract.
<PAGE>
Neither the Collateral Agent nor any Senior Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or
Contract by reason of or arising out of this Security Agreement or the receipt
by the Collateral Agent of any payment relating to such Receivable or Contract
pursuant hereto, nor shall the Collateral Agent or any Senior Party be obligated
in any manner to perform any of the obligations of the Partnership under or
pursuant to any Receivable (or any agreement giving rise thereto) or under or
pursuant to any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party under any Receivable (or any agreement giving
rise thereto) or under any Contract, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
SECTION 6.4. REMEDIES. Upon the occurrence of any Trigger
Event and continuance thereof, the Collateral Agent shall have the rights set
forth in ARTICLE VII hereof, and in addition may (i) enforce all remedies,
rights, powers and privileges of the Partnership under any or all of the
Contracts, (ii) sell any or all of the Contract Rights at a public or private
sale upon at least 10 days' prior written notice and/or (iii) substitute itself
or any nominee or trustee in lieu of the Partnership as party to any of the
Contracts and to notify the obligor of any Contract Right (the Partnership
hereby agreeing to deliver any such notice at the request of the Collateral
Agent) that all payments and performance under the relevant Contract shall be
made or rendered to the Collateral Agent or such other Person as the Collateral
Agent may designate.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF A TRIGGER EVENT
SECTION 7.1. REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT.
(a) Subject to the terms of the Collateral Agency Agreement, upon the occurrence
of any Trigger Event and continuance thereof, the Collateral Agent shall be
entitled to exercise on behalf of the Senior Parties, all the rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
any relevant jurisdiction and all rights now or hereafter existing under all
other applicable laws to enforce this Security Agreement and the security
interests contained herein, and, in addition, subject to any Applicable Laws
then in effect, the Collateral Agent may, in addition to its other rights and
remedies hereunder, including without limitation under SECTIONS 7.2 (Remedies;
Disposition of the Collateral) and 7.6 (Discontinuance of Proceedings) of this
Security Agreement, and also the rights of the Senior Parties under the
Transaction Documents, do any of the following:
<PAGE>
(i) personally, or by agents, trustees or attorneys,
immediately take possession of the Collateral or any part thereof, from
the Partnership or any other Person who then has possession of any part
thereof with or without notice or process of law, and for that purpose
may enter upon the Partnership's or such other Person's premises where
any of the Collateral is located and remove the same and use in
connection with such removal any and all services, supplies, aids and
other facilities of the Partnership;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such instrument or agreement directly
to the Collateral Agent; and
(iii) take possession of the Collateral or any part thereof,
by directing the Partnership in writing to turn over the same to the
Collateral Agent at the Site or, to the extent such Collateral may be
moved, to deliver the same to the Collateral Agent at any other place
or places designated by the Collateral Agent, in which event the
Partnership shall at its own expense, (A) forthwith turnover the same
to the Collateral Agent at the Site or cause the same to be moved to
the place or places so designated by the Collateral Agent and there
delivered to the Collateral Agent, as the case may be; (B) store and
keep any Collateral so turned over or delivered to the Collateral Agent
at the Site or at such place or places pending further action by the
Collateral Agent as provided in SECTION 7.2 (Remedies; Disposition of
the Collateral) hereof; and (C) while the Collateral shall be so stored
and kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain the
Collateral in good condition.
(b) The Partnership's obligation to turn over or deliver the
Collateral as set forth above is of the essence of this Security Agreement and,
accordingly, upon application to a court of equity having jurisdiction, the
Collateral Agent shall be entitled to obtain a decree requiring specific
performance by the Partnership of said obligation.
(c) When Collateral is in the Collateral Agent's possession,
(i) the Partnership shall pay (or reimburse the Collateral Agent on demand for)
all reasonable expenses (including the cost of any insurance and payment of
taxes or other charges) incurred in the custody, preservation, use or operation
of the Collateral, and the obligation to reimburse all such expenses shall be
secured hereby, and (ii) the risk of accidental loss or damage shall be on the
Partnership to the extent of any deficiency in any effective insurance coverage.
<PAGE>
SECTION 7.2. REMEDIES; DISPOSITION OF THE COLLATERAL. Any
Collateral repossessed by the Collateral Agent under or pursuant to SECTION 7.1
(Remedies; Obtaining the Collateral upon Default) and any other Collateral,
whether or not so repossessed by the Collateral Agent, may, to the extent
permitted by any Contract terms governing such Collateral, be sold, leased or
otherwise disposed of under one or more contracts or as an entirety, and without
the necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms (whether cash or credit, and in the case of credit, without
assumption of future credit risk) as the Collateral Agent may, in compliance
with Applicable Laws and as directed by the Required Senior Parties, determine
to be commercially reasonable. Any of the Collateral may be sold, leased or
options or contracts entered to do so, or otherwise disposed of, in the
condition in which the same existed when taken by the Collateral Agent or after
any overhaul or repair which the Collateral Agent shall determine (upon the
direction of the Required Senior Parties) to be commercially reasonable. Any
such disposition shall be made upon not less than ten (10) days' written notice
to the Partnership specifying the time such disposition is to be made and, if
such disposition shall be a public sale, specifying the place of such sale. Any
such sale may be adjourned by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned. To the extent permitted by Applicable Laws, any
Senior Party may itself bid for and become the buyer of the Collateral or any
item thereof offered for sale at a public auction without accountability to the
Partnership (except to the extent of surplus money received as provided in
SECTION 7.4 (Application of Proceeds)).
SECTION 7.3. WAIVER. (a) EXCEPT AS OTHERWISE PROVIDED IN THIS
SECURITY AGREEMENT, THE PARTNERSHIP HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL IN ACCORDANCE WITH THIS SECURITY AGREEMENT, INCLUDING, WITHOUT
LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH THE PARTNERSHIP WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND THE
PARTNERSHIP HEREBY FURTHER WAIVES:
(i) all damages occasioned by such taking of possession except
any damages which are finally judicially determined to have been the
direct result of any Senior Party's gross negligence or wilful
misconduct;
<PAGE>
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Senior Parties' rights hereunder;
(iii) demand of performance or other demand, notice of intent
to demand or accelerate, notice of acceleration, presentment, protest,
advertisement or notice of any kind to or upon the Partnership or any
other Person; and
(iv) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Security
Agreement or the absolute sale of the Collateral or any portion
thereof, and the Partnership, for itself and all who may claim under
it, insofar as it or they may now or hereafter lawfully do so, hereby
waives the benefit of such laws.
(b) Without limiting the generality of the foregoing, the
Partnership hereby: (i) authorizes the Collateral Agent, without notice to or
demand upon the Partnership and without otherwise affecting the obligations of
the Partnership hereunder from time to time, to take and hold other collateral
granted to it by any other Person (in addition to the Collateral) for payment of
any Obligations, or any part thereof, and to exchange, enforce or release such
other collateral or any part thereof, and to accept and hold any endorsement or
guarantee of payment of the Obligations or any part thereof, and to release or
substitute any endorser or guarantor or any other person granting security for
or in any way obligated upon any Obligations, or any part thereof; and (ii)
waives and releases any and all right to require the Senior Parties to collect
any of the Obligations from any specific item or items of Collateral or from any
other party liable as guarantor or in any other manner in respect of any of the
Obligations or from any collateral (other than the Collateral) for any of the
Obligations.
(c) Any sale of, or the grant of options to purchase, or any
other realization upon, any Collateral shall, provided that it is done in
accordance with applicable law and this Security Agreement, operate to divest
all right, title, interest, claim and demand, either at law or in equity, of the
Partnership therein and thereto, and shall be a perpetual bar both at law and in
equity against the Partnership and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through and under the Partnership.
<PAGE>
SECTION 7.4. APPLICATION OF PROCEEDS; PARTNERSHIP LIABLE FOR
DEFICIENCY. The Collateral Agent shall apply any proceeds from time to time held
by it and the net proceeds of any collection, recovery, receipt, appropriation,
realization or sale with respect to the Collateral in accordance with the
Collateral Agency Agreement. Any surplus remaining after payment in full of all
of the Obligations shall be paid over to the Partnership or to whomever may be
entitled to receive such surplus. The Partnership shall be liable for any
deficiency remaining after any application of funds pursuant hereto.
SECTION 7.5. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of any Senior Party in exercising any right, remedy, power or
privilege hereunder and no course of dealing between the Partnership and any
Senior Party shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. A waiver by any Senior Party of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which any
Senior Party would otherwise have on any future occasion. The rights and
remedies herein expressly provided are cumulative and may be exercised singly or
concurrently and as often and in such order as any Senior Party deems expedient
and are not exclusive of any rights or remedies which the Senior Parties would
otherwise have whether by agreement or now or hereafter existing under
applicable law. No notice to or demand on the Partnership in any case shall
entitle the Partnership to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Senior Parties
to any other or future action in any circumstances without notice or demand.
SECTION 7.6. DISCONTINUANCE OF PROCEEDINGS. In case any Senior
Party shall have instituted any proceeding to enforce any right, power or remedy
under this Security Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to such Senior Party, then, in every such case,
subject to the terms of any final non-appealable judgment rendered in any such
proceeding, the Partnership, the Senior Parties and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral, subject to the security interest created under
this Security Agreement, and all rights, remedies and powers of the Senior
Parties shall continue as if no such proceeding had been instituted.
<PAGE>
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
provided in writing (including telegraphic, telex, facsimile or cable
communication) and shall be sent by telecopy, telex, telegraph or cable with the
original of such communication dispatched by registered airmail (or, if inland,
registered first-class mail) with postage prepaid to the Partnership at 1044 N.
115th Street, Suite 400, Omaha, Nebraska 68154-4446 and the Collateral Agent at
450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Annette
M. Marsula, International & Project Finance Service Delivery or at such other
address as shall be designated by such Person in a written notice to the other
parties hereto and (a) all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, cabled or sent by overnight courier, be
effective seven (7) days after being deposited in the mails in the manner as
aforesaid, when delivered to the telegraph company or cable company (if inland),
one (1) day or (if overseas) three (3) days after delivery to a courier in the
manner as aforesaid, as the case may be, or when sent by telex (with the correct
answer back) or telecopier (after confirmation of receipt).
SECTION 8.2. AMENDMENT. No waiver, amendment, modification or
termination of any provision of this Security Agreement, or consent to any
departure by the Partnership therefrom, shall in any event be effective without
the prior written consent of the Collateral Agent, acting pursuant to the
Collateral Agency Agreement, and none of the Collateral shall be released
without the written consent of the Collateral Agent, acting pursuant to the
Collateral Agency Agreement. Any such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 8.3. SUCCESSORS AND ASSIGNS. This Security Agreement
shall be binding upon and inure to the benefit of the Partnership, the Senior
Parties, all future holders of the Obligations and their respective successors
and assigns, except that the Partnership may not assign or transfer any of its
rights or obligations under this Security Agreement without the prior written
consent of the Collateral Agent.
SECTION 8.4. SURVIVAL. All agreements, statements,
representations and warranties made by the Partnership herein or in any
certificate or other instrument delivered by the Partnership or on its behalf
under this Security Agreement shall be considered to have been relied upon by
the Senior Parties and
<PAGE>
shall survive the execution and delivery of this Security Agreement and the
other Financing Documents regardless of any investigation made by the Senior
Parties, or on their behalf until the Obligations shall have been paid in full.
SECTION 8.5. HEADINGS DESCRIPTIVE. The headings of the several
sections of this Security Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Security Agreement.
SECTION 8.6. SEVERABILITY. In case any provision in or
obligation under this Security Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 8.7. PARTNERSHIP'S DUTIES. Anything herein contained
to the contrary notwithstanding, the Partnership shall remain liable to perform
all of its obligations under or with respect to the Collateral, and the Senior
Parties shall not have any obligations or liabilities under or with respect to
any Collateral by reason of or arising out of this Security Agreement, nor shall
the Senior Parties be required or obligated in any manner to perform or fulfill
any of the obligations of the Partnership under or with respect to any
Collateral except to the extent any of the Senior Parties have assumed the same.
SECTION 8.8. CONTINUING SECURITY INTEREST. This Security
Agreement shall create a continuing Lien on the Collateral until the release
thereof pursuant to SECTION 8.9 (Termination; Release).
SECTION 8.9. TERMINATION; RELEASE. Upon the Debt Termination
Date (as defined in the Collateral Agency Agreement), this Security Agreement
shall terminate (except as provided in SECTION 8.4 (Survival)), and the
Collateral Agent, at the request and expense of the Partnership, will promptly
execute and deliver to the Partnership the proper instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
termination of this Security Agreement, and will duly assign, transfer and
deliver to the Partnership (without recourse and without any representation or
warranty of any kind) such of the Collateral as may be in the possession of the
Collateral Agent and has not theretofore been disposed of or otherwise applied
or released.
SECTION 8.10. REINSTATEMENT. This Security Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any
<PAGE>
amount received by the Senior Parties in respect of the Obligations is rescinded
or must otherwise be restored or returned by such Senior Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Partnership or upon the appointment of any intervenor or conservator of, or
trustee or similar official for, the Partnership or any substantial part of its
assets, or upon the entry of an order by a bankruptcy court avoiding payment of
such amount, or otherwise, all as though such payments had not been made.
SECTION 8.11. COUNTERPARTS. This Security Agreement may be
executed in any number of counterparts, each of which, taken together, shall
constitute one and the same instrument and any of the parties hereto may execute
this Security Agreement by signing any such counterpart.
SECTION 8.12. GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL. (a) This Security Agreement is a contract made under the
laws of the State of New York of the United States and shall for all purposes be
governed by and construed in accordance with the laws of such State without
regard to the conflict of law rules thereof (other than Section 5-1401 of the
New York General Obligations Law).
(b) Any legal action or proceeding against the Partnership
with respect to this Security Agreement may be brought in the courts of the
State of New York in the County of New York or of the United States for the
Southern District of New York and, by execution and delivery of this Security
Agreement, the Partnership hereby irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Partnership agrees that a judgment, after exhaustion of
all available appeals, in any such action or proceeding shall be conclusive and
binding upon the Partnership, and may be enforced in any other jurisdiction, by
a suit upon such judgment, a certified copy of which shall be conclusive
evidence of the judgment. The Partnership irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Partnership, at its address referred to in SECTION 8.1
(Notices), such service to become effective thirty (30) days after such mailing.
Nothing herein shall affect the right of the Collateral Agent or any other
Person to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Partnership in any other
jurisdiction.
(c) The Partnership hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Security Agreement in the courts referred to in clause (b) above and hereby
further irrevocably waives and
<PAGE>
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
(d) EACH OF THE PARTNERSHIP AND THE COLLATERAL AGENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS SECURITY AGREEMENT OR ANY
MATTER ARISING HEREUNDER.
SECTION 8.13. AUTHORITY OF COLLATERAL AGENT. The Partnership
acknowledges that the rights and responsibilities of the Collateral Agent under
this Security Agreement with respect to any action taken by the Collateral Agent
or the exercise or non-exercise by the Collateral Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Security Agreement shall, as between the Collateral Agent
and the Senior Parties, be governed by the Collateral Agency Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Collateral Agent and the Partnership, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Senior
Parties with full and valid authority so to act or refrain from acting, and the
Partnership shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
SECTION 8.14. CONFLICT WITH COLLATERAL AGENCY AGREEMENT. In
case of a conflict between any provision of this Security Agreement and any
provision of the Collateral Agency Agreement, the provisions of the Collateral
Agency Agreement shall control. No such conflict shall be deemed to exist merely
because this Security Agreement imposes greater obligations on the Partnership
than the Collateral Agency Agreement.
SECTION 8.15. INDEMNITIES AND EXPENSES. The obligation of the
Partnership to pay the costs and expenses of, and to indemnify, defend and hold
harmless, the Collateral Agent and the Senior Parties under and in connection
with this Security Agreement shall be as provided in SECTION 6.4
(Indemnification Bankruptcy) of the Collateral Agency Agreement as in effect as
of the date hereof. No amendment to such SECTION 6.4 or termination of the
Collateral Agency Agreement shall affect the provisions of this SECTION 8.15
unless such amendment or termination shall have been consented to by the parties
to this Security Agreement in accordance with the provisions hereof and of the
Collateral Agency Agreement.
SECTION 8.16. ENTIRE AGREEMENT. This Security Agreement,
together with any other agreement executed in connection herewith, is intended
by
<PAGE>
the parties as a final expression of their agreement as to the matters covered
hereby and is intended as a complete and exclusive statement of the terms and
conditions thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.,
Managing General Partner
By: /s/ MICHAEL F. LAWLER
-----------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ ANNETTE M. MARSULA
-----------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
Schedule I to
ASSIGNMENT AND
SECURITY AGREEMENT
FILING OFFICES
l. State of Nebraska, Secretary of State
2. State of New York, Secretary of State
3. State of Georgia, Secretary of State
4. State of Georgia, Heard County
5. State of New York, County of New York
<PAGE>
Schedule II to
ASSIGNMENT AND
SECURITY AGREEMENT
INSTRUMENTS
None.
<PAGE>
Schedule I- Filing Offices
- ----------
Schedule II- Instruments
- -----------
<PAGE>
Exhibit 4.5
Execution Copy
================================================================================
GENERAL PARTNER PLEDGE AND SECURITY AGREEMENT
Dated as of November 1, 1999
by
TENASKA GEORGIA, INC.
to
THE CHASE MANHATTAN BANK,
as Collateral Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 1. DEFINED TERMS..................................................................................2
Section 2. PLEDGE.........................................................................................2
Section 3. SECURITY FOR OBLIGATIONS.......................................................................3
Section 4. REPRESENTATIONS AND WARRANTIES.................................................................3
Section 5. SUPPLEMENTS, FURTHER ASSURANCES................................................................5
Section 6. RIGHTS OF PLEDGOR; ETC.........................................................................5
(a) Generally................................................................................5
(b) Distributions............................................................................5
(c) Amounts Wrongfully Received Held in Trust................................................6
Section 7. COVENANTS......................................................................................6
Section 8. COMPLIANCE WITH CERTIFICATE REQUIREMENTS REGARDING SUBSTANTIVE CONSOLIDATION...................7
Section 9. COLLATERAL AGENT MAY PERFORM...................................................................7
Section 10. REASONABLE CARE................................................................................7
Section 11. NO LIABILITY...................................................................................7
Section 12. REMEDIES UPON A TRIGGER EVENT..................................................................8
Section 13. PURCHASE OF THE PLEDGED COLLATERAL.............................................................9
Section 14. EXPENSES.......................................................................................9
Section 15. NO WAIVER......................................................................................9
Section 16. AMENDMENTS, ETC................................................................................9
Section 17. RELEASE.......................................................................................10
Section 18. NOTICES.......................................................................................10
Section 19. CONTINUING SECURITY INTEREST..................................................................10
Section 20. SECURITY INTEREST ABSOLUTE....................................................................10
Section 21. INDEMNITY.....................................................................................11
Section 22. OBLIGATIONS SECURED BY PLEDGED COLLATERAL.....................................................12
Section 23. SEVERABILITY..................................................................................12
Section 24. COUNTERPARTS; EFFECTIVENESS...................................................................12
Section 25. REINSTATEMENT.................................................................................12
</TABLE>
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<TABLE>
<S> <C> <C>
Section 26. WAIVER OF SUBROGATION; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.......................12
Section 27. GOVERNING LAW; TERMS..........................................................................13
Section 28. RECOURSE LIMITED TO PLEDGED COLLATERAL........................................................13
Section 29. AUTHORITY OF COLLATERAL AGENT.................................................................13
Section 30. CONFLICTS WITH THE COLLATERAL AGENCY AGREEMENT................................................14
Exhibit A Certificate(s)
</TABLE>
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GENERAL PARTNER
PLEDGE AND SECURITY AGREEMENT
GENERAL PARTNER PLEDGE AND SECURITY AGREEMENT (as amended, supplemented
or otherwise modified from time to time, this "AGREEMENT") dated as of November
1, 1999, made by TENASKA GEORGIA, INC., a Delaware corporation (together with
its successors and assigns, the "PLEDGOR") and the managing general partner of
Tenaska Georgia Partners, L.P., a Delaware limited partnership (together with
its successors and assigns, the "PARTNERSHIP"), to THE CHASE MANHATTAN BANK, as
collateral agent (together with its successors in such capacity, the "COLLATERAL
AGENT") and grantee hereunder for the benefit of the Senior Parties. Terms used
and not otherwise defined herein shall have the meanings ascribed to them in the
Common Agreement.
W I T N E S S E T H :
WHEREAS, the Partnership proposes to develop, construct,
operate and maintain a 936 MW (nominal rating) natural gas-fired simple-cycle
electric generating plant in Heard County, Georgia (the "PROJECT").
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE").
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "AUTHORITY"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership.
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "AUTHORITY BONDS") pursuant to a trust indenture, dated as of
November 1, 1999 between the Authority and The Chase Manhattan Bank, as
Authority Trustee (the "AUTHORITY INDENTURE").
WHEREAS, the Authority Bonds will be purchased by the
Partnership and pledged to the Collateral Agent, along with certain other
Collateral to secure the obligations of the Partnership under the Bonds.
WHEREAS, the Collateral Agent, the Partnership and others are
entering into the Security Documents, pursuant to which the Collateral Agent,
acting on behalf of the Senior Parties, will obtain a continuing Lien on and
perfected security interest in the Collateral; and
WHEREAS, the Senior Parties, the Authority and the Partnership
have entered into a Collateral Agency and Intercreditor Agreement, dated as of
November 1, 1999 (as amended, restated, modified or otherwise supplemented from
time to time in accordance with the
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terms thereof, the "COLLATERAL AGENCY AGREEMENT"), to set forth their mutual
understanding with respect to (a) the exercise of certain rights, remedies and
options by the respective parties thereto under the above described documents,
(b) the priority of their respective security interests created by the Security
Documents, (c) the appointment of the Collateral Agent as collateral agent, and
(d) the appointment of the Depositary Bank to hold and administer money
deposited in accounts established thereunder and funded with, among other
things, proceeds of insurance and condemnation, and certain revenues of the
Project under the Project Documents.
WHEREAS, as additional security for the Obligations, the Pledgor
desires to grant to the Collateral Agent a Lien on and security interest in the
Pledged Collateral;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Pledgor hereby agrees with the Collateral Agent as
follows:
Section 1. DEFINED TERMS. As used herein, the following capitalized
terms are defined as follows:
"DEFAULT RATE" means the interest rate applicable to the Initial Bonds
PLUS 1%.
"EXPENSES" shall have the meaning ascribed thereto in SECTION 21(A).
"INVESTMENT GRADE ENTITY" shall mean any partnership, corporation or
wholly-owned subsidiary or one hundred percent (100%) owned affiliate thereof
having securities rated BBB- or higher by S&P or Baa3 or higher by Moody's or
equivalent or higher rating by a nationally recognized rating agency or such
other entity reasonably acceptable to the Collateral Agent.
"OBLIGATIONS" means (i) all Senior Debt, and (ii) the Pledgor's
obligations hereunder.
"PLEDGED COLLATERAL" shall have the meaning ascribed thereto in SECTION
2.
Section 2. PLEDGE. As security for the Obligations and subject to and
in accordance with the provisions of this Agreement, including without
limitation SECTION 6 hereof, the Pledgor hereby pledges, grants, assigns,
hypothecates, transfers and delivers to the Collateral Agent, for its benefit
and the benefit of the Senior Parties, a first priority security interest in the
following (the "PLEDGED COLLATERAL"):
(i) all of the Pledgor's general partnership interests in the
Partnership, whether now owned or hereafter acquired;
(ii) the right to receive all monies and property representing
a distribution in respect of the property described in the preceding
clause (i), whether now owned or hereafter acquired; and
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(iii) all proceeds, products and accessions of and to any of
the property described in the preceding clauses (i) and (ii), whether
now owned or hereafter acquired;
PROVIDED, HOWEVER, that notwithstanding any of the foregoing, (x) the Collateral
Agent shall not acquire any interest in any of Pledgor's obligations contained
in the Partnership Agreement, and (y) the Collateral Agent hereby releases its
security interest in any monies, property or other distributions received or
receivable by the Pledgor in respect of its interests in the Partnership in the
absence of a Trigger Event that has occurred and is continuing, and the
Collateral Agent agrees that such security interest is hereby released.
Section 3. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
property described in SECTION 2 above is collateral security for, the payment
and performance in full when due, whether at stated maturity, by acceleration or
otherwise (including the payment of amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a)), of all Obligations now or hereafter existing.
Section 4. REPRESENTATIONS AND WARRANTIES. As of the date hereof, the
Pledgor represents and warrants as follows:
(a) The Pledgor is the sole legal and beneficial owner of the
Pledged Collateral free and clear of any Lien other than the Lien created
pursuant to this Agreement. No security agreement, financing statement or other
public notice with respect to all or any part of the Pledged Collateral is on
file or of record in any public office, except such as may have been filed in
favor of the Collateral Agent pursuant to this Agreement.
(b) The Pledgor is a corporation duly organized and validly
existing under the laws of the State of Delaware, and is qualified to own,
lease, or hold property and transact business in every jurisdiction where the
ownership of its property and the nature of its business as currently conducted
and as contemplated to be conducted require it to be qualified and where the
failure to be so qualified would have a material adverse effect on the Pledgor.
(c) The Pledgor has full power, authority and legal right to
enter into this Agreement and to perform its obligations hereunder and to pledge
all of the Pledged Collateral pursuant to this Agreement. The pledge of the
Pledged Collateral pursuant to this Agreement has been duly authorized by the
Pledgor. This Agreement has been duly authorized, executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation of the Pledgor
enforceable against the Pledgor in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar Laws affecting creditors' rights generally and except as
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(d) No consent of any other party (including, without
limitation, stockholders or creditors of the Pledgor) and no Governmental
Approval is required which has not been obtained either (i) for the execution,
delivery and performance by the Pledgor of this Agreement, (ii) for the pledge
by the Pledgor of the Pledged Collateral pursuant to this Agreement, or (iii)
for
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the exercise by the Collateral Agent of the rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral pursuant to this
Agreement unless failure to so obtain, maintain or comply with such Governmental
Approvals or consents would not reasonably be expected to result in a Material
Adverse Effect (except as may be required (x) in connection with any disposition
of all or any part of the Pledged Collateral under any Laws affecting the
offering and sale of securities generally, (y) under applicable federal and
state Laws, rules and regulations and applicable interpretations thereof
providing for the supervision or regulation of the banking or trust businesses
generally and applicable to the Collateral Agent or any Senior Party, and (z)
with respect to the Collateral Agent or any Senior Party as a result of any
relationship which such Person may have with Persons not parties to, or any
activity or business such Person may conduct other than pursuant to, any of the
Financing Documents).
(e) The execution and delivery of this Agreement concurrently
with the filing of UCC-1 financing statements with the Secretary of State of the
States of Nebraska and Delaware create a valid and perfected first priority
security interest in the Pledged Collateral securing the payment of the
Obligations.
(f) The Pledgor is the only general partner of the
Partnership.
(g) The execution, delivery and performance of this Agreement
will not (i) require any consent or approval of the Board of Directors of the
Pledgor which has not been obtained; (ii) violate the provisions of the
Pledgor's governing documents; (iii) violate the provisions of any Law
(including, without limitation, any usury Laws), regulation or order of any
Governmental Authority applicable to the Pledgor or the Partnership; (iv) result
in a breach of or constitute a default under any material agreement relating to
the management or affairs of the Pledgor or the Partnership, or any material
indenture or loan or credit agreement or any other material agreement, lease or
instrument to which the Pledgor or the Partnership is a party or by which the
Pledgor or the Partnership or any of their material properties may be bound
(which default or breach has not been permanently waived by the other party to
such document); or (v) result in or create any Lien (other than Permitted Liens)
under, or require any consent which has not been obtained under any material
indenture or loan or credit agreement or any other material agreement,
instrument or document, or the provisions of any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority binding
upon the Pledgor or the Partnership or any of their properties.
(h) There are no proceedings and there is no action, suit or
proceeding at law or in equity or by or before any Governmental Authority,
arbitral tribunal or other body now pending against the Pledgor which, singly or
in the aggregate, could reasonably be expected to have a Material Adverse Effect
or, to the best knowledge of the Pledgor, threatened against the Pledgor or the
Partnership which questions the validity or legality of or seeks damages in
connection with this Agreement.
(i) The chief executive office of the Pledgor and the office
where the Pledgor keeps its records concerning the Partnership and the Project
and all contracts relating thereto is located at 1044 North 115th Street, Suite
400, Omaha, Nebraska 68154. The Pledgor shall not establish a new location for
its chief executive office or change its name until (i) it has given to the
Collateral Agent not less than sixty (60) days prior written notice of its
intention so to do,
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clearly describing such new location or specifying such new name, as the case
may be, and (ii) with respect to such new location or such new name, as the case
may be, it shall have taken all action, satisfactory to the Collateral Agent, to
maintain the security interest of the Collateral Agent in the Pledged Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
Section 5. SUPPLEMENTS, FURTHER ASSURANCES. The Pledgor agrees that at
any time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral.
Section 6. RIGHTS OF PLEDGOR, ETC. (a) GENERALLY. The Pledgor shall be
entitled to exercise any and all rights, if any, pertaining to the Pledged
Collateral or any part thereof (including, without limitation, the right to
manage and direct the affairs of the Partnership and the right to receive
distributions in respect of its partnership interest) so long as no Trigger
Event shall have occurred and be continuing.
(b) DISTRIBUTIONS. Unless an Event of Default shall have
occurred and be continuing, the Pledgor shall be entitled to receive and retain
any and all distributions paid in respect of the Pledged Collateral in
compliance with the terms of the Collateral Agency Agreement; PROVIDED, HOWEVER,
that any and all
(i) distributions paid or payable in respect of any Pledged
Collateral (whether paid in cash, securities or other property) in
connection with a partial or total liquidation or dissolution of the
Partnership (other than in connection with any deemed liquidation on
account of a termination of the Partnership under Section 708(b)(1)(B)
of the Code), and
(ii) all property (whether cash, securities or other property)
paid, payable or otherwise distributed in redemption of, or in exchange
for, the property described in SECTION 2(i) above,
shall be, and shall be forthwith delivered to the Collateral Agent to hold as,
Pledged Collateral and shall, if received by the Pledgor, be received in trust
for the benefit of the Collateral Agent, be segregated from the other property
or funds of the Pledgor, and be forthwith delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement); and PROVIDED FURTHER THAT if the circumstances in Section 3.9(b)
of the Collateral Agency Agreement exist then the Pledgor shall be entitled to
receive any and all distributions in accordance with the provisions thereof.
Upon the occurrence and during the continuance of a Trigger Event, all rights of
the Pledgor to receive the distributions which it would otherwise be authorized
to receive and retain pursuant to the preceding sentence shall cease, and all
such rights shall thereupon become vested in the Collateral Agent which shall
thereupon have the sole right to receive and hold as Pledged Collateral such
distributions; PROVIDED that, notwithstanding anything herein to the contrary,
if such Trigger Event is cured or waived, any such distribution
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previously paid to the Collateral Agent shall, upon request of the Pledgor, be
returned to the Pledgor.
(c) AMOUNTS WRONGFULLY RECEIVED HELD IN TRUST. All
distributions and other amounts which are received by the Pledgor contrary to
the provisions of SECTION 6(b) above shall be received in trust for the benefit
of the Collateral Agent, shall be segregated from other funds of the Pledgor,
and shall be forthwith paid over to the Collateral Agent as Pledged Collateral
in the same form as so received (with any necessary endorsement).
Section 7. COVENANTS.
(a) The Pledgor agrees that without the consent of the
Collateral Agent it will not (i) sell or otherwise dispose of the Pledged
Collateral or any interest therein unless subject to the lien of this Agreement
and otherwise not prohibited by or resulting in a Default or Event of Default
under the provisions of the Common Agreement, and (ii) except for Permitted
Liens, create or permit to exist any Lien upon or with respect to any of the
Pledged Collateral or any interest therein.
(b) Except for transfers of Partnership interests not
prohibited by, and not giving rise to a Default or Event of Default under this
Agreement or the Common Agreement, the Pledgor agrees that it will not authorize
or cause the Partnership to issue any Partnership interest to any other party
without prior written consent from the Collateral Agent. The Pledgor agrees that
it will pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional general partnership interests issued
to it by the Partnership.
(c) The Pledgor shall preserve and maintain (i) its legal
existence, as a corporation in good standing under the Laws of the State of
Delaware and (ii) its qualification to do business in every jurisdiction where
the ownership of its property and the nature of its business require it to be so
qualified and where the failure to be so qualified would have a material adverse
effect on the Pledgor.
(d) Until such time as there shall be no Bonds Outstanding
under the Indenture, the Pledgor (i) shall limit its purpose to the holding and
management of the Pledged Collateral; (ii) shall not create or incur or suffer
to exist any Indebtedness; and (iii) shall not enter into any transaction of
merger or consolidation, liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution).
(e) The Pledgor shall pay or cause to be paid and discharge
all taxes, assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its property prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, could
reasonably be expected to become a material Lien (other than a Permitted Lien)
upon the Pledged Collateral, unless such matters are being challenged by the
Pledgor or the Partnership in good faith and by appropriate proceedings
diligently conducted. The Pledgor will promptly pay or cause to be paid any
valid, final judgment enforcing any such tax, assessment, charge, levy or claim
and cause the same to be satisfied of record.
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(f) Subject to SECTION 7 hereof, the Pledgor shall remain a
general partner of the Partnership and shall not withdraw from the Partnership
without the written approval of the Collateral Agent.
(g) The Pledgor hereby agrees that it will give S&P (or cause
the Partnership to give S&P) prior written notice of any amendment to the
Partnership Agreement that will (i) affect the actions for which unanimous
approval or consent of the general partners is required, or (ii) reduce the vote
required for the actions which currently require the unanimous approval or
consent of the general partners.
Section 8. COMPLIANCE WITH CERTIFICATE REQUIREMENTS REGARDING
SUBSTANTIVE CONSOLIDATION.
The Pledgor will not take any action or omit to take any action if such
action or omission would be inconsistent with the certifications made in the
Certificate(s) listed in Exhibit A hereto; except for any such action or
omission as to which the Pledgor shall have received a reasoned opinion of
counsel to the Partnership (and shall have delivered a copy thereof to the
Collateral Agent) to the effect that, after giving effect to such action or
omission, and subject to customary qualifications and exceptions, in a
bankruptcy proceeding involving Tenaska Energy, Inc., the assets and liabilities
of the Partnership should not be consolidated with those of Tenaska Energy, Inc.
Section 9. COLLATERAL AGENT MAY PERFORM. If the Pledgor fails to
perform any agreement contained herein after receipt of a written request to
do so from the Collateral Agent, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent, including the fees and expenses of its counsel, incurred in
connection therewith shall be payable by the Pledgor under SECTION 14 hereof.
Section 10. REASONABLE CARE. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equivalent to that which the Collateral Agent accords its own
property of the type of which the Pledged Collateral consists, it being
understood that the Collateral Agent shall have no responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not the Collateral Agent has or is deemed to have knowledge of such matters,
or (ii) taking any necessary steps to preserve rights against any parties with
respect to any Pledged Collateral absent its gross negligence and willful
misconduct.
Section 11. NO LIABILITY. None of the Collateral Agent or the Senior
Parties or any of their directors, officers, employees or agents shall be deemed
to have assumed any of the liabilities or obligations of a partner of the
Partnership as a result of the pledge and security interest granted under or
pursuant to this Agreement. None of the Collateral Agent or the Senior Parties
or any of their directors, officers, employees or agents shall be liable for any
failure to collect or realize upon the Obligations or any collateral security or
guarantee therefor, or any part
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thereof, or for any delay in so doing nor shall it be under any obligation to
take any action whatsoever with regard thereto.
Section 12. REMEDIES UPON A TRIGGER EVENT. If a Trigger Event shall
have occurred and be continuing:
(a) (i) The Collateral Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the Uniform Commercial Code (the
"Code") then in effect in the State of New York, or unless prohibited
by applicable Law or the Uniform Commercial Code then in effect in any
other applicable jurisdiction, and the Collateral Agent may also, upon
the direction of the Required Senior Parties, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one
or more parcels at a public or private sale or at any of the Collateral
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Collateral Agent may reasonably deem commercially reasonable (as
directed by the Required Senior Parties), irrespective of the impact of
any such sales on the market price of the Pledged Collateral at any
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of the Pledgor, and
the Pledgor hereby waives (to the extent permitted by Law) all rights
of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of Law or statute now existing
or hereafter enacted. The Pledgor agrees that, to the extent notice of
sale shall be required by Law, at least ten (10) days' notice to the
Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been
given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to
which it was so adjourned. The Collateral Agent shall incur no
liability as a result of the sale of the Pledged Collateral, or any
part thereof, at any public or private sale. The Pledgor hereby waives
any claims against the Collateral Agent arising by reason of the fact
that the price at which any Pledged Collateral may have been sold at
such a private sale, if commercially reasonable, was less than the
price which might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.
(ii) The Pledgor recognizes that the Collateral Agent may
elect, upon the direction of the Required Senior Parties, to sell all
or a part of the Pledged Collateral to one or more purchasers in
privately negotiated transactions in which the purchasers will be
obligated to agree, among other things, to acquire the Pledged
Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any
such private sales may be at prices and on terms less favorable than
those obtainable through a public sale (including, without limitation,
a public offering made pursuant to a registration statement under the
Securities Act of 1933, as amended (the "Securities Act")), and the
Pledgor and the Collateral Agent agree
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that such private sales shall be made in a commercially reasonable
manner and that the Collateral Agent has no obligation to engage in
public sales and no obligation to delay the sale of any Pledged
Collateral to permit the issuer thereof to register the Pledged
Collateral for a form of public sale requiring registration under the
Securities Act.
(b) Any cash held by the Collateral Agent as Pledged
Collateral and all cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Pledged Collateral shall, as soon as reasonably practicable, be applied (after
payment of any amounts payable to the Collateral Agent pursuant to SECTION 14)
by the Collateral Agent FIRST to the payment of the costs and expenses of such
sale, collection or other realization, if any, including reasonable compensation
to the Collateral Agent and its agents and counsel, and all expenses,
liabilities and advances made or incurred by the Collateral Agent in connection
therewith; and SECOND to the payment of the Obligations in accordance with the
terms of the Collateral Agency Agreement; and THEN, all remaining amounts shall
promptly be paid to the Pledgor.
Section 13. PURCHASE OF THE PLEDGED COLLATERAL. The Pledgor may be a
purchaser of the Pledged Collateral or any part thereof or any right or interest
therein at any sale thereof, whether pursuant to foreclosure, power of sale or
otherwise hereunder and the Collateral Agent may apply the purchase price to the
payment of the Obligations secured hereby. Any purchaser of all or any part of
the Pledged Collateral shall, upon any such purchase, acquire good title to the
Pledged Collateral so purchased, free of the security interests created by this
Agreement.
Section 14. EXPENSES. The Pledgor will, upon demand, pay to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, and
any transfer taxes, in each case payable upon sale of the Pledged Collateral,
which the Collateral Agent may incur in connection with (i) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral pursuant to the exercise or enforcement of any of the
rights of the Collateral Agent hereunder or (ii) the failure by the Pledgor to
perform or observe any of the provisions hereof, together with interest thereon
from the date of demand at the rate per annum equal to the Default Rate. Any
amount payable by the Pledgor pursuant to this SECTION 14 shall be payable on
demand and shall constitute Obligations secured hereby.
Section 15. NO WAIVER. No failure or delay on the part of the
Collateral Agent to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
of any right, power or remedy. The remedies herein provided are to the fullest
extent permitted by Law cumulative and are not exclusive of any remedies
provided by Law. No notice to or demand on the Pledgor in any case shall entitle
the Pledgor to any other or further notice or demand in similar or other
circumstances.
Section 16. AMENDMENTS, ETC. No waiver, amendment, modification or
termination of any provision of this Agreement, or consent to any departure by
the Pledgor therefrom, shall in
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any event be effective without the written concurrence of the Collateral Agent
and none of the Pledged Collateral shall be released without the written consent
of the Collateral Agent. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
Section 17. RELEASE. Upon the Maturity Date, the Collateral Agent, upon
request by the Pledgor, shall execute and deliver all such documentation
necessary to release the liens created pursuant to this Agreement.
Section 18. NOTICES. Any notice to the Collateral Agent shall be deemed
effective only if sent to and received at the office of the Collateral Agent at
450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Annette
M. Marsula, International & Project Finance Service Delivery or sent by
confirmed telecopy to telecopy number (212) 946-8178. Any notice to the Pledgor
hereunder shall be deemed to have been duly given only if sent to and received
at the office of the Pledgor at 1044 North 115th Street, Suite 400, Omaha,
Nebraska 68154, Attention: Vice President, or sent by confirmed telecopy to
telecopy number (402) 691-9550, or at such other address of which such Person
shall have notified in writing the party giving such notice.
Section 19. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing Lien in the Pledged Collateral until the release thereof pursuant to
SECTION 17 hereof. The Collateral Agent may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other person or entity
in accordance with the Indenture, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to the
Collateral Agent herein or otherwise.
Sectin 20. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Pledgor
hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any of the
Financing Documents, the Project Documents or any other agreement or
instrument relating thereto (other than against the Collateral Agent);
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the
Financing Documents, the Project Documents or any other agreement or
instrument relating thereto;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guaranty, for all or any of the Obligations; or
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(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor.
Section 21. INDEMNITY. (a) The Pledgor agrees to indemnify, reimburse
and hold the Collateral Agent and the Senior Parties and their respective
officers, directors, employees and agents (each individually, an "INDEMNITEE,"
and collectively, "INDEMNITEES") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs and expenses (including reasonable attorneys'
fees and disbursements) (such expenses, for purposes of this SECTION 21,
hereinafter "EXPENSES") of whatsoever kind and nature imposed on, asserted
against or incurred by any of the Indemnitees in any way relating to this
Agreement or the Pledged Collateral and arising out of (i) this Agreement or the
documents executed in connection herewith or in any other way connected with the
administration of the transactions contemplated hereby, or the enforcement of
any of the terms hereof, or the preservation of any rights hereunder, (ii) the
ownership, purchase, delivery, control, acceptance, financing, possession,
condition, sale, return or other disposition, or use of, the Pledged Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), (iii) the violation of the Laws of any country, state or other
governmental body or unit, (iv) any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person including any Indemnitee), or property
damage, or (v) any contract claim, excluding in all cases those Expenses, claims
and liabilities finally judicially determined to have arisen solely from the
gross negligence or willful misconduct of any Indemnitee. Each Indemnitee agrees
to use its best efforts to promptly notify the Pledgor of any assertion of any
such liability, damage, injury, penalty, claim, demand, action, judgment or suit
of which such Indemnitee has knowledge.
(b) Without limiting the application of SECTION 21(A), the
Pledgor agrees to pay, or reimburse the Collateral Agent for any and all
reasonable fees, costs and Expenses of whatever kind or nature incurred in
connection with the creation, preservation, protection or validation of the
Collateral Agent's Liens on, and security interest in, the Pledged Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Pledged Collateral,
premiums for insurance with respect to the Pledged Collateral and all other
reasonable fees, costs and expenses in connection with protecting, maintaining
or preserving the Pledged Collateral and the Collateral Agent's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Pledged Collateral.
(c) Without limiting the application of SECTION 21(A), the
Pledgor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, reasonable costs, damages and reasonable expenses which such
Indemnitee may suffer, expend or incur in consequence of or growing out of any
failure of the Pledgor to comply with its obligations under this Agreement, or
any misrepresentation by the Pledgor in this Agreement, or in any statement or
writing contemplated by or made or delivered pursuant to or in connection with
this Agreement.
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(d) If and to the extent that the obligations of the Pledgor
under this SECTION 21 are unenforceable for any reason, the Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable Law.
Section 22. OBLIGATIONS SECURED BY PLEDGED COLLATERAL. Any amounts
paid by any Indemnitee as to which such indemnitee has the right to
reimbursement, and any amounts paid by the Collateral Agent in preservation
of any of its rights or interest in the Pledged Collateral, together with
interest on such amounts from the date paid until reimbursement in full at a
rate per annum equal at all times to the Default Rate, shall constitute
Obligations secured by the Pledged Collateral.
Section 23. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Where provisions of any
Law or regulation resulting in such prohibition or unenforceability may be
waived, they are hereby waived by the parties hereto to the full extent
permitted by Law so that this Agreement shall be deemed a valid, binding
agreement in accordance with its terms.
Section 24. COUNTERPARTS; EFFECTIVENESS. This Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts, when taken together, shall constitute but one and the same
instrument. This Agreement shall become effective upon the execution and
delivery of a counterpart hereof by each of the parties hereto.
Section 25. REINSTATEMENT. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Collateral Agent or any Senior Party hereunder or pursuant
hereto is rescinded or must otherwise be restored or returned by the Collateral
Agent or such Senior Party, as the case may be, upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Pledgor or the Partnership or
upon the appointment of any intervenor or conservator of, or trustee or similar
official for, the Pledgor or the Partnership or any substantial part of their
respective assets, or upon the entry of an order by a bankruptcy court avoiding
the payment of such amount, or otherwise, all as though such payments had not
been made.
Section 26. WAIVER OF SUBROGATION; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL.
(a) UNTIL THE PAYMENT IN FULL OF THE OBLIGATIONS, THE PLEDGOR
IRREVOCABLY WAIVES ALL RIGHTS OF SUBROGATION (WHETHER
12
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CONTRACTUAL, UNDER SECTION 509 OF TITLE 11 OF THE UNITED STATES CODE, 11 U.S.C.
ss. 101, ET SEQ. (THE "BANKRUPTCY CODE"), UNDER COMMON LAW, OR OTHERWISE) TO THE
CLAIMS OF THE COLLATERAL AGENT AGAINST THE PLEDGOR WHICH ARISE IN CONNECTION
WITH, OR AS A RESULT OF, THIS AGREEMENT.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND THE PLEDGOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. THE PLEDGOR AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVE
TRIAL BY JURY, AND THE PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) THE PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE PLEDGOR AT ITS ADDRESS SPECIFIED BY SECTION 18, SUCH SERVICE TO BECOME
EFFECTIVE FOUR (4) DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN ANY OTHER JURISDICTION.
Section 27. GOVERNING LAW; TERMS. THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR THE REMEDIES
HEREUNDER, ARE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK. UNLESS OTHERWISE DEFINED HEREIN OR IN THE COMMON AGREEMENT, TERMS
DEFINED IN ARTICLE 8 OR ARTICLE 9 OF THE NEW YORK UNIFORM COMMERCIAL CODE ARE
USED HEREIN AS THEREIN DEFINED.
Section 28. RECOURSE LIMITED TO PLEDGED COLLATERAL. Notwithstanding
anything herein to the contrary, including without limitation SECTION 21, the
Collateral Agent acknowledges and agrees on behalf of itself and each Senior
Party, that neither the Pledgor, nor any past or present shareholder, officer,
employee, servant, controlling Person, executive, director, agent, or
13
<PAGE>
authorized representative or Affiliate (other than the Partnership) of the
Pledgor, shall be personally liable for any deficiency in the payment or
satisfaction of the Obligations of the Pledgor and that the sole recourse of the
Collateral Agent and each Senior Party for payment and performance of the
obligations of the Pledgor hereunder shall be to the Pledged Collateral.
Section 29. AUTHORITY OF COLLATERAL AGENT. The Pledgor acknowledges
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Senior
Parties, be governed by the Collateral Agency Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Pledgor, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Senior Parties with full and
valid authority so to act or refrain from acting, and the Pledgor shall not be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
Section 30. CONFLICTS WITH THE COLLATERAL AGENCY AGREEMENT.
Notwithstanding any provision contained herein to the contrary, in the event
of any conflict between the terms of this Agreement and the Collateral Agency
Agreement, the terms of the Collateral Agency Agreement shall control.
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<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have caused
this Agreement to be duly executed and delivered by their officers thereunto
duly authorized as of the date first above written.
TENASKA GEORGIA, INC.
By: /s/ Michael F. Lawler
-----------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
-----------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
EXHIBIT A
CERTIFICATE(S)
Certificate of Tenaska Georgia, Inc., a Delaware corporation, dated November 10,
1999 and issued in connection with the opinion of special counsel to the
Partnership with respect to the issue of substantive consolidation in connection
with a bankruptcy of Tenaska Energy, Inc.
<PAGE>
Exhibit 4.6
Execution Copy
================================================================================
LIMITED PARTNER PLEDGE AND SECURITY AGREEMENT
Dated as of November 1, 1999
by
TENASKA GEORGIA I, L.P.
to
THE CHASE MANHATTAN BANK,
as Collateral Agent
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Section 1. DEFINED TERMS..................................................................................2
Section 2. PLEDGE.........................................................................................2
Section 3. SECURITY FOR OBLIGATIONS.......................................................................3
Section 4. REPRESENTATIONS AND WARRANTIES.................................................................3
Section 5. SUPPLEMENTS, FURTHER ASSURANCES................................................................5
Section 6. RIGHTS OF PLEDGOR; ETC.........................................................................5
(a) Generally................................................................................5
(b) Distributions............................................................................5
(c) Amounts Wrongfully Received Held in Trust................................................6
Section 7. COVENANTS......................................................................................6
Section 8. COMPLIANCE WITH CERTIFICATE REQUIREMENTS REGARDING SUBSTANTIVE CONSOLIDATION...................7
Section 9. COLLATERAL AGENT MAY PERFORM...................................................................7
Section 10. REASONABLE CARE................................................................................7
Section 11. NO LIABILITY...................................................................................8
Section 12. REMEDIES UPON A TRIGGER EVENT..................................................................8
Section 13. PURCHASE OF THE PLEDGED COLLATERAL.............................................................9
Section 14. EXPENSES.......................................................................................9
Section 15. NO WAIVER......................................................................................9
Section 16. AMENDMENTS, ETC...............................................................................10
Section 17. RELEASE.......................................................................................10
Section 18. NOTICES.......................................................................................10
Section 19. CONTINUING SECURITY INTEREST..................................................................10
Section 20. SECURITY INTEREST ABSOLUTE....................................................................10
Section 21. INDEMNITY.....................................................................................11
Section 22. OBLIGATIONS SECURED BY PLEDGED COLLATERAL.....................................................12
Section 23. SEVERABILITY..................................................................................12
Section 24. COUNTERPARTS; EFFECTIVENESS...................................................................12
Section 25. REINSTATEMENT.................................................................................12
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 26. WAIVER OF SUBROGATION; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.......................13
Section 27. GOVERNING LAW; TERMS..........................................................................13
Section 28. RECOURSE LIMITED TO PLEDGED COLLATERAL........................................................14
Section 29. AUTHORITY OF COLLATERAL AGENT.................................................................14
Section 30. CONFLICTS WITH THE COLLATERAL AGENCY AGREEMENT................................................14
Exhibit A Certificate(s)
</TABLE>
ii
<PAGE>
LIMITED PARTNER
PLEDGE AND SECURITY AGREEMENT
LIMITED PARTNER PLEDGE AND SECURITY AGREEMENT (as amended, supplemented
or otherwise modified from time to time, this "AGREEMENT") dated as of November
1, 1999, made by TENASKA GEORGIA I, L.P., a Delaware limited partnership
(together with its successors and assigns, the "PLEDGOR") and the limited
partner of Tenaska Georgia Partners, L.P., a Delaware limited partnership
(together with its successors and assigns, the "PARTNERSHIP"), to THE CHASE
MANHATTAN BANK, as collateral agent (together with its successors in such
capacity, the "COLLATERAL AGENT") and grantee hereunder for the benefit of the
Senior Parties. Terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Common Agreement.
W I T N E S S E T H :
WHEREAS, the Partnership proposes to develop, construct,
operate and maintain a 936 MW (nominal rating) natural gas-fired simple-cycle
electric generating plant in Heard County, Georgia (the "PROJECT").
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE").
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "AUTHORITY"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership.
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "AUTHORITY BONDS") pursuant to a trust indenture, dated as of
November 1, 1999 between the Authority and The Chase Manhattan Bank, as
Authority Trustee (the "AUTHORITY INDENTURE").
WHEREAS, the Authority Bonds will be purchased by the
Partnership and pledged to the Collateral Agent, along with certain other
Collateral to secure the obligations of the Partnership under the Bonds.
WHEREAS, the Collateral Agent, the Partnership and others are
entering into the Security Documents, pursuant to which the Collateral Agent,
acting on behalf of the Senior Parties, will obtain a continuing Lien on and
perfected security interest in the Collateral; and
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WHEREAS, the Senior Parties, the Authority and the Partnership
have entered into a Collateral Agency and Intercreditor Agreement, dated as of
November 1, 1999 (as amended, restated, modified or otherwise supplemented from
time to time in accordance with the terms thereof, the "COLLATERAL AGENCY
AGREEMENT"), to set forth their mutual understanding with respect to (a) the
exercise of certain rights, remedies and options by the respective parties
thereto under the above described documents, (b) the priority of their
respective security interests created by the Security Documents, (c) the
appointment of the Collateral Agent as collateral agent, and (d) the appointment
of the Depositary Bank to hold and administer money deposited in accounts
established thereunder and funded with, among other things, proceeds of
insurance and condemnation, and certain revenues of the Project under the
Project Documents.
WHEREAS, as additional security for the Obligations, the Pledgor
desires to grant to the Collateral Agent a Lien on and security interest in the
Pledged Collateral;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Pledgor hereby agrees with the Collateral Agent as
follows:
Section 1. DEFINED TERMS. As used herein, the following capitalized
terms are defined as follows:
"DEFAULT RATE" means the interest rate applicable to the Initial Bonds
PLUS 1%.
"EXPENSES" shall have the meaning ascribed thereto in SECTION 21(A).
"INVESTMENT GRADE ENTITY" shall mean any partnership, corporation or
wholly-owned subsidiary or one hundred percent (100%) owned affiliate thereof
having securities rated BBB- or higher by S&P or Baa3 or higher by Moody's or
equivalent or higher rating by a nationally recognized rating agency or such
other entity reasonably acceptable to the Collateral Agent.
"OBLIGATIONS" means (i) all Senior Debt, and (ii) the Pledgor's
obligations hereunder.
"PLEDGED COLLATERAL" shall have the meaning ascribed thereto in SECTION
2.
Section 2. PLEDGE. As security for the Obligations and subject to and
in accordance with the provisions of this Agreement, including without
limitation SECTION 6 hereof, the Pledgor hereby pledges, grants, assigns,
hypothecates, transfers and delivers to the Collateral Agent, for its benefit
and the benefit of the Senior Parties, a first priority security interest in the
following (the "PLEDGED COLLATERAL"):
(i) all of the Pledgor's limited partnership interests in the
Partnership, whether now owned or hereafter acquired;
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<PAGE>
(ii) the right to receive all monies and property representing
a distribution in respect of the property described in the preceding
clause (i), whether now owned or hereafter acquired; and
(iii) all proceeds, products and accessions of and to any of
the property described in the preceding clauses (i) and (ii), whether
now owned or hereafter acquired;
PROVIDED, HOWEVER, that notwithstanding any of the foregoing, (x) the Collateral
Agent shall not acquire any interest in any of Pledgor's obligations contained
in the Partnership Agreement, and (y) the Collateral Agent hereby releases its
security interest in any monies, property or other distributions received or
receivable by the Pledgor in respect of its interests in the Partnership in the
absence of a Trigger Event that has occurred and is continuing, and the
Collateral Agent agrees that such security interest is hereby released.
Section 3. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
property described in SECTION 2 above is collateral security for, the payment
and performance in full when due, whether at stated maturity, by acceleration or
otherwise (including the payment of amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a)), of all Obligations now or hereafter existing.
Section 4. REPRESENTATIONS AND WARRANTIES. As of the date hereof, the
Pledgor represents and warrants as follows:
(a) The Pledgor is the sole legal and beneficial owner of the
Pledged Collateral free and clear of any Lien other than the Lien created
pursuant to this Agreement. No security agreement, financing statement or other
public notice with respect to all or any part of the Pledged Collateral is on
file or of record in any public office, except such as may have been filed in
favor of the Collateral Agent pursuant to this Agreement.
(b) The Pledgor is a limited partnership duly organized and
validly existing under the laws of the State of Delaware, and is qualified to
own, lease, or hold property and transact business in every jurisdiction where
the ownership of its property and the nature of its business as currently
conducted and as contemplated to be conducted require it to be qualified and
where the failure to be so qualified would have a material adverse effect on the
Pledgor.
(c) The Pledgor has full power, authority and legal right to
enter into this Agreement and to perform its obligations hereunder and to pledge
all of the Pledged Collateral pursuant to this Agreement. The pledge of the
Pledged Collateral pursuant to this Agreement has been duly authorized by the
Pledgor. This Agreement has been duly authorized, executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation of the Pledgor
enforceable against the Pledgor in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar Laws affecting creditors' rights generally and except as
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
3
<PAGE>
(d) No consent of any other party (including, without
limitation, stockholders, the general or limited partners or creditors of the
Pledgor) and no Governmental Approval is required which has not been obtained
either (i) for the execution, delivery and performance by the Pledgor of this
Agreement, (ii) for the pledge by the Pledgor of the Pledged Collateral pursuant
to this Agreement, or (iii) for the exercise by the Collateral Agent of the
rights provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement unless failure to so obtain, maintain or
comply with such Governmental Approval or consent would not reasonably be
expected to result in a Material Adverse Effect (except as may be required (x)
in connection with any disposition of all or any part of the Pledged Collateral
under any Laws affecting the offering and sale of securities generally, (y)
under applicable federal and state Laws, rules and regulations and applicable
interpretations thereof providing for the supervision or regulation of the
banking or trust businesses generally and applicable to the Collateral Agent or
any Senior Party, and (z) with respect to the Collateral Agent or any Senior
Party as a result of any relationship which such Person may have with Persons
not parties to, or any activity or business such Person may conduct other than
pursuant to, any of the Financing Documents).
(e) The execution and delivery of this Agreement concurrently
with the filing of UCC-1 financing statements with the Secretary of State of the
States of Nebraska and Delaware create a valid and perfected first priority
security interest in the Pledged Collateral securing the payment of the
Obligations.
(f) The Pledgor is the only limited partner of the
Partnership.
(g) The execution, delivery and performance of this Agreement
will not (i) require any consent or approval of the Executive Review Committee
of the Pledgor which has not been obtained; (ii) violate the provisions of the
Pledgor's governing documents; (iii) violate the provisions of any Law
(including, without limitation, any usury Laws), regulation or order of any
Governmental Authority applicable to the Pledgor or the Partnership; (iv) result
in a breach of or constitute a default under any material agreement relating to
the management or affairs of the Pledgor or the Partnership, or any material
indenture or loan or credit agreement or any other material agreement, lease or
instrument to which the Pledgor or the Partnership is a party or by which the
Pledgor or the Partnership or any of their material properties may be bound
(which default or breach has not been permanently waived by the other party to
such document); or (v) result in or create any Lien (other than Permitted Liens)
under, or require any consent which has not been obtained under any material
indenture or loan or credit agreement or any other material agreement,
instrument or document, or the provisions of any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority binding
upon the Pledgor or the Partnership or any of their properties.
(h) There are no proceedings and there is no action, suit or
proceeding at law or in equity or by or before any Governmental Authority,
arbitral tribunal or other body now pending against the Pledgor which, singly or
in the aggregate could reasonably be expected to have a Material Adverse Effect
or, to the best knowledge of the Pledgor, threatened against the Pledgor or the
Partnership which questions the validity or legality of or seeks damages in
connection with this Agreement.
4
<PAGE>
(i) The chief executive office of the Pledgor and the office
where the Pledgor keeps its records concerning the Partnership and the Project
and all contracts relating thereto is located at 1044 North 115th Street, Suite
400, Omaha, Nebraska 68154. The Pledgor shall not establish a new location for
its chief executive office or change its name until (i) it has given to the
Collateral Agent not less than sixty (60) days prior written notice of its
intention so to do, clearly describing such new location or specifying such new
name, as the case may be, and (ii) with respect to such new location or such new
name, as the case may be, it shall have taken all action, satisfactory to the
Collateral Agent, to maintain the security interest of the Collateral Agent in
the Pledged Collateral intended to be granted hereby at all times fully
perfected and in full force and effect.
Section 5. SUPPLEMENTS, FURTHER ASSURANCES. The Pledgor agrees that at
any time and from time to time, at the expense of the Pledgor, the Pledgor will
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the Collateral Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Collateral Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral.
Section 6. RIGHTS OF PLEDGOR, ETC.(a) GENERALLY. The Pledgor shall
be entitled to exercise any and all rights, if any, pertaining to the Pledged
Collateral or any part thereof (including, without limitation, the right to
manage and direct the affairs of the Partnership and the right to receive
distributions in respect of its partnership interest) so long as no Trigger
Event shall have occurred and be continuing.
(b) DISTRIBUTIONS. Unless an Event of Default shall have occurred and
be continuing, the Pledgor shall be entitled to receive and retain any and all
distributions paid in respect of the Pledged Collateral in compliance with the
terms of the Collateral Agency Agreement; PROVIDED, HOWEVER, that any and all
(i) distributions paid or payable in respect of any Pledged
Collateral (whether paid in cash, securities or other property) in
connection with a partial or total liquidation or dissolution of the
Partnership (other than in connection with any deemed liquidation on
account of a termination of the Partnership under Section 708(b)(1)(B)
of the Code), and
(ii) all property (whether cash, securities or other property)
paid, payable or otherwise distributed in redemption of, or in exchange
for, the property described in SECTION 2(i) above,
shall be, and shall be forthwith delivered to the Collateral Agent to hold as,
Pledged Collateral and shall, if received by the Pledgor, be received in trust
for the benefit of the Collateral Agent, be segregated from the other property
or funds of the Pledgor, and be forthwith delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsement); and PROVIDED FURTHER THAT if the circumstances in Section 3.9(b)
of the Collateral Agency Agreement exist then the Pledgor shall be entitled to
retain and receive any and all of the distributions in accordance with the
provisions thereof. Upon the occurrence and during the
5
<PAGE>
continuance of a Trigger Event, all rights of the Pledgor to receive the
distributions which it would otherwise be authorized to receive and retain
pursuant to the preceding sentence shall cease, and all such rights shall
thereupon become vested in the Collateral Agent which shall thereupon have the
sole right to receive and hold as Pledged Collateral such distributions;
PROVIDED that, notwithstanding anything herein to the contrary, if such Trigger
Event is cured or waived, any such distribution previously paid to the
Collateral Agent shall, upon request of the Pledgor, be returned to the Pledgor.
(c) AMOUNTS WRONGFULLY RECEIVED HELD IN TRUST. All distributions and
other amounts which are received by the Pledgor contrary to the provisions of
SECTION 6(b) above shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of the Pledgor, and shall be
forthwith paid over to the Collateral Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
Section 7. COVENANTS.
(a) The Pledgor agrees that without the consent of the
Collateral Agent it will not (i) sell or otherwise dispose of the Pledged
Collateral or any interest therein unless subject to the lien of this Agreement
and otherwise not prohibited by or resulting in a Default or Event of Default
under the provisions of the Common Agreement, and (ii) except for Permitted
Liens, create or permit to exist any Lien upon or with respect to any of the
Pledged Collateral or any interest therein.
(b) Except for transfers of Partnership interests not
prohibited by, and not giving rise to a Default or Event of Default under this
Agreement or the Common Agreement, the Pledgor agrees that it will not authorize
or cause the Partnership to issue any Partnership interest to any other party
without prior written consent from the Collateral Agent. The Pledgor agrees that
it will pledge hereunder, immediately upon its acquisition (directly or
indirectly) thereof, any and all additional limited partnership interests issued
to it by the Partnership.
(c) The Pledgor shall preserve and maintain (i) its legal
existence, as a limited partnership in good standing under the Laws of the State
of Delaware and (ii) its qualification to do business in every jurisdiction
where the ownership of its property and the nature of its business require it to
be so qualified and where the failure to be so qualified would have a material
adverse effect on the Pledgor.
(d) Until such time as there shall be no Bonds Outstanding
under the Indenture, the Pledgor (i) shall limit its purpose to the holding and
management of the Pledged Collateral; (ii) shall not create or incur or suffer
to exist any Indebtedness; and (iii) shall not enter into any transaction of
merger or consolidation, liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution).
(e) The Pledgor shall pay or cause to be paid and discharge
all taxes, assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its property prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, could
reasonably be expected to become a material Lien (other than a Permitted
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<PAGE>
Lien) upon the Pledged Collateral, unless such matters are being challenged by
the Pledgor or the Partnership in good faith and by appropriate proceedings
diligently conducted. The Pledgor will promptly pay or cause to be paid any
valid, final judgment enforcing any such tax, assessment, charge, levy or claim
and cause the same to be satisfied of record.
(f) Subject to SECTION 7 hereof, the Pledgor shall remain a
limited partner of the Partnership and shall not withdraw from the Partnership
without the written approval of the Collateral Agent.
(g) The Pledgor hereby agrees that it will give S&P (or cause
the Partnership to give S&P) prior written notice of any amendment to the
Partnership Agreement that will (i) affect the actions for which unanimous
approval or consent of the general partners is required, or (ii) reduce the vote
required for the actions which currently require the unanimous approval or
consent of the general partners.
Section 8. COMPLIANCE WITH CERTIFICATE REQUIREMENTS REGARDING
SUBSTANTIVE CONSOLIDATION.
The Pledgor will not take any action or omit to take any action if such
action or omission would be inconsistent with the certifications made in the
Certificate(s) listed in Exhibit A hereto; except for any such action or
omission as to which the Pledgor shall have received a reasoned opinion of
counsel to the Partnership (and shall have delivered a copy thereof to the
Collateral Agent) to the effect that, after giving effect to such action or
omission, and subject to customary qualifications and exceptions, in a
bankruptcy proceeding involving Tenaska Energy, Inc., the assets and liabilities
of the Partnership should not be consolidated with those of Tenaska Energy, Inc.
Section 9. COLLATERAL AGENT MAY PERFORM. If the Pledgor fails to
perform any agreement contained herein after receipt of a written request to do
so from the Collateral Agent, the Collateral Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Collateral
Agent, including the fees and expenses of its counsel, incurred in connection
therewith shall be payable by the Pledgor under SECTION 14 hereof.
Section 10. REASONABLE CARE. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equivalent to that which the Collateral Agent accords its own
property of the type of which the Pledged Collateral consists, it being
understood that the Collateral Agent shall have no responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Pledged Collateral, whether
or not the Collateral Agent has or is deemed to have knowledge of such matters,
or (ii) taking any necessary steps to preserve rights against any parties with
respect to any Pledged Collateral absent its gross negligence and willful
misconduct.
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Section 11. NO LIABILITY. None of the Collateral Agent or the Senior
Parties or any of their directors, officers, employees or agents shall be deemed
to have assumed any of the liabilities or obligations of a partner of the
Partnership as a result of the pledge and security interest granted under or
pursuant to this Agreement. None of the Collateral Agent or the Senior Parties
or any of their directors, officers, employees or agents shall be liable for any
failure to collect or realize upon the Obligations or any collateral security or
guarantee therefor, or any part thereof, or for any delay in so doing nor shall
it be under any obligation to take any action whatsoever with regard thereto.
Section 12. REMEDIES UPON A TRIGGER EVENT. If a Trigger Event shall
have occurred and be continuing:
(a) (i) The Collateral Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the Uniform Commercial Code (the
"Code") then in effect in the State of New York, or unless prohibited
by applicable Law or the Uniform Commercial Code then in effect in any
other applicable jurisdiction, and the Collateral Agent may also, upon
the direction of the Required Senior Parties, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one
or more parcels at a public or private sale or at any of the Collateral
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Collateral Agent may reasonably deem commercially reasonable (as
directed by the Required Senior Parties), irrespective of the impact of
any such sales on the market price of the Pledged Collateral at any
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of the Pledgor, and
the Pledgor hereby waives (to the extent permitted by Law) all rights
of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of Law or statute now existing
or hereafter enacted. The Pledgor agrees that, to the extent notice of
sale shall be required by Law, at least ten (10) days' notice to the
Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been
given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to
which it was so adjourned. The Collateral Agent shall incur no
liability as a result of the sale of the Pledged Collateral, or any
part thereof, at any public or private sale. The Pledgor hereby waives
any claims against the Collateral Agent arising by reason of the fact
that the price at which any Pledged Collateral may have been sold at
such a private sale, if commercially reasonable, was less than the
price which might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.
(ii) The Pledgor recognizes that the Collateral Agent may
elect, upon the direction of the Senior Parties, to sell all or a part
of the Pledged Collateral to one or more purchasers in privately
negotiated transactions in which the purchasers will be
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<PAGE>
obligated to agree, among other things, to acquire the Pledged
Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. The Pledgor acknowledges that any
such private sales may be at prices and on terms less favorable than
those obtainable through a public sale (including, without limitation,
a public offering made pursuant to a registration statement under the
Securities Act of 1933, as amended (the "Securities Act")), and the
Pledgor and the Collateral Agent agree that such private sales shall be
made in a commercially reasonable manner and that the Collateral Agent
has no obligation to engage in public sales and no obligation to delay
the sale of any Pledged Collateral to permit the issuer thereof to
register the Pledged Collateral for a form of public sale requiring
registration under the Securities Act.
(b) Any cash held by the Collateral Agent as Pledged
Collateral and all cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Pledged Collateral shall, as soon as reasonably practicable, be applied (after
payment of any amounts payable to the Collateral Agent pursuant to SECTION 14)
by the Collateral Agent FIRST to the payment of the costs and expenses of such
sale, collection or other realization, if any, including reasonable compensation
to the Collateral Agent and its agents and counsel, and all expenses,
liabilities and advances made or incurred by the Collateral Agent in connection
therewith; and SECOND to the payment of the Obligations in accordance with the
terms of the Collateral Agency Agreement; and THEN, all remaining amounts shall
promptly be paid to the Pledgor.
Section 13. PURCHASE OF THE PLEDGED COLLATERAL. The Pledgor may be a
purchaser of the Pledged Collateral or any part thereof or any right or interest
therein at any sale thereof, whether pursuant to foreclosure, power of sale or
otherwise hereunder and the Collateral Agent may apply the purchase price to the
payment of the Obligations secured hereby. Any purchaser of all or any part of
the Pledged Collateral shall, upon any such purchase, acquire good title to the
Pledged Collateral so purchased, free of the security interests created by this
Agreement.
Section 14. EXPENSES. The Pledgor will, upon demand, pay to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, and
any transfer taxes, in each case payable upon sale of the Pledged Collateral,
which the Collateral Agent may incur in connection with (i) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral pursuant to the exercise or enforcement of any of the
rights of the Collateral Agent hereunder or (ii) the failure by the Pledgor to
perform or observe any of the provisions hereof, together with interest thereon
from the date of demand at the rate per annum equal to the Default Rate. Any
amount payable by the Pledgor pursuant to this SECTION 14 shall be payable on
demand and shall constitute Obligations secured hereby.
Section 15. NO WAIVER. No failure or delay on the part of the
Collateral Agent to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
of any right, power or remedy. The remedies herein provided are to the fullest
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<PAGE>
extent permitted by Law cumulative and are not exclusive of any remedies
provided by Law. No notice to or demand on the Pledgor in any case shall entitle
the Pledgor to any other or further notice or demand in similar or other
circumstances.
Section 16. AMENDMENTS. ETC. No waiver, amendment, modification or
termination of any provision of this Agreement, or consent to any departure by
the Pledgor therefrom, shall in any event be effective without the written
concurrence of the Collateral Agent and none of the Pledged Collateral shall be
released without the written consent of the Collateral Agent. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 17. RELEASE. Upon the Maturity Date, the Collateral Agent, upon
request by the Pledgor, shall execute and deliver all such documentation
necessary to release the liens created pursuant to this Agreement.
Section 18. NOTICES. Any notice to the Collateral Agent shall be deemed
effective only if sent to and received at the office of the Collateral Agent at
450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Annette
M. Marsula, International & Project Finance Service Delivery or sent by
confirmed telecopy to telecopy number (212) 946-8178. Any notice to the Pledgor
hereunder shall be deemed to have been duly given only if sent to and received
at the office of the Pledgor at 1044 North 115th Street, Suite 400, Omaha,
Nebraska 68154, Attention: Managing General Partner, or sent by confirmed
telecopy to telecopy number (402) 691-9550, or at such other address of which
such Person shall have notified in writing the party giving such notice.
Section 19. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing Lien in the Pledged Collateral until the release thereof pursuant to
SECTION 17 hereof. The Collateral Agent may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other person or entity
in accordance with the Indenture, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to the
Collateral Agent herein or otherwise.
Section 20. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Pledgor
hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any of the
Financing Documents, the Project Documents or any other agreement or
instrument relating thereto (other than against the Collateral Agent);
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any
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consent to any departure from the Financing Documents, the Project
Documents or any other agreement or instrument relating thereto;
(c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Pledgor.
Section 21. INDEMNITY. (a) The Pledgor agrees to indemnify, reimburse
and hold the Collateral Agent and the Senior Parties and their respective
officers, directors, employees and agents (each individually, an "INDEMNITEE,"
and collectively, "INDEMNITEES") harmless from any and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions, suits,
judgments and any and all costs and expenses (including reasonable attorneys'
fees and disbursements) (such expenses, for purposes of this SECTION 21,
hereinafter "EXPENSES") of whatsoever kind and nature imposed on, asserted
against or incurred by any of the Indemnitees in any way relating to this
Agreement or the Pledged Collateral and arising out of (i) this Agreement or the
documents executed in connection herewith or in any other way connected with the
administration of the transactions contemplated hereby, or the enforcement of
any of the terms hereof, or the preservation of any rights hereunder, (ii) the
ownership, purchase, delivery, control, acceptance, financing, possession,
condition, sale, return or other disposition, or use of, the Pledged Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), (iii) the violation of the Laws of any country, state or other
governmental body or unit, (iv) any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person including any Indemnitee), or property
damage, or (v) any contract claim, excluding in all cases those Expenses, claims
and liabilities finally judicially determined to have arisen solely from the
gross negligence or willful misconduct of any Indemnitee. Each Indemnitee agrees
to use its best efforts to promptly notify the Pledgor of any assertion of any
such liability, damage, injury, penalty, claim, demand, action, judgment or suit
of which such Indemnitee has knowledge.
(b) Without limiting the application of SECTION 21(a), the
Pledgor agrees to pay, or reimburse the Collateral Agent for any and all
reasonable fees, costs and Expenses of whatever kind or nature incurred in
connection with the creation, preservation, protection or validation of the
Collateral Agent's Liens on, and security interest in, the Pledged Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Pledged Collateral,
premiums for insurance with respect to the Pledged Collateral and all other
reasonable fees, costs and expenses in connection with protecting, maintaining
or preserving the Pledged Collateral and the Collateral Agent's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Pledged Collateral.
(c) Without limiting the application of SECTION 21(a), the
Pledgor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, reasonable costs,
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damages and reasonable expenses which such Indemnitee may suffer, expend or
incur in consequence of or growing out of any failure of the Pledgor to comply
with its obligations under this Agreement, or any misrepresentation by the
Pledgor in this Agreement, or in any statement or writing contemplated by or
made or delivered pursuant to or in connection with this Agreement.
(d) If and to the extent that the obligations of the Pledgor
under this SECTION 21 are unenforceable for any reason, the Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable Law.
Section 22. OBLIGATIONS SECURED BY PLEDGED COLLATERAL. Any amounts paid
by any Indemnitee as to which such indemnitee has the right to reimbursement,
and any amounts paid by the Collateral Agent in preservation of any of its
rights or interest in the Pledged Collateral, together with interest on such
amounts from the date paid until reimbursement in full at a rate per annum equal
at all times to the Default Rate, shall constitute Obligations secured by the
Pledged Collateral.
Section 23. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Where provisions of any
Law or regulation resulting in such prohibition or unenforceability may be
waived, they are hereby waived by the parties hereto to the full extent
permitted by Law so that this Agreement shall be deemed a valid, binding
agreement in accordance with its terms.
Section 24. COUNTERPARTS; EFFECTIVENESS. This Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts, when taken together, shall constitute but one and the same
instrument. This Agreement shall become effective upon the execution and
delivery of a counterpart hereof by each of the parties hereto.
Section 25. REINSTATEMENT. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by the Collateral Agent or any Senior Party hereunder or pursuant
hereto is rescinded or must otherwise be restored or returned by the Collateral
Agent or such Senior Party, as the case may be, upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Pledgor or the Partnership or
upon the appointment of any intervenor or conservator of, or trustee or similar
official for, the Pledgor or the Partnership or any substantial part of their
respective assets, or upon the entry of an order by a bankruptcy court avoiding
the payment of such amount, or otherwise, all as though such payments had not
been made.
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Section 26. WAIVER OF SUBROGATION; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL.
(a) UNTIL THE PAYMENT IN FULL OF THE OBLIGATIONS, THE PLEDGOR
IRREVOCABLY WAIVES ALL RIGHTS OF SUBROGATION (WHETHER CONTRACTUAL, UNDER SECTION
509 OF TITLE 11 OF THE UNITED STATES CODE, 11 U.S.C. ss. 101, ET SEQ. (THE
"BANKRUPTCY CODE"), UNDER COMMON LAW, OR OTHERWISE) TO THE CLAIMS OF THE
COLLATERAL AGENT AGAINST THE PLEDGOR WHICH ARISE IN CONNECTION WITH, OR AS A
RESULT OF, THIS AGREEMENT.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND THE PLEDGOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. THE PLEDGOR AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVE
TRIAL BY JURY, AND THE PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) THE PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE PLEDGOR AT ITS ADDRESS SPECIFIED BY SECTION 18, SUCH SERVICE TO BECOME
EFFECTIVE FOUR (4) DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL
AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN ANY OTHER JURISDICTION.
Section 27. GOVERNING LAW; TERMS. THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR THE REMEDIES
HEREUNDER, ARE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK. UNLESS OTHERWISE DEFINED HEREIN OR IN THE COMMON AGREEMENT, TERMS
DEFINED IN ARTICLE 8 OR ARTICLE 9 OF THE NEW YORK UNIFORM COMMERCIAL CODE ARE
USED HEREIN AS THEREIN DEFINED.
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Section 28. RECOURSE LIMITED TO PLEDGED COLLATERAL. Notwithstanding
anything herein to the contrary, including without limitation SECTION 21, the
Collateral Agent acknowledges and agrees on behalf of itself and each Senior
Party, that neither the Pledgor, nor any past or present shareholder, officer,
employee, servant, controlling Person, executive, director, agent, or authorized
representative or Affiliate (other than the Partnership) of the Pledgor, shall
be personally liable for any deficiency in the payment or satisfaction of the
Obligations of the Pledgor and that the sole recourse of the Collateral Agent
and each Senior Party for payment and performance of the obligations of the
Pledgor hereunder shall be to the Pledged Collateral.
Section 29. AUTHORITY OF COLLATERAL AGENT. The Pledgor acknowledges
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the Senior
Parties, be governed by the Collateral Agency Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Pledgor, the Collateral Agent shall be
conclusively presumed to be acting as agent for the Senior Parties with full and
valid authority so to act or refrain from acting, and the Pledgor shall not be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
Section 30. CONFLICTS WITH THE COLLATERAL AGENCY AGREEMENT.
Notwithstanding any provision contained herein to the contrary, in the event of
any conflict between the terms of this Agreement and the Collateral Agency
Agreement, the terms of the Collateral Agency Agreement shall control.
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IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have caused
this Agreement to be duly executed and delivered by their officers thereunto
duly authorized as of the date first above written.
TENASKA GEORGIA I, L.P., by
Tenaska Georgia, Inc.
Managing General Partner
By: /s/ Michael F. Lawler
---------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
---------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
EXHIBIT A
CERTIFICATE(S)
Certificate of Tenaska Georgia I, L.P., a Delaware limited partnership, dated
November 10, 1999 and issued in connection with the opinion of special counsel
to the Partnership with respect to the issue of substantive consolidation in
connection with a bankruptcy of Tenaska Energy, Inc.
<PAGE>
Exhibit 4.7
TENASKA GEORGIA PARTNERS, L.P.
$275,000,000 9.50% SENIOR SECURED BONDS DUE 2030
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
November 10, 1999
Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
TD Securities (USA) Inc.
31 West 52nd Street
New York, New York 10019
Ladies and Gentlemen:
Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to issue and sell to the Initial Purchasers (as defined
herein) upon the terms set forth in the Purchase Agreement (as defined herein)
its $275,000,000 9.50% Senior Secured Bonds Due 2030. As an inducement to the
Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchasers thereunder, the
Partnership agrees with the Initial Purchasers for the benefit of holders (as
defined herein) from time to time of the Registrable Securities (as defined
herein) as follows:
1. CERTAIN DEFINITIONS. For purposes of this Exchange and Registration
Rights Agreement, the following terms shall have the following respective
meanings:
<PAGE>
"BASE INTEREST" shall mean the interest that would otherwise
accrue on the Securities under the terms thereof and the Indenture,
without giving effect to the provisions of this Agreement.
The term "BROKER-DEALER" shall mean any broker or dealer
registered with the Commission under the Exchange Act.
"CLOSING DATE" shall mean the date on which the Securities are
initially issued.
"COMMISSION" shall mean the United States Securities and
Exchange Commission, or any other federal agency at the time
administering the Exchange Act or the Securities Act, whichever is the
relevant statute for the particular purpose.
"EFFECTIVE TIME," in the case of (i) an Exchange Registration,
shall mean the time and date as of which the Commission declares the
Exchange Registration Statement effective or as of which the Exchange
Registration Statement otherwise becomes effective and (ii) a Shelf
Registration, shall mean the time and date as of which the Commission
declares the Shelf Registration Statement effective or as of which the
Shelf Registration Statement otherwise becomes effective.
"ELECTING HOLDER" shall mean any holder of Registrable
Securities that has returned a completed and signed Notice and
Questionnaire to the Partnership in accordance with Section 3(d)(ii) or
3(d)(iii).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
or any successor thereto, as the same shall be amended from time to
time.
"EXCHANGE OFFER" shall have the meaning assigned thereto in
Section 2(a)
"EXCHANGE REGISTRATION" shall have the meaning assigned
thereto in Section 3(c).
"EXCHANGE REGISTRATION STATEMENT" shall have the meaning
assigned thereto in Section 2(a).
<PAGE>
"EXCHANGE SECURITIES" shall have the meaning assigned thereto
in Section 2(a) hereof.
The term "HOLDER" shall mean each of the Initial Purchasers
and other persons who acquire Registrable Securities from time to time
(including any successors or assigns), in each case for so long as such
person owns any Registrable Securities.
"INDENTURE" shall mean the Trust Indenture, dated as of
November 1, 1999, between the Partnership, The Chase Manhattan Bank, as
Depositary Bank and The Chase Manhattan Bank, as Trustee, as the same
shall be amended from time to time.
"NOTICE AND QUESTIONNAIRE" means a Notice of Registration
Statement and Selling Security holder Questionnaire substantially in
the form of Exhibit A hereto.
The term "PERSON" shall mean a corporation, association,
partnership, organization, business, individual, government or
political subdivision thereof or governmental agency.
"PURCHASE AGREEMENT" shall mean the Purchase Agreement, dated
November 3, 1999, between the Initial Purchasers and the Partnership
relating to the Securities.
"INITIAL PURCHASERS" shall mean the Initial Purchasers named
in Schedule I to the Purchase Agreement.
"REGISTRABLE SECURITIES" shall mean the Securities; PROVIDED,
HOWEVER, that a Security shall cease to be a Registrable Security when
(i) in the circumstances contemplated by Section 2(a), the Security has
been exchanged for an Exchange Security in an Exchange Offer as
contemplated in Section 2(a) (PROVIDED that any Exchange Security that,
pursuant to the last two sentences of Section 2(a), is included in a
prospectus for use in connection with resales by broker-dealers shall
be deemed to be a Registrable Security with respect to Sections 5, 6
and 9 until resale of such Registrable Security has been effected
within the 180-day period referred to in Section 2(a)), (ii) in the
circumstances contemplated by Section 2(b) hereof, a Shelf Registration
<PAGE>
Statement registering such Security under the Securities Act has been
declared or becomes effective and such Security has been sold or
otherwise transferred by the holder thereof pursuant to and in a manner
contemplated by such effective Shelf Registration Statement; (iii) such
Security is sold pursuant to Rule 144 under circumstances in which any
legend borne by such Security relating to restrictions on
transferability thereof, under the Securities Act or otherwise, is
removed by the Partnership or pursuant to the Indenture; (iv) such
Security is eligible to be sold pursuant to paragraph (k) of Rule 144;
or (v) such Security shall cease to be outstanding.
"REGISTRATION DEFAULT" shall have the meaning assigned thereto
in Section 2(c).
"REGISTRATION EXPENSES" shall have the meaning assigned
thereto in Section 4.
"RESALE PERIOD" shall have the meaning assigned thereto in
Section 2(a). .
"RESTRICTED HOLDER" shall mean (i) a holder that is an
affiliate of the Partnership within the meaning of Rule 405, (ii) a
holder who acquires Exchange Securities outside the ordinary course of
such holder's business, (iii) a holder who has arrangements or
understandings with any person to participate in the Exchange Offer for
the purpose of distributing Exchange Securities and (iv) a holder that
is a broker-dealer, but only with respect to Exchange Securities
received by such broker-dealer pursuant to an Exchange Offer in
exchange for Registrable Securities acquired by the broker-dealer
directly from the Partnership.
"RULE 144," "RULE 405" AND "RULE 415" shall mean, in each
case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.
"SECURITIES" shall mean, collectively, the $275,000,000 9.50%
Senior Secured Bonds Due 2030 of the Partnership to be issued and sold
to the Initial Purchasers, and securities issued in exchange therefor
or in lieu thereof pursuant to the Indenture.
<PAGE>
"SECURITIES ACT" shall mean the Securities Act of 1933, or any
successor thereto, as the same shall be amended from time to time.
"SHELF REGISTRATION" shall have the meaning assigned thereto
in Section 2(b).
"SHELF REGISTRATION STATEMENT" shall have the meaning assigned
thereto in Section 2(b).
"SPECIAL INTEREST" shall have the meaning assigned thereto in
Section 2(c).
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of
1939, or any successor thereto, and the rules, regulations and forms
promulgated thereunder, all as the same shall be amended from time to
time.
Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Exchange and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and
Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) Except as set forth in Section 2(b), the Partnership
agrees to file under the Securities Act, as soon as practicable, but no
later than 150 days after the Closing Date, a registration statement
relating to an offer to exchange (such registration statement, the
"Exchange Registration Statement", and such offer, the "Exchange
Offer") any and all of the Securities for a like aggregate principal
amount of debt securities issued by the Partnership which debt
securities are substantially identical to the Securities (and are
entitled to the benefits of a trust indenture which is substantially
identical to the Indenture or is the Indenture and which has been
qualified under the Trust Indenture Act), except that they have been
registered pursuant to an effective registration statement under the
Securities Act and do not contain provisions for the additional
interest contemplated in Section 2(c) (such new debt securities
hereinafter called "Exchange Securities"). The Partnership agrees to
use its reasonable best efforts to cause
<PAGE>
the Exchange Registration Statement to become effective under the
Securities Act as soon as practicable, but no later than 270 days after
the Closing Date. The Exchange Offer will be registered under the
Securities Act on the appropriate form and will comply with all
applicable tender offer rules and regulations under the Exchange Act.
The Partnership further agrees to use its reasonable best efforts to
commence and complete the Exchange Offer promptly, but no later than 45
days after such registration statement has become effective, hold the
Exchange Offer open for at least 20 business days and exchange Exchange
Securities for all Registrable Securities that have been properly
tendered and not withdrawn on or prior to the expiration of the
Exchange Offer. The Exchange Offer will be deemed to have been
"completed" only if the debt securities received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities
are, upon receipt, transferable by each such holder without restriction
under the Securities Act and the Exchange Act and without material
restrictions under the blue sky or securities laws of a substantial
majority of the States of the United States of America, which shall be
deemed to have occurred upon the Partnership having exchanged, pursuant
to the Exchange Offer, Exchange Securities for all Registrable
Securities that have been properly tendered and not withdrawn before
the expiration of the Exchange Offer, which shall be on a date that is
at least 20 business days following the commencement of the Exchange
Offer. The Partnership agrees (x) to include in the Exchange
Registration Statement a prospectus for use in any resales by any
holder of Exchange Securities that is a broker-dealer and (y) to keep
such Exchange Registration Statement effective for a period (the
"Resale Period") beginning when Exchange Securities are first issued in
the Exchange Offer and ending upon the earlier of the expiration of the
180th day after the Exchange Offer has been completed or such time as
such broker-dealers no longer own any Registrable Securities. With
respect to such Exchange Registration Statement, such holders shall
have the benefit of the rights of indemnification and contribution set
forth in Sections 6(a), (c), (d) and (e).
(b) If (i) on or prior to the time the Exchange Offer is
completed existing Commission interpretations are changed such that the
debt securities received by holders other than Restricted Holders in
the Exchange Offer for Registrable Securities are not or would not be,
upon receipt, transferable by each such holder without restriction
under the Securities Act, (ii) the Exchange Offer has not been
completed within 315 days following the Closing Date or (iii) the
Exchange Offer is not available to any holder of the
<PAGE>
Securities, the Partnership agrees to, in lieu of (or, in the case of
clause (iii), in addition to) conducting the Exchange Offer
contemplated by Section 2(a), file under the Securities Act as soon as
practicable, but no later than 30 days after the time such obligation
to file arises, a "shelf" registration statement providing for the
registration of, and the sale on a continuous or delayed basis by the
holders of, all of the Registrable Securities, pursuant to Rule 415 or
any similar rule that may be adopted by the Commission (such filing,
the "Shelf Registration" and such registration statement, the "Shelf
Registration Statement"). The Partnership agrees to use its reasonable
best efforts (x) to cause the Shelf Registration Statement to become or
be declared effective no later than 120 days after such Shelf
Registration Statement is filed and to keep such Shelf Registration
Statement continuously effective for a period ending on the earlier of
the second anniversary of the Effective Time or such time as there are
no longer any Registrable Securities outstanding (or such shorter
period as may be prescribed by paragraph (k) of Rule 144), PROVIDED,
HOWEVER, that no holder shall be entitled to be named as a selling
security holder in the Shelf Registration Statement or to use the
prospectus forming a part thereof for resales of Registrable Securities
unless such holder is an Electing Holder, and (y) after the Effective
Time of the Shelf Registration Statement, promptly upon the request of
any holder of Registrable Securities that is not then an Electing
Holder, to take any action reasonably necessary to enable such holder
to use the prospectus forming a part thereof for resales of Registrable
Securities, including, without limitation, any action necessary to
identify such holder as a selling security holder in the Shelf
Registration Statement, PROVIDED, HOWEVER, that nothing in this clause
(y) shall relieve any such holder of the obligation to return a
completed and signed Notice and Questionnaire to the Partnership in
accordance with Section 3(d)(iii). The Partnership further agrees to
supplement or make amendments to the Shelf Registration Statement, as
and when required by the rules, regulations or instructions applicable
to the registration form used by the Partnership for such Shelf
Registration Statement or by the Securities Act or rules and
regulations thereunder for shelf registration, and the Partnership
agrees to furnish to each Electing Holder copies of any such supplement
or amendment prior to its being used or promptly following its filing
with the Commission.
(c) In the event that (i) the Partnership has not filed the
Exchange Registration Statement or Shelf Registration Statement on or
before the date on which such registration statement is required to be
filed pursuant to
<PAGE>
Section 2(a) or 2(b), respectively, (ii) such Exchange Registration
Statement or Shelf Registration Statement has not become effective or
been declared effective by the Commission on or before the date on
which such registration statement is required to become or be declared
effective pursuant to Section 2(a) or 2(b), respectively, or (iii) the
Exchange Offer has not been completed within 45 days after the initial
effective date of the Exchange Registration Statement relating to the
Exchange Offer (if the Exchange Offer is then required to be made) or
(iv) any Exchange Registration Statement or Shelf Registration
Statement required by Section 2(a) or 2(b) is filed and declared
effective but shall thereafter either be withdrawn by the Partnership
or shall become subject to an effective stop order issued pursuant to
Section 8(d) of the Securities Act suspending the effectiveness of such
registration statement (except as specifically permitted herein)
without being succeeded immediately by an additional registration
statement filed and declared effective (each such event referred to in
clauses (i) through (iv), a "Registration Default", then, as liquidated
damages for such Registration Default, subject to the provisions of
Section 9(b), special interest ("Special Interest"), in addition to the
Base Interest, shall accrue on the Securities that are then not
transferable without restriction under the Securities Act from the date
of such Registration Default to the applicable date set forth in the
next sentence at a per annum rate of 0.50%; PROVIDED, HOWEVER, that
Special Interest on the Bonds may not exceed in the aggregate 0.50% per
annum. Special Interest on the Bonds shall cease to accrue (A) in the
case of clause (i) above, upon the filing of the Exchange Registration
Statement or Shelf Registration Statement, (B) in the case of clause
(ii) above upon the effectiveness of the Exchange Offer Registration
Statements or Shelf Registration Statement, (C) in the case of clause
(iii) above, upon the completion of the Exchange Offer and (D) upon the
expiration of two years (or such shorter period as may be prescribed by
paragraph (k) of Rule 144) commencing on the date of the initial
issuance of the Bonds.
(d) The Partnership shall take all actions necessary or
advisable to be taken by it to ensure that the transactions
contemplated herein are effected as so contemplated.
(e) Any reference herein to a registration statement as of any
time shall be deemed to include any document incorporated, or deemed to
be incorporated, therein by reference as of such time and any reference
herein to any post-effective amendment to a registration statement as
of any time shall
<PAGE>
be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time.
3. REGISTRATION PROCEDURES.
If the Partnership files a registration statement pursuant to Section
2(a) or Section 2(b), the following provisions shall apply:
(a) At or before the Effective Time of the Exchange Offer or
the Shelf Registration, as the case may be, the Partnership shall
qualify the Indenture under the Trust Indenture Act of 1939.
(b) In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Partnership shall
appoint a new trustee thereunder pursuant to the applicable provisions
of the Indenture.
(c) In connection with the Partnership's obligations with
respect to the registration of Exchange Securities as contemplated by
Section 2(a) (the "Exchange Registration"), if applicable, the
Partnership shall, as soon as practicable (or as otherwise specified):
(i) prepare and file with the Commission, as soon as
practicable but no later than 150 days after the Closing Date,
an Exchange Registration Statement on any form which may be
utilized by the Partnership and which shall permit the
Exchange Offer and resales of Exchange Securities by
broker-dealers during the Resale Period to be effected as
contemplated by Section 2(a), and use its best efforts to
cause such Exchange Registration Statement to become effective
as soon as practicable thereafter, but no later than 270 days
after the Closing Date;
(ii) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Exchange
Registration Statement and the prospectus included therein as
may be necessary to effect and maintain the effectiveness of
such Exchange Registration Statement for the periods and
purposes contemplated in Section 2(a) and as may be required
by the applicable rules and
<PAGE>
regulations of the Commission and the instructions applicable
to the form of such Exchange Registration Statement, and
promptly provide each broker-dealer holding Exchange
Securities with such number of copies of the prospectus
included therein (as then amended or supplemented), in
conformity in all material respects with the requirements of
the Securities Act and the Trust Indenture Act and the rules
and regulations of the Commission thereunder, as such
broker-dealer reasonably may request prior to the expiration
of the Resale Period, for use in connection with resales of
Exchange Securities;
(iii) promptly notify each broker-dealer that has
requested or received copies of the prospectus included in
such registration statement, and confirm such advice in
writing, (A) when such Exchange Registration Statement or the
prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and,
with respect to such Exchange Registration Statement or any
post-effective amendment, when the same has become effective,
(B) of any comments by the Commission and by the blue sky or
securities commissioner or regulator of any state with respect
thereto or any request by the Commission for amendments or
supplements to such Exchange Registration Statement or
prospectus or for additional information, (C) of the issuance
by the Commission of any stop order suspending the
effectiveness of such Exchange Registration Statement or the
initiation or threatening of any proceedings for that purpose,
(D) if at any time the representations and warranties of the
Partnership contemplated by Section 5 cease to be true and
correct in all material respects, (E) of the receipt by the
Partnership of any notification with respect to the suspension
of the qualification of the Exchange Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (F) at any time during the
Resale Period when a prospectus is required to be delivered
under the Securities Act, that such Exchange Registration
Statement, prospectus, prospectus amendment or supplement or
post-effective amendment does not conform in all material
respects to the applicable requirements of the Securities Act
and the Trust Indenture Act and the rules and regulations of
the Commission thereunder or contains an untrue statement of a
material fact or omits to state any material fact
<PAGE>
necessary to make the statements therein not misleading in
light of the circumstances then existing;
(iv) in the event that the Partnership would be
required, pursuant to Section 3(c)(iii)(F), to notify any
broker-dealers holding Exchange Securities, without delay
prepare and furnish to each such holder a reasonable number of
copies of a prospectus supplemented or amended so that, as
thereafter delivered to Purchaser of such Exchange Securities
during the Resale Period, such prospectus shall conform in all
material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and shall not contain
an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not
misleading in light of the circumstances then existing;
(v) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of such
Exchange Registration Statement or any post-effective
amendment thereto at the earliest practicable date;
(vi) use its reasonable best efforts to (A) register
or qualify the Exchange Securities under the securities laws
or blue sky laws of such jurisdictions as are contemplated by
Section 2(a) no later than the commencement of the Exchange
Offer, (B) keep such registrations or qualifications in effect
and comply with such laws so as to permit the continuance of
offers, sales and dealings therein in such jurisdictions until
the expiration of the Resale Period and (C) take any and all
other actions as may be reasonably necessary or advisable to
enable each broker-dealer holding Exchange Securities to
consummate the disposition thereof in such jurisdictions;
PROVIDED, HOWEVER, that the Partnership shall not be required
for any such purpose to (1) qualify as a foreign partnership
in any jurisdiction wherein it would not otherwise be required
to qualify but for the requirements of this Section 3(c)(vi),
(2) consent to general service of process in any such
jurisdiction or (3) make any changes to its partnership
agreement or other organizational documents or any agreement
between it and its partners;
<PAGE>
(vii) use its reasonable best efforts to obtain the
consent or approval of each governmental agency or authority,
whether federal, state or local, which may be required to
effect the Exchange Registration, the Exchange Offer and the
offering and sale of Exchange Securities by broker-dealers
during the Resale Period;
(viii) provide a CUSIP number for all Exchange
Securities, not later than the applicable Effective Time;
(ix) comply with all applicable rules and regulations
of the Commission, and make generally available to its
security holders as soon as practicable but no later than
eighteen months after the effective date of such Exchange
Registration Statement, an earning statement of the
Partnership and its subsidiaries complying with Section 11(a)
of the Securities Act (including, at the option of the
Partnership, Rule 158 thereunder).
(d) In connection with the Partnership's obligations with
respect to the Shelf Registration, if applicable, the Partnership
shall, as soon as practicable (or as otherwise specified):
(i) prepare and file with the Commission, as soon as
practicable but in any case within the time periods specified
in Section 2(b), a Shelf Registration Statement on any form
which may be utilized by the Partnership and which shall
register all of the Registrable Securities for resale by the
holders thereof in accordance with such method or methods of
disposition as may be specified by such of the holders as,
from time to time, may be Electing Holders and use its
reasonable best efforts to cause such Shelf Registration
Statement to become effective as soon as practicable but in
any case within the time periods specified in Section 2(b);
(ii) not less than 30 calendar days prior to the
Effective Time of the Shelf Registration Statement, mail the
Notice and Questionnaire to the holders of Registrable
Securities; no holder shall be entitled to be named as a
selling security holder in the Shelf Registration Statement as
of the Effective Time, and no holder shall be entitled to use
the prospectus forming a part thereof for resales of
<PAGE>
Registrable Securities at any time, unless such holder has
returned a completed and signed Notice and Questionnaire to
the Partnership by the deadline for response set forth
therein; PROVIDED, HOWEVER, holders of Registrable Securities
shall have at least 28 calendar days from the date on which
the Notice and Questionnaire is first mailed to such holders
to return a completed and signed Notice and Questionnaire to
the Partnership;
(iii) after the Effective Time of the Shelf
Registration Statement, upon the request of any holder of
Registrable Securities that is not then an Electing Holder,
promptly send a Notice and Questionnaire to such holder;
PROVIDED that the Partnership shall not be required to take
any action to name such holder as a selling security holder in
the Shelf Registration Statement or to enable such holder to
use the prospectus forming a part thereof for resales of
Registrable Securities until such holder has returned a
completed and signed Notice and Questionnaire to the
Partnership;
(iv) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Shelf
Registration Statement and the prospectus included therein as
may be necessary to effect and maintain the effectiveness of
such Shelf Registration Statement for the period specified in
Section 2(b) hereof and as may be required by the applicable
rules and regulations of the Commission and the instructions
applicable to the form of such Shelf Registration Statement,
and furnish to the Electing Holders copies of any such
supplement or amendment simultaneously with or prior to its
being used or filed with the Commission;
(v) comply with the provisions of the Securities Act
with respect to the disposition of all of the Registrable
Securities covered by such Shelf Registration Statement in
accordance with the intended methods of disposition by the
Electing Holders provided for in such Shelf Registration
Statement;
(vi) provide (A) the Electing Holders, (B) the
underwriters (which term, for purposes of this Exchange and
Registration Rights Agreement, shall include a person deemed
to be
<PAGE>
an underwriter within the meaning of Section 2(a)(11) of the
Securities Act), if any, thereof, (C) any sales or placement
agent therefor, (D) counsel for any such underwriter or agent
and (E) not more than one counsel for all the Electing Holders
the opportunity to participate in the preparation of such
Shelf Registration Statement, each prospectus included therein
or filed with the Commission and each amendment or supplement
thereto;
(vii) for a reasonable period prior to the filing of
such Shelf Registration Statement, and throughout the period
specified in Section 2(b), make available at reasonable times
at the Partnership's principal place of business or such other
reasonable place for inspection by the persons referred to in
Section 3(d)(vi) who shall certify to the Partnership that
they have a current intention to sell the Registrable
Securities pursuant to the Shelf Registration such financial
and other information and books and records of the
Partnership, and cause the officers, employees, counsel and
independent certified public accountants of the Partnership to
respond to such inquiries, as shall be reasonably necessary,
in the judgment of the respective counsel referred to in such
Section, to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act; PROVIDED,
HOWEVER, that each such party shall be required to maintain in
confidence and not to disclose to any other person any
information or records reasonably designated by the
Partnership as being confidential, until such time as (A) such
information becomes a matter of public record (whether by
virtue of its inclusion in such registration statement or
otherwise), (B) such person shall be required so to disclose
such information pursuant to a subpoena or order of any court
or other governmental agency or body having jurisdiction over
the matter (subject to the requirements of such order, and
only after such person shall have given the Partnership prompt
prior written notice of such requirement), or (C) such
information is required to be set forth in such Shelf
Registration Statement or the prospectus included therein or
in an amendment to such Shelf Registration Statement or an
amendment or supplement to such prospectus in order that such
Shelf Registration Statement, prospectus, amendment or
supplement, as the case may be, complies with applicable
requirements of the federal securities laws and the rules and
regulations of the Commission and does not contain an
<PAGE>
untrue statement of a material fact or omit to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing;
(viii) promptly notify each of the Electing Holders,
any sales or placement agent therefor and any underwriter
thereof (which notification may be made through any managing
underwriter that is a representative of such underwriter for
such purpose) and confirm such advice in writing, (A) when
such Shelf Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to
such Shelf Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any
comments by the Commission and by the blue sky or securities
commissioner or regulator of any state with respect thereto or
any request by the Commission for amendments or supplements to
such Shelf Registration Statement or prospectus or for
additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of such Shelf
Registration Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time the
representations and warranties of the Partnership contemplated
by Section 3(d)(xvii) or Section 5 cease to be true and
correct in all material respects, (E) of the receipt by the
Partnership of any notification with respect to the suspension
of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (F) if at any time when a
prospectus is required to be delivered under the Securities
Act, that such Shelf Registration Statement, prospectus,
prospectus amendment or supplement or post-effective amendment
does not conform in all material respects to the applicable
requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder or
contains an untrue statement of a material fact or omits to
state any material fact necessary to make the statements
therein not misleading in light of the circumstances then
existing;
(ix) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of such
<PAGE>
registration statement or any post-effective amendment thereto
at the earliest practicable date;
(x) if requested by any managing underwriter or
underwriters, any placement or sales agent or any Electing
Holder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as is required by
the applicable rules and regulations of the Commission and as
such managing underwriter or underwriters, such agent or such
Electing Holder specifies should be included therein relating
to the terms of the sale of such Registrable Securities,
including information with respect to the principal amount of
Registrable Securities being sold by such Electing Holder or
agent or to any underwriters, the name and description of such
Electing Holder, agent or underwriter, the offering price of
such Registrable Securities and any discount, commission or
other compensation payable in respect thereof, the purchase
price being paid therefor by such underwriters and with
respect to any other terms of the offering of the Registrable
Securities to be sold by such Electing Holder or agent or to
such underwriters; and make all required filings of such
prospectus supplement or post-effective amendment promptly
after notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(xi) furnish to each Electing Holder, each placement
or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section
3(d)(vi) an executed copy (or, in the case of an Electing
Holder, a conformed copy) of such Shelf Registration
Statement, each such amendment and supplement thereto (in each
case including all exhibits thereto (in the case of an
Electing Holder of Registrable Securities, upon request) and
documents incorporated by reference therein) and such number
of copies of such Shelf Registration Statement (excluding
exhibits thereto and documents incorporated by reference
therein unless specifically so requested by such Electing
Holder, agent or underwriter, as the case may be) and of the
prospectus included in such Shelf Registration Statement
(including each preliminary prospectus and any summary
prospectus), in conformity in all material respects with the
applicable requirements of the Securities
<PAGE>
Act and the Trust Indenture Act and the rules and regulations
of the Commission thereunder, and such other documents, as
such Electing Holder, agent, if any, and underwriter, if any,
may reasonably request in order to facilitate the offering and
disposition of the Registrable Securities owned by such
Electing Holder, offered or sold by such agent or underwritten
by such underwriter and to permit such Electing Holder, agent
and underwriter to satisfy the prospectus delivery
requirements of the Securities Act; and the Partnership hereby
consents to the use of such prospectus (including such
preliminary and summary prospectus) and any amendment or
supplement thereto by each such Electing Holder and by any
such agent and underwriter, in each case in the form most
recently provided to such person by the Partnership, in
connection with the offering and sale of the Registrable
Securities covered by the prospectus (including such
preliminary and summary prospectus) or any supplement or
amendment thereto;
(xii) use its reasonable best efforts to (A) register
or qualify the Registrable Securities to be included in such
Shelf Registration Statement under such securities laws or
blue sky laws of such jurisdictions as any Electing Holder and
each placement or sales agent, if any, therefor and
underwriter, if any, thereof shall reasonably request, (B)
keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers,
sales and dealings therein in such jurisdictions during the
period the Shelf Registration is required to remain effective
under Section 2(b) above and for so long as may be necessary
to enable any such Electing Holder, agent or underwriter to
complete its distribution of Securities pursuant to such Shelf
Registration Statement and (C) take any and all other actions
as may be reasonably necessary or advisable to enable each
such Electing Holder, agent, if any, and underwriter, if any,
to consummate the disposition in such jurisdictions of such
Registrable Securities; PROVIDED, HOWEVER, that the
Partnership shall not be required for any such purpose to (1)
qualify as a foreign partnership in any jurisdiction wherein
it would not otherwise be required to qualify but for the
requirements of this Section 3(d)(xii), (2) consent to general
service of process in any such jurisdiction or (3) make any
<PAGE>
changes to its partnership agreement or other organizational
documents or any agreement between it and its partners;
(xiii) use its reasonable best efforts to obtain the
consent or approval of each governmental agency or authority,
whether federal, state or local, which may be required to
effect the Shelf Registration or the offering or sale in
connection therewith or to enable the selling holder or
holders to offer, or to consummate the disposition of, their
Registrable Securities;
(xiv) unless any Registrable Securities shall be in
book-entry only form, cooperate with the Electing Holders and
the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates, if so
required by any securities exchange upon which any Registrable
Securities are listed, shall be penned, lithographed or
engraved, or produced by any combination of such methods, on
steel engraved borders, and which certificates shall not bear
any restrictive legends; and, in the case of an underwritten
offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing
underwriters may request at least two business days prior to
any sale of the Registrable Securities;
(xv) provide a CUSIP number for all Registrable
Securities, not later than the applicable Effective Time;
(xvi) enter into one or more underwriting agreements,
engagement letters, agency agreements, "best efforts"
underwriting agreements or similar agreements, as appropriate,
including customary provisions relating to indemnification and
contribution, and take such other actions in connection
therewith as any Electing Holders aggregating at least 40% in
aggregate principal amount of the Registrable Securities at
the time outstanding shall request in order to expedite or
facilitate the disposition of such Registrable Securities;
(xvii) whether or not an agreement of the type
referred to in Section 3(d)(xvi) hereof is entered into and
whether or
<PAGE>
not any portion of the offering contemplated by the Shelf
Registration is an underwritten offering or is made through a
placement or sales agent or any other entity, (A) make such
representations and warranties to the Electing Holders and the
placement or sales agent, if any, therefor and the
underwriters, if any, thereof in form, substance and scope as
are customarily made in connection with an offering of debt
securities pursuant to any appropriate agreement or to a
registration statement filed on the form applicable to the
Shelf Registration; (B) obtain an opinion of counsel to the
Partnership in customary form and covering such matters, of
the type customarily covered by such an opinion, as the
managing underwriters, if any, or as any Electing Holders of
at least 40% in aggregate principal amount of the Registrable
Securities at the time outstanding may reasonably request,
addressed to such Electing Holder or Electing Holders and the
placement or sales agent, if any, therefor and the
underwriters, if any, thereof and dated the effective date of
such Shelf Registration Statement (and if such Shelf
Registration Statement contemplates an underwritten offering
of a part or all of the Registrable Securities, dated the date
of the closing under the underwriting agreement relating
thereto) (it being agreed that the matters to be covered by
such opinion shall include the due formation and good standing
of the Partnership; the qualification of the Partnership to
transact business as foreign partnership; the due
authorization, execution and delivery of the relevant
agreement of the type referred to in Section 3(d)(xvi); the
due authorization, execution, authentication and issuance, and
the validity and enforceability, of the Securities; the
absence of material legal or governmental proceedings
involving the Partnership; the absence of a breach by the
Partnership of, or a default under, material agreements
binding upon the Partnership; the absence of governmental
approvals required to be obtained in connection with the Shelf
Registration, the offering and sale of the Registrable
Securities, this Exchange and Registration Rights Agreement or
any agreement of the type referred to in Section 3(d)(xvi),
except such approvals as may be required under state
securities or blue sky laws; the material compliance as to
form of such Shelf Registration Statement and any documents
incorporated by reference therein and of the Indenture with
the requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission
<PAGE>
thereunder, respectively; and, as of the date of the opinion
and of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the
absence from such Shelf Registration Statement and the
prospectus included therein, as then amended or supplemented,
and from the documents incorporated by reference therein (in
each case other than the financial statements and other
financial information contained therein) of an untrue
statement of a material fact or the omission to state therein
a material fact necessary to make the statements therein not
misleading (in the case of such documents, in the light of the
circumstances existing at the time that such documents were
filed with the Commission under the Exchange Act)); (C) obtain
a "cold comfort" letter or letters from the independent
certified public accountants of the Partnership addressed to
the selling Electing Holders, the placement or sales agent, if
any, therefor or the underwriters, if any, thereof, dated (i)
the effective date of such Shelf Registration Statement and
(ii) the effective date of any prospectus supplement to the
prospectus included in such Shelf Registration Statement or
post-effective amendment to such Shelf Registration Statement
which includes unaudited or audited financial statements as of
a date or for a period subsequent to that of the latest such
statements included in such prospectus (and, if such Shelf
Registration Statement contemplates an underwritten offering
pursuant to any prospectus supplement to the prospectus
included in such Shelf Registration Statement or
post-effective amendment to such Shelf Registration Statement
which includes unaudited or audited financial statements as of
a date or for a period subsequent to that of the latest such
statements included in such prospectus, dated the date of the
closing under the underwriting agreement relating thereto),
such letter or letters to be in customary form and covering
such matters of the type customarily covered by letters of
such type; (D) deliver such documents and certificates,
including officers' certificates, as may be reasonably
requested by any Electing Holders of at least 40% in aggregate
principal amount of the Registrable Securities at the time
outstanding or the placement or sales agent, if any, therefor
and the managing underwriters, if any, thereof to evidence the
accuracy of the representations and warranties made pursuant
to clause (A) above or those contained in Section 5(a) and the
compliance with or satisfaction of any agreements or
conditions contained in the underwriting agreement or other
agreement entered
<PAGE>
into by the Partnership; and (E) undertake such obligations
relating to expense reimbursement, indemnification and
contribution as are provided in Section 6;
(xviii) notify in writing each holder of Registrable
Securities of any proposal by the Partnership to amend or
waive any provision of this Exchange and Registration Rights
Agreement pursuant to Section 9(h) and of any amendment or
waiver effected pursuant thereto, each of which notices shall
contain the text of the amendment or waiver proposed or
effected, as the case may be;
(xix) in the event that any broker-dealer registered
under the Exchange Act shall underwrite any Registrable
Securities or participate as a member of an underwriting
syndicate or selling group or "assist in the distribution"
(within the meaning of the Conduct Rules (the "Conduct Rules)
of the National Association of Securities Dealers, Inc.
("NASD") or any successor thereto, as amended from time to
time) thereof, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent or
a broker or dealer in respect thereof, or otherwise, assist
such broker-dealer in complying with the requirements of such
Conduct Rules, including by (A) if such Conduct Rules shall so
require, engaging a "qualified independent underwriter" (as
defined in such Conduct Rules) to participate in the
preparation of the Shelf Registration Statement relating to
such Registrable Securities, to exercise usual standards of
due diligence in respect thereto and, if any portion of the
offering contemplated by such Shelf Registration Statement is
an underwritten offering or is made through a placement or
sales agent, to recommend the yield of such Registrable
Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of
underwriters provided in Section 6 hereof (or to such other
customary extent as may be requested by such underwriter), and
(C) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the
requirements of the Conduct Rules; and
(xx) comply with all applicable rules and regulations
of the Commission, and make generally available to its
<PAGE>
security holders as soon as practicable but in any event not
later than eighteen months after the effective date of such
Shelf Registration Statement, an earning statement of the
Partnership and its subsidiaries complying with Section 11(a)
of the Securities Act (including, at the option of the
Partnership, Rule 158 thereunder).
(e) In the event that the Partnership would be required,
pursuant to Section 3(d)(viii)(F), to notify the Electing Holders, the
placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, the Partnership shall without delay
prepare and furnish to each of the Electing Holders, to each placement
or sales agent, if any, and to each such underwriter, if any, a
reasonable number of copies of a prospectus supplemented or amended so
that, as thereafter delivered to Purchaser of Registrable Securities,
such prospectus shall conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder and
shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing. Each Electing Holder agrees that upon
receipt of any notice from the Partnership pursuant to Section
3(d)(viii)(F), such Electing Holder shall forthwith discontinue the
disposition of Registrable Securities pursuant to the Shelf
Registration Statement applicable to such Registrable Securities until
such Electing Holder shall have received copies of such amended or
supplemented prospectus, and if so directed by the Partnership, such
Electing Holder shall deliver to the Partnership (at the Partnership's
expense) all copies, other than permanent file copies, then in such
Electing Holder's possession of the prospectus covering such
Registrable Securities at the time of receipt of such notice.
(f) In the event of a Shelf Registration, in addition to the
information required to be provided by each Electing Holder in its
Notice Questionnaire, the Partnership may require such Electing Holder
to furnish to the Partnership such additional information regarding
such Electing Holder and such Electing Holder's intended method of
distribution of Registrable Securities as may be required in order to
comply with the Securities Act. Each such Electing Holder agrees to
notify the Partnership as promptly as practicable of any inaccuracy or
change in information previously furnished by such Electing Holder to
the Partnership or of the occurrence of any event
<PAGE>
in either case as a result of which any prospectus relating to such
Shelf Registration contains or would contain an untrue statement of a
material fact regarding such Electing Holder or such Electing Holder's
intended method of disposition of such Registrable Securities or omits
to state any material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable
Securities required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing, and promptly to furnish to the Partnership any additional
information required to correct and update any previously furnished
information or required so that such prospectus shall not contain, with
respect to such Electing Holder or the disposition of such Registrable
Securities, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing.
(g) Until the expiration of two years after the Closing Date,
the Partnership will not, and will not permit any of its "affiliates"
(as defined in Rule 144) to, resell any of the Securities that have
been reacquired by any of them except pursuant to an effective
registration statement under the Securities Act.
4. REGISTRATION EXPENSES.
The Partnership agrees to bear and to pay or cause to be paid promptly
all expenses incident to the Partnership's performance of or compliance with
this Exchange and Registration Rights Agreement, including (a) all Commission
and any NASD registration, filing and review fees and expenses including fees
and disbursements of counsel for the placement or sales agent or underwriters in
connection with such registration, filing and review, (b) all fees and expenses
in connection with the qualification of the Securities for offering and sale
under the State securities and blue sky laws referred to in Section 3(d)(xii)
and determination of their eligibility for investment under the laws of such
jurisdictions as any managing underwriters or the Electing Holders may
designate, including the reasonable fees and disbursements of counsel for the
Electing Holders or underwriters in connection with such qualification and
determination, (c) all expenses relating to the preparation, printing,
production, distribution and reproduction of each registration statement
required to be filed hereunder, each prospectus included therein or prepared for
distribution pursuant hereto, each
<PAGE>
amendment or supplement to the foregoing, the expenses of preparing the
Securities for delivery and the expenses of printing or producing any
underwriting agreements, agreements among underwriters, selling agreements and
blue sky memoranda and all other documents in connection with the offering, sale
or delivery of Securities to be disposed of (including certificates representing
the Securities), (d) reasonable messenger, telephone and delivery expenses
relating to the offering, sale or delivery of Securities and the preparation of
documents referred in clause (c) above, (e) fees and expenses of the Trustee
under the Indenture, any agent of the Trustee and any counsel for the Trustee
and of any collateral agent or custodian, (f) internal expenses (including all
salaries and expenses of the Partnership's officers and employees performing
legal or accounting duties), (g) fees, disbursements and expenses of counsel and
independent certified public accountants of the Partnership (including the
expenses of any opinions or "cold comfort" letters required by or incident to
such performance and compliance), (h) reasonable fees, disbursements and
expenses of any "qualified independent underwriter" engaged pursuant to Section
3(d)(xix), (i) reasonable fees, disbursements and expenses of one counsel for
the Electing Holders retained in connection with a Shelf Registration, as
selected by the Electing Holders of a majority in aggregate principal amount of
the Registrable Securities held by Electing Holders (which counsel shall be
reasonably satisfactory to the Partnership), (j) any fees charged by securities
rating services for rating the Securities, and (k) fees, expenses and
disbursements of any other persons, including special experts, retained by the
Partnership in connection with such registration (collectively, the
"Registration Expenses"). To the extent that any Registration Expenses are
incurred, assumed or paid by any holder of Registrable Securities or any
placement or sales agent therefor or underwriter thereof, the Partnership shall
reimburse such person for the full amount of the Registration Expenses so
incurred, assumed or paid promptly after receipt of a request therefor.
Notwithstanding the foregoing, the holders of the Registrable Securities being
registered shall pay all agency fees and commissions and underwriting discounts
and commissions attributable to the sale of such Registrable Securities and the
fees and disbursements of any counsel or other advisors or experts retained by
such holders (severally or jointly), other than the counsel and experts
specifically referred to above.
5. REPRESENTATIONS AND WARRANTIES.
The Partnership represents and warrants to, and agrees with, each
Purchaser and each of the holders from time to time of Registrable Securities
that:
<PAGE>
(a) Each registration statement covering Registrable
Securities and each prospectus (including any preliminary or summary
prospectus) contained therein or furnished pursuant to Section 3(d) or
Section 3(c) and any further amendments or supplements to any such
registration statement or prospectus, when it becomes effective or is
filed with the Commission, as the case may be, and, in the case of an
underwritten offering of Registrable Securities, at the time of the
closing under the underwriting agreement relating thereto, will conform
in all material respects to the requirements of the Securities Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at all
times subsequent to the Effective Time when a prospectus would be
required to be delivered under the Securities Act, other than from (i)
such time as a notice has been given to holders of Registrable
Securities pursuant to Section 3(d)(viii)(F) or Section 3(c)(iii)(F)
until (ii) such time as the Partnership furnishes an amended or
supplemented prospectus pursuant to Section 3(e) or Section 3(c)(iv)
hereof, each such registration statement, and each prospectus
(including any summary prospectus) contained therein or furnished
pursuant to Section 3(d) or Section 3(c) hereof, as then amended or
supplemented, will conform in all material respects to the requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Partnership by a holder of
Registrable Securities expressly for use therein.
(b) Any documents incorporated by reference in any prospectus
referred to in Section 5(a), when they become or became effective or
are or were filed with the Commission, as the case may be, will conform
or conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such
documents will contain or contained an untrue statement of a material
fact or will omit or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation
<PAGE>
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Partnership by a holder of Registrable Securities expressly for
use therein.
(c) The compliance by the Partnership with all of the
provisions of this Exchange and Registration Rights Agreement and the
consummation of the transactions herein contemplated will not conflict
with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Partnership is a party or by which the Partnership is bound or to which
any of the property or assets of the Partnership is subject, nor will
such action result in any violation of the provisions of the
partnership agreement or other organizational documents of the
Partnership or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Partnership or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the consummation
by the Partnership of the transactions contemplated by this Exchange
and Registration Rights Agreement, except the registration under the
Securities Act of the Securities, qualification of the Indenture under
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under State
securities or blue sky laws in connection with the offering and
distribution of the Securities.
(d) This Exchange and Registration Rights Agreement has been
duly authorized, executed and delivered by the Partnership.
6. INDEMNIFICATIon.
(a) INDEMNIFICATION BY THE PARTNERSHIP. The Partnership will
indemnify and hold harmless each of the holders of Registrable
Securities included in an Exchange Registration Statement, each of the
Electing Holders of Registrable Securities included in a Shelf
Registration Statement and each person who participates as a placement
or sales agent or as an underwriter in any offering or sale of such
Registrable Securities against any losses, claims, damages or
liabilities, joint or several, to which such holder, agent or
underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect
<PAGE>
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Exchange
Registration Statement or Shelf Registration Statement, as the case may
be, under which such Registrable Securities were registered under the
Securities Act, or any preliminary, final or summary prospectus
contained therein or furnished by the Partnership to any such holder,
Electing Holder, agent or underwriter, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse such holder, such Electing Holder, such agent and such
underwriter for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim
as such expenses are incurred; PROVIDED, HOWEVER, that the Partnership
shall not be liable to any such person in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, or
preliminary, final or summary prospectus, or amendment or supplement
thereto, in reliance upon and in conformity with written information
furnished to the Partnership by such person expressly for use therein.
(b) INDEMNIFICATION BY THE HOLDERS AND ANY AGENTS AND
UNDERWRITERS. The Partnership may require, as a condition to including
any Registrable Securities in any registration statement filed pursuant
to Section 2(b) hereof and to entering into any underwriting agreement
with respect thereto, that the Partnership shall have received an
undertaking reasonably satisfactory to it from the Electing Holder of
such Registrable Securities and from each underwriter named in any such
underwriting agreement, severally and not jointly, to (i) indemnify and
hold harmless the Partnership and all other holders of Registrable
Securities, against any losses, claims, damages or liabilities to which
the Partnership or such other holders of Registrable Securities may
become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
or any preliminary, final or summary prospectus contained therein or
furnished by the Partnership to any such Electing Holder, agent or
underwriter, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged
<PAGE>
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Partnership by such Electing Holder or underwriter expressly for
use therein, and (ii) reimburse the Partnership for any legal or other
expenses reasonably incurred by the Partnership in connection with
investigating or defending any such action or claim as such expenses
are incurred; PROVIDED, HOWEVER, that no such Electing Holder shall be
required to undertake liability to any person under this Section 6(b)
for any amounts in excess of the dollar amount of the proceeds to be
received by such Electing Holder from the sale of such Electing
Holder's Registrable Securities pursuant to such registration.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of written notice
of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party
pursuant to the indemnification provisions of or contemplated by this
Section 6, notify such indemnifying party in writing of the
commencement of such action; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under the indemnification
provisions of or contemplated by Section 6(a) or 6(b) hereof. In case
any such action shall be brought against any indemnified party and it
shall notify an indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party,
in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought
<PAGE>
hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) CONTRIBUTION. If for any reason the indemnification
provisions contemplated by Section 6(a) or Section 6(b) are unavailable
to or insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree
that it would not be just and equitable if contributions pursuant to
this Section 6(d) were determined by pro rata allocation (even if the
holders or any agents or underwriters or all of them were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to in
this Section 6(d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, or liabilities (or actions
in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 6(d), no holder
shall be required to contribute any amount in excess of the amount by
which the dollar amount of the proceeds received by such holder from
the sale of any Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) exceeds the amount of any
<PAGE>
damages which such holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission, and no underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the
Registrable Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
holders' and any underwriters' obligations in this Section 6(d) to
contribute shall be several in proportion to the principal amount of
Registrable Securities registered or underwritten, as the case may be,
by them and not joint.
(e) The obligations of the Partnership under this Section 6
shall be in addition to any liability which the Partnership may
otherwise have and shall extend, upon the same terms and conditions, to
each officer, director and partner of each holder, agent and
underwriter and each person, if any, who controls any holder, agent or
underwriter within the meaning of the Securities Act; and the
obligations of the holders and any agents or underwriters contemplated
by this Section 6 shall be in addition to any liability which the
respective holder, agent or underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each partner and
representative of the Partnership and to each person, if any, who
controls the Partnership within the meaning of the Securities Act.
7. UNDERWRITTEN OFFERINGS.
(a) SELECTION OF UNDERWRITERS. If any of the Registrable
Securities covered by the Shelf Registration are to be sold pursuant to
an underwritten offering, the managing underwriter or underwriters
thereof shall be designated by Electing Holders holding at least a
majority in aggregate principal amount of the Registrable Securities to
be included in such offering, provided that such designated managing
underwriter or underwriters is or are reasonably acceptable to the
Partnership.
(b) PARTICIPATION BY HOLDERS. Each holder of Registrable
Securities hereby agrees with each other such holder that no such
holder may participate
<PAGE>
in any underwritten offering hereunder unless such holder (i) agrees to
sell such holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of
such underwriting arrangements.
8. RULE 144.
The Partnership covenants to the holders of Registrable Securities that
to the extent it shall be required to do so under the Exchange Act, the
Partnership shall timely file the reports required to be filed by it under the
Exchange Act or the Securities Act (including the reports under Section 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted
by the Commission under the Securities Act) and the rules and regulations
adopted by the Commission thereunder, and shall take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Securities
without registration under the Securities Act within the limitations of the
exemption provided by Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar or successor rule or regulation
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities in connection with that holder's sale pursuant to Rule
144, the Partnership shall deliver to such holder a written statement as to
whether it has complied with such requirements.
9. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Partnership represents,
warrants, covenants and agrees that it has not granted, and shall not
grant, registration rights with respect to Registrable Securities or
any other securities which would be inconsistent with the terms
contained in this Exchange and Registration Rights Agreement.
(b) SPECIFIC PERFORMANCE. The parties hereto acknowledge that
there would be no adequate remedy at law if the Partnership fails to
perform any of its obligations hereunder and that the Initial
Purchasers and the holders from time to time of the Registrable
Securities may be irreparably harmed by any such failure, and
accordingly agree that the Initial Purchasers and such
<PAGE>
holders, in addition to any other remedy to which they may be entitled
at law or in equity, shall be entitled to compel specific performance
of the obligations of the Partnership under this Exchange and
Registration Rights Agreement in accordance with the terms and
conditions of this Exchange and Registration Rights Agreement, in any
court of the United States or any State thereof having jurisdiction.
(c) NOTICES. All notices, requests, claims, demands, waivers
and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, if delivered
personally or by courier, or three days after being deposited in the
mail (registered or certified mail, postage prepaid, return receipt
requested) as follows: If to the Partnership, to it at 1044 North 115th
Street, Suite 400, Omaha, Nebraska, 68154-4446, and if to a holder, to
the address of such holder set forth in the security register or other
records of the Partnership, or to such other address as the Partnership
or any such holder may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be
effective only upon receipt.
(d) PARTIES IN INTEREST. All the terms and provisions of this
Exchange and Registration Rights Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the parties hereto
and the holders from time to time of the Registrable Securities and the
respective successors and assigns of the parties hereto and such
holders. In the event that any transferee of any holder of Registrable
Securities shall acquire Registrable Securities, in any manner, whether
by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be
deemed a beneficiary hereof for all purposes and such Registrable
Securities shall be held subject to all of the terms of this Exchange
and Registration Rights Agreement, and by taking and holding such
Registrable Securities such transferee shall be entitled to receive the
benefits of, and be conclusively deemed to have agreed to be bound by
all of the applicable terms and provisions of this Exchange and
Registration Rights Agreement. If the Partnership shall so request, any
such successor, assign or transferee shall agree in writing to acquire
and hold the Registrable Securities subject to all of the applicable
terms hereof.
(e) SURVIVAL. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this
<PAGE>
Exchange and Registration Rights Agreement or made pursuant hereto
shall remain in full force and effect regardless of any investigation
(or statement as to the results thereof) made by or on behalf of any
holder of Registrable Securities, any director, officer or partner of
such holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling person of any of the foregoing, and
shall survive delivery of and payment for the Registrable Securities
pursuant to the Purchase Agreement and the transfer and registration of
Registrable Securities by such holder and the consummation of an
Exchange Offer.
(F) GOVERNING LAW. THIS EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
(g) HEADINGS. The descriptive headings of the several Sections
and paragraphs of this Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this
Exchange and Registration Rights Agreement and shall not affect in any
way the meaning or interpretation of this Exchange and Registration
Rights Agreement.
(h) ENTIRE AGREEMENT; AMENDMENTS. This Exchange and
Registration Rights Agreement and the other writings referred to herein
(including the Indenture and the form of Securities) or delivered
pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This
Exchange and Registration Rights Agreement supersedes all prior
agreements and understandings between the parties with respect to its
subject matter. This Exchange and Registration Rights Agreement may be
amended and the observance of any term of this Exchange and
Registration Rights Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by
a written instrument duly executed by the Partnership and the holders
of a majority in aggregate principal amount of the Registrable
Securities at the time outstanding. Each holder of any Registrable
Securities at the time or thereafter outstanding shall be bound by any
amendment or waiver effected pursuant to this Section 9(h), whether or
not any notice, writing or marking indicating such amendment or waiver
appears on such Registrable Securities or is delivered to such holder.
<PAGE>
(i) INSPECTION. For so long as this Exchange and Registration
Rights Agreement shall be in effect, this Exchange and Registration
Rights Agreement and a complete list of the names and addresses of all
the holders of Registrable Securities shall be made available for
inspection and copying on any business day by any holder of Registrable
Securities for proper purposes only (which shall include any purpose
related to the rights of the holders of Registrable Securities under
the Securities, the Indenture and this Agreement) at the offices of the
Partnership at the address thereof set forth in Section 9(c) and at the
office of the Trustee under the Indenture.
(j) COUNTERPARTS. This agreement may be executed by the
parties in counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together
constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us three counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Initial Purchasers, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Initial Purchasers and the Partnership. It is understood that your acceptance of
this letter on behalf of each of the Initial Purchasers is pursuant to the
authority set forth in a form of Agreement among Initial Purchasers, the form of
which shall be submitted to the Partnership for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
Tenaska Georgia Partners, L.P.
By: Tenaska Georgia, Inc.,
its Managing Partner
By: /s/ Michael F. Lawler
-----------------------------
Name: Michael F. Lawler
Title: Vice President of Finance
and Treasurer
Accepted as of the date hereof:
Goldman, Sachs & Co.,
for itself as Initial Purchaser and
for TD Securities (USA) Inc. as
Initial Purchaser
By: /s/ Goldman, Sachs & Co.
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
TENASKA GEORGIA PARTNERS, L.P.
INSTRUCTION TO DTC PARTICIPANTS
(DATE OF MAILING)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE] *
The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in the Tenaska Georgia Partners, L.P. (the
"Partnership") 9.50% Senior Secured Bonds Due 2030 (the "Securities") are held.
The Partnership is in the process of registering the Securities under the
Securities Act of 1933 for resale by the beneficial owners thereof. In order to
have their Securities included in the registration statement, beneficial owners
must complete and return the enclosed Notice of Registration Statement and
Selling Security holder Questionnaire.
IT IS IMPORTANT THAT BENEFICIAL OWNERS OF THE SECURITIES RECEIVE A COPY OF THE
ENCLOSED MATERIALS AS SOON AS POSSIBLE as their rights to have the Securities
included in the registration statement depend upon their returning the Notice
and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact Tenaska Georgia
Partners, L.P., 1044 North 115th Street, Suite 400, Omaha, Nebraska, 68154-4446,
Attention: Michael F. Lawler (402) 691-9500.
- ----------
Not less than 28 calendar days from date of mailing.
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
Notice of Registration Statement
and
SELLING SECURITYHOLDER QUESTIONNAIRE
(Date)
Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Exchange and Registration Rights Agreement") between Tenaska Georgia Partners,
L.P. (the "Partnership") and the Initial Purchasers named therein. Pursuant to
the Exchange and Registration Rights Agreement, the Partnership has filed with
the United States Securities and Exchange Commission (the "Commission") a
registration statement on Form [__] (the "Shelf Registration Statement") for the
registration and resale under Rule 415 of the Securities Act of 1933, as amended
(the "Securities Act"), of the Partnership's $275,000,000 9.50% Senior Secured
Bonds Due 2030 (the "Securities"). A copy of the Exchange and Registration
Rights Agreement is attached hereto. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Exchange and Registration
Rights Agreement.
Each beneficial owner of Registrable Securities (as defined below) is entitled
to have the Registrable Securities beneficially owned by it included in the
Shelf Registration Statement. In order to have Registrable Securities included
in the Shelf Registration Statement, this Notice of Registration Statement and
Selling Security holder Questionnaire ("Notice and Questionnaire") must be
completed, executed and delivered to the Partnership's counsel at the address
set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial
owners of Registrable Securities who do not complete, execute and return this
Notice and Questionnaire by such date (i) will not be named as selling security
holders in the Shelf Registration Statement and (ii) may not use the Prospectus
forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling security holder
in the Shelf Registration Statement and related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling security holder in the Shelf Registration Statement and
related Prospectus.
The term "REGISTRABLE SECURITIES" is defined in the Exchange and Registration
Rights Agreement.
2
<PAGE>
ELECTION
The undersigned holder (the "Selling Security holder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Exchange and Registration Rights
Agreement, including, without limitation, Section 6 of the Exchange and
Registration Rights Agreement, as if the undersigned Selling Security holder
were an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Security holder will be required to deliver to the
Partnership and Trustee the Notice of Transfer set forth in Appendix A to the
Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement.
The Selling Security holder hereby provides the following information to the
Partnership and represents and warrants that such information is accurate and
complete:
3
<PAGE>
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Security holder:
-------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as in
(a) above) of Registrable Securities Listed in Item (3) below:
-------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not
the same as (b) above) Through Which Registrable Securities
Listed in Item (3) below are Held:
-------------------------------------------------------
(2) Address for Notices to Selling Security holder:
______________________________
______________________________
______________________________
Telephone: ______________________________
Fax: ______________________________
Contact Person: ______________________________
(3) Beneficial Ownership of Securities:
EXCEPT AS SET FORTH BELOW IN THIS ITEM (3), THE UNDERSIGNED DOES NOT
BENEFICIALLY OWN ANY SECURITIES.
(a) Principal amount of Registrable Securities beneficially owned:
________ CUSIP No(s). of such Registrable Securities: ________
(b) Principal amount of Securities other than Registrable
Securities beneficially owned:
______________________________________________________________
CUSIP No(s). of such other Securities: _______________________
(c) Principal amount of Registrable Securities which the
undersigned wishes to be included in the Shelf Registration
Statement: ___________________________ CUSIP No(s). of such
Registrable Securities to be included in the Shelf
Registration Statement: ________
4
<PAGE>
(4) Beneficial Ownership of Other Securities of the Partnership:
EXCEPT AS SET FORTH BELOW IN THIS ITEM (4), THE UNDERSIGNED
SELLING SECURITY HOLDER IS NOT THE BENEFICIAL OR REGISTERED
OWNER OF ANY OTHER SECURITIES OF THE PARTNERSHIP, OTHER THAN
THE SECURITIES LISTED ABOVE IN ITEM (3).
State any exceptions here:
(5) Relationships with the Partnership:
EXCEPT AS SET FORTH BELOW, NEITHER THE SELLING SECURITY HOLDER
NOR ANY OF ITS AFFILIATES, OFFICERS, DIRECTORS OR PRINCIPAL
EQUITY HOLDERS (5% OR MORE) HAS HELD ANY POSITION OR OFFICE OR
HAS HAD ANY OTHER MATERIAL RELATIONSHIP WITH THE PARTNERSHIP
(OR ITS PREDECESSORS OR AFFILIATES) DURING THE PAST THREE
YEARS.
State any exceptions here:
(6) Plan of Distribution:
EXCEPT AS SET FORTH BELOW, THE UNDERSIGNED SELLING SECURITY
HOLDER INTENDS TO DISTRIBUTE THE REGISTRABLE SECURITIES LISTED
ABOVE IN ITEM (3) ONLY AS FOLLOWS (IF AT ALL): SUCH
REGISTRABLE SECURITIES MAY BE SOLD FROM TIME TO TIME DIRECTLY
BY THE UNDERSIGNED SELLING SECURITY HOLDER OR, ALTERNATIVELY,
THROUGH UNDERWRITERS, BROKER-DEALERS OR AGENTS. SUCH
REGISTRABLE SECURITIES MAY BE SOLD IN ONE OR MORE TRANSACTIONS
AT FIXED PRICES, AT PREVAILING MARKET PRICES AT THE TIME OF
SALE, AT VARYING PRICES DETERMINED AT THE TIME OF SALE, OR AT
NEGOTIATED PRICES. SUCH SALES MAY BE EFFECTED IN TRANSACTIONS
(WHICH MAY INVOLVE CROSSES OR BLOCK TRANSACTIONS) (I) ON ANY
NATIONAL SECURITIES EXCHANGE OR QUOTATION SERVICE ON WHICH THE
REGISTERED SECURITIES MAY BE LISTED OR QUOTED AT THE TIME OF
SALE, (II) IN THE OVER-THE-COUNTER MARKET, (III) IN
TRANSACTIONS OTHERWISE THAN ON SUCH EXCHANGES OR SERVICES OR
IN THE OVER-THE-COUNTER MARKET, OR (IV) THROUGH THE WRITING OF
OPTIONS. IN CONNECTION WITH SALES OF THE REGISTRABLE
SECURITIES OR OTHERWISE, THE SELLING SECURITY HOLDER MAY ENTER
INTO HEDGING TRANSACTIONS WITH BROKER-DEALERS, WHICH MAY IN
TURN ENGAGE IN SHORT SALES OF THE REGISTRABLE SECURITIES IN
THE COURSE OF HEDGING THE POSITIONS THEY ASSUME. THE SELLING
SECURITY HOLDER MAY ALSO SELL REGISTRABLE SECURITIES SHORT AND
DELIVER REGISTRABLE SECURITIES TO CLOSE OUT SUCH SHORT
POSITIONS, OR LOAN OR PLEDGE REGISTRABLE SECURITIES TO
BROKER-DEALERS THAT IN TURN MAY SELL SUCH SECURITIES.
State any exceptions here:
5
<PAGE>
By signing below, the Selling Security holder acknowledges that it understands
its obligation to comply, and agrees that it will comply, with the provisions of
the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.
In the event that the Selling Security holder transfers all or any portion of
the Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Partnership, the Selling Security holder agrees
to notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.
By signing below, the Selling Security holder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus. The Selling Security holder understands that such
information will be relied upon by the Partnership in connection with the
preparation of the Shelf Registration Statement and related Prospectus.
In accordance with the Selling Security holder's obligation under Section 3(d)
of the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Security holder agrees to promptly notify the Partnership of any
inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains in effect. All notices hereunder and pursuant to the Exchange and
Registration Rights Agreement shall be made in writing, by hand-delivery,
first-class mail, or air courier guaranteeing overnight delivery as follows:
(i) To the Partnership:
Tenaska Georgia Partners, L.P.
1044 North 115th Street
Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
6
<PAGE>
(ii) With a copy to:
_________________________
_________________________
_________________________
_________________________
_________________________
Once this Notice and Questionnaire is executed by the Selling Security holder
and received by the Partnership's counsel, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Partnership and the Selling Security holder (with respect to the Registrable
Securities beneficially owned by such Selling Security holder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.
7
<PAGE>
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated: ___________________
________________________________________________________________
Selling Security holder
(Print/type full legal name of beneficial owner of Registrable
Securities)
By: ____________________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO The Partnership'S COUNSEL AT:
_________________________
_________________________
_________________________
_________________________
_________________________
8
<PAGE>
EXHIBIT B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
The Chase Manhattan Bank
Tenaska Georgia Partners, L.P.
c/o The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Global Trust Services
Attention: Trust Officer
Re: Tenaska Georgia Partners, L.P. (the "Partnership")
9.50% Senior Secured Bonds Due 2030
Dear Sirs:
Please be advised that ________________ has transferred ________________________
aggregate principal amount of the above-referenced Bonds pursuant to an
effective Registration Statement on Form [_____] (File No. 333-_______) filed by
the Partnership.
We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the Bonds is named as a "Selling Holder" in the Prospectus
dated [DATE] or in supplements thereto, and that the aggregate principal amount
of the Bonds transferred are the Bonds listed in such Prospectus opposite such
owner's name.
Dated:
Very truly yours,
______________________________
(Name)
By: ______________________________
(Authorized Signature)
9
<PAGE>
Exhibit 4.8
This instrument was prepared by, and
after recording, please return to:
Jena Bridges, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT
OF RENTS AND LEASES AND SECURITY AGREEMENT
by
TENASKA GEORGIA PARTNERS, L.P.
(as "Grantor")
-to-
THE CHASE MANHATTAN BANK, AS COLLATERAL AGENT
(as "Grantee")
Dated as of: November 10,1999
THIS INSTRUMENT IS A "CONSTRUCTION MORTGAGE"
AS THAT TERM IS DEFINED IN ARTICLE 9, SECTION 313(1)(C)
OF THE UNIFORM COMMERCIAL CODE, TITLE 11 OF THE
CODE OF GEORGIA, AND SECURES AN OBLIGATION INCURRED
FOR THE CONSTRUCTION OF AN IMPROVEMENT UPON LAND.
NOTE TO GEORGIA TAX COMMISSIONER: THIS INSTRUMENT SECURES A BOND
ISSUE AND LETTERS OF CREDIT REIMBURSEMENT AGREEMENTS. THEREFORE,
THIS INSTRUMENT IS NOT SUBJECT TO INTANGIBLE RECORDING TAX PURSUANT
TO CHAPTER 560-11-8-.14(D) OF THE RULES OF THE DEPARTMENT OF REVENUE,
PROPERTY TAX DIVISION.
<PAGE>
LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT OF RENTS AND
LEASES AND SECURITY AGREEMENT
THIS LEASEHOLD DEED TO SECURE DEBT, ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (as the same may from time to time be extended, consolidated,
modified, restated and renewed, this "SECURITY DEED") made and delivered as of
this 10th day of November, 1999, by TENASKA GEORGIA PARTNERS, L.P., a Delaware
limited partnership having an address at 1044 North 115th Street, Suite 400,
Omaha, Nebraska 68154-4446 (together with its permitted successors and assigns,
the "GRANTOR"), to THE CHASE MANHATTAN BANK a bank organized and existing under
the laws of the State of New York and having an address at 450 West 33rd Street,
15th Floor, New York, New York, 10001, not individually, but solely in its
capacity as Collateral Agent under the Collateral Agency Agreement (as
hereinafter defined) for the benefit of the Senior Parties (together with its
permitted successors and assigns, the "GRANTEE").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of that certain Lease dated as of
November 1, 1999 (the "LEASE") between Development Authority of Heard County
("LESSOR") and Grantor, as lessee, Grantor is the holder of (i) a leasehold
estate (the "SITE LEASEHOLD ESTATE") affecting those certain pieces or parcels
of land which are more particularly described on EXHIBIT A annexed hereto
(collectively, the "SITE"), and (ii) the Project Easements (as hereinafter
defined). The Lease was delivered to the Clerk of the Superior Court of Heard
County (the "RECORDER'S OFFICE") for recording prior to the recordation of this
Security Deed;
WHEREAS, pursuant to the terms of that certain Ground Lease dated as of
November 10, 1999 (the "CONSTRUCTION LEASE") between Tenaska, Inc. ("TENASKA"),
as lessor, and Grantor, as lessee, Grantor is the holder of a leasehold estate
(the "CONSTRUCTION LEASEHOLD ESTATE") affecting that certain piece or parcel of
land which is more particularly described on EXHIBIT B annexed hereto (the
"LAY-DOWN SITE"). A memorandum of the Construction Lease was delivered to the
Recorder's Office for recording prior to the recordation of this Security Deed;
WHEREAS, Grantor will obtain funds to finance a portion of the cost of
the development, construction and equipping of a 936 megawatt natural gas-fired
(with oil as the backup fuel) electric power generation facility, consisting of
6 F-class simple cycle combustion engines on the Site (the "PROJECT") through
the issuance, from time to time, of certain securities (the "SECURITIES") issued
pursuant to the Indenture (as hereinafter defined);
WHEREAS, in connection with the commencement of commercial operation of
the Project, Grantor is required to deliver the Debt Service Reserve Letter of
Credit (the "DSR LETTER OF CREDIT") and The Toronto Dominion Bank ("TTDB"), as
issuing bank, has agreed to issue the DSR Letter of Credit subject to the terms
and conditions contained in the Debt Service Reserve Letter of Credit and
Reimbursement Agreement, dated as of November 10, 1999 (as amended, supplemented
or modified and in effect from time to time, THE "DSR LOC REIMBURSEMENT
AGREEMENT"), among each of the banks and financial institutions parties thereto
and TTDB, as
2
<PAGE>
issuing bank and as agent for such banks and financial institutions
(in such capacity as agent, and together with its successors and assigns, the
"DSR LOC Provider");
WHEREAS, in connection with the Grantor's obligations under the Power
Purchase Agreement (as defined in the Common Agreement hereafter referred to),
the Grantor may deliver the PPA Letter of Credit (the "PPA LOC") and The Toronto
Dominion Bank, as issuing bank, has agreed to issue the PPA LOC subject to the
terms and conditions contained in the PPA Letter of Credit and Reimbursement
Agreement, dated as of November 10, 1999 (as amended, supplemented or modified
and in effect from time to time, the "PPA LOC REIMBURSEMENT AGREEMENT"), among
each of the banks and financial institutions parties thereto and TTDB, as
issuing bank and as agent for such banks and financial institutions (in such
capacity as agent, and together with its successors and assigns, the "PPA LOC
PROVIDER");
WHEREAS, Grantor, the Collateral Agent and the Senior Parties entered
into a Collateral Agency and Intercreditor Agreement dated as of November 1,
1999 (the "COLLATERAL AGENCY AGREEMENT") to set forth the rights of Grantor and
the Senior Parties as to the Collateral;
WHEREAS, an Agreement as to Certain Undertakings, Common
Representations, Warranties, Covenants and Other Terms dated as of November 1,
1999 (the "COMMON AGREEMENT") has been entered into among (as defined in the
Common Agreement) Grantor, the Collateral Agent and the Senior Parties, which
Agreement sets forth certain representations, warranties and covenants of the
Grantor relating to the Project;
WHEREAS, it has been agreed that Grantor's obligations under the
Indenture, the Common Agreement, the DSR LOC Reimbursement Agreement, the PPA
LOC Reimbursement Agreement, and all other debt constituting Senior Debt (as
defined in the Common Agreement) none of which other Senior Debt is presently
evidenced by a note and all future modifications, extensions and renewals of
such obligations, including without limitation the payment of the indebtedness
evidenced by the Securities (such obligations collectively, the "SECURED
OBLIGATIONS"), shall be secured by, inter alia, a deed to secure debt,
assignment of rents and leases and security agreement by Grantor of the
Collateral (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises set forth above, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged and FOR THE PURPOSE OF SECURING the payment and performance
of the Secured Obligations, which Secured Obligations may increase, decrease and
increase again, from time to time, Grantor and Grantee hereby agree as follows:
G R A N T I N G C L A U S E S:
In order to secure the Secured Obligations, including without limitation
the payment by Grantor of the indebtedness evidenced by the Securities, in the
aggregate principal amount of up to Two Hundred Seventy-five Million and 00/100
Dollars ($275,000,000.00) lawful money of the United States (the unpaid balance
of which, if not sooner paid, will be due and payable on February 1, 2030), and
any and all sums, amounts and expenses incurred hereunder and under the
Indenture, the DSR LOC Reimbursement Agreement and the PPA LOC Reimbursement
Agreement by Grantee according to the terms hereof or thereof and all future
modifications,
3
<PAGE>
extensions and renewals of such obligations, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Grantor does hereby grant, bargain, sell, warrant, alien, remise, assign,
transfer, set over, deliver, confirm and convey unto Grantee, its successors and
assigns upon the terms and conditions of this Security Deed, with power of sale
and right of entry as provided hereinbelow, all of the right, title and interest
of Grantor in and to the following property described in Granting Clauses (a)
through (l) inclusive (all of which is hereinafter collectively referred to as
the "COLLATERAL" or the "MORTGAGED PROPERTY") and Grantor covenants that it
shall pay and perform the Secured Obligations when due in accordance with the
provisions of the appropriate Financing Documents:
(a) THE LEASEHOLD ESTATE: (i) the Site Leasehold Estate in the
Site and the Facility, created under the Lease and all other, further or
additional estates, rights, title or interests which may at any time be acquired
by Grantor by reason of amendments, modifications, supplements, extensions and
renewals of the Lease, and (ii) the Construction Leasehold Estate in the
Lay-down Site created under the Construction Lease and all other, further or
additional estates, rights, title or interest which may at any time be acquired
by Grantor by reason of amendments, modifications, supplements, extensions and
renewals of the Construction Lease;
(b) THE EASEMENTS: (i) that certain easement granted pursuant to
the terms of that certain Access and Utility Easement Agreement dated as of
November 10, 1999, between Tenaska and Grantor (the "TENASKA ACCESS EASEMENT")
affecting those certain pieces or parcels of land which are more particularly
described on EXHIBIT C annexed hereto (the "TENASKA EASEMENT PREMISES"), which
Tenaska Access Easement was subsequently assigned by Grantor to Lessor pursuant
to the Deed and thereafter demised by Lessor to Grantor pursuant to the terms of
the Lease. The Tenaska Access Easement was delivered to the Recorder's Office
for recording immediately prior to the recordation of this Security Deed; (ii)
those certain easements granted pursuant to the terms of those certain easement
agreements set forth on EXHIBIT D annexed hereto (collectively, the "PIPELINE
EASEMENTS") affecting those certain pieces or parcels of land which are more
particularly described on EXHIBIT E annexed hereto (the "PIPELINE EASEMENT
PREMISES"; the Tenaska Easement Premises and the Pipeline Easement Premises
collectively, the "EASEMENT PREMISES"),which Pipeline Easements were
subsequently assigned by Grantor to Lessor pursuant to the Deed and thereafter
demised by Lessor to Grantor pursuant to the terms of the Lease; (iii) that
certain easement granted pursuant to that certain Easement (Access and
Utilities) dated as of November 10, 1999, between Robert Charles Payne and Susan
Lynn Payne and Grantor (the "PAYNE EASEMENT") affecting those certain pieces or
parcels of land which are more particularly described on EXHIBIT F annexed
hereto (the "PAYNE EASEMENT PREMISES"), which Payne Easement was subsequently
assigned by Grantor to Lessor pursuant to the Deed and thereafter demised by
Lessor to Grantor pursuant to the Lease, which Payne Easement was delivered to
the Recorder's Office for recording prior to the recordation of this Security
Deed; and (iv) all other easements, rights-of-way, gores of land, streets, ways,
alleys, passages, sewer rights, water courses, water rights and powers, mineral
rights, ditches, ditch rights, reservoirs and reservoir rights, and all
privileges, tenements, hereditaments and appurtenances whatsoever, of any nature
whatsoever, in any way belonging, relating or appertaining to the Site or the
Facility, or which hereafter shall in any way belong, relate or be appurtenant
thereto (said easements, rights and privileges described in this paragraph (b),
hereinafter referred to, collectively, as the "EASEMENTS");
4
<PAGE>
(c) TOGETHER WITH: subject to the provisions of this Security
Deed, all right, title and interest of Grantor in and to all awards or payments,
including interest thereon, and the right to receive the same, which may be made
with respect to the Mortgaged Property or any part thereof, from the exercise of
the right of eminent domain, either temporary or permanent (including any
transfer made in lieu of the exercise of said right) or for any changes to the
grades of streets or as a result of any other damage to the Mortgaged Property
or any part thereof;
(d) TOGETHER WITH: all of the following property of Grantor: all
contractual and other rights of the Grantor under and pursuant to the Lease and
the Construction Lease, to the extent not otherwise included in the foregoing
clauses, including, without limitation, in the case of the Lease, (i) any and
all rights to succeed to the ownership of the Project (and any interests
therein), (ii) any and all rights of the Grantor to receive amounts or proceeds
in respect of the foreclosure sale or other exercise of remedies with respect to
the Project (and any interests therein), whether or not any option to purchase
the Project or such interest shall have been exercised, and any security
interests and liens on such amounts or proceeds, and (iii) any and all options
of the Grantor to purchase the DAHC's right, title and interest in and to the
Project, and including, without limiting the generality of the foregoing, all
rights granted to or held by the Grantor in Articles X, XI and XII of the Lease;
(e) TOGETHER WITH: subject to the provisions of the Collateral
Agency Agreement, the Common Agreement and the Indenture and this Security Deed,
all right, title and interest of Grantor in and to all insurance or other
proceeds of, and any unearned premiums on, any insurance policies required to be
maintained by Grantor under the Indenture and/or the Lease, including, without
limitation, the right, subject to the terms of the Indenture and this Security
Deed, to receive and apply the proceeds of any insurance, judgments or
settlements made in lieu thereof;
(f) TOGETHER WITH: subject to the terms of the Collateral Agency
Agreement, the Common Agreement and the Indenture, all right, title and interest
of Grantor in and to all "general intangibles", "accounts" and "proceeds",
together with the replacements and substitutes thereof and profits therefrom (as
such terms are defined in the Uniform Commercial Code (as hereinafter defined)),
with respect to which Grantee shall have, in addition to all rights and remedies
provided in ARTICLE V hereof, all of the rights and remedies of a "secured
party" under the Uniform Commercial Code other than any right, title and
interest of Grantor in and to any account created under the Indenture or the
Collateral Agency Agreement;
(g) TOGETHER WITH: subject in all respects to the provisions of
ARTICLE IV hereof, all right, title and interest of Grantor in, to and under any
and all Real Property Leases (as hereinafter defined) now or hereafter entered
into, including without limitation, all right, title and interest of Grantor to
receive the rents, issues and profits of the Mortgaged Property thereunder,
including without limitation Project Revenues (as defined in the Common
Agreement) (collectively, "INCOME") together with all books and records which
contain payments made under the Real Property Leases;
(h) TOGETHER WITH: all of Grantor's right, title and interest in
and to all plans and specifications prepared for construction or operation of
the Facility or other development of the Collateral (including all amendments,
modifications, supplements, general
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conditions and addenda thereof or thereto) and all studies, data and drawings
(including without limitation architectural, engineering, mechanical and
electrical drawings) related thereto, and all contracts and agreements of
Grantor relating to the aforesaid plans and specifications or to the aforesaid
studies, data and drawings or to the construction or operation of the Facility;
(i) TOGETHER WITH: to the extent permitted by Legal Requirements
(as hereinafter defined), all of Grantor's right, title and interest in and to
all present and future Permits (as hereinafter defined); PROVIDED, that any of
the Permits which by their terms or by operation of Law would become void,
voidable, terminable or revocable or would constitute a breach or default
thereunder if pledged or assigned hereunder or if a security interest therein
were granted hereunder are expressly excepted and excluded from the lien and
term of this Security Deed to the extent necessary to avoid such voidness,
voidability, terminability or revocability;
(j) TOGETHER WITH: all of Grantor's right, title and interest in
and to all development, construction management and maintenance contracts,
including, but not limited to, (i) the Project Documents (as defined in the
Common Agreement), (ii) that certain Electric Substation Site Option Agreement
dated as of November 10, 1999 between Grantor and Tenaska with respect to up to
eight (8) acres of that certain real property identified and described as
"Parcel A-2" on EXHIBIT C annexed hereto and (iii) warranties, indemnities,
undertakings and guarantees of contractors, subcontractors, materialmen, vendors
and suppliers relating to the Facility;
(k) TOGETHER WITH: to the extent permitted by applicable law, all
of Grantor's rights and remedies at any time arising under or pursuant to
Section 365(h) of the United States Bankruptcy Code, including, without
limitation, all of Grantor's rights to remain in possession of the Collateral;
and
(l) TOGETHER WITH: all and singular the tenements, hereditaments
and appurtenances belonging to the Mortgaged Property or any part thereof hereby
mortgaged or intended so to be or in anywise appertaining thereto (including,
but not limited to, all income, rents and profits arising therefrom), all
streets, alleys, passages, ways, water courses, all other rights, liberties and
privileges of whatsoever kind or character, the reversions and remainders, and
all the estate, right, title, interest, property, possession, claim and demand
whatsoever, as well as at law and equity, of Grantor in and to all of the
foregoing or any or every part thereof.
TO HAVE AND TO HOLD the Mortgaged Property and all parts, rights,
members and appurtenances thereof, to the use, benefit and behoof of Grantee,
and its successors and assigns, forever; and Grantor covenants that Grantor is
lawfully seized and possessed of the Mortgaged Property as aforesaid and has
good right to convey the same that the same is unencumbered except for those
matters expressly set forth in EXHIBIT G attached hereto and by this reference
made a part hereof, and that Grantor does warrant and will forever defend the
title thereto against the claims of all persons whomsoever, except as to those
matters set forth in said EXHIBIT G attached hereto. This conveyance is intended
to operate and is to be construed as a deed passing title to the Mortgaged
Property to Grantee and is made under those provisions of the existing laws of
the State of Georgia relating to deeds to secure debt, and not as a mortgage,
and is given to secure the Secured Obligations.
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ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Capitalized terms not otherwise defined in this Security
Deed shall have the meaning given to such terms in the Common Agreement. For
purposes of this Security Deed, the following terms shall have the following
meanings, unless the context of this Security Deed requires otherwise:
(a) "Adjusted Base Rate" means the interest rate which is the
higher of (x) the Federal Funds Rate plus .5% and (y) the Reference Rate.
(b) "Additional Collateral" has the meaning provided in SECTION
5.1.
(c) "Affected Property" has the meaning provided in SECTION 2.5.
(d) "Business Day" means any day other than a Saturday, Sunday or
other day on which banks in New York, New York are authorized or required by law
or executive order to remain closed or a day on which the Corporate Trust Office
of the Trustee is closed for business.
(e) "Collateral" has the meaning provided in the Granting
Clauses.
(f) "Collateral Agency Agreement" has the meaning provided in the
Recitals.
(g) "Deed" shall mean that certain Limited Warranty Deed between
Tenaska Georgia Partners, L.P., as grantor, to Development Authority of Heard
County, as grantee, dated as of November 10, 1999 and delivered to the
Recorder's Office for recording immediately prior to the recordation of the
Lease.
(h) "Easement Facilities" means all pipes, valves, conduits,
pumps, lines, processors, transformers, works, facilities, equipment, devices,
buildings and improvements of every kind and nature located on or within any
Easement Premises.
(i) "Easements" has the meaning provided in the Granting Clauses.
(j) "Environmental Liabilities and Costs" means all liabilities,
obligations, losses, damages (whether actual, consequential or punitive), costs
and expenses (including, without limitation, all reasonable fees, disbursements
and expenses of counsel, experts and consultants), fines, penalties and
sanctions, whether based on or in contract, tort, implied or express warranty,
strict liability or criminal or civil statute (including, without limitation,
any of the foregoing arising under any Environmental Law, Permit, or order or
agreement with any Governmental Authority or other Person), and which relate to
any environmental, health or safety condition, or a Release or threatened
Release.
(k) "Environmental Lien" means any lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
(l) "Equipment" has the meaning provided in clause (n) below.
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(m) "Event of Default" means any of the events or circumstances
described as such in ARTICLE VI hereof.
(n) "Facility" means (i) all buildings, structures and
improvements of every nature whatsoever presently or hereafter located, erected
or placed upon the Site or the Easement Premises comprising the Project and
leased by Lessor to Grantor pursuant to the terms of the Lease, and all
extensions, additions, improvements, betterments, renewals, substitutions and
replacements of or to any of the foregoing (collectively, the "Improvements")
and (ii) all machinery, appliances, apparatus, equipment, fittings, furniture,
fixtures, interior improvements, decorations, piping, conduits, chattels,
articles of personal property and other property of every kind and nature
whatsoever owned by Lessor and now or hereafter leased to Grantor pursuant to
the terms of the Lease, located on the Site, the Lay-down Site, the
Improvements, the Easement Premises or any appurtenances thereof, and used in
connection with the present or future operation and occupancy of the Project,
together with any and all extensions, additions, improvements, betterments,
renewals, substitutions and replacements to any of the foregoing, and all of the
right, title and interest of Grantor in and to any such personal property or
fixtures which, to the fullest extent permitted by law, shall be conclusively
deemed fixtures and a part of the real property encumbered hereby (collectively,
the "EQUIPMENT"; the Improvements and said Equipment being herein referred to,
collectively, as the "FACILITY");
(o) "Federal Funds Rate" means, for any period, a fluctuating
interest rate PER ANNUM equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York or, if such rate is not so published for
any day that is a Business Day, the average of the quotations for such day on
such transactions received by The Chase Manhattan Bank from federal funds
brokers of recognized standing selected by it.
(p) "Grantee" means the Grantee herein named or, at any given
time, the holder or holders of this Security Deed, and its or their respective
heirs, executors, administrators, successors and assigns.
(q) "Grantor" means the Grantor herein named, any subsequent
owner or owners of the Mortgaged Property, and its or their respective heirs,
executors, administrators, successors and permitted assigns.
(r) "Impositions" means all duties, taxes, assessments, dues,
charges, fees, excises, levies, license and permit fees, impositions, water
rates, sewer rents and other charges, ordinary or extraordinary, whether
foreseen or unforeseen, of any kind whatsoever, (i) now or hereafter levied or
assessed or imposed against or upon or in respect of the Mortgaged Property, or
(ii) which now is or may be levied or assessed against the Income by virtue of
any present or future Legal Requirement, as well as all income taxes,
assessments and other governmental charges levied and imposed by any
Governmental Authority upon or against Grantor or in respect of the Mortgaged
Property or any part thereof, to the extent the same is in lieu of or in
substitution of the items described in clause (i). Taxes shall not include any
taxes imposed on
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the net income, gross receipts or any franchise taxes of Grantee, except as
provided in the Indenture.
(s) "Improvements" has the meaning provided in clause (n) above.
(t) "Income" has the meaning provided in the Granting Clauses.
(u) "Indemnitee" has the meaning provided in SECTION 2.11.
(v) "Indenture" means the Indenture of Trust, dated as of
November 1, 1999 between Grantor and The Chase Manhattan Bank, as Trustee.
(w) "Legal Requirement(s)" means all present and future laws,
ordinances, orders, judgments, rules, regulations and requirements of any
Governmental Authority or arbitrator applicable to the Grantor or the Mortgaged
Property, including, without limitation, Environmental Laws, the Employee
Retirement Income Security Act of 1974 (as amended from time to time), zoning
and subdivision laws and ordinances and building codes, restrictive covenants,
and development orders, which at any time are or may be applicable to the
Mortgaged Property or any part thereof, including, without limitation, the
Americans With Disabilities Act (42 U.S.C. ss.12101 ET SEQ.), as amended, and
the regulations promulgated thereunder.
(x) "Mortgaged Property" has the meaning provided in the Granting
Clauses.
(y) "Permit" means any permit, approval, authorization, license,
consent, variance or permission required from or by a Governmental Authority for
the use, operation, maintenance and restoration of the Mortgaged Property or any
part thereof in accordance with all Legal Requirements, including, without
limitation, a certificate of occupancy.
(z) "Permitted Liens" has the meaning provided in the Common
Agreement.
(aa) "Project Easements" means, collectively, the Tenaska Access
Easement and the Pipeline Easements.
(bb) "Real Property Leases" means any lease, sublease, rental
agreement, occupancy agreement, license, franchise or concession agreement or
any other form of occupancy or use agreement, however denominated, written or
oral, affecting the Mortgaged Property, or any part thereof, including, without
limitation, the Project Documents now or hereafter entered into and all
modifications, amendments, renewals, extensions, replacements, guarantees and
other agreements affecting the same.
(cc) "Reference Rate" means the variable rate of interest PER
ANNUM officially announced or published by The Chase Manhattan Bank from time to
time as its "reference rate," such rate being set by The Chase Manhattan Bank as
a general reference rate of interest, taking into account such factors as The
Chase Manhattan Bank may deem appropriate, it being understood that many of The
Chase Manhattan Bank's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that Grantor may make various commercial or other loans at rates of
interest having no relationship to such rate. Each change in the Reference Rate
shall be effective as of
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the opening of business on the date announced as the effective date of the
change in such "reference rate."
(dd) "Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any property,
including, without limitation, the movement of Hazardous Materials through or in
the air, soil, surface water, ground water or property or as may be otherwise
defined under Environmental Laws.
(ee) "Remedial Action" means any and all actions required by any
Environmental Law or voluntarily undertaken to (i) clean up, remove, treat or in
any other way address Hazardous Materials in the indoor or outdoor environment,
(ii) prevent the Release or threatened Release or minimize the further Release
of Hazardous Materials so that they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment or (iii)
perform pre-remedial studies and investigations and post-remedial monitoring and
care.
(ff) "Required Senior Parties" has the meaning provided in the
Common Agreement.
(gg) "Secured Obligations" has the meaning provided in the
Granting Clauses.
(hh) "Security Deed" means this document, as the same may be
amended, modified, supplemented, assigned by Grantee, extended, renewed,
restated and in effect from time to time.
(ii) "Senior Parties" has the meaning provided in the Common
Agreement.
(jj) "Site" has the meaning provided in the Granting Clauses.
(kk) "State" means the State of Georgia.
(ll) "Tenant(s)" means all of the parties to, and Persons
obligated to Grantor under, any Real Property Lease.
(mm) "Trigger Event" has the meaning provided in the Common
Agreement.
(nn) "Uniform Commercial Code" means the Uniform Commercial Code
as in effect from time to time in the State.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF GRANTOR
Grantor represents and warrants to Grantee as follows:
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Section 2.1. PAYMENT AND PERFORMANCE OF SECURED OBLIGATIONS. The maximum
principal indebtedness secured by this Security Deed is Two Hundred Seventy-five
Million and 00/100 Dollars ($275,000,000.00), provided, however, that such
limitation shall not limit the security of this Security Deed with respect to
future advances. This Security Deed secures future advances. All future advances
under the Securities, this Security Deed, the Indenture and the other Financing
Documents shall have the same priority as if the future advance was made on the
date that this Security Deed was recorded. Grantor hereby acknowledges and
agrees that the Secured Obligations include, and that this Security Deed is
given to secure, advances that may be made by Grantee, the PPA LOC Provider, the
DSR LOC Provider and any other Senior Party to Grantor and obligations to
Grantee that may be incurred by Grantor after the execution of this Security
Deed ("FUTURE ADVANCES") and that this Security Deed shall secure all future
advances of every kind and whenever occurring, including, without limitation,
interest on the principal indebtedness, the payment of taxes, assessments,
maintenance charges, insurance premiums, costs incurred for the protection of
the Mortgaged Property and the lien of this Security Deed, expenses incurred by
the Grantee by reason of default by the Grantor, and advances made to enable
completion of the Improvements.
Section 2.2. WARRANTY OF TITLE, ETC. Grantor represents and warrants
that:
(a) (i) it is the sole and lawful owner of the Site Leasehold Estate,
(ii) it has a good and valid leasehold estate in and to the Site and the
Lay-down Site, (iii) it is lawfully possessed of the Easements, (iv) Grantor has
good and valid rights of access to the Site for the operation of the Facility,
(v) the Grantor is the sole and lawful owner of the Easement Facilities, (vi)
its Site Leasehold Estate and Construction Leasehold Estate and its interest in
the Facility and Easements are free and clear of all liens, charges and
encumbrances of every kind and character, other than the Permitted Liens, (vii)
it is not required to obtain the consent of any third-party which has not been
obtained prior to encumbering and conveying the Mortgaged Property as provided
herein, (viii) this Security Deed is and will remain a valid and enforceable
first lien on the Mortgaged Property, subject only to the Permitted Liens, (ix)
it has not previously assigned the Income or any of its other rights in and to
the Mortgaged Property, (x) there are no offsets or defenses to this Security
Deed or to the Secured Obligations, and (xi) that there are no unpaid claims of
mechanics, materialmen or contractors that may result in the entry of a lien on
the Mortgaged Property;
(b) the Facility is or will be situated on the Site and certain of the
Easement Premises and the use thereof is or will be in full compliance in all
material respects with all Legal Requirements; and
(c) the Grantor has all easements and rights necessary for Grantor's
construction and operation of the Facility in a manner which is consistent with
the Common Agreement, the Indenture and the Transaction Documents.
Section 2.3. MORTGAGED PROPERTY IS FREE FROM DAMAGE. Grantor represents
and warrants that the Mortgaged Property is free from material damage caused by
fire, explosion, accident or any other casualty (whether or not covered by
insurance) and there are no condemnation or similar proceedings pending or, to
the best of Grantor's knowledge, threatened which affect the Mortgaged Property.
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Section 2.4. UTILITIES. Grantor represents and warrants that the
Facility is served by, or will be served by, and have, or will have, the benefit
of all utilities, services, facilities, easements and rights required for its
operation of the Facility in accordance with the Common Agreement, the Indenture
and the Transaction Documents.
Section 2.5. ENVIRONMENTAL INDEMNIFICATION. (a) Grantor agrees to
defend, indemnify and hold harmless Grantee and its respective co-trustees and
affiliates, and the directors, officers, employees, consultants and advisers and
agents of any of the foregoing (each of the foregoing being an "INDEMNITEE")
from and against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including, without limitation, reasonable fees and disbursements
of one firm of counsel to all such Indemnitees) which may be imposed on,
incurred by or asserted against any such Indemnitee in connection with or
arising out of any costs or liabilities incurred in connection with any matter
affecting the Affected Property (as defined below) pursuant to any Environmental
Law, or any Release or use, storage, treatment, transportation , disposal or
handling of any Hazardous Materials on, from, under or affecting all or any part
of the Affected Property, including, without limitation, (i) all Environmental
Liabilities and Costs arising from or connected with the Affected Property, (ii)
damages (whether actual, consequential or punitive) arising from any personal
injury (including wrongful death) or property damage (real or personal) alleged
to have resulted from any Release of Hazardous Materials on, upon or into all or
any part of the Affected Property, (iii) any costs and liabilities incurred in
connection with the investigation, removal, cleanup and/or remediation of any
Hazardous Material present upon all or any part of the Affected Property, (iv)
to the extent required by law, additional costs to treat or to take necessary
precautions to protect against the release or migration of Hazardous Materials
on, from, under or affecting the Mortgaged Property into the air, any body of
surface or subsurface water or any surrounding areas, and (v) any costs or
liabilities incurred in connection with any Environmental Lien (except, with
respect to any of the foregoing, to the extent the same results from the gross
negligence or willful misconduct of any Indemnitee) (the Mortgaged Property and
any surrounding areas to the extent affected by a Release from the Mortgaged
Property are hereinafter collectively referred to as the "AFFECTED PROPERTY").
The indemnity contained in this SECTION 2.5 shall not be limited, impaired or
terminated by (1) any extensions of time for performance under any of the
Financing Documents, (2) any sale or assignment of this Security Deed, (3) any
sale or transfer of all or any part of the Mortgaged Property, (4) any
foreclosure of this Security Deed or deed to the Mortgaged Property in lieu of
foreclosure, or exercise of any other remedies under this Security Deed, (5) the
satisfaction, release or termination of this Security Deed, (6) the release or
substitution in whole or in part of any other security for the Secured
Obligations or (7) Grantee's participating in the management of, or taking
possession of, or title to, the Mortgaged Property or any part thereof whether
by foreclosure or otherwise, to the extent any such matters set forth in this
SECTION 2.5(A) arose prior to Grantee's taking possession of, or title to, the
Mortgaged Property or any portion thereof.
(b) Grantee agrees that, in the event any investigation,
litigation or proceeding alleging matters of the nature set forth in paragraph
(a) above is asserted or threatened in writing or instituted against it or any
other Indemnitee, or any remedial, removal or response action is requested of it
or any of its officers, directors, agents and employees, for which any
Indemnitee is entitled to an indemnity or defense hereunder, such Indemnitee
shall promptly notify Grantor in writing after obtaining any notice of the
foregoing, provided that a failure to so notify Grantor
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in writing after obtaining any notice of the foregoing shall not relieve Grantor
of any liability hereunder unless such failure prejudices Grantor's ability to
defend against such action or proceeding or take other necessary or appropriate
action to remedial or mitigate the liability involved. Notwithstanding anything
to the contrary in this SECTION 2.5, if Grantor has actual knowledge of any of
the foregoing, independent of Indemnitee's notice, Grantor shall in no event be
relieved of any obligation under this SECTION 2.5. In the event that any
Indemnitee requests Grantor to defend against such investigation, litigation or
proceeding or requested remedial, removal or response action, Grantor shall
promptly do so, and such Indemnitee shall have the right to have legal counsel
of its choice participate in such defense. No action taken by legal counsel
chosen by such Indemnitee in defending against any such investigation,
litigation or proceeding or requested remedial, removal or response action shall
vitiate or in any way impair Grantor's obligation hereunder to otherwise
indemnify and hold harmless such Indemnitee.
(c) Grantee shall give Grantor reasonable prior notice of any
settlement, compromise or similar disposition by Grantee of any investigation,
litigation or proceeding as to which Grantor has an obligation to defend and
Grantee will not settle, compromise or effect a similar disposition of any
matter unless such settlement, compromise or disposition (i) includes an
unconditional release of the Grantor from all liability relating thereto and
(ii) does not include a statement as to, or an admission of fault, culpability
or failure to act, by or on behalf of Grantor.
(d) The obligations of Grantor under this SECTION 2.5 shall
survive the repayment and performance of the Secured Obligations and the
cancellation of this Security Deed.
Section 2.6. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY. Except
to the extent permitted the Common Agreement, no part of the Mortgaged Property
shall be terminated, sold, transferred, leased, assigned, licensed, disposed of
or conveyed or, except for Permitted Liens, further encumbered, mortgaged or
hypothecated, whether voluntarily or involuntarily, directly or indirectly, or
by operation of law or otherwise, without the prior written consent of Grantee
in each instance. To the extent any new real property or real property interest
(referred to herein as the "new property") is acquired by Grantor, Grantor shall
(i) execute and deliver a deed to secure debt in the form and substance of this
Security Deed and all other documents necessary to create a first lien on the
new property in favor of Grantee, (ii) deliver to Grantee title insurance
insuring the new deed to secure debt free and clear of all Liens other than
Permitted Liens, (iii) deliver to Grantee a survey of the new property prepared
by a registered land surveyor and complying with the minimum detail requirements
adopted by the American Land Title Association and the American Congress on
Surveying and Mapping, and (iv) deliver to Grantee an opinion of Grantor's
counsel, in customary form and substance and reasonably acceptable to Grantee.
All costs and expenses incurred by Grantor and Grantee by virtue of the
foregoing, including, but not limited to, title insurance premiums, recording
fees, mortgage and other taxes, survey costs and Grantee's attorneys' fees and
disbursements, shall be paid by Grantor on demand.
Section 2.7. AFTER-ACQUIRED PROPERTY. All right, title and interest of
Grantor in and to all improvements, betterments, renewals, substitutes and
replacements of, and all additions, accessions and appurtenances to, the
Mortgaged Property hereafter acquired, constructed,
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assembled or placed by the Grantor on the Site, the Facility, the Easement
Premises and the Easement Facilities, and all conversions of the security
constituted thereby, immediately upon such acquisition, construction, assembly,
placement or conversion, as the case may be, and in each such case without any
further mortgage, conveyance or assignment or other act of Grantor, shall become
subject to the lien of this Security Deed as fully and completely, and with the
same effect, as though now owned by Grantor and incorporated in the Granting
Clauses hereof.
Section 2.8. FURTHER ASSURANCES. Grantor shall, at Grantor's sole cost
and expense, and at the request of Grantee, do, execute, acknowledge and deliver
all further acts, mortgages, assignments, notices of assignment, transfers and
assurances as Grantee shall from time to time reasonably require (i) for filing,
registering or recording this Security Deed and all UCC financing and
continuation statements delivered in connection with the Secured Obligations;
(ii) for better assuring, assigning, transferring and confirming unto Grantee
the Mortgaged Property or such property which Grantor may be or may hereafter
become bound to convey, mortgage or assign to Grantee, including, without
limitation, amendments and supplements to this Security Deed and UCC financing
and continuation statements, the filing or recordation of which are, in the
determination of Grantee, necessary or appropriate to create, perfect or
maintain the existence or perfected status of any security interest granted
pursuant to this Security Deed or any other Financing Document; and (iii) for
carrying out the intention or facilitating the performance of the terms of this
Security Deed or any other Financing Document. Grantee is hereby authorized to
file such UCC Financing Statements and Continuation Statements as it may deem
necessary or appropriate to evidence, maintain, perfect and continue the
security interest granted by this Security Deed without notice to or the
signature or consent of the Grantor.
Section 2.9. LITIGATION. Grantor shall promptly furnish to Grantee
written notice of, and copies of any documents or papers requested by Grantee
relating to, any actions, suits or proceedings pending, or to the knowledge of
Grantor threatened, against and, which could have a Material Adverse Effect on
Grantor or all or any portion of the Mortgaged Property.
Section 2.10. REPRESENTATIONS. All representations and warranties
contained in this ARTICLE II are made as of the date of this Security Deed.
ARTICLE III
CONDEMNATION
Section 3.1. Grantor, immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Mortgaged Property or
any portion thereof, shall notify Grantee of the pendency of such proceedings.
Grantee, at its election and in its discretion, may participate in any such
proceedings and Grantor from time to time shall deliver to Grantee all
instruments requested by it to permit such participation. All awards from a
condemnation (or other taking or purchase in lieu thereof) of the Mortgaged
Property or any portion thereof shall be deposited and applied in accordance
with the Collateral Agency Agreement.
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ARTICLE IV
LEASES AND INCOME;
ASSIGNMENT AS FURTHER SECURITY
Section 4.1. ASSIGNMENT, RIGHTS OF GRANTEE. Grantor hereby collaterally
assigns, transfers and sets over to Grantee, as further security for the Secured
Obligations, all of Grantor's right, title and interest in and to all Real
Property Leases and Income. The foregoing assignment shall be fully operative
and create, and is intended and shall be construed to create, an absolute
assignment for security purposes without any further action on the part of
either party. Grantee hereby gives Grantor a revocable license to collect the
Income and to retain, use and enjoy the same and to exercise the rights granted
herein. The license herein granted may be revoked by Grantee by written notice
to Grantor upon the occurrence and during the continuation of any Event of
Default.
Section 4.2. GRANTOR'S RIGHTS AND REMEDIES. Upon the occurrence and
during the continuance of any Event of Default under this Security Deed or any
other Financing Document, Grantee shall have all the rights, remedies and
benefits granted to it under this Security Deed with respect to the Real
Property Leases and Income. If a Trigger Event shall have occurred and be
continuing and Grantee shall have received the written request from the Required
Senior Parties pursuant to Section 5.2(b) of the Collateral Agency Agreement,
and in addition to the right to collect, use and apply Income as more fully
described below, and whether or not a foreclosure has or shall have been
instituted, Grantee shall have the unqualified and absolute right to enter upon
and take possession of, and manage and operate, any part of or all of the
Mortgaged Property and to carry on the business and exercise the rights and
powers of Grantor with respect to the Mortgaged Property. If a Trigger Event
shall have occurred and be continuing and Grantee shall have received the
written request from the Required Senior Parties required pursuant to Section
5.2(b) of the Collateral Agency Agreement, Grantee shall also have the
unqualified and absolute right, whether or not Grantee takes possession of the
Mortgaged Property, to receive the Income and to use and apply the Income in
accordance with the terms of the Collateral Agency Agreement provided that
Grantee shall first have the right to apply the Income to (i) the operation and
maintenance of the Mortgaged Property and (ii) the payment of the Secured
Obligations until the same have been repaid in full. Grantee shall not, if in
fact it chooses to exercise any or all of the rights given to Grantee pursuant
to this ARTICLE 4 (collectively, the "Rights"), be liable to Grantor for any act
done or anything omitted to be done by it in good faith in connection with the
management or operation of the Mortgaged Property, except for the consequences
of its own gross negligence or willful misconduct.
Section 4.3. POWER OF ATTORNEY. Grantor hereby irrevocably constitutes
and appoints Grantee (acting itself or by its agents, servants or attorneys, or
by such officers or agents as it may appoint, or by a court-appointed receiver)
its true and lawful attorney and agent, coupled with an interest, to undertake
and execute, if a Trigger Event shall have occurred and be continuing and
Grantee shall have received the written request from the Required Senior Parties
pursuant to Section 5.2(b) of the Collateral Agency Agreement, any or all of the
Rights with the same force and effect as if undertaken or executed by Grantor.
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Section 4.4. UNTIL AND UNLESS LICENSE REVOKED. Until and unless the
license granted in SECTION 4.1 is so revoked, Grantor agrees to collect and
receive the Income and to apply the Income in accordance with the Collateral
Agency Agreement or otherwise to the payment of the Secured Obligations, and all
expenses that Grantor may be authorized to make under this Security Deed or the
other Financing Documents. In no event shall the execution and delivery of this
Security Deed or the exercise by Grantee (if Grantee so chooses) of any of the
Rights, release Grantor from any of its obligations under any of the Real
Property Leases or be deemed to be a waiver by Grantee or its successors and
assigns of the right to enforce the Secured Obligations in strict accordance
with the terms of this Security Deed or the other Financing Documents.
Section 4.5. NO FURTHER ASSIGNMENT. Grantor covenants that so long as
any of the Secured Obligations shall remain unpaid, Grantor will make no
assignment, pledge or other disposition of, nor encumber, any of the Real
Property Leases or the Income except as permitted under the terms of the Common
Agreement and the Collateral Agency Agreement.
Section 4.6. NOTICE TO TENANTS. Grantor, for the benefit of Grantee and
each Tenant, hereby covenants and agrees that a notice in writing by Grantee to
Tenants advising them that Grantor has suffered an Event of Default hereunder
and requesting that all future payments of rent, additional rent or other
charges under the Real Property Leases be made to Grantee (or its agent) or to
accept performance by Grantee of Grantor's obligations under the Real Property
Leases, as the case may be, shall be construed as conclusive authority to such
Tenants that such payments are to be made to Grantee (or its agent) or such
performance is to be accepted from Grantee (or its agent). Such Tenants shall be
fully released and protected by Grantor in making such payments to or accepting
such performance from Grantee (or its agent); and Grantor hereby waives any
claims against such Tenants and irrevocably constitutes and appoints Grantee the
attorney-in-fact and agent of Grantor, coupled with an interest, for the purpose
of endorsing the consent of Grantor on any such notice.
Section 4.7. ATTORNMENT BY TENANTS. In the event that Grantee or its
designee acquires the Mortgaged Property pursuant to exercise of power of sale
or foreclosure, or pursuant to a deed in lieu of foreclosure, each party under a
Real Property Lease shall, at the option of Grantee, attorn to any Person in the
place of Grantor under the applicable Real Property Lease without change in the
terms or other provisions thereof. To the extent permitted by applicable Legal
Requirements, such Person shall not be (i) liable for any act or omission of any
Person preceding such Person under such Real Property Lease (including Grantor),
(ii) subject to any offsets or defenses against any Person preceding such Person
(including Grantor), or (iii) bound by (a) any payment of rent or additional
rent made more than one month in advance of its due date, (b) any obligation to
make any payment to, or to undertake or complete any construction for, such
Tenant, or (c) any amendment or modification of any such Real Property Lease
made without Grantee's consent and which, pursuant to the Financing Documents,
required Grantee's consent. Each party to a Real Property Lease shall, upon
request of Grantee or such Person, execute and deliver instruments confirming
such attornment, but Grantor shall have no liability if such party fails to do
so.
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ARTICLE V
SECURITY AGREEMENT
Section 5.1. THIS SECURITY DEED A SECURITY AGREEMENT; FILINGS. This
Security Deed constitutes both a deed to secure debt and a "security agreement"
within the meaning of the Uniform Commercial Code. Grantor (as Debtor) hereby
grants to Grantee (as Creditor and Secured Party) a security interest in all of
Grantor's right, title and interest in and to (i) so much of the Equipment or
any other part of the Mortgaged Property as is considered or as shall be
determined to be personal property or "fixtures" (as defined in the Uniform
Commercial Code) and not real estate, together with all replacements thereof,
substitutions therefor or additions thereto, and (ii) all general intangibles
and accounts in any way relating to the Mortgaged Property (said Equipment,
personal property, fixtures, general intangibles and accounts being sometimes
hereinafter referred to as the "ADDITIONAL COLLATERAL"), subject only to
Permitted Liens, Grantor and Grantee acknowledge and agree that all references
in this Security Deed to Collateral shall include, but shall not be limited to,
the Additional Collateral. Grantor shall execute any and all such documents,
including without limitation financing statements pursuant to the Uniform
Commercial Code ("FINANCING STATEMENTS"), as Grantee may reasonably request, to
preserve and maintain the priority of the lien created hereby on property which
may constitute or be deemed to be Additional Collateral, and shall pay to
Grantee on demand any reasonable expenses incurred by Grantee in connection with
the preparation, execution and filing of any such documents. Grantor shall, at
its sole cost and expense, execute and file all Financing Statements and
refilings and continuations of filings previously executed by Grantor as Grantee
reasonably deems necessary or advisable to create, preserve and protect said
lien; and Grantor hereby authorizes and empowers Grantee as its attorney-in-fact
to execute any such Financing Statements or filings, on Grantee's behalf, if
Grantor should fail to do so. The foregoing power of attorney is irrevocable and
is coupled with an interest.
Section 5.2. RIGHT TO PROCEED AGAINST ADDITIONAL COLLATERAL UPON THE
OCCURRENCE OF AND DURING CONTINUATION OF EVENT OF DEFAULT. If a Trigger Event
shall have occurred and be continuing and Grantee shall have received the
written request from the Required Senior Parties pursuant to SECTION 5.2(B) of
the Collateral Agency Agreement, in addition to any other rights and remedies
which it may have, Grantee shall have and may exercise immediately and without
demand, any and all rights and remedies granted to a secured party upon default
under the Uniform Commercial Code, including, without limiting the generality of
the foregoing, the right to take possession of the Additional Collateral or any
part thereof and sell the same at one or more public or private sales, and to
take such other measures as Grantee may deem necessary for the care, protection
and preservation of the Additional Collateral. The parties agree that, in the
event Grantee shall elect to proceed with respect to the Additional Collateral
separately from the other Mortgaged Property unless a greater period shall then
be mandated by the Uniform Commercial Code, ten (10) days' notice of the sale of
the Additional Collateral shall be reasonable notice. Grantee's reasonable
expenses of retaking, holding, preparing for sale, selling and the like,
including, but not limited to, reasonable, actual attorneys' fees and other
legal expenses, shall be assessed against Grantor, added to the Secured
Obligations and secured by the lien of this Security Deed. Grantor agrees that
it will not remove or permit to be removed from the Mortgaged Property any of
the Additional Collateral without the prior written consent of Grantee except as
hereinabove provided or as permitted by the Common Agreement. The
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proceeds of any disposition of the Additional Collateral, or any part thereof,
shall be applied by Grantee in accordance with the terms of the Collateral
Agency Agreement.
Section 5.3. REPLACEMENTS, ETC. All replacements, renewals, accessions,
attachments and additions to the Additional Collateral shall be and become
immediately subject to the security interest of this Security Deed and the
provisions of this ARTICLE V. Grantor warrants and represents that the
Additional Collateral now is, and covenants to ensure that all replacements
thereof, substitutions therefor or additions thereto will be, free and clear of
liens, encumbrances or security interests of others except Permitted Liens.
ARTICLE VI
DEFAULTS
Section 6.1. The term "EVENT OF DEFAULT", as used in this Security Deed,
shall mean the occurrence of and continuation of a Trigger Event.
ARTICLE VII
REMEDIES
Section 7.1. GRANTEE'S POWER OF ENFORCEMENT. If a Trigger Event shall
have occurred and be continuing and Grantee shall have received the written
request from the Required Senior Parties required pursuant to SECTION 5.2(B) of
the Collateral Agency Agreement, Grantee may and in accordance with the
procedures prescribed, and to the extent permitted, by applicable law, either
with or without entry or taking possession as hereinabove provided or otherwise,
and without regard to whether or not the Secured Obligations shall be due and
without prejudice to any other right of Grantee, proceed by any appropriate
action or proceeding: (i) to institute proceedings for the complete or partial
foreclosure of this Security Deed and to sell, at one or more sales as an
entirety or in separate lots or parcels, the Mortgaged Property, as hereinafter
provided or pursuant to law, (ii) to sell for cash or upon credit the Mortgaged
Property or any part thereof and all estate, claim, demand, right, title and
interest of Grantor therein and rights of redemption thereof, at one (1) or more
sales, in its entirety or in portions, at such time and place, upon such terms
and after such notice thereof as may be required or permitted by law or in the
absence of any such requirements, as Grantee (acting in accordance with an
opinion of counsel upon which Grantee may conclusively rely) may deem
appropriate, and in the foreclosure sale, of less than all of the Mortgaged
Property, this Security Deed shall continue as a lien on the remaining portion
of the Mortgaged Property, (iii) to split this Security Deed into two (2) or
more deeds to secure debt and to institute proceedings for the complete or
partial foreclosure of any one or more of such deeds to secure debt, with such
unforeclosed deeds to secure debt remaining a lien on the Mortgaged Property and
to sell, at one or more sales as an entirety or in separate lots or parcels, the
Mortgaged Property, as hereinafter provided or pursuant to law, subject to such
deeds to secure debt which were not foreclosed, (iv) to cumulatively pursue any
other remedy now or hereafter available to it in equity, at law, by virtue of
statute or otherwise, (v) to exercise in respect of any part or parts of the
Additional Collateral, all of the rights and remedies available to a secured
party upon default under the applicable provisions of the
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Uniform Commercial Code in effect in the State, and (vi) to enforce any and all
remedies of the Grantor under the Project Contracts.
Section 7.2. ENTRY; RECEIVERSHIP. If a Trigger Event shall have occurred
and be continuing and Grantee shall have received the written request from the
Required Senior Parties pursuant to SECTION 5.2(B) of the Collateral Agency
Agreement, Grantee may and in accordance with the procedures prescribed, and to
the extent permitted, by applicable law, either with or without entry or taking
possession as hereinabove provided or otherwise, and without regard to whether
or not the Secured Obligations shall be due and without prejudice to any other
right of Grantee, proceed by any appropriate action or proceeding to enter into
possession of the Mortgaged Property, with or without legal action, and by
force, if necessary, lease the same and collect all rents and profits therefrom
and, after deducting all costs of collection and administration expense, apply
the net rents and profits to the payment of taxes, water and sewer rents,
charges and claims, insurance premiums, assessments and all other carrying
charges (including, without limitation, agents' compensation and fees and costs
of counsel and receivers) and to the maintenance, repair or restoration of the
Mortgaged Property, or on account and in reduction of the principal or interest,
or principal and interest, hereby secured, in such order and amounts as Grantee,
in Grantee's sole discretion, may elect and have a receiver appointed to enter
into possession of the Mortgaged Property, collect the rents and profits
therefrom, and apply the same as provided for herein. Grantee shall be liable to
account only for rents and profits actually received. Notwithstanding the
foregoing, if a Trigger Event shall have occurred and be continuing and Grantee
shall have received the written request from the Required Senior Parties
required pursuant to SECTION 5.2(B) of the Collateral Agency Agreement, and in
the event of threatened waste to any part of the Mortgaged Property (but not
actual waste), Grantee shall provide notice to Grantor of its intention to
appoint a receiver and shall permit Grantor a reasonable period of time to
eliminate the threatened waste prior to the appointment of a receiver.
Section 7.3. FORECLOSURE BY POWER OF SALE. If a Trigger Event shall have
occurred and be continuing and Grantee shall have received the written request
from the Required Senior Parties required pursuant to SECTION 5.2(B) of the
Collateral Agency Agreement, Grantee may, with or without taking possession,
sell the Mortgaged Property as a whole, or any parcel thereof separately, at
public sale or sales, before the court house doors in the county in which the
Mortgaged Property or any part thereof is situated, to the highest bidder for
cash, first giving notice of the time, place and terms of such sale or sales by
advertising once a week for the four consecutive weeks immediately preceding
such sale (but without regard to the number of days intervening between the date
of publication of the first advertisement and the date of sale) in the newspaper
published in such county, or in the paper in which the Sheriff of the County
wherein the Mortgaged Property, or any part thereof, lies, publishes his
advertisements, all other notice being hereby waived by Grantor. This power
shall not be exhausted until the Secured Obligations have been satisfied, and
one or more sales may be held hereunder. The Grantee, its agents,
representatives, successors or assigns may bid and purchase at any sale and
shall be entitled to apply all or a part of the Secured Obligations secured by
this Security Deed as a credit against the purchase price; and may execute and
deliver to the purchaser or purchasers at any sale a sufficient conveyance of
the Mortgaged Property sold in fee simple or such other estate, if any, as
stated hereinbefore, with full warranties of title, Grantor hereby constitutes
and appoints Grantee, or any agent or attorney of Grantee, the agent and
attorney-in-fact of Grantor to make
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such sale and conveyance, which conveyance shall be effectual to bar all equity
of redemption, homestead, dower and all other exemptions of Grantor (all of
which are hereby expressly waived) and shall thereby divest the Grantor of all
right, title or equity that Grantor may have in and to the Mortgaged Property
and shall vest the same in the purchaser or purchasers at such sale or sales.
Grantee shall collect the proceeds of such sale, and after reserving therefrom
the entire debt secured hereby (and reasonable attorneys' fees) and all costs
and expenses of such sale, shall pay any surplus to Grantor, or such other party
entitled to the surplus, all as provided by applicable Legal Requirements. The
aforesaid power of sale and agency hereby granted are coupled with an interest
and are irrevocable by death or dissolution, or otherwise, and are in addition
to any and all other remedies that Grantor may have hereunder, at law or in
equity. All of the acts and doings of said attorney-in-fact are hereby ratified
and confirmed, and any recitals in said conveyance as to the facts essential to
a valid sale shall be binding upon Grantor.
Section 7.4. WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS SECURITY
DEED AND BY INITIALING THIS SECTION 7.4, GRANTOR EXPRESSLY ACKNOWLEDGES THE
RIGHT TO ACCELERATE THE INDEBTEDNESS AND THE POWER OF ATTORNEY GIVEN HEREIN TO
GRANTEE TO SELL THE MORTGAGED PROPERTY IN ACCORDANCE WITH THE PROVISIONS HEREOF
BY NON-JUDICIAL. FORECLOSURE UPON THE OCCURRENCE OF AN EVENT OF DEFAULT WITHOUT
ANY JUDICIAL HEARING AND WITHOUT ANY NOTICE. GRANTOR HEREBY EXPRESSLY WAIVES ANY
RIGHT GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE STATE OF GEORGIA OR THE
CONSTITUTION OF THE UNITED STATES OF AMERICA TO NOTICE OR TO A JUDICIAL HEARING
PRIOR TO THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED BY THIS SECURITY DEED TO
GRANTEE AND GRANTOR WAIVES THE RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY
SALE DULY CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECURITY DEED ON
THE GROUND (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR
JUDICIAL HEARING. ALL WAIVERS BY GRANTOR IN THIS PARAGRAPH HAVE BEEN MADE
VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY, AFTER GRANTOR HAS BEEN FIRST INFORMED
BY COUNSEL OF GRANTOR'S OWN CHOOSING AS TO POSSIBLE ALTERNATIVE RIGHTS, AND HAVE
BEEN MADE AS AN INTENTIONAL RELINQUISHMENT AND ABANDONMENT OF A KNOWN RIGHT AND
PRIVILEGE.
GRANTOR'S INITIALS: /S/ MFL
Section 7.5. GRANTEE'S RIGHT TO ENTER, TO OPERATE MORTGAGED PROPERTY AND
APPLY INCOME.
(a) If a Trigger Event shall have occurred and be continuing and Grantee
shall have received the written request from the Required Senior Parties
required pursuant to SECTION 5.2(B) of the Collateral Agency Agreement, Grantor
upon demand of Grantee, shall forthwith surrender to Grantee the actual
possession of the Mortgaged Property, and if and to the extent permitted by law,
Grantee itself, or by such officers or agents as it may appoint, or by a
court-appointed receiver, may, without assuming liability for the performance of
any obligations of Grantor, enter and take possession of all the Mortgaged
Property and may exclude Grantor
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and its agents and employees wholly therefrom and have unencumbered access to
the books, papers and accounts of Grantor.
(b) If a Trigger Event shall have occurred and be continuing and
Grantee shall have received the written request from the Required Senior Parties
required pursuant to SECTION 5.2(B) of the Collateral Agency Agreement, and if
Grantor shall for any reason fail to surrender or deliver the Mortgaged Property
or any part thereof after Grantee's demand therefor, Grantee may seek to obtain
a writ, judgment or decree conferring on Grantee the right to immediate
possession or requiring Grantor to deliver immediate possession of all or any
part of the Mortgaged Property to Grantee. Grantor shall pay to Grantee, upon
demand, all reasonable costs and expenses of obtaining such judgment or decree
and reasonable compensation to Grantee, its attorneys and agents, and all such
costs, expenses and compensation shall, until paid, be Secured Obligations
secured by the lien of this Security Deed.
(c) Upon every such entry upon or taking of possession, Grantee
shall have the right, at the expense of Grantor, to operate, manage and control
the Mortgaged Property and to carry on the business thereof in the name of
Grantor or otherwise as Grantee shall deem best and otherwise to exercise all or
any of the Rights described in ARTICLE IV, as it shall deem best, and to make
all such repairs, replacements, alterations, additions or improvements to the
Mortgaged Property or any part thereof as Grantee may deem proper.
Section 7.6. LEASES. Grantee is authorized to foreclose this Security
Deed in accordance with the terms of this Security Deed subject or not subject,
as Grantee may elect, to the rights of any Tenants and the election to not
foreclose subject to any such Tenants and to foreclose their rights will not be,
nor be asserted by Grantor to be, a defense to any proceedings instituted by
Grantee to collect the sums secured hereby or to collect any deficiency
remaining unpaid after the foreclosure sale of the Mortgaged Property.
Section 7.7. FORECLOSURE; PROCEEDS OF SALE. At any foreclosure sale,
Grantee may bid for and acquire the Mortgaged Property or any part thereof (and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting against the Secured Obligations then outstanding the net sales price
after deducting therefrom the expenses of the sale and the costs of the auction
and any other sums which Grantee is authorized to deduct under this Security
Deed) and, upon compliance with the terms of sale, may hold, retain and possess
and dispose of such property in its own absolute right without further
accountability. The proceeds of such sale shall be applied in accordance with
the Collateral Agency Agreement.
Section 7.8. WAIVER OF APPRAISEMENT, VALUATION, STAY, EXTENSION AND
REDEMPTION LAWS. Grantor agrees, to the fullest extent that it may lawfully do
so, that in the event of any Event of Default on its part hereunder, neither
Grantor nor anyone claiming through or under Grantor shall or will claim, insist
upon or plead or in any way take advantage of, and hereby waives, any
appraisement, valuation, stay, marshalling of assets, extension, homestead or
similar exemption, redemption or moratorium law now or hereafter in force and
effect.
Section 7.9. RECEIVER. If a Trigger Event shall have occurred and be
continuing and Grantee shall have received the written request from the Required
Senior Parties required
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pursuant to SECTION 5.2(B) of the Collateral Agency Agreement, Grantee, without
regard to the value or adequacy of any security for the Secured Obligations and
without regard for the solvency of the Grantor, shall be entitled as a matter of
right if it so elects, without notice to Grantor except as provided below, to
the appointment of a receiver to enter upon and take possession of the Mortgaged
Property and to collect all Income and apply the same in accordance with the
Indenture and this Security Deed. Grantor agrees to, and does consent to, the
appointment of a receiver in the circumstance described in the preceding
sentence. Notwithstanding the foregoing, if a Trigger Event shall have occurred
and be continuing and Grantee shall have received the written request from the
Required Senior Parties required pursuant to SECTION 5.2(B) of the Collateral
Agency Agreement, and in the event of threatened waste to any part of the
Mortgaged Property (but not actual waste),Grantee shall provide notice to
Grantor of its intention to appoint a receiver and shall permit Grantor a
reasonable period of time to eliminate the threatened waste prior to the
appointment of a receiver. The expenses, including receiver's fees, reasonable
attorneys' fees, costs and agent's compensation, incurred pursuant to the powers
herein contained shall be Secured Obligations secured by the lien of this
Security Deed. The right to enter and take possession of and to operate, manage
and control the Mortgaged Property and to collect all Income, whether by a
receiver or otherwise, shall be cumulative of any other right or remedy
hereunder or afforded by law and may be exercised concurrently therewith or
independently thereof. Grantee shall be liable to account only for such Income
as is actually received by Grantee, whether received pursuant to this SECTION
7.9, SECTION 7.2 or SECTION 7.3 hereof.
Section 7.10. LEGAL EXPENSES OF GRANTEE. Grantor shall pay to Grantee,
on demand, all costs, charges and expenses (including reasonable attorneys' fees
and disbursements) actually incurred or paid at any time by Grantee (i) because
of the failure of Grantor to pay, perform or observe any of the Secured
Obligations or (ii) in any litigation to prosecute or defend the title, rights
and lien created by this Security Deed (including an action to foreclose this
Security Deed or otherwise enforce Grantee's remedies hereunder), together with
interest on each such payment made by Grantee at the Adjusted Base Rate plus
three percent (3%) from the date each such payment is made and, to the extent
permitted by law, all such sums and the interest thereon shall be Secured
Obligations secured by the lien of this Security Deed.
Section 7.11. DELAY OR OMISSION. No delay or omission of Grantee in
exercising any right, power or remedy accruing upon any Event of Default shall
exhaust or impair any such right, power or remedy or shall be construed to waive
any such Event of Default or to constitute acquiescence therein. Every right,
power and remedy given to Grantee may be exercised from time to time and as
often as may be deemed expedient by Grantee.
Section 7.12. NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER. No waiver of
any Event of Default hereunder shall extend to or affect any subsequent or any
other Event of Default then existing, or impair any rights, powers or remedies
consequent thereon.
Section 7.13. NO MERGER. It is the intention of the parties hereto that
if Grantee shall at any time hereafter acquire title to all or any portion of
the Mortgaged Property, then, and until the Secured Obligations have been paid
and performed in full, the interest of Grantee under this Security Deed shall
not merge or become merged in or with the estate and interest of Grantee as the
holder and owner of title to the Mortgaged Property or any part thereof and
that, until such
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payment in full, the estate of Grantee in the Mortgaged Property and the
interest of Grantee under this Mortgage shall be deemed separate and apart and
shall continue in full force and effect to the same extent as if Grantee had not
acquired title to the Mortgaged Property or any part thereof.
Section 7.14. GRANTEE'S RIGHTS TO PERFORM GRANTOR'S COVENANTS. If a
Trigger Event shall have occurred and be continuing and Grantee shall have
received the written request from the Required Senior Parties required pursuant
to SECTION 5.2(B) of the Collateral Agency Agreement, then, without limiting any
other provision of this Security Deed, and without waiving or releasing Grantor
from any Secured Obligation or default hereunder, Grantee (or any receiver of
the Mortgaged Property) may (but shall not be obligated to), in order to
preserve its interest in the Mortgaged Property, and upon not less than two (2)
days' prior written notice to Grantor, except in case of an emergency, make any
such payment or perform any other act or take any appropriate action (including,
without limitation, entry on the Mortgaged Property and performance of work
thereat) as Grantee, in its reasonable discretion, may deem necessary, and all
payments made and costs and expenses incurred or paid by Grantee in correction
therewith shall become due and payable immediately. The amounts so incurred or
paid by Grantee, together with interest thereon at the Adjusted Base Rate plus
three percent (3%) from the date incurred until paid by Grantor, shall be added
to the Secured Obligations and secured by the lien of this Security Deed.
Grantee is hereby empowered to enter and to authorize others to enter upon the
Mortgaged Property or any part thereof for the purpose of performing or
observing any such defaulted covenant, condition or term, without thereby
becoming liable to Grantor or any person in possession holding under Grantor.
Section 7.15. GRANTEE'S RIGHT TO SPECIFIC PERFORMANCE. If a Trigger
Event shall have occurred and be continuing and Grantee shall have received the
written request from the Required Senior Parties required pursuant to SECTION
5.2(B) of the Collateral Agency Agreement, then, without limiting any other
provisions of this Security Deed, and without waiving or releasing Grantor from
any Secured Obligations or default hereunder, Grantee may (but shall not be
obligated to), in order to protect its interest in the Mortgaged Property,
commence an action for specific performance to cause Grantor to comply with any
of the covenants contained in this Security or any other Financing Document.
Section 7.16. REMEDIES CUMULATIVE. No right, power or remedy conferred
upon or reserved to Grantee by this Security Deed is exclusive of any other
right, power or remedy, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power and
remedy given hereunder, or now or hereafter existing at law, in equity or by
statute.
Section 7.17. RIGHT TO RELEASE.
(a) Grantee at all times shall have the right to release any part of the
Mortgaged Property now or hereafter covered by this instrument or any other
security Grantee now has or may hereafter have securing payment of all or any
part of the Secured Obligations, without releasing any other part of the
Mortgaged Property or other security, without impairing the Secured Obligations
or any rights to any deficiency, and without affecting the lien,
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assignment of rents and security interest of this instrument as to the part or
parts thereof not so released.
(b) In the event that Grantor elects to exercise the rights
granted to it pursuant to Section 5.2(e)(ii) of the Common Agreement to sell,
transfer, assign, hypothecate, pledge, lease sublease or otherwise dispose of
(in one transaction or in a series of transactions) any of the Mortgaged
Property, including without limitation, any portion of the Mortgaged Property
which is subject to the Electric Interconnection Agreement (as defined in the
Common Agreement), Grantee shall release such portion of the Mortgaged Property.
ARTICLE VIII
PROVISIONS OF GENERAL APPLICATION
Section 8.1. MODIFICATIONS. No change, amendment, modification,
cancellation or discharge of this Security Deed, or any part hereof, shall be
valid unless in writing, dated and signed by the party against whom enforcement
of such change, amendment, modification, cancellation or discharge is sought.
Section 8.2. JUDICIAL PROCEEDINGS; WAIVER OF JURY TRIAL. Any judicial
proceeding brought against any party with respect to this Security Deed shall be
brought in any court of competent jurisdiction in Heard County, Georgia and, by
execution and delivery of this Security Deed, each party (i) accepts, generally
and unconditionally, the nonexclusive jurisdiction of such courts and any
related appellate court and irrevocably agrees to be bound by any judgment
rendered thereby in connection with any such claim and (ii) irrevocably waives,
to the greatest extent permitted by applicable law, any objection it may now or
hereafter have as to the venue of any such proceeding brought in such a court or
that such a court is an inconvenient forum. Nothing herein shall affect the
right of Grantor or Grantee to serve process in any other manner permitted by
law or shall limit the right of Grantor or Grantee in the courts of any other
jurisdiction.
Section 8.3. SATURDAY, SUNDAY OR NON-BUSINESS DAY. If the date for the
performance of any term, provision or condition (monetary or otherwise) under
the Financing Documents or this Security Deed shall happen to fall on a
Saturday, Sunday or non-Business Day, the date for the performance of such term,
provision or condition shall be extended to the next succeeding Business Day
immediately thereafter occurring, with interest at the rate provided in the
respective Financing Document on the outstanding principal balance to such next
succeeding Business Day if such term, provision or condition shall result in the
extension of any monetary payment due to Grantee.
Section 8.4. USE OF THE WORD "HEREIN". The words "herein," "hereof,"
"hereinafter," "hereunder" and other words of similar import refer to this
Security Deed as a whole and not to any particular Article, Section, subsection
or other subdivision of this Security Deed unless specifically noted otherwise
in this Security Deed.
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Section 8.5. MONIES. All references to monies in this Security, the
Indenture or any of the Financing Documents, or the equivalent thereof, shall be
deemed to mean lawful monies of the United States of America.
Section 8.6. NO PARTNERSHIP OR JOINT VENTURE. Nothing herein, nor the
acts of the parties hereto, shall be deemed or construed to create a partnership
or joint venture between Grantor and Grantee.
Section 8.7. STAMP OR OTHER TAX. Should any stamp tax, intangible tax,
recording tax or other tax (excluding income, franchise, gross receipts or
similar taxes with respect to Grantee) now or hereafter become payable with
respect to this Security Deed, or their execution or delivery, Grantor will pay
the same prior to the due date thereof and hold Grantee harmless from all costs
arising from same (including, without limitation, costs arising from Grantor's
failure to timely pay same).
Section 8.8. ASSIGNMENT OF FINANCING DOCUMENTS: COVENANTS RUN WITH LAND.
The covenants, terms, conditions and agreements contained in this Security Deed
shall run with the land and bind Grantor, the heirs, executors, administrators,
principals, legal representatives, successors and assigns of Grantor and each
person constituting Grantor and all subsequent owners, encumbrances and Tenants
of the Mortgaged Property, or any part thereof, and shall inure to the benefit
of Grantee its successors and assigns and all subsequent beneficial owners of
this Security Deed.
Section 8.9. RIGHTS OF THIRD-PARTIES. Grantee makes no representations
and assumes no obligations concerning the quality of the construction of the
Mortgaged Property or the absence therefrom of any defects. In this regard,
Grantor agrees to and shall indemnify Grantee from any liability, claim or
losses resulting from the condition of the Mortgaged Property, whether related
to the quality of construction or otherwise and whether arising during or after
the term of the Collateral Agency Agreement. This paragraph shall survive the
payment and performance of the Secured Obligations and shall continue in full
force and effect so long as the possibility of any liability, claim or loss
exists.
Section 8.10. NO AGENCY. Grantee is not the agent or representative of
Grantor, and Grantor is not the agent or representative of Grantee, and nothing
in this Mortgage shall be construed to make Grantee liable to anyone for goods
delivered or services performed by them upon the Mortgaged Property or for debts
or claims accruing to them against Grantor. Nothing herein shall be construed to
create a contractual relationship between Grantee and anyone supplying labor or
materials to the Mortgaged Property.
Section 8.11. CONFLICTS AND INCONSISTENCIES/EFFECT OF COLLATERAL AGENCY
AGREEMENT.
In the event of a conflict between any provision of the Collateral
Agency Agreement and this Mortgage, the Collateral Agency Agreement shall
control, except that this Security Deed shall control with respect to (i) the
conveyance of security title and the imposition of the lien hereof, (ii) the
governing law applicable to this Security Deed as set forth in SECTION 8.17
hereof, and (iii) the exercise of the remedies hereunder including, without
limitation, the power of sale contained in SECTION 7.3 hereof and the rights
under SECTION 5.2 hereof. To the
25
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extent the Collateral Agency Agreement expressly permits any acts or conditions
prohibited hereunder (or which result in an Event of Default) or which are
expressly excluded from any prohibitions thereunder, such acts or conditions
shall be allowed without resulting in an Event of Default.
Section 8.12. NOTICES AND DELIVERIES; MANNER OF DELIVERY; EFFECTIVENESS.
8.12.1. MANNER OF DELIVERY. All notices, communications and
materials (including all information) to be given or delivered pursuant to this
Security Deed shall be in writing (which shall include telex and telecopy
transmissions).
8.12.2. ADDRESSES. All notices, communications and materials to
be given or delivered pursuant to this Security Deed shall be given or delivered
at the following respective addresses and telecopier and telephone numbers and
to the attention of the following individuals or departments:
if to Grantor, to it at:
Tenaska Georgia Partners, L.P.
1044 N. 115th Street, Suite 400
Omaha, NE 68154-4446
Attention: Michael F. Lawler
Telecopier/Telephone No.: 402-691-9500/402-691-9550
if to Grantee, to it at:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula,
International & Project Finance Service Delivery
Telecopier/Telephone No.: 212-946-7557/212-946-8178
or at such other address or telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice specifically
captioned "Notice of Change of Address" given to (i) if the party to which such
information pertains is the Grantor, the Grantee, and (ii) if the party to which
such information pertains is the Grantee, the Grantor.
8.12.3. EFFECTIVENESS. Each notice and communication and any
material given or delivered under this Mortgage shall be deemed so given or
delivered (i) if sent by certified mail, postage prepaid, return receipt
requested, on the third Business Day after such notice, communication or
material, addressed as above provided, is delivered to a United States post
26
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office and a receipt therefor is issued thereby, (ii) if sent by any other means
of physical delivery, when such notice, communication or material is delivered
to the appropriate address as above provided, and (iii) if sent by telecopier,
when such notice, communication or material is transmitted to the appropriate
telecopier number as above provided and is received at such number.
8.12.4. REASONABLE NOTICE. Any requirement under applicable law
of reasonable notice by the Grantee to the Grantor of any event in connection
with, or in any way related to, this Security Deed or the exercise by the
Grantee of any of its rights hereunder or thereunder shall be met if notice of
such event is given to the Grantor in the manner prescribed above at least ten
(10) days before (i) the date of such event or (ii) the date after which such
event will occur.
Section 8.13. CAPTIONS. The captions and the table of contents herein
are inserted only for convenience and reference, and in no way define, limit,
enlarge or describe the scope or intent of this Security Deed or the
construction of any provision hereof. References herein to Articles, Sections,
subsections, paragraphs and subparagraphs are to those of this Security Deed
unless another document is specified.
Section 8.14. GENDER AND NUMBER. Wherever the context of this Security
Deed so requires, the masculine gender includes the feminine or neuter, and the
singular number or word includes the plural, and vice versa.
Section 8.15. SEVERABILITY. If any provision of this Security Deed or
the application thereof to any Person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Security Deed, or the
application of such provision to Persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Security Deed shall be valid and enforceable to the fullest
extent permitted by law.
Section 8.16. FILING OF SECURITY DEED, ETC. Grantor forthwith upon the
execution and delivery of this Security Deed and thereafter, from time to time,
will cause this Security Deed, and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of, and to
fully protect the priority of, the lien hereof and the interest of Grantee in
the Mortgaged Property. Grantor will pay all filing, registration or recording
fees, and all expenses incident to the preparation, execution and acknowledgment
of this Security Deed, any instrument of further assurance, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property and any instrument of further assurance, any amendment or restatement
hereof, and any satisfaction or assignment of this Security Deed, and Grantor
will pay all Federal, state, county and municipal taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution,
delivery and recording of this Security Deed, any mortgage supplemental hereto,
any amendment or restatement of this Security Deed, any security instrument with
respect to the Mortgaged Property or any instrument of further assurance.
Grantor shall hold harmless and indemnify Grantee, its successors and assigns,
against any liability incurred by reason of the imposition of any tax on the
making, delivery and recording of this Security Deed.
27
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Section 8.17. CONTROLLING LAW. This Security Deed shall be governed by,
and construed and enforced in accordance with the law of the State.
Section 8.18. NON-RECOURSE LIABILITY. Satisfaction of the Secured
Obligations shall be had solely from the Collateral. Notwithstanding any
provision to the contrary in the Transaction Documents, there shall be no
recourse against any Affiliates, stockholders, officers, directors,
representatives or employees of Grantor, other than Grantor (each a
"NON-RECOURSE PARTY"), for any payment due hereunder or under any other
Financing Document or Security Document from the Grantor or for the performance
of any obligation of such Non-Recourse Party, or breach of any representation or
warranty made by such Non-Recourse Party hereunder or thereunder. The sole
recourse of the Grantee and the Senior Parties hereunder or under any other
Transaction Document or for the performance of any obligation of Grantor, or
breach of any representation or warranty made hereunder or thereunder by
Grantor, shall be against Grantor and its assets, it being expressly understood
by the Senior Parties that such obligations of Grantor are obligations solely of
Grantor and that no such personal liability shall attach to, or be incurred by
any Non-Recourse Party; PROVIDED, that nothing contained in this SECTION 8.18
shall (i) impair in respect of Grantor the validity of any of the Financing
Documents, prevent the taking of any action permitted by law against Grantor or
any of its Affiliates, or in any way affect or impair the rights of the Agent
and Senior Parties to take any action permitted by law, in either case to
realize upon the Collateral, (ii) be deemed to release Grantor or any of its
Affiliates, or any past, present or future shareholder, partner, officer,
employee, director or agent of any thereof, from liability for its fraudulent
actions, fraudulent misrepresentations, gross negligence or willful misconduct
or (iii) limit or affect the obligations and liabilities of any Non-Recourse
Party in accordance with the terms of any other Transaction Document creating
such obligations and liabilities to which such Non-Recourse Party is a party.
Section 8.19. FUTURE ADVANCES. In the event Grantee, DSR LOC Provider,
the PPA LOC Provider and/or any other Senior Party makes future advances to
Grantor, such future advances, with interest thereon, shall be secured by this
Security Deed, unless the parties shall agree otherwise in writing. If any of
such future advances should be applied to the payment of any existing debt owed
by the Grantor, Grantee shall be subrogated to the rights of the party to whom
such payment is made.
Section 8.20. SECURITY AND PRIORITY OF ADVANCES. This Security Deed
secures, and the Secured Obligations include, future advances. Advances may be
made by Grantee, DSR LOC Provider, the PPA LOC Provider and/or any other Senior
Party and indebtedness may be incurred from time to time hereafter, but each
such advance or indebtedness shall be secured hereby as if made on the date
hereof.
Section 8.21. CANCELLATION OF SECURITY DEED. If all of the Secured
Obligations are paid and all of the covenants, warranties, undertakings and
agreements made in this Security Deed are kept and performed and all obligations
of Grantee, the DSR LOC Provider, the PPA LOC Provider and any other Senior
Party for future advances have been terminated, then, and in that event only,
this Security Deed shall be cancelled by Grantee in due form at Grantor's cost.
Without limitation, all provisions herein for indemnity of Grantee shall survive
discharge of the Secured Obligations
28
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IN WITNESS WHEREOF, this Security Deed has been duly executed by Grantor
the day and year first above written.
Signed, sealed GRANTOR:
and delivered by Grantor
this 10th day of November, TENASKA GEORGIA PARTNERS, L.P.
1999 in the presence
of the following witnesses: By: Tenaska Georgia, Inc.
Managing General Partner
By: /s/ Michael F. Lawler
------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
/s/ Bree J. Smith
- ---------------------------------
Unofficial Witness
Name: Bree J. Smith
Address: 322 West 57th St.
Apt. 19J
New York, NY 10019
/s/ Cindy Tate
- ---------------------------------
Notary Public
My Commission Expires:
Cindy Tate
Notary Public, State of New York
No. 24-6014369
Qualified in Kings County
Commission Expires Oct. 13, 2000
NOTARIAL SEAL
29
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EXHIBIT "A"
THE SITE
TRACT A1
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 72 degrees 48 minutes 00 seconds West for a distance of
405.46 feet to a 12 INCH WOOD POST;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a 1/2 INCH REBAR SET ON THE WESTERLY LINE OF A GEORGIA POWER
COMPANY RIGHT OF WAY (150 FOOT WIDTH), SAID POINT BEING THE POINT OF BEGINNING
FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 1982.75 feet to a
1/2 INCH REBAR SET ON THE NORTHERLY LIMITS OF THE WETLANDS OF HILLY MILL CREEK;
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 191.17 feet to a
POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 46 degrees 21 minutes 20 seconds West for a distance of 66.26
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
30
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THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF TEE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK;
THENCE along the centerline of the unnamed creek to the Northeast, more
or less, North 68 degrees 03 minutes 13 seconds East for a distance of 336.28
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 29 minutes 52 seconds East for a distance of
296.07 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 54 degrees 43 minutes 02 seconds East for a distance of
67.68 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 17 degrees 17 minutes 28 seconds East for a distance of
228.26 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 23 degrees 21 minutes 46 seconds East for a distance of
241.49 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 07 degrees 17 minutes 08 seconds East for a distance of
71.42 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 79 degrees 26 minutes 44 seconds East for a distance of
307.88 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 48 degrees 14 minutes 55 seconds East for a distance of
157.63 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 27 degrees 04 minutes 19 seconds East for a distance of
111.97 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 55 degrees 09 minutes 32 seconds East for a distance of
128.35 feet to a POINT IN THE CENTERLINE OF THE CREEK;
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THENCE North 08 degrees 06 minutes 45 seconds East for a distance of
34.61 feet to a point;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
212.86 feet to a 1/2 inch rebar set on the Westerly line of a GEORGIA POWER
COMPANY TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH); Said point being the
POINT OF BEGINNING.
Said property contains 46.13 acres, and is that same tract or parcel of
land shown as Tract AI on that certain ALTA/ACSM Title Survey, entitled Heard
County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc., Tenaska
Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title Insurance
Company of New York, Stewart Title Guaranty Company, Heard County Development
Authority & The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and certification of
James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19, 1999,
last revised November 4, 1999, and recorded in Plat Book 10, Pages 176 - 188, in
the Office of the Clerk of the Superior Court of Heard County, Georgia, which
recorded Survey is incorporated herein by reference.
TRACT B
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
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THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a distance of
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek, Said point being the POINT OF BEGINNING for the herein described parcel
of land;
THENCE along said wetlands limits to the Southeast, more or less, South
53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
33
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THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
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THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 Minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE leaving said wetlands limits, North 65 degrees 01 minutes 43
seconds West for a distance of 98.87 feet to a point;
THENCE North 11 degrees 02 minutes 41 seconds East for a distance of
230.45 feet to a point;
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THENCE North 11 degrees 13 minutes 13 seconds West for a distance of
121.54 feet to a point;
THENCE North 38 degrees 58 minutes 52 seconds West for a distance of
121.90 feet to a point;
THENCE North 23 degrees 10 minutes 22 seconds West for a distance of
116.83 feet to a point;
THENCE North 27 degrees 01 minutes 41 seconds West for a distance of
102.77 feet to a point;
THENCE North 44 degrees 31 minutes 22 seconds West for a distance of
55.85 feet to a point;
THENCE South 70 degrees 40 minutes 56 seconds West for a distance of
73.31 feet to a point;
THENCE South 71 degrees 22 minutes 08 seconds West for a distance of
120.59 feet to a point;
THENCE North 27 degrees 11 minutes 02 seconds West for a distance of
173.06 feet to a point;
THENCE North 06 degrees 27 minutes 30 seconds East for a distance of
58.98 feet to a point;
THENCE North 40 degrees 46 minutes 01 seconds East for a distance of
132.31 feet to a point;
THENCE North 01 degrees 41 minutes 21 seconds West for a distance of
32.15 feet to a point;
THENCE North 42 degrees 40 minutes 25 seconds West for a distance of
132.37 feet to a point;
THENCE North 47 degrees 57 minutes 38 seconds East for a distance of
97.57 feet to the POINT OF BEGINNING.
Said property contains 3.84 acres more or less and is that same tract or parcel
of land shown as Tract B on that certain ALTA/ACSM Title Survey, entitled Heard
County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc., Tenaska
Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title Insurance
Company of New York, Stewart Title Guaranty Company, Heard County Development
Authority & The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and certification of
James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19, 1999,
last revised November 4, 1999, and recorded in Plat Book 10, Pages 176 - 188, in
the Office of the Clerk of
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the Superior Court of Heard County, Georgia, which recorded Survey is
incorporated herein by reference.
TRACT C
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek, said point being the POINT OF BEGINNING for the herein described parcel
of land.
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4" PIPE;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE North 72 degrees 59 minutes 23 seconds West for a distance of
97.41 feet to a point;
THENCE North 28 degrees 40 minutes 02 seconds West for a distance of
114.55 feet to a point;
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<PAGE>
THENCE North 62 degrees 08 minutes 04 seconds West for a distance of
184.99 feet to a point;
THENCE North 63 degrees 50 minutes 09 seconds West for a distance of
166.92 feet to a point;
THENCE North 64 degrees 00 minutes 12 seconds West for a distance of
173.39 feet to a point;
THENCE North 87 degrees 49 minutes 10 seconds West for a distance of
111.55 feet to a point;
THENCE North 66 degrees 04 minutes 51 seconds West for a distance of
158.94 feet to a point;
THENCE North 66 degrees 19 minutes 50 seconds West for a distance of
121.59 feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of
186.45 feet to a point;
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of
163.48 feet to a point;
THENCE North 56 degrees 31 minutes 54 seconds West for a distance of
127.08 feet to a point;
THENCE North 49 degrees 42 minutes 26 seconds West for a distance of
110.80 feet to a point;
THENCE South 63 degrees 26 minutes 27 seconds West for a distance of
73.93 feet to a point;
THENCE South 34 degrees 43 minutes 18 seconds West for a distance of
155.58 feet to a point;
THENCE North 65 degrees 01 minutes 43 seconds West for a distance of
125.76 feet to a point on the Southerly Wetland limits of Hilly Mill Creek;
THENCE along said Wetland Limits to the Southeast, more or Less, North
19 degrees 07 minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
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<PAGE>
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
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<PAGE>
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47. 1 5 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.1 1 feet to a point;
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to the POINT OF BEGINNING.
Said property contains 5.13 acres more or less and is that same tract
or parcel of land shown as Tract C on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the
40
<PAGE>
Office of the Clerk of the Superior Court of Heard County, Georgia, which
recorded Survey is incorporated herein by reference.
[LEGAL DESCRIPTION CONTINUED ON NEXT PAGE]
TRACT D
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK; SAID POINT BEING
THE POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
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<PAGE>
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a Distance of
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek;
THENCE along said wetlands limits to the Southeast, more or less, South
53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
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<PAGE>
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
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<PAGE>
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE across an unnamed creek and wetlands area which intersects from
the Southwest, South 65 degrees 01 minutes 43 seconds East for a distance of
394.79 feet to a point;
THENCE continuing along said wetlands limit, North 19 degrees 07
minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
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<PAGE>
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
45
<PAGE>
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to a point;
THENCE North 02 degrees 18 minutes 34 seconds East for a distance of
978.06 feet to a point;
THENCE North 01 degrees 18 minutes 40 seconds East for a distance of
32.38 feet to the POINT OF BEGINNING.
Said property contains 43.03 acres more or less and is that same tract
or parcel of land shown as Tract D on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
46
<PAGE>
TRACT G
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
177.75 feet to point;
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<PAGE>
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
82.45 feet to a point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
639.20 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
52.57 feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
150.00 feet to a point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
25.93 feet to a point;
THENCE South 44 degrees 18 minutes 22 seconds East for a distance of
63.80 feet to a point;
THENCE South 53 degrees 03 minutes 38 seconds East for a distance of
18.78 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
211.55 feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
11.80 feet to a point;
THENCE along a curve to the right having a radius of 3600.00 feet, a
central angle of 09 degrees 21 minutes 08 seconds, an Arc length of 587.61 feet,
and subtended by a chord bearing South 33 degrees 47 minutes 14 seconds West for
a distance of 586.96 feet to the POINT OF BEGINNING.
Said property contains 3.16 acres more or less and is that same tract
or parcel of land shown as Tract G on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
48
<PAGE>
EXHIBIT "B"
LAY-DOWN SITE
TRACT H
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
206 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A 1/2 INCH REBAR SET AT THE POINT WHERE THE WEST LINE OF
LAND LOT 206 INTERSECTS THE SOUTH RIGHT OF WAY LINE OF GEORGE BROWN ROAD
(PRESCRIPTIVE RIGHT OF WAY, 40 FEET, MORE OF LESS, IN WIDTH), SAID POINT BEING
THE POINT OF REFERENCE; THENCE NORTH 01 DEGREE 30 MINUTES 06 SECONDS EAST FOR A
DISTANCE OF 40.01 FEET TO A POINT WHERE SAID WEST LINE OF LAND LOT 206
INTERSECTS THE NORTH RIGHT OF WAY LINE OF GEORGE BROWN ROAD, SAID POINT BEING
THE POINT BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
Thence along said west line of Land Lot 206 North 01 degree 27 minutes
40 seconds East for a distance of 800.22 feet to a Painted Rock at the Northwest
comer of said Land Lot 206;
Thence along the North line of Land Lot 206 South 89 degrees 14 minutes
11 seconds East for a distance of 821.44 feet to a 1/2 inch rebar set on the
West Right of Way line of Joe Stephens Road (80 foot width);
Thence along said western right of way line of Joe Stephens Road, along
a curve to the left having a radius of 2021.86 feet, a central angle of 16
degrees 46 minutes 53 seconds, an Arc length of 592.18 feet, and subtended by a
chord bearing South 00 degrees 33 minutes 16 seconds East for a chord distance
of 590.07 feet to a 1/2 inch rebar set at the point where said western right of
way line of Joe Stephens Road intersects the North right of way line of George
Brown Road;
Thence along said northern right of way line of George Brown Road South
78 degrees 31 minutes 36 seconds West for a chord distance of 146.61 feet to a
point;
Thence along a curve to the left having a radius of 4280.10 feet, a
central angle of 05 degrees 04 minutes 37 seconds, an Arc length of 379.26 feet,
and subtended by a chord bearing South 75 degrees 59 minutes 18 seconds West for
a distance of 379.13 feet to a point;
Thence South 73 degrees 26 minutes 59 seconds West for a distance of
265.34 feet to a point;
Thence along a curve to the right having a radius of 159.33 feet, a
central angle of 29 degrees 41 minutes 14 seconds, an Arc length of 82.56 feet,
and subtended by a chord bearing South 88 degrees 17 minutes 36 seconds West for
a chord distance of 81.64 feet to a point, said point being the POINT OF
BEGINNING.
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<PAGE>
Said property contains 13.13 acres more or less and is that same tract
or parcel of land shown as Tract H on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
LESS AND EXCEPT:
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
206 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, DEEDED FROM TENASKA
GEORGIA PARTNERS, L.P., AS GRANTOR, TO HEARD COUNTY, AS GRANTEE, PURSUANT TO
THAT CERTAIN RURAL POST ROADS RIGHT OF WAY DEED DATED JULY 1, 1999, RECORDED IN
DEED BOOK 197, PAGE 618, HEARD COUNTY, GEORGIA RECORDS.
50
<PAGE>
EXHIBIT "C"
TENASKA EASEMENT PREMISES
TRACT A2
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE POINT OF
BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
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<PAGE>
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
61.64 feet to a POINT ON THE WESTERLY LIMIT OF A GEORGIA POWER COMPANY
TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 191.17 feet to
a 1/2 INCH REBAR SET AT THE NORTHERLY LIMITS OF THE WETLANDS OF HILLY MILL
CREEK;
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 1982.75 feet
to a 1/2 INCH REBAR SET;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
252.91 feet to a 12 INCH WOOD POST;
THENCE North 72 degrees 48 minutes 00 seconds East for a distance of
405.46 feet to the POINT OF BEGINNING.
Said property contains 27.41 acres, more or less, and is that same
tract or parcel of land shown as Tract A2 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
TRACT E2
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE POINT OF
BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE South 72 degrees 48 minutes 00 seconds East for a distance of
405.46 feet to a point;
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THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a 1/2 inch rebar set on the westerly line of a Georgia Power
Company Easement (150 foot width);
THENCE North 05 degrees 00 minutes 38 seconds West for a distance of
456.22 feet to a point on said westerly line of a Georgia Power Company Easement
and on the southerly right of way line of George Brown Road;
THENCE along said right of way line in an easterly direction, along a
curve to the right having a radius of 668.28 feet and an arc length of 237.56
feet and being subtended by a chord bearing South 71 degrees 01 minutes 39
seconds East for a distance of 236.31 feet to a point;
THENCE South 60 degrees 47 minutes 40 seconds East for a distance of
454.84 feet to a point;
THENCE along a curve to the left having a radius of 199.33 feet and an
arc length of 64.11 feet and being subtended by a chord bearing South 70 degrees
00 minutes 28 seconds East for a distance of 63.83 feet to a 1/2 inch rebar set;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
20.09 feet to the POINT OF BEGINNING.
Said property contains 4.13 acres, more or less, and is that same tract
or parcel of land shown as Tract E2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
LESS AND EXCEPT:
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, DEEDED FROM TENASKA,
INC., A DELAWARE CORPORATION, AND TENASKA GEORGIA, INC., A DELAWARE CORPORATION,
AS GRANTORS, TO HEARD COUNTY, AS GRANTEE, PURSUANT TO THAT CERTAIN RURAL POST
ROADS RIGHT OF WAY DEED DATED NOVEMBER 10, 1999, FILED FOR RECORD NOVEMBER
10,1999 AT 4:06.M., RECORDED IN DEED BOOK 201, PAGE 628. HEARD COUNTY, GEORGIA
RECORDS.
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EXHIBIT "D"
PIPELINE EASEMENTS
(A) That certain Construction Easement Agreement by and between Inland
Paperboard and Packaging, Inc., a Delaware corporation, Tenaska, Inc.,
a Delaware corporation, and Tenaska Georgia Partners, L.P., a Delaware
limited partnership, dated October 8, 1999, filed for record October
11, 1999 at 2:51 p.m., recorded in Deed Book 201, Page 107, Heard
County, Georgia Records.
(B) That certain Access Easement Agreement by and between Inland Paperboard
and Packaging, Inc., a Delaware corporation, Tenaska, Inc., a Delaware
corporation, and Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated October 8, 1999, filed for record October 11, 1999
at 2:54 p.m., recorded in Deed Book 201, Page 120, aforesaid Records.
(C) That certain Perpetual Right of Way and Easement Agreement from Charles
L. Goodson, as Executor of the Last Will and Testament of Ora Lee
Goodson, to Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated November 10, 1999, filed for record November 10,
1999 at 4 :14.m., recorded in Deed Book 201, Page 705, aforesaid
Records, as affected by that certain Non-Interference and
Cross-Indemnity Agreement by and between Tenaska, Inc., a Delaware
corporation, and Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated November 10, 1999, filed for record November 10,
1999 at 4:22.m., recorded in Deed Book 201, Page 792, aforesaid
Records.
(D) That certain Natural Gas Pipeline Right of Way from Great Northern
Nekoosa Corporation, a Maine corporation, to Tenaska Georgia Partners,
L.P., a Delaware limited partnership, dated November 10, 1999, filed
for record November 10, 1999 at 4:16.m., recorded in Deed Book 201,
Page 743, aforesaid Records, as affected by that certain
Non-Interference and Cross-Indemnity Agreement by and between Tenaska,
Inc., a Delaware corporation, and Tenaska Georgia Partners, L.P., a
Delaware limited partnership, dated November 10, 1999, filed for record
November 10, 1999 at 4:22.m., recorded in Deed Book 201, Page 792,
aforesaid Records.
(E) That certain Access and Utility Easement Agreement from Tenaska, Inc.,
a Delaware corporation to Tenaska Georgia Partners, L.P., a Delaware
limited partnership, dated November 10, 1999, filed for record November
10, 1999 at 4:10.m., recorded in Deed Book 201, Page 666, aforesaid
Records.
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<PAGE>
EXHIBIT "E"
PIPELINE EASEMENT PREMISES
EASEMENT AREA 2 - PERMANENT GAS PIPELINE EASEMENT
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 & 236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER OF LAND LOT
236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
102.52 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
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<PAGE>
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
309.02 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
389.03 feet to a point;
THENCE South 13 degrees 57 minutes 28 seconds West for a distance of
235.43 feet to a point;
THENCE South 01 degrees 34 minutes 09 seconds East for a distance of
636.83 feet to a point;
THENCE South 20 degrees 37 minutes 20 seconds East for a distance of
13.96 feet to a point;
THENCE South 75 degrees 41 minutes 17 seconds West for a distance of
50.30 feet to a point;
THENCE North 20 degrees 37 minutes 20 seconds West for a distance of
16.82 feet to a point;
THENCE North 01 degrees 34 minutes 09 seconds West for a distance of
652.03 feet to a point;
THENCE North 13 degrees 57 minutes 28 seconds East for a distance of
257.78 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
381.45 feet to a point;
THENCE North 01 degrees 08 minutes 53 seconds West for a distance of
237.86 feet to a point;
THENCE North 13 degrees 19 minutes 59 seconds West for a distance of
1046.41 feet to a point;
THENCE North 30 degrees 02 minutes 25 seconds East for a distance of
439.69 feet to a point;
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<PAGE>
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
288.60 feet to a point;
THENCE North 12 degrees 00 minutes 21 seconds West for a distance of
143.97 feet to a point;
THENCE North 02 degrees 23 minutes 46 seconds West for a distance of
463.86 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
263.22 feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of
50.16 feet to the POINT OF BEGINNING.
Said property contains 4.81 acres more or less and is that same tract
or parcel of land shown as Easement Area 2 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
EASEMENT AREA 3 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
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THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE along a curve to the right having a radius of 3600.00 feet and
an arc length of 149.43 feet, being subtended by a chord of South 39 degrees 39
minutes 09 seconds West for a distance of 149.42 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
117.12 feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of
102.52 feet to the POINT OF BEGINNING.
Said property contains 0.14 acre more or less and is that same tract or
parcel of land shown as Easement Area 3 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
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<PAGE>
EASEMENT AREA 4 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER OF LAND LOT
236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
50.16 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
25.08 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
92.32 feet to a point;
THENCE along a curve to the right having a radius of 3525.00 feet and
an arc length of 369.76 feet, being subtended by a chord of South 44 degrees 20
minutes 28 seconds West for a distance of 369.59 feet to a point;
THENCE South 42 degrees 39 minutes 13 seconds East for a distance of
75.00 feet to a point;
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THENCE along a curve to the left having a radius of 3600.00 feet and an
arc length of 302.97 feet, being subtended by a chord of North 44 degrees 56
minutes 07 seconds East for a distance of 302.89 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
67.37 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
431.14 feet to a point;
THENCE North 46 degrees 21 minutes 35 seconds West for a distance of
115.41 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
100.00 feet to a point;
THENCE South 46 degrees 21 minutes 35 seconds East for a distance of
275.00 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
14.21 feet to a point;
THENCE North 12 degrees 00 minutes 21 seconds West for a distance of
143.97 feet to a point;
THENCE North 02 degrees 23 minutes 46 seconds West for a distance of
463.86 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
263.22 feet to the POINT OF BEGINNING.
Said property contains 1.38 acres more or less and is that same tract
or parcel of land shown as Easement Area 4 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
EASEMENT AREA 5 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
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<PAGE>
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER OF LAND LOT
236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
50.16 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
263.22 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
463.86 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
143.97 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
175.27 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 46 degrees 21 minutes 35 seconds West for a distance of
225.00 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
100.00 feet to a point;
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<PAGE>
THENCE South 46 degrees 21 minutes 35 seconds East for a distance of
221.78 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
13.71 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
113.33 feet to the POINT OF BEGINNING.
Said property contains 0.52 acres more or less and is that same tract
or parcel of land shown as Easement Area 5 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
EASEMENT AREA 6 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 & 236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER OF LAND LOT
236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
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THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
202.70 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
106.32 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
213.81 feet to a point;
THENCE South 41 degrees 31 minutes 33 seconds East for a distance of
225.00 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
100.00 feet to a point;
THENCE North 41 degrees 31 minutes 33 seconds West for a distance of
200.00 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
125.37 feet to a point;
THENCE North 01 degrees 08 minutes 53 seconds West for a distance of
280.53 feet to a point;
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<PAGE>
THENCE North 13 degrees 19 minutes 59 seconds West for a distance of
1024.59 feet to a point;
THENCE North 30 degrees 02 minutes 25 seconds East for a distance of
507.24 feet to the POINT OF BEGINNING.
Said property contains 1.60 acres more or less and is that same tract
or parcel of land shown as Easement Area 6 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
EASEMENT AREA 7 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER OF LAND LOT
236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
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<PAGE>
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
309.02 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
297.81 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
91.22 feet to a point;
THENCE South 13 degrees 57 minutes 28 seconds West for a distance of
235.43 feet to a point;
THENCE South 01 degrees 34 minutes 09 seconds East for a distance of
636.83 feet to a point;
THENCE South 20 degrees 37 minutes 20 seconds East for a distance of
13.96 feet to a point;
THENCE North 75 degrees 41 minutes 17 seconds East for a distance of
25.15 feet to a point;
THENCE North 20 degrees 37 minutes 20 seconds West for a distance of
12.53 feet to a point;
THENCE North 01 degrees 34 minutes 09 seconds West for a distance of
629.22 feet to a point;
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THENCE North 13 degrees 57 minutes 28 seconds East for a distance of
204.18 feet to a point;
THENCE South 41 degrees 31 minutes 33 seconds East for a distance of
188.62 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
100.00 feet to a point;
THENCE North 41 degrees 31 minutes 33 seconds West for a distance of
225.00 feet to the POINT OF BEGINNING.
Said property contains 1.01 acres more or less and is that same tract
or parcel of land shown as Easement Area 7 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
EASEMENT AREA 9 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
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THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of
124.94 feet to a point;
THENCE along a curve to the left having a radius of 3700.00 feet and an
arc length of 513.91 feet, being subtended by a chord bearing North 33 degrees
18 minutes 31 seconds East for a distance of 513.50 feet to a point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
20.82 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
202.54 feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of
104.97 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
211.55 feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
11.80 feet to a point;
THENCE along a curve to the right having a radius of 3600.00 feet and
an arc length of 587.61 feet, being subtended by a chord bearing South 33
degrees 47 minutes 14 seconds West for a distance of 586.96 feet to a point,
said point being the POINT OF BEGINNING.
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Said property contains 1.78 acres more or less and is that same tract
or parcel of land shown as Easement Area 9 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
EASEMENT AREA 10 -TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
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THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
50.16 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
25.08 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
82.45 feet to a point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
639.20 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
52.57 feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
150.00 feet to a point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
25.93 feet to a point;
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of
99.68 feet to a point;
THENCE North 56 degrees 31 minutes 54 seconds West for a distance of
120.58 feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
68.89 feet to a point;
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THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
350.00 feet to a point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
140.96 feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
583.23 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
119.61 feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of
100.31 feet to a point, said point being the POINT OF BEGINNING.
Said property contains 3.02 acres more or less and is that same tract
or parcel of land shown as Easement Area 10 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia. which recorded Survey is incorporated herein by
reference.
EASEMENT AREA 11 - PERMANENT ACCESS
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER OF LAND LOT
236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
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THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1502.56 feet to a point;
THENCE South 03 degrees 25 minutes 19 seconds West for a distance of
556.81 feet to a 3/4 inch pipe;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of
434.31 feet to a 3/4 inch pipe, said point being the POINT OF BEGINNING for the
herein described parcel of land.
THENCE South 00 degrees 29 minutes 20 seconds East for a distance of
30.01 feet to a point;
THENCE North 89 degrees 13 minutes 51 seconds West for a distance of
16.78 feet to a point;
THENCE North 32 degrees 43 minutes 50 seconds West for a distance of
70.24 feet to a point;
THENCE North 08 degrees 02 minutes 18 seconds West for a distance of
31.43 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
69.56 feet to a point;
THENCE South 89 degrees 04 minutes 41 seconds East for a distance of
12.67 feet to a point;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of
110.58 feet to the POINT OF BEGINNING.
Said property contains 0.13 acre more or less and is that same tract or
parcel of land shown as Easement Area 11 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
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EXHIBIT "F"
PARCEL E-12
EASEMENT AREA 12 - PERMANENT ACCESS - LOT 175, POWERS CREEK ESTATES
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
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THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1502.56 feet to a point;
THENCE South 03 degrees 25 minutes 19 seconds West for a distance of
556.81 feet to a 3/4 inch pipe;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of
434.31 feet to a 3/4 inch pipe, said point being the POINT OF BEGINNING for the
herein described parcel of land.
THENCE South 89 degrees 13 minutes 51 seconds East for a distance of
615.65 feet to a 3/4 inch pipe on the westerly right of way line of Dogwood Road
(60' Width);
THENCE along said right of way line South 28 degrees 15 minutes 41
seconds East for a distance of 34.31 feet to a point;
THENCE North 89 degrees 13 minutes 51 seconds West for a distance of
631.64 feet to a point;
THENCE North 00 degrees 29 minutes 20 seconds West for a distance of
30.01 feet to the POINT OF BEGINNING.
Said property contains 0.43 acre more or less and is that same tract or
parcel of land shown as Easement Area 12 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia, which recorded Survey is incorporated herein by
reference.
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EXHIBIT "G"
PERMITTED ENCUMBRANCES
1. All taxes for the year 1999 and subsequent years, not yet due and payable.
2. Riparian Rights incident to the Property.
3. Right-of-Way Deed Plant Wansley-Fortson Transmission Line from Georgia
Kraft Company, a Delaware Corporation, to Georgia Power Company, a Georgia
Corporation, dated August 7, 1974, filed for record September 14, 1974 at
8:30 a.m., recorded in Deed Book 75, Page 438, Records of Heard County,
Georgia.
4. Terms and conditions contained in that certain Easement Agreement by and
between Violet E. Davis and Tenaska, Inc., a Delaware corporation, dated
May 7, 1998, filed for record May 7, 1998 at 1:54 p.m., recorded in Deed
Book 184, Page 578, aforesaid Records.
5. Terms and conditions contained in that certain Construction Easement
Agreement by and between Inland Paperboard and Packaging, Inc., a Delaware
corporation, Tenaska, Inc., a Delaware corporation, and Tenaska Georgia
Partners, L.P., a Delaware limited partnership, dated October 8, 1999,
filed for record October 11, 1999 at 2:51 p.m., recorded in Deed Book 201,
Page 107, aforesaid Records.
6. Terms and conditions contained in that certain Access Easement Agreement by
and between Inland Paperboard and Packaging, Inc., a Delaware corporation,
Tenaska, Inc., a Delaware corporation, and Tenaska Georgia Partners, L.P.,
a Delaware limited partnership, dated October 8, 1999, filed for record
October 11, 1999 at 2:54 p.m., recorded in Deed Book 201, Page 120,
aforesaid Records.
7. Terms and conditions contained in that certain Access and Utility Easement
Agreement from Tenaska, Inc., a Delaware corporation to Tenaska Georgia
Partners, L.P., a Delaware limited partnership, dated November 10, 1999,
filed for record November 10, 1999 at 4:10.m., recorded in Deed Book 201,
Page 666, aforesaid Records.
8. Terms and conditions of that certain Perpetual Right of Way and Easement
Agreement from Charles L. Goodson, as Executor of the Last Will and
Testament of Ora Lee Goodson, to Tenaska Georgia Partners, L.P., a Delaware
limited partnership, dated November 10, 1999, filed for record November 10,
1999 at 4:14.m., recorded in Deed Book 201, Page 705, aforesaid Records,
and the terms and conditions of that certain Non-Interference and
Cross-Indemnity Agreement by and between Tenaska, Inc., a Delaware
corporation, and Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated November 10, 1999, filed for record November 10, 1999 at
4:22.m., recorded in Deed Book 201, Page 792, aforesaid Records.
9. Terms and conditions of that certain Natural Gas Pipeline Right of Way from
Great Northern Nekoosa Corporation, a Maine corporation, to Tenaska Georgia
Partners, L.P.,
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a Delaware limited partnership, dated November 10, 1999, filed for record
November 10, 1999 at 4:16.m., recorded in Deed Book 201, Page 743,
aforesaid Records, and the terms and conditions of that certain
Non-Interference and Cross-Indemnity Agreement by and between Tenaska,
Inc., a Delaware corporation, and Tenaska Georgia Partners, L.P., a
Delaware limited partnership, dated November 10, 1999, filed for record
November 10, 1999 at 4:22.m., recorded in Deed Book 201, Page 792,
aforesaid Records.
10. Terms and conditions of that certain Easement Agreement from Robert Charles
Payne and Susan Lynn Payne, to Tenaska Georgia Partners, L.P., a Delaware
limited partnership, dated November 10, 1999, filed for record November 10,
1999 at 4:19.m., recorded in Deed Book 201, Page 786, aforesaid Records.
11. Easement Agreement by and between Tenaska, Inc., a Delaware corporation,
and Inland Paperboard and Packaging, Inc., a Delaware corporation, dated
October 8, 1999, filed for record October 11, 1999 at 2:54 p.m., recorded
in Deed Book 201, Page 125, aforesaid Records.
12. Memorandum of Right of First Refusal and Right To Repurchase Agreement by
and between Julie R. Thomas (formerly known as Julie Rebecca Brown
Arrighton), and Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated August 26, 1998, filed for record September 1, 1998 at
1:21 p.m., recorded in Deed Book 188, Page 339, aforesaid Records.
12. Memorandum of Right of First Refusal Agreement by and between Tenaska,
Inc., a Delaware corporation, and Inland Paperboard and Packaging, Inc., a
Delaware corporation, dated October 8, 1999, filed for record October 11,
1999 at 3:15 p.m., recorded in Deed Book 201, Page 131, aforesaid Records.
13. Perpetual Right-of-Way and Easement Agreement from Tenaska Georgia
Partners, L.P., a Delaware limited partnership, to Tenaska, Inc., a
Delaware corporation, dated November 10, 1999, filed for record November
10, 1999 at 4:08.m., recorded in Deed Book 201, Page 653, aforesaid
Records.
14. Restricted Covenant from Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated November 10, 1999, filed for record November 10, 1999 at
4:12.m., recorded in Deed Book 201, Page 678, aforesaid Records.
15. Those matters disclosed by that certain ALTA/ACSM Title Survey, entitled
Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty
Company, Heard County Development Authority & The Chase Manhattan Bank as
Trustee and Collateral Agent, prepared by Donaldson, Garrett & Associate,
Inc., bearing the seal and certification of James W. Newberry, Jr.
Registered Land Surveyor No. 2558, dated March 19, 1999, last revised
November 4, 1999, and recorded in Plat Book 10, Pages 176 - 188, in the
Office of the Clerk of the Superior Court of Heard County, Georgia, which
recorded Survey is incorporated herein by reference.
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16. Right of Way Deeds, in favor of Heard County, a political subdivision of
the State of Georgia, as follows:
(a) from Jimmy Adams, et al., dated June 12, 1963, recorded in Deed Book
55, Page 494, Records of Heard County, Georgia;
(b) from Jimmy Adams, et al., dated June 12, 1963, filed for record
October 29, 1963, recorded in Deed Book 55, Page 495, aforesaid
Records; and
(c) from Ann Henry, et al., dated June 15, 1963, filed for record October
29, 1963, recorded in Deed Book 55, Page 496, aforesaid Records.
17. That certain Indenture of Trust by and between the Development Authority of
Heard County, a public corporation of the State of Georgia, as issuer, and
The Chase Manhattan Bank, as trustee, a state banking corporation duly
organized and existing under and by virtue of the laws of the State of New
York, as trustee, dated November 10, 1999, filed for record November 10,
1999 at 4:36.m., recorded in Deed Book 202, Page 86, aforesaid Records.
18. Terms and conditions contained in that certain Lease Agreement by and
between the Development Authority of Heard County, a public corporation of
the State of Georgia, as lessor, and Tenaska Georgia Partners, L.P., a
Delaware limited partnership, as lessee, dated November 10, 1999, filed for
record November 10, 1999 at 4:34.m., recorded in Deed Book 202, Page 1,
aforesaid Records.
19. Terms and conditions contained in that certain Ground Lease by and between
Tenaska, Inc., a Delaware corporation, as lessor, and Tenaska Georgia
Partners, L.P., a Delaware limited partnership, as lessee, dated November
10, 1999, as evidenced by that certain Short Form Ground Lease Agreement by
and between Tenaska, Inc., a Delaware corporation, as lessor, and Tenaska
Georgia Partners, L.P., a Delaware limited partnership, as lessee, dated
November 10, 1999, filed for record November 10, 1999 at 4:33.m., recorded
in Deed Book 201, Page 820, aforesaid Records.
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Exhibit 4.9
EXECUTION COPY
PECO ENERGY COMPANY
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "CONSENT"), dated as of
November 10, 1999 among PECO Energy Company, a Pennsylvania corporation (the
"CONSENTING PARTY"), Tenaska Georgia Partners, L.P., a Delaware limited
partnership (the "PARTNERSHIP"), and The Chase Manhattan Bank, a national
association organized and existing under the laws of the State of Delaware, as
collateral agent (together with its successors in such capacity, the "COLLATERAL
AGENT") for the benefit of the Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership proposes to develop, construct, lease
or own, operate and maintain a 936 megawatt ("MW") (nominal rating) natural
gas-fired electric generating plant, together with related facilities at George
Brown Road (one mile north of Highway 34) near the town of Franklin in Heard
County, Georgia (the "PROJECT");
WHEREAS, the Consenting Party and the Partnership have entered
into a Power Purchase Agreement, dated as of August 24, 1999 (the "ASSIGNED
AGREEMENT") pursuant to which the Partnership will sell and the Consenting Party
will purchase the capacity and associated energy from the Project;
WHEREAS, the Partnership intends to finance the development,
construction, lease or ownership, operation and maintenance of the Project,
through the issuance of certain bonds (the "BONDS") pursuant to a trust
indenture(the "INDENTURE"), dated as of November 1, 1999 between the Partnership
and The Chase Manhattan Bank, as Trustee (the "Trustee");
WHEREAS, the Partnership intends to obtain ancillary credit
facilities for the Project pursuant to a debt service reserve letter of credit
reimbursement agreement, dated November 10, 1999 between the Partnership, The
Toronto-Dominion Bank, as Agent and as letter of credit issuer, and the banks
party thereto (the "DSR LOC Reimbursement Agreement") and a power purchase
agreement letter of credit reimbursement agreement, dated November 10, 1999
between the Partnership, The Toronto-Dominion Bank, as Agent and as letter of
credit issuer, and the banks party thereto (the "PPA LOC Reimbursement
Agreement") and the Partnership may in the future enter into a working capital
facility (the "Working Capital Facility");
WHEREAS, the Project will initially be owned by the
Development Authority of Heard County, Georgia, a public corporation created and
existing under the laws of the State of Georgia (the "AUTHORITY"), and will be
leased to the Partnership pursuant to a Lease Agreement, dated as of November 1,
1999 between the Authority and the Partnership ("the Lease").
<PAGE>
WHEREAS, the Senior Parties and the Partnership have entered
into the Collateral Agency and Intercreditor Agreement (as amended, restated,
modified or otherwise supplemented from time to time in accordance with the
terms thereof, the "COLLATERAL AGENCY AGREEMENT") to set forth their mutual
understanding with respect to (a) the exercise of certain rights, remedies and
options by the respective parties thereto under the above described documents,
(b) the priority of their respective security interests created by the Security
Documents, and (c) the appointment of the Collateral Agent as collateral agent
(the Bonds, the Indenture, the DSR LOC Reimbursement Agreement, PPA LOC
Reimbursement Agreement and the Working Capital Facility, the Lease and the
Collateral Agency Agreement shall collectively be known as the "Financing
Documents");
WHEREAS, as security for the Financing Documents, the
Partnership has assigned as security to the lenders and other credit providers
under the Financing Documents and to the Collateral Agent and the Trustee
(collectively, the Senior Parties") all of its right, title and interest in, to
and under, and granted a security interest in, the Assigned Agreement to the
Collateral Agent (as amended, restated, modified or otherwise supplemented from
time to time, the "Security Agreement); and.
WHEREAS, it is a condition precedent to the obligations of the
Senior Parties to enter into their respective Financing Documents that the
Consenting Party execute and deliver this Consent.
NOW, THEREFORE, in consideration of good and valuable
consideration, the receipt of which is hereby acknowledged, and intending to be
legally bound, the parties hereby agree as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a) consents
in all respects to the pledge and assignment to the Collateral Agent of all of
the Partnership's right, title and interest in, to and under the Assigned
Agreement pursuant to one or more of the Security Documents and (b) acknowledges
the right, but not the obligation, of the Collateral Agent or a Qualified
Agent's Designee (as defined below), in the exercise of the Collateral Agent's
rights and remedies under the Security Documents, to make all demands, give all
notices, take all actions and exercise all rights of the Partnership in
accordance with the Assigned Agreement, and agrees that, in such event, the
Consenting Party shall continue to perform its obligations under the Assigned
Agreement in accordance with its terms.
For purposes of this Consent, a "QUALIFIED AGENT'S DESIGNEE"
means a corporation, partnership, joint venture, firm, a person or other legal
entity ("PERSON") that is designated by the Collateral Agent and that possesses,
a satisfactory level of experience in electric power plant operations to operate
the Plant (as defined in the Assigned Agreement) for a period of two hundred
seventy (270) days or such longer period of time as may reasonably be necessary
for the Collateral Agent to complete foreclosure proceedings upon, or otherwise
obtain title to, the Plant and to sell the Plant in a commercially reasonably
manner to a third party in order to maximize the sale price.
2
<PAGE>
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the
Collateral Agent shall notify the Consenting Party that an event of default
under any of the Financing Documents has occurred and is continuing and that the
Collateral Agent has exercised its rights (a) to have itself or a Qualified
Agent's Designee substituted for the Partnership under the Assigned Agreement or
(b) to sell, assign, transfer or otherwise dispose of the Assigned Agreement to
(i) a Person that possesses, a satisfactory level of experience in electric
power plant operations (a "PERMITTED TRANSFEREE") or (ii) any Person which has
acquired a partnership interest in the Partnership without contravening the
terms of the Assigned Agreement or this Consent, and any other Person under
common control with any of such Persons (each, a "SPONSOR"), then the Collateral
Agent, the Qualified Agent's Designee, such Permitted Transferee or such Sponsor
shall be substituted for the Partnership under the Assigned Agreement upon the
assumption by the Collateral Agent, the Qualified Agent's Designee, such
Permitted Transferee or such Sponsor, as the case may be, of all of the rights
and obligations of the Partnership under the Assigned Agreement pursuant to a
written assumption agreement (each, a "SUBSTITUTE OWNER") and that, in such
event, the Consenting Party will continue to perform its obligations under the
Assigned Agreement in accordance with its terms in favor of the Substitute
Owner.
Notwithstanding the foregoing, in no event shall a Substitute
Owner be any of the Persons (each, a "DISQUALIFIED PERSON") that the Consenting
Party so designates in accordance with this sentence in writing to the
Collateral Agent within ten (10) days of delivery of written notice by the
Collateral Agent to the Consenting Party that the Collateral Agent intends to
seek a purchaser for the Plant following an event of default under any of the
Financing Documents, provided that (i) the Consenting Party may only designate
up to three (3) Disqualified Persons (together with any Persons under common
control with any such Disqualified Persons) but only to the extent that the
Consenting Party has determined in good faith (and certified in writing to the
Collateral Agent) that such Disqualified Person is a Competitor (as defined in
the Assigned Agreement) of the Consenting Party in the sale, brokering or
marketing of electrical energy or capacity and that the sale, assignment or
other transfer of the Plant to such Disqualified Person would be detrimental to
the Consenting Party's competitive interests in the sale, brokering or marketing
of electrical energy and capacity and (ii) in no event shall the Consenting
Party designate any of the Sponsors as a Disqualified Person. No Person (other
than the Collateral Agent, the Qualified Agent's Designee or a Sponsor) that
otherwise qualifies as a Substitute Owner pursuant to this Section 1.2 shall be
a Substitute Owner for purposes of this Consent until eleven (11) days after the
Collateral Agent has delivered to the Consenting Party the above written notice.
1.3 RIGHT TO CURE. The Consenting Party agrees that in the
event of a default by the Partnership in the performance of any of its
obligations under the Assigned Agreement, or upon the occurrence or
non-occurrence of any event or condition under the Assigned Agreement which
would immediately or with the passage of any applicable grace period or the
giving of notice, or both, enable the Consenting Party to terminate or suspend
its obligations or exercise any other right or remedy under the Assigned
Agreement or under applicable law (hereinafter a "DEFAULT"), the Consenting
Party will continue to perform its obligations under the Assigned Agreement and
will not exercise any such right or remedy until it gives written notice of such
default to the Collateral Agent (a "DEFAULT NOTICE") and, as set forth in
Section 14.03(b) and (c) of the Assigned Agreement, affords the Collateral
Agent, the Qualified Agent's Designee and the
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Senior Parties a period to cure such default. Such cure period will be no less
than thirty (30) days (in the case of a monetary default) and seventy-five (75)
days (in the case of a non-monetary default) beginning upon the later of (a) the
Collateral Agent's receipt of the Default Notice and (b) the termination of the
Partnership's right to cure such default under the Assigned Agreement, provided
that in the event that a Substitute Owner assumes the rights and obligations of
the Partnership under the Assigned Agreement pursuant to a written assumption
agreement (a copy of which is provided to the Consenting Party by the later of
(i) sixty (60) days after receipt of the Default Notice and (ii) the termination
of the Partnership's right to cure such default under the Assigned Agreement),
such Substitute Owner shall have forty-five (45) days from the effective date of
the assumption of the rights and obligations of the Partnership under the
Assigned Agreement to cure such default or if such default is a non-monetary
default, such longer period as is required so long as such Substitute Owner has
commenced and is diligently pursuing appropriate action to cure such default;
provided, however, that if such Substitute Owner is prohibited from curing any
such default by any process, stay or injunction issued by any governmental
authority or pursuant to any bankruptcy or insolvency proceeding involving the
Partnership, the Collateral Agent, the Qualified Agent's Designee, the Senior
Parties or such Substitute Owner, then the time periods specified in this
Section 1.3 for curing a default shall be extended for the period of such
prohibition. In no event shall the cure rights provided in this Section 1.3
continue beyond (x) twelve (12) calendar months from the date of the Default
Notice in the case of a non-monetary default (unless the Partnership or the
Collateral Agent, the Qualified Agent's Designee or the Senior Parties post
$10,000,000 in Acceptable Credit Support (as defined in the Assigned Agreement),
in which case the cure rights provided in this Section 1.3 shall extend beyond
such twelve (12) calendar months) or (y) four (4) calendar months from the date
of the Default Notice in the case of a monetary default.
1.4 NO AMENDMENTS. The Consenting Party will not, without the
prior written consent of the Collateral Agent, enter into any consensual
cancellation or termination of the Assigned Agreement, or assign or otherwise
transfer any of its right, title and interest thereunder or consent to any such
assignment or transfer by the Partnership, provided that the Consenting Party
may assign the Assigned Agreement without the consent of the Collateral Agent in
the event that (i) the Consenting Party sells or otherwise transfers its power
marketing business to a buyer or transferee whose senior unsecured public debt
is rated by Moody's Investor Services, Inc. or Standard & Poors (each, a "RATING
AGENCY") at not less than the comparable rating of the Consenting Party's
unsecured senior debt at the time of such transfer and (ii) such Rating Agency
has confirmed in writing delivered to the Collateral Agent that the senior
unsecured public debt rating of such buyer or transferee shall remain in effect
following the assumption of the Assigned Agreement by such buyer or transferee.
The Consenting Party will not enter into any material amendment, supplement or
other modification of the Assigned Agreement (an "AMENDMENT") until after the
Collateral Agent has been given ten (10) days (excluding Saturdays, Sundays and
any days which are a legal holiday in New York or any days on which banking
institutions are authorized or required by law or government action to close)
prior written notice of the proposed Amendment by the Partnership (a copy of
which notice will be provided to the Consenting Party by the Partnership), and
will not then enter into such Amendment if the Consenting Party has, within such
ten (10) day period, received a copy of (i) the Collateral Agent's objection to
such Amendment or (ii) the Collateral Agent's request to the Partnership for
additional information with respect to such Amendment.
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1.5 NO LIABILITY. The Consenting Party acknowledges and agrees
that neither the Collateral Agent, the Qualified Agent's Designee or the Senior
Parties shall have any liability or obligation to the Consenting Party under the
Assigned Agreement as a result of this Consent or the assignment of the Assigned
Agreement to the Collateral Agent as security for the Bonds, nor shall the
Collateral Agent, the Qualified Agent's Designee or the Senior Parties be
obligated or required to (a) perform any of the Partnership's obligations under
the Assigned Agreement, except, in the case of the Collateral Agent or the
Qualified Agent's Designee, during any period in which the Collateral Agent or
the Qualified Agent's Designee is a Substitute Owner pursuant to Section 1.2, in
which case (i) the obligations of such Substitute Owner shall be no more than
that of the Partnership under such Assigned Agreement, and (ii) the sole
recourse of the Consenting Party shall be to such Substituted Owner and its
interest in the Project, or (b) take any action to collect or enforce any claim
for payment assigned as security for the Bonds.
1.6 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party
shall perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the Assigned
Agreement in full force and effect in accordance with its terms and with all of
the Consenting Party's rights and remedies thereunder, subject to this Consent.
1.7 DELIVERY OF NOTICES. The Consenting Party shall deliver to
the Collateral Agent, concurrently with the delivery thereof to the Partnership,
a copy of each notice, request or demand given by the Consenting Party pursuant
to the Assigned Agreement.
1.8 ACKNOWLEDGMENTS. The Consenting Party agrees to execute
such acknowledgments or other similar instruments as the Collateral Agent shall
reasonably request in connection with the transactions provided for in this
Consent.
SECTION 2. PAYMENTS UNDER THE ASSIGNED AGREEMENT
2.1 PAYMENTS. The Consenting Party will pay all amounts
payable by it under the Assigned Agreement, if any, in the manner required by
the Assigned Agreement directly into the account specified on Exhibit A hereto,
or to such other person or account as shall be specified from time to time by
the Collateral Agent to the Consenting Party by not less than seven (7) business
days prior written notice. Amounts paid by the Consenting Party pursuant to
Section 9.04 of the Assigned Agreement shall be paid to the Collateral Agent in
trust for deposit into a PPA Disputed Payments Account Depositary Agreement in
the form of Exhibit D hereto, to be entered into with the bank specified
pursuant to Section 9.04(b) as the depositary for payments under the Assigned
Agreement, pending resolution of the dispute or the issuance of a final and
binding arbitral award or a binding court order directing a disposition of such
funds, in each case, in accordance with the terms of the Assigned Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
The Consenting Party makes the following representations and
warranties (as of the date hereof), which shall survive the execution and
delivery of this Consent and the Assigned Agreement and the consummation of the
transactions contemplated hereby and thereby.
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3.1 ORGANIZATION; POWER AND AUTHORITY. The Consenting Party is
a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation, and is duly qualified, authorized to do
business and in good standing in every jurisdiction in which it owns or leases
real property or in which the nature of its business requires it to be so
qualified, and has all requisite power and authority, corporate and otherwise,
to enter into and to perform its obligations hereunder and under the Assigned
Agreement, and to carry out the terms hereof and thereof and the transactions
contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by
the Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate action on the part of the Consenting Party
and do not require any approval or consent of any holder (or any trustee for any
holder) of any indebtedness or other obligation of (a) the Consenting Party or
(b) any other person or entity, except approvals or consents which have
previously been obtained.
3.3 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this
Consent and the Assigned Agreement is in full force and effect, has been duly
executed and delivered on behalf of the Consenting Party by the appropriate
officers of the Consenting Party, and constitutes the legal, valid and binding
obligation of the Consenting Party, enforceable against the Consenting Party in
accordance with its terms, except as the enforceability thereof may be limited
by (a) bankruptcy, insolvency, reorganization, or other similar laws affecting
the enforcement of creditors' rights generally and (b) general equitable
principles (whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no litigation, action, suit,
proceeding or investigation pending or (to the best of the Consenting Party's
knowledge) threatened against the Consenting Party before or by any court,
administrative agency, arbitrator or governmental authority, body or agency
which, if adversely determined, individually or in the aggregate, (a) is
reasonably likely to have a material adverse effect upon the performance by the
Consenting Party of its obligations hereunder or under the Assigned Agreement,
or which could modify or otherwise adversely affect the Approvals (as defined in
Section 3.6 of this Consent), (b) questions the validity, binding effect or
enforceability hereof or of the Assigned Agreement, any action taken or to be
taken pursuant hereto or thereto or any of the transactions contemplated hereby
or thereby or (c) is reasonably likely to have a material adverse effect upon
(i) the business, operations, properties, assets, or condition (financial or
otherwise) of the Consenting Party, (ii) the ability of the Consenting Party to
perform under the Assigned Agreement or this Consent, (iii) the business,
operations, properties, assets, prospects or condition (financial or otherwise)
of the Project, (iv) the value, validity, perfection and enforceability of the
liens granted to the Collateral Agent under the Security Documents or (v) the
ability of the Collateral Agent or the Senior Parties to enforce any of their
material rights and remedies under the Assigned Agreement or this Consent
(collectively, a "MATERIAL ADVERSE EFFECT").
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Consenting
Party is not in violation of its charter or by-laws, and the execution, delivery
and performance by the Consenting Party of this Consent and the Assigned
Agreement and the consummation of the transactions contemplated hereby and
thereby will not result in any violation of, breach of or default under any term
of its charter or by-laws, or of any contract or agreement to which it is a
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party or by which it or its property is bound, or of any license, permit,
franchise, judgment, writ, injunction, decree, order, charter, law, ordinance,
rule or regulation applicable to it, except for any such violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Consenting Party.
3.6 GOVERNMENT CONSENT. No consent, order, authorization,
waiver, approval or any other action, or registration, declaration or filing
with, any person, board or body, public or private (collectively, the
"APPROVALS"), is required to be obtained by the Consenting Party in connection
with the execution, delivery or performance of the Assigned Agreement or the
consummation of the transactions between the Partnership and the Consenting
Party contemplated thereunder, except as listed in Exhibit B hereto. All such
Approvals listed on Exhibit B, except for those set forth in Part II thereof
(the "DEFERRED APPROVALS"), are Final (as defined below). An Approval shall be
"FINAL" if it has been validly issued, is in full force and effect, is not
subject to any condition (other than compliance with the terms thereof), does
not impose restrictions or requirements inconsistent with the terms of the
Assigned Agreement, and is final and not subject to any appeal. The Consenting
Party reasonably believes that each Deferred Approval will be obtained in the
ordinary course of business prior to the time when such Deferred Approval is
required to be Final.
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor,
to the best of the Consenting Party's knowledge, any other party to the Assigned
Agreement is in default of any of its obligations thereunder. The Consenting
Party has no existing counterclaims, offsets or defenses against the
Partnership. The Consenting Party and, to the best of the Consenting Party's
knowledge, each other party to the Assigned Agreement have complied with all
conditions precedent to the respective obligations of such party to perform
under the Assigned Agreement. To the best of the Consenting Party's knowledge,
no event or condition exists which would either immediately or with the passage
of any applicable grace period or giving of notice, or both, enable either the
Consenting Party or the Partnership to terminate or suspend its obligations
under the Assigned Agreement. The Assigned Agreement has not been amended,
modified or supplemented in any manner.
3.8 REGULATION. The Consenting Party acknowledges and agrees
that, notwithstanding any adverse treatment or burdensome rate regulation that
may apply under any applicable federal, state or local law with respect to sales
by the Consenting Party of capacity and energy furnished under the Assigned
Agreement, its obligations to make payments required under the Assigned
Agreement and otherwise to perform its other obligations under the Assigned
Agreement shall not be diminished or reduced and shall remain valid and binding,
in accordance with the terms of the Assigned Agreement.
3.9 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no
notice of, and has not consented to, any previous assignment of all or any part
of its rights under the Assigned Agreement.
3.10 REPRESENTATIONS AND WARRANTIES. All representations,
warranties and other statements made by the Consenting Party in the Assigned
Agreement were true and correct as of the date when made and are true and
correct in all material respects as of the date of this Consent.
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SECTION 4. OPINION OF COUNSEL
The Consenting Party shall deliver an opinion of counsel
relating to the Assigned Agreement and this Consent, which opinion shall be
substantially in the form attached hereto as Exhibit C.
SECTION 5. CLARIFICATIONS
5.1 "CREDIT DOCUMENTS" AND "FINANCIAL INSTITUTIONS". The
Consenting Party acknowledges and agrees that each of this Consent, the
Financing Documents and the Security Documents shall be deemed "CREDIT
DOCUMENTS" for all purposes of the Assigned Agreement. The Consenting Party
further acknowledges and agrees that each of the Senior Parties, the Collateral
Agent and their respective successors and assigns shall be deemed "FINANCIAL
INSTITUTIONS" for all purposes of the Assigned Agreement.
5.2 USE OF CASUALTY PROCEEDS. The Consenting Party hereby
agrees that Section 3.7 of the Collateral Agency Agreement dealing with the
treatment of casualty insurance proceeds, a copy of which is attached hereto as
Exhibit E, constitutes arrangements satisfactory to the Consenting Party under
Section 17.03(c) of the Assigned Agreement. The Consenting Party further agrees
that, notwithstanding anything to the contrary in Section 17.03(c) of the
Assigned Agreement, the Partnership shall not be obligated (and shall not be in
default under the Assigned Agreement for failure) to restore the Plant with any
casualty insurance proceeds resulting from an insured casualty loss to the Plant
if and to the extent that such casualty insurance proceeds are not released to
the Partnership for such purpose in accordance with the provisions of the
Collateral Agency Agreement attached hereto as Exhibit E. This Section 5.2 shall
not otherwise alter or amend the Partnership's obligations under Section
17.03(c) of the Assigned Agreement.
5.3 ASSIGNMENTS BY THE PARTNERSHIP. The Consenting Party
confirms that the prohibition on assignments in Section 12.01 of the Assigned
Agreement applies to assignments of the Assigned Agreement by the Consenting
Party and by the Partnership and not to transfers of partnership interests in
the Partnership, provided that PECO does not waive any right it may have to
contend that transfers after the date of this Consent of more than fifty percent
(50%) of the partnership interests of the Partnership to parties that are not in
common control with a Sponsor as of the date of this Consent is prohibited by
Section 12.01 thereof.
5.4 CLARIFICATIONS The following sections of the
Assigned Agreement are corrected as follows:
(a) The definition of Interconnection Agreement in the
Assigned Agreement shall be corrected to refer to "the Interconnection Agreement
dated as of October 19, 1999 between Georgia Power Company and the Partnership,
providing for the construction and operation of Interconnection Facilities
necessary for the delivery of energy to PECO pursuant to this Agreement at the
Primary Point of Delivery".
(b) The cross reference in Section 6.06(c) shall be corrected
to refer to Section 6.06(b);
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(b) Section 8.03(b) shall be corrected to read "The
Replacement Energy Payment shall be calculated in accordance with Section 8.12";
(c) Section 8.03(b)(i) shall be corrected by deleting the
words, "ends at hour 00:00 (midnight) for 600 MWh's, the Excess Run Time would
be 2 hours at 600 MWhs or 1200 MWhs times $2.00/MWh" at the end of the sentence;
(d) Section 8.08(d)(ii) shall be corrected to refer to "the
Annual Availability Percentage" in place of "Annual Availability";
(e) Section 8.09(a) shall be corrected by the deletion of the
word "or" at the end of the sentence; and
(f) Section 8.09(c) shall be corrected to read
"8.09(c) The Parties shall make Availability Adjustment
payments to each other at the end of each Contract Year as follows:
(i) If the amount of the Summer Availability Adjustment
that has been paid exceeds the Annual Availability Adjustment which has
not been rebated or otherwise paid to PECO, PECO shall make payment of
such difference to Tenaska by wire transfer in immediately available
funds within twenty (20) days of the end of a Contract Year provided
that if there is any Accrued Availability Adjustment for the preceding
Contract Years which has not been rebated to PECO, PECO shall offset
its payment obligation under this Section against such Accrued
Availability Adjustment.
(ii) If the Annual Availability Adjustment exceeds the
amount of the Summer Availability Adjustment that has been paid,
Tenaska shall make payment to PECO of such difference by offsetting all
amounts payable by PECO to Tenaska during succeeding months of the next
Contract Year until the amount of such offsets equals the Annual
Availability Adjustment; provided, however, that any Availability
Adjustment payable to PECO at the end of the Operating Term shall be
paid by wire transfer in immediately available funds within twenty (20)
days of the end of such Operating Term."
(g) The Consenting Party acknowledges that Confidential
disclosures have been made and will be made to the Trustee, the Collateral
Agent, credit rating agencies and the prospective and actual bond holders and
hereby waives the requirement of Section 16.02(a) of the Assigned Agreement that
would require the Trustee, the Collateral Agent, credit rating agencies and the
prospective and actual bond holders to enter into confidentiality agreements
with the Partnership, provided that the Partnership shall use reasonable efforts
to the extent consistent with its obligations under applicable securities law to
exclude specific pricing information in the Assigned Agreement from documents
that are available to the general public during the period prior to the filing
of the Assigned Agreement with FERC pursuant to Section 205 of the Federal Power
Act.
(h) The Parties confirm that Section 18.07 which provides that
a failure of a Party to insist, on any occasion, upon strict performance of the
Assigned Agreement shall not be a waiver of the right to insist upon strict
performance of any provision on any other occasion,
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incorporates the concept that any failure to offset amounts that are otherwise
due and owing shall not be a waiver of the right to claim payment of such
amounts.
(i) Except as herein provided, the Assigned Agreement shall
remain unchanged and in full force and effect and is hereby ratified and
affirmed by each of the parties thereto.
SECTION 6. MISCELLANEOUS
6.1 NOTICES. All notices and other communications hereunder
shall be in writing, shall be deemed given upon receipt thereof by the party or
parties to whom such notice is addressed, shall refer on their face to the
Assigned Agreement (although failure to so refer shall not render any such
notice of communication ineffective), shall be sent by first class mail, by
personal delivery or by a nationally recognized courier service, and shall be
directed as follows:
If to the Consenting Party:
PECO Energy Company - Power Team
2004 Renaissance Blvd.
King of Prussia, PA 19406
Attention: Lin A. Johnson
Fax: 610-292-6630
If to the Partnership:
Tenaska Georgia Partners, L.P.
1044 N. 115th Street, Suite 400
Omaha, Nebraska 68154
Attention: Michael F. Lawler
Fax: 402-691-9550
If to the Collateral Agent:
The Chase Manhattan Bank, as Collateral Agent
Capital Markets Fiduciary Services
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attn: Annette M. Marsula
International & Project Finance Service
Delivery
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
6.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS
CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF
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RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this
Consent and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Consent, each of the Consenting Party, the Partnership and the Collateral
Agent hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each of the Consenting Party and the
Partnership hereby irrevocably designates, appoints and empowers CT Corporation
System, 1633 Broadway, New York, New York, 10019, as its designee, appointee and
agent to receive, accept and acknowledge for and on its behalf, and in respect
of its property, service of any and all legal process, summons, notices and
documents which may be served in any action or proceeding. If for any reason
such designee, appointee and agent shall cease to be available to act as such,
the Partnership or the Consenting Party, as applicable, agrees to designate a
new designee, appointee and agent in New York City on the terms and for the
purposes of this provision satisfactory to the Collateral Agent. Each of the
Consenting Party, the Partnership and the Collateral Agent irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Consenting Party at its notice address provided
pursuant to Section 6.1 hereof. Each of the Consenting Party, the Partnership
and the Collateral Agent hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Consent brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of the Collateral Agent or its designees to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Consenting Party in any other jurisdiction.
6.3 COUNTERPARTS. This Consent may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
6.4 HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Consent are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Consent.
6.5 SEVERABILITY. In case any provision in or obligation under
this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
6.6 AMENDMENT, WAIVER. Neither this Consent nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the Consenting Party and the Collateral
Agent.
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6.7 TERMINATION; REFINANCING. (a) The Consenting Party's
obligations hereunder are absolute and unconditional, and the Consenting Party
has no right, and shall have no right, to terminate this Consent or to be
released, relieved or discharged from any obligation or liability hereunder
until all obligations under the Financing Documents (the "FINANCE LIABILITIES")
have been indefeasibly satisfied in full, notice of which shall be provided by
the Collateral Agent when all such obligations have been satisfied (the
"TERMINATION NOTICE"). Notwithstanding the foregoing or anything else to the
contrary contained herein, this Consent shall terminate on the earlier of (i)
the termination of the original term of the Bonds or (ii) the termination of the
Assigned Agreement in accordance with this Consent.
(b) In the event that the Collateral Agent delivers the
Termination Notice to the Consenting Party pursuant to Section 6.7(a) of this
Consent, this Consent shall terminate for all purposes as to the Collateral
Agent and the Financing Documents, and the Collateral Agent, the Senior Parties
and the Consenting Party shall have no further rights or obligations under this
Consent, provided, however that the Consenting Party agrees that this Consent
shall continue to apply for the benefit of the Partnership and the providers of
any new credit facilities (the "NEW LENDER") entered into by the Partnership to
refinance or replace the Finance Liabilities, provided that (i) within five days
following delivery by the Collateral Agent to the Consenting Party of the
Termination Notice as provided in Section 6.7(a), the New Lender or an agent,
trustee or other representative of the New Lender, shall have notified the
Consenting Party that it undertakes the prospective obligations of the
"COLLATERAL AGENT" under this Consent, and shall have supplied substitute notice
address information for Section 6.1 and new payment instructions (countersigned
on behalf of the Partnership) for Exhibit A hereto, (ii) the amount of the new
credit facilities do not exceed the original amount of commitments by the Senior
Parties to make loans and extend other credit facilities under the original
Financing Documents, and (iii) thereafter, (a) the term "FINANCE LIABILITIES"
under this Consent will be deemed to refer to the new credit facilities, (b) the
term "COLLATERAL AGENT" or "SENIOR PARTIES" shall be deemed to refer to the New
Lender or any agent or trustee for the New Lender, (c) the term "FINANCE
DOCUMENTS" shall be deemed to refer to the credit agreement, indenture or other
instrument providing for the new credit facilities and (d) the term "SECURITY
DOCUMENTS" shall be deemed to refer to the security agreements under which the
Assigned Agreement is assigned as collateral to secure performance of the
obligations of the Partnership under the new credit facilities.
6.8 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon
the parties hereto and their permitted successors and assigns and shall inure to
the benefit of the parties, their designees and their respective permitted
successors and assigns.
6.9 FURTHER ASSURANCES. The parties hereto hereby agree to
execute and deliver all such instruments and take all such action as may be
necessary to effectuate fully the purposes of this Consent.
6.10 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE CONSENTING PARTY, THE PARTNERSHIP AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT.
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6.11 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Collateral Agent and the Senior Parties and shall survive the
execution and delivery of this Consent.
6.12 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Collateral Agent in exercising any right, power or privilege
hereunder and no course of dealing between the Consenting Party and the
Collateral Agent shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
exercise, or the further exercise, of any other right, power or privilege
hereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Collateral Agent would
otherwise have.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
13
<PAGE>
IN WITNESS WHEREOF, the Consenting Party, the Partnership and
the Collateral Agent have caused this Consent to be duly executed and delivered
by their respective officers thereunto duly authorized as of the date first
above written.
PECO ENERGY COMPANY
By: /S/ IAN P. MCLEAN
------------------------
Name: Ian P. McLean
Title: Senior Vice President, PECO Energy Company
and President, Power Team
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Managing General Partner
By: /S/ MICHAEL F. LAWLER
------------------------
Name: Michael F. Lawler
Title: Vice President of Finance & Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /S/ ANNETTE M. MARSULA
------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
Exhibit A to
CONSENT AND AGREEMENT
PAYMENT INSTRUCTIONS
Chase Manhattan Bank ABA# 021 000 021
450 West 33rd Street, 15th Fl. Account Number: 507 891325
NY, NY 10001 Account Name: The Chase Manhattan Bank, as
Collateral Agent
Tenaska Georgia Partners,
L.P., Concentration Account
Vista Account Number: 294580000
For Further Credit to: Trust Acct. No.
C29458, The Chase Manhattan Bank, as
Collateral Agent, Tenaska Georgia - Revenue
Fund. Attention: A. Marsula
<PAGE>
Exhibit B to
CONSENT AND AGREEMENT
APPROVALS
None
<PAGE>
Exhibit C to
CONSENT AND AGREEMENT
FORM OF OPINION OF COUNSEL
November ____, 1999
To Addressees on Schedule B
Re: The 936 MW natural gas-fired electric generating
facility located in Heard County, Georgia (the
"PROJECT").
Dear Ladies and Gentlemen:
I have acted as counsel to PECO Energy Company, a Pennsylvania corporation
("PECO"), in connection with the Project to be constructed by Tenaska Georgia
Partners, L.P., a Delaware limited partnership (the "BORROWER"), from which PECO
will purchase capacity and energy pursuant to a Power Purchase Agreement, dated
as of August 24, 1999, between the Borrower and PECO (the "AGREEMENT"). This
opinion is delivered to you pursuant to the Agreement as to Certain
Undertakings, Common Representations, Warranties, Covenants and Other Terms
dated as of November 1, 1999 ("the Common Agreement") by and among TGP, The
Chase Manhattan Bank, as Trustee, The Toronto-Dominion Bank, as DSR LOC Agent,
The Toronto-Dominion Bank, as PPA LOC Agent and The Chase Manhattan Bank, as
Collateral Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Common Agreement.
In connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of the following:
(i) the Agreement;
(ii) the Consent and Agreement of PECO, dated as of the
date hereof (the "CONSENT");
(iii) the Certificate of Incorporation and By-laws of
PECO; and
(iv) general resolutions adopted by the Board of
Directors of PECO authorizing the President, and delegations of
authority to other officers, to take such actions as may be necessary
or convenient to execute contracts and other instruments.
The documents referred to in items (iii) and (iv) above are
hereinafter collectively referred to as the "GOVERNING DOCUMENTS" and the
Agreement and the Consent are hereinafter collectively referred to as the
"DOCUMENTS". In addition, I have examined and am familiar with
<PAGE>
originals or copies, certified or otherwise identified to my satisfaction, of
such other documents as I have deemed necessary or appropriate as a basis for
the opinions set forth below. As to all factual matters, I have relied, to the
extent appropriate, upon statements and certificates of PECO officers and
appropriate public officials.
In my examination I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified
or photostatic copies, and the authenticity of the originals of such copies. In
rendering the opinions expressed below, I have further assumed, without any
independent investigation or verification of any kind, that each Document I have
examined is the valid and binding obligation of each party thereto other than
PECO.
I am admitted to the Bar of the State of Pennsylvania. I
express no opinion as to the law of any jurisdiction other than (i) the laws of
the State of Pennsylvania and (ii) the federal laws of the United States of
America.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. PECO is a corporation duly organized, validly existing and
in good standing under the laws of the State of Pennsylvania. PECO is duly
qualified to transact business in each jurisdiction in which it owns or leases
real property or in which the nature of its business requires it to be so
qualified.
2. PECO has full corporate power and authority to enter into,
deliver and perform its obligations under each of the Documents.
3. PECO has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each Document.
4. PECO has duly executed and delivered each Document.
5. Each Document constitutes the valid and binding obligation
of PECO enforceable against PECO in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
6. The execution, delivery and performance by PECO of the
Documents will not (i) contravene any applicable provision of any currently
effective law, regulation, ruling, order or decree of any governmental authority
having jurisdiction over PECO and to which or by which PECO or any of its
property or assets is subject or bound or (ii) violate any provision of the
Governing Documents of PECO. The execution, delivery or performance by PECO of
the Documents do not and will not, to the best of my knowledge, materially
conflict with, result in any material breach of, or constitute a material
default under, or result in the creation or imposition of (or the obligation to
create or impose) any material lien or encumbrance upon any of the property or
assets of PECO pursuant to any provision of any securities issued by PECO, or
under any indenture, mortgage, deed of trust, contract, undertaking, document,
instrument or
<PAGE>
other agreement to which PECO is a party or by which it or any of its property
or assets is bound.
7. No consent, order, authorization, waiver, approval or any
other action, or registration, declaration or filing with, any person, board or
body, public or private (collectively, the "APPROVALS"), is required to be
obtained by PECO in connection with the execution, delivery or performance of
the Documents or the consummation of the transactions contemplated thereby,
except as listed on Schedule A hereto. All such Approvals listed on Schedule A,
except for those set forth in Part II thereof, are Final (as defined below). An
Approval shall be Final if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with terms
thereof), doe s not impose restrictions or requirements inconsistent with the
terms of the Documents, and is final and not subject to any appeal.
8. To the best of my knowledge after due inquiry, there are no
pending or threatened actions or proceedings affecting PECO or any of its
properties or assets that individually or in the aggregate could prohibit or
limit in any way the execution, delivery and performance by PECO of any of the
Documents.
This opinion is being furnished only to the Agent, the
Borrower, the parties identified on Schedule B hereto and their respective
successors and assigns and is solely for the benefit of such parties; provided
that assignees of, or participants in, the interests of the Banks may rely on
this opinion as if it were addressed to them.
Very truly yours,
-----------------------
Lin Johnson
For PECO Energy Company
<PAGE>
Schedule A
APPROVALS
None
<PAGE>
Schedule B
<PAGE>
Exhibit D to
CONSENT AND AGREEMENT
PPA DISPUTED PAYMENTS ACCOUNT DEPOSITARY AGREEMENT
<PAGE>
Exhibit E to
CONSENT AND AGREEMENT
CASUALTY INSURANCE PROVISIONS
[Section 3.7] LOSS PROCEEDS ACCOUNT. (a) All Loss Proceeds shall be paid
directly into the Loss Proceeds Account; PROVIDED that any insurance proceeds
related to any business interruption insurance policies shall be paid directly
into the Revenue Fund. If any Loss Proceeds are received by or on behalf of the
Partnership, such Loss Proceeds shall be received in trust for the Collateral
Agent, segregated from the other funds of the Partnership and immediately paid
to the Collateral Agent for deposit into the Loss Proceeds Account. Amounts held
in the Loss Proceeds Account shall be applied solely for the payment of the
costs of rebuilding, repair or restoration of the Project or as otherwise set
forth below.
(b) If an Event of Loss shall have occurred with respect to
the Project for which the Partnership receives Loss Proceeds less than or equal
to $10,000,000, the Collateral Agent shall withdraw and transfer to the
Partnership (or as otherwise directed by the Partnership) the amount of such
Loss Proceeds requested by the Partnership in an Officer's Certificate of the
Partnership which shall also describe how such Loss Proceeds shall be used;
PROVIDED that such Officer's Certificate shall certify that (i) no Event of
Default shall have occurred and be continuing, (ii) the Project can be rebuilt,
repaired or restored to permit operation of the Project or a portion thereof on
a commercially feasible basis and (iii) the Loss Proceeds, together with any
other amounts that are available to the Partnership for such rebuilding, repair
or restoration are sufficient to permit such rebuilding, repair or restoration
of the Project or a portion thereof, including the making of all required
payments of interest and principal on the Partnership's Indebtedness during such
rebuilding, repair or restoration.
(c) If an Event of Loss shall have occurred with respect to
the Project for which the Partnership receives Loss Proceeds in excess of
$10,000,000, the Collateral Agent shall withdraw and transfer to the Partnership
(or as otherwise directed by the Partnership) the amount of such Loss Proceeds
requested by the Partnership in an Officer's Certificate of the Partnership;
PROVIDED that (A) the Collateral Agent and the Independent Engineer shall have
received an Officer's Certificate of the Partnership and such Officer's
Certificate shall (i) describe in reasonable detail the nature of the
rebuilding, repair or restoration, (ii) state the cost of such rebuilding,
repair or restoration and the specific amount requested to be paid to the
Partnership (or as otherwise directed by the Partnership), the timing of such
payments and that such amount is requested to pay the cost thereof, (iii)
certify that the Project can be rebuilt, repaired or restored to permit
operation of the Project or a portion thereof on a commercially feasible basis,
(iv) certify that the Loss Proceeds, together with any other amounts that are
available to the Partnership for such rebuilding, repair or restoration are
sufficient to permit such rebuilding, repair or restoration of the Project or a
portion thereof, including the making of all required payments of interest and
principal on the Partnership's Indebtedness during such rebuilding, repair or
restoration, and (v) certify that the Partnership shall use its best efforts to
cause any repairs or restoration to be commenced and completed promptly and
diligently at its own cost
<PAGE>
and expense (including the use of funds on deposit in the Loss Proceeds Account
(other than any Energy Contract Buy-Out proceeds or EPC Buy-Down proceeds)) and
(B) the Independent Engineer shall have provided to the Collateral Agent a
written certificate stating that, based on a reasonable investigation, it
believes that the certifications made by the Partnership are reasonable.
(d) If (i) the Partnership determines that the Project or a
portion thereof cannot be rebuilt, repaired or restored in accordance with the
provisions of [SECTION 3.7(C)] above or (ii) Excess Loss Proceeds greater than
$1,000,000 remain in the Loss Proceeds Account, then the Collateral Agent shall
withdraw such unused Loss Proceeds and transfer such amounts to the Revenue Fund
which such proceeds shall be distributed by the Collateral Agent in accordance
with the terms of [SECTION 3.18 (Exercise of Remedies - Loss Proceeds)] hereof.
<PAGE>
Exhibit 4.10
EXECUTION COPY
CONSENT TO ASSIGNMENT
THIS CONSENT TO ASSIGNMENT (this "Consent") is executed as of
this 10th day of November, 1999, by Georgia Power Company, a Georgia corporation
("GPC"), TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership (the
"Partnership"), and THE CHASE MANHATTAN BANK, as collateral agent (together with
its successors in such capacity, the "Collateral Agent"), for the benefit of the
Senior Parties (as defined below).
WHEREAS, the Partnership intends to develop, construct, lease,
operate, maintain and finance a 936 MW (nominal summer rating) natural gas-fired
simple-cycle electric generating plant (the "Facility" and, together with the
Project Documents, governmental approvals relating to the Facility or the
Project Documents and any other item relating to the Facility, including any
improvements to, and the operation of, the Facility and all activities related
thereto, the "Project") to be located in Heard County, Georgia; and
WHEREAS, the Partnership intends to finance the Project
through the financing described in Annex A attached hereto and made a part
hereof, to which reference is made for a description of such financing and the
definitions of the terms used herein, to the extent not otherwise defined
herein; and
WHEREAS, the Partnership and GPC have entered into that
certain Interconnection Agreement, dated as of October 19, 1999 (as amended,
restated, modified or otherwise supplemented from time to time in accordance
with the terms thereof, the "Agreement"), which, as one of the Project Documents
referred to in the attached Annex A, is required to be assigned by the
Partnership to the Collateral Agent as security pursuant to one or more of the
Security Documents; and
WHEREAS, it is a condition precedent to the extension of
credit by the Senior Parties that GPC execute and deliver this Consent for the
benefit of the Senior Parties;
NOW, THEREFORE, as an inducement to the Senior Parties to
enter into the Financing Documents, and in consideration of good and valuable
consideration, the sufficiency of which is hereby acknowledged, and intending to
be legally bound, GPC hereby agrees as follows:
1. CONSENT TO ASSIGNMENT. Subject to compliance by Collateral Agent
with Section 2 hereof, GPC (a) consents in all respects to the pledge and
assignment, for collateral security purposes, to the Collateral Agent of all of
Partnership's right, title and interest in, to and under the Agreement and (b)
acknowledges the right, but not the obligation, of the Collateral Agent, in the
exercise of the Collateral Agent's rights and remedies under the Security
Documents and to exercise all rights of Partnership in accordance with the
Agreement.
<PAGE>
2. PERFORMANCE BY GPC AND EXERCISE OF COLLATERAL AGENT'S RIGHTS UNDER
SECURITY DOCUMENTS. (a) GPC agrees that, if the Collateral Agent shall notify
GPC that an event of default under any of the Financing Documents has occurred
and is continuing and that the Collateral Agent has exercised its rights (a) to
have itself or its designee, which designee shall be reasonably acceptable to
GPC, substituted for the Partnership under the Agreement or (b) to sell, assign,
transfer or otherwise dispose of the Agreement to a person, then the Collateral
Agent, the Collateral Agent's designee or such person in each such case
reasonably acceptable to GPC (each, a "Substitute Owner") shall be substituted
for the Partnership under the Agreement and that, in such event, GPC will
continue to perform its obligations under the Agreement in favor of the
Substitute Owner.
(b) GPC agrees that in the event of a default by the
Partnership in the performance of any of its obligations under the Agreement
(hereinafter a "default"), GPC will give prompt written notice of such default
to the Collateral Agent. The Collateral Agent, its designee, which designee
shall be reasonably acceptable to GPC and any Substitute Owner, shall have the
same rights and benefits as the Partnership under the Agreement, including,
without limitation, the right to cure any default.
(c) GPC agrees to deliver to the Collateral Agent a copy of
each notice, request or demand given by GPC to the Partnership pursuant to the
Agreement.
3. NO LIABILITY. GPC acknowledges and agrees that neither the
Collateral Agent, the Collateral Agent's designee nor the Senior Parties shall
have any liability or obligation under the Agreement as a result of this
Consent, the Security Documents or otherwise, and neither the Collateral Agent,
the Collateral Agent's designee nor the Senior Parties shall be obligated or
required to perform any of the Partnership's obligations under the Agreement,
except, in the case of the Collateral Agent or the Collateral Agent's designee,
during any period in which the Collateral Agent or the Collateral Agent's
designee is a Substitute Owner pursuant to Section 2 hereof, in which case the
obligations of such Substitute Owner shall be no more than that of the
Partnership under such Agreement.
4. NO MODIFICATION OF GPC'S RIGHTS. The parties hereto acknowledge and
agree that neither the execution of this Consent nor any actions taken by GPC
hereunder (including any forbearance of GPC as against Collateral Agent) shall
in any way, limit, modify or otherwise affect GPC's rights or remedies under the
Agreement against Partnership or otherwise.
5. NO DEFAULTS, AMENDMENTS OR ASSIGNMENTS. GPC acknowledges that, to
the best of its knowledge, as of the date of execution of this Consent, (a)
neither party to the Agreement is in default of any of its respective
obligations thereunder, (b) the Agreement has not been amended, modified or
supplemented in any manner and (c) other than as contemplated hereby in favor of
Collateral Agent, GPC has no notice of, and has not consented to, any previous
assignment of all or any part of the rights of either party under the Agreement.
The statements made by GPC pursuant to this Section 5 are as of the date of this
Consent and GPC shall have no continuing obligation to notify Collateral Agent
of the occurrence of events or circumstances which would render such statements
inaccurate or untrue.
2
<PAGE>
6. TERMINATION. GPC's obligations hereunder are absolute and
unconditional, and GPC has no right, and shall have no right, to terminate this
Consent or to be released, relieved or discharged from any obligation or
liability hereunder unless the Agreement is terminated pursuant to its terms or
until all obligations under the Financing Documents have been indefeasibly
satisfied in full, notice of which shall be provided by the Collateral Agent
when all such obligations have been satisfied.
7. MISCELLANEOUS.
(a) NOTICES. All notices and other communications hereunder
shall be in writing, shall be deemed given upon receipt thereof by the party or
parties to whom such notice is addressed, shall refer on their face to the
Agreement (although failure to so refer shall not render any such notice of
communication ineffective), shall be sent by first class mail, by personal
delivery or by a nationally recognized courier service, and shall be directed as
follows:
If to GPC:
Georgia Power Company
241 Ralph McGill Boulevard, NE
Atlanta, GA 30308
Attention: Senior Vice President, Power Delivery
If to Partnership:
Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154
Attention: Michael F. Lawler
Telephone: (402) 691-9500
Fax: (402) 691-9550
If to the Collateral Agent:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
(b) GOVERNING LAW. THIS CONSENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
3
<PAGE>
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(c) COUNTERPARTS. This Consent may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
(d) HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Consent are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Consent.
(e) AMENDMENT; WAIVER. Neither this Consent nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the parties hereto.
(f) SUCCESSORS AND ASSIGNS. This Consent may not be assigned
by the Collateral Agent without the prior written consent of GPC, which consent
shall not be unreasonably withheld. This Consent shall be binding upon the
parties hereto and their permitted successors and assigns and shall inure to the
benefit of the parties, their designees and their respective permitted
successors and assigns.
(g) FURTHER ASSURANCES. The parties hereto hereby agree to
execute and deliver all such instruments and take all such actions as may be
reasonably necessary to effectuate fully the purposes of this Consent.
(h) NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of either party hereto in exercising any right, power or privilege
hereunder and no course of dealing between the parties hereto shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other exercise, or the further exercise, of any
other right, power or privilege hereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which either party hereto would otherwise have.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Consent to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
THE CHASE MANHATTAN BANK Georgia Power Company
as Collateral Agent
By: /s/ ANNETTE M. MARSULA By: /s/ FRED WILLIAMS
------------------------- ---------------------------
Name ANNETTE M. MARSULA Name:F. D. WILLIAMS
------------------------- -----------------------------
Title: ASSISTANT VICE PRESIDENT Title: SENIOR VP
----------------------------- ---------------------------
Date: Date: 11-4-99
----------------------------- ---------------------------
TENASKA GEORGIA PARTNERS, L.P.
by Tenaska Georgia, Inc.
By: /s/ MICHAEL F. LAWLER
----------------------------
Name: MICHAEL F. LAWLER
---------------------------
Title: VICE PRESIDENT OF FINANCE & TREASURER
---------------------------------------
Date:
----------------------------------------
5
<PAGE>
ANNEX A
This Annex A is attached to the Consent executed as of
November 10, 1999 by Georgia Power Company, a Georgia corporation ("GPC"),
Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"Partnership"), and The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent") for certain Senior Parties (as defined below). This Annex A
describes certain relevant transactions constituting a part of the Partnership's
financing of the Project described in such Consent, and defines certain terms
used in such Consent where such terms are not defined in the body of the Consent
or in the Common Agreement.
The Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain 144A
securities (the "144A Securities"). The Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "Authority"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership. The Authority will issue its
Industrial Development Bonds (the "DAHC Bonds") pursuant to an Indenture, dated
as of November 1, 1999 between the Authority and The Chase Manhattan Bank, as
DAHC Trustee. The DAHC Bonds will be purchased by the Partnership and pledged to
the Collateral Agent, along with certain other Collateral to secure the
obligations of the Partnership under the 144A Securities.
In addition to the DAHC Bonds and related collateral, all
obligations of the Partnership with respect to the 144A Securities, and any
other agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor to
any such person and each other person that becomes a secured party under any
Financing Document (collectively, the "Senior Parties") will be secured by a
certain Security Agreement, Collateral Agency Agreement, Deed to Secure Debt,
Security Agreement and Assignment of Rents and Leases, each Third Party Consent
and any other document providing for any lien, pledge, encumbrance, mortgage or
security interest (collectively, the "Security Documents").
The Senior Parties, the Authority, and the Partnership have
entered into the Collateral Agency and Intercreditor Agreement (as amended,
restated, modified or otherwise supplemented from time to time in accordance
with the terms thereof, the "Collateral Agency Agreement") to set forth their
mutual understanding with respect to (a) the exercise of certain rights,
remedies and options by the respective parties thereto under the above described
documents, (b) the priority of their respective security interests created by
the Security Documents, and (c) the appointment of the Collateral Agent as
collateral agent.
6
<PAGE>
Exhibit 4.11
EXECUTION COPY
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent"), dated as of November 10,
1999 among Zachry Construction Corporation, a Delaware corporation (the
"Consenting Party"), Tenaska Georgia Partners, L.P., a Delaware limited
partnership (the "Partnership"), and THE CHASE MANHATTAN BANK, as collateral
agent, together with its successors in such capacity (the "Collateral Agent"),
for the benefit of the Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership intends to develop, construct, lease,
operate, maintain and finance a 936 megawatt ("MW") (nominal summer rating)
natural gas-fired simple-cycle electric generating plant (the "Facility" and,
together with the Project Documents, governmental approvals relating to the
Facility or the Project Documents and any other item relating to the Facility,
including any improvements to, and the operation of, the Facility and all
activities related thereto, the "Project") to be located in Heard County,
Georgia;
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE").
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "Authority"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership;
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "DAHC Bonds") pursuant to an Indenture, dated as of November 1, 1999
between the Authority and The Chase Manhattan Bank, as DAHC Trustee;
WHEREAS, the DAHC Bonds will be purchased by the Partnership
and pledged to the Collateral Agent, along with certain assets of the
Partnership including its rights under the Lease Agreement, to secure the
obligations of the Partnership under the Bonds;
WHEREAS, in addition to the DAHC Bonds and related collateral,
all obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor
thereto and each other person that becomes a secured party under any Financing
Document (collectively, the "Senior Parties") will be secured by a certain
Security Agreement, Pledge Agreements, Collateral Agency Agreement, Deed to
Secured Debt, Security Agreement and Assignment of Rents and Leases, each Third
Party Consent and any other document providing for any lien, pledge,
encumbrance, mortgage or security interest (collectively, the "Security
Documents");
<PAGE>
WHEREAS, the Senior Parties, the Authority, and the
Partnership have entered into the Collateral Agency and Intercreditor Agreement
(as amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Collateral Agency Agreement") to set
forth their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by the respective parties thereto under the above
described documents, (b) the priority of their respective security interests
created by the Security Documents, and (c) the appointment of the Collateral
Agent as collateral agent.
WHEREAS, Tenaska Georgia I, L.P. ("TGILP") and the Consenting
Party have entered into that certain Engineering Procurement and Construction
Contract, dated as of September 15, 1999 (as amended, restated, modified or
otherwise supplemented from time to time in accordance with the terms thereof,
the "Assigned Agreement");
WHEREAS, TGILP has assigned to the Partnership and the
Partnership has assumed all of TGILP's right, title and interest in, and
obligations under the Assigned Agreement pursuant to an Assignment and
Assumption Agreement dated as of and delivered to the Consenting Party on the
date hereof ("Assignment and Assumption Agreement").
WHEREAS, the Consenting Party has determined that the
Partnership has adequate resources to fulfill its obligations under the Assigned
Contract.
WHEREAS, the Partnership has notified the Consenting Party
that all of the Partnership's right, title and interest in, to, and under the
Assigned Agreement is to be assigned to the Collateral Agent as security
pursuant to one or more of the Security Documents;
WHEREAS, it is a condition precedent to the issuance of the
Bonds and the other Financing Documents that the Consenting Party execute and
deliver this Consent for the benefit of the Senior Parties;
NOW, THEREFORE, as an inducement to the Senior Parties to
enter into the Financing Documents, and in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the Consenting Party hereby agrees as follows:
ARTICLE I
CONSENT TO ASSIGNMENT, ETC.
Section 1.01 CONSENT TO ASSIGNMENT. The Consenting Party (a)
acknowledges that the Collateral Agent and the Senior Parties are entering into
the Financing Documents in reliance upon the execution and delivery by the
Consenting Party of the Assigned Agreement and this Consent, (b) consents in all
respects to the pledge and assignment to the Collateral Agent of all
2
<PAGE>
of the Partnership's right, title and interest in, to and under the Assigned
Agreement pursuant to one or more of the Security Documents and (c) acknowledges
the right, but not the obligation, of the Collateral Agent or the Collateral
Agent's designee, in the exercise of the Collateral Agent's rights and remedies
under the Security Documents, to make all demands, give all notices, take all
actions and exercise all rights of the Partnership in accordance with the
Assigned Agreement, and agrees that in such event the Consenting Party shall
continue to perform its obligations under the Assigned Agreement.
Section 1.02 SUBSTITUTE OWNER. The Consenting Party agrees that, if the
Collateral Agent shall notify the Consenting Party that an event of default
under any of the Financing Documents has occurred and is continuing and that the
Collateral Agent has exercised its rights (a) to have itself or its designee
substituted for the Partnership under the Assigned Agreement or (b) to sell,
assign, transfer or otherwise dispose of the Assigned Agreement to a person,
then the Collateral Agent, the Collateral Agent's designee or such person (each,
a "Substitute Owner") shall be substituted for the Partnership under the
Assigned Agreement and that, in such event, the Consenting Party will continue
to perform its obligations under the Assigned Agreement in favor of the
Substitute Owner.
Section 1.03 RIGHT TO CURE. The Consenting Party agrees that in the
event of a default by the Partnership in the performance of any of its
obligations under the Assigned Agreement, or upon the occurrence or
non-occurrence of any event or condition under the Assigned Agreement which
would immediately or with the passage of any applicable grace period or the
giving of notice, or both, enable the Consenting Party to terminate its
obligations or exercise any other right or remedy (other than its right to
suspend performance after fifteen (15) days following a monetary default as
provided in the Assigned Agreement) under the Assigned Agreement or under
applicable law (hereinafter a "default"), the Consenting Party will continue to
perform its obligations under the Assigned Agreement and will not exercise any
such right or remedy until it first gives prompt written notice of such default
to the Collateral Agent and affords the Collateral Agent, the Collateral Agent's
designee and the Senior Parties a period of at least sixty (60) days (or if such
default is a non-monetary default, such longer period not to exceed one hundred
eighty (180) days as is required so long as any such party has commenced and is
diligently pursuing appropriate action to cure such default) from receipt of
such notice to cure such default; provided, however, that if any such party is
prohibited from curing any such default by any process, stay or injunction
issued by any governmental authority or pursuant to any bankruptcy or insolvency
proceeding involving the Partnership, then the time periods specified in this
Section 1.3 for curing a default shall be extended for the period of such
prohibition.
Section 1.04 NO TERMINATION, ASSIGNMENT OR MATERIAL AMENDMENTS. The
Consenting Party will not, without the prior written consent of the Collateral
Agent, enter into any consensual cancellation or termination of the Assigned
Agreement, or assign or otherwise transfer any of its right, title and interest
thereunder or consent to any such assignment or transfer by the Partnership.
Section 1.05 REPLACEMENT AGREEMENT. In the event that the Assigned
Agreement is terminated as a result of any bankruptcy or insolvency proceeding
affecting the Partnership, the Consenting Party will, at the option of the
Collateral Agent enter into a new agreement with the
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Collateral Agent (or its transferee or other nominee that owns or leases the
Project) having terms substantially the same as the terms of the Assigned
Agreement.
Section 1.06 NO LIABILITY. The Consenting Party acknowledges and agrees
that neither the Collateral Agent, the Collateral Agent's designee or the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise, nor shall the
Collateral Agent, the Collateral Agent's designee or the Senior Parties be
obligated or required to (a) perform any of the Partnership's obligations under
the Assigned Agreement, except, in the case of the Collateral Agent or the
Collateral Agent's designee, during any period in which the Collateral Agent or
the Collateral Agent's designee is a Substitute Owner pursuant to Section 1.2
hereof, in which case (i) the obligations of such Substitute Owner shall be no
more than that of the Partnership under such Assigned Agreement and (ii) the
sole recourse of the Consenting Party shall be to such Substituted Owner's
interest in the Project, or (b) take any action to collect or enforce any claim
for payment assigned under the Security Documents.
Section 1.07 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party
shall perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the Assigned
Agreement in full force and effect in accordance with its terms.
Section 1.08 DELIVERY OF NOTICES. The Consenting Party shall deliver to
the Collateral Agent, concurrently with the delivery thereof to the Partnership,
a copy of each notice, request or demand given by the Consenting Party pursuant
to the Assigned Agreement.
Section 1.09 ACKNOWLEDGMENTS. The Consenting Party agrees to execute
such acknowledgments or other similar instruments as the Collateral Agent shall
reasonably request in connection with the transactions provided for in this
Consent.
Section 1.10 CONFIDENTIALITY. In connection with the issuance of the
Bonds, the Consenting Party hereby waives the requirement pursuant to Section
22(c) of the Assigned Agreement of confidentiality agreements from the
Construction Lenders and the Independent Engineer.
ARTICLE II
PAYMENTS UNDER THE ASSIGNED AGREEMENT.
Section 2.01 PAYMENTS. The Consenting Party will pay all amounts
payable by it under the Assigned Agreement, if any, in the manner required by
the Assigned Agreement directly into the account specified on Exhibit A hereto,
or to such other person or account as shall be specified from time to time by
the Collateral Agent to the Consenting Party in writing.
Section 2.02 NO OFFSET, ETC. All payments required to be made by the
Consenting Party under the Assigned Agreement shall be made without any offset,
recoupment, abatement,
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withholding, reduction or defense whatsoever, except as specifically permitted
under the Assigned Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
In order to induce the Collateral Agent and the Senior Parties to enter
into the Financing Documents, the Consenting Party makes the following
representations and warranties, which shall survive the execution and delivery
of this Consent and the Assigned Agreement and the consummation of the
transactions contemplated hereby and thereby.
Section 3.01 ORGANIZATION; POWER AND AUTHORITY. The Consenting Party is
a limited partnership duly organized, validly existing and in good standing
under the laws of the state of its incorporation, and is duly qualified,
authorized to do business and in good standing in every jurisdiction in which it
owns or leases real property or in which the nature of its business requires it
to be so qualified, and has all requisite power and authority, to enter into and
to perform its obligations hereunder and under the Assigned Agreement, and to
carry out the terms hereof and thereof and the transactions contemplated hereby
and thereby.
Section 3.02 AUTHORIZATION. The execution, delivery and performance by
the Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary partnership action on the part of the Consenting
Party and do not require any approval or consent of any holder (or any trustee
for any holder) of any indebtedness or other obligation of (a) the Consenting
Party or (b) any other person or entity, except approvals or consents which have
previously been obtained.
Section 3.03 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this
Consent and the Assigned Agreement is in full force and effect, has been duly
executed and delivered on behalf of the Consenting Party by the appropriate
officers of the Consenting Party, and constitutes the legal, valid and binding
obligation of the Consenting Party, enforceable against the Consenting Party in
accordance with its terms except as the enforceability thereof may be limited by
(a) bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).
Section 3.04 LITIGATION. There is no legislation, litigation, action,
suit, proceeding or investigation pending or (to the best of the Consenting
Party's knowledge after due inquiry) threatened against the Consenting Party
before or by any court, administrative agency, arbitrator or governmental
authority, body or agency which, if adversely determined, individually or in the
aggregate, (a) could adversely affect the performance by the Consenting Party of
its obligations hereunder or under the Assigned Agreement, or which could modify
or otherwise adversely affect the Approvals (as defined in Section 3.6), (b)
questions the validity, binding effect or enforceability hereof or of the
Assigned Agreement, any action taken or to be taken pursuant hereto or thereto
or any of the transactions contemplated hereby or thereby or (c) could have a
material adverse effect upon (i) the business, operations, properties, assets,
or condition (financial or otherwise) of the Consenting Party, (ii) the ability
of the Consenting Party to
5
<PAGE>
perform under the Assigned Agreement or this Consent, (iii) the business,
operations, properties, assets, prospects or condition (financial or otherwise)
of the Project, (iv) the value, validity, perfection and enforceability of the
liens granted to the Collateral Agent under the Security Documents or (v) the
ability of the Collateral Agent or the Senior Parties to enforce any of their
material rights and remedies under the Assigned Agreement or this Consent
(collectively, a "Material Adverse Effect").
Section 3.05 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Consenting
Party is not in violation of its charter or by-laws, and the execution, delivery
and performance by the Consenting Party of this Consent and the Assigned
Agreement and the consummation of the transactions contemplated hereby and
thereby will not result in any violation of, breach of or default under any term
of its charter or by-laws, or of any contract or agreement to which it is a
party or by which it or its property is bound, or of any license, permit,
franchise, judgment, writ, injunction, decree, order, charter, law, ordinance,
rule or regulation applicable to it, except for any such violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Consenting Party.
Section 3.06 GOVERNMENT CONSENT. No consent, order, authorization,
waiver, approval or any other action, or registration, declaration or filing
with, any person, board or body, public or private (collectively, the
"Approvals"), is required to be obtained by the Consenting Party in connection
with the execution, delivery or performance of the Assigned Agreement or the
consummation of the transactions contemplated thereunder, except as listed in
Exhibit B hereto. All such Approvals listed on Exhibit B, except for those set
forth in Part II thereof (the "Deferred Approvals"), are Final (as defined
below). An Approval shall be "Final" if it has been validly issued, is in full
force and effect, is not subject to any condition (other than compliance with
the terms thereof), does not impose restrictions or requirements inconsistent
with the terms of the Assigned Agreement, and is final and not subject to any
appeal. The Consenting Party reasonably believes that each Deferred Approval
will be obtained in the ordinary course of business prior to the time when such
Deferred Approval is required to be Final.
Section 3.07 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor,
to the best of the Consenting Party's knowledge after due inquiry, any other
party to the Assigned Agreement is in default of any of its obligations
thereunder. The Consenting Party has no existing counterclaims, offsets or
defenses against the Partnership. The Consenting Party and, to the best of the
Consenting Party's knowledge after due inquiry, each other party to the Assigned
Agreement have complied with all conditions precedent to the respective
obligations of such party to perform under the Assigned Agreement. To the best
of the Consenting Party's knowledge after due inquiry, no event or condition
exists which would either immediately or with the passage of any applicable
grace period or giving of notice, or both, enable either the Consenting Party or
the Partnership to terminate or suspend its obligations under the Assigned
Agreement. The Assigned Agreement has not been amended, modified or supplemented
in any manner.
Section 3.08 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no
notice of, and has not consented to, any previous assignment of all or any part
of its rights under the Assigned Agreement.
6
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Section 3.09 REPRESENTATIONS AND WARRANTIES. All representations,
warranties and other statements made by the Consenting Party in the Assigned
Agreement were true and correct as of the date when made and are true and
correct as of the date of this Consent.
ARTICLE IV
OPINION OF IN-HOUSE COUNSEL
The Consenting Party shall deliver an opinion of counsel relating to
the Assigned Agreement and this Consent, which opinion shall be substantially in
the form attached hereto as Exhibit C.
ARTICLE V
MISCELLANEOUS
Section 5.01 NOTICES. All notices and other communications hereunder
shall be in writing, shall be deemed given upon receipt thereof by the party or
parties to whom such notice is addressed, shall refer on their face to the
Assigned Agreement (although failure to so refer shall not render any such
notice of communication ineffective), shall be sent by first class mail, by
personal delivery or by a nationally recognized courier service, and shall be
directed as follows:
If to the Consenting Party: Zachry Construction Corporation
527 Logwood (Zip 78221-1738)
P.O. Box 240130
San Antonio, TX 78224-0130
Attention: Robert J. Kalt
Telephone: 210-475-8000
Fax: 210-475-8572
If to the Partnership: Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, NE 68154-4446
Attention: Michael F. Lawler
Telephone: (402) 691-9500
If to the Collateral Agent: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
7
<PAGE>
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
Section 5.02 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS
CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF
LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this
Consent and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Consent, each of the Consenting Party, the Partnership and the Collateral
Agent hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each of the Consenting Party and the
Partnership hereby irrevocably designates, appoints and empowers CT Corporation
System as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any action
or proceeding. If for any reason such designee, appointee and agent shall cease
to be available to act as such, the Partnership or the Consenting Party, as
applicable, agrees to designate a new designee, appointee and agent in New York
City on the terms and for the purposes of this provision satisfactory to the
Collateral Agent. Each of the Consenting Party, the Partnership and the
Collateral Agent irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the
Consenting Party at its notice address provided pursuant to Section 5.1 hereof.
Each of the Consenting Party, the Partnership and the Collateral Agent hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Consent brought in the courts referred to above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of the
Collateral Agent or its designees to serve process in any other manner permitted
by law or to commence legal proceedings or otherwise proceed against the
Consenting Party in any other jurisdiction.
Section 5.03 COUNTERPARTS. This Consent may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so
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<PAGE>
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
Section 5.04 HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Consent are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Consent.
Section 5.05 SEVERABILITY. In case any provision in or obligation under
this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
Section 5.06 AMENDMENT, WAIVER. Neither this Consent nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the Consenting Party and the Collateral
Agent.
Section 5.07 TERMINATION. (a) The Consenting Party's obligations
hereunder are absolute and unconditional, and the Consenting Party has no right,
and shall have no right, to terminate this Consent or to be released, relieved
or discharged from any obligation or liability hereunder until all obligations
under the Financing Documents (the "Finance Liabilities") have been indefeasibly
satisfied in full, notice of which shall be provided by the Collateral Agent
when all such obligations have been satisfied (the "Termination Notice").
(b) In the event that the Finance Liabilities are refinanced
or replaced by other credit facilities, this Consent and Agreement shall
continue in effect for the benefit of the Partnership and the provider of such
new credit facilities (the "New Lender") provided that (i) within five days
following delivery by the Collateral Agent to the Consenting Party of the notice
from the Collateral Agent as provided in Section 5.7 hereof that the original
Finance Liabilities have been indefeasibly satisfied in full, the New Lender or
an agent, trustee or other representative of the New Lender, shall have notified
the Consenting Party that it assumes the rights and the prospective obligations
of the Collateral Agent under this Consent, and shall have supplied substitute
notice address information for Section 5.1 hereof and new Payment Instructions
(as more fully described in Exhibit A hereto) (countersigned on behalf of the
Partnership) for Exhibit A, (ii) the amount of the new credit facilities do not
exceed the original amount of commitments by the Senior Parties to make loans
and extend other credit facilities under the original Financing Documents and
(iii) thereafter, (a) the term "Finance Liabilities" under this Consent will be
deemed to refer to the new credit facilities, (b) the term "Collateral Agent" or
"Senior Parties" shall be deemed to refer to the New Lender or any agent or
trustee for the New Lender, (c) the term "Financing Documents" shall be deemed
to refer to the credit agreement, indenture or other instrument providing for
the new credit facilities and (d) the term "Security Documents" shall be deemed
to refer to the security agreements under which the Assigned Agreement is
assigned as collateral to secure performance of the obligations of the
Partnership under the new credit facilities.
Section 5.08 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon
the parties hereto and their permitted successors and assigns and shall inure to
the benefit of the parties, their designees and their respective permitted
successors and assigns.
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<PAGE>
Section 5.09 FURTHER ASSURANCES. The parties hereto hereby agree to
execute and deliver all such instruments and take all such action as may be
necessary to effectuate fully the purposes of this Consent.
Section 5.10 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, The CONSENTING PARTY, THE PARTNERSHIP AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT.
Section 5.11 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Collateral Agent and the Senior Parties and shall survive the
execution and delivery of this Consent.
Section 5.12 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Collateral Agent in exercising any right, power or privilege
hereunder and no course of dealing between the Consenting Party and the
Collateral Agent shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
exercise, or the further exercise, of any other right, power or privilege
hereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Collateral Agent would
otherwise have.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the Consenting Party, the Partnership and the
Collateral Agent have caused this Consent to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first above
written.
ZACHRY CONSTRUCTION CORPORATION
By: /s/ ROBERT J. KALT
----------------------------------
Name: Robert J. Kalt
Title: Vice President
TENASKA GEORGIA PARTNERS, L.P.
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /s/ MICHAEL F. LAWLER
---------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ ANNETTE M. MARSULA
-----------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
11
<PAGE>
Exhibit A to
CONSENT AND AGREEMENT
PAYMENT INSTRUCTIONS
Chase Manhattan Bank ABA# 021 000 021
450 West 33rd Street, 15th Fl. Account Number: 507 891325
NY, NY 10001 Account Name:The Chase Manhattan Bank, as
Collateral Agent
Tenaska Georgia Partners, L.P.,
Concentration Account
Vista Account Number: 294570000
For Further Credit to: Trust Acct.No.C29457, The Chase
Manhattan Bank, as Collateral Agent, Tenaska Georgia -
Construction Fund. Attention: A. Marsula
<PAGE>
Exhibit B to
FORM OF CONSENT
APPROVALS
I. None
II. None
<PAGE>
Exhibit C to
CONSENT AND AGREEMENT
FORM OF OPINION OF COUNSEL
November ____, 1999
[OTHER ADDRESSEE]
Tenaska Georgia Partners, L.P.
1044 North 115th Street
Omaha, Nebraska 68154
Re: Natural gas-fired electric generating facility located in
Heard County, Georgia (the "Project")
Ladies and Gentlemen:
I and other staff attorneys have acted as counsel to Zachry
Construction Corporation, a Delaware corporation ("Zachry") in connection with
the Project to be constructed by Tenaska Georgia Partners, L.P., a Delaware
limited partnership ("TGP"), for which Zachry will provide design and
construction services pursuant to the Engineering, Procurement and Construction
Agreement, dated as of September 15, 1999, to which TGP and Zachry are parties
(the "EPC Contract") and the Contract for Purchase dated as of August 23, 1999
by and between Zachry and General Electric Company (the "Turbine Contract"), as
assigned by TGP and assumed by Zachry pursuant to an Assignment and Assumption
Agreement dated _____________________, 1999 by and between TGP and Zachry (the
"Assignment and Assumption Agreement"). This opinion is delivered to you
pursuant to the Bond Purchase Agreement dated _______________ (the "Bond
Purchase Agreement") by and among TGP, Goldman, Sachs & Co., and the purchaser
of the taxable bonds thereunder (the "Bondholders").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following:
(1) the EPC Contract;
(2) the Turbine Contract;
(3) the Assignment and Assumption Agreement;
(4) the Consent and Agreement of Zachry, dated ___________; and
(5) the Articles of Incorporation and Bylaws for Zachry.
<PAGE>
October __, 1999
Page 2
The documents referred to in item (v) above are hereinafter
collectively referred to as the "Governing Documents" and the documents referred
to in items (i) through (iv) above are hereinafter collectively referred to as
the "Documents". In addition, we have examined and are familiar with originals
or copies, certified or otherwise identified to our satisfaction, of such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below.
In our examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such copies. In
rendering the opinions expressed below, we have further assumed, without any
independent investigation or verification of any kind, that each Document we
have examined is the valid and binding obligation of each party thereto other
than Zachry.
I am admitted to the bar of the State of Texas. I express no opinion as
to the law of any jurisdiction other than (i) the laws of the State of Texas and
(ii) the federal laws of the United States of America and (iii) the laws of the
State of Delaware pertaining to corporations.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. Zachry is a Delaware corporation, duly organized, validly
existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in
which the nature of its business requires it to be so
qualified.
2. Zachry has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each
Document, and has duly executed and delivered each Document.
3. Zachry has all corporate power and authority to execute,
deliver, and perform obligations under, the Documents.
4. Each Document constitutes the valid and binding obligation of
Zachry enforceable against Zachry in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law).
5. The execution, delivery and performance by Zachry of the
Documents will not: (i) contravene any applicable provision of
any law, regulation, ruling, order or decree of any
governmental authority to which or by which Zachry or any of
its property or assets is subject or bound or (ii) violate any
provision of the Governing Documents of Zachry. The execution,
delivery, and performance by Zachry of the Documents do not
and will not, to the best of our knowledge after due inquiry,
conflict with, result in any breach of, or constitute a
default under, or result in the creation or imposition of (or
the
<PAGE>
October __, 1999
Page 3
obligation to create or impose) any lien or encumbrance upon
any of the property or assets of Zachry pursuant to any
provision of any securities issued by Zachry, or any
indenture, mortgage, deed of trust, contract, undertaking,
document, instrument or other agreement to which Zachry is a
party or by which it or any of its property or assets is
bound.
6. No consent, order, authorization, waiver, approval or any
other action, or registration, declaration or filing with, any
person, board or body, public or private, is required to be
obtained by Zachry in connection with the execution, delivery
or performance of the Documents or the consummation of the
transactions contemplated thereby.
7. To the best of our knowledge after due inquiry, there are no
pending or threatened actions or proceeding affecting Zachry
or any of its properties or assets that individually or in the
aggregate could prohibit or limit in any way the execution,
delivery and performance by Zachry of any of the Documents.
This opinion is being furnished only to the Addressees, and their
respective successors and assigns and is solely for the benefit of such parties.
Very truly yours,
Timothy A. Watt
Attorney
<PAGE>
Exhibit 4.12
EXECUTION COPY
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent"), dated as of November 10,
1999 among H.B. Zachry Company, a Delaware corporation (the "Consenting Party"),
Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"Partnership"), and THE CHASE MANHATTAN BANK, as collateral agent (together with
its successors in such capacity, the "Collateral Agent") for the benefit of the
Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership intends to develop, construct, lease,
operate, maintain and finance a 936 megawatt ("MW") (nominal summer rating)
natural gas-fired simple-cycle electric generating plant (the "Facility" and,
together with the Project Documents, governmental approvals relating to the
Facility or the Project Documents and any other item relating to the Facility,
including any improvements to, and the operation of, the Facility and all
activities related thereto, the "Project") to be located in Heard County,
Georgia;
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE");
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "Authority"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership;
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "DAHC Bonds") pursuant to an Indenture, dated as of November 1, 1999
between the Authority and The Chase Manhattan Bank, as DAHC Trustee;
WHEREAS, the DAHC Bonds will be purchased by the Partnership
and pledged to the Collateral Agent, along with certain other assets of the
Partnership including its rights under the Lease Agreement to secure the
obligations of the Partnership under the Bonds;
WHEREAS, in addition to the DAHC Bonds and related collateral,
all obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor
thereto and each other person that becomes a secured party under any Financing
Document (collectively, the "Senior Parties") will be secured by a certain
Security Agreement, Pledge Agreements, Collateral Agency Agreement, Deed to
Secured Debt, Security Agreement and Assignment of Rents and Leases, each Third
Party Consent and any other document
<PAGE>
providing for any lien, pledge, encumbrance, mortgage or security interest
(collectively, the "Security Documents");
WHEREAS, the Senior Parties, the Authority, and the
Partnership have entered into the Collateral Agency and Intercreditor Agreement
(as amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Collateral Agency Agreement") to set
forth their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by the respective parties thereto under the above
described documents, (b) the priority of their respective security interests
created by the Security Documents, and (c) the appointment of the Collateral
Agent as collateral agent.
WHEREAS, Tenaska Georgia I, L.P. ("TGILP") and Zachry Construction
Corporation, a Delaware corporation, have entered into that certain Engineering,
Procurement and Construction Agreement dated as of September 15, 1999, (as
amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "EPC Agreement");
WHEREAS, TGILP and General Electric Company, a New York corporation,
have entered into that certain Contract for Purchase dated as of August 27, 1999
(as amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Contract for Purchase");
WHEREAS, TGILP has assigned and the Partnership has assumed all of
TGILP's right, title and interest in, and obligations under the Contract for
Purchase pursuant to an Assignment and Assumption Agreement dated as of and
delivered to the Consenting Party on the date hereof.
WHEREAS, the Partnership has assigned and the Contractor has assumed
certain of the Partnership's right, title and interest in, and obligations under
the Contract for Purchase pursuant to an Assignment and Assumption Agreement
dated as of and delivered to the Consenting Party on the date hereof (the
"Assignment and Assumption Agreement");
WHEREAS, the Consenting Party has entered into a Guaranty of
Obligation, dated as of the date hereof, in favor of the Partnership, pursuant
to which the Consenting Party has agreed, INTER ALIA, to guarantee the full and
timely performance of all of the Contractor's obligations under the EPC
Agreement (as amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Assigned Agreement");
WHEREAS, it is a condition precedent to the issuance of the
Bonds and the other Financing Documents that the Consenting Party execute and
deliver this Consent for the benefit of the Senior Parties;
NOW, THEREFORE, as an inducement to the Senior Parties to
enter into the Financing Documents, and in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the Consenting Party hereby agrees as follows:
2
<PAGE>
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a) acknowledges that
the Collateral Agent and the Senior Parties are entering into the Financing
Documents in reliance upon the execution and delivery by the Consenting Party of
the Assigned Agreement and this Consent, (b) consents in all respects to the
pledge and assignment to the Collateral Agent of all of the Partnership's right,
title and interest in, to and under the Assigned Agreement pursuant to one or
more of the Security Documents and (c) acknowledges the right, but not the
obligation, of the Collateral Agent or the Collateral Agent's designee, in the
exercise of the Collateral Agent's rights and remedies under the Security
Documents, to make all demands, give all notices, take all actions and exercise
all rights of the Partnership in accordance with the Assigned Agreement, and
agrees that in such event the Consenting Party shall continue to perform its
obligations under the Assigned Agreement.
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the
Collateral Agent shall notify the Consenting Party that an event of default
under any of the Financing Documents has occurred and is continuing and that the
Collateral Agent has exercised its rights (a) to have itself or its designee
substituted for the Partnership under the Assigned Agreement or (b) to sell,
assign, transfer or otherwise dispose of the Assigned Agreement to a person,
then the Collateral Agent, the Collateral Agent's designee or such person (each,
a "Substitute Owner") shall be substituted for the Partnership under the
Assigned Agreement and that, in such event, the Consenting Party will continue
to perform its obligations under the Assigned Agreement in favor of the
Substitute Owner.
1.3 [Reserved]
1.4 NO TERMINATION, ASSIGNMENTS OR MATERIAL AMENDMENTS. The Consenting
Party will not, without the prior written consent of the Collateral Agent, enter
into any consensual cancellation or termination of the Assigned Agreement, or
assign or otherwise transfer any of its right, title and interest thereunder or
consent to any such assignment or transfer by the Partnership.
1.5 REPLACEMENT AGREEMENT. In the event that the Assigned Agreement is
terminated as a result of any bankruptcy or insolvency proceeding affecting the
Partnership, the Consenting Party will, at the option of the Collateral Agent
enter into a new agreement with the Collateral Agent (or its transferee or other
nominee that owns or leases the Project) having terms substantially the same as
the terms of the Assigned Agreement.
1.6 NO LIABILITY. The Consenting Party acknowledges and agrees that
neither the Collateral Agent, the Collateral Agent's designee or the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise.
1.7 PERFORMANCE UNDER ASSIGNED AGREEMENTS. The Consenting Party shall
perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the Assigned
Agreement in full force and effect in accordance with its terms.
3
<PAGE>
1.8 DELIVERY OF NOTICES. The Consenting Party shall deliver to the
Collateral Agent, concurrently with the delivery thereof to the Partnership, a
copy of each notice, request or demand given by the Consenting Party pursuant to
the Assigned Agreement.
1.9 ACKNOWLEDGMENTS. The Consenting Party agrees to execute such
acknowledgments or other similar instruments as the Collateral Agent shall
reasonably request in connection with the transactions provided for in this
Consent.
SECTION 2. PAYMENTS UNDER THE ASSIGNED AGREEMENT
2.1 PAYMENTS. The Consenting Party will pay all amounts payable by it
under the Assigned Agreement, if any, in the manner required by the Assigned
Agreement directly into the account specified on Exhibit A hereto, or to such
other person or account as shall be specified from time to time by the
Collateral Agent to the Consenting Party in writing.
2.2 NO OFFSET, ETC. All payments required to be made by the Consenting
Party under the Assigned Agreement shall be made without any offset, recoupment,
abatement, withholding, reduction or defense whatsoever, except as specifically
permitted under the Assigned Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
In order to induce the Collateral Agent and the Senior Parties to enter
into the Financing Documents, the Consenting Party makes the following
representations and warranties, which shall survive the execution and delivery
of this Consent and the Assigned Agreement and the consummation of the
transactions contemplated hereby and thereby.
3.1 ORGANIZATION; POWER AND AUTHORITY. The Consenting Party is a
limited liability partnership duly organized, validly existing and in good
standing under the laws of the state of its formation, and is duly qualified,
authorized to do business and in good standing in every jurisdiction in which it
owns or leases real property or in which the nature of its business requires it
to be so qualified, and has all requisite power and authority, corporate or
otherwise, to enter into and to perform its obligations hereunder and under the
Assigned Agreement, and to carry out the terms hereof and thereof and the
transactions contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by the
Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate and partnership action on the part of the
Consenting Party and do not require any approval or consent of any holder (or
any trustee for any holder) of any indebtedness or other obligation of (a) the
Consenting Party or (b) any other person or entity, except approvals or consents
which have previously been obtained.
3.3 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this Consent
and the Assigned Agreement is in full force and effect, has been duly executed
and delivered on behalf of the Consenting Party by the appropriate members of
the Consenting Party, and constitutes the legal, valid and binding obligation of
the Consenting Party, enforceable against the Consenting
4
<PAGE>
Party in accordance with its terms except as the enforceability thereof may be
limited by (a) bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
equitable principles (whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no legislation, litigation, action, suit,
proceeding or investigation pending or (to the best of the Consenting Party's
knowledge after due inquiry) threatened against the Consenting Party before or
by any court, administrative agency, arbitrator or governmental authority, body
or agency which, if adversely determined, individually or in the aggregate, (a)
could adversely affect the performance by the Consenting Party of its
obligations hereunder or under the Assigned Agreement, or which could modify or
otherwise adversely affect the Approvals (as defined in Section 3.6), (b)
questions the validity, binding effect or enforceability hereof or of the
Assigned Agreement, any action taken or to be taken pursuant hereto or thereto
or any of the transactions contemplated hereby or thereby or (c) could have a
material adverse effect upon (i) the business, operations, properties, assets,
or condition (financial or otherwise) of the Consenting Party, (ii) the ability
of the Consenting Party to perform under the Assigned Agreement or this Consent,
(iii) the business, operations, properties, assets, prospects or condition
(financial or otherwise) of the Project, (iv) the value, validity, perfection
and enforceability of the liens granted to the Collateral Agent under the
Security Documents or (v) the ability of the Collateral Agent or the Senior
Parties to enforce any of their material rights and remedies under the Assigned
Agreement or this Consent (collectively, a "Material Adverse Effect").
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Consenting Party is not
in violation of its certificate of limited liability partnership, limited
liability partnership agreement, or other organizational documents, and the
execution, delivery and performance by the Consenting Party of this Consent and
the Assigned Agreement and the consummation of the transactions contemplated
hereby and thereby will not result in any violation of, breach of or default
under any term of its certificate of limited partnership, limited partnership
agreement, or other organizational documents, or of any contract or agreement to
which it is a party or by which it or its property is bound, or of any license,
permit, franchise, judgment, writ, injunction, decree, order, charter, law,
ordinance, rule or regulation applicable to it, except for any such violations
which, individually or in the aggregate, would not have a Material Adverse
Effect on the Consenting Party.
3.6 GOVERNMENT CONSENT. No consent, order, authorization, waiver,
approval or any other action, or registration, declaration or filing with, any
person, board or body, public or private (collectively, the "Approvals"), is
required to be obtained by the Consenting Party in connection with the
execution, delivery or performance of the Assigned Agreement or the consummation
of the transactions contemplated thereunder, except as listed in Exhibit B
hereto. All such Approvals listed on Exhibit B, except for those set forth in
Part II thereof (the "Deferred Approvals"), are Final (as defined below). An
Approval shall be "Final" if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with the terms
thereof), does not impose restrictions or requirements inconsistent with the
terms of the Assigned Agreement, and is final and not subject to any appeal. The
Consenting Party reasonably believes that each Deferred Approval will be
obtained in the ordinary course of business prior to the time when such Deferred
Approval is required to be Final.
5
<PAGE>
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor, to the
best of the Consenting Party's knowledge after due inquiry, any other party to
the Assigned Agreement is in default of any of its obligations thereunder. The
Consenting Party has no existing counterclaims, offsets or defenses against the
Partnership. The Consenting Party and, to the best of the Consenting Party's
knowledge after due inquiry, each other party to the Assigned Agreement have
complied with all conditions precedent to the respective obligations of such
party to perform under the Assigned Agreement. To the best of the Consenting
Party's knowledge after due inquiry, no event or condition exists which would
either immediately or with the passage of any applicable grace period or giving
of notice, or both, enable either the Consenting Party or the Partnership to
terminate or suspend its obligations under the Assigned Agreement. The Assigned
Agreement has not been amended, modified or supplemented in any manner.
3.8 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no notice of, and
has not consented to, any previous assignment of all or any part of its rights
under the Assigned Agreement.
3.9 REPRESENTATIONS AND WARRANTIES. All representations, warranties and
other statements made by the Consenting Party in the Assigned Agreement were
true and correct as of the date when made and are true and correct as of the
date of this Consent.
SECTION 4. OPINION OF IN-HOUSE COUNSEL
The Consenting Party shall deliver an opinion of in-house counsel
relating to the Assigned Agreement and this Consent, which opinion shall be
substantially in the form attached hereto as Exhibit C.
SECTION 5. MISCELLANEOUS
5.1 NOTICES. All notices and other communications hereunder shall be in
writing, shall be deemed given upon receipt thereof by the party or parties to
whom such notice is addressed, shall refer on their face to the Assigned
Agreement (although failure to so refer shall not render any such notice of
communication ineffective), shall be sent by first class mail, by personal
delivery or by a nationally recognized courier service, and shall be directed as
follows:
If to the Consenting Party: H.B. Zachry Company
527 Logwood (78221-1738)
P.O. Box 240130
San Antonio, TX 78224-0130
Attention: R.J. Kalt
Telephone: (210) 458-8050
Fax: (210) 458-8572
6
<PAGE>
Copy to: Murray L. Johnson, Jr.
General Counsel
310 S. St. Mary's Street
Suite 2600
San Antonio, TX 78205
Telephone: (210) 258-2600
Fax: (210) 258-2699
If to the Partnership: Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, NE 68154-4446
Attention: Michael F. Lawler
Telephone: (402) 691-9500
Fax: (402) 691-9550
If to the Collateral Agent: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
5.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS CONSENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT
TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this
Consent and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Consent, each of the Consenting Party, the Partnership and the Collateral
Agent hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each of the Consenting Party, the
Partnership and the Collateral Agent irrevocably consents to the service of
process out of any of the aforementioned courts in any
7
<PAGE>
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Consenting Party at its notice address
provided pursuant to Section 5.1 hereof. Each of the Consenting Party, the
Partnership and the Collateral Agent hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Consent brought in the courts referred to above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of the Collateral Agent or its
designees to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Consenting Party in any other
jurisdiction.
5.3 COUNTERPARTS. This Consent may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
5.4 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.
5.5 SEVERABILITY. In case any provision in or obligation under this
Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
5.6 AMENDMENT, WAIVER. Neither this Consent nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified except by an
instrument in writing signed by the Consenting Party, the Partnership, and the
Collateral Agent.
5.7 TERMINATION. (a) The Consenting Party's obligations hereunder are
absolute and unconditional, and the Consenting Party has no right, and shall
have no right, to terminate this Consent or to be released, relieved or
discharged from any obligation or liability hereunder until all Loans and all
other obligations under the Financing Documents (the "Finance Liabilities") have
been indefeasibly satisfied in full, notice of which shall be provided by the
Collateral Agent when all such obligations have been so satisfied (the
"Termination Notice").
(b) In the event that the Collateral Agent delivers the
Termination Notice to the Consenting Party pursuant to this Section 5.7, this
Consent shall terminate for all purposes as to the Collateral Agent and the
Financing Documents and the Collateral Agent and the Senior Parties shall have
no further rights or obligations under this Consent; provided, however, that the
Consenting Party agrees that this Consent shall continue to apply for the
benefit of the Partnership and the providers of new credit facilities to replace
the Financing Documents (the "New Lender") provided that (i) within five (5)
days following delivery by the Collateral Agent to the Consenting Party of the
Termination Notice pursuant to this Section 5.7, the New Lender or an agent,
trustee or other representative of the New Lender, shall have notified the
Consenting Party that it undertakes the prospective obligations of the
"Collateral Agent" under this Consent, and shall have supplied substitute notice
address information for Section 5.1 and new payment
8
<PAGE>
instructions (countersigned on behalf of the Partnership) for Exhibit A, (ii)
the amount of the new credit facilities do not exceed the original amount of
commitment by the Senior Parties to make loans and extend other credit
facilities under the Financing Documents, and (iii) thereafter, (w) the term
"Finance Liabilities" under this Consent will be deemed to refer to the new
credit facilities, (x) the term "Collateral Agent" or "Senior Parties" shall be
deemed to refer to the New Lender or any agent or trustee for the New Lender,
(y) the term "Financing Documents" shall be deemed to refer to the credit
agreement, indenture or other instrument providing for the new credit facilities
and (z) the term "Security Documents" shall be deemed to refer to the security
agreements under which the Assigned Agreement is assigned as collateral to
secure performance of the obligations of the Partnership under the new credit
facilities.
5.8 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon the
parties hereto and their permitted successors and assigns and shall inure to the
benefit of the parties, their designees and their respective permitted
successors and assigns.
5.9 FURTHER ASSURANCES. The parties hereto hereby agree to execute and
deliver all such instruments and take all such action as may be necessary to
effectuate fully the purposes of this Consent.
5.10 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE CONSENTING PARTY, THE PARTNERSHIP AND THE COLLATERAL AGENT HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT.
5.11 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Collateral Agent and the Senior Parties and shall survive the
execution and delivery of this Consent.
5.12 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Collateral Agent in exercising any right, power or privilege hereunder and
no course of dealing between the Consenting Party and the Collateral Agent shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other exercise, or the further
exercise, of any other right, power or privilege hereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Collateral Agent would otherwise have.
9
<PAGE>
IN WITNESS WHEREOF, the Consenting Party, the Partnership and the
Collateral Agent have caused this Consent to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first above
written.
H.B. Zachry Company
By: /s/ ROBERT J. KALT
-----------------------------------------
Name: Robert J. Kalt
Title: Vice President
TENASKA GEORGIA PARTNERS, L.P.
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /s/ MICHAEL F. LAWLER
------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK, as Collateral Agent
By: /s/ ANNETTE M. MARSULA
-------------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
Exhibit A to
CONSENT AND AGREEMENT
PAYMENT INSTRUCTIONS
Chase Manhattan Bank ABA# 021 000 021
450 West 33rd Street, 15th Fl. Account Number: 507 891325
NY, NY 10001 Account Name: The Chase Manhattan Bank, as
Collateral Agent
Tenaska Georgia Partners, L.P.,
Concentration Account
Vista Account Number: 294570000
For Further Credit to: Trust Acct. No. C29457, The Chase
Manhattan Bank, as Collateral Agent, Tenaska Georgia -
Construction Fund. Attention: A. Marsula
<PAGE>
Exhibit B to
CONSENT AND AGREEMENT
APPROVALS
I. None
II. None
<PAGE>
Exhibit C to
CONSENT AND AGREEMENT
FORM OF OPINION OF COUNSEL
November _____, 1999
[OTHER ADDRESSEE]
Tenaska Georgia Partners, L.P.
1044 North 115th Street
Omaha, Nebraska 68154
Re: Natural gas-fired electric generating facility located in
Heard County, Georgia (the "Project")
Ladies and Gentlemen:
I and other staff attorneys have acted as counsel to H. B. Zachry
Company, a Delaware corporation (the "Guarantor"), in connection with the
Project to be constructed by Tenaska Georgia Partners, L.P., a Delaware limited
partnership ("TGP"), for which the Guarantor has entered into a Guaranty of
Obligations, dated ________, 1999, (the "Guaranty") in favor of TGP, to induce
TGP to enter into an Engineering, Procurement and Construction Agreement, dated
as of September 15, 1999 with Zachry Construction Corporation. This opinion is
delivered to you pursuant to the Bond Purchase Agreement dated _______________
(the "Bond Purchase Agreement") by and among TGP, Goldman, Sachs & Co., and the
purchaser of the taxable bonds thereunder (the "Bondholders").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following:
(1) the Guaranty;
(2) the Consent and Agreement of Zachry, dated ________
("Consent");
(3) the Certificate of Incorporation and Bylaws of the
Guarantor; and
(4) the resolutions authorizing the execution and delivery
of the Guaranty and Consent by the Guarantor.
The documents referred to in items (iii) and (iv) above are hereinafter
collectively referred to as the "Governing Documents" and the Guaranty and the
Consent are hereinafter collectively referred to as the "Documents". In
addition, we have examined and are familiar with originals or copies, certified
or otherwise identified to our satisfaction, of such other documents as we have
deemed necessary or appropriate as a basis for the opinions set forth below.
<PAGE>
In our examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such copies. In
rendering the opinions expressed below, we have further assumed, without any
independent investigation or verification of any kind, that each Document we
have examined is the valid and binding obligation of each party thereto other
than the Guarantor.
I am admitted to the bar of the State of Texas. I express no opinion as
to the law of any jurisdiction other than (i) the laws of the State of Texas and
(ii) the federal laws of the United States of America and (iii) the laws of the
State of Delaware pertaining to corporations and to limited partnerships.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. The Guarantor is a Delaware corporation, duly organized,
validly existing and in good standing under the laws of
the State of Delaware. The Guarantor is duly qualified
to transact business in each jurisdiction in which it
owns or leases real property or in which the nature of
its business requires it to be so qualified.
2. The Guarantor has full power and authority to enter
into, deliver and perform its obligations under each of
the Documents.
3. The Guarantor has taken all necessary corporate action
to authorize the execution, delivery and performance by
it of each Document.
4. The Guarantor has duly executed and delivered each
Document.
5. Each Document constitutes the valid and binding
obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar
laws affecting enforcement of creditors' rights
generally and by general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law).
6. The execution, delivery and performance by the Guarantor
of the Documents will not: (i) contravene any applicable
provision of any law, regulation, ruling, order or
decree of any governmental authority to which or by
which the Guarantor or any of its property or assets is
subject or bound or (ii) violate any provision of the
Governing Documents of the Guarantor. The execution,
delivery and performance by the Guarantor of the
Documents do not and will not, to the best of our
knowledge after due inquiry, conflict with, result in
any breach of, or constitute a default under, or result
in the creation or imposition of (or the obligation to
create or impose) any lien or encumbrance upon any of
the property or assets of the Guarantor pursuant to any
provision of any securities issued by the Guarantor, or
any indenture, mortgage, deed of trust, contract,
2
<PAGE>
undertaking, document, instrument or other agreement to
which the Guarantor is a party or by which it or any of
its property or assets is bound.
7. No consent, order, authorization, waiver, approval or
any other action, or registration, declaration or filing
with, any person, board or body, public or private, is
required to be obtained by the Guarantor in connection
with the execution, delivery or performance of the
Documents or the consummation of the transactions
contemplated thereby.
8. To the best of our knowledge after due inquiry, there
are no pending or threatened actions or proceedings
affecting the Guarantor or any of its properties or
assets that individually or in the aggregate could
prohibit or limit in any way the execution, delivery and
performance by the Guarantor of any of the Documents.
This opinion is being furnished only to the Addressees, and their
respective successors and assigns and is solely for the benefit of such parties.
Very truly yours,
--------------------
Attorney
3
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Exhibit 4.13
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent"), dated as of
November 10, 1999 among Tenaska Operations, Inc., a Delaware corporation (the
"Consenting Party"), Tenaska Georgia Partners, L.P., a Delaware limited
partnership (the "Partnership"), and THE CHASE MANHATTAN BANK, as collateral
agent, together with its successors in such capacity (the "Collateral Agent"),
for the benefit of the Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership intends to develop, construct, lease,
operate, maintain and finance a 936 megawatt ("MW") (nominal summer rating)
natural gas-fired simple-cycle electric generating plant (the "Facility" and,
together with the Project Documents, governmental approvals relating to the
Facility or the Project Documents and any other item relating to the Facility,
including any improvements to, and the operation of, the Facility and all
activities related thereto, the "Project") to be located in Heard County,
Georgia;
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE").
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "Authority"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership;
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "DAHC Bonds") pursuant to an Indenture, dated as of November 1, 1999
between the Authority and The Chase Manhattan Bank, as DAHC Trustee;
WHEREAS, the DAHC Bonds will be purchased by the Partnership
and pledged to the Collateral Agent, along with certain other assets of the
Partnership including its rights under the Lease Agreement to secure the
obligations of the Partnership under the Bonds;
WHEREAS, in addition to the DAHC Bonds and related collateral,
all obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor
thereto and each other person that becomes a secured party under any Financing
Document (collectively, the "Senior Parties") will be secured by a certain
Security Agreement, Pledge Agreements Collateral Agency Agreement, Deed to
Secured Debt, Security Agreement and Assignment of Rents and Leases, each Third
Party Consent and any other document
<PAGE>
providing for any lien, pledge, encumbrance, mortgage or security interest
(collectively, the "Security Documents");
WHEREAS, the Senior Parties, the Authority, and the
Partnership have entered into the Collateral Agency and Intercreditor Agreement
(as amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Collateral Agency Agreement") to set
forth their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by the respective parties thereto under the above
described documents, (b) the priority of their respective security interests
created by the Security Documents, and (c) the appointment of the Collateral
Agent as collateral agent.
WHEREAS, the Partnership and the Consenting Party have entered
into that certain Operations and Maintenance Agreement, dated as of September
10, 1999 (as amended, restated, modified or otherwise supplemented from time to
time in accordance with the terms thereof, the "Assigned Agreement");
WHEREAS, the Partnership has notified the Consenting Party
that all of the Partnership's right, title and interest in, to, and under the
Assigned Agreement is to be assigned to the Collateral Agent as security
pursuant to one or more of the Security Documents;
WHEREAS, it is a condition precedent to the issuance of the
Bonds and the other Financing Documents that the Consenting Party execute and
deliver this Consent for the benefit of the Senior Parties;
NOW, THEREFORE, as an inducement to the Senior Parties to
enter into the Financing Documents, and in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the Consenting Party hereby agrees as follows:
SECTION 1 CONSENT TO ASSIGNMENT, ETC.
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a)
acknowledges that the Collateral Agent and the Senior Parties are entering into
the Financing Documents in reliance upon the execution and delivery by the
Consenting Party of the Assigned Agreement and this Consent, (b) consents in all
respects to the pledge and assignment to the Collateral Agent of all of the
Partnership's right, title and interest in, to and under the Assigned Agreement
pursuant to one or more of the Security Documents and (c) acknowledges the
right, but not the obligation, of the Collateral Agent or the Collateral Agent's
designee, in the exercise of the Collateral Agent's rights and remedies under
the Security Documents, to make all demands, give all notices, take all actions
and exercise all rights of the Partnership in accordance with the Assigned
Agreement, and agrees that, in such event, the Consenting Party shall continue
to perform its obligations under the Assigned Agreement.
2
<PAGE>
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the
Collateral Agent shall notify the Consenting Party that an event of default
under any of the Financing Documents has occurred and is continuing and that the
Collateral Agent has exercised its rights (a) to have itself or its designee
substituted for the Partnership under the Assigned Agreement or (b) to sell,
assign, transfer or otherwise dispose of the Assigned Agreement to a person,
then the Collateral Agent, the Collateral Agent's designee or such person (each,
a "Substitute Owner") shall be substituted for the Partnership under the
Assigned Agreement and that, in such event, the Consenting Party will continue
to perform its obligations under the Assigned Agreement in favor of the
Substitute Owner.
1.3 RIGHT TO CURE. The Consenting Party agrees that in the
event of a default by the Partnership in the performance of any of its
obligations under the Assigned Agreement, or upon the occurrence or
non-occurrence of any event or condition under the Assigned Agreement which
would immediately or with the passage of any applicable grace period or the
giving of notice, or both, enable the Consenting Party to terminate or suspend
its obligations or exercise any other right or remedy under the Assigned
Agreement or under applicable law (hereinafter a "default"), the Consenting
Party will continue to perform its obligations under the Assigned Agreement and
will not exercise any such right or remedy until it first gives prompt written
notice of such default to the Collateral Agent and affords the Collateral Agent,
the Collateral Agent's designee and the Senior Parties a period of the longer of
(a) sixty (60) days (or if such default is a non-monetary default, such longer
period not to exceed one hundred eighty (180) days as is required so long as any
such party has commenced and is diligently pursuing appropriate action to cure
such default) from receipt of such notice to cure such default or (b) the
termination of the Partnership's right to cure such default under the Assigned
Agreement, provided that in the event that a Substitute Owner assumes the rights
and obligations of the Partnership under the Assigned Agreement pursuant to a
written assumption agreement (a copy of which is provided to the Consenting
Party), such Substitute Owner shall have 60 days from the date of such
assumption agreement to cure such default or if such default is a non-monetary
default, such longer period so long as such Substitute Owner has commenced and
is diligently pursuing appropriate action to cure such default; provided,
however, that if any such party is prohibited from curing any such default by
any process, stay or injunction issued by any governmental authority or pursuant
to any bankruptcy or insolvency proceeding involving the Partnership, then the
time periods specified in this Section 1.3 for curing a default shall be
extended for the period of such prohibition.
1.4 NO TERMINATION, ASSIGNMENT OR MATERIAL AMENDMENTS. The
Consenting Party will not, without the prior written consent of the Collateral
Agent, enter into any consensual cancellation or termination of the Assigned
Agreement, or assign or otherwise transfer any of its right, title and interest
thereunder or consent to any such assignment or transfer by the Partnership.
1.5 REPLACEMENT AGREEMENT. In the event that the Assigned
Agreement is terminated as a result of any bankruptcy or insolvency proceeding
affecting the Partnership, the Consenting Party will, at the option of the
Collateral Agent enter into a new agreement with the Collateral Agent (or its
transferee or other nominee that owns or leases the Project) having terms
substantially the same as the terms of the Assigned Agreement.
3
<PAGE>
1.6 NO LIABILITY. The Consenting Party acknowledges and agrees
that neither the Collateral Agent, the Collateral Agent's designee or the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise, nor shall the
Collateral Agent, the Collateral Agent's designee or the Senior Parties be
obligated or required to (a) perform any of the Partnership's obligations under
the Assigned Agreement, except, in the case of the Collateral Agent or the
Collateral Agent's designee, during any period in which the Collateral Agent or
the Collateral Agent's designee is a Substitute Owner pursuant to Section 1.2
hereof, in which case (i) the obligations of such Substitute Owner shall be no
more than that of the Partnership under such Assigned Agreement, (ii) such
Substitute Owner shall have no personal liability to the Consenting Party for
the performance of such obligations and (iii) the sole recourse of the
Consenting Party shall be to such Substituted Owner's interest in the Project,
or (b) take any action to collect or enforce any claim for payment assigned
under the Security Documents.
1.7 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party
shall perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the Assigned
Agreement in full force and effect in accordance with its terms.
1.8 DELIVERY OF NOTICES. The Consenting Party shall deliver to
the Collateral Agent, concurrently with the delivery thereof to the Partnership,
a copy of each notice, request or demand given by the Consenting Party pursuant
to the Assigned Agreement.
1.9 ACKNOWLEDGMENTS. The Consenting Party agrees to execute
such acknowledgments or other similar instruments as the Collateral Agent shall
reasonably request in connection with the transactions provided for in this
Consent.
1.10 CLARIFICATIONS. In connection with the issuance of
the Bonds and the other Financing Documents, the Consenting Party hereby
consents pursuant to Section 14.5 of the Assigned Agreement to the disclosure of
Confidential (as defined in the Assigned Agreement) information to third
parties.
SECTION 2 PAYMENTS UNDER THE ASSIGNED AGREEMENT
2.1 PAYMENTS. The Consenting Party will pay all amounts
payable by it under the Assigned Agreement, if any, in the manner required by
the Assigned Agreement directly into the account specified on Exhibit A hereto,
or to such other person or account as shall be specified from time to time by
the Collateral Agent to the Consenting Party in writing.
2.2 NO OFFSET, ETC. All payments required to be made by the
Consenting Party under the Assigned Agreement shall be made without any offset,
recoupment, abatement, withholding, reduction or defense whatsoever, except as
specifically permitted under the Assigned Agreement.
4
<PAGE>
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
In order to induce the Collateral Agent and the Senior Parties
to enter into the Financing Documents, the Consenting Party makes the following
representations and warranties, which shall survive the execution and delivery
of this Consent and the Assigned Agreement and the consummation of the
transactions contemplated hereby and thereby.
3.1 ORGANIZATION; POWER AND AUTHORITY. The Consenting Party is
a corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation, and is duly qualified, authorized to do
business and in good standing in every jurisdiction in which it owns or leases
real property or in which the nature of its business requires it to be so
qualified, and has all requisite power and authority, corporate and otherwise,
to enter into and to perform its obligations hereunder and under the Assigned
Agreement, and to carry out the terms hereof and thereof and the transactions
contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by
the Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate action on the part of the Consenting Party
and do not require any approval or consent of any holder (or any trustee for any
holder) of any indebtedness or other obligation of (a) the Consenting Party or
(b) any other person or entity, except approvals or consents which have
previously been obtained.
3.3 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this
Consent and the Assigned Agreement is in full force and effect, has been duly
executed and delivered on behalf of the Consenting Party by the appropriate
officers of the Consenting Party, and constitutes the legal, valid and binding
obligation of the Consenting Party, enforceable against the Consenting Party in
accordance with its terms except as the enforceability thereof may be limited by
(a) bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no legislation, litigation, action,
suit, proceeding or investigation pending or (to the best of the Consenting
Party's knowledge after due inquiry) threatened against the Consenting Party
before or by any court, administrative agency, arbitrator or governmental
authority, body or agency which, if adversely determined, individually or in the
aggregate, (a) could adversely affect the performance by the Consenting Party of
its obligations hereunder or under the Assigned Agreement, or which could modify
or otherwise adversely affect the Approvals (as defined in Section 3.6 hereof),
(b) questions the validity, binding effect or enforceability hereof or of the
Assigned Agreement, any action taken or to be taken pursuant hereto or thereto
or any of the transactions contemplated hereby or thereby or (c) could have a
material adverse effect upon (i) the business, operations, properties, assets,
or condition (financial or otherwise) of the Consenting Party, (ii) the ability
of the Consenting Party to perform under the Assigned Agreement or this Consent,
(iii) the business, operations, properties, assets, or condition (financial or
otherwise) of the Project, (iv) the value, validity, perfection and
enforceability of the liens granted to the Collateral Agent under the Security
Documents or (v) the ability of the Collateral Agent or the Senior Parties to
enforce any of their material rights and
5
<PAGE>
remedies under the Assigned Agreement or this Consent (collectively, a "Material
Adverse Effect").
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Consenting
Party is not in violation of its charter or by-laws, and the execution, delivery
and performance by the Consenting Party of this Consent and the Assigned
Agreement and the consummation of the transactions contemplated hereby and
thereby will not result in any violation of, breach of or default under any term
of its charter or by-laws, or of any contract or agreement to which it is a
party or by which it or its property is bound, or of any license, permit,
franchise, judgment, writ, injunction, decree, order, charter, law, ordinance,
rule or regulation applicable to it, except for any such violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Consenting Party.
3.6 CONSENTS AND APPROVALS. No consent, order, authorization,
waiver, approval or any other action, or registration, declaration or filing
with, any person, board or body, public or private (collectively, the
"Approvals"), is required to be obtained by the Consenting Party in connection
with the execution, delivery or performance of the Assigned Agreement or the
consummation of the transactions contemplated thereunder, except as listed in
Exhibit B hereto. All such Approvals listed on Exhibit B, except for those set
forth in Part II thereof (the "Deferred Approvals"), are Final (as defined
below). An Approval shall be "Final" if it has been validly issued, is in full
force and effect, is not subject to any condition (other than compliance with
the terms thereof), does not impose restrictions or requirements inconsistent
with the terms of the Assigned Agreement, and is final and not subject to any
appeal. The Consenting Party reasonably believes that each Deferred Approval
will be obtained in the ordinary course of business prior to the time when such
Deferred Approval is required to be Final.
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor,
to the best of the Consenting Party's knowledge after due inquiry, any other
party to the Assigned Agreement is in default of any of its obligations
thereunder. The Consenting Party has no existing counterclaims, offsets or
defenses against the Partnership. The Consenting Party and, to the best of the
Consenting Party's knowledge after due inquiry, each other party to the Assigned
Agreement has complied with all conditions precedent to the respective
obligations of such party to perform under the Assigned Agreement. To the best
of the Consenting Party's knowledge after due inquiry, no event or condition
exists which would either immediately or with the passage of any applicable
grace period or giving of notice, or both, enable either the Consenting Party or
the Partnership to terminate or suspend its obligations under the Assigned
Agreement. The Assigned Agreement has not been amended, modified or supplemented
in any manner.
3.8 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no
notice of, and has not consented to, any previous assignment of all or any part
of its rights under the Assigned Agreement.
3.9 REPRESENTATIONS AND WARRANTIES. All representations,
warranties and other statements made by the Consenting Party in the Assigned
Agreement were true and correct as of the date when made and are true and
correct as of the date of this Consent.
6
<PAGE>
SECTION 4 OPINION OF COUNSEL
The Consenting Party shall deliver an opinion of counsel,
dated the Closing Date (as defined in the Financing Documents), relating to the
Assigned Agreement and this Consent, which opinion shall be substantially in the
form attached hereto as Exhibit C.
SECTION 5 MISCELLANEOUS
5.1 NOTICES. All notices and other communications hereunder
shall be in writing, shall be deemed given upon receipt thereof by the party or
parties to whom such notice is addressed, shall refer on their face to the
Assigned Agreement (although failure to so refer shall not render any such
notice of communication ineffective), shall be sent by first class mail, by
personal delivery or by a nationally recognized courier service, and shall be
directed as follows:
If to the Consenting Party: Tenaska Operations, Inc..
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
Attention: H. Dwight Howell
Telephone: (402) 691-9540
Fax: (402) 691-9700
If to the Partnership: Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
Telephone: (402) 691-9547
Fax: (402) 691-9550
If to the Collateral Agent: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project
Finance Service Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
7
<PAGE>
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
5.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS
CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF
LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this
Consent and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Consent, each of the Consenting Party, the Partnership and the Collateral
Agent hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each of the Consenting Party and the
Partnership hereby irrevocably designates, appoints and empowers CT Corporation
System, 111 Eighth Avenue, 13th Floor, New York, New York, 10011, as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any action or proceeding.
If for any reason such designee, appointee and agent shall cease to be available
to act as such, the Partnership or the Consenting Party, as applicable, agrees
to designate a new designee, appointee and agent in New York City on the terms
and for the purposes of this provision satisfactory to the Collateral Agent.
Each of the Consenting Party, the Partnership and the Collateral Agent
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Consenting Party at its
notice address provided pursuant to Section 5.1 hereof. Each of the Consenting
Party, the Partnership and the Collateral Agent hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Consent brought in the courts referred to above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of the Collateral Agent or its
designees to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Consenting Party in any other
jurisdiction.
5.3 COUNTERPARTS. This Consent may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
5.4 HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Consent are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Consent.
8
<PAGE>
5.5 SEVERABILITY. In case any provision in or obligation under
this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
5.6 AMENDMENT, WAIVER. Neither this Consent nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the Consenting Party and the Collateral
Agent.
5.7 TERMINATION; REFINANCING. (a) The Consenting Party's
obligations hereunder are absolute and unconditional, and the Consenting Party
has no right, and shall have no right, to terminate this Consent or to be
released, relieved or discharged from any obligation or liability hereunder
until all obligations under the Financing Documents (the "Finance Liabilities")
have been indefeasibly satisfied in full, notice of which shall be provided by
the Collateral Agent when all such obligations have been satisfied (the
"Termination Notice").
(b) In the event that the Finance Liabilities of the
Partnership are refinanced or replaced by other credit facilities, this Consent
shall continue in effect for the benefit of the Partnership and the provider of
such new credit facilities (the "New Lender") provided that (i) within five days
following delivery by the Collateral Agent to the Consenting Party of the notice
from the Collateral Agent as provided in Section 5.7 hereof that the original
Finance Liabilities have been indefeasibly satisfied in full, the New Lender or
an agent, trustee or other representative of the New Lender, shall have notified
the Consenting Party that it assumes the rights and the prospective obligations
of the Collateral Agent under this Consent, and shall have supplied substitute
notice address information for Section 5.1 hereof and new Payment Instructions
(as more fully described in Exhibit A hereto) (countersigned on behalf of the
Partnership) for Exhibit A, and (ii) thereafter, (a) the term "Finance
Liabilities" under this Consent will be deemed to refer to the new credit
facilities, (b) the term "Collateral Agent" or "Senior Parties" shall be deemed
to refer to the New Lender or any agent or trustee for the New Lender, (c) the
term "Financing Documents" shall be deemed to the credit agreement, indenture or
other instrument providing for the new credit facilities and (d) the term
"Security Documents" shall be deemed to refer to the security agreements under
which the Assigned Agreement is assigned as collateral to secure performance of
the obligations of the Partnership under the new credit facilities.
5.8 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon
the parties hereto and their permitted successors and assigns and shall inure to
the benefit of the parties, their designees and their respective permitted
successors and assigns.
5.9 FURTHER ASSURANCES. The parties hereto hereby agree to
execute and deliver all such instruments and take all such action as may be
necessary to effectuate fully the purposes of this Consent.
5.10 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE CONSENTING PARTY, THE PARTNERSHIP AND THE COLLATERAL AGENT
HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY
9
<PAGE>
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION
WITH THIS CONSENT.
5.11 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Collateral Agent and the Senior Parties and shall survive the
execution and delivery of this Consent.
5.12 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on
the part of the Collateral Agent in exercising any right, power or privilege
hereunder and no course of dealing between the Consenting Party and the
Collateral Agent shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
exercise, or the further exercise, of any other right, power or privilege
hereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Collateral Agent would
otherwise have.
10
<PAGE>
IN WITNESS WHEREOF, the Consenting Party, the Partnership and
the Collateral Agent have caused this Consent to be duly executed and delivered
by their respective officers thereunto duly authorized as of the date first
above written.
TENASKA OPERATIONS, INC.
By: /s/ H.D. Howell
--------------------------------------
Name: Dwight H. Howell
Title: Vice-President of Operations
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Managing General Partner
By: /s/ Michael F. Lawler
-------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
-----------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
Exhibit A to
CONSENT AND AGREEMENT
PAYMENT INSTRUCTIONS
Chase Manhattan Bank ABA# 021 000 021
450 West 33rd Street, 15th Fl. Account Number: 507 891325
NY, NY 10001 Account Name:The Chase Manhattan Bank, as
Collateral Agent
Tenaska Georgia Partners, L.P.,
Concentration Account
Vista Account Number: 294580000
For Further Credit to: Trust Acct. No.
C29458, The Chase Manhattan Bank, as
Collateral Agent, Tenaska Georgia -Revenue
Fund. Attention: A. Marsula
<PAGE>
Exhibit B to
CONSENT AND AGREEMENT
APPROVALS
None
<PAGE>
Exhibit C to
CONSENT AND AGREEMENT
FORM OF OPINION OF COUNSEL
November ____, 1999
Goldman, Sachs & Co. The Toronto-Dominion Bank
85 Broad Street 31 West 52nd Street
New York, New York 10004 New York, New York 10019
Credit Lyonnais Tenaska Georgia Partners, L.P.
1301 Avenue of the Americas 1044 North 115th Street
20th Floor Suite 400
New York, New York 10019 Omaha, Nebraska 68154-4446
TD Securities (USA) Inc. The Chase Manhattan Bank
31 West 52nd Street Capital Markets Fiduciary Services
New York, New York 10019 International & Project Finance
Service Delivery
450 West 33rd Street, 15th Floor
New York, New York 10001
Re: Natural Gas-Fired Electric Generating Facility Located in
Heard County, Georgia (the "Project")
Ladies and Gentlemen:
In connection with the generation facility to be constructed in Heard
County, in the State of Georgia we have acted as counsel to Tenaska Operations,
Inc., a Delaware corporation.
This opinion is being provided to you pursuant to the Agreement as to
Certain Understandings, Common Representations, Warranties, Covenants and Other
Terms dated as of November 1, 1999 (the "Common Agreement") by and among Tenaska
Georgia Partners, L.P., The Chase Manhattan Bank, as Trustee, the
Toronto-Dominion Bank as DSR LOC Agent, The Toronto-Dominion Bank, as PPA LOC
Agent and The Chase Manhattan Bank, as Collateral Agent. Capitalized terms used
and not otherwise defined herein shall have the meanings ascribed to them in the
Common Agreement.
<PAGE>
In connection with this opinion, we have examined copies, certified or
otherwise identified to our satisfaction, of the documents, i.e., the Operations
and Maintenance Agreement and the Consent and Agreement of Tenaska Operations,
Inc. executed on September 10, 1999 by and between Tenaska Operations, Inc. and
Tenaska Georgia Partners, L.P. and Amendment to Operations and Maintenance
Agreement executed on October 26, 1999 by and between Tenaska Georgia Partners,
L.P. and Tenaska Operations, Inc., and the Second Amendment to Operations and
Maintenance Agreement executed on November ____, 1999 by and between Tenaska
Georgia Partners, L.P. and Tenaska Operations, Inc. (the "Documents").
In addition, we have examined and are familiar with originals or
copies, certified or otherwise identified to our satisfaction, of authorizing
resolutions of Tenaska Operations, Inc., and of the articles of incorporation
and by-laws of Tenaska Operations, Inc., as well as such other documents as we
have deemed necessary or appropriate as a basis for the opinions set forth
below.
In our examination we have assumed the due execution and delivery of
the Documents on behalf of the parties to the Documents, other than Tenaska
Operations, Inc. (provided however, that we have assumed due execution and
delivery with respect to the Borrower), the genuineness of all signatures, the
authenticity of all documents submitted as originals, the conformity to original
documents of all documents submitted as certified or photostatic copies, and the
authenticity of the originals of such copies. In rendering the opinions
expressed below, we have further assumed, without any independent investigation
or verification of any kind, that each Document we have examined is the valid
and binding obligation of each party thereto other than of Tenaska Operations,
Inc.
We are admitted to the bar of the State of Nebraska. We express no
opinion as to the law of any jurisdiction other than (i) the laws of the State
of Nebraska, (ii) the federal laws of the United States of America, and (iii)
the laws of the State of Delaware pertaining to corporations. For purposes of
the opinions set forth in paragraph 1 with respect to the qualification to do
business in the State of Georgia of Tenaska Operations, Inc. we have relied
exclusively on certificates from, and oral representations of, officers and
employees of the State of Georgia.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Tenaska Operations, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Tenaska
Operations, Inc. is duly qualified to do business in the State of Georgia and is
duly qualified to do business in each jurisdiction in which it owns or leases
real property or in which the nature of its business requires it to be so
qualified.
2. Tenaska Operations, Inc. has all corporate power and authority to
execute, deliver and perform obligations under the Documents and the execution,
delivery and performance of each of the Documents by Tenaska Operations, Inc.
has been duly authorized by all requisite corporate action of Tenaska
Operations, Inc.
<PAGE>
3. Tenaska Operations, Inc. has duly executed and delivered the
Documents.
4. The execution, delivery and performance by Tenaska Operations, Inc.
of each of the Documents to which it is a party and the consummation of the
transactions contemplated thereby, will not (a) result in any violation of (i)
any contract, agreement or governing document applicable to Tenaska Operations,
Inc., (ii) of any license, permit, franchise, judgment, writ, injunction,
decree, order or of any Nebraska or federal law, ordinance, rule or regulations
thereunder applicable to Tenaska Operations, Inc., or (b) require the consent of
any other Person or result in the imposition of any lien on the property of
Tenaska Operations, Inc.
5. There are no pending or, to the best of our knowledge after due
inquiry, threatened actions or proceedings affecting Tenaska Operations, Inc. or
any of their properties or assets that individually or in the aggregate could
prohibit or limit in any way or adversely affect the execution, delivery and
performance of the Documents to which it is a party.
6. No consent, order, authorization, waiver, approval or any other
action, or registration, declaration or filing with, any public person, board or
body, is required to be obtained by Tenaska Operations, Inc. in connection with
the execution, delivery or performance of the Documents or the consummation of
the transactions contemplated thereby.
This opinion is being furnished only to the addressees hereto, and
their respective successors and assigns and is solely for the benefit of such
parties; provided that assignees of, or participants in, the interests of any
such entities may rely on this opinion as if it were addressed to them.
This opinion is rendered as of the date hereof, the opinions expressed
herein are given only as of the date hereof, and we expressly decline any
undertaking to revise or update any of the opinions subsequent to the date
hereof or to advise you of any matter arising subsequent to the date hereof,
including but not limited to a change in law or procedure, which would cause us
to modify our opinion in whole or in part.
<PAGE>
Exhibit 4.14
HEARD COUNTY WATER AUTHORITY
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent"), dated as of November 10,
1999 among Heard County Water Authority, a public corporation created and
existing under the laws of the State of Georgia (the "CONSENTING PARTY"),
Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"PARTNERSHIP"), and The Chase Manhattan Bank, as collateral agent (together with
its successors in such capacity, the "COLLATERAL AGENT") for the benefit of the
Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership proposes to develop, construct,
operate and maintain a 936 megawatt ("MW") (nominal rating) natural gas-fired
simple-cycle electric generating plant in Heard County, Georgia (the "PROJECT").
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE").
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "AUTHORITY"), and will be leased to
the Partnership pursuant to a Lease Agreement, dated as of November 1, 1999
between the Authority and the Partnership.
WHEREAS, the Authority will issue its Industrial Development
Revenue Bonds (the "DAHC BONDS") pursuant to a trust indenture, dated as of
November 1, 1999 between the Authority and The Chase Manhattan Bank, as DAHC
Trustee (the "DAHC INDENTURE").
WHEREAS, the DAHC Bonds will be purchased by the Partnership
and pledged to the Collateral Agent, along with certain other collateral to
secure the obligations of the Partnership under the Bonds.
WHEREAS, in addition to the DAHC Bonds and related collateral,
all obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"FINANCING DOCUMENTS") to the Trustee, the Collateral Agent, each successor
thereto and each other person that becomes a secured party under any Financing
Document (collectively, the "SENIOR PARTIES") will be secured by a certain
Security Agreement, Collateral Agency Agreement, Deed to Secured Debt, Security
Agreement and Assignment of Rents and Leases, each Third Party Consent and any
other document providing for any lien, pledge, encumbrance, mortgage or security
interest (collectively, the "SECURITY DOCUMENTS").
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WHEREAS, the Senior Parties, the Authority and the Partnership
have entered into the Collateral Agency and Intercreditor Agreement (as amended,
restated, modified or otherwise supplemented from time to time in accordance
with the terms thereof, the "COLLATERAL AGENCY AGREEMENT") to set forth their
mutual understanding with respect to (a) the exercise of certain rights,
remedies and options by the respective parties thereto under the above described
documents, (b) the priority of their respective security interests created by
the Security Documents, and (c) the appointment of the Collateral Agent as
collateral agent.
WHEREAS, the Consenting Party and the Partnership have entered
into a Water Purchase Agreement, dated as of February 25, 1999 (as amended,
restated, modified or otherwise supplemented from time to time in accordance
with the terms thereof, the "ASSIGNED AGREEMENT").
WHEREAS, the Partnership has notified the Consenting Party
that the Partnership has granted a security interest to the Collateral Agent and
all of the Partnership's rights, title and interest in, to and under the
Assigned Agreement are to be assigned to the Collateral Agent as security
pursuant to one or more of the Security Documents.
WHEREAS, it is a condition precedent to the obligations of the
Senior Parties to enter into their respective Financing Documents that the
Consenting Party execute and deliver this Consent.
NOW, THEREFORE, as an inducement to the Senior Parties to make
the Loans, and in consideration of good and valuable consideration, the receipt
of which is hereby acknowledged, and intending to be legally bound, the
Consenting Party hereby agrees as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a) acknowledges that
the Collateral Agent and the Senior Parties are entering into the Financing
Documents in reliance upon the execution and delivery by the Consenting Party of
the Assigned Agreement and this Consent, (b) consents in all respects to the
pledge and assignment to the Collateral Agent of all of the Partnership's
rights, title and interest in, to and under the Assigned Agreement pursuant to
one or more of the Security Documents, and (c) acknowledges the right, but not
the obligation, of the Collateral Agent or the Collateral Agent's designee, in
the exercise of the Collateral Agent's rights and remedies under the Security
Documents, to make all demands, give all notices, take all actions and exercise
all rights of the Partnership in accordance with the Assigned Agreement, and
agrees that, in such event, the Consenting Party shall continue to perform its
obligations under the Assigned Agreement.
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the
Collateral Agent shall notify the Consenting Party that an event of default
under the Financing Documents has occurred and is continuing and that the
Collateral Agent has exercised its rights (a) to have itself or its designee
substituted for the Partnership under the Assigned Agreement or (b) to sell,
assign, transfer or otherwise dispose of the Assigned Agreement to a person,
then the Collateral Agent, the Collateral Agent's designee or such person (each,
a "SUBSTITUTE OWNER") shall be substituted
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for the Partnership under the Assigned Agreement and that, in such event, the
Consenting Party will continue to perform its obligations under the Assigned
Agreement in favor of the Substitute Owner.
1.3 RIGHT TO CURE. The Consenting Party agrees that in the event of a
default by the Partnership in the performance of any of its obligations under
the Assigned Agreement, or upon the occurrence or non-occurrence of any event or
condition under the Assigned Agreement which would immediately or with the
passage of any applicable grace period or the giving of notice, or both, enable
the Consenting Party to terminate or suspend its obligations or exercise any
other right or remedy under the Assigned Agreement or under applicable law
(hereinafter a "DEFAULT"), the Consenting Party will continue to perform its
obligations under the Assigned Agreement and will not exercise any such right or
remedy until it first gives prompt written notice of such default to the
Collateral Agent and affords the Collateral Agent, the Collateral Agent's
designee and the Senior Parties a period of at least sixty (60) days (or if such
default is a non-monetary default, such longer period not to exceed one hundred
eighty (180) days as is required so long as any such party has commenced and is
diligently pursuing appropriate action to cure such default) from receipt of
such notice to cure such default; provided, however, that if any such party is
prohibited from curing any such default by any process, stay or injunction
issued by any governmental authority or pursuant to any bankruptcy or insolvency
proceeding involving the Partnership, then the time periods specified in this
Section 1.3 for curing a default shall be extended for the period of such
prohibition. The Collateral Agent and the Senior Parties shall have no right to
require the Consenting Party to enter into a new agreement under Section 1.4
below or cure a default under the Assigned Agreement pursuant to this Section
1.3 if the Assigned Agreement was terminated by the Consenting Party pursuant to
the termination option contained in Section 16(a) of the Assigned Agreement, but
the Collateral Agent and the Senior Parties shall have the right to require
Consenting Party to enter into a new agreement under Section 1.4 below and to
cure any default and/or Triggering Event under the Assigned Agreement pursuant
to this Section 1.3 if the Assigned Agreement was terminated by the Consenting
Party pursuant to the termination option contained in Section 16(b) of the
Assigned Agreement.
1.4 NO TERMINATION, ASSIGNMENTS OR MATERIAL AMENDMENTS. The Consenting
Party will not, without the prior written consent of the Collateral Agent, enter
into any consensual cancellation or termination of the Assigned Agreement, or
assign or otherwise transfer any of its right, title and interest thereunder or
consent to any such assignment or transfer by the Partnership. The Consenting
Party will not enter into any material amendment, supplement or other
modification of the Assigned Agreement (an "AMENDMENT") until after the
Collateral Agent has been given ten (10) days (excluding Saturdays, Sundays and
any days which are a legal holiday in New York or any days on which banking
institutions are authorized or required by law or government action to close)
prior written notice of the proposed Amendment by the Partnership (a copy of
which notice will be provided to the Consenting Party by the Partnership), and
will not then enter into such Amendment if the Consenting Party has, within such
ten (10) day period, received a copy of (i) the Collateral Agent's objection to
such Amendment or (ii) the Collateral Agent's request to the Partnership for
additional information with respect to such Amendment.
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<PAGE>
In the event that the Assigned Agreement is terminated as a result of
any bankruptcy or insolvency proceeding affecting the Partnership, the
Consenting Party will, at the option of the Collateral Agent, enter into a new
agreement with the Collateral Agent (or its transferee or other nominee that
owns or leases the Project) having terms substantially the same as the terms of
the Assigned Agreement, provided that (i) such option to enter into a new
agreement is exercised by the Collateral Agent within sixty (60) days after the
date the Consenting Party gives the Senior Parties and the Collateral Agent
written notice of such termination, and (ii) the Senior Parties or the
Collateral Agent pay any amounts due under the Assigned Agreement for Water (as
defined in the Assigned Agreement) delivered to the Partnership that remains
outstanding and unpaid as of the date of the new agreement.
1.5 NO LIABILITY. The Consenting Party acknowledges and agrees that
neither the Collateral Agent, the Collateral Agent's designee or the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise, nor shall the
Collateral Agent, the Collateral Agent's designee or the Senior Parties be
obligated or required to (a) perform any of the Partnership's obligations under
the Assigned Agreement, except, in the case of the Collateral Agent or the
Collateral Agent's designee, during any period in which the Collateral Agent or
the Collateral Agent's designee is a Substitute Owner pursuant to Section 1.2,
in which case (i) the obligations of such Substitute Owner shall be no more than
that of the Partnership under such Assigned Agreement, (ii) such Substitute
Owner shall have no personal liability to the Consenting Party for the
performance of such obligations and (iii) the sole recourse of the Consenting
Party shall be to such Substituted Owner's interest in the Project, or (b) take
any action to collect or enforce any claim for payment assigned under the
Security Documents.
1.6 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party shall
perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the Assigned
Agreement in full force and effect in accordance with its terms.
1.7 DELIVERY OF NOTICES. The Consenting Party shall deliver to the
Collateral Agent, concurrently with the delivery thereof to the Partnership, a
copy of each notice, request or demand given by the Consenting Party pursuant to
the Assigned Agreement.
1.8 ACKNOWLEDGMENTS. The Consenting Party agrees to execute such
acknowledgments or other similar instruments as the Collateral Agent shall
reasonably request in connection with the transactions provided for in this
Consent.
SECTION 2. PAYMENTS UNDER THE ASSIGNED AGREEMENT
The Consenting Party will pay all amounts payable by it under the
Assigned Agreement, if any, in the manner required by the Assigned Agreement
directly into the account as shall be specified from time to time by the
Collateral Agent to the Consenting Party in writing.
All payments required to be made by the Consenting Party under the
Assigned Agreement shall be made without any offset, recoupment, abatement,
withholding, reduction or defense whatsoever, except as specifically permitted
under the Assigned Agreement.
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<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
In order to induce the Collateral Agent and the Senior Parties to enter
into their respective Financing Documents, the Consenting Party makes the
following representations and warranties, which shall survive the execution and
delivery of this Consent and the Assigned Agreement and the consummation of the
transactions contemplated hereby and thereby.
3.1 ORGANIZATION. The Consenting Party is a legally created political
subdivision and public corporation of the State of Georgia, duly organized,
validly existing, qualified, authorized to do business and in good standing
under and by virtue of the laws of the State of Georgia, and has all requisite
power and authority, corporate and otherwise, to enter into and to perform its
obligations hereunder and under the Assigned Agreement, and to carry out the
terms hereof and thereof and the transactions contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by the
Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate and member action on the part of the
Consenting Party and do not require any approval or consent of any holder (or
any trustee for any holder) of any indebtedness or other obligation of (a) the
Consenting Party or (b) any other person or entity, except approvals or consents
which have previously been obtained.
3.3 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this Consent
and the Assigned Agreement is in full force and effect, has been duly executed
and delivered on behalf of the Consenting Party by the appropriate officers of
the Consenting Party, and constitutes the legal, valid and binding obligation of
the Consenting Party, enforceable against the Consenting Party in accordance
with its terms, except as the enforceability thereof may be limited by (a)
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no legislation, litigation, action, suit,
proceeding or investigation pending or (to the best of the Consenting Party's
knowledge after due inquiry) threatened against the Consenting Party before or
by any court, administrative agency, arbitrator or governmental authority, body
or agency which, if adversely determined, individually or in the aggregate, (a)
could adversely affect the performance by the Consenting Party of its
obligations hereunder or under the Assigned Agreement, or which could modify or
otherwise adversely affect the Approvals (as defined in Section 3.6 of this
Consent), (b) questions the validity, binding effect or enforceability hereof or
of the Assigned Agreement, any action taken or to be taken pursuant hereto or
thereto or any of the transactions contemplated hereby or thereby or (c) could
have a material adverse effect upon (i) the business, operations, properties,
assets, or condition (financial or otherwise) of the Consenting Party, (ii) the
ability of the Consenting Party to perform under the Assigned Agreement or this
Consent, (iii) the business, operations, properties, assets, prospects or
condition (financial or otherwise) of the Project, (iv) the value, validity,
perfection and enforceability of the liens granted to the Collateral Agent under
the Security Documents or (v) the ability of the Collateral Agent or the Senior
Parties to enforce any of their material rights and remedies under the Assigned
Agreement or this Consent (collectively, a "MATERIAL ADVERSE EFFECT").
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<PAGE>
3.5 COMPLIANCE WITH OTHER INSTRUMENTS. The Consenting Party is not in
violation of its charter or by-laws, and the execution, delivery and performance
by the Consenting Party of this Consent and the Assigned Agreement and the
consummation of the transactions contemplated hereby and thereby will not result
in any violation of, breach of or default under any term of its charter or
by-laws, or of any contract or agreement to which it is a party or by which it
or its property is bound, or of any license, permit, franchise, judgment, writ,
injunction, decree, order, charter, law, ordinance, rule or regulation
applicable to it, except for any such violations which, individually or in the
aggregate, would not have a Material Adverse Effect on the Consenting Party.
3.6 GOVERNMENT CONSENT. No consent, order, authorization, waiver,
approval or any other action, or registration, declaration or filing with, any
person, board or body, public or private (collectively, the "APPROVALS"), is
required to be obtained by the Consenting Party in connection with the
execution, delivery or performance of the Assigned Agreement or the consummation
of the transactions contemplated thereunder, except as listed in Exhibit B
hereto. All such Approvals listed on Exhibit B, except for those set forth in
Part II thereof (the "DEFERRED APPROVALS"), are Final (as defined below). An
Approval shall be "FINAL" if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with the terms
thereof), does not impose restrictions or requirements inconsistent with the
terms of the Assigned Agreement, and is final and not subject to any appeal. The
Consenting Party reasonably believes that each Deferred Approval will be
obtained in the ordinary course of business prior to the time when such Deferred
Approval is required to be Final.
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor, to the
best of the Consenting Party's knowledge after due inquiry, any other party to
the Assigned Agreement is in default of any of its obligations thereunder. Thee
Consenting Party has no existing counterclaims, offsets or defenses against the
Partnership. The Consenting Party and, to the best of the Consenting Party's
knowledge after due inquiry, each other party to the Assigned Agreement have
complied with all conditions precedent to the respective obligations of such
party to be performed under the Assigned Agreement. To the best of the
Consenting Party's knowledge after due inquiry, no event or condition exists
which would either immediately or with the passage of any applicable grace
period or giving of notice, or both, enable either the Consenting Party or the
Partnership to terminate or suspend its obligations under the Assigned
Agreement. The Assigned Agreement has not been amended, modified or supplemented
in any manner.
3.8 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no notice of, and
has not consented to, any previous assignment of all or any part of its rights
under the Assigned Agreement.
3.9 REPRESENTATIONS AND WARRANTIES. All representations, warranties and
other statements made by the Consenting Party in the Assigned Agreement were
true and correct as of the date when made and are true and correct as of the
date of this Consent.
SECTION 4. OPINION OF COUNSEL The Consenting Party shall deliver an opinion of
counsel relating to the Assigned Agreement and this Consent substantially in the
form of Exhibit
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C hereto, and addressing such other matters as may be requested by the
Partnership and the Collateral Agent.
SECTION 5. MISCELLANEOUS
5.1 NOTICES. All notices and other communications hereunder shall be in
writing, shall be deemed given upon receipt thereof by the party or parties to
whom such notice is addressed, shall refer on their face to the Assigned
Agreement (although failure to so refer shall not render any such notice or
communication ineffective), shall be sent by first class mail, by personal
delivery or by a nationally recognized guaranteed overnight delivery service
(E.G., UPS Next Day Air), and shall be directed as follows:
If to the Consenting Party: Heard County Water Authority
11520 Highway 34 West
Franklin, Georgia 30217
Attention: Executive Director
Telephone: (706) 675-3358
Fax: (706) 675-3383
If to the Partnership: Tenaska Georgia Partners, L.P.
2000 E. Lamar Blvd., Suite 430
Arlington, Texas 76006
Attention: Bill Braudt
Telephone: (817) 462-1505
Fax: (817) 462-1510
with a copy to:
(i) Plant Manager (Designated Representative)
Tenaska Georgia Partners, L.P.
Franklin, Georgia 30217
(ii) Ronald Quinn
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
If to the Collateral Agent: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance Service
Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
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<PAGE>
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
5.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS CONSENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT
TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this
Consent and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of Georgia or of the United States of America
for the Northern District of Georgia, and, by execution and delivery of this
Consent, each of the Consenting Party, the Partnership, and the Collateral Agent
hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each of the Consenting Party, the
Partnership and the Collateral Agent hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Consent brought in the courts referred to above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of the Collateral Agent or its
designees to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Consenting Party in any other
jurisdiction.
5.3 COUNTERPARTS. This Consent may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
5.4 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.
5.5 SEVERABILITY. In case any provision in or obligation under this
Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
5.6 AMENDMENT; WAIVER. Neither this Consent nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified except by an
instrument in writing signed by the Consenting Party, the Partnership, and the
Collateral Agent.
(a) The Consenting Party's obligations hereunder are absolute
and unconditional, and the Consenting Party has no right, and shall have no
right, to terminate this Consent or to be released, relieved or discharged from
any obligation or liability hereunder until
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<PAGE>
the occurrence of one of the following: (1) all obligations under the Finance
Documents (the "FINANCE LIABILITIES") have been indefeasibly satisfied in full,
notice of which shall be provided by the Collateral Agent when all such
obligations have been satisfied, (2) the expiration of the thirty (30) year term
of the Assigned Agreement, or (3) provided that the Senior Parties and the
Collateral Agent have not elected to enter into a new agreement pursuant to the
terms of Section 1.4 above, the termination of the Assigned Agreement in
accordance with its terms and in accordance with the terms of this Consent.
(b) In the event that the Collateral Agent delivers a
termination notice to the Consenting Party pursuant to this Section 5.6, this
Consent shall terminate for all purposes as to the Collateral Agent and the
Financing Documents and the Collateral Agent and the Senior Parties shall have
no further rights or obligations under this Consent; provided, however, that the
Consenting Party agrees that this Consent shall continue to apply for the
benefit of the Partnership and the providers of any new credit facilities (the
"NEW LENDER") entered into by the Partnership to refinance or replace the
Finance Liabilities provided that (i) within five (5) days following delivery by
the Collateral Agent to the Consenting Party of the Termination Notice pursuant
to this Section 5.6, the New Lender or an agent, trustee or other representative
of the New Lender, shall have notified the Consenting Party that it undertakes
the prospective obligations of the Collateral Agent under this Consent, and
shall have supplied substitute notice address information for Section 5.1 and
new payment instructions (countersigned on behalf of the Partnership) for
Exhibit A hereto, (ii) the amount of the new credit facilities do not exceed the
original amount of the commitment by the Senior Parties to make extend other
credit facilities under the original Financing Documents, and (iii) thereafter,
(w) the term "FINANCE LIABILITIES" under this Consent will be deemed to refer to
the new credit facilities, (x) the term "COLLATERAL AGENT" or "SENIOR PARTIES"
shall be deemed to refer to the New Lender or any Collateral Agent or trustee
for the New Lender, (y) the term "FINANCING DOCUMENTS" shall be deemed to refer
to the credit agreement, indenture or other instrument providing for the new
credit facilities and (z) the term "SECURITY DOCUMENTS" shall be deemed to refer
to the security agreements under which the Assigned Agreement is assigned as
collateral to secure performance of the obligations of the Partnership under the
new credit facilities.
5.7 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon the
parties hereto and their permitted successors and assigns and shall inure to the
benefit of the parties, their designees and their respective permitted
successors and assigns.
5.8 FURTHER ASSURANCES. The parties hereto hereby agree to execute and
deliver all such instruments and take all such action as may be necessary to
effectuate fully the purposes of this Consent.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE CONSENTING PARTY, THE
PARTNERSHIP AND THE COLLATERAL AGENT HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS CONSENT.
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5.9 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Collateral Agent and the Senior Parties and shall survive the
execution and delivery of this Consent.
5.10 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Collateral Agent in exercising any right, power or privilege hereunder and
no course of dealing between the Consenting Party and the Collateral Agent shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other exercise, or the further
exercise, of any other right, power or privilege hereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Collateral Agent would otherwise have.
5.11 WAIVER OF SOVEREIGN IMMUNITY. To the extent that the Consenting
Party is protected by sovereign immunity, the Consenting Party hereby
acknowledges that, pursuant to the Georgia Constitution (1983 Ga. Const. Article
I, Section II, Paragraph IX(c)) and O.C.G.A. Section 50-21-1(a), and to the
extent permitted by other applicable law, the Consenting Party irrevocably
waives, and that it intends to irrevocably waive, the defense of sovereign
immunity in connection with any matters related to this Consent or the
performance of the Consenting Party hereunder. To the extent that the Consenting
Party and its assets are protected by sovereign immunity and it is determined
for any reason that the Consenting Party has not effectively waived its
sovereign immunity, then the Consenting Party further agrees not to raise the
defense of sovereign immunity in connection with any matters related to this
Consent or the performance of the Consenting Party hereunder. Notwithstanding
the foregoing waiver of sovereign immunity, the Consenting Party reserves and is
not waiving the right to raise sovereign immunity as a defense to any civil
action or actions brought by persons or entities other than the Collateral
Agent, the Senior Parties, the Partnership, and their respective successors and
assigns.
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IN WITNESS WHEREOF, the Consenting Party, the Partnership and the
Collateral Agent have caused this Consent to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first above
written.
HEARD COUNTY WATER AUTHORITY
By: /s/ Hershel W. Parmer
-------------------------------
Name: Hershel W. Parmer
Title: Chairman
TENASKA GEORGIA PARTNERS, L.P.
By: TENASKA GEORGIA, INC.,
as Managing General Partner
By: /s/ Michael F. Lawler
-------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
-------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
EXHIBIT A TO
CONSENT AND AGREEMENT
PAYMENT INSTRUCTIONS
Chase Manhattan Bank ABA# 021 000 021
450 West 33rd Street, 15th Fl. Account Number: 507 891325
NY, NY 10001 Account Name: The Chase Manhattan Bank, as
Collateral Agent
Tenaska Georgia Partners, L.P.,
Concentration Account
Vista Account Number: 294580000
For Further Credit to: Trust Acct. No.
C29458, The Chase Manhattan Bank, as
Collateral Agent, Tenaska Georgia - Revenue
Fund. Attention: A. Marsula
<PAGE>
EXHIBIT B TO
CONSENT AND AGREEMENT
APPROVALS
None
<PAGE>
EXHIBIT C TO
CONSENT AND AGREEMENT
FORM OF OPINION OF COUNSEL
[Other Addressees]
Tenaska Georgia Partners, L.P.
2000 E. Lamar Blvd., Suite 430
Arlington, Texas 76006
Re: The 950 MW peaking electric power generation process
facility located in Heard County, Georgia (the "Project").
Dear Ladies and Gentlemen:
I have acted as counsel to Heard County Water Authority, a public
corporation and political subdivision of the State of Georgia created and
existing under the laws of the State of Georgia (the "Authority"), in connection
with the Project to be constructed by Tenaska Georgia Partners, L.P., a Delaware
limited partnership ("TGP"), for which the Authority will provide the supply and
use of water pursuant to the Water Purchase Agreement, dated as of February 25,
1999 between TGP and the Authority (the "Purchase Agreement"). This opinion is
being provided in connection with the transactions contemplated by the terms of
the Bond Purchase Agreement, dated as of the date hereof by and among TGP, the
Authority, and the Purchasers of the Bonds (as defined in the Bond Purchase
Agreement).
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of the following:
(i) the Purchase Agreement;
(ii) the Consent and Agreement of the Authority to the
Purchase Agreement, dated as of the date hereof,
(the "Consent");
(iii) the Charter, By-laws, and any rules and regulations
governing of the Authority; and
(iv) the resolutions authorizing the execution and
delivery of the Purchase Agreement and the Consent,
duly adopted by the Board of Directors of the
Authority;
The documents referred to in items (iii) and (iv) above are hereinafter
collectively referred to as the "Governing Documents," and the Purchase
Agreement and the Consent are hereinafter collectively referred to as the
"Documents." In addition, I have examined and am familiar with originals or
copies, certified or otherwise identified to my satisfaction, of such other
documents as I have deemed necessary or appropriate as a basis for the opinions
set forth below.
<PAGE>
In my examination I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such copies. In rendering the
opinions expressed below, I have further assumed, without any independent
investigation or verification of any kind, that each Document I have examined is
the valid and binding obligation of each party thereto other than the Authority.
This opinion assumes that each of the Documents has been duly executed and
delivered by, constitute legal, valid and binding obligations of, and are
enforceable in accordance with their respective terms against, each party to
such Documents other than the Authority.
I am admitted to the bar of the State of Georgia. I express no opinion
as to the law of any jurisdiction other than (i) the laws of the State of
Georgia and (ii) the federal laws of the United States of America.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. The Authority is a a public corporation and political
subdivision of the State of Georgia created and existing under the laws
of the State of Georgia duly organized, validly existing and in good
standing under the laws of the State of Georgia. The Authority is duly
qualified to transact business in each jurisdiction in which it owns or
leases real property or in which the nature of its business requires it
to be so qualified.
2. The Authority has full corporate power and authority to enter
into, deliver and perform its obligations under each of the Documents.
3. The Authority has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each
Document.
4. The Authority has duly executed and delivered each Document.
5. Each Document constitutes the valid and binding obligation of
the Authority enforceable against the Authority in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
6. The execution, delivery and performance by the Authority of the
Documents will not: (i) contravene any applicable provision of any law,
regulation, ruling, order or decree of any governmental authority to
which or by which the Authority or any of its property or assets is
subject or bound or (ii) violate any provision of the Governing
Documents of the Authority. The execution, delivery and performance by
the Authority of the Documents do not and will not, to the best of my
knowledge after due inquiry, conflict with, result in any breach of, or
constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any lien or encumbrance upon
any of the property or assets of the Authority pursuant to any
provision of any securities issued by the Authority, or any indenture,
mortgage, deed of trust, contract,
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undertaking, document, instrument or other agreement to which the
Authority is a party or by which it or any of its property or assets is
bound.
7. No consent, order, authorization, waiver, approval or any other
action, or registration, declaration or filing with, any person, board
or body, public or private, is required to be obtained by the Authority
in connection with the execution, delivery or performance of the
Documents or the consummation of the transactions contemplated thereby.
8. To the best of my knowledge after due inquiry, there are no
pending or threatened actions or proceedings affecting the Authority or
any of its properties or assets that individually or in the aggregate
could prohibit or limit in any way the execution, delivery and
performance by the Authority of any of the Documents.
This opinion is being furnished only to the addressees hereof and their
respective successors and assigns and is solely for the benefit of such parties;
provided that assignees of, or participants in, the interests of the addressees
of this letter may rely on this opinion as if it were addressed to them.
Very truly yours,
<PAGE>
Exhibit 4.15
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent"), dated as of November 10,
1999 among Transcontinental Gas Pipe Line Corporation, a Delaware corporation
(the "Consenting Party"), Tenaska Georgia Partners, L.P., a Delaware limited
partnership (the "Partnership"), and The Chase Manhattan Bank, as collateral
agent, together with its successors in such capacity (the "Collateral Agent"),
for the benefit of the Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership intends to develop, construct, lease, operate,
maintain and finance a 936 megawatt ("MW") (nominal summer rating) natural
gas-fired simple-cycle electric generating plant (the "Facility" and, together
with the Project Documents, governmental approvals relating to the Facility or
the Project Documents and any other item relating to the Facility, including any
improvements to, and the operation of, the Facility and all activities related
thereto, the "Project") to be located in Heard County, Georgia;
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture (the "INDENTURE"), dated as of
November 1, 1999 between the Partnership and The Chase Manhattan Bank, as
Trustee (the "Trustee");
WHEREAS, the Project will be owned by the Development Authority of
Heard County, Georgia, a public corporation created and existing under the laws
of the State of Georgia (the "Authority"), and will be leased to the Partnership
pursuant to a Lease Agreement dated as of November 1, 1999 between the Authority
and the Partnership;
WHEREAS, the Authority will issue its Industrial Development Bonds (the
"DAHC Bonds") pursuant to an Indenture, dated as of November 1, 1999 between the
Authority and The Chase Manhattan Bank, as DAHC Trustee;
WHEREAS, the DAHC Bonds will be purchased by the Partnership and
pledged to the Collateral Agent, along with certain assets of the Partnership
including its rights under the Lease Agreement, to secure the obligations of the
Partnership under the Bonds;
WHEREAS, in addition to the DAHC Bonds and related collateral, all
obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor to
any such person and each other person that becomes a secured party under any
Financing Document (collectively, the "Senior Parties") will be secured by a
certain Security Agreement, Pledge Agreements, Collateral Agency Agreement, Deed
to Secured Debt, Security
<PAGE>
Agreement and Assignment of Rents and Leases, each Third Party Consent and any
other document providing for any lien, pledge, encumbrance, mortgage or security
interest (collectively, the "Security Documents");
WHEREAS, the Senior Parties, the Authority, and the Partnership have
entered into the Collateral Agency and Intercreditor Agreement (as amended,
restated, modified or otherwise supplemented from time to time in accordance
with the terms thereof, the "Collateral Agency Agreement") to set forth their
mutual understanding with respect to (a) the exercise of certain rights,
remedies and options by the respective parties thereto under the above described
documents, (b) the priority of their respective security interests created by
the Security Documents, and (c) the appointment of the Collateral Agent as
collateral agent.
WHEREAS, the Partnership and the Consenting Party have entered into
that certain Interconnect, Reimbursement and Operating Agreement, dated as of
August 18, 1999 (as amended, restated, modified or otherwise supplemented from
time to time in accordance with the terms thereof, the "Assigned Agreement");
WHEREAS, the Partnership has notified the Consenting Party that all of
the Partnership's right, title and interest in, to, and under the Assigned
Agreement is to be assigned to the Collateral Agent as security pursuant to one
or more of the Security Documents;
WHEREAS, it is a condition precedent to the issuance of the Bonds and
the other Financing Documents that the Consenting Party execute and deliver this
Consent for the benefit of the Senior Parties;
NOW, THEREFORE, as an inducement to the Senior Parties to enter into
the Financing Documents, and in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the Consenting Party hereby agrees as follows:
SECTION 1 CONSENT TO ASSIGNMENT, ETC.
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a) acknowledges that
the Collateral Agent and the Senior Parties are entering into the Financing
Documents in reliance upon the execution and delivery by the Consenting Party of
the Assigned Agreement and this Consent, (b) consents in all respects to the
pledge and assignment to the Collateral Agent of all of the Partnership's right,
title and interest in, to and under the Assigned Agreement pursuant to one or
more of the Security Documents and (c) acknowledges the right, but not the
obligation, of the Collateral Agent or the Collateral Agent's designee, in the
exercise of the Collateral Agent's rights and remedies under the Security
Documents, to make all demands, give all notices, take all actions and exercise
all rights of the Partnership in accordance with the Assigned Agreement, and
agrees that, in such event, the Consenting Party shall continue to perform its
obligations under the Assigned Agreement, provided that
2
<PAGE>
the Collateral Agent or its designee meet the credit worthiness standards
contained in Section 32 of the General Terms and Conditions of Consenting
Party's FERC Gas Tariff.
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the
Collateral Agent shall notify the Consenting Party that an event of default
under any of the Financing Documents has occurred and is continuing and that the
Collateral Agent has exercised its rights (a) to have itself or its designee
substituted for the Partnership under the Assigned Agreement or (b) to sell,
assign, transfer or otherwise dispose of the Assigned Agreement to a person,
then the Collateral Agent, the Collateral Agent's designee or such person (each,
a "Substitute Owner") shall be substituted for the Partnership under the
Assigned Agreement and that, in such event, the Consenting Party will continue
to perform its obligations under the Assigned Agreement in favor of the
Substitute Owner provided that the Substitute Owner meets the credit worthiness
standards contained in Section 32 of the General Terms and Conditions of
Consenting Party's FERC Gas Tariff.
1.3 RIGHT TO CURE. The Consenting Party agrees that in the event of a
default by the Partnership in the performance of any of its obligations under
the Assigned Agreement, or upon the occurrence or non-occurrence of any event or
condition under the Assigned Agreement which would immediately or with the
passage of any applicable grace period or the giving of notice, or both, enable
the Consenting Party to terminate or suspend its obligations or exercise any
other right or remedy under the Assigned Agreement or under applicable law
(hereinafter a "default"), the Consenting Party will continue to perform its
obligations under the Assigned Agreement and will not exercise any such right or
remedy until it first gives prompt written notice of such default to the
Collateral Agent and affords the Collateral Agent, the Collateral Agent's
designee and the Senior Parties a period of sixty (60) days (or if such default
is a non-monetary default, such longer period not to exceed ninety (90) days as
is required so long as any such party has commenced and is diligently pursuing
appropriate action to cure such default) from receipt of such notice to cure
such default, provided that in the event that a Substitute Owner assumes the
rights and obligations of the Partnership under the Assigned Agreement pursuant
to a written assumption agreement (a copy of which is provided to the Consenting
Party), such Substitute Owner shall have 60 days from the date of such
assumption agreement to cure such default or if such default is a non-monetary
default, such longer period so long as such Substitute Owner has commenced and
is diligently pursuing appropriate action to cure such default; provided,
however, that if any such party is prohibited from curing any such default by
any process, stay or injunction issued by any governmental authority or pursuant
to any bankruptcy or insolvency proceeding involving the Partnership, then the
time periods specified in this Section 1.3 for curing a default shall be
extended for the period of such prohibition. Notwithstanding the foregoing,
nothing in this Consent shall prevent the Consenting Party's ability to
immediately suspend service pursuant to the consenting Party's effective FERC
Gas Tariff for force majeure, safety or operating conditions.
1.4 NO TERMINATION OR ASSIGNMENT. The Consenting Party will not,
without the prior written consent of the Collateral Agent, enter into any
consensual cancellation or termination of the Assigned Agreement, or assign or
otherwise transfer any of its right, title and interest thereunder or consent to
any such assignment or transfer by the Partnership.
3
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1.5 REPLACEMENT AGREEMENT. In the event that the Assigned Agreement is
terminated as a result of any bankruptcy or insolvency proceeding affecting the
Partnership, the Consenting Party will, upon written notice from the Collateral
Agent to the Consenting Party, enter into a new agreement with the Collateral
Agent (or its transferee or other nominee that owns or leases the Project)
having terms substantially the same as the terms of the Assigned Agreement,
subject to the applicable provisions of the Consenting Party's effective FERC
Gas Tariff, as amended from time to time, and approval by the Federal Energy
Regulatory Commission, if necessary.
1.6 NO LIABILITY. The Consenting Party acknowledges and agrees that
neither the Collateral Agent, the Collateral Agent's designee or the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise, nor shall the
Collateral Agent, the Collateral Agent's designee or the Senior Parties be
obligated or required to (a) perform any of the Partnership's obligations under
the Assigned Agreement, except, in the case of the Collateral Agent or the
Collateral Agent's designee, during any period in which the Collateral Agent or
the Collateral Agent's designee is a Substitute Owner pursuant to Section 1.2
hereof, in which case (i) the rights and obligations of such Substitute Owner
shall be no more and no less than that of the Partnership under such Assigned
Agreement, (ii) such Substitute Owner shall have no personal liability to the
Consenting Party for the performance of such obligations and (iii) the sole
recourse of the Consenting Party shall be to such Substituted Owner's interest
in the Project, or (b) take any action to collect or enforce any claim for
payment assigned under the Security Documents.
1.7 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party and the
Partnership shall perform and comply with all material terms and provisions of
the Assigned Agreement to be performed or complied with by it and the Consenting
Party shall maintain the Assigned Agreement in full force and effect in
accordance with its terms, except as otherwise provided in this Consent.
1.8 DELIVERY OF NOTICES. Any notice by the Consenting Party shall be
deemed delivered to the Collateral Agent if made in accordance with the
provisions of, and to the address specified in, the Assigned Agreement.
1.9 ACKNOWLEDGMENTS. The Consenting Party agrees to execute such
acknowledgments or other similar instruments as the Collateral Agent shall
reasonably request in connection with the transactions provided for in this
Consent.
SECTION 2 PAYMENTS UNDER THE ASSIGNED AGREEMENT
2.1 PAYMENTS. The Consenting Party will pay all amounts payable by it
under the Assigned Agreement, if any, in the manner required by the Assigned
Agreement directly into the account specified on Exhibit A hereto, or to such
other person or account as shall be specified from time to time by the
Collateral Agent to the Consenting Party in writing.
2.2 NO OFFSET, ETC. All payments required to be made by the
Consenting Party under the Assigned Agreement shall be made without any offset,
recoupment, abatement,
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withholding, reduction or defense whatsoever, EXCEPT AS SPECIFICALLY PERMITTED
UNDER THE ASSIGNED AGREEMENT.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
In order to induce the Collateral Agent and the Senior Parties to enter
into the Financing Documents, the Consenting Party makes the following
representations and warranties, which shall survive the execution and delivery
of this Consent and the Assigned Agreement and the consummation of the
transactions contemplated hereby and thereby.
3.1 ORGANIZATION; POWER AND AUTHORITY. The Consenting Party is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and is duly qualified, authorized to do
business and in good standing in every jurisdiction in which it owns or leases
real property or in which the nature of its business requires it to be so
qualified, and has all requisite power and authority, corporate and otherwise,
to enter into and to perform its obligations hereunder and under the Assigned
Agreement, and to carry out the terms hereof and thereof and the transactions
contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by the
Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate action on the part of the Consenting Party
and do not require any approval or consent of any holder (or any trustee for any
holder) of any indebtedness or other obligation of (a) the Consenting Party or
(b) any other person or entity, except approvals or consents which have
previously been obtained.
3.3 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this Consent
and the Assigned Agreement is in full force and effect, has been duly executed
and delivered on behalf of the Consenting Party by the appropriate officers of
the Consenting Party, and constitutes the legal, valid and binding obligation of
the Consenting Party, enforceable against the Consenting Party in accordance
with its terms except as the enforceability thereof may be limited by (a)
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no legislation, litigation, action, suit,
proceeding or investigation pending or (to the best of the Consenting Party's
knowledge after due inquiry) threatened against the Consenting Party before or
by any court, administrative agency, arbitrator or governmental authority, body
or agency which, if adversely determined, individually or in the aggregate, (a)
could materially adversely affect the performance by the Consenting Party of its
obligations hereunder or under the Assigned Agreement, or which could modify or
otherwise materially adversely affect the Approvals (as defined in Section 3.6
hereof), (b) questions the validity, binding effect or enforceability hereof or
of the Assigned Agreement, any action taken or to be taken pursuant hereto or
thereto or any of the transactions contemplated hereby or thereby or (c) could
have a material adverse effect upon (i) the business, operations, properties,
assets, or condition (financial or otherwise) of the Consenting Party, (ii) the
ability of the Consenting Party to perform under the Assigned Agreement or this
Consent, (iii) the business,
5
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operations, properties, assets, prospects or condition (financial or otherwise)
of the Project, (iv) the value, validity, perfection and enforceability of the
liens granted to the Collateral Agent under the Security Documents or (v) the
ability of the Collateral Agent or the Senior Parties to enforce any of their
material rights and remedies under the Assigned Agreement or this Consent
(collectively, a "Material Adverse Effect").
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Consenting Party is not
in violation of its charter or by-laws, and the execution, delivery and
performance by the Consenting Party of this Consent and the Assigned Agreement
and the consummation of the transactions contemplated hereby and thereby will
not result in any violation of, breach of or default under any term of its
charter or by-laws, or of any contract or agreement to which it is a party or by
which it or its property is bound, or of any license, permit, franchise,
judgment, writ, injunction, decree, order, charter, law, ordinance, rule or
regulation applicable to it, except for any such violations which, individually
or in the aggregate, would not have a Material Adverse Effect on the Consenting
Party.
3.6 CONSENTS AND APPROVALS. No consent, order, authorization, waiver,
approval or any other action, or registration, declaration or filing with, any
person, board or body, public or private (collectively, the "Approvals"), is
required to be obtained by the Consenting Party in connection with the
execution, delivery or performance of the Assigned Agreement or the consummation
of the transactions contemplated thereunder, except as listed in Exhibit B
hereto. All such Approvals listed on Exhibit B, except for those set forth in
Part II thereof (the "Deferred Approvals"), are Final (as defined below). An
Approval shall be "Final" if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with the terms
thereof), does not impose restrictions or requirements inconsistent with the
terms of the Assigned Agreement, and is final and not subject to any appeal. The
Consenting Party reasonably believes that each Deferred Approval will be
obtained in the ordinary course of business prior to the time when such Deferred
Approval is required to be Final.
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor, to the
best of the Consenting Party's knowledge after due inquiry, any other party to
the Assigned Agreement is in default of any of its obligations thereunder. The
Consenting Party has no existing counterclaims, offsets or defenses against the
Partnership. The Consenting Party and, to the best of the Consenting Party's
knowledge after due inquiry, each other party to the Assigned Agreement have
complied with all conditions precedent to the respective obligations of such
party to perform under the Assigned Agreement. To the best of the Consenting
Party's knowledge after due inquiry, no event or condition exists which would
either immediately or with the passage of any applicable grace period or giving
of notice, or both, enable either the Consenting Party or the Partnership to
terminate or suspend its obligations under the Assigned Agreement. The Assigned
Agreement has not been amended, modified or supplemented in any manner.
3.8 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no notice of, and
has not consented to, any previous assignment of all or any part of its rights
under the Assigned Agreement.
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3.9 REPRESENTATIONS AND WARRANTIES. All representations, warranties and
other statements made by the Consenting Party in the Assigned Agreement were
true and correct as of the date when made and are true and correct as of the
date of this Consent.
SECTION 4 OPINION OF COUNSEL
The Consenting Party shall deliver an opinion of counsel, dated the
Closing Date (as defined in the Financing Documents), relating to the Assigned
Agreement and this Consent, which opinion shall be substantially in the form
attached hereto as Exhibit C.
SECTION 5 MISCELLANEOUS
5.1 NOTICES. All notices and other communications hereunder, except
such notices provided under Section 1.8 of this Consent, shall be in writing,
shall be deemed given upon receipt thereof by the party or parties to whom such
notice is addressed, shall refer on their face to the Assigned Agreement
(although failure to so refer shall not render any such notice of communication
ineffective), shall be sent by first class mail, by personal delivery or by a
nationally recognized courier service, and shall be directed as follows:
If to the Consenting Party: Transcontinental Gas Pipe Line Corporation
P.O. Box 1396
Houston, Texas 77251-1396
For operating design and construction
matters:
Attention: Vice President-Operations
For all other matters:
Attention: Vice President-Customer
Service and Rates
If to the Partnership: Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
Telephone: (402) 691-9547
Fax: (402) 691-9550
If to the Collateral Agent: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance Service
Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
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The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
5.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS CONSENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO
THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.).
(b) Any legal action or proceeding with respect to this Consent and any
action for enforcement of any judgment in respect thereof may be brought in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Consent,
each of the Consenting Party, the Partnership and the Collateral Agent hereby
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each of the Consenting Party and the
Partnership hereby irrevocably designates, appoints and empowers CT Corporation
System, 111 Eighth Avenue, 13th Floor, New York, New York, 10011, as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any action or proceeding.
If for any reason such designee, appointee and agent shall cease to be available
to act as such, the Partnership or the Consenting Party, as applicable, agrees
to designate a new designee, appointee and agent in New York City on the terms
and for the purposes of this provision satisfactory to the Collateral Agent.
Each of the Consenting Party, the Partnership and the Collateral Agent
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to the Consenting Party at its
notice address provided pursuant to Section 5.1 hereof. Each of the Consenting
Party, the Partnership and the Collateral Agent hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Consent brought in the courts referred to above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing herein shall affect the right of the Collateral Agent or its
designees to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Consenting Party in any other
jurisdiction.
5.3 COUNTERPARTS. This Consent may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
5.4 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.
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5.5 SEVERABILITY. In case any provision in or obligation under this
Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
5.6 AMENDMENT, WAIVER. Neither this Consent nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified except by an
instrument in writing signed by the Consenting Party and the Collateral Agent.
5.7 TERMINATION; REFINANCING. (a) The Consenting Party's obligations
hereunder are absolute and unconditional, and the Consenting Party has no right,
and shall have no right, to terminate this Consent or to be released, relieved
or discharged from any obligation or liability hereunder until (i) all
obligations under the Financing Documents (the "Finance Liabilities") have been
indefeasibly satisfied in full, notice of which shall be provided by the
Collateral Agent when all such obligations have been satisfied (the "Termination
Notice"), or (ii) the date that the Assigned Agreement is terminated pursuant to
this Consent and is not replaced. The Collateral Agent shall provide written
notice to the Consenting Party within sixty (60) days of the termination caused
by clause (i) above, that all Finance Liabilities have been extinguished and
that this Consent has been terminated as of such date.
(b) In the event that the Finance Liabilities of the Partnership are
refinanced or replaced by other credit facilities, this Consent shall continue
in effect for the benefit of the Partnership and the provider of such new credit
facilities (the "New Lender") provided that (i) within five days following
delivery by the Collateral Agent to the Consenting Party of the notice from the
Collateral Agent as provided in Section 5.7 hereof that the original Finance
Liabilities have been indefeasibly satisfied in full, the New Lender or an
agent, trustee or other representative of the New Lender, shall have notified
the Consenting Party that it assumes the rights and the prospective obligations
of the Collateral Agent under this Consent, and shall have supplied substitute
notice address information for Section 5.1 hereof and new Payment Instructions
(as more fully described in Exhibit A hereto) (countersigned on behalf of the
Partnership) for Exhibit A, and (ii) thereafter, (a) the term "Finance
Liabilities" under this Consent will be deemed to refer to the new credit
facilities, (b) the term "Collateral Agent" or "Senior Parties" shall be deemed
to refer to the New Lender or any agent or trustee for the New Lender, (c) the
term "Financing Documents" shall be deemed to the credit agreement, indenture or
other instrument providing for the new credit facilities and (d) the term
"Security Documents" shall be deemed to refer to the security agreements under
which the Assigned Agreement is assigned as collateral to secure performance of
the obligations of the Partnership under the new credit facilities.
5.8 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon the
parties hereto and their permitted successors and assigns and shall inure to the
benefit of the parties, their designees and their respective permitted
successors and assigns.
5.9 FURTHER ASSURANCES. The parties hereto hereby agree to execute and
deliver all such instruments and take all such action as may be necessary to
effectuate fully the purposes of this Consent.
9
<PAGE>
5.10 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Collateral Agent and the Senior Parties and shall survive the
execution and delivery of this Consent.
5.11 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Collateral Agent or Consenting Party in exercising any right, power or
privilege hereunder and no course of dealing between the Consenting Party and
the Collateral Agent shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
exercise, or the further exercise, of any other right, power or privilege
hereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Collateral Agent or Consenting
Party would otherwise have.
10
<PAGE>
IN WITNESS WHEREOF, the Consenting Party, the Partnership and the
Collateral Agent have caused this Consent to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first above
written.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
By: /s/ Frank Ferazzi
---------------------------------------
Name: Frank J. Ferazzi
Title: Vice President, Customer Service and Rates
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Managing General Partner
By: /s/ Michael F. Lawler
-----------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
---------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
Exhibit A to
Consent And Agreement
---------------------
Payment Instructions
--------------------
Chase Manhattan Bank ABA# 021 000 021
450 West 33rd Street, 15th Fl. Account Number: 507 891325
NY, NY 10001 Account Name: The Chase Manhattan Bank, as
Collateral Agent
Tenaska Georgia Partners, L.P.,
Concentration Account
Vista Account Number: 294580000
For Further Credit to: Trust Acct. No. C29458,
The Chase Manhattan Bank, as Collateral Agent,
Tenaska Georgia - Revenue Fund. Attention:
A. Marsula
<PAGE>
Exhibit B to
Consent And Agreement
---------------------
Approvals
---------
Part I
None at this time.
Part II
The permits identified below are based on current job scope and site
specifications. Transco may not require all the listed permits or may require
additional permits not listed in the event of a change to the job scope or site
specifications. Transco applies for and receives authorization for the types of
permits identified below in the ordinary course of business.
Corps of Engineers Permit (if wetlands are present)
T&E Clearance (U.S. Fish and Wildlife Service)
Cultural Resources Clearance (State Historic Preservation Office)
Hydrostatic Discharge Permit
Land Disturbance Permit (SE&SCP)
Building Permit from the county
Radio Tower Permit from the county
<PAGE>
Exhibit C to
Consent And Agreement
---------------------
November __, 1999
[OTHER ADDRESSEES]
Tenaska Georgia Partners, L.P.
1044 North 115th Street
Omaha, Nebraska 68154
Re: Natural gas-fired electric generating facility located in
Heard County, Georgia (the "Project")
Ladies and Gentlemen:
I or other staff attorneys acting under my supervision have acted as
counsel to Transcontinental Gas Pipe Line Corporation, a Delaware corporation
("Transco") in connection with the Project to be constructed by Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("TGP"), for which Transco will
construct facilities to interconnect Transco's natural gas pipeline with TGP's
natural gas facilities pursuant to the Interconnect, Reimbursement and Operating
Agreement, dated August 18, 1999, to which TGP and Transco are parties (the
"Interconnect Agreement"). This opinion is delivered to you pursuant to the Bond
Purchase Agreement dated _______________ (the "Bond Purchase Agreement") by and
among TGP, Goldman, Sachs & Co., and the purchaser of the taxable bonds
thereunder (the "Bondholders").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following:
(i) the Interconnect Agreement;
(ii) the Consent and Agreement of Transco, dated
___________; and
(iii) the Articles of Incorporation and Bylaws for Transco.
The documents referred to in item (iii) above are hereinafter
collectively referred to as the "Governing Documents" and the documents referred
to in items (i) through (ii) above are hereinafter collectively referred to as
the "Documents." In addition, we have examined and are familiar with originals
or copies, certified or otherwise identified to our satisfaction, of such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below.
<PAGE>
In our examination we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies, the authenticity of the originals of such copies, and the
due execution and delivery, pursuant to due authorization, of the Documents and
the enforceability (subject to limitations on enforceability of the types
referred to in paragraph 4 of this opinion) of the Documents against TGP and
Bondholders. In rendering the opinions expressed below, we have further assumed,
without any independent investigation or verification of any kind, that each
Document we have examined is the valid and binding obligation of each party
thereto other than Transco.
I am admitted to the bar of the State of Texas. I express no opinion as
to the law of any jurisdiction other than (i) the laws of the State of Texas and
(ii) the federal laws of the United States of America and (iii) the laws of the
State of Delaware pertaining to corporations and to limited partnerships. As to
all questions of fact material to this opinion that have not been independently
established, I have relied upon certificates or comparable documentation of
officers and representatives of Transco and upon representations and warranties
of Transco contained in the Documents.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. Transco is a Delaware corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business in each jurisdiction in which it
owns or leases real property or in which the nature of its business
requires it to be so qualified.
2. Transco has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each
Document, and has duly executed and delivered each Document.
3. Transco has all corporate power and authority to execute,
deliver, and perform obligations under, the Documents.
4. Each Document constitutes the valid and binding obligation
of Transco enforceable against Transco in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
affecting enforcement of creditors' rights generally and by general
principles of equity including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding in equity or at law).
5. The execution, delivery and performance by Transco of the
Documents will not: (i) contravene any applicable provision of any law,
regulation, ruling, order or decree of any governmental authority to
which or by which Transco or any of its property or assets is subject
or bound or (ii) violate any provision of the Governing Documents of
Transco. The execution, delivery, and performance by Transco of the
Documents do not
<PAGE>
and will not, to the best of our knowledge after due inquiry, conflict
with, result in any breach of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or
impose) any lien or encumbrance upon any of the property or assets of
Transco pursuant to any provision of any securities issued by Transco,
or any indenture, mortgage, deed of trust, contract, undertaking,
document, instrument or other agreement to which Transco is a party or
by which it or any of its property or assets is bound.
6. No consent, order, authorization, waiver, approval or any
other action, or registration, declaration or filing with, any person,
board or body, public or private (collectively "Approvals"), is
required to be obtained by Transco in connection with the execution,
delivery or performance of the Documents or the consummation of the
transactions contemplated thereby, except as listed on Schedule A
hereto. All such Approvals listed on Schedule A, except for those in
Part II thereof, are Final (as defined below). An Approval shall be
Final if it has been validly issued, is in full force and effect, is
not subject to any condition (other than compliance with terms
thereof), does not impose restrictions or requirements inconsistent
with the terms of the Documents, and is final and not subject to any
appeal.
7. To the best of our knowledge after due inquiry, there are
no pending or threatened actions or proceeding affecting Transco or any
of its properties or assets that individually or in the aggregate could
materially adversely affect the execution, delivery and performance by
Transco of any of the Documents.
8. I express no opinion as to the effect on the opinions
herein stated of compliance or noncompliance by TGP or Bondholder with
any applicable state, federal or other laws or regulations.
This opinion and the matters addressed herein are as of the date
hereof, and I undertake no, and hereby expressly disclaim any, obligation to
advise you or any other person of any change in any matter set forth herein
occurring after the date hereof. This opinion is furnished by me, as counsel to
the Company, to lender for its use in connection with the subject transaction
and may not be otherwise used, quoted, referred to or otherwise relied upon, for
any other purpose by any other person or entity, without my prior written
consent. This letter is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated. This opinion is
being furnished only to the Addressees, and their respective successors and
assigns and is solely for the benefit of such parties.
Very truly yours,
--------------------------------
Attorney
<PAGE>
SCHEDULE A
APPROVALS
Part I
None at this time.
Part II
The permits identified below are based on current job scope and site
specifications. Transco may not require all the listed permits or may require
additional permits not listed in the event of a change to the job scope or site
specifications. Transco applies for and receives authorization for the types of
permits identified below in the ordinary course of business.
Corps of Engineers Permit (if wetlands are present)
T&E Clearance (U.S. Fish and Wildlife Service)
Cultural Resources Clearance (State Historic Preservation Office)
Hydrostatic Discharge Permit
Land Disturbance Permit (SE&SCP)
Building Permit from the county
Radio Tower Permit from the county
<PAGE>
Exhibit 4.16
EXECUTION COPY
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent"), dated as of November 10,
1999 among General Electric Company, a New York corporation (the "Consenting
Party"), Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"Partnership"), and THE CHASE MANHATTAN BANK, as collateral agent, together with
its successors in such capacity (the "Collateral Agent"), for the benefit of the
Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership intends to develop, construct, lease,
operate, maintain and finance a 936 megawatt ("MW") (nominal summer rating)
natural gas-fired simple-cycle electric generating plant (the "Facility" and,
together with the Project Documents, governmental approvals relating to the
Facility or the Project Documents and any other item relating to the Facility,
including any improvements to, and the operation of, the Facility and all
activities related thereto, the "Project") to be located in Heard County,
Georgia;
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE");
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "Authority"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership;
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "DAHC Bonds") pursuant to an Indenture, dated as of November 1, 1999
between the Authority and The Chase Manhattan Bank, as DAHC Trustee;
WHEREAS, the DAHC Bonds will be purchased by the Partnership
and pledged to the Collateral Agent, along with certain assets of the
Partnership including its rights under the Lease Agreement, to secure the
obligations of the Partnership under the Bonds;
WHEREAS, in addition to the DAHC Bonds and related collateral,
all obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor
thereto and each other person that becomes a secured party under any Financing
Document (collectively, the "Senior Parties") will be secured by a certain
Security Agreement, Pledge Agreements, Collateral Agency Agreement, Deed to
Secured Debt, Security Agreement and Assignment of Rents and Leases, each Third
Party Consent and any other document providing for any lien, pledge,
encumbrance, mortgage or security interest (collectively, the "Security
Documents");
<PAGE>
WHEREAS, the Senior Parties, the Authority, and the
Partnership have entered into the Collateral Agency and Intercreditor Agreement
(as amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Collateral Agency Agreement") to set
forth their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by the respective parties thereto under the above
described documents, (b) the priority of their respective security interests
created by the Security Documents, and (c) the appointment of the Collateral
Agent as collateral agent.
WHEREAS, Tenaska Georgia I, L.P. and the Consenting Party have
entered into that certain Contract for Purchase, dated as of August 27, 1999 (as
amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Assigned Agreement");
WHEREAS, Tenaska Georgia I, L.P. has assigned and the
Partnership has assumed all of Tenaska Georgia I, L.P.'s right, title and
interest in, and obligations under the Assigned Agreement pursuant to an
Assignment and Assumption Agreement dated as of and delivered to the Consenting
Party on the date hereof ("Assignment and Assumption Agreement").
WHEREAS, the Partnership has assigned and Zachry Construction
Corporation, a Delaware Corporation (the "Contractor"), has assumed certain of
the Partnership's right, title and interest in, and obligations under the
Assigned Agreement pursuant to an Assignment and Assumption Agreement dated as
of and delivered to the Consenting Party on the date hereof ("Assignment and
Assumption Agreement");
WHEREAS, the Partnership has notified the Consenting Party
that all of the Partnership's right, title and interest in, to, and under the
Assigned Agreement is to be assigned to the Collateral Agent as security
pursuant to one or more of the Security Documents;
WHEREAS, it is a condition precedent to the issuance of the
Bonds and the other Financing Documents that the Consenting Party execute and
deliver this Consent for the benefit of the Senior Parties;
NOW, THEREFORE, as an inducement to the Senior Parties to
enter into the Financing Documents, and in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the Consenting Party hereby agrees as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a) acknowledges that
the Collateral Agent and the Senior Parties are entering into the Financing
Documents in reliance upon the execution and delivery by the Consenting Party of
the Assigned Agreement and this
2
<PAGE>
Consent, (b) consents in all respects to the pledge and assignment to the
Collateral Agent of all of the Partnership's right, title and interest in, to
and under the Assigned Agreement pursuant to one or more of the Security
Documents and (c) acknowledges the right, but not the obligation, of the
Collateral Agent or the Collateral Agent's designee, in the exercise of the
Collateral Agent's rights and remedies under the Security Documents, to make all
demands, give all notices, take all actions and exercise all rights of the
Partnership in accordance with the Assigned Agreement, and agrees that in such
event the Consenting Party shall continue to perform its obligations under the
Assigned Agreement.
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the
Collateral Agent shall notify the Consenting Party that an event of default
under any of the Financing Documents has occurred and is continuing and that the
Collateral Agent has exercised its rights (a) to have itself or its designee
substituted for the Partnership under the Assigned Agreement or (b) to sell,
assign, transfer or otherwise dispose of the Assigned Agreement to a person,
then the Collateral Agent, the Collateral Agent's designee or such person (each,
a "Substitute Owner") shall be substituted for the Partnership under the
Assigned Agreement and that, in such event, the Consenting Party will continue
to perform its obligations under the Assigned Agreement in favor of the
Substitute Owner.
1.3 RIGHT TO CURE. The Consenting Party agrees that in the event of a
default by the Partnership in the performance of any of its obligations under
the Assigned Agreement, or upon the occurrence or non-occurrence of any event or
condition under the Assigned Agreement which would immediately or with the
passage of any applicable grace period or the giving of notice, or both, enable
the Consenting Party to terminate or suspend its obligations or exercise any
other right or remedy under the Assigned Agreement or under applicable law
(hereinafter a "default"), the Consenting Party will continue to perform its
obligations under the Assigned Agreement and will not exercise any such right or
remedy until it first gives prompt written notice of such default to the
Collateral Agent and affords the Collateral Agent, the Collateral Agent's
designee and the Senior Parties a period of at least sixty (60) days (or if such
default is a non-monetary default, such longer period not to exceed one hundred
eighty (180) days as is required so long as any such party has commenced and is
diligently pursuing appropriate action to cure such default) from receipt of
such notice to cure such default which period shall in either event run
concurrently with the period of any notice in connection with such default which
is given by the Consenting Party to the Partnership under the Assigned
Agreement; provided, however, that if any such party is prohibited from curing
any such default by any process, stay or injunction issued by any governmental
authority or pursuant to any bankruptcy or insolvency proceeding involving the
Partnership, then the time periods specified in this Section 1.3 for curing a
default shall be extended for the period of such prohibition.
1.4 NO TERMINATION, ASSIGNMENTS OR MATERIAL AMENDMENTS. The Consenting
Party will not, without the prior written consent of the Collateral Agent, enter
into any consensual cancellation or termination of the Assigned Agreement, or
assign or otherwise transfer any of its right, title and interest thereunder or
consent to any such assignment or transfer by the Partnership.
1.5 REPLACEMENT AGREEMENT. In the event that the Assigned Agreement is
terminated as a result of any bankruptcy or insolvency proceeding affecting the
Partnership, the Consenting
3
<PAGE>
Party will, at the option of the Collateral Agent enter into a new agreement
with the Collateral Agent (or its transferee or other nominee that owns or
leases the Project) having terms substantially the same as the terms of the
Assigned Agreement.
1.6 NO LIABILITY. The Consenting Party acknowledges and agrees that
neither the Collateral Agent, the Collateral Agent's designee or the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise, nor shall the
Collateral Agent, the Collateral Agent's designee or the Senior Parties be
obligated or required to (a) perform any of the Partnership's obligations under
the Assigned Agreement, except, in the case of the Collateral Agent or the
Collateral Agent's designee, during any period in which the Collateral Agent or
the Collateral Agent's designee is a Substitute Owner pursuant to Section 1.2
hereof, in which case (i) the obligations of such Substitute Owner shall be no
more than that of the Partnership under such Assigned Agreement and (ii) the
sole recourse of the Consenting Party shall be to such Substituted Owner's
interest in the Project, or (b) take any action to collect or enforce any claim
for payment assigned under the Security Documents.
1.7 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party shall
perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the Assigned
Agreement in full force and effect in accordance with its terms.
1.8 DELIVERY OF NOTICES. The Consenting Party shall deliver to the
Collateral Agent, concurrently with the delivery thereof to the Partnership, a
copy of each notice, request or demand given by the Consenting Party pursuant to
the Assigned Agreement.
1.9 ACKNOWLEDGMENTS. The Consenting Party agrees to execute such
acknowledgments or other similar instruments as the Collateral Agent shall
reasonably request in connection with the transactions provided for in this
Consent.
1.10 CONSENT TO ASSIGNMENT AND ASSUMPTION OF THE ASSIGNED AGREEMENT.
The Consenting Party consents to the assignments by Tenaska Georgia I, L.P. to
the Partnership and the assumption by the Partnership and then the Contractor of
the Assigned Agreement pursuant to the Assignment and Assumption Agreement, and
acknowledges and agrees as follows:
(a) Tenaska Georgia I, L.P. and the Partnership are released
from any and all obligations and liability under the Assigned Agreement, except
for the obligation to process and make payments with respect to the Assigned
Agreement in accordance with and as limited by the Assignment and Assumption
Agreement;
(b) As a condition to receipt of any payment under the
Assigned Agreement, the Consenting Party will execute a lien waiver (in a form
supplied by the Partnership or the Contractor reasonably satisfactory to the
Consenting Party) which lien waiver will waive the Consenting Party's rights to
place a lien on the Project with respect to that portion of the Equipment (as
defined in the Assigned Agreement) and Services (as defined in the Assigned
Agreement) which is the subject of that payment and any prior payments received
by the Consenting Party; and
4
<PAGE>
(c) The Partnership retains certain rights pursuant to Section
22.1 and Appendix M of the Assigned Agreement and there shall be no amendment of
the Assigned Agreement without the prior written consent of the Partnership. The
Consenting Party agrees that it shall provide to the Partnership a duplicate
copy of any notice given to the Contractor under the Assigned Agreement.
(d) In connection with the issuance of the Bonds and the other
Financing Documents, the Consenting Party hereby consents pursuant to Section
11.5 of the Assigned Agreement to the disclosure of the terms and provisions of
Article 3 of the Assigned Agreement to third parties.
SECTION 2. PAYMENTS UNDER THE ASSIGNED AGREEMENT
2.1 PAYMENTS. The Consenting Party will pay all amounts payable by it
under the Assigned Agreement, if any, in the manner required by the Assigned
Agreement directly into the account specified on Exhibit A hereto, or to such
other person or account as shall be specified from time to time by the
Collateral Agent to the Consenting Party in writing.
2.2 NO OFFSET, ETC. All payments required to be made by the Consenting
Party under the Assigned Agreement shall be made without any offset, recoupment,
abatement, withholding, reduction or defense whatsoever, except as specifically
permitted under the Assigned Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
In order to induce the Collateral Agent and the Senior Parties to enter
into the Financing Documents, the Consenting Party makes the following
representations and warranties, which shall survive the execution and delivery
of this Consent and the Assigned Agreement and the consummation of the
transactions contemplated hereby and thereby.
3.1 ORGANIZATION; POWER AND AUTHORITY. The Consenting Party is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and is duly qualified, authorized to do
business and in good standing in every jurisdiction in which the nature of its
business requires it to be so qualified, and has all requisite power and
authority, corporate and otherwise, to enter into and to perform its obligations
hereunder and under the Assigned Agreement, and to carry out the terms hereof
and thereof and the transactions contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by the
Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate and member action on the part of the
Consenting Party and do not require any approval or consent of any holder (or
any trustee for any holder) of any indebtedness or other obligation of (a) the
Consenting Party or (b) any other person or entity, except approvals or consents
which have previously been obtained.
5
<PAGE>
3.3 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this Consent
and the Assigned Agreement is in full force and effect, has been duly executed
and delivered on behalf of the Consenting Party by the appropriate officers of
the Consenting Party, and constitutes the legal, valid and binding obligation of
the Consenting Party, enforceable against the Consenting Party in accordance
with its terms except as the enforceability thereof may be limited by (a)
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no legislation, litigation, action, suit,
proceeding or investigation pending or (to the best of the Consenting Party's
knowledge after due inquiry) threatened against the Consenting Party before or
by any court, administrative agency, arbitrator or governmental authority, body
or agency which, if adversely determined, individually or in the aggregate, (a)
could adversely affect the performance by the Consenting Party of its
obligations hereunder or under the Assigned Agreement, or which could modify or
otherwise adversely affect the Approvals (as defined in Section 3.6), (b)
questions the validity, binding effect or enforceability hereof or of the
Assigned Agreement, any action taken or to be taken pursuant hereto or thereto
or any of the transactions contemplated hereby or thereby or (c) could have a
material adverse effect upon (i) the business, operations, properties, assets,
or condition (financial or otherwise) of the Consenting Party, (ii) the ability
of the Consenting Party to perform under the Assigned Agreement or this Consent,
(iii) the business, operations, properties, assets, prospects or condition
(financial or otherwise) of the Project, (iv) the value, validity, perfection
and enforceability of the liens granted to the Collateral Agent under the
Security Documents or (v) the ability of the Collateral Agent or the Senior
Parties to enforce any of their material rights and remedies under the Assigned
Agreement or this Consent (collectively, a "Material Adverse Effect").
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Consenting Party is not
in violation of its charter or by-laws, and the execution, delivery and
performance by the Consenting Party of this Consent and the Assigned Agreement
and the consummation of the transactions contemplated hereby and thereby will
not result in any violation of, breach of or default under any term of its
charter or by-laws, or of any contract or agreement to which it is a party or by
which it or its property is bound, or of any license, permit, franchise,
judgment, writ, injunction, decree, order, charter, law, ordinance, rule or
regulation applicable to it, except for any such violations which, individually
or in the aggregate, would not have a Material Adverse Effect on the Consenting
Party.
3.6 GOVERNMENT CONSENT. No consent, order, authorization, waiver,
approval or any other action, or registration, declaration or filing with, any
person, board or body, public or private (collectively, the "Approvals"), is
required to be obtained by the Consenting Party in connection with the
execution, delivery or performance of the Assigned Agreement or the consummation
of the transactions contemplated thereunder, except as listed in Exhibit B
hereto. All such Approvals listed on Exhibit B, except for those set forth in
Part II thereof (the "Deferred Approvals"), are Final (as defined below). An
Approval shall be "Final" if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with the terms
thereof), does not impose restrictions or requirements inconsistent with the
terms of the Assigned Agreement, and is final and not subject to any appeal. The
Consenting Party
6
<PAGE>
reasonably believes that each Deferred Approval will be obtained in the ordinary
course of business prior to the time when such Deferred Approval is required to
be Final.
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor, to the
best of the Consenting Party's knowledge after due inquiry, any other party to
the Assigned Agreement is in default of any of its obligations thereunder. The
Consenting Party has no existing counterclaims, offsets or defenses against the
Partnership. The Consenting Party and, to the best of the Consenting Party's
knowledge after due inquiry, each other party to the Assigned Agreement have
complied with all conditions precedent to the respective obligations of such
party to perform under the Assigned Agreement. To the best of the Consenting
Party's knowledge after due inquiry, no event or condition exists which would
either immediately or with the passage of any applicable grace period or giving
of notice, or both, enable either the Consenting Party or the Partnership to
terminate or suspend its obligations under the Assigned Agreement. The Assigned
Agreement has not been amended, modified or supplemented in any manner.
3.8 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no notice of, and
has not consented to, any previous assignment of all or any part of its rights
under the Assigned Agreement.
3.9 REPRESENTATIONS AND WARRANTIES. All representations, warranties and
other statements made by the Consenting Party in the Assigned Agreement were
true and correct as of the date when made and are true and correct as of the
date of this Consent.
SECTION 4. OPINION OF COUNSEL
The Consenting Party shall deliver an opinion of counsel, dated the
Closing Date (as defined in the Financing Documents) relating to the Assigned
Agreement and this Consent, which opinion shall be substantially in the form
attached hereto as Exhibit C.
SECTION 5. MISCELLANEOUS
5.1 NOTICES. All notices and other communications hereunder shall be in
writing, shall be deemed given upon receipt thereof by the party or parties to
whom such notice is addressed, shall refer on their face to the Assigned
Agreement (although failure to so refer shall not render any such notice of
communication ineffective), shall be sent by first class mail, by personal
delivery or by a nationally recognized courier service, and shall be directed as
follows:
If to the Consenting Party: General Electric Company
c/o Global Power Plant Systems
Department
General Electric International, Inc.
1 River Road, Bldg. 2-309
Schenectady, NY 12345
Attention: Jerry Enot
Telephone: (518) 385-3058
Fax: (518) 385-4357
7
<PAGE>
If to the Partnership: Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, NE 68154-4446
Attention: Michael F. Lawler
Telephone: (402) 691-9500
Fax: (402) 691-9550
If to the Collateral Agent: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance
Service Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
5.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) THIS CONSENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT
TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this
Consent and any action for enforcement of any judgment in respect thereof may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Consent, each of the Consenting Party, the Partnership and the Collateral
Agent hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any appeal thereof. Each of the Consenting Party, the
Partnership and the Collateral Agent irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Consenting Party at its notice address provided pursuant to
Section 5.1 hereof. Each of the Consenting Party, the Partnership and the
Collateral Agent hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Consent brought in the
courts referred to above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of the Collateral Agent or its
8
<PAGE>
designees to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Consenting Party in any other
jurisdiction.
5.3 COUNTERPARTS. This Consent may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
5.4 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.
5.5 SEVERABILITY. In case any provision in or obligation under this
Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
5.6 AMENDMENT, WAIVER. Neither this Consent nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified except by an
instrument in writing signed by the Consenting Party, the Partnership and the
Collateral Agent.
5.7 TERMINATION. (a) The Consenting Party's obligations hereunder are
absolute and unconditional, and the Consenting Party has no right, and shall
have no right, to terminate this Consent or to be released, relieved or
discharged from any obligation or liability hereunder until all obligations
under the Financing Documents (the "Finance Liabilities") have been indefeasibly
satisfied in full, notice of which shall be provided by the Collateral Agent
when all such obligations have been satisfied (the "Termination Notice").
(b) In the event that the Collateral Agent delivers the
Termination Notice to the Consenting Party pursuant to this Section 5.7, this
Consent shall terminate for all purposes as to the Collateral Agent and the
Financing Documents and the Collateral Agent and the Senior Parties shall have
no further rights or obligations under this Consent; provided, however, that the
Consenting Party agrees that this Consent shall continue to apply for the
benefit of the Partnership and the providers of new credit facilities to replace
the Financing Documents (the "New Lender") provided that (i) within five (5)
days following delivery by the Collateral Agent to the Consenting Party of the
Termination Notice pursuant to this Section 5.7, the New Lender or an agent,
trustee or other representative of the New Lender, shall have notified the
Consenting Party that it undertakes the prospective obligations of the
"Collateral Agent" under this Consent, and shall have supplied substitute notice
address information for Section 5.1 and new payment instructions (countersigned
on behalf of the Partnership) for Exhibit A, (ii) the amount of the new credit
facilities do not exceed the original amount of commitment by the Senior Parties
to make loans and extend other credit facilities under the Financing Documents,
and (iii) thereafter, (w) the term "Finance Liabilities" under this Consent will
be deemed to refer to the new credit facilities, (x) the term "Collateral Agent"
or "Senior Parties" shall be deemed to refer to the New Lender or any agent or
trustee for the New Lender, (y) the term "Financing Documents" shall be deemed
to refer to the credit agreement, indenture or other instrument providing for
the new credit facilities and (z) the term "Security Documents" shall be deemed
to refer to the security
9
<PAGE>
agreements under which the Assigned Agreement is assigned as collateral to
secure performance of the obligations of the Partnership under the new credit
facilities.
5.8 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon the
parties hereto and their permitted successors and assigns and shall inure to the
benefit of the parties, their designees and their respective permitted
successors and assigns.
5.9 FURTHER ASSURANCES. The parties hereto hereby agree to execute and
deliver all such instruments and take all such action as may be necessary to
effectuate fully the purposes of this Consent.
5.10 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE CONSENTING PARTY, THE PARTNERSHIP AND THE COLLATERAL AGENT HEREBY
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT.
5.11 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Collateral Agent and the Senior Parties and shall survive the
execution and delivery of this Consent.
5.12 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Collateral Agent in exercising any right, power or privilege hereunder and
no course of dealing between the Consenting Party and the Collateral Agent shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other exercise, or the further
exercise, of any other right, power or privilege hereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Collateral Agent would otherwise have.
5.13 ENTIRE AGREEMENT. This Consent embodies the complete agreement
between the parties hereto and supersedes all other oral or written
understandings or agreements.
10
<PAGE>
IN WITNESS WHEREOF, the Consenting Party, the Partnership and the
Collateral Agent have caused this Consent to be duly executed and delivered by
their respective officers thereunto duly authorized as of the date first above
written.
GENERAL ELECTRIC COMPANY
By: /s/ Elizabeth K. Lanier
-------------------------------------
Name: Elizabeth K. Lanier
Title: Vice President
TENASKA GEORGIA PARTNERS, L.P.
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /s/ Michael F. Lawler
-----------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
-------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
EXHIBIT A TO
CONSENT AND AGREEMENT
PAYMENT INSTRUCTIONS
Chase Manhattan Bank ABA# 021 000 021
450 West 33rd Street, 15th Fl. Account Number: 507 891325
NY, NY 10001 Account Name: The Chase Manhattan Bank, as
Collateral Agent
Tenaska Georgia Partners, L.P.,
Concentration Account
Vista Account Number: 294580000
For Further Credit to: Trust Acct. No.
C29458, The Chase Manhattan Bank, as
Collateral Agent, Tenaska Georgia - Revenue
Fund. Attention: A. Marsula
<PAGE>
EXHIBIT B TO
CONSENT AND AGREEMENT
APPROVALS
None
<PAGE>
EXHIBIT C TO
CONSENT AND AGREEMENT
g
GE POWER SYSTEMS
- --------------------------------------------------------------------------------
MICHAEL C. BARNAS GENERAL ELECTRIC COMPANY
COUNSEL-AFRICA, INDIA, MID EAST ONE RIVER ROAD, BUILDING 36, SUITE 413
SCHENECTADY, NY 12345
TEL. (518) 385-7602
FAX (518) 385-5466
November , 1999
To Addressees on Schedule A
Re: Natural gas-fired electric generating facility located in Heard
County, Georgia (the "Project")
Ladies and Gentlemen:
I have acted as counsel to General Electric Company, a New York
corporation (the "Company") in connection with the Project to be constructed by
Tenaska Georgia Partners, L.P., a Delaware limited partnership ("TGP"), with
respect to which which the Company has executed that certain Contract for
Purchase (the "Agreement") dated August 23, 1999 to which TGP was a party, and
pursuant to which the Company will provide to TGP six PG7241 gas
turbine-generators, together with auxiliary equipment. This opinion is delivered
to you pursuant to the Agreement dated as of November 1, 1999 ("the Common
Agreement") by and among TGP, The Chase Manhattan Bank, as Trustee, The
Toronto-Dominion Bank, as DSR LOC Agent, The Toronto-Dominion Bank, as PPA LOC
Agent and The Chase Manhattan Bank, as Collateral Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to such
terms in the Common Agreement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of the following:
(i) the Agreement;
(ii) the Consent and Agreement of the Company, dated as
of ________ (the "Consent");
(iii) the Certificate of Incorporation and By-Laws of the
Company; and
(iv) the resolutions authorizing the execution and delivery
of the Agreement and the Consent, duly adopted by the
Board of Directors of the Company.
<PAGE>
Legal Opinion of
Michael C. Barnas
November ___, 1999
Page 2
The documents referred to in items (iii) and (iv) above are hereinafter
collectively referred to as the "Governing Documents" and the Agreement and the
Consent are hereinafter collectively referred to as the "Documents". In
addition, I have examined and am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of such other documents as I have
deemed necessary or appropriate as a basis for the opinions set forth below.
In my examination I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such copies. In rendering the
opinions expressed below, I have further assumed, without any independent
investigation or verification of any kind, that each Document I have examined is
the valid and binding obligation of each party thereto other than the Company.
I am admitted to the bar of the State of New York. I express no opinion
as to the law of any jurisdiction other than (i) the laws of the State of New
York and (ii) the federal laws of the United States of America.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. The Company is a corporation, duly organized, validly
existing and in good standing under the laws of the State of New York.
The Company is duly qualified to transact business in each jurisdiction
in which the nature of its business requires it to be so qualified.
2. The Company has full corporate power and authority to enter
into, deliver and perform its obligations under each of the Documents.
3. The Company has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each
Document.
4. The Company has duly executed and delivered each Document.
5. Each Document constitutes the valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors= rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
6. The execution, delivery and performance by the Company of
the Documents will not: (i) contravene any applicable provision of any
law, regulation,
2
<PAGE>
Legal Opinion of
Michael C. Barnas
November ___, 1999
Page 3
ruling, order or decree of any governmental authority to which or by
which the Company or any of its property or assets is subject or bound
or (ii) violate any provision of the Governing Documents of the
Company. The execution, delivery and performance by the Company of the
Documents do not and will not, to the best of our knowledge after due
inquiry, conflict with, result in any breach of, or constitute a
default under, or result in the creation or imposition of (or the
obligation to create or impose) any lien or encumbrance upon any of the
property or assets of the Company pursuant to any provision of any
securities issued by the Company, or any indenture, mortgage, deed of
trust, contract, undertaking, document, instrument or other agreement
to which the Company is a party or by which it or any of its property
or assets is bound.
7. No consent, order, authorization, waiver, approval or any
other action, or registration, declaration or filing with, any person,
board or body, public or private, is required to be obtained by the
Company in connection with the execution, delivery or performance of
the Documents or the consummation of the transactions contemplated
thereby.
8. To the best of our knowledge after due inquiry, there are
no pending or threatened actions or proceedings affecting the Company
or any of its properties or assets that individually or in the
aggregate could prohibit or limit in any way the execution, delivery
and performance by the Company of any of the Documents.
This opinion is being furnished only to the Agent, the Borrower, the
parties identified on Schedule A hereto and their respective successors and
assigns and is solely for the benefit of such parties; provided that assignees
of, or participants in, the interests of the Banks may rely on this opinion as
if it were addressed to them.
Very truly yours,
Michael C. Barnas
3
<PAGE>
Legal Opinion of
Michael C. Barnas
November ___, 1999
Page 4
SCHEDULE A
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Credit Lyonnais
1301 Avenue of the Americas
20th Floor
New York, New York 10019
TD Securities (USA) Inc.
31 West 52nd Street
New York, New York 10019
The Toronto-Dominion Bank
31 West 52nd Street
New York, New York 10019
Tenaska Georgia Partners, L.P.
1044 North 115th Street
Suite 400
Omaha, NE 68154 - 4446
The Chase Manhattan Bank
Capital Markets Fiduciary Services
International & Project Finance Service Delivery
450 West 33rd Street
15th Floor
New York, New York 10001
4
<PAGE>
Exhibit 4.17
EXECUTION COPY
CONSENT TO ASSIGNMENT
THIS CONSENT TO ASSIGNMENT (this "Consent") is executed as of
this 10th day of November, 1999, by Willbros Engineers, Inc., a Delaware
corporation (the "Consenting Party"), TENASKA GEORGIA PARTNERS, L.P., a Delaware
limited partnership (the "Partnership"), and THE CHASE MANHATTAN BANK, as
collateral agent (together with its successors in such capacity, the "Collateral
Agent"), for the benefit of the Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership intends to develop, construct, lease,
operate, maintain and finance a 936 megawatt ("MW") (nominal summer rating)
natural gas-fired simple-cycle electric generating plant (the "Facility" and,
together with the Project Documents, governmental approvals relating to the
Facility or the Project Documents and any other item relating to the Facility,
including any improvements to, and the operation of, the Facility and all
activities related thereto, the "Project") to be located in Heard County,
Georgia;
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE");
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "Authority"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership;
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "DAHC Bonds") pursuant to an Indenture, dated as of November 1, 1999
between the Authority and The Chase Manhattan Bank, as DAHC Trustee;
WHEREAS, the DAHC Bonds will be purchased by the Partnership
and pledged to the Collateral Agent, along with certain other assets of the
Partnership including its rights under the Lease Agreement to secure the
obligations of the Partnership under the Bonds;
WHEREAS, in addition to the DAHC Bonds and related collateral,
all obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor to
any such person and each other person that becomes a secured party under any
Financing Document (collectively, the "Senior Parties") will be secured by a
certain Security Agreement, Pledge Agreements, Collateral Agency Agreement, Deed
to Secured Debt, Security Agreement and Assignment of Rents and Leases, each
Third Party Consent and any other
<PAGE>
document providing for any lien, pledge, encumbrance, mortgage or security
interest (collectively, the "Security Documents");
WHEREAS, the Senior Parties, the Authority, and the
Partnership have entered into the Collateral Agency and Intercreditor Agreement
(as amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Collateral Agency Agreement") to set
forth their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by the respective parties thereto under the above
described documents, (b) the priority of their respective security interests
created by the Security Documents, and (c) the appointment of the Collateral
Agent as collateral agent.
WHEREAS, the Partnership and the Consenting Party have entered
into that certain Engineering Procurement and Construction Contract, dated as of
September 23, 1999 (as amended, restated, modified or otherwise supplemented
from time to time in accordance with the terms thereof, the "Assigned
Agreement");
WHEREAS, the Partnership has notified the Consenting Party
that all of the Partnership's right, title and interest in, to, and under the
Assigned Agreement is to be assigned to the Collateral Agent as security
pursuant to one or more of the Security Documents;
WHEREAS, it is a condition precedent to the issuance of the
Bonds and the other Financing Documents that the Consenting Party execute and
deliver this Consent for the benefit of the Senior Parties;
NOW, THEREFORE, in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the Consenting Party hereby agrees as follows:
1. CONSENT TO ASSIGNMENT. Subject to compliance by Collateral Agent
with Section 2 hereof, the Consenting Party (a) consents in all respects to the
pledge and assignment, for collateral security purposes, to the Collateral Agent
of all of Partnership's right, title and interest in, to and under the Assigned
Agreement and (b) acknowledges the right, but not the obligation, of the
Collateral Agent, in the exercise of the Collateral Agent's rights and remedies
under the Security Documents and to exercise all rights of Partnership in
accordance with the Assigned Agreement.
2. PERFORMANCE BY THE CONSENTING PARTY AND EXERCISE OF COLLATERAL
AGENT'S RIGHTS UNDER SECURITY DOCUMENTS. (a) The Consenting Party agrees that,
if the Collateral Agent shall notify the Consenting Party that an event of
default under any of the Financing Documents has occurred and is continuing and
that the Collateral Agent has exercised its rights (a) to have itself or its
designee substituted for the Partnership under the Assigned Agreement or (b) to
sell, assign, transfer or otherwise dispose of the Assigned Agreement to a
person, then the Collateral Agent, the Collateral Agent's designee or such
person (each, a "Substitute Owner") shall be substituted for the Partnership
under the Assigned Agreement and that, in
<PAGE>
such event, the Consenting Party will continue to perform its obligations under
the Assigned Agreement in favor of the Substitute Owner, provided that the
Consenting Party is timely paid according to the Assigned Agreement.
(b)The Consenting Party agrees that in the event of a default
by the Partnership in the performance of any of its obligations under the
Assigned Agreement, or upon the occurrence or non-occurrence of any event or
condition under the Assigned Agreement which would immediately or with the
passage of any applicable grace period or the giving of notice, or both, enable
the Consenting Party to terminate or suspend its obligations or exercise any
other right or remedy under the Assigned Agreement or under applicable law
(hereinafter a "default"), the Consenting Party will continue to perform its
obligations under the Assigned Agreement and will not exercise any such right or
remedy until it first gives prompt written notice of such default to the
Collateral Agent and affords the Collateral Agent, the Collateral Agent's
designee and the Senior Parties a period of at least five (5) days (or if such
default is a non-monetary default, such longer period not to exceed ten (10)
days as is required so long as any such party has commenced and is diligently
pursuing appropriate action to cure such default) from receipt of such notice to
cure such default; provided, however, that if any such party is prohibited from
curing any such default by any process, stay or injunction issued by any
governmental authority or pursuant to any bankruptcy or insolvency proceeding
involving the Partnership, then the time periods specified in this Section 2 for
curing a default shall be extended for the period of such prohibition.
(c) (i) the Consenting Party will not, without the prior
written consent of the Collateral Agent, enter into any consensual cancellation
or termination of the Assigned Agreement.
(ii) the Consenting Party will not without prior written
notice to the Collateral Agent assign or otherwise transfer, except by
subcontracts in the ordinary course, any of its right, title and interest in the
Assigned Agreement.
(d) In the event that the Assigned Agreement is terminated as
a result of any bankruptcy or insolvency proceeding affecting the Partnership,
the Consenting Party will, at the option of the Collateral Agent enter into a
new agreement with the Collateral Agent (or its transferee or other nominee that
owns or leases the Project) having terms the same as the terms of the Assigned
Agreement.
(e) The Consenting Party shall perform and comply with all
material terms and provisions of the Assigned Agreement to be performed or
complied with by it and shall maintain the Assigned Agreement in full force and
effect in accordance with its terms. The Consenting Party agrees to deliver to
the Collateral Agent, concurrently with the delivery thereof to the Partnership,
a copy of each notice of default or demand given by the Consenting Party
pursuant to the Assigned Agreement.
3. LIMITED LIABILITY. The Consenting Party acknowledges and agrees that
neither the Collateral Agent, the Collateral Agent's designee nor the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise, and neither the
Collateral Agent, the Collateral Agent's designee nor the Senior
<PAGE>
Parties shall be obligated or required to (a) perform any of the Partnership's
obligations under the Assigned Agreement, except, in the case of the Collateral
Agent or the Collateral Agent's designee, during any period in which the
Collateral Agent or the Collateral Agent's designee is a Substitute Owner
pursuant to Section 2 hereof, in which case (i) the obligations of such
Substitute Owner shall be no more than that of the Partnership under such
Assigned Agreement and (ii) the sole recourse of the Consenting Party shall be
to such Substitute Owner's interest in the Project, or (b) take any action to
collect or enforce any claim for payment assigned under the Security Documents.
4. NO MODIFICATION OF THE CONSENTING PARTY'S RIGHTS. The parties hereto
acknowledge and agree that neither the execution of this Consent nor any actions
taken by the Consenting Party hereunder (including any forbearance of the
Consenting Party as against Collateral Agent) shall in any way, limit, modify or
otherwise affect the Consenting Party's rights or remedies under the Assigned
Agreement or otherwise.
5. NO DEFAULTS, AMENDMENTS OR ASSIGNMENTS. The Consenting Party
acknowledges that, to the best of its knowledge, as of the date of execution of
this Consent, (a) neither party to the Assigned Agreement is in default of any
of its respective obligations thereunder, (b) the Assigned Agreement has not
been amended, modified or supplemented in any manner and (c) other than as
contemplated hereby in favor of Collateral Agent, the Consenting Party has no
notice of, and has not consented to, any previous assignment of all or any part
of the rights of either party under the Assigned Agreement. The statements made
by the Consenting Party pursuant to this Section 5 are as of the date of this
Consent and the Consenting Party shall have no continuing obligation to notify
Collateral Agent of the occurrence of events or circumstances which would render
such statements inaccurate or untrue.
6. CONSENTS AND APPROVALS. To the best of its knowledge after due
inquiry, the Consenting Party represents and warrants as of the date of this
Consent that no consent, order, authorization, waiver, approval or any other
action, or registration, declaration or filing with, any person, board or body,
public or private (collectively, the "Approvals"), is required to be obtained by
the Consenting Party in connection with the execution, delivery or performance
of the Assigned Agreement or the consummation of the transactions contemplated
thereunder.
7. PAYMENTS. The Consenting Party will pay all amounts, if any, payable
by it under the Assigned Agreement, in the manner required by the Assigned
Agreement. All payments required to be made by the Consenting Party under the
Assigned Agreement shall be made without any offset, recoupment, abatement,
withholding, reduction or defense whatsoever, except as permitted under the
Assigned Agreement.
8. TERMINATION. (a) The Consenting Party's obligations hereunder are
absolute and unconditional, and the Consenting Party has no right, and shall
have no right, to terminate this Consent or to be released, relieved or
discharged from any obligation or liability hereunder until all obligations
under the Financing Documents have been satisfied in full, notice of which shall
be provided by the Collateral Agent or upon termination of the Assigned
Agreement.
(b) The Consenting Party hereby acknowledges that the
Partnership may from time to time obtain refinancing for the Project (including
privately or publicly placed bonds or
<PAGE>
notes), and the Consenting Party agrees that it will promptly upon request
execute in favor of the lenders providing such refinancing a consent to
assignment containing terms and conditions similar to those terms and conditions
contained in this Consent.
9. MISCELLANEOUS.
(a) NOTICES. All notices and other communications hereunder
shall be in writing, shall be deemed given upon receipt thereof by the party or
parties to whom such notice is addressed, shall refer on their face to the
Assigned Agreement (although failure to so refer shall not render any such
notice of communication ineffective), shall be sent by first class mail, by
personal delivery or by a nationally recognized courier service, and shall be
directed as follows:
If to the Consenting Party:
Willbros Engineers, Inc.
2087 East 71st Street
Tulsa, Oklahoma 74136
Attention: Mr. Steve Shores
Telephone: (918) 496-0400
Fax: (918) 493-3430
If to Partnership:
Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154
Attention: Michael F. Lawler
Telephone: (402) 691-9500
Fax: (402) 691-9550
If to the Collateral Agent:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Telephone: (212) 946-7557
Fax: (212) 946-8178
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
<PAGE>
(b) GOVERNING LAW. THIS CONSENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
(c) COUNTERPARTS. This Consent may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
(d) HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Consent are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Consent.
(e) AMENDMENT; WAIVER. Neither this Consent nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the parties hereto.
(f) SUCCESSORS AND ASSIGNS. This Consent may not be assigned
without the prior written consent of the other party, which consent shall not be
unreasonably withheld. This Consent shall be binding upon the parties hereto and
their permitted successors and assigns and shall inure to the benefit of the
parties, their designees and their respective permitted successors and assigns.
(g) FURTHER ASSURANCES. The parties hereto hereby agree to
execute and deliver all such instruments and take all such actions as may be
reasonably necessary to effectuate fully the purposes of this Consent.
(h) NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of either party hereto in exercising any right, power or privilege
hereunder and no course of dealing between the parties hereto shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other exercise, or the further exercise, of any
other right, power or privilege hereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which either party hereto would otherwise have.
(i) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS CONSENT; PROVIDED THAT, THIS WAIVER SHALL NOT APPLY TO ANY
ACTION, PROCEEDING OR COUNTERCLAIM SOLELY ARISING OUT OF OR BASED, IN ANY WAY,
UPON THE ASSIGNED AGREEMENT.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Consent to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
THE CHASE MANHATTAN BANK Willbros Engineers, Inc.
as Collateral Agent
By: /s/ Annette M. Marsula By: /s/ James R. Beasley
------------------------------- ----------------------------
Name: Annette M. Marsula Name: James R. Beasley
------------------------------ --------------------------
Title: Assistant Vice President Title: President
----------------------------- -------------------------
Date: Date: November 2, 1999
------------------------------ -------------------------
TENASKA GEORGIA PARTNERS, L.P.
by Tenaska Georgia, Inc.
By: /s/ Michael F. Lawler
------------------------------------------
Name: Michael F. Lawler
----------------------------------------
Title: Vice President of Finance & Treasurer
---------------------------------------
Date:
----------------------------------------
(EXH.4.18)63185626V3-WILLBROSENGINEERSCONSENT2
<PAGE>
Exhibit 4.18
EXECUTION COPY
CONSENT TO ASSIGNMENT
THIS CONSENT TO ASSIGNMENT (this "Consent") is executed as of
this 10th day of November, 1999, by Willbros Group, Inc., a Panama corporation
(the "Consenting Party"), TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership (the "Partnership"), and THE CHASE MANHATTAN BANK, as collateral
agent (together with its successors in such capacity, the "Collateral Agent"),
for the benefit of the Senior Parties (as defined below).
RECITALS
WHEREAS, the Partnership intends to develop, construct, lease,
operate, maintain and finance a 936 megawatt ("MW") (nominal summer rating)
natural gas-fired simple-cycle electric generating plant (the "Facility" and,
together with the Project Documents, governmental approvals relating to the
Facility or the Project Documents and any other item relating to the Facility,
including any improvements to, and the operation of, the Facility and all
activities related thereto, the "Project") to be located in Heard County,
Georgia;
WHEREAS, the Partnership intends to finance the development,
construction and start-up of the Project, through the issuance of certain bonds
(the "BONDS") pursuant to a trust indenture, dated as of November 1, 1999
between the Partnership and The Chase Manhattan Bank, as Trustee (the
"INDENTURE");
WHEREAS, the Project will be owned by the Development
Authority of Heard County, Georgia, a public corporation created and existing
under the laws of the State of Georgia (the "Authority"), and will be leased to
the Partnership pursuant to a Lease Agreement dated as of November 1, 1999
between the Authority and the Partnership;
WHEREAS, the Authority will issue its Industrial Development
Bonds (the "DAHC Bonds") pursuant to an Indenture, dated as of November 1, 1999
between the Authority and The Chase Manhattan Bank, as DAHC Trustee;
WHEREAS, the DAHC Bonds will be purchased by the Partnership
and pledged to the Collateral Agent, along with certain assets of the
Partnership including its rights under the Lease Agreement, to secure the
obligations of the Partnership under the Bonds;
WHEREAS, in addition to the DAHC Bonds and related collateral,
all obligations of the Partnership with respect to the Bonds, and any other
agreements evidencing senior debt of the Partnership (collectively, the
"Financing Documents") to the Trustee, the Collateral Agent, each successor
thereto and each other person that becomes a secured party under any Financing
Document (collectively, the "Senior Parties") will be secured by a certain
Security Agreement, Pledge Agreements, Collateral Agency Agreement, Deed to
Secured Debt, Security Agreement
<PAGE>
and Assignment of Rents and Leases, each Third Party Consent and any other
document providing for any lien, pledge, encumbrance, mortgage or security
interest (collectively, the "Security Documents");
WHEREAS, the Senior Parties, the Authority, and the
Partnership have entered into the Collateral Agency and Intercreditor Agreement
(as amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "Collateral Agency Agreement") to set
forth their mutual understanding with respect to (a) the exercise of certain
rights, remedies and options by the respective parties thereto under the above
described documents, (b) the priority of their respective security interests
created by the Security Documents, and (c) the appointment of the Collateral
Agent as collateral agent.
WHEREAS, Tenaska Georgia Partners, L.P. and Willbros Engineers, Inc., a
Delaware corporation, have entered into an Engineering, Procurement and
Construction Agreement dated as of September 23, 1999, (as amended, supplemented
or otherwise modified from time to time, the "EPC Agreement");
WHEREAS, the Consenting Party has entered into a Guaranty of
Obligation, dated September 23, 1999, in favor of the Partnership, pursuant to
which the Consenting Party has agreed, INTER ALIA, to guarantee the full and
timely performance of all of the Contractor's obligations under the EPC
Agreement (as amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Assigned Agreement");
WHEREAS, it is a condition precedent to the issuance of the
Bonds and the other Financing Documents that the Consenting Party execute and
deliver this Consent for the benefit of the Senior Parties;
NOW, THEREFORE, as an inducement to the Senior Parties to
enter into the Financing Documents, and in consideration of good and valuable
consideration, the sufficiency of which is hereby acknowledged, and intending to
be legally bound, the Consenting Party hereby agrees as follows:
1. CONSENT TO ASSIGNMENT. Subject to compliance by Collateral Agent
with Section 2 hereof, the Consenting Party (a) consents in all respects to the
pledge and assignment, for collateral security purposes, to the Collateral Agent
of all of Partnership's right, title and interest in, to and under the Assigned
Agreement and (b) acknowledges the right, but not the obligation, of the
Collateral Agent, in the exercise of the Collateral Agent's rights and remedies
under the Security Documents and to exercise all rights of Partnership in
accordance with the Assigned Agreement.
2. PERFORMANCE BY THE CONSENTING PARTY AND EXERCISE OF COLLATERAL
AGENT'S RIGHTS UNDER SECURITY DOCUMENTS. (a) The Consenting Party agrees that,
if the Collateral Agent shall notify the Consenting Party that an event of
default under any of the Financing Documents has occurred and is continuing and
that the Collateral Agent has exercised its rights (a) to have itself or its
designee substituted for the Partnership under the Assigned Agreement or
2
<PAGE>
(b) to sell, assign, transfer or otherwise dispose of the Assigned Agreement to
a person, then the Collateral Agent, the Collateral Agent's designee or such
person (each, a "Substitute Owner") shall be substituted for the Partnership
under the Assigned Agreement and that, in such event, the Consenting Party will
continue to perform its obligations under the Assigned Agreement in favor of the
Substitute Owner, provided that Willbros Engineers, Inc. is timely paid under
the EPC Agreement.
(b) (i) The Consenting Party will not, without the prior
written consent of the Collateral Agent, enter into any consensual cancellation
or termination of the Assigned Agreement.
(ii) The Consenting Party will not without prior written
notice to the Collateral Agent assign or otherwise transfer, except by
subcontracts in the ordinary course, any of its right, title and interest in the
Assigned Agreement.
(c) In the event that the Assigned Agreement is terminated as
a result of any bankruptcy or insolvency proceeding affecting the Partnership,
the Consenting Party will, at the option of the Collateral Agent enter into a
new agreement with the Collateral Agent (or its transferee or other nominee that
owns or leases the Project) having terms the same as the terms of the Assigned
Agreement.
(d) The Consenting Party shall perform and comply with all
material terms and provisions of the Assigned Agreement to be performed or
complied with by it and shall maintain the Assigned Agreement in full force and
effect in accordance with its terms. The Consenting Party agrees to deliver to
the Collateral Agent, concurrently with the delivery thereof to the Partnership,
a copy of each notice request or demand given by the Consenting Party pursuant
to the Assigned Agreement.
3. NO LIABILITY. The Consenting Party acknowledges and agrees that
neither the Collateral Agent, the Collateral Agent's designee nor the Senior
Parties shall have any liability or obligation under the Assigned Agreement as a
result of this Consent, the Security Documents or otherwise.
4. NO MODIFICATION OF THE CONSENTING PARTY'S RIGHTS. The parties hereto
acknowledge and agree that neither the execution of this Consent nor any actions
taken by the Consenting Party hereunder (including any forbearance of the
Consenting Party as against Collateral Agent) shall in any way, limit, modify or
otherwise affect the Consenting Party's rights or remedies under the Assigned
Agreement or otherwise.
5. NO DEFAULTS, AMENDMENTS OR ASSIGNMENTS. The Consenting Party
acknowledges that, to the best of its knowledge, as of the date of execution of
this Consent, (a) neither party to the Assigned Agreement is in default of any
of its respective obligations thereunder, (b) the Assigned Agreement has not
been amended, modified or supplemented in any manner and (c) other than as
contemplated hereby in favor of Collateral Agent, the Consenting Party has no
notice of, and has not consented to, any previous assignment of all or any part
of the rights of either party under the Assigned Agreement. The statements made
by the Consenting Party
3
<PAGE>
pursuant to this Section 5 are as of the date of this Consent and the Consenting
Party shall have no continuing obligation to notify Collateral Agent of the
occurrence of events or circumstances which would render such statements
inaccurate or untrue.
6. CONSENTS AND APPROVALS. The Consenting Party represents and warrants
as of the date of this Consent that no consent, order, authorization, waiver,
approval or any other action, or registration, declaration or filing with, any
person, board or body, public or private (collectively, the "Approvals"), is
required to be obtained by the Consenting Party in connection with the
execution, delivery or performance of the Assigned Agreement or the consummation
of the transactions contemplated thereunder.
7. PAYMENTS. The Consenting Party will pay all amounts, if any, payable
by it under the Assigned Agreement, in the manner required by the Assigned
Agreement. All payments required to be made by the Consenting Party under the
Assigned Agreement shall be made without any offset, recoupment, abatement,
withholding, reduction or defense whatsoever, except as permitted under the
Assigned Agreement.
8. TERMINATION. (a) The Consenting Party's obligations hereunder are
absolute and unconditional, and the Consenting Party has no right, and shall
have no right, to terminate this Consent or to be released, relieved or
discharged from any obligation or liability hereunder until all obligations
under the Financing Documents have been satisfied in full, notice of which shall
be provided by the Collateral Agent or upon termination of the Assigned
Agreement.
(b) The Consenting Party hereby acknowledges that the
Partnership may from time to time obtain refinancing for the Project (including
privately or publicly placed bonds or notes), and the Consenting Party agrees
that it will promptly upon request execute in favor of the lenders providing
such refinancing a consent to assignment containing terms and conditions similar
to those terms and conditions contained in this Consent.
9. MISCELLANEOUS.
(a) NOTICES. All notices and other communications hereunder
shall be in writing, shall be deemed given upon receipt thereof by the party or
parties to whom such notice is addressed, shall refer on their face to the
Assigned Agreement (although failure to so refer shall not render any such
notice of communication ineffective), shall be sent by first class mail, by
personal delivery or by a nationally recognized courier service, and shall be
directed as follows:
4
<PAGE>
If to the Consenting Party:
Willbros Group, Inc.
c/o Willbros USA, Inc.
600 Willbros Place
2431 East 61st Street
Tulsa, Oklahoma 74136
Attention: John Hove
Telephone: (918) 748-7054
Fax: (918) 748-7026
If to Partnership:
Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154
Attention: Michael F. Lawler
Telephone: (402) 691-9500
Fax: (402) 691-9550
If to the Collateral Agent:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette M. Marsula
Telephone: (212) 946-7557
Fax: (212) 946-8178
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
(b) GOVERNING LAW. THIS CONSENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES
THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
(c) COUNTERPARTS. This Consent may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
5
<PAGE>
(d) HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Consent are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this Consent.
(e) AMENDMENT; WAIVER. Neither this Consent nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the parties hereto.
(f) SUCCESSORS AND ASSIGNS. This Consent may not be assigned
without the prior written consent of the other party, which consent shall not be
unreasonably withheld. This Consent shall be binding upon the parties hereto and
their permitted successors and assigns and shall inure to the benefit of the
parties, their designees and their respective permitted successors and assigns.
(g) FURTHER ASSURANCES. The parties hereto hereby agree to
execute and deliver all such instruments and take all such actions as may be
reasonably necessary to effectuate fully the purposes of this Consent.
(h) NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of either party hereto in exercising any right, power or privilege
hereunder and no course of dealing between the parties hereto shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other exercise, or the further exercise, of any
other right, power or privilege hereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which either party hereto would otherwise have.
(i) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS CONSENT; PROVIDED THAT, THIS WAIVER SHALL NOT APPLY TO ANY
ACTION, PROCEEDING OR COUNTERCLAIM SOLELY ARISING OUT OF OR BASED, IN ANY WAY,
UPON THE ASSIGNED AGREEMENT.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Consent to be duly executed and delivered by their respective officers thereunto
duly authorized as of the date first above written.
THE CHASE MANHATTAN BANK Willbros Group, Inc.
as Collateral Agent
By: /s/ ANNETTE M. MARSULA By: /s/ MELVIN F. SPREITZER
Name: ANNETTE M. MARSULA Name: MELVIN F. SPREITZER
Title: ASSISTANT VICE PRESIDENT Title: EXECUTIVE VICE PRESIDENT
Date: Date: NOVEMBER 2, 1999
TENASKA GEORGIA PARTNERS, L.P.
by Tenaska Georgia, Inc.
By: /s/ MICHAEL F. LAWLER
Name: MICHAEL F. LAWLER
Title: VICE PRESIDENT OF FINANCE & TREASURER
Date:
7
<PAGE>
Exhibit 4.19
EXECUTION COPY
================================================================================
INDENTURE OF TRUST
BETWEEN
DEVELOPMENT AUTHORITY OF HEARD COUNTY
AND
THE CHASE MANHATTAN BANK,
AS TRUSTEE
-----------------------------
SECURING THE ISSUANCE OF NOT TO EXCEED $400,000,000 IN AGGREGATE
PRINCIPAL AMOUNT OF DEVELOPMENT AUTHORITY OF HEARD COUNTY TAXABLE
INDUSTRIAL DEVELOPMENT REVENUE BONDS (TENASKA GEORGIA PARTNERS, L.P.
PROJECT), SERIES 1999, AND ANY ADDITIONAL BONDS ISSUED HEREUNDER.
-----------------------------
DATED AS OF NOVEMBER 1, 1999
================================================================================
THIS INSTRUMENT WAS PREPARED BY:
KING & SPALDING
191 PEACHTREE STREET, SUITE 4400
ATLANTA, GEORGIA 30303-1763
---------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<S> <C>
SECTION 1.01. Definitions..................................................................5
SECTION 1.02. Use of Phrases...............................................................8
ARTICLE II
THE BONDS
SECTION 2.01. Issuance of Bonds in Series..................................................8
SECTION 2.02. Dates and Places of Payment of Bonds.........................................8
SECTION 2.03. Execution; Limited Obligation................................................9
SECTION 2.04. Authentication...............................................................9
SECTION 2.05. Form of Bonds...............................................................10
SECTION 2.06. Mutilated, Lost, Stolen or Destroyed Bonds..................................10
SECTION 2.07. Transfer of Bonds; Persons Treated as Owners................................10
SECTION 2.08. Home Office Payment Agreement...............................................11
SECTION 2.09. Redemption of Bonds.........................................................11
SECTION 2.10. Procedure for Redemption of Bonds...........................................12
SECTION 2.11. Selection of Bonds to be Redeemed; Partial Redemption of Bonds..............12
SECTION 2.12. Notice of Redemption........................................................12
SECTION 2.13. Additional Notice of Redemption.............................................13
SECTION 2.14. Payment of Redemption Price; Effect of Call for Redemption..................14
ARTICLE III
THE SERIES 1999 BONDS
SECTION 3.01. Issuance of Series 1999 Bonds...............................................14
SECTION 3.02. Form of Series 1999 Bonds...................................................15
SECTION 3.03. Authentication and Delivery of Series 1999 Bonds............................15
SECTION 3.04. Optional Redemption of Series 1999 Bonds....................................17
SECTION 3.05. Procedures for Redemption of Series 1999 Bonds..............................17
ARTICLE IV
ADDITIONAL BONDS
SECTION 4.01. Additional Bonds............................................................17
SECTION 4.02. Parity of Bonds.............................................................20
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. Payment of Principal and Interest...........................................20
SECTION 5.02. Performance of Covenants; Issuer............................................20
SECTION 5.03. Ownership; Instruments of Further Assurance.................................21
SECTION 5.04. [Intentionally Omitted].....................................................21
SECTION 5.05. [Intentionally Omitted].....................................................21
-i-
<PAGE>
SECTION 5.06. Recordation of the Lease Agreement, Security Deed,
Financing Statements and Continuation Statements..........................21
SECTION 5.07. Inspection of Project Books.................................................21
SECTION 5.08. Priority of Pledgee.........................................................21
SECTION 5.09. Rights Under Lease Agreement................................................21
SECTION 5.10. Quitclaim Deed to be Held by Trustee........................................22
ARTICLE VI
REVENUES AND FUNDS
SECTION 6.01. Source of Payment of Bonds..................................................22
SECTION 6.02. Creation of the Bond Fund...................................................22
SECTION 6.03. Payments into the Bond Fund.................................................22
SECTION 6.04. Use of Moneys in the Bond Fund..............................................23
SECTION 6.05. Custody of the Bond Fund....................................................24
SECTION 6.06. Non-presentment of Bonds at Maturity........................................24
SECTION 6.07. Trustee's Fees, Charges and Expenses........................................24
SECTION 6.08. Moneys to be Held in Trust..................................................24
SECTION 6.09. Repayment to the Lessee from the Bond Fund..................................24
ARTICLE VII
CUSTODY AND APPLICATION OF PROCEEDS OF BONDS
SECTION 7.01. Construction Fund; Disbursements............................................25
SECTION 7.02. Completion of the Project...................................................25
SECTION 7.03. Appointment of Agent........................................................25
ARTICLE VIII
INVESTMENTS
SECTION 8.01. Bond Fund Investments.......................................................25
ARTICLE IX
POSSESSION, USE AND PARTIAL RELEASE OF PROJECT
SECTION 9.01. Subordination to Rights of the Lessee.......................................26
SECTION 9.02. Release of Certain Land.....................................................26
SECTION 9.03. Release of Leased Equipment.................................................26
SECTION 9.04. Granting or Release of Easements; Amendments or
Modifications to Easements................................................27
ARTICLE X
DISCHARGE OF LIEN
SECTION 10.01. Discharge of Lien...........................................................27
SECTION 10.02. Provision for Payment of Bonds..............................................27
SECTION 10.03. Discharge of the Indenture..................................................28
-ii-
<PAGE>
ARTICLE XI
DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND BONDHOLDERS
SECTION 11.01. Defaults; Events of Default.................................................28
SECTION 11.02. Acceleration................................................................28
SECTION 11.03. Surrender of Possession of Project; Rights and Duties
of Trustee in Possession..................................................28
SECTION 11.04. Other Remedies..............................................................29
SECTION 11.05. Rights of Bondholders.......................................................29
SECTION 11.06. Right of Owners of the Bonds to Direct Proceedings..........................30
SECTION 11.07. Appointment of Receivers....................................................30
SECTION 11.08. Waiver of Benefit of Laws...................................................30
SECTION 11.09. Application of Moneys.......................................................30
SECTION 11.10. Rights and Remedies Vested in Trustee.......................................31
SECTION 11.11. Rights and Remedies of Owners of the Bonds..................................31
SECTION 11.12. Termination of Proceedings..................................................31
SECTION 11.13. Waivers of Events of Default................................................32
ARTICLE XII
THE TRUSTEE
SECTION 12.01. Acceptance of the Trusts....................................................32
SECTION 12.02. Fees, Charges and Expenses of Trustee.......................................34
SECTION 12.03. [Intentionally omitted].....................................................35
SECTION 12.04. Intervention by Trustee.....................................................35
SECTION 12.05. Successor Trustee...........................................................35
SECTION 12.06. Resignation by the Trustee..................................................35
SECTION 12.07. Removal of the Trustee......................................................35
SECTION 12.08. Appointment of Successor Trustee by the Owners of the
Bonds; Temporary Trustee..................................................35
SECTION 12.09. Concerning Any Successor Trustee............................................36
SECTION 12.10. Right of Trustee to Pay Taxes and Other Charges.............................36
SECTION 12.11. Trustee Protected in Relying Upon Resolutions, etc..........................36
SECTION 12.12. Successor Trustee as Custodian of Funds, Paying Agent
and Bond Registrar........................................................36
SECTION 12.13. Trust Estate May Be Vested in Co-Trustee....................................37
SECTION 12.14. [Intentionally Omitted].....................................................37
SECTION 12.15. This Article Controls.......................................................37
SECTION 12.16. Consequential Damages.......................................................37
ARTICLE XIII
SUPPLEMENTAL INDENTURES
SECTION 13.01. Supplemental Indentures Not Requiring Consent of
Owners of the Bonds.......................................................38
SECTION 13.02. Supplemental Indentures Requiring Consent of Owners
of the Bonds..............................................................40
-iii-
<PAGE>
SECTION 13.03. Trustee Authorized to Join in Supplements;
Reliance on Counsel.......................................................39
ARTICLE XIV
AMENDMENT OF LEASE AGREEMENT AND SECURITY DEED
SECTION 14.01. Amendments, etc., to Lease Agreement and Security
Deed Not Requiring Consent of Owners of the Bonds.........................40
SECTION 14.02. Amendments, etc., to Lease Agreement and Security
Deed Requiring Consent of Owners of the Bonds.............................40
SECTION 14.03. Trustee Authorized to Join in Amendments; Reliance
on Counsel................................................................40
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Consents, etc. of Owners of the Bonds.......................................41
SECTION 15.02. Limitation of Rights........................................................41
SECTION 15.03. Issuer's Obligations Limited................................................42
SECTION 15.04. Immunity of Directors, Officers and Employees of Issuer.....................42
SECTION 15.05. Severability................................................................42
SECTION 15.06. Notices.....................................................................43
SECTION 15.07. Trustee as Paying Agent and Bond Registrar..................................44
SECTION 15.08. Payments Due on Saturdays, Sundays and Holidays.............................44
SECTION 15.09. Counterparts................................................................44
SECTION 15.10. Law Governing Indenture.....................................................44
EXHIBIT A Form of Bond
</TABLE>
-iv-
<PAGE>
INDENTURE OF TRUST
THIS INDENTURE OF TRUST (the "Indenture"), dated as of November 1,
1999, made and entered into by and between the DEVELOPMENT AUTHORITY OF HEARD
COUNTY, a public corporation created and existing under the laws of the State of
Georgia (the "Issuer"), and THE CHASE MANHATTAN BANK, a state banking
corporation duly organized and existing under and by virtue of the laws of the
State of New York, having power and authority to accept and execute trusts, and
having its principal office in New York, New York, as Trustee (the "Trustee"),
RECITALS
WHEREAS, the Issuer has been created pursuant to the provisions of an
Act of the General Assembly of the State of Georgia (O.C.G.A. Section 36-62), as
amended and an activating resolution of the Board of Commissioners of Heard
County, Georgia duly adopted on January 3, 1972 (collectively, the "Act"), its
directors have been appointed as provided in the Act and are currently acting in
such capacity; and
WHEREAS, the Issuer has been created for the purpose of encouraging and
promoting the expansion and development of industrial and commercial facilities
in Heard County, Georgia; the Act empowers the Issuer to issue its revenue
obligations, in accordance with the applicable provisions of the Revenue Bond
Law of the State of Georgia (O.C.G.A. Sections 36-82-60 to 36-82-85), as
heretofore and hereafter amended, for the purpose of financing any undertaking
within the scope of its power, including, without limitation, the acquisition by
purchase or gift of any building or structure within the territorial limits of
Heard County suitable for and intended for use as a factory, mill, shop,
processing plant, assembly plant or fabricating plant, including all appurtenant
lands and appurtenances thereto and all necessary or useful furnishings,
machinery and equipment, and the lease or sale of such building or structure for
operation by one or more persons, firms or corporations, all in furtherance of
the public purpose for which it was created; and
WHEREAS, after careful study and investigation the Issuer, in
furtherance of the purpose for which it was created and pursuant to a resolution
duly adopted, has entered into a lease agreement (as the same may be amended
from time to time in accordance with its terms, the "Lease Agreement"), dated as
of even date herewith, with Tenaska Georgia Partners, L.P. (the "Lessee"), a
limited partnership organized and existing under the laws of the State of
Delaware, and duly qualified to do business in the State of Georgia, pursuant to
which the Issuer has agreed to acquire, construct and install the Project (as
defined in the Lease Agreement), including the real property owned by the Issuer
for the exclusive use and occupancy of the Lessee under the Lease Agreement and
the Lessee has agreed to pay the Issuer specified rental payments and other
payments; and
WHEREAS, after careful investigation, the Issuer has found and does
hereby declare that it is in the best interest of the citizens of Heard County
that the Project be acquired, constructed and installed and leased to the Lessee
for the purposes stated in the Lease Agreement, all in keeping with the public
purpose for which the Issuer was created, and that such acquisition,
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construction and installation of the Project and lease thereof to the Lessee are
specifically authorized under the Act; and
WHEREAS, a Project Summary (the "Project Summary") for the Project has
been prepared by the Lessee, and it is estimated that the amount necessary to
finance the cost of the Project, including expenses incidental thereto, will not
exceed $400,000,000 (said Project Summary, a copy of which is attached to the
Lease Agreement as Exhibit C and which may be amended from time to time by the
Lessee, has been approved by the Issuer and is on file with the Secretary of the
Issuer); and
WHEREAS, the most feasible method of financing the cost of the Project
is through the issuance hereunder of Development Authority of Heard County
Taxable Industrial Development Revenue Bonds (Tenaska Georgia Partners, L.P.
Project), Series 1999, in the aggregate principal amount of not to exceed
$400,000,000 (the "Series 1999 Bonds"); and
WHEREAS, the execution and delivery of this Indenture and the sale,
issuance and delivery of the Series 1999 Bonds have been in all respects duly
and validly authorized by resolution duly adopted by the Issuer; and
WHEREAS, it is anticipated that additional moneys may be necessary to
finance the cost of (a) completing the acquisition, construction and
installation of the Project, (b) providing for the enlargement, improvement,
expansion or replacement of the Project, (c) refunding all of the Bonds of any
one or more series then outstanding, or (d) any combination of the foregoing,
and provision should be made for the issuance from time to time of Additional
Bonds which shall be equally and ratably secured hereunder with the Series 1999
Bonds (the Series 1999 Bonds and such Additional Bonds being hereinafter
collectively referred to as the "Bonds"); and
WHEREAS, the Series 1999 Bonds will be delivered to and paid for by
Tenaska Georgia Partners, L.P., as purchaser (the "Purchaser") to finance the
acquisition, construction and installation of the Project, and the provisions of
this Indenture are to be liberally read and construed in a manner which
facilitates such approach to delivery and payment; and
WHEREAS, the Issuer will receive rental payments and other payments
from the Lessee, which revenues, together with all other rents, revenues and
receipts and other payments to be received pursuant to the Lease Agreement,
shall be pledged together with the Lease Agreement (except for the Unassigned
Rights) as security for the payment of the principal of and interest on the
Bonds; and
WHEREAS, as additional security for the payment of the Bonds, the
Issuer has conveyed title to that portion of the Project consisting of real
property and has assigned all leases in and to all rents and other payments
derived from the Project and has granted a security interest in that portion of
the Project consisting of personal property to the Trustee pursuant to the terms
of a Deed to Secure Debt, Security Agreement and Assignment of Rents and Leases
(the "Security Deed"), dated as of even date herewith; and
WHEREAS, the Lessee, the Senior Parties (hereafter referred to) and the
Collateral Agent (hereafter defined) have entered into an Agreement as to
Certain Undertakings, Common Representations, Warranties, Covenants and Other
Terms dated November 1, 1999 (as amended
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or modified in accordance with its terms, the "Common Agreement") which sets
forth certain representations, warranties and covenants of the Issuer and the
Lessee; and
WHEREAS, the Lessee, the Trustee, the Senior Parties, The Chase
Manhattan Bank, as collateral agent (the "Collateral Agent"), and The Chase
Manhattan Bank, as the depositary bank (the "Depositary Bank"), have entered
into a Collateral Agency and Intercreditor Agreement dated November 1, 1999 (as
amended or modified in accordance with its terms, the "Collateral Agency
Agreement"), which Collateral Agency Agreement, among other things, (a) sets
forth the mutual understandings of the parties thereto with respect to (i) the
exercise of certain rights, remedies and options by the respective parties
thereto, (ii) the priority of their respective Security Interests (as defined in
the Collateral Agency Agreement) created by the Security Documents (as defined
in the Common Agreement) and (iii) the appointment of the Collateral Agent, and
(b) provides for (i) the grant to the Collateral Agent, acting on behalf of the
Senior Parties and as agent for the Trustee, of a lien on and security interest
in, among other things, the funds established and created under the Collateral
Agency Agreement and (ii) the appointment by the Collateral Agent of the
Depositary Bank as depositary bank to hold and administer money deposited in the
various funds established and created under the Collateral Agency Agreement and
funded with, among other things, proceeds of certain insurance and revenues
generated and distributed to the Lessee;
WHEREAS, the Trustee recites that a condition of its acceptance of this
Indenture is the receipt of a duly authorized, executed and delivered Guaranty
Agreement, dated as of even date herewith, pursuant to which the Lessee, as
guarantor, absolutely and unconditionally guarantees to it the full and prompt
payment in accordance with the provisions on this Indenture of the principal of
and interest on the Series 1999 Bonds; and
WHEREAS, all things necessary to make the Series 1999 Bonds, when
authenticated by the Trustee and issued and delivered as in this Indenture
provided, the valid, binding and legal obligations of the Issuer, according to
the import thereof, and to create a valid assignment and pledge of the rental
payments and other payments derived from the Lease Agreement to the payment of
the principal of and interest on the Bonds and a valid assignment of all the
right, title and interest of the Issuer (except for the Unassigned Rights) in
the Lease Agreement, have been done and performed, and the execution and
delivery of this Indenture and the execution, issuance and delivery of the
Series 1999 Bonds, subject to the terms hereof, have in all respects been duly
authorized;
NOW, THEREFORE, KNOW ALL BY THESE PRESENTS, THIS INDENTURE WITNESSETH:
That the Issuer, in consideration of the premises and of the acceptance
by the Trustee of the trusts hereby created, and of the purchase and acceptance
of the Series 1999 Bonds by the owners thereof, and of the sum of One Dollar
($1.00), lawful money of the United States of America, to it duly paid by the
Trustee, at or before the execution and delivery of these presents, and for
other good and valuable considerations the receipt of which is hereby
acknowledged, in order to secure the payment of the principal of and interest on
the Bonds according to their tenor and effect and to insure the performance and
observance by the Issuer of all the covenants expressed or implied herein and in
the Bonds, has given, granted, pledged, assigned, conveyed
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and transferred and does by these presents give, grant, pledge, assign, convey
and transfer to the Trustee (including to the Collateral Agent as agent for the
Trustee), and to its successors in the trusts hereby created, and to them and
their assigns forever, all of the Issuer's estate, right, title and interest in,
to and under any and all of the following described property, rights and
interest:
I.
A security interest in all right, title and interest of the Issuer in
the Lease Agreement and all amendments, modifications and renewals thereof
(except for the Unassigned Rights).
II.
A security interest in all rents, revenues or receipts and other
payments to be received pursuant to the Lease Agreement, together with all other
rents, revenues and receipts arising out of or in connection with the Issuer's
ownership of the Project (except for the Unassigned Rights), and all amendments,
modifications and renewals thereof.
III.
A security interest in all amounts on deposit from time to time in the
Construction Fund established under the Collateral Agency Agreement to the
extent such amounts represent proceeds of the Bonds, and a security interest in
all amounts on deposit from time to time in the Bond Fund established hereunder,
subject to the provisions of the Collateral Agency Agreement and this Indenture
permitting the application thereof for the purposes and on the terms and
conditions set forth therein and herein.
IV.
The Quitclaim Deed executed and owned by the Issuer, to be held in
trust in accordance with the terms hereof.
TO HAVE AND HOLD all the same with all privileges and appurtenances
hereby given, granted, pledged, assigned, conveyed, mortgaged and transferred,
or agreed or intended to be to the Trustee and its successors in said trusts and
to them and their assigns forever;
IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth, for
the equal and proportionate benefit, security and protection of all owners of
the Bonds issued or to be issued under and secured by this Indenture, without
preference, priority or distinction as to lien or otherwise of any of the Bonds
over any of the others except as herein expressly provided;
PROVIDED, HOWEVER, that upon Payment in Full of the Bonds in accordance
with the terms and provisions of this Indenture, this Indenture and the rights
hereby granted shall cease, determine and be void; otherwise, this Indenture
shall be of full force and effect.
THIS INDENTURE FURTHER WITNESSETH and it is expressly declared that all
Bonds issued and secured hereunder are to be issued, authenticated and delivered
and all property hereby given, granted, pledged, assigned, conveyed or
transferred is to be dealt with and disposed of under, upon and subject to the
terms, conditions, stipulations, covenants, agreements,
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trusts, uses and purposes as hereinafter expressed, and the Issuer has agreed
and covenanted and does hereby agree and covenant with the Trustee and with the
respective owners, from time to time, of the Bonds or any part thereof, as
follows, that is to say:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following words and phrases and others evidently
intended as the equivalent thereof shall, in the absence of clear implication
herein otherwise, be given the following respective interpretations herein
(terms which are not defined in this Section shall have the meaning specified in
Article I of the Lease Agreement except as herein otherwise expressly provided
or unless the context requires otherwise):
"ACT" means an Act of the General Assembly of the State of Georgia
(O.C.G.A. Section 36-62-1 ET SEQ.), as amended, and an activating resolution of
the Board of Commissioners of Heard County, Georgia duly adopted on January 3,
1972.
"ADDITIONAL BONDS" means the bonds of any series, other than the Series
1999 Bonds, authorized under the Indenture and authenticated and delivered in
accordance with the provisions of Article IV of this Indenture.
"BOND FUND" means the Bond principal and interest payment fund created
by Section 6.02 hereof and within which there shall be established a General
Account and a Special Account. The Special Account may be established by the
Trustee for bookkeeping purposes only and moneys designated as being held in the
Special Account may be held in any segregated account designated by the Trustee
for such purpose. Any reference herein to the words "Bond Fund" without further
qualification shall constitute a reference to the General Account.
"BOND PURCHASE AGREEMENT" means the Bond Purchase Agreement, dated as
of November 1, 1999, between the Issuer and the Lessee, as lessee and as
purchaser of the Bonds, pursuant to which the Issuer has agreed to sell, and the
Lessee has agreed to purchase, the Series 1999 Bonds, in accordance with the
provisions thereof.
"BOND" or "BONDS" shall mean any or all of the not to exceed
$400,000,000 in aggregate principal amount of Development Authority of Heard
County Taxable Industrial Development Revenue Bonds (Tenaska Georgia Partners,
L.P. Project), Series 1999, to be issued by the Issuer hereunder, and from and
after the issuance of any Additional Bonds, unless the context clearly indicates
otherwise, such Additional Bonds.
"COLLATERAL AGENCY AGREEMENT" has the meaning set forth in the recitals
hereto.
"COLLATERAL AGENT" has the meaning set forth in the recitals hereto.
"COMMON AGREEMENT" has the meaning set forth in the recitals hereto.
"CONSTRUCTION FUND" means the fund so designated, established and
created under Section 2.2 of the Collateral Agency Agreement.
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The term "EVENT OF DEFAULT" means the events specified in Section 11.01
hereof, subject to the terms of Section 11.12 hereof.
"GOVERNMENT OBLIGATIONS" means (a) direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged, or (b) obligations issued by a person
controlled or supervised by and acting as an instrumentality of the United
States of America, the payment of the principal of and interest on which is
fully and unconditionally guaranteed as a full faith and credit obligation by
the United States of America (including any securities described in (a) or (b)
issued or held in book-entry form on the books of the Department of Treasury of
the United States of America), which obligations, in either case, are held in
the name of the Trustee and not subject to redemption prior to maturity by
anyone other than the holder thereof.
"GUARANTY AGREEMENT" means the Guaranty Agreement, of even date
herewith, from the Lessee, as guarantor, to the Trustee, pursuant to the terms
of which the Lessee has absolutely and unconditionally guaranteed the payment of
the principal of and interest on, the Bonds, and any amendments or supplements
thereto, including any amendments or any additional Guaranty Agreements executed
by the Lessee in connection with the issuance of any Additional Bonds.
"INDENTURE" means this Indenture of Trust and any amendments or
supplements hereto entered into by the Issuer and the Trustee pursuant to
Article XIII hereof.
"INDEPENDENT COUNSEL" means an attorney, or firm thereof, duly admitted
to practice law before the highest court of any state in the United States of
America or of the District of Columbia and not an employee of or regularly
retained by either the Issuer or the Lessee.
"INTEREST PAYMENT DATE" means, with respect to the Series 1999 Bonds,
each February 1 and August 1, commencing August 1, 2000, and each date on which
interest or principal is due and payable on all or part of the Series 1999 Bonds
by reason of acceleration or redemption.
"INTEREST PERIOD" means the period from and including any Interest
Payment Date to and including the calendar day immediately preceding the next
following Interest Payment Date.
"ISSUER" means the Development Authority of Heard County, a public
corporation created and existing under the laws of the State of Georgia
(including specifically the Act), and its lawful successors and assigns.
"LEASE AGREEMENT" or "LEASE" means the Lease Agreement, of even date
herewith, between the Issuer and the Lessee, and any amendments or supplements
thereto.
"LESSEE" means Tenaska Georgia Partners, L.P., a Delaware limited
partnership, and its successors and assigns, including any surviving, resulting
or transferee entity as provided in Section 8.3 of the Lease Agreement.
The term "OUTSTANDING", when used with reference to the Bonds at any
date as of which the amount of outstanding Bonds is to be determined, means all
Bonds which have been authenticated and delivered to the Trustee under this
Indenture, except:
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(a) Bonds cancelled at or prior to such date;
(b) Bonds for the payment or prepayment of which sufficient
moneys and/or Government Obligations meeting the terms and conditions
specified in Section 10.02 hereof shall have been theretofore
transferred or deposited into the Bond Fund (whether upon or prior to
the maturity or prepayment date of any such Bonds); provided that if
such Bonds are to be prepaid prior to the maturity thereof, notice of
such prepayment shall have been given or arrangements satisfactory to
the Trustee shall have been made therefor, or waiver of such notice
satisfactory in form to the Trustee shall have been filed with the
Trustee;
(c) Bonds in lieu of which others have been authenticated
under Section 2.06 hereof; and
(d) For purposes of any consent or other action to be taken by
the owners of a specified percentage of outstanding Bonds hereunder, or
unless the Lessee or an affiliate of the Lessee shall own at such time
100% of the outstanding Bonds (determined without reference to this
subparagraph (d)), Bonds held by the Lessee or an affiliate of the
Lessee.
The term "OWNERS OF THE BONDS" means the registered owners of the
Bonds, and, upon the occurrence of a "Trigger Event" under the Collateral Agency
Agreement, specifically means the Collateral Agent, as pledgee of the Bonds
pursuant to the Partnership Assignment and Security Agreement.
The term "PAYMENT IN FULL OF THE BONDS" specifically encompasses the
situations described in Sections 10.01 and 10.02 hereof.
"PERSON" means natural persons, firms, associations, corporations and
public bodies and other legal entities.
The term "PRINCIPAL OFFICE OF THE TRUSTEE" means the principal
corporate trust office of the Trustee in New York, New York, or the principal
corporate trust office of any successor trustee designated pursuant to the
provisions of a supplemental indenture.
"PROJECT" means the Building, the Leased Land and the Leased Equipment,
as each may at any time exist.
"PURCHASER" means Tenaska Georgia Partners, L.P., as initial purchaser
of the Series 1999 Bonds under the Bond Purchase Agreement, and its successors
and assigns.
"RECORD DATE" means the close of business on the 15th day (whether of
not a business day) of the month immediately preceding the applicable Interest
Payment Date.
"SECURITY DEED" means the Deed to Secure Debt, Security Agreement and
Assignment of Rents and Leases, of even date herewith, from the Issuer to the
Trustee, including any amendment thereto;
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"SECURITY INTEREST" shall refer to the security interests created
herein and in the Security Deed and shall have the meaning set forth in the
Uniform Commercial Code of Georgia, as now or hereafter amended.
"SENIOR PARTIES" shall have the meaning given in the Common Agreement.
"SERIES 1999 BOND" or "SERIES 1999 BONDS" shall mean any and all of the
$275,000,000 in aggregate principal amount of the Development Authority of Heard
County Taxable Industrial Development Revenue Bonds (Tenaska Georgia Partners,
L.P. Project), Series 1999, issued by the Issuer hereunder on the Closing Date.
"STATE" means the State of Georgia.
"TRUST ESTATE" means the property described in Sections I, II, III and
IV of the Granting Clauses of this Indenture.
"TRUSTEE" means the party so named and designated in the first
paragraph of this Indenture and any co-trustee or successor trustee hereunder
and any corporation resulting from or surviving any consolidation or merger to
which it or its successors may be a party.
"U.C.C." means the Uniform Commercial Code of the State, as now or
hereafter amended.
"UNASSIGNED RIGHTS" means the rights of the Issuer in and under the
Lease Agreement to be reimbursed for fees and expenses and the right of the
Issuer to be indemnified in accordance with the Lease Agreement.
SECTION 1.02. USE OF PHRASES. "HEREIN", "HEREBY", "HEREUNDER",
"HEREOF", "HEREINBEFORE", "HEREINAFTER" and other equivalent words refer to this
Indenture and not solely to the particular portion hereof in which any such word
is used. The definitions set forth in Section 1.01 hereof include both singular
and plural. Whenever used herein, any pronoun shall be deemed to include both
singular and plural and to cover all genders.
ARTICLE II
THE BONDS
SECTION 2.01. ISSUANCE OF BONDS IN SERIES. The Bonds may be issued in
different series and each Bond shall have an appropriate series designation. All
of the Bonds shall be equally and ratably secured by this Indenture by the
pledge herein made, it being expressly understood and agreed that no Bonds
issued hereunder shall be prior to any other Bonds thereafter issued hereunder,
but shall be on a parity therewith, with respect to the liens and security
interests created in favor of the Trustee under this Indenture.
SECTION 2.02. DATES AND PLACES OF PAYMENT OF BONDS. Each series of the
Bonds shall bear such date as shall be specified in this Indenture or in the
supplemental indenture providing for the issuance thereof and shall mature on
such dates in such years and in such amounts as shall be fixed therefor prior to
its issuance. Interest on the Bonds from their
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respective dates until their respective maturities shall be payable at such
rates as shall be fixed therefor prior to their issuance.
The Bonds shall be issued as fully registered Bonds as hereinafter
provided.
Each Bond shall be dated the date of its authentication and delivery by
the Trustee. The Bonds shall bear interest from the Interest Payment Date next
preceding the date of authentication of such Bond to which interest has been
paid or provided for, unless: (1) the date of authentication of such Bond is an
Interest Payment Date to which interest has been paid or provided for, then from
the date of authentication thereof, or (2) no interest has been paid on such
Bond, in which case from the dated date of such Bond or (3) such authentication
date shall be after any Record Date and before the next succeeding Interest
Payment Date in which case interest shall be paid from the next succeeding
Interest Payment Date.
The principal of and interest on each of the Bonds shall be payable in
lawful money of the United States of America by check payable to the owner
thereof delivered at the address of such owner as shown on the bond register
maintained by the Trustee as Bond Registrar (the "Bond Register"), unless there
shall be in effect a home office payment agreement satisfactory to the Trustee,
as provided in Section 2.08 hereof. Such payments shall be made to the person in
whose name a Bond shall be registered on the Bond Register, with respect to
payment of principal, on the date such principal is due, and, with respect to
the payment of interest, as of the applicable Record Date as shown on the Bond
Register. Payment of the final installment of principal of each Bond to the
owner thereof shall be made upon surrender of the Bond to the Trustee. The Bond
Registrar shall maintain a record of the amount and date of all payments or
prepayment of the principal of and interest on the Bonds.
SECTION 2.03. EXECUTION; LIMITED OBLIGATION. The Bonds shall be
executed on behalf of the Issuer by the official manual or facsimile signature
of its Chairman or Vice Chairman and the Issuer's corporate seal shall be
affixed thereto or printed thereon and attested by the official manual or
facsimile signature of its Secretary or Assistant Secretary. The obligation of
the Issuer to pay the Bonds and the interest thereon shall not be a general
obligation of the Issuer but shall be a limited obligation which shall be
payable from, and wholly secured by, a pledge of the Trust Estate. If any
officer of the Issuer who shall have signed or sealed any Bonds shall cease to
be such officer before such Bond so signed and/or sealed has been authenticated
and delivered by the Trustee, such Bond nevertheless may be authenticated and
delivered as though the person who signed and/or sealed such Bond had not ceased
to be such officer, and also any Bond may be signed and sealed on behalf of the
Issuer by such persons as at the actual time of execution of such Bond shall be
the proper officers of the Issuer, although at the date of such Bond such
persons may not have been officers of the Issuer.
SECTION 2.04. AUTHENTICATION. Only such Bonds as shall have endorsed
thereon a certificate of authentication substantially in the form hereinafter
set forth duly executed by the Trustee shall be entitled to any right or benefit
under this Indenture. No Bond shall be valid or obligatory for any purpose
unless and until such certificate of authentication shall have been duly
executed by the Trustee, and such executed certificate of the Trustee upon any
such Bond shall be conclusive evidence that such Bond has been authenticated and
delivered under this Indenture. Said certificate of authentication on any Bond
shall be deemed to have been executed
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by the Trustee if signed by an authorized signatory of the Trustee, but it shall
not be necessary that the same signatory sign the certificate of authentication
on all of the Bonds issued hereunder.
SECTION 2.05. FORM OF BONDS. The fully registered Series 1999 Bonds and
the form for transfer and the validation certificate to be printed thereon, and
the Trustee's certificate to be endorsed on all Series 1999 Bonds shall be in
substantially the form hereinafter set forth in Exhibit "A" hereto with such
appropriate variations, omissions, substitutions and insertions as are permitted
or required by this Indenture and may have such letters, numbers or other marks
of identification and such legends and endorsements placed thereon, as may be
required to comply with any applicable laws or rules or regulations, or as may,
consistently herewith, be determined by the officers executing such Series 1999
Bonds, as evidenced by their execution of the Series 1999 Bonds. The Bonds of
each series of Additional Bonds, and the various certificates to be endorsed
thereon shall be in substantially the forms respectively provided therefor in
the supplemental indenture under which each series of Additional Bonds is
issued, which forms shall in general be similar to the form applicable to the
Series 1999 Bonds, with such insertions, omissions and other variations as may
be necessary to conform to the provisions hereof and of such supplemental
indenture.
SECTION 2.06. MUTILATED, LOST, STOLEN OR DESTROYED BONDS. If any Bond
is mutilated, lost, stolen or destroyed, the Issuer may execute and the Trustee
may authenticate and deliver a new Bond in the same principal amount in lieu of
and in substitution for the Bond mutilated, lost, stolen or destroyed; provided
that, in the case of any mutilated Bond, such mutilated Bond shall first be
surrendered to the Trustee, and in the case of any lost, stolen or destroyed
Bond, there shall be first furnished to the Issuer and the Trustee evidence
satisfactory to them and to the Lessee of the ownership of such Bond and of such
loss, theft or destruction, together with indemnity satisfactory to them. If any
such Bond shall have fully matured, instead of issuing a new Bond the Issuer may
pay the same. The Issuer and the Trustee may charge the owner of such Bond with
their reasonable fees and expenses in this connection.
SECTION 2.07. TRANSFER OF BONDS; PERSONS TREATED AS OWNERS. The Issuer
shall cause books for the transfer of the Bonds as provided in this Indenture to
be kept by the Trustee which is hereby constituted and appointed the Bond
Registrar of the Issuer. Upon surrender for transfer of any Bond at the
Principal Office of the Trustee, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
fully registered Bond or fully registered Bonds in the same aggregate principal
amount of any authorized denomination or denominations. Fully registered Bonds
may be exchanged at the Principal Office of the Trustee for an equal aggregate
principal amount of fully registered Bonds of any authorized denomination or
denominations.
Any Bond shall be fully transferable by the registered owner on the
Bond Register to be provided for that purpose, upon presentation of such Bond
for notation of transfer thereof at the Principal Office of the Trustee, as Bond
Registrar, accompanied by a written instrument of transfer in form satisfactory
to the Bond Registrar duly executed by the registered owner or its attorney duly
authorized in writing. No service charge shall be made for any such transfer,
but the Bond Registrar may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith. The person in
whose name any Bond is registered from time to time shall be deemed and regarded
as the absolute owner thereof for all
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purposes and payment of or on account of the principal of and interest on such
Bond shall be made only to or upon the order of the registered owner thereof, or
its attorney duly authorized in writing, and neither the Issuer, the Trustee
(acting in its capacity as Bond Registrar or otherwise), nor any paying agent
acting for the Issuer shall be affected by any notice to the contrary. All such
payments shall be valid and effectual to satisfy and discharge the liability
upon the Bonds to the extent of the sum or sums so paid.
Anything in this Indenture to the contrary notwithstanding, there shall
not be effected, and the Trustee acting as Bond Registrar shall not permit the
effecting of, any transfer of any Bond pursuant to the provisions of this
Section, unless there is delivered to the Trustee (except for a transfer under
and pursuant to the Partnership Assignment and Security Agreement) an opinion of
Counsel satisfactory to the Trustee, the Issuer and the Lessee to the effect
that such transfer will not violate applicable securities laws.
All Bonds which have been surrendered to the Trustee pursuant to
Section 2.06 or 2.07 of this Indenture or for the purpose of payment upon
maturity or prepayment prior to maturity shall be cancelled and destroyed by the
Trustee and a certificate of destruction shall be delivered to the Issuer upon
the Issuer's request.
SECTION 2.08. HOME OFFICE PAYMENT AGREEMENT. Notwithstanding any
provision of this Indenture or of any Bond to the contrary, the Issuer and the
Trustee may enter into a home office payment agreement with the owner of any
Bond in an original principal amount of at least $100,000, providing for the
making to such owner of all payments of principal and interest on such Bond or
any part thereof (other than any payment of the entire unpaid principal amount
thereof) at a place and in a manner other than as provided in this Indenture and
in the Bonds without presentation or surrender of such Bond, upon such
conditions as shall be satisfactory to the Trustee (including the payment by the
Lessee of rental payments under the Lease directly to the owners of the Bonds in
satisfaction of the principal and interest on the Bonds). The Trustee agrees to
make or permit to be made payments of principal and interest on the Bonds in
accordance with the provisions of such home office payment agreement. The
Trustee shall not be liable to any such owner or to the Issuer for any act or
omission to act on the part of the Issuer, any such owner or any agent of the
Issuer, in connection with any such agreement, and the Trustee shall have no
obligation in connection with any payment of principal or interest made in
compliance with any such agreement and shall not be deemed to have notice of any
default in the making of any such payment. Upon the transfer of any registered
Bond being paid in accordance with the provisions of a home office payment
agreement permitted by this Section, the owner of such registered bond prior to
the delivery of such Bond to the transferee, shall make a notation on such Bond
of the date to which interest has been paid thereon and the amount of any
prepayments made on account of the principal thereof, and the Trustee shall not
be deemed to have notice of any such payment.
SECTION 2.09. REDEMPTION OF BONDS. The Series 1999 Bonds shall be
subject to redemption prior to maturity as set forth in Article III hereof, and
any series of Additional Bonds issued hereunder shall be subject to redemption
prior to maturity as provided in the supplemental indenture relating thereto.
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<PAGE>
SECTION 2.10. PROCEDURE FOR REDEMPTION OF BONDS. The Issuer and the Trustee
shall take all action necessary to effect the redemption of Bonds as herein
provided upon the receipt by the Trustee, at least 10 days prior to the date
fixed for redemption, of a certificate of the Lessee specifying the proposed
redemption date, the principal amount of the Bonds to be called for redemption,
the applicable redemption price or prices and the provision or provisions of
this Indenture pursuant to which such Series 1999 Bonds are to be called for
redemption.
SECTION 2.11. SELECTION OF BONDS TO BE REDEEMED; PARTIAL REDEMPTION OF
BONDS.
(a) If less than all of the Bonds are to be redeemed, the
Bonds to be redeemed shall be selected by the Trustee by lot.
(b) In the case of any redemption of Bonds of denominations
greater than $100,000, if less than all of such Bonds then outstanding
are to be called for redemption, then for all purposes in connection
with such redemption, each $100,000 of face value shall be treated as
though it were a separate Bond of the denomination of $100,000. If it
is determined that one or more, but not all of the $100,000 units of
face value represented by any Bond are to be called for redemption,
then, upon notice of intention to redeem such $100,000 unit or units,
the owner of such Bond shall forthwith surrender such Bond to the
Trustee (1) for payment of the redemption price of the $100,000 unit or
units of face value called for redemption and (2) in exchange for a new
Bond or Bonds of the aggregate principal amount of the unredeemed
balance of the principal amount of such Bond. New Bonds representing
the unredeemed balance of the principal amount of such Bond shall be
issued to the registered owner thereof without charge therefor. If the
owner of any such Bond of a denomination greater than $100,000 shall
fail to present such Bond to the Trustee for payment and exchange as
aforesaid, such Bond shall, nevertheless, become due and payable on the
date fixed for redemption to the extent of the $100,000 unit or units
of face value called for redemption (and to that extent only); interest
shall cease to accrue on the portion of the principal amount of such
Bond represented by such $100,000 unit or units of face value on and
after the date fixed for the redemption; and, provided funds sufficient
for the payment of the redemption price have been deposited with the
Trustee and are available for the redemption of said $100,000 unit or
units on the date fixed for redemption, such Bond shall not be entitled
to the benefit or security of this Indenture to the extent of the
portion of its principal amount (and accrued interest thereon to the
date fixed for redemption) represented by such $100,000 unit or units
of face value, nor shall new Bonds be thereafter issued corresponding
to such $100,000 unit or units.
SECTION 2.12. NOTICE OF REDEMPTION. Notice of the call for redemption
identifying the Bonds to be redeemed shall be given by the Trustee by mailing a
copy of the redemption notice by first class mail, postage prepaid, not less
than 10 nor more than 60 days prior to the redemption date to the registered
owner of each Bond to be redeemed, in whole or in part, at the address shown on
the Bond Register. Any notice mailed as provided in this Section shall be
conclusively presumed to have been duly given, whether or not the owner receives
such notice.
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<PAGE>
Each notice of redemption shall specify the date fixed for redemption,
the CUSIP number or numbers of the Bonds to be redeemed, the principal amount of
the Bonds or portions thereof to be redeemed, the redemption price or prices,
the place or places of payment, that redemption of the Bonds is contingent upon
the satisfaction of certain conditions or the occurrence of certain events (if
any) specified by the Lessee, that payment will be made upon presentation and
surrender of the Bonds to be redeemed (provided that the Bonds are not held in
book-entry only form), that interest accrued to the date fixed for redemption
will be paid as specified in said notice, and that on and after said date
interest thereon will cease to accrue. If less than all the outstanding Bonds
are to be redeemed, the notice of redemption shall specify the numbers of the
Bonds to be redeemed. In case any Bond is to be redeemed in part only, the
notice of redemption shall state that on and after the date fixed for
redemption, upon surrender of such Bond, a new Bond or Bonds in principal amount
equal to the unredeemed portion thereof will be issued without charge therefor.
Failure to give any such notice by mailing, or any defect therein,
shall not affect the validity of any proceedings for the redemption of any Bond
as to which notice was given as provided herein.
If the Lessee specifies any conditions to such redemption, unless all
conditions to redemption specified in the notice of redemption shall have been
satisfied or waived by the Lessee, such notice shall be of no force and effect,
the Issuer and the Trustee shall not redeem such Bonds and the bond registrar
shall promptly return the Bonds it has received to the registered owners thereof
as shown on the registration books. The Trustee may conclusively rely upon a
certificate of the Authorized Lessee Representative as to the satisfaction or
waiver of any conditions specified to any such redemption.
SECTION 2.13. ADDITIONAL NOTICE OF REDEMPTION. In the event any Bond to
be redeemed is registered in the name of any person other than the Purchaser,
further notice of redemption of such Bonds shall be given by the Trustee as set
out below, but no defect in said further notice nor any failure to give all or
any portion of such further notice shall in any manner defeat the effectiveness
of a call for redemption if notice thereof is given as prescribed in Section
2.14.
Each further notice of redemption given hereunder shall contain the
information required in Section 2.14 for an official notice of redemption, plus
(i) the CUSIP numbers of all Bonds being redeemed (if not included pursuant to
the notice required by Section 2.14); (ii) the date of issue of the Bonds as
originally issued; (iii) the rate of interest borne by each Bond being redeemed;
(iv) the maturity date of each Bond being redeemed; and (v) any other
descriptive information needed to identify accurately the Bonds being redeemed.
Each further notice of redemption shall be sent at least 30 days before
the redemption date by registered or certified mail or overnight delivery
service (at the expense of the addressee) to all of the following registered
securities depositories then in the business of holding substantial amounts of
bonds of the type comprising the Bonds (such depositories now being Depository
Trust Company of New York, New York; Midwest Securities Trust Company of
Chicago, Illinois; and Philadelphia Depository Trust Company of Philadelphia,
Pennsylvania) and to one or more national information services that disseminate
notices of redemption of bonds
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<PAGE>
such as the Bonds (such as Financial Information Inc.'s Financial Daily Called
Bond Service; Interactive Data Corporation's Bond Service; Kenny Information
Service's Called Bond Service; Moody's Investors Services Municipal and
Government and Standard & Poor's Called Bond Record).
Upon the payment of the redemption price of Bonds being redeemed, each
check or other transfer of funds issued for such purpose shall bear the CUSIP
number identifying, by issue and maturity, the Bonds being redeemed with the
proceeds of such check or other transfer.
SECTION 2.14. PAYMENT OF REDEMPTION PRICE; EFFECT OF CALL FOR
REDEMPTION. On or before the redemption date specified in the notice of
redemption, an amount of money sufficient (together with any moneys available
therefor in the Bond Fund) to redeem all the Bonds or portions thereof called
for redemption at the appropriate redemption price, including accrued interest
to the date fixed for redemption, shall be deposited with the Trustee. On the
date designated for redemption, if all conditions specified in such notice have
been satisfied, notice having been given and moneys for payment of the
redemption price being on deposit with the Trustee or any paying agents, the
Bonds or portions thereof so called for redemption shall cease to bear interest;
shall cease to be entitled to any benefit or any security under this Indenture;
and the registered owners thereof shall have no rights in respect to such Bonds
or such portions thereof so called for redemption except to receive payment of
the redemption price therefor and accrued interest thereon to the redemption
date from the moneys on deposit with the Trustee or any paying agents pursuant
to the provisions of this Section.
ARTICLE III
THE SERIES 1999 BONDS
SECTION 3.01. ISSUANCE OF SERIES 1999 BONDS. The Series 1999 Bonds (i)
shall be designated "Development Authority of Heard County Taxable Industrial
Development Revenue Bonds (Tenaska Georgia Partners, L.P. Project), Series
1999," (ii) shall be issuable in an aggregate principal amount of not to exceed
$400,000,000 as one or more fully registered Bonds in denominations of $100,000
or any integral multiple thereof, except that one Bond may be issued in an
integral multiple of $5,000 in excess of $100,000 as necessary given the
aggregate principal amount of Series 1999 Bonds to be issued, (iii) shall be
dated in the manner set forth in Section 2.02 hereof, (iv) shall be numbered
from R-1 consecutively upwards in order of authentication according to the
records of the Trustee, (v) shall bear interest at a rate of 9.5% per annum
(computed on the basis of a 360-day year composed of twelve 30-day months),
payable on February 1 and August 1 of each year (each an "Interest Payment
Date") until paid, from the Interest Payment Date next preceding the date of
authentication of such Bond to which interest has been paid or provided for,
unless: (1) the date of authentication of such Bond is an Interest Payment Date
to which interest has been paid or provided for, then from such Interest Payment
Date, or (2) no interest has been paid on such Bond, in which case from the date
of authentication and delivery of such Bond or (3) such authentication date
shall be after any Record Date and before the next succeeding Interest Payment
Date in which case interest shall be paid from the next succeeding Interest
Payment Date, and (vi) shall mature on the dates set forth below.
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<PAGE>
<TABLE>
<CAPTION>
MATURITY DATE PRINCIPAL MATURITY DATE PRINCIPAL
<S> <C> <C> <C>
February 1, 2006 344,000 February 1, 2018 5,844,000
August 1, 2006 344,000 August 1, 2018 5,844,000
February 1, 2007 344,000 February 1, 2019 6,532,000
August 1, 2007 344,000 August 1, 2019 6,532,000
February 1, 2008 688,000 February 1, 2020 6,875,000
August 1, 2008 688,000 August 1, 2020 6,875,000
February 1, 2009 1,032,000 February 1, 2021 7,219,000
August 1, 2009 1,032,000 August 1, 2021 7,219,000
February 1, 2010 1,375,000 February 1, 2022 7,563,000
August 1, 2010 1,375,000 August 1, 2022 7,563,000
February 1, 2011 1,719,000 February 1, 2023 8,250,000
August 1, 2011 1,719,000 August 1, 2023 8,250,000
February 1, 2012 2,407,000 February 1, 2024 8,594,000
August 1, 2012 2,407,000 August 1, 2024 8,594,000
February 1, 2013 3,094,000 February 1, 2025 8,938,000
August 1, 2013 3,094,000 August 1, 2025 8,938,000
February 1, 2014 3,438,000 February 1, 2026 9,282,000
August 1, 2014 3,438,000 August 1, 2026 9,282,000
February 1, 2015 4,125,000 February 1, 2027 9,969,000
August 1, 2015 4,125,000 August 1, 2027 9,969,000
February 1, 2016 4,469,000 February 1, 2028 11,688,000
August 1, 2016 4,469,000 August 1, 2028 11,688,000
February 1, 2017 5,157,000 February 1, 2029 12,375,000
August 1, 2017 5,157,000 August 1, 2029 12,375,000
February 1, 2030 12,358,000
===========
Total: 275,000,000
</TABLE>
Interest due on any Series 1999 Bond or any Interest Payment Date shall
be paid to the owner of such Series 1999 Bond as shown on the registration books
kept by the Registrar on the Record Date.
SECTION 3.02. FORM OF SERIES 1999 BONDS. The fully registered Series
1999 Bonds shall be in substantially the form set forth, to the extent provided
in Section 2.05 hereof, in Exhibit "A" hereto.
SECTION 3.03. AUTHENTICATION AND DELIVERY OF SERIES 1999 BONDS.
Immediately following the execution and delivery of this Indenture, the Issuer
will deliver a Series 1999 Bond executed by the Issuer to the Trustee, together
with an order signed by the Chairman or Vice Chairman of the Issuer calling for
the authentication and delivery of said Series 1999 Bond, and the Trustee in
accordance with such order, shall authenticate and deliver said Series 1999 Bond
as in this Indenture provided and not otherwise.
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<PAGE>
Prior to the authentication and delivery by the Trustee of the
aforesaid Series 1999 Bond which it will be initially ordered to authenticate
and deliver hereunder, there shall be filed with the Trustee:
1. A copy, duly certified by the Secretary of the Issuer, of
the resolution by the Issuer authorizing, among other things, the
issuance of the Series 1999 Bonds and the execution, delivery and
performance of this Indenture, the Lease Agreement, the Security Deed
and the Bond Purchase Agreement.
2. An original executed counterpart of this Indenture, the
Lease Agreement, the Security Deed, the Guaranty Agreement and the Bond
Purchase Agreement.
3. Copies of Financing Statements filed to perfect the
security interests created herein.
4. A title insurance policy satisfactory to the Purchaser
stating that the Issuer holds good and marketable fee simple title to
the Leased Land, free from encumbrances except Permitted Liens.
5. The written opinion of Counsel for the Issuer relating to
the power and authority of the Issuer to execute and deliver and to
perform its obligations under the various documents to which it is a
party and to issue the Bonds for the purposes stated therein, and the
due authorization, execution and delivery of such documents and the
Bonds, and covering such matters with respect to the liens and security
interests created under the Indenture and the Security Deed, and such
other matters, as may be reasonably requested by the parties to the
transaction.
6. A written request, order and authorization to the Trustee
on behalf of the Issuer and signed by its Chairman or Vice Chairman to
authenticate and deliver the Series 1999 Bonds in full form to or upon
the order of the Purchaser upon payment to the Trustee, but for the
account of the Issuer, of the sum specified in such request order and
authentication (which sum shall consist of the purchase price of the
Series 1999 Bonds set forth in the Bond Purchase Agreement) plus
accrued interest on the Series 1999 Bonds from the dated date thereof
to the date of delivery thereof. The proceeds from the sale of the
Series 1999 Bonds any such Bond shall be deposited in the Construction
Fund as hereinafter provided in Article VII.
7. An opinion of a firm of nationally recognized bond
attorneys satisfactory to the Trustee to the effect that (i) the
issuance of the Series 1999 Bonds has been duly authorized and the
terms thereof comply with the requirements of this Indenture and the
Constitution and laws of the State of Georgia; (ii) all conditions
precedent provided for in this Indenture relating to the authentication
and delivery of the Series 1999 Bonds have been satisfied; (iii) upon
the issuance of the Series 1999 Bonds, they shall be valid and binding
obligations of the Issuer entitled to the benefits of and secured by
this Indenture; and (iv) such other matters as may be reasonably
required by the Issuer and the Trustee; and
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<PAGE>
SECTION 3.04. OPTIONAL REDEMPTION OF SERIES 1999 BONDS. The Series 1999
Bonds are subject to redemption prior to maturity at any time in whole or in
part at a redemption price equal to the principal amount to be redeemed plus
accrued interest thereon to the date of redemption, at the option of the Lessee,
such option to be exercised by written notice delivered to the Issuer and the
Trustee at least 10 days prior to the date of redemption.
SECTION 3.05. PROCEDURES FOR REDEMPTION OF SERIES 1999 BONDS. The
procedures for redemption of Series 1999 Bonds pursuant to Section 3.04 hereof,
including notices of redemption, selection of Series 1999 Bonds for partial
redemption and certain other provisions relating thereto, shall be as set forth
in Article II of this Indenture.
ARTICLE IV
ADDITIONAL BONDS
SECTION 4.01. ADDITIONAL BONDS. By an indenture or indentures
supplemental hereto and in accordance with the provisions of this Indenture, the
Issuer may from time to time provide for the issuance hereunder of Additional
Bonds for the purpose of financing the cost of (i) completing the acquisition,
construction and installation of the Project, (ii) providing for the
enlargement, improvement, expansion or replacement of the Project, (iii)
refunding all of the Bonds of any one or more series then outstanding; or (iv)
any combination of the foregoing.
Such Additional Bonds shall be in fully registered form and have such
identifying designation, shall be dated such date, shall mature at such time or
times, shall bear interest at such rate or rates, shall be subject to prepayment
prior to maturity at such times and prices and shall contain such other
provisions not inconsistent with this Indenture as the resolution of the Issuer
and the supplemental indenture providing for the issuance thereof shall fix and
determine.
(a) ADDITIONAL BONDS FOR COMPLETION, EXPANSION, ETC. The
Issuer may execute and deliver to the Trustee and the Trustee shall
authenticate and deliver Additional Bonds for the purposes specified in
(i) or (ii) above upon receipt by the Trustee of the following:
(1) A written statement of the Lessee executed on
behalf of the Lessee by any officer, chairman of the board,
president or vice president of the general partner of the
Lessee (i) approving the terms, conditions, manner of
issuance, purchase price, delivery and contemplated
disposition of the proceeds of the sale of such Additional
Bonds, and (ii) certifying that no Event of Default has
occurred and is continuing under the Lease Agreement or, to
the best of his knowledge, this Indenture and that all
conditions precedent to the incurrence of such indebtedness
set forth in the Common Agreement have been satisfied or
waived;
(2) A copy, duly certified by the Secretary of the
Issuer, of the resolution adopted and approved by the Issuer
authorizing the issuance of such Additional Bonds and the
execution and delivery of the supplemental indenture
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<PAGE>
providing for the terms and conditions under which such
Additional Bonds shall be issued, together with an executed
counterpart of such supplemental indenture;
(3) An executed counterpart of an amendment of the
Lease Agreement expressly providing for an adjustment in the
rentals of the Lessee to provide payments sufficient to pay
the principal of and interest on such Additional Bonds and
further expressly providing that, for all purposes of this
Indenture and the Lease Agreement, the Project shall include
the facilities being financed by the Additional Bonds (except
in the case of Refunding Bonds hereinafter referred to), and
providing for the use of the proceeds of the sale of such
Additional Bonds;
(4) An original executed counterpart of a guaranty
agreement substantially identical to the Guaranty Agreement in
all material respects and satisfactory to the Trustee and its
Counsel as to form and content, signed by the Lessee, as
guarantor, and accepted by the Trustee unconditionally
guaranteeing the principal of and interest on such Additional
Bonds.
(5) Copies of Financing Statements filed to protect
the security interests created in the supplemental indenture
with respect to the Additional Bonds;
(6) The written opinion of Counsel to the Issuer or
other Counsel satisfactory to the Trustee expressing the
opinion (a) that this Indenture, as supplemented, creates a
valid first lien on and pledge of the revenues thereby
conveyed and pledged, and all filings and/or recordings of any
document required in order to perfect and preserve such first
lien and pledge have been duly accomplished, and (b) that the
amendment to the Lease Agreement has been properly recorded in
the proper place or places where such recordation is required
for the giving of notice thereof, such recordation is complete
and no other filing, recording, publishing or rerecording is
required.
(7) An opinion of a firm of nationally recognized
bond attorneys satisfactory to the Trustee to the effect that
(i) the issuance of such Additional Bonds has been duly
authorized and the terms thereof comply with the requirements
of this Indenture and the Constitution and laws of the State
of Georgia; (ii) all conditions precedent provided for in this
Indenture relating to the authentication and delivery of such
Additional Bonds have been satisfied; (iii) upon the issuance
of such Additional Bonds, they shall be valid and binding
obligations of the Issuer entitled to the benefits of and
secured by this Indenture; and (iv) such other matters as may
be reasonably required by the Issuer and the Trustee; and
(8) A written request, order and authorization to the
Trustee on behalf of the Issuer and signed by the Chairman or
Vice Chairman and Secretary of the Issuer to authenticate and
deliver such Additional Bonds to the purchaser or purchasers
therein identified upon payment to the Trustee, but for the
account of
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<PAGE>
the Issuer, of the sum specified in such request and
authorization plus accrued interest on such Additional Bonds
to the date of delivery thereof.
The proceeds of such Additional Bonds shall be deposited with the
Trustee and held and disbursed by the Trustee as provided in the supplemental
indenture providing for the issuance of such Additional Bonds.
(b) ADDITIONAL BONDS FOR REFUNDING. The Issuer may execute and
deliver to the Trustee and the Trustee shall authenticate and deliver
Additional Bonds for the purpose specified in (iii) above upon receipt
by the Trustee of the following:
(1) The items specified in subsections (1) through
(7) of Section 4.01(a) hereof;
(2) A copy, duly certified by the Secretary of the
Issuer, of the resolution adopted and approved by the Issuer
describing the Bonds to be refunded, and authorizing all
necessary action in connection with the refunding thereof
pursuant to the provisions of this Indenture;
(3) In the event that any of the Bonds being refunded
are to be prepaid on any date prior to their maturity,
irrevocable instructions to prepay such Bonds on such date and
evidence satisfactory to the Trustee that notice of prepayment
of the Bonds to be prepaid has been published or given as
provided in the Indenture, or irrevocable power authorizing
the Trustee to give such notice;
(4) Irrevocably in trust for the purpose of paying or
prepaying the Bonds to be refunded, either moneys or
Government Obligations or a combination thereof in an amount
which, together with the interest thereon, is sufficient to
discharge the lien of this Indenture with respect to the Bonds
to be refunded;
(5) Moneys equal to the sum of (i) the amount
estimated by the Trustee as necessary for the payment of
expenses incurred or to be incurred by it or by or on behalf
of the Issuer in connection with the payment or prepayment of
the Bonds to be refunded and the issuance of such Additional
Bonds plus (ii) the accrued interest, if any, on the
Additional Bonds to the date of delivery thereof; and
(6) A written request, order and authorization to the
Trustee on behalf of the Issuer and signed by the Chairman or
Vice Chairman and Secretary of the Issuer to authenticate and
deliver such Additional Bonds to the purchaser or purchasers
therein identified upon payment or delivery to the Trustee for
the account of the Issuer of the moneys or Government
Obligations or combination thereof required by subsection (5)
next above, as the consideration for the sale of such
Additional Bonds.
The amounts estimated by the Issuer and the Trustee for payment of
their respective expenses incurred or to be incurred in connection with the
payment or prepayment of the Bonds to be refunded and the issuance of such
Additional Bonds shall be set aside by the Trustee from
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<PAGE>
the proceeds of such Additional Bonds and applied by the Trustee in payment of
such expenses. Any amount of the moneys set aside for the payment of such
expenses remaining after all such expenses have been paid or provided for shall
be transferred by the Trustee to the Bond Fund. The balance of the proceeds of
the sale of such Additional Bonds remaining after the deposit of the amount set
aside for the payment of the expenses incurred or to be incurred in connection
with the payment or prepayment of the Bonds to be refunded and the issuance of
such Additional Bonds shall be held by the Trustee in trust for the sole and
exclusive purpose of paying the principal of and interest on, the Bonds to be
refunded.
SECTION 4.02. PARITY OF BONDS. Each of such Additional Bonds of
whatever series shall rank equally and on a parity with the Series 1999 Bonds
and shall be equally and ratably secured hereunder and under the Security Deed
with the Series 1999 Bonds and all other series of Additional Bonds, if any,
without preference, priority or distinction of any of the aforesaid Bonds, or
any coupons appertaining thereto, over any other thereof. The Issuer shall not
incur any indebtedness or issue any bonds or other obligations of any kind
(other than the Series 1999 Bonds and any Additional Bonds) secured by a pledge
of the rental payments received under the Lease Agreement.
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants
that it will promptly pay the principal of and interest on the Bonds at the
place, on the dates and in the manner provided herein and in the Bonds according
to the true intent and meaning hereof and thereof. The principal and interest
are payable solely from (i) the Trust Estate (except for the Unassigned Rights),
and (ii) payments made under the Guaranty Agreement, which payments, rents,
revenues and receipts are hereby specifically pledged to the payment of the
principal of and interest on the Bonds in the manner and to the extent herein
specified. The Bonds and the interest thereon shall not be deemed to constitute
a debt or a general obligation of the State of Georgia or Heard County, and the
Bonds do not directly, indirectly or contingently obligate said State or County
to levy or to pledge any form of taxation whatsoever for the payment of the
principal of or interest on the Bonds. The principal of and interest on the
Bonds are payable solely from the Bond Fund and specifically from the Special
Account established therein pursuant to Section 6.02 hereof.
SECTION 5.02. PERFORMANCE OF COVENANTS; ISSUER. The Issuer covenants
that it will faithfully perform at all times any and all covenants, agreements,
undertakings, stipulations and provisions contained in this Indenture, in any
and every Bond, and in all proceedings of the Issuer pertaining thereto. The
Issuer covenants that it is duly authorized under the laws of the State of
Georgia to issue the Bonds and to execute, deliver and perform the Indenture and
to pledge the Trust Estate (except for the Unassigned Rights) in the manner and
to the extent herein set forth; that all action on its part for the issuance of
the Bonds and the execution, delivery and performance of this Indenture has been
duly and effectively taken, and that the Bonds are and will be valid and
enforceable limited obligations of the Issuer according to the import thereof.
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<PAGE>
SECTION 5.03. OWNERSHIP; INSTRUMENTS OF FURTHER ASSURANCE. The Issuer
covenants that it lawfully owns and is lawfully possessed of the Leased Land
(subject, however, to Permitted Liens) and that it has good and marketable fee
simple title therein and thereto and that it holds and owns the Building and the
Leased Equipment and that it will defend its title in and to the Leased Land and
every part thereof to the Trustee, and its respective successors and assigns,
for the benefit of the owners of the Bonds against the claims and demands of all
persons whomsoever. The foregoing covenants are subject to the limitations
described in Section 3.4 of the Lease Agreement. The Issuer covenants that it
will do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, such indentures supplemental hereto and such further
acts, instruments and transfers as the Trustee may reasonably require for the
better giving, granting, pledging, assigning, conveying, transferring, assuring
and confirming unto the Trustee all and singular the rents, revenues and
receipts pledged hereby to the payment of the principal of and interest on the
Bonds. The Issuer covenants that, except for the Quitclaim Deed, and except as
herein and in the Lease Agreement and Security Deed provided, it will not sell,
convey, encumber or otherwise dispose of any part of the Project.
SECTION 5.04. [INTENTIONALLY OMITTED].
SECTION 5.05. [INTENTIONALLY OMITTED].
SECTION 5.06. RECORDATION OF THE LEASE AGREEMENT, SECURITY DEED, FINANCING
STATEMENTS AND CONTINUATION STATEMENTS. The Issuer covenants that it will cause
the Lease Agreement, the Security Deed and all Financing Statements and all
supplements thereto and hereto to be recorded and filed in such manner and in
such places as may be required by law in order to fully protect and preserve the
interest of the owners of the Bonds in the rights, privileges and options of the
Trustee hereunder and the Lessee has covenanted in Section 8.8 of the Lease
Agreement to cause continuation statements with respect to said Financing
Statements to be kept recorded and filed in such manner and in such places as
may be required by law in order to fully protect and preserve the interest of
the owners of the Bonds as aforesaid.
SECTION 5.07. INSPECTION OF PROJECT BOOKS. The Issuer covenants that all
books and documents in its possession relating to the rents, revenues and
receipts derived from the Project shall at all times during normal business
hours be open to inspection by such accountants or other agents as the Trustee
may, from time to time, designate. The Lessee shall be given at least 48 hours
prior written notice of any such inspection and the opportunity to have a
representative present during such inspection.
SECTION 5.08. PRIORITY OF PLEDGEE. The pledge hereby made of the Trust
Estate (except for the Unassigned Rights) constitutes a first and prior pledge
thereof and shall not be impaired directly or indirectly by the Issuer or the
Trustee and the payments, rents, revenues and receipts from the Project and the
Issuer's interest in the Lease Agreement shall not otherwise be pledged and no
persons shall have any rights with respect thereto except as provided herein and
in the Lease Agreement and Security Deed.
SECTION 5.09. RIGHTS UNDER LEASE AGREEMENT. Reference is hereby made to
the Lease Agreement for a detailed statement of the obligations of the Lessee
thereunder, and the Issuer agrees that the Trustee in its own name or in the
name of the Issuer may enforce all rights
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<PAGE>
of the Issuer (except for the Unassigned Rights) and all obligations of the
Lessee under and pursuant to the Lease Agreement for and on behalf of the owners
of the Bonds, whether or not the Issuer is in default hereunder.
SECTION 5.10. QUITCLAIM DEED TO BE HELD BY TRUSTEE. The Trustee agrees
that it will hold or cause to be held the Quitclaim Deed in escrow hereunder
as a part of the Trust Estate, and will deliver or cause to be delivered the
Quitclaim Deed to the Lessee at the written direction of the Lessee after
Payment in Full of the Bonds.
ARTICLE VI
REVENUES AND FUNDS
SECTION 6.01. SOURCE OF PAYMENT OF BONDS. The obligation of the Issuer
to pay the principal of and interest on the Bonds is not a general obligation
of the Issuer but is a limited obligation payable solely from the rental
payments and other payments received from the Lessee under the Lease
Agreement together with all other rents, revenues and receipts (except for
certain indemnification rights provided therein) arising out of or in
connection with the Issuer's ownership of the Project and as authorized and
provided herein.
The Project has been leased under the Lease Agreement and the rental
payments provided for in Section 5.3 of the Lease Agreement are to be remitted
directly to the Trustee for the account of the Issuer and are to be deposited in
the Bond Fund (except as may be otherwise provided in a home office payment
agreement authorized by the provisions of Section 2.08 hereof). Said rental
payments are sufficient in amount and become due in a timely manner so as to
insure the prompt payment of the principal of and interest on the Bonds.
The Bond Purchase Agreement contains a home office payment agreement in
satisfaction of the requirements of Section 2.08 hereof.
The Lessee has also executed the Guaranty Agreement wherein the Lessee,
as guarantor, has absolutely and unconditionally guaranteed the full and prompt
payment of the principal of and interest on the Bonds.
SECTION 6.02. CREATION OF THE BOND FUND. There is hereby created by the
Issuer and ordered established with the Trustee a trust fund to be designated
"Development Authority of Heard County Bond Fund - Tenaska Georgia Partners,
L.P. Project, Series 1999", which shall be used to pay the principal of and
interest on the Bonds. There shall be established as trust accounts within
the Bond Fund a General Account and a Special Account. The Special Account
may be established by the Trustee for bookkeeping purposes only and moneys
designated as being held in the Special Account may be held in any segregated
account designated by the Trustee for such purpose. Any reference in this
Indenture to "Bond Fund" without further qualification or explanation shall
constitute a reference to said General Account.
SECTION 6.03. PAYMENTS INTO THE BOND FUND. There shall be paid into the
Bond Fund, as and when received, (a) all rental payments specified in Section
5.3 of the Lease Agreement (except for any moneys paid directly to the owner
of a fully registered Bond pursuant to the provisions at a home office
payment agreement permitted pursuant to Section 2.08 above
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and described in Section 6.01 above), (b) all moneys, if any, required to be so
deposited from the Construction Fund as provided in the Collateral Agency
Agreement, (c) all other moneys received by the Trustee under and pursuant to
any of the provisions of the Lease Agreement, the Collateral Agency Agreement,
the Security Deed or this Indenture which are required or which are accompanied
by directions that such moneys are to be paid into the Bond Fund, and (d) any
moneys received from the Lessee, as guarantor pursuant to the Guaranty
Agreement.
The Issuer covenants that so long as any of the Bonds are outstanding
it will pay, or cause to be paid, into the Bond Fund from the sources of payment
described in Section 6.01 hereof sufficient moneys to promptly pay the principal
of and interest on the Bonds as the same become due and payable. Nothing herein
shall be construed as requiring the Issuer to operate the Project or to use any
funds from any source to pay the principal of and interest on the Bonds or to
pay the costs of maintaining and insuring the Project other than rents, revenues
and receipts arising out of or in connection with its ownership of the Project.
SECTION 6.04. USE OF MONEYS IN THE BOND FUND.
(a) Except as provided in Section 6.09 hereof, moneys in the Bond
Fund shall be used solely for the payment of the principal of and interest
on the Bonds. No part of the rental payments under the Lease Agreement
required to be paid into the Bond Fund (excluding prepayments under
Section 9.5 of the Lease Agreement) shall be used to redeem, prior to
maturity, a portion of any Bond; provided, that whenever the moneys held
in the Bond Fund (in the General Account and in the Special Account) from
any source whatsoever are sufficient to redeem or otherwise pay all of the
Bonds and to pay interest to accrue thereon prior to such redemption or
other payment, the Issuer agrees to take and cause to be taken the
necessary steps to redeem all of the Bonds from the sources herein
provided on the next succeeding redemption date for which the required
redemption notice can be given; and, provided further, that any moneys in
the Bond Fund other than rental payments may, at the direction of the
Lessee, be used to redeem a portion of the Bonds so long as the Lessee is
not in default with respect to any rental payments under the Lease
Agreement.
(b) At the maturity date or redemption date prior to maturity of each
Bond the Trustee shall transfer from the General Account in the Bond Fund
to the Special Account in the Bond Fund sufficient moneys to pay the
principal or redemption price of and interest then due and payable with
respect to each such Bond. Moneys so transferred into said Special Account
shall not thereafter be invested in any manner but shall be held by the
Trustee without liability on the part of the Trustee or the Issuer for
interest thereon until actually paid out for the purposes intended.
The Issuer hereby authorizes and directs the Trustee to withdraw, from
time to time, sufficient moneys from the Special Account in the Bond Fund to pay
the principal or redemption price of and interest on the Bonds as the same
become due and payable, which authorization and direction the Trustee hereby
accepts.
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SECTION 6.05. CUSTODY OF THE BOND FUND. The Bond Fund shall be held by the
Trustee as a trust fund for the benefit of the owners of the Bonds. The General
Account and the Special Account established in the Bond Fund shall constitute
trust accounts.
SECTION 6.06. NON-PRESENTMENT OF BONDS AT MATURITY. If any Bond shall not
be presented for payment when the principal thereof becomes due, either at
maturity or at the prepayment date, provided moneys sufficient to pay such Bond
shall have been made available to the Trustee and are held in the Special
Account in the Bond Fund for the benefit of the owner thereof, all liability of
the Issuer to the owner thereof for the payment of such Bond shall forthwith
cease, determine and be completely discharged, and thereupon it shall be the
duty of the Trustee to hold such moneys in said Special Account, without
liability for interest thereon, for the benefit of the owner of such Bond who
shall thereafter be restricted exclusively to moneys held in said special
account, for any claim of whatever nature on his part under this Indenture or
on, or with respect to, such Bond.
SECTION 6.07. TRUSTEE'S FEES, CHARGES AND EXPENSES. Pursuant to the terms
of the Lease Agreement the Lessee has agreed to pay directly to the Trustee,
until the principal of and interest on the Bonds shall have been paid in full:
(i) an amount equal to the annual fee of the Trustee for its services rendered
as Trustee, paying agent and Bond Registrar and its expenses incurred under this
Indenture, as and when the same become due, (ii) the reasonable fees and
expenses of Trustee's Counsel, as and when the same become due. It is further
understood and agreed that the initial or acceptance fees of the Trustee and the
fees, charges and expenses of the Trustee and Trustee's Counsel referred to in
the preceding sentence which become due prior to the time the Lessee becomes
obligated to pay the same, will be paid to the Trustee, as and when the same
shall become due, as set forth in Section 4.3 of the Lease Agreement.
SECTION 6.08. MONEYS TO BE HELD IN TRUST. All moneys, if any, paid over to
the Trustee for the account of the Bond Fund under any provision of this
Indenture shall be held in trust by the Trustee for the benefit of the owners of
the Bonds entitled to be paid therefrom.
SECTION 6.09. REPAYMENT TO THE LESSEE FROM THE BOND FUND.
(a) Any moneys remaining in the General Account in the Bond Fund after
payment in full of all Bonds (taking into consideration that sufficient
moneys or obligations such as are described in Section 10.02 hereof have
been transferred to and/or deposited in the Special Account in the Bond
Fund to pay all principal of and interest then due and payable with respect
to each Bond not yet presented for payment and to pay all principal and
interest relating to each Bond which is not yet due and payable but with
respect to which the lien of this Indenture has been defeased upon
compliance with Article X hereof) and of the fees, charges and expenses of
the Trustee, any paying agents and the Bond Registrar which have accrued
and which will accrue and all other items required to be paid hereunder
(other than items payable from the Special Account in the Bond Fund), shall
be paid to the Collateral Agent upon the expiration or sooner termination
of the term of the Lease Agreement.
(b) Any moneys held by the Trustee in the Special Account in the Bond
Fund
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in trust for the payment of the principal of or interest on any Bond
remaining unclaimed for two years after such principal or interest has
become due and payable shall be paid to the Collateral Agent, and the owner
of such Bond shall thereafter, as an unsecured general creditor, look only
to the Lessee for the payment thereof and all liability of the Issuer and
the Trustee with respect to such trust money shall thereupon cease.
ARTICLE VII
CUSTODY AND APPLICATION OF PROCEEDS OF BONDS
SECTION 7.01. CONSTRUCTION FUND; DISBURSEMENTS. The proceeds derived from
the sale of the Bonds and moneys received from the Lessee pursuant to Section
6.2 of the Lease Agreement shall be paid into the Construction Fund under the
Collateral Agency Agreement. Moneys in the Construction Fund shall be disbursed
in the manner and subject to the conditions set forth in the Collateral Agency
Agreement, upon receipt of requisitions submitted to the Collateral Agent in
accordance with Section 3.1 of the Collateral Agency Agreement, which shall
contain, among other things, certain representations and certifications by the
Lessee, including that proceeds derived from the sale of the Bonds have been,
and will be, spent only on Project Costs, as defined in the Common Agreement.
SECTION 7.02. COMPLETION OF THE PROJECT. The completion of the acquisition,
construction and installation of the Project and the payment of all costs and
expenses incident thereto shall be evidenced by the filing with the Trustee of
(i) the certificate of the Lessee executed on behalf of the Lessee by an
Authorized Lessee Representative required by Section 4.5 of the Lease Agreement
and (ii) a certificate signed on behalf of the Issuer by the Authorized Issuer
Representative and on behalf of the Lessee by an Authorized Lessee
Representative (designated pursuant to the terms of the Lease Agreement), which
certificate shall state that all costs and expenses in connection with the
Project and payable out of the Construction Fund have been paid except for costs
and expenses not then due and payable with respect to which funds are being
retained in the Construction Fund with the approval of the Lessee and the Issuer
for the payment of the same. Any moneys remaining in the Construction Fund
shall, without further authorization be applied or disbursed in accordance with
the Collateral Agency Agreement.
SECTION 7.03. APPOINTMENT OF AGENT. The Trustee hereby appoints the
Collateral Agent as its agent under the Collateral Agency Agreement in
connection with the administration of the Project Funds thereunder.
ARTICLE VIII
INVESTMENTS
SECTION 8.01. BOND FUND INVESTMENTS. Moneys held in the Bond Fund (other
than moneys held in the Special Account in the Bond Fund referred to in Section
6.04(b) hereof) shall be invested and reinvested by the Trustee in Permitted
Investments at the oral direction of the Lessee, promptly confirmed in writing,
in accordance with Section 4.8 of the Lease Agreement. Such investments shall be
held by or under the control of the Trustee and shall be
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deemed at all times a part of the Bond Fund and the interest accruing thereon
and any profit resulting therefrom shall be credited to the Bond Fund and any
loss resulting therefrom shall be charged to the Bond Fund. The Trustee is
directed to sell and convert to cash a sufficient amount of such investments in
the Bond Fund whenever the cash held in the Bond Fund is insufficient to provide
for the payment of the principal of (whether at the maturity date or prepayment
date prior to maturity) and interest on the Bonds as the same become due and
payable.
Unless otherwise confirmed in writing, an account statement delivered
by the Trustee to the Lessee shall be deemed written confirmation by the Lessee
that the investment transactions identified therein accurately reflect the
investment directions given to the Trustee by the Lessee, unless the Lessee
notifies the Trustee in writing to the contrary within 30 days of the date of
receipt of such statement.
ARTICLE IX
POSSESSION, USE AND PARTIAL RELEASE OF PROJECT
SECTION 9.01. SUBORDINATION TO RIGHTS OF THE LESSEE. So long no Event of
Default exists under the Lease Agreement, the Security Deed or this Indenture,
the rights, options and privileges hereunder of the Trustee (other than rights
of the Trustee set forth in Article XII hereof) and the owners of the Bonds, are
specifically made subject and subordinate to the rights, options, obligations
and privileges of the Lessee set forth in the Lease Agreement. So long as not
otherwise provided in this Indenture, the Lessee shall be suffered and permitted
to possess, use and enjoy the Project and its appurtenances so as to carry out
its obligations under the Lease Agreement.
SECTION 9.02. RELEASE OF CERTAIN LAND. Reference is made to the provisions
of the Lease Agreement, including, without limitation, Sections 8.6 and 11.3
thereof, wherein the Issuer and the Lessee have reserved the right to withdraw
certain portions of the Leased Land from the Lease Agreement and the Security
Deed upon compliance with the terms and conditions of the Lease Agreement. The
Trustee shall release from this Indenture all rights to and liens on such
portion of the Leased Land and the revenues and receipts derived from such
released land upon compliance with the provisions of the Lease Agreement and the
Security Deed. The Trustee is hereby authorized and directed to execute and
record or cause to be executed and to be properly recorded any and all
instruments reasonably requested by the Lessee to effectuate a conveyance of the
Leased Land so released and to terminate any security interest or other lien
with respect thereto.
SECTION 9.03. RELEASE OF LEASED EQUIPMENT. Reference is made to the
provisions of the Lease Agreement, including, without limitation, Section 6.2
thereof, wherein the Lessee has reserved the right to withdraw certain items of
Leased Equipment from the Lease Agreement and the Security Deed upon compliance
with the terms and conditions of the Lease Agreement. The Trustee shall at the
request of the Issuer or the Lessee confirm that all rights to and liens on such
portion of the Leased Equipment and the rents, revenues and receipts derived
from such withdrawn items under this Indenture shall be relinquished upon
compliance with the provisions of the Lease Agreement and the Security Deed. The
Trustee is hereby authorized and directed to execute and record or cause to be
executed and properly recorded any and all
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instruments reasonably requested by the Lessee to effectuate a conveyance of the
Leased Equipment so released and to terminate any security interest or other
lien with respect thereto.
SECTION 9.04. GRANTING OR RELEASE OF EASEMENTS; AMENDMENTS OR MODIFICATIONS
TO EASEMENTS. Reference is made to the provisions of the Lease Agreement,
including, without limitation, Section 8.5 thereof, wherein the Lessee has
reserved the right to grant or release easements or to amend or modify easements
and take other action upon compliance with the terms and conditions of the Lease
Agreement. The Trustee shall confirm in writing any action taken by the Lessee
under said Section 8.5 upon compliance with the provisions of the Lease
Agreement.
ARTICLE X
DISCHARGE OF LIEN
SECTION 10.01. DISCHARGE OF LIEN. If the Issuer shall pay or cause to be
paid the principal of and interest on the Bonds at the times and in the manner
stipulated therein and herein, and if the Issuer shall keep, perform and observe
all and singular the covenants and agreements in the Bonds and in this Indenture
expressed as to be kept, performed and observed by it or on its part, then the
lien of this Indenture, these presents and the Trust Estate shall cease,
determine and be void, and thereupon the Trustee shall cancel and discharge this
Indenture, the Security Deed and the Security Interests, and shall execute and
deliver to the Issuer such instruments in writing as shall be required to cancel
and discharge this Indenture, the Security Deed and the Security Interest, and
reconvey to the Issuer the Trust Estate, and assign and deliver to the Issuer so
much of the Trust Estate as may be in its possession or subject to its control,
except for moneys and Government Obligations held in the Bond Fund for the
purpose of paying Bonds which have not yet been presented for payment and moneys
and obligations in the Bond Fund required to be paid to the Lessee pursuant to
Section 6.09 hereof. At the written direction of the Lessee and upon Payment in
Full of the Bonds, the Trustee shall deliver the Quitclaim Deed to the Lessee.
SECTION 10.02. PROVISION FOR PAYMENT OF BONDS. Bonds shall be deemed to
have been paid within the meaning of Section 10.01 hereof if:
(a) (i) there shall have been irrevocably deposited in the
Bond Fund either
(A) sufficient moneys, or
(B) Government Obligations of such maturities and interest
payment dates and bearing such interest as will, in the opinion
of a nationally recognized certified public accountant or firm
thereof, without further investment or reinvestment of either the
principal amount thereof or the interest earnings thereon (said
earnings to be held in trust also), be sufficient, together with
any moneys referred to in subsection (i) above, for the payment
at their respective maturities or prepayment dates prior to
maturity, of the principal thereof, together
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with the interest accrued and to accrue to such maturity or
prepayment dates, as the case may be; and
(ii) if any Bonds are to be prepaid on any date prior to their
maturity, the Issuer shall have given to the Trustee in form
satisfactory to the Trustee irrevocable instructions to prepay such
Bonds on such date and either evidence satisfactory to the Trustee
that all prepayment notices required by this Indenture have been given
or irrevocable power authorizing the Trustee to give such prepayment
notices; or
(b) with respect to any Bond, the owner thereof shall have
deposited such Bond with the Trustee with irrevocable instructions to
the Trustee that such Bond shall be cancelled; and
(c) with respect to both (a) and (b), above, there shall have
been paid to the Trustee all Trustee's fees and expenses (including
its fees and expenses in connection with its duties as paying agent
and bond registrar) due or to become due in connection with the
payment or prepayment of the Bonds.
SECTION 10.03. DISCHARGE OF THE INDENTURE. Notwithstanding the fact that
the lien of this Indenture upon the Trust Estate may have been discharged and
cancelled in accordance with Section 10.01 hereof, this Indenture and the rights
granted and duties imposed hereby, to the extent not inconsistent with the fact
that the lien upon the Trust Estate may have been discharged and cancelled,
shall nevertheless continue and subsist until the principal of and interest on
all of the Bonds shall have been fully paid or the Trustee shall have returned
to the Lessee pursuant to this Indenture all funds theretofore held by the
Trustee for payment of any Bonds not theretofore presented for payment.
ARTICLE XI
DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDHOLDERS
SECTION 11.01. DEFAULTS; EVENTS OF DEFAULT. The declaration of a "Trigger
under the Collateral Agency Agreement, subject to the terms of Section 11.12
hereof, is hereby defined as and declared to be and to constitute an "event of
default" under this Indenture.
SECTION 11.02. ACCELERATION. Upon the occurrence of an event of default,
the Trustee may, with the written consent of the Collateral Agent, and shall,
upon written direction of the Collateral Agent, by notice to the Issuer, declare
the entire unpaid principal of and interest on the Bonds due and payable; and
upon such declaration, the said principal, together with interest accrued
thereon, shall become payable immediately at the place of payment provided
therein, anything in this Indenture or in the Bonds to the contrary
notwithstanding. Upon any declaration of acceleration hereunder, the Trustee
shall immediately declare all rental payments due under the Lease Agreement to
be immediately due and payable in accordance with Section 10.2 of the Lease
Agreement.
SECTION 11.03. SURRENDER OF POSSESSION OF PROJECT; RIGHTS AND DUTIES OF
TRUSTEE IN POSSESSION. Upon the occurrence of an event of default the Lessee,
upon demand of the Trustee in accordance with the instruction of the Collateral
Agent, shall forthwith surrender the
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possession of, and it shall be lawful for the Trustee, by such officer or agent
as it may appoint, to take possession of all or any part of the Project,
including the rights and the position of the Issuer under the Lease Agreement,
and the Trustee shall be authorized to hold, operate and manage the same, and,
from time to time, make all needful repairs and improvements as it shall deem
wise; and the Trustee, subject to the Lease Agreement may, in accordance with
the instruction of the Collateral Agent, lease the Project or any part thereof
in the name and for the account of the Issuer and collect, receive and sequester
the rents, revenues, earnings, income, products and profits therefrom, and out
of the same and of any moneys received from any receiver of the same, pay
expenses of so taking, holding and managing the same, including reasonable
compensation to the Trustee, its agent and counsel, and any charges of the
Trustee hereunder, and any taxes and assessments and other charges prior to the
lien and security interests of this Indenture and the Security Deed which the
Trustee may deem it wise to pay, and all expenses of such repairs and
improvements, and apply the remainder of the moneys to received in accordance
with the provisions of Section 11.09. Whenever all that is due and payable with
respect to the Bonds shall have been paid in full or all defaults under this
Indenture made good, the Trustee shall surrender possession to the Issuer, its
successors or assigns, but the Trustee shall have the same right of entry upon
any subsequent event of default hereunder.
While in possession of such property, the Trustee shall render annually
to the Issuer and the Lessee and also to the owners of the Bonds at their
addresses as shown by the registration books kept by the Trustee a summarized
statement of income and expenditures in connection therewith.
SECTION 11.04. OTHER REMEDIES. Upon the occurrence and continuance of an
event of default the Trustee shall have the power to proceed, in accordance with
the instructions of the Collateral Agent, with any right or remedy granted by
the Constitution and laws of the State of Georgia, as it may deem best,
including any suit, action or special proceeding in equity or at law for the
specific performance of any covenant or agreement contained herein or for the
enforcement of any proper, legal or equitable remedy as the Trustee shall deem
most effectual to protect the rights aforesaid, insofar as such may be
authorized by law, and the right to the appointment, as a matter of right and
without regard to the sufficiency of the security afforded by the Trust Estate,
of a receiver for all or any part of the Trust Estate and the rents, revenues
and receipts thereof; the rights herein specified are to be cumulative to all
other available rights, remedies or powers and shall not exclude any such
rights, remedies or powers. Without intending to limit the foregoing rights,
remedies and powers by virtue of such specification, the Trustee is authorized
to exercise any and all rights available from time to time under the U.C.C.
including the right to further assign the Issuer's right, title and interest in
the Lease Agreement to a successor trustee in the manner set forth in this
Indenture.
SECTION 11.05. RIGHTS OF BONDHOLDERS. Upon the occurrence and continuance
of an event of default and if requested so to do by the owners of a majority in
principal amount of Bonds outstanding and provision of indemnity to the Trustee
as provided in Section 12.01(m) hereof, the Trustee shall be obliged to exercise
such one or more of the rights and remedies conferred by this Article as such
owners of the Bonds shall have instructed the Trustee, subject, however to the
provisions of Section 12.15.
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No right or remedy by the terms of this Indenture conferred upon or
reserved to the Trustee (or to the owners of the Bonds) is intended to be
exclusive of any other right or remedy, but each and every such right and remedy
shall be cumulative and shall be in addition to any other right or remedy given
to the Trustee or to the owners of the Bonds or now or hereafter existing at
law, in equity or by statute.
No delay or omission to exercise any right or remedy accruing upon any
event of default shall impair any such right or remedy or shall be construed to
be a waiver of any such event of default or acquiescence therein; and every such
right and remedy may be exercised from time to time and as often as may be
deemed expedient.
No waiver of any event of default hereunder, whether by the Trustee or
by the owners of the Bonds, shall extend to or shall affect any subsequent event
of default or shall impair any rights or remedies consequent thereon.
SECTION 11.06. RIGHT OF OWNERS OF THE BONDS TO DIRECT PROCEEDINGS. Anything
in this Indenture to the contrary notwithstanding, upon the occurrence and
continuance of an event of default, the owners of a majority in principal amount
of Bonds outstanding shall have the right, at any time, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the
method and place of conducting all proceedings to be taken in connection with
the enforcement of the terms and conditions of this Indenture, or for the
appointment of a receiver or any other proceedings hereunder; provided, that
such direction shall not be otherwise than in accordance with the provisions of
law and of this Indenture.
SECTION 11.07. APPOINTMENT OF RECEIVERS. Upon the occurrence of an event of
default and upon the filing of a suit or other commencement of judicial
proceedings to enforce the rights and remedies of the Trustee and of the owners
of the Bonds under this Indenture, the Trustee shall, with the consent of the
Collateral Agent, be entitled, as a matter of right, to the appointment of a
receiver or receivers of the Project and of the rents, revenues and receipts
thereof and therefrom, pending such proceedings, with such powers as the court
making such appointment shall confer.
SECTION 11.08. WAIVER OF BENEFIT OF LAWS. Upon the occurrence of an event
of default, to the extent that such rights may then lawfully be waived, neither
the Issuer, nor anyone claiming through or under it, shall set up, claim or seek
to take advantage of any appraisement, valuation, stay, extension or redemption
laws now or hereafter in force, in order to prevent or hinder the enforcement of
the Security Deed or the foreclosure of the Security Deed, but the Issuer, for
itself and all who may claim through or under it, hereby waives, to the extent
that they lawfully may do so, the benefit of all such laws and all right of
appraisement and redemption to which it may be entitled under the laws of the
State.
SECTION 11.09. APPLICATION OF MONEYS. All moneys received by the Trustee
pursuant to any right given or action taken under the provisions of this Article
shall be transferred to the Collateral Agent and disbursed in accordance with
the Collateral Agency Agreement.
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Whenever all Bonds and interest thereon have been paid under the
provisions of this Section 11.09 and all expenses and charges of the Trustee
have been paid, any balance remaining in the Bond Fund shall, subject to the
Lease Agreement, be paid to the Lessee as provided in Section 6.09 hereof.
SECTION 11.10. RIGHTS AND REMEDIES VESTED IN TRUSTEE. Subject to the
provisions of Section 11.05, all rights and remedies of action (including the
right to file proof of claims) under this Indenture or under any of the Bonds
may be enforced by the Trustee without the possession of any of the Bonds or the
production thereof in any trial or other proceedings relating thereto and any
such suit or proceeding instituted by the Trustee shall be brought in its name
as Trustee without the necessity of joining as plaintiffs or defendants any
owners of the Bonds, and any recovery of judgment shall be for the equal benefit
of the owners of the Bonds.
SECTION 11.11. RIGHTS AND REMEDIES OF OWNERS OF THE BONDS. No owner of any
Bonds shall have any right to institute any suit, action or proceeding in equity
or at law for the enforcement of this Indenture, for the execution of any trust
thereof or for the appointment of a receiver or to enforce any other right or
remedy hereunder, unless a default has occurred of which the Trustee has been
notified as provided in subsection (h) of Section 12.01 hereof, or of which by
said subsection it is deemed to have notice, and in either case unless (i) such
default shall have become an event of default and the owners of 100% in
principal amount of Bonds outstanding shall have made written request to the
Trustee and shall have offered reasonable opportunity either to proceed to
exercise the powers hereinbefore granted or to institute such action, suit or
proceeding in its own name, such owners have offered to the Trustee indemnity as
provided in Section 12.01(m) hereof, (ii) the written consent of the Collateral
Agent shall have been obtained, and (iii) the Trustee shall thereafter fail or
refuse to exercise the powers hereinbefore granted, or to institute such action,
suit or proceeding in its, his or their own name or names. Such notification,
request and offer of indemnity are hereby declared in every case at the option
of the Trustee to be conditions precedent to the execution of the powers and
trusts of this Indenture and to any action or cause of action for the
enforcement of this Indenture, or for the appointment of a receiver or for any
other right or remedy hereunder; it being understood and intended that no one or
more owners of the Bonds shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien of this Indenture by its, his or their
action or to enforce any right or remedy hereunder except in the manner herein
provided, and that all proceedings at law or in equity shall be instituted, had
and maintained in the manner herein provided and for the equal benefit of the
owners of all Bonds. Nothing in this Indenture contained shall, however, affect
or impair the right of any owner of the Bonds to enforce the payment of the
principal of and interest on any Bond at and after the maturity thereof, or the
obligation of the Issuer to pay the principal of and interest on each of the
Bonds issued hereunder to the respective owners hereof at the time, place, from
the source and in the manner expressed in the Bonds.
SECTION 11.12. TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any right or remedy under this Indenture by the appointment
of a receiver, by entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely, then and in every such case the Issuer and the Trustee shall be
restored to their former positions and rights hereunder with respect to the
Trust Estate, and all rights, remedies and powers of the Trustee shall continue
as if no such proceedings had been taken.
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SECTION 11.13. WAIVERS OF EVENTS OF DEFAULT. The Trustee, with the consent
of the Collateral Agent, (a) may waive any event of default hereunder and its
consequences and rescind any declaration of maturity of principal and its
consequences, if such event of default has been cured and there is no longer
continuing any default hereunder, and (b) shall waive any event of default
hereunder and its consequences and rescind any declaration of maturity of
principal, upon the written request of the owners of a majority in principal
amount of the Bonds outstanding; provided, however, that there shall not be
waived (i) any event of default pertaining to the payment of the principal of
any Bond at its maturity date or any prepayment date prior to maturity, or (ii)
any event of default pertaining to the payment when due of the interest on any
Bond, unless prior to such waiver or rescission, all arrears of principal (due
otherwise than by declaration) and interest, with interest (to the extent
permitted by law) at the rate borne by the Bonds on overdue installments of
principal and interest and all arrears of payments of principal when due, as the
case may be, and all expenses of the Trustee due hereunder in connection with
such event of default, shall have been paid or provided for, and in case of any
such waiver or rescission, then the Issuer, the Trustee and the owners of the
Bonds shall be restored to their former positions and rights hereunder
respectively, but no such waiver or rescission shall extend to any subsequent or
other event of default, or impair any right consequent thereon.
ARTICLE XII
THE TRUSTEE
SECTION 12.01. ACCEPTANCE OF THE TRUSTS. The Trustee hereby accepts the
trusts imposed upon it by this Indenture, and agrees to perform such duties and
only such duties as are specifically set forth in this Indenture upon and
subject to the following express terms and conditions:
(a) The Trustee, prior to the occurrence of an event of default and
after the curing of all events of default which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee. In
case an event of default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) The Trustee may consult with counsel selected by it and the
advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by agents or attorneys
and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed in good
faith by it hereunder.
(d) The Trustee shall not be responsible for any recital herein, or in
the Bonds
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(except in respect to the authentication certificate of the Trustee
endorsed on the Bonds), or for the recording or rerecording, filing or
re-filing of this Indenture, the Lease Agreement or the Security Deed,
or for insuring the Trust Estate or any part of the Project or
collecting any insurance moneys, or for the validity of the execution
by the Issuer of this Indenture or of any supplements hereto or
instruments of further assurance, or for the sufficiency of the
security for the Bonds, or for the value of or title in and to the
Trust Estate or any part of the Project or otherwise as to the
maintenance of the security hereof; provided that, as set forth in
Section 8.8 of the Lease, the Trustee shall provide its reasonable
cooperation to the Issuer and the Lessee in the filing of continuation
statements relating to the liens and security interests created under
the Security Deed and this Indenture; and provided further that if the
Trustee enters into possession of a part or all of the Trust Estate
pursuant to any provision of this Indenture it shall use due diligence
in preserving the same, and the Trustee shall not be bound to
ascertain or inquire as to the performance or observance of any
covenants, agreements or conditions on the part of the Issuer or on
the part of the Lessee under the Lease Agreement, except as
hereinafter set forth; but the Trustee may require of the Issuer or
the Lessee full information and advice as to the performance of the
covenants, agreements and conditions aforesaid and as to the condition
of the Trust Estate. The Trustee shall not be liable for any loss
suffered in connection with any investment of funds made by it in
accordance with Section 8.01 and 8.02 hereof.
(e) The Trustee may become the owner of Bonds with the same rights
which it would have if it were not Trustee.
(f) The Trustee shall be protected in acting upon any notice,
request, consent, certificate, order, affidavit, letter, telegram or
other paper or documents believed to be genuine and correct and to have
been signed or sent by the proper Person or Persons. Any action taken by
the Trustee, pursuant to this Indenture upon the request, authority or
consent of any Person who at the time of making such request or giving
such authority or consent is the owner of any Bond, shall be conclusive
and binding upon all future owners of the same Bond and upon Bonds
issued in exchange therefor or in place thereof.
(g) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, the
Trustee shall be entitled to rely upon a certificate signed on behalf
of the Issuer by the Chairman or Vice Chairman of the Issuer and
attested by the Secretary of the Issuer as sufficient evidence of the
facts therein contained and prior to the occurrence of a default of
which the Trustee has been notified as provided in subsection (h) of
this Section, or of which by said subsection it is deemed to have
notice, shall also be at liberty to accept a similar certificate to
the effect that any particular dealing, transaction or action is
necessary or expedient, but may at its discretion secure such further
evidence deemed necessary or advisable, but shall in no case be bound
to secure the same. The Trustee may accept a certificate of the
Secretary of the Issuer under its seal to the effect that a resolution
in the form therein set forth has been adopted by the Issuer as
conclusive evidence that such resolution has been duly adopted, and is
in full force and effect.
(h) The right of the Trustee to do things enumerated in this
Indenture shall not
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be construed as a duty and the Trustee shall not be answerable for
other than its gross negligence or willful default.
(i) The Trustee shall not be personally liable for any debts
contracted or for damages to persons or property, or for salaries or
nonfulfillment of contracts during any period in which it may be in
the possession of or managing the Project as in this Indenture
provided.
(j) At reasonable times the Trustee, and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives who are
acceptable to the Lessee, and accompanied by an official of the
Lessee, shall have the right to inspect the Project as well as all
books, papers and records of the Issuer pertaining to the Project and
the Bonds, and to take copies of such memoranda from and in regard
thereto only as required from the books, papers and records of the
Issuer.
(k) The Trustee shall not be required to give any bond or surety in
respect of the execution of the said trusts and powers or otherwise in
respect of the premises.
(l) Notwithstanding anything elsewhere in this Indenture contained,
the Trustee shall have the right, but shall not be required, to
demand, in respect of the authentication of any Bonds, the withdrawal
of any cash, the release of any property, or any action whatsoever
within the purview of this Indenture, any showings, certificates,
opinions of Counsel, appraisals or other information, or corporate
action or evidence thereof, in addition to that by the terms hereof
required as a condition of such action by the Trustee relevant to and
deemed desirable in connection with the authentication of any Bonds,
the withdrawal of any cash, or the taking of any other action by the
Trustee.
(m) Before taking any action hereunder the Trustee may require that
a satisfactory indemnity bond be furnished for the reimbursement of
all expenses to which it may be put and to protect it against all
liability, except liability which is adjudicated to have resulted from
the gross negligence or willful misconduct of the Trustee by reason of
any action so taken. None of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise to incur financial liability in the performance of any of
its duties or the exercise of any of its rights or powers hereunder.
(n) All moneys received by the Trustee or any paying agent for the
Bonds shall, until used or applied or invested as herein provided, be
held in trust for the purpose for which they were received but need not
be segregated from other funds except to the extent required herein or
by law. Neither the Trustee nor any such paying agent shall be under any
liability for interest on any moneys received hereunder except such as
may be agreed upon.
SECTION 12.02. FEES, CHARGES AND EXPENSES OF TRUSTEE. The Trustee shall be
entitled to payment and/or reimbursement for reasonable fees for its services
rendered hereunder and all advances, reasonable Counsel fees and expenses and
other expenses reasonably and necessarily made or incurred by the Trustee in
connection with such services. Upon the occurrence of an event of default, but
only upon such occurrence, the Trustee shall have a first
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lien on the Trust Estate with right of payment prior to payment of the principal
of and interest on any Bond for the foregoing advances, fees, costs and expenses
incurred.
SECTION 12.03. [INTENTIONALLY OMITTED].
SECTION 12.04. INTERVENTION BY TRUSTEE. In any judicial proceeding to which
the Issuer is a party which, in the opinion of the Trustee and its Counsel, has
a substantial bearing on the interest of the owners of the Bonds, the Trustee
shall intervene on behalf of the owners of the Bonds if so requested in writing
by the owners of at least 100% in principal amount of the Bonds. The rights and
obligations of the Trustee under this Section are subject to the approval of a
court of competent jurisdiction.
SECTION 12.05. SUCCESSOR TRUSTEE. Any corporation or association into which
the Trustee may be converted or merged, or with which it may be consolidated, or
to which it may sell or transfer its trust business and assets as a whole or
substantially as a whole, or any corporation or association resulting from any
such conversion, merger, consolidation, sale or transfer to which it is a party,
IPSO FACTO, shall be and become successor Trustee hereunder and vested with all
of the title to the Trust Estate and all the trusts, powers, discretions,
immunities, privileges and all other matters as was its predecessor, without the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 12.06. RESIGNATION BY THE TRUSTEE. The Trustee and any successor
Trustee may at any time resign from the trusts hereby created by giving 30 days'
written notice to the Issuer and the Lessee and by first class mail to each
registered owner of Bonds, and such resignation shall take effect at the end of
such 30 day period, or upon the earlier appointment of a successor Trustee by
the owners of the Bonds or by the Issuer. Such notice to the Issuer may be
served personally or sent by registered or certified mail.
SECTION 12.07. REMOVAL OF THE TRUSTEE. The Trustee may be removed at any
time, by an instrument or concurrent instruments in writing delivered to the
Trustee and to the Issuer, and signed by the owners of a majority in principal
amount of the Bonds.
SECTION 12.08. APPOINTMENT OF SUCCESSOR TRUSTEE BY THE OWNERS OF THE BONDS;
TEMPORARY TRUSTEE. If the Trustee hereunder shall resign, be removed, be
dissolved, be in course of dissolution or liquidation, or shall otherwise become
incapable of acting hereunder or in case it shall be taken under the control of
any public officer, officers or a receiver appointed by a court, a successor may
be appointed by the owners of a majority in principal amount of the Bonds, by an
instrument or concurrent instruments in writing signed by such owners, or by
their attorneys in fact, duly authorized; provided, nevertheless, that in case
of such vacancy the Issuer by an instrument signed by the Chairman of the Issuer
and attested by the Secretary of the Issuer under its seal, may appoint a
temporary Trustee to fill such vacancy until a successor Trustee shall be
appointed by the owners of the Bonds in the manner above provided; and any such
temporary Trustee shall immediately and without further act be superseded by the
Trustee so appointed by such owners of the Bonds. Every such Trustee appointed
pursuant to the provisions of this Section shall be a trust company or bank
(having trust powers) in good standing, within or outside the State of Georgia,
having an unimpaired capital and surplus of not
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less than fifty million dollars ($50,000,000), if there be such an institution
willing, qualified and able to accept the trust upon reasonable or customary
terms.
SECTION 12.09. CONCERNING ANY SUCCESSOR TRUSTEE. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Issuer an instrument in writing accepting such appointment
hereunder, and thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the estates, properties, rights,
powers, trusts, duties and obligations of its predecessor; but such predecessor
shall, nevertheless, on the written request of the Issuer, or of its successor,
execute and deliver an instrument transferring to such successor Trustee all the
estates, properties, rights, powers and trusts of such predecessor hereunder;
and every predecessor Trustee shall deliver all securities and moneys held by it
as Trustee hereunder to its successor. Should any instrument in writing from the
Issuer be required by any successor Trustee in order to more fully and certainly
vest in such successor the estates, properties, rights, powers and trusts hereby
vested or intended to be vested in the predecessor any and all such instruments
in writing shall, on request, be executed, acknowledged and delivered by the
Issuer. The resignation of any Trustee and the instrument or instruments
removing any Trustee and appointing a successor hereunder, together with all
other instruments provided for in this Article, shall be filed and/or recorded
by the successor Trustee in each recording office where the Indenture and Lease
Agreement shall have been filed and/or recorded.
SECTION 12.10. RIGHT OF TRUSTEE TO PAY TAXES AND OTHER CHARGES. Subject to
the Lessee's rights to contest the following under the Lease, if any tax,
assessment or governmental or other charge upon any part of the Trust Estate or
the Project is not paid as required herein, the Trustee may pay such tax,
assessment or charge, without prejudice, however, to any rights of the Trustee
or the owners of the Bonds hereunder arising in consequence of such failure; and
any amount at any time so paid under this Section, with interest thereon from
the date of payment at the rate per annum borne by the Bonds, shall become so
much additional indebtedness secured by this Indenture, and the same shall be
given a preference in payment over the principal of and interest on the Bonds
and shall be paid out of the revenues and receipts from the Trust Estate, if not
otherwise caused to be paid; but the Trustee shall not be under obligation to
and shall not make any such payment unless it shall have been requested to do so
by the owners of a majority in principal amount of the Bonds and shall have been
provided with sufficient moneys for the purpose of making such payment.
SECTION 12.11. TRUSTEE PROTECTED IN RELYING UPON RESOLUTIONS, ETC. The
resolutions, opinions, certificates and other instruments provided for in this
Indenture may be accepted by the Trustee as conclusive evidence of the facts and
conclusions stated therein and shall be full warrant, protection and authority
to the Trustee for the release of property and the withdrawal of moneys
hereunder.
SECTION 12.12. SUCCESSOR TRUSTEE AS CUSTODIAN OF FUNDS, PAYING AGENT AND
BOND REGISTRAR. In the event of a change in the office of Trustee, the
predecessor Trustee which has resigned or has been removed shall cease to be the
owner of the Construction Fund and Bond Fund, paying agent for the principal of
and interest on the Bonds and Bond Registrar, and the successor Trustee shall
become such owner, paying agent and Bond Registrar.
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SECTION 12.13. TRUST ESTATE MAY BE VESTED IN CO-TRUSTEE. It is the purpose
of this Indenture that there shall be no violation of any law of any
jurisdiction (including particularly the laws of the State of Georgia) denying
or restricting the right of banking corporations or associations to transact
business as a trustee in such jurisdiction. It is recognized that in case of
litigation under this Indenture, and in particular in case of the enforcement of
either the Indenture or the Lease Agreement upon the occurrence of an event of
default, it may be necessary that there be appointed an additional individual or
institution as a separate Trustee or Co-Trustee. The following provisions of
this Section 12.13 are adapted to these ends.
In the event of the incapacity or lack of authority of the Trustee, by
reason of any present or future law of any jurisdiction, to exercise any of the
rights, powers and trusts herein granted to the Trustee or to hold title to the
Trust Estate or to take any other action which may be necessary or desirable in
connection therewith, the Issuer with the consent of the Lessee may appoint, and
at the request of the Trustee shall appoint, a separate Trustee or Co-Trustee
and each and every remedy, power, right, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by or vested in or conveyed to the Trustee with
respect thereto shall be exercisable by and vest in such separate Trustee or
Co-Trustee but only to the extent necessary to enable the separate Trustee or
Co-Trustee to exercise such rights, powers and trusts, and every covenant and
obligation necessary to the exercise thereof by such separate Trustee or
Co-Trustee shall run to and be enforceable by either of them.
Should any deed, conveyance or instrument in writing from the Issuer be
required by the separate Trustee or Co-Trustee so appointed in order to more
fully and certainly vest in and confirm to him or it such properties, rights,
powers, trusts, duties and obligations, any and all such deeds, conveyances and
instruments shall, on request, be executed, acknowledged and delivered by the
Issuer. In case any separate Trustee or Co-Trustee or a successor to either,
shall die, become incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of such separate
Trustee or Co-Trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new Trustee or successor to
such separate Trustee or Co-Trustee.
SECTION 12.14. [INTENTIONALLY OMITTED].
SECTION 12.15. THIS ARTICLE CONTROLS. Whether or not therein expressly so
provided every provision of this Indenture relating to the conduct or affecting
the liability of the Trustee shall be subject to the provisions of this Article
XII.
SECTION 12.16. CONSEQUENTIAL DAMAGES. Anything in this Indenture to the
contrary notwithstanding, in no event shall the Trustee be liable under or in
connection with this Indenture for indirect, special, incidental or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Trustee
and regardless of the form of action.
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ARTICLE XIII
SUPPLEMENTAL INDENTURES
SECTION 13.01. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF OWNERS OF
THE BONDS. The Issuer and the Trustee may without the consent of, or notice to,
any of the owners of the Bonds, enter into an indenture or indentures
supplemental to this Indenture as shall not be inconsistent with the terms and
provisions hereof for any one or more of the following purposes:
(a) to cure any ambiguity or formal defect or omission in this
Indenture;
(b) to grant to or confer upon the Trustee for the benefit of the
owners of the Bonds any additional rights, remedies, powers or authorities
that may lawfully be granted to or conferred upon the owners of the Bonds
or the Trustee or either of them;
(c) to subject to the lien and pledge of this Indenture additional
rents, revenues or receipts, properties or collateral;
(d) in connection with the issuance of Additional Bonds;
(e) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit the qualification
hereof and thereof under the Trust Indenture Act of 1939, as amended, or
any similar federal statute hereafter in effect or to permit the
qualification of the Bonds for sale under the securities laws of any of the
states of the United States of America, and, if they so determine, to add
hereto or to any indenture supplemental hereto such other terms, conditions
and provisions as may be permitted by said Trust Indenture Act of 1939 or
similar Federal statute;
(f) to evidence the appointment of a separate Trustee or Co-Trustee or
the succession of a new Trustee hereunder; or
(g) in connection with any other changes in this Indenture which
are not to the prejudice of the interests of any registered owner of the
Bonds, or in the judgment of the Trustee, are not to the prejudice of the
interests of the Trustee.
SECTION 13.02. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF OWNERS OF THE
BONDS. Exclusive of supplemental indentures covered by Section 13.01 hereof and
subject to the terms and provisions contained in this Section, and not
otherwise, the owners of not less than a majority in principal amount of the
Bonds outstanding shall have the right, from time to time, anything contained in
this Indenture to the contrary notwithstanding, to consent to and approve the
execution by the Issuer and the Trustee of such other indenture or indentures
supplemental hereto as shall be deemed necessary and desirable by the Issuer for
the purpose of modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained in this Indenture or in any
supplemental indenture; provided, however, that nothing in this Section
contained shall permit, or be construed as permitting (a) an extension of the
maturity date (or mandatory sinking fund redemption) on which the principal of
or the interest on any
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Bond is, or is to become, due and payable, (b) a reduction in the principal
amount of any Bond or the rate of interest thereon, (c) a privilege or priority
of any Bond or Bonds over any other Bond or Bonds, or (d) a reduction in the
principal amount of the Bonds required for consent to such supplemental
indenture.
If the Issuer shall request the Trustee to enter into any such
supplemental indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such supplemental indenture to be given to
the owners of the Bonds. Such notice shall briefly set forth the nature of the
proposed supplemental indenture and shall state that copies thereof are on file
at the Principal Office of the Trustee for inspection by all owners of the
Bonds. If, within 60 days or such longer period as shall be prescribed by the
Issuer following the giving such notice, the owners of not less than a majority
in principal amount of the Bonds outstanding shall have consented to and
approved the execution of such supplemental indenture as herein provided, no
owner of any Bond shall have any right to object to any of the terms and
provisions contained therein, or the operation thereof, or in any manner to
question the propriety of the execution thereof, or to enjoin or restrain the
Trustee or the Issuer from executing the same or from taking any action pursuant
to the provisions thereof. Upon the execution of any such supplemental indenture
as in this Section permitted and provided, this Indenture shall be modified and
amended in accordance therewith.
Anything herein to the contrary notwithstanding, a supplemental
indenture under this Article XIII which affects any right or obligation of the
Lessee under the Lease Agreement shall not become effective unless and until the
Lessee shall have consented to the execution and delivery of such supplemental
indenture. In this regard, the Trustee shall cause notice of the proposed
execution and delivery of any such supplemental indenture together with a copy
of the proposed supplemental indenture to be mailed by certified or registered
mail or overnight delivery to the Lessee at least 60 days prior to the proposed
date of execution and delivery of any such supplemental indenture. The Lessee
shall be deemed to have consented to the execution and delivery of any such
supplemental indenture if the Trustee does not receive a letter of protest or
objection thereto signed by or on behalf of the Lessee on or before 4:30 P.M.,
Eastern time, of the 60th day after the mailing of said notice and a copy of the
proposed supplemental indenture.
The Trustee shall have no obligation to execute any supplemental
indenture which affects its own rights, duties, obligations or compensation.
SECTION 13.03. TRUSTEE AUTHORIZED TO JOIN IN SUPPLEMENTS; RELIANCE ON
COUNSEL. The Trustee is authorized to join with the Issuer in the execution and
delivery of any supplemental indenture permitted by this Article XIII and, in so
doing, shall be fully protected by an opinion of Independent Counsel that such
supplemental indenture is so permitted and has been duly authorized by the
Issuer and that all things necessary to make it a valid and binding supplemental
indenture have been done.
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ARTICLE XIV
AMENDMENT OF LEASE AGREEMENT AND SECURITY DEED
SECTION 14.01. AMENDMENTS, ETC., TO LEASE AGREEMENT AND SECURITY DEED NOT
REQUIRING CONSENT OF OWNERS OF THE BONDS. The Trustee shall without the consent
of, or notice to, the owners of the Bonds consent to any amendment, change or
modification of the Lease Agreement or the Security Deed as may be required (i)
by the provisions of the Lease Agreement or the Security Deed or this Indenture,
(ii) for the purpose of curing any ambiguity or formal defect or omission in the
Lease Agreement or the Security Deed, (iii) in connection with additional real
property which pursuant to the Lease Agreement is to become part of the Leased
Land, (iv) in connection with the machinery, equipment and related property
described in Exhibit "B" to the Lease Agreement and Security Deed so as to more
precisely identify the same or substitute additional machinery, equipment and
related property acquired with the proceeds of the Bonds in accordance with the
provisions of Sections 4.1 and 6.2 of the Lease Agreement, (v) in connection
with additional real property which pursuant to Section 11.3 of the Lease
Agreement and the Security Deed is to become part of the Leased Land or in
connection with any real property to be released from the Leased Land pursuant
to Section 8.6 of the Lease Agreement and the Security Deed, (vi) in connection
with the issuance of Additional Bonds, or (vii) in connection with any other
change therein which, in the judgment of the Trustee, does not prejudice the
interests of the Trustee or the owners of the Bonds.
SECTION 14.02. AMENDMENTS, ETC., TO LEASE AGREEMENT AND SECURITY DEED
REQUIRING CONSENT OF OWNERS OF THE BONDS. Except for the amendments, changes or
modifications as provided in Section 14.01 hereof, neither the Issuer nor the
Trustee shall consent to any other amendment, change or modification of the
Lease Agreement without the delivery of notice and the written approval or
consent of the owners of not less than a majority in principal amount of the
Bonds outstanding given and procured as in Section 13.02 provided. If at any
time the Issuer and the Lessee shall request the consent of the Trustee to any
such proposed amendment, change or modification of the Lease Agreement or the
Security Deed, the Trustee shall, upon being satisfactorily indemnified with
respect to expenses, cause notice of such proposed amendment, change or
modification to be given in the same manner as provided by Section 13.02 hereof
with respect to proposed supplemental indentures; provided, however, that the
Trustee shall have no obligation to consent to the execution of any amendment,
change or modification of the Lease Agreement or the Security Deed which affects
its own rights, duties, obligations or compensation. Such notice shall briefly
set forth the nature of such proposed amendment, change or modification and
shall state that copies of the instrument embodying the same are on file at the
Principal Office of the Trustee for inspection by owners of the Bonds.
SECTION 14.03. TRUSTEE AUTHORIZED TO JOIN IN AMENDMENTS; RELIANCE ON
COUNSEL. The Trustee is authorized to join with the Issuer in the execution and
delivery of any amendment permitted by this Article XIV and, in so doing, shall
be fully protected by an opinion of Independent Counsel that such amendment is
so permitted and has been duly authorized by the Issuer and that all things
necessary to make it a valid and binding agreement have been done.
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ARTICLE XV
MISCELLANEOUS
SECTION 15.01. CONSENTS, ETC. OF OWNERS OF THE BONDS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken
by the owners of the Bonds may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such owners
in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and,
where it is hereby expressly required, to the Issuer and the Lessee.
Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee, the Lessee and the Issuer, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Where such execution is by an officer of a
corporation or a member of a partnership, on behalf of such
corporation or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) The fact and date of execution of any such instrument or writing
may also be proved in any other manner which the Trustee deems
sufficient; and the Trustee may in any instance require further proof
with respect to any of the matters referred to in this Section.
(d) The ownership of Bonds shall be proved by the registration books
kept by the Trustee as Bond Registrar.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any owner of the Bonds shall bind every
future owner of the same Bond in respect of anything done or suffered
to be done by the Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Bond.
SECTION 15.02. LIMITATION OF RIGHTS. With the exception of rights herein
expressly conferred, nothing expressed or mentioned in or to be implied from
this Indenture or the Bonds is intended or shall be construed to give to any
Person other than the parties hereto, the Lessee and the owners of the Bonds,
any legal or equitable right, remedy or claim under or in respect to this
Indenture or any covenants, agreements, conditions and provisions herein
contained; this Indenture and all of the covenants, agreements, conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto, the Lessee and the owners of the Bonds as herein
provided.
A-41
<PAGE>
SECTION 15.03. ISSUER'S OBLIGATIONS LIMITED. No recourse under or upon any
obligation or agreement contained in this Indenture or in any Bond or under any
judgment obtained against the Issuer, or by the enforcement of any assessment or
by any legal or equitable proceeding by virtue of any constitution or statute or
otherwise or under any circumstances, under or independent of this Indenture,
shall be had against the Issuer.
Anything in this Indenture to the contrary notwithstanding, it is
expressly understood and agreed by the parties hereto that (a) the Issuer may
rely conclusively on the truth and accuracy of any certificate, opinion, notice
or other instrument furnished to the Issuer by the Trustee or the Lessee as to
the existence of any fact or state of affairs required hereunder to be noticed
by the Issuer; (b) the Issuer shall not be under any obligation hereunder to
perform any record-keeping or to provide any legal services, it being understood
that such services shall be performed either by the Trustee or the Lessee; and
(c) none of the provisions of this Indenture shall require the Issuer to expend
or risk its own funds or to otherwise incur financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder, unless it shall first have been adequately indemnified to its
satisfaction against the cost, expenses and liability which may be incurred
thereby.
Notwithstanding anything herein contained to the contrary, any
obligation which the Issuer may incur under this Indenture or under any
instrument executed in connection herewith which shall entail the expenditure of
money shall not be a general obligation of the Issuer by shall be a limited
obligation payable solely from the Trust Estate.
SECTION 15.04. IMMUNITY OF DIRECTORS, OFFICERS AND EMPLOYEES OF ISSUER. No
recourse shall be had for the enforcement of any obligation, promise or
agreement of the Issuer contained in the Lease Agreement, the Security Deed,
this Indenture or in any Bond issued hereunder for any claim based thereon or
otherwise in respect thereof, against any director, officer or employee, as
such, in his individual capacity, past, present or future, of the Issuer or of
any successor corporation, either directly or through the Issuer or any
successor corporation, whether by virtue of any constitutional provision,
statute or rule of law, or by the enforcement of any assignment or penalty or
otherwise; it being expressly agreed and understood that the Bonds, the Lease
Agreement, the Security Deed and this Indenture are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
incurred by, any director, officer or employee as such, past, present or future,
of the Issuer or of any successor corporation, either directly or through the
Issuer or any successor corporation, under or by reason of any of the
obligations, promises or agreements entered into between the Issuer and the
Lessee whether contained in the Lease Agreement or the Security Deed or to be
implied therefrom as being supplemental hereto or thereto, and that all personal
liability of the character against every such director, officer and employee is,
by the execution of the Lease Agreement, the Security Deed and this Indenture,
and as a condition of, and as part of the consideration for, the execution of
the Lease Agreement, the Security Deed and this Indenture, expressly waived and
released.
SECTION 15.05. SEVERABILITY. If any provision of this Indenture
shall be held or deemed to be or shall, in fact, be inoperative or
unenforceable as applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions, or in all cases because it
conflicts with any other provision or provisions hereof or any
constitution or statute or rule of public policy, or for any other
reason, such circumstances shall not have the effect of rendering the
provision in
A-42
<PAGE>
question inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatever.
SECTION 15.06. NOTICES. It shall be sufficient service of any notice,
request, complaint, demand or other paper if the same shall be duly mailed by
first class mail or by delivery to physical address, return receipt requested,
postage prepaid, addressed as follows or by facsimile with receipt confirmed:
If to the Issuer: Development Authority of Heard County
c/o Glover & Davis
10 Brown Street
Newnan, Georgia 30264-1038
Attention: A. Mitchell Powell, Esq.
Telephone: (770) 683-6000
Telecopy: (770) 683-6010
If to the Lessee: Tenaska Georgia Partners, L.P.
c/o Tenaska, Inc.
1044 N. 115th Street
Suite 400
Omaha, Nebraska 68154
Attention: Mr. Michael F. Lawler,
Vice President of
Finance and Treasurer
Telephone: (402) 691-9547
Telecopy: (402) 691-9550
with a copies to: Nelson, Morrow & Waldron
675 Commercial Federal Tower
2120 S. 72nd Street
Omaha, Nebraska 68124
Attention: W.C. Nelson, Esq.
Telephone: (402) 392-2340
Telecopy: (402) 392-2130
A-43
<PAGE>
and Long, Aldridge & Norman
303 Peachtree Street
Suite 5300
Atlanta, Georgia 30308
Attention: Michael S. Bradley, Esq.
Telephone: (404) 527-4650
Telecopy: (404) 527-4198
If to the Trustee: The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Trust Department
Telephone: (212) 946-7557
Telecopy: (212) 946-8177
A duplicate copy of each notice, certificate or other communication
given hereunder by either the Issuer, the Lessee or the Trustee shall also be
given to each of the others. The Issuer, the Lessee and the Trustee may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
SECTION 15.07. TRUSTEE AS PAYING AGENT AND BOND REGISTRAR. The Trustee is
hereby designated and agrees to act as paying agent and Bond Registrar for and
in respect of the Bonds.
SECTION 15.08. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. In any case
where the date of maturity of principal of or interest on the Bonds or the date
fixed for prepayment of any Bonds shall be, in the city of payment, a Saturday,
Sunday or a legal holiday or a day on which banking institutions are authorized
by law to close, then payment of principal or interest need not be made on such
date in such city but may be made on the next succeeding business day not a
Saturday, Sunday, legal holiday or day upon which banking institutions are
authorized by law to close with the same force and effect as if made on the date
of maturity or the date fixed for prepayment, and no interest shall accrue for
the period after such date.
SECTION 15.09. COUNTERPARTS. This Indenture may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
SECTION 15.10. LAW GOVERNING INDENTURE. The effect and meaning of
this Indenture and the rights of all parties hereunder shall be governed
by, and construed according to, the laws of the State of Georgia, except
that the duties, responsibilities, obligations and powers of the Trustee
hereunder shall be governed by and construed according to the laws of
the State of New York, but it is the intention of the Issuer that the
situs of the trust created by this Indenture be in the state in which is
located the Principal Office of the Trustee from time to time acting
under this Indenture. The word "Trustee" as used in the preceding
sentence shall not be deemed to include any additional individual or
institution appointed as a separate or Co-Trustee
A-44
<PAGE>
pursuant to Section 12.13 of this Indenture. It is the further intention of the
Issuer that the Trustee administer said trust in the state in which is located,
from time to time, the situs of said trust.
A-45
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused these presents to be signed
in its name and behalf by its Chairman and its corporate seal to be hereunto
affixed and attested by its Secretary, and to evidence its acceptance of the
trusts hereby created the Trustee has caused these presents to be signed in its
name and behalf and its official seal to be hereunto affixed and attested by its
duly authorized officers, all as of the date first above written.
(CORPORATE SEAL) DEVELOPMENT AUTHORITY OF
HEARD COUNTY
By: /S/_______________________
Chairman
Attest:
/S/_________________________
Secretary
As to the Issuer, signed and sealed in the presence of:
/S/__________________________
Unofficial Witness
/S/__________________________
Notary Public
My commission expires:
(NOTARIAL SEAL)
A-46
<PAGE>
(CORPORATE SEAL) THE CHASE MANHATTAN BANK
as Trustee
By: /S/_______________________
Annette M. Marsula
Assistant Vice President
As to the Trustee, signed and sealed in the presence of:
/S/__________________________
Unofficial Witness
/S/__________________________
Notary Public
My commission expires:
(NOTARIAL SEAL)
A-47
<PAGE>
EXHIBIT A
(FORM OF SERIES 1999 BOND)
UNITED STATES OF AMERICA
STATE OF GEORGIA
DEVELOPMENT AUTHORITY OF HEARD COUNTY
TAXABLE INDUSTRIAL DEVELOPMENT REVENUE BOND
(TENASKA GEORGIA PARTNERS, L.P. PROJECT)
SERIES 1999
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND,
EXCEPT FOR THE PLEDGE HEREOF BY THE INITIAL PURCHASER TO THE COLLATERAL AGENT AS
DESCRIBED HEREIN, MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED NOR MAY THE EXTENT OF ITS REGISTRATION BE REDUCED, WITHOUT OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE, THE ISSUER AND THE LESSEE REFERRED TO IN
THIS BOND TO THE EFFECT THAT SUCH TRANSFER OR CHANGE IN THE EXTENT OF
REGISTRATION WILL NOT VIOLATE APPLICABLE SECURITIES LAWS.
No. R-1 $275,000,000
FOR VALUE RECEIVED, the Development Authority of Heard County (the
"Issuer"), an instrumentality of Heard County, Georgia, and a public corporation
created and existing under the laws of the State of Georgia, hereby promises to
pay to Tenaska Georgia Partners, L.P., or registered assigns (the "Initial
Purchaser"), solely from the fund hereinafter described and from no other
source, the principal sum of
TWO HUNDRED SEVENTY-FIVE MILLION DOLLARS
such amount to be paid on February 1 and August 1 of the years and in the
amounts set forth on EXHIBIT "A" attached hereto, with the final payment of such
principal to be made on February 1, 2030, and to pay to the registered owner
hereof solely from said special fund, interest hereon at the rate of nine and
one-half percent (9 1/2%) per annum (calculated on the basis of a 30-day month,
360-day year), payable on February 1 and August 1 of each year (each such date
an "Interest Payment Date") until the principal hereof is paid, from the last
Interest Payment Date to which interest has been paid or provided for, unless:
(1) the date of authentication of this Bond is an Interest Payment Date to which
interest has been paid or provided for, then from the date of authentication
hereof, or (2) such authentication date shall be after any Record Date
(hereinafter defined) and before the next succeeding Interest Payment Date in
which case interest shall be paid from the next succeeding Interest Payment
Date. Interest due on this Bond on any Interest Payment Date shall be paid to
the registered owner hereof as shown on the registration books
A-48
<PAGE>
kept by the Registrar on the 15th day (whether or not a business day) of the
month immediately preceding such Interest Payment Date (each such date a "Record
Date"). The principal of and the interest on this Bond shall be payable in
lawful money of the United States of America by check mailed to the registered
owner hereof at the orders shown on the Bond Register or to the order of any
subsequent registered owner hereof on the applicable Record Date at the address
shown on the Bond Register, unless there shall be in effect, as provided in the
hereinafter mentioned Indenture, a home office payment agreement satisfactory to
the Trustee. Payment of the final installment of principal on this Bond shall be
made upon surrender of this Bond to The Chase Manhattan Bank, at is principal
corporate trust office in New York, New York or at the principal office of its
success or in trust (said Trustee and any successor trustee being hereinafter
called the "Trustee") under the Indenture of Trust (the "Indenture") between the
Issuer and the Trustee. Such payment shall be made to the person in whose name
this Bond is registered on the Bond Register with respect to payment of
principal, on the date such principal is due and with respect to the payment of
interest.
This Bond is a fully registered bond comprising one of a duly
authorized series in the aggregate principal amount of $275,000,000 (the
"Bonds"), of like tenor except as to numbers, issued under and secured by the
Indenture and an authorizing resolution of the Issuer adopted on October 5,
1999, as supplemented by a resolution of the Issuer adopted November 4, 1999,
for the purpose of financing the acquisition of certain real estate (the "Leased
Land"), the acquisition, construction and installation of certain buildings and
structures thereon (the "Building") and the acquisition, construction and
installation of new machinery and equipment and related real and personal
property therein (the "Leased Equipment") (collectively, the "Project") for
lease to Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"Lessee") pursuant to a Lease Agreement, dated as of November 1, 1999 (the
"Lease Agreement") between the Issuer and the Lessee.
This Bond will be pledged by the Initial Purchaser to The Chase
Manhattan Bank, as collateral agent (the "Collateral Agent"), pursuant to the
terms of that certain Partnership Assignment and Security Agreement, dated as of
November 1, 1999, among the Purchaser, the Senior Parties listed therein and the
Collateral Agent, in order to secure certain obligations of the Initial
Purchaser to the Senior Parties with respect to the Project.
This Bond and the interest hereon shall not be deemed to constitute a
debt or a general obligation or a pledge of the faith and credit of the State of
Georgia or of Heard County, and does not directly, indirectly or contingently
obligate said State or County to levy or to pledge any form of taxation whatever
for the payment of such principal and interest. This Bond is payable solely from
the rental payments and other payments received under the Lease Agreement
(hereinafter described) together with all other rents, revenues and receipts
arising out of or in connection with the Issuer's ownership of the Project
(except for certain indemnification rights provided therein) and the Issuer is
obligated to pay the principal of and the interest on this Bond only from the
fund entitled "Development Authority of Heard County Revenue Bond Fund - Tenaska
Georgia Partners, L.P. Project, Series 1999 (the "Bond Fund"), created in the
Indenture. No recourse shall be had for the payment of the principal of and the
interest on this Bond against any officer or member of the Issuer.
A-49
<PAGE>
This Bond is issued and the Indenture was authorized, executed and
delivered by the Issuer under and pursuant to the Constitution and laws of the
State of Georgia, including particularly, as amended, and the aforesaid
resolution of the Issuer. Pursuant to the terms of the Lease Agreement, the
Lessee must pay to the Issuer rental payments which are pledged to, and will be
fully sufficient to provide for, the payment of the principal of and the
interest on the Bonds as the same become due. In addition, the Issuer conveyed
that portion of the Project consisting of real property and granted a security
interest in that portion of the Project consisting of personal property and has
assigned all leases and rents therefrom to the Trustee pursuant to the terms of
a Deed to Secure Debt, Security Agreement and Assignment of Rents and Leases,
dated as of November 1, 1999. As additional security for the payment of the
Bonds, the Lessee will enter into a Guaranty Agreement with the Trustee, dated
as of November 1, 1999, under the terms of which the Lessee, as guarantor, will
unconditionally guarantee to the Trustee, for the benefit of the owners of the
Bonds, the payment of the principal of and interest on the Bonds as the same
become due.
Pursuant to the Indenture, the Issuer may from time to time after the
issuance of all of the Bonds of this series which are to be issued have been
issued, sell and issue additional parity bonds for the purposes and subject to
the terms and conditions contained in the Indenture. Such additional parity
bonds will rank on a parity with and be equally secured with the Bonds of this
series. Reference is hereby made to Article IV of the Indenture for a more
complete description of the terms under which such additional parity bonds may
be issued by the Issuer.
The Issuer has agreed that it will use its best efforts to keep the
Project continuously leased and will prescribe and collect rental payments
therefor sufficient to pay when due the principal of and the interest on the
Bonds. Reference to the Indenture is hereby made for a description of the
aforesaid Bond Fund which is charged with, and pledged to, the payment of the
principal of and the interest on the Bonds, the nature and extent of the
security, the rights, duties and obligations of the Issuer and the Trustee, the
rights of the owners of the Bonds, the terms and conditions under and upon the
occurrence of which the Indenture and the Lease Agreement may be modified, the
terms and conditions under which additional parity bonds may be issued and the
terms and conditions under and upon the occurrence of which the lien of the
Indenture may be defeased as to this Bond prior to the maturity or prepayment
date hereof, to all of the provisions of which the owner hereof, by the
acceptance of this Bond, assents.
The Bonds of this series are subject to redemption prior to maturity at
any time in whole or in part, at a redemption price equal to the principal
amount to be redeemed plus accrued interest thereon to the date of redemption,
at the option of the Lessee, such option to be exercised by written notice
delivered to the Issuer and the Trustee at least 10 days prior to the date of
redemption.
When Bonds are called for redemption as aforesaid, notice thereof
identifying the Bonds to be redeemed shall be given by mailing a copy of the
redemption notice by first class mail, postage prepaid, not less than 10 nor
more than 60 days prior to the redemption date to the registered owner of each
such Bond to be redeemed at the address shown on the Bond Register. Any notice
mailed as provided above shall be conclusively presumed to have been duly given,
whether or not the owner receives such notice. Failure to give any notice of
redemption, or any
A-50
<PAGE>
defect therein, shall not affect the validity of any proceedings for the
redemption of any Bond as to which notice was given as provided in the
Indenture.
Upon the giving of such notice, the Bonds or portions thereof so called
for redemption shall become and be due and payable at the applicable redemption
price and on the date specified for redemption in such notice. On the date
designated for redemption, notice having been given, moneys for payment of the
redemption price being on deposit with the Trustee or any paying agents and any
conditions to such redemption having been satisfied, the Bonds or portions
thereof shall cease to be entitled to any benefit or security under the
Indenture; and the registered owners thereof shall have no rights in respect of
such Bonds or such portions thereof so called for redemption except to receive
payment of the redemption price therefor and accrued interest thereon to the
redemption date from the moneys deposited with the Trustee or any paying agent
as provided in this paragraph.
Less than the entire principal amount of any Bond in a denomination in
excess of $100,000 may be redeemed and in such case, upon the surrender of such
Bond, there shall be issued to the registered owner thereof, without charge
therefor, for the unredeemed balance of the principal amount of such Bond, at
the option of such registered owner, Bonds of the same stated maturity and
interest rate and in any of the authorized denominations, as more fully set
forth in the Indenture.
This Bond is transferable by the registered owner hereof in person or
by his attorney duly authorized in writing at the principal office of the
Trustee, but only in the manner, subject to the conditions and limitations and
upon payment of the charges provided in the Indenture, and upon surrender and
cancellation of this Bond. Upon such transfer, a new fully registered Bond or
fully registered Bonds in the same aggregate principal amount and of any
authorized denomination or denominations shall be issued to the transferee or
transferees in exchange therefor.
The owner of this Bond shall have the right to enforce the payment of
the principal hereof and the interest hereon at or after the maturity hereof,
and the owner of this Bond shall have the right to enforce the provisions of the
Indenture and to institute action to enforce the covenants therein, and to take
any action with respect to any Event of Default under the Indenture, and to
institute, appear in or defend any suit or other proceedings with respect
thereto, as provided in the Indenture. In certain events, on the conditions, in
the manner and with the effect set forth in the Indenture, the principal of all
the Bonds issued under the Indenture and then outstanding may become or may be
declared due and payable before the stated maturity thereof, together with the
interest accrued thereon. Modifications or alterations of the Indenture, or of
any supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond is issued with the intent that the laws of the State of
Georgia shall govern its construction.
It is hereby certified and recited that all acts, conditions and things
required by the Constitution and laws of the State of Georgia to happen, exist
and be performed precedent to and in the issuance of this Bond, the execution of
the Indenture and the adoption of the aforesaid resolution by the Issuer, have
happened, exist and have been performed. The issuance of this
A-51
<PAGE>
Bond and the series of which it forms a part, together with all other
obligations of the Issuer, does not exceed or violate any constitutional or
statutory limitation.
This Bond shall not be entitled to any benefit under the Indenture nor
shall it become valid or obligatory for any purpose until it shall have been
authenticated by execution by the Trustee of the certificate hereon endorsed.
IN WITNESS WHEREOF, the Development Authority of Heard County has
caused this Bond to be executed in its name by the signature of its Chairman,
and its corporate seal to be hereunto affixed and attested by the signature of
its Secretary, all as of the ____ day of November, 1999.
A-52
<PAGE>
DEVELOPMENT AUTHORITY OF HEARD
COUNTY
By: (Form)
-------------------------------
Chairman
ATTEST
(Form)
---------------------------
Secretary
(SEAL)
* * * * *
A-53
<PAGE>
EXHIBIT A
SCHEDULE OF MATURITIES
<TABLE>
<CAPTION>
MATURITY DATE PRINCIPAL MATURITY DATE PRINCIPAL
------------- --------- ------------- ---------
<S> <C> <C> <C>
February 1, 2006 $ 344,000 February 1, 2018 5,844,000
August 1, 2006 344,000 August 1, 2018 5,844,000
February 1, 2007 344,000 February 1, 2019 6,532,000
August 1, 2007 344,000 August 1, 2019 6,532,000
February 1, 2008 688,000 February 1, 2020 6,875,000
August 1, 2008 688,000 August 1, 2020 6,875,000
February 1, 2009 1,032,000 February 1, 2021 7,219,000
August 1, 2009 1,032,000 August 1, 2021 7,219,000
February 1, 2010 1,375,000 February 1, 2022 7,563,000
August 1, 2010 1,375,000 August 1, 2022 7,563,000
February 1, 2011 1,719,000 February 1, 2023 8,250,000
August 1, 2011 1,719,000 August 1, 2023 8,250,000
February 1, 2012 2,407,000 February 1, 2024 8,594,000
August 1, 2012 2,407,000 August 1, 2024 8,594,000
February 1, 2013 3,094,000 February 1, 2025 8,938,000
August 1, 2013 3,094,000 August 1, 2025 8,938,000
February 1, 2014 3,438,000 February 1, 2026 9,282,000
August 1, 2014 3,438,000 August 1, 2026 9,282,000
February 1, 2015 4,125,000 February 1, 2027 9,969,000
August 1, 2015 4,125,000 August 1, 2027 9,969,000
February 1, 2016 4,469,000 February 1, 2028 11,688,000
August 1, 2016 4,469,000 August 1, 2028 11,688,000
February 1, 2017 5,157,000 February 1, 2029 12,375,000
August 1, 2017 5,157,000 August 1, 2029 12,375,000
February 1, 2030 12,358,000
====================
Total: $275,000,000
</TABLE>
A-54
<PAGE>
TRUSTEE'S AUTHENTICATION CERTIFICATE
Date of authentication: ____________
The above Bond is one of the fully registered Bonds described in the
above mentioned Indenture of Trust, and is hereby authenticated on its dated
date as specified above.
--------------------------------------,
as Trustee
By:________________________________
* * * * *
A-55
<PAGE>
VALIDATION CERTIFICATE
STATE OF GEORGIA
COUNTY OF HEARD
The undersigned Clerk of the Superior Court of Heard County, Georgia,
HEREBY CERTIFIES that the within Bond was confirmed and validated by judgment of
the Superior Court of Heard County, Georgia, rendered on the 25th day of
October, 1999, that no intervention or objection was filed thereto and that no
appeal has been taken therefrom.
WITNESS the manual or a duly authorized reproduced facsimile of may
signature and the reproduced facsimile seal of said court.
(SEAL) ________________________
Clerk, Superior Court,
Heard County, Georgia
* * * * *
A-56
<PAGE>
(Form for Transfer)
COMPLETE AND SIGN THIS FORM FOR
REGISTRATION OF TRANSFER
For value received ________________________ hereby sells,
assigns and transfers unto ________________________ this Bond and hereby
irrevocably constitutes and appoints ______________________ Attorney to register
such transfer on the books of registration in the office of the Registrar with
full power of substitution in the premises.
Dated:_____________________ ____________________________________
NOTE: The signature on this assignment
Signature Guaranteed by: must correspond with the name
as written on the face of this Bond in
every particular, without alteration,
enlargement or any change whatsoever.
- ---------------------------- ------------------------------
Bank, Trust Company or Please insert social security
Member Firm of New York number or other identifying
Stock Exchange, Inc. number of assignee
A-57
<PAGE>
<TABLE>
<CAPTION>
MANNER OF TRANSFER FORM
<S> <C> <C> <C>
/ / Beneficiary / / Transfer outside the United
States in compliance with Rule 904
of the Securities Act.
/ / Transfer inside the United States to / / Transfer inside the United States
a Qualified Institutional Buyer in in compliance with Rule 144
compliance with Rule 144A under under the Securities Act.
the Securities Act.
[Name of Holder]
------------------------------------
Dated: _______________, ______ *
*To be dated the date of presentation or surrender.
</TABLE>
[END OF FORM OF BOND]
TRUSTINDENTURE
A-58
<PAGE>
<PAGE>
EXHIBIT 4.20
BOND POWER
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social
Security or other tax
Identifying number of
Assignee:
- --------------------------------------------------------------
(name and address of assignee)
- --------------------------------------------------------------
the following described bond:
$___________________ principal amount of the Development Authority of
Heard County Taxable Industrial Development Bonds (Tenaska Georgia
Partners, L.P. Project), Series 1999
and hereby irrevocably constitutes and appoints ______________________________,
attorney-in-fact, to transfer the same on the Bond Register in the
___________________ office of The Chase Manhattan Bank as Registrar, or in the
office of its successors as Registrar, with full power of substitution in the
premises.
Date: November 10, 1999
TENASKA GEORGIA PARTNERS, L.P.
By: /S/_____________________________
Michael F. Lawler
Vice President of Finance & Treasurer
<PAGE>
UNITED STATES OF AMERICA
STATE OF GEORGIA
DEVELOPMENT AUTHORITY OF HEARD COUNTY
TAXABLE INDUSTRIAL DEVELOPMENT REVENUE BOND
(TENASKA GEORGIA PARTNERS, L.P. PROJECT)
SERIES 1999
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND,
EXCEPT FOR THE PLEDGE HEREOF BY THE INITIAL PURCHASER TO THE COLLATERAL AGENT AS
DESCRIBED HEREIN, MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED NOR MAY THE EXTENT OF ITS REGISTRATION BE REDUCED, WITHOUT OPINION
OF COUNSEL SATISFACTORY TO THE TRUSTEE, THE ISSUER AND THE LESSEE REFERRED TO IN
THIS BOND TO THE EFFECT THAT SUCH TRANSFER OR CHANGE IN THE EXTENT OF
REGISTRATION WILL NOT VIOLATE APPLICABLE SECURITIES LAWS.
No. R-1 $275,000,000
FOR VALUE RECEIVED, the Development Authority of Heard County (the
"Issuer"), an instrumentality of Heard County, Georgia, and a public corporation
created and existing under the laws of the State of Georgia, hereby promises to
pay to Tenaska Georgia Partners, L.P., or registered assigns (the "Initial
Purchaser"), solely from the fund hereinafter described and from no other
source, the principal sum of
TWO HUNDRED SEVENTY-FIVE MILLION DOLLARS
such amount to be paid on February 1 and August 1 of the years and in the
amounts set forth on EXHIBIT "A" attached hereto, with the final payment of such
principal to be made on February 1, 2030, and to pay to the registered owner
hereof solely from said special fund, interest hereon at the rate of nine and
one-half percent (9 1/2%) per annum (calculated on the basis of a 30-day month,
360-day year), payable on February 1 and August 1 of each year (each such date
an "Interest Payment Date") until the principal hereof is paid, from the last
Interest Payment Date to which interest has been paid or provided for, unless:
(1) the date of authentication of this Bond is an Interest Payment Date to which
interest has been paid or provided for, then from the date of authentication
hereof, or (2) such authentication date shall be after any Record Date
(hereinafter defined) and before the next succeeding Interest Payment Date in
which case interest shall be
2
<PAGE>
paid from the next succeeding Interest Payment Date. Interest due on this Bond
on any Interest Payment Date shall be paid to the registered owner hereof as
shown on the registration books kept by the Registrar on the 15th day (whether
or not a business day) of the month immediately preceding such Interest Payment
Date (each such date a "Record Date"). The principal of and the interest on this
Bond shall be payable in lawful money of the United States of America by check
mailed to the registered owner hereof at the orders shown on the Bond Register
or to the order of any subsequent registered owner hereof on the applicable
Record Date at the address shown on the Bond Register, unless there shall be in
effect, as provided in the hereinafter mentioned Indenture, a home office
payment agreement satisfactory to the Trustee. Payment of the final installment
of principal on this Bond shall be made upon surrender of this Bond to The Chase
Manhattan Bank, at is principal corporate trust office in New York, New York or
at the principal office of its success or in trust (said Trustee and any
successor trustee being hereinafter called the "Trustee") under the Indenture of
Trust (the "Indenture") between the Issuer and the Trustee. Such payment shall
be made to the person in whose name this Bond is registered on the Bond Register
with respect to payment of principal, on the date such principal is due and with
respect to the payment of interest.
This Bond is a fully registered bond comprising one of a duly
authorized series in the aggregate principal amount of $275,000,000 (the
"Bonds"), of like tenor except as to numbers, issued under and secured by the
Indenture and an authorizing resolution of the Issuer adopted on October 5,
1999, as supplemented by a resolution of the Issuer adopted November 4, 1999,
for the purpose of financing the acquisition of certain real estate (the "Leased
Land"), the acquisition, construction and installation of certain buildings and
structures thereon (the "Building") and the acquisition, construction and
installation of new machinery and equipment and related real and personal
property therein (the "Leased Equipment") (collectively, the "Project") for
lease to Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"Lessee") pursuant to a Lease Agreement, dated as of November 1, 1999 (the
"Lease Agreement") between the Issuer and the Lessee.
This Bond will be pledged by the Initial Purchaser to The Chase
Manhattan Bank, as collateral agent (the "Collateral Agent"), pursuant to the
terms of that certain Partnership Assignment and Security Agreement, dated as of
November 1, 1999, among the Purchaser, the Senior Parties listed therein and the
Collateral Agent, in order to secure certain obligations of the Initial
Purchaser to the Senior Parties with respect to the Project.
This Bond and the interest hereon shall not be deemed to constitute a
debt or a general obligation or a pledge of the faith and credit of the State of
Georgia or of Heard County, and does not directly, indirectly or contingently
obligate said State or County to levy or to pledge any form of taxation whatever
for the payment of such principal and interest. This Bond is payable solely from
the rental payments and other payments received under the Lease Agreement
(hereinafter described) together with all other rents, revenues and receipts
arising out of or in connection with the Issuer's ownership of the Project
(except for certain indemnification rights provided therein) and the Issuer is
obligated to pay the principal of and the interest on this Bond only from the
fund entitled "Development Authority of Heard County Revenue Bond Fund - Tenaska
Georgia Partners, L.P. Project, Series 1999 (the "Bond Fund"), created in the
Indenture. No recourse shall be had for the payment of the principal of and the
interest on this Bond against any officer or member of the Issuer.
3
<PAGE>
This Bond is issued and the Indenture was authorized, executed and
delivered by the Issuer under and pursuant to the Constitution and laws of the
State of Georgia, including particularly, as amended, and the aforesaid
resolution of the Issuer. Pursuant to the terms of the Lease Agreement, the
Lessee must pay to the Issuer rental payments which are pledged to, and will be
fully sufficient to provide for, the payment of the principal of and the
interest on the Bonds as the same become due. In addition, the Issuer conveyed
that portion of the Project consisting of real property and granted a security
interest in that portion of the Project consisting of personal property and has
assigned all leases and rents therefrom to the Trustee pursuant to the terms of
a Deed to Secure Debt, Security Agreement and Assignment of Rents and Leases,
dated as of November 1, 1999. As additional security for the payment of the
Bonds, the Lessee will enter into a Guaranty Agreement with the Trustee, dated
as of November 1, 1999, under the terms of which the Lessee, as guarantor, will
unconditionally guarantee to the Trustee, for the benefit of the owners of the
Bonds, the payment of the principal of and interest on the Bonds as the same
become due.
Pursuant to the Indenture, the Issuer may from time to time after the
issuance of all of the Bonds of this series which are to be issued have been
issued, sell and issue additional parity bonds for the purposes and subject to
the terms and conditions contained in the Indenture. Such additional parity
bonds will rank on a parity with and be equally secured with the Bonds of this
series. Reference is hereby made to Article IV of the Indenture for a more
complete description of the terms under which such additional parity bonds may
be issued by the Issuer.
The Issuer has agreed that it will use its best efforts to keep the
Project continuously leased and will prescribe and collect rental payments
therefor sufficient to pay when due the principal of and the interest on the
Bonds. Reference to the Indenture is hereby made for a description of the
aforesaid Bond Fund which is charged with, and pledged to, the payment of the
principal of and the interest on the Bonds, the nature and extent of the
security, the rights, duties and obligations of the Issuer and the Trustee, the
rights of the owners of the Bonds, the terms and conditions under and upon the
occurrence of which the Indenture and the Lease Agreement may be modified, the
terms and conditions under which additional parity bonds may be issued and the
terms and conditions under and upon the occurrence of which the lien of the
Indenture may be defeased as to this Bond prior to the maturity or prepayment
date hereof, to all of the provisions of which the owner hereof, by the
acceptance of this Bond, assents.
The Bonds of this series are subject to redemption prior to maturity at
any time in whole or in part, at a redemption price equal to the principal
amount to be redeemed plus accrued interest thereon to the date of redemption,
at the option of the Lessee, such option to be exercised by written notice
delivered to the Issuer and the Trustee at least 10 days prior to the date of
redemption.
When Bonds are called for redemption as aforesaid, notice thereof
identifying the Bonds to be redeemed shall be given by mailing a copy of the
redemption notice by first class mail, postage prepaid, not less than 10 nor
more than 60 days prior to the redemption date to the registered owner of each
such Bond to be redeemed at the address shown on the Bond Register. Any notice
mailed as provided above shall be conclusively presumed to have been duly given,
whether or not the owner receives such notice. Failure to give any notice of
redemption, or any
4
<PAGE>
defect therein, shall not affect the validity of any proceedings for the
redemption of any Bond as to which notice was given as provided in the
Indenture.
Upon the giving of such notice, the Bonds or portions thereof so called
for redemption shall become and be due and payable at the applicable redemption
price and on the date specified for redemption in such notice. On the date
designated for redemption, notice having been given, moneys for payment of the
redemption price being on deposit with the Trustee or any paying agents and any
conditions to such redemption having been satisfied, the Bonds or portions
thereof shall cease to be entitled to any benefit or security under the
Indenture; and the registered owners thereof shall have no rights in respect of
such Bonds or such portions thereof so called for redemption except to receive
payment of the redemption price therefor and accrued interest thereon to the
redemption date from the moneys deposited with the Trustee or any paying agent
as provided in this paragraph.
Less than the entire principal amount of any Bond in a denomination in
excess of $100,000 may be redeemed and in such case, upon the surrender of such
Bond, there shall be issued to the registered owner thereof, without charge
therefor, for the unredeemed balance of the principal amount of such Bond, at
the option of such registered owner, Bonds of the same stated maturity and
interest rate and in any of the authorized denominations, as more fully set
forth in the Indenture.
This Bond is transferable by the registered owner hereof in person or
by his attorney duly authorized in writing at the principal office of the
Trustee, but only in the manner, subject to the conditions and limitations and
upon payment of the charges provided in the Indenture, and upon surrender and
cancellation of this Bond. Upon such transfer, a new fully registered Bond or
fully registered Bonds in the same aggregate principal amount and of any
authorized denomination or denominations shall be issued to the transferee or
transferees in exchange therefor.
The owner of this Bond shall have the right to enforce the payment of
the principal hereof and the interest hereon at or after the maturity hereof,
and the owner of this Bond shall have the right to enforce the provisions of the
Indenture and to institute action to enforce the covenants therein, and to take
any action with respect to any Event of Default under the Indenture, and to
institute, appear in or defend any suit or other proceedings with respect
thereto, as provided in the Indenture. In certain events, on the conditions, in
the manner and with the effect set forth in the Indenture, the principal of all
the Bonds issued under the Indenture and then outstanding may become or may be
declared due and payable before the stated maturity thereof, together with the
interest accrued thereon. Modifications or alterations of the Indenture, or of
any supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond is issued with the intent that the laws of the State of
Georgia shall govern its construction.
It is hereby certified and recited that all acts, conditions and things
required by the Constitution and laws of the State of Georgia to happen, exist
and be performed precedent to and in the issuance of this Bond, the execution of
the Indenture and the adoption of the aforesaid resolution by the Issuer, have
happened, exist and have been performed. The issuance of this
5
<PAGE>
Bond and the series of which it forms a part, together with all other
obligations of the Issuer, does not exceed or violate any constitutional or
statutory limitation.
This Bond shall not be entitled to any benefit under the Indenture nor
shall it become valid or obligatory for any purpose until it shall have been
authenticated by execution by the Trustee of the certificate hereon endorsed.
6
<PAGE>
IN WITNESS WHEREOF, the Development Authority of Heard County has
caused this Bond to be executed in its name by the signature of its Chairman,
and its corporate seal to be hereunto affixed and attested by the signature of
its Secretary, all as of the November 10, 1999.
DEVELOPMENT AUTHORITY OF HEARD
COUNTY
By: /S/_______________________________
Chairman
ATTEST
/S/___________________________
Secretary
(SEAL)
* * * * *
<PAGE>
EXHIBIT A
SCHEDULE OF MATURITIES
<PAGE>
<TABLE>
<CAPTION>
MATURITY DATE PRINCIPAL MATURITY DATE PRINCIPAL
<S> <C> <C> <C>
February 1, 2006 $ 344,000 February 1, 2018 5,844,000
August 1, 2006 344,000 August 1, 2018 5,844,000
February 1, 2007 344,000 February 1, 2019 6,532,000
August 1, 2007 344,000 August 1, 2019 6,532,000
February 1, 2008 688,000 February 1, 2020 6,875,000
August 1, 2008 688,000 August 1, 2020 6,875,000
February 1, 2009 1,032,000 February 1, 2021 7,219,000
August 1, 2009 1,032,000 August 1, 2021 7,219,000
February 1, 2010 1,375,000 February 1, 2022 7,563,000
August 1, 2010 1,375,000 August 1, 2022 7,563,000
February 1, 2011 1,719,000 February 1, 2023 8,250,000
August 1, 2011 1,719,000 August 1, 2023 8,250,000
February 1, 2012 2,407,000 February 1, 2024 8,594,000
August 1, 2012 2,407,000 August 1, 2024 8,594,000
February 1, 2013 3,094,000 February 1, 2025 8,938,000
August 1, 2013 3,094,000 August 1, 2025 8,938,000
February 1, 2014 3,438,000 February 1, 2026 9,282,000
August 1, 2014 3,438,000 August 1, 2026 9,282,000
February 1, 2015 4,125,000 February 1, 2027 9,969,000
August 1, 2015 4,125,000 August 1, 2027 9,969,000
February 1, 2016 4,469,000 February 1, 2028 11,688,000
August 1, 2016 4,469,000 August 1, 2028 11,688,000
February 1, 2017 5,157,000 February 1, 2029 12,375,000
August 1, 2017 5,157,000 August 1, 2029 12,375,000
February 1, 2030 12,358,000
====================
Total: $275,000,000
</TABLE>
<PAGE>
TRUSTEE'S AUTHENTICATION CERTIFICATE
Date of authentication: 11/10/99
The above Bond is one of the fully registered Bonds described in the
above mentioned Indenture of Trust, and is hereby authenticated on its dated
date as specified above.
The Chase Manhattan Bank
as Trustee
By: /S/________________________________
Annette M. Marsula
Assistant Vice President
* * * * *
<PAGE>
VALIDATION CERTIFICATE
STATE OF GEORGIA
COUNTY OF HEARD
The undersigned Clerk of the Superior Court of Heard County, Georgia,
HEREBY CERTIFIES that the within Bond was confirmed and validated by judgment of
the Superior Court of Heard County, Georgia, rendered on the 25th day of
October, 1999, that no intervention or objection was filed thereto and that no
appeal has been taken therefrom.
WITNESS the manual or a duly authorized reproduced facsimile of may
signature and the reproduced facsimile seal of said court.
(SEAL) /S/________________________
Clerk, Superior Court,
Heard County, Georgia
* * * * *
<PAGE>
(Form for Transfer)
COMPLETE AND SIGN THIS FORM FOR
REGISTRATION OF TRANSFER
For value received ________________________ hereby sells,
assigns and transfers unto ________________________ this Bond and hereby
irrevocably constitutes and appoints ______________________ Attorney to register
such transfer on the books of registration in the office of the Registrar with
full power of substitution in the premises.
<TABLE>
<S> <C>
Dated:_____________________ ____________________________________
NOTE: The signature on this assignment
Signature Guaranteed by: must correspond with the name
as written on the face of this Bond in every
particular, without alteration, enlargement or
any change whatsoever.
____________________________ _______________________________
Bank, Trust Company or Please insert social security
Member Firm of New York number or other identifying
Stock Exchange, Inc. number of assignee
</TABLE>
<PAGE>
MANNER OF TRANSFER FORM
<TABLE>
<S> <C>
[ ] Beneficiary [ ] Transfer outside the United
States in compliance with Rule 904
of the Securities Act.
[ ] Transfer inside the United States to [ ] Transfer inside the United States
a Qualified Institutional Buyer in in compliance with Rule 144
compliance with Rule 144A under under the Securities Act.
the Securities Act.
</TABLE>
[Name of Holder]
____________________________________
Dated: _______________, ______ *
*To be dated the date of presentation or surrender.
<PAGE>
Exhibit 4.21
- ----SPACE ABOVE THIS LINE LEFT INTENTIONALLY BLANK FOR RECORDING INFORMATION----
After recording, please return to:
King & Spalding
Attention: Ruth T. West, Esq.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1763
================================================================================
LEASE AGREEMENT
between
DEVELOPMENT AUTHORITY OF HEARD COUNTY
and
TENASKA GEORGIA PARTNERS, L.P.
Dated as of November 1, 1999
================================================================================
This Lease Agreement and all right, title and interest of the Development
Authority of Heard County in any rents, revenues and receipts derived under this
Agreement have been assigned to THE CHASE MANHATTAN BANK, as Trustee under the
Indenture of Trust, dated as of November 1, 1999, from the Development Authority
of Heard County which secures not to exceed $400,000,000 in aggregate principal
amount of Development Authority of Heard County Taxable Industrial Development
Revenue Bonds (Tenaska Georgia Partners, L.P. Project), Series 1999, and any
Additional Bonds issued thereunder.
================================================================================
<PAGE>
LEASE AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Lease Agreement is for convenience of reference
only and is not intended to define, limit or describe the scope or intent of any
provisions of this Lease Agreement.)
<TABLE>
<S> <C> <C>
ARTICLE
I DEFINITIONS
SECTION 1.1. Definitions.................................................................................4
SECTION 1.2. Rules of Construction.......................................................................8
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. Representations and Warranties by the Issuer................................................9
SECTION 2.2. Representations and Warranties by the Lessee...............................................10
ARTICLE III
LEASING CLAUSES AND WARRANTY OF TITLE
SECTION 3.1. Lease of the Project.......................................................................12
SECTION 3.2. Title to Project...........................................................................12
SECTION 3.3. Quiet Enjoyment............................................................................12
SECTION 3.4. Limitations of Warranties..................................................................12
SECTION 3.5. Agreement of the Issuer to Execute Amendment to Lease Agreement
and Release from Security Deed.............................................................13
ARTICLE IV
COMMENCEMENT AND COMPLETION OF THE PROJECT;
ISSUANCE OF THE SERIES 1999 BONDS; ADDITIONAL BONDS
SECTION 4.1. Agreement to Construct and Install the Project.............................................13
SECTION 4.2. Agreement to Issue Series 1999 Bonds; Application of Series 1999 Bond Proceeds.............14
SECTION 4.3. Disbursements from the Construction Fund...................................................14
SECTION 4.4. Obligation of the Parties to Cooperate in Furnishing Documents to
Trustee....................................................................................16
SECTION 4.5. Establishment of Completion Date...........................................................16
SECTION 4.6. Issuer Not Required to Pay Project Costs in Event Construction Fund
Insufficient...............................................................................16
SECTION 4.7. Issuer to Pursue Remedies Against Suppliers, Contractors and
Subcontractors and Their Sureties..........................................................17
SECTION 4.8. Investment of Moneys Permitted.............................................................17
SECTION 4.9. Issuance of Additional Bonds...............................................................17
-i-
<PAGE>
ARTICLE V
EFFECTIVE DATE OF THIS LEASE; DURATION OF LEASE TERM;
RENTAL PROVISIONS
SECTION 5.1. Effective Date of this Lease; Duration of Lease Term.......................................18
SECTION 5.2. Delivery and Acceptance of Possession......................................................18
SECTION 5.3. Rents and Other Amounts Payable............................................................18
SECTION 5.4. Place of Rental Payments...................................................................19
SECTION 5.5. Obligations of Lessee Hereunder Absolute and Unconditional.................................19
SECTION 5.6. Lessee's Performance under Indenture.......................................................20
ARTICLE VI
MAINTENANCE AND MODIFICATIONS, TAXES AND INSURANCE
SECTION 6.1. Maintenance and Modifications of Project by Lessee.........................................20
SECTION 6.2. Removal of Leased Equipment................................................................20
SECTION 6.3. Taxes, Other Governmental Charges and Utility Charges......................................21
SECTION 6.4. Insurance Required.........................................................................22
SECTION 6.5. Application of Insurance Proceeds..........................................................22
SECTION 6.6. Additional Provisions Respecting Insurance.................................................22
SECTION 6.7. Other Issuer Expenses......................................................................22
SECTION 6.8. [Intentionally Omitted]....................................................................22
SECTION 6.9. Indemnification of Issuer and the Trustee..................................................22
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
SECTION 7.1. Damage and Destruction.....................................................................24
SECTION 7.2. Condemnation...............................................................................24
ARTICLE VIII
SPECIAL COVENANTS
SECTION 8.1. No Warranty of Condition or Suitability by the Issuer......................................24
SECTION 8.2. Inspection of Project; Right of Access to the Project by the Issuer........................24
SECTION 8.3. Lessee to Maintain Its Existence; Exceptions Permitted.....................................25
SECTION 8.4. Qualification in Georgia...................................................................25
SECTION 8.5. Granting and Release of Easements; Amending or Modifying
Easements..................................................................................25
SECTION 8.6. Release of Certain Land....................................................................25
SECTION 8.7. Release of Electric Switchyard Equipment and Land..........................................26
SECTION 8.8. Filing of Certain Continuation Statements..................................................27
SECTION 8.9. Special Environmental Indemnification......................................................27
SECTION 8.10. [Intentionally Omitted]....................................................................28
SECTION 8.11. [Intentionally Omitted]....................................................................28
SECTION 8.12. Granting of Security Interest in Leased Equipment..........................................28
SECTION 8.13. Special Covenants Related to Ad Valorem Taxation...........................................28
-ii-
<PAGE>
ARTICLE IX
ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT
SECTION 9.1. Assignment and Subleasing..................................................................28
SECTION 9.2. Conveying of Project by Issuer by Security Deed............................................29
SECTION 9.3. Restrictions on Sale of Project by Issuer..................................................29
SECTION 9.4. Prepayment of Bonds........................................................................30
SECTION 9.5. Prepayment of Rents........................................................................30
SECTION 9.6. Reference to Bonds Ineffective After Bonds Paid............................................31
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default Defined..................................................................31
SECTION 10.2. Remedies on Default........................................................................31
SECTION 10.3. Remedies Exclusive.........................................................................32
SECTION 10.4. Agreement to Pay Attorneys'Fees and Expenses...............................................32
SECTION 10.5. No Additional Waiver Implied by One Waiver.................................................32
SECTION 10.6. Waiver of Appraisement, Valuation, Etc.....................................................33
ARTICLE XI
OPTIONS IN FAVOR OF LESSEE
SECTION 11.1. Options to Terminate the Lease Term........................................................33
SECTION 11.2. Option to Purchase All or Portion of Project...............................................33
SECTION 11.3. Option to Purchase Unimproved Land.........................................................34
SECTION 11.4. Conveyance on Purchase.....................................................................35
SECTION 11.5. Relative Position of Options and Indenture.................................................36
ARTICLE XII
OBLIGATIONS OF LESSEE; RIGHTS OF LESSEE
SECTION 12.1. Obligation to Purchase Project.............................................................36
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Notices....................................................................................36
SECTION 13.2. Binding Effect.............................................................................38
SECTION 13.3. Severability...............................................................................38
SECTION 13.4. Amounts Remaining in Bond Fund.............................................................38
SECTION 13.5. Amendments, Changes and Modifications; Consents of Collateral
Agent......................................................................................38
SECTION 13.6. Execution Counterparts.....................................................................38
SECTION 13.7. Captions...................................................................................38
SECTION 13.8. Recording of Lease and Security Deed.......................................................38
SECTION 13.9. Law Governing Construction of Lease........................................................38
-iii-
<PAGE>
SECTION 13.10. Net Lease..................................................................................38
SECTION 13.11. Trustee as Third-Party Beneficiary.........................................................39
SECTION 13.12. Estate for Years...........................................................................39
EXHIBIT A - DESCRIPTION OF LEASED LAND
EXHIBIT B - DESCRIPTION OF LEASED EQUIPMENT
EXHIBIT C - PROJECT SUMMARY
EXHIBIT D - QUITCLAIM DEED AND BILL OF SALE
EXHIBIT E - FORM OF AMENDMENT TO LEASE AGREEMENT
EXHIBIT F - AD VALOREM TAX AGREEMENT
EXHIBIT G LEASE PAYMENTS TO COUNTY AND ISSUER FEES
</TABLE>
-iv-
<PAGE>
LEASE AGREEMENT
THIS LEASE AGREEMENT, dated as of November 1, 1999, by and between the
DEVELOPMENT AUTHORITY OF HEARD COUNTY (the "Issuer"), a public corporation of
the State of Georgia, as lessor, and TENASKA GEORGIA PARTNERS, L.P. (the
"Lessee"), a limited partnership organized and existing under the laws of the
State of Delaware and qualified to do business in the State of Georgia, as
lessee,
RECITALS
WHEREAS, the Issuer has been created pursuant to the provisions of an
Act of the General Assembly of the State of Georgia (O.C.G.A. Section 36-62 ET
SEQ.), as amended and an activating resolution of the Board of Commissioners of
Heard County, Georgia duly adopted on January 3, 1972 (collectively, the "Act"),
its directors have been appointed as provided in the Act and are currently
acting in such capacity; and
WHEREAS, the Issuer has been created for the purpose of encouraging and
promoting the expansion and development of industrial and commercial facilities
in Heard County, Georgia; the Act empowers the Issuer to issue its revenue
obligations, in accordance with the applicable provisions of the Revenue Bond
Law of the State of Georgia (O.C.G.A. Sections 36-82-60 to 36-82-85), as
heretofore and hereafter amended, for the purpose of financing any undertaking
within the scope of its power, including, without limitation, the acquisition by
purchase or gift of any building or structure within the territorial limits of
Heard County suitable for and intended for use as a factory, mill, shop,
processing plant, assembly plant or fabricating plant, including all appurtenant
lands and appurtenances thereto and all necessary or useful furnishings,
machinery and equipment, and the lease or sale of such building or structure for
operation by one or more persons, firms or corporations, all in furtherance of
the public purpose for which it was created; and
WHEREAS, after careful study and investigation the Issuer, in
furtherance of the purpose for which it was created and pursuant to a resolution
duly adopted, has agreed to enter into this lease agreement (the "Lease
Agreement"), dated as of the date first written above, with the Lessee, pursuant
to which the Issuer agrees to acquire, construct and install the Project (as
defined herein), including the real property owned by the Issuer for the
exclusive use and occupancy of the Lessee under the Lease Agreement and the
Lessee has agreed to pay the Issuer specified rental payments and other
payments; and
WHEREAS, after careful investigation, the Issuer has found and does
hereby declare that it is in the best interest of the citizens of Heard County
that the Project be acquired, constructed and installed and leased to the Lessee
for the purposes stated herein, all in keeping with the public purpose for which
the Issuer was created, and that such acquisition, construction and installation
of the Project and lease thereof to the Lessee hereunder are specifically
authorized under the Act; and
WHEREAS, a Project Summary (the "Project Summary") for the Project has
been prepared by the Lessee, and it is estimated that the amount necessary to
finance the cost of the Project, including expenses incidental thereto, will not
exceed $400,000,000 (said Project
<PAGE>
Summary, a copy of which is attached to this Lease Agreement as Exhibit C and
which may be amended from time to time by the Lessee, has been approved by the
Issuer and is on file with the Secretary of the Issuer); and
WHEREAS, the most feasible method of financing the cost of the Project
is through the issuance by the Issuer of its Development Authority of Heard
County Taxable Industrial Development Revenue Bonds (Tenaska Georgia Partners,
L.P. Project), Series 1999, in the aggregate principal amount of not to exceed
$400,000,000 (the "Series 1999 Bonds") pursuant to an Indenture of Trust dated
as of November 1, 1999 between the Issuer and The Chase Manhattan Bank, as
trustee (the "Trustee"), as the same may from time to time be amended, modified
or supplemented; and
WHEREAS, it is anticipated that additional moneys may be necessary to
finance the cost of (a) completing the acquisition, construction and
installation of the Project, (b) providing for the enlargement, improvement,
expansion or replacement of the Project, (c) refunding all of the Bonds (defined
below) of any one or more series then outstanding, or (d) any combination of the
foregoing, and provision should be made for the issuance from time to time of
Additional Bonds which shall be equally and ratably secured hereunder with the
Series 1999 Bonds (the Series 1999 Bonds and such Additional Bonds being
hereinafter collectively referred to as the "Bonds"); and
WHEREAS, the Series 1999 Bonds will be delivered to and paid for by
Tenaska Georgia Partners, L.P., as purchaser (the "Purchaser") to finance the
acquisition, construction and installation of the Project; and
WHEREAS, the Issuer will receive rental payments and other payments
from the Lessee, which revenues, together with all other rents, revenues and
receipts and other payments to be received pursuant to this Lease Agreement,
shall be pledged together with this Lease Agreement (except for the Unassigned
Rights defined in the Indenture) as security for the payment of the principal of
and interest on the Bonds; and
WHEREAS, a condition of the Trustee's acceptance of the Indenture, the
Lessee has executed and delivered a Guaranty Agreement, dated as of even date
herewith, pursuant to which the Lessee, as guarantor, absolutely and
unconditionally guarantees to the Trustee the full and prompt payment in
accordance with the provisions on this Indenture of the principal of and
interest on the Series 1999 Bonds; and
WHEREAS, as additional security for the payment of the Bonds, the
Issuer has conveyed title to that portion of the Project consisting of real
property and has assigned all leases in and to all rents and other payments
derived from the Project and has granted a security interest in that portion of
the Project consisting of personal property to the Trustee pursuant to the terms
of a Deed to Secure Debt, Security Agreement and Assignment of Rents and Leases
(the "Security Deed"), dated as of even date herewith; and
WHEREAS, in connection with the commencement of commercial operation of
the Project, the Lessee is required to deliver the Debt Service Reserve Letter
of Credit (the "DSR
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Letter of Credit") and The Toronto-Dominion Bank ("Toronto-Dominion"), as
issuing bank, has agreed to issue the DSR Letter of Credit subject to the terms
and conditions contained in the Debt Service Reserve Letter of Credit and
Reimbursement Agreement, dated as of November 1, 1999, among each of the banks
and financial institutions parties thereto and Toronto-Dominion, as issuing bank
and as agent for such banks and financial institutions (in such capacity as
agent, and together with its successors and assigns, the "DSR LOC Provider");
and
WHEREAS, in connection with the Lessee's obligations under the Power
Purchase Agreement (as defined in the Common Agreement hereafter referred to),
the Lessee may deliver the PPA Letter of Credit (the "PPA LOC") and
Toronto-Dominion, as issuing bank, has agreed to issue the PPA LOC subject to
the terms and conditions contained in the PPA Letter of Credit and Reimbursement
Agreement, dated as of November 1, 1999, among each of the banks and financial
institutions parties thereto and Toronto-Dominion, as issuing bank and as agent
for such banks and financial institutions (in such capacity as agent, and
together with its successors and assigns, the "PPA LOC Provider"); and
WHEREAS, the Lessee may finance certain working capital requirements of
the Project by entering into a working capital agreement with a financial
institution for the provision of credit to the Lessee (such financial
institution, the "Working Capital Provider" and, together with the DSR LOC
Provider and the PPA LOC Provider, the "Senior Parties"); and
WHEREAS, the Lessee, as purchaser of the Bonds, has agreed to pledge
the Bonds to The Chase Manhattan Bank, as Collateral Agent (the "Collateral
Agent") pursuant to a Partnership Assignment and Security Agreement dated as of
November 1, 1999 (the "Partnership Assignment and Security Agreement") as
security for its obligations to the Senior Parties under the Financing Documents
(as defined in the Common Agreement hereinafter referred to); and
WHEREAS, the Lessee, the Collateral Agent, The Chase Manhattan Bank, as
Depositary Bank (the "Depositary Bank), the Trustee and the Senior Parties have
entered into a Collateral Agency and Intercreditor Agreement, dated as of
November 1, 1999 (the "Collateral Agency Agreement") to set forth the rights of
the Lessee and the Senior Parties as to the Collateral (as defined therein); and
WHEREAS, the Lessee, the Collateral Agent and the Senior Parties have
entered into an Agreement as to Certain Undertakings, Common Representations,
Warranties, Covenants and Other Terms dated as of November 1, 1999 (the "Common
Agreement") which sets forth certain representations, warranties and covenants
of the Lessee relating to the Project;
NOW, THEREFORE, in consideration of the respective representations and
agreements hereinafter contained, the Issuer and the Lessee agree as follows
(provided, that in the performance of the agreements of the Issuer herein
contained, any obligation it may thereby incur for the payment of money shall
not be a general debt on its part but shall be payable solely out of the rents,
revenues and receipts derived from this Lease Agreement, the sale of the Bonds,
the insurance and condemnation awards as herein described and any other rents,
revenues and receipts arising out of or in connection with its ownership of the
Project):
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ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. In addition to the words and terms elsewhere defined
in this Lease Agreement, the following words and terms as used in this Lease
Agreement shall have the following meanings unless the context or use indicates
another or different meaning or intent. Terms which are not defined in this
Lease Agreement shall have the meaning specified in Article I of the Indenture
except as herein otherwise expressly provided or unless the context requires
otherwise.
"ACT" means an Act of the General Assembly of the State of Georgia
(O.C.G.A. Section 36-62 ET SEQ.), as amended and an activating resolution of the
Board of Commissioners of Heard County, Georgia duly adopted on January 3, 1972.
"ADDITIONAL BONDS" means the bonds of any series, other than the Series
1999 Bonds, authorized under the Indenture and authenticated and delivered in
accordance with Sections 4.01 and 4.02 of the Indenture.
"AUTHORIZED ISSUER REPRESENTATIVE" means the person or persons at the
time designated to act on behalf of the Issuer by certificate furnished to the
Lessee and the Trustee containing the specimen signature of each such person and
signed by the Chairman or Vice Chairman of the Issuer. Such certificate may
designate an alternate or alternates, each of whom shall be entitled to perform
all duties of the Authorized Issuer Representative. Such certificate shall be
effective until revoked in writing.
"AUTHORIZED LESSEE REPRESENTATIVE" means the person or persons at the
time designated to act on behalf of the Lessee by certificate furnished to the
Issuer and the Trustee containing the specimen signature of each such person and
signed on behalf of the Lessee by the president or any vice president of the
general partner of the Lessee. Such certificate may designate an alternate or
alternates, each of whom shall be entitled to perform all duties of the
Authorized Lessee Representative. Such certificate shall be effective until
revoked in writing.
"BOND" or "BONDS" means any or all of the Series 1999 Bonds and any
Additional Bonds issued by the Issuer pursuant to the Indenture.
"BOND FUND" means the Bond principal and interest payment fund created
by Section 6.02 of the Indenture and within which has been established a General
Account and a Special Account. Any reference herein to the "Bond Fund" without
further limitation or explanation shall be deemed to be a reference to the
General Account in the Bond Fund.
The term "BONDHOLDER" or "HOLDER OF THE BONDS" means the registered
owner of the Bonds (or, if the Bonds, or any of them, have been pledged, the
registered pledgee of the Bonds).
"BUILDINGS" means those certain facilities forming a part of the
Project located on the Leased Land and not constituting a part of the Leased
Equipment, the acquisition, construction or
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installation of which or the improvements or replacement thereto, in whole or in
part, is to be financed with the proceeds from the sale of the Bonds, as they
may at any time exist.
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency and
Intercreditor Agreement dated as of November 1, 1999 among the Lessee, the
Trustee, the Senior Parties, the Collateral Agent and the Depositary Bank, as
the same may be amended from time to time in accordance with its terms.
"COLLATERAL AGENT" means The Chase Manhattan Bank, its successors and
assigns, in its capacity as collateral agent under the Collateral Agency
Agreement.
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings,
Common Representations, Warranties, Covenants and Other Terms, dated November 1,
1999, among the Lessee, the Senior Parties and the Collateral Agent, as the same
may be amended from time to time in accordance with its terms.
"COMPLETION DATE" means the date of completion of the acquisition,
construction and installation of the Project as that date shall be certified as
provided in Section 4.5 hereof.
"CONSTRUCTION FUND" means the fund so designated, established and
created under Section 2.2 of the Collateral Agency Agreement.
"CONSTRUCTION PERIOD" means the period beginning on the date on which
the Series 1999 Bonds are delivered to the first purchaser or purchasers thereof
or the date upon which the acquisition, construction and installation of the
Project began, whichever is earlier, and ending on the Completion Date.
"COUNSEL" means an attorney or firm thereof admitted to practice law
before the highest court of any state of the United States of America or the
District of Columbia. An attorney for the Issuer or the Lessee may be eligible
for appointment as Counsel.
"DEPOSITARY BANK" means The Chase Manhattan Bank, as depositary bank
under the Collateral Agency Agreement, or any successor thereto pursuant to the
terms hereof.
"EVENT OF DEFAULT" means any of the events described in Section 10.1
hereof.
"FINANCING STATEMENTS" means any and all financing statements
(including continuation statements) filed for record from time to time to
perfect the security interests created by the Indenture and/or the Security
Deed.
"GOVERNMENTAL APPROVALS" has the meaning set forth in the Common
Agreement.
"GOVERNMENT OBLIGATIONS" means (a) direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged, or (b) obligations issued by any agency
controlled or supervised by and acting as an instrumentality of the United
States of America, the payment of the principal of and interest on which is
fully and unconditionally guaranteed as a full faith and credit obligation of
the United States of America (including any securities described in (a) or (b)
issued or held in book-entry form on the
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books of the Department of Treasury of the United States of America), which
obligations, in either case, are held in the name of the Trustee and are not
subject to redemption prior to maturity by anyone other than the holder thereof.
"GUARANTY AGREEMENT" means the Guaranty Agreement, of even date
herewith, from the Lessee, as guarantor, to the Trustee, pursuant to the terms
of which the Lessee has absolutely and unconditionally guaranteed the payment of
the principal of and interest on, the Bonds, and any amendments or supplements
thereto, including any amendments or any additional Guaranty Agreements executed
by the Lessee in connection with the issuance of any Additional Bonds.
"INDENTURE" means the Indenture of Trust between the Issuer and the
Trustee, of even date herewith, pursuant to which the Bonds are authorized to be
issued and the Issuer's interest in the Lease and the rents, revenues and
receipts arising out of or in connection with the Issuer's ownership of the
Project are to be pledged and assigned to the Trustee as security for the
payment of the principal of and interest on, the Bonds, including any indenture
supplemental thereto.
"INDEPENDENT COUNSEL" means an attorney or firm thereof duly admitted
to practice law before the highest court of any state in the United States of
America or the District of Columbia and not an employee of or regularly retained
by either the Issuer or the Lessee.
"INSURANCE PROCEEDS" has the meaning set forth in the Common Agreement.
"ISSUER" means the Development Authority of Heard County, a public body
corporate and politic created and existing under the laws of the State of
Georgia, and its lawful successors and assigns.
"ISSUER DOCUMENTS" means this Lease, the Indenture, the Bond Purchase
Agreement, the Security Deed and the Quitclaim Deed.
"LEASE" or "LEASE AGREEMENT" means this Lease Agreement as it now
exists and as it may hereafter be amended in accordance with its terms..
"LEASE TERM" means the duration of the leasehold interest created by
this Lease as specified in Section 5.1 hereof.
"LEASED EQUIPMENT" means those items of machinery, equipment and
related property required herein to be acquired and/or installed in the Building
or on the Leased Land with proceeds from the sale of the Bonds or the proceeds
of any payment by the Lessee pursuant to Section 4.6 hereof and any item of
machinery, equipment and related property acquired and installed in the Building
or on the Leased Land in substitution therefor and renewals and replacements
thereof pursuant to Sections 6.2, 7.1 and 7.2 hereof, less such machinery,
equipment and related property as may be released from this Lease pursuant to
Section 6.2 hereof or taken by the exercise of power of eminent domain as
provided in Section 7.2 hereof, but not including the Lessee's own machinery,
equipment and related property installed under the provisions of Section 6.1(b)
hereof. The Leased Equipment insofar as it will be initially installed as a part
of the Project is more fully described in Exhibit "B" attached hereto and by
this reference made a part of this Lease.
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"LEASED LAND" means the real estate and interests in real estate
described in Exhibit "A" attached hereto and by this reference made a part
hereof, increased or decreased by any real estate and interests in real estate
as may be released from this Lease pursuant to Sections 8.5 or 8.6 or added to
this Lease pursuant to Section 11.3 hereof, respectively, or taken by the
exercise of the power of eminent domain as provided in Section 7.2 hereof.
"LESSEE" means Tenaska Georgia Partners, L.P., a Delaware limited
partnership, and its successors and assigns, including any surviving, resulting
or transferee entity as provided in Section 8.3 hereof.
"LESSEE DOCUMENTS" means this Lease, the Guaranty Agreement and the
Bond Purchase Agreement.
"LOSS PROCEEDS" shall have the meaning set forth in the Common
Agreement.
The term "PAYMENT IN FULL OF THE BONDS" specifically encompasses the
situations referred to in Sections 10.01 and 10.02 of the Indenture.
"PARTNERSHIP ASSIGNMENT AND SECURITY AGREEMENT" shall have the meaning
set forth in the Common Agreement.
"PERMITTED INVESTMENTS" means:
(a) Government Obligations;
(b) Obligations of the Federal Land Bank;
(c) Obligations of the Federal Home Loan Bank;
(d) Obligations of the Federal Intermediate Credit Bank;
(e) Obligations of the Central Bank for Cooperatives;
(f) Certificates of deposit of national or state banks located
within the State which have deposits insured by the Federal Deposit
Insurance Corporation and certificates of deposit of Federal savings
and loan associations and state building and loan associations located
within the State which have deposits insured by the Federal Savings and
Loan Insurance Corporation (including the certificates of deposit of
any bank, savings and loan association or building and loan association
acting as depository, custodian or trustee for any proceeds of the
Bonds); provided, however, that the portion of such certificates of
deposit in excess of the amount insured by the Federal Deposit
Insurance Corporation, if any, shall be secured by deposit with the
Federal Reserve Bank of Atlanta, Georgia, or with any national or state
bank located within the State, of any of the obligations included in
(a), (b), (c), (d) or (e) above; and
(g) Repurchase agreements with respect to obligations included
in (a), (b), (c), (d) or (e) above and any other investments to the
extent at the time permitted by then applicable law for the investment
of public funds.
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"PERMITTED LIENS" has the meaning set forth in Section 5.2(b) of the
Common Agreement.
"PROJECT" means the Leased Land, the Building and the Leased Equipment,
as each may at any time exist.
"PROJECT SUMMARY" means the project summary filed with the Secretary of
the Issuer, as the same may be amended from time to time in accordance with the
provisions of this Lease. The Project Summary is contained as Exhibit "C"
attached hereto and by this reference made a part of this Lease.
"QUITCLAIM DEED" means the Quitclaim Deed and Bill of Sale to be dated
the date of actual execution and delivery thereof, held in trust by the Trustee
in accordance with the provisions hereof. The Quitclaim Deed and Bill of Sale,
in substantially the form it is to be executed and delivered, is attached as
Exhibit "D" hereto.
"SECURITY DEED" means the Deed to Secure Debt, Security Agreement and
Assignment of Rents and Leases, dated as of November 1, 1999, by and between the
Issuer and the Trustee, as amended from time to time.
"SECURITY DOCUMENTS" shall have the meaning given in the Common
Agreement.
"SECURITY INTEREST" or "SECURITY INTERESTS" means the security
interests created in the Indenture and shall have the meaning set forth in the
Uniform Commercial Code of Georgia, as now or hereafter amended.
"SENIOR PARTIES" has the meaning given in the recitals hereto.
"SERIES 1999 BONDS" means the Development Authority of Heard County
Taxable Industrial Development Revenue Bonds (Tenaska Georgia Partners, L.P.
Project), Series 1999, in the aggregate principal amount not to exceed
$400,000,000, authenticated and delivered in accordance with Section 3.03 of the
Indenture.
"STATE" means the State of Georgia.
"TRUSTEE" means The Chase Manhattan Bank or any co-trustee and any
successor trustee under the Indenture.
SECTION 1.2. RULES OF CONSTRUCTION. Unless the context clearly
indicates to the contrary:
(a) "Herein," "hereby," "hereunder," "hereof", "hereinbefore",
"hereinafter" and other equivalent words refer to this Lease and not solely to
the particular portion thereof in which any such word is used.
(b) Words importing the singular number shall include the plural number
and vice versa, and any pronoun used herein shall be deemed to cover all
genders.
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(c) All references herein to particular Articles or Sections are
references to Articles or Sections of this Lease.
(d) Any certificate or statement required to be delivered under the
provisions of this Lease or the Indenture shall, in the absence of manifest
error, be deemed to be conclusive evidence of the truth, correctness and
accuracy of the matters covered in such certificate or statement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS AND WARRANTIES BY THE ISSUER. The Issuer
makes the following representations and warranties:
(a) ORGANIZATION AND AUTHORITY. The Issuer is a public body corporate
and politic, created and validly existing pursuant to the Constitution and laws
of the State of Georgia, including particularly the provisions of the Act. Under
the provisions of the Act, the Issuer has the power to execute and deliver the
Issuer Documents, to enter into the transactions contemplated thereby and to
perform and observe its obligations contained therein in accordance with the
terms thereof. By proper corporate action, the Issuer has duly authorized the
execution, delivery and performance of the Issuer Documents.
(b) ABILITY TO FINANCE PROJECT UNDER ACT. The Project constitutes an
undertaking within the scope of the Issuer's power for which bonds may be issued
to finance under the Act, and is located within the corporate limits of Heard
County, Georgia.
(c) PUBLIC PURPOSE. The Issuer has found and hereby declares that the
undertaking for which the Bonds are to be issued will increase employment within
the territorial limits designated in the Act, and the Lessee of the Project will
not, by virtue of establishing operations in said territorial limits, reduce the
number of employees employed by the Lessee elsewhere in the State of Georgia.
(d) AGREEMENTS ARE LEGAL AND AUTHORIZED. The Issuer is not subject to
any charter, by-law or contractual limitation or provision of any nature
whatsoever which in any way limits, restricts or prevents the Issuer from
entering into the Issuer Documents or performing any of its obligations
thereunder, except to the extent that such performance may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors'
rights.
(e) LIMITED OBLIGATIONS. Notwithstanding anything herein contained to
the contrary, any obligation the Issuer may hereby incur for the payment of
money shall not be a general debt on its part but shall be payable solely from
rents, revenues and receipts derived from this Lease, the sale of the Bonds and
any other rents, revenues and receipts derived by the Issuer arising out of or
in connection with its ownership of the Project (except for Unassigned Rights).
(f) ISSUANCE OF BONDS. To accomplish the foregoing, the Issuer proposes
to issue from time to time not to exceed $400,000,000 aggregate principal amount
of its Series 1999 Bonds.
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The date, denominations, interest rate, maturity date, redemption provisions and
other pertinent provisions with respect to the Bonds are set forth in the
Indenture (particularly Articles II and III thereof) and by this reference
thereto they are incorporated herein.
(g) SECURITY FOR BONDS. The Bonds are to be issued under and secured by
the Indenture, pursuant to which the Issuer's right, title and interest in this
Lease (except for certain rights of indemnification and payment of expenses),
and the rents, revenues and receipts arising out of or in connection with the
Issuer's ownership of the Project will be assigned to the Trustee and pledged as
security for the payment of the principal of and interest on the Bonds.
(h) NO PRIOR PLEDGE. Neither this Lease nor the rents, receipts and
revenues derived hereunder have been pledged or hypothecated in any manner or
for any purpose (other than as provided in the Indenture).
(i) GOVERNMENTAL CONSENTS. Neither the nature of the Issuer nor any of
its activities or properties, nor any relationship between the Issuer and any
other Person, nor any circumstance in connection with the offer, issue, sale or
delivery of any of the Bonds is such as to require the consent, approval or
authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Issuer in connection with the
execution, delivery and performance of any of the Issuer Documents or the offer,
issue, sale or delivery of the Bonds, other than those already obtained or
filed; provided, however, no representation is made herein as to compliance with
the securities or "blue sky" laws of any jurisdiction.
(j) NO DEFAULTS. No event has occurred and no condition exists with
respect to the Issuer which would constitute an event of default, as defined
therein, under any of the Issuer Documents or which, with the lapse of time or
with the giving of notice or both, would become an event of default under any of
the Issuer Documents.
(k) ENFORCEABILITY. This Lease is a legal, valid and binding obligation
of the Issuer enforceable in accordance with its terms, except to the extent the
enforceability hereof may be subject to (i) the exercise of judicial discretion
in accordance with general principles of equity, and (ii) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting
creditors' rights heretofore or hereinafter enacted to the extent
constitutionally applicable.
(l) NO WARRANTY BY ISSUER OF CONDITION OR SUITABILITY OF THE PROJECT
FACILITIES. The Issuer makes no warranty, either expressed or implied, as to the
suitability or utility of the Project or as to the condition of the Project or
that they are or will be suitable for the Lessee's purposes or needs.
SECTION 2.2. REPRESENTATIONS AND WARRANTIES BY THE LESSEE. The Lessee
makes the following representations and warranties:
(a) The Lessee (i) is a limited partnership duly organized and validly
existing under the laws of the State of Delaware and (ii) is duly qualified to
do business as a limited partnership in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own, lease or hold its property and
to conduct the business in which it is now engaged or proposed to be engaged,
except where the failure to so qualify or have such power or authority would
not, singularly or in
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the aggregate, have a Material Adverse Effect (as such term is defined in the
Common Agreement).
(b) The Lessee has full partnership right, power and authority to
execute and deliver this Lease Agreement and to perform its obligations
hereunder; and all partnership action required to be taken for the due and
proper authorization, execution and delivery of this Lease Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
taken.
(c) This Lease Agreement has been duly authorized, executed and
delivered by the Lessee, and constitutes a valid and legally binding obligation
of the Lessee enforceable against it in accordance with the terms hereof, except
to the extent limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws affecting creditors'
rights generally, and by general equitable principles (whether considered in a
proceeding in equity or at law).
(d) The execution, delivery and performance by the Lessee of this Lease
Agreement and the consummation of the transactions contemplated hereby will not
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Lessee pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the Lessee is a
party or by which the Lessee is bound or to which any of the property or assets
of the Lessee is subject, (ii) result in any violation of the provisions of the
Partnership Agreement (as such term is defined in the Common Agreement), or
(iii) result in any violation of any statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Lessee or any of its properties or assets.
(e) All Governmental Approvals (as such term is defined in the Common
Agreement) which are required, as of the date of issuance and delivery of the
Bonds, to be obtained by, in the name of, or on behalf of the Lessee in
connection with the due execution, delivery and performance of this Lease
Agreement have been duly obtained or made, are validly issued and are in full
force and effect. The Lessee is in compliance with all such Governmental
Approvals, except to the extent that noncompliance could not reasonably be
expected to result in a Material Adverse Effect.
(f) There are no legal or governmental proceedings pending to which the
Lessee is a party or of which any property or assets of the Lessee are the
subject which, singly or in the aggregate, could reasonably be expected to have
a Material Adverse Effect; and to the best of the Lessee's knowledge, no such
proceedings are threatened by governmental authorities or others.
(g) The Lessee is not (i) in violation of its Partnership Agreement or
other organizational documents, (ii) in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
herein .
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(h) The Lessee presently intends to operate the Project, located wholly
within Heard County, in a manner consistent with the Act, principally as an 936
megawatt natural-gas fired (with oil as the backup fuel) electric power
generation facility, consisting of 6 F-class simple cycle combustion turbine
engines from the Completion Date until the expiration or sooner termination of
the Lease Term as provided herein.
ARTICLE III
LEASING CLAUSES AND WARRANTY OF TITLE
SECTION 3.1. LEASE OF THE PROJECT. The Issuer hereby leases to the
Lessee, and the Lessee hereby leases from the Issuer, subject to Permitted
Liens, the Project at the rental set forth in Section 5.3 hereof and in
accordance with the provisions of this Lease.
SECTION 3.2. TITLE TO PROJECT. Upon the execution and delivery hereof,
the Issuer agrees that it will furnish to the Lessee an opinion of the Issuer's
Counsel or other Counsel satisfactory to the Lessee stating that the Issuer
holds good and marketable fee simple title in and to the Leased Land. Likewise,
upon delivery of the Bonds, the Issuer agrees that it will furnish to the Lessee
and to the Trustee an opinion of the Issuer's Counsel or other Counsel
satisfactory to the Lessee and to the Trustee stating that the Security Deed has
been duly filed and recorded in the Office of the Clerk of the Superior Court of
Heard County, and constitutes a first lien on the real property comprising a
portion of the Project and a first security interest in the personal property
comprising a portion of the Project subject only to Permitted Liens.
The Issuer agrees that it shall upon request of the Lessee join where
necessary in any proceeding to protect and defend the Issuer's title in and to
the Project, provided that the Lessee shall pay the entire cost of any such
proceeding or reimburse the Issuer therefor and indemnify and hold harmless the
Issuer from any cost or liability whatsoever.
SECTION 3.3. QUIET ENJOYMENT. The Issuer warrants and covenants that it
will defend the Lessee in the quiet enjoyment and peaceable possession of the
Leased Land, and all appurtenances thereunto belonging, free from all claims of
all persons whomsoever acting by, through or under the Issuer, throughout the
Lease Term.
In addition to the foregoing warranty, the Issuer agrees that it will
not take or cause another party to take any action to interfere with the
Lessee's peaceful and quiet enjoyment of the Project. The Issuer agrees that in
the event the peaceful and quiet enjoyment of the Project shall otherwise be
denied to the Lessee or contested by anyone, the Issuer shall upon request of
the Lessee join where necessary in any proceeding to protect and defend the
quiet enjoyment of the Lessee, provided that, unless such denial or contest
shall result from the gross negligence or wilful misconduct of the Issuer, the
Lessee shall pay the entire cost of any such proceeding or reimburse the Issuer
therefor and indemnify and hold harmless the Issuer from any cost or liability
whatsoever.
SECTION 3.4. LIMITATIONS OF WARRANTIES. The warranties of the Issuer
which are contained in Sections 3.2 and 3.3 hereof shall be limited to the
extent and in such amount as may be contained in and recoverable under an
Owner's Policy of Title Insurance naming the Issuer as
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the insured, to be furnished to the Issuer by the Lessee at the Lessee's expense
upon the execution and delivery of this Lease; provided, however that nothing
contained in this section shall restrict the Issuer's liability resulting from
the Issuer's tortious acts or gross negligence.
SECTION 3.5. AGREEMENT OF THE ISSUER TO EXECUTE AMENDMENT TO LEASE
AGREEMENT AND RELEASE FROM SECURITY DEED. The Issuer and the Lessee understand
and agree that (i) certain items of personal property may be acquired by the
Lessee and conveyed to the Issuer or may be acquired directly by the Issuer from
time to time hereafter, (ii) items of Leased Equipment and/or portions of the
Land may be removed or released from this Lease in accordance with the
provisions of Sections 6.2 and 8.6 hereof, and (iii) easements, restrictive
covenants and certain other rights of way across the Leased Land may be granted
by the Lessee in accordance with Section 8.5 hereof. The Issuer agrees, at the
request of the Lessee, to execute an Amendment to Lease Agreement in the form
contained as Exhibit "E" hereto or such other form as shall be reasonably
acceptable to the Issuer and the Lessee, without further action on its part
unless further action is otherwise required under the provisions hereof, and the
equipment or property added or released thereby shall become subject to or be
released from this Lease. In connection with any amendment of this Lease
Agreement providing for the removal of Leased Equipment or the release of Leased
Land as provided herein, the Issuer shall execute and deliver such amendments,
releases and/or termination statements as may be necessary to release the lien
on such Leased Equipment or Leased Land created under the Security Deed.
ARTICLE IV
COMMENCEMENT AND COMPLETION OF THE PROJECT;
ISSUANCE OF THE SERIES 1999 BONDS; ADDITIONAL BONDS
SECTION 4.1. AGREEMENT TO CONSTRUCT AND INSTALL THE PROJECT. Not later
than the delivery of this Lease the Issuer will have acquired the title in and
to the Leased Land and, subject to the provisions of Section 4.6 hereof, the
Issuer agrees that it will cause the acquisition, construction and installation
of the Buildings to be made in accordance with the Project Summary, as may be
amended from time to time by the Lessee, filed or to be filed with the Issuer,
and will cause to be acquired and installed in the Building or on the Leased
Land, the Leased Equipment, to consist of machinery, equipment and related
property described in the list attached hereto as Exhibit "B" and such other
items of machinery, equipment and related property as in the Lessee's judgment
may be necessary or desirable for the operation of the Project and as shall from
time to time prior to the Completion Date be specified in written orders from
the Lessee to the Issuer, all of which acquisitions and installations shall be
made substantially in accordance with directions given by the Lessee. Any
changes to the Project Summary shall be made at the sole discretion of the
Lessee and shall also be filed with the Secretary of the Issuer and the
Authorized Lessee Representative. The Building and the Leased Equipment shall be
the property of the Issuer and subject to the terms of this Lease.
The Issuer hereby makes, constitutes and appoints the Lessee as its
true, lawful and exclusive agent for the acquisition, construction and
installation of the Project, and the Lessee hereby accepts such agency to act
and do all things on behalf of the Issuer, to perform all acts of the Issuer
hereinbefore provided in this Section 4.1, and to bring any actions or
proceedings
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against any person which the Issuer might bring with respect thereto as the
Lessee shall deem proper. The Issuer hereby ratifies and confirms all actions
of, and assumes and adopts all contracts entered into by, the Lessee with
respect to the Project prior to the date hereof. This appointment of the Lessee
to act as agent and all authority hereby conferred or granted is conferred and
granted irrevocably, until all activities in connection with the acquisition,
construction and installation of the Project shall have been completed, and
shall not be terminated prior thereto by act of the Issuer or of the Lessee.
The Issuer agrees that only such changes will be made in the Project
Summary as may be specified by an Authorized Lessee Representative. The Issuer
agrees that it will enter into, or accept the assignment of, such contracts as
the Lessee may request in order to effectuate the purposes of this Section, but
that it will not execute any other contract or give any order for the
construction of the Building or any modification thereto or the acquisition and
installation of the Leased Equipment unless and until the Authorized Lessee
Representative shall have approved the same in writing.
The Issuer (or the Lessee, as its agent), agrees to complete the
acquisition, construction and installation of the Project in accordance with the
Project Summary as promptly as practicable after the date of the execution and
delivery of this Lease, to continue said construction with all reasonable
dispatch and to use its best efforts to cause said construction to be completed
as soon as practicable, delays incident to strikes, riots, acts of God or the
public enemy beyond the reasonable control of the Issuer or the Lessee only
excepted, but if said acquisition, construction and installation is not
completed within the time herein contemplated there shall be no resulting
liability on the part of the Issuer and no diminution in or postponement of the
rents required in Section 5.3 hereof to be paid by the Lessee. The Issuer (or
the Lessee, as its agent) agrees to effect the acquisition and installation of
the Leased Equipment as promptly as practicable after specification by the
Lessee of the items to be installed and receipt of the installation schedule
desired by the Lessee.
The Leased Equipment shall include all property located on the Leased
Land to be tagged or otherwise adequately identified in the records of the
Lessee in such manner so as to permit its identification as part of the Leased
Equipment.
SECTION 4.2. AGREEMENT TO ISSUE SERIES 1999 BONDS; APPLICATION OF
SERIES 1999 BOND PROCEEDS. In order to provide funds for payment of the cost of
the acquisition, construction and installation of the Project provided for in
Section 4.1 hereof, the Issuer agrees that as soon as possible it will
authorize, sell and cause to be delivered to the initial purchaser or purchasers
thereof, the Series 1999 Bonds, bearing interest and maturing as set forth in
Article III of the Indenture, at a price to be approved by the Lessee. Upon
receipt of the proceeds derived from the sale of the Series 1999 Bonds, the
Issuer will deposit said proceeds received upon said sale in the Construction
Fund under the Collateral Agency Agreement. The Bonds will be authenticated and
delivered in two or more increments and at different times as provided in
Article II of the Indenture.
SECTION 4.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND. (a) The Issuer
will in the Indenture authorize and direct the Trustee to designate the
Collateral Agent as agent for the Trustee with respect to the disbursement of
moneys in the Construction Fund in accordance with
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the provisions of the Collateral Agency Agreement for the payment of all
"Project Costs," as defined in the Common Agreement. To the extent not otherwise
included therein, Project Costs shall be deemed to include the following:
(i) Payment of the initial or acceptance fee of the Trustee and
customary and reasonable fees and expenses of the Trustee and its counsel;
the fees and expenses for recording or filing the deed whereby fee simple
title in and to the Leased Land has been or is to be conveyed to the
Issuer; the fees and expenses for recording or filing this Lease, the
Indenture, the Security Deed, the Security Documents and any other
documents by which this Lease is assigned as security for the Series 1999
Bonds; the fees and expenses for recording or filing any documents that the
Lessee may deem desirable to file for record in order to protect the title
of the Issuer to the Project, or any part thereof; and the fees and
expenses in connection with any actions or proceedings that the Lessee may
deem desirable to bring in order to perfect or protect the title of the
Issuer to the Project;
(ii) Payment to the Lessee and the Issuer, as the case may be, of such
amounts, if any, as shall be necessary to reimburse the Lessee and the
Issuer in full for all advances and payments made by them or either of them
prior to or after the delivery of the Series 1999 Bonds for expenditures in
connection with the acquisition by the Issuer or the Lessee of fee simple
title to the Leased Land (including the cost of the Leased Land and of any
options to purchase the Leased Land and rights-of-way for the purpose of
providing access (including utility access to and from the Leased Land),
clearing the Leased Land, site improvement, the preparation of the plans
and specifications for the Project (including any preliminary study or
planning of the Project or any aspect thereof), the acquisition,
construction and installation of the Project, the acquisition, construction
and installation necessary to provide utility services or other facilities
including trackage to connect the Project with public transportation
facilities, and the acquisition, construction and installation of all real
or personal properties deemed necessary in connection with the Project, and
any architectural, engineering and supervisory services with respect to any
of the foregoing;
(iii) Payment of, or reimbursement of the Issuer or the Lessee for,
the customary and reasonable legal and accounting fees and expenses,
financial consultants' fees, rating agencies' fees, financing charges
(including underwriting or placement fees) and printing and engraving costs
incurred in connection with the authorization, sale and issuance of the
Series 1999 Bonds, the preparation of this Lease, the Indenture, the
Security Deed, the Financing Statements and all other documents in
connection therewith and in connection with acquisition of title to the
Project;
(iv) Payment for labor, services, materials and supplies used or
furnished in site improvement and in the acquisition, construction and
installation of the Project, all as provided in the plans and
specifications therefor; payment for the cost of the acquisition,
construction and installation of utility services or other facilities, and
payment for the cost of all real and personal property deemed necessary in
connection with the Project; and payment for the miscellaneous expenses
incidental to any of the foregoing;
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(v) Payment of the fees, if any, for architectural, engineering and
supervisory services with respect to the Project;
(vi) Payment, as such payments become due, of the fees and expenses of
the Trustee and the fees and expenses of its counsel properly incurred
under the Indenture that may become due during the Construction Period;
(vii) To such extent as they shall not be paid by a contractor for
acquisition, construction or installation with respect to any part of the
Project, payment of the premiums on all insurance required to be taken out
and maintained during the Construction Period under this Lease, or
reimbursement thereof if paid by the Lessee under Section 6.4 hereof;
(viii) Payment of the taxes, assessments and other charges, if any,
referred to in Section 6.3 hereof that may become payable during the
Construction Period; and
(ix) Payment of expenses incurred with approval of the Lessee in
seeking to enforce any remedy against any contractor or subcontractor in
respect of any default under a contract relating to the Project.
(b) The payments specified in subsection (a) of this Section shall be
made by the Collateral Agent from the Construction Fund in accordance with the
provisions of Article III of the Collateral Agency Agreement.
SECTION 4.4. OBLIGATION OF THE PARTIES TO COOPERATE IN FURNISHING
DOCUMENTS TO TRUSTEE. The Issuer and the Lessee agree to cooperate with each
other in furnishing to the Collateral Agent the documents referred to in the
Collateral Agency Agreement that are required to effect payments out of the
Construction Fund, and to cause such requisitions and certificates to be
directed by the Authorized Lessee Representative to the Collateral Agent as may
be necessary to effect payment out of the Construction Fund in accordance with
Collateral Agency Agreement. Such obligation of the Issuer and the Lessee is
subject to any provisions of this Lease, the Collateral Agency Agreement or the
Common Agreement requiring additional documentation with respect to payments;
provided, however, such obligation shall, with respect to this Lease and the
Indenture, not extend beyond the moneys in the Construction Fund available for
payment under the terms of the Collateral Agency Agreement.
SECTION 4.5. ESTABLISHMENT OF COMPLETION DATE. The Completion Date
shall be evidenced to the Trustee by a certificate delivered in accordance with,
and containing such certifications and representations are required under,
Section 3.2 of the Collateral Agency Agreement.
SECTION 4.6. ISSUER NOT REQUIRED TO PAY PROJECT COSTS IN EVENT
CONSTRUCTION FUND INSUFFICIENT. The Issuer does not make any warranty, either
express or implied, that the moneys which will be paid into the Construction
Fund and which, under the provisions of this Lease, will be available for
payment of the costs of the Project, will be sufficient to pay all the costs
which will be incurred in that connection. The Lessee agrees that if after
exhaustion of the moneys in the Construction Fund, the Lessee should pay or
cause to be paid any portion of the costs of the Project, it shall not be
entitled to any reimbursement therefor from the Issuer or from
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the Trustee or from the holders of any of the Bonds nor shall it be entitled to
any diminution in or postponement of the rental payments required in Section 5.3
hereof to be paid by the Lessee.
SECTION 4.7. ISSUER TO PURSUE REMEDIES AGAINST SUPPLIERS, CONTRACTORS
AND SUBCONTRACTORS AND THEIR SURETIES. In the event of any default of any
supplier, contractor or subcontractor under any contract made by it in
connection with the Project or in the event of breach of warranty with respect
to any material, workmanship or performance guaranty, the Issuer will promptly
proceed (only at the written direction and sole cost of the Lessee), either
separately or in conjunction with others, to exhaust the remedies of the Issuer
against any defaulting supplier, contractor or subcontractor and against any
surety therefor, for the performance of any contract made in connection with the
Project. The Issuer agrees to advise the Lessee of the steps it intends to take
in connection with any such default, and will not consent to any settlement
agreement without the prior written consent of the Lessee. If the Lessee shall
so notify the Issuer in writing, the Lessee may, in its own name or in the name
of the Issuer, prosecute or defend any action or proceeding or take any other
action involving any such supplier, contractor, subcontractor or surety which
the Lessee deems reasonably necessary, and in such event the Issuer hereby
agrees to cooperate fully with the Lessee and to take all action necessary to
effect the substitution of the Lessee for the Issuer in any such action or
proceeding. Any amounts recovered by way of damages, refunds, adjustments or
otherwise in connection with the foregoing prior to the Completion Date shall be
applied in accordance with the Collateral Agency Agreement.
SECTION 4.8. INVESTMENT OF MONEYS PERMITTED. Any moneys held as part of
the Bond Fund shall be invested or reinvested by the Trustee upon the oral
request and direction of the Authorized Lessee Representative, promptly
confirmed in writing in Permitted Investments. Such investments shall mature or
shall be subject to sale prior to maturity in such amounts and at such times as
may be necessary to provide funds when needed to make payments from the Bond
Fund. The Trustee may make any and all such investments through its own bond
department. Any interest or gain received from such investments of the moneys in
the Bond Fund shall be credited to and held in the Bond Fund and any loss from
such investments shall be charged against the Bond Fund.
Any moneys held as part of the Construction Fund shall be invested or
reinvested in accordance with the Collateral Agency Agreement.
SECTION 4.9. ISSUANCE OF ADDITIONAL BONDS. So long as there shall not
have occurred and be continuing an Event of Default hereunder or an event of
default under the Indenture, the Issuer shall, from time to time at the request
of the Lessee, use its best efforts to issue Additional Bonds in aggregate
principal amounts as requested by the Lessee under the terms and conditions
provided herein and in the Indenture, the Security Deed and the Common
Agreement, but in no event shall the Issuer be liable for not issuing Additional
Bonds. Additional Bonds may be issued to finance the cost of (a) completing the
acquisition, construction and installation of the Project, (b) providing for the
enlargement, improvement, expansion or replacement of the Project, (c) refunding
all of the Bonds of any one or more series then outstanding or (d) any
combination of the foregoing; provided, in any case, that either prior to or
contemporaneously with the issuance of Additional Bonds (i) the terms,
conditions, manner of issuance, purchase price, delivery and contemplated
disposition of the proceeds of the sale of
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such Additional Bonds shall have been approved in writing by the Lessee,
executed by the chairman of the board, president or any vice president of the
general partner of the Lessee, and (ii) the conditions specified in the
Indenture with respect to the issuance of such Additional Bonds shall have been
satisfied.
ARTICLE V
EFFECTIVE DATE OF THIS LEASE;
DURATION OF LEASE TERM; RENTAL PROVISIONS
SECTION 5.1. EFFECTIVE DATE OF THIS LEASE; DURATION OF LEASE TERM. This Lease
shall become effective upon its delivery. The leasehold interest created by this
Lease shall then begin, and, subject to the other provisions of this Lease
(including particularly Articles X, XI, and XII hereof), shall expire at
midnight, February 1, 2030, or if at said time and on said date Payment in Full
of the Bonds shall not have been made, then on such date as such payment shall
have been made. Articles X, XI and XII shall survive the expiration of the
leasehold created by this Lease.
SECTION 5.2. DELIVERY AND ACCEPTANCE OF POSSESSION. The Issuer agrees to deliver
to the Lessee sole and exclusive possession of the Project (subject to the right
of the Trustee to enter thereon for inspection and other purposes as set forth
in Section 8.2 hereof) on the effective date of this Lease and the Lessee agrees
to accept possession of the Project upon such delivery.
SECTION 5.3. RENTS AND OTHER AMOUNTS PAYABLE. (a) On or before February 1 and
August 1 in each year, commencing August 1, 2000, until Payment in Full of the
Bonds, the Lessee shall pay or cause to be paid to the Collateral Agent, for the
account of the Trustee and the Issuer, as rents for the Project a sum equal to
the amount payable on such date as principal of and redemption premium (if any)
and interest on the Bonds, as provided in the Indenture. Such amounts shall be
applied by the Collateral Agent in accordance with the Collateral Agency
Agreement. Each rental payment under this Section shall be sufficient to pay the
total amount of principal, interest and premium (if any) payable on such
semiannual interest payment date, and if at any semiannual interest payment date
the balance in the Bond Fund is insufficient to make required payments of
principal, interest and premium (if any) on such date, the Lessee shall
forthwith pay any such deficiency.
Anything herein to the contrary notwithstanding, any amount at any time
held by the Trustee in the Bond Fund shall be credited against the next
succeeding rental payment and such credit shall reduce the payment to be then
made by the Lessee; and further, if the amount held by the Trustee in the Bond
Fund shall be sufficient to pay at the times required the principal of and
redemption premium (if any) and interest on all Bonds then remaining unpaid, and
any and all other amounts due and payable hereunder and under the Indenture as
contemplated in Article X thereof, the Lessee shall not be obligated to make any
further rental payments under the provisions of this Section.
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(b) The Lessee agrees to pay or cause to be paid to Heard County and the
Issuer, as applicable, until payment in full of the Bonds, the fees set forth on
the schedule attached as Exhibit "G" hereto, payable in annual or semi-annual
installments.
(c) The Lessee agrees to pay or cause to be paid to the Trustee until
Payment in Full of the Bonds (i) at least once a year an amount equal to the
annual fee of the Trustee for the services of the Trustee rendered and its
expenses incurred under the Indenture and (ii) the reasonable fees of Trustee's
Counsel as provided in the Indenture, as and when the same become due.
(d) If the Lessee should fail to make any of the payments required in this
Section, the item or installment so in default shall continue as an obligation
of the Lessee until the same shall have been fully paid. The provisions of this
Section shall be subject to the provisions of Section 9.6 hereof.
SECTION 5.4. PLACE OF RENTAL PAYMENTS. The rents provided for in paragraph
(a) of Section 5.3 hereof shall be paid directly to the Collateral Agent, as
agent for the Trustee, for the account of the Issuer, and will be applied in
accordance with the Collateral Agency Agreement. The payments provided for in
paragraph (b) of Section 5.3 hereof shall be paid directly to Heard County or
the Issuer, as applicable, for their own use. The payments provided for in
paragraph (c) of Section 5.3 hereof shall be paid directly to the Trustee for
its own use or for disbursement to any other paying agent on the Bonds, as the
case may be.
SECTION 5.5. OBLIGATIONS OF LESSEE HEREUNDER ABSOLUTE AND UNCONDITIONAL.
The obligations of the Lessee to make the payments required in Section 5.3
hereof and to perform and observe the other agreements on its part contained
herein shall be absolute and unconditional. Until such time as Payment in Full
of the Bonds shall have been made, the Lessee (i) will not suspend or
discontinue any payments provided for in Section 5.3 hereof except to the extent
the same have been prepaid, (ii) will perform and observe all of its other
agreements contained in this Lease Agreement, and (iii) except as provided in
Sections 11.1 and 11.2 hereof, will not terminate the Lease Term for any cause,
including, without limiting the generality of the foregoing, failure of the
Issuer to complete the Project, failure of the Issuer's title in and to the
Project or any part thereof, any acts or circumstances that may constitute
failure of consideration, eviction or constructive eviction, destruction of or
damage to the Project, commercial frustration of purpose, any change in the tax
or other laws of the United States of America or of the State of Georgia or any
political subdivision of either thereof or any failure of the Issuer to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Lease Agreement or the
Indenture. Nothing contained in this Section shall be construed to release the
Issuer from the performance of any of the agreements on its part herein
contained; and if the Issuer should fail to perform any such agreement, the
Lessee may institute such action against the Issuer as the Lessee may deem
necessary to compel performance or recover its damages for nonperformance so
long as such action shall not conflict with the agreements on the part of the
Lessee contained in the preceding sentence. The Lessee may, however, at its own
cost and expense and in its own name or in the name of the Issuer, prosecute or
defend any action or proceeding or take any other action involving third persons
which the Lessee deems reasonably necessary or in order to insure the
acquisition, construction, installation and completion of the Project or to
secure or protect its
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right of possession, occupancy and use of the Project hereunder, and in such
event the Issuer hereby agrees to cooperate fully with the Lessee and to take
all lawful action which is required to effect the substitution of the Lessee for
the Issuer in any such action or proceeding if the Lessee shall so request.
SECTION 5.6. LESSEE'S PERFORMANCE UNDER INDENTURE. The Lessee agrees, for
the benefit of the owners (including the Collateral Agent, as pledgee of the
Bonds under the Partnership Assignment and Security Agreement) from time to time
of the Bonds, to do and perform all acts and things contemplated in the
Indenture to be done or performed by it.
ARTICLE VI
MAINTENANCE AND MODIFICATIONS, TAXES AND INSURANCE
SECTION 6.1. MAINTENANCE AND MODIFICATIONS OF PROJECT BY LESSEE.
(a) The Lessee will cause the Project to be maintained, preserved and kept
in good repair, working order and condition and will from time to time cause to
be made all necessary and proper repairs, replacements and renewals as provided
in and in accordance with the terms and conditions of the Common Agreement.
(b) The Lessee covenants that as long as the Lessee or any of its
subsidiaries or affiliates operates the Project, it or such subsidiary or
affiliate will cause the Project to be maintained and operated as a "project"
under the Act as in effect on the date hereof.
(c) The Lessee may from time to time, in its sole discretion, at its own
expense and not from the proceeds of the Bonds, make any additions,
modifications or improvements to the Project, including installation of
additional machinery, equipment and related property in the Building or on the
Leased Land, which it may deem desirable for its business purposes. All
machinery, equipment and related property so installed by the Lessee shall
remain the sole property of the Lessee in which neither the Issuer nor the
Trustee shall have any interest. All such machinery, equipment and other related
property may be modified or removed at any time.
SECTION 6.2. REMOVAL OF LEASED EQUIPMENT. The Issuer shall not be under any
obligation to renew, repair or replace any inadequate, obsolete, worn out,
unsuitable, undesirable, inappropriate or unnecessary Leased Equipment. In any
instance where the Lessee in its sole discretion (but subject to the provisions
of the Collateral Agency Agreement and the Common Agreement) determines that any
such items have become inadequate, obsolete, worn out, unsuitable, undesirable,
inappropriate or unnecessary for their purposes at such time, the Lessee may
remove such items of Leased Equipment and (on behalf of the Issuer) sell, trade
in, exchange or otherwise dispose of them (as a whole or in part) without any
responsibility or accountability to the Issuer or the Trustee therefor. The
removal from the Project of any portion of the Leased Equipment pursuant to the
provisions of this Section shall not entitle the Lessee to any abatement or
diminution in amount of the rents payable under Section 5.3 hereof.
At the option of the Lessee, at any time prior to the Completion Date,
the Lessee may pay the proceeds of any such sale, trade-in or other disposition
of such items of Leased Equipment to
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the Trustee with written instructions to deposit such moneys in accordance with
the Collateral Agency Agreement whereupon such moneys shall become subject to
the Collateral Agency Agreement and shall be disbursed in the manner set forth
in the Collateral Agency Agreement and Article IV hereof.
The Lessee shall deliver to the Issuer a bill of sale or other appropriate
documents conveying to the Issuer title to any machinery, equipment or related
property installed or placed in the Building or upon the Leased Land pursuant to
this Section 6.2, and upon the request of the Lessee, the Issuer shall deliver
and cause or direct the Trustee to deliver to the Lessee an Amendment to Lease
Agreement in substantially the form of Exhibit "E" hereto or other appropriate
documents conveying to the Lessee title to any property removed from the Project
pursuant to this Section 6.2 and releasing the same from the provisions of this
Lease and from the lien of the Indenture and the Security Deed and canceling any
Security Interest with respect thereto.
The preceding provisions of this Section 6.2 shall apply only so long as
any part of the principal of or the interest on any of the Bonds remains unpaid.
After Payment in Full of the Bonds, neither the Issuer nor the Lessee shall be
under any obligation hereunder to renew, repair or replace any of the Leased
Equipment that may become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary in the operation of the Project, and after such
Payment in Full of the Bonds the Lessee may, if in its sole discretion any item
of the Leased Equipment has become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary in the operation of the Project, remove such item of
Leased Equipment from the Project and (on behalf of the Issuer) sell, trade in,
exchange or otherwise dispose of it, without any responsibility or
accountability to the Issuer therefor and without being required to substitute
and install in the Project other equipment in substitution therefor, and may
retain any money or other consideration received by it upon any disposition of
any such item of Leased Equipment.
SECTION 6.3. TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY CHARGES. The
Issuer and the Lessee further acknowledge that under present law no part of the
Project owned by the Issuer will be subject to ad valorem taxation by the State
of Georgia or by any political or taxing subdivision thereof, and that under
present law the income and profits (if any) of the Issuer from the Project are
not subject to either Federal or Georgia taxation and these factors have induced
the Lessee to enter into this Lease.
Subject to the provisions of the Collateral Agency Agreement and the Common
Agreement the Lessee may, at its own expense and in its own name and behalf or
in the name and behalf of the Issuer, in good faith contest any taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments and other charges so contested to remain unpaid during
the period of such contest and any appeal therefrom. The Issuer shall cooperate
fully with the Lessee in any such contest. If the Lessee shall fail to pay any
of the foregoing items required by this Section to be paid by the Lessee, the
Issuer or the Trustee may (but shall be under no obligation to) pay the same and
any amounts so advanced therefor by the Issuer or the Trustee shall become an
additional obligation of the Lessee to the one making the advancement, which
amounts the Lessee agrees to pay.
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SECTION 6.4. INSURANCE REQUIRED. During the acquisition, construction,
installation and equipping of the Project, and throughout the Lease Term, the
Issuer and the Trustee shall be named as additional insureds under any insurance
policy or policies required to be maintained by the Lessee under the Common
Agreement, as their respective interests may appear.
SECTION 6.5. APPLICATION OF INSURANCE PROCEEDS. The Insurance Proceeds of
the insurance carried pursuant to the provisions of Section 6.4 hereof shall be
applied in accordance with the provisions of the Collateral Agency Agreement.
SECTION 6.6. ADDITIONAL PROVISIONS RESPECTING INSURANCE. The Lessee shall
furnish to the Issuer and the Trustee at closing and annually thereafter a
certificate of the Authorized Lessee Representative or other evidence
satisfactory to the Issuer and the Trustee that it is in compliance with the
requirements of Section 5.1(b) of the Common Agreement relating to maintenance
of insurance.
SECTION 6.7. OTHER ISSUER EXPENSES. Anything to the contrary herein
notwithstanding, the Lessee shall pay any expenses not specifically mentioned
herein which are reasonably incurred by the Issuer in connection with the
Project, this Lease, the Indenture or the Bonds, and which are not paid from the
Construction Fund pursuant to Section 4.3 hereof.
SECTION 6.8. [INTENTIONALLY OMITTED].
SECTION 6.9. INDEMNIFICATION OF ISSUER AND THE TRUSTEE. The Lessee shall,
to the extent permitted by applicable law, indemnify and save the Issuer and the
Trustee and the officers, agents, employees and attorneys of each harmless
against and from all claims by or on behalf of any person, firm or corporation
or governmental entity arising from the conduct or management of, or from any
work or thing done on, the Project during the Lease Term, and against and from
all claims arising during the Lease Term from (a) any condition of the Project,
(b) any breach or default on the part of the Lessee in the performance of any of
its obligations under this Lease, (c) any contract entered into in compliance
with the provisions of Section 4.1 hereof in connection with the acquisition,
construction and installation of the Project, (d) any act of negligence of the
Lessee or of any of its agents, contractors, servants, employees or licensees,
(e) any act of negligence of any sublessee of the Lessee, or of any agents,
contractors, servants, employees or licensees of any sublessee of the Lessee,
(f) in the case of the Issuer and the Trustee and the respective officers,
agents and attorneys of each, against and from any loss, liability, expense or
claim arising under or in connection with the acceptance or administration of
the Trust Estate or the performance by the Trustee of its duties and obligations
under the Indenture, and (g) including without limiting the generality of the
foregoing, any loss, liability or expense arising under the Comprehensive
Environmental Response Compensation and Liability Act of 1980 as amended, and
any other environmental statute, rule or regulation.
The Lessee shall indemnify and save the Issuer and the Trustee and the
officers, agents, employees and attorneys of each harmless from and against all
costs and expenses incurred in or in connection with any action or proceeding
brought on such claims, and upon notice from the Issuer or the Trustee, the
Lessee shall defend them or either of them in any such action or proceeding.
Nothing contained herein shall require the Lessee to indemnify the Issuer and
the Trustee and the officers, agents, employees and attorneys of each for any
claim or liability
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resulting from the Issuer's or the Trustee's own willful acts or gross
negligence. The Issuer or the Trustee shall reimburse the Lessee for payments
made by the Lessee pursuant to this Section 6.9 to the extent of any proceeds,
net of all expenses of collection, actually received by either such party from
any insurance covering such claims with respect to the losses sustained. The
Issuer or the Trustee, as applicable shall promptly claim any such insurance
proceeds and shall assign its rights to such proceeds, to the extent of such
required reimbursement, to the Lessee.
In case any action shall be brought against the Issuer or the Trustee in
respect of which indemnity may be sought against the Lessee, the Issuer or the
Trustee, as applicable shall promptly notify the Lessee in writing and the
Lessee shall have the right to assume the investigation and defense thereof
including the employment of counsel and the payment of all expenses. Failure to
give any such notice shall not affect the right of the Issuer or Trustee, as
applicable, to receive the indemnification provided herein; unless such failure
resulted from the gross negligence or wilful misconduct of the Issuer or the
Trustee, such failure could not be remedied and the result of such failure is
that the interests of the Lessee were materially and adversely affected as a
direct result of such failure. The Issuer or the Trustee, as applicable shall
have the right to employ separate counsel in any such action and participate in
the investigation and defense thereof, but the fees and expenses of such counsel
shall be paid by the Issuer or the Trustee, as applicable, unless (i) the
employment of such counsel has been authorized by the Lessee, or (ii) the Lessee
shall have failed promptly after receiving notice of such action from the Issuer
or the Trustee, as applicable, to assume the defense of such action and employ
counsel reasonably satisfactory to the Issuer or the Trustee, as applicable, or
(iii) the named parties to any such action (including any impleaded parties)
include both the Issuer or the Trustee, as applicable, and the Lessee or an
affiliate of the Lessee, and the Issuer or the Trustee, as applicable, shall
have been advised by counsel that there may be one or more legal defenses
available to such party which are different from or in addition to those
available to the Lessee or affiliate of the Lessee or (iv) the Issuer or the
Trustee, as applicable, shall have been advised by counsel that there is a
conflict on any issue between the Issuer or the Trustee, as applicable, and the
Lessee (in which case, if the Issuer or the Trustee, as applicable, notifies the
Lessee in writing that it elects to employ separate counsel at the expense of
the Lessee, the Lessee shall not have the right to assume the defense of such
action or proceeding on behalf of the Issuer or the Trustee, as applicable). The
Lessee shall not be liable for any settlement of any such action without its
consent but, if any such action is settled with the consent of the Lessee or if
there be a final unappealable judgment for the plaintiff in any such action, the
Lessee agrees to indemnify and hold harmless the Issuer and the Trustee and the
officers, agents, employees and attorneys of each from and against any loss by
reason of such settlement or judgment.
Nothing herein shall be construed as requiring the Issuer or the Trustee to
acquire or maintain insurance of any form or nature with respect to the Project
or any portion thereof or with respect to any phrase, term, provision, condition
or obligation of this Lease or any other matter in connection herewith. The
obligations of the Lessee under this Section 6.9 shall survive the termination
of this Lease and the satisfaction and discharge of the Indenture and shall
continue in full force and effect, binding the Lessee to the provisions of this
Section 6.9 without regard to the manner of termination of this Lease.
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ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
SECTION 7.1. DAMAGE AND DESTRUCTION. Upon damage or destruction of all or a
portion of the Project, all Insurance Proceeds shall be applied in accordance
with the Collateral Agency Agreement; provided, however, in the event that prior
to Payment in Full of the Bonds the Project is damaged or destroyed by fire or
other casualty, the Lessee shall be obligated to continue to make the rental
payments specified in Section 5.3 hereof and, if the Project is to be replaced,
repaired, rebuilt or restored, it shall be replaced, rebuilt or restored in such
manner as will not change its character to such an extent that its ownership by
the Issuer would not be permitted under the Act. Any such replacement, repair,
rebuilding or restoration shall be made in accordance with the terms and
conditions set forth in the Collateral Agency Agreement and the Common
Agreement.
SECTION 7.2. CONDEMNATION. In the event all or a portion of the Project is
taken by the exercise of the power of condemnation or eminent domain, all
Eminent Domain Proceeds (as defined in the Common Agreement) shall be applied in
accordance with the provisions of the Collateral Agency Agreement; provided,
however, in the event that prior to the Payment in Full of the Bonds, title in
and to, or the temporary use of, the Project or any part thereof shall be taken
under the exercise of the power of eminent domain by any governmental body or by
any person, firm or corporation acting under governmental authority, the Lessee
shall be obligated to continue to make the rental payments specified in Section
5.3 hereof, and, if the Project is to be replaced, rebuilt or restored, it shall
be replaced, rebuilt or restored in such manner as will not change its character
to such extent that its ownership by the Issuer would not be permitted under the
Act. To the extent there shall be acquired and installed other machinery,
equipment or related property suitable for the Lessee's operations at the
Project, title to such machinery, equipment or related property will be conveyed
to the Issuer by bill of sale and will be deemed a part of the Project and
available for use and occupancy by the Lessee without the payment of any rent
other than the payments specified in Section 5.3 hereof. Any such replacement,
rebuilding or restoration shall be made in accordance with the terms and
conditions set forth in the Security Deed, the Collateral Agency Agreement and
the Common Agreement.
ARTICLE VIII
SPECIAL COVENANTS
SECTION 8.1. NO WARRANTY OF CONDITION OR SUITABILITY BY THE ISSUER. THE
ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE
PROJECT OR THAT IT WILL BE SUITABLE FOR THE LESSEE'S PURPOSES OR NEEDS. The
Lessee releases the Issuer from, agrees that the Issuer shall not be liable for
and agrees, to the extent permitted by applicable law, to hold the Issuer
harmless against, any loss that may be occasioned by the condition of the
Project or its suitability for the Lessee's purposes or needs.
SECTION 8.2. INSPECTION OF PROJECT; RIGHT OF ACCESS TO THE PROJECT BY THE
ISSUER. The Lessee agrees that the Authorized Issuer Representative, the Trustee
or either of their duly
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authorized agents who are acceptable to the Lessee shall have the right at all
reasonable times during business hours, to enter upon, examine and inspect the
Project, provided that this does not result in any interference or prejudice to
the Lessee's operations. Provided that the Lessee is not in default hereunder,
such inspection shall only be made in the presence of an official of the Lessee.
The Lessee further agrees that the Issuer and its duly authorized agents shall
have such rights of access to the Project as may be reasonably necessary to
cause to be completed the acquisition, construction and installation provided
for in Section 4.1 hereof.
SECTION 8.3. LESSEE TO MAINTAIN ITS EXISTENCE; EXCEPTIONS PERMITTED. The
Lessee agrees that as long as the Bonds, or any portion thereof shall remain
outstanding, it shall comply with Section 5.1(d)(i) and Section 5.2(e) of the
Common Agreement with respect to maintenance of existence and sales of assets.
SECTION 8.4. QUALIFICATION IN GEORGIA. The Lessee warrants (except as may
be otherwise permitted pursuant to the provisions of Section 8.3 above) that it
is and throughout the Lease Term it will continue to be a limited partnership
either organized under the laws of the State of Georgia or duly qualified to do
business in the State of Georgia, as the case may be.
SECTION 8.5. GRANTING AND RELEASE OF EASEMENTS; AMENDING OR MODIFYING
EASEMENTS. Subject to the provisions of the Collateral Agency Agreement and the
Common Agreement, the Lessee may at any time or times cause to be granted
easements, licenses, rights-of-way (temporary or perpetual and including the
dedication of public highways), restrictive covenants (including, without
limitations, the restrictive covenants necessary to comply with environmental
permits) and other rights or privileges in the nature of easements or
restrictive covenants with respect to any property included in the Project and
such grant will be free from the lien or security interests created by the
Indenture or this Lease, or the Lessee may cause to be amended, modified or
released existing easements, licenses, rights-of-way, restrictive covenants and
other rights or privileges in the nature of easements or restrictive covenants,
held with respect to any property included in the Project with or without
consideration, and the Issuer agrees that it shall execute and deliver and will
cause the Trustee to execute and deliver any instrument necessary or appropriate
to confirm and grant, amend, modify or release any such easement, restrictive
covenant, license, right-of-way or other right or privilege upon receipt of: (i)
a copy of the instrument of grant, covenant, amendment, modification or release,
and (ii) a written application of the Lessee signed by an Authorized Lessee
Representative requesting such instrument and stating (1) that such grant,
covenant, amendment, modification or release is not detrimental to the proper
conduct of the business of the Lessee, and (2) that such grant, covenant,
amendment, modification or release will not impair the effective use or
materially interfere with the operation of the Project and will not materially
diminish or impair the security intended to be given by or under this Lease, the
Indenture or the Security Deed.
SECTION 8.6. RELEASE OF CERTAIN LAND. Notwithstanding any other provision
of this Lease, but subject to the provisions of the Collateral Agency Agreement
and the Common Agreement, the parties hereto reserve the right at any time and
from time to time by mutual agreement to amend this Lease for the purpose of
effecting the release and removal from this Lease (i) of any unimproved part of
the Leased Land (on which neither the Building nor any Leased Equipment is
located but on which parking, transportation, utility facilities or other
support facilities may be located) on which the Issuer proposes to construct
improvements for
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lease under another and different lease agreement or (ii) of any part of the
Leased Land with respect to which the Issuer proposes to convey a fee or other
title to a railroad or other public body or quasi-public body or to a public
utility in order that transportation facilities or services by rail, water, road
or other means or utility services for the Project, for the benefit of the
Lessee, may be provided, increased or improved; provided, that if at the time
any such amendment is made any of the Bonds are outstanding and unpaid, there
shall be deposited with the Trustee the following:
(a) an executed copy of said amendment in the form attached as Exhibit "E"
hereto;
(b) a resolution of the Issuer (i) stating that the Issuer is not in
default under any of the provisions of this Lease or the Indenture and that the
Lessee is not, to the knowledge of the Issuer, in default under any of the
provisions of this Lease, (ii) giving an adequate legal description of that
portion of the Leased Land to be released, (iii) stating the purpose for which
the Issuer desires the release, (iv) stating that the improvements which will be
constructed or the facilities and services which will be provided, increased or
improved will be such as will promote the purposes for which the Issuer was
created, and (v) requesting such release;
(c) an opinion of Counsel to the Lessee that all necessary action required
under its limited partnership agreement has been taken to authorize and approve
such amendment together with an officer's certificate stating that the Lessee is
not in default under any of the provisions of this Lease;
(d) a copy of the agreement wherein the Issuer agrees to construct or
install improvements on the portion of the Leased Land so requested to be
released and agrees to lease the same to the lessee under said lease agreement,
and wherein such lessee agrees to lease the same from the Issuer or a copy of
the instrument conveying the title to a railroad, public utility or public or
quasi-public body; and
(e) a certificate of an Authorized Lessee Representative, dated not more
than 60 days prior to the date of the release and stating that, in the opinion
of the person signing such certificate, (i) the portion of the Leased Land so
proposed to be released is necessary or desirable for railroad, utility services
or roads to benefit the Project or is not otherwise needed for the operation of
the Project for the purposes hereinabove stated, and (ii) the release so
proposed to be made will not materially impair the utility of the Project and
will not destroy the means of ingress thereto and egress therefrom.
No release effected under the provisions hereof shall entitle the Lessee to any
abatement or diminution of the rents payable under Section 5.3 hereof.
SECTION 8.7. RELEASE OF ELECTRIC SWITCHYARD EQUIPMENT AND LAND.
Notwithstanding any other provision of this Lease to the contrary, but subject
to the provisions of the Collateral Agency Agreement and the Common Agreement,
the parties hereto agree that, prior to commercial operation of the Project,
they shall amend this Lease for the purpose of releasing and removing from this
Lease, and conveying to Georgia Power Company, or any of its affiliates or
assigns, (i) by bill of sale, that portion of Leased Equipment comprising the
electric switchyard equipment (the "Switchyard Equipment"), as more specifically
described on Exhibit
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"B" hereto, and (ii) by deed, lease, license or other conveyance, up to eight
(8) acres of the Leased Land, the exact location of which has yet to be
determined but upon which the Switchyard Equipment is to be located; provided
however, there shall first be deposited with the Trustee said amendment in the
form attached as Exhibit "E" hereto, executed by the Issuer (or an Authorized
Issuer Representative) and the Lessee (or an Authorized Lessee Representative).
No release effected under the provisions hereof shall entitle the Lessee to any
abatement or diminution of the rents payable under Section 5.3 hereof.
SECTION 8.8. FILING OF CERTAIN CONTINUATION STATEMENTS. From time to time,
the Lessee shall duly file or cause to be filed continuation statements for the
purpose of continuing without lapse the effectiveness of (i) those Financing
Statements which shall have been filed at or prior to the issuance of the Bonds
in connection with the security for the Bonds pursuant to the authority of the
Uniform Commercial Code of Georgia, and (ii) any previously filed continuation
statements which shall have been filed as herein or in the Indenture required.
The Lessee shall sign (if necessary) and deliver to the Issuer or its designee
and the Issuer shall sign and deliver to the Trustee such continuation
statements as may be requested of it from time to time. As set forth in the
Indenture under Section 12.01(d), the Trustee shall provide its reasonable
cooperation to the Issuer and the Lessee in connection with the filing of such
continuation statements. Upon the filing of any such continuation statement the
Lessee shall immediately notify the Trustee and the Issuer that the same has
been accomplished.
SECTION 8.9. SPECIAL ENVIRONMENTAL INDEMNIFICATION.
(a) The Lessee agrees to and shall indemnify, hold harmless, and defend the
Issuer, its officers, directors, agents, and employees from and against any and
all claims, losses, damages, expenses, causes of action, lawsuits, government
regulatory enforcement actions, and liability (individually, a "Claim,"
collectively, "Claims") asserted against the Issuer arising out of alleged or
actual "environmental contamination" (hereinafter defined) arising from the
Lessee's leasing and operation of the Project.
(b) "Environmental contamination" as used herein shall mean damages to
persons or property or violations of state or federal environmental laws or
regulations arising out of the Lessee's past operations at the Project or the
operations of the Lessee at any time at the Project with respect to but not
limited to air emissions, water effluent discharges, and waste generation,
transportation, storage, disposal, or the handling of hazardous materials.
(c) The Issuer shall notify the Lessee in writing within 10 days after any
Claim is made, brought, or asserted, in any event, in writing, against the
Issuer, and as to which the Issuer has actual knowledge by receipt of such
written notification. The Lessee shall similarly notify the Issuer in writing
within 10 days after any Claim is made, brought, or asserted against the Lessee.
(d) The Issuer shall fully cooperate with the Lessee, including but not
limited to, assisting the Lessee in the preparation of a defense to Claims when
and as the Lessee fulfills its obligations under this Section of the Lease. In
the event the Issuer provides notice to the Lessee under Subsection (c) above,
the Lessee shall handle and control the defense of all Claims and the Lessee's
decision on litigation and settlement and all other such aspects shall be final;
provided,
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however, no settlement or decision shall impose upon the Issuer by apportionment
or otherwise, any loss, damage or liability as a result thereof.
(e) The Issuer shall use its best efforts to deliver the notice specified
in subsection (c) above within a period of 10 days after the Issuer has direct
knowledge (by receipt of written notice or otherwise) of a claim; but, in any
event, the Issuer shall deliver notice in sufficient time to respond and without
prejudice to the rights of the Lessee.
(f) The provisions of this Section 8.9 shall survive the termination of
this Lease and shall continue in full force and effect, binding the Lessee to
the provisions of this Section 8.9 without regard to the manner of termination
of this Lease.
SECTION 8.10. [INTENTIONALLY OMITTED].
SECTION 8.11. [INTENTIONALLY OMITTED].
SECTION 8.12. GRANTING OF SECURITY INTEREST IN LEASED EQUIPMENT. As
security for the payment of rents and all other amounts which shall be or become
due and payable hereunder, the Lessee hereby grants to the Issuer a security
interest covering any right, title or interest which the Lessee may have in the
Leased Equipment and all proceeds thereof and general intangibles relating
thereto. The security interest granted in this Section shall not attach to any
of the Leased Equipment until the same is located in the State.
SECTION 8.13. SPECIAL COVENANTS RELATED TO AD VALOREM TAXATION. The Lessee,
the Board of Commissioners of Heard County and the Board of Tax Assessors of
Heard County have entered into an Agreement Regarding Ad Valorem Taxation dated
July 30, 1999 (the "Ad Valorem Tax Agreement") governing the taxation of the
Lessee's interest in the Project a copy of which is attached as Exhibit "F"
hereto. The Issuer is granting to the Lessee hereunder only a limited right to
use the Project during the Lease Term upon the terms set forth herein. The
Lessee and the Issuer acknowledge that the leasehold valuation formula takes
into account the fair market value of similarly leased property and the
prevailing rents changed in the geographic area of the Project. The Lessee and
the Issuer agree to cooperate with each other and with the Board of Tax
Assessors of Heard County with respect to the matters set forth in the Ad
Valorem Tax Agreement, including the manner from time to time reasonably
required by the Issuer or the Board of Tax Assessors of Heard County for the
labeling or other identification of the Project, including all substitutions and
replacements therefor made in accordance with the provisions of Section 6.2
hereof.
ARTICLE IX
ASSIGNMENT, SUBLEASING, PLEDGING AND
SELLING; REDEMPTION; RENT PREPAYMENT AND ABATEMENT
SECTION 9.1. ASSIGNMENT AND SUBLEASING. The Issuer hereby specifically
acknowledges and consents to the execution and delivery by the Lessee of the
Security Documents and the Security Interests created thereby. Except for any
assignment, sublease or transfer pursuant to the Security Deed or the Security
Documents, this Lease may not be
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assigned, in whole or in part, and the Project may not be subleased, as a whole
or in part, by the Lessee without the consent of the Issuer and the Trustee,
which consent shall not be unreasonably withheld, or without the consent of the
Bondholders; provided, however, that this Lease may be assigned in whole or in
part, or the Project may be subleased, as a whole or a part, without the consent
of the Issuer, the Trustee or the Bondholders, to any successor to substantially
all of the business of the Lessee. Any such assignment or sublease is further
subject to the following conditions:
(a) no assignment (other than pursuant to Section 8.3 hereof) or sublease
shall relieve the Lessee from primary liability for any of its obligations
hereunder, and if any such assignment occurs the Lessee shall continue to remain
primarily liable for payment of the rents specified in Section 5.3 hereof and
for performance and observance of the other agreements on its part herein
provided to be performed and observed by it unless the Lessee shall have
obtained the consent of the Issuer and the Trustee or the Bondholders;
(b) the Lessee shall, within 30 days after the delivery thereof, furnish or
cause to be furnished to the Issuer and to the Trustee a true and complete copy
of each such assignment or sublease, as the case may be, together with any
instrument of assumption;
(c) the Lessee shall confirm in writing that the Guaranty Agreement will
remain in full force and effect or the assignee shall have assumed the same.
The provisions of this Section 9.1 restricting the assignment and
subleasing of the Project shall no longer be in effect in the event that the
Security Documents have been foreclosed upon by the Collateral Agent and the
Lessee is no longer in possession of the Project.
SECTION 9.2. CONVEYING OF PROJECT BY ISSUER BY SECURITY DEED. The Issuer
will convey its title in and to that portion of the Project consisting of real
property and grant a security interest in that portion of the Project consisting
of personal property to the Trustee by the Security Deed, and will assign,
pledge and create a security interest in the Trust Estate under the terms of the
Indenture, as security for the payment of the principal of and the interest on
the Bonds, but the Security Deed and said assignment and pledge shall be subject
and subordinate to this Lease so long as there shall not exist a default under
this Lease or the Indenture. As described in the Security Deed, any amount
realized upon a foreclosure sale or exercise of other remedies under the
Security Deed shall, after satisfaction of the indebtedness described therein,
be paid to the Collateral Agent, on behalf of the Lessee, in respect of the
Lessee's interests hereunder, whether or not the Lessee has exercised its option
to purchase the Project or performed its obligation to purchase the Project
arising under Article XI or XII hereof.
SECTION 9.3. RESTRICTIONS ON SALE OF PROJECT BY ISSUER. The Issuer agrees
that, except as otherwise permitted under the terms of this Lease, the Security
Deed or the Indenture, it will not mortgage, sell, assign, transfer, convey or
otherwise encumber the Project or any portion thereof during the Lease Term and
that it will not take any other action which results in the levy or assessment
of ad valorem taxes on the Project or the Lessee's leasehold interest in the
Project. If the laws of the State of Georgia at the time require or permit such
action to be taken, nothing contained in this Section shall prevent the
consolidation of the Issuer with, or the merger of the Issuer into, or the
transfer of the Project as an entirety to, any public entity whose property
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and income are not subject to taxation and which has the authority to carry on
the business of owning and leasing the Project; provided, (a) that no such
action shall be taken without the prior written consent of the Lessee, the
Trustee and the Bondholders, unless such action shall be required by law, and
(b) that upon any such consolidation, merger or transfer, the due and punctual
payment of the principal of and interest on the Bonds according to their tenor,
and the due and punctual performance and observance of all the agreements and
conditions of this Lease to be kept and performed by the Issuer, shall be
expressly assumed in writing by the entity resulting from such consolidation or
surviving such merger or to which the Project shall be transferred as an
entirety.
SECTION 9.4. PREPAYMENT OF BONDS. The Issuer, at the request at any time of
the Lessee and if the same are then redeemable, shall forthwith take all steps
that may be necessary under the applicable redemption provisions of the
Indenture to effect redemption of all or any portion of the Bonds, as may be
specified by the Lessee, on the earliest redemption date on which such
redemption may be made under such applicable provisions. So long as the Lessee
is not in default hereunder and the Issuer is not obligated to redeem the Bonds
pursuant to the terms of the Indenture, the Issuer shall not redeem any Bonds
prior to their maturity unless requested in writing by the Lessee. The Lessee
agrees to give notice to the Issuer and the Trustee of any redemption at least
10 days prior to the redemption date specifying (a) the proposed redemption
date, (b) the principal amount of the Bonds to be called for redemption, (c) the
applicable redemption price or prices, (d) any conditions to the effectiveness
of such redemption, and (e) the provision or provisions of the Indenture
pursuant to which such Bonds are to be redeemed, and shall deposit with the
Collateral Agent for the account of the Trustee, on or before the redemption
date, an amount of money which, when added to the funds in the Bond Fund, will
be sufficient to pay the principal of and redemption premium (if any) and
interest on the Bonds (or portions thereof) to be redeemed on the date specified
by the Lessee and any Trustee's and the paying agents' fees and expenses under
the Indenture accrued and to accrue until and in connection with such
redemption. The exercise by the Lessee of the option to redeem Bonds as
described in this Section 9.4 shall be revocable by the Lessee at any time prior
to the effective date of such redemption.
The Trustee as provided in the Indenture shall forthwith take or cause to
be taken all actions necessary under the Indenture to effect the redemption of
Bonds in accordance with the terms of the Indenture; provided, however, that if
any such redemption is subject to satisfaction of one or more conditions as
specified by the Lessee as described above, and if on or prior to the specified
date of redemption, such conditions have not been satisfied or waived by the
Lessee, then such redemption shall not be effective as provided in Section 2.09
of the Indenture and (i) all Bonds received by the Bond Registrar for redemption
shall be returned to the owners thereof and (ii) any moneys received by the
Trustee as a prepayment of the Lessee's obligations hereunder in connection with
such redemption shall, upon request, be returned to the Lessee. The Trustee may
conclusively rely upon a certificate of the Authorized Lessee Representative as
to the satisfaction or waiver of any conditions specified to any such
redemption.
SECTION 9.5. PREPAYMENT OF RENTS. There is expressly reserved to the Lessee
the right, and the Lessee is authorized and permitted, at any time it may
choose, so long as it is not in default hereunder, to prepay all or any part of
the rents payable under Section 5.3 hereof, and the Issuer agrees that the
Trustee may accept such prepayment when the same is tendered by the
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Lessee. All prepaid rents shall be credited on the rents specified in Section
5.3, in the chronological order of their due dates.
SECTION 9.6. REFERENCE TO BONDS INEFFECTIVE AFTER BONDS PAID. Upon Payment
in Full of the Bonds and all fees, charges and expenses of the Trustee, all
references in this Lease to the Bonds and the Trustee shall be ineffective and
neither the Trustee nor the holders of any of the Bonds shall thereafter have
any rights hereunder, saving and excepting those that shall have theretofore
vested. Reference is hereby made to Section 10.02 of the Indenture which sets
forth the conditions upon the existence or occurrence of which Payment in Full
of the Bonds shall be deemed to have been made.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. EVENTS OF DEFAULT DEFINED. The existence of a "Trigger Event"
under the Collateral Agency Agreement shall be an Event of Default under this
Lease.
SECTION 10.2. REMEDIES ON DEFAULT. Whenever any Event of Default shall have
happened and be continuing, the Issuer, or the Trustee as provided in the
Indenture, may, with the written consent of the Collateral Agent, or shall, upon
the written direction of the Collateral Agent, take any one or more of the
following remedial steps:
(a) declare all installments of rent payable under Section 5.3 hereof for
the remainder of the Lease Term to be immediately due and payable, whereupon the
same shall become immediately due and payable. If the Issuer or the Trustee
elects to exercise the remedy afforded in this Section 10.2(a) and accelerates
all rents payable under Section 5.3 hereof for the remainder of the Lease Term,
the amount then due and payable as accelerated rents shall be the sum of (1) the
aggregate principal amount of the outstanding Bonds, and (2) all interest on the
Bonds accruing to the date of maturity by declaration;
(b) re-enter and take possession of the Project without terminating this
Lease and without any liability to the Lessee for such entry and repossession,
and sublease the Project for the account of the Lessee, holding the Lessee
liable for the difference in the rents and other amounts payable by such
sublessee in such subleasing and the rents and other amounts payable by the
Lessee hereunder;
(c) the Trustee may require the Lessee to assemble the Leased Equipment and
make the same available at a place or places to be designated and shall have the
right, without notice, demand or legal process, to come upon the Leased Land and
take possession of all or any of the Leased Equipment in such manner and as and
on such terms as it may choose, and otherwise the Issuer or the Trustee may
exercise with respect to the Leased Equipment the rights of a secured party
under the U.C.C.;
(d) the Trustee may exercise any remedies provided for in the Indenture or
the Security Deed and, with respect to any Security Interest, the rights of a
secured party under the U.C.C.
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(e) terminate this Lease (provided, however, that upon such termination,
the options of the Lessee to purchase the Project pursuant to the provisions of
Article XI hereof and the obligations of the Lessee to make the rental payments
pursuant to Section 5.3 hereof and purchase the Project pursuant to Section 12.1
hereof contained therein shall survive such termination), exclude the Lessee
from possession of the Project and use its best efforts to lease the Project to
another for the account of the Lessee, holding the Lessee liable for all rent
and other payments due up to the effective date of such leasing;
(f) require accounting books and records of the Lessee pertaining
exclusively to the Project only for an Event of Default under Section 10.1(a);
(g) take whatever action at law or in equity may appear necessary or
desirable to collect the rents then due, or to enforce performance and
observance of any obligation, agreement or covenant of the Lessee under this
Lease; and
Any amounts collected pursuant to action taken under this Section shall be paid
and applied in accordance with the provisions of the Collateral Agency Agreement
and after Payment in Full of the Bonds and the payment of any costs occasioned
by an Event of Default hereunder, and subject to the provisions of and the lien
and security interest created under the Partnership Assignment and Security
Agreement, any excess moneys in the Bond Fund shall be returned to the Lessee as
an overpayment of rent.
The Issuer will not exercise any remedies without the consent of the
Collateral Agent and the Issuer will grant any consents or waivers or take any
other actions under this Lease (subject to such actions being consistent with
the terms of this Lease and provisions of law applicable to the Issuer) upon the
direction of the Collateral Agent.
SECTION 10.3. REMEDIES EXCLUSIVE. The remedies herein conferred upon or
reserved to the Issuer or the Trustee are intended to be exclusive of any other
available remedy or remedies, notwithstanding every other remedy now or
hereafter existing at law or in equity or by statute. Such remedies as are given
to the Issuer hereunder shall also extend to the Trustee, and the Trustee and
the owners of the Bonds shall be deemed third-party beneficiaries of all
covenants and agreements herein contained.
SECTION 10.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. Should an
Event of Default occur and the Issuer and/or the Trustee should employ attorneys
or incur other expenses for collection of rents or the enforcement of
performance or observance of any obligation or agreement on the part of the
Lessee herein contained, the Lessee agrees that it shall on demand therefor pay
to the Issuer and/or the Trustee the reasonable fees of such attorneys and such
other reasonable expenses so incurred by the Issuer and/or the Trustee.
SECTION 10.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. If any agreement
contained in this Lease should be breached by either party and thereafter waived
by the other party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder.
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SECTION 10.6. WAIVER OF APPRAISEMENT, VALUATION, ETC. If the Lessee should
default under any of the provisions of this Lease, the Lessee agrees to waive,
to the extent it may lawfully do so, the benefit of all appraisement, valuation,
stay, extension or redemption laws now or hereafter in force, and all right of
appraisement and redemption to which it may be entitled.
ARTICLE XI
OPTIONS IN FAVOR OF LESSEE
SECTION 11.1. OPTIONS TO TERMINATE THE LEASE TERM. The Lessee shall have
the following options to terminate the Lease Term:
(a) At any time prior to Payment in Full of the Bonds, the Lessee may
terminate the Lease Term by giving the Issuer and the Trustee notice in writing
of such termination and by paying to the Trustee an amount which, when added to
the funds in the Bond Fund, will be sufficient to pay, retire and/or redeem all
of the outstanding Bonds in accordance with the provisions of Article X of the
Indenture (including, without limiting the generality of the foregoing,
principal, interest to maturity or earliest applicable redemption date, as the
case may be, redemption premium, if any, due in connection with any such
redemption, expenses of redemption and the Trustee's fees and expenses), and, in
case of redemption, making arrangements satisfactory to the Trustee for the
giving of the required notice of redemption; or
(b) At any time after Payment in Full of the Bonds, the Lessee may
terminate the Lease Term by giving the Issuer notice in writing of such
termination and such termination shall forthwith become effective.
Upon any such termination of the Lease Term as described above, the Lessee
shall purchase and the Issuer shall sell the Issuer's right, title and interest
in the Project to the Lessee for the amount and under the terms set forth in
Section 12.1 hereof.
SECTION 11.2. OPTION TO PURCHASE ALL OR PORTION OF PROJECT. Under the
conditions set forth in Section 3.04 of the Indenture and prior to the
expiration of the Lease Term and Payment in Full of the Bonds, the Lessee shall
have and is hereby granted the option to prepay its obligations hereunder and
purchase the Project in whole or in part, in order to effect a redemption of the
Bonds, in whole or in part, pursuant to such Section 3.04 of the Indenture. In
order to exercise such option, the Lessee shall give written notice to the
Trustee at least 10 days prior to the proposed redemption date that all or a
portion of the Bonds are to be redeemed pursuant to such Section and specifying
(a) the proposed redemption date, (b) the principal amount of the Bonds to be
called for redemption, (c) the applicable redemption price or prices, and (d)
any conditions to the effectiveness of such redemption, and shall deposit with
the Trustee on or before the redemption date, to the credit of the Bond Fund,
the following:
(1) an amount of money which, when added to the funds in the
Bond Fund, will be sufficient to retire and redeem all of the then
outstanding Bonds or the portion thereof specified by the Lessee, at
par on the date specified by the Lessee for such redemption including,
without limitation, principal plus accrued interest thereon to said
redemption date, PLUS
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<PAGE>
(2) an amount of money equal to the Trustee's and the paying
agents' fees and expenses under the Indenture accrued and to accrue
until such final payment and redemption of the Bonds.
The exercise by the Lessee of the option to redeem Bonds as described in
this Section 11.2 shall be revocable by the Lessee at any time prior to the
effective date of the redemption of the applicable Bonds.
Upon receipt of a notice furnished pursuant to this Section 11.2, the
Trustee as provided in the Indenture shall forthwith take or cause to be taken
all actions necessary under the Indenture to effect the redemption of Bonds in
accordance with such notice, as the case may be; provided, however, that if any
such redemption is subject to satisfaction of one or more conditions as
specified by the Lessee as described above, and if on or prior to the specified
date of redemption, such conditions have not been satisfied or waived by the
Lessee, then such redemption shall not be effective as provided in Section 2.09
of the Indenture and (i) all Bonds received by the Bond Registrar for redemption
shall be returned to the owners thereof and (ii) any moneys received by the
Trustee as a prepayment of the Lessee's obligations hereunder in connection with
such redemption shall, upon request, be returned to the Lessee. The Trustee may
conclusively rely upon a certificate of the Authorized Lessee Representative as
to the satisfaction or waiver of any conditions specified to any such
redemption.
SECTION 11.3. OPTION TO PURCHASE UNIMPROVED LAND. In addition to the
provisions of Section 8.6 hereof, the Lessee shall have, and is hereby granted
an option to purchase any unimproved portion of the Leased Land (on which
neither the Building or any Leased Equipment is located but on which parking,
transportation or utility facilities may be located) at any time and from time
to time, prior to Payment in Full of the Bonds, at a purchase price equal to one
hundred dollars ($100) per acre for the portion of the Leased Land to be
purchased, provided that it furnishes the Issuer with the following:
(a) A notice in writing containing (i) an adequate legal description of
that portion of the Leased Land with respect to which such option is to be
exercised, (ii) a statement that the Lessee intends to exercise its option to
purchase such portion of the Leased Land on a date stated, which shall not be
less than 45 nor more than 90 days from the date of such notice, and (iii) a
statement that the use to which it is intended that such portion of, or interest
in, the Leased Land is to be devoted will promote the continued purpose of the
Project;
(b) A certificate of an Authorized Lessee Representative, dated not more
than 90 days prior to the date of the purchase and stating that, in the opinion
of the person signing such certificate, (i) the portion of, or interest in, the
Leased Land with respect to which the option is exercised is not needed for the
operation of the Project for the purpose hereinabove stated or that sufficient
right and title is reserved to the Issuer to fulfill said needs, and (ii) the
purchase will not impair the usefulness of the Building for the intended purpose
of the Project and will not destroy the means of ingress thereto and egress
therefrom; and
(c) An amount of money equal to the purchase price computed as provided in
this Section.
34
<PAGE>
The Issuer agrees that upon receipt of the notice, certificate and money
required in this Section to be furnished to it by the Lessee, the Issuer will
promptly deliver the same to the Trustee for deposit in the Bond Fund, and
secure from the Trustee a release from this Lease of such portion of the Leased
Land with respect to which the Lessee shall have exercised the option granted to
it in this Section, subject to any right and title reserved to the Issuer. In
the event the Lessee shall exercise the option granted to it under this Section,
the Lessee shall not be entitled to any abatement or diminution of the rents
payable under Section 5.3 hereof.
Subsequent to Payment in Full of the Bonds, the Lessee shall have, and is
hereby granted an option to purchase any unimproved portion of the Leased Land
at a purchase price equal to one dollar ($1.00) per acre with respect to the
portion of the Leased Land to be purchased. The Issuer agrees that upon receipt
of the money required herein to be furnished it by the Lessee, the Issuer will
promptly release such portion of the Leased Land with respect to which the
Lessee shall have exercised the option granted to it herein.
If the Lessee purchases any unimproved part of the Leased Land pursuant to
the provisions of this Section 11.3, the Lessee and the Issuer agree that all
walls presently standing or hereafter erected on or contiguous to the boundary
line of the land so purchased by the Lessee shall be party walls and each party
grants the other a 10-foot easement adjacent to any such party wall for the
purpose of inspection, maintenance, repair and replacement thereof and the
tying-in of new construction. If the Lessee utilizes any party wall for the
purpose of tying-in new construction that will be utilized under common control
with the Project, the Lessee may also tie into the utility facilities on the
Leased Land for the purpose of serving the new construction and may remove any
non-loadbearing wall panels in the party wall; provided, however, that if the
property so purchased ceases to be operated under common control with the
Project, the Lessee covenants that it will install non-loadbearing wall panels
similar in quality to those that have been removed and will provide separate
utility services for the new construction. Prior to Payment in Full of the
Bonds, no wall may be so utilized by the Lessee unless prior thereto the Issuer
has been furnished with a certificate of an Authorized Lessee Representative who
is acceptable to the Trustee, stating that the proposed utilization will not
impair the usefulness of the Project for the purpose for which it was designed
to be used or most recently modified.
SECTION 11.4. CONVEYANCE ON PURCHASE. At the closing of any purchase
pursuant to Article XI or Article XII hereof or pursuant to the exercise of any
option to purchase granted herein, the Issuer will upon receipt of the purchase
price by it or by the Trustee on its behalf deliver to the Lessee the Quitclaim
Deed or similar documents satisfactory to the Lessee conveying to the Lessee
title in and to the property with respect to which such obligation or option was
exercised, without other warranty of title, subject to the following, (i) those
liens and encumbrances (if any) to which such title in and to said property was
subject when conveyed to the Issuer, (ii) those liens and encumbrances created
by the Lessee or to the creation or suffering of which the Lessee consented in
writing, (iii) those liens, security interests and encumbrances resulting from
the failure of the Lessee to perform or observe any of the agreements on its
part contained in this Lease and (iv) Permitted Liens other than the Indenture,
the Security Deed and this Lease.
If at the time the Indenture and the Security Deed have not been satisfied
in full, a release by the Trustee from the lien or Security Interest of the
Indenture and the Security Deed in the
35
<PAGE>
Property with respect to which such purchase is being consummated shall also be
delivered to the Lessee.
SECTION 11.5. RELATIVE POSITION OF OPTIONS AND INDENTURE. The options
respectively granted to the Lessee in this Article, except under Section 11.3
hereof, shall be and remain prior and superior to the Indenture and may be
exercised whether or not the Lessee is in default hereunder, provided that such
default will not result in nonfulfillment of any condition to the exercise of
any such option.
ARTICLE XII
OBLIGATIONS OF LESSEE; RIGHTS OF LESSEE
SECTION 12.1. OBLIGATION TO PURCHASE PROJECT. The Lessee hereby agrees to
purchase, and the Issuer hereby agrees to sell, the Issuer's right, title and
interest in the Project for Ten Dollars ($10.00) at the expiration or sooner
termination of the Lease Term following Payment in Full of the Bonds. At any
time subsequent to the expiration or sooner termination of this Lease as
aforesaid upon notice to the Issuer by the Lessee, the Issuer shall upon receipt
of the purchase price set forth above deliver to the Lessee or cause the
Trustee, as the assignee of the Issuer to deliver to the Lessee those documents
set forth in Section 11.4 hereof. The obligation specified in this Section shall
be and remain prior and superior to the Indenture and the Security Deed and may
be exercised whether or not the Lessee is in default hereunder, provided that
such default will not result in nonfulfillment of any condition to this right.
SECTION 12.2. SUCCESSION RIGHTS OF LESSEE. The Issuer and the Lessee hereby
agree that, whether or not the options in Article XI or this Article XII have
been exercised, the Lessee shall be entitled to succeed to the ownership of the
Project upon and after the Payment in Full of the Bonds.
SECTION 12.3. SECURITY INTEREST OF LESSEE. The Issuer hereby grants to the
Lessee a security interest in and lien upon the Issuer's right, title and
interest in and to any amounts realized upon the foreclosure sale or exercise of
other remedies under the Security Deed not required to satisfy the Indebtedness
described therein, and such amounts shall be paid to the Collateral Agent, on
behalf of the Lessee, for application in accordance with the terms of the
Collateral Agency Agreement.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. NOTICES. Unless otherwise stated herein, all notices,
certificates or other communications hereunder shall be sufficiently given and
shall be deemed given when mailed by first class mail or by delivery to physical
address, return receipt requested, postage prepaid, addressed as follows or by
facsimile with receipt confirmed:
36
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(a) If to the Issuer: Development Authority of Heard County
c/o Glover & Davis
10 Brown Street
Newnan, Georgia 30264-1038
Attention: A. Mitchell Powell, Esq.
Telephone: (770) 683-6000
Telecopy: (770) 683-6010
(b) If to the Lessee: Tenaska Georgia Partners, L.P.
c/o Tenaska, Inc.
1044 N. 115th Street
Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
Telephone: (402) 691-9547
Telecopy: (402) 691-9550
with a copy to: Nelson, Morrow & Waldron
675 Commercial Federal Tower
2120 S. 72nd Street
Omaha, Nebraska 68124
Attention: W.C. Nelson, Esq.
Telephone: (402) 392-2340
Telecopy: (402) 392-2130
and Long, Aldridge & Norman
303 Peachtree Street
Suite 5300
Atlanta, Georgia 30308
Attention: Michael S. Bradley, Esq.
Telephone: (404) 527-4650
Telecopy: (404) 527-4198
(c) If to the Trustee: The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Telephone: (212) 946-7557
Telecopy: (212) 946-8177
Attention: Capital Markets Fiduciary
Services
A duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer, the Lessee or the Trustee shall be given to each
of the others. The Issuer, the Lessee and the Trustee may, by notice given
hereunder, designate any further or different addresses to which subsequent
notices, certificates or other communications shall be sent.
37
<PAGE>
SECTION 13.2. BINDING EFFECT. This Lease shall inure to the benefit of and
shall be binding upon the Issuer, the Lessee and their respective successors and
assigns.
SECTION 13.3. SEVERABILITY. If any provision of this Lease shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.
SECTION 13.4. AMOUNTS REMAINING IN BOND FUND. It is agreed by the parties
hereto that, subject to and in accordance with the terms and conditions of
Section 6.09 of the Indenture certain surplus moneys remaining in the Bond Fund
shall belong to and be paid to the Lessee by the Trustee as an overpayment of
rents.
SECTION 13.5. AMENDMENTS, CHANGES AND MODIFICATIONS; CONSENTS OF COLLATERAL
AGENT. (a) Except as otherwise provided in this Lease or in the Indenture,
subsequent to the initial issuance of the Bonds and prior to Payment in Full of
the Bonds, this Lease may only be amended, changed, modified, altered or
terminated upon the written consent of the Collateral Agent, if and to the
extent such consent is required under the terms of the Security Documents, and
shall be evidenced by the written agreement of the Issuer and the Lessee.
Provided the Lessee is not in default with respect to its obligations hereunder,
and provided such amendment, modification or alteration will not increase
materially the Issuer's obligations hereunder or under any other Financing
Documents to which it is a party, the Issuer's consent to any such amendment,
modification or alteration and its execution and delivery of a written agreement
evidencing the same shall not be unreasonably withheld or delayed.
(b) Whenever the consent of the Collateral Agent is required for the
taking of any action hereunder the Collateral Agent's consent shall be deemed to
be given if the Collateral Agent has no corresponding right to consent to such
action under the Security Documents.
SECTION 13.6. EXECUTION COUNTERPARTS. This Lease may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
SECTION 13.7. CAPTIONS. The captions and headings in this Lease are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions of this Lease.
SECTION 13.8. RECORDING OF LEASE AND SECURITY DEED. This Lease and the
Security Deed and every assignment and modification hereof and thereof shall be
recorded in the office of the Clerk of the Superior Court of Heard County,
Georgia, or in such other office as may be at the time provided by law as the
proper place for such recordation.
SECTION 13.9. LAW GOVERNING CONSTRUCTION OF LEASE. This Lease shall be
governed by, and construed in accordance with, the laws of the State of Georgia.
SECTION 13.10. NET LEASE. This Lease shall be deemed a "net lease", and the
Lessee shall pay absolutely net during the Lease Term the rents, revenues and
receipts pledged hereunder, without abatement, deduction or set-off other than
those herein expressly provided.
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SECTION 13.11. TRUSTEE AS THIRD-PARTY BENEFICIARY. The parties hereto agree
that the Trustee shall be entitled to rely on, and shall be a third-party
beneficiary of, the terms of this Lease, including without limitation Section
6.9 hereof.
SECTION 13.12. ESTATE FOR YEARS. This Lease grants to Lessee an estate for
years for the term hereof and not a usufroct.
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the Lessee have caused this Lease to
be executed in their respective names by their duly authorized officers, all as
of the date first above written.
DEVELOPMENT AUTHORITY
OF HEARD COUNTY
By:/S/____________________
Chairman
(CORPORATE SEAL)
Attest:
/S/__________________________
Secretary
As to the Issuer, signed
sealed and delivered in
the presence of:
/S/_________________________
Witness
/S/_________________________
Notary Public
My commission expires:
(Notarial Seal)
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware Limited Partnership
By: TENASKA GEORGIA, INC., a Delaware
Corporation, its
General Partner
By: /S/____________________________________
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
As to the Lessee, signed
and sealed in the presence of:
/S/_________________________
Witness
/S/_________________________
Notary Public
My commission expires:
(NOTARIAL SEAL)
<PAGE>
EXHIBIT A
DESCRIPTION OF LEASED LAND
TRACT A1
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS 236
& 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE;THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 72 degrees 48 minutes 00 seconds West for a distance of 405.46
feet to a 12 INCH WOOD POST;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of 252.91
feet to a 1/2 INCH REBAR SET ON THE WESTERLY LINE OF A GEORGIA POWER COMPANY
RIGHT OF WAY (150 FOOT WIDTH), SAID POINT BEING THE POINT OF BEGINNING FOR THE
HEREIN DESCRIBED PARCEL OF LAND.
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 1982.75 to a 1/2
INCH REBAR SET ON THE NORTHERLY LIMITS OF THE WETLANDS OF HILLY MILL CREEK;
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 191.17 to a POINT
IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more or
less, North 46 degrees 21 minutes 20 seconds West for a distance of 66.26 feet
to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of 274.76
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of 188.31
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of 142.40
feet to a POINT IN THE CENTERLINE OF THE CREEK;
<PAGE>
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of 170.99
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of 280.96
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of 101.90
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of 162.95
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of 406.05
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of 496.12
feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK;
THENCE along the centerline of the unnamed creek to the Northeast, more or
less, North 68 degrees 03 minutes 13 seconds East for a distance of 336.28 feet
to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 29 minutes 52 seconds East for a distance of 296.07
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 54 degrees 43 minutes 02 seconds East for a distance of 67.68
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 17 degrees 17 minutes 28 seconds East for a distance of 228.26
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 23 degrees 21 minutes 46 seconds East for a distance of 241.49
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 07 degrees 17 minutes 08 seconds East for a distance of 71.42
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 79 degrees 26 minutes 44 seconds East for a distance of 307.88
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 48 degrees 14 minutes 55 seconds East for a distance of 157.63
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 27 degrees 04 minutes 19 seconds East for a distance of 111.97
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 55 degrees 09 minutes 32 seconds East for a distance of 128.35
feet to a POINT IN THE CENTERLINE OF THE CREEK;
A-2
<PAGE>
THENCE North 08 degrees 06 minutes 45 seconds East for a distance of 34.61
feet to an IRON PIN SET IN THE CENTERLINE OF THE CREEK;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of 212.86
feet to a 1/2 inch rebar set on the Westerly line of a GEORGIA POWER COMPANY
TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH); Said point being the POINT OF
BEGINNING.
Said property contains 46.13 acres, and is that same tract or parcel of
land shown as Tract A1 on that certain ALTA/ACSM Title Survey, entitled Heard
County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc., Tenaska
Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title Insurance
Company of New York, Stewart Title Guaranty Company, Heard County Development
Authority & The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and certification of
James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19, 1999,
last revised November 4, 1999, and recorded in Plat Book 10, Pages 176 - 188, in
the Office of the Clerk of the Superior Court of Heard County, Georgia.
TRACT B
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS 236
& 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE;THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of 902.40
feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of 321.00
feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of 802.62
feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of 291.17
feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more or
less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17 feet
to a POINT IN THE CENTERLINE OF THE CREEK;
A-3
<PAGE>
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of 136.80
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of 223.86
feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION LINE
RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of 36.90
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of 127.90
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of 274.76
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of 188.31
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of 142.40
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of 170.99
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of 280.96
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of 101.90
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of 162.95
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of 406.05
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of 496.12
feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK FROM
THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a distance of 360.23
feet to a point on the Southern limits of the wetlands of Hilly Mill Creek, Said
point being the POINT OF BEGINNING for the herein described parcel of land;
THENCE along said wetlands limits to the Southeast, more or less, South 53
degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
A-4
<PAGE>
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of 63.42
feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of 63.14
feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of 96.50
feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of 54.60
feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of 62.60
feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of 30.89
feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of 59.72
feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of 60.24
feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of 33.85
feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of 30.45
feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of 29.26
feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of 44.52
feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of 57.00
feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of 65.93
feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of 47.19
feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of 58.28
feet to a point;
A-5
<PAGE>
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE leaving said wetlands limits, North 65 degrees 01 minutes 43
seconds West for a distance of 98.87 feet to a point;
THENCE North 11 degrees 02 minutes 41 seconds East for a distance of
230.45 feet to a point;
A-6
<PAGE>
THENCE North 11 degrees 13 minutes 13 seconds West for a distance of
121.54 feet to a point;
THENCE North 38 degrees 58 minutes 52 seconds West for a distance of
121.90 feet to a point;
THENCE North 23 degrees 10 minutes 22 seconds West for a distance of
116.83 feet to a point;
THENCE North 27 degrees 01 minutes 41 seconds West for a distance of
102.77 feet to a point;
THENCE North 44 degrees 31 minutes 22 seconds West for a distance of
55.85 feet to a point;
THENCE South 70 degrees 40 minutes 56 seconds West for a distance of
73.31 feet to a point;
THENCE South 71 degrees 22 minutes 08 seconds West for a distance of
120.59 feet to a point;
THENCE North 27 degrees 11 minutes 02 seconds West for a distance of
173.06 feet to a point;
THENCE North 06 degrees 27 minutes 30 seconds East for a distance of
58.98 feet to a point;
THENCE North 40 degrees 46 minutes 01 seconds East for a distance of
132.31 feet to a point;
THENCE North 01 degrees 41 minutes 21 seconds West for a distance of
32.15 feet to a point;
THENCE North 42 degrees 40 minutes 25 seconds West for a distance of
132.37 feet to a point;
THENCE North 47 degrees 57 minutes 38 seconds East for a distance of
97.57 feet to the POINT OF BEGINNING.
Said property contains 3.84 acres more or less and is that same tract
or parcel of land shown as Tract B on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia.
A-7
<PAGE>
TRACT C
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE;THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek, said point being the POINT OF BEGINNING for the herein described parcel
of land.
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4" PIPE;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE North 72 degrees 59 minutes 23 seconds West for a distance of
97.41 feet to a point;
THENCE North 28 degrees 40 minutes 02 seconds West for a distance of
114.55 feet to a point;
A-8
<PAGE>
THENCE North 62 degrees 08 minutes 04 seconds West for a distance of
184.99 feet to a point;
THENCE North 63 degrees 50 minutes 09 seconds West for a distance of
166.92 feet to a point;
THENCE North 64 degrees 00 minutes 12 seconds West for a distance of
173.39 feet to a point;
THENCE North 87 degrees 49 minutes 10 seconds West for a distance of
111.55 feet to a point;
THENCE North 66 degrees 04 minutes 51 seconds West for a distance of
158.94 feet to a point;
THENCE North 66 degrees 19 minutes 50 seconds West for a distance of
121.59 feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of
186.45 feet to a point;
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of
163.48 feet to a point;
THENCE North 56 degrees 31 minutes 54 seconds West for a distance of
127.08 feet to a point;
THENCE North 49 degrees 42 minutes 26 seconds West for a distance of
110.80 feet to a point;
THENCE South 63 degrees 26 minutes 27 seconds West for a distance of
73.93 feet to a point;
THENCE South 34 degrees 43 minutes 18 seconds West for a distance of
155.58 feet to a point;
THENCE North 65 degrees 01 minutes 43 seconds West for a distance of
125.76 feet to a point on the Southerly Wetland limits of Hilly Mill Creek;
THENCE along said Wetland Limits to the Southeast, more or Less, North
19 degrees 07 minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
A-9
<PAGE>
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
A-10
<PAGE>
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to the POINT OF BEGINNING.
Said property contains 5.13 acres more or less and is that same tract
or parcel of land shown as Tract C on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia.
A-11
<PAGE>
TRACT D
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE;THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK; SAID POINT BEING
THE POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
A-12
<PAGE>
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a Distance of
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek;
THENCE along said wetlands limits to the Southeast, more or less, South
53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
A-13
<PAGE>
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
A-14
<PAGE>
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE across an unnamed creek and wetlands area which intersects from
the Southwest, South 65 degrees 01 minutes 43 seconds East for a distance of
394.79 feet to a point;
THENCE continuing along said wetlands limit, North 19 degrees 07
minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
A-15
<PAGE>
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
A-16
<PAGE>
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to a point;
THENCE North 02 degrees 18 minutes 34 seconds East for a distance of
978.06 feet to a point;
THENCE North 01 degrees 18 minutes 40 seconds East for a distance of
32.38 feet to the POINT OF BEGINNING.
Said property contains 43.03 acres more or less and is that same tract
or parcel of land shown as Tract D on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia.
A-17
<PAGE>
TRACT G
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE;THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
177.75 feet to point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
82.45 feet to a point;
A-18
<PAGE>
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
639.20 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
52.57 feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
150.00 feet to a point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
25.93 feet to a point;
THENCE South 44 degrees 18 minutes 22 seconds East for a distance of
63.80 feet to a point;
THENCE South 53 degrees 03 minutes 38 seconds East for a distance of
18.78 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
211.55 feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
11.80 feet to a point;
THENCE along a curve to the right having a radius of 3600.00 feet, a
central angle of 09 degrees 21 minutes 08 seconds, an Arc length of 587.61 feet,
and subtended by a chord bearing South 33 degrees 47 minutes 14 seconds West for
a distance of 586.96 feet to the POINT OF BEGINNING.
Said property contains 3.16 acres more or less and is that same tract or parcel
of land shown as Tract G on that certain ALTA/ACSM Title Survey, entitled Heard
County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc., Tenaska
Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title Insurance
Company of New York, Stewart Title Guaranty Company, Heard County Development
Authority & The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and certification of
James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19, 1999,
last revised November 4, 1999, and recorded in Plat Book 10, Pages 176 - 188, in
the Office of the Clerk of the Superior Court of Heard County, Georgia.
A-19
<PAGE>
EXHIBIT B
DESCRIPTION OF LEASED EQUIPMENT
I. GENERAL
The Leased Equipment consists of all machinery, equipment and related personal
property from time to time located in the Building or on the Leased Land and
tagged or otherwise identified to reflect such ownership.
II. SWITCHYARD EQUIPMENT
The Switchyard Equipment consists of the following pieces of Leased Equipment:
(a) Two 500kV connections to the existing Wansley-Forston 500kV
transmission line.
(b) One 500kV ring bus with three 500kV line circuit breakers complete
with disconnect switches, relaying and controls.
(c) Three 500kV disconnect devices for generator's high side step-up
transformers.
(d) Protective relaying equipment located off-site at the Wansley
substation.
(e) Protective relaying equipment located off-site at the Fortson
substation.
<PAGE>
EXHIBIT C
PROJECT SUMMARY
The following is a brief summary of the Project and certain agreements
relating thereto prepared by the Lessee, which summary may be modified, amended
or supplemented by the Lessee from time to time in accordance with the terms
hereof and of the other Financing Documents.
OVERVIEW. The Facility is expected to be a 936 megawatt ("MW") (nominal
summer rating) natural gas-fired simple-cycle electric generating plant. It will
be located on a site near Georgia State Highway 34 in Heard County, Georgia,
approximately 40 miles southwest of Atlanta (the "Facility Site"). The Facility
will use natural gas to produce electric energy and will use fuel oil as a
back-up fuel. The Lessee expects the Facility to serve as a peaking facility,
operating primarily during the summer months with very low capacity factors
during the remainder of the year. Pursuant to a 29-year Power Purchase Agreement
dated August 24, 1999 (the "Power Purchase Agreement"), the Lessee will sell all
of the Facility's net capacity and electrical output to PECO Energy Company
("PECO") and PECO will provide the Lessee with natural gas and fuel oil.
Pursuant to a lump sum, fixed-price, date-certain contract (the "EPC Contract"),
Zachry Construction Corporation (the "EPC Contractor") will provide engineering,
procurement and construction services with respect to the Facility and its
related electric interconnection facilities. Pursuant to a Contract for
Purchase, dated August 27, 1999 (the "Turbine Contract") General Electric
Company will provide six PG7241 (FA) heavy-duty single shaft gas
turbine-generators that will be used to produce the electric energy at the
Facility. On the date of issuance of the Bonds, the right to acquire the
turbine-generators (hereinafter referred to as the "Units") under the Turbine
Contract will be assigned to the EPC Contractor, who will acquire the Units as a
part of its obligations under the EPC Contract. Pursuant to a Long Term Parts
and Long Term Service Contract (the "LTSA") with General Electric International
Inc. ("GEI"), GEI will provide long-term parts and servicing with respect to
major parts replacement and repair, inspection and overhaul services for the
Units. Certain other operations and maintenance services for the Project will be
provided by Tenaska Operations, Inc. under an Operations and Maintenance
Agreement (the "O&M Agreement"). Tenaska Operations, Inc. is referred to herein
as the "Operator."
FACILITY SITE. The Facility Site lies in the middle of the Southern
Company transmission system, which extends from Mississippi to South Carolina
and from Tennessee to Florida. According to an analysis of the Southeast U.S.
power market prepared for the Lessee by Resource Data International, Inc.
("RDI"), the Project has many strong competitive advantages including direct
access to additional power markets beyond Georgia via relatively strong
transmission links into the TVA, Virginia and Southwest Power Pool markets, and
ready access to competitively-priced gas supply from a diversified range of
sources through an extensive interstate gas pipeline transmission system. In
addition, according to RDI, the Project represents a low cost, highly
competitive and much needed peaking resource for the growing Southeastern power
market.
<PAGE>
Tenaska, Inc., the current owner of the 101-acre Facility Site, will
convey it to the Lessee concurrently with the issuance of the Bonds, and the
Lessee will transfer it, together with related easements held by the Lessee, to
the Issuer. In addition, Tenaska, Inc. will, at the same time, grant the Lessee
a lease of a nearby 13-acre area for laydown of material and equipment during
construction. This lease will remain in effect through the end of Project
construction. Tenaska, Inc. will also grant to the Lessee an option to acquire
certain land adjacent to the Facility Site. This land, together with a portion
of the Facility Site, will be the site at which the interconnection facilities
will be installed to interconnect the Facility with the transmission grid and
will be transferred by deed, ground lease, license or other conveyance to
Georgia Power Company ("GPC"), as owner of such facilities.
THE FACILITY. The Facility will include six Units. Each Unit contains
an enclosed inlet air filter, evaporative cooler, air compressor, dual fuel
combustion system, power turbine, 3,600 rpm 60 Hz generator and auxiliary
systems. In each of the Units, atmospheric air and water are delivered into the
turbine combustion chamber for NOx control when firing fuel oil. Fuel oil
operation is limited by the air permit to 57 million gallons in any consecutive
12 month period and is expected to occur only when natural gas is not available.
The Units can be fueled by either natural gas or fuel oil, and will be capable
of switching fuels on-line at reduced load.
POWER PURCHASE AGREEMENT. The Lessee's Power Purchase Agreement ("PPA")
with PECO provides for completion of the Facility in two stages of three Units
each. The base term of the PPA expires 29 years after the first three Units are
operational. The first three Units are scheduled to be operational on June 1,
2001. The second three Units are scheduled to be operational on June 1, 2002.
These dates are subject to adjustment to a limited extent in the case of a force
majeure event. PECO is responsible for supplying all the natural gas and fuel
oil necessary to fulfill the Lessee's obligations under the Power Purchase
Agreement. PECO will have the ability to dispatch any Unit upon such Unit
achieving operational status.
All of the capacity and energy produced by the Facility is committed to
be sold to PECO, except for electricity that is used for the Facility's own
energy needs. The PPA provides for certain fixed payments (subject to
off-setting payments by us to PECO for reduced availability), an availability
incentive bonus and certain variable payments. The Lessee expects that such
fixed payments, which are payable whether or not PECO chooses to dispatch any of
the Units, will be adequate to cover the Lessee's debt service and fixed
operating and maintenance costs and to provide the Lessee with a return on
equity.
EPC CONTRACT. Under the Lessee's EPC Contract, the Lessee is obligated
to pay a fixed price of $229,064,832 (including the cost of the Units under the
Turbine Contract) to Zachry Construction Corporation for the construction of the
Facility and its related electric interconnection facilities (subject to
increase for scope changes) (the "Guaranteed Lump Sum Price"). More than 70% of
the value of the EPC Contract is represented by the cost of the Units purchased
under the Turbine Contract. Construction of the Facility is scheduled to
commence in December 1999. The EPC Contract contains liquidated damages
provisions for late completion and for failure to meet certain performance
guarantees. The EPC Contractor's aggregate liability for liquidated damages for
such late completion and for failure to meet such performance guarantees is
limited to 30% of the Guaranteed Lump Sum Price. On September 10, 1999, the
Lessee delivered to the EPC Contractor a limited notice to proceed which
authorized the commencement of geotechnical investigations and engineering and
procurement activities by the EPC Contractor. The Lessee expects to deliver to
the EPC Contractor full notice to proceed on
C-2
<PAGE>
the date of issuance of the Bonds. The EPC Contractor's obligations under the
EPC Contract will be guaranteed by its parent company, H.B. Zachry Company. The
EPC Contractor will also provide a payment and performance bond in the amount of
the Guaranteed Lump Sum Price issued by United States Fidelity and Guaranty
Company.
TURBINE CONTRACT. Tenaska Georgia I, L.P. had previously acquired
rights to purchase the Units from GE. The Turbine Contract has been assigned to
the EPC Contractor as cost, resulting in approximately $33.6 million in savings
over recent market prices. As assignee of the Turbine Contract, the EPC
Contractor will acquire the Units. The Turbine Contract requires the Units to be
delivered in installments beginning September 30, 2000 and continuing through
December 15, 2001. GE will be obligated to pay damages to the EPC Contractor (i)
for unexcused late delivery of the Units and (ii) if the performance of the
Units is not as required under the Turbine Contract. GE will also issue certain
warranties in connection with the performance of the Units.
LONG TERM PARTS AND LONG TERM SERVICE CONTRACT. This agreement with GEI
provides the Lessee with long-term maintenance services with respect to the
Units and covers major parts replacement and repair, inspection and overhaul
services for the Units. Pursuant to this agreement, GEI is obligated to provide
certain long-term guarantees on the performance availability of the Units.
OPERATIONS AND MAINTENANCE AGREEMENT. The Lessee entered into the O&M
Agreement with the Operator on September 10, 1999 for the operation and
maintenance of the Project. The O&M Agreement has a term of 29 years from the
date of commercial operation of the first three Units. The Operator is obligated
to provide all services necessary for the safe and reliable start-up,
commissioning, operation and maintenance of the Project. The Operator will be
compensated with a fixed management fee and an incentive fee, with an
availability adjustment based on performance.
The Operator is organized under Delaware law and is a wholly-owned
subsidiary of Tenaska, Inc. The Operator was formed to provide operations and
maintenance services to electric generating facilities in which affiliates of
Tenaska, Inc. have an interest. Pursuant to the O&M Agreement, the Operator is
obligated to provide initial startup support for the Project prior to the date
of commercial operation of the first three Units, operate and maintain the first
three Units once they achieve commercial operation and operate and maintain the
completed Project. The Operator is obligated to provide skilled personnel,
procedures, training, administrative, management, and professional and technical
services necessary for the safe and reliable start-up, commissioning, operation
and maintenance of the Project.
FUEL ARRANGEMENTS. PECO is obligated to supply the Lessee with all the
fuel necessary to produce electric energy for PECO. The Lessee has entered into
the Interconnect, Reimbursement and Operating Agreement with Transcontinental
Gas Pipe Line Corporation ("Transco"), on August 18, 1999 (the "Gas Interconnect
Agreement"). Under this agreement, Transco will install and own metering
facilities for an interconnection between Transco's pipeline and a lateral gas
pipeline to be constructed to deliver to deliver natural gas from this
interconnection point to the Facility Site. The gas pipeline will be part of the
property owned by the Issuer and leased to the Lessee and will be designed,
constructed and installed pursuant to a $2.3 million Fixed Price Engineering,
Procurement and Construction Contract between the Lessee and Willbros Engineers,
Inc., dated September 23, 1999.
C-3
<PAGE>
Fuel oil will be delivered to the Facility Site by truck and stored in
a 165,000 barrel storage tank. We expect this quantity to be sufficient to
operate all available Units for over 80 hours at full capacity. Four fuel oil
unloading stations will be constructed to enable the Facility to operate on fuel
oil for extended periods of time, should the need arise, subject to air permit
restrictions.
ELECTRIC INTERCONNECTION ARRANGEMENTS. The Facility will be
interconnected to the Georgia Integrated Transmission System ("GITS") pursuant
to the Interconnection Agreement (the "GPC Interconnection Agreement") with GPC.
The interconnection facilities, which will be designed, procured and constructed
under the EPC Contract, will consist of equipment operating at 500 kV at the
high-side of the step-up transformers, and will include a new 500 kV substation
and modification of the Wansley to Fortson 500 kV transmission line. The GITS
consists of the aggregate of the Georgia transmission assets of GPC, Georgia
Transmission Corporation ("GTC") and two other participants, and was created
through bilateral contracts between GPC on the one hand, and each of the other
three participants on the other hand. The point of interconnection of our
Facility is on a portion of the GITS owned and maintained by GTC.
WATER AND WASTEWATER ARRANGEMENTS. The Facility will require water
to operate the evaporative coolers of the generators and to operate the Units
on fuel oil. The Lessee will purchase water from the Heard County Water
Authority (the "Water Authority") under the Water Purchase Agreement, dated
as of February 25, 1999 (the "Water Agreement"). The Water Agreement has a
term of 30 years. The Lessee expects that the water in the storage tanks
combined with the 350 gallons per minute of water supplied by the Water
Authority pursuant to the Water Agreement will provide sufficient water to
operate the Units on fuel oil for approximately 160 hours over a two-week
period. A small amount of wastewater will be produced when the evaporative
coolers are used or when fuel oil is fired. Such wastewater will be
discharged into Hilly Mill Creek under the Lessee's wastewater discharge
permit.
LEASE AGREEMENT. Simultaneously with the issuance of the Bonds, the
Lessee will enter into the Lease Agreement with the Issuer (the "Lease
Agreement"). Under the Lease Agreement, the Issuer will lease the Facility, the
Facility Site and certain related infrastructure facilities and easements to the
Lessee and the Lessee agrees to make rent payments sufficient to pay, when due,
the principal of and interest on the Bonds together with certain other payments
which may be retained by the Issuer or paid by the Issuer to Heard County. In
addition, the Lessee will guarantee the payment obligations of the Issuer on the
Bonds (the "Guaranty").
AD VALOREM TAX AGREEMENT. The Lessee has entered into the Ad Valorem
Taxation Agreement with the Board of Commissioners of Heard County and the Board
of Tax Assessors of Heard County (the "Tax Agreement"). While the Tax Agreement
is in effect, the Facility will not be subject to ad valorem taxation because it
will be owned by the Authority. However, our leasehold interest will be subject
to ad valorem taxes. The Tax Agreement sets forth how our interest under the
Lease Agreement will be valued before the completion of construction, and for
the 20 year period following the year in which the Facility is completed
C-4
<PAGE>
EXHIBIT D
FORM
OF
QUITCLAIM DEED AND BILL OF SALE
by and between
DEVELOPMENT AUTHORITY OF HEARD COUNTY
and
TENASKA GEORGIA PARTNERS, L.P.
Dated ________ 1, 1999
<PAGE>
QUITCLAIM DEED AND BILL OF SALE
This QUITCLAIM DEED AND BILL OF SALE, (the "Deed") dated the date
hereof by and between the DEVELOPMENT AUTHORITY OF HEARD COUNTY (the "Grantor")
and TENASKA GEORGIA PARTNERS, L.P., a limited partnership duly organized and
validly existing under the laws of the State of Delaware and in good standing
under the laws of the State of Georgia, as grantee (the "Grantee"):
W I T N E S S E T H:
WHEREAS, the Grantor and the Grantee have entered into a Lease
Agreement, dated as of November 1, 1999 (the "Lease Agreement") recorded in the
office of the Superior Court of Heard County in Book ____, Page ____; and
WHEREAS, the Grantor and the Grantee, pursuant to the terms of the
Lease Agreement have agreed to enter into this Deed; and
WHEREAS, all capitalized terms used herein and not defined herein shall
have the meanings ascribed to them in the Lease Agreement; and
WHEREAS, the Grantor desires to assign its right, title and interest in
and to the Project to the Grantee and to execute a Quitclaim Deed and Bill of
Sale with respect to all property rights it has in and to the Project;
NOW THEREFORE, in consideration of the premises and the respective
undertakings and agreements hereinafter set forth, THE GRANTOR HEREBY AGREES AS
FOLLOWS:
1. The Grantor hereby, with effect as and from the date hereof, grants,
assigns, transfers and conveys to the Grantee, all of its right, title and
interest in, to and under the Project.
2. The Grantor has such title in and to the Leased Land as disclosed in
the title policy issued by _____________________ dated _________ __, 1999, as
from time to time amended at the request of the Grantee free from all
encumbrances except Permitted Liens described in the Lease Agreement, free of
all claims of all persons whomsoever claiming by, through or under the Grantor.
3. The Grantee hereby accepts the conveyance of all of the foregoing
rights, title and interest of the Grantor in, to and under the Project.
4. The Grantor does hereby bargain, sell and convey to the Grantee its
interest, if any, in the Leased Land described in Exhibit "A" hereto and the
Building located thereon and the Leased Equipment located on the Leased Land and
in the Building and being more particularly described in Exhibit "B" hereto,
such property being free from all liens, security interests and encumbrances
from Persons claiming through and under the Grantor other than Permitted Liens
described in the Lease Agreement.
D-2
<PAGE>
THE GRANTOR AND THE GRANTEE FURTHER AGREE AS FOLLOWS:
The Grantor, in consideration of the sum of Ten Dollars ($10.00) by it
in hand paid at and before the sealing of these presents (the receipt whereof is
hereby acknowledged), has granted, bargained, sold and released, and by these
presents does grant, bargain, sell and release, unto the said Grantee, its
successors and assigns, whatever right, title, and interest the Grantor does
possess, and does by these presents demise, release, and forever quitclaim unto
the Grantee all of the interest of the Grantor, if any, in and to the Project
including, without limitation, the Leased Land, the Building, and the Leased
Equipment;
TOGETHER, with all and singular the rights, tenements, hereditaments
and appurtenances to the said Project belonging or in anywise incident or
appertaining.
TO HAVE AND TO HOLD, all and singular the said premises before
mentioned unto the said Grantee, its successors and assigns forever.
D-3
<PAGE>
IN WITNESS WHEREOF, the Development Authority of Heard County has
caused these presents to be executed in its name and its corporate seal to be
hereto affixed this ____ day of _____________, 1999.
DEVELOPMENT AUTHORITY OF HEARD COUNTY
By:__________________________________
Chairman
Attest:
- -------------------------
Secretary
Signed, Sealed and
Delivered in the
Presence of:
- -------------------------
Witness
- -------------------------
Notary Public
My Commission Expires: ____________
(NOTARIAL SEAL)
D-4
<PAGE>
EXHIBIT E
FORM OF AMENDMENT TO LEASE AGREEMENT
Number____
This AMENDMENT TO LEASE AGREEMENT, dated as of _________________,
between the DEVELOPMENT AUTHORITY OF HEARD COUNTY (the "Authority"), a public
corporation created and existing under the laws of the State of Georgia, as
Lessor, TENASKA GEORGIA PARTNERS, L.P. (the "Lessee"), a limited partnership
created and existing under the laws of the State of Delaware.
W I T N E S S E T H:
WHEREAS, the Authority and the Lessee have heretofore entered into a
Lease Agreement, dated as of November 1, 1999 (said Lease Agreement, as from
time to time modified or amended, is herein called the "Lease"), relating to
certain Leased Land in Heard County, Georgia (as more fully described
hereinafter as the "Leased Land"); and
WHEREAS, the Authority and the Lessee have now determined that it is
necessary to amend the Lease in certain respects to reflect the [removal from]
[addition to] the description of the [Leased Land the real property (including
the improvements thereon constituting a part of the Project)] [Leased Equipment,
the items] described in Exhibit "1" hereto; and
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter contained, the Authority and the Lessee agree to and do
hereby amend the Lease to modify the description of the [Leased Land] [Leased
Equipment] contained as Exhibit ["A"] ["B"] attached thereto in order to [remove
therefrom] [add thereto], effective as of the date hereof, the [real property
(including all structures, buildings and other improvements thereon)] [Leased
Equipment, the items] described in Exhibit "1" to this Amendment to Lease
Agreement.
Section 1. AMENDMENT OF LEASE. The Lease shall be deemed to be modified
and amended in accordance with the provisions of this Amendment to Lease
Agreement and the respective rights, duties and obligations of the Authority and
the Lessee under the Lease shall hereafter be determined, exercised and enforced
under the Lease subject in all respects to this Amendment to Lease Agreement,
and all the terms and conditions of this Amendment to the Lease Agreement shall
be part of the terms and conditions of the Lease for any and all purposes.
All references in the Lease to the [Leased Land] [Leased Equipment]
described in Exhibit ["A"] ["B"] thereof shall refer to said Exhibit as hereby
amended and modified.
Section 2. EXECUTION COUNTERPARTS. This Amendment to Lease Agreement
may be simultaneously executed in several counterparts, each of which shall be
an original and all of which shall constitute but one and the same instrument.
<PAGE>
Section 3. RECORDATION. This Amendment to Lease Agreement may be
recorded in the office of the Superior Court of Heard County, or in such other
office as may be at the time provided by law as the proper place for such
recordation.
Section 4. LEASE TO CONTINUE IN FULL FORCE AND EFFECT. All other terms
of the Lease shall continue in full force and effect subject to this Amendment
to Lease Agreement as set forth herein.
IN WITNESS WHEREOF, the Authority and the Lessee have caused this
Amendment to the Lease Agreement to be executed, sealed and delivered in their
respective names by their duly authorized officers as of _________ __, ____.
DEVELOPMENT AUTHORITY OF
HEARD COUNTY
(CORPORATE SEAL)
Attest: By:____________________________
Chairman
- --------------------------
Secretary
Signed, sealed and delivered in the presence of:
- --------------------------
Witness
- --------------------------
Notary Public
My commission expires: ______
(NOTARIAL SEAL)
E-2
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware Limited Partnership
By: TENASKA GEORGIA, INC., a Delaware
Corporation, its General Partner
[SEAL]
By:________________________________
Name:
Title:
Attest:
- --------------------------
Title:
Signed, sealed and delivered in the presence of:
- --------------------------
Witness
- --------------------------
Notary Public
My commission expires: ______
(NOTARIAL SEAL)
E-3
<PAGE>
Exhibit 1
to Amendment to Lease Agreement (Number )
among
DEVELOPMENT AUTHORITY OF HEARD COUNTY,
and
TENASKA GEORGIA PARTNERS, L.P.
dated as of November 1, 1999
DESCRIPTION OF [ADDITIONAL] [REMOVED] LEASED LAND
[LEASED EQUIPMENT]
<PAGE>
EXHIBIT F
AD VALOREM TAX AGREEMENT
[SEE ATTACHED]
A copy of the Ad Valorem Tax Agreement is a separate file enclosed with
this reqeust
<PAGE>
EXHIBIT G
LEASE PAYMENTS TO COUNTY AND ISSUER FEES
<TABLE>
<CAPTION>
YEAR LEASE PAYMENTS TO HEARD COUNTY ISSUER FEES(1)
- ---- ------------------------------ ---------------
<S> <C> <C>
1999 $ 0 $ 100,000(2)
2000 $ 50,000 $ 25,000
2001 $ 50,000 $ 25,000
2002 $ 50,000 $ 25,000
2003 $ 50,000 $ 25,000
2004 $ 50,000 $ 25,000
2005 $ 125,000 $ 25,000
2006 $ 125,000 $ 25,000
2007 $ 125,000 $ 25,000
2008 $ 125,000 $ 25,000
2009 $ 125,000 $ 25,000
2010 $ 165,000 $ 25,000
2011 $ 165,000 $ 25,000
2012 $ 215,000 $ 25,000
2013 $ 215,000 $ 25,000
2014 $ 215,000 $ 25,000
2015 $ 300,000 $ 25,000
2016 $ 300,000 $ 25,000
2017 $ 325,000 $ 25,000
2018 $ 325,000 $ 25,000
2019 $ 325,000 $ 25,000
2020 $ 500,000 $ 25,000
2021 $ 500,000 $ 25,000
------------------------------ ---------------
TOTALS $ 4,425,000 $ 650,000
</TABLE>
- --------
1 Represents the Issuer's annual fee.
2 Reflects a one-time $100,000 payment to the Issuer.
<PAGE>
Exhibit 4.22
--SPACE ABOVE THIS LINE LEFT INTENTIONALLY BLANK FOR RECORDING INFORMATION--
NOTE TO GEORGIA TAX COMMISSIONER: THIS INSTRUMENT SECURES A BOND ISSUE BY A
PUBLIC AUTHORITY OF THE STATE OF GEORGIA, AND A PUBLIC AUTHORITY OF THE STATE OF
GEORGIA IS A PARTY TO THIS INSTRUMENT. THEREFORE, THIS INSTRUMENT IS NOT SUBJECT
TO INTANGIBLE RECORDING TAX PURSUANT TO CHAPTER 560-11-8-14(1) OF THE RULES OF
THE DEPARTMENT OF REVENUE, PROPERTY TAX DIVISION
After recording,
please return to:
KING & SPALDING
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attn: Ruth T. West
This instrument prepared by the above-named attorney
STATE OF GEORGIA
HEARD COUNTY
DEED TO SECURE DEBT,
SECURITY AGREEMENT AND ASSIGNMENT OF RENTS AND LEASES
THIS DEED TO SECURE DEBT, SECURITY AGREEMENT AND ASSIGNMENT OF RENTS
AND LEASES (the "Security Deed"), made and given as of this 1st day of November,
1999, by the DEVELOPMENT AUTHORITY OF HEARD COUNTY, a public body corporate and
politic having its principal place of business in Franklin, Georgia (herein
called "Grantor") in favor of THE CHASE MANHATTAN BANK, a New York banking
corporation having its principal corporate trust office in New York, New York,
not individually, but solely in
<PAGE>
its capacity as Trustee under the Indenture (as hereafter defined) (together
with its permitted successors and assigns, the "Grantee"), whose address is 450
West 33rd Street, 15th Floor, New York, New York 10001, Attention: Capital
Markets Fiduciary Services;
W I T N E S S E T H :
WHEREAS, the Grantor has been created pursuant to an act of the General
Assembly of the State of Georgia (O.C.G.A. Section 36-62, ET SEQ.), as amended
(the "Act"), and an activating resolution of the Board of Commissioners of Heard
County, adopted on January 3, 1972, the Grantor has been activated as required
by the terms of the Act, its directors have been appointed as provided therein
and are currently acting in that capacity and a copy of said activating
resolution has been filed with the Secretary of State of the State of Georgia as
required by law; and
WHEREAS, the Grantor has been created to develop and promote for the
public good and general welfare trade, commerce, industry and employment
opportunities and to promote the general welfare of the State of Georgia; the
Act empowers the Grantor to issue its revenue obligations, in accordance with
the applicable provisions of the Revenue Bond Law of the State of Georgia
(O.C.G.A. Sections 36-82-60 to 36-82-85), as heretofore and hereafter amended,
for -the purpose of acquiring, constructing and installing any "project" (as
defined in the Act) for lease or sale to prospective tenants or purchasers in
furtherance of the public purpose for which it was created; and
WHEREAS, after careful study and investigation, the Grantor, in
furtherance of the public purpose for which it was created and pursuant to an
authorizing resolution, has entered into a Lease Agreement of even date herewith
(as the same may be amended from time to time in accordance with its terms, the
"Lease"), with Tenaska Georgia Partners, L.P., a limited partnership organized
and existing under the laws of the State of Delaware ("Lessee"); and
WHEREAS, to obtain funds to finance in part, the acquisition,
construction, installation and equipping of an approximately 936 megawatt
natural gas fired (with oil as the backup fuel) electric power generation
facility, consisting of 6 F-class simple cycle combustion turbine engines in
Heard County, Georgia owned by the Grantor and leased to and operated by the
Lessee (the "Project"), the Grantor will issue its Taxable Industrial
Development Revenue Bonds (Tenaska Georgia Partners, L.P. Project), Series 1999
(the "Bonds") pursuant to an Indenture of Trust dated as of November 1, 1999 (as
the same may be supplemented and amended from time to time, the "Indenture")
between the Grantor and The Chase Manhattan Bank as Trustee (the "Trustee") in
the aggregate principal amount of not to exceed $400,000,000 in substantially
the form, bearing interest at the rates and maturing on the dates set forth in
the Indenture; and
WHEREAS, in connection with the commencement of commercial operation of
the Project, the Lessee is required to deliver the Debt Service Reserve Letter
of Credit (the "DSR Letter of Credit") and The Toronto-Dominion Bank
("Toronto-Dominion"), as issuing bank, has agreed to issue the DSR Letter of
Credit subject to the terms and conditions contained in the Debt Service Reserve
Letter of Credit and Reimbursement Agreement, dated as of November 1, 1999,
among each of the banks and financial institutions parties thereto and
Toronto-Dominion,
-2-
<PAGE>
as issuing bank and as agent for such banks and financial institutions (in such
capacity as agent, and together with its successors and assigns, the "DSR LOC
Provider");
WHEREAS, in connection with the Lessee's obligations under the Power
Purchase Agreement (as defined in the Common Agreement hereafter referred to),
the Lessee may deliver the PPA Letter of Credit (the "PPA LOC") and
Toronto-Dominion, as issuing bank, has agreed to issue the PPA LOC subject to
the terms and conditions contained in the PPA Letter of Credit and Reimbursement
Agreement, dated as of November 1, 1999, among each of the banks and financial
institutions parties thereto and Toronto-Dominion, as issuing bank and as agent
for such banks and financial institutions (in such capacity as agent, and
together with its successors and assigns, the "PPA LOC Provider");
WHEREAS, the Lessee may finance certain working capital requirements of
the Project by entering into a working capital agreement with a financial
institution for the provision of credit to the Lessee (such financial
institution, the "Working Capital Provider" and, together with the DSR LOC
Provider and the PPA LOC Provider, the "Senior Parties"); and
WHEREAS, the Lessee, as purchaser of the Bonds, has agreed to pledge
the Bonds to The Chase Manhattan Bank, as Collateral Agent (the "Collateral
Agent") pursuant to a Partnership Assignment and Security Agreement dated as of
November 1, 1999 (as amended from time to time in accordance with its terms, the
"Partnership Assignment and Security Agreement") as security for its obligations
to the Senior Parties under the Financing Documents (as defined in the Common
Agreement hereinafter referred to); and
WHEREAS, the Lessee, the Collateral Agent, the Trustee and the Senior
Parties have entered into a Collateral Agency and Intercreditor Agreement, dated
as of November 1, 1999 (as amended from time to time in accordance with its
terms, the "Collateral Agency Agreement") to set forth the rights of the Lessee
and the Senior Parties as to the Collateral (as defined therein); and
WHEREAS, the Lessee, the Collateral Agent and the Senior Parties have
entered into an Agreement as to Certain Undertakings, Common Representations,
Warranties, Covenants and Other Terms dated as of November 1, 1999 (as amended
from time to time in accordance with its terms, the "Common Agreement") which
sets forth certain representations, warranties and covenants of the Lessee
relating to the Project; and
WHEREAS, the Grantor, as security for the payment of the Bonds, will
assign and pledge all of its rights, title, interest and remedies in and under
the Lease Agreement, except certain rights reserved by the Grantor under the
terms of the Indenture, together with the Lease Agreement itself, and all
amounts on deposit from time to time in the "Bond Fund" established under the
Indenture and, to the extent such amounts represent proceeds of the Bonds, the
"Construction Fund" established under the Collateral Agency Agreement, to the
Grantee, as Trustee, under the terms of the Indenture; and
WHEREAS, the Grantor has further agreed under the terms of the
Indenture to convey to the Trustee title to, and to grant to the Trustee a
security interest in, the Project as additional
-3-
<PAGE>
security for the indebtedness evidenced by the Bonds and all leases and rents
related thereto, all as more fully set forth in the Indenture, and, by this
reference thereto, the Indenture is incorporated herein and made a part hereof;
and
NOW THEREFORE, FOR AND IN CONSIDERATION of the sum of TEN AND NO/100
DOLLARS ($10.00) and other valuable consideration, the receipt and sufficiency
whereof are hereby acknowledged, and in order to secure (i) the indebtedness of
Grantor hereinafter set forth, (ii) all amounts, sums and expenses paid
hereunder by Grantee according to the terms hereof and (iii) all other
obligations and liabilities of Grantor hereunder, together with interest on the
said indebtedness, obligations, liabilities, amounts, sums and expenses (all of
the aforesaid are hereinafter collectively referred to as the "Indebtedness"),
Grantor hereby grants, bargains, sells, warrants, conveys, aliens, remises,
releases, assigns, sets over and confirms to Grantee and the successors and
assigns of Grantee all of the following described land and interests in land,
estates, easements, tenements, rights, improvements, property, fixtures,
machinery and equipment:
ALL THOSE CERTAIN lot(s), piece(s) or parcel(s) of land described in
EXHIBIT A attached hereto and by this reference incorporated herein and made a
part hereof;
TOGETHER WITH the buildings, structures and improvements now or
hereafter located on said land described in EXHIBIT A hereto and all right,
title and interest, if any, of Grantor in and to the streets and roads abutting
said land to the center lines thereof, the strips and gores within or adjoining
said land, the air space and right to use said air space above said land, all
rights of ingress and egress by pedestrians and motor vehicles to parking
facilities on or within said land, and all easements now or hereafter affecting
said land, royalties and all rights appertaining to the use and enjoyment of
said land, including, without limitation, alley, drainage, sewer, mineral,
water, oil and gas rights, rights-of-way, vaults, ways, passages, water courses,
water rights and powers, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances whatsoever, in any way
belonging, relating or appertaining to the land or any part thereof, or which
hereafter shall in any way belong, relate or be appurtenant thereto, whether now
owned or hereafter acquired by Grantor and the reversion and reversions,
remainder and remainders (said land described in EXHIBIT A hereto, together with
said buildings and improvements, the property and other rights, privileges and
interests encumbered and conveyed hereby, are hereinafter collectively referred
to as the "Premises");
TOGETHER WITH all right, title, and interest now held or hereafter
acquired by Grantor in and to all fixtures and articles of personal property
acquired with the proceeds of the Bonds and owed by the Grantor and all
appurtenances and additions thereto and substitutions or replacements thereof,
now or hereafter attached to, contained in, used or intended to be incorporated
in or used or placed upon any part of the adjacent land and easements described
in EXHIBIT B hereto (the Premises, together with such easements and other title
exceptions described on EXHIBIT B, the "Project Site") which Project Site itself
shall not be deemed to be a part of the Premises, including, but not limited to,
all building materials, screens, awnings, shades, blinds, curtains, draperies,
carpets, rugs, furniture and furnishings, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, incinerating and elevator plants,
stoves, ovens (microwave, convection and others), refrigerators, freezers,
ranges, shelving, racks, vacuum
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cleaning systems, call systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, motors, machinery, pipes, appliances,
equipment, gasoline pumps, petroleum storage facilities, fittings, fixtures and
articles of personal property all of which are hereby declared and shall be
deemed to be fixtures and accessions to the freehold and a part of the Premises
as between the parties hereto and all persons claiming by, through or under
them, and which shall be deemed to be a portion of the security for the
Indebtedness secured by this Security Deed, and all accounts receivable,
inventory, trade names, trademarks, tradestyles, service marks, copyrights,
service contracts, computers and computer software, telephone equipment and
systems, warranties, guarantees, business and building licenses and permits,
architects' and engineers' plans, blueprints and drawings, good will and books
and records relating to the business operated on the Premises; together with all
proceeds of all of the foregoing; together with all of Grantor's present and
future "equipment," "contract rights," "accounts" and "general intangibles" (as
said quoted terms are defined in the Georgia Uniform Commercial Code) (the
Premises and said fixtures and articles of personal property and said
"equipment," "contract rights," "accounts" and "general intangibles" and
proceeds encumbered and conveyed hereby are hereinafter sometimes called the
"Secured Property") and Grantee shall have, in addition to all rights and
remedies provided herein, and in any other agreements, commitments and
undertakings made by Grantor to Grantee, all of the rights and remedies of a
"secured party" under the said Uniform Commercial Code; and if the lien of this
Security Deed is subject to a security interest or lease covering any such
personal property, then together with all of the right, title and interest of
Grantor in and to any and all such property, together with the benefits of all
deposits and payments now or hereafter made thereon by Grantor; provided,
however, there shall be excluded from this granting clause any personal
property, inventory, and trade fixtures, accounts, contract rights and general
intangibles owned by any tenant (other than by Grantor or an affiliate of
Grantor and other than any personal property, inventory or fixtures leased to
any such tenant by Grantor or an affiliate of Grantor as lessor) occupying the
Premises and sold or used by such tenant, to the extent that the same does not
become the property of Grantor as landlord under the lease with such tenant or
pursuant to applicable law;
TOGETHER WITH all leases, lettings and licenses of the Premises or any
part thereof now or hereafter entered into and all right, title and interest of
Grantor thereunder, including specifically but without limitation the Lease
Agreement (the "Lease"), and the rents, issues, profits, accounts receivable and
revenues of the Premises from time to time accruing (including without
limitation all payments under leases or tenancies, tenant security deposits and
escrow funds), and all the estate, right, title, interest, property, possession,
claim and demand whatsoever at law, as well as in equity, of Grantor of, in and
to the same and including, without limitation, the right to receive and collect
the rents, issues and profits payable thereunder;
TOGETHER WITH any and all right, title and interest of the Grantor in
and to (i) all modifications, extensions, and renewals of the Lease and all
options and rights to renew or extend the same, including, but not limited to,
all purchase options contained in the Lease; (ii) all options and rights to
purchase or of first refusal with respect to the Premises, or any part thereof,
including, but not limited to, the options and rights contained in the Lease;
and (iii) all other, further or additional title, estates, options, privileges,
interest or rights which the Grantor may now or hereafter acquire in and to the
Premises and the Lease;
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TOGETHER WITH all unearned premiums, accrued, accruing or to accrue
under insurance policies now or hereafter obtained by Grantor and all proceeds
of the conversion, voluntary or involuntary, of the Secured Property or any part
thereof into cash or liquidated claims, including, without limitation, proceeds
of hazard and title insurance and all awards and compensation heretofore and
hereafter made to the present and all subsequent owners of the Secured Property
by any governmental or other lawful authorities for the taking by eminent
domain, condemnation or otherwise, of all or any part of the Secured Property or
any easement therein, including awards for any change of grade of streets;
TOGETHER WITH all right, title and interest of Grantor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Secured Property, hereafter
acquired by, or released to, Grantor, or constructed, assembled or placed by
Grantor or by others for Grantor's benefit on the Secured Property, and all
conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be, and in each such case, without any further conveyance, assignment
or other act by Grantor, shall become subject to the lien of this Security Deed
as fully and completely, and with the same effect, as though now owned by
Grantor and specifically described herein.
TO HAVE AND TO HOLD the Secured Property and all parts, rights, members
and appurtenances thereof, to the use, benefit and behoof of Grantee, its
successors and assigns, IN FEE SIMPLE forever.
THIS CONVEYANCE is intended to operate and is to be construed as a deed
passing title to the Secured Property to Grantee and is made under those
provisions of the existing laws of the State of Georgia relating to deeds to
secure debt, and not as a mortgage, and is given to secure the following
described indebtedness liabilities and obligations:
(a) The debt evidenced by the Bonds in an aggregate principal amount of
not to exceed FOUR HUNDRED MILLION DOLLARS ($400,000,000) outstanding at any
time with the final payment being due on February 1, 2030, together with any and
all renewal or renewals, modification or modifications and extension or
extensions of the Indebtedness evidenced thereby, and together with any and all
accrued and unpaid interest which may be added to the principal of the Bonds in
accordance with their terms;
(b) Any and all additional advances made by Grantee to protect or
preserve the Secured Property or the lien thereof on the Secured Property or to
pay taxes, to pay premiums on insurance on the Secured Property, or to repair or
maintain the Secured Property, or to complete improvements on the Secured
Property (whether or not the original Grantor remains the owner of the Secured
Property at the time of such advances, and whether or not the original Grantee
remains the owner of the Indebtedness and this instrument);
(c) Any and all expenses incident to the collection of the Indebtedness
secured hereby, the foreclosure hereof by action in any court, or by exercise of
the power of sale herein contained; and
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(d) The full and prompt payment and performance of any and all
obligations or covenants of Grantor to Grantee under the terms of any other
agreements, assignments or other instruments now or hereafter evidencing,
securing or otherwise relating to the Indebtedness evidenced by the Bonds,
including without limitation, the Lease Agreement, the Indenture and any
assignment of rents and leases given by Grantor to Grantee (any and all other
such agreements, assignments and other instruments together with the Bonds and
this Security Deed, are herein collectively called the "Bond Documents").
Should the Indebtedness secured by this Security Deed be paid according
to the tenor and effect thereof when the same shall become due and payable, and
should Grantor perform all covenants herein contained in a timely manner, then
this Security Deed shall be canceled and surrendered.
AND Grantor covenants and agrees with Grantee as follows:
ARTICLE I
Covenants of Grantor
Section 1.01. PAYMENT OF THE INDEBTEDNESS. Grantor shall punctually pay
the Indebtedness as provided herein and in the Indenture, the Bonds and the
Lease Agreement all in the coin and currency of the United States of America
which is legal tender for the payment of public and private debts.
Section 1.02. TITLE TO THE SECURED PROPERTY. Grantor warrants that: (i)
it has title to the Secured Property identified in EXHIBIT A subject only to the
encumbrances ("Permitted Encumbrances") enumerated on EXHIBIT C attached hereto
and by this reference incorporated herein and made a part hereof; (ii) it has
full power and lawful authority to encumber the Secured Property in the manner
and form herein set forth; (iii) it owns or leases or will own or lease all
fixtures and articles of personal property now or hereafter affixed and/or used
in connection with the Premises, which was constructed or purchased with the
proceeds of the Indebtedness, including any substitutions or replacements
thereof, free and clear of liens, security interests and claims, subject only to
Permitted Encumbrances; (iv) this Security Deed is and will remain a valid and
enforceable security title, security interest and lien on the Secured Property;
and (v) it will preserve such title, and will forever warrant and defend the
same to Grantee and will forever warrant and defend the validity and priority of
the lien hereof against the claims of all persons and parties whomsoever, except
only for the Permitted Encumbrances.
Section 1.03. MAINTENANCE OF THE SECURED PROPERTY. Grantor shall
maintain the Secured Property in good repair and, subject to the right to
contest certain governmental actions specifically provided herein, shall comply
with the requirements of any governmental authority claiming jurisdiction over
the Secured Property. Grantor shall permit Grantee to enter upon the Premises
and inspect the Secured Property at all reasonable hours and without prior
notice. Grantor shall not, without the prior written consent of the Grantee,
threaten, commit, permit or suffer to occur any waste, material alteration or
demolition or removal of
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any material portion of the Secured Property unless otherwise permitted under
the Financing Documents (as defined in the Common Agreement); provided, however,
that fixtures and articles of personal property constituting Secured Property
may be removed from the Premises unless prohibited by the Lease Agreement.
Section 1.04. INSURANCE; RESTORATION.
(a) Until the Indebtedness shall have been paid in full and until
Grantor shall have performed all covenants herein contained, Grantor shall
maintain or cause to be maintained and keep in full force and effect the
following types and kinds of insurance with respect to the Secured Property (as
now or hereafter constituted) and Grantor's ownership, operation and management
thereof: (i) casualty insurance against all risks of physical loss for the full
insurable value thereof without deduction for depreciation or coinsurance, but
in no event less than the principal amount of the Indebtedness; (ii) use and
occupancy insurance in an amount satisfactory to Grantee covering either rental
income or business interruption, whichever may be applicable; and (iii)
comprehensive general liability insurance in an amount satisfactory to Grantee.
Deductible amounts from the coverages afforded by such policies shall not exceed
limits approved by Grantee. In addition, Grantee may require Grantor to carry
such other insurance on the buildings and improvements now or hereafter located
within the Premises, in such amounts as may from time to time be reasonably
required by institutional lenders, against insurable casualties (including risks
of war, nuclear explosion, earthquake, including subsidence, and contingent
liability from operation of any building laws or codes pertaining to
non-conforming property) which at the time are commonly insured against in the
case of premises similarly situated, due regard being given to the site and the
type of the building, the construction, location, utilities and occupancy or any
replacements or substitutions therefor. Grantor shall additionally keep the
buildings, improvements and equipment located therein and thereon now or
hereafter located on the Premises insured against loss by flood (including
surface waters) if the Premises are located in an area identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the National
Flood Insurance Act of 1968 (and any successor act thereto) in an amount at
least equal to the outstanding Indebtedness or the maximum limit of coverage
available with respect to the buildings under said Act, whichever is less. In
addition, from time to time, upon the occurrence of any material change in the
use, operation or value of the Premises, or in the availability of insurance in
the area in which the Premises are located, Grantor shall, within five (5) days
after demand by Grantee, take out such additional amounts and/or such other
kinds of insurance as Grantee may reasonably require. Notwithstanding the
foregoing, maintenance of the insurance requirements under the Common Agreement
shall be deemed to satisfy the insurance requirements hereof. Grantor shall
cause the Collateral Agent, as agent for the Grantee, to be named as loss payee
or additional insured with respect to such policies and shall deliver a
certificate of insurance as evidence of such insurance to Grantee. The proceeds
of insurance paid on account of any damage or destruction to the Premises or any
part thereof shall be paid over to the Collateral Agent to be applied in
accordance with the Collateral Agency Agreement.
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(b) Each insurance company is hereby authorized and directed to make
payment for all such losses directly and solely to the Collateral Agent, as
agent for the Grantee, instead of to Grantor and Grantee, jointly. In the event
any insurance company fails to disburse directly and solely to the Collateral
Agent, as agent for the Grantee, but disburses instead either solely to Grantor
or to Grantor and Grantee, jointly, Grantor shall immediately endorse and
transfer such proceeds to the Collateral Agent, as agent for the Grantee. Upon
Grantor's failure to do so, the Collateral Agent, as agent for the Grantee, may
execute such endorsements or transfers for and in the name of Grantor and
Grantor hereby irrevocably appoints the Collateral Agent, as agent for the
Grantee, as Grantor's agent and attorney in fact so to do. Neither the Grantee
nor the Collateral Agent shall be held responsible for any failure to collect
any insurance proceeds due under the terms of any policy regardless of the cause
of such failure.
(c) In the event of the foreclosure of this Security Deed or any other
transfer of title to the Premises in full or partial extinguishment of the
Indebtedness, all right, title and interest of Grantor in and to all insurance
policies then in force shall pass to the purchaser or Collateral Agent, as agent
for the Grantee.
Section 1.05. MAINTENANCE OF EXISTENCE. Grantor shall, so long as it is
the owner of the Secured Property, do all things necessary to preserve and keep
in full force and effect its existence, franchises, rights and privileges under
the laws of the State of Georgia and comply with all regulations, rules,
ordinances, statutes, orders and decrees of any governmental authority or court
applicable to Grantor or to the Secured Property or any part thereof except
where the failure to so comply would not have a Materially Adverse Effect (as
such term is defined in the Common Agreement.
Section 1.06. TAXES AND OTHER CHARGES. Unless otherwise being contested
by Lessee under the terms and conditions set forth in the Common Agreement,
Grantor shall pay and discharge when due all taxes of every kind and nature,
water rates, sewer rents and assessments, levies, permits, inspection and
license fees and all other charges imposed upon or assessed against the Secured
Property or any part thereof or upon the revenues, rents, issues, income and
profits of the Premises or arising in respect of the occupancy, uses or
possession thereof. Should Grantor default in the payment of any of the
foregoing taxes, assessments, water rates, sewer rents, or other charges,
Grantee may, but shall not be obligated to, pay the same or any part thereof,
and amounts so paid shall be secured by this Security Deed, and Grantor shall,
on demand, reimburse Grantee for all amounts so paid.
Section 1.07. MECHANICS' AND OTHER LIENS. Unless otherwise being
contested by Lessee under the terms and conditions set forth in the Common
Agreement, Grantor shall pay, from time to time when the same shall become due,
all lawful claims and demands of mechanics, materialmen, laborers, and others
which, if unpaid, might result in, or permit the creation of, a lien or claim of
lien on the Secured Property or any part thereof, or on the revenues, rents,
issues, income or profits arising therefrom. In the event Grantor fails to make
payment of such claims and demands, Grantee may, but shall not be obligated to,
make payment thereof, all sums so expended shall be secured by this Security
Deed, and Grantor shall, on demand, reimburse Grantee for all sums so expended.
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Section 1.08. CONDEMNATION AWARDS. Any awards and compensation for
condemnation or other taking or purchase in lieu thereof, of the Premises or any
part thereof, shall be applied and disbursed in accordance with the Collateral
Agency Agreement.
Section 1.09. SECURITY DEED AUTHORIZED. Grantor hereby warrants and
represents that: the execution and delivery of this Security Deed, the Lease
Agreement and the Bonds have been duly authorized and that there is no provision
in its activating resolution or articles or certificate of incorporation or
by-laws, as applicable, as same may have been amended, requiring further consent
for such action by any other entity or person; it is duly organized, validly
existing and in good standing under the laws of the State of Georgia and has (a)
all necessary licenses, authorizations, registrations and approvals and (b) full
power and authority to own its properties and carry on its business as presently
conducted; and the execution and delivery by and performance of its obligations
under this Security Deed, the Lease Agreement and the Bonds will not result in
Grantor being in default under any provision of its activating resolution or
articles or certificate of incorporation or by-laws, as applicable, as the same
may have been amended, or of any other note, security deed, mortgage, deed of
trust or security, credit or other agreement to which it is a party.
Section 1.10. COSTS OF DEFENDING AND UPHOLDING THE LIEN. If any action
or proceeding is commenced to which action or proceeding Grantee or the
Collateral Agent or its assignee is made a party or in which it becomes
necessary to defend or uphold the lien of this Security Deed (other than actions
or proceedings caused solely by Grantee's or the Collateral Agent's or its
assignee's gross negligence or willful misconduct) Grantor shall, on demand,
reimburse Grantee or the Collateral Agent, or their respective assignees, as
applicable, for all reasonable expenses (including, without limitation,
reasonable attorneys' fees and appellate attorneys' fees) actually incurred by
Grantee or the Collateral Agent, or their respective assignees, as applicable,
in any such action or proceeding and all such expenses shall be secured by this
Security Deed.
Section 1.11. COSTS OF ENFORCEMENT. Grantor agrees to bear and pay all
reasonable expenses (including reasonable attorneys' fees and appellate
attorneys' fees actually incurred) of or incidental to the perfection and
enforcement of any provision hereof, or the enforcement, compromise or
settlement of this Security Deed, and for the curing thereof, or for defending
or asserting the rights and claims of Grantee or the Collateral Agent in respect
thereof, by litigation or otherwise. All rights and remedies of Grantee and the
Collateral Agent shall be cumulative and may be exercised singly or
concurrently. Notwithstanding anything herein contained to the contrary,
Grantor: (a) will not (i) at any time insist upon, or plead, or in any manner
whatever claim or take any benefit or advantage of any stay or extension or
moratorium law, any exemption from execution or sale of the Secured Property or
any part thereof, wherever enacted, now or at any time hereafter in force, which
may affect the covenants and terms of performance of this Security Deed, nor
(ii) claim, take or insist upon any benefit or advantage of any law now or
hereafter in force providing for the valuation or appraisal of the Secured
Property, or any part thereof, prior to any sale or sales thereof which may be
made pursuant to any provision herein, or pursuant to the decree, judgment or
order of
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any court of competent jurisdiction, nor (iii) after any such sale or sales,
claim or exercise any right under any statute heretofore or hereafter enacted to
redeem the property so sold or any part thereof; (b) hereby expressly waives all
benefit or advantage of any such law or laws; and (c) covenants not to hinder,
delay or impede the execution of any power herein granted or delegated to
Grantee or the Collateral Agent, but to suffer and permit the execution of every
power as though no such law or laws had been made or enacted. Grantor, for
itself and all who may claim under it, waives, to the extent that it lawfully
may, all right to have the Secured Property marshalled upon any foreclosure
hereof.
Section 1.12. BOOKS AND RECORDS. Grantor shall permit Grantee and its
assigns and designees to examine the records, books and papers of Grantor which
reflect upon its financial condition and the income and expenses relative to the
Premises and the business conducted thereat at the times and upon the conditions
set forth in Section 8.2 of the Lease Agreement.
Section 1.13. ADDITIONAL COVENANTS.
(a) Except as otherwise permitted in accordance with the Financing
Documents, without the prior written consent of Grantee, Grantor shall not: (i)
execute or permit to exist any lease of all or any portion of the Premises; (ii)
modify or vary, surrender, cancel or terminate, either orally or in writing, any
lease affecting the Premises; (iii) execute any conditional bill of sale,
chattel mortgage, security agreement or other security instruments covering any
furniture, furnishings, fixtures and equipment, intended to be incorporated in
the Premises or the appurtenances thereto, or covering articles of personal
property placed in the Premises, or purchase any of such furniture, furnishings,
fixtures and equipment so that ownership of the same will not vest
unconditionally in Grantor, free from encumbrances on delivery to the Premises,
provided, however, that Grantor may incur Permitted Liens (as such term is
defined in the Common Agreement); (iv) further assign the leases and rents
affecting the Premises; (v) further encumber, alienate, hypothecate, grant a
security interest in or grant any other interest whatsoever in the Secured
Property, or any part thereof; or (vi) enter into any agreement whereby the
holder of any prior or subordinate mortgage, deed of trust or deed to secure
debt, waives, extends or modifies any of the terms of such prior or subordinate
security instrument.
(b) Except as otherwise permitted in accordance with the Financing
Documents, without the prior written consent of Grantee, Grantor shall not (i)
sell, lease, exchange, assign, convey, transfer or otherwise dispose of (or
enter into any agreement to do so), the Secured Property or any part thereof or
any interest therein, including, without limitation, the leases, rents or income
thereof, or (ii) grant or permit to exist any other mortgage, deed to secure
debt, deed of trust, security agreement or other lien, security interest, charge
or encumbrance against the Secured Property or any part thereof or any interest
therein, including, without limitation, the leases, rents or income thereof,
whether superior or inferior to this Security Deed, except for Permitted Liens
(as such term is defined in the Common Agreement).
Section 1.14. ESTOPPEL CERTIFICATES. Grantor, within three (3) days
upon request in person or within five (5) days upon request by mail, shall
furnish to Grantee a written
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statement, duly acknowledged, setting forth the amount due under this Security
Deed, the terms of payment and maturity date of the Bonds, the date to which
interest has been paid, whether any offsets or defenses exist against the
Indebtedness and, if any are alleged to exist, the nature thereof shall be set
forth in detail.
Section 1.15. ASSIGNMENT OF RENTS. Grantor hereby assigns to Grantee,
as further security for the payment of the Indebtedness, the rents, issues and
profits of the Premises, together with all leases and other documents evidencing
such rents, issues and profits now or hereafter in effect and any and all
deposits held as security under said leases. Nothing contained in the foregoing
sentence shall be construed to bind Grantee to the performance of any of the
covenants, conditions or provisions contained in any such lease or other
document or otherwise to impose any obligation on Grantee (including, without
limitation, any liability under the covenant of quiet enjoyment contained in any
lease or in any law of any applicable state in the event that any tenant shall
have been joined as a party defendant in any action to foreclose this Security
Deed and shall have been barred and foreclosed thereby of all right, title and
interest and equity of redemption in the Premises), except that Grantee shall be
accountable for any money actually received pursuant to such assignment.
Following the occurrence and during the continuation of an Event of Default,
Grantor hereby further grants to Grantee the right (to be exercised in
accordance with the Security Documents) (i) to enter upon and take possession of
the Premises for the purpose of collecting the said rents, issues and profits,
(ii) to dispossess by the usual summary proceedings any tenant defaulting in the
payment thereof to Grantee, (iii) to let the Premises, or any part thereof, and
(iv) to apply said rents, issues and profits, after payment of all necessary
charges and expenses, on account of said Indebtedness. Such assignment and grant
shall continue in effect until the Indebtedness is paid, the execution of this
Security Deed constituting and evidencing the irrevocable consent of Grantor to
the entry upon and taking possession of the Premises by Grantee pursuant to such
grant, whether foreclosure has been instituted or not and without applying for a
receiver. Until the occurrence of an Event of Default, Grantor shall be entitled
to collect and receive said rents, issues and profits. Such right of Grantor to
collect and receive such rents, issues and profits may be revoked by Grantee
upon the occurrence of an Event of Default by giving written notice of such
revocation, served personally upon or sent by registered or certified mail to
the record owner of the Premises. In the event Grantor has executed a separate
assignment of rents and leases, then the provisions of such separate assignment
shall supersede the provisions of this Section.
Section 1.16. LEASES AND OTHER AGREEMENTS AFFECTING SECURED PROPERTY.
Grantor will duly and punctually perform all terms, covenants, conditions and
agreements binding upon it under any lease or any other agreement of any nature
whatsoever which involves or affects the Secured Property or any part thereof.
Grantor will, at the request of Grantee, furnish Grantee with executed copies of
all leases now or hereafter created upon the Secured Property or any part
thereof.
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Section 1.17. SECURITY AGREEMENT.
(a) Insofar as the machinery, apparatus, equipment, fittings, fixtures,
building supplies and materials, articles of personal property, contract rights,
accounts and general intangibles either referred to or described in this
Security Deed, or in any way connected with the use and enjoyment of the Secured
Property is concerned (other than the personal property expressly excluded
pursuant to the granting clauses hereof) this Security Deed is hereby made and
declared to be a security agreement, encumbering each and every item of personal
property included herein, in compliance with the provisions of the Uniform
Commercial Code as enacted in the State of Georgia. A financing statement or
statements reciting this Security Deed to be a security agreement, affecting all
of said personal property aforementioned, shall be executed by Grantor and
appropriately filed. The remedies for any violation of the covenants, terms and
conditions of the security agreement herein contained shall be (i) as prescribed
herein, or (ii) as prescribed by general law, or (iii) as prescribed by the
specific statutory consequences now or hereafter enacted and specified in said
Uniform Commercial Code, all at Grantee's sole election. Grantor and Grantee
agree that the filing of such financing statement(s) in the records normally
having to do with personal property shall never be construed as in anywise
derogating from or impairing this declaration and hereby stated intention of
Grantor and Grantee that everything used in connection with the production of
income from the Secured Property and/or adapted for use therein and/or which is
described or reflected in this Security Deed, is, and at all times and for all
purposes and in all proceedings both legal or equitable shall be, regarded as
part of the real estate irrespective of whether (a) any such item is physically
attached to the Premises, (b) serial numbers are used for the better
identification of certain items capable of being thus identified in a recital
contained herein, or (c) any such item is referred to or reflected in any such
financing statement(s) so filed at any time. Similarly, the mention in any such
financing statement(s) of the rights in and to (aa) the proceeds of any fire,
casualty and/or hazard insurance policy, or (bb) any award in condemnation
proceedings for a taking or for loss of value, or (cc) Grantor's interest as
lessor in any present or future lease or rights to income growing out of the use
and/or occupancy of the Secured Property, whether pursuant to lease or
otherwise, shall never be construed as in anywise altering any of the rights of
Grantee as determined by this instrument or impugning the priority of Grantee's
lien granted hereby or by any other recorded document, but such mention in such
financing statement(s) is declared to be for the protection of Grantee in the
event any court shall at any time hold with respect to the foregoing (aa), (bb)
or (cc), that notice of Grantee's priority of interest to be effective against a
particular class of persons, must be filed in the Uniform Commercial Code
records.
(b) Grantor shall execute and deliver to Grantee, in form and substance
satisfactory to Grantee, such "financing statements," real estate and related
notice filing and such further assurances as Grantee may from time to time
reasonably consider necessary to create, perfect and preserve Grantee's security
interest herein granted, and Grantee may cause such statements and assurances to
be recorded and filed at such times and places as may be required or permitted
by law to so create, perfect and preserve such security interest.
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<PAGE>
(c) The assignment and security interest herein granted shall not be
deemed or construed to constitute Grantee as a "trustee in possession" of the
Secured Property, to obligate Grantee to lease the Secured Property or attempt
to do same, or to take any action, incur any expense or perform or discharge any
obligation, duty or liability whatsoever under any of the leases or otherwise.
ARTICLE II
Default and Remedies
Section 2.01. EVENTS OF DEFAULT. The occurrence and continuation of a
"Trigger Event" under the Collateral Agency Agreement, as such term is defined
therein, shall constitute an Event of Default under this Security Deed.
Section 2.02. REMEDIES.
(a) Upon the occurrence of any Event of Default, Grantee may, with the
consent of the Collateral Agent, and shall, at the direction of the Collateral
Agent, take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Grantor and in and to the Secured
Property, including, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such order as the
Collateral Agent, as agent for the Grantee, may determine, in its sole
discretion, without impairing or otherwise affecting the other rights and
remedies of Grantee: (1) declare the entire unpaid Indebtedness to be
immediately due and payable; or (2) notify all tenants of the Premises and all
others obligated on leases of any part of the Premises that all rents and other
sums owing on leases have been assigned to Grantee and are to be paid directly
to Grantee, and to enforce payment of all obligations owing on leases, by suit,
ejectment, cancellation, releasing, reletting or otherwise, whether or not
Grantee has taken possession of the Premises, and to exercise whatever rights
and remedies Grantee may have under any assignment of rents and leases; or (3)
enter into or upon the Premises, either personally or by its agents, nominees or
attorneys and dispossess Grantor and its agents and servants therefrom, and
thereupon Grantee may (i) use, operate, manage, control, insure, maintain,
repair, restore and otherwise deal with all and every part of the Premises and
conduct the business thereat; (ii) complete any construction on the Premises in
such manner and form as the Collateral Agent, as agent for the Grantee, deems
advisable; (iii) make alterations, additions, renewals, replacements and
improvements to or on the Secured Property; (iv) exercise all rights and power
of Grantor with respect to the Premises, whether in the name of Grantor, or
otherwise, including, without limitation, the right to make, cancel, enforce or
modify leases, obtain and evict tenants, and demand, sue for, collect and
receive all earnings, revenues, rents, issues, profits and other income of the
Premises and every part thereof, which rights shall not be in limitation of
Grantee's rights under any assignment of rents and leases securing the Bonds;
and (v) apply the receipts from the Premises to the payment of the Indebtedness,
after deducting therefrom all reasonable expenses (including reasonable
attorneys' fees) incurred in connection with the aforesaid operations and all
amounts necessary to pay the taxes, assessments, insurance and other charges in
connection with the Secured Property, as well as just and reasonable
compensation for the services of Grantee, its counsel, agents and employees; or
(4) institute proceedings for
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<PAGE>
the complete foreclosure of this Security Deed either at law, in equity or
pursuant to Section 2.02(b) herein, in which case the Secured Property may be
sold for cash or upon credit in one or more parcels; or (5) with or without
entry, to the extent permitted and pursuant to the procedures provided by
applicable law, institute proceedings for the partial foreclosure of this
Security Deed for the portion of the Indebtedness then due and payable (if the
Collateral Agent, as agent for the Grantee, shall have elected not to declare
the entire Indebtedness to be immediately due and owing), subject to the
continuing lien of this Security Deed for the balance of the Indebtedness not
then due; or (6) sell for cash or upon credit the Secured Property or any part
thereof and all estate, claim, demand, right, title and interest of Grantor
therein and rights of redemption thereof, pursuant to power of sale or
otherwise, at one or more sales, as an entity or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or
permitted by law, and in the event of a sale, by foreclosure or otherwise, of
less than all of the Secured Property, this Security Deed shall continue as a
lien on the remaining portion of the Secured Property; or (7) institute an
action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein; or (8) recover judgment on
the Indebtedness either before, during or after any proceedings for the
enforcement of this Security Deed; or (9) apply for the appointment of a
trustee, receiver, liquidator or conservator of the Secured Property, without
regard for the adequacy of the security for the Indebtedness and without regard
for the solvency of Grantor, any guarantor, or any other person, firm or other
entity liable for the payment of the Indebtedness; or (10) pay or perform any
default in the payment, performance or observance of any term, covenant or
condition of this Security Deed, and all payments made or costs or expenses
incurred by Grantee in connection therewith, shall be secured hereby and shall
be, without demand, immediately repaid by Grantor to Grantee with interest
thereon as provided in Section 1.11 hereof, the necessity for any such actions
and of the amounts to be paid to be in the sole judgment of Grantee, and Grantee
may enter and authorize others to enter upon the Secured Property or any part
thereof for the purpose of performing or observing any such defaulted term,
covenant or condition without thereby becoming liable to Grantor or any person
in possession holding under Grantor; or (11) pursue such other remedies as
Grantee may have under applicable law, in equity or under the Indebtedness or
this Security Deed; or (12) pursue any remedy available to Grantee under any
guaranty.
(b) If an Event of Default shall have occurred, Grantee may, with the
consent of the Collateral Agent, and shall, at the direction of the Collateral
Agent, sell the Secured Property or any part of the Secured Property at public
sale or sales at the usual place for conducting sales in the county in which the
Secured Property or any part of the Secured Property is situated, to the highest
bidder for cash, in order to pay the Indebtedness secured hereby and accrued
interest thereon and insurance premiums, liens, assessments, taxes and charges,
including utility charges, if any, with accrued interest thereon, and all
expenses of the sale and of all proceedings in connection therewith, including
reasonable attorneys' fees, actually incurred, after advertising the time, place
and terms of sale once a week for four (4) weeks immediately preceding such sale
(but without regard to the number of days) in a newspaper in which Sheriff's
sales are advertised in said county, all other notice being hereby waived by
Grantor. At any such public sale, Grantee may execute and deliver to the
purchaser a conveyance of the Secured Property or any part of the Secured
Property in fee simple, with
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full warranties of title (or without warranties if Grantee shall so elect) and
to this end, Grantor hereby constitutes and appoints the Collateral Agent, as
agent for the Grantee, the agent and attorney-in-fact of Grantor to make such
sale and conveyance, and thereby to divest Grantor of all right, title,
interest, equity and equity of redemption that Grantor may have in and to the
Secured Property and to vest the same in the purchaser or purchasers at such
sale or sales, and all the acts and doings of said agent and attorney-in-fact
are hereby ratified and confirmed and any recitals in said conveyance or
conveyances as to facts essential to a valid sale shall be binding upon Grantor.
The aforesaid power of sale and agency hereby granted are coupled with an
interest and are irrevocable by death or otherwise, are granted as cumulative of
the other remedies provided hereby or by law for collection of the Indebtedness
secured hereby and shall not be exhausted by one exercise thereof but may be
exercised until full payment of all Indebtedness secured hereby. In the event of
any such foreclosure sale by Grantee, Grantor shall be deemed a tenant holding
over and shall forthwith deliver possession to the purchaser or purchasers at
such sale or be summarily dispossessed according to provisions of law applicable
to tenants holding over.
(c) The purchase money proceeds or avails of any sale made under or by
virtue of this Article II, together with any other sums which then may be held
by Grantee under this Security Deed, whether under the provisions of this
Article II or otherwise, shall be applied in accordance with the Collateral
Agency Agreement. Notwithstanding anything contained herein to the contrary, any
such proceeds remaining after any such sale shall be paid to the Collateral
Agent, on behalf of the Lessee, in respect of its rights and interests under the
Lease.
(d) Grantee may adjourn from time to time any sale by it to be made
under or by virtue of this Security Deed by announcement at the time and place
appointed for such sale or for such adjourned sale or sales; and, except as
otherwise provided by any applicable provision of law, Grantee, without further
notice or publication, may make such sale at the time and place to which the
same shall be so adjourned.
(e) Upon the completion of any sale or sales made by Grantee under or
by virtue of this Article II, Grantee, or an officer of any court empowered to
do so, shall execute and deliver to the accepted purchaser or purchasers a good
and sufficient instrument, or good and sufficient instruments, conveying,
assigning and transferring all estate, right, title and interest in and to the
property and rights sold. The Collateral Agent, as agent for the Grantee, is
hereby irrevocably appointed the true and lawful attorney of Grantor, in its
name and stead, to make all necessary conveyances, assignments, transfers and
deliveries of the Secured Property and rights so sold and for that purpose
Grantee may execute all necessary instruments of conveyance, assignment and
transfer, and may substitute one or more persons with like power, Grantor hereby
ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof. Any such sale or sales made
under or by virtue of this Article II, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
Grantor in and to the properties and rights so sold, and shall be a perpetual
bar both at law
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and in equity against Grantor and against any and all persons claiming or who
may claim the same, or any part thereof from, through or under Grantor.
(f) In the event of any sale made under or by virtue of this Article II
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale) the
entire Indebtedness, if not previously due and payable, immediately thereupon
shall, anything in the Financing Documents or in this Security Deed to the
contrary notwithstanding, become due and payable.
(g) Upon any sale made under or by virtue of this Article II (whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale), the Collateral
Agent, as agent for the Grantee, may bid for and acquire the Secured Property or
any part thereof and in lieu of paying cash therefor may make settlement for the
purchase price by crediting upon the Indebtedness the net sales price after
deducting therefrom the expenses of the sale and the costs of the action and any
other sums which Grantee is authorized to deduct under this Security Deed.
(h) No recovery of any judgment by Grantee and no levy of an execution
under any judgment upon the Secured Property or upon any other property of
Grantor shall affect in any manner or to any extent, the lien and title of this
Security Deed upon the Secured Property or any part thereof, or any liens,
titles, rights, powers or remedies of Grantee hereunder, but such liens, titles,
rights, powers and remedies of Grantee shall continue unimpaired as before.
(i) Grantor agrees, to the fullest extent permitted by law, that upon
the occurrence of an Event of Default, neither Grantor nor anyone claiming
through or under it shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension, homestead, exemption or redemption
laws now or hereafter in force, in order to prevent or hinder the enforcement or
foreclosure of this Security Deed, or the absolute sale of the Secured Property,
or the final and absolute putting into possession thereof, immediately after
such sale, of the purchasers thereat, and Grantor, for itself and all who may at
any time claim through or under it, hereby waives to the full extent that it may
lawfully so do, the benefit of all such laws, and any and all right to have the
assets comprised in the security intended to be created hereby marshalled upon
any foreclosure of the lien or title hereof.
(j) The Collateral Agent, as agent for the Grantee, at its option, is
authorized to foreclose this Security Deed subject to the rights of any tenants
of the Premises, and the failure to make any such tenants parties to any such
foreclosure proceedings and to foreclose their rights will not be, nor be
asserted to be by Grantor, a defense to any proceedings instituted by Grantee to
collect the sums secured hereby.
Section 2.03. [Intentionally omitted].
Section 2.04. POSSESSION OF THE PREMISES. Possession of the Premises
during the existence of the Indebtedness by Grantor, or any person claiming
under Grantor, shall be that of a tenant under Grantee and its successors and
assigns. Upon the occurrence and during the
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continuation of any Event of Default hereunder, it is agreed that the then owner
of the Premises, if it is the occupant of the Premises or any part thereof,
shall, at the option of the Collateral Agent, as agent for the Grantee,
immediately surrender possession of the Premises so occupied to Grantee, and if
such occupant is permitted to remain in possession, the possession shall be as
tenant of Grantee and, on demand, such occupant (a) shall pay to Grantee
monthly, in advance, a reasonable rental for the space so occupied, and (b) in
default thereof may be dispossessed by the usual summary proceedings. The
covenants herein contained may be enforced by a receiver of the Secured Property
or any part thereof. Nothing in this Section 2.04 shall be deemed to be a waiver
of the provisions of this Security Deed prohibiting the sale or other
disposition of the Secured Property without Grantee's consent.
Section 2.05. GRANTOR'S ACTIONS AFTER DEFAULT. After the happening of
any Event of Default and immediately upon the commencement of any action, suit
or other legal proceedings by Grantee to obtain judgment for the Indebtedness,
or of any other nature in aid of the enforcement of the Indebtedness or of this
Security Deed, Grantor will, if required by Grantee, consent to the appointment
of a receiver or receivers of the Secured Property and of all the earnings,
revenues, rents, issues, profits and income thereof. Nothing herein shall be
deemed to require the commencement of a suit or the consent of Grantor as a
condition precedent for Grantee's right to the appointment of a receiver or the
exercise of any other rights or remedies available to Grantee.
Section 2.06. CONTROL BY GRANTEE AFTER DEFAULT. Notwithstanding the
appointment of any receiver, liquidator or trustee of Grantor, or of any of its
property, or of the Secured Property or any part thereof, Grantee shall be
entitled to retain possession and control of all property now and hereafter
covered by this Security Deed.
Section 2.07. WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS SECURITY
DEED AND BY INITIALING THIS SECTION 2.07, GRANTOR EXPRESSLY: (A) ACKNOWLEDGES
THE RIGHT TO ACCELERATE THE INDEBTEDNESS AND THE POWER OF ATTORNEY GIVEN HEREIN
TO GRANTEE TO SELL THE SECURED PROPERTY IN ACCORDANCE WITH THE PROVISIONS HEREOF
AND OF THE COLLATERAL AGREEMENT BY NONJUDICIAL FORECLOSURE UPON THE OCCURRENCE
OF AN EVENT OF DEFAULT WITHOUT ANY JUDICIAL HEARING AND WITHOUT ANY NOTICE; (B)
WAIVES ANY AND ALL RIGHTS WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE
UNITED STATES (INCLUDING THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF), THE
VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF
ANY OTHER APPLICABLE LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE
EXERCISE BY GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO GRANTEE; (C)
ACKNOWLEDGES THAT GRANTOR HAS READ THIS SECURITY DEED AND ITS PROVISIONS HAVE
BEEN EXPLAINED FULLY TO GRANTOR AND GRANTOR HAS CONSULTED WITH COUNSEL OF
GRANTOR'S CHOICE PRIOR TO EXECUTING THIS SECURITY DEED; AND (D) ACKNOWLEDGES
THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE KNOWINGLY,
INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A BARGAINED FOR LOAN
TRANSACTION:
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INITIALED BY GRANTOR:
DEVELOPMENT AUTHORITY OF HEARD COUNTY
By:_____________
ARTICLE III
Miscellaneous
Section 3.01. INTENTIONALLY OMITTED.
Section 3.02. NO RELEASE. Grantor agrees, that in the event the Secured
Property is sold and Grantee enters into any agreement with the then owner of
the Secured Property extending the time of payment of the Indebtedness, or
otherwise modifying the terms hereof, Grantor shall continue to be liable to pay
the Indebtedness according to the tenor of any such agreement unless expressly
released and discharged in writing by Grantee.
Section 3.03. NOTICES. All notices to any parties hereunder shall be in
writing (including bankwire, telex, telecopy or similar teletransmission or
writing) and shall be given by United States mail, telex, teletransmission or
overnight courier to such party at its address or applicable teletransmission
number set forth below or such other address or applicable telecopy number as
such party may hereafter specified by notice to the other party hereto. Each
such notice, request or other communication shall be effective (i) if given by
telex, once such telex is transmitted to the telex number specified in the Lease
Agreement and the appropriate answerback is received (ii) if given by mail, 72
hours after such communication is deposited in the mail with first class postage
pre-paid, addressed as aforesaid, (iii) if given by telecopy, when such telecopy
is transmitted to the telecopy number specified below and the appropriate
confirmation is received or (iv) if given by any other means (including, without
limitation, by air courier), when delivered or received at the address specified
in this sections (provided that notices to the Grantee shall not be effective
until received):
<TABLE>
<S> <C>
If to the Grantor: DEVELOPMENT AUTHORITY OF HEARD COUNTY
c/o Glover & Davis
10 Brown Street
Newnan, Georgia 30264-1038
Attn: A. Mitchell Powell, Esq.
Telephone No. (770) 683-6000
Telecopy No. (770) 683-6010
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Grantee: THE CHASE MANHATTAN BANK
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, New York 10001
Telephone No. (212) 946-7557
Telecopy No. (212) 946-8177
</TABLE>
Section 3.04. BINDING OBLIGATIONS. The provisions and covenants of this
Security Deed shall run with the land, shall be binding upon Grantor and shall
inure to the benefit of Grantee, subsequent holders of this Security Deed and
their respective successors and assigns. For the purpose of this Security Deed,
the term "Grantor" shall mean Grantor named herein, any subsequent owner of the
Secured Property, and their respective heirs, executors, legal representatives,
successors and assigns. If there is more than one Grantor, all their
undertakings hereunder shall be deemed joint and several.
Section 3.05. CAPTIONS. The captions of the Sections of this Security
Deed are for the purpose of convenience only and are not intended to be a part
of this Security Deed and shall not be deemed to modify, explain, enlarge or
restrict any of the provisions hereof.
Section 3.06. FURTHER ASSURANCES. Grantor shall do, execute,
acknowledge and deliver, at the sole cost and expense of Grantor, all and every
such further acts, deeds, conveyances, assignments, estoppel certificates,
notices of assignment, transfers and assurances as Grantee may reasonably
require from time to time in order to better assure, convey, assign, transfer
and confirm unto Grantee, the rights now or hereafter intended to be granted to
Grantee under this Security Deed, any other instrument executed in connection
with this Security Deed or any other instrument under which Grantor may be or
may hereafter become bound to convey, transfer or assign to Grantee for carrying
out the intention of facilitating the performance of the terms of this Security
Deed.
Section 3.07. SEVERABILITY. Any provision of this Security Deed which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provisions in any other
jurisdiction.
Section 3.08. GENERAL CONDITIONS.
(a) All covenants hereof shall be construed as affording to Grantee
rights additional to and not exclusive of the rights conferred under the
provisions of applicable laws of the State of Georgia.
(b) This Security Deed cannot be altered, amended, modified or
discharged orally and no agreement shall be effective to modify or discharge it
in whole or in part, unless it is in writing and signed by the party against
whom enforcement of the modification, alteration, amendment or discharge is
sought.
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(c) No remedy herein conferred upon or reserved to Grantee is intended
to be exclusive of any other remedy or remedies, and each and every such remedy
shall be cumulative, and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. No
delay or omission of Grantee in exercising any right or power accruing upon any
Event of Default shall impair any such right or power, or shall be construed to
be a waiver of any such Event of Default, or any acquiescence therein.
Acceptance of any payment after the occurrence of an Event of Default shall not
be deemed to waive or cure such Event of Default; and every power and remedy
given by this Security Deed to Grantee may be exercised from time to time as
often as may be deemed expedient by Grantee. Nothing in this Security Deed shall
affect the obligation of Grantor to pay the Indebtedness in the manner and at
the time and place therein respectively expressed.
(d) No waiver by Grantee will be effective unless it is in writing and
then only to the extent specifically stated. Without limiting the generality of
the foregoing, any payment made by Grantee for insurance premiums, taxes,
assessments, water rates, sewer rentals or any other charges affecting the
Secured Property, shall not constitute a waiver of Grantor's default in making
such payments and shall not obligate Grantee to make any further payments.
(e) Grantee shall have the right to appear in and defend any action or
proceeding which the Collateral Agent, as agent for the Grantee, in its
discretion, determines may adversely affect the Secured Property or this
Security Deed and, following the occurrence of an Event of Default, may appear
in the name and on behalf of Grantor. Grantee shall also have the right to
institute any action or proceeding which Grantee, in its discretion, determines
should be brought to protect its interest in the Secured Property or its rights
hereunder. All reasonable costs and expenses incurred by Grantee in connection
with such actions or proceedings, including, without limitation, reasonable
attorneys' fees and appellate attorneys' fees actually incurred, shall be paid
by Grantor, on demand.
(f) In the event of the passage after the date of this Security Deed of
any law of any governmental authority having jurisdiction, deducting the
Indebtedness from the value of the Premises for the purpose of taxation,
affecting any lien thereon or changing in any way the laws of the taxation of
security deeds or debts secured by security deeds for federal, state or local
purposes, or the manner of the collection of any such taxes, so as to affect
this Security Deed, Grantor shall promptly pay to Grantee, on demand, all taxes,
costs and charges for which Grantee is or may be liable as a result thereof,
provided said payment shall not be prohibited by law or render the Bonds
usurious, in which event Grantee may declare the Indebtedness to be immediately
due and payable.
(g) Grantor acknowledges that it has received a true copy of this
Security Deed.
(h) For the purposes of this Security Deed, (i) capitalized terms used
herein and not defined herein shall have the meanings ascribed thereto in the
Common Agreement and (ii) all defined terms and personal pronouns contained
herein shall be construed, whenever the context of this Security Deed so
requires, so that the singular shall be construed as the plural and vice
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versa and so that the masculine, feminine or neuter gender shall be construed to
include all other genders.
(i) No provision of this Security Deed shall be construed against or
interpreted to the disadvantage of Grantor or Grantee by any court or other
governmental or judicial authority by reason of such party having or being
deemed to have drafted, prepared, structured or dictated such provision.
(j) Time is of the essence with respect to each and every covenant,
agreement and obligation of Grantor and any guarantor under this Security Deed.
(k) Whenever this Security Deed, the Bonds or the Lease Agreement
requires the consent, approval, waiver, acceptance, satisfaction or the taking
of any discretionary act by, Grantee all of the foregoing being referred to as
"Consent" in this subsection 3.08(k), the right, power, privilege and option of
Grantee to withhold or grant its Consent shall not be exhausted by the exercise
thereof on one or more occasions, but shall be a continuing right, power,
privilege and option of Grantee with respect to any such matters.
Section 3.09. LEGAL CONSTRUCTION. The enforcement of this Security Deed
shall be governed, construed and interpreted by the laws of the State of
Georgia. Nothing in this Security Deed, the Lease, the Bonds or in any other
agreement between Grantor and Grantee shall require Grantor to pay, or Grantee
to accept, interest in an amount which would subject Grantee to any penalty
under applicable law. In the event that the payment of any interest due
hereunder or under the Bonds or any such other agreement would subject Grantee
to any penalty under applicable law, then automatically the obligations of
Grantor to make such payment shall be reduced to the highest rate authorized
under applicable law.
Section 3.10. WAIVER OF JURY TRIAL. Grantor and Grantee, on behalf of
themselves and their respective successors and assigns, waive all right to trial
by jury in any action or proceeding to enforce or defend any rights or remedies
under the Bonds, the Lease or this Security Deed or relating thereto.
Section 3.11. NO PARTNERSHIP OR JOINT VENTURE. Nothing contained herein
or in the Bonds or in the Lease, nor the acts of the parties hereto, shall be
construed to create a partnership or joint venture between Grantor and Grantee.
The relationship between Grantor and Grantee is the relationship of "debtor" and
"creditor".
Section 3.12. COUNTERPARTS. This Security Deed may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which, taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Security Deed has been duly executed and
delivered under seal as of the day and year first above written.
GRANTOR:
DEVELOPMENT AUTHORITY OF HEARD COUNTY
[CORPORATE SEAL] By: /S/__________________________
Name: Mal Milam
Title: Chairman
Attest:
By: /S/__________________________
Name: Robin C. McKenzie
Title: Secretary
Signed, sealed and delivered
in the presence of:
/S/______________________________
Unofficial Witness
/S/______________________________
Notary Public
Date executed by Notary:
November 5, 1999
My commission expires:________
[NOTARIAL SEAL]
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EXHIBIT A
DESCRIPTION OF PREMISES
TRACT A1
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 72 degrees 48 minutes 00 seconds West for a distance of
405.46 feet to a 12 INCH WOOD POST;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a 1/2 INCH REBAR SET ON THE WESTERLY LINE OF A GEORGIA POWER
COMPANY RIGHT OF WAY (150 FOOT WIDTH), SAID POINT BEING THE POINT OF BEGINNING
FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 1982.75 to a 1/2
INCH REBAR SET ON THE NORTHERLY LIMITS OF THE WETLANDS OF HILLY MILL CREEK;
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 191.17 to a POINT
IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 46 degrees 21 minutes 20 seconds West for a distance of 66.26
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
<PAGE>
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK;
THENCE along the centerline of the unnamed creek to the Northeast, more
or less, North 68 degrees 03 minutes 13 seconds East for a distance of 336.28
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 29 minutes 52 seconds East for a distance of
296.07 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 54 degrees 43 minutes 02 seconds East for a distance of
67.68 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 17 degrees 17 minutes 28 seconds East for a distance of
228.26 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 23 degrees 21 minutes 46 seconds East for a distance of
241.49 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 07 degrees 17 minutes 08 seconds East for a distance of
71.42 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 79 degrees 26 minutes 44 seconds East for a distance of
307.88 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 48 degrees 14 minutes 55 seconds East for a distance of
157.63 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 27 degrees 04 minutes 19 seconds East for a distance of
111.97 feet to a POINT IN THE CENTERLINE OF THE CREEK;
A-2
<PAGE>
THENCE North 55 degrees 09 minutes 32 seconds East for a distance of
128.35 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 08 degrees 06 minutes 45 seconds East for a distance of
34.61 feet to an IRON PIN SET IN THE CENTERLINE OF THE CREEK;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
212.86 feet to a 1/2 inch rebar set on the Westerly line of a GEORGIA POWER
COMPANY TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH); Said point being the
POINT OF BEGINNING.
Said property contains 46.13 acres, and is that same tract or parcel of
land shown as Tract A1 on that certain ALTA/ACSM Title Survey, entitled Heard
County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc., Tenaska
Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title Insurance
Company of New York, Stewart Title Guaranty Company, Heard County Development
Authority & The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and certification of
James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19, 1999,
last revised November 4, 1999, and recorded in Plat Book 10, Pages 176 - 188, in
the Office of the Clerk of the Superior Court of Heard County, Georgia.
TRACT B
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
A-3
<PAGE>
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
A-4
<PAGE>
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a distance of
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek, Said point being the POINT OF BEGINNING for the herein described parcel
of land;
THENCE along said wetlands limits to the Southeast, more or less, South
53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
A-5
<PAGE>
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
A-6
<PAGE>
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE leaving said wetlands limits, North 65 degrees 01minutes 43
seconds West for a distance of 98.87 feet to a point;
THENCE North 11 degrees 02 minutes 41 seconds East for a distance of
230.45 feet to a point;
THENCE North 11 degrees 13 minutes 13 seconds West for a distance of
121.54 feet to a point;
THENCE North 38 degrees 58 minutes 52 seconds West for a distance of
121.90 feet to a point;
THENCE North 23 degrees 10 minutes 22 seconds West for a distance of
116.83 feet to a point;
THENCE North 27 degrees 01 minutes 41 seconds West for a distance of
102.77 feet to a point;
THENCE North 44 degrees 31 minutes 22 seconds West for a distance of
55.85 feet to a point;
THENCE South 70 degrees 40 minutes 56 seconds West for a distance of
73.31 feet to a point;
THENCE South 71 degrees 22 minutes 08 seconds West for a distance of
120.59 feet to a point;
THENCE North 27 degrees 11 minutes 02 seconds West for a distance of
173.06 feet to a point;
THENCE North 06 degrees 27 minutes 30 seconds East for a distance of
58.98 feet to a point;
THENCE North 40 degrees 46 minutes 01 seconds East for a distance of
132.31 feet to a point;
A-7
<PAGE>
THENCE North 01 degrees 41 minutes 21 seconds West for a distance of
32.15 feet to a point;
THENCE North 42 degrees 40 minutes 25 seconds West for a distance of
132.37 feet to a point;
THENCE North 47 degrees 57 minutes 38 seconds East for a distance of
97.57 feet to the POINT OF BEGINNING.
Said property contains 3.84 acres more or less and is that same tract
or parcel of land shown as Tract B on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia.
TRACT C
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
A-8
<PAGE>
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek, said point being the POINT OF BEGINNING for the herein described parcel
of land.
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4" PIPE;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE North 72 degrees 59 minutes 23 seconds West for a distance of
97.41 feet to a point;
THENCE North 28 degrees 40 minutes 02 seconds West for a distance of
114.55 feet to a point;
THENCE North 62 degrees 08 minutes 04 seconds West for a distance of
184.99 feet to a point;
THENCE North 63 degrees 50 minutes 09 seconds West for a distance of
166.92 feet to a point;
THENCE North 64 degrees 00 minutes 12 seconds West for a distance of
173.39 feet to a point;
THENCE North 87 degrees 49 minutes 10 seconds West for a distance of
111.55 feet to a point;
THENCE North 66 degrees 04 minutes 51 seconds West for a distance of
158.94 feet to a point;
THENCE North 66 degrees 19 minutes 50 seconds West for a distance of
121.59 feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of
186.45 feet to a point;
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of
163.48 feet to a point;
THENCE North 56 degrees 31 minutes 54 seconds West for a distance of
127.08 feet to a point;
A-9
<PAGE>
THENCE North 49 degrees 42 minutes 26 seconds West for a distance of
110.80 feet to a point;
THENCE South 63 degrees 26 minutes 27 seconds West for a distance of
73.93 feet to a point;
THENCE South 34 degrees 43 minutes 18 seconds West for a distance of
155.58 feet to a point;
THENCE North 65 degrees 01 minutes 43 seconds West for a distance of
125.76 feet to a point on the Southerly Wetland limits of Hilly Mill Creek;
THENCE along said Wetland Limits to the Southeast, more or Less, North
19 degrees 07 minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
A-10
<PAGE>
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
A-11
<PAGE>
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to the POINT OF BEGINNING.
Said property contains 5.13 acres more or less and is that same tract
or parcel of land shown as Tract C on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia.
TRACT D
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
A-12
<PAGE>
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK; SAID POINT BEING
THE POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
A-13
<PAGE>
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a Distance of
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek;
THENCE along said wetlands limits to the Southeast, more or less, South
53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
A-14
<PAGE>
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
A-15
<PAGE>
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE across an unnamed creek and wetlands area which intersects from
the Southwest, South 65 degrees 01 minutes 43 seconds East for a distance of
394.79 feet to a point;
THENCE continuing along said wetlands limit, North 19 degrees 07
minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
A-16
<PAGE>
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
A-17
<PAGE>
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to a point;
THENCE North 02 degrees 18 minutes 34 seconds East for a distance of
978.06 feet to a point;
THENCE North 01 degrees 18 minutes 40 seconds East for a distance of
32.38 feet to the POINT OF BEGINNING.
Said property contains 43.03 acres more or less and is that same tract
or parcel of land shown as Tract D on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia.
TRACT G
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
A-18
<PAGE>
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land. THENCE North 88 degrees 57 minutes 38 seconds West for
a distance of 177.75 feet to point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
82.45 feet to a point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
639.20 feet to a point;
A-19
<PAGE>
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
52.57 feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
150.00 feet to a point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
25.93 feet to a point;
THENCE South 44 degrees 18 minutes 22 seconds East for a distance of
63.80 feet to a point;
THENCE South 53 degrees 03 minutes 38 seconds East for a distance of
18.78 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
211.55 feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
11.80 feet to a point;
THENCE along a curve to the right having a radius of 3600.00 feet, a
central angle of 09 degrees 21 minutes 08 seconds, an Arc length of 587.61 feet,
and subtended by a chord bearing South 33 degrees 47 minutes 14 seconds West for
a distance of 586.96 feet to the POINT OF BEGINNING.
Said property contains 3.16 acres more or less and is that same tract
or parcel of land shown as Tract G on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and recorded in Plat
Book 10, Pages 176 - 188, in the Office of the Clerk of the Superior Court of
Heard County, Georgia.
A-20
<PAGE>
EXHIBIT "B"
EASEMENTS AND PERMITTED TITLE EXCEPTIONS
TOGETHER WITH:
(A) All rights of the above named Grantor under that certain
Construction Easement Agreement by and between Inland
Paperboard and Packaging, Inc., a Delaware corporation,
Tenaska, Inc., a Delaware corporation, and Tenaska Georgia
Partners, L.P., a Delaware limited partnership, dated
October 8, 1999, filed for record October 11, 1999 at
2:51 p.m., recorded in Deed Book 201, Page 107, Heard County,
Georgia Records.
(B) All rights of the above named Grantor under that certain Access
Easement Agreement by and between Inland Paperboard and
Packaging, Inc., a Delaware corporation, Tenaska, Inc., a Delaware
corporation, and Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated October 8, 1999, filed for record October 11,
1999 at 2:45 p.m., recorded in Deed Book 201, Page 120, aforesaid
Records.
(C) All rights of the above named Grantor under that certain
Perpetual Right of Way and Easement Agreement for Charles L.
Goodson, as Executor of the Last Will and Testament of Ora Lee
Goodson, to Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated November 10, 1999, filed for record
November 10, 1999 at 4:14 ?.m. recorded in Deed Book 201, Page
705, aforesaid Records, as affected by that certain
Non-Interference and Cross-Indemnity Agreement by and between
Tenaska, Inc., a Delaware corporation, and Tenaska Georgia
Partners, L.P., a Delaware limited partnership, dated
November 10, 1999, filed for record November 10, 1999 at
4:22 ?.m., recorded in Deed Book 201, Page 792, aforesaid
Records.
(D) All rights of the above named Grantor under that certain
Natural Gas Pipeline Right of Way for Great Northern Nekoosa
Corporation, a Maine corporation, to Tenaska Georgia Partners,
L.P., a Delaware limited partnership, dated November 10, 1999,
filed for record November 10, 1999 at 4:16 ?.m., recorded in
Deed Book 201, Page 743, aforesaid Records, as affected by that
certain Non-Interference and Cross-Indemnity Agreement by and
between Tenaska, Inc., a Delaware corporation, and Tenaska
Georgia Partners, L.P., a Delaware limited partnership, dated
November 10, 1999, filed for record November 10, 1999 at 4:22 ?.m.,
recorded in Deed Book 201, Page 792, aforesaid Records.
18
<PAGE>
(E) All rights of the above named Grantor under that certain Easement
Agreement from Robert Charles Payne and Susan Lynn Payne to Tenaska
Georgia Partners, L.P., a Delaware limited partnership, dated
November 10, 1999, filed for record November 10, 1999 at 4:19 ?.m.,
recorded in Deed Book 201, Page 786, aforesaid Records.
(F) All rights of the above named Grantor under that certain Access and
Utility Easement Agreement from Tenaska, Inc., a Delaware
corporation to Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated November 10, 1999, filed for record November 10,
1999 at 4:10 ?.m., recorded in Deed Book 201, Page 666, aforesaid
Records.
AND SUBJECT TO:
- ---------------
1. All taxes for the year 1999 and subsequent years, not yet due and
payable.
2. Riparian Rights incident to the Property.
3. Right-of-Way Deed Plant Wansley-Fortson Transmission Line from
Georgia Kraft Company, a Delaware Corporation, to Georgia Power
Company, a Georgia Corporation dated August 7, 1974, filed for
record September 14, 1974 at 8:30 a.m., recorded in Deed Book 75,
Page 438, Records of Heard County, Georgia.
4. Terms and conditions contained in that certain Easement Agreement by
and between Violet E. Davis and Tenaska, Inc., a Delaware
corporation, dated May 7, 1998, filed for record May 7, 1998 at 1:54
p.m., recorded in Deed Book 184, Page 578, aforesaid Records.
5. The terms and conditions of that certain Construction Easement
Agreement by and between Inland Paperboard and Packaging, Inc., a
Delaware corporation, Tenaska, Inc. a Delaware corporation, and
Tenaska Georgia Partners, L.P., a Delaware limited partnership,
dated October 8, 1999, filed for record October 11, 1999 at
2:51 p.m., recorded in Deed Book 201, Page 107, aforesaid Records,
Terms and conditions contained in that certain.
6. Terms and conditions contained in that certain Access Easement
Agreement by and between Inland Paperboard and Packaging, Inc., a
Delaware corporation, Tenaska, Inc. a Delaware corporation and
Tenaska Georgia Partners, L.P., a Delaware limited partnership,
dated October 8, 1999, filed for record October 11, 1999 at
2:54 p.m., recorded in Deed Book 201, Page 120, aforesaid Records.
7. Terms and conditions contained in that certain Access and Utility
Easement Agreement from Tenaska, Inc., a Delaware corporation to
Tenaska Georgia Partners, L.P., a Delaware limitied partnership,
dated November 10, 1999, filed for record November 10, 1999 at
4:10 ?.m., recorded in Deed Book 201, Page 666, aforesaid Records.
19
<PAGE>
8. Terms and conditions of that certain Perpetual Right of Way and
Easement Agreement from Charles L. Goodson, as Executor of the Last
Will and Testament of Ore Lee Goodson, to Tenaska Georgia Partners,
L.P., a Delaware limited partnership, dated November 10, 1999, filed
for record November 10, 1999 at 4:14 ?.m., recorded in Deed Book 201,
Page 705, aforesaid Records and the terms and conditions of that
certain Non-Interference and Cross-Indemnity Agreement by and
between Tenaska, Inc., a Delaware corporation, and Tenaska Georgia
Partners, L.P., a Delaware limited partnership, dated November 10,
1999, filed for record November 10, 1999 at 4:22 ?.m., recorded in
Deed Book 201, Page 792, aforesaid Records.
9. Terms and conditions of that certain Natural Gas Pipeline Right of
Way from Great Northern Nekoosa Corporation, a Maine corporation, to
Tenaska Georgia Partners, L.P., a Delaware limited partnership,
dated November 10, 1999, filed for record November 10, 1999 at
4:16 ?.m., recorded in Deed Book 201, Page 743, aforesaid Records,
and the terms and conditions of that certain Non-Interference and
Cross-Indemnity Agreement by and between Tenaska, Inc., a Delaware
corporation, and Tenaska Georgia Partners, L.P., a Delaware limited
partnership, dated November 10, 1999, filed for record November 10,
1999 at 4:22 ?.m., recorded in Deed Book 201, Page 792, aforesaid
Records.
10. Easement Agreement by and between Tenaska, Inc., a Delaware
corporation, and Inland Paperboard and Packaging, Inc., a Delaware
corporation, dated October 8, 1999, filed for record October 11,
1999 at 2:54 p.m., recorded in Deed Book 201, Page 125, aforesaid
Records.
11. Memorandum of Rights of First Refusal and Right to Repurchase
Agreement by and between Julie R. Thomas (formerly known as Julie
Rebecca Brown Arrington), and Tenaska Georgia Partners, L.P., a
Delaware limited partnership, dated August 26, 1998, filed for
record September 1, 1998 at 1:21 p.m., recorded in Deed Book 188,
Page 339, aforesaid records.
12. Memorandum of Right of First Refusal Agreement by and between
Tenaska, Inc., a Delaware corporation, and Inland Paperboard and
Packaging, Inc., a Delaware corporation, dated October 8, 1999,
filed for record October 11, 1999 at 3:15 p.m., recorded in Deed
Book 201, Page 131, aforesaid Records.
13. Perpetual Right-of-Way and Easement Agreement from Tenaska Georgia
Partners, L.P., a Delaware limited partnership, to Tenaska, Inc., a
Delaware corporation, dated November 10, 1999, filed for record
November 10, 1999 at 4:08 ?.m., recorded in Deed Book 201, Page 653,
aforesaid Records.
14. Restricted Covenant from Tenaska Georgia Partners, L.P., a Delaware
limited partnership, dated November 10, 1999, filed for record
November 10, 1999 at 4:12 ?.m., recorded in Deed Book 201, Page 678,
aforesaid Records.
20
<PAGE>
15. Those matters disclosed by that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc.,
Tenaska Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia
Partners, LP, Fidelity National Title Insurance Company of New York,
Stewart Title Guaranty Company, Heard County Development Authority &
The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and
certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, and
recorded in Plat Book 10, Pages 176-188, in the Office of the Clerk
of the Superior Court of Heard County, Georgia, which recorded
Survey is incorporated herein by reference.
16. That certain Indenture of Trust between by and between the
Development Authority of Heard County, a public corporation of the
State of Georgia, as issuer, and The Chase Manhattan Bank, as
trustee, a state banking corporation duly organized and existing
under and by virtue of the laws of the State of New York, as
trustee, dated November 10, 1999, filed for record November 10, 1999
at 4:36 ?.m., recorded in Deed Book 202, Page 86, aforesaid Records.
17. Terms and conditions contained in that certain Lease Agreement by
and between the Development Authority of Heard County, a public
corporation of the State of Georgia, as lessor, and Tenaska Georgia
Partners, L.P., a Delaware limited partnership, as lessee, dated
November 10, 1999, filed for record November 10, 1999 at 4:34 ?.m.,
recorded in Deed Book 202, Page 1, aforesaid Records.
21
<PAGE>
Exhibit 4.23
EXECUTION COPY
==============================================================================
GUARANTY AGREEMENT
BETWEEN
TENASKA GEORGIA PARTNERS, L.P.
AND
THE CHASE MANHATTAN BANK,
AS TRUSTEE
DATED AS OF NOVEMBER 1, 1999
==============================================================================
This instrument was prepared by:
KING & SPALDING
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
<PAGE>
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") made and entered into as of
November 1, 1999, by and between TENASKA GEORGIA PARTNERS, L.P., a limited
partnership duly organized and existing under the laws of State of Delaware (the
"Guarantor"), and THE CHASE MANHATTAN BANK, a New York banking corporation
having its principal corporate trust office in The City of New York, New York,
together with any successor trustee or trustees at the time serving as such
under the Indenture of Trust described below (the "Trustee");
W I T N E S S E T H T H A T:
WHEREAS, at the request of the Guarantor, the Development Authority
of Heard County, a public body corporate and politic created and existing
under the laws of the State of Georgia (the "Issuer"), has agreed to issue
its Taxable Industrial Development Revenue Bonds (Tenaska Georgia Partners,
L.P. Project), Series 1999, in an aggregate principal amount not to exceed
$400,000,000 (the "Bonds"); and
WHEREAS, the Bonds are to be issued under and pursuant to an
Indenture of Trust, dated as of even date herewith, between the Issuer and
the Trustee (as the same may be supplemented or amended from time to time in
accordance with its terms, the "Indenture"), a true and correct copy of which
has been delivered to the Guarantor, and the Bonds are more particularly
described in Articles II and III of the Indenture (unless otherwise
indicated, capitalized terms used herein but not defined shall have the
meanings assigned to such terms in the Indenture); and
WHEREAS, the proceeds derived from the issuance and sale of the
Bonds are to be applied toward the acquisition of certain real estate (the
"Leased Land"), the acquisition, construction and installation of certain
buildings and structures thereon (the "Building") and the acquisition,
construction and installation of new machinery and equipment and related real
and personal property therein (the "Lease Equipment") (collectively, the
"Project") to be leased to the Guarantor subject to "Permitted Liens" for the
use and benefit of the Guarantor pursuant to a Lease Agreement, dated as of
November 1, 1999 (as the same may be amended from time to time in accordance
with its terms, the "Lease Agreement") between the Issuer, as lessor, and the
Guarantor, as lessee; and
WHEREAS, the Guarantor desires that the Issuer issue the Bonds and
apply the proceeds derived therefrom as described above and is willing to
enter into this Guaranty, intending to be legally bound hereby;
NOW THEREFORE, in consideration of the premises the Guarantor does
hereby agree with the Trustee, intending to be legally bound hereby, as
follows:
<PAGE>
ARTICLE I
REPRESENTATIONS AND WARRANTIES
Section 1.1. REPRESENTATIONS AND WARRANTIES OF GUARANTOR. The
Guarantor represents and warrants that:
(a) ORGANIZATION; POWER; AND STATUS. The Guarantor (i) is a
limited partnership duly organized and validly existing under the
laws of the State of Delaware and (ii) is duly qualified to do
business as a limited partnership in each jurisdiction in which its
ownership or lease of property or the conduct of its business
requires such qualification, and has all power and authority
necessary to own, lease or hold its property and to conduct the
business in which it is now engaged or proposed to be engaged,
except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, have a Material
Adverse Effect (as such term is defined in the Common Agreement).
(b) AUTHORIZATION; ENFORCEABILITY; EXECUTION AND DELIVERY. (i) The
Guarantor has full partnership right, power and authority to execute
and deliver this Guaranty and to perform its obligations hereunder;
and all partnership action required to be taken for the due and
proper authorization, execution and delivery of this Guaranty and
the consummation of the transactions contemplated hereby has been
duly and validly taken.
(ii) This Guaranty has been duly authorized, executed
and delivered by the Guarantor. This Guaranty constitutes a valid and
legally binding obligation of the Guarantor enforceable against it in
accordance with the terms hereof, except to the extent limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws affecting creditors' rights
generally, and by general equitable principles (whether considered in a
proceeding in equity or at law).
(c) NO CONFLICTS; LAWS; AND CONTRACTS. The execution, delivery and
performance by the Guarantor of this Guaranty and the consummation
of the transactions contemplated hereby will not (i) conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Guarantor pursuant to, any material
indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Guarantor is a party
or by which the Guarantor is bound or to which any of the property
or assets of the Guarantor is subject, (ii) result in any
violation of the provisions of the Partnership Agreement (as
such term is defined in the Common Agreement), or (iii) result in
any violation of any statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over the Guarantor or any of
its properties or assets.
<PAGE>
ARTICLE II
COVENANTS AND GUARANTEES
Section 2.1. GUARANTEE OF BONDS. The Guarantor hereby absolutely and
unconditionally guarantees to the Trustee for the benefit of the owners at
any time and from time to time of the Bonds the full and prompt payment in
accordance with the provisions of the Indenture of: (a) the principal of any
Bond when and as the same shall become due and payable, whether at the stated
maturity thereof, by acceleration or call for prepayment or otherwise and (b)
the interest on any Bond when and as the same shall become due and payable.
If the owner of any Bond shall fail to receive any such payment as and when
said payment becomes due, the Guarantor shall immediately pay to the Trustee,
in lawful money of the United States of America, an amount equal to the
required payment. In the event of such a failure, this guarantee is a primary
and original obligation of the Guarantor and is an absolute, unconditional,
continuing and irrevocable guarantee of payment and is not a guarantee of
collectibility or performance and is in no way conditioned or contingent upon
any attempt to collect from the Issuer or to realize upon any of the Trust
Estate (as defined in the Indenture). This Guaranty shall remain in full
force and effect without respect to future changes in conditions, including
change in law, until the Payment in Full of the Bonds (as defined in the
Indenture). Subject to the provisions of Section 5.2 hereof and unless all of
the Bonds shall have become due at stated maturity or by acceleration or
prepayment prior to stated maturity or otherwise, each and every default in
payment of the principal of or interest on any Bond shall give rise to a
separate cause of action hereunder and separate suits may be brought
hereunder as each cause of action arises. The Guarantor hereby waives (a)
notice of the acceptance hereof and of any action taken or omitted in
reliance hereon, (b) any presentment, demand, notice or protest of any kind,
except as required under the Lease Agreement and the Indenture, and (c) to
the fullest extent permitted by law, any other act or thing or omission or
delay to do any other act or thing which might in any manner or to any extent
vary the risk of the Guarantor or which might otherwise operate as a
discharge of the Guarantor's obligations hereunder, except payment.
If any principal of the Bonds shall have been accelerated pursuant
to Section 11.02 of the Indenture, and such acceleration shall have been
rescinded and annulled pursuant to Section 11.13 of the Indenture, then the
amount of principal that was the subject of such acceleration shall no longer
be considered as due under the provisions of this Section and Section 5.1 of
this Guaranty.
Section 2.2. UNCONDITIONAL OBLIGATION. The obligations of the
Guarantor under this Guaranty shall be absolute and unconditional and shall
remain in full force and effect until Payment in Full of the Bonds in
accordance with the Indenture and, until Payment in Full of the Bonds, shall
not to the fullest extent permitted by law, be affected, modified or impaired
upon the happening from time to time of any event, including, without
limitation, any of the following, whether or not with notice to or the
consent of the Guarantor:
<PAGE>
(a) the compromise, settlement, release or termination of any or
all of the obligations, covenants or agreements of the Issuer under
the Indenture, the Lease Agreement or the Security Deed;
(b) the failure to give notice to the Guarantor of the occurrence
of an event of default under the terms and provisions of this
Guaranty or an Event of Default under the Indenture, the Lease
Agreement or the Security Deed;
(c) the assigning or mortgaging or the purported assigning or
mortgaging of all or any part of the interest of the Issuer in the
Project;
(d) the waiver of the payment, performance or observance by the
Issuer of any of its obligations, covenants or agreements contained
in the Indenture, the Lease Agreement or the Security Deed or by the
Guarantor of any of its obligations, covenants or agreements
contained in this Guaranty, the Bond Purchase Agreement or the Lease
Agreement;
(e) the extension of the time for payment of any principal of or
interest on any Bond or any part thereof owing or payable on such
Bond or under this Guaranty or of the time for performance of any
other obligation, covenant or agreement under or arising out of the
Indenture, the Lease Agreement, the Security Deed or this Guaranty
or the extension or the renewal of either thereof;
(f) the modification or amendment (whether material or otherwise)
of any obligation, covenant or agreement set forth in the Indenture,
the Lease Agreement or the Security Deed;
(g) the taking of or the omitting to take any of the actions
referred to in, or required by, the Indenture, the Lease Agreement,
the Security Deed or this Guaranty;
(h) any failure, omission, delay or lack on the part of the
Issuer or the Trustee to enforce, assert or exercise any right,
power or remedy conferred on the Trustee by this Guaranty or on the
Issuer or the Trustee by the Indenture, the Lease Agreement or the
Security Deed, or any other act or acts on the part of the Issuer,
the Trustee or any of the owners at any time or from time to time of
the Bonds;
(i) the voluntary or involuntary liquidation, dissolution, sale
or other disposition of all or substantially all of the assets of
the Guarantor or the Issuer, the marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition
with creditors or readjustment of, or other similar proceedings
affecting the Guarantor or the Issuer or any of the assets of either
of them, or any allegation or contest of the validity of this
Guaranty, the Lease Agreement or the Security Deed in any proceeding;
<PAGE>
(j) to the extent permitted by law, any event or action that
would, in the absence of this clause, result in the release or
discharge of the Guarantor from the performance or observance of any
obligation, covenant or agreement contained in this Guaranty by
operation of law;
(k) any right of set-off, counterclaim, reduction, or diminution
which the Guarantor might have against the Issuer or the Trustee
other than payment under this Guaranty;
(l) failure of the Issuer to issue or failure of the Guarantor
to request the Issuer to order authenticated and delivered by the
Trustee, Bonds in the entire amount authorized pursuant to the terms
of the Indenture;
(m) Payment or prepayment (whether by payment or refunding) of
any portion of the Bonds, except to the extent of such payment; or
(n) the failure of the Guarantor fully to perform any of its
obligations set forth in this Guaranty.
Section 2.3. WAIVER OF NOTICE. The Guarantor hereby expressly waives
notice in writing, or otherwise, from the Trustee or the owners at any time
or from time to time of any of the Bonds of their acceptance and reliance on
this Guaranty.
Section 2.4. COSTS, EXPENSES AND FEES. The Guarantor agrees to pay
all reasonable costs, expenses and fees, including all reasonable attorneys'
fees, which may be incurred by the Trustee in connection with this Guaranty,
whether the same shall be enforced by suit or otherwise.
ARTICLE III
[INTENTIONALLY OMITTED]
ARTICLE IV
NOTICE AND SERVICE OF PROCESS,
PLEADINGS AND OTHER PAPERS
Section 4.1. AGENT FOR SERVICE. The Guarantor designates and
appoints, without power of revocation prior to Payment in Full of the Bonds,
(i) Tenaska Georgia, Inc., a Delaware corporation, the general partner of the
Guarantor, and (ii) the Secretary of State of the State of Georgia, as the
respective agents of the Guarantor upon whom may be served all process,
pleadings, notices or other papers which may or must be served upon the
Guarantor as a result of any of its obligations under this Guaranty. The
Guarantor shall take any and all actions,
<PAGE>
including the filing of any and all documents or instruments as shall be
necessary to continue such appointment in full force and effect.
Section 4.2. NO DEFENSE, COUNTERCLAIM OR SET-OFF. The Guarantor
further agrees, covenants and stipulates, without power of revocation prior
to Payment in Full of the Bonds that in any civil suit or action brought
(after notice as provided herein) against it as a result of any of its
obligations under this Guaranty, it will not assert as a defense,
counterclaim or set-off (i) any default by the Issuer or the Trustee, or (ii)
any cause of action, claim or counterclaim which it may have against the
Issuer or the Trustee. Failure to assert such matter shall not be deemed to
be a waiver by the Guarantor but the same may be asserted in a separate
action.
Section 4.3. NOTICES. Any process, pleadings, notices or other
papers served upon any of the foregoing agents shall, at the same time, be
sent by certified or registered mail, postage prepaid, return receipt
requested, or by overnight delivery, to the Guarantor at the address
specified in Section 6.6 hereof, or to such other address as may be furnished
by the Guarantor to the Issuer and the Trustee in writing.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.1. EVENTS OF DEFAULT. If any of the following events
occurs and is continuing, it is hereby defined and declared to be and
constitute an "event of default" hereunder:
(a) failure by the Guarantor to make any payment required to be
made under Section 2.1 hereof as and when the same shall become due
and payable two business days after written notice of such failure
shall have been given to any officer of the Guarantor; or
(b) failure by the Guarantor to comply with any other provision
of this Guaranty and continuance of such failure for more than 60
days after written notice of such failure so to comply with this
Guaranty have been given to any officer of the Guarantor.
Section 5.2. REMEDIES. Whenever any event of default referred to in
Section 5.1 hereof shall have occurred and is continuing, the Trustee may,
with the consent of the Collateral Agent, and shall, at the direction of the
Collateral Agent, take such action and pursue such remedies against the
Guarantor as may be available at law or in equity, and the Trustee shall have
the right, with the consent of the Collateral Agent, to proceed first and
directly against the Guarantor under this Guaranty without proceeding against
or exhausting any other remedies which it may have and without resorting to
any other security held by the Issuer, the Trustee or the Collateral Agent.
Before taking any action hereunder, the Trustee may require that satisfactory
indemnity be furnished for the reimbursement of all expenses to which it may
be put and to protect it against all liability, except liability which is
adjudicated to have resulted from its negligence or wilful default, by reason
of any action so taken.
<PAGE>
The right to enforce this Guaranty is vested exclusively in the Trustee
for the equal and pro rata benefit of all owners at any time of the Bonds
(including the Collateral Agent, as pledgee of the Bonds under the Security
Documents, as such term is defined in the Common Agreement), unless the Trustee
refuses or neglects to act within a reasonable time after being requested in
writing to do so by the Collateral Agent and after being furnished satisfactory
indemnity as aforesaid, in which event the Collateral Agent may thereupon so act
in the name and behalf of the Trustee or may so act in its own name in lieu of
action by or in the name and behalf of the Trustee.
Section 5.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Trustee is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Guaranty or now
or hereafter existing at law or in equity. No delay or omission to exercise
any right or power accruing upon any default, event of default, omission or
failure of performance hereunder shall impair any such right or power or be
construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order
to entitle the Trustee to exercise any remedy reserved to it in this
Guaranty, it shall not be necessary to physically produce the Bonds in any
proceedings instituted by the Trustee or to give any notice, other than such
notice as may be herein expressly required.
Section 5.4. GUARANTY FOR BENEFIT OF TRUSTEE AND OWNERS OF THE
BONDS. This Guaranty is entered into by the Guarantor for the benefit of the
Trustee and the owners of the Bonds (including the Collateral Agent, as
pledgee of the Bonds under the Security Documents, as such term is defined in
the Common Agreement) and any successor trustee or co-trustee and their
respective successors and assigns under the Indenture, all of whom shall be
entitled to enforce performance and observance of this Guaranty, subject to
the provisions of Section 5.2 hereof, and of the guarantees and other
provisions herein contained to the same extent as if they were parties
signatory hereto.
Section 5.5. REMEDIES CUMULATIVE. The terms of this Guaranty may be
enforced as to any one or more breaches, either separately or cumulatively.
ARTICLE VI
WAIVERS, AMENDMENTS AND MISCELLANEOUS
Section 6.1. WAIVERS, AMENDMENTS AND MODIFICATIONS. In the event any
provision contained in this Guaranty should be breached by the Guarantor and
thereafter duly waived by the Trustee, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder. No waiver, amendment, release or modification of this Guaranty
shall be established by conduct, custom or course of dealing, but solely by
an instrument in writing duly executed by the Trustee. The Trustee shall not
consent to any amendment or modification of this Guaranty or waive any of the
provisions hereof without the written approval or consent of the Collateral
Agent and of the owners of all of the Bonds at the
<PAGE>
time outstanding given as hereinafter provided. If at any time, the Guarantor
shall request the consent of the Trustee to any such proposed amendment,
change or modification of this Guaranty or the waiver of any of the
provisions hereof, the Trustee shall (except as hereinafter set forth), upon
being satisfactorily indemnified with respect to expenses, cause notice of
such proposed amendment, change, modification or waiver to be mailed, first
class mail, postage prepaid, to all owners of outstanding Bonds. Such notice
shall briefly set forth the nature of such proposed amendment, change,
modification or waiver and shall state that copies of the instrument
embodying the same are on file at the principal corporate trust office of the
Trustee for inspection by all owners of the Bonds. If, within 10 days or such
longer period as shall be prescribed by the Trustee following the mailing of
such notice, the owners of not less than the requisite percentage of
outstanding Bonds as required in this Section 6.1 shall have consented to and
approved the execution of such amendment, change, modification or waiver of
this Guaranty as herein provided, no owner of any Bond shall have any right
to object to any of the terms and provisions contained therein, or the
operation thereof, or in any manner to question the propriety of the
execution thereof, or to enjoin or restrain the Trustee or the Guarantor from
executing the same or from taking any action pursuant to the provisions
thereof.
In no event shall any amendment be made without the written consent
of the Guarantor and the Collateral Agent.
No amendment, change, modification, alteration or termination of the
Indenture shall be effective that would in any way increase the Guarantor's
obligations under this Guaranty without obtaining the prior written consent
of the Guarantor.
Section 6.2. EFFECTIVE DATE. The obligations of the Guarantor
hereunder shall arise absolutely and unconditionally when any Bonds shall
have been initially issued, sold and delivered by the Issuer as contemplated
in the Indenture.
Section 6.3. GOVERNING LAW. This Guaranty and the rights and
obligations of the parties hereto (including third party beneficiaries) shall
be governed, construed and interpreted according to the laws of the State of
Georgia.
Section 6.4. ENTIRE AGREEMENT; COUNTERPARTS. This Guaranty
constitutes the entire agreement, and supersedes all prior agreements, both
written and oral, between the parties with respect to the subject matter
hereof and may be executed simultaneously in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
Section 6.5. SEVERABILITY. If any provision of this Guaranty shall
be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions, or in all cases because it conflicts
with any other provision or provisions hereof or any Constitution or statute
or rule of public policy, or for any other reason, such circumstances shall
not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or of
rendering
<PAGE>
any other provision or provisions herein contained invalid, inoperative or
unenforceable to any extent whatever.
Section 6.6. NOTICES. Any notice or notices which may be or are
required to be given to the Guarantor respecting any matter pertaining to
this Guaranty shall be deemed to have been sufficiently given if in writing
and forwarded in a sealed envelope by United States registered or certified
mail, postage prepaid, return receipt requested, or by next day air, and if
given to the Guarantor, addressed to the Guarantor at Tenaska Georgia
Partners, L.P., c/o Nelson, Morrow Waldron, 675 Commercial Federal Tower,
2120 S. 72nd Street, Omaha, Nebraska 68124, Attention: W.C. Nelson, Esq.,
Telephone (402) 392-2340, Telecopy (402) 392-2130 with a copy to Long,
Aldridge & Norman, 303 Peachtree Street, Suite 5300, Atlanta, Georgia 30308,
Attention: Michael S. Bradley, Esq., Telephone (404) 527-4650, Telecopy (404)
527-4198 or, if given to the Trustee, addressed to the Trustee at The Chase
Manhattan Bank, Capital Markets Fiduciary Services, 450 West 33rd Street,
15th Floor, New York, New York 10001. Either party may, by notice given
hereunder, designate any further or different address to which subsequent
notices shall be sent.
Section 6.7. HEADINGS. The headings of the several Articles and
Sections of this Guaranty are for convenience only and shall not be construed
to affect the meaning or construction of any of the provisions hereof.
Section 6.8. SUCCESSORS. This Guaranty shall be binding upon the
undersigned Guarantor and its successors and assigns and shall inure to the
benefit of, and shall be enforceable by, the Trustee and its successors and
assigns and, subject to the provisions of Section 5.2 hereof, the Collateral
Agent until Payment in Full of the Bonds as provided in the Indenture.
<PAGE>
IN WITNESS WHEREOF, the Guarantor pursuant to proper resolution duly
passed, has caused this Guaranty to be executed in its name and behalf by its
duly authorized officers as of the date first above written.
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware Limited Partnership
By: TENASKA GEORGIA, INC., a Delaware
Corporation, its General Partner
By: /S/__________________________
Title: Michael F. Lawler
Vice President of Finance &
Treasurer
<PAGE>
Exhibit 4.24
EXECUTION COPY
- --------------------------------------------------------------------------------
DEBT SERVICE RESERVE LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated
November 10, 1999
among
Tenaska Georgia Partners, L.P.,
as Partnership
and
The Toronto-Dominion Bank
as the Issuing Bank
as a Bank and Agent
and
THE BANKS PARTY HERETO
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE I
DEFINITIONS 1
<S> <C> <C>
SECTION 1.1 DEFINITIONS................................................................................ 1
SECTION 1.2 CONSTRUCTION............................................................................... 6
ARTICLE II
DSR LETTER OF CREDIT............................................................................................. 7
SECTION 2.1 COMMITMENTS................................................................................ 7
SECTION 2.2 AMOUNT AND TERM OF DSR LETTER OF CREDIT.................................................... 7
SECTION 2.3 PARTICIPATION IN DSR LETTER OF CREDIT...................................................... 8
SECTION 2.4 9
(a) DRAWING AND REIMBURSEMENT............................................................ 9
SECTION 2.5 FEES....................................................................................... 9
SECTION 2.6 INTEREST.................................................................................. 10
(a) RATE................................................................................. 10
(b) METHOD OF ELECTING INTEREST RATES.................................................... 10
(c) FUNDING LOSSES....................................................................... 12
(d) BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR............................. 12
(e) MAXIMUM RATE......................................................................... 13
SECTION 2.7 REPAYMENT................................................................................. 13
SECTION 2.8 PREPAYMENTS............................................................................... 14
SECTION 2.9 SECURITY.................................................................................. 14
SECTION 2.10 PAYMENTS.................................................................................. 14
SECTION 2.12 PAYMENTS ON NON-BUSINESS DAYS............................................................. 15
SECTION 2.13 SHARING OF PAYMENTS, ETC.................................................................. 15
SECTION 2.14 EVIDENCE OF DEBT.......................................................................... 16
SECTION 2.15 INCREASED COSTS AND REDUCED RETURNS....................................................... 16
SECTION 2.16 CAPITAL ADEQUACY.......................................................................... 18
SECTION 2.17 TAXES..................................................................................... 18
SECTION 2.18 ILLEGALITY................................................................................ 20
SECTION 2.19 REDUCTION IN COMMITMENTS/REIMBURSEMENTS................................................... 21
SECTION 2.20 RIGHT OF SET-OFF.......................................................................... 21
</TABLE>
i
<PAGE>
<TABLE>
ARTICLE III
<S> <C> <C>
CONDITIONS PRECEDENT............................................................................................ 21
SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING DATE...................................................... 21
SECTION 3.2 CONDITIONS PRECEDENT TO ISSUE DATE........................................................ 22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................................................................................. 22
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF PARTNERSHIP............................................. 22
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF THE ISSUING BANK........................................ 22
ARTICLE V
COVENANTS 23
SECTION 5.1 COVENANTS................................................................................. 23
ARTICLE VI
DEFAULTS AND REMEDIES........................................................................................... 23
SECTION 6.1 EVENTS OF DEFAULT......................................................................... 23
SECTION 6.2 REMEDIES.................................................................................. 24
SECTION 6.3 COLLATERALIZATION UPON ACCELERATION OF THE BONDS.......................................... 24
ARTICLE VII
CHARACTER OF OBLIGATIONS........................................................................................ 25
SECTION 7.1 OBLIGATIONS ABSOLUTE...................................................................... 25
SECTION 7.2 LIMITED LIABILITY OF AGENT AND BANKS...................................................... 25
ARTICLE VIII
THE AGENT 26
SECTION 8.1 AUTHORIZATION AND ACTION.................................................................. 26
SECTION 8.2 AGENT'S RELIANCE, ETC..................................................................... 27
SECTION 8.3 THE AGENT, THE ISSUING BANK AND AFFILIATES................................................ 27
SECTION 8.4 BANK CREDIT DECISION...................................................................... 27
SECTION 8.5 INDEMNIFICATION........................................................................... 28
SECTION 8.6 SUCCESSOR AGENT........................................................................... 28
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 8.7 COLLATERAL................................................................................ 28
ARTICLE IX
MISCELLANEOUS................................................................................................... 29
SECTION 9.1 AMENDMENTS, ETC........................................................................... 29
SECTION 9.2 NOTICES, ETC.............................................................................. 29
SECTION 9.3 NO WAIVER, REMEDIES....................................................................... 30
SECTION 9.4 COSTS AND EXPENSES........................................................................ 30
SECTION 9.5 APPLICATION OF MONEY...................................................................... 30
SECTION 9.6 SEVERABILITY.............................................................................. 30
SECTION 9.7 NON-RECOURSE LIABILITY.................................................................... 31
SECTION 9.8 BINDING EFFECT............................................................................ 31
SECTION 9.9 ASSIGNMENTS AND PARTICIPATIONS............................................................ 31
SECTION 9.10 INDEMNIFICATION........................................................................... 33
SECTION 9.11 GOVERNING LAW; SUBMISSION OF JURISDICTION; VENUE; WAIVER OF JURY TRIAL.................... 34
SECTION 9.12 HEADINGS.................................................................................. 35
SECTION 9.13 EXECUTION IN COUNTERPARTS................................................................. 35
</TABLE>
Exhibit A Form of DSR Letter of Credit
Exhibit B Form of Assignment and Acceptance
Exhibit C Amortization Schedule
Exhibit D Applicable Margin Table
iii
<PAGE>
DEBT SERVICE RESERVE LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
This DEBT SERVICE RESERVE LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT,
dated November 10, 1999 (this "AGREEMENT"), is entered into by and among (1)
TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership (the
"PARTNERSHIP"); (2) THE TORONTO-DOMINION BANK as the Issuing Bank (the "ISSUING
BANK"); (3) THE TORONTO-DOMINION BANK, in its individual capacity, together with
each other bank that becomes a party hereto pursuant to Section 9.9 (each,
including the Issuing Bank, a "BANK" and collectively, the "BANKS"); and (4) THE
TORONTO-DOMINION BANK, as agent for the Banks (in such capacity, together with
its successors in such capacity, the "AGENT").
WHEREAS, the Partnership is constructing and will lease a 936 MW
(nominal summer rating) natural gas-fired, simple-cycle electric generating
facility in Heard County, Georgia and related property and facilities (the
"Facility");
WHEREAS, the Partnership intends to finance the construction and
equipping of the Facility through an offering of Bonds (the "Bonds") under Rule
144A, the proceeds of which Bonds will be used to purchase Taxable Industrial
Development Revenue Bonds issued by the Development Authority of Heard County,
Georgia, a public corporation created and existing under the laws of the State
of Georgia (the "DAHC Bonds"), the net proceeds of which will be used to pay
Project Costs related to the Facility;
WHEREAS, the Partnership has duly authorized the creation and issuance
of the Bonds pursuant to the Indenture; and
WHEREAS, in order to provide assurances in respect of the Partnership's
satisfaction of its payment obligations under the Bonds and the Indenture, the
Partnership has requested that the Issuing Bank agree to issue and the Banks
participate in, and the Issuing Bank is willing to agree to issue and the Banks
are willing to participate in, the DSR Letter of Credit upon the terms and
conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. (a) Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed to them in the Common
Agreement.
(b) The following terms are used in this Agreement with the
following respective meanings:
"ADJUSTED BASE RATE" means the higher of (i) the Federal Funds Rate
plus .50% and (ii) the Base Rate.
<PAGE>
"AGENT" has the meaning set forth in the preamble to this Agreement.
"APPLICABLE MARGIN" means, at any time, the margin applicable at such
time, to Base Rate Loans or Eurodollar Rate Loans or the letter of credit fee
payable under Section 2.5(a), in each case as set forth on Exhibit D hereto.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance entered
into by a Bank and another Person, substantially in the form of Exhibit B.
"BANK" has the meaning set forth in the preamble of this Agreement.
"BASE RATE" means the variable rate of interest PER ANNUM officially
announced or published by the Agent from time to time as its "base rate," such
rate being set by the Agent as a general reference rate of interest, taking into
account such factors as the Agent may deem appropriate, it being understood that
many of the Agent's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Agent may make various commercial or other loans at rates
of interest having no relationship to such rate. For purposes of this Agreement,
each change in the Base Rate shall be effective as of the opening of business on
the date announced as the effective date of the change in such "base rate."
"BASE RATE LOAN" means a DSR Loan, or portion thereof, bearing interest
at a rate determined with reference to the Adjusted Base Rate.
"BOND CONVERSION EVENT" means, in respect of a DSR LOC Loan, the
failure by the Partnership to have repaid (i) at least 50% of the original
amount of such DSR LOC Loan on the date 30 months after the making of such DSR
LOC Loan or (ii) the full amount of such DSR LOC Loan by the DSR LOC Loan
Required Payment Date.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for business in New York, New York, and with respect to all
notices and determinations in connection with, advances of, continuations of,
conversions from and to, and payments of principal and interest on, Eurodollar
Rate Loans, any day that is also a day for trading by and between banks in U.S.
dollar deposits in the London interbank Eurodollar market.
"CLOSING DATE" means the date on which the conditions precedent set
forth in Section 3.1 have been fulfilled.
"COMMITMENT" of a Bank at any time means (i) an amount equal to the
product of (A) the Maximum Stated Amount at such time, as the same may be
reduced from time to time in accordance with the provisions of this Agreement,
and (B) such Bank's Percentage Interest as set forth opposite the name of such
Bank on the signature pages hereof, or if one or more Assignments and
Acceptances shall have been entered into, as set forth in the register of the
Agent set forth for such purpose, or (ii) as the context may require, the
obligation of such Bank to make loans in an aggregate amount of principal at any
time outstanding not exceeding such amount.
"COMMITMENTS" means all of the Commitments.
2
<PAGE>
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings,
Common Representations, Warranties, Covenants and other items dated as of
November 1, 1999 made by and among the Partnership, the Trustee, the DSR LOC
Agent, the PPA LOC Agent and the Collateral Agent.
"CREDIT DOCUMENTS" means this Agreement, the Security Documents, the
Collateral Agency Agreement and the DSR Letter of Credit.
"DEFAULT" means an event that with the giving of any required notice
and/or the lapse of any required time would constitute an Event of Default.
"DOLLARS" and "$" means freely transferable United States dollars.
"DRAWING" means a drawing under the DSR Letter of Credit.
"DSR BOND" has the meaning set forth in Section 2.7(g).
"DSR LETTER OF CREDIT" means a letter of credit in favor of the
Collateral Agent substantially in the form of Exhibit A, issued or to be issued
by the Issuing Bank.
"DSR LOAN" means any DSR LOC Loan, DSR Term Loan or DSR Bond, as
applicable.
"DSR LOC LOAN" means a loan made as a result of Drawing on the DSR
Letter of Credit which, is not made upon the occurrence of a Step-up Event.
"DSR LOC LOAN REQUIRED PAYMENT DATE" means, in respect of each DSR LOC
Loan, the earlier of (i) the date five years from the date such DSR LOC Loan is
made by the Banks pursuant to the terms of this Agreement and (b) the Final
Maturity Date.
"DSR TERM LOAN" means a loan made as a result of the occurrence of a
Step-up Event either to fund a Drawing made upon such occurrence or by way of
the conversion of then outstanding DSR LOC Loans.
"DSR TERM LOAN REQUIRED PAYMENT DATE" means, in respect of each DSR
Term Loan, the earlier of (i) the date ten years after such DSR Term Loan is
made by the Banks pursuant to the terms of this Agreement and (b) the Final
Maturity Date.
"EUROCURRENCY LIABILITIES" has the meaning set forth in Regulation D.
"EUROCURRENCY RESERVE PERIOD" has the meaning set forth in Section
2.15(b).
"EURODOLLAR RATE" means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate PER ANNUM equal to the average (rounded upwards,
if necessary, to the nearest 1/100 of 1%) of the offered rates which appear on
the Dow Jones Telerate page 3750, British Bankers Association Interest
Settlement Rates for deposits in Dollars (or such other system for the purpose
of displaying rates of leading reference banks in the London interbank market,
as designated by the Agent) as of 11:00 a.m. (London time) on the day two
Business Days prior to the first day of such Interest Period in an amount
approximately equal to the principal amount of
3
<PAGE>
the Eurodollar Rate Loan to which such Interest Period is to apply and for a
period of time comparable to such Interest Period.
"EURODOLLAR RATE LOAN" means a DSR Loan, or portion thereof, bearing
interest at a rate determined with reference to the Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
"EXCLUDED TAXES" has the meaning set forth in Section 2.17(a).
"EXPIRATION DATE" means seven years from the Closing Date.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
PER ANNUM equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"INDEMNIFIED PARTY" has the meaning set forth in Section 9.10.
"INTEREST PERIOD" means with respect to each Eurodollar Rate Loan, a
period commencing on the date specified in the applicable Notice of Interest
Rate Election and ending one, two, three, six or, with the consent of the Banks,
nine or twelve calendar months thereafter, as the Partnership may elect in the
applicable Notice of Interest Rate Election; PROVIDED, that:
(a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month;
(c) no Interest Period shall be selected to be applicable to a
DSR Loan if such Interest Period ends after the next scheduled principal payment
date therefor pursuant to this Agreement unless, at the time of such selection,
there are outstanding Base Rate Loans and/or Eurodollar Rate Loans the Interest
Period(s) applicable to which, end on or before such scheduled payment date
which the Partnership reasonably determines are in an aggregate principal amount
at least equal to the amount of such next scheduled principal payment; and
(d) no Interest Period shall end after the latest Required
Payment Date.
"ISSUE DATE" means the Business Day on which the Issuing Bank shall
issue the DSR Letter of Credit in accordance with Section 2.2(a) and Section
3.2.
4
<PAGE>
"ISSUING BANK" has the meaning set forth in the preamble of this
Agreement.
"LOAN OBLIGATIONS" means the Drawings and the principal of all DSR
Loans (including but not limited to the Partnership's obligations in respect of
amounts not yet disbursed).
"MAXIMUM STATED AMOUNT" means at any time, the highest Stated Amount
Value at such time.
"MORTGAGE BASIS" means in respect of each DSR Term Loan, an
amortization schedule which, taking into account the interest rate applicable to
such DSR Term Loan determined in accordance with Section 2.7(e) and assuming
payments are made on Interest Payment Dates, results in levelized payment of the
principal of and interest on such DSR Term Loan to and including the DSR Term
Loan Required Payment Date applicable thereto.
"NON-RECOURSE PARTY" has the meaning specified in Section 9.7.
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.6(b).
"OBLIGATIONS" means all of the Loan Obligations and any and all other
obligations of the Partnership to the Issuing Bank, the Banks or the Agent under
or in connection with the Credit Documents, whether for interest, fees,
expenses, indemnification or otherwise.
"PARTICIPANT" has the meaning set forth in Section 9.9(b).
"PARTNERSHIP" has the meaning set forth in the preamble of this
Agreement.
"PERCENTAGE INTEREST" means, for each Bank, the fraction, expressed as
a percentage, where the numerator is the Commitment of such Bank and the
denominator is the aggregate of all the Commitments held by all the Banks, as
set forth on the signature page opposite the name and signature of each
respective Bank or if applicable, in Schedule 1 to any Assignment and
Acceptance.
"PURCHASING BANK" has the meaning set forth in Section 9.9(a).
"QUARTERLY DATE" has the meaning set forth in Section 2.5(a)
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REGULATORY CHANGE" means, subsequent to the date of this Agreement,
any adoption or change in United States Federal, state or municipal or foreign
law or regulations (including Regulation D) or the adoption or change or making
of any application, interpretation, directive, request or guideline of or under
any United States Federal, state or municipal or foreign law or regulations by
any court, central bank or Governmental Authority.
"REQUIRED BANKS" means, at any time, Banks (one of which shall be the
Agent) owed at least 66 2/3% of the sum of Loan Obligations then outstanding
and/or the Commitments;
5
<PAGE>
PROVIDED, HOWEVER, that, if and so long as there are only two Banks, then
"Required Banks" shall mean both of such Banks.
"REQUIRED PAYMENT DATE" means in the case of any DSR LOC Loan, the
applicable DSR LOC Loan Required Payment Date, in the case of a DSR Term Loan,
the applicable DSR Term Loan Required Payment Date or in the case of any DSR
Bond, the Final Maturity Date.
"STATED AMOUNT" means the amount (not to exceed the Maximum Stated
Amount) available to be drawn under the DSR Letter of Credit as of each
Scheduled Payment Date, which amount shall equal the Stated Amount Value for
such date as in effect from time to time pursuant to the terms of this
Agreement.
"STATED AMOUNT VALUE" means, for any date, the Stated Amount Value for
such date set forth in Schedule 1 to the Letter of Credit and as adjusted from
time to time pursuant to Sections 2.2 and 2.7.
"STEP-UP EVENT" means (i) the failure of the DSR Letter of Credit to
have been extended or replaced at least 45 days prior to the stated expiration
date of such DSR Letter of Credit or (ii) if the credit rating of the Issuing
Bank is less than the Required Rating, the failure of the DSR Letter of Credit
to have been replaced within 45 days after the failure to satisfy the
requirements of the Required Rating with a replacement letter of credit issued
by an issuer that satisfies the requirements of the Required Rating and, in
either case, the Collateral Agent has made a Drawing on such DSR Letter of
Credit in an amount sufficient to fund the Debt Service Reserve Account up to
the Debt Service Reserve Required Balance.
"TAXES" means any and all present or future income, stamp, transfer,
turnover and other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, and any and all interest, penalties, claims or
other liabilities arising under or relating thereto, including those imposed on
any of the Banks or on payments to be made to or received by any of them from
the Partnership hereunder.
"TERMINATION NOTICE" has the meaning set forth in Section 2.2(e).
SECTION 1.2 CONSTRUCTION. In this Agreement, unless expressly specified
to the contrary: the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to statutes or
regulations are to be construed as including all statutory or regulatory
provisions consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing, lithography and
other means of reproducing words in a tangible, visible form, but shall not
include electronic mail; the words "including," "includes" and "include" shall
be deemed to be followed by the words "without limitation;" references to
articles, sections (or subdivisions of sections), recitals, appendices,
exhibits, annexes or schedules are to those of this Agreement; references to
agreements and other instruments shall be deemed to include all amendments and
other modifications to such agreements and instruments, but only to the extent
such amendments and other modifications are not prohibited by the terms of this
Agreement; references to Persons include their respective permitted successors
and assigns and, in the case of Governmental Authorities, Persons
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succeeding to their respective functions and capacities; and all accounting
terms used in this Agreement shall be interpreted, all accounting determinations
under this Agreement shall be made and all financial statements required to be
delivered under this Agreement shall be prepared in accordance with GAAP as in
effect from time to time, on a basis consistent with the most recent audited
financial statements, if any, of the relevant Person delivered to the Agent, or
otherwise reasonably acceptable to the Agent.
ARTICLE II
DSR LETTER OF CREDIT
SECTION 2.1 COMMITMENTS. Each Bank irrevocably agrees severally, on the
terms and conditions contained in this Agreement, to participate in the DSR
Letter of Credit and, each Drawing thereunder in the Percentage Interest of such
Bank and in an aggregate amount not to exceed at any time such Bank's
Commitment; provided that the maximum total Commitment shall at no time exceed
$16 million.
SECTION 2.2 AMOUNT AND TERM DSR LETTER OF CREDIT. (a) Subject to the
terms and conditions contained in this Agreement:
(i) The Issuing Bank irrevocably agrees to issue the DSR
Letter of Credit on the Issue Date for the account of the Partnership
and in the Stated Amount equal to the Stated Amount Value set forth for
the Issue Date in Schedule 1 to the form of the DSR Letter of Credit
attached to this Agreement as Exhibit A (Schedule 1 shall be prepared
by the Partnership and submitted to the Issuing Bank no later than 3
Business Days prior to the Issue Date). Schedule 1 to the DSR Letter of
Credit when issued shall include a schedule of Stated Amount Values in
effect for the entire term of the DSR Letter of Credit.
(ii) (A) If the Debt Service Reserve Required Balance for
any period is reduced by a prepayment of the principal of the Bonds,
the Stated Amount Values for such period shall be correspondingly
reduced; provided that, if the Debt Service Reserve Required Balance
for a period is greater than $16,000,000 immediately prior to giving
effect to such reduction and is less than $16,000,000 after giving
effect to such reduction, then the Stated Amount Value for such period
shall be reduced only by an amount equal to the amount by which
$16,000,000 exceeds the Debt Service Reserve Required Balance for such
period after giving effect to such reduction.
(B) If the Debt Service Reserve Required Balance for any
period is increased by reason of the issuance of up to $9,000,000
principal amount of Additional Bonds, as defined in the Indenture, the
Stated Amount Value for such period shall be correspondingly increased,
provided that no such increase shall result in any Stated Amount Value
as set forth on Schedule 1 to the Letter of Credit being in excess of
$16,000,000.
(iii) Each of the Stated Amount Values set forth in
Schedule 1 to the DSR Letter of Credit as in effect from time to time
shall be reduced from time to time in
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accordance with the provisions of Section 2.2(c) and (a)(ii) and shall
be reduced and reinstated from time to time in accordance with Section
2.7(b) and (c).
(b) If a Step-up Event shall have occurred and the Collateral
Agent shall have made a Drawing in accordance with Section 2.4, the DSR Letter
of Credit shall thereupon terminate.
(c) If a Bond Conversion Event shall have occurred with
respect to any DSR LOC Loan, and the Agent, subject to the approval of the
Required Banks, elects to convert such DSR LOC Loan into a DSR Bond in
accordance with Section 2.7(g), each of the Stated Amount Values set forth in
Schedule 1 to the DSR Letter of Credit as then in effect shall be reduced by an
amount equal to the amount of the DSR LOC Loan so converted and the Maximum
Stated Amount correspondingly reduced.
(d) To the extent the Debt Service Reserve Required Balance
for any period is reduced by a prepayment of the principal of the Bonds at a
time when there are amounts on deposit in the Debt Service Reserve Account, then
the Stated Amount Value for each affected date, as set forth in Schedule 1 to
the DSR Letter of Credit, shall, notwithstanding any other provision of this
Agreement, including the provisions of Section 2.2(a)(ii), be reduced to an
amount equal to not less than the excess of (i) the Debt Service Reserve
Required Balance applicable to such affected date, over (ii) the amount on
deposit in the Debt Service Reserve Account on the date such prepayment is made.
(e) The Issuing Bank shall have the right, upon the occurrence
and during the continuance of an Event of Default, to deliver to the Collateral
Agent and the Trustee a notice in the form of Annex 2 to the DSR Letter of
Credit (a "TERMINATION NOTICE"), which notice shall be given at least sixty (60)
days prior to the date of termination referred to in such notice. After the
delivery by the Issuing Bank of a Termination Notice, the Stated Amount shall be
neither increased, nor reinstated upon payment of any DSR LOC Loans
notwithstanding any other provision of this Agreement to the contrary.
(f) The Agent shall, solely for informational purposes,
deliver to the Partnership a copy of any Termination Notice given to the
beneficiary under the DSR Letter of Credit; PROVIDED, HOWEVER, that the Banks'
ability to terminate the DSR Letter of Credit shall not be contingent upon the
Agent's delivery to the Partnership of such notice and that neither the Agent
nor the Banks shall incur any liability whatsoever as a result of the Agent's
failure to deliver such notice to the Partnership.
SECTION 2.3 PARTICIPATION IN DSR LETTER OF CREDIT. Simultaneously with
the issuance of the DSR Letter of Credit, the Issuing Bank shall be deemed to
have sold and transferred to each Bank, and each Bank shall be deemed to have
purchased and received from the Issuing Bank, in each case irrevocably and
without any further action by any party, an undivided interest and participation
in the DSR Letter of Credit, each Drawing and the other Loan Obligations in
respect thereof in an amount equal to such Bank's Percentage Interest therein.
The Agent shall promptly advise each Bank of any reduction in the Maximum Stated
Amount, change in the Stated Amount or Expiration Date in respect of the DSR
Letter of Credit or the cancellation or other termination of the DSR Letter of
Credit and any Drawing; PROVIDED,
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HOWEVER, that failure to provide such notice shall not limit or impair the
rights of the Agent hereunder or under the Financing Documents.
SECTION 2.4 (a) DRAWING AND REIMBURSEMENT. The payment by the Issuing
Bank of a Drawing shall constitute the making by the Issuing Bank of a loan to
the Partnership in the amount of such payment. In the event that a Drawing is
not repaid by the Partnership by 10:00 a.m. (New York City time), on the day of
such Drawing, the Agent shall promptly notify each other Bank. Each such Bank
(including the Issuing Bank in its capacity as a Bank) shall, on the day of such
notification, make a DSR Loan (either a DSR LOC Loan or a DSR Term Loan) to the
Partnership, which shall be used to repay the applicable portion of the Issuing
Bank's loan with respect to such Drawing, in an amount equal to the amount of
such Bank's Percentage Interest in such Drawing, for application to repay the
Issuing Bank, and shall deliver to the Agent for the Issuing Bank's account, on
the day of such notification and in immediately available funds, the amount of
such DSR Loan. In the event that any Bank fails to make available to the Agent
for the account of the Issuing Bank the amount of such DSR Loan, the Issuing
Bank shall be entitled to recover such amount on demand from such Bank together
with interest thereon at the Federal Funds Rate and until such reimbursement is
made, the unreimbursed amount of the Issuing Bank's loan shall be deemed to be a
DSR Loan for all purposes of this Agreement.
(b) If a Step-up Event shall have occurred, the Collateral
Agent shall (i) make a Drawing on the DSR Letter of Credit in an amount equal to
the lesser of (A) the Stated Amount of the DSR Letter of Credit as in effect
immediately prior to such Drawing and (B) the positive difference between (x)
the Debt Service Reserve Required Balance and (y) amounts then on deposit in the
Debt Service Reserve Account (such Drawing shall be funded as a DSR Term Loan),
and (ii) deposit such amount in the Debt Service Reserve Account, and the DSR
Letter of Credit shall thereupon terminate.
SECTION 2.5 FEES. The Partnership shall pay the following fees to the
Agent for the respective accounts of the persons specified below:
(a) from and after the Issue Date for the respective accounts
of the Banks, a letter of credit fee equal to the product of (i) the average
daily Stated Amount and (ii) a per annum rate equal to the average daily
Applicable Margin, for Eurodollar Rate Loans, as in effect during the applicable
period, payable quarterly in arrears on the first Business Day of each February,
May, August and November (each such Business Day, a "QUARTERLY DATE") occurring
after the Closing Date calculated on the basis of a 360-day year for the actual
number of Days elapsed;
(b) from and including the Issue Date, for the account of the
Issuing Bank, a fronting fee equal to the product of (x) the average daily
Stated Amount and (y) 0.125% per annum payable quarterly in arrears on each
Quarterly Date occurring after the Issue Date calculated on the basis of a
360-day year for the actual number of Days elapsed;
(c) for the account of each Bank an annual commitment fee
payable quarterly in arrears on each Quarterly Date and calculated on the basis
of a 360 day year for the number of days elapsed in an amount equal to (i) from
and including the Closing Date to but excluding the Issue Date, 0.125% of the
average daily Commitment under this Agreement and (ii) from and
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after the Issue Date, 0.375% of the positive difference between the average
daily Commitment under this Agreement and the average daily Stated Amount Value
for the applicable period; and
(d) such other fees specified in the fee letter among the
Partnership and the Agent.
SECTION 2.6 INTEREST. (a) RATE. The Partnership shall pay interest on
the unpaid principal amount of each DSR Loan for each day from the date such DSR
Loan is made until such principal amount has been paid in full as follows:
(i) BASE RATE LOANS. As to Base Rate Loans for each day
until due at a rate PER ANNUM equal to (x) the sum of the Adjusted Base
Rate plus (y) the Applicable Margin as in effect on such day, payable
monthly in arrears or the first Business Day of each month;
(ii) EURODOLLAR RATE LOANS. As to Eurodollar Rate Loans,
for each day until due at a rate PER ANNUM equal to the sum of (x) the
Eurodollar Rate plus (y) as in effect on such day, the Applicable
Margin, payable on the last day of the applicable Interest Period or,
if such Interest Period exceeds three months, at intervals of three
months from the first day of such Interest Period; and
(iii) DEFAULT INTEREST. Interest payments for each day on
any principal amounts that have not been paid when due shall be payable
at the Adjusted Base Rate plus the Applicable Margin as in effect on
such day plus 2%.
(b) METHOD OF ELECTING INTEREST RATES. (i) Each DSR Loan shall
constitute a Base Rate Loan unless the Partnership elects otherwise pursuant to
the following provisions of this Section 2.6(b).
(ii) Each DSR Loan shall constitute a Base Rate Loan or a
Eurodollar Rate Loan as the Partnership may elect in accordance with
this Section 2.6(b). If no such election is timely made with respect to
a DSR Loan, such DSR Loan shall constitute a Base Rate Loan in
accordance with Section 2.6(b)(i); provided that, in the case of DSR
Term Loans or DSR Bonds that arise on the occasion of a conversion from
DSR LOC Loans in accordance with Section 2.7(d) or 2.7(g), such DSR
Term Loans DSR Bonds shall be continued as the same type of DSR Loan
(i.e., Base Rate Loan or Eurodollar Loan), and if any such DSR LOC Loan
was a Eurodollar Loan, the then current Interest Period shall continue
after such conversion, until the end of such Interest Period, at which
time the provisions for election of Interest Periods contained in this
Section 2.6(b) shall apply. The Partnership may from time to time elect
to change or continue the interest rate borne by each DSR Loan, subject
to the conditions set forth below, as follows:
(A) with respect to DSR Loans that are Base
Rate Loans, the Partnership may elect to convert all or any
portion of such DSR Loans to Eurodollar Rate Loans as of any
Business Day; and
(B) with respect to DSR Loans that are
Eurodollar Rate Loans, the Partnership may elect to convert
all or any portion of such DSR Loans to Base
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Rate Loans or elect to continue all or any portion of such DSR
Loans as Eurodollar Rate Loans for an additional Interest
Period, in each case effective on the last day of the then
current Interest Period applicable to such DSR Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST
RATE ELECTION") to the Agent (1) in the case of a conversion to or continuation
of a Eurodollar Rate Loan, not later than 10:00 a.m. (New York City time) on the
third Business Day prior to the day on which such conversion or continuation is
to be effective or (2) in the case of a conversion to a Base Rate Loan, at any
time prior to the day on which such conversion is to be effective. Each Notice
of Interest Rate Election shall be in writing (including facsimile transmission)
or by voice, promptly confirmed in writing. A Notice of Interest Rate Election
may, if it so specifies, apply to only a portion of the aggregate principal
amount of the relevant DSR Loan.
(iii) Each Notice of Interest Rate Election shall specify:
(A) the DSR Loans (or portion thereof)
together with amount of each thereof to which such notice
applies;
(B) the date on which the conversion or
continuation selected in such notice is to be effective, which
shall comply with the applicable clause of subsection (ii)
above;
(C) if DSR Loans are to be converted, each
new type of DSR Loan together with amount thereof, and if such
new DSR Loans are Eurodollar Rate Loans, the duration of the
initial Interest Period applicable thereto; and
(D) if such DSR Loans are to be continued as
Eurodollar Rate Loans for additional Interest Periods, the
duration of such Interest Periods.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period. No conversion
into or continuation of a Eurodollar Rate Loans shall be permitted when a
Default or an Event of Default has occurred and is continuing, and if a Default
or an Event of Default has occurred and is continuing, each Eurodollar Rate Loan
shall automatically be converted into a Base Rate Loan on the last day of the
then current Interest Period applicable thereto.
(iv) A Notice of Interest Rate Election shall not be
revocable by the Partnership. If the Partnership fails to deliver a
timely Notice of Interest Rate Election to the Agent for any Eurodollar
Rate Loan, such DSR Loans shall be converted into Base Rate Loans on
the last day of the then current Interest Period applicable thereto.
(c) FUNDING LOSSES. If the Partnership makes any payment of principal
with respect to any Eurodollar Rate Loan or any Eurodollar Rate Loan is
converted to a Base Rate Loan on any day other than the last day of an Interest
Period applicable thereto, or if the Partnership fails to borrow, repay or
prepay any Eurodollar Rate Loan after notice has been given to the Agent in
accordance with the terms hereof, the Partnership shall reimburse the Agent, for
the ratable account of the Banks, within 30 days after demand for any resulting
loss or expense incurred by them, including any loss incurred in obtaining,
liquidating or employing
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deposits from third parties. Without prejudice to the foregoing, the Partnership
shall indemnify the Agent and the Banks against any direct (as opposed to
consequential) loss or expense that the Agent or the Banks may sustain or incur
as a consequence of a failure by the Partnership in payment of principal of, or
interest on, any Eurodollar Rate Loan, or any part thereof, including any
interest, premium or penalty paid by the Agent or any Bank to lenders of funds
borrowed by it or deposited with it for the purpose of making or maintaining
such Eurodollar Rate Loan. A certificate as to the amount of any such loss or
expense in reasonable detail (specifying the basis of such loss or expense)
shall be promptly submitted by the Agent, or by any Bank through the Agent, to
the Partnership and shall be conclusive and binding as to the amount thereof,
absent manifest error.
(d) BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR:
If on or prior to the first day of any Interest Period for any Eurodollar Rate
Loan:
(i) the Agent or any Bank determines, in its reasonable
judgment, that deposits in Dollars (in the applicable amounts) are not
being offered to the Agent or such Bank in the relevant market for such
Interest Period, or
(ii) the Agent or such Bank, in its reasonable judgment,
shall determine that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Agent or such Bank of funding its Eurodollar
Rate Loans for such Interest Period,
the Agent, or such Bank through the Agent, shall forthwith give notice thereof
(which notice shall describe in reasonable detail the basis for such
determination) to the Partnership, whereupon until the Agent, or such Bank
through the Agent, notifies the Partnership that the circumstances giving rise
to such suspension no longer exist, (A) the obligations of the Agent or such
Bank to make or continue Eurodollar Rate Loans or to convert outstanding DSR
Loans into Eurodollar Rate Loans shall be suspended and (B) each outstanding
Eurodollar Rate Loan, or if a Bank only shall be affected, each Eurodollar Rate
Loan held by such Bank shall be converted into a Base Rate Loan on the last day
of the then current Interest Period applicable thereto.
(e) MAXIMUM RATE. This Agreement is hereby expressly limited
so that in no contingency or event, whether by reason of acceleration of the
maturity of any indebtedness hereunder or otherwise, shall the interest
contracted for or charged or received by the Banks exceed the maximum amount
permissible under Applicable Law. If, from any circumstance whatsoever, interest
would otherwise be payable to the Banks in excess of the maximum lawful amount,
the interest payable to the Banks shall be reduced to the maximum amount
permitted under Applicable Law, and the amount of interest for any subsequent
period, to the extent less than that permitted by Applicable Law, shall to that
extent be increased by the amount of such reduction.
SECTION 2.7 REPAYMENT. (a) The Partnership shall repay the principal
amount of each DSR LOC Loan in accordance with the provisions of Exhibit C
applicable to DSR LOC Loans. Each DSR LOC Loan shall mature and be due and
payable on the applicable DSR LOC Loan Required Payment Date.
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(b) The Issuing Bank shall reduce the Stated Amount by the
outstanding principal amount of each DSR LOC Loan.
(c) Subject to Sections 2.2 and 6.2, the Issuing Bank shall,
upon receipt of written notice from the Partnership, reinstate the Stated Amount
Values set forth in Schedule 1 to the DSR Letter of Credit to the extent of any
repayment or prepayment of the principal amount of any DSR LOC Loan; PROVIDED,
that such reinstatement shall not cause the Stated Amount to exceed the Maximum
Stated Amount as then in effect or (when added to the cash balance in the Debt
Service Reserve Account) to exceed the Debt Service Reserve Required Balance
(with interest calculated as provided for in Section 2.2(a)(i)) as then in
effect.
(d) Notwithstanding the foregoing provisions of this Section
2.7, if a Step-up Event shall have occurred, all outstanding DSR LOC Loans shall
be automatically converted into DSR Term Loans on the date the Collateral Agent
makes the Drawing pursuant to Section 2.4(b), and such DSR Term Loans shall for
purposes of this Agreement be treated as made when so converted.
(e) Each DSR Term Loan shall, in accordance with the
provisions of Exhibit C applicable to DSR Term Loans, (i) amortize and be
payable on successive Scheduled Payment Dates in amounts of principal and
interest computed on a Mortgage Basis, and (ii) finally mature and be due and
payable on the applicable DSR Term Loan Required Payment Date in the amount of
remaining principal thereof and accrued interest thereon. Payments of DSR Term
Loans shall not give rise to a reinstatement of the Stated Amount of the DSR
Letter of Credit.
(f) [reserved]
(g) If a Bond Conversion Event shall have occurred, then from
and after the date such Bond Conversion Event occurs, the Agent may, subject to
the approval of the Required Banks and upon 15 Business Days' prior written
notice to the Partnership and the other Senior Parties, convert any such DSR LOC
Loan into a substitute security (such converted DSR LOC Loan, a "DSR BOND"), the
interest and principal of which shall be payable at the same level of priority
as the Bonds. The Partnership shall pay the entire remaining principal amount of
such DSR Bond in accordance with Section 3.3 of the Collateral Agency Agreement.
(h) Each DSR Bond shall, in accordance with the provisions of
Exhibit C applicable to DSR Bonds, (x) amortize and be payable on successive
Scheduled Payment Dates in amounts of principal (proportionate in amount to the
amount of the Bonds being paid) and interest computed on the same amortization
schedule as the Bonds and (y) finally mature and be due and payable on the Final
Maturity Date in the amount of remaining principal thereof and interest accrued
thereon. Payments of DSR Bonds shall not give rise to a reinstatement of the
Stated Amount of the DSR Letter of Credit.
SECTION 2.8 PREPAYMENTS. The Partnership may, at any time and from time
to time on any Business Day, upon prior written notice to the Agent not later
than 11:00 a.m. (New York City time), at least one Business Day before the day
of any prepayment of the DSR LOC Loans, such notice stating the proposed date
and aggregate principal amount of the prepayment, and if such notice is given
the Partnership shall, prepay without premium or penalty, except as provided
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in Section 2.6(c), the outstanding principal amounts of the DSR LOC Loans in
whole or in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid. DSR Term Loans and DSR Bonds shall be prepaid
ratably with the Bonds in the event the Bonds are prepaid provided that in the
event that a LOC Sweep Notice shall have been given, the DSR Term Loans may be
prepaid in accordance with Section 3.3(c) of the Collateral Agency Agreement.
All prepayments made hereunder shall be applied by the Agent and the
Banks against the installments of principal amount of outstanding DSR Loans of a
particular class (i.e., DSR LOC Loans, DSR Term Loans or DSR Bonds), in inverse
order of maturity; such prepayments shall first be applied to the prepayment of
outstanding Base Rate Loans of a particular class (i.e., DSR LOC Loans, DSR Term
Loans or DSR Bonds) to the extent thereof and then to the prepayment of
outstanding Eurodollar Rate Loans of such class.
SECTION 2.9 SECURITY. The Obligations shall be secured by the Security
Documents, the rights and remedies in respect of which shall be exercised
pursuant to the Collateral Agency Agreement.
SECTION 2.10 PAYMENTS. (a) The Partnership shall make each payment
hereunder not later than 10:00 a.m. (New York City time), on the day when due to
the Agent at its address set forth in Section 9.2, in Dollars in immediately
available funds. The Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal (including reimbursement of
Drawings), interest or fees ratably (other than amounts payable for the account
of the Issuing Bank pursuant to Section 2.5(a), which shall be payable solely to
the Issuing Bank, or payable pursuant to Section 9.4) to the Banks and like
funds relating to the payment of any other amount payable to any Bank, to such
Bank, in each case to be applied in accordance with the terms of this Agreement.
The Agent may withhold from any interest payment to any Bank an amount equal to
any applicable withholding tax (including upon the failure of any Bank to
provide the forms or other documentation required under Section 2.17(f)).
(b) Unless the Agent receives notice from the Partnership
before the date on which any payment is due to the Banks hereunder that the
Partnership will not make such payment in full, the Agent may assume that the
Partnership has made such payment in full to the Agent on such date, and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due to such Bank. If
and to the extent that the Partnership has not so made such payment in full to
the Agent on the date on which such payment is due, each Bank agrees,
irrevocably and without qualification or exception, to repay to the Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date on which such Bank repays such amount to the Agent, at the
Federal Funds Rate.
(c) All payments made by the Partnership to each of the Banks
and the Agent under this Agreement will be made without set-off, counterclaim or
other defense.
SECTION 2.11 COMPUTATION OF INTEREST AND FEES. All computations of
interest hereunder for Eurodollar Rate Loans shall be made on the basis of a
year of 360 days and for
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Base Rate Loans shall be made on the basis of a year of 365/366 days, in each
case for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest or fees are payable.
Each calculation and each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
SECTION 2.12 PREPAYMENTS ON NON-BUSINESS DAYS. Whenever any payment
hereunder is stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest or
fees, as the case may be. If no due date is specified for the payment of any
amount payable by the Partnership hereunder, such amount shall be due and
payable not later than 10 Business Days after receipt by the Partnership of
written demand from the Agent for payment thereof.
SECTION 2.13 SHARING OF PAYMENTS, ETC. (a) Each Bank agrees that if, as
a result of the exercise of a right of set-off, banker's lien or counterclaim or
other similar right or the receipt of a secured claim it receives any payment in
respect of the DSR Loans or other Obligations hereunder it shall promptly notify
the Agent thereof (and the Agent shall promptly notify the other Banks). If, as
a result of such payment, such Bank receives a greater percentage of the
Obligations owed to it under this Agreement than the percentage received by any
other Bank, such Bank shall purchase a participation (which it shall be deemed
to have purchased simultaneously upon the receipt of such payment) in the
Obligations then held by such other Banks so that all such recoveries of
principal and interest with respect to all Obligations owed to each Bank shall
be pro rata on the basis of its respective amount of such Obligations owed to
all Banks; PROVIDED, that if all or part of such proportionately greater payment
received by such purchasing Bank is thereafter recovered by or on behalf of the
Partnership from such Bank, such purchase shall be rescinded and the purchase
price paid for such participation shall be returned to such Bank to the extent
of such recovery, but without interest.
(b) Each Bank which receives a secured claim as described in
subsection (a) above shall, to the extent practicable, exercise its rights in
respect of such secured claim in accordance with such subsection (a) and
otherwise in a manner consistent with the rights of the Banks entitled under
this Section 2.13 to share in the benefits of any recovery on such secured
claim.
(c) The Partnership expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any Obligation so
purchased or otherwise acquired of which the Partnership has received notice may
exercise any and all rights of set-off, banker's lien or counterclaim with
respect to any and all monies owing by the Partnership to such holder as fully
as if such holder were a holder of such Obligation in the amount of the
participation held by such holder.
SECTION 2.14 EVIDENCE OF DEBT. (a) The indebtedness of the Partnership
resulting from all DSR Loans shall be evidenced by this Agreement.
(b) The books and accounts of the Agent shall be conclusive
evidence, absent manifest error, of the amounts of all Drawings, DSR Loans,
fees, interest and other amounts advanced, due, outstanding, payable or paid
pursuant to this Agreement.
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SECTION 2.15 INCREASED COSTS AND REDUCED RETURNS. (a) If, on or after
the date hereof, the adoption of any Applicable Law, or any change therein, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Agent or any Bank with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject the Agent or such Bank to any tax,
duty or other charge (other than routine examination fees or Taxes)
with respect to the Eurodollar Rate Loans or its obligation to make or
continue Eurodollar Rate Loans, or shall change the basis of taxation
of payments to the Agent or any Bank of the principal of or interest on
its Eurodollar Rate Loans or any other amounts due under this Agreement
in respect of its Eurodollar Rate Loans or its obligation to make or
continue DSR Loans or Eurodollar Rate Loans (except for changes in the
rate of tax on the net income of the Agent or such Bank imposed by the
federal, state or local jurisdiction in which the Agent's or such
Bank's principal executive office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including any such requirement
imposed by the Board of Governors of the Federal Reserve System, but
excluding with respect to any Eurodollar Rate Loan any such requirement
provided in Section 2.17(b), against assets of, deposits with or for
the account of, or credit extended by, the Agent or any Bank or shall
impose on the Agent or any Bank or on the London interbank market any
other condition affecting the Eurodollar Rate Loans or its obligation
to advance Eurodollar Rate Loans;
and the result of any of the foregoing is to increase the cost to the Agent or
such Bank of making or continuing any Eurodollar Rate Loan or to reduce the
amount of any sum received or receivable by the Agent or such Bank under this
Agreement with respect thereto by an amount deemed by the Agent or such Bank to
be material, then, the Agent, or such Bank through the Agent, shall deliver to
the Partnership as promptly as practicable a certificate setting forth in
reasonable detail the additional amounts that the Agent or such Bank, as the
case may be, determines will fully compensate it for such reduction, increased
cost or payment and the basis for the determination of such amount; PROVIDED,
that the Partnership shall not be obligated to compensate the Agent or any Bank
for the amount of such increased cost incurred with respect to a period of time
prior to the date which is 90 days before the date on which the Agent first
notifies the Partnership of a claim for such compensation or that an event had
occurred which will entitle the Agent or a Bank to such compensation. Any such
amount claimed by the Agent or any Bank shall, in the case of clause (i) above,
be net of applicable tax savings, if any, directly attributable thereto. Within
15 Business Days after demand by the Agent, the Partnership shall pay to the
Agent, for its account or for the account of the applicable Bank, as the case
may be, such additional amount shown as due on any such certificate, absent
manifest error.
(b) In the event that the Agent or any Bank shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding on all the parties hereto) at any time that the Agent or such Bank is
required to maintain reserves in respect of Eurocurrency Liabilities during any
period during which any DSR Loan owing to it bears interest based on the
Eurodollar Rate (each such period, for the Agent or such Bank, a "EUROCURRENCY
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RESERVE PERIOD"), but only in respect of any period during which any reserve
shall actually be maintained by the Agent or such Bank for any Eurodollar Rate
Loan as a result of a reserve requirement applicable to it under Regulation D in
connection with Eurocurrency Liabilities, then the Agent, or such Bank through
the Agent, shall promptly give notice to the Partnership of such determination,
and the Partnership shall directly pay to the Agent, for its account or for the
account of the applicable Bank, as the case may be, additional interest on the
unpaid principal amount of such DSR Loan during such Eurocurrency Reserve Period
at a rate PER ANNUM which shall, during each monthly period applicable to such
DSR Loan, be the amount by which (x) the Eurodollar Rate for such monthly period
divided (and rounded upward to the next whole multiple of 1/100 of 1%) by a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable to the Agent or such Bank in respect of Eurocurrency
Liabilities exceeds (y) the Eurodollar Rate for such monthly period. The Agent,
or such Bank through the Agent, shall furnish along with such notice a
certificate setting forth in reasonable detail the cost actually incurred to
maintain such reserves and the basis for the determination of such amount;
PROVIDED, that the Partnership shall not be obligated to compensate the Agent or
any Bank for the amount of such increased cost incurred with respect to a period
of time prior to the date which is 90 days before the date on which the Agent
first notifies the Partnership of a claim for such compensation or that an event
has occurred which will entitle the Agent or a Bank to such compensation.
Additional interest payable pursuant to the immediately preceding sentence shall
be paid by the Partnership at the time that it is otherwise required to pay
interest in respect of such DSR Loan, or, if later demanded by the Agent or any
Bank, promptly on demand. Each of the Agent and the Banks agrees that, if notice
is given to the Partnership of the existence of a Eurocurrency Reserve Period,
the Agent, or the applicable Bank through the Agent, shall promptly notify the
Partnership of any termination thereof, at which time the Partnership shall
cease to be obligated to pay additional interest to the Agent or such Bank
pursuant to the first sentence of this paragraph until such time, if any, as a
subsequent Eurocurrency Reserve Period shall occur.
(c) The Agent, and each Bank through the Agent, will promptly
notify the Partnership of any event of which it has knowledge, occurring after
the date hereof, which will entitle the Agent or such Bank to compensation
pursuant to this Section and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of the Agent or such Bank, be otherwise
disadvantageous to the Agent or such Bank.
SECTION 2.16 CAPITAL ADEQUACY. If the Agent or any Bank shall determine
that, after the date hereof, the adoption of any Applicable Law regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of the Agent or such Bank or
its holding company as a consequence of the Agent's or such Bank's obligations
hereunder to a level below that which the Agent or such Bank could have achieved
but for such adoption, change, request or directive (taking into consideration
its policies with respect to capital adequacy) by an amount deemed by the Agent
or such Bank to be material, then the Agent, or such Bank through the Agent,
shall deliver to the Partnership as promptly as practicable (but in no event
later than 120 days after the
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Agent or such Bank has actual knowledge of such claim for capital adequacy) a
certificate setting forth in reasonable detail the amount being charged by the
Agent or such Bank and the basis for the determination of such amount. Within 15
Business Days after the delivery of such certificates by the Agent, the
Partnership shall pay to the Agent, for its account or for the account of the
applicable Bank, as the case may be, the amount shown as due on any such
certificate.
SECTION 2.17 TAXES. (a) Payments by the Partnership to the Agent and
the Banks under this Agreement will be made free and clear of and without
deduction for Taxes, other than Taxes based on the net income of the Agent or
any Bank (including franchise taxes imposed in lieu of net income taxes) imposed
by (i) the United States federal government, (ii) the jurisdiction where the
Agent or such Bank is organized or has its principal office or (iii) the
jurisdiction of the branch of such Bank maintaining any DSR Loan or the branch
of the Agent through which it renders its services as the Agent ("EXCLUDED
TAXES"). If the Partnership is required by law to deduct Taxes (other than
Excluded Taxes) from such a payment, then the sum payable under the instrument
to which the payment relates will be increased so that such deduction does not
result in a diminution in the amount the Agent or any Bank actually receives.
(b) To the extent permitted by law, without duplication of
amounts paid by the Partnership under Section 2.17(a), the Partnership hereby
indemnifies and holds harmless the Agent and each Bank from and against, and
agrees to reimburse the Agent and each Bank on an after-tax basis (computed
taking into account any deductions or other benefits available for federal
income tax purposes for the Agent or such Bank if it is a United States taxpayer
and any deductions and benefits available for income tax purposes in any
jurisdiction in which the Agent or such Bank is a taxpayer) on demand for, any
and all Taxes paid or incurred by the Agent or such Bank in connection with the
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that the
foregoing indemnity does not cover Excluded Taxes. Reimbursement on an
"after-tax basis" means on a basis such that the Agent or such Bank is made
whole after taking into account income taxes that the Agent or such Bank will
owe on the indemnity or reimbursement payment in any jurisdiction and any
related tax benefits, assuming the Agent or such Bank is subject to income taxes
at the highest marginal rates. Nothing in this paragraph shall interfere with
the right of the Agent or any Bank to arrange its tax affairs in whatever manner
it thinks fit and, in particular, the Agent and the Banks are under no
obligation to claim a deduction or other benefit relating to these transactions
ahead of any other claim, relief, credit, deduction or other benefit to which it
is entitled. The Agent, or applicable Bank through the Agent, shall promptly
give written notice to the Partnership office (but in no event later than 60
days) the Agent or such Bank has actual knowledge of the imposition of any Taxes
subject to indemnification hereunder; PROVIDED, HOWEVER, that failure to give
such notice within such 60 day period will not relieve the Partnership of the
obligation to indemnify the Agent or such Bank in accordance with the terms
hereof, except to the extent of interest that would have been avoided had the
notice been given prior to the end of such 60-day period.
(c) The Partnership will provide evidence that all Taxes
imposed on payments under this Agreement or any DSR Loan have been fully paid to
the appropriate authorities by delivering official receipts or notarized copies
to the Agent within 15 Business Days after payment. The Partnership will
compensate the Agent or any Bank that has to pay any Taxes because the
Partnership failed to timely furnish such evidence; PROVIDED, that prior to
paying
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such Taxes, the Agent, or such Bank through the Agent, shall have notified the
Partnership of its intent to make such payment.
(d) If the Partnership so requests promptly in writing after
receipt of any notice under Section 2.17 hereof, the Agent or applicable Bank
will contest in good faith the Taxes at the Partnership's expense, keep the
Partnership fully informed about the progress of the contest, consult in good
faith with the Partnership's counsel regarding conduct of the contest, and not
compromise or otherwise settle the contest without the Partnership's consent
(which shall not be unreasonably withheld or delayed); PROVIDED, that the Agent
or such Bank may in its sole discretion select the forum for the contest and
determine whether the contest will be by resisting payment of the Taxes or by
paying the Taxes and seeking a refund; PROVIDED, FURTHER that the Agent or such
Bank will be under no obligation to contest unless (A) if the Agent or such Bank
requests, the Partnership has provided the Agent or such Bank an opinion of
independent tax counsel selected by the Partnership and reasonably acceptable to
the Agent or such Bank to the effect that there is a reasonable basis for the
contest, (B) the amount in controversy is at least $75,000, (C) the Agent or
such Bank has received satisfactory indemnification and security for any
liability, loss, cost or expense arising out of the contest (including, but not
limited to, all reasonable legal and accounting fees and expenses, penalties,
interest and additions to tax), (D) if requested by the Agent or such Bank, the
Partnership has admitted in writing its duty to indemnify the Agent or such Bank
for the Taxes if the contest is lost (but such admission shall not preclude the
Partnership from raising a defense to liability if a court of competent
jurisdiction has rendered a decision articulating the cause of such Taxes, and
the cause is not one for which the Partnership is responsible under this Section
2.17), and (E) if the contest is conducted in a manner that requires paying all
or part of the Taxes, the Partnership has paid the amount required.
(e) If the Partnership so requests within 10 days of notice to
the Partnership of the imposition of any Taxes on payments to any of the Banks
of a type not generally imposed on United States or foreign lenders making
advances of the types contemplated hereunder, such Banks shall (consistent with
legal and regulatory restrictions) comply with Section 2.19 hereof.
(f) At such times as may be required by Applicable Law or as
the Agent or the Partnership may reasonably request, each Bank agrees that it
will deliver to the Agent and the Partnership duly completed forms of any
applicable jurisdiction or other documentation reasonably satisfactory to the
Agent and the Partnership that such Bank is entitled to receive payments under
this Agreement without deduction or withholding of income tax under the
Applicable Law of such jurisdiction. Each Bank further agrees to notify the
Agent and the Partnership of the occurrence of any event (including any change
in treaty, law or regulation) that would render such Bank unable to receive
payments hereunder without such deduction or withholding.
SECTION 2.18 ILLEGALITY. If, on or after the date of this Agreement,
the adoption of any Applicable Law, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or any Bank with any request or directive
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency shall make it unlawful or impossible for the
Agent
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or such Bank to make, continue or convert its Eurodollar Rate Loans, the Agent,
or such Bank through the Agent, shall so notify the Partnership, whereupon until
the Agent, or such Bank through the Agent, notifies the Partnership that the
circumstances giving rise to such suspension no longer exist, the obligation of
the Agent or such Bank to make or continue Eurodollar Rate or convert
outstanding DSR Loans into Eurodollar Rate Loans, shall be suspended. Before
giving any notice to the Partnership pursuant to this Section, the Agent or
applicable Bank shall designate a different lending office for the Eurodollar
Rate Loans if such designation will avoid the need for giving such notice and
will not, in the sole judgment of the Agent or such Bank, be otherwise
disadvantageous to the Agent or such Bank. If such notice is given, each
Eurodollar Rate Loan of the Agent or such Bank then outstanding shall either (i)
be converted to a Base Rate Loan on the last day of the then current Interest
Period applicable to such Eurodollar Rate Loan if the Agent or such Bank may
lawfully make or continue such DSR Loan to such day, or (ii) be immediately
converted to a Base Rate Loan if the Agent or such Bank shall determine that it
may not lawfully continue to make or continue such DSR Loan to such day;
PROVIDED, that the Partnership shall not be obligated to make any payment
pursuant to Section 2.6(c) as a result of such conversion. If the Partnership so
requests within 10 days of receipt of the notice referred to above, the
applicable Bank shall (consistent with legal and regulatory restrictions) comply
with Section 2.19 hereof.
SECTION 2.19 REDUCTION IN COMMITMENTS/REIMBURSEMENTS. The Partnership
shall have the right to refinance the Commitments and any outstanding DSR Loans,
if any, without premium or penalty, except as provided in Section 2.6(c), upon
at least 10 Business Days' prior written notice to the Agent.
SECTION 2.20 RIGHT OF SET-OFF. Subject to the terms and conditions of
the Collateral Agency Agreement, the Partnership hereby authorizes each Bank (in
addition to, and without limitation of, any right of set-off, banker's lien or
counterclaim a Bank may otherwise have), upon the occurrence and during the
continuance of any Event of Default, at any time and from time to time, without
notice to the Partnership or any Person other than the Collateral Agent (any
such notice being hereby expressly waived by the Partnership to the extent it
may legally do so) to set off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held, and
other indebtedness at any time owing, by such Bank in any of its offices,
wherever located (whether such deposits or indebtedness be in dollars or in any
other currency), to or for the credit or the account of the Partnership against
any and all of the Obligations and liabilities of the Partnership now or
hereafter existing under this Agreement, irrespective of whether or not such
Bank shall have made any demand hereunder or thereunder and although such
Obligations may be contingent or unmatured.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING DATE. The occurrence of the
Closing Date is subject to satisfaction or waiver of the following conditions
precedent:
(a) issuance of the bonds;
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(b) the Agent shall have received the following, each dated on
or before the Closing Date, in form and substance satisfactory to the Agent
(i) the Indenture, the Common Agreement and the
Collateral Agency Agreement each duly executed by the parties thereto;
(ii) this Agreement duly executed by the Partnership;
(iii) an original of each of the Security Documents, duly
executed by the parties thereto;
(iv) written opinions of counsel covering such matters as
the Agent may reasonably request; and
(v) evidence reasonably satisfactory to the Agent that
all actions necessary or appropriate in order to effectively establish,
create or perfect the Security Interest have been duly taken.
(c) receipt by the Issuing Bank of a copy of the report of the
Independent Engineer in form and substance reasonably satisfactory to the Agent;
(d) receipt by the Issuing Bank of a copy of the Market Study
in form and substance reasonably satisfactory to the Agent; and
(e) payment by the Partnership of all accrued fees and
expenses (as provided in Sections 2.5 and 9.4) of the Agent and the Banks
(including the reasonable accrued fees and disbursements of counsel to the Agent
and the Banks), to the extent that one or more statements for such fees and
expenses have been presented for payment.
SECTION 3.2 CONDITIONS PRECEDENT TO ISSUE DATE. The DSR Letter of
Credit shall be issued by the Issuing Bank and immediately thereafter shall be
available for drawing on June 1, 2002. The obligation of the Issuing Bank to
issue the DSR Letter of Credit shall be subject to no conditions other than the
occurrence of June 1, 2002.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF PARTNERSHIP. The
Partnership hereby makes for the benefit of the Agent and the Banks all of the
representations and warranties of the Partnership contained in Article IV of the
Common Agreement (which representations and warranties are incorporated by
reference herein as if fully set forth herein together with all related
definitions and which representations and warranties shall be true and correct
as of the date hereof and the Closing Date).
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF THE ISSUING BANK. The
Issuing Bank represents and warrants to the Partnership as of the Closing Date
that:
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(a) The Issuing Bank is duly formed, validly existing and in
good standing under the laws of its jurisdiction of organization.
(b) The Issuing Bank has all necessary power and authority to
execute and deliver, and to perform its obligations under this Agreement, and
when issued, the DSR Letter of Credit.
(c) All action on the part of the Issuing Bank that is
required for the authorization, execution and delivery of, and performance by
the Issuing Bank of its obligations under this Agreement, and when issued, the
DSR Letter of Credit has been duly and effectively taken.
(d) This Agreement constitutes, and the DSR Letter of Credit
upon the issuance thereof will constitute, the legal, valid and binding
obligations of the Issuing Bank, enforceable against the Issuing Bank in
accordance with the respective terms thereof, except to the extent limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
liquidation, moratorium and other laws affecting creditors' rights generally, by
equitable principles (whether considered a proceeding in equity or at law).
ARTICLE V
COVENANTS
SECTION 5.1 COVENANTS. So long as any Commitment is in effect, the DSR
Letter of Credit is outstanding or the Obligations remain unpaid, the
Partnership shall observe and perform all of the covenants of the Partnership
contained in Article V of the Common Agreement (which covenants together with
all related definitions are incorporated herein by reference as if fully set
forth herein.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT. Each of the following shall constitute
an "Event of Default" under this Agreement so long as the same shall be
continuing:
(a) the Partnership shall fail to pay any amount of principal
due under this Agreement within 5 days after the due date thereof;
(b) the Partnership shall fail to pay any amount due (other
than amounts due pursuant to Section 6.1(a)) under this Agreement within 15 days
after the due date thereof; or
(c) an "Event of Default" under the Indenture shall have
occurred and be continuing.
SECTION 6.2 REMEDIES. Upon the occurrence and during the continuation
of an Event of Default, the Agent shall, at the request of the Required Banks,
take one or more of the
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following actions: (i) after giving any required notice to the beneficiary of
the DSR Letter of Credit and the lapse of the time period required prior to
termination of the DSR Letter of Credit, terminate the DSR Letter of Credit in
accordance with Section 2.2(e), (ii) declare the Obligations, all interest
thereon and all other amounts payable under this Agreement to be forthwith due
and payable, including but not limited to the amount of any and all DSR LOC
Loans which may be made upon a Drawing under the DSR Letter of Credit which
occurs after the date on which the Agent declares such amounts to be due and
payable, but prior to the effective date of a termination of the DSR Letter of
Credit in accordance with Section 2.2(e), whereupon the Obligations, all such
interest and all such amounts shall become and be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Partnership, (iii) terminate the ability of
the Partnership to cause reinstatement of the Stated Amount through the
reimbursement of Drawings, as contemplated by the terms hereof or (iv) terminate
the ability of the Partnership to continue DSR Loans, as or convert DSR Loans
to, Eurodollar Rate Loans; provided, that the Agent and the Banks shall not have
the right to exercise any other remedy otherwise available to the Agent or any
Bank except in accordance with the provisions of the Collateral Agency
Agreement.
SECTION 6.3 COLLATERALIZATION UPON ACCELERATION OF THE BONDS. In the
event that an Event of Default hereunder results from an "EVENT OF DEFAULT"
under the Indenture and the Trustee accelerates amounts due under the Indenture,
the DSR LOC Provider shall be entitled to require collateralization of the
Maximum Stated Amount by having the Collateral Agent deposit (in a separate
account to be held by the Collateral Agent), at the time that any amounts are
paid to the Trustee in respect of accelerated amounts due under the Indenture,
an amount equal to the amount that would have been disbursed to the Agent at
such time (based on pro rata payment requirements) if Drawings had been made to
the full extent of the Maximum Stated Amount ("DEEMED DSR LOC LOANS") and the
Deemed DSR LOC Loans had been accelerated at the same time as an acceleration
under the Indenture. Upon a Drawing on the DSR Letter of Credit, a portion of
the amount in the separate account equal to such Drawing's proportionate share
of the Maximum Stated Amount shall be transferred by the Collateral Agent to the
Agent for the account of the Banks. The Agent, the Issuing Bank and each Bank
agree that upon termination or expiration of the DSR Letter of Credit, the
Collateral Agent shall become entitled to all amounts in such separate
collateral account that have not been transferred pursuant to the previous
sentence (to the extent of such expiration or termination) for application in
accordance with the provisions of Section 3.18 of the Collateral Agency
Agreement.
ARTICLE VII
CHARACTER OF OBLIGATIONS
SECTION 7.1 OBLIGATIONS ABSOLUTE. The Obligations shall be absolute,
unconditional and irrevocable and shall not be affected or impaired under any
circumstances whatsoever, including the following circumstances:
(a) any lack of validity or enforceability of any provision of
any Project Document or Financing Document;
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(b) any amendment or waiver of, or any consent to departure
from, any provision of any Project Document or Financing Document;
(c) the existence of any claim, set-off, defense or other
right that the Partnership may have at any time against the beneficiary of the
DSR Letter of Credit (or any Person for whom such beneficiary may be acting),
any Bank, the Agent or any other Person, whether in connection with any Project
Document or Financing Document, the transactions contemplated thereby or any
unrelated transaction;
(d) any statement or signature in any certificate or other
document presented under the DSR Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect, or any such statement being
untrue or inaccurate in any respect whatsoever;
(e) any exchange, release or nonperfection of any Collateral
or other collateral, or any release, amendment or waiver of or consent to
departure from any Project Document, Financing Document or any guaranty, for any
of the Obligations;
(f) payment by the Issuing Bank under the DSR Letter of Credit
against presentation of a draft or certificate that does not comply with the
terms of the DSR Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
SECTION 7.2 LIMITED LIABILITY OF AGENT AND BANKS. As among the
Partnership, the Agent and the Banks (including the Issuing Bank), the
Partnership assumes all risks of the acts or omissions of the beneficiaries of
the DSR Letter of Credit with respect to the use of the DSR Letter of Credit.
Neither the Agent nor any Bank nor any of their respective officers, directors,
employees or agents shall be liable or responsible for (i) the use that may be
made of the DSR Letter of Credit or any acts or omissions of any beneficiaries
of the DSR Letter of Credit in connection with the DSR Letter of Credit; (ii)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted in connection with the DSR Letter of Credit or of any
endorsement thereon, even if such document or endorsement should prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(iii) payment by the Issuing Bank against presentation of any document that does
not comply with the terms of the DSR Letter of Credit, including failure of any
document to bear any reference or adequate reference to the DSR Letter of
Credit; or (iv) any other circumstance whatsoever in making, delaying to make or
failing to make payment under the DSR Letter of Credit; PROVIDED, HOWEVER, that
the Partnership shall have a claim against the Issuing Bank, and the Issuing
Bank shall be liable to the Partnership, to the extent of any direct, as opposed
to consequential, damages suffered by the Partnership that the Partnership
proves were the result of the Issuing Bank's willful misconduct or gross
negligence in paying under the DSR Letter of Credit or the Issuing Bank's
willful or grossly negligent failure to pay under the DSR Letter of Credit after
the presentation to it by the beneficiary of a draft and certificate strictly
complying with the terms and conditions of the DSR Letter of Credit (unless the
Issuing Bank in good faith believed itself (based upon an opinion of counsel) to
be prohibited by law or legal authority from making such payment). In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
any
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document that appears on its face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
ARTICLE VIII
THE AGENT
SECTION 8.1 AUTHORIZATION AND ACTION. (a) Each Bank hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by the Credit Documents (including
enforcement of and collection under any Credit Document or other Project
Document), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Banks, and such instructions shall be binding upon all Banks;
PROVIDED, HOWEVER, that the Agent shall not be required to take any action that,
in the Agent's sole judgment, exposes the Agent to personal liability or that is
contrary to any Credit Document or other Project Document or Applicable Law. In
performing its function and duties hereunder as Agent, the Agent shall act
solely as the agent of the Banks and in its capacity as Issuing Bank, the
Issuing Bank shall act solely as issuer of the DSR Letter of Credit, and does
not assume and shall not be deemed to have assumed in either such capacity any
obligation towards or relationship of agency or trust or other fiduciary
relationship with or for the Partnership or any other party to any Project
Document.
(b) Each Bank hereby authorizes the Agent in the name of and
on behalf of such Bank to sign such documents, take all such actions and perform
such obligations that the Agent deems necessary or appropriate to bind each of
the Banks under the Credit Documents and to create, perfect or maintain the
existence or perfected status of any security interest created pursuant to any
such Credit Documents.
SECTION 8.2 AGENT'S RELIANCE, ETC. Neither the Agent nor the Issuing
Bank nor any of its or their directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with any Credit Document or other Project Document, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Agent and the Issuing Bank (i) may treat any
Bank that has signed an Assignment and Acceptance as the holder of the
applicable portion of the Obligations; (ii) may consult with legal counsel
(including counsel for the Partnership or any Affiliate), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with any
Credit Document or other Project Document; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any Credit Document or other Project Document on the
part of the Partnership or any Affiliate or to inspect the property (including
the books and records) of the Partnership or
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any Affiliate thereof; (v) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Credit Document or other Project Document or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall incur no liability
under or in respect of any Credit Document or other Project Document by acting
upon any notice, consent, certificate or other instrument or writing (which may
be by telecopier or otherwise) believed by it to be genuine and signed or sent
by the proper party or parties.
SECTION 8.3 THE AGENT, THE ISSUING BANK AND AFFILIATES. With respect to
its Commitment and participation in the DSR Letter of Credit, the Issuing Bank
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent or the Issuing Bank, as
the case may be; and the term "BANK" or "BANKS" shall, unless otherwise
expressly indicated, include the Agent and the Issuing Bank in their capacity as
a Bank (including the Issuing Bank in its capacity as such). The Agent and the
Issuing Bank and their Affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind of business
with, the Partnership, any Affiliate thereof and any Person that may do business
with or own securities of the Partnership or any Affiliate thereof, all as if
the Agent and the Issuing Bank, respectively, were not the Agent and the Issuing
Bank and without any duty to account therefor to the Banks.
SECTION 8.4 BANK CREDIT DECISION. Each Bank agrees that it has,
independently and without reliance on the Agent, the Issuing Bank or any other
Bank and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Bank also agrees that it will, independently and without reliance on the Agent,
the Issuing Bank or any other Bank and based on such documents and information
as it deems appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
SECTION 8.5 INDEMNIFICATION. The Banks agree to indemnify the Agent and
the Issuing Bank (to the extent not promptly reimbursed by the Partnership and
without limiting the obligation of the Partnership to do so), on demand, ratably
according to such Bank's Percentage Interest, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever that may at
any time (including at any time following the payment of any Obligations or
termination of this Agreement) be imposed on, incurred by or asserted against
the Agent or the Issuing Bank in any way relating to or arising out of any
Credit Document or other Project Document or any action taken or omitted by the
Agent under any Credit Document or other Project Document; PROVIDED, HOWEVER,
that no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting solely from the Agent's gross negligence
or willful misconduct. Without limitation of the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any costs and
expenses payable by the Partnership under Section 9.4, to the extent that the
Agent is not reimbursed for such costs and expenses by the Partnership.
SECTION 8.6 SUCCESSOR AGENT. The Agent may resign at any time by giving
30 days prior written notice thereof to the Banks and the Partnership and may be
removed at any time with or without cause with the written approval of the
Required Banks. Upon any such
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<PAGE>
resignation or removal, the Required Banks shall have the right to appoint a
successor Agent with the consent of the Partnership, which shall not be
unreasonably withheld. If no successor Agent has been so appointed by the
Required Banks, and has accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Banks' removal
of the retiring Agent, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent with the consent of the Partnership (which shall not
be unreasonably withheld), which successor Agent shall be a commercial bank
organized under the laws of the United States of America or of any state thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Credit
Documents and the other Project Documents. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was agent under this Agreement.
SECTION 8.7 COLLATERAL. (a) Except as expressly provided herein, the
Agent shall have no duty to take any affirmative steps with respect to the
collection of amounts payable in respect of the Collateral. The Agent shall
incur no liability as a result of any private sale of the Collateral.
(b) The Banks hereby consent, and agree upon written request
by the Agent to execute and deliver such instruments and other documents as the
Agent may deem desirable to confirm such consent, to the release of the Liens on
the Collateral, including any release in connection with any sale, transfer or
other disposition of the Collateral or any part thereof, in accordance with the
Project Documents.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENT, ETC. No amendment or waiver of any provision of
this Agreement or consent to any departure by the Partnership therefrom, shall
be effective unless in writing and signed or consented to (in writing) by the
Required Banks (and, in the case of amendments, the Partnership), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that (A) no amendment,
waiver or consent shall, unless in writing and signed or consented to (in
writing) by all of the Banks do any of the following: (i) waive any of the
conditions specified in Article 3; (ii) increase the Commitments of the Banks,
extend the term of any Commitment or subject the Banks to any additional
obligations; (iii) reduce the principal of, or interest on, the DSR Loans or any
fees or other amounts payable hereunder; (iv) postpone any date fixed for (a)
payment of principal of, or interest on, any DSR Loans (b) reimbursement of
drawings under the DSR Letter of Credit or (c) payment of fees or other amounts
payable hereunder; (v) change the percentage of the Commitments or the number of
Banks, required for the Banks or any of them to take any action hereunder; or
(vi) amend this Section 9.1; (B) no amendment, waiver or consent shall, unless
in writing or consented to (in writing) by the Issuing Bank, affect the rights
and obligations of the Issuing Bank hereunder; (C) no amendment, waiver or
consent shall, unless in
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<PAGE>
writing and signed by the Agent in addition to the Persons required above to
take such action, affect the rights or duties of the Agent under this Agreement
or any other Credit Document; and (D) any provision that is a part of this
Agreement as a result of an incorporation by reference to the Common Agreement
shall be amended or waived as provided in Section 9.1 of the Collateral Agency
Agreement.
SECTION 9.2 NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing (including by telecopier and shall be mailed,
telecopied or delivered, if to the Partnership, to it at Tenaska Georgia
Partners, L.P., 1044 N. 115th Street, Suite 400, Omaha, NE 68154-4446,
Attention: Michael F. Lawler, telephone 402-691-9500, telecopier 402-691-9550;
if to any Bank other than the Issuing Bank, to it at the address or telecopier
number set forth below its name in the Assignment and Acceptance by which it
became a party hereto; if to the Agent or the Issuing Bank, to it at The
Toronto-Dominion Bank, 909 Fannin, Suite 1700, Houston, Texas, Attention: Jeff
Lents; telephone 713-653-8229, telecopier 713-951-9921, or, as to each party, to
it at such other address or telecopier number as designated by such party in a
written notice to the other parties. All such notices and communications shall
be deemed received, (i) if personally delivered, upon delivery, (ii) if sent by
first-class mail, on the third Business Day following deposit into the mails and
(iii) if sent by telecopier, upon acknowledgment of receipt thereof by the
intended recipient, except that notices and communications to the Agent pursuant
to Article 2 or 8 shall not be effective until received by the Agent.
SECTION 9.3 NO WAIVER, REMEDIES. No failure on the part of any Bank
(including the Issuing Bank) or the Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, and no single
or partial exercise of any such right shall preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
SECTION 9.4 COSTS AND EXPENSES. The Partnership agrees to pay on demand
(i) all reasonable costs and expenses of the Agent and the Banks (including the
Issuing Bank) in connection with the preparation, execution, delivery,
syndication, administration, modification and amendment of this Agreement, the
other Credit Documents, and the other documents to be delivered hereunder,
including (a) the reasonable fees and out-of-pocket expenses of counsel for the
Agent and the Banks with respect thereto and with respect to advising the Agent
and the Banks as to their rights and responsibilities, or the perfection,
protection or reservation of rights or interests, under this Agreement, the
other Credit Documents, the other Project Documents and the other documents to
be delivered hereunder, (b) the reasonable fees and expenses of any consultants,
auditors or accountants engaged by the Agent with the written consent (which
shall not be unreasonably withheld) of the Partnership pursuant hereto, and (ii)
all reasonable costs and expenses of the Agent and the Banks (including the
Issuing Bank) (including reasonable counsel fees and expenses of the Agent and
the Banks) in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the other Credit Documents,
the other Project Documents and the other documents to be delivered hereunder,
whether in any action, suit or litigation, bankruptcy, insolvency or similar
proceeding. In addition, the Partnership shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of the aforementioned documents, and
the Partnership agrees to indemnify and hold the Agent and the
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Banks (including the Issuing Bank) harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay any of the foregoing.
SECTION 9.5 APPLICATION OF MONEY. If any sum paid or recovered in
respect of the Obligations is less than the amount then due, the Agent may apply
that sum to principal, interest, fees or any other amount due under this
Agreement in such proportions and order and generally in such manner as the
Agent shall reasonably determine.
SECTION 9.6 SEVERABILITY. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions of this Agreement or affecting the validity, enforceability or
authorization of such provision in any other jurisdiction.
SECTION 9.7 NON-RECOURSE LIABILITY. Satisfaction of the Obligations
shall be had solely from the Collateral. Notwithstanding any provision to the
contrary in the Transaction Documents, there shall be no recourse against any
Affiliates, partners, stockholders, officers, directors, representatives or
employees of the Partnership, other than the Partnership (each a "NON-RECOURSE
PARTY"), for any payment due hereunder or under any other Financing Document or
Security Document from the Partnership or for the performance of any obligation
of such Non-Recourse Party, or breach of any representation or warranty made by
such Non-Recourse Party hereunder or thereunder. The sole recourse of the Agent
and the Banks hereunder or under any other Transaction Document or for the
performance of any obligation of the Partnership, or breach of any
representation or warranty made hereunder or thereunder by the Partnership,
shall be against the Partnership and its assets, it being expressly understood
by the Senior Parties that such obligations of the Partnership are obligations
solely of the Partnership and that no such personal liability shall attach to,
or be incurred by any Non-Recourse Party; PROVIDED, that nothing contained in
this Section 9.7 shall (i) impair in respect of the Partnership the validity of
any Credit Document, as applicable, prevent the taking of any action permitted
by law against the Partnership or any of its Affiliates, or in any way affect or
impair the rights of the Agent and the Banks to take any action permitted by
law, in either case to realize upon the Collateral, (ii) be deemed to release
the Partnership or any of its Affiliates, or any past, present or future
shareholder, partner, officer, employee, director or agent of any thereof, from
liability for its fraudulent actions, fraudulent misrepresentations, gross
negligence or willful misconduct or (iii) limit or affect the obligations and
liabilities of any Non-Recourse Party in accordance with the terms of any other
Transaction Document creating such obligations and liabilities to which such
Non-Recourse Party is a party.
SECTION 9.8 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Partnership, the Agent and the Banks and their
respective successors and assigns, except that the Partnership shall not have
the right to assign any of its rights and obligations hereunder without the
prior written consent of the Required Banks, and, except as
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provided in Section 9.9, no Bank other than the Issuing Bank shall have the
right to assign any of its rights and obligations hereunder.
SECTION 9.9 ASSIGNMENTS AND PARTICIPATIONS. (a) Any Bank may at any
time (with the consent of the Partnership, such consent not to be unreasonably
withheld or delayed, the consent of the Agent, such consent not to be
unreasonably withheld or delayed, and the consent of the Issuing Bank) sell to
one or more banks or other entities whose long-term unsecured debt is rated at
least "A" or the equivalent by S&P and Moody's (a "PURCHASING BANK") all or any
part of its rights and obligations under this Agreement (which, except in the
case of an assignment to a Person that, immediately before such assignment, was
a Bank), shall be in an amount equal to not less than 33 1/3% of the Maximum
Stated Amount pursuant to an Assignment and Acceptance, executed by such
Purchasing Bank, such transferor Bank, the Agent and the Issuing Bank (and, in
the case of a Purchasing Bank that is not then a Bank or an Affiliate thereof,
by the Partnership). Upon (i) such execution of such Assignment and Acceptance
and (ii) delivery of a copy thereof to the Partnership and payment of the amount
of its participation to the Agent or such transferor Bank, such Purchasing Bank
shall for all purposes be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank under this Agreement, to the same extent as if
it were an original party hereto with the Percentage Interest as set forth in
such Assignment and Acceptance, which shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Percentage Interests arising
from the purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Agreement.
(b) Any Bank may, from time to time, sell or offer to sell
participating interests in any DSR Loans owing to such Bank, any Commitment of
such Bank or any other interests and obligations of such Bank hereunder, to one
or more banks or other entities (each, a "PARTICIPANT"), on such terms and
conditions as may be determined by the selling Bank, without the consent of or
notice to the Partnership, and the grant of such participation shall not relieve
any Bank of its obligations, or impair the rights of any Bank, hereunder. In the
event of any such sale by a Bank of a participating interest to a Participant,
such Bank shall remain solely responsible for the performance of such Bank's
obligations under this Agreement, the Partnership, the Agent and the Issuing
Bank will continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement and such Bank shall
retain the sole right and responsibility to exercise the rights of such Bank,
and enforce the obligations of the Partnership, including the right to, subject
to Section 9.1, approve any amendment, modification, supplement or waiver of any
provision of any Credit Document and the right to take action under Article 6
hereof, subject to Section 9.1, and such Bank shall not grant any such
Participant any voting rights or veto power over any such action by such Bank
under this Agreement. No Participant shall have any rights under this Agreement
to receive payment of principal, interest or any other amount payable hereunder
except through a Bank and as provided in this Section 9.9. The Partnership
agrees that, upon the occurrence and during the continuance of any Event of
Default, each Participant shall have the right of set-off in respect of its
participating interest in amounts owing under this Agreement as set forth in
Section 2.20 hereof to the same extent as if the amount of its participating
interest was owing directly to it as a Bank under this Agreement. The
Partnership also agrees that each Participant shall be entitled to the benefits
of Sections 2.15, 2.16, 2.17 and 2.18 hereof with respect to its participation
granted hereunder; PROVIDED, that no Participant shall be entitled to receive
any greater amount pursuant
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to such Sections than the Bank transferring such participation would have been
entitled to receive in respect of the amount of the participation transferred to
such Participant had no such transfer occurred.
(c) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.9, disclose to the Purchasing Bank or Participant or proposed Purchasing Bank
or Participant any information relating to the Partnership furnished to such
Bank by or on behalf of the Partnership; provided, however, that prior to any
such disclosure, the Person receiving such disclosure shall sign such
confidentiality agreements as the Partnership may reasonably request.
SECTION 9.10 INDEMNIFICATION. The Partnership agrees to indemnify, on
demand, and hold harmless the Agent and each Bank (including the Issuing Bank)
and each of their respective officers, directors, employees, agents and
affiliates from and against any and all claims, damages, losses, liabilities,
costs and expenses whatsoever that such indemnified party may incur (or that may
be claimed against such indemnified party by any Person) by reason of (i) any
untrue statement or alleged untrue statement of any material fact concerning the
Partnership or the Collateral, or the omission or alleged omission to state any
fact concerning the Partnership or the Collateral necessary to make any such
statement, in light of the circumstances under which it was made, not
misleading; (ii) the issuance, sale or delivery of the Senior Debt; (iii) the
use of the proceeds of the Senior Debt or any Drawing; (iv) any reasonable
action taken by such indemnified party in protecting and enforcing the rights
and remedies of the Agent and the Banks under the Project Documents; (v) subject
to Section 7.2, the execution, delivery or transfer of, or payment or failure to
pay under, the DSR Letter of Credit; (vi) any claim of any Person with respect
to any finder's fee, brokerage commission or other similar sum due in connection
with any Project Document; or (vii) any failure by the Partnership to comply
with any Environmental Laws; PROVIDED, HOWEVER, that the Partnership shall not
be required to indemnify the Issuing Bank for any claims, damages, losses,
liabilities, costs or expenses to the extent caused by the Issuing Bank's
willful misconduct or gross negligence in paying under the DSR Letter of Credit
or the Issuing Bank's willful or grossly negligent failure to pay under the DSR
Letter of Credit after the presentation to it by the beneficiary of a draft and
certificate strictly complying with the terms and conditions of the DSR Letter
of Credit (unless the Issuing Bank in good faith believed itself (based upon an
opinion of counsel) to be prohibited by law or legal authority from making such
payment). The Partnership, upon demand by any party indemnified or intended to
be indemnified pursuant to this Section 9.10 at any time, shall also reimburse
such party for any reasonable legal or other expenses incurred in connection
with investigating or defending against any of the foregoing. If any action,
suit or proceeding arising from any of the foregoing is brought against any
party indemnified or intended to be indemnified pursuant to this Section 9.10
(an "INDEMNIFIED PARTY"), such Indemnified Party shall promptly notify the
Partnership in writing, enclosing a copy of all papers served, but the omission
so to notify the Partnership of any such action shall not relieve it of any
liability that it may have to any Indemnified Party otherwise than under this
Section 9.10; PROVIDED, HOWEVER, that the Partnership shall not be liable for
any settlement of any such action effected without the Partnership's prior
written consent. In case any such action shall be brought against any
Indemnified Party and it shall notify the Partnership of the commencement
thereof, the Partnership shall be entitled to participate in and,
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to the extent that it shall wish, to assume the defense thereof with counsel
reasonably satisfactory to such Indemnified Party, and after notice from the
Partnership to such Indemnified Party of the Partnership's election so to assume
the defense thereof, the Partnership shall not be liable to such Indemnified
Party for any subsequent legal or other expenses attributable to such defense,
except as provided below, other than reasonable costs of investigation
subsequently incurred by such Indemnified Party in connection with the defense
thereof. The Indemnified Party shall have the right to employ its own counsel in
any such action, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (i) the employment of counsel by such
Indemnified Party has been authorized by the Partnership, (ii) the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Partnership and the Indemnified Party in the conduct of the defense
of such action (in which case the Partnership shall not have the right to direct
the defense of such action on behalf of the Indemnified Party) or counsel for
the Partnership shall have declined to represent the Indemnified Party in light
of a potential conflict of interest or (iii) the Partnership shall not in fact
have employed counsel reasonably satisfactory to the Indemnified Party to assume
the defense of such action.
SECTION 9.11 GOVERNING LAW; SUBMISSION OF JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS
AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ANY LEGAL ACTION OR PROCEEDING AGAINST THE PARTNERSHIP WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTNERSHIP HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. THE PARTNERSHIP HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 111 EIGHTH
AVENUE, 13TH FLOOR, NEW YORK, NY 10011, AS ITS DESIGNEE, APPOINTEE AND AGENT
WITH RESPECT TO ANY ACTION OR PROCEEDING IN NEW YORK TO RECEIVE ON ITS BEHALF,
AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING AND
AGREES THAT THE FAILURE OF SUCH AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF
PROCESS TO THE PARTNERSHIP SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH
SERVICE OR OF ANY CLAIM BASED THEREON. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE PARTNERSHIP
AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE
TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT. THE
PARTNERSHIP FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
PARTNERSHIP AT ITS ADDRESS
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SET FORTH IN SECTION 9.2, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING.
(b) THE PARTNERSHIP HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN SECTION 9.11(a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO ANY OF THIS AGREEMENT OR THE CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.12 HEADINGS. The section and subsection headings used herein
have been inserted for convenience of reference only and do not constitute
matters to be considered in interpreting this Agreement.
SECTION 9.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
TENASKA GEORGIA PARTNERS, L.P.,
by Tenaska Georgia, Inc.,
its Managing General Partner
By: /s/ MICHAEL F. LAWLER
-----------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
PERCENTAGE INTEREST
___________________ THE TORONTO-DOMINION BANK,
as Agent, the Issuing Bank and as a Bank
By: /s/ WARREN FINLEY
-----------------------------------
Name: Warren Finley
Title: Manager Credit
<PAGE>
EXHIBIT A
FORM OF DEBT SERVICE RESERVE LETTER OF CREDIT
<TABLE>
<S> <C>
The Toronto-Dominion Bank Letter of Credit No. [__________]
31 West 52nd Street, New York, New York 10019 Irrevocable Standby Credit
Date and Place of Issue: Date and Place of Expiry:
New York, New York The Toronto-Dominion Bank,
[__________] New York, New York
[seven years from Closing Date], as
the same may be extended from time
to time in accordance with the terms
hereof
Applicant:
Tenaska Georgia Partners, L.P.
Amount: Up to an aggregate of
[__________] United States Dollars
(US$ [________])
Beneficiary:
The Chase Manhattan Bank, as Collateral Agent Credit Available With:
Capital Markets Fiduciary Services The Toronto-Dominion Bank
450 W. 33rd Street, 15th Floor By: Negotiation, Against Presentation of the
New York, NY 10001 Documents Detailed Herein Drawn on
Attn: Annette M. Marsula The Toronto-Dominion Bank
International & Project Finance Service Delivery
</TABLE>
Ladies and Gentlemen:
We irrevocably authorize you to draw on us for the account of the
Applicant up to an aggregate amount of [ ] UNITED STATES DOLLARS (US$ )]
[to be revised in accordance with Section 2.2(a)(i) prior to issuance] or, on
any day, such other amount as shall be specified for such day on Schedule 1
attached to this Letter of Credit (as reinstated from time to time as set forth
in this Letter of Credit, the "STATED AMOUNT") available against presentation
of a dated drawing request drawn on The Toronto-Dominion Bank, manually signed
by an authorized officer of the Beneficiary (who is identified as such)
appropriately completed in the form of Annex 1 hereto.
The above drawing request and all communications with respect to this
Letter of Credit shall be in writing, addressed to us at The Toronto-Dominion
Bank, 909 Fannin, Suite 1700, Houston, Texas, Attention: Jeff Lents; telephone
713-653-8229, telecopier 713-951-9921, referencing this Letter of Credit No. [ ]
and presented to us by delivery in person or facsimile transmission at such
address, provided that the original of the above drawing request or such
communications, as the case may be, shall be sent to us at such address by
overnight courier for receipt by us within two (2) Business Days of the date of
any such facsimile transmission.
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If the drawing request is presented in compliance with the terms of
this Letter of Credit to us at such address by 12:00 noon New York City time on
any Business Day, payment will be made no later than 3:00 p.m. New York City
time on such Business Day and if such drawing request is so presented to us
after 12:00 noon New York City time on any Business Day, payment will be made no
later than 12:00 noon New York City time on the following Business Day. Payment
under this Letter of Credit shall be made in immediately available funds by wire
transfer to such account as may be designated by the Beneficiary in the
applicable drawing request.
As used in this Letter of Credit, "Business Day" means any day on which
commercial banks located in New York, New York are not required or authorized to
remain closed.
This Letter of Credit shall expire on the then applicable Stated
Expiration Date or New Stated Expiration Date (as each such term is hereinafter
defined), as the case may be. Notwithstanding the foregoing, we may at any time,
subject to the provisions of the Debt Service Reserve Letter of Credit and
Reimbursement Agreement, dated November 10, 1999, among the Applicant, the
Issuing Bank and the other Banks party thereto and the Issuing Bank, as Agent
(the "REIMBURSEMENT AGREEMENT"), terminate this Letter of Credit by giving the
Beneficiary and The Chase Manhattan Bank, as Trustee (in such capacity, the
"TRUSTEE") under the Indenture referred to in the Reimbursement Agreement,
written notice thereof in the form of Annex 2 hereto by delivery in person or
facsimile transmission (with written confirmation by overnight courier for
receipt by the Beneficiary and the Trustee within two (2) Business Days)
addressed to in the case of the Beneficiary, 450 West 33rd Street, 15th Floor,
New York, New York, 10001, Attention: Annette M. Marsula, International &
Project Finance Service Delivery, telephone no. (212) 946-7557, telecopier no.
(212) 946-8178, and in the case of the Trustee, 450 West 33rd Street, 15th
Floor, New York, New York, 10001, Attention: Annette M. Marsula, International &
Project Finance Service Delivery, telephone no. (212) 946-7557, telecopier no.
(212) 946-8178, at least sixty (60) days prior to termination whereupon the
Beneficiary is authorized to draw on us prior to such termination the Stated
Amount of this Letter of Credit by presentation to us, in the manner and at the
address specified in the third preceding paragraph, of a drawing request
appropriately completed in the form of Annex 1 hereto and signed by the
Beneficiary's authorized officer.
This Letter of Credit is effective immediately upon and after June 1,
2002. Unless terminated earlier in accordance with the provisions hereof, the
date of expiry set forth hereinabove (the "STATED EXPIRATION DATE") may be
extended for a period of one or more years at the option of the Agent effective
upon the Stated Expiration Date (each expiration date of any extension being
referred to as the "NEW STATED EXPIRATION DATE") upon notice of such extension
given by [the Issuing Bank], to the Beneficiary, the Collateral Agent and the
Trustee by delivery in person or facsimile transmission (with written
confirmation by overnight courier for receipt by the Beneficiary, the Collateral
Agent and the Trustee within two (2) Business Days) addressed to in the case of
the Beneficiary, 450 West 33rd Street, 15th Floor, New York, New York, 10001,
Attention: Annette M. Marsula, International & Project Finance Service Delivery,
and in the case of the Trustee, 450 West 33rd Street, 15th Floor, New York, New
York, 10001, Attention: Annette M. Marsula, International & Project Finance
Service Delivery on or before the date that is forty-five (45) days prior to the
Stated Expiration Date or any such New Stated Expiration Date which notice of
extension shall have attached to it a revised Schedule 1, to be attached to
2
<PAGE>
this Letter of Credit, setting forth the Stated Amount Values (as defined in the
Reimbursement Agreement) for each day of the term of this Letter of Credit
(including any reductions effected pursuant to a Certificate in the form of
Annex 5, but not including any reductions or reinstatements effected pursuant to
a Certificate in the form of Annex 4) for the period from and including the
effective date of the extension, to and including the New Stated Expiration
Date.
In the event that a drawing request fails to comply with the terms of
this Letter of Credit, we shall provide the Beneficiary prompt notice of same
stating the reasons therefor and shall upon your instructions hold any
non-conforming drawing request and other documents at your disposal or return
any non-conforming drawing request and other documents to the Beneficiary at the
address set forth above by delivery in person or facsimile transmission (with
originals thereof sent by overnight courier for receipt within two (2) Business
Days). Upon being notified that the drawing was not effected in compliance with
this Letter of Credit, the Beneficiary may attempt to correct such non-complying
drawing request in accordance with the terms of this Letter of Credit.
This Letter of Credit sets forth in full the terms of our undertaking
and this undertaking shall not in any way be modified, amended, limited or
amplified by reference to any document, instrument or agreement referred to
herein, except only defined terms used herein and the drawing requests and
certificates referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument, or agreement except
for such defined terms, drawing requests and certificates.
This Letter of Credit may be assigned upon presentation to us of a
signed transfer certificate in the form of Annex 3 accompanied by this Letter of
Credit, in which the Beneficiary irrevocably transfers to such transferee all of
its rights hereunder, whereupon we agree to either issue a substitute letter of
credit to such successor or endorse such transfer on the reverse of this Letter
of Credit.
Partial drawings under this Letter of Credit are allowed and each such
partial drawing shall reduce the amount thereafter available hereunder for
drawings under this Letter of Credit. This Letter of Credit shall be reinstated
as provided in Section 2.7(c) of the Reimbursement Agreement and we shall so
advise the Beneficiary in a certificate in the form of Annex 4 hereto. The
Stated Amount shall be reduced as provided in Section 2.7(b) of the
Reimbursement Agreement. In addition, the Stated Amount Values in Schedule 1 to
this Letter of Credit shall be reduced as provided in Section 2.2(c) of the
Reimbursement Agreement to the extent that we so advise the Beneficiary pursuant
to a certificate in the form of Annex 5 hereto.
All banking charges, including any advising and negotiating bank
charges, are for the account of the Applicant.
All drawing requests under this Letter of Credit must bear the clause:
"Drawn under [the Issuing Bank], Letter of Credit No. [ ]
dated __________ __, 20 ."
3
<PAGE>
This Letter of Credit shall not be amended except with the
written concurrence of The Toronto-Dominion Bank, the
Applicant and the Beneficiary.
We hereby engage with you that a drawing request drawn
strictly in compliance with the terms of this Letter of Credit
and amendments thereto shall meet with due honor upon
presentation.
This Letter of Credit is subject to the International Standby Practices
(ISP98). This Letter of Credit shall be deemed to be a contract made under the
laws of the State of New York and shall, as to matters not governed by the
International Standby Practices (ISP98), be governed by and construed in
accordance with the laws of such State.
We irrevocably agree with you that any legal action or proceeding with
respect to this Letter of Credit shall be brought in the courts of the State of
New York in the County of New York or of the United States of America in the
Southern District of New York. By signing this Letter of Credit, we irrevocably
submit to the jurisdiction of such courts solely for the purposes of this Letter
of Credit. We hereby waive, to the fullest extent permitted by law, any
objection we may now or hereafter have to the laying of venue in any such action
or proceeding in any such court.
THE TORONTO-DOMINION BANK,
By:
-----------------------
Authorized Signature
4
<PAGE>
ANNEX 1
DRAWING REQUEST
[Date]
"Drawn under [the Issuing Bank],
Letter of Credit No. [ ] Irrevocable Standby Letter of Credit
dated __________ __, 200_."
[The Issuing Bank]
[Address]
[Address]
Attn:___________________
Ladies and Gentlemen:
The undersigned hereby draws on [the Issuing Bank], Letter of Credit
No. [ ] Irrevocable Standby Letter of Credit (the "LETTER OF CREDIT"), dated
__________ __, 200_, issued by you in favor of us. Any capitalized term used
herein and not defined herein shall have its respective meaning as set forth in
the Letter of Credit.
In connection with this drawing, we hereby certify that:
(A) "This drawing in the amount of US$_________ is being made pursuant to [the
Issuing Bank], Letter of Credit No. [ ] Irrevocable Standby Letter of Credit
issued to The Chase Manhattan Bank pursuant to Section 3.6 of the Collateral
Agency and Intercreditor Agreement, dated as of November 1, 1999, by and among
the Partnership, The Chase Manhattan Bank, as Trustee, Collateral Agent and
Depositary Bank, and The Toronto-Dominion Bank, as DSR LOC Agent, and PPA LOC
Agent (as the same may be amended, supplemented or modified from time to time,
the "COLLATERAL AGENCY AGREEMENT")"; and
(B) "The date of this Drawing is June 1, 2002 or later"; and
[Use one or more of the following forms of paragraph C, as applicable]
[(C) "After application of funds from the Debt Service Reserve Account, there
are insufficient monies in the Bond Payment Account, on the Scheduled Payment
Date occurring ________20__ to pay the [interest] [and] [principal] due on the
Bonds on such date (each capitalized term being used as defined in the Common
Agreement)";]
or
[(C) "The long-term debt rating of [the Issuing Bank] has fallen below "A-" as
determined by Standard & Poor's and "A3" as determined by Moody's (the "Required
Rating"), and the
5
<PAGE>
Partnership has failed within 45 days to deliver a replacement letter of credit
from a financial institution which meets the Required Rating";]
or
[(C) "You have delivered to us notice that the Letter of Credit will not be
extended or replaced upon its stated expiry date of [insert Stated Expiration
Date or New Stated Expiration Date, as applicable] and the Partnership has
failed to deliver no later than 45 days prior to such stated expiry date a
replacement letter of credit from a financial institution with a long-term debt
rating of "A-" as determined by Standard & Poor's and "A3" as determined by
Moody's (each capitalized term being used as defined in the Common Agreement)";]
or
["(C) "There are insufficient funds available pursuant to Section 3.3(b) of the
Collateral Agency Agreement to repay interest now due and payable on any DSR LOC
Loans made by [the Issuing Bank], in respect of drawings under the [the Issuing
Bank], Letter of Credit No. [ ] Irrevocable Standby Letter of Credit (each
capitalized term being used as defined in the Collateral Agency Agreement)"];
or
[(C) "A Trigger Event has occurred and is continuing and the written request of
the Required Senior Parties has been delivered to the Collateral Agent and not
been rescinded (each capitalized term being used as defined in the Collateral
Agency Agreement)";]
and
(D) "The amount requested to be drawn does not exceed the Stated Amount"; and
(E) "You are directed to make payment of the requested drawing to account no.
____________ at ____________________________ [insert bank name, address and
account number]."
IN WITNESS WHEREOF, the undersigned has executed and delivered this
request on this _____ day of _______________, 20__ .
THE CHASE MANHATTAN BANK, as
COLLATERAL AGENT
By:
----------------------------------
Name:
Title:
6
<PAGE>
ANNEX 2
NOTICE OF TERMINATION OF LETTER OF CREDIT
[Date]
The Chase Manhattan Bank, as Trustee
Capital Markets Fiduciary Services
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attn: Annette M. Marsula
International & Project Finance Service Delivery
The Chase Manhattan Bank, as Collateral Agent
Capital Markets Fiduciary Services
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attn: Annette M. Marsula
International & Project Finance Service Delivery
Ladies and Gentlemen:
Reference is made to [the Issuing Bank], Letter of Credit No. [ ]
Irrevocable Standby Letter of Credit (the "LETTER OF CREDIT"), dated __________
__, 20__, issued by us in favor of The Chase Manhattan Bank.
This constitutes our notice to you pursuant to the Letter of Credit
that the Letter of Credit shall terminate on ___________, 20__ [insert a date
which is [ ] or more days after the date of this notice of termination (the
"TERMINATION DATE")].
Pursuant to the terms of the Letter of Credit, you are authorized to
draw (pursuant to one or more drawings), prior to the Termination Date, on the
Letter of Credit in an aggregate amount that does not exceed the Stated Amount
(as defined in the Letter of Credit).
Very truly yours,
[THE ISSUING BANK]
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
7
<PAGE>
ANNEX 3
TRANSFER OF LETTER OF CREDIT
[Date]
"Delivered under [the Issuing Bank],
Letter of Credit No. [ ]
dated __________ __, 20__."
[The Issuing Bank]
[Address]
Attn: __________________
Gentlemen:
Reference is made to [the Issuing Bank], Letter of Credit No. [ ]
Irrevocable Standby Letter of Credit, dated __________ __, 200_, originally
issued by you in favor of The Chase Manhattan Bank (the "LETTER OF CREDIT"). Any
capitalized terms used, but not defined, herein shall have its respective
meaning as set forth in the Letter of Credit.
For value received, the undersigned, as Beneficiary under the Letter of
Credit, hereby irrevocably transfers to _____________ (the "TRANSFEREE") all
rights of the undersigned to draw under the Letter of Credit in their entirety.
The Transferee is the successor to the Beneficiary, under the
Collateral Agency Agreement, dated as of November 1, 1999, by and among the
Partnership, The Chase Manhattan Bank, as Trustee, Collateral Agent and
Depositary Bank, and [ ], as DSR LOC Provider, and PPA LOC Provider (as the
same may be amended, supplemented or modified from time to time, the
"COLLATERAL AGENCY AGREEMENT") and all conditions to appointment of such
successor set forth in the Collateral Agency Agreement have been satisfied.
By this transfer, all rights of the undersigned, as Beneficiary under
the Letter of Credit, are transferred to the Transferee, and the Transferee
shall have the sole rights with respect to the Letter of Credit relating to any
amendments thereof and any notices thereunder. All amendments to the Letter of
Credit are to be consented to by the Transferee without necessity of any consent
of or notice to the undersigned.
Simultaneously with the delivery of this notice to you, copies of this
notice are being transmitted to the Transferee.
8
<PAGE>
The Letter of Credit is returned herewith, and we ask you to either
issue a substitute letter of credit for the benefit of the Transferee or endorse
the transfer on the reverse thereof, and forward it directly to the Transferee
with your customary notice of transfer.
Very truly yours,
THE CHASE MANHATTAN BANK, AS
COLLATERAL AGENT
By:
----------------------------------
Name:
Title:
9
<PAGE>
ANNEX 4
CERTIFICATE OF REINSTATEMENT OF STATED AMOUNT
[Date]
The Chase Manhattan Bank, as Collateral Agent
Capital Markets Fiduciary Services
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attn: Annette M. Marsula
International & Project Finance Service Delivery
Ladies and Gentlemen:
Reference is made to [the Issuing Bank], Letter of Credit No. [ ]
Irrevocable Standby Letter of Credit (the "LETTER OF CREDIT"), dated __________
__, 20__ , issued by us in your favor. Any capitalized term used herein and not
defined shall have its respective meaning as set forth in the Letter of Credit.
Reference is also made to that certain Collateral Agency and Intercreditor
Agreement, dated as of November 1, 1999, by and among the Partnership, The Chase
Manhattan Bank, as Trustee, Collateral Agent and Depositary Bank, and [ ], as
DSR LOC Provider, and PPA LOC Provider (as the same may be amended, supplemented
or modified from time to time, the "COLLATERAL AGENCY AGREEMENT").
This constitutes our notice to you pursuant to the Letter of Credit
that:
[use one or more of the following paragraphs]
We have received repayment of a DSR LOC Loan in accordance with the
provisions of the Reimbursement Agreement in the amount of $_________, and,
pursuant to Section 2.7(c) of the Reimbursement Agreement, the Stated Amount is
therefore increased by such amount to $___________.
or
We have received payment of a DSR LOC Loan in accordance with the
provisions of the Reimbursement Agreement in the amount of $____________. The
Debt Service Reserve Required Balance (as defined in the Common Agreement) has
been previously reduced. Accordingly, the Stated Amount is hereby increased by
$___________ to $__________ to the extent that such increase shall not cause the
Stated Amount (when added to the balance in the
10
<PAGE>
Debt Service Reserve Account (as defined in the Common Agreement)) to exceed the
Debt Service Reserve Required Balance.
Very truly yours,
[The Issuing Bank]
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
11
<PAGE>
ANNEX 5
CERTIFICATE OF REDUCTION/INCREASE OF STATED AMOUNT VALUE
[Date]
The Chase Manhattan Bank, as Collateral Agent
Capital Markets Fiduciary Services
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attn: Annette M. Marsula
International & Project Finance Service Delivery
Ladies and Gentlemen:
Reference is made to [the Issuing Bank], Letter of Credit No. [ ]
Irrevocable Standby Letter of Credit (the "LETTER OF CREDIT"), dated __________
__, 20__, issued by us in your favor. Any capitalized term used herein and not
defined shall have its respective meaning as set forth in the Letter of Credit.
Reference is also made to that certain Collateral Agency and Intercreditor
Agreement, dated as of November 1, 1999, by and among the Partnership, The Chase
Manhattan Bank, as Trustee, and Depositary Bank, and [ ], as DSR LOC
Provider, and PPA LOC Provider (as the same may be amended, supplemented or
modified from time to time, the "COLLATERAL AGENCY AGREEMENT").
This constitutes our notice to you pursuant to the Letter of Credit
that we have been advised by the Applicant that:
[use one or more of the following paragraphs]
An event specified in Section 2.2(c) of the Reimbursement Agreement has
occurred and, accordingly, each of the Stated Amount Values specified in
Schedule 1 attached to this Letter of Credit is reduced by $______ [insert
amount of DSR LOC Loan being converted into DSR Bond].
OR
The Debt Service Reserve Required Balance (as defined in the Common
Agreement) for each period covered by the Letter of Credit has been
reduced/increased as set forth in the attached Addendum 1. Accordingly, pursuant
to Section 2.2(a)(ii) of the Reimbursement Agreement, each of the Stated Amount
Values specified in Schedule 1 attached to the Letter of Credit is
reduced/increased correspondingly.
12
<PAGE>
Attached hereto is a revised Schedule 1, to be attached to the Letter
of Credit, modifying the Stated Amount Values in accordance with this
Certificate.
Very truly yours,
[The Issuing Bank]
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
13
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 20__
Reference is made to the Debt Service Reserve Letter of Credit and
Reimbursement Agreement, dated as of [ ] (the "REIMBURSEMENT AGREEMENT"),
among Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"PARTNERSHIP"), the Issuing Bank (as defined in the Reimbursement Agreement),
the Banks (as defined in the Reimbursement Agreement) and the Issuing Bank, as
Agent for the Banks (the "Agent"). Terms defined in the Reimbursement Agreement
are used herein with the same meaning.
_________________ (the "ASSIGNOR") and ___________________ (the
"ASSIGNEE") agree as follows:
(1) The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, the percentage interest
specified on Schedule 1 hereto in and to all of the Assignor's rights and
obligations under the Reimbursement Agreement as of the date hereof (after
giving effect to any other assignments thereof made before the date hereof,
whether or not such assignments have become effective, but without giving effect
to any other assignments thereof also made on the date hereof), including,
without limitation, such Percentage Interest in the Assignor's Commitment, each
of the DSR Loans owing to the Assignor and the DSR Letter of Credit. The
Assignee shall pay to the Assignor, at or before 12:00 noon, local time of the
Assignor, on the Effective Date (as defined below), the purchase price therefor
in an amount equal to the Percentage Interest of each of the DSR Loans owing to
the Assignor, as reflected on Schedule 1 hereto, in immediately available funds.
(2) The Assignor (a) represents and warrants that as of the date hereof
its Commitment, each of the DSR Loans owing to it and its participation in the
DSR Letter of Credit (after giving effect to any other assignments of the
foregoing made before the date hereof, whether or not such assignments have
become effective, but without giving effect to any other such assignments also
made on the date hereof) are in the respective dollar amounts specified therefor
on Schedule 1 hereto; (b) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (c) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any of the Credit
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any of the Credit Documents or any other instrument or
document furnished pursuant thereto; and (d) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Partnership or the performance or observance by the Partnership or any other
Person of any of its obligations under any of the Credit Documents or any other
instrument or document furnished pursuant thereto.
(3) The Assignee (a) confirms that it has received copies of the Credit
Documents and such other documents and information as it has deemed appropriate
to make its own credit
1
<PAGE>
analysis and decision to enter into this Assignment and Acceptance, including
such documents evidencing satisfaction of the conditions precedent set forth in
the Reimbursement Agreement; (b) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank (including the Issuing
Bank) and based on such documents and information as it may deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Reimbursement Agreement; (c) appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers under the
Credit Documents as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto; (d) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Reimbursement Agreement are required to be performed by it as a Bank; and
(e) specifies as its address for notices the address set forth beneath its name
on Schedule 1 hereto.
(4) Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance and
recording by the Agent in the Register maintained by the Agent for such purpose.
The effective date of this Assignment and Acceptance shall be the date of
acceptance thereof by the Agent, unless otherwise specified on Schedule 1 hereto
(the "EFFECTIVE DATE").
(5) Upon such acceptance and recording by the Agent, as of the
Effective Date (a) the Assignee shall be a party to the Reimbursement Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Bank thereunder and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Reimbursement Agreement.
(6) Upon such acceptance and recording by the Agent, from and after the
Effective Date the Agent shall make all payments under the Reimbursement
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto)
to the Assignee. The Assignor and the Assignee shall make all appropriate
adjustments directly between themselves in respect of payments of principal,
interest and/or fees under the Reimbursement Agreement for periods before the
Effective Date.
(7) Each of the Assignor and the Assignee agrees that at any time and
from time to time upon the written request of the other party, it will execute
and deliver such further documents and do such further acts and things as the
other party may reasonably request in order to effect the purposes of this
Assignment and Acceptance.
(8) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS
ASSIGNMENT AND ACCEPTANCE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
(9) This Assignment and Acceptance is executed by the parties on
Schedule 1 hereto and may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document. Execution of this Assignment and Acceptance by the Agent and
the Partnership on Schedule 1 hereto shall constitute any consent of such Person
required pursuant to Section 9.9 of the Reimbursement Agreement.
2
<PAGE>
Schedule 1 to
Assignment and Acceptance
Section 1.
Percentage of Assignor interest
in Drawings, Commitments, and
DSR Loans to be assigned: _______%
Section 2.
Immediately prior to Effective Date:
Assignor's Commitment: $_______
DSR Loans owing to Assignor:
DSR LOC Loan $_______
DSR Term Loan $_______
DSR Bond $_______
Assignor's participation in DSR Letter
of Credit: $_______
Assignor's Percentage Interest (as defined
in the Reimbursement Agreement) _______%
Section 3.
Upon Effective Date:
Assignor's Commitment: $_______
Assignor's Percentage Interest: _______%
Assignee's Commitment: $_______
Assignee's Percentage Interest: _______%
Section 4.
Effective Date: ____________________
3
<PAGE>
[ASSIGNOR]
By:
----------------------------------
Name:
Title:
[ADDRESS FOR NOTICES]
Consented to on this _____ day of
__________, 20__:
[ ],
as Agent and the Issuing Bank
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Consented to on this _____ day of
__________, 20__:
TENASKA GEORGIA PARTNERS, L.P.,
by Tenaska Georgia, Inc.,
its Managing General Partner
By:
--------------------------------
Name:
Title:
4
<PAGE>
EXHIBIT C
AMORTIZATION SCHEDULE
The principal amount of each DSR LOC Loan shall be due and payable in
semi-annual installments on consecutive Scheduled Payment Dates, commencing on
the first such Scheduled Payment Date to occur after such DSR LOC Loan is made,
and shall in any event be due and payable, to the extent not previously paid on
the applicable DSR LOC Loan Required Payment Date. The Partnership shall pay
interest on any DSR LOC Loan or such Scheduled Payment Date and on the DSR LOC
Loan Required Payment Date out of cash available in the Revenue Account at the
same level in the flow of funds as interest on other Senior Debt and shall repay
the principal amount, if any, of DSR LOC Loans on such Scheduled Payment Dates
and on the DSR LOC Loan Required Payment Date out of 100% of the cash available
in the Revenue Account after payment of Debt Service on all Senior Debt other
than principal of DSR LOC Loans.
The principal amount of each DSR Term Loan shall be due and payable in
semi annual installments on consecutive Scheduled Payment Dates, commencing on
the first such Scheduled Payment Date to occur after such DSR Term Loan is made,
and maturing in full on the applicable DSR Term Loan Required Payment Date. The
amount of principal payable on each such Scheduled Payment Date shall be equal
to the amount of the principal component only of an amortization schedule based
on the foregoing payment schedule and a final maturity date being the earlier of
(x) ten (10) years after the date on which such DSR Term Loan is made and (y)
the Final Maturity Date, and assuming (i) a fixed per annum interest rate equal
to the interest rate (whether determined with reference to the Adjusted Base
Rate or the Eurodollar Rate) applicable to such DSR Term Loan on such date and
(ii) mortgage style payments of principal and interest.
The principal amount of each DSR Bond shall be due and payable in
semi-annual installments on consecutive Scheduled Payment Dates, commencing on
the first Scheduled Payment Date to occur after such DSR Bond is issued, and
maturing in full on the Final Maturity Date. Each DSR Bond shall be amortized on
the same amortization schedule and in an amount on each Scheduled Payment Date
that bears the same proportion to the original principal amount of the required
payment of principal on the Bonds bears to the remaining unpaid principal amount
of the Bonds outstanding on the date of such conversion. Interest on and
principal of any DSR Bond will be paid, respectively, at the same levels as
interest on and principal of the Bonds.
1
<PAGE>
EXHIBIT D
<TABLE>
<CAPTION>
- -------------------------- ------------------------- ------------------------- -------------------------
BBB-/Baa3 or above+ BB+/Ba1+ BB/Ba2 or below+
- -------------------------- ------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Eurodollar Base Rate Eurodollar Base Rate Eurodollar Base Rate
Rate Loans Loans Rate Loans Loans Rate Loans Loans
and LOC and LOC and LOC
fees fees fees
- -------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Year 1-4 175.0 bps 175.0 bps 187.5 bps 187.5 bps 237.5 bps 237.5 bps
- -------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Year 5-7 200.0 bps 200.0 bps 212.5 bps 212.5 bps 262.5 bps 262.5 bps
- -------------------------- ------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
- --------
+ In the event of a split rating, the lower rating will be used.
1
<PAGE>
Exhibit 4.25
EXECUTION COPY
- --------------------------------------------------------------------------------
EQUITY CONTRIBUTION AGREEMENT
Dated as of
November 1, 1999
among
TENASKA GEORGIA PARTNERS, L.P.,
THE CONTRIBUTING PARTNERS PARTY HERETO
and
THE CHASE MANHATTAN BANK,
as Collateral Agent
- --------------------------------------------------------------------------------
936 MW (Nominal Summer Rating) Natural Gas-Fired Simple-Cycle Electric
Generating Plant Heard County, Georgia
<PAGE>
EQUITY CONTRIBUTION AGREEMENT
EQUITY CONTRIBUTION AGREEMENT (this "AGREEMENT"), dated as of November
1, 1999, made by and among TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership (the "PARTNERSHIP"), TENASKA GEORGIA, INC., a Delaware corporation
("TGI"), TENASKA GEORGIA PARTNERS I, L.P., a Delaware limited partnership
("TGILP"), and each other partner of the Partnership listed as a Contributing
Partner hereunder in Schedule 1 hereto, as the same may be amended from time to
time pursuant to the terms of this Agreement (TGI, TGILP and each such other
partner of the Partnership, being referred to herein individually as a
"Contributing Partner" and collectively as the "Contributing Partners") and THE
CHASE MANHATTAN BANK, in its capacity as Collateral Agent under the Collateral
Agency Agreement referred to below (together with its successors and assigns,
the "COLLATERAL AGENT"). (Each of the Partnership, each of the Contributing
Partners and the Collateral Agent, a "PARTY" and collectively, the "PARTIES").
W I T N E S S E T H
WHEREAS, the Partnership has been formed to develop, construct, own or
lease, operate and maintain a 936 MW (nominal summer rating) natural gas-fired
simple-cycle electric generating plant in Heard County, Georgia (the "PROJECT").
WHEREAS, the Partnership intends to finance the construction and
equipping of the Project through an offering of Bonds (the "BONDS") under Rule
144A, the proceeds of which Bonds will be used to purchase Taxable Industrial
Development Revenue Bonds issued by the Development Authority of Heard County,
Georgia, a public corporation created and existing under the laws of the State
of Georgia (the "DAHC BONDS"), the net proceeds of which will be used to pay
Project Costs.
WHEREAS, the Senior Parties, the Authority Trustee and the Partnership
have entered into the Collateral Agency and Intercreditor Agreement, dated as of
even date herewith (as the same may be amended, supplemented or otherwise
modified from time to time, the "COLLATERAL AGENCY AGREEMENT"), pursuant to
which the Collateral Agent has been appointed to act as Collateral Agent and
representative for the Senior Parties in connection with, among other things,
the matters referred to herein.
WHEREAS, each of TGI and TGILP (each, a "PARTNER" and, collectively,
the "PARTNERS") is a partner in the Partnership pursuant to the Partnership
Agreement.
WHEREAS, in order to ensure the making of certain equity contributions
that may become due under the Collateral Agency Agreement, the Collateral Agent,
solely on behalf of the Senior Parties, requires commitments from the partners
of the Partnership to contribute capital to the Partnership on the terms and
conditions, and for the purposes, provided herein.
WHEREAS, other partners of the Partnership may become Contributing
Partners, and undertake a portion of the commitments of the then existing
Contributing Partners, at which time
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the commitments of such existing Contributing Partners shall be reduced, all
pursuant to and subject to the terms and conditions of this Agreement.
WHEREAS, it is a condition precedent to the obligation of the Senior
Parties to enter into their respective Financing Documents that the Parties
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
SECTION 1. DEFINITIONS.
(a) All capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings ascribed thereto in the Common
Agreement. As used herein, the following capitalized terms are defined as
follows:
"ACCEPTABLE LETTER OF CREDIT" means an irrevocable letter of credit or
letters of credit substantially in the form of Exhibit A hereto, issued to
Collateral Agent as named beneficiary and for the account of a Contributing
Partner or an Affiliate thereof other than the Partnership, in an initial stated
amount equal to the Contributing Partner's Support Amount on the date of
issuance of such Acceptable Letter of Credit, issued by The First National Bank
of Omaha or a domestic or foreign commercial bank whose outstanding senior
unsecured long-term debt is rated at least A- or the equivalent by S&P or
Moody's.
"ACCEPTABLE GUARANTY" means a Guaranty substantially in the form of
Exhibit B hereto, in favor of the Collateral Agent, guaranteeing the obligations
of a Contributing Partner to make all of the Equity Contributions required to be
made by such Contributing Partner under this Agreement, entered into, executed
and delivered by a party which is the parent company or other Affiliate of such
Contributing Partner, which parent company or other Affiliate (i) is rated
Investment Grade by S&P and Moody's, and (ii) has net worth of not less than
$100,000,000.
"CASH DEPOSIT" means as of any date, a cash deposit to a Contributing
Partner Support Account in the amount equal to all or a portion of the
Contributing Partner's Support Amount as of such date.
"CONSTRUCTION FUND" means the fund of such name created pursuant to
Section 2.2(a) of the Collateral Agency Agreement.
"CONTRIBUTING PARTNER ASSUMPTION AGREEMENT" means an Assignment and
Assumption Agreement in the form of Exhibit C hereto, entered into by a
Contributing Partner.
"CONTRIBUTING PARTNER ASSUMPTION DATE" for a Contributing Partner means
the date on which such Contributing Partner's Contributing Partner Assumption
Agreement becomes effective.
"CONTRIBUTING PARTNER'S EQUITY CONTRIBUTION COMMITMENT" means on any
date, the sum of such Contributing Partner's First Tranche Equity Contribution
Commitment and such Contributing Partner's Second Tranche Equity Contribution
Commitment.
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"CONTRIBUTING PARTNER EVENT OF DEFAULT" has the meaning given such term
in Section 6 of this Agreement.
"CONTRIBUTING PARTNER'S FIRST TRANCHE EQUITY CONTRIBUTION COMMITMENT"
means on any date, for any Contributing Partner, the amount of such Contributing
Partner's First Tranche Equity Contribution Commitment as set forth in Schedule
1 hereto, as in effect on such date.
"CONTRIBUTING PARTNER FIRST TRANCHE PERCENTAGE" means, as of any date,
for any Contributing Partner, the percentage described as being the Contributing
Partner First Tranche Percentage, set forth opposite such Contributing Partner's
name in Schedule 1, as in effect on such date.
"CONTRIBUTING PARTNER'S FIRST TRANCHE SUPPORT AMOUNT" means, as of any
date on or prior to the First Tranche Utilization Date, for any Contributing
Partner, such Contributing Partner's First Tranche Equity Contribution
Commitment, reduced by all Equity Contributions made by such Contributing
Partner on or prior to the First Tranche Utilization Date (including any such
Equity Contribution to the extent it causes such Contributing Partner's total
Equity Contributions to equal such Contributing Partner's First Tranche Equity
Contribution Commitment).
"CONTRIBUTING PARTNER'S SECOND TRANCHE EQUITY CONTRIBUITON COMMITMENT"
means on any date, the amount of such Contributing Partner's Second Tranche
Equity Contribution Commitment as set forth in Schedule 1 hereto, as in effect
on such date.
"CONTRIBUTING PARTNER SECOND TRANCHE PERCENTAGE" means, as of any
date, for any Contributing Partner, the percentage described as being the
Contributing Partner Second Tranche Percentage, set forth opposite such
Contributing Partner's name in Schedule 1, as in effect on such date.
"CONTRIBUTING PARTNER'S SECOND TRANCHE SUPPORT AMOUNT" means, as of
any date on or after the First Tranche Utilization Date, such Contributing
Partner's Second Tranche Equity Contribution Commitment, reduced by all Equity
Contributions made by such Contributing Partner on or after the First Tranche
Utilization Date (including any such Equity Contribution to the extent it causes
such Contributing Partner's total Equity Contributions to exceed such
Contributing Partner's First Tranche Equity Contribution Commitment, if any).
"CONTRIBUTING PARTNER SUPPORT ACCOUNT" has the meaning set forth in
Section 10(d) of this Agreement.
"CONTRIBUTING PARTNER'S SUPPORT AMOUNT" means, as of any date, such
Contributing Partner's Equity Contribution Commitment, reduced by all Equity
Contributions made by such Contributing Partner prior to such date.
"CONTRIBUTING PARTNER SUPPORT INSTRUMENT" means, as to any Contributing
Partner, an Acceptable Letter of Credit, (ii) a Cash Deposit with Support
Account Documentation as set forth in Section 10(d), (iii) an Acceptable
Guaranty or (iv) a Contributing Partner Substitute Support Instrument, in each
case provided by or in support of the obligations of such Contributing Partner.
"EQUITY CONTRIBUTION" has the meaning given such term in Section 2 of
this Agreement.
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"EQUITY CONTRIBUTION DATE" means any date on which the Contributing
Partners are required to contribute equity to the Construction Fund pursuant to
the terms of this Agreement.
"FIRST TRANCHE SUPPORT AMOUNT" means, as of any date, $20.5 million
reduced by the sum of the Equity Contributions made prior to such date and prior
to the First Tranche Utilization Date (including for this purpose the Equity
Contributions made on the First Tranche Utilization Date to the extent that they
cause the total Equity Contributions to equal $20.5 million).
"FIRST TRANCHE UTILIZATION DATE" means the date on which the total
Equity Contributions made pursuant to this Agreement equal or exceed $20.5
million.
"REMAINING REQUIRED EQUITY CONTRIBUTION" means the amount required as
of the Date of Commercial Operation of the Final Units to pay the required
amounts in accordance with Section 3.2 of the Collateral Agency Agreement, less
the aggregate of the amounts then on deposit in the Construction Fund.
"SECOND TRANCHE SUPPORT AMOUNT", on any date on or after the First
Tranche Utilization Date, $15 million reduced by the sum of the Equity
Contributions made on or after the First Tranche Utilization Date (including for
this purpose the Equity Contributions made on the First Tranche Utilization Date
to the extent that they cause the total Equity Contributions to exceed $20.5
million).
"SUBSTITUTE SUPPORT INSTRUMENT" means, as to any Contributing Partner,
(i) an Acceptable Letter of Credit, (ii) a Cash Deposit with Support Account
Documentation as set forth in Section 10(d), or (iii) an Acceptable Guaranty, in
each case provided by or in support of the obligations of such Contributing
Partner.
"SUPPORT ACCOUNT DOCUMENTATION" has the meaning set forth in Section
10(d) of this Agreement.
(b) All references to Parties herein shall include their permitted
successors and assigns.
SECTION 2. EQUITY CONTRIBUTIONS.
(a) Each Contributing Partner shall make or cause to be made
to the Partnership equity contributions (each, an "Equity Contribution") in the
amounts required to be made by such Contributing Partner under this Agreement,
in the manner herein provided and otherwise in accordance with the terms and
conditions of this Agreement; PROVIDED, HOWEVER, that (i) in no event shall a
Contributing Partner's obligation to make an Equity Contribution pursuant to
this Agreement cause the total amount of Equity Contributions made by such
Contributing Partner to exceed such Contributing Partner's Equity Contribution
Commitment, and (ii) the aggregate amount of the Contributing Partners' Equity
Contributions shall not at any time exceed thirty-five million five hundred
thousand dollars ($35,500,000).
(b) To support its obligations to make its Equity
Contributions hereunder, each Contributing Partner shall provide to the
Collateral Agent, on the Closing Date in the case of
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TGI and TGILP, and on the applicable Contributing Partner Assumption Date in the
case of any other Contributing Partner, a Contributing Partner Support
Instrument or Support Instruments in the aggregate amount of such Contributing
Partner's Equity Contribution Commitment.
(c) Commencing on the Closing Date to and including the Date
of Commercial Operation of the Final Units, if at any time (i) the aggregate
amount then required to pay Project Costs pursuant to a Requisition presented to
the Collateral Agent in accordance with Section 3.1 of the Collateral Agency
Agreement is greater than (ii) the amount on deposit in the Construction Fund at
such time (such difference, the "SHORTFALL AMOUNT"), the Collateral Agent shall
notify the Contributing Partners of the amount of the Shortfall Amount, and the
date on which the Requisition is to be paid. On the Business Day on which
payment of the Requisition is to be made, the Collateral Agent shall make a
drawing under each Contributing Partner's Contributing Partner Support
Instrument or Support Instruments in an amount equal to (A) on or prior to the
First Tranche Utilization Date, the lesser of (1) the sum of such Contributing
Partner's First Tranche Percentage of such Shortfall Amount and (2) such
Contributing Partner's then current Contributing Partner's First Tranche Support
Amount, and (B) on or after the First Tranche Utilization Date, the lesser of
(1) such Contributing Partner's Second Tranche Percentage of the positive
difference between (x) the Shortfall Amount and (y) the aggregate amount that
the Collateral Agent is directed under clause (A) above to draw under all of the
Contributing Partners' Support Instruments, and (2) such Contributing Partner's
then current Contributing Partner's Second Tranche Support Amount. All amounts
so drawn shall be deposited by the Collateral Agent into the Construction Fund,
and shall be applied to pay or reimburse the Partnership for the payment of the
Project Costs, whether matured or unmatured, in accordance with the Financing
Documents. The amounts so drawn shall be treated as equity contributions to the
Partnership by the respective Contributing Partners in the amounts drawn under
their respective Contributing Partner Support Instruments.
On the Date of Commercial Operation of the Final Units, the
Collateral Agent shall (i) make a drawing under each Contributing Partner's
Support Instrument or Support Instruments (and shall deposit in the Construction
Fund the amounts so drawn) in an amount equal to such Contributing Partner's
then current Contributing Partner's Support Amount; except that the amount
required to be drawn on each Contributing Partner's Support Instrument or
Support Instruments pursuant to this sentence shall be reduced to such
Contributing Partner's First Tranche Percentage (to the extent the related
Equity Contribution is being made on or prior to the First Tranche Utilization
Date) or Second Tranche Percentage (to the extent the related Equity
Contribution is being made on or after the First Tranche Utilization Date) of
the Remaining Required Equity Contribution, and (ii) cancel the remaining
"excess" equity that is committed but unfunded, if the Partnership delivers an
Officer's Certificate to the Collateral Agent on the Date of Commercial
Operation of the Final Units certifying that:
(A) the Date of Commercial Operation of the Final Units
has occurred;
(B) all other amounts due and payable under this Agreement
have been paid or escrowed or otherwise provided for as of the Date of
Commercial Operation of the Final Units;
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(C) no Default or Event of Default under the Common Agreement
or any other Financing Document has occurred and is continuing on and
as of the Date of Commercial Operation of the Final Units; and
(D) the Debt Service Reserve Account is fully funded on and as
of the Date of Commercial Operation of the Final Units to the extent
required under the Collateral Agency Agreement.
(d) (i) At any time on or prior to the Date of Commercial
Operation of the Final Units, if an Event of Default under the Common Agreement
has occurred and is continuing, the Collateral Agent is hereby authorized by
each Contributing Partner to make a drawing under such Contributing Partner's
Support Instrument or Support Instruments, in an amount equal to their
respective Contributing Partner's then current Contributing Partner's Support
Amount. Such amounts so drawn shall be deposited in the Construction Fund, and
shall be treated as equity contributions by the respective Contributing Partners
to the Partnership in the respective amounts so drawn and deposited.
(ii) Upon the occurrence of any Contributing Partner Event
of Default, on or prior to the Date of Commercial Operation of the Final Units,
the Collateral Agent is hereby authorized by the applicable Contributing Partner
to make a drawing under such Contributing Partner's Support Instrument or
Support Instruments, in an amount equal to such Contributing Partner's then
current Contributing Partner's Support Amount. Such amount so drawn shall be
deposited in the Construction Fund, and shall be treated as an equity
contribution by such Contributing Partner to the Partnership in the amount so
drawn and deposited.
(iii) All Equity Contributions hereunder shall be applied
in accordance with Section 3.1 of the Collateral Agency Agreement.
(e) Any amount which is not paid when due pursuant to this
Section 2 shall bear interest at a rate per annum equal to one per cent (1%)
plus the interest rate on the Bonds until paid in full.
(f) In the event that any of the Contributing Partners has
provided two or more Contributing Partner Support Instruments in fulfillment of
its obligations under this Section, drawings made by the Collateral Agent shall
be made (as the Contributing Partner shall elect) (i) by drawings on one of such
Contributing Partner Support Instruments until the earlier of (A) such time as
all amounts available under such Contributing Partner Support Instrument have
been drawn and (B) such time as the provider of such Contributing Partner
Support Instrument fails to make payment in accordance with the terms of such
Contributing Partner Support Instrument, and then, subject to the same
conditions, by drawings on the other Contributing Partner Support Instrument or
Support Instruments in turn or, (ii) ratably in accordance with the amounts
available thereunder, or, otherwise, in accordance with the express written
instructions of such Contributing Partner.
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SECTION 3. USE OF PROCEEDS OF EQUITY CONTRIBUTIONS.
The Partnership, each of the Contributing Partners and the Senior
Parties agree that the entire proceeds of the Equity Contributions made by the
Contributing Partners pursuant to Section 2 hereof will, upon their receipt by
the Collateral Agent, be applied to pay or reimburse the Partnership for the
payment of the Project Costs, whether matured or unmatured, in accordance with
the Financing Documents, and the Partnership, each of the Contributing Partners
and the Senior Parties hereby irrevocably instruct the Collateral Agent, upon
receipt of the proceeds of any Equity Contributions made by the Contributing
Partners pursuant to Section 2 hereof, to apply the entire proceeds of such
Equity Contributions to pay or reimburse the Partnership for the payment of the
Project Costs and any other amounts required to be paid in accordance with
Section 3.1 of the Collateral Agency Agreement and which are due and payable on
such date.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Each Contributing Partner hereby severally, on its own behalf,
represents and warrants to the Collateral Agent as to itself, that:
(a) ORGANIZATION; POWER; AND STATUS. It is (i) duly organized
and validly existing under the laws of the jurisdiction of its organization and
(ii) duly qualified to do business in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own, lease or hold its property and
to conduct the business in which it is now engaged or proposed to be engaged,
except where the failure to so qualify or have such power or authority would
not, singly or in the aggregate, have a Material Adverse Effect.
(b) AUTHORIZATION; ENFORCEABILITY; EXECUTION AND DELIVERY. (i)
It has full right, power and authority to execute and deliver this Agreement and
to perform its obligations hereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly taken.
(ii) This Agreement has been duly authorized, executed and
delivered by the Contributing Partner. This Agreement constitutes a valid and
legally binding obligation of the Contributing Partner enforceable against the
Contributing Partner in accordance with the terms hereof, except to the extent
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws affecting creditors' rights generally,
by general equitable principles (whether considered in a proceeding in equity or
at law).
(c) NO CONFLICTS; LAWS; AND CONTRACTS. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any of its property or assets pursuant to, any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to which
it is a party or by which it is bound or to which any of its property or assets
is subject, (ii) result in any violation
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of any statute or any judgment, order, decree, rule or regulation of any court
or arbitrator or governmental agency or body having jurisdiction.
(d) GOVERNMENTAL APPROVALS. Except to the extent that
noncompliance could not reasonably be expected to result in a Material Adverse
Effect, no Governmental Approval is required to authorize, or is required in
connection with, its execution, delivery and performance of this Agreement or
the taking of any action by it contemplated hereby.
(e) LITIGATION. There are no legal or governmental proceedings
pending or affecting it or any of its properties or assets which, singly or in
the aggregate, could reasonably be expected to have a Material Adverse Effect;
and to the best of its knowledge, no such proceedings are threatened by
governmental authorities or others.
SECTION 5. COVENANTS.
So long as any of its obligations under this Agreement is outstanding,
each Contributing Partner covenants and agrees with the Collateral Agent, as
follows:
(a) CORPORATE EXISTENCE. It shall (i) preserve and maintain
its legal existence, (ii) preserve and maintain all of its rights, privileges
and franchises, if any, necessary for the operation of its business and the
maintenance of its existence, and (iii) comply in all material respects with all
Applicable Laws, where in the case of clause (ii) and (iii) any failure to
comply would reasonably be expected to have a material adverse effect on its
ability to comply with its obligations under this Agreement.
(b) REPORTING REQUIREMENTS. It shall furnish (i) written
notice of any Contributing Partner Event of Default, specifically stating that a
Contributing Partner Event of Default has occurred and describing such
Contributing Partner Event of Default and any action being taken with respect to
such Contributing Partner Event of Default, and (ii) notice of the occurrence of
a material adverse change with respect to it.
(c) So long as any of its obligations under this Agreement is
outstanding and it is a party to this Agreement, each Contributing Partner
covenants and agrees with the Collateral Agent that it shall not enter into any
transaction of merger or consolidation, or change its form of organization or
its business or liquidate or dissolve itself (or suffer any liquidation or
dissolution) or transfer all or substantially all of its assets other than to an
Affiliate in accordance with Section 7 of this Agreement or as provided for in
the Common Agreement.
SECTION 6. EVENTS OF DEFAULT.
If any of the following events (each a "CONTRIBUTING PARTNER EVENT OF
DEFAULT") shall occur and be continuing:
(a) a Contributing Partner shall fail to make or cause to be
made any Equity Contribution when required pursuant to Section 2 of this
Agreement;
(b) a Bankruptcy Event in respect of a Contributing Partner
shall have occurred and be continuing; or
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(c) this Agreement shall at any time for any reason cease to
be valid and binding and in full force and effect or the validity or
enforceability thereof shall be contested by any Party or any Party (other than
the Collateral Agent) shall deny that it has any liability or obligation
hereunder;
then, at any time thereafter if a Contributing Partner Event of Default shall
then be continuing, the Collateral Agent may, and at the direction of the
Required Senior Parties shall, by notice to the Partnership, take any or all of
the following actions, without prejudice to the rights of the Collateral Agent
to enforce its claims against the Partnership, in respect of such Contributing
Partner Event of Default: (i) declare all Equity Contributions required by such
Contributing Partner under this Agreement to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Partnership and such
Contributing Partner, and (ii) exercise any other remedies against the
defaulting Contributing Partner available at law or in equity.
SECTION 7. TRANSFERS OF EQUITY CONTRIBUTION COMMITMENTS.
Each Contributing Partner agrees that it shall not directly or
indirectly transfer any of its obligations hereunder; PROVIDED, HOWEVER, that
(i) each Contributing Partner may, if such transfer is in accordance with the
Common Agreement and the Partnership Agreement, transfer its entire interest in
the Partnership to an Affiliate and be released from all of its obligations
under this Agreement so long as (A) such Affiliate assumes all of such
Contributing Partner's obligations under this Agreement, (B) such Affiliate
provides Substitute Support Instruments satisfactory to the Collateral Agent,
(C) any such transferee or transferees enter into a Contributing Partner
Assumption Agreement, and (D) Schedule 1 hereto is amended to substitute in lieu
of the name of the transferring Contributing Partner, the name of such
Affiliate; and (ii) each of TGI and TGILP may, if such transfer would not
conflict with the Common Agreement or the Partnership Agreement, transfer one or
more portions of its Contributing Partner Equity Contribution Commitment to one
or more other persons, and its obligations (including its Contributing Partner's
Equity Contribution Commitment) shall thereupon be reduced to the extent that
the transferee or transferees assume such obligations (including, to such
extent, such Contributing Partner's Equity Contribution Commitment and its
applicable Contributing Partner Support Instrument or Support Instruments) as
hereinafter provided, so long as (A) the transferee or transferees execute and
deliver a Contributing Partner Assumption Agreement specifying (x) the
respective amounts of the Contributing Partner's First Tranche Equity
Contribution Commitment and Second Tranche Equity Contribution Commitment being
assumed, and (y) the Contributing Partner First Tranche Percentage of the First
Tranche Support Amount and the Contributing Partner Second Tranche Percentage of
the Second Tranche Support Amount for which such Contributing Partner shall
thereafter be obligated, (B) such transferee or transferees provide Substitute
Support Instruments to the Collateral Agent and (C) the Partnership delivers to
the Collateral Agent a revised Schedule 1 dated the applicable Contributing
Partner Assumption Date, and reflecting the revised Contributing Partner First
Tranche Equity Contribution Commitments and Second Tranche Equity Contribution
Commitments for each Contributing Partner and the revised Contributing Partner
First Tranche Percentage and Contributing Partner Second Tranche Percentage for
each Contributing Partner, after giving effect to the Contributing Partner
Assumption Agreement; PROVIDED THAT, such Schedule 1 shall reflect (i)
Contributing Partners' First Tranche Equity Contribution Commitments which in
the aggregate are not less
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than $20,500,000, (ii) Contributing Partners' Second Tranche Equity Contribution
Commitments which in the aggregate are not less than $15,000,000, and (iii)
Contributing Partner First Tranche Percentages and Contributing Partner Second
Tranche Percentages which equal, in the case of each such tranche, 100%.
SECTION 8. OBLIGATIONS SEVERAL, ABSOLUTE, ETC.
Each Contributing Partner further covenants and agrees as follows:
(a) The obligations of each Contributing Partner to make its
Equity Contribution is a several obligation of each Contributing Partner and
shall not be affected by the failure of any other Contributing Partner to make
the Equity Contribution required by such other Contributing Partner. The several
obligations of each Contributing Partner to make, or cause to be made, Equity
Contributions pursuant to Section 2 of this Agreement constitute direct
obligations of each Contributing Partner to the Collateral Agent, and shall be
enforceable by the Collateral Agent.
(b) The several obligations of each of the Contributing
Partners to make, or cause to be made, Equity Contributions pursuant to Section
2 hereof are and shall be absolute and unconditional and are not, and shall not
be, subject to any defense or right of set-off, counterclaim, deduction,
diminution, abatement, recoupment, defense, suspension, deferment or reduction
or any other legal or equitable defense which such Party has or hereafter may
have, against any other Person (including the Partnership) for any reason
whatsoever (including, without limitation, any circumstance which constitutes,
or might be construed to constitute, an equitable or legal discharge of any or
all of the Partnership's obligations in bankruptcy or otherwise).
(c) To the extent permitted by Applicable Law, the obligations
of each Contributing Partner hereunder shall be absolute and unconditional,
shall remain in full force and effect, and shall not be released, discharged or
in any way affected, notwithstanding:
(i) any lack of validity, enforceability or value of
any Financing Documents or any other agreement or instrument relating
thereto or to any collateral therefor;
(ii) any change in the time, manner or place of
payment of, or in any other term of, the Financing Documents or any
amendment or waiver thereof, or any consent to departure from any of
those documents;
(iii) any failure to pay any taxes which may be
payable with respect to the performance of its obligations hereunder by
a Contributing Partner or failure to obtain any authorization or
approval from or other action by, or to notify or file with, any
Governmental Authority required in connection with the performance of
such obligations by a Contributing Partner;
(iv) any impossibility or impracticality of
performance, force majeure, any act of any government, or other
circumstance which might constitute a defense available to, or a
discharge of, a Contributing Partner, or any other circumstance, event
or
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happening whatsoever, whether foreseen or unforeseen and whether
similar or dissimilar to anything referred to above in this Section 8;
(v) any merger or consolidation of the Partnership or
a Contributing Partner into or with any other entity, or any sale,
lease or transfer of all or any of the assets of the Partnership or a
Contributing Partner to any other Person;
(vi) any change in the ownership in the Partnership;
or
(vii) to the fullest extent permitted by law, any
other circumstance which might otherwise constitute a defense available
to, or a discharge of, any of the Contributing Partners or the
Partnership.
(d) No Contributing Partner has any right, nor shall any
Contributing Partner have any right, to terminate this Agreement or to be
released, relieved or discharged (other than by full and strict compliance by it
with the terms hereof) from any obligation or liability hereunder for any reason
whatsoever.
(e) The obligations of each of the Contributing Partners
hereunder will be performed regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of the terms of the
Financing Documents or any other document related thereto or the rights of any
Person with respect thereto.
SECTION 9. WAIVER.
To the fullest extent permitted by Applicable Law, each Contributing
Partner hereby expressly waives diligence, presentment, demand for payment,
protest, benefit of any statute of limitations affecting the liability of the
Partnership under the Financing Documents, benefit of any act or omission by the
Collateral Agent which directly or indirectly results in or aids the discharge
of the Partnership by operation of law or otherwise, all notices relating to
this Agreement, including, without limitation, notice of acceptance of this
Agreement and the incurring of the obligation to make or to cause to be made any
payment hereunder and notice of any of the circumstances referred to in Section
7 hereof, and any requirement that the Collateral Agent exhaust any right,
power, or remedy, or proceed against the Partnership for the Equity
Contributions.
SECTION 10. CONTRIBUTING PARTNER SUPPORT INSTRUMENTS.
(a) Any payments made to the Collateral Agent under, or
pursuant to drawings on or from, a Contributing Partner Support Instrument shall
be deemed to be an Equity Contribution by the applicable Contributing Partner to
the Partnership and to satisfy, to the extent of such payment, the obligation of
such Contributing Partner to make the applicable Equity Contributions hereunder.
(b) At any time prior to the termination or reduction of a
Contributing Partner's obligations under this Agreement, such Contributing
Partner may deliver to the Collateral Agent a Substitute Support Instrument or
Substitute Support Instruments having a stated amount or combined stated
amounts, as the case may be, equal to the amount covered by any previously
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delivered Contributing Partner Support Instrument, in substitution for such
existing Contributing Partner Support Instrument. Upon such delivery, the
previously delivered Contributing Partner Support Instrument may be terminated
by the issuer thereof.
(c) Upon the earlier of (i) the termination or reduction of a
Contributing Partner's obligations under this Agreement or (ii) the delivery to
the Collateral Agent of a Substitute Support Instrument or Substitute Support
Instruments, pursuant to and in the amount specified in Section 10(b) above, the
Collateral Agent shall promptly return to the issuer thereof, with a copy to the
applicable Contributing Partner, the applicable Contributing Partner Support
Instrument or Support Instruments previously delivered to the Collateral Agent,
together with any certificate or other documentation that may be required to
effect the cancellation of such Contributing Partner Support Instrument or
Support Instruments.
(d) (i)Upon the request of a Contributing Partner and subject
to the receipt of the Support Account Documentation, as defined below, in form
and substance satisfactory to the Collateral Agent, the Collateral Agent shall
open with a bank or trust company an account in the name of such Contributing
Partner but under the sole dominion and control of the Collateral Agent (the
"Contributing Partner Support Account"). Any Cash Deposit by a Contributing
Partner and any Equity Contribution made upon the occurrence of an event set
forth in Section 10(e) shall be deposited in the Contributing Partner Support
Account (as provided therein). The Collateral Agent shall not withdraw funds
from the Contributing Partner Support Account except as provided in this Section
10(d). The term "Support Account Documentation" shall mean documentation in form
and substance reasonably satisfactory to the Collateral Agent which (A) grants
the Collateral Agent, for the benefit of the Senior Parties, a security interest
in any Cash Deposit or other amounts deposited in the Contributing Partner
Support Account and (B) contains the agreement of such Contributing Partner to
transfer additional cash to the Contributing Partner Support Account in the
event that the aggregate market value of the Permitted Investments (plus any
cash deposits) in such Contributing Partner Support Account is, at any time,
less than such Contributing Partner's Support Amount.
(ii) On each Equity Contribution Date, the Collateral Agent
shall withdraw an amount equal to the required Equity Contribution from such
Contributing Partner's Contributing Partner Support Account, and such withdrawal
shall be deemed to satisfy the obligation of such Contributing Partner to make,
or cause to be made, the related Equity Contribution hereunder. The Collateral
Agent shall apply all such withdrawn amounts to the satisfaction of amounts
owing as such Contributing Partner's Equity Contributions.
(iii) Amounts on deposit in any Contributing Partner Support
Account shall be invested and reinvested by the Collateral Agent, at the
direction, expense and risk of such Contributing Partner, in Permitted
Investments. If the amount on deposit in such Contributing Partner Support
Account exceeds the applicable Contributing Partner's Support Amount, an amount
equal to the amount of such excess shall be withdrawn at the end of each
calendar quarter by the Collateral Agent and the net amount thereof (after
giving effect to any broker commissions or other expenses of withdrawal or sale)
shall be paid to such Contributing Partner.
(iv) If, following a Cash Deposit by a Contributing Partner
into such Contributing Partner Support Account, such Contributing Partner shall
deliver a Substitute Support Instrument
12
<PAGE>
or Substitute Support Instruments in respect of an amount of such Cash Deposit
to the Collateral Agent, the Collateral Agent shall promptly withdraw and pay to
such Contributing Partner such amount (after giving effect to any broker
commissions or other expenses of withdrawal or sale).
(v) Upon the satisfaction or other termination of the
obligations of any Contributing Partner hereunder, the remaining balance, if
any, of such Contributing Partner Support Account shall be paid forthwith to
such Contributing Partner.
(e) If, at any time prior to the termination of this
Agreement, a Contributing Partner Support Instrument then in effect shall fail
to be renewed or extended in accordance with the terms of such Contributing
Partner Support Instrument fifteen (15) Business Days prior to the day upon
which such Contributing Partner Support Instrument is scheduled to expire or
terminate and such Contributing Partner shall have failed to furnish a
Substitute Support Instrument or Substitute Support Instruments in substitution
for such Contributing Partner Support Instrument, then the Collateral Agent
shall draw upon such Contributing Partner Support Instrument in accordance with
its terms prior to such expiration or termination date and shall deposit the
proceeds of any such drawing into such Contributing Partner Support Account;
provided that if no such Contributing Partner Support Account is then currently
in existence, the Collateral Agent shall hold such proceeds in a separate
account until such Contributing Partner Support Account is established in
accordance with Section 10(d)(i) and shall promptly deposit such proceeds in
such Contributing Partner Support Account upon its establishment.
(f) If, at any time prior to the termination of this
Agreement, the outstanding long-term senior unsecured debt of the bank providing
a Contributing Partner Support Instrument that is an Acceptable Letter of Credit
fails at any time to be rated at least "A-" or the equivalent by S&P or Moody's
(or in the case of an Acceptable Letter of Credit issued by The First National
Bank of Omaha, if the outstanding long-term senior unsecured debt of such bank
fails at any time to be rated at least "Baa2" by S&P or Moody's (such event, a
"Downgrade Event"), such Contributing Partner shall, within fifteen (15)
Business Days of its receipt of written notice from the Collateral Agent of the
occurrence of such event, furnish a Substitute Support Instrument in
substitution for such Support Instrument and if prior to the expiration of such
fifteen (15) day period, such Contributing Partner shall have failed to furnish
a Substitute Support Instrument, then the Collateral Agent shall draw upon the
Contributing Partner Support Instrument then in effect in accordance with its
terms and shall deposit the proceeds of such drawing into such Contributing
Partner's Support Account for application in accordance with the provisions of
Section 10(d); provided that if no such Contributing Partner Support Account is
then currently in existence, the Collateral Agent shall hold such proceeds in a
separate account until such Contributing Partner Support Account is established
in accordance with Section 10(d)(i) and shall promptly deposit such proceeds in
such Contributing Partner Support Account upon its establishment.
(g) Each Contributing Partner shall cause any Contributing
Partner Support Instrument that is an Acceptable Guaranty to be issued by a
parent company or other Affiliate of such Contributing Partner, which (i) is
rated Investment Grade by S&P and Moody's, and (ii) has net worth of not less
than $100,000,000. If, at any time prior to the termination of this Agreement,
the parent company or other Affiliate which issued the Acceptable Guaranty fails
at any time to be rated Investment Grade by S&P and Moody's or (ii) has net
worth of less than
13
<PAGE>
$100,000,000 (such event, a "Guaranty Downgrade Event"), such Contributing
Partner shall, within fifteen (15) Business Days of its receipt of written
notice from the Collateral Agent of the occurrence of such event, furnish a
Substitute Support Instrument in substitution for such Support Instrument and if
prior to the expiration of such fifteen (15) day period, such Contributing
Partner shall have failed to furnish a Substitute Support Instrument, then the
Collateral Agent shall draw upon the Contributing Partner Support Instrument
then in effect in accordance with its terms and shall deposit the proceeds of
such drawing into such Contributing Partner's Support Account for application in
accordance with the provisions of Section 10(d); provided that if no such
Contributing Partner Support Account is then currently in existence, the
Collateral Agent shall hold such proceeds in a separate account until such
Contributing Partner Support Account is established in accordance with Section
10(d)(i) and shall promptly deposit such proceeds in such Contributing Partner
Support Account upon its establishment.
SECTION 11. RESCISSION OF PAYMENT.
To the fullest extent permitted by Applicable Law and notwithstanding
any prior release or termination, this Agreement shall continue to be effective
or be reinstated, as the case may be, with respect to each Contributing Partner
if at any time any payment (or part thereof) made or caused to be made by a
Contributing Partner pursuant to this Agreement is rescinded or must otherwise
be restored or returned to such Contributing Partner or the Partnership by any
beneficiary of this Agreement upon the insolvency, bankruptcy or reorganization
of a Contributing Partner or the Partnership or otherwise, all as though such
payment had not been made or caused to be made.
SECTION 12. SEPARATE UNDERTAKINGS.
Without limiting the generality of any of the foregoing provisions of
this Agreement, each Contributing Partner irrevocably waives, to the fullest
extent permitted by Applicable Law and for the benefit of, and as a separate
undertaking with, the Collateral Agent, for the benefit of the Senior Parties,
any defense to the performance of this Agreement which may be available to it as
a consequence of this Agreement being rejected or otherwise not assumed by the
Partnership or any trustee or other similar official for the Partnership or for
any substantial part of the property of the Partnership, or as a consequence of
this Agreement being otherwise terminated or modified, in any proceeding seeking
to adjudicate the Partnership a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, protection, relief or composition of
the Partnership or the debts of the Partnership under any law relating to
bankruptcy, insolvency or reorganization or relief or protection of debtors,
whether such rejection, non-assumption, termination or modification be by reason
of this Agreement being held to be an executory contract or by reason of any
other circumstance. If this Agreement shall be so rejected or otherwise not
assumed, or so terminated or modified, each Contributing Partner agrees for the
benefit of, and as a separate undertaking with the Collateral Agent, for the
benefit of the Senior Parties, that it will be unconditionally liable to pay or
to cause to be paid to the Collateral Agent, for the benefit of the Senior
Parties, an amount equal to each payment which would otherwise be payable by it
pursuant to the provisions of this Agreement, or by such Party that it would
have caused to make payment, under or in connection with this Agreement if this
Agreement were not so rejected or otherwise not assumed or were otherwise not so
terminated or modified, such amount to be payable to the Collateral Agent, for
the benefit of the Senior Parties,
14
<PAGE>
in accordance with the instructions of the Collateral Agent, as and when such
payment would otherwise be payable hereunder and such amount to be applied as
such payment would otherwise be applied hereunder.
SECTION 13. NOTICES.
Any notice or other communication hereunder shall be given in the
manner set forth in the Collateral Agency Agreement to the Parties at the
addresses, phone numbers and fax numbers shown on Schedule 2, or in the case of
any Party, at such other address, phone number or fax number as such Party shall
provide in writing to each of the other Parties. At such time as any person
becomes a Contributing Partner, the Partnership shall provide to the Collateral
Agent a revised Schedule 2 which includes the address, phone number and fax
number of such Contributing Partner.
SECTION 14. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon each of the Parties and their
successors and inure to the benefit of the Collateral Agent and its respective
successors and permitted assigns as Collateral Agent under the Collateral Agency
Agreement. This Agreement may not be assigned by either Contributing Partner or
the Partnership; PROVIDED, HOWEVER, the obligations of the Contributing Partners
and the Partnership hereunder may be assigned as provided in Section 7 hereof or
otherwise with the prior express written consent of the Required Senior Parties.
SECTION 15. AMENDMENT, ETC.
No amendment or waiver of any provision of this Agreement nor any
consent to any departure by a Party herefrom shall in any event be effective
unless the same shall be in writing and signed by each Party, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure or delay on the part of the
Collateral Agent in exercising any right or remedy hereunder shall operate as a
waiver thereof nor shall any single or partial exercise of any power or right
preclude other or further exercise thereof or the exercise of any other right or
remedy.
SECTION 16. REMEDIES.
No remedy herein conferred upon or reserved to the Collateral Agent is
intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in
equity or by statute. In order to entitle the Collateral Agent to exercise any
remedy reserved to it in this Agreement, it shall not be necessary to give any
notice, other than such notice as may be expressly required by this Agreement.
No notice to or demand on a Contributing Partner in any case shall entitle such
Contributing Partner to any other or further notice or demand in the same or
similar circumstances. Each and every right and remedy of the Collateral Agent
shall, to the extent permitted by law, be cumulative and shall be in addition to
any other remedy given hereunder or under the Collateral Agency Agreement or any
other document now or hereafter existing at law or in equity or by statute.
15
<PAGE>
SECTION 17. HEADINGS.
The headings herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
SECTION 18. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW
PROVISIONS OF SUCH LAWS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK).
SECTION 19. CONSENT TO JURISDICTION.
To the fullest extent permitted by Applicable Law, with respect to any
legal action or proceeding against a Contributing Partner arising out of or in
connection with this Agreement, each Contributing Partner hereby irrevocably (i)
consents to the jurisdiction of any court of the State of New York or of the
United States of America located in The City of New York, (ii) consents to the
service of process outside the territorial jurisdiction of said courts in any
such action or proceeding by mailing copies thereof by registered United States
mail, postage prepaid, to the address specified pursuant to Section 13 hereof,
and (iii) waives any objection to the venue of the aforesaid courts and any
objection that the aforesaid courts are an inconvenient forum.
SECTION 20. WAIVER OF JURY TRIAL.
THE COLLATERAL AGENT, THE PARTNERSHIP AND EACH OF THE CONTRIBUTING
PARTNERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OTHER
FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 21. LIMITATION OF LIABILITY.
No Contributing Partner or other Person other than the Partnership (nor
any officer, employee, controlling Person, executive, director, agent,
authorized representative or affiliate of such Contributing Partner or other
Person shall be personally liable for payments due by the Partnership under the
Financing Documents or any other Transaction Document (other than as expressly
provided therein) or for the performance of any obligations thereunder (other
than as expressly provided therein).
SECTION 22. EXPENSES.
Each Contributing Partner will, upon demand, pay to the Collateral
Agent any and all reasonable expenses, including reasonable attorneys' fees and
expenses, which the Collateral Agent may incur in connection with the exercise
or enforcement of any of the rights or interests of the Collateral Agent against
such Contributing Partner hereunder.
16
<PAGE>
SECTION 23. COUNTERPARTS.
This Agreement may be executed by one or more of the Parties on any
number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
SECTION 24. SEVERABILITY.
If any provision of this Agreement shall be held or deemed to be or
shall, in fact, be illegal, inoperative or unenforceable, the same shall not
affect any other provision or provisions herein contained or render the same
invalid, inoperative or unenforceable to any extent whatever.
SECTION 25. TERMINATION.
This Agreement and the obligations hereunder shall terminate upon the
payment in full of all Equity Contributions required under this Agreement.
SECTION 26. SURVIVAL OF AGREEMENTS.
All covenants, agreements, representations and warranties in this
Agreement or in any certificate, instrument, document or other writing delivered
pursuant hereto shall survive the execution and delivery of this Agreement, and
all such covenants and agreements shall continue in full force and effect until
the obligations of the Parties have been finally paid and satisfied in full.
SECTION 27. ENTIRE AGREEMENT.
This Agreement and the other Financing Documents to which the Parties
are party, together with all schedules and exhibits hereto and thereto, contain
the full, final and exclusive statement of the agreement among the Partnership,
the Contributing Partners and the Collateral Agent relating to the transactions
contemplated hereby.
SECTION 28. FURTHER ASSURANCES.
The Parties agree to execute and deliver all such instruments and take
all such action as may be necessary to effectuate fully the purposes of this
Agreement.
17
<PAGE>
IN WITNESS WHEREOF, the Parties have each caused this Agreement to be
executed by its duly appointed representatives as of the date first written
above.
TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership
By: Tenaska Georgia, Inc.,
its Managing General Partner
By: /s/ Michael F. Lawler
-------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance & Treasurer
TENASKA GEORGIA, INC., a Delaware corporation
By: /s/ Ronald N. Quinn
-------------------------------
Name: Ronald N. Quinn
Title: Vice President
TENASKA GEORGIA I, L.P., a Delaware limited
partnership
By: Tenaska Georgia, Inc.,
its General Partner
By: /s/ Paul G. Smith
-------------------------------
Name: Paul G. Smith
Title: Vice President
THE CHASE MANHATTAN BANK, as Collateral Agent
By: /s/ Annette M. Marsula
-------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
<PAGE>
Schedule 1
<TABLE>
<CAPTION>
- ------------------- ----------------- ------------------ ----------------------- --------------------- --------------------
Contributing Contributing Contributing Contributing Partner Contributing Contributing
Partner Partner First Partner Second Equity Contribution Partner's First Partner's Second
Tranche Tranche Commitment Tranche Equity Tranche Equity
Percentage Percentage Contribution Contribution
Commitment Commitment
- ------------------- ----------------- ------------------ ----------------------- --------------------- --------------------
<S> <C> <C> <C> <C> <C>
Tenaska Georgia 99% 99% $35,145,000 $20,295,000 $14,850,000
I, L.P
- ------------------- ----------------- ------------------ ----------------------- --------------------- --------------------
Tenaska Georgia, 1% 1% $355,000 $205,000 $150,000
Inc.
- ------------------- ----------------- ------------------ ----------------------- --------------------- --------------------
Total 100% 100% $35,500,000 $20,500,000 $15,000,000
- ------------------- ----------------- ------------------ ----------------------- --------------------- --------------------
</TABLE>
2
<PAGE>
Schedule 2
If to Partnership, at:
Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
(Telephone): 402-691-9500
(Facsimile): 402-691-9550
If to TGI, at:
Tenaska Georgia, Inc.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
(Telephone): 402-691-9500
(Facsimile): 402-691-9550
If to TGILP, at:
Tenaska Georgia Partners I, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
Attention: Michael F. Lawler
(Telephone): 402-691-9500
(Facsimile): 402-691-9550
If to the Collateral Agent, at:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
(Telephone): 212-946-7557
(Facsimile): 212-946-8178
<PAGE>
EXHIBIT A
[The First National Bank Of Omaha Letterhead]
IRREVOCABLE STANDBY LETTER OF CREDIT
DATE: __________ __, 1999
LETTER OF CREDIT NUMBER: __________
BENEFICIARY:
THE CHASE MANHATTAN BANK, NEW YORK BRANCH
450 WEST 33rd STREET
NEW YORK, NY 10001
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. __________ ON
BEHALF OF [__________], 1044 NORTH 115TH STREET, SUITE 400, OMAHA, NE
68154-4446, FOR ANY SUM OR SUMS NOT EXCEEDING AN AGGREGATE TOTAL AMOUNT OF
*USD__,___,___* (__________ AND NO/100 U.S. DOLLARS) AVAILABLE UPON PRESENTATION
OF YOUR SIGHT DRAFTS AT THE FIRST NATIONAL BANK OF OMAHA, INTERNATIONAL
DEPARTMENT, 1620 DODGE STREET, OMAHA, NE 68102.
DRAFTS MUST BE ACCOMPANIED BY:
PRESENTATION OF:
1. A DRAFT IN THE FORM OF "EXHIBIT A" HERETO, DULY COMPLETED, EXECUTED AND
DELIVERED BY THE BENEFICIARY'S AUTHORIZED OFFICER; AND
2. A DRAWING CERTIFICATE ("DRAWING CERTIFICATE") IN THE FORM OF "EXHIBIT
B" HERETO, DULY COMPLETED, EXECUTED AND DELIVERED BY THE BENEFICIARY'S
AUTHORIZED OFFICER.
THE TERM "BENEFICIARY" INCLUDES ANY SUCCESSOR BY OPERATION OF LAW OF THE NAMED
BENEFICIARY, INCLUDING, WITHOUT LIMITATION, ANY LIQUIDATOR, REHABILITATOR,
RECEIVER OR CONSERVATOR. ALL OTHER CAPITALIZED TERMS USED HEREIN HAVE THE
MEANING SET FORTH IN THE EQUITY CONTRIBUTION AGREEMENT (THE "EQUITY CONTRIBUTION
AGREEMENT"), DATED AS OF NOVEMBER 1, 1999, BY AND AMONG TENASKA GEORGIA
PARTNERS, L.P., THE CONTRIBUTING PARTNERS THERETO AND THE BENEFICIARY, AS
COLLATERAL AGENT.
A-1
<PAGE>
NOTWITHSTANDING RULE [___] OF THE INTERNATIONAL STANDBY PRACTICES (ISP98), IF
THIS LETTER OF CREDIT EXPIRES DURING AN INTERRUPTION OF BUSINESS AS DESCRIBED IN
RULE [___], WE WILL EFFECT PAYMENT OF THE LETTER OF CREDIT IF DRAWN AGAINST
WITHIN 30 DAYS AFTER THE RESUMPTION OF BUSINESS.
PAYMENT WILL BE EFFECTED BY 5:00 P.M. THE SAME DAY THAT CONFORMING DOCUMENTS ARE
PRESENTED TO THE FIRST NATIONAL BANK OF OMAHA, INTERNATIONAL DEPARTMENT, 1620
DODGE STREET, OMAHA, NE 68102 IF RECEIVED PRIOR TO 1:00 P.M. LOCAL TIME.
THE DRAFTS DRAWN UNDER THIS LETTER OF CREDIT ARE TO BE ENDORSED HEREON AND MUST
BEAR THE CLAUSE "DRAWN UNDER THE FIRST NATIONAL BANK OF OMAHA LETTER OF CREDIT
NO. __________ DATED __________ __, 1999."
WE HEREBY AGREE WITH THE DRAWERS, ENDORSERS AND BONA FIDE HOLDERS OF DRAFTS
DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT THAT THE
SAME SHALL BE DULY HONORED ON DUE PRESENTATION IF DRAWN AND NEGOTIATED ON OR
BEFORE __________ __, ____. DRAFTS MUST BE PRESENTED TO THE FIRST NATIONAL BANK
OF OMAHA, INTERNATIONAL DEPARTMENT, 1620 DODGE STREET, OMAHA, NE 68102 BY 5:00
PM LOCAL TIME.
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING, AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE
TO ANY NOTE, DOCUMENT, INSTRUMENT OR AGREEMENT REFERRED TO HEREIN OR IN WHICH
THIS LETTER OF CREDIT IS REFERRED TO OR TO WHICH THIS LETTER OF CREDIT RELATES
AND ANY SUCH REFERENCE SHALL NOT BE DEEMED TO BE INCORPORATED HEREIN BY
REFERENCE TO ANY NOTE, DOCUMENT OR AGREEMENT.
IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT IS DEEMED TO BE AUTOMATICALLY
EXTENDED WITHOUT AMENDMENT FOR 12 MONTHS FROM THE EXPIRY DATE HEREOF, OR ANY
FUTURE EXPIRATION DATE, UNLESS 90 DAYS PRIOR TO ANY EXPIRATION DATE, WE NOTIFY
YOU BY REGISTERED MAIL OR COURIER SERVICE THAT WE ELECT NOT TO CONSIDER THIS
LETTER OF CREDIT RENEWED FOR ANY SUCH ADDITIONAL PERIOD. IN THAT EVENT, YOU MAY
DRAW HEREUNDER ON OR PRIOR TO THE THEN RELEVANT EXPIRATION DATE, UP TO THE FULL
AMOUNT THEN AVAILABLE HEREUNDER, AGAINST YOUR SIGHT DRAFT(S) ON US, BEARING THE
NUMBER OF THIS LETTER OF CREDIT.
THE ORIGINAL LETTER OF CREDIT AND ALL AMENDMENTS MUST BE PRESENTED WITH EACH
DRAWING OR WHEN CANCELING THE LETTER OF CREDIT PRIOR TO THE EXPIRY DATE.
A-2
<PAGE>
EXCEPT SO FAR AS OTHERWISE STATED, THIS LETTER OF CREDIT IS SUBJECT TO THE
INTERNATIONAL STANDBY PRACTICES (ISP98) PUBLISHED BY THE INTERNATIONAL CHAMBER
OF COMMERCE, WHICH ARE IN EFFECT AT THE TIME OF ISSUANCE OF THE LETTER OF
CREDIT.
THE FIRST NATIONAL BANK OF OMAHA
--------------------------------
AUTHORIZED SIGNATURE
<PAGE>
ANNEX A
SIGHT DRAFT
DATE:
TO: THE FIRST NATIONAL BANK OF OMAHA
(AS THE ISSUER OF THE LETTER OF CREDIT REFERENCED BELOW
INTERNATIONAL DEPARTMENT
1620 DODGE STREET
OMAHA, NE 68102
RE: DRAWN UNDER THE FIRST NATIONAL BANK OF OMAHA
IRREVOCABLE LETTER OF CREDIT NO. __________ DATED ____________
ON SIGHT
PAY TO THE CHASE MANHATTAN BANK, NEW YORK BRANCH, AS THE COLLATERAL
AGENT UNDER THE EQUITY CONTRIBUTION AGREEMENT, DATED AS OF NOVEMBER 1,1999, BY
AND AMONG TENASKA GEORGIA PARTNERS, L.P., THE CONTRIBUTING PARTNER PARTY
THERETO, AND THE CHASE MANHATTAN BANK, A NATIONAL ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, ACTING THROUGH ITS NEW YORK
BRANCH, AS COLLATERAL AGENT (THE "COLLATERAL AGENT") FOR THE SENIOR PARTIES
UNDER AND AS DEFINED IN THE COMMON AGREEMENT, DATED AS OF NOVEMBER 1,1999, BY
AND AMONG TENASKA GEORGIA PARTNERS, L.P., THE TRUSTEE, THE DSR LOC AGENT, THE
PPA LOC AGENT, THE WORKING CAPITAL LINE FACILITY PROVIDER AND THE COLLATERAL
AGENT, IN IMMEDIATELY AVAILABLE FUNDS __________ U.S. DOLLARS (U.S.$__________)
BY 5:00 P.M. NEBRASKA TIME, ON THE DATE HEREOF, IF THIS SIGHT DRAFT IS PRESENTED
PRIOR TO 1:00 P.M., NEBRASKA TIME, PURSUANT TO IRREVOCABLE LETTER OF CREDIT NO.
__________ OF THE FIRST NATIONAL BANK OF OMAHA, AND OTHERWISE BY 5:00 P.M.
NEBRASKA TIME, ON THE NEXT BUSINESS DATE AFTER THE DATE HEREOF.
THE CHASE MANHATTAN BANK,
NEW YORK BRANCH
BY: ___________________________________
NAME:
TITLE:
Annex A-1
<PAGE>
ANNEX B
DRAWING CERTIFICATE
In connection with the proposed drawing in the amount of $__________ under The
First National Bank of Omaha Irrevocable Standby Letter of Credit No.___________
(the "LETTER OF CREDIT") issued for the account of [__________], the undersigned
authorized officer of The Chase Manhattan Bank, New York Branch, as Collateral
Agent (the "BENEFICIARY") hereby certifies that:
1. [This Drawing Certificate, as executed, must contain one, but only
one, of the three alternative paragraphs set forth below:]
Alternative 1: The foregoing amount represents all or a portion of
a Contributing Partner Equity Contribution (as defined in the
Equity Contribution Agreement (the "AGREEMENT"), dated as of
November 1, 1999, by and among Tenaska Georgia Partners, L.P., the
Contributing Partner Party thereto and the Beneficiary, as
Collateral Agent), from [__________], which is currently due and
payable to the Beneficiary under the Agreement in accordance with
its terms and has not been paid.
OR
Alternative 2: The Letter of Credit no longer qualifies as an
Acceptable Letter of Credit (as defined in the Agreement) and
[__________] has not furnished a Substitute Support Instrument (as
defined in the Agreement) in substitution for the Letter of
Credit.
OR
Alternative 3: The Letter of Credit will expire within fifteen
(15) Business Days and [__________] has not furnished a Substitute
Support Instrument (as defined in the Agreement) in substitution
for the Letter of Credit and as a consequence thereof the amount
of $[__,___,___] is due and payable.
2. The amount of the drawing to be made hereunder does not exceed the
amount of the Contributing Partner Equity Contribution which is
due and payable on the Date of Commercial Operation of the Final
Units by [__________] to the Beneficiary pursuant to the Agreement
and has not been paid.
Annex B-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed and delivered this Drawing
Certificate as of this _____ day of __________, ____.
The Chase Manhattan Bank,
New York Branch
BY: ______________________________
Name:
Title:
Annex B-2
<PAGE>
Exhibit B
FORM OF GUARANTY
GUARANTY (this "GUARANTY"), dated as of ___________ ____, 1999, by [ ],
a [ ] (the "GUARANTOR"), in favor of [The Chase Manhattan Bank, a Delaware
corporation, in its capacity as Collateral Agent under the Collateral Agency
Agreement hereinafter referred to] ("GUARANTEED PARTY"), pursuant to the Equity
Contribution Agreement, dated as of [ ] by and among the Tenaska Georgia
Partners, L.P., the Contributing Partners Party thereto and the Guaranteed Party
and the Assignment and Assumption Agreement dated as of [ ] by and among [ ] and
[Contributing Partner] a [subsidiary/affiliate] of Guarantor (the "CONTRIBUTING
PARTNER") (the "Equity Contribution Agreement"). Capitalized terms used herein,
but not otherwise defined herein, shall have the respective meanings ascribed to
such terms in the Equity Contribution Agreement.
RECITALS
WHEREAS, the Guarantor is willing to provide this Guaranty to the
Guaranteed Party, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the above premise and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be bound hereby, the Guarantor agrees as follows:
Section 1. OBLIGATIONS OF GUARANTOR. Subject to the Guaranty Cap set
forth in Section 2 of this Guaranty, the Guarantor unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, to and for
the benefit of the Guaranteed Party, the prompt payment when due of all present
and future obligations of the Contributing Partner under or pursuant to the
Equity Contribution Agreement (the obligations referred to above, collectively
and individually, the "OBLIGATIONS"). Subject to the Guaranty Cap set forth in
Section 2 of this Guaranty, the Guarantor agrees, that upon the failure of the
Contributing Partner to pay any of the Obligations when they become due, the
Guarantor will pay, or cause to be paid, to the Guaranteed Party any and all
such unpaid Obligations.
Section 2. MAXIMUM GUARANTEED AMOUNT. The aggregate liability of the
Guarantor under this Guaranty (except, in each case, for liability under Section
6(b)) and the Guaranteed Party's right of recovery hereunder is limited to a
total aggregate amount equal to the "Guaranty Cap." The Guaranty Cap will be [
], which Guaranty Cap shall be reduced immediately upon the payment of any
amounts paid by the Guarantor under this Guaranty or by the Contributing Partner
under the Equity Contribution Agreement in the amount of such payment.
Section 3. NATURE OF OBLIGATIONS. The Guarantor guarantees that the
Obligations shall be performed strictly in accordance with the terms of the
Equity Contribution Agreement, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Guaranteed Party with respect thereto. The duties of the
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<PAGE>
Guarantor under this Guaranty are independent of the Obligations, and a separate
action or actions may be brought and prosecuted against the Guarantor to enforce
this Guaranty, irrespective of whether any action is brought against the
Contributing Partner or whether the Contributing Partner is joined in any such
action or actions. The Guaranteed Party shall not be obligated to file any claim
relating to the Obligations if the Contributing Partner becomes subject to a
bankruptcy, reorganization or similar proceeding, and neither the failure of the
Guaranteed Party to so file, nor the existence of any such proceeding, shall
affect the Guarantor's obligations hereunder with respect to Obligations arising
either before or after the commencement of such proceedings. The liability of
the Guarantor under this Guaranty as specified in Section 1 of this Guaranty
shall, to the fullest extent permitted by law, be absolute and unconditional
irrespective of:
(a) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to departure from the Equity
Contribution Agreement including, without limitation, any increase in
the Obligations; provided, however, no action taken pursuant to this
Section 3(a) shall be construed to increase the amount of the Guaranty
Cap;
(b) any manner of sale or other disposition of the stock in or
the assets of the Contributing Partner or any of its affiliates;
(c) any change, restructuring or termination of the structure
or existence of the Contributing Partner, the Guarantor or any of their
affiliates;
(d) or any other circumstance which might otherwise constitute
an equitable defense available to, or a discharge of, the Guarantor or
any other surety, or any other guarantor of the Contributing Partner.
The Guarantor shall not contest the amount, the Guaranteed Party's
right to collect, or the Guaranteed Party's collection of, the Obligations (as
they may be revised from time to time as provided for herein) in any future
proceeding including, without limitation, civil, criminal, regulatory,
administrative, judicial, equitable or appellate, on the basis that the
Obligations constitute a penalty, are or will result in a forfeiture, or are
otherwise unlawful.
The Guarantor agrees that the obligations of the Guarantor set forth in
this Guaranty shall be direct obligations of the Guarantor, and such obligations
shall be absolute and unconditional and shall not be subject to any
counterclaim, set-off, deduction, diminution, abatement, recoupment, suspension,
deferment, reduction or defense (other than as set forth in the Equity
Contribution Agreement or full and strict compliance by the Guarantor with its
obligations hereunder) based upon any claim the Guarantor may have against the
Guaranteed Party or the Contributing Partner. This Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Obligations is rescinded or must otherwise be returned upon the
insolvency, bankruptcy or reorganization of the Contributing Partner or
otherwise, all as though such payment had not been made.
Section 4. WAIVER. The Guarantor hereby waives any requirement that the
Guaranteed Party exhaust any right or take any action against the Contributing
Partner or any other person.
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Section 5. SUBROGATION. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation under this Guaranty, by any payment
made hereunder or otherwise, until all Obligations and all other amounts payable
under the Equity Contribution Agreement shall have been paid in full to the
Guaranteed Party. If any amount shall be paid to the Guarantor on account of any
subrogation rights at any time prior to the payment in full of the Obligations
and all other amounts payable under this Guaranty, such amount(s) shall be paid
immediately to the Guaranteed Party to be credited and applied to the
Obligations, whether matured or unmatured, in accordance with the terms hereof
and the Equity Contribution Agreement. Upon full performance and payment of the
Obligations and all other amounts payable under the Equity Contribution
Agreement, the Guarantor shall be subrogated to the rights of the Guaranteed
Party, and the Guaranteed Party shall take all such reasonable actions, at the
Guarantor's sole expense, as Guarantor shall reasonably request to effect such
subrogation rights.
Section 6. CERTAIN RIGHTS AND POWERS OF THE GUARANTEED PARTY;
ENFORCEMENT COSTS AND INTEREST. (a) The Guaranteed Party shall have all of the
rights and remedies available under applicable law and may proceed by
appropriate court action to enforce the terms hereof and to recover damages for
the breach hereof. Each and every remedy of the Guaranteed Party shall, to the
extent permitted by law, be cumulative and shall be in addition to any other
remedy now or hereafter existing at law or in equity. At the option of the
Guaranteed Party and upon notice to the Guarantor, the Guarantor may be joined
in any action or proceeding commenced by the Guaranteed Party against the
Contributing Partner in respect of any Obligation and recovery may be had
against the Guarantor in such action or proceeding or in any independent action
of proceeding against the Guarantor, without any requirement that the Guaranteed
Party first assert, prosecute or exhaust any remedy or claim against the
Contributing Partner.
(b) The Guarantor will, upon demand, pay or cause payment to
be made to the Guaranteed Party the amount of any and all reasonable
out-of-pocket expenses which the Guaranteed Party may incur in connection with
the exercise or enforcement of any of the rights of the Guaranteed Party
hereunder. If any amount is not paid when due under this Guaranty, such amount
shall bear interest from the date due until paid in full at the prime rate (or
the equivalent) of interest publicly announced by the Guaranteed Party, plus two
percent per annum. Amounts payable by the Guarantor under this Section 6(b) are
not subject to the Guaranty Cap of Section 2.
Section 7. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to the Guaranteed Party as follows:
(a) ORGANIZATION; POWER; AND STATUS. It is (i) duly organized
and validly existing under the laws of the jurisdiction of its organization and
(ii) duly qualified to do business in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own, lease or hold its property and
to conduct the business in which it is now engaged or proposed to be engaged,
except where the failure to so qualify or have such power or authority would
not, singularly or in the aggregate, have a Material Adverse Effect.
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<PAGE>
(b) AUTHORIZATION; ENFORCEABILITY; EXECUTION AND DELIVERY. (i)
It has full right, power and authority to execute and deliver this Guaranty and
to perform its obligations hereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of this Guaranty and
the consummation of the transactions contemplated hereby has been duly and
validly taken.
(ii) This Guaranty has been duly authorized, executed and
delivered by the Guarantor. This Guaranty constitutes a valid and legally
binding obligation of the Guarantor enforceable against the Guarantor in
accordance with the terms hereof, except to the extent limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other laws affecting creditors' rights generally, by general equitable
principles (whether considered in a proceeding in equity or at law).
(c) NO CONFLICTS; LAWS; AND CONTRACTS. The execution, delivery
and performance of this Guaranty and the consummation of the transactions
contemplated hereby will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any of its property or assets pursuant to, any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to which
it is a party or by which it is bound or to which any of its property or assets
is subject, (ii) result in any violation of any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or governmental agency or
body having jurisdiction..
(d) GOVERNMENTAL APPROVALS. Except to the extent that
noncompliance could not reasonably be expected to result in a Material Adverse
Effect, no Governmental Approval is required to authorize, or is required in
connection with, its execution, delivery and performance of this Guaranty or the
taking of any action by it contemplated hereby.
(e) LITIGATION. There are no legal or governmental proceedings
pending or affecting it or any of its properties or assets which, singly or in
the aggregate, could reasonably be expected to have a Material Adverse Effect;
and to the best of its knowledge, no such proceedings are threatened by
governmental authorities or others.
Section 8. COVENANTS. The Guarantor covenants and agrees that, so long
as any part of the Obligations shall remain unperformed or unpaid, the Guarantor
shall:
(a) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain its corporate existence and preserve its material rights, franchises
and privileges to conduct its business substantially as conducted on the date
hereof, except where the failure to do so would not reasonably be expected to
have a Material Adverse Effect.
(b) COMPLIANCE WITH LAWS, ETC. Comply with all Applicable Laws
and Governmental Approvals, non-compliance with which would have a material
adverse effect on its ability to perform its obligations herein, except laws,
rules, regulations and orders being contested in good faith.
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<PAGE>
(c) MERGERS, ETC. Not merge with any person, corporation,
partnership, or other entity unless: (i) the surviving and resulting entity
agrees in writing to be bound hereby to the same extent as the Guarantor, and
(ii) immediately after giving effect thereto, no event of default or breach of
this Guaranty shall have occurred and be continuing.
Section 9. NO WAIVER. No failure on the part of the Guaranteed Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver hereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.
Section 10. CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall (i) remain in full force and effect from the time of execution and
delivery of the Equity Contribution Agreement until the payment in full of all
Obligations and all amounts payable under this Guaranty, (ii) be binding upon
the Guarantor, its successors and assigns, and (iii) inure to the benefit of,
and be enforceable by, the Guaranteed Party and its successors, transferees and
assigns.
Section 11. WAIVER OF NOTICES. The Guarantor hereby unconditionally and
irrevocably waives all notices to and demands upon the Contributing Partner or
the Guarantor and all other formalities, the omission of any of which or delay
in performance of which, might, but for the provisions of this paragraph, by
rule of law, under equitable principles or otherwise, constitute grounds for
relieving or discharging the Guarantor in whole or in part from its obligations
hereunder.
Section 12. NO CONSEQUENTIAL DAMAGES. In the absence of bad faith or
willful misconduct by the Guarantor, the Guarantor shall not be liable to the
Guaranteed Party under this Guaranty or otherwise for any exemplary,
consequential, special, or punitive losses or damages that may be incurred by
the Guaranteed Party as a result of the Guarantor's execution of and performance
under this Guaranty.
Section 13. FURTHER ASSURANCES. The Guarantor, at is sole cost and
expense, shall cause to be promptly and duly taken, executed, acknowledged and
delivered, such further documents and instruments as the Guaranteed Party may
from time to time reasonably request in order to carry out more effectively the
intent and purposes of this Guaranty.
Section 14. SEVERABILITY. If any provision of this Guaranty shall be
held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative or unenforceable to any
extent whatsoever.
Section 15. COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed
in any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument. The
effective date of this Guaranty for all purposes shall be the date specified on
page one (1) above.
Section 16. AMENDMENT; WAIVER; REQUIREMENT OF WRITING. This Guaranty
cannot be amended, changed, modified, released or discharged except by a writing
signed by the party against whom enforcement of the amendment, change,
modification or waiver is sought.
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Section 17. ADDRESS FOR NOTICES. Any notice, request, consent, waiver
or other communication required or permitted hereunder shall be effective only
if it is in writing and personally delivered or sent by certified or registered
mail, postage prepaid, or by nationally recognized overnight courier, addressed
as set forth below:
If to the Guaranteed Party:
If to the Collateral Agent, at:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 W. 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
(Telephone): 212-946-7557
(Facsimile): 212-946-8178
If to Guarantor:
[ ]
or to such other person or address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice or communication
shall be deemed to have been given as of the date received by the recipient
thereof.
Section 18. GOVERNING LAW. This Guaranty shall be construed in
accordance with and governed by the laws of the State of New York without regard
to the conflict of laws provisions of such laws that could result in the
application of laws of any jurisdiction other that the State of New York.
Section 19. ASSIGNMENT. The Guaranteed Party may not assign this
Guaranty, other than to a financial institution which succeeds the Guaranteed
Party as Collateral Agent under the Collateral Agency Agreement and any
purported assignment shall be void and ineffective
IN WITNESS WHEREOF, the Guarantor and the Guaranteed Party have each
caused this Guaranty to be executed on its behalf by its duly authorized officer
as of the date shown above.
[ ]
as Guarantor
By:
------------------------
Name:
Title:
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<PAGE>
Exhibit C
FORM OF CONTRIBUTING PARTNER ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT, (this "Agreement") is made as
of ___________, by [ ]("Assuming Contributing Partner") and [TGI and/or TGILP].
Capitalized terms used herein and not defined have the meanings
ascribed thereto in that certain Equity Contribution Agreement dated as of
November 1, 1999 by and among Tenaska Georgia Partners, L.P, the Contributing
Partners party thereto and The Chase Manhattan Bank (the "Equity Contribution
Agreement").
WHEREAS, each of Tenaska Georgia, Inc. ("TGI") and Tenaska Georgia I,
L.P. ("TGILP")(each, a "PARTNER" and, collectively, with any other persons who
become partners in the Partnership the "PARTNERS") is a partner in the
Partnership pursuant to the Partnership Agreement dated as of [ ] (the
"Partnership Agreement");
WHEREAS, under the Partnership Agreement, other persons may become
partners of the Partnership pursuant to the Partnership Agreement;
WHEREAS [TGI and/or TGILP] wishes to transfer a portion of [its/their
respective] interest in the Partnership to Assuming Contributing Partner, and
[TGI's and/or TGILP's] obligations (including [its/their respective]
Contributing Partner's Equity Contribution Commitments (as defined in the Equity
Contribution Agreement) shall thereupon be reduced.
WHEREAS Assuming Contributing Partner shall assume such obligations
(including the relevant Contributing Partner's Equity Contribution Commitments).
NOW, THEREFORE, in consideration of the foregoing, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assuming Contributing Partner agrees as follows:
Section 1. ASSIGNMENT BY [TGI/TGILP]. [TGI and/or TGILP] assigns to
Assuming Contributing Partner:
[Specify $ amounts of First Tranche Equity Contribution Commitment and Second
Tranche Equity Contribution Commitment being assigned by each of TGI/TGILP]
[Specify First Tranche Percentage and Second Tranche Percentage being
transferred from TGI/TGILP]
Section 2. ASSUMPTION BY ASSUMING CONTRIBUTING PARTNER. (a) Assuming
Contributing Partner hereby assumes and agrees to be bound by the Equity
Contribution Agreement as if a party thereto, including but not limited to its
share of all payment obligations whatsoever, and to
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<PAGE>
undertake and perform all other obligations. Without limiting the generality of
the foregoing, Assuming Contributing Partner agrees to (x) make Equity
Contributions to the Partnership in an aggregate amount equal to $_______, such
amount being the Assuming Contributing Partner's Contributing Partner Equity
Contribution Commitment, consisting of $ __________ of First Tranche Equity
Contribution Commitment and $ _______ of Second Tranche Equity Contribution
Commitment, (y) to pay ___% (the "Contributing Partner's First Tranche
Percentage") of the First Tranche Support Amount, and ___ % (the "Contributing
Partner's Second Tranche Percentage") of the Second Tranche Support Amount, and
(z) provide Substitute Support Instruments to the Collateral Agent.
(b) This Agreement shall become effective at such time as all
of the following conditions shall have been fulfilled: (i) this Agreement shall
have been executed and delivered by the parties hereto: (ii) the Assuming
Contributing Party shall have presented its Substitute Support Instrument being
First Tranche Contributing Partner Support Instrument to the Collateral Agent
and the Collateral Agent shall have accepted the same; (iii) revised Schedule 1
reflecting the assignments and assumptions herein provided shall have been
prepared by the Partnership and submitted to the Collateral Agent in
substitution for the existing Schedule 1 and (iv) revised Schedule 2 reflecting
the notice details of the Assuming Contributing Partner shall have been prepared
by the Partnership and submitted to the Collateral Agent in substitution for the
existing Schedule 2.
Section 3. REPRESENTATIONS AND WARRANTIES. Assuming Contributing
Partner represents and warrants that:
(a) ORGANIZATION; POWER; AND STATUS. It is (i) duly organized
and validly existing under the laws of the jurisdiction of its organization and
(ii) duly qualified to do business in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own, lease or hold its property and
to conduct the business in which it is now engaged or proposed to be engaged,
except where the failure to so qualify or have such power or authority would
not, singularly or in the aggregate, have a Material Adverse Effect.
(b) AUTHORIZATION; ENFORCEABILITY; EXECUTION AND DELIVERY. (i)
it has full right, power and authority to execute and deliver this Agreement and
to perform its obligations hereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby has been duly and
validly taken.
(ii) This Agreement has been duly authorized, executed and
delivered by the Partnership. This Agreement constitutes a valid and legally
binding obligation of the Assuming Contributing Partner enforceable against the
Assuming Contributing Partner in accordance with the terms hereof, except to the
extent limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws affecting creditors' rights generally,
by general equitable principles (whether considered in a proceeding in equity or
at law).
(c) NO CONFLICTS; LAWS; AND CONTRACTS. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby
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<PAGE>
will not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of its property or
assets pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject, (ii)
result in any violation of any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction.
(d) GOVERNMENTAL APPROVALS. Except to the extent that
noncompliance could not reasonably be expected to result in a Material Adverse
Effect, no Governmental Approval is required to authorize, or is required in
connection with, its execution, delivery and performance of this Agreement or
the taking of any action by it contemplated hereby.
(e) LITIGATION. There are no legal or governmental proceedings
pending or affecting it or any of its properties or assets which, singly or in
the aggregate, could reasonably be expected to have a Material Adverse Effect;
and to the best of its knowledge, no such proceedings are threatened by
governmental authorities or others.
Section 4. BINDING UPON SUCCESSORS. All agreements, covenants,
conditions and provisions of this Agreement shall be binding upon and inure to
the benefit of the successors and assigns of each of the parties hereto.
Assuming Contributing Partner may not assign or otherwise transfer all or any
part of its obligations or rights hereunder, except in accordance with the
provisions of the Equity Contribution Agreement.
Section 5. GOVERNING LAW; VENUE; WAIVER OR JURY TRIAL. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PROVISIONS
OF SUCH LAWS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK).
(b) THE COLLATERAL AGENT, THE PARTNERSHIP AND THE ASSUMING
CONTRIBUTING PARTNER HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY
OTHER FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(c) To the fullest extent permitted by applicable law, with
respect to any legal action or proceeding against the Assuming Contributing
Partner arising out of or in connection with this Agreement, the Assuming
Contributing Partner hereby irrevocably (i) consents to the jurisdiction of any
court of the State of New York or of the United States of America located in The
City of New York, (ii) consents to the service of process outside the
territorial jurisdiction of said courts in any such action or proceeding by
mailing copies thereof by registered United States mail, postage prepaid, to the
address specified pursuant to Schedule 2 of the Equity Contribution Agreement,
and (iii) waives any objection to the venue of the aforesaid courts and any
objection that the aforesaid courts are an inconvenient forum.
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<PAGE>
Section 6. SEVERABILITY. Every provision of this Agreement is intended
to be severable. If any term or provision hereof is declared by a court of
competent jurisdiction to be illegal, invalid or unenforceable for any reason
whatsoever, such illegality, invalidity or unenforceability shall not affect the
other terms and provisions hereof, which terms and provisions shall remain
binding and enforceable, and to the extent possible all of such other provisions
shall remain in full force and effect.
Section 7. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be executed by their duly authorized officers on the date first written
above.
[ ]
By: _______________________________
Name:
Title:
Accepted by:
The Chase Manhattan Bank,
as Collateral Agent
By: __________________________________
Name:
Title:
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<PAGE>
Exhibit 4.26
EXECUTION COPY
================================================================================
AGREEMENT AS TO CERTAIN UNDERTAKINGS, COMMON REPRESENTATIONS,
WARRANTIES, COVENANTS AND OTHER TERMS
among
TENASKA GEORGIA PARTNERS, L.P.,
THE CHASE MANHATTAN BANK, as
Trustee,
THE TORONTO-DOMINION BANK, as
DSR LOC Agent,
THE TORONTO-DOMINION BANK, as
PPA LOC Agent,
and
THE CHASE MANHATTAN BANK, as
Collateral Agent
Dated as of November 1, 1999
Relating to the Tenaska Georgia Partners, L.P. Project
to be located in Heard County, Georgia
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1 Definitions and Principles of Construction....................................3
ARTICLE II
CLOSING
Section 2.1 Time and Place of Closing.....................................................3
Section 2.2 Transactions on Closing Date..................................................3
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to the Occurrence of the Closing Date and the Initial
Disbursement..................................................................4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Partnership.............................9
ARTICLE V
COVENANTS
Section 5.1 Affirmative Covenants of the Partnership.....................................13
Section 5.2 Negative Covenants of the Partnership........................................18
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default............................................................21
Section 6.2 Remedies Upon an Event of Default............................................23
i
<PAGE>
ARTICLE VII
INDEMNIFICATION AND CONTRIBUTION
Section 7.1 Indemnification and Contribution.............................................24
Section 7.2 Procedure for Indemnification Claims.........................................24
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Survival.....................................................................25
Section 8.2 Notices......................................................................25
Section 8.3 Severability of Provisions...................................................27
Section 8.4 Amendments, Waivers, Etc.....................................................27
Section 8.5 Headings; Table of Contents..................................................27
Section 8.6 Counterparts.................................................................27
Section 8.7 Governing Law; Submission to Jurisdiction; Venue.............................27
Section 8.8 Entire Agreement.............................................................28
Section 8.9 Benefit of Agreement.........................................................28
Section 8.10 Expenses.....................................................................28
Section 8.11 Removal of Independent Engineer; Payment of Independent Engineer.............28
Section 8.12 Third Party Engineer Dispute Resolution......................................29
Section 8.13 Waiver of Litigation Payments................................................30
Section 8.14 Recitals.....................................................................31
Section 8.15 Immunity of Officers and Employees of Trustee, DSR LOC Agent, PPA LOC
Agent, Collateral Agent and Depositary Bank..................................31
Section 8.16 No Recourse..................................................................31
</TABLE>
ii
<PAGE>
APPENDICES
Appendix A Definitions
Appendix B Insurance Requirements
SCHEDULES
Schedule 3.1(d) The Facility Site
Schedule 3.1(l) Form of Approved Project Construction Budget
Schedule 3.1(m) Base Case Projections
Schedule 3.1(o) Environmental Matters
Schedule 3.1(t) Consents to Assignment
Schedule 8.11 Independent Engineers
EXHIBITS
Exhibit 5.1(r). Certificate of the Partnership
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<PAGE>
THIS AGREEMENT AS TO CERTAIN UNDERTAKINGS, COMMON REPRESENTATIONS,
WARRANTIES, COVENANTS AND OTHER TERMS, dated as of November 1, 1999 (this
"AGREEMENT"), among TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership (the "PARTNERSHIP"), THE TORONTO-DOMINION BANK, acting as agent on
behalf of the DSR LOC Banks under the DSR LOC Reimbursement Agreement (in such
capacity together with its successors and assigns, the "DSR LOC AGENT"), THE
TORONTO-DOMINION BANK, acting as agent on behalf of the PPA LOC Banks under the
PPA LOC Reimbursement Agreement (in such capacity together with its successors
and assigns, the "PPA LOC AGENT"), THE CHASE MANHATTAN BANK, acting in its
capacity as the bond trustee under the Indenture (in such capacity together with
its successors and assigns, the "TRUSTEE"), and THE CHASE MANHATTAN BANK, acting
in its capacity as the collateral agent appointed hereunder for the Senior
Parties (in such capacity together with its successors and assigns, the
"COLLATERAL AGENT").
R E C I T A L S:
A. The Partnership was formed for the purpose of developing, financing,
constructing, leasing, maintaining and operating an approximately 936 megawatt
("MW") (nominal summer rating) natural gas-fired simple-cycle electric
generating facility to be located on a site near Georgia State Highway 34 in
Heard County, Georgia (the "Facility").
B. The Partnership has entered or will enter into certain Project
Documents and Financing Documents.
C. Pursuant to the PPA, the Partnership has agreed to deliver and sell
to PECO, and PECO has agreed to receive and purchase from the Partnership,
electric capacity and energy for the term of the PPA, on the terms and
conditions set forth therein.
D. Pursuant to the Lease Agreement, the Authority has agreed to lease to
the Partnership, and the Partnership has agreed to rent from the Authority, the
Facility, the Facility Site and certain related infrastructure facilities, on
the terms and conditions set forth therein.
E. The Partnership (as assignee of TGILP) and the EPC Contractor are
parties to the EPC Contract, providing for the construction of the Facility on a
lump sum, fixed-price basis, on the terms and conditions set forth therein.
F. Pursuant to the EPC Guaranty, the EPC Guarantor has agreed to
guarantee the obligations of the EPC Contractor under the EPC Contract, on the
terms and conditions set forth therein.
G. Pursuant to the Turbine Contract, GE will provide six General
Electric PG7241 (FA) heavy-duty, single shaft gas turbine-generators, on the
terms and conditions set forth therein.
<PAGE>
H. The Partnership and Transco have entered into the Gas Interconnect
Agreement, providing for the delivery of natural gas to the Transco
interconnection point, on the terms and conditions set forth therein.
I. The Partnership and the Pipeline EPC Contractor have entered into the
Pipeline EPC Contract, providing for the construction of an approximately
one-mile lateral gas pipeline from the Transco interconnection point to the
Facility Site, on the terms and conditions set forth therein.
J. The Partnership and GPC have entered into the GPC Interconnection
Agreement, providing for the Facility to be connected to the Georgia integrated
transmission system at 500kV, on the terms and conditions set forth therein.
K. Pursuant to the Water Agreement, the Water Authority has agreed to
sell to the Partnership and deliver to the Facility, and the Partnership has
agreed to buy, water, on the terms and conditions set forth therein.
L. The Partnership, as assignee of TGILP, and GE International are
parties to the LTSA, pursuant to which GE International will provide long term
parts and services for the six gas turbines and associated generators and
specified auxiliaries, on the terms and conditions set forth therein.
M. The Partnership and the Operator have entered into the O&M Agreement,
providing for the Operator to operate and maintain the Facility, on the terms
and conditions set forth therein.
N. Pursuant to the Purchase Agreement and the Indenture, the Partnership
has agreed to issue and sell the Bonds to the Initial Purchasers who will in
turn sell the Bonds to certain purchasers as contemplated by the Purchase
Agreement.
O. Pursuant to the Authority Purchase Agreement and the Authority
Indenture, the Authority has agreed to issue and sell the Authority Bonds to the
Partnership who will in turn deposit the Authority Bonds with the Collateral
Agent as collateral for the Senior Debt.
P. Pursuant to the DSR LOC Reimbursement Agreement, the DSR LOC Issuer
has agreed to issue or cause to be issued, for the account of the Partnership, a
letter of credit, in an amount, and on the terms and conditions set forth
therein.
Q. Pursuant to the PPA LOC Reimbursement Agreement, the PPA LOC Issuer
has agreed to issue, for the account of the Partnership, a letter of credit,
with PECO as the beneficiary thereof, for use in connection with the PPA.
R. In order to secure the availability of certain monies and in order to
satisfy certain equity contribution requirements, the Partners and the
Collateral Agent have entered into the Equity Contribution Agreement pursuant to
which the Contributing Partners (as defined therein) agree to contribute equity
to the Partnership up to $35.5 million from time to time prior to the Date of
Commercial Operation of the Final Units.
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S. In order to secure the respective obligations of the Partnership and
the Authority pursuant to the Financing Documents entered into by the
Partnership and the Authority, on or prior to the Closing Date, the Partnership
and the Authority will enter into the Security Documents to which each is a
party.
T. Each of the Financing Documents requires, as a condition precedent to
the obligations of the Senior Parties thereto, the execution of this Agreement
to provide for certain common representations, warranties and covenants of the
Partnership.
U. In consideration of the Senior Parties entering into their respective
Financing Documents, the Partnership has agreed to enter into this Agreement and
be bound by all covenants and obligations provided herein.
Accordingly, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1 Definitions and Principles of Construction. For all purposes
of this Agreement, unless the context otherwise requires, (a) all capitalized
terms used herein (including the Recitals) and not otherwise defined shall have
the meanings set forth in Part I of Appendix A and (b) the principles of
construction set forth in Part II of Appendix A shall apply.
ARTICLE II
CLOSING
Section 2.1 TIME AND PLACE OF CLOSING. The closing of the transactions
described in Section 2.2 shall commence at 9:30 a.m., Eastern Standard time, on
the Closing Date at the offices of Winthrop, Stimson, Putnam & Roberts, One
Battery Park Plaza, New York, New York 10004, or at such other time and at such
other location as shall be agreed by the parties hereto.
Section 2.2 TRANSACTIONS ON CLOSING DATE. On the Closing Date, the
following transactions shall be consummated simultaneously:
(a) The Transaction Documents not previously executed shall be
duly executed and delivered by the respective parties thereto.
(b) The Partnership shall, in accordance with and subject to the
Purchase Agreement, issue, sell and cause to be delivered to the Initial
Purchasers the Bonds.
(c) The Authority shall, in accordance with and subject to the
Authority Purchase Agreement, issue, sell and cause to be delivered to the
Partnership the Authority Bonds.
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(d) The PPA LOC Issuer shall issue or cause to be issued the PPA
LOC.
(e) The Initial Disbursement shall be made by the Collateral
Agent.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS TO THE OCCURRENCE OF THE CLOSING DATE AND THE
INITIAL DISBURSEMENT. The obligation of each of the Senior Parties to enter into
the transactions described in Section 2.2 on the Closing Date and the making of
the Initial Disbursement shall be subject to the satisfaction (or waiver by such
Person) on or prior to the Closing Date of the following conditions precedent:
(a) TRANSACTION DOCUMENTS. Each of the Transaction Documents
entered into or required to be entered into on or prior to the Closing Date
shall be satisfactory in all material respects to the Senior Parties, and each
such Transaction Document shall be in full force and effect.
(b) EQUITY SUPPORT. Each letter of credit required under the
Equity Contribution Agreement shall be reasonably satisfactory in all material
respects to the Senior Parties, and such letters of credit shall be in full
force and effect.
(c) AUTHORIZATION, EXECUTION AND DELIVERY OF DOCUMENTS. Each of
the Transaction Documents entered into or required to be entered into on or
prior to the Closing Date shall have been duly authorized, executed and
delivered by each of the parties thereto (other than the Senior Parties). The
Senior Parties shall have received a true and correct copy of each of the
Transaction Documents (not furnished in original form) entered into or required
to be entered into on or prior to the Closing Date, certified as such by an
Authorized Representative of the Partnership, including without limitation all
amendments and supplements to each of the Transaction Documents.
(d) THE LEASE. The Partnership shall have entered into the Lease
Agreement with respect to the Facility Site and shall have obtained rights in
the Necessary Easements, and such Lease Agreement and each such right shall be
in full force and effect. Each Senior Party shall have received a copy of the
Lease Agreement, a survey of the Facility Site and a copy of all documents
evidencing such rights in form and substance satisfactory to each such Person.
The Senior Parties shall have received satisfactory evidence that, except as set
forth on Schedule 3.1(d), there shall be no actions, suits, investigations or
proceedings at law or in equity by or before any Governmental Authority pending
in connection with the leasing by the Partnership of the Facility Site or, to
the best of the Partnership's knowledge, threatened in connection with the
leasing by the Partnership of the Facility Site or the acquisition by the
Partnership of the Necessary Easements, in either case that could reasonably be
expected to result in a Material Adverse Effect.
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(e) GOVERNMENT APPROVALS. The Partnership shall have obtained
all material Governmental Approvals then required for the commencement of
construction of the Project and the Senior Parties shall have received a copy of
all such Governmental Approvals.
(f) OPINIONS. The Senior Parties shall have received opinions
addressed to such Persons, dated the Closing Date, of the following counsel (or,
if counsel is not identified, of counsel reasonably satisfactory to such
Persons), each such opinion to be in the form and addressing such matters as
shall be reasonably satisfactory to the Senior Parties (together with such
changes as each Senior Party may approve):
(i) Winthrop, Stimson, Putnam & Roberts, special New York
counsel to the Partnership;
(ii) Long, Aldridge & Norman L.L.P., Georgia counsel to the
Partnership;
(iii) Glover & Davis, counsel to the Authority;
(iv) King & Spalding, Bond counsel;
(v) Cadwalader, Wickersham & Taft, special counsel to the
Authority Trustee, the Trustee, the Collateral Agent and
the Depositary Bank;
(vi) Nelson, Morrow & Waldron, general counsel to the
Partnership and the Partners;
(vii) Winthrop, Stimson, Putnam & Roberts, Federal energy
counsel to the Partnership;
(viii) Long, Aldridge & Norman L.L.P., Georgia energy counsel
to the Partnership;
(ix) Sutherland, Asbill & Brennan, local environmental
counsel (air permit) to the Partnership;
(x) Long, Aldridge & Norman L.L.P., local environmental
counsel (water, wastewater and wetlands) to the
Partnership;
(xi) Lin Johnson, in-house counsel to PECO;
(xii) Timothy A. Watt, in-house counsel to the EPC Contractor;
(xiii) Timothy A. Watt, in-house counsel to the EPC Guarantor;
(xiv) Michael Barnas, in-house counsel to GE;
(xv) Michael Barnas, in-house counsel to GE International;
(xvi) Nelson, Morrow & Waldron , counsel to the Operator;
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(xvii) Skadden, Arps, Slate, Meagher & Flom L.L.P., special
counsel to the DSR LOC Agent and the PPA LOC Agent;
(xviii) Skadden, Arps, Slate, Meagher & Flom L.L.P., New York
counsel to the Initial Purchasers;
(xix) King & Spalding, Georgia counsel to the Initial
Purchasers;
(xx) Gisela B. Cherches, in-house counsel to Transco;
(xxi) Jay Dalton, in-house counsel to the Pipeline EPC
Contractor;
(xxii) Jay Dalton, in-house counsel to Willbros Group;
(xxiii) Price, Pyles, Dangel, Parmer & Brooks, counsel to the
Water Authority; and
(xxiv) Brown, McCarrol & Oaks Hartline, LLP, special Texas
counsel to the Partnership.
(g) NO MATERIAL ADVERSE CHANGE. On the Closing Date, there shall
not have been any change in the business, operations or financial condition of
(i) the Partnership, (ii) the Project, (iii) the EPC Contractor, (iv) the
Operator, (v) PECO, (vi) GE, (vii) the Water Authority, (viii) the Authority or
(ix) any Contributing Partner that would reasonably be expected to have a
Material Adverse Effect on the ability of any such Person to carry on its
business or to enter into or perform its obligations under the Transaction
Documents to which it is a party.
(h) NO DEFAULT. Before and after giving effect to the
consummation of the transactions contemplated by this Agreement, no Default or
Event of Default under any Transaction Document shall have occurred and be
continuing.
(i) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Partnership set forth in this Agreement shall be true and
complete on and as of the Closing Date.
(j) CLOSING CERTIFICATE OF THE PARTNERSHIP. On the Closing Date,
each of the Senior Parties shall have received an Officer's Certificate of the
Partnership, dated the Closing Date, in form and substance reasonably
satisfactory to the Senior Parties to the effect that: (i) the representations
and warranties of the Partnership set forth in Section 4.1 hereof are true and
complete on the Closing Date, (ii) the Transaction Documents to which the
Partnership is a party have been duly executed and delivered by the Partnership
and are in full force and effect, (iii) no Default or Event of Default has
occurred and is continuing under this Agreement or any other Transaction
Document, and (iv) the Partnership has duly performed and complied with all
covenants, agreements and conditions contained herein or in any Transaction
Document required to be performed or complied with by it on or prior to the
Closing Date.
(k) REPORT OF INDEPENDENT ENGINEER. The Senior Parties shall have
received a report of the Independent Engineer in form and substance reasonably
satisfactory to such Persons addressing, inter alia, Facility design, Facility
performance, hours of operation, Project Costs,
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schedule of construction, adequacy of testing procedures, certain environmental
matters, Governmental Approvals, a review of Project Documents, and occupational
health and safety matters pertaining to the Facility and the Facility Site and
such other matters related thereto as any Senior Party shall reasonably request.
(l) APPROVED PROJECT CONSTRUCTION BUDGET. The Independent
Engineer and the Senior Parties shall have received a copy of the approved
project construction budget, in substantially the form of Schedule 3.1(l) (as
amended, modified or supplemented from time to time pursuant to the terms hereof
and the other Financing Documents, the "APPROVED PROJECT CONSTRUCTION BUDGET"),
setting forth the timing and amount in dollars of all projected payments of
Project Costs relating to the development, construction, lease, operation and
maintenance of the Project (including amounts due pursuant to the EPC Contract)
certified as the best reasonable estimate of the information set forth therein
on the Closing Date, by an officer of the Partnership, which budget shall be in
form and substance reasonably satisfactory to the Senior Parties and the
Independent Engineer.
(m) BASE CASE PROJECTIONS. The Partnership shall have furnished
to the Independent Engineer and the Senior Parties the base case projections for
the Project (as set forth on Schedule 3.1(m), the "BASE CASE PROJECTIONS"),
certified by the Independent Engineer, projecting that the Partnership shall
have, from the Date of Commercial Operation of the Final Units through the Final
Maturity Date of the Bonds, (i) an average annual Debt Service Coverage Ratio
equal to or greater than 1.49 to 1.0, and (ii) a minimum annual Debt Service
Coverage Ratio during each year of such period equal to or greater than 1.30 to
1.0, which projections shall be based upon attached pro-forma income statements
and annual cash flow projections for each such year, each of which shall be
based upon assumptions stated therein which the Independent Engineer certifies
as reasonable, together with a certificate of an Authorized Officer of the
Partnership stating that such projections and supporting documents were prepared
in good faith by the Partnership and are based upon assumptions which the
Partnership considers to be reasonable.
(n) INSURANCE AND REPORT OF INSURANCE CONSULTANT. The Partnership
shall have obtained the insurance described on Appendix B attached hereto and
required as of the Closing Date, together with loss payee endorsements in favor
of the Collateral Agent in the form set forth in Appendix B, and such insurance
shall be in full force and effect and the Senior Parties shall have received a
report from the Insurance Consultant in form and substance reasonably
satisfactory to such Persons, dated the Closing Date, setting forth the
insurance so obtained and stating that such insurance is in full force and
effect and that all premiums then due thereon have been paid, and stating that,
in the opinion of the Insurance Consultant, such insurance complies with the
insurance set forth on Appendix B and insures against such risks and in such
amounts as are commercially available on reasonable terms or as may be required
by Applicable Law. In addition to and without limiting the foregoing, the Senior
Parties shall have received a form of each policy and a binder or certificate
evidencing such insurance signed by the insurer or an agent authorized to bind
the insurer.
(o) ENVIRONMENTAL MATTERS. The Senior Parties shall have obtained
all material environmental permits, approvals and licenses required to be
obtained by it to commence construction of the Facility in accordance with the
terms of the EPC Contract and (ii) shall have
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received reasonably satisfactory evidence that, except as set forth in Schedule
3.1(o), (A) the Facility Site is, to the best of the Partnership's knowledge, in
compliance with all applicable Environmental Laws affecting the Facility Site or
the Facility, the noncompliance with which could reasonably be expected to
result in a Material Adverse Effect, and (B) to the best of the Partnership's
knowledge, there are no environmental conditions which could reasonably be
expected to materially interfere with the construction or commercial operation
of the Facility or adversely affect the Lien of the Collateral Agent thereon.
(p) UTILITY REGULATION. Neither the Partnership nor any of the
Senior Parties shall solely by reason of (i) the development, construction,
lease, operation and maintenance of the Project by the Partnership, or (ii) any
other transaction contemplated by the Transaction Documents be deemed by any
Governmental Authority to be subject to financial, organizational or rate
regulation as an "electric utility," "electric corporation," "electrical
company," "public utility," "public utility holding company" or any similar
entity under any Applicable Law.
(q) SECURITY. All actions necessary or, in the reasonable opinion
of any Senior Party, desirable, in order to effectively establish and create the
security contemplated by the Security Documents and, where appropriate, to
create a first priority security interest in and charge over the Collateral,
subject only to Permitted Liens, shall have been duly taken, including without
limitation, the making of all conveyances, registrations and filings.
(r) OFFICERS' CERTIFICATES. The Senior Parties shall have
received an Officer's Certificate of the Partnership and each Project Party, in
form and substance reasonably satisfactory to such Persons, attaching and
certifying as of the Closing Date as to (i) its articles of incorporation or
association or its certificate of limited partnership, as the case may be, (ii)
its by-laws (if any), (iii) the resolutions of its Board of Directors or
applicable governing body (or, in the case of a partnership, any required
authorization and consent of its partners) duly authorizing its execution,
delivery and performance of each Transaction Document to which it is or is to be
a party and each other document required to be executed and delivered by it in
accordance with the provisions hereof or thereof, and (iv) the incumbency and
signature of the persons authorized to execute and deliver, as may be required
hereunder, documents on its behalf in connection with the transactions
contemplated hereby and by the Transaction Documents.
(s) ESTABLISHMENT OF ACCOUNTS. Each of the Accounts and all
subaccounts thereof shall have been established pursuant to the Collateral
Agency Agreement and each of the accounts required to be established pursuant to
the Indenture shall have been so established.
(t) CONSENTS TO ASSIGNMENT. The Partnership shall have delivered
to each Senior Party, Consents (the "Third Party Consents"), in form and
substance satisfactory to such Person, from each of the Project Parties listed
on Schedule 3.1(t).
(u) PURCHASE AGREEMENT; AUTHORITY PURCHASE AGREEMENT; DSR LOC
REIMBURSEMENT AGREEMENT; PPA LOC REIMBURSEMENT AGREEMENT. All of the conditions
to the closing of the transactions contemplated by the Purchase Agreement, the
Authority Purchase Agreement, the DSR LOC Reimbursement Agreement and the PPA
LOC Reimbursement Agreement have been satisfied (or waived by the Initial
Purchasers, the Partnership, the DSR LOC Agent or the PPA LOC Agent, as the case
may be).
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(v) FEES AND EXPENSES. The Partnership shall have paid to the
Senior Parties the fees and expenses payable to such Persons on the Closing
Date.
(w) LIEN SEARCHES. The Partnership shall have obtained the
results of a recent search, by a Person reasonably satisfactory to the Senior
Parties, of all effective UCC financing statements and fixture filings and all
judgment and tax lien filings which may have been made with respect to any
personal or mixed property of the Partnership, together with copies of all such
filings disclosed by such search, and UCC termination statements duly executed
by an Authorized Representative of the Partnership for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC financing
statements or fixture filings disclosed in such search (other than any such
financing statements or fixture filings in respect of Permitted Liens);
(x) TITLE INSURANCE. The Partnership shall have obtained the
mortgagee title insurance policies or unconditional commitments therefor issued
by a title company with respect to the Facility Site described on Appendix B
attached hereto and required as of the Closing Date, together with a title
report issued by a title company with respect thereto, dated not more than
thirty (30) days prior to the Closing Date and copies of all recorded documents
listed as exceptions to title or otherwise referred to therein, each in form and
substance reasonably satisfactory to the Senior Parties;
(y) AUTHORIZATION TO PROCEED. The Partnership shall have
delivered to the EPC Contractor, and the EPC Contractor shall have acknowledged
and accepted, the Authorization to Proceed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP. The
Partnership makes the following representations and warranties on the Closing
Date and at such times thereafter as are required in accordance with the
Collateral Agency Agreement as the basis for the undertakings on its part herein
contained:
(a) ORGANIZATION; POWER; AND STATUS. The Partnership (i) is a
limited partnership duly organized, in good standing and validly existing under
the laws of the State of Delaware and (ii) is duly qualified to do business as a
limited partnership in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has all
power and authority necessary to own, lease or hold its property and to conduct
the business in which it is now engaged or proposed to be engaged, except where
the failure to so qualify or have such power or authority would not, singularly
or in the aggregate, have a Material Adverse Effect.
(b) AUTHORIZATION; ENFORCEABILITY; EXECUTION AND DELIVERY. (i)
The Partnership has full partnership right, power and authority to execute and
deliver this Agreement and each other Transaction Document to which it is a
party and to perform its obligations hereunder and thereunder; and all
partnership action required to be taken for the due and proper authorization,
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execution and delivery of this Agreement and each other Transaction Document to
which the Partnership is a party and the consummation of the transactions
contemplated hereby and thereby has been duly and validly taken.
(ii) This Agreement and each other Transaction Document to which
the Partnership is a party has been duly authorized, executed and delivered by
the Partnership. This Agreement and each other Transaction Document to which the
Partnership is a party constitutes a valid and legally binding obligation of the
Partnership enforceable against the Partnership in accordance with the terms
hereof and thereof, except to the extent limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws
affecting creditors' rights generally, by general equitable principles (whether
considered in a proceeding in equity or at law).
(c) FORCE MAJEURE. To the best of the Partnership's knowledge, no
force majeure (as defined in each Project Document) has occurred and is
continuing under any Project Document.
(d) NO CONFLICTS; LAWS; AND CONTRACTS. The execution, delivery
and performance by the Partnership of each of the Transaction Documents and the
consummation of the transactions contemplated thereby will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Partnership pursuant
to, any material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Partnership is a party or by which
the Partnership is bound or to which any of the property or assets of the
Partnership is subject, (ii) result in any violation of the provisions of the
Partnership Agreement, or (iii) result in any violation of any statute or any
judgment, order, decree, rule or regulation of any court or arbitrator or
governmental agency or body having jurisdiction over the Partnership or any of
its properties or assets.
(e) GOVERNMENTAL APPROVALS. All Governmental Approvals which are
required, as of the Closing Date, to be obtained by, in the name of, or on
behalf of the Partnership and, as far as the Partnership is aware, each other
party to the relevant Transaction Document in connection with (i) the issuance
of the Bonds, (ii) the carrying on of the business of the Partnership as it is
presently carried on and is contemplated to be carried on, and (iii) the due
execution, delivery and performance of each of the Transaction Documents by each
of the parties thereto have been duly obtained or made, are validly issued and
are in full force and effect. The Partnership is in compliance with all such
Governmental Approvals, except to the extent that noncompliance could not
reasonably be expected to result in a Material Adverse Effect.
(f) LITIGATION. There are no legal or governmental proceedings
pending to which the Partnership is a party or of which any property or assets
of the Partnership are the subject which, singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; and to the best of the
Partnership's knowledge, no such proceedings are threatened by governmental
authorities or others.
(g) NO DEFAULT. The Partnership is not (i) in violation of its
Partnership Agreement or its other organizational documents, (ii) in default,
and no event has occurred
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which, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any Transaction Document to which it is a party or by which it is bound or to
which any of its property or assets is subject, where such default has had, or
could reasonably be expected to have, a Material Adverse Effect, or (iii) in
violation of any Applicable Law to which it or its property or assets may be
subject, where such violation has had, or could reasonably be expected to have,
a Material Adverse Effect.
(h) LICENSES; CERTIFICATES; AUTHORIZATIONS; PERMITS;
DECLARATIONS; FILINGS. The Partnership possesses all material licenses,
certificates, authorizations and permits issued by, and has made all
declarations and filings with, the appropriate federal or state regulatory
agencies or bodies which are necessary or desirable for (i) the construction or
operation of the Project (other than those not yet required), (ii) the ownership
of its properties, (iii) the conduct of its business as it is presently carried
on and is contemplated to be carried on, or (iv) the execution, delivery and
performance of the Transaction Documents, except where the failure to possess or
make the same would not, singularly or in the aggregate, have a Material Adverse
Effect, and the Partnership has not received notification of any revocation or
modification of any such license, certificate, authorization or permit and does
not have any reason to believe that any such license, certificate, authorization
or permit will not be renewed in the ordinary course, except where such
revocation, modification or failure to renew would not reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect.
(i) TAXES. The Partnership is a partnership for federal income
tax purposes. The Partnership has filed, or caused to be filed, all federal,
state, local and other tax returns required to be filed through the Closing
Date, and has paid, or caused to be paid, all taxes, fees, charges and
assessments (collectively, "TAXES") due thereon, other than Taxes the payment of
which are subject to a good faith contest and for which adequate reserves have
been established.
(j) INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
The Partnership is not (i) an "investment company" or an entity "controlled" by
an "investment company" as such terms are defined in the Investment Company Act
of 1940, as amended (the "INVESTMENT COMPANY ACT"), and the rules and
regulations of the Commission thereunder, or (ii) a "holding company" or a
"subsidiary company" of a holding company or an "affiliate" thereof as such
terms are defined in the PUHCA.
(k) INSURANCE. All insurance policies that are required to be in
place as of the Closing Date, pursuant to the Transaction Documents and Appendix
B hereto, will be in place and will be in full force and effect, and to the best
of the Partnership's knowledge, no event or circumstance has occurred, nor has
there been any omission to disclose a fact, which would entitle an insurer or
reinsurer to validly avoid or otherwise reduce its liability under the relevant
policy of insurance or reinsurance. The Partnership has not received any notice
from any insurer or reinsurer that any insurance policy has ceased to be in full
force and effect or claiming that the insurer's or reinsurer's liability under
any insurance policy can be reduced or avoided.
(l) PATENTS; TRADEMARKS; AND LICENSES. The Partnership owns or
possesses adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how
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(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the operation of
the Project, and the operation of the Project does not conflict in any material
respect with, and the Partnership has not received any notice of any claim of
conflict with, any such rights of others.
(m) COMPLIANCE OF EMPLOYEE BENEFIT PLANS WITH APPLICABLE LAW. The
Partnership does not sponsor, maintain, administer, contribute to, participate
in or have any obligation to contribute to or any liability under, any ERISA
Plan, nor since the date which is six (6) years immediately preceding the
Closing Date has the Partnership established, sponsored, maintained,
administered, contributed to, participated in or had any obligation to
contribute to or any liability under, any ERISA Plan. No accumulated funding
deficiency (as defined in Section 412 of the Code or Section 302 of ERISA) or
Reportable Event has occurred with respect to any ERISA Plan. There are no
Unfunded Benefit Liabilities under any ERISA Plan. The Partnership and each
member of its ERISA Controlled Group have complied with the requirements of
Section 515 of ERISA with respect to each Multiemployer Plan and are not in
"default" (as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan. The aggregate potential total withdrawal liability, and
the aggregate potential annual withdrawal liability payments of the Partnership
and the members of its ERISA Controlled Group as determined in accordance with
Title IV of ERISA as if the Partnership and the members of its ERISA Controlled
Group had completely withdrawn from all Multiemployer Plans is not greater than
$500,000 and $50,000, respectively. To the best knowledge of the Partnership and
each member of its ERISA Controlled Group, no Multiemployer Plan is or is likely
to be in reorganization (as defined in Section 4241 of ERISA or Section 418 of
the Code) or is insolvent (as defined in Section 4245 of ERISA). No material
liability to the Pension Benefit Guaranty Corporation ("PBGC") (other than
required premium payments), the Internal Revenue Service, any ERISA Plan (other
than required minimum funding contributions) or any trust established under
Title IV of ERISA has been, or is expected by the Partnership or any member of
its ERISA Controlled Group to be, incurred by the Partnership or any member of
its ERISA Controlled Group. The Partnership has no contingent liability with
respect to any post-retirement benefit under any "welfare plan" (as defined in
Section 3(1) of ERISA), other than liability for continuation coverage under
Part 6 of Title I of ERISA. No Lien under Section 412(n) of the Code or Section
302(f) of ERISA or requirement to provide security under Section 401(a)(29) of
the Code or Section 307 of ERISA has been or is reasonably expected by the
Partnership or any member of its ERISA Controlled Group to be imposed on the
assets of the Partnership or any member of its ERISA Controlled Group.
(n) SINGLE-PURPOSE PARTNERSHIP. The Partnership has not conducted
and is not conducting any business other than business in connection with the
development, construction, lease, financing, operation and maintenance of the
Project as contemplated by the Transaction Documents to which the Partnership is
a party.
(o) SECURITY DOCUMENTS. The Security Documents create legal,
valid and enforceable perfected Liens on all of the Collateral, in favor of the
Collateral Agent, for the ratable benefit of the Senior Parties, subject to no
Liens other than Permitted Liens. All governmental filings or approvals
necessary or desirable to perfect such Liens have been duly effected or taken
prior to, or will be duly effected or taken on the Closing Date.
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(p) PROJECTIONS. All projections furnished or to be furnished to
the Senior Parties by or on behalf of the Partnership and the summaries of
significant assumptions related thereto (i) are, to the Partnership's knowledge,
based on reasonable assumptions as to all legal, accounting, tax and factual
matters material to the estimates set forth therein, (ii) are consistent with
the provisions of the Transaction Documents in all material respects, (iii) have
been and will be prepared in good faith and in all material respects, with due
care, and (iv) fairly represent the Partnership's expectation as to the matters
covered thereby as of the Closing Date.
(q) REGULATORY STATUS OF THE PARTNERSHIP AND THE PROJECT. The
Partnership is an "exempt wholesale generator" ("EWG") under PUHCA and, as such,
is not considered to be an "electric utility company" under PUHCA, is exempt
from all provisions of PUHCA, and is not considered as being primarily engaged
in the generation or sale of electric power under the FPA.
(r) PROPERTY RIGHTS; CONTRACT RIGHTS; MATERIALS, EQUIPMENT AND
SUPPLIES. The Partnership possesses all property rights and contract rights
which are necessary for the construction and operation of the Project as
contemplated by this Agreement and by each of the Transaction Documents to which
the Partnership is a party, and there are no materials, equipment or supplies
consistent with the Approved Project Construction Budget which are not expected
to be available at the Facility Site.
(s) COLLATERAL. The Partnership has, or has valid and enforceable
rights to acquire, good title or valid leasehold rights to the interests in the
Facility, the Facility Site, including all Necessary Easements, and the tangible
personal property forming a part of the Collateral purported to be covered by
the Security Documents to which it is a party, subject only to Permitted Liens.
(t) YEAR 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) the Partnership's computer
systems and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which Partnership's systems interface) and
the testing of all such systems and equipment, as so reprogrammed, will be
completed by December 31, 1999. The cost to the Partnership of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Partnership (including, without limitation, reprogramming errors and
the failure of others' systems or equipment) will not result in a Default, Event
of Default or a Material Adverse Effect. Except for such of the reprogramming
referred to in the preceding sentence as may be necessary, the computer and
management information systems of the Partnership are and, with ordinary course
upgrading and maintenance, will continue until the Final Maturity Date to be,
sufficient to permit the Partnership to conduct its business without Material
Adverse Effect.
ARTICLE V
COVENANTS
Section 5.1 AFFIRMATIVE COVENANTS OF THE PARTNERSHIP. The
Partnership covenants and agrees, from and after the Closing Date, for the
benefit of the Senior Parties or certain of them, as follows:
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(a) PAYMENTS. The Partnership shall promptly pay, or cause to be
paid, the principal, premium (if any), interest, and all other amounts due and
payable under and in accordance with the terms of the Financing Documents.
(b) INSURANCE. (i) The Partnership shall at all times maintain,
with responsible and financially sound insurance carriers, and provide
satisfactory evidence of, customary insurance in such amounts (subject to
reasonable, customarily available and customary deductibles and sublimits) and
with terms and conditions in accordance with standard industry practice, as
described in Appendix B hereto. All policies of physical damage and business
interruption insurance of the Partnership shall name the Collateral Agent as
loss payee and as additional insured; PROVIDED that, unless the Collateral Agent
is exercising remedies in accordance with the Security Agreement, the consent of
the Partnership shall be required prior to any final adjustment upon an event of
loss under such policies, and the Collateral Agent shall be named as additional
insured under any general liability, automotive liability, excess liability or
other policy similar in nature in accordance with standard industry practice.
(ii) Each insurance policy obtained by the Partnership shall
provide for at least ten (10) days' written notice to the Collateral Agent of
cancellation, reduction in amount of coverage or any other material change in
coverage.
(c) INFORMATION. The Partnership shall furnish, or cause to be
furnished, to the Collateral Agent, the Trustee, each Rating Agency and such
other Senior Parties which so request:
(i) as soon as available and in any event within sixty (60) days
after the end of each of the first three quarterly accounting periods of
the Partnership's fiscal year (commencing with the quarter ending March
31, 2000), Unaudited Financial Statements of the Partnership for such
period, each accompanied by an Officer's Certificate of the Partnership
(1) to the effect that such Unaudited Financial Statements fairly
present the financial condition and results of operations of the
Partnership on the dates and for the periods indicated in accordance
with GAAP (other than with respect to the notes and normally recurring
year-end adjustments) and (2) stating that no Default or Event of
Default has occurred and is continuing, or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature
thereof;
(ii) as soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of the Partnership
and (commencing with the fiscal year ended December 31, 2000), Annual
Audited Financial Statements of the Partnership for such fiscal year,
each accompanied by (1) an audit opinion thereon by the Auditor, which
opinion shall state that said financial statements of the Partnership
present fairly, in all material respects, the financial position of the
Partnership at the end of, and for, such fiscal year in accordance with
GAAP and (2) an Officer's Certificate of the Partnership stating that no
Default or Event of Default has occurred and is continuing, or, if a
Default or Event of Default has occurred and is continuing, a statement
as to the nature thereof;
(iii) promptly after the Partnership has knowledge thereof,
written notice of the occurrence of any event or condition which
constitutes a Default or Event of Default,
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specifically stating that such event or condition has occurred and
describing it and any action being or proposed to be taken with respect
thereto;
(iv) promptly after delivery to the Partnership of any notice of
any material litigation, claim (including any Environmental Claim),
proceeding pending or, to the best of the Partnership's knowledge,
threatened, involving or affecting the Partnership or the Project, a
copy of such notice; and
(v) as soon as available and in any event not less than
forty-five (45) days in advance of the beginning of each calendar year
after the Date of Commercial Operation, a copy of the annual Operating
Budget for such year.
(d) MAINTENANCE OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS.
(i) The Partnership shall at all times preserve and maintain in full force and
effect (A) its existence as a partnership in good standing under the laws of the
State of Delaware and (B) its qualification to do business in each other
jurisdiction in which the character of properties owned or leased by it or in
which the transaction of its business as conducted or proposed to be conducted
makes such qualification necessary, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect.
(ii) The Partnership shall maintain and renew all of the powers,
rights, privileges and franchises necessary for the transaction of its business
as conducted or proposed to be conducted, except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect.
(iii) The Partnership shall comply with all Applicable Laws
(including Environmental Laws) and Governmental Approvals applicable to it, and
all other acts, rules, regulations, permits, orders and requirements of any
legislative, executive, administrative or judicial body relating to the
performance by the Partnership of its obligations under the Financing Documents,
except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect.
(e) CONSTRUCTION OF THE FACILITY. The Partnership shall cause the
construction of the Facility to be carried out and completed with diligence and
continuity (except for interruptions provided for in the EPC Contract or due to
events of force majeure, which events of force majeure the Partnership shall use
its commercially reasonable efforts to mitigate), in a good and workmanlike
manner in accordance with sound, generally accepted building and engineering
practices, all material Applicable Laws and Governmental Approvals and the EPC
Contract. The Partnership shall at all times cause a complete set of the current
and (when available) as-built plans (and all supplements thereto) relating to
the Facility to be maintained on the Facility Site or the EPC Contractor's
offices and available for inspection by the Independent Engineer and the Senior
Parties.
(f) PAYMENT OF TAXES AND CLAIMS. The Partnership shall, prior to
the time penalties shall attach thereto, pay and discharge or cause to be paid
or discharged all taxes, assessments and governmental charges or levies imposed
upon it or its income or profits; PROVIDED that, the Partnership shall not be
required to pay any such obligation if (i) such charges
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are being diligently contested in good faith by appropriate proceedings, (ii)
during the period of such contest the enforcement of any contested item is
effectively stayed, (iii) adequate reserves are established with respect to the
contested items (in accordance with GAAP), and (iv) such contest could not
reasonably be expected to result in the sale, forfeiture or loss of any material
amount of the Collateral. The Partnership shall promptly pay or cause to be paid
any valid, final, non-appealable judgment enforcing any such tax, duty, fee,
assessment, levy, other governmental charge or claim and shall cause the same to
be satisfied of record, as applicable.
(g) BOOKS AND RECORDS. The Partnership shall at all times keep
proper books of record and accounts adequate to reflect truly and fairly the
financial condition and results of operations of the Partnership in which full,
true and correct entries in conformity with GAAP and all Applicable Laws shall
be made of all dealings and transactions in relation to its business and
activities.
(h) RIGHT OF INSPECTION. The Partnership shall permit officers
and designated representatives of the Senior Parties, the Independent Engineer
and the Insurance Consultant to visit and inspect, in the presence of
representatives of the Partnership, if requested by the Partnership, any of the
properties of the Partnership, and to examine and make copies of the books of
record and accounts of the Partnership and discuss the affairs, finances and
accounts of the Partnership with, and be advised as to the same by, its
officers, all at such reasonable times and intervals with reasonable notice
prior to such inspection and to such reasonable extent as the Senior Parties may
request.
(i) USE OF PROCEEDS. The Partnership shall use the proceeds of
the sale of the Bonds to purchase the Authority Bonds and shall use the proceeds
of the Authority Bonds only to pay Project Costs.
(j) COMPLIANCE WITH PROJECT DOCUMENTS. The Partnership shall
comply with, perform and observe in all respects the terms and provisions of
each Project Document to which it is a party, except to the extent any
noncompliance, non-performance or non-observance would not reasonably be
expected to result in a Material Adverse Effect.
(k) GOVERNMENTAL APPROVALS; TITLE; AND REGULATORY STATUS OF THE
PROJECT. (i) The Partnership shall at all times obtain in a timely manner,
maintain in full force and effect (or where appropriate, renew) all Governmental
Approvals and other consents and approvals (including, without limitation, those
required under Environmental Laws) required at any time or advisable in
connection with the construction, maintenance, ownership and good and orderly
operation of the Project, as currently conducted and as proposed to be
conducted, unless failure to so obtain, maintain or comply with such
Governmental Approvals or other consents or approvals would not reasonably be
expected to result in a Material Adverse Effect.
(ii) The Partnership shall preserve and maintain good and
marketable title or valid leasehold rights to all of its properties and assets
subject to no Liens other than Permitted Liens.
(iii) The Partnership shall at all times maintain its status as
an EWG under PUHCA, unless failure to maintain such status (A) would not cause a
breach under or forfeiture
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of the pricing or other material benefits of the Project Documents or (B) would
not reasonably be expected to result in a Material Adverse Effect.
(l) EVENT OF LOSS. Upon the occurrence of an Event of Loss, the
Partnership shall diligently pursue all rights and remedies available to it
under any insurance policy or any Transaction Document with respect to the
receipt of Loss Proceeds or any other compensation available to the Partnership
upon the occurrence of such event.
(m) RATING. The Partnership shall maintain a rating of the Bonds
by each of the applicable Rating Agencies and shall comply with all reasonable
requests from each of the Rating Agencies for information and/or notices related
to the Bonds.
(n) RULE 144A INFORMATION; OTHER INFORMATION. (i) Unless a
registration statement shall have previously become effective with respect to
the Bonds, at any time when the Partnership is not subject to the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act, upon the
request of any Holder or any owner of a beneficial interest in the Restricted
Global Security, the Partnership shall promptly furnish to such Holder or
beneficial owner, to a prospective purchaser of a Bond or beneficial interest
therein designated by such Holder or beneficial owner, or to the Trustee for
delivery to such Holder, beneficial owner or prospective purchaser, as the case
may be, all information specified in, and meeting the requirements of, paragraph
(d)(4) of Rule 144A in order to permit compliance by such Holder or beneficial
owner with Rule 144A in connection with a resale of Bond pursuant to Rule 144A.
(ii) At any time after a registration statement with respect to
the Bonds shall have been filed with and declared effective by the Commission,
and notwithstanding that the Partnership may no longer be required to do so
pursuant to the Exchange Act or the rules and regulations promulgated
thereunder, the Partnership shall provide to the Trustee, each Holder and each
owner of a beneficial interest in the Restricted Global Security such periodic
and other reports that the Partnership would be required to file if it were
subject to Section 13 or Section 15(d) of the Exchange Act.
(o) FURTHER ASSURANCES. The Partnership shall, at its own
expense, take all reasonable actions that have been or shall be requested by the
Collateral Agent or that the Partnership knows are necessary to establish,
maintain, protect, perfect and continue the perfection of the Liens created by
the Security Documents and shall furnish timely notice of the necessity of any
such action, together with such instruments, in execution form, and such other
information as may be required to enable the Collateral Agent to effect any such
action. Without limiting the generality of the foregoing, the Partnership shall
do everything necessary in the reasonable judgment of the Collateral Agent to
preserve and protect the Collateral, to establish, maintain and perfect such
Liens, and to protect and enforce its rights and title and the rights and title
of the Senior Parties to the Collateral.
(p) CONSENTS. The Partnership shall use all reasonable efforts to
obtain executed consents to the assignment of each material Project Document
(other than contracts with an existing duration of one month or less) entered
into after the Closing Date, from each party thereto.
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(q) YEAR 2000 COMPLIANCE. The Partnership shall take all
reasonable actions necessary to commit appropriate resources to assure that its
computer-based and other systems are able to effectively process data, including
dates before, on and after January 1, 2000, without experiencing any Year 2000
Problem that could cause a Material Adverse Effect. At the request of the
Collateral Agent, the Partnership will provide the Collateral Agent with
assurances and substantiations (including, but not limited to, the results of
internal or external audit reports prepared in the ordinary course of business)
reasonably acceptable to the Collateral Agent as to the capability of the
Partnership to conduct its business and operations before, on and after January
1, 2000 without experiencing a Year 2000 Problem causing a Material Adverse
Effect. The Partnership represents and warrants that it has a reasonable basis
to believe that no Year 2000 Problem will cause a Material Adverse Effect.
(r) COMPLIANCE WITH CERTIFICATE REQUIREMENTS REGARDING
SUBSTANTIVE CONSOLIDATION. The Partnership will not take any action or omit to
take any action if such action or omission would be inconsistent with the
certifications made in the Certificate(s) listed in Exhibit 5.1(r) hereto;
except for any such action or omission as to which the Partnership shall have
received a reasoned opinion of counsel to the Partnership (and shall have
delivered a copy thereof to the Collateral Agent) to the effect that, after
giving effect to such action or omission, and subject to customary
qualifications and exceptions, in a bankruptcy proceeding involving Tenaska
Energy, Inc., the assets and liabilities of the Partnership should not be
consolidated with those of Tenaska Energy, Inc.
Section 5.2 NEGATIVE COVENANTS OF THE PARTNERSHIP. The Partnership
covenants and agrees, from and after the Closing Date, for the benefit of the
Senior Parties, as follows:
(a) INDEBTEDNESS. The Partnership shall not create or incur or
suffer to exist any Indebtedness except the following (collectively, "PERMITTED
INDEBTEDNESS"):
(i) the Authority Bonds, the Lease Agreement and the Guaranty;
(ii) the Bonds;
(iii) Indebtedness incurred to finance in whole or in part the
making of capital improvements to the Project required to maintain
compliance with Applicable Laws or the Project Documents; PROVIDED that,
after giving effect to the incurrence of such Indebtedness (A) an
Authorized Officer of the Partnership certifies in writing and the
Independent Engineer confirms as reasonable (subject to customary
assumptions and qualifications) that (1) such capital improvements are
reasonably expected to enable the Partnership to comply with such
Applicable Laws or Project Documents, as the case may be, and (2) the
calculations of the Partnership that demonstrate that after giving
effect to the incurrence of such Indebtedness the minimum Projected Debt
Service Coverage Ratio for (x) the next two consecutive Semi-Annual
Periods commencing with the Semi-Annual Period in which such
Indebtedness is incurred, taken as one annual period, and (y) each pair
of subsequent consecutive Semi-Annual Periods taken as a single annual
period through the Final Maturity Date, will not be less than 1.1 to
1.0, or (B) each Rating Agency then rating the Bonds provides written
confirmation that no Rating Downgrade will result from the incurrence of
such Indebtedness;
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(iv) Indebtedness in an aggregate principal amount not to exceed
$15,000,000 incurred to finance in whole or in part the making of
capital improvements in respect of the Project, other than those capital
improvements referenced in clause (iii) above; PROVIDED that, (A) no
Event of Default shall have occurred and be continuing and (B) each
Rating Agency then rating the Bonds provides written confirmation that
no Rating Downgrade will result from such the incurrence of such
Indebtedness;
(v) Indebtedness incurred under the DSR LOC Reimbursement
Agreement, a Working Capital Facility and the PPA LOC Reimbursement
Agreement;
(vi) Indebtedness in an aggregate amount not to exceed $100,000
incurred in connection with the GPC Interconnection Agreement;
(vii) Subordinated Debt in an aggregate principal amount not to
exceed $20,000,000, in accordance with the requirements set forth
herein; and
(viii) Other Indebtedness in an aggregate principal amount not
to exceed $10,000,000 which may be used for Project Costs, Operating and
Maintenance Expenses and capital expenditures with respect to the
Project.
(b) LIENS. The Partnership shall not create or suffer to exist or
permit any Lien upon or with respect to any of its properties except the
following (collectively, "PERMITTED LIENS"):
(i) Liens specifically permitted or required by, or created by,
any Security Document;
(ii) Liens to secure Permitted Indebtedness; PROVIDED that, the
holder of such Permitted Indebtedness, or a representative thereof,
shall have entered into the Collateral Agency Agreement; and PROVIDED,
FURTHER that, in the case of Liens to secure Permitted Indebtedness
which constitutes Subordinated Debt, the holders of Subordinated Debt
shall not be permitted to foreclose such Liens until all Senior Debt has
been irrevocably paid in full in cash;
(iii) Liens for taxes, assessments or governmental charges which
are either not yet due or which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves are
established in accordance with GAAP;
(iv) Liens in connection with worker's compensation,
unemployment insurance or other social security or pension obligations;
(v) mechanic's, workmen's, materialmen's, supplier's,
construction or other similar Liens arising in the ordinary course of
business or incident to the development, construction, operation and
maintenance of the Project;
(vi) servitudes, easements, rights-of-way, restrictions, minor
defects or irregularities in title and such other encumbrances or
charges against real property or interests therein as are of a nature
generally existing with respect to properties of a
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similar character and which do not in any material way interfere with
the use thereof or the business of the Partnership;
(vii) capital leases entered into by the Partnership to the
extent not prohibited by Section 5.2(a) of this Agreement; and
(viii) other Liens incidental to the conduct of the
Partnership's business or the ownership of properties and assets which
were not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than vendor's liens for accounts
payable in the ordinary course of business), and which do not in the
aggregate materially impair the use thereof in the operation of the
Partnership's business.
(c) GUARANTEES. The Partnership shall not contingently or
otherwise be or become liable, directly or indirectly, in connection with any
Guarantee Obligation, except for (i) the Guaranty and (ii) endorsements and
similar obligations in the ordinary course of business.
(d) BUSINESS ACTIVITIES. The Partnership shall not at any time
conduct any activities other than (i) those contemplated by the Transaction
Documents and (ii) activities incidental thereto.
(e) FUNDAMENTAL CHANGES; SALE OF ASSETS. (i) The Partnership
shall not enter into any transaction of merger or consolidation, change its form
of organization or its business, liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution).
(ii) The Partnership shall not sell, transfer, assign,
hypothecate, pledge, lease, sublease or otherwise dispose of (in one transaction
or in a series of transactions) any of its assets, except (A) in the ordinary
course of business or (B) if such asset is worn out, obsolete, or no longer
necessary or useful in the operation of the Project; PROVIDED however, if the
aggregate fair market value of such worn out, obsolete, unnecessary or useless
asset exceeds $2,000,000, the Partnership shall certify in writing that such
asset is worn out, obsolete or no longer necessary or useful in the operation of
the Project; PROVIDED further, this Section 5.2(e)(ii) shall not apply to any
property which is the subject of the GPC Interconnection Agreement and the land
on which such property is to be located and related easements.
(f) TRANSACTIONS WITH AFFILIATES. Except for transactions entered
into pursuant to the Transaction Documents or the Partnership Agreement, the
Partnership shall not enter into any transaction or series of related
transactions with any Person (including any Affiliate of the Partnership) on
terms less favorable to the Partnership than those in comparable arms length
transactions.
(g) RESTRICTED PAYMENTS. The Partnership shall not make any
Restricted Payments, except for the Initial Disbursement and payments permitted
under the Collateral Agency Agreement.
(h) AMENDMENTS TO PROJECT DOCUMENTS. The Partnership shall not
amend, modify, cancel or terminate any Project Document (other than change
orders under the EPC Contract and the Pipeline EPC Contract) or the Tax
Agreement unless the Partnership certifies that (i) such amendment,
modification, termination or cancellation would not reasonably be
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expected to result in a Material Adverse Effect; PROVIDED that, in the case of
an amendment, modification, termination or cancellation of the PPA (or relating
thereto), each Rating Agency then rating the Bonds shall provide written
confirmation that such amendment, modification, cancellation or termination
would not result in a Rating Downgrade.
(i) ADDITIONAL PROJECT DOCUMENTS. The Partnership shall not
enter, and shall cause the Project not to enter, into any Additional Project
Document unless an Authorized Officer of the Partnership certifies in writing
that the transactions contemplated by such Additional Project Document would not
reasonably be expected to result in a Material Adverse Effect, and either (A)
the Independent Engineer concurs in writing with such certification or (B) each
Rating Agency then rating the Bonds confirms in writing that the entry into the
Additional Project Document would not result in a Rating Downgrade; PROVIDED
that, the foregoing prohibition shall not apply (1) if PECO is not performing
under the PPA, to any Additional Project Document providing for short term
capacity and energy sales, spot gas and related transportation or (2) if the
transactions contemplated by the Additional Project Document, when taken
together with all other Additional Project Documents which are in effect and
have not been so certified, do not exceed $1,500,000 in any one calendar year.
(j) CHANGE ORDERS. The Partnership shall not initiate or consent
to any change orders under the EPC Contract unless an Authorized Representative
of the Partnership certifies that (i) such change order is reasonable and is
consistent with sound engineering practice, (ii) such change order could not
reasonably be expected to materially adversely affect the operation or
reliability of the Project, and (iii) the implementation of such change order is
not reasonably expected to materially delay the Date of Commercial Operation of
the Final Units; PROVIDED that, unless the Independent Engineer has concurred in
writing with the certifications set forth in clauses (i), (ii) and (iii) above,
such change order does not exceed $500,000 individually or, when aggregated with
all other change orders that have not been concurred with in writing or
otherwise approved or ratified by the Independent Engineer, $5,000,000.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 EVENTS OF DEFAULT. The term "Event of Default," whenever
used herein, shall mean any of the following events (whatever the reason for
such event and whether it shall be voluntary or involuntary or shall come about
or be affected by operation of law, or be pursuant to or in compliance with any
Applicable Law), and any such event shall continue to be an Event of Default if
and for so long as it shall not have been remedied:
(a) an event of default under the Bonds, the Indenture, the DSR
LOC Reimbursement Agreement, the PPA LOC Reimbursement Agreement or any Working
Capital Facility;
(b) any representation or warranty made by the Partnership
herein, or in any certificate or other document furnished to the Senior Parties
by or on behalf of the Partnership in accordance with the terms hereof, shall
prove to have been false or misleading in any material respect as of the time
made, confirmed or furnished and the fact, event or circumstance that gave
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rise to such inaccuracy has resulted in, or is reasonably expected to result in
a Material Adverse Effect and such fact, event or circumstance shall continue
uncured for thirty (30) or more days from the date the Partnership obtains
actual knowledge thereof; PROVIDED that, if the Partnership commences and
diligently pursues efforts to cure such fact, event or circumstance within such
thirty (30) day period and delivers written notice thereof to the Collateral
Agent, the Partnership may continue to effect such cure and such
misrepresentation shall not be deemed an Event of Default for an additional
sixty (60) days so long as the Partnership is diligently pursuing such cure;
(c) the Partnership shall fail to perform or observe any covenant
or agreement contained in Section 5.1(b) (Insurance); Section 5.1(d)(i)
(Maintenance of Existence; Compliance with Applicable Laws); Section 5.1(k)(i)
(Governmental Approvals; Title; Regulatory Status of the Project); Section
5.2(a) (Indebtedness); Section 5.2(b) (Liens); Section 5.2(c) (Guarantees);
Section 5.2(d) (Business Activities); Section 5.2(e) (Fundamental Changes; Sale
of Assets); Section 5.2(g) (Restricted Payments); Section 5.2(h) (Amendments to
Project Documents); or Section 5.2(i) (Additional Project Documents) of this
Agreement, and such failure shall continue uncured for thirty (30) or more days
from the date the Partnership obtains actual knowledge of such failure;
(d) the Partnership shall fail to perform or observe any of its
covenants or agreements contained in any other provisions of this Agreement
(other than those referred to in paragraph (c) above), and such failure shall
continue uncured for thirty (30) or more days from the date the Partnership
obtains actual knowledge of such failure; PROVIDED that, if the Partnership
commences and diligently pursues efforts to cure such failure within such thirty
(30) day period and delivers written notice thereof to the Collateral Agent, the
Partnership may continue to effect such cure and the failure shall not be deemed
an Event of Default for an additional sixty (60) days so long as the Partnership
is diligently pursuing such cure;
(e) the Partnership shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or all or a substantial part of its property, (ii) make
a general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other Debtor Relief Law, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or any other Debtor Relief Law or
(vi) take any action for the purpose of effecting any of the foregoing;
(f) a proceeding or case shall be commenced without the
application or consent of the Partnership in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution,
winding-up or the composition or readjustment of debts or (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like of the Partnership or
all or a substantial part of its property under any Debtor Relief Law and such
proceeding or case shall continue undismissed, or any order, judgment or decree
approving any of the foregoing shall be entered and continue unstayed and in
effect, for a period of sixty (60) or more consecutive days, or any order for
relief against the Partnership shall be entered in any involuntary case under
the Bankruptcy Code or any other Debtor Relief Law (each such event described in
subsections (e) and (f) of this Section 6.1 is hereinafter referred to as a
"Bankruptcy Event");
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(g) failure by the Partnership to make any payment, or comply
with any covenant, in respect of any Indebtedness in an amount exceeding
$10,000,000; PROVIDED that, such failure continues unwaived or uncured beyond
any applicable grace period and results in the acceleration of the maturity of
such Indebtedness;
(h) any material Project Document ceases to be valid and binding
and in full force and effect, any third party thereto denies that it has any
liability or obligation under any material Project Document and such third party
ceases performance thereunder, or any third party is in default under such
Project Document (subject to any applicable grace period), and in each case such
cessation or default has resulted or would reasonably be expected to result in a
Material Adverse Effect; PROVIDED that, no such event shall be an Event of
Default if within one hundred eighty (180) days from the occurrence of such
event, the Partnership (A) causes the third party to confirm its obligations
under such Project Document and/or resume performance thereunder (as the case
may be) or (B) enters into an alternate agreement which (x) contains, as
certified by an Authorized Officer of the Partnership and confirmed by the
Independent Engineer, substantially similar terms and conditions or, if such
terms and conditions are no longer available on a commercially reasonable basis,
the terms and conditions then available on a commercially reasonable basis and
(y) after giving effect to the agreement, enables the Partnership to maintain a
minimum annual Projected Debt Service Coverage Ratio equal to or greater than
the lesser of (1) the minimum annual Projected Debt Service Coverage Ratio which
would have been in effect had performance under the original Project Document
continued and (2) 1.2 to 1.0; PROVIDED FURTHER that, in the case of the PPA, in
addition to the conditions set forth above, each Rating Agency confirms that
neither of such actions shall result in a Rating Downgrade;
(i) the entry of one or more final and non-appealable judgment or
judgments for the payment of money in excess of $10,000,000 against the
Partnership, which remain unpaid or unstayed for a period of sixty (60) or more
consecutive days;
(j) the Partners shall cease collectively to maintain Control (as
defined below) of the Partnership unless each Rating Agency then rating the
Bonds provides written confirmation to the Collateral Agent that such cessation
shall not result in a Rating Downgrade (it being understood that for all
purposes of this clause (j), "Control" means the possession, directly or
indirectly, of the economic interest in or power to direct or cause the
direction of the management and policies of a Person through ownership of equity
interests); or
(k) any Security Document shall cease to be in full force and
effect or any Lien purported to be granted thereby with respect to any material
Collateral shall cease to be a valid and perfected Lien in favor of the
Collateral Agent for the benefit of the Senior Parties on the Collateral
described therein with the priority purported to be created thereby and such
cessation has resulted in a Material Adverse Effect; PROVIDED that, the
Partnership shall have thirty (30) days from the date the Partnership obtains
actual knowledge thereof to cure such cessation (if curable) or to furnish to
the Collateral Agent all documents or instruments required to cure any such
cessation (if curable).
Section 6.2 REMEDIES UPON AN EVENT OF DEFAULT. Upon the occurrence and
during the continuance of any Event of Default on or after the Closing Date,
each Senior Party shall be,
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subject to the terms of the Collateral Agency Agreement, entitled to exercise
the remedies available to such Senior Party under and in accordance with the
provisions of the Transaction Documents to which it is party.
ARTICLE VII
INDEMNIFICATION AND CONTRIBUTION
Section 7.1 INDEMNIFICATION AND CONTRIBUTION. If, in connection with
this Agreement or any other Financing Document or the transactions contemplated
hereby or thereby, any of the Senior Parties become involved in any capacity in
any action or legal proceeding, the Partnership agrees, subject to Section 8.16,
(a) to reimburse the Senior Parties, their affiliates and their respective
directors, officers, employees, agents and controlling persons (each, an
"Indemnified Party") promptly upon request for all reasonable expenses
(including the reasonable fees and disbursements of legal counsel and the
reasonable cost of investigation and preparation), disbursements and advances as
they are incurred, and (b) to indemnify and hold harmless each Indemnified Party
against all direct losses, claims, damages or liabilities, joint or several, to
which such Indemnified Party may become subject in connection with this
Agreement or any other Transaction Document or the transactions contemplated
hereby or thereby including without limitation the use by the Partnership of the
proceeds of any moneys provided pursuant to the Financing Documents; PROVIDED,
however, that the Partnership shall not be liable under this Section 7.1 in
respect of any expense, loss, claim, damage or liability to the extent that
either the Partnership obtains a final judgment, not subject to appeal, that
such expense, loss, claim, damage or liability resulted from the willful
misconduct or gross negligence of such Indemnified Party. All indemnifications
and releases from liability granted hereunder to the Senior Parties shall extend
to their officers, directors, employees, agents, successors and assigns. The
agreements in this Section 7.1 shall survive the payment or satisfaction in full
of the obligations, any other termination of this Agreement and the resignation
or removal of the Collateral Agent.
Section 7.2 PROCEDURE FOR INDEMNIFICATION CLAIMS. In the event that a
claim shall be made or threatened, or an action or proceeding shall be commenced
or threatened, against an Indemnified Party, which claim, action or proceeding
could result in liability of the Partnership the indemnification obligations
hereunder, the Indemnified Party shall give prompt notice to the Partnership and
the Partnership shall have the right to take over the defense or settlement of
such claim, action or proceeding at its own expense by giving prompt written
notice to the Indemnified Party; PROVIDED, however, that the omission so to
notify the Partnership will not relieve the Partnership from any liability to
the extent the Partnership is not materially prejudiced as a proximate result of
such failure; PROVIDED, FURTHER, that (a) the Indemnified Party shall at all
times have the right, at its option and expense, to participate fully therein;
PROVIDED that the Partnership shall be responsible for the legal fees and
expenses of the Indemnified Party if (i) the employment of such counsel by the
Indemnified Party has been authorized by the Partnership, (ii) the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Partnership and the Indemnified Party in the conduct of the defense
of such action (in which case the Partnership shall not have the right to direct
the defense of such action on behalf of the Indemnified Party) or counsel for
the Partnership shall have declined to represent the Indemnified Party in light
of a potential conflict of interest, or (iii) the Partnership shall not in
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fact have employed counsel reasonably satisfactory to the Indemnified Party to
assume the defense of such action, and (b) if the Partnership did not give such
notice and did not proceed diligently to defend the claim, action or proceeding
within 15 days after receipt of such notice of the claim, action or proceeding,
the Indemnified Party shall have the right, but not the obligation, to undertake
the defense of any such claim, action or proceeding for the account of and at
the risk of the Partnership and the Partnership shall be bound by any defense or
settlement that the Indemnified Party may make as to such claim, action or
proceeding. The parties shall cooperate in defending any such claim, action or
proceeding, and the defending party shall have reasonable access to the books
and records and personnel in the possession or control of the other party that
are pertinent to the defense. The Partnership shall not, in the defense of such
claim, action or proceeding, consent to the entry of any judgment or award, or
enter into any settlement, except in either event with the prior written consent
of the Indemnified Party. The parties agree that any Indemnified Party may join
the Partnership in any claim, action or proceeding as to which any right of
indemnity granted to such Indemnified Party pursuant to this Agreement would or
might apply, for the purpose of enforcing such right of indemnity.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 SURVIVAL. All agreements, covenants, representations,
warranties and indemnities contained in this Agreement and in any agreement,
document or certificate delivered pursuant hereto, or in connection herewith,
shall survive and continue in effect following the execution and delivery of
this Agreement and the Closing Date.
Section 8.2 NOTICES. Except as otherwise expressly provided herein in
any particular case, all notices, approvals, consents, requests and other
communications hereunder shall be in writing and shall, if addressed as provided
in the following sentence, be deemed to have been given, when (i) delivered by
hand, (ii) mailed by first class registered or certified mail, return receipt
requested, postage prepaid, (iii) sent by private overnight courier service or
(iv) sent by telecopy, if immediately after transmission the sender's facsimile
machine records in writing the correct answer back and such transmission is
promptly followed by hand, mail or overnight courier service. Until otherwise so
notified by the respective parties, all notices, approvals, consents, requests
and other communications shall be addressed to the following addresses:
If to the Partnership:
Tenaska Georgia Partners, L.P.
1044 N. 115th St. Suite 400
Omaha, NE 68154-4446
Attention: Michael F. Lawler
Telecopier No.: 402-691-9550
Telephone No.: 402-691-9500
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If to the Trustee:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Telecopier No.: (212) 946-8178
Telephone No.: (212) 946-7557
If to the DSR LOC Agent:
The Toronto-Dominion Bank
909 Fannin
Suite 1700
Houston, Texas 77010
Attention: Jeff Lents
Telecopier No.: (713) 653-8227
Telephone No.: (713) 951-9921
If to the PPA Letter of Credit Agent:
The Toronto-Dominion Bank
909 Fannin
Suite 1700
Houston, Texas 77010
Attention: Jeff Lents
Telecopier No.: (713) 653-8227
Telephone No.: (713) 951-9921
If to the Collateral Agent:
The Chase Manhattan Bank
Capital Markets Fiduciary Services
450 West 33rd Street, 15th Floor
New York, NY 10001
Attention: Annette M. Marsula
International & Project Finance Service Delivery
Telecopier No.: (212) 946-8178
Telephone No.: (212) 946-7557
A duplicate copy of each notice, approval, consent, request or other
communication given hereunder by each of the parties, to any one of the others
or to the holders of the Bonds shall also be given to all of the others. Each of
the parties may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, approvals, consents, requests or other
communications shall be sent or persons to whose attention the same shall be
directed.
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Section 8.3 SEVERABILITY OF PROVISIONS. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 8.4 AMENDMENTS, WAIVERS, ETC. No amendment, modification or
supplement of this Agreement shall be effective unless such amendment,
modification or supplement was effected in accordance with the terms of this
Agreement and Section 6.11 of the Collateral Agency Agreement. Any approval of
an amendment to, or any waiver of any provision of, this Agreement shall be
effective only in the specific instance and for the specific purpose for which
such approval or waiver is given. No delay on the part of any Senior Party in
the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial waiver by such Senior Party of any right, power
or remedy preclude any further exercise thereof, or the exercise of any other
right, power or remedy.
Section 8.5 HEADINGS; TABLE OF CONTENTS. The Table of Contents and the
headings of the Articles, Sections, subsections, clauses and paragraphs hereof,
and of Schedules, Appendices and Exhibits hereto, are for convenience of
reference only, and shall not affect the construction or interpretation of this
Agreement.
Section 8.6 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 8.7 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (i) This
Agreement is a contract made under the laws of the State of New York of the
United States and shall for all purposes be governed by and construed in
accordance with the laws of such State without regard to the conflict of law
rules thereof (other than Section 5-1401 of the New York General Obligations
Law).
(ii) Any legal action or proceeding against the Partnership with
respect to this Agreement may be brought in the courts of the State of New York
in the County of New York or of the United States for the Southern District of
New York and, by execution and delivery of this Agreement, the Partnership
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The Partnership
agrees that a judgment, after exhaustion of all available appeals, in any such
action or proceeding shall be conclusive and binding upon the Partnership, and
may be enforced in any other jurisdiction, by a suit upon such judgment, a
certified copy of which shall be conclusive evidence of the judgment. The
Partnership irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Partnership, at
its address referred to in Section 8.2 hereto, such service to become effective
thirty (30) days after such mailing. Nothing herein shall affect the right of
the Trustee or any other Person to serve process in any other manner permitted
by law or to commence legal proceedings or otherwise proceed against the
Partnership in any other jurisdiction.
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(iii) The Partnership hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement in the courts referred to in clause (b) above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 8.8 ENTIRE AGREEMENT. This Agreement (including, without
limitation, the schedules and exhibits hereto) and the other Transaction
Documents supersede all prior agreements, written or oral, between or among any
of the parties hereto relating to the transactions contemplated hereby and
thereby, and each of the parties hereto represents and warrants to the others
that this Agreement and the other Transaction Documents constitute the entire
agreement among the parties relating to the transactions contemplated hereby and
thereby.
Section 8.9 BENEFIT OF AGREEMENT. All agreements, representations,
warranties and indemnities in this Agreement and in any agreement, document or
certificate delivered pursuant hereto shall be binding upon the Person making
the same and its successors and assigns and shall inure to the benefit of and be
enforceable by the Person for whom made and its successors and assigns;
PROVIDED, however, the Partnership may not assign or transfer any of its rights
or obligations hereunder without the prior written consent of each of the Senior
Parties. Any Senior Party may transfer, assign or grant its rights and
obligations hereunder in connection with an assignment or transfer of all or any
part of its interest in accordance with the provisions of the respective
Financing Document; PROVIDED that, any such assignee has agreed to be bound by
the terms of the Financing Documents. This Agreement is for the sole benefit of
the parties hereto and their respective successors and assigns and all
Indemnified Parties and their respective successors and assigns, and is not for
the benefit of any other Person.
Section 8.10 EXPENSES. All statements, reports, certificates, opinions
and other documents or information required to be furnished by the Partnership
to the Senior Parties under this Agreement or any other Financing Document shall
be supplied without cost to the Senior Parties. The Partnership shall pay,
within thirty (30) days after demand therefor, all reasonable and documented
out-of-pocket costs and expenses of the Senior Parties, incurred in connection
with (i) the negotiation, preparation, execution and delivery of the Financing
Documents or any waiver or amendment of, or supplement or modification to, the
Financing Documents and (ii) the review of any of the other agreements,
instruments or documents referred to in this Agreement or relating to the
transactions contemplated hereby. In addition, the Partnership shall pay, within
thirty (30) days after demand therefor, all reasonable and documented
out-of-pocket costs and expenses of the Senior Parties (including the reasonable
and documented fees and disbursements of counsel to the Senior Parties),
incurred in connection with an exercise of the Senior Parties' remedies under
the Financing Documents following the occurrence of an Event of Default under
the Financing Documents.
Section 8.11 REMOVAL OF INDEPENDENT ENGINEER; PAYMENT OF INDEPENDENT
ENGINEER. The Collateral Agent shall, at the request of the Required Senior
Parties, remove the Independent Engineer and appoint a successor Independent
Engineer from those engineers then listed on Schedule 8.11(and designated in
such request) if at any time the existing Independent Engineer becomes incapable
of acting or is, or is reasonably likely to be, adjudged bankrupt or insolvent
or a receiver is appointed for, or any public officer shall take charge or
control of, the Independent
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Engineer or its property or its affairs for the purpose of rehabilitation,
conservation or liquidation. Within thirty (30) days of receipt by the
Collateral Agent of a written notification from the Partnership to the effect
that the Independent Engineer has failed to carry out its obligations in a
timely manner, the Collateral Agent shall, unless directed by the Required
Senior Parties not to do so, remove the Independent Engineer and appoint a
successor Independent Engineer from those engineers then listed on Schedule 8.11
(and designated by the Partnership in such written notification); provided,
however, that the Partnership shall have the unilateral right to remove the
Independent Engineer and appoint a successor Independent Engineer from those
independent engineers then listed on Schedule 8.11 in the event that a Third
Party Engineer determines that the failure of the existing Independent Engineer
to carry out its obligations in a timely manner has resulted or could reasonably
be expected to result in a Material Adverse Effect; and provided, further, that
the Independent Engineer so appointed shall not be such Third Party Engineer.
The Partnership shall pay for all services performed by the Independent Engineer
and its reasonable and documented costs and expenses related thereto.
Section 8.12 THIRD PARTY ENGINEER DISPUTE RESOLUTION. (i) If the
Partnership and the Independent Engineer are in dispute in respect of a notice,
plan, report, certificate or budget and they are unable to resolve the dispute
within seven (7) days of the Independent Engineer expressing its disagreement
with, or failing when requested by the Partnership to approve, confirm, concur
in or consent to, such notice, plan, report, certificate or budget, a single
independent engineer (the "THIRD PARTY ENGINEER") shall be designated to
consider and decide the issues raised by such dispute. The selection of such
Third Party Engineer shall be made from the list of engineers described below.
The Partnership shall designate the Third Party Engineer from such list not
later than the third (3rd) day following the expiration of the seven (7) day
period described above and such designation, subject to acceptance thereof by
the Third Party Engineer so designated, shall become effective ten (10) Business
Days after notice is given by the Partnership to the Collateral Agent of the
selection of a Third Party Engineer unless the Collateral Agent, acting at the
direction of the Required Senior Parties, gives notice of their disagreement
with such designation within such ten (10) Business Day period, in which event
the Partnership shall select another Third Party Engineer pursuant to the
foregoing procedure. In the event the designated Third Party Engineer shall
decline the assignment, the foregoing procedure shall apply to designation of an
alternative Third Party Engineer. Within three (3) days of the acceptance of a
Third Party Engineer, each of the Partnership and the Independent Engineer shall
submit to the Third Party Engineer a notice setting forth in detail such
Person's position in respect of the issues in dispute. Such notice shall include
supporting documentation, if appropriate.
(ii) The Third Party Engineer shall complete all proceedings and
issue his decision with regard to the issues in dispute as promptly as
reasonably possible, but in any event within ten (10) days of the date on which
he is designated as Third Party Engineer unless the Third Party Engineer
reasonably determines that additional time is required in order to give adequate
consideration to the issues raised. In such case the Third Party Engineer shall
state in writing his reasons for believing that additional time is needed and
shall specify the additional period required, which such period shall not exceed
ten (10) days without the Partnership's agreement.
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(iii) If the Third Party Engineer determines that the concerns
set forth in the Independent Engineer's notice are valid, he shall so state and
shall state the corrective actions to be taken by the Partnership. In such case,
the Partnership shall promptly take such actions. The Partnership shall
thereafter bear all costs which may arise from actions taken pursuant to the
Third Party Engineer's decision. If the Third Party Engineer determines that the
concerns set forth in the Independent Engineer's notice are not valid, he shall
so state and shall state the appropriate actions, if any, to be taken by the
Partnership. In such case, the Partnership shall take such actions, if any, and
for purposes of this Agreement, the Independent Engineer shall be deemed to have
approved, confirmed, concurred in or consented to the notice, plan, report,
certificate or budget in dispute. The decision of the Third Party Engineer shall
be final and non-appealable. The Partnership shall bear all reasonable and
documented costs incurred by the Third Party Engineer in connection with this
dispute resolution mechanism.
(iv) The Third Party Engineer shall be chosen from the list of
qualified engineers maintained as Schedule 8.11 to this Agreement. At any time
the Partnership or the Collateral Agent, acting at the direction of the Required
Senior Parties, may remove a particular engineer from the list by obtaining the
other's consent to such removal (such consent not to be unreasonably withheld,
conditioned or delayed). However, no name or names may be removed from the list
if such removal would leave the list without at least two (2) names, unless,
concurrently therewith, the parties agree to the addition of one (1) or more
names to such list (such agreement not to be unreasonably withheld, conditioned
or delayed).
(v) During January of each year, each of the Partnership and the
Collateral Agent shall review the current list of Third Party Engineers and the
Partnership shall give notice to the Collateral Agent and the Collateral Agent,
acting at the direction of the Required Senior Parties, shall give notice to the
Partnership of any proposed additions to the list and any intended deletions.
Intended deletions shall automatically become effective thirty (30) days after
notice is received by the other unless written objection is made by such other
person within thirty (30) days and provided that such deletions do not leave the
list without at least two (2) names. Proposed additions to the list shall
automatically become effective thirty (30) days after notice is received by the
other person unless written objection is made by such other person within thirty
(30) days. By mutual agreement between the Partnership and the Collateral Agent,
acting at the direction of Senior Parties holding five percent (5%) of the
Combined Exposure, a new name or names may be added to the list of Third Party
Engineers at any time.
Section 8.13 WAIVER OF LITIGATION PAYMENTS. In the event that any action
or lawsuit is initiated by or on behalf of the Senior Parties against the
Partnership, or any other party to any Financing Document, the Partnership, to
the fullest extent permissible under Applicable Law, irrevocably waives its
right to, and agrees not to request, plead, or claim that any Senior Party or
their respective successors, transfers, and assigns (any such Person, a "SENIOR
PARTY PLAINTIFF") post, pay, or offer, any caution judicatum solvi bond,
litigation bond, or any other bond, fee, payment, or security measure provided
for by any provision of law applicable to such action or lawsuit (any such bond,
fee, payment, or measure, a "LITIGATION PAYMENt"), and the Partnership further
waives any objection that it may now or hereafter have to a Senior Party
Plaintiff's claim that such Senior Party Plaintiff should be exempt or immune
from posting, paying, making or offering any such Litigation Payment.
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Section 8.14 RECITALS. Neither the Collateral Agent, the Trustee, the
DSR LOC Agent, the PPA LOC Agent, the Depositary Bank nor any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be
responsible in any manner to any of the other Senior Parties for any recitals,
representations, statements or warranties made in this Agreement.
Section 8.15 IMMUNITY OF OFFICERS AND EMPLOYEES OF TRUSTEE, DSR LOC
AGENT, PPA LOC AGENT, COLLATERAL AGENT AND DEPOSITARY BANK. No recourse shall be
had for the enforcement of any obligation, covenant, promise or agreement of the
Collateral Agent, Trustee, DSR LOC Agent, PPA LOC Agent or the Depositary Bank
contained in this Agreement or for any claim based hereon or otherwise in
respect hereof against any past, present or future officer or employee, as such,
in his individual capacity, of the Collateral Agent, Trustee, DSR LOC Agent, PPA
LOC Agent or the Depositary Bank or of any successor entity, either directly or
through the Collateral Agent, Trustee, DSR LOC Agent, PPA LOC Agent or the
Depositary Bank or any successor entity, whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, and no personal liability whatsoever shall attach to, or
be incurred by, any past, present or future officer or employee, as such, of the
Collateral Agent, Trustee, DSR LOC Agent, PPA LOC Agent or the Depositary Bank
or of any successor entity, either directly or through the Collateral Agent,
Trustee, DSR LOC Agent, PPA LOC Agent or the Depositary Bank or any successor
entity, under or by reason of any of the obligations, covenants, promises or
agreements entered into among the Collateral Agent, Trustee, DSR LOC Agent, PPA
LOC Agent or the Depositary Bank and the other parties to this Agreement whether
contained in this Agreement or to be implied herefrom as being supplemental
hereto, and all personal liability of that character against every such officer
and employee is, by the execution of this Agreement and as a condition of, and
as part of the consideration for, the execution of this Agreement, expressly
waived and released; PROVIDED, however, that nothing contained in this Section
8.15 or in this Agreement shall be construed to protect or release any officer
or employee of the Collateral Agent, Trustee, DSR LOC Agent, PPA LOC Agent or
the Depositary Bank from liability arising from any fraudulent actions,
fraudulent misrepresentations, gross negligence or willful misconduct. The
immunity of officers and employees of the Trustee, Collateral Agent, DSR LOC
Agent, PPA LOC Agent or the Depositary Bank under the provisions contained in
this Section 8.15 shall survive the termination of this Agreement.
Section 8.16 NO RECOURSE. The obligations of the Partnership and each
Non-Recourse Party with respect to their respective obligations under this
Agreement are limited as provided in Section 8.21 of the Collateral Agency
Agreement which is hereby incorporated herein by reference, mutatis mutandis.
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IN WITNESS WHEREOF, the parties have caused this Common Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc., its
Managing General Partner
By: /s/ Michael F. Lawler
---------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Annette M. Marsula
---------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
THE TORONTO-DOMINION BANK,
as DSR LOC Agent
By: /s/ Warren Finley
---------------------------------------
Name: Warren Finley
Title: Manager Credit
THE TORONTO-DOMINION BANK,
as PPA LOC Agent
By: /s/ Warren Finley
---------------------------------------
Name: Warren Finley
Title: Manager Credit
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
---------------------------------------
Name: Annette M. Marsula
Title: Assistant Vice President
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APPENDIX A
PART I: DEFINITIONS
"ACCOUNT" means any account established under the Collateral Agency
Agreement.
"ADDITIONAL BONDS" means any Bonds issued pursuant to the Indenture or a
supplemental indenture thereto other than the Initial Bonds.
"ADDITIONAL PROJECT DOCUMENT" means (i) any material contract or
undertaking entered into by the Partnership after the Closing Date relating to
the sale of electricity from the Project or to capital improvements for,
operation or maintenance of, the Project and (ii) any consent or security
instrument entered into by the Partnership or any other relevant party in
connection with an Additional Project Document.
"AFFILIATE" means, with respect to any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
such Person. For purposes of this definition, the term "control" (including the
correlative meanings of the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of securities or
partnership or other ownership interests or by contract or otherwise.
Notwithstanding the foregoing, each Person owning, directly or indirectly, 10%
or more of the partnership interests in the Partnership shall be deemed to be an
Affiliate of the Partnership.
"AFFILIATE SUBORDINATED DEBT" means Indebtedness (and any note or other
instrument evidencing the same) advanced by Affiliates of the Partnership which
has been subordinated to the Senior Debt, on the terms and conditions
substantially in the form of the subordination provisions set forth in Exhibit B
of the Collateral Agency Agreement.
"ANNUAL AUDITED FINANCIAL STATEMENTS" means, for any Person, audited
financial statements of such Person, including a statement of equity, a balance
sheet as of the close of the applicable fiscal year and an income and expense
statement.
"APPLICABLE LAW" means, with respect to any Person, property or matter,
any of the following applicable thereto: any statute, law, regulation,
ordinance, rule, judgment, rule of common law, order, decree, Governmental
Approval, approval, concession, grant, franchise, license, agreement, directive,
guideline, policy, requirement, or other governmental restriction or any similar
form of decision of, or determination by, or any interpretation or
administration of any of the foregoing, by any Governmental Authority, whether
in effect as of the date of the Common Agreement or thereafter and in each case
as amended (including, without limitation, any pertaining to land use or zoning
restrictions).
"APPROVED PROJECT CONSTRUCTION BUDGET" means shall have the meaning
given to that term in SECTION 3.1(L) of the Common Agreement.
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"AUDITOR" means Arthur Andersen LLP.
"AUTHORITY" means the Development Authority of Heard County, Georgia.
"AUTHORITY BONDS" means the $275,000,000 Taxable Industrial Development
Revenue Bonds (Tenaska Georgia Partners, L.P. Project), Series 1999 issued by
the Authority pursuant to the Authority Indenture.
"AUTHORITY INDENTURE" means that certain Indenture of Trust, dated as of
November 1, 1999, between the Authority and The Chase Manhattan Bank, as trustee
thereunder.
"AUTHORITY PURCHASE AGREEMENT" means the Bond Purchase Agreement, dated
as of November 1, 1999 among the Authority, the Partnership, as Lessee, and the
Partnership, as purchaser.
"AUTHORITY SECURITY DEED" means the Deed to Secure Debt, Security
Agreement and Assignment of Rents and Leases, dated as of November 1, 1999, by
and between the Authority and the Authority Trustee, as amended from time to
time.
"AUTHORITY TRUSTEE" shall mean The Chase Manhattan Bank, its successors
and assigns, in its capacity as trustee under the Authority Indenture.
"AUTHORIZATION TO PROCEED" means the order to the EPC Contractor
granting it the authority to proceed with performance pursuant to all provisions
of the EPC Contract.
"AUTHORIZED OFFICER" OR "AUTHORIZED REPRESENTATIVE" means (a) in the
case of any corporation or limited liability company, the chief executive
officer, the president, the chief financial officer, a vice president, the
treasurer or an assistant treasurer of such corporation or limited liability
company and (b) in the case of any general or limited partnership, any Person
authorized by the executive review committee (or such other Person that is
responsible for the management of such Partnership) to take the applicable
action on behalf of such Partnership or any officer (with a title specified in
clause (a) above) or Authorized Officer of such partnership's managing general
partner (or such other Person that is responsible for the management of such
managing general partner).
"AVAILABILITY TEST" shall have the meaning given to that term in the EPC
Contract.
"BANKRUPTCY CODE" means the Title 11 of the United States Code, as
amended from time to time.
"BANKRUPTCY EVENT" has the meaning set forth in Section 6.1(f) of this
Agreement.
"BASE CASE PROJECTIONS" shall have the meaning given to that term in
SECTION 3.1(M) of the Common Agreement.
"BOARD OF DIRECTORS" means, with respect to any corporation, either the
board of directors of such corporation or any committee of such board of
directors duly authorized to act therefor.
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"BONDS" shall mean any of the Initial Bonds and, when issued, any of the
Additional Bonds issued pursuant to the Indenture.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or legal
holiday in the State of New York, or a day on which banking institutions
chartered by the State of New York, or the United States, are legally required
or authorized to close.
"CASH FLOW AVAILABLE FOR DEBT SERVICE" means, in respect of a specified
period, (i) all Revenues deposited in the Revenue Fund, if such specified period
occurred prior to the date of determination or (ii) all Revenues projected to be
deposited in the Revenue Fund during such period if such specified period is to
occur subsequent to the date of determination less amounts paid, or projected to
be paid, as applicable, in respect of Operating and Maintenance Expenses,
Collateral Agent Claims, Depositary Bank Claims, Trustee Claims, Authority
Trustee Claims, PPA LOC Agent Claims and DSR LOC Agent Claims, and under a
Working Capital Facility during such period.
"CLOSING DATE" shall mean the date of issuance and delivery of the
Initial Bonds.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"COLLATERAL" shall have the meaning given to that term in each Security
Document.
"COLLATERAL AGENCY AGREEMENT" means the Collateral Agency and
Intercreditor Agreement, dated as of November 1, 1999, among the Partnership,
the Authority Trustee, the Trustee, the DSR LOC Agent, the PPA LOC Agent, the
Collateral Agent and the Depositary Bank.
"COLLATERAL AGENT" means The Chase Manhattan Bank, its successors and
assigns in its capacity as collateral agent under the Collateral Agency
Agreement and the other Financing Documents to which it is a party.
"COMBINED EXPOSURE" means, as of any date of calculation, the sum
(calculated without duplication) of the following, to the extent the same is
held by or represented by a Senior Party: (i) the aggregate principal amount of
all Outstanding Bonds; (ii) the maximum amount available to be drawn under the
DSR LOC (taking into account, without duplication, in the case of the DSR LOC,
the maximum amount which may become available to be drawn in the future by
reason of an increase in the Debt Service Reserve Required Balance); (iii) the
maximum amount available to be drawn as of such date under the PPA LOC; (iv) the
maximum amount available to be drawn under a Working Capital Facility; (v) the
amount, without duplication, of any unreimbursed drawing under the Working
Capital Facility, the DSR LOC and the PPA LOC; (vi) the aggregate amount of all
undrawn financing commitments under the documents governing Other Senior Debt,
which the creditors party thereto have no right to terminate; and (vii) the
amount, without duplication, of any unreimbursed drawing under the documentation
governing such Other Senior Debt.
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"COMMERCIAL OPERATION" means, with respect to a Unit, that it has passed
each of the following tests: (i) Functional Testing, (ii) the Demonstration
Tests, (iii) PECO Tests, and (iv) the Availability Test.
"COMMERCIAL OPERATION CERTIFICATE" shall have the meaning given to that
term in SECTION 3.2 (Payments on Commercial Operation Date) of the Collateral
Agency Agreement.
"COMMISSION" means the United States Securities and Exchange Commission
or, if at any time such Commission is not existing and performing the duties now
assigned to it under Applicable Law, the body performing such duties at such
time.
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings,
Common Representations, Warranties, Covenants and Other Terms, dated as of
November 1, 1999, among the Partnership, the Trustee, the DSR LOC Agent, the PPA
LOC Agent and the Collateral Agent.
"CONSTRUCTION FUND" means the Fund so designated, established and
created under SECTION 2.2 (Establishment of Funds and Sub-accounts) of the
Collateral Agency Agreement.
"CONTRIBUTING PARTNER" has the meaning set forth in the Equity
Contribution Agreement.
"DATE OF COMMERCIAL OPERATION" means the date not earlier than June 1,
2001, on which the Initial Units have achieved PPA Commercial Operation.
"DATE OF COMMERCIAL OPERATION OF THE FINAL UNITS" means the date not
earlier than June 1, 2002 on which all the Final Units have achieved Commercial
Operation.
"DEBT SERVICE" means, without duplication, all principal, interest,
premium (if any) and letter of credit fees due with respect to the Bonds and all
other Permitted Indebtedness due during such period.
"DEBT SERVICE COVERAGE RATIO" means for any period the ratio of (a) Cash
Flow Available for Debt Service for such period to (b) Debt Service (other than
Subordinated Debt) for such period.
"DEBT SERVICE FUND" means the Debt Service Fund established by the
Collateral Agent pursuant to SECTION 2.2 (Establishment of Funds and
Sub-accounts) of the Collateral Agency Agreement.
"DEBT SERVICE RESERVE ACCOUNT" means the sub-account of the Debt Service
Fund established by the Collateral Agent pursuant to SECTION 2.2 (Establishment
of Funds and Sub-accounts) of the Collateral Agency Agreement.
"DEBT SERVICE RESERVE REQUIRED BALANCE" shall mean the amount equal to
the next succeeding semi-annual scheduled payment of principal and interest due
and payable on Outstanding Bonds plus, if a DSR LOC is to be provided, an amount
corresponding to six months of interest on the maximum amount of such DSR LOC,
as established by the Partnership and the DSR LOC Agent pursuant to the DSR LOC
Reimbursement Agreement.
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"DEBTOR RELIEF LAW" means any applicable liquidation, dissolution,
conservatorship, bankruptcy, moratorium, rearrangement, insolvency,
reorganization, readjustment of debt or similar law affecting the rights or
remedies of creditors generally, as in effect from time to time.
"DEFAULT" shall mean, an event or condition that, with the giving of
notice, lapse of time or failure to satisfy certain specified conditions, or any
combination thereof, would become an Event of Default.
"DEMONSTRATION TEST" shall have the meaning given to that term in the
EPC Contract.
"DEPOSITARY BANK" means The Chase Manhattan Bank, as depositary bank
under the Collateral Agency Agreement or any successor thereto pursuant to the
terms thereof.
"DISTRIBUTION CONDITIONS" means
(i) no Default or Event of Default under the Common Agreement
shall have occurred and be continuing;
(ii) an Authorized Officer of the Partnership certifies to the
Trustee that the (x) Debt Service Coverage Ratio for the preceding two
Semi-Annual Periods taken as a whole (or, for the period since the Date
of Commercial Operation of the Final Units notwithstanding that such
period does not include any complete Semi-Annual Periods) and (y)
Projected Debt Service Coverage Ratio for the pair of subsequent
consecutive Semi-Annual Periods taken as a whole, each equals or exceeds
(A) 1.2 to 1.0 for ordinary distributions or (B) 1.15 to 1.0 for
distributions in amounts equal to the tax liability of the Partners,
their Affiliates or their owners in respect of Partnership income;
(iii) (x) the balance in the Debt Service Reserve Account
(including amounts available to be drawn under the DSR LOC) equals or
exceeds the Debt Service Reserve Required Balance and (y) the amount
deposited in the Major Maintenance Sub-account of the Operating Fund on
the Funding Date on which such distribution is proposed to be made
equals or exceeds the Major Maintenance Required Amount required to be
deposited therein on such Funding Date; and
(iv) the Partnership is not insolvent and would not be
rendered insolvent by such distribution.
"DISTRIBUTION DATE" means any Scheduled Payment Date occurring at least
six months after the Date of Commercial Operation of the Final Units.
"DISTRIBUTION SUSPENSE ACCOUNT" means the sub-account of the Partnership
Distribution Fund established by the Collateral Agent pursuant to SECTION 2.2
(Establishment of Funds and Sub-accounts) of the Collateral Agency Agreement.
"DSR BOND" has the meaning specified in the DSR LOC Reimbursement
Agreement.
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"DSR LOC" means a letter of credit provided by the Partnership to the
Collateral Agent from a financial institution rated at least "A-" by S&P and
"A3" by Moody's in respect of all or a portion of the Debt Service Reserve
Required Balance.
"DSR LOC AGENT" means, initially, The Toronto-Dominion Bank, and any
other financial institution acting as the agent for the DSR LOC Issuer and the
DSR LOC Banks under the DSR LOC Reimbursement Agreement.
"DSR LOC BANK" means each bank or financial institution that becomes
party to the DSR LOC Reimbursement Agreement.
"DSR LOC DOCUMENTS" means the DSR LOC Reimbursement Agreement, the DSR
LOC and each document related thereto.
"DSR LOC EVENT OF DEFAULT" means an "Event of Default" under the DSR LOC
Reimbursement Agreement.
"DSR LOC LOAN" means each drawing, and "DSR LOC LOANS" means all
drawings, by the Collateral Agent under the DSR LOC.
"DSR LOC ISSUER" means, initially, The Toronto-Dominion Bank or any
other commercial bank(s) or financial institution(s) issuing the DSR LOC
pursuant to the DSR LOC Reimbursement Agreement.
"DSR LOC REIMBURSEMENT AGREEMENT" means the Debt Service Reserve Letter
of Credit and Reimbursement Agreement, dated as of the Closing Date, among the
Partnership, the DSR LOC Issuer, the DSR LOC Agent and the DSR LOC Banks or
another reimbursement agreement providing for the issuance of a DSR LOC.
"DSR TERM LOAN" means a loan resulting from a conversion of a DSR LOC
Loan to a DSR Term Loan or a draw on the DSR LOC after the occurrence of a
Step-up Event.
"DTC" means The Depository Trust Company, having a principal office at
55 Water Street, New York, New York, 10041-0099, together with any Person
succeeding thereto by merger, consolidation or acquisition of all or
substantially all of its assets, including substantially all of its securities
payment and transfer operations.
"EMINENT DOMAIN PROCEEDS" means all proceeds in respect of any action to
condemn, seize or appropriate all or any part of the Project.
"ENERGY CONTRACT BUY-OUT" means any cash payment by a purchaser of
capacity and/or energy, including by PECO, the effect of which is to result in
the termination or cancellation of, reduce future payments under, or change the
term of, the purchase contract between such purchaser and the Partnership.
"ENVIRONMENTAL CLAIM" means any written complaint, order, citation,
decree, demand, judgment or written notice actually received by the Partnership
from any Person relating to any
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matters of Environmental Law affecting or relating to any activity or operations
at any time conducted by the Partnership, including, without limitation:
(i) the existence of any Environmentally Regulated Materials at
the Facility Site in violation of any Environmental Law;
(ii) the release or threatened release of any Environmentally
Regulated Materials generated at the Facility Site in violation of any
Environmental Law;
(iii) remediation of any such release of the Facility Site; and
(iv) any violation of any relevant Environmental Law in
connection with the Facility Site.
"ENVIRONMENTAL LAWS" means any and all Laws (as well as obligations,
duties and requirements relating thereto under common law) relating to: (i)
noise, emissions, discharges, spills, releases or threatened releases of
pollutants, contaminants, Environmentally Regulated Materials, materials
containing Environmentally Regulated Materials, or hazardous or toxic materials
or wastes into ambient air, surface water, groundwater, watercourses, publicly
or privately-owned treatment works, drains, sewer systems, wetlands, septic
systems or onto land surface or subsurface strata; (ii) the use, treatment,
storage, disposal, handling, manufacture, processing, distribution,
transportation, or shipment of Environmentally Regulated Materials, materials
containing Environmentally Regulated Materials or hazardous and/or toxic wastes,
material, products or by-products (or of equipment or apparatus containing
Environmentally Regulated Materials); (iii) pollution or the protection of human
health, the environment or natural resources, or (iv) zoning and land use.
"ENVIRONMENTALLY REGULATED MATERIALS" means (i) hazardous materials,
hazardous wastes. hazardous substances, extremely hazardous wastes, restricted
hazardous wastes, toxic substances, toxic pollutants, contaminants, pollutants
or words of similar import, as used under Environmental Laws, including but not
limited to the following: the Hazardous Materials Transportation Act, 49 U.S.C.
1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et
seq., the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, 42 U.S.C. 9601 et seq., the Clean Water Act, 33 U.S.C. 1231 et seq.,
the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Toxic Substances Control Act,
15 U.S.C. 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. ss. 3808 et seq.,
and the Oil Pollution Act, 33 U.S.C. ss. 2701 et seq., and their State and local
counterparts or equivalents; (ii) petroleum and petroleum products including
crude oil and an fractions thereof; (iii) natural gas, synthetic gas and any
mixtures thereof; (iv) radon; (v) any other hazardous, radioactive, toxic or
noxious substance, material, pollutant, or solid, liquid or gaseous waste;, and
(vi) any substance that, whether by its nature or its use, is now or hereafter
subject to regulation under any Environmental Law or with respect to which any
Federal, state or local Environmental Law or governmental agency requires
environmental investigation, monitoring or remediation.
"EPC BUY-DOWN" means any cash payment by the EPC Contractor or the EPC
Guarantor, or by the issuer of any performance bond securing the performance by
the EPC Contractor of the EPC Contract in respect of performance liquidated
damages paid in accordance
A-7
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with the EPC Contract and no longer subject to refund to the EPC Contractor due
to subsequent enhanced Facility performance, all in accordance with the EPC
Contract.
"EPC BUY-DOWN PROCEEDS SUB-ACCOUNT" means the sub-account of the Revenue
Fund established by the Collateral Agent pursuant to SECTION 2.2 (Establishment
of Funds and Sub-accounts) of the Collateral Agency Agreement.
"EPC CONTRACT" means the Engineering, Procurement and Construction
Agreement, dated September 15, 1999, as amended, between the Partnership (as
assignee of TGILP) and the EPC Contractor.
"EPC CONTRACTOR" means Zachry Construction Corporation, a Delaware
corporation.
"EPC GUARANTOR" means H.B. Zachry Company, a Delaware corporation.
"EPC GUARANTY" means the guaranty by the EPC Guarantor of the EPC
Contractor's obligations under the EPC Contract.
"EQUITY CONTRIBUTION AGREEMENT" means the Equity Contribution Agreement,
dated as of November 1, 1999, between the Partners and the Collateral Agent
pursuant to which the Contributing Partners agree to contribute to the
Partnership equity up to $35.5 million from time to time prior to the Date of
Commercial Operation of the Final Units.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA CONTROLLED GROUP" means the Partnership or any other organization
that is a member of the same controlled group of organizations as the
Partnership within the meaning of Sections 414(b),(c),(m) or (o) of the Code.
"ERISA PLAN" means an employee pension benefit plan within the meaning
of Section 3(2) of ERISA that is (A) subject to the minimum funding requirements
of Section 412 of the Code or Section 302 of ERISA, and (B) sponsored,
maintained or contributed to by the Partnership or any other member of its ERISA
Controlled Group, or to which any such Person is required to contribute.
"EVENT OF DEFAULT" shall have the meaning given to that term in SECTION
6.1 (Events of Default) of the Common Agreement.
"EVENT OF EMINENT DOMAIN" means any compulsory transfer or taking, or
transfer under threat of compulsory transfer or taking, of a material part of
the Facility by any governmental authority or any Person acting with the
authority thereof for more than six months, unless such transfer or taking is
being contested by the Partnership in good faith.
"EVENT OF LOSS" means any event of damage, destruction, condemnation,
seizure or appropriation of all or any part of the Project.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
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"EWG" means an "exempt wholesale generator" as defined in Section
32(a)(1) of PUHCA.
"FACILITY" means the 936 megawatt (nominal summer rating) natural
gas-fired simple-cycle electric generating plant to be financed, constructed,
procured, engineered and operated by the Partnership and located in Heard
County, Georgia.
"FACILITY SITE" means the land and other real property leased under the
Lease Agreement.
"FINAL MATURITY DATE" means January 31, 2030.
"FINAL UNITS" means the second three Units scheduled to be placed into
PPA Commercial Operation.
"FINANCING DOCUMENTS" means, collectively, the Bonds, the Indenture, the
DSR LOC Reimbursement Agreement and any evidence of indebtedness thereunder
entered into, the PPA LOC Reimbursement Agreement and any evidence of
indebtedness thereunder entered into, the Collateral Agency Agreement, any
Working Capital Facility, the Equity Contribution Agreement
and the Security Documents.
"FUNCTIONAL TESTING" shall have the meaning given to that term in the
EPC Contract.
"FUNDING DATE" means the 23rd day of each month, or, if such day is not
a Business Day, the next succeeding Business Day.
"FUNDING PERIOD" means a period commencing on a Funding Date and ending
on the day preceding the next succeeding Funding Date.
"GAAP" means generally accepted accounting principles in the United
States as in effect from time to time.
"GAS INTERCONNECT AGREEMENT" means the Interconnect, Reimbursement and
Operating Agreement, dated as of August 18, 1999, between the Partnership and
Transco.
"GE" means General Electric Company, a New York corporation.
"GE INTERNATIONAL" means General Electric International Inc., a Delaware
corporation.
"GENERAL PARTNER PLEDGE AND SECURITY AGREEMENT" means the General
Partner Pledge and Security Agreement, dated as of November 1, 1999, between TGI
and the Collateral Agent.
"GOVERNMENTAL APPROVALS" means all governmental approvals,
authorizations, consents, decrees, licenses, permits, waivers, privileges,
filings, or franchises with all Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means the government of any federal, state,
municipal or other political subdivision in which the Project is located, and
any other government or political subdivision thereof exercising jurisdiction
over the Project or any party to any of the Project
A-9
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Documents, including all agencies and instrumentalities of such governments and
political subdivisions.
"GPC" means Georgia Power Company, a Georgia corporation.
"GPC INTERCONNECTION AGREEMENT" means the Interconnection Agreement,
dated October 19, 1999, between GPC and the Partnership.
"GUARANTEE OBLIGATION" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person directly or indirectly
guaranteeing in any manner any Indebtedness or similar obligation of any other
Person.
"GUARANTY" means the guarantee by the Partnership of the Authority's
obligations on the Authority Bonds.
"HOLDER" means, with respect to any Bond, the Person in whose name such
Bond is registered in the securities register; PROVIDED that the Partnership or
any Affiliate thereof shall not be deemed a Holder with respect to any matter
herein or any other Financing Document requiring a vote of the Holders.
"INDEBTEDNESS" of any Person means, at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments
(excluding "deposit only" endorsements on checks payable to the order of such
Person), (iii) all obligations of such Person to pay the deferred purchase price
of property or services (except accounts payable and similar obligations arising
in the ordinary course of business shall not be included as Indebtedness), (iv)
all obligations of such Person as lessee under capital leases to the extent
required to be capitalized on the books of such Person in accordance with GAAP
and (v) all obligations of others of the type referred to in clauses (i) through
(iv) above guaranteed by such Person, whether or not secured by a lien on or
other security interest in any asset of such Person.
"INDENTURE" means the Indenture of Trust, dated as of November 1, 1999
between the Partnership and the Trustee.
"INDEPENDENT ENGINEER" means R.W. Beck, Inc., its successors and assigns
or such other independent engineer as may be appointed in accordance with the
terms of the Common Agreement.
"INITIAL BONDS" means the $275,000,000 9.50% Senior Secured Bonds Due
2030, issued by the Partnership pursuant to the Indenture.
"INITIAL DISBURSEMENT" means the initial disbursement from the
Construction Fund made on the Closing Date in accordance with the terms of the
Collateral Agency Agreement.
"INITIAL PURCHASERS" means, collectively, Goldman Sachs & Co. and TD
Securities (USA) Inc.
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"INITIAL UNITS" means the first three Units scheduled to be placed into
PPA Commercial Operation.
"INSURANCE CONSULTANT" means Marsh U.S.A., Inc.
"INSURANCE PROCEEDS" shall mean all proceeds in respect of any property
insurance policy (other than proceeds of business interruption insurance or
delayed opening insurance) covering the Partnership or the Project.
"LEASE AGREEMENT" means the Lease Agreement, dated as of November 1,
1999, between the Authority and the Partnership pursuant to which the
Partnership has agreed to lease from the Authority the Facility, the Facility
Site and certain related infrastructure facilities and related easements on the
terms and conditions set forth thereunder.
"LIEN" means any mortgage, pledge, hypothecation, assignment, mandatory
deposit arrangement with any Person owning Indebtedness of such Person,
encumbrance, lien (statutory or other), preference, priority or other security
agreement of any kind or nature whatsoever which has the substantial effect of
constituting a security interest, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same effect as any of the foregoing and the filing of any
financing statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction, domestic or foreign.
"LIMITED PARTNER PLEDGE AND SECURITY AGREEMENT" means the Limited
Partner Pledge and Security Agreement, dated as of November 1, 1999, between
TGILP and the Collateral Agent.
"LOC SWEEP NOTICE" means a notice by the Partnership, furnished to the
Collateral Agent no earlier than February 1, 2012, directing and authorizing the
Collateral Agent to apply available cash to the prepayment of DSR Bonds, DSR
Term Loans and PPA Term Loans in accordance with the provisions of the
Collateral Agency Agreement.
"LOC SWEEP PERIOD" means the period commencing on the commencement date
specified by the Partnership in the LOC Sweep Notice, and ending on the LOC
Sweep Termination Date.
"LOC SWEEP TERMINATION DATE" means the earliest of the following dates:
(i) the date of receipt by the Collateral Agent of notice from the Partnership
stating that the Partnership had not received any notice from PECO of its
intention to exercise its early termination right under the PPA prior to the
close of business on the date 365 days before the 20th anniversary of the Date
of Commercial Operation, in accordance with Section 3.06 of the PPA, (ii) the
date of receipt by the Collateral Agent of notice from the Partnership stating
that the Partnership had not received from PECO prior to the close of business
on the date 30 days before such 20th anniversary a letter of credit complying
with the provisions of Section 3.06 of the PPA, (iii) the date of receipt by the
Collateral Agent of the $175,000,000 of proceeds from PECO, and (iv) if and to
the extent that the LOC Sweep Notice permits the Partnership to revoke the same,
receipt by the Partnership of a notice from the Partnership revoking its LOC
Sweep Notice.
"LOCAL ACCOUNTS" shall have the meaning given to that term in Section
2.2 (Establishment of Funds and Sub-accounts) of the Collateral Agency
Agreement.
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"LOSS PROCEEDS" means, individually and collectively, Insurance Proceeds
and Eminent Domain Proceeds.
"LOSS PROCEEDS ACCOUNT" means the sub-account of the Revenue Fund
established by the Collateral Agent pursuant to SECTION 2.2 (Establishment of
Funds and Sub-accounts) of the Collateral Agency Agreement.
"LTSA" means the Long Term Parts and Long Term Service Contract, dated
June 24, 1999 between GE International and the Partnership (as assignee of
TGILP).
"MAJOR MAINTENANCE SUB-ACCOUNT" means the sub-account of the Operating
Fund established by the Collateral Agent pursuant to the terms of the Collateral
Agency Agreement.
"MAJOR MAINTENANCE REQUIRED AMOUNT" has the meaning set forth in the
Collateral Agency Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, operations, properties, assets, or condition (financial or otherwise)
of the Partnership, (ii) the validity or priority of the Liens on the
Collateral, (iii) the ability of the Partnership to observe and perform its
obligations under the Indenture, the Bonds or any of the other Financing
Documents to which it is a party, or (iv) the ability of the Partnership to
perform its material obligations under the Project Documents; PROVIDED that if
each Rating Agency then rating the Bonds shall provide written confirmation
within sixty (60) days after the event or action in question that such event or
action would not result in a Rating Downgrade, then this clause (iv) shall not
be applicable.
"MATURITY DATE" means, with respect to any Bond, the date on which the
principal of such Bond or an installment of principal becomes due and payable as
herein or therein provided, whether at stated maturity, acceleration, redemption
or otherwise.
"MONTHLY DISTRIBUTION DATE" means any Funding Date at least six months
after the Date of Commercial Operation of the Final Units.
"MONTHLY DISTRIBUTION CONDITIONS" means any Monthly Distribution Date on
which:
(i) each of the Distribution Conditions is satisfied;
(ii) an Authorized Officer of the Partnership certifies to the
Trustee that the (x) Debt Service Coverage Ratio for the two preceding
Semi-Annual Periods (or, for the period since the Date of Commercial
Operation of the Final Units notwithstanding that such period does not
include any complete Semi-Annual Periods) taken as one annual period and
(y) Projected Debt Service Coverage Ratio for the pair of succeeding
Semi-Annual Periods taken as one annual period, each equals or exceeds
1.4 to 1.0; and
(iii) an Authorized Officer of the Partnership certifies to the
Trustee that sufficient cash shall be available for the next succeeding
Scheduled Payment Date without giving effect to, or drawing on, any
funds available in the Debt Service Reserve
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Account, the Distribution Suspense Account, the Partnership Distribution
Fund, the Unrestricted Account, the Subordinated Debt Account or any
Working Capital Facility.
"MOODY'S" means Moody's Investors Service, Inc., a corporation organized
and existing under the laws of the State of Delaware, its successors and
assigns.
"MULTIEMPLOYER PLAN" means any ERISA Plan that is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"MW" means megawatts.
"NECESSARY EASEMENTS" means, collectively, all easements, licenses,
franchises, rights-of-way, and agreements relating to non-possessory interests
in real estate to which the Partnership is now or hereafter a party or
beneficiary, affecting construction on, or the use or operation, or constituting
a part of, the Facility Site.
"NON-RECOURSE PARTY" shall have the meaning given to that term in
SECTION 8.21 (No Recourse) of the Collateral Agency Agreement.
"NON-RENEWAL EVENT" means, with respect to any PPA LOC, such PPA LOC has
not been extended or replaced within 10 days prior to the stated expiration date
thereof.
"OFFICER'S CERTIFICATE" means a certificate that has been signed by an
Authorized Officer of the Partnership.
"O&M AGREEMENT" means the Operating and Maintenance Agreement, dated as
of September 10, 1999, as amended, between the Partnership and the Operator.
"OPERATING AND MAINTENANCE EXPENSES" means all actual cash maintenance
and operation costs to be incurred and paid with respect to the Facility in any
particular period, including franchise, sales, property and other similar taxes
(but not taxes on or measured by net income), payments under the Tax Agreement,
payments for the supply and transportation of fuels, insurance, consumables,
payments under any lease, payments pursuant to the Project Documents (including
payments under the O&M Agreement), repair and replacement costs for equipment
included in the Facility, legal fees and expenses paid by the Partnership in
connection with the management, maintenance or operation of the Facility, fees
paid in connection with obtaining, transferring, maintaining or amending any
Governmental Approvals, employee salaries, wages and other employment-related
costs and general and administrative expenses (including, after 2009, the annual
fee payable in accordance with the Partnership Agreement), all fees, expenses
and other payments due to all indemnities and other arrangements providing for
the payment of amounts to the Initial Purchasers, independent consultants,
counsel and employees in connection with the Indebtedness of the Partnership
(but excluding transaction costs associated with the offering and issuance of
Bonds), and expenses related to maintaining with the Rating Agencies the credit
rating assigned to the Bonds, but exclusive in all cases of (i) non-cash
charges, including depreciation or obsolescence charges or reserves therefor,
amortization of intangibles or other bookkeeping entries of a similar nature,
(ii) interest charges and (iii) all commitment fees, underwriting fees and other
similar fees due and payable in connection with Indebtedness of the Partnership.
In the event that the LTSA is terminated and not replaced with an agreement
similar in scope to the LTSA,
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Operating and Maintenance Expenses shall also include an amount equal to the
Major Maintenance Required Amount for the relevant period, which amount shall be
deposited in the Major Maintenance Sub-account of the Operating Fund.
"OPERATING BUDGET" means the annual budget for the Project, as prepared
by the Partnership.
"OPERATING FUND" means the Fund so designated, established and created
under SECTION 2.2 (Establishment of Funds and Sub-accounts) of the Collateral
Agency Agreement.
"OPERATOR" means Tenaska Operations, Inc., a Delaware corporation.
"OTHER SENIOR DEBT" shall have the meaning given to that term in the
Collateral Agency Agreement.
"OUTSTANDING" when used in connection with any Bond, means, as of the
time in question, all Bonds authenticated and delivered under the Indenture,
except (a) Bonds theretofore cancelled or required to be cancelled pursuant to
the Indenture, (b) Bonds for which provision for payment shall have been made
pursuant to the Indenture and (c) Bonds in substitution for which other Bonds
have been authenticated and delivered pursuant to the Indenture.
"PARTNER" means any Person owning a partnership interest in the
Partnership.
"PARTNERS" mean TGILP and TGI, and each other Partner added to the
Partnership.
"PARTNERSHIP" means Tenaska Georgia Partners, L.P., a Delaware limited
partnership.
"PARTNERSHIP AGREEMENT" means the Amended and Restated Limited
Partnership Agreement, dated as of April 16, 1998, among TGI and TGILP, as the
same may from time to time be amended, modified or supplemented.
"PARTNERSHIP DISTRIBUTION FUND" means the Fund so designated,
established and created under SECTION 2.2 (Establishment of Funds and
Sub-accounts) of the Collateral Agency Agreement.
"PARTNERSHIP SECURITY DEED" means the Deed to Secure Debt, Assignment of
Rents and Leases and Security Agreement, dated as of November 1, 1999, by and
between the Partnership and the Collateral Agent, as amended from time to time.
"PECO" means PECO Energy Company, a Pennsylvania corporation.
"PECO TESTS" shall have the meaning given to that term in the EPC
Contract.
"PERMITTED INDEBTEDNESS" shall have the meaning given to that term in
Section 5.2(a) of the Common Agreement.
"PERMITTED INVESTMENTS" means, as to any Person: (a) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof
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(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than six (6) months from the date
of acquisition by such Person; (b) time deposits and certificates of deposit,
with maturities of not more than six (6) months from the date of acquisition by
such Person, of any international commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 and having a rating on its
commercial paper of at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody's; (c) commercial paper issued by any
Person, which commercial paper is rated at least A-1 or the equivalent thereof
by S&P or at least P-1 or the equivalent thereof by Moody's and matures not more
than six (6) months after the date of acquisition by such Person; (d)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (a) and (b) above
(including any such fund for which the Depositary Bank or any Affiliate thereof
serves as investment manager, administrator or custodian); (e) SEC registered
money market mutual funds conforming to Rule 2a-7 of the Investment Company Act
of 1940 if effect in the United States, that invest primarily in direct
obligations issued by the United States Treasury and repurchase obligations
backed by those obligations, and rated in the highest category by S&P and
Moody's; and (f) any dollar investment which the Partnership certifies in
writing shall constitute a dollar-denominated Permitted Investment; PROVIDED
that, with respect to amounts on deposit in the Local Accounts, the dollar
amount set forth in clause (b) hereof shall equal $250,000,000 and the
references to both S&P and Moody's and the respective ratings thereof in clauses
(b), (c) and (e) shall not be applicable.
"PERMITTED LIENS" shall have the meaning given to that term in Section
5.2(b) of the Common Agreement.
"PERSON" means any individual, sole proprietorship, corporation,
partnership, limited liability company, joint venture, trust, unincorporated
association, governmental authority or any other entity.
"PIPELINE EPC CONTRACT" means the Fixed Price Engineering, Procurement
and Construction Services Contract, effective September 23, 1999 between the
Partnership and the Pipeline EPC Contractor.
"PIPELINE EPC CONTRACTOR" means Willbros Engineers, Inc., a Delaware
corporation.
"PPA" means the Power Purchase Agreement, dated as of August 24, 1999,
between the Partnership and PECO.
"PPA COMMERCIAL OPERATION" of a Unit shall be deemed to be achieved at
00:01 hours on the day next following the day (i) such Unit has been declared to
have a generating capacity of at least 150 MW if such Unit is one of the Initial
Units or at least 146 MW if such Unit is one of the Final Units, (ii) the Unit
shall be capable of producing energy through "firing" with natural gas, (iii)
interconnection of the Unit and the delivery point shall have been achieved,
(iv) sufficient gas supply facilities and interconnection facilities shall be in
operation to accept capacity from all Units which are in commercial operation
and (v) the Partnership shall have delivered written notice to PECO that such
Unit is placed in commercial operation provided that,
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in the case of the Initial Units, such date may not be earlier than June 1,
2001, and in the case of the Final Units, such date may not be earlier than June
1, 2002.
"PPA LOC" means the letter of credit provided by the PPA LOC Issuer to
be issued as security for PECO in connection with the PPA or any replacement or
renewal thereof.
"PPA LOC AGENT" means initially, The Toronto-Dominion Bank and any other
financial institution acting as the agent for the PPA LOC Issuer and PPA LOC
Banks under the PPA LOC Reimbursement Agreement.
"PPA LOC BANK" means each bank or financial institution that becomes
party to the PPA LOC Reimbursement Agreement.
"PPA LOC ISSUER" means, initially, The Toronto-Dominion Bank or any
other financial institution providing the PPA LOC pursuant to the PPA LOC
Reimbursement Agreement.
"PPA LOC LOAN" means a loan resulting from the drawing on the PPA LOC,
other than a PPA LOC Term Loan.
"PPA LOC REIMBURSEMENT AGREEMENT" means the Power Purchase Agreement
Letter of Credit and Reimbursement Agreement, dated as of the Closing Date,
among the Partnership, the PPA LOC Issuer, the PPA LOC Agent and PPA LOC Banks
or another reimbursement agreement providing for the issuance of a PPA LOC.
"PPA TERM LOAN" means a loan resulting from a conversion of a PPA LOC
Loan to a PPA Term Loan or draw on the PPA LOC after the occurrence of a
Non-Renewal Event.
"PROJECT" means the Facility together with the Project Documents,
governmental approvals relating to the Facility or the Project Documents and any
other item relating to the Facility, including any improvements to, and the
operation of, the Facility and all activities related thereto.
"PROJECT COSTS" means all costs of developing, financing, constructing,
testing and initial operation (through PPA Commercial Operation of the Final
Units) of the Facility, including but not limited to: (i) all amounts payable
under the Project Documents including any contractor bonuses, site acquisition
and preparation costs, costs of acquisition and construction of fuel handling
and processing equipment, any electric interconnection and transmission upgrade
costs payable by the Partnership, all water interconnection costs payable by the
Partnership and all gas interconnection and pipeline costs payable by the
Partnership; (ii) all development costs which shall be paid to, or as designated
by, the Partnership on the Closing Date; (iii) all other Project-related costs,
including but not limited to insurance costs, fees and expenses payable pursuant
to the O&M Agreement and expenses to complete the construction and financing of
the Project, including any project management costs and any costs related to the
acquisition of all Necessary Easements; (iv) start-up and testing costs and
initial working capital costs; (v) initial reserve fund requirements; (vi) fees
and costs payable during construction with respect to any DSR LOC and any other
letters of credit or security provided under any Project Document; (vii)
payments in respect of the Tax Agreement, (viii) the amount required to cash
collaterize the obligations of the Partnership in respect of the security
provided under the GPC Interconnection Agreement; (ix)
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payments to the PPA LOC Issuer in respect of amounts advanced under the PPA LOC
to make payments to PECO; (x) legal and other transaction costs and
financing-related fees; (xi) any other out-of-pocket expenses related to the
financing; and (xii) interest on the Bonds.
"PROJECT DOCUMENTS" shall mean, collectively, the PPA, EPC Contract, O&M
Agreement, LTSA, GPC Interconnection Agreement, the Gas Interconnect Agreement,
the Turbine Contract, Water Agreement, and the Lease Agreement.
"PROJECTED DEBT SERVICE COVERAGE RATIO" for any period means, on any
date of determination, a projection of the Debt Service Coverage Ratio for the
applicable time period.
"PROJECT FUNDS" means the funds and sub-accounts established by the
Collateral Agent pursuant to SECTION 2.2 (Establishment of Funds and
Sub-accounts) of the Collateral Agency Agreement.
"PROJECT PARTY" means a party to a Project Document other than the
Partnership or an affiliate of the Partnership.
"PROJECT REVENUES" means, the Partnership's revenues or income
calculated on a cash basis and received pursuant to the terms of the relevant
Project Documents, including, without limitation, proceeds of an Event of Loss,
proceeds of any EPC Buy-Down and proceeds of any Energy Contract Buy-Out not
required to be used to redeem the Senior Debt, the proceeds of any draws with
respect to any Working Capital Facility and refunds or returns of any amounts
previously paid for Operating and Maintenance Expenses of the Partnership, any
income from the investment of monies in any Fund pursuant to the Collateral
Agency Agreement and any income received as holder of the Authority Bonds;
PROVIDED that for purposes of calculating any Debt Service Coverage Ratio,
"Project Revenues" shall not include draws with respect to any Working Capital
Facility or any proceeds of any Event of Loss, EPC Buy-Down or Energy Contract
Buy-Out.
"PRUDENT UTILITY PRACTICE" shall mean any of the practices, methods and
acts engaged in or approved by a significant portion of the independent power
industry from time to time or any of the practices, methods and acts which, in
the exercise of reasonable judgment in light of the facts known (or which should
have been known) at the time the decision was made, would have been expected to
accomplish the desired results at the lowest reasonable cost consistent with
good business practices, taking into account (without limitation) such factors
as reliability, safety and expedition. Prudent Utility Practice is not intended
to be limited to the optimum practice, method or act to the exclusion of all
others, but rather to be a spectrum of possible practices, methods or acts
having due regard for, among other things, manufacturers' warranties and other
contractual obligations, the requirements or guidance of governmental agencies
of competent jurisdiction, requirements of insurers, and the requirements of
this Agreement.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated November 3,
1999, between the Initial Purchasers and the Partnership.
"RATINGS" means the credit ratings assigned to the Bonds by the Rating
Agencies.
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"RATING AGENCY" means either of Moody's or S&P or if either shall cease
to rate securities of the type equivalent to the Bonds, another nationally
recognized rating agency.
"RATING DOWNGRADE" means a lowering or withdrawal by any Rating Agency
of the then current Ratings of the Bonds.
"REGULATION S" means Regulation S under the Securities Act.
"REPORTABLE EVENT" means, with respect to any ERISA Plan, (a) the
occurrence of any of the events set forth in Section 4043(c) of ERISA, other
than an event as to which the requirement of 30 days' notice, or the penalty for
failure to provide such notice, has been waived by the PBGC or (b) the existence
of conditions sufficient to require advance notice to the PBGC pursuant to
Section 4043(b) of ERISA.
"REQUIRED RATING" means a rating of at least "A-" by S&P and "A3" by
Moody's.
"REQUIRED SENIOR PARTIES" means the affirmative vote of 51% of the
Combined Exposure.
"REQUISITION" shall have the meaning given to that term in Section
3.1(b) of the Collateral Agency Agreement.
"RESPONSIBLE OFFICER" means the president or any vice president,
assistant vice president or trust officer of the Collateral Agent to whom any
matter has been referred because of such officer's knowledge and familiarity
with the particular subject.
"RESTRICTED GLOBAL SECURITY" shall have the meaning given to that term
in the Indenture.
"RESTRICTED PAYMENT" means, with respect to any Person, (a) the
declaration or payment of distributions, dividends or any other payment made in
cash, property, obligations or other securities or (b) any payment of the
principal of or interest on any Affiliate Subordinated Debt, in each case from
cash, investments, securities or other funds from time to time in the
Distribution Suspense Account.
"REVENUE FUND" means the Fund so designated, established and created
under SECTION 2.2 (Establishment of Funds and Sub-accounts) of the Collateral
Agency Agreement.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's, a Division of The McGraw Hill Companies,
and its successors.
"SCHEDULED DATE OF COMMERCIAL OPERATION" means June 1, 2001, subject to
any extension of such date in accordance with the EPC Contract.
"SCHEDULED DATE OF COMMERCIAL OPERATION FOR THE FINAL UNITS" means June
1, 2002, subject to any extension of such date in accordance with the EPC
Contract.
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"SCHEDULED PAYMENT DATE" means, with respect to any Bond, each February
1 and August 1, commencing August 1, 2000.
"SEC" means the Securities and Exchange Commission of the United States
of America.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY AGREEMENT" means the Assignment and Security Agreement, dated
as of November 1, 1999 between the Partnership and the Collateral Agent.
"SECURITY DOCUMENTS" means, collectively, the Security Agreement, the
Lease Agreement, the Authority Bonds, the Guaranty, the Collateral Agency
Agreement, the Authority Security Deed, the Partnership Security Deed, the
Limited Partner Pledge and Security Agreement, the General Partner Pledge and
Security Agreement and each Third Party Consent.
"SEMI-ANNUAL PERIOD" means a period commencing on a Scheduled Payment
Date and ending on the day preceding the next Scheduled Payment Date; PROVIDED
that the first Semi-Annual Period shall mean the period commencing on the
Closing Date and ending on the day preceding the first Scheduled Payment Date.
"SENIOR DEBT" means Permitted Indebtedness other than Subordinated Debt.
"SENIOR PARTIES" means collectively, the Trustee, the Collateral Agent,
the DSR LOC Agent, the PPA LOC Agent, a Working Capital Agent, any holder or the
agent or representative of Senior Debt (other than the Bonds) and any other
Person that becomes a secured party under any Security Document.
"STEP-UP EVENT" means in respect of any DSR LOC, (i) such DSR LOC has
not been extended or replaced within 45 days prior to the termination date of
such DSR LOC or (ii) the credit rating of the DSR LOC Issuer is less than the
Required Rating and such DSR LOC has not been replaced within 45 days of the
failure to satisfy the requirements of the Required Rating with a replacement
letter of credit issued by an issuer that satisfies the requirements of the
Required Rating and, in each case, the Collateral Agent has drawn on such DSR
LOC in an amount sufficient to fund the Debt Service Reserve Account up to the
Debt Service Reserve Required Balance.
"SUBORDINATED DEBT" shall mean, individually and collectively, Third
Party Subordinated Debt and Affiliate Subordinated Debt.
"SUBORDINATED DEBT ACCOUNT" means the sub-account of the Debt Service
Fund established by the Collateral Agent pursuant to SECTION 2.2 (Establishment
of Funds and Sub-accounts) of the Collateral Agency Agreement.
"SUBSIDIARY" means, with respect to any Person at any time, any other
Person (i) that is, at such time, controlled by, or (ii) securities of which
having ordinary voting power to elect a majority of the board of directors (or
other persons having similar functions), or other ownership interests of which
ordinarily constituting a majority voting interest, are at such time, directly
or
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indirectly, owned or controlled by such first Person, or by such first Person
and one or more of its Subsidiaries.
"SUPPLEMENTAL INDENTURE" means an indenture supplemental to the
Indenture entered into by the Partnership and the Trustee for the purpose of
establishing, in accordance with the Indenture, the title, form and terms of the
Bonds.
"TAX AGREEMENT" means the Ad Valorem Taxation Agreement, dated July 30,
1999, among the Partnership, the Board of Commissioners of Heard County and the
Board of Tax Assessors of Heard County.
"TGI" means Tenaska Georgia, Inc., a Delaware corporation.
"TGILP" means Tenaska Georgia I, L.P., a Delaware limited partnership.
"THIRD PARTY CONSENT" shall have the meaning given to that term in
Section 3.1(t) of the Common Agreement.
"THIRD PARTY ENGINEER" shall have the meaning given to that term in
Section 8.12 of the Common Agreement.
"THIRD PARTY SUBORDINATED DEBT" means Debt (and each note or other
instrument evidencing the same) advanced by Persons who are not Affiliates of
the Partnership which has been subordinated to the Senior Debt, on the terms and
conditions substantially in the form of the subordination provisions set forth
in Exhibit B of the Collateral Agency Agreement.
"TRANSACTION DOCUMENTS" means the Project Documents and the Financing
Documents.
"TRANSCO" means Transcontinental Gas Pipe Line Corporation.
"TRIGGER EVENT" means (a) an Event of Default under the Indenture and an
acceleration of all indebtedness issued thereunder, (b) an Event of Default
under the DSR LOC Reimbursement Agreement and an acceleration of all
indebtedness incurred thereunder, (c) an Event of Default under the PPA LOC
Reimbursement Agreement and an acceleration of all indebtedness incurred
thereunder or (d) an event of default under any other Senior Debt instrument and
an acceleration of all of the Indebtedness issued thereunder in an aggregate
principal amount in excess of $10 million; and, in each case, the Collateral
Agent has, upon direction from the Required Senior Parties, declared such event
to be a "Trigger Event."
"TRUSTEE" means The Chase Manhattan Bank, its successors and assigns, in
its capacity as trustee under the Indenture.
"TURBINE CONTRACT" means the Contract for Purchase, dated August 27,
1999, between GE and the Partnership, as assignee of TGILP.
"UNAUDITED FINANCIAL STATEMENTS" means, for any Person, with respect to
any fiscal period, the unaudited balance sheet of such Person as of the last day
of such fiscal period, the related statements of income and cash flows for such
period and (in the case of any period which
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does not terminate on the last day of a fiscal year) for the portion of the
fiscal year ending with the last day of such period, setting forth, in each
case, in comparative form, corresponding unaudited figures from the preceding
fiscal year.
"UNFUNDED BENEFIT LIABILITIES" means, with respect to any ERISA Plan at
any time, the amount of unfunded benefit liabilities of such ERISA Plan at such
time as determined under Section 4001(a)(18) of ERISA.
"UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as the
same may, from time to time, be in effect in the State of New York.
"UNIT" means one of the six General Electric PG7241 (FA) heavy-duty
single shaft gas turbine-generators, nominal 175 MW ratings at ISO conditions
(59(0)F, sea level) purchased by the Partnership pursuant to the Turbine
Contract.
"UNRESTRICTED ACCOUNT" means an account established by the Partnership
which shall be funded with amounts withdrawn from the Partnership Distribution
Fund and otherwise available to the Partnership.
"WATER AUTHORITY" means the Heard County Water Authority.
"WATER AGREEMENT" means the Water Purchase Agreement, dated February 25,
1999, between the Water Authority and the Partnership.
"WORKING CAPITAL AGENT" means the financial institution serving as agent
under a Working Capital Facility and provider of amounts available thereunder.
"WORKING CAPITAL BANKS" means each bank that becomes party to the
Working Capital Facility.
"WORKING CAPITAL FACILITY" means a working capital facility in an amount
up to $10,000,000 issued by the Working Capital Agent and used for the payment
of Operating and Maintenance Expenses in connection with the Project.
"WORKING CAPITAL LOAN" means each drawing by the Partnership under a
Working Capital Facility.
"YEAR 2000 PROBLEM" shall mean any significant risk that computer
hardware, software or equipment containing embedded microchips essential to the
business or operations of the Partnership will not, in the case of dates or time
periods occurring after December 31, 1999, function at least as effectively and
reliably as in the case of times or time periods occurring before January 1,
2000, including the making of accurate leap year calculations.
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PART II. RULES OF CONSTRUCTION
1. Section and Clause headings and the table of contents in each
Transaction Document are inserted for convenience of reference only and shall be
ignored in the interpretation of said Transaction Document.
2. In each Transaction Document, unless the context otherwise requires:
(a) references to Sections, Clauses, the Appendices, Exhibits and
Schedules are to be construed as references to the sections of, clauses of, and
appendices, exhibits and schedules to, said Transaction Document as in force for
the time being and as amended in accordance with the terms of said Transaction
Document, or, as the case may be, with the agreement of the relevant parties;
(b) references to Sub-sections or Sub-clauses are to be construed
as references to a sub-section or sub-clause of the Section or Clause in which
such reference appears;
(c) references to any Transaction Document include its
Appendices, Exhibits and Schedules, each which shall be deemed to be a part
thereof;
(d) references to (or to any specified provision of) any
Transaction Document or any other document shall be construed as references to
said Transaction Document, that document or that provision as in force for the
time being and as amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms hereof or thereof or, as the case may
be, with the agreement of the relevant parties;
(e) references to any law or enactment shall be deemed to include
references to such law or enactment as re-enacted, amended, extended,
consolidated or replaced and any orders, decrees, proclamations, regulations,
instruments or other subordinate legislation made thereunder;
(f) words importing the plural shall include the singular and
vice versa;
(g) words importing any gender shall be construed as including
every gender;
(h) the phrase "without limitation" shall always be deemed to
follow "include" or "including"; and
(i) any reference to any Person (including each of the Parties to
any Transaction Document) shall include such Person and its successors,
permitted assigns, and permitted transferees.
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APPENDIX B
INSURANCE REQUIREMENTS
CONSTRUCTION INSURANCE:
CONSTRUCTION/ERECTION ALL RISKS INSURANCE ("CAR")
TERM: From the Closing Date until the later of the Date of Commercial Operation
of the Final Units or the replacement by the operational property, boiler and
machinery insurance.
COVER: All risks of physical loss of or damage to the Project during
construction, testing and commissioning periods including (subject to sub-limits
as described below) earthquake and flood, inland transit, debris removal and
off-site storage. Cover will also include mechanical/electrical breakdown of the
contract works, testing and commissioning of the plant.
SUM INSURED: Replacement value with appropriate sub-limits for inland transit,
debris removal, off-site storage and expediting expense.
DEDUCTIBLES: $ 25,000 each occurrence except:
$100,000 each occurrence in respect to flood, earthquake, subsidence
$100,000 each occurrence in respect to testing and commissioning
$500,000 any one occurrence in respect to hot testing-gas turbines
CONSTRUCTION DELAY IN START-UP
COVER: The sum insured is based on an indemnity period of eighteen (18) months
after the exhaustion of the waiting period for covered losses under the CAR
policy, including damage to the Project, all inland transit losses and offsite
storage. Coverage includes loss of profits including debt service, continuing
expenses and liquidated damage penalties in the Power Purchase Agreement as a
result of an admissible claim.
INDEMNITY PERIOD: 18 months after exhaustion of waiting period following
admissible CAR loss.
WAITING PERIOD: 30 days for all insured events.
OCEAN MARINE CARGO/AIR SHIPMENTS AND DELAY IN START-UP
COVER: Coverage is to be in effect prior to shipments being made with ocean
marine cargo physical damage limit at the maximum value of any one shipment or
conveyance. The delay in start-up limit will be equal to and not less than
twelve (12) months of the projected loss of profits including continuing
expenses, debt service and liquidated damage penalties in the Power Purchase
Agreement as a result of an admissible claim.
WAITING PERIOD: 30 days for all insured events.
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TERMS APPLYING TO COMMERCIAL GENERAL LIABILITY/UMBRELLA LIABILITY
COVER: The insured's legal liability for damages, costs and expenses arising out
of bodily injury to or death of third party persons and loss of or damage to
third party property.
SUM INSURED: $25,000,000 each occurrence and in the aggregate, which may include
a combination of primary and excess/umbrella policies.
POLICY FORM: May be on a claims-made form.
AUTOMOBILE LIABILITY
COVER: The insured's legal liability for damages, costs and expenses arising out
of bodily injury to or death of third party persons and loss of or damages to
third party property covering any owned, non-owned and hired vehicles.
SUM INSURED: $25,000,000 each occurrence and in the aggregate, which may include
a combination of primary and excess/umbrella policies.
WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY
COVER: If the Partnership has any liability with respect to employees, then the
Partnership shall maintain worker's compensation coverage for the relevant state
of employment in accordance with statutory requirements and employer's liability
coverage.
SUM INSURED: Worker's compensation coverage shall meet minimum statutory
requirements and employer's liability coverage shall be $25,000,000 each
occurrence and in the aggregate, which may be provided for in the
excess/umbrella liability insurance policies.
OPERATIONAL INSURANCE:
OPERATIONAL PROPERTY AND BOILER AND MACHINERY INSURANCE
TERM: Beginning with the Date of Commercial Operation of the Final Units.
COVER: All risks of physical loss of or damage to the Project including
earthquake and flood, inland transit, debris removal and off-site storage.
SUM INSURED: Replacement value of the Project through 2016. After 2016, in an
amount greater than or equal to 80% of the replacement value. In either case,
with appropriate sub-limits for inland transit, debris removal, off-site storage
and expediting expense.
DEDUCTIBLES: $100,000 each occurrence except:
$250,000 each occurrence in respect to flood, earthquake, subsidence $1,000,000
in respect to any one occurrence-gas turbines
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BUSINESS INTERRUPTION
COVER: The sum insured is based on an indemnity period of fifteen (15) months
after the exhaustion of the waiting period for covered losses under the
operational property and boiler and machinery policy including damage to the
Project, all inland transit losses and offsite storage. Coverage to include loss
of profits including debt service and continuing expenses as a result of an
admissible claim.
INDEMNITY PERIOD: 15 months after exhaustion of waiting period following
admissible operational property and boiler and machinery loss.
WAITING PERIOD: 30 days for all insured events except for gas turbines which
shall be 45 days or less.
TERMS APPLYING TO COMMERCIAL GENERAL LIABILITY/UMBRELLA LIABILITY
COVER: The insured's legal liability for damages, costs and expenses arising out
of bodily injury to or death of third party persons and loss of or damage to
third party property.
SUM INSURED: $25,000,000 each occurrence and in the aggregate, which may include
a combination of primary and excess/umbrella policies.
POLICY FORM: May be on an AEGIS or comparable claims-made form.
AUTOMOBILE LIABILITY
COVER: The insured's legal liability for damages, costs and expenses arising out
of bodily injury to or death of third party persons and loss of or damages to
third party property covering any owned, non-owned and hired vehicles.
SUM INSURED: $25,000,000 each occurrence and in the aggregate, which may include
a combination of primary and excess/umbrella policies.
WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY
COVER: If the Partnership has any liability with respect to employees, then the
Partnership shall maintain worker's compensation coverage for the relevant state
of employment in accordance with statutory requirements and employer's liability
coverage.
SUM INSURED: Worker's compensation coverage shall meet minimum statutory
requirements and employer's liability coverage shall be $25,000,000 each
occurrence and in the aggregate, which may be provided for in the
excess/umbrella liability insurance policies.
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SCHEDULE 3.1(D)
THE FACILITY SITE
[To be Provided.]
<PAGE>
SCHEDULE 3.1(L)
TENASKA GEORGIA PARTNERS, L.P.
FORM OF APPROVED CONSTRUCTION BUDGET
AMOUNTS IN THOUSANDS
Total
--------
EPC Contract - phase 1 115,917
EPC Contract - phase 2 113,447
Mobilization Payment 110
Sales Tax 1,000
Electrical 1,000
Interconnection
Facilities
GPC Monthly Fees 158
Gas Supply Facilities 3,123
Heard County Water 515
Authority
Land 712
Closing Cost 4,158
Agency Fees 114
Letter of Credit Issued 346
Fees
Letter of Credit 246
Commitment Fees
Development Costs 7,000
Project Management 4,643
Interest During 36,998
Construction
Title Insurance 250
Builder's Risk Insurance 950
Marine Cargo Insurance 300
Liability Insurance 100
Contingencies 11,962
Spare Parts 3,649
Start-Up Cost 3,040
Initial Units Cash Flow 504
Working Capital 258
--------
Total 310,500
--------
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
FORM OF APPROVED CONSTRUCTION BUDGET
AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00
DRAW DRAW DRAW DRAW DRAW DRAW DRAW DRAW DRAW DRAW
1 2 3 4 5 6 7 8 9 10
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EPC - Building Materials Phase 1 8,897 2,701 3,040 4,679 5,305 5,640 5,193 5,404 6,949 10,087
EPC - Building Materials Phase 2 5,223 0 1,899 0 0 0 0 0 0 0
Mobilization Payment 0 0 0 0 0 0 0 0 0 0
Sales Tax 7 24 14 9 19 25 25 29 54 58
Electrical Interconnection Facilities 67 67 67 67 67 67 67 67 67 67
GPC Monthly Fees 5 5 5 5 5 5 5 5 5 5
Gas Supply Facilities 167 167 167 167 167 1,737 167 167 167 167
Heard County Water Authority 515 0 0 0 0 0 0 0 0 0
Land 712 0 0 0 0 0 0 0 0 0
Financing Costs 3,391 13 13 13 13 13 13 13 13 13
Agency & Other Fees 0 0 19 0 0 19 0 0 19 0
Letter of Credit Issued Fees 0 0 52 0 0 52 0 0 52 0
LC Commitment Fees 0 0 41 0 0 41 0 0 41 0
Development Costs 7,000 0 0 0 0 0 0 0 0 0
Project Management 100 104 108 112 116 121 126 131 136 141
Interest During Construction 0 0 0 0 0 0 0 0 0 11,104
Title Insurance 250 0 0 0 0 0 0 0 0 0
Builder's Risk Insurance 950 0 0 0 0 0 0 0 0 0
Marine Cargo Insurance 300 0 0 0 0 0 0 0 0 0
Liability Insurance 100 0 0 0 0 0 0 0 0 0
Contingencies 0 0 0 0 0 0 0 0 0 0
Spare Parts 0 0 0 0 0 0 0 0 0 0
Start-Up Cost 0 0 0 0 0 0 0 0 0 0
Initial Units Cash Flow 0 0 0 0 0 0 0 0 0 0
Working Capital 0 0 43 0 0 0 0 0 43 0
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Construction Cost 27,684 3,081 5,468 5,052 5,692 7,720 5,596 5,816 7,546 21,642
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Cum Construction Cost 27,684 30,765 36,233 41,285 46,977 54,697 60,293 66,109 73,655 95,297
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Amount Transferred to Initial
Units 6/01/2001
Bonds Outstanding 275,000 275,000 275,000 275,000 275,000 275,000 275,000 275,000 275,000 275,000
Treasury 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25%
Spread 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25%
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Interest Rate 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500%
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Interest Expense 2,177 2,177 2,177 2,177 2,177 2,177 2,177 2,177 2,177 2,177
Interest Due on Scheduled
Payment Date 19,593
Unspent Bond Proceeds 247,316 244,235 238,767 233,715 228,023 220,303 214,707 208,891 201,345 179,703
Interest Rate 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000%
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Interest Income on Unspent
Bond Proceeds 1,030 1,018 995 974 950 918 895 870 839 749
Interest Income 8,489
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Interest Expense 0 0 0 0 0 0 0 0 11,104 0
<CAPTION>
Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01 Apr-01
DRAW DRAW DRAW DRAW DRAW DRAW DRAW DRAW
11 12 13 14 15 16 17 18
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EPC - Building Materials Phase 1 9,878 6,636 6,772 8,826 7,580 9,874 2,369 1,588
EPC - Building Materials Phase 2 0 0 1,899 5,697 5,539 5,065 4,749 4,749
Mobilization Payment 0 0 0 0 110 0 0 0
Sales Tax 70 68 70 65 44 43 38 26
Electrical Interconnection Facilities 67 67 67 67 62 0 0 0
GPC Monthly Fees 5 5 5 5 5 5 5 5
Gas Supply Facilities 167 167 167 166 0 0 0 0
Heard County Water Authority 0 0 0 0 0 0 0 0
Land 0 0 0 0 0 0 0 0
Financing Costs 13 13 13 13 13 13 13 13
Agency & Other Fees 0 19 0 0 19 0 0 19
Letter of Credit Issued Fees 0 52 0 0 52 0 0 86
LC Commitment Fees 0 41 0 0 41 0 0 41
Development Costs 0 0 0 0 0 0 0 0
Project Management 147 153 159 165 172 179 186 193
Interest During Construction 0 0 0 0 0 9,201 0 0
Title Insurance 0 0 0 0 0 0 0 0
Builder's Risk Insurance 0 0 0 0 0 0 0 0
Marine Cargo Insurance 0 0 0 0 0 0 0 0
Liability Insurance 0 0 0 0 0 0 0 0
Contingencies 0 0 0 0 0 0 0 0
Spare Parts 0 0 0 0 0 0 0 1,216
Start-Up Cost 0 0 0 0 0 0 760 760
Initial Units Cash Flow 0 0 0 0 0 0 0 0
Working Capital 0 0 0 0 43 0 0 0
------- ------- ------- ------- ------- ------- ------- -------
Total Construction Cost 10,347 7,221 9,152 15,004 13,680 24,380 8,120 8,696
------- ------- ------- ------- ------- ------- ------- -------
Cum Construction Cost 105,644 112,865 122,017 137,021 150,701 175,081 183,201 191,898
======= ======= ======= ======= ======= ======= ======= =======
Amount Transferred to Initial
Units 6/01/2001
Bonds Outstanding 275,000 275,000 275,000 275,000 275,000 275,000 275,000 275,000
Treasury 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25%
Spread 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25%
------- ------- ------- ------- ------- ------- ------- -------
Interest Rate 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500%
------- ------- ------- ------- ------- ------- ------- -------
Interest Expense 2,177 2,177 2,177 2,177 2,177 2,177 2,177 2,177
Interest Due on Scheduled
Payment Date 13,062
Unspent Bond Proceeds 169,356 162,135 152,983 137,979 124,299 99,919 91,799 83,102
Interest Rate 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000%
------- ------- ------- ------- ------- ------- ------- -------
Interest Income on Unspent
Bond Proceeds 706 676 637 575 518 416 382 346
Interest Income 3,861
------- ------- ------- ------- ------- ------- ------- -------
Net Interest Expense 0 0 0 0 9,201 0 0 0
</TABLE>
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
FORM OF APPROVED CONSTRUCTION BUDGET
AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02
DRAW DRAW DRAW DRAW DRAW DRAW DRAW DRAW DRAW
19 20 21 22 23 24 25 26 27
------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EPC - Building Materials Phase 1 4,499 0 0 0 0 0 0 0 0
EPC - Building Materials Phase 2 4,749 5,822 6,101 7,280 9,011 12,839 13,720 12,107 1,420
Mobilization Payment 0 0 0 0 0 0 0 0 0
Sales Tax 14 17 22 41 43 54 43 42 23
Electrical Interconnection Facilities 0 0 0 0 0 0 0 0 0
GPC Monthly Fees 5 5 5 5 5 5 5 5 5
Gas Supply Facilities 0 (784) 0 0 0 0 0 0 0
Heard County Water Authority 0 0 0 0 0 0 0 0 0
Land 0 0 0 0 0 0 0 0 0
Financing Costs 13 13 13 13 13 13 13 13 13
Agency & Other Fees 0 0 0 0 0 0 0 0 0
Letter of Credit Issued Fees 0 0 0 0 0 0 0 0 0
LC Commitment Fees 0 0 0 0 0 0 0 0 0
Development Costs 0 0 0 0 0 0 0 0 0
Project Management 201 209 125 130 135 140 146 152 158
Interest During Construction 0 0 0 8,473 0 0 0 0 0
Title Insurance 0 0 0 0 0 0 0 0 0
Builder's Risk Insurance 0 0 0 0 0 0 0 0 0
Marine Cargo Insurance 0 0 0 0 0 0 0 0 0
Liability Insurance 0 0 0 0 0 0 0 0 0
Contingencies 0 0 0 0 0 0 0 0 0
Spare Parts 1,216 0 0 0 0 0 0 0 0
Start-Up Cost 760 0 0 0 0 0 0 0 0
Initial Units Cash Flow 0 42 42 42 42 42 42 42 42
Working Capital 0 0 43 0 0 0 0 0 43
------- ------- ------- ------- ------- ------- ------- ------- -------
Total Construction Cost 11,457 5,324 6,351 15,984 9,249 13,093 13,969 12,361 1,704
------- ------- ------- ------- ------- ------- ------- ------- -------
Cum Construction Cost 203,355 208,679 215,031 231,015 240,264 253,357 267,326 279,687 281,392
Amount Transferred to Initial
Units 6/01/2001 165,466
Bonds Outstanding 275,000 109,534 109,534 109,534 109,534 109,534 109,534 109,534 109,534
Treasury 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25%
Spread 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25% 3.25%
------- ------- ------- ------- ------- ------- ------- ------- -------
Interest Rate 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500% 9.500%
------- ------- ------- ------- ------- ------- ------- ------- -------
Interest Expense 2,177 867 867 867 867 867 867 867 867
Interest Due on Scheduled
Payment Date 10,442 5,202
Unspent Bond Proceeds 71,645 66,321 59,969 43,985 34,736 21,643 7,674 0 0
Interest Rate 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000%
------- ------- ------- ------- ------- ------- ------- ------- -------
Interest Income on Unspent
Bond Proceeds 299 276 250 183 145 90 32 0 0
Interest Income 1,969 450
------- ------- ------- ------- ------- ------- ------- ------- -------
Net Interest Expense 0 0 8,473 0 0 0 0 0 4,752
<CAPTION>
Feb-02 Mar-02 Apr-02 May-02 Jun-02
DRAW DRAW DRAW DRAW DRAW
28 29 30 31 32 TOTAL
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
EPC - Building Materials Phase 1 0 0 0 0 0 115,917
EPC - Building Materials Phase 2 285 105 99 5,089 0 113,447
Mobilization Payment 0 0 0 0 0 110
Sales Tax 5 2 2 4 0 1,000
Electrical Interconnection Facilities 0 0 0 0 0 1,000
GPC Monthly Fees 5 5 5 5 0 158
Gas Supply Facilities 0 0 0 0 0 3,123
Heard County Water Authority 0 0 0 0 0 515
Land 0 0 0 0 0 712
Financing Costs 13 13 403 0 0 4,158
Agency & Other Fees 0 0 0 0 0 114
Letter of Credit Issued Fees 0 0 0 0 0 346
LC Commitment Fees 0 0 0 0 0 246
Development Costs 0 0 0 0 0 7,000
Project Management 164 171 178 185 0 4,643
Interest During Construction 4,752 0 0 0 3,468 36,998
Title Insurance 0 0 0 0 0 250
Builder's Risk Insurance 0 0 0 0 0 950
Marine Cargo Insurance 0 0 0 0 0 300
Liability Insurance 0 0 0 0 0 100
Contingencies 0 0 0 11,962 0 11,962
Spare Parts 0 0 0 1,216 0 3,649
Start-Up Cost 0 0 0 760 0 3,040
Initial Units Cash Flow 42 42 42 42 0 504
Working Capital 0 0 43 0 0 258
------- ------- ------- ------- ------- -------
Total Construction Cost 5,266 338 772 19,264 3,468 310,500
------- ------- ------- ------- ------- -------
Cum Construction Cost 286,658 286,996 287,768 307,032 310,500
Amount Transferred to Initial
Units 6/01/2001
Bonds Outstanding 109,534 109,534 109,534 109,534 0
Treasury 6.25% 6.25% 6.25% 6.25% 6.25%
Spread 3.25% 3.25% 3.25% 3.25% 3.25%
------- ------- ------- ------- -------
Interest Rate 9.500% 9.500% 9.500% 9.500% 9.500%
------- ------- ------- ------- -------
Interest Expense 867 867 867 867 0 51,767
Interest Due on Scheduled
Payment Date 3,468 51,767
Unspent Bond Proceeds 0 0 0 0 0
Interest Rate 5.000% 5.000% 5.000% 5.000% 5.000%
------- ------- ------- ------- -------
Interest Income on Unspent
Bond Proceeds 0 0 0 0 0 14,769
Interest Income 14,769
------- ------- ------- ------- ------- -------
Net Interest Expense 0 0 0 3,468 0 36,998
</TABLE>
<PAGE>
SCHEDULE 3.1(M)
BASE CASE PROJECTIONS
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
BASE CASE
<TABLE>
<CAPTION>
Year Ending December 31 2002(1) 2003 2004 2005 2006
- ----------------------- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity (kW)(2) 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3) 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4) 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5) 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6) 2.0% 2.0% 3.0% 4.0% 5.0%
Unit Starts per year (7) 181 181 272 363 454
Energy Generation (MWh) 159,082 159,082 238,622 318,163 397,704
Net Plant Heat Rate (Btu/kWh)(8) 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9) 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr) $42.00 42.21 43.34 44.74 45.73
Unit Start Up Rates ($/Start) $11,330 11,670 12,020 12,381 12,752
Energy Charges ($/MWh) $0.17 0.18 0.18 0.19 0.20
OPERATING REVENUES ($000)
Reservation Payments $22,246 38,327 39,353 40,624 41,523
Unit Startup Charges $1,921 1,979 3,057 4,198 5,405
Energy Payments $27 29 43 60 80
Availability Incentive Adjustment
(11) $87 150 150 150 150
Summer Availability Adjustment (12) $0 0 0 0 0
Annual Availability Adjustment (13) $0 0 0 0 0
Efficiency Adjustment (14) $0 0 0 0 0
------- ------- ------- ------- -------
Total Operating Revenues $24,282 40,485 42,603 45,032 47,158
OPERATING EXPENSES ($000)(15)
Fuel $0 0 0 0 0
Operations (16) $914 1,622 2,057 2,152 2,251
Capital Expenditures $32 55 57 58 59
Major Maintenance (17) $1,559 2,477 3,502 4,583 5,727
Operator Fee, Incentive and Bonus
(18) $202 107 366 376 386
Home Office Expenses (19) $422 742 761 780 799
Insurance $224 394 404 414 424
Property and Other Taxes $52 142 189 305 339
------- ------- ------- ------- -------
Total Operating Expenses $3,405 5,539 7,336 8,669 9,985
NET OPERATING REVENUES ($000) $20,877 34,945 35,267 36,364 37,173
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance $275,000 275,000 275,000 275,000 274,714
Annual Principal $0 0 0 286 688
Annual Interest $15,240 26,125 26,125 26,125 26,081
Letter of Credit Fees $429 735 735 738 810
------- ------- ------- ------- -------
Total Debt Service $15,669 26,860 26,860 27,149 27,579
TRANSFERS FROM DSRF $0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE 1.33 1.30 1.31 1.34 1.35
AVERAGE DEBT COVERAGE (21) 1.49
DEBT SERVICE RESERVE ACCOUNT LOC (22) $7,982 13,683 13,683 13,833 14,020
WORKING CAPITAL LOC (23) $5,000 5,000 5,000 5,000 5,000
<CAPTION>
Year Ending December 31 2007 2008 2009 2010 2011
- ----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity (kW)(2) 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3) 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4) 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5) 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6) 5.0% 5.0% 6.0% 5.0% 5.0%
Unit Starts per year (7) 454 454 544 454 454
Energy Generation (MWh) 397,704 397,704 477,245 397,704 397,704
Net Plant Heat Rate (Btu/kWh)(8) 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9) 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr) 46.43 47.03 48.19 49.68 51.40
Unit Start Up Rates ($/Start) 13,135 13,529 13,934 14,353 14,783
Energy Charges ($/MWh) 0.21 0.22 0.23 0.24 0.25
OPERATING REVENUES ($000)
Reservation Payments 42,158 42,703 43,757 45,109 46,671
Unit Startup Charges 5,567 5,734 7,088 6,084 6,266
Energy Payments 84 87 110 95 99
Availability Incentive Adjustment
(11) 150 150 150 150 150
Summer Availability Adjustment (12) 0 0 0 0 0
Annual Availability Adjustment (13) 0 0 0 0 0
Efficiency Adjustment (14) 0 0 0 0 0
------- ------- ------- ------ -------
Total Operating Revenues 47,959 48,674 51,105 51,438 53,186
OPERATING EXPENSES ($000)(15)
Fuel 0 0 0 0 0
Operations (16) 2,308 2,364 2,472 2,486 2,546
Capital Expenditures 61 62 64 66 67
Major Maintenance (17) 5,895 6,068 7,348 6,430 6,591
Operator Fee, Incentive and Bonus
(18) 397 408 420 431 444
Home Office Expenses (19) 819 840 861 1,480 1,532
Insurance 435 446 457 468 480
Property and Other Taxes 365 382 391 429 416
------- ------- ------- ------ -------
Total Operating Expenses 10,280 10,569 12,014 11,790 12,077
NET OPERATING REVENUES ($000) 37,679 38,105 39,091 39,648 41,110
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance 274,026 273,052 271,391 269,042 266,005
Annual Principal 974 1,661 2,349 3,036 4,010
Annual Interest 26,016 25,907 25,733 25,494 25,189
Letter of Credit Fees 812 819 825 893 900
------- ------- ------- ------ -------
Total Debt Service 27,802 28,388 28,907 29,423 30,099
TRANSFERS FROM DSRF 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE 1.36 1.34 1.35 1.35 1.37
AVERAGE DEBT COVERAGE (21)
DEBT SERVICE RESERVE ACCOUNT LOC (22) 14,136 14,439 14,708 14,943 15,293
WORKING CAPITAL LOC (23) 5,000 5,000 5,000 5,000 5,000
</TABLE>
<PAGE>
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
BASE CASE
<TABLE>
<CAPTION>
Year Ending December 31 2012 2013 2014 2015 2016
- ----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity (kW)(2) 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3) 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4) 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5) 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6) 5.0% 5.0% 4.0% 4.0% 3.0%
Unit Starts per year (7) 454 454 363 363 272
Energy Generation (MWh) 397,704 397,704 318,163 318,163 238,622
Net Plant Heat Rate (Btu/kWh)(8) 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9) 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr) $53.18 54.79 55.93 56.91 57.99
Unit Start Up Rates ($/Start) $15,227 15,683 16,154 16,638 17,138
Energy Charges ($/MWh) $0.26 0.27 0.29 0.30 0.31
OPERATING REVENUES ($000)
Reservation Payments $48,287 49,749 50,784 51,674 52,655
Unit Startup Charges $6,454 6,648 5,478 5,642 4,358
Energy Payments $103 107 92 95 74
Availability Incentive Adjustment
(11) $150 150 150 150 150
Summer Availability Adjustment (12) $0 0 0 0 0
Annual Availability Adjustment (13) $0 0 0 0 0
Efficiency Adjustment (14) $0 0 0 0 0
------- ------- ------- ------ -------
Total Operating Revenues $54,994 56,654 56,504 57,561 57,237
OPERATING EXPENSES ($000)(15)
Fuel $0 0 0 0 0
Operations (16) $2,612 2,676 2,687 2,754 2,764
Capital Expenditures $69 71 72 74 76
Major Maintenance (17) $6,756 6,924 5,843 5,990 4,821
Operator Fee, Incentive and Bonus
(18) $456 469 482 496 510
Home Office Expenses (19) $1,586 1,642 1,701 1,762 1,824
Insurance $492 504 517 530 543
Property and Other Taxes $497 532 569 693 735
------- ------- ------- ------ -------
Total Operating Expenses $12,467 12,819 11,871 12,300 11,273
NET OPERATING REVENUES ($000) $42,527 43,836 44,633 45,262 45,964
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance $261,995 256,609 250,135 242,688 234,151
Annual Principal $5,385 6,474 7,448 8,536 9,510
Annual Interest $24,775 24,231 23,600 22,859 22,032
Letter of Credit Fees $901 933 933 933 965
------- ------- ------- ------ -------
Total Debt Service $31,062 31,638 31,981 32,329 32,508
TRANSFERS FROM DSRF $0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE 1.37 1.39 1.40 1.40 1.41
AVERAGE DEBT COVERAGE (21) 1.49
DEBT SERVICE RESERVE ACCOUNT LOC (22) $15,797 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23) $5,000 5,000 5,000 5,000 5,000
<CAPTION>
Year Ending December 31 2017 2018 2019 2020 2021
- ----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity (kW)(2) 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3) 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4) 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5) 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6) 3.0% 3.0% 2.0% 2.0% 2.0%
Unit Starts per year (7) 272 272 181 181 181
Energy Generation (MWh) 238,622 238,622 159,082 159,082 159,082
Net Plant Heat Rate (Btu/kWh)(8) 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9) 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr) 59.42 61.17 63.39 62.90 61.10
Unit Start Up Rates ($/Start) 17,652 18,181 18,727 19,289 19,867
Energy Charges ($/MWh) 0.33 0.34 0.36 0.37 0.39
OPERATING REVENUES ($000)
Reservation Payments 53,953 55,542 57,558 57,113 55,479
Unit Startup Charges 4,489 4,624 3,175 3,270 3,368
Energy Payments 79 81 57 59 62
Availability Incentive Adjustment
(11) 150 150 150 150 150
Summer Availability Adjustment (12) 0 0 0 0 0
Annual Availability Adjustment (13) 0 0 0 0 0
Efficiency Adjustment (14) 0 0 0 0 0
------- ------- ------- ------ -------
Total Operating Revenues 58,671 60,397 60,940 60,592 59,059
OPERATING EXPENSES ($000)(15)
Fuel 0 0 0 0 0
Operations (16) 2,837 2,907 2,917 2,991 3,064
Capital Expenditures 78 80 82 84 86
Major Maintenance (17) 4,943 5,066 3,773 3,868 3,965
Operator Fee, Incentive and Bonus
(18) 524 539 555 570 586
Home Office Expenses (19) 1,890 1,958 2,030 2,103 2,180
Insurance 557 571 585 600 615
Property and Other Taxes 803 851 900 1,127 1,183
------- ------- ------- ------ -------
Total Operating Expenses 11,632 11,973 10,843 11,342 11,679
NET OPERATING REVENUES ($000) 47,039 48,424 50,098 49,249 47,380
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance 224,641 213,755 201,495 188,146 174,109
Annual Principal 10,885 12,260 13,349 14,036 14,724
Annual Interest 21,096 20,029 18,832 17,547 16,198
Letter of Credit Fees 965 965 965 965 964
------- ------- ------- ------ -------
Total Debt Service 32,946 33,255 33,146 32,549 31,885
TRANSFERS FROM DSRF 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE 1.43 1.46 1.51 1.51 1.49
AVERAGE DEBT COVERAGE (21)
DEBT SERVICE RESERVE ACCOUNT LOC (22) 16,000 16,000 16,000 16,000 16,000
WORKING CAPITAL LOC (23) 5,000 5,000 5,000 5,000 5,000
</TABLE>
<PAGE>
TENASKA GEORGIA FACILITY
PROJECTED OPERATING RESULTS
BASE CASE
<TABLE>
<CAPTION>
Year Ending December 31 2022 2023 2024 2025 2026 2027 2028 2029 2030(1)
- ----------------------- ---- ---- ---- ---- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERFORMANCE
Net Summer Installed Capacity (kW)(2) 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000 936,000
PPA Contract Capacity (kW)(3) 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000 908,000
Summer Availability under the PPA
(%)(4) 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0%
Annual Availability under the PPA
(%)(5) 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0%
Capacity Factor (%)(6) 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Unit Starts per year (7) 181 181 181 181 181 181 181 181 0
Energy Generation (MWh) 159,082 159,082 159,082 159,082 159,082 159,082 159,082 159,082 0
Net Plant Heat Rate (Btu/kWh)(8) 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088 11,088
COMMODITY PRICES
General Inflation (%)(9) 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Electricity Prices (10)
Reservation Charges ($/kW-yr) $60.67 60.86 62.71 65.29 67.01 69.03 70.57 71.55 72.00
Unit Start Up Rates ($/Start) $20,463 21,077 21,709 22,361 23,032 23,723 24,434 25,167 25,922
Energy Charges ($/MWh) $0.41 0.43 0.45 0.47 0.49 0.51 0.53 0.56 0.56
OPERATING REVENUES ($000)
Reservation Payments $55,088 55,261 56,941 59,283 60,845 62,679 64,078 64,967 5,448
Unit Startup Charges $3,470 3,574 3,681 3,791 3,905 4,022 4,143 4,267 0
Energy Payments $65 68 72 75 78 81 84 89 0
Availability Incentive Adjustment
(11) $150 150 150 150 150 150 150 150 12
Summer Availability Adjustment (12) $0 0 0 0 0 0 0 0 0
Annual Availability Adjustment (13) $0 0 0 0 0 0 0 0 0
Efficiency Adjustment (14) $0 0 0 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------ ------- -------
Total Operating Revenues $58,773 59,053 60,844 63,299 64,978 66,932 68,455 69,473 5,461
OPERATING EXPENSES ($000)(15)
Fuel $0 0 0 0 0 0 0 0 0
Operations (16) $3,141 3,220 3,300 3,384 3,467 3,555 3,643 3,734 306
Capital Expenditures $88 90 93 95 97 100 102 105 9
Major Maintenance (17) $4,064 4,165 4,270 4,377 4,487 4,598 4,713 4,831 349
Operator Fee, Incentive and Bonus
(18) $603 620 638 656 674 694 713 734 63
Home Office Expenses (19) $2,261 2,344 2,431 2,522 2,616 2,713 2,815 2,922 253
Insurance $630 646 662 678 695 713 731 749 64
Property and Other Taxes $1,609 1,587 1,566 1,545 1,524 1,504 1,484 1,465 117
-------- ------- ------- ------- ------- ------- ----- ------- -------
Total Operating Expenses $12,396 12,672 12,960 13,257 13,560 13,878 14,201 14,540 1,161
NET OPERATING REVENUES ($000) $46,377 46,381 47,884 50,042 51,418 53,055 54,254 54,933 4,299
ANNUAL DEBT SERVICE ($000)(20)
Bonds
Outstanding Balance $159,385 143,688 126,901 109,427 91,266 72,130 50,760 26,812 2,062
Annual Principal $15,698 16,786 17,474 18,161 19,135 21,370 23,948 24,750 2,063
Annual Interest $14,782 13,258 11,647 9,971 8,229 6,379 4,267 1,959 98
Letter of Credit Fees $964 964 962 951 942 946 952 934 77
-------- ------- ------- ------- ------- ------- ------ ------- -------
Total Debt Service $31,444 31,009 30,083 29,084 28,307 28,695 29,167 27,643 2,237
TRANSFERS FROM DSRF $0 0 0 0 0 0 0 0 0
ANNUAL DEBT SERVICE COVERAGE 1.47 1.50 1.59 1.72 1.82 1.85 1.86 1.99 1.92
AVERAGE DEBT COVERAGE (21) 1.49
DEBT SERVICE RESERVE ACCOUNT LOC (22) $15,964 15,736 15,252 14,734 14,332 14,533 14,778 13,989 1,132
WORKING CAPITAL LOC (23) $5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
</TABLE>
<PAGE>
SCHEDULE 3.1(O)
ENVIRONMENTAL MATTERS
[To be Provided.]
<PAGE>
SCHEDULE 3.1(T)
CONSENTS TO ASSIGNMENT
1. PECO Energy Company, a Pennsylvania corporation.
2. Zachry Construction Corporation, a Delaware corporation.
3. H.B. Zachry Company, a Delaware corporation.
4. General Electric Company, a New York corporation.
5. General Electric International, Inc., a Delaware corporation.
6. Tenaska Operations, Inc., a Delaware corporation.
7. Georgia Power Company, a Georgia corporation.
8. Heard County Water Authority, a public corporation created and existing
under the laws of the State of Georgia.
9. Transcontinental Gas Pipe Line Corporation, a Delaware corporation.
10. Willbros Engineers, Inc., a Delaware corporation.
11. Willbros Group, Inc., a Panama corporation.
<PAGE>
SCHEDULE 8.11
INDEPENDENT ENGINEERS
1. Energy and Environmental Engineering.
2. PB Power, a division of Parsons Brinckerhoff.
3. Stone & Webster Engineering.
<PAGE>
EXHIBIT 5.1(R)
Certificate of Tenaska Georgia Partners, L.P. dated November 10, 1999 and issued
in connection with the opinion of special counsel to the partnership with
respect to the issue of substantive consolidation in connection with a
bankruptcy of Tenaska Energy, Inc.
<PAGE>
EXHIBIT 4.27
IRREVOCABLE STAND-BY LETTER OF CREDIT NO. 1635
THE TORONTO-DOMINION BANK
PECO ENERGY COMPANY
2004 Renaissance Blvd.
King of Prussia, PA 19406
November 10, 1999
Dear Sirs:
For the account of Tenaska Georgia Partners, L.P. ("Tenaska"), we hereby
authorize you to draw on us at sight $15,000,000 plus upon and after April 1,
2001, $10,000,000 (giving a total of $25,000,000 less any non-reimbursed draws)
(such amount, or after such date the sum of such amounts, as the same shall be
reduced and reinstated from time to time in accordance with the terms hereof,
being referred to herein as the "Stated Amount").
Funds under this Letter of Credit are available to you against your
sight draft(s) drawn on us and accompanied by a certificate purportedly signed
by your authorized representative in the form of ANNEX A attached hereto.
Presentation of such draft(s) and certificate(s) shall be made at our
office located at 909 Fannin, Suite 1700, Houston, Texas, Attention: Jeff Lents
or at any other location which may be designated by us by written notice
delivered to you. Drafts must be marked "Drawn under The Toronto-Dominion Bank
Irrevocable Letter of Credit No. 1635". We hereby agree that all drafts drawn
under and in compliance with the terms of this Letter of Credit will be duly
honored by us upon due delivery of the draft(s) and certificate(s) if presented
at such office on or before the termination date hereof.
Payment under this Letter of Credit shall be made in accordance with the
payment nstructions set forth in your certificate in the form of ANNEX A.
All drafts, certificates and notices shall be personally delivered to
us.
Upon our receipt of a certificate in the form of ANNEX B attached hereto
from your authorized representative, the Stated Amount will be reduced in
accordance with such certificate.
This Letter of Credit shall automatically terminate and be delivered to
us for cancellation upon the earliest of (i) our receipt of a certificate signed
by your authorized representative in the form of ANNEX C attached hereto, (ii)
the close of business on November 10, 2006, and (iii) 60 days after our delivery
to you of a termination certificate stating that this Letter of Credit will
terminate on such 60th day by reason of an event of default having occurred
under the
<PAGE>
reimbursement agreement between Tenaska and us. The earlier of the termination
dates arising under clause (ii) and (iii) above is the "Expiry Date."
Partial drawings under this Letter of Credit are permitted. Each drawing
hereunder shall reduce the Stated Amount by the amount paid on such drawing;
provided that a reduction in the Stated Amount may be reinstated by our delivery
to you of a certificate in the form of ANNEX D indicating that the Stated Amount
has been so increased.
This Letter of Credit is subject to the International Standby Practices
(ISP98). This Letter of Credit shall be deemed to be made under the laws of the
State of New York, including Article 5 of the Uniform Commercial Code, and
shall, as to matters not governed by the International Standby Practices
(ISP98), be governed by and construed in accordance with the laws of the State
of New York, excluding any choice of law provisions or conflict of law
principles which would require reference to the laws of any other jurisdiction.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein; and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for the certificate(s) and such sight
draft(s) referred to herein.
Very truly yours,
The Toronto-Dominion Bank
By: /s/ Warren Finley
----------------------------------------
Name: Warren Finley
Title: Vice President
By: /s/ Jano Mott
----------------------------------------
Name: Jano Mott
Title: Mgr. Syndications & Credit Admin.
2
<PAGE>
Annex A
DRAWING CERTIFICATE
The undersigned, a duly authorized representative of PECO Energy Company
("PECO"), as the beneficiary of the Irrevocable Letter of Credit No. 1635 (the
"Letter of Credit") issued by [Bank] (the "Bank") for the account of Tenaska
Georgia Partners, L.P. ("Tenaska"), certifies as follows to the Bank:
1. Tenaska and PECO are parties to a Power Purchase Agreement dated
August 24, 1999 (the "PPA"). (Tenaska has failed to pay PECO certain liquidated
damages payable under Section 4.02, 8.09, 9.09, 8.10 or 8.11 of the PPA) OR
[Tenaska has failed to pay an Availability Adjustment due under the PPA.] OR
[The [Expiry Date being the date 7 years after the issue date of the Letter of
Credit] is to occur within 10 days of the date of this Drawing Certificate and
the Letter of Credit has not been renewed or replaced by an Acceptable Credit
Support (as defined in the PPA)] OR [The [Expiry Date being the date 60 days
after delivery of a termination certificate stating that this Letter of Credit
will terminate on such 60th day by reason of an Event of Default having occurred
under Tenaska's financing documents] is to occur within 30 days of the date of
this Drawing Certificate and the Letter of Credit has not been renewed or
replaced by an Acceptable Credit Support (as defined in the PPA).
2. PECO is entitled to make a drawing under the Letter of Credit in the
amount of $_____. The amount of drawing to be made hereunder does not exceed (a)
(1) the amount of the obligations due and payable by Tenaska to PECO or (2) the
amount required to be posted as cash collateral upon the expiration of an
Acceptable Credit Support to PECO, pursuant to the PPA and (b) the Stated Amount
of the Letter of Credit.
3. All payments to PECO under the Letter of Credit shall be made by wire
transfer of immediately available funds to PECO at [PECO's Bank], for credit to
account no. _____.
Any capitalized term used herein and not defined shall have its
respective meaning as set forth in the Letter of Credit.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
-----------------------------
Name:
Title:
3
<PAGE>
Annex B
CONSENT TO REDUCTION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by The Toronto-Dominion Bank for the account of
Tenaska Georgia Partners, L.P. The undersigned beneficiary of such Letter of
Credit hereby consents to a permanent reduction in the amount available to be
drawn under the Letter of Credit, effective immediately, to $_____________.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
-----------------------------
4
<PAGE>
Annex C
CONSENT TO TERMINATION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by The Toronto-Dominion Bank for the account of
Tenaska Georgia Partners, L.P. The undersigned beneficiary of such Letter of
Credit hereby consents to the termination of the Letter of Credit, effective
immediately, and is surrendering the Letter of Credit for cancellation.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________, 20__.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
----------------------------
5
<PAGE>
Annex D
CERTIFICATE OF REINSTATEMENT OF STATED AMOUNT
[Date]
PECO
[Address]
Attn:
Ladies and Gentlemen:
Reference is made to The Toronto-Dominion Bank, Letter of Credit No.
1635 Irrevocable Standby Letter of Credit (the "Letter of Credit"), dated
November 10, 1999, issued by us in your favor. Any capitalized term used herein
and not defined shall have its respective meaning as set forth in the Letter of
Credit. This constitutes our notice to you pursuant to the Letter of Credit that
$______has been added to the amount available to be drawn. The Stated Amount is
therefore increased by such amount to $___________.
Very truly yours,
The Toronto-Dominion Bank
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
6
<PAGE>
Annex E
NOTICE OF TERMINATION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by The Toronto-Dominion Bank for the account of
Tenaska Georgia Partners, L.P. The undersigned The Toronto-Dominion Bank hereby
provides notice that this Letter of Credit will terminate on the 60th day after
the date hereof by reason of an event of default having occurred under the
reimbursement agreement between Tenaska and us.
IN WITNESS WHEREOF, the The Toronto-Dominion Bank has executed and
delivered this certificate as of the ____ day of __________, 20__.
The Toronto-Dominion Bank
By:
---------------------------------
7
<PAGE>
Exhibit 4.28
IRREVOCABLE STAND-BY LETTER OF CREDIT NO. 1635
THE TORONTO-DOMINION BANK
PECO ENERGY COMPANY
2004 Renaissance Blvd.
King of Prussia, PA 19406
November 10, 1999
Dear Sirs:
For the account of Tenaska Georgia Partners, L.P. ("Tenaska"), we
hereby authorize you to draw on us at sight $15,000,000 plus upon and after
April 1, 2001, $10,000,000 (giving a total of $25,000,000 less any
non-reimbursed draws) (such amount, or after such date the sum of such amounts,
as the same shall be reduced and reinstated from time to time in accordance with
the terms hereof, being referred to herein as the "Stated Amount").
Funds under this Letter of Credit are available to you against your
sight draft(s) drawn on us and accompanied by a certificate purportedly signed
by your authorized representative in the form of ANNEX A attached hereto.
Presentation of such draft(s) and certificate(s) shall be made at our
office located at 909 Fannin, Suite 1700, Houston, Texas, Attention: Jeff Lents
or at any other location which may be designated by us by written notice
delivered to you. Drafts must be marked "Drawn under The Toronto-Dominion Bank
Irrevocable Letter of Credit No. 1635". We hereby agree that all drafts drawn
under and in compliance with the terms of this Letter of Credit will be duly
honored by us upon due delivery of the draft(s) and certificate(s) if presented
at such office on or before the termination date hereof.
Payment under this Letter of Credit shall be made in accordance with
the payment instructions set forth in your certificate in the form of ANNEX A.
All drafts, certificates and notices shall be personally delivered to
us.
Upon our receipt of a certificate in the form of ANNEX B attached
hereto from your authorized representative, the Stated Amount will be reduced in
accordance with such certificate.
This Letter of Credit shall automatically terminate and be delivered to
us for cancellation upon the earliest of (i) our receipt of a certificate signed
by your authorized representative in the form of ANNEX C attached hereto, (ii)
the close of business on November 10, 2006, and (iii) 60 days after our delivery
to you of a termination certificate stating that this Letter of Credit will
terminate on such 60th day by reason of an event of default having occurred
under the
<PAGE>
reimbursement agreement between Tenaska and us. The earlier of the termination
dates arising under clause (ii) and (iii) above is the "Expiry Date."
Partial drawings under this Letter of Credit are permitted. Each
drawing hereunder shall reduce the Stated Amount by the amount paid on such
drawing; provided that a reduction in the Stated Amount may be reinstated by our
delivery to you of a certificate in the form of ANNEX D indicating that the
Stated Amount has been so increased.
This Letter of Credit is subject to the International Standby Practices
(ISP98). This Letter of Credit shall be deemed to be made under the laws of the
State of New York, including Article 5 of the Uniform Commercial Code, and
shall, as to matters not governed by the International Standby Practices
(ISP98), be governed by and construed in accordance with the laws of the State
of New York, excluding any choice of law provisions or conflict of law
principles which would require reference to the laws of any other jurisdiction.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein; and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for the certificate(s) and such sight
draft(s) referred to herein.
Very truly yours,
The Toronto-Dominion Bank
By: /s/ Warren Finley
-----------------------------------------
Name: Warren Finley
Title: Vice President
By: /s/ Jano Mott
-----------------------------------------
Name: Jano Mott
Title: Mgr. Syndications & Credit Admin.
2
<PAGE>
Annex A
DRAWING CERTIFICATE
The undersigned, a duly authorized representative of PECO Energy
Company ("PECO"), as the beneficiary of the Irrevocable Letter of Credit No.
1635 (the "Letter of Credit") issued by [Bank] (the "Bank") for the account of
Tenaska Georgia Partners, L.P. ("Tenaska"), certifies as follows to the Bank:
1. Tenaska and PECO are parties to a Power Purchase Agreement dated
August 24, 1999 (the "PPA"). (Tenaska has failed to pay PECO certain liquidated
damages payable under Section 4.02, 8.09, 9.09, 8.10 or 8.11 of the PPA) OR
[Tenaska has failed to pay an Availability Adjustment due under the PPA.] OR
[The [Expiry Date being the date 7 years after the issue date of the Letter of
Credit] is to occur within 10 days of the date of this Drawing Certificate and
the Letter of Credit has not been renewed or replaced by an Acceptable Credit
Support (as defined in the PPA)] OR [The [Expiry Date being the date 60 days
after delivery of a termination certificate stating that this Letter of Credit
will terminate on such 60th day by reason of an Event of Default having occurred
under Tenaska's financing documents] is to occur within 30 days of the date of
this Drawing Certificate and the Letter of Credit has not been renewed or
replaced by an Acceptable Credit Support (as defined in the PPA).
2. PECO is entitled to make a drawing under the Letter of Credit in the
amount of $_____. The amount of drawing to be made hereunder does not exceed (a)
(1) the amount of the obligations due and payable by Tenaska to PECO or (2) the
amount required to be posted as cash collateral upon the expiration of an
Acceptable Credit Support to PECO, pursuant to the PPA and (b) the Stated Amount
of the Letter of Credit.
3. All payments to PECO under the Letter of Credit shall be made by
wire transfer of immediately available funds to PECO at [PECO's Bank], for
credit to account no. _____.
Any capitalized term used herein and not defined shall have its
respective meaning as set forth in the Letter of Credit.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
----------------------------------
Name:
Title:
3
<PAGE>
Annex B
CONSENT TO REDUCTION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by The Toronto-Dominion Bank for the account of
Tenaska Georgia Partners, L.P. The undersigned beneficiary of such Letter of
Credit hereby consents to a permanent reduction in the amount available to be
drawn under the Letter of Credit, effective immediately, to $_____________.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
----------------------------------
Name:
Title:
4
<PAGE>
Annex C
CONSENT TO TERMINATION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by The Toronto-Dominion Bank for the account of
Tenaska Georgia Partners, L.P. The undersigned beneficiary of such Letter of
Credit hereby consents to the termination of the Letter of Credit, effective
immediately, and is surrendering the Letter of Credit for cancellation.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________, 20__.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
----------------------------------
Name:
Title:
5
<PAGE>
Annex D
CERTIFICATE OF REINSTATEMENT OF STATED AMOUNT
[Date]
PECO
[Address]
Attn:
Ladies and Gentlemen:
Reference is made to The Toronto-Dominion Bank, Letter of Credit No.
1635 Irrevocable Standby Letter of Credit (the "Letter of Credit"), dated
November 10, 1999, issued by us in your favor. Any capitalized term used herein
and not defined shall have its respective meaning as set forth in the Letter of
Credit. This constitutes our notice to you pursuant to the Letter of Credit that
$______has been added to the amount available to be drawn. The Stated Amount is
therefore increased by such amount to $___________.
Very truly yours,
The Toronto-Dominion Bank
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
6
<PAGE>
Annex E
NOTICE OF TERMINATION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by The Toronto-Dominion Bank for the account of
Tenaska Georgia Partners, L.P. The undersigned The Toronto-Dominion Bank hereby
provides notice that this Letter of Credit will terminate on the 60th day after
the date hereof by reason of an event of default having occurred under the
reimbursement agreement between Tenaska and us.
IN WITNESS WHEREOF, the The Toronto-Dominion Bank has executed and
delivered this certificate as of the ____ day of __________, 20__.
The Toronto-Dominion Bank
By:
-----------------------------
7
<PAGE>
Exhibit 4.29
[The First National Bank Of Omaha Letterhead]
IRREVOCABLE STANDBY LETTER OF CREDIT
DATE: NOVEMBER 04, 1999
LETTER OF CREDIT NUMBER: STB20000387
BENEFICIARY:
THE CHASE MANHATTAN BANK
NEW YORK BRANCH
450 WEST 33rd STREET
NEW YORK, NY 10001
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. STB20000387 ON
BEHALF OF TENASKA GEORGIA, INC., 1044 NORTH 115TH STREET, SUITE 400, OMAHA, NE
68154-4446, FOR ANY SUM OR SUMS NOT EXCEEDING AN AGGREGATE TOTAL AMOUNT OF
*USD355,000.00* (THREE HUNDRED FIFTY FIVE THOUSAND AND NO/100 U.S. DOLLARS)
AVAILABLE UPON PRESENTATION OF YOUR DRAFTS AT SIGHT ON FIRST NATIONAL BANK OF
OMAHA, INTERNATIONAL DEPARTMENT, 1620 DODGE STREET, OMAHA, NE 68102.
DRAFTS MUST BE ACCOMPANIED BY:
PRESENTATION OF:
1. A DRAFT IN THE FORM OF "EXHIBIT A" HERETO, DULY COMPLETED, EXECUTED AND
DELIVERED BY THE BENEFICIARY'S AUTHORIZED OFFICER; AND
2. A DRAWING CERTIFICATE ("DRAWING CERTIFICATE") IN THE FORM OF "EXHIBIT
B" HERETO, DULY COMPLETED, EXECUTED AND DELIVERED BY THE BENEFICIARY'S
AUTHORIZED OFFICER.
THE TERM "BENEFICIARY" INCLUDES ANY SUCCESSOR BY OPERATION OF LAW OF THE NAMED
BENEFICIARY, INCLUDING, WITHOUT LIMITATION, ANY LIQUIDATOR, REHABILITATOR,
RECEIVER OR CONSERVATOR. ALL OTHER CAPITALIZED TERMS USED HEREIN HAVE THE
MEANING SET FORTH IN THE EQUITY CONTRIBUTION AGREEMENT (THE "EQUITY CONTRIBUTION
AGREEMENT"), DATED AS OF NOVEMBER 1, 1999, BY AND AMONG TENASKA GEORGIA
PARTNERS, L.P., THE CONTRIBUTING PARTNERS THERETO AND THE BENEFICIARY, AS
COLLATERAL AGENT.
IN ACCORDANCE WITH RULE 3.14 OF THE INTERNATIONAL STANDBY PRACTICES (ISP98), IF
THIS LETTER OF CREDIT EXPIRES DURING AN INTERRUPTION OF
A-1
<PAGE>
BUSINESS, WE WILL EFFECT PAYMENT OF THE LETTER OF CREDIT IF DRAWN AGAINST WITHIN
30 DAYS AFTER THE RESUMPTION OF BUSINESS.
PAYMENT WILL BE EFFECTED BY 5:00 P.M. THE SAME DAY THAT CONFORMING DOCUMENTS ARE
PRESENTED TO THE FIRST NATIONAL BANK OF OMAHA, INTERNATIONAL DEPARTMENT, 1620
DODGE STREET, OMAHA, NE 68102 IF RECEIVED PRIOR TO 1:00 P.M. LOCAL TIME.
IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT IS DEEMED TO BE AUTOMATICALLY
EXTENDED WITHOUT AMENDMENT FOR 12 MONTHS FROM THE EXPIRY DATE HEREOF, OR ANY
FUTURE EXPIRATION DATE, UNLESS AT LEAST 90 DAYS PRIOR TO ANY EXPIRATION DATE, WE
NOTIFY YOU BY REGISTERED MAIL OR COURIER SERVICE THAT WE ELECT NOT TO CONSIDER
THIS LETTER OF CREDIT RENEWED FOR ANY SUCH ADDITIONAL PERIOD. IN THAT EVENT, YOU
MAY DRAW HEREUNDER ON OR PRIOR TO THE THEN RELEVANT EXPIRATION DATE, UP TO THE
FULL AMOUNT THEN AVAILABLE HEREUNDER, AGAINST YOUR SIGHT DRAFT(S) ON US, BEARING
THE NUMBER OF THIS LETTER OF CREDIT.
THE DRAFTS DRAWN UNDER THIS CREDIT ARE TO BE ENDORSED HEREON AND MUST BEAR THE
CLAUSE "DRAWN UNDER THE FIRST NATIONAL BANK OF OMAHA LETTER OF CREDIT NO.
STB20000387 DATED NOVEMBER 04, 1999."
WE HEREBY AGREE WITH YOU THAT DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE
TERMS OF THIS LETTER OF CREDIT THAT THE SAME SHALL BE DULY HONORED ON DUE
PRESENTATION IF DRAWN AND NEGOTIATED ON OR BEFORE NOVEMBER 04, 2000. DRAFTS MUST
BE PRESENTED TO FIRST NATIONAL BANK OF OMAHA, INTERNATIONAL DEPARTMENT, 1620
DODGE STREET, OMAHA, NE 68102 BY 5:00 PM LOCAL TIME.
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING, AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE
TO ANY NOTE, DOCUMENT, INSTRUMENT OR AGREEMENT REFERRED TO HEREIN OR IN WHICH
THIS LETTER OF CREDIT IS REFERRED TO OR TO WHICH THIS LETTER OF CREDIT RELATES
AND ANY SUCH REFERENCE SHALL NOT BE DEEMED TO BE INCORPORATED HEREIN BY
REFERENCE TO ANY NOTE, DOCUMENT OR AGREEMENT.
THE ORIGINAL LETTER OF CREDIT AND ALL AMENDMENTS MUST BE PRESENTED WITH EACH
DRAWING OR WHEN CANCELING THE LETTER OF CREDIT PRIOR TO THE EXPIRY DATE.
EXCEPT SO FAR AS OTHERWISE STATED, THIS LETTER OF CREDIT IS SUBJECT TO THE RULES
OF THE INTERNATIONAL STANDBY PRACTICES AS ADOPTED BY THE INTERNATIONAL CHAMBER
OF COMMERCE, WHICH ARE IN EFFECT AT THE TIME OF ISSUANCE OF THE LETTER OF
CREDIT.
A-2
<PAGE>
THE FIRST NATIONAL BANK OF OMAHA
/s/ Wanda A. Nesluitt
--------------------------------
AUTHORIZED SIGNATURE
A-3
<PAGE>
EXHIBIT A
SIGHT DRAFT
DATE:
TO: THE FIRST NATIONAL BANK OF OMAHA
(AS THE ISSUER OF THE LETTER OF CREDIT REFERENCED BELOW)
INTERNATIONAL DEPARTMENT
1620 DODGE STREET
OMAHA, NE 68102
RE: DRAWN UNDER THE FIRST NATIONAL BANK OF OMAHA
IRREVOCABLE LETTER OF CREDIT NO. STB20000387 DATED
NOVEMBER 04, 1999
ON SIGHT
PAY TO THE CHASE MANHATTAN BANK, NEW YORK BRANCH, AS THE COLLATERAL
AGENT UNDER THE EQUITY CONTRIBUTION AGREEMENT, DATED AS OF NOVEMBER 1,1999, BY
AND AMONG TENASKA GEORGIA PARTNERS, L.P., THE CONTRIBUTING PARTNER PARTY
THERETO, AND THE CHASE MANHATTAN BANK, A NATIONAL ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, ACTING THROUGH ITS NEW YORK
BRANCH, AS COLLATERAL AGENT (THE "COLLATERAL AGENT") FOR THE SENIOR PARTIES
UNDER AND AS DEFINED IN THE COMMON AGREEMENT, DATED AS OF NOVEMBER 1,1999, BY
AND AMONG TENASKA GEORGIA PARTNERS, L.P., THE TRUSTEE, THE DSR LOC AGENT, THE
PPA LOC AGENT, THE WORKING CAPITAL LINE FACILITY PROVIDER AND THE COLLATERAL
AGENT, IN IMMEDIATELY AVAILABLE FUNDS __________ U.S. DOLLARS (U.S.$__________)
BY 5:00 P.M. NEBRASKA TIME, ON THE DATE HEREOF, IF THIS SIGHT DRAFT IS PRESENTED
PRIOR TO 1:00 P.M., NEBRASKA TIME, PURSUANT TO IRREVOCABLE LETTER OF CREDIT NO.
STB20000387 OF THE FIRST NATIONAL BANK OF OMAHA, AND OTHERWISE BY 5:00 P.M.
NEBRASKA TIME, ON THE NEXT BUSINESS DATE AFTER THE DATE HEREOF.
THE CHASE MANHATTAN BANK,
NEW YORK BRANCH
BY:
------------------------------------
NAME:
TITLE:
Annex A-1
<PAGE>
EXHIBIT B
DRAWING CERTIFICATE
In connection with the proposed drawing in the amount of $__________ under The
First National Bank of Omaha Irrevocable Standby Letter of Credit No.
STB20000387 (the "LETTER OF CREDIT") issued for the account of TENASKA GEORGIA,
INC., the undersigned authorized officer of The Chase Manhattan Bank, New York
Branch, as Collateral Agent (the "BENEFICIARY") hereby certifies that:
1. This Drawing Certificate, as executed, must contain one, but
only one, of the three alternative paragraphs set forth below:
Alternative 1: The foregoing amount represents all or a
portion of a Contributing Partner Equity Contribution (as
defined in the Equity Contribution Agreement (the
"AGREEMENT"), dated as of November 1, 1999, by and among
Tenaska Georgia Partners, L.P., the Contributing Partner Party
thereto and the Beneficiary, as Collateral Agent), from
[__________], which is currently due and payable to the
Beneficiary under the Agreement in accordance with its terms
and has not been paid.
OR
Alternative 2: The Letter of Credit no longer qualifies as an
Acceptable Letter of Credit (as defined in the Agreement) and
[__________] has not furnished a Substitute Support Instrument
(as defined in the Agreement) in substitution for the Letter
of Credit.
OR
Alternative 3: The Letter of Credit will expire within fifteen
(15) Business Days and [__________] has not furnished a
Substitute Support Instrument (as defined in the Agreement) in
substitution for the Letter of Credit and as a consequence
thereof the amount of $[__,___,___] is due and payable.
2. The amount of the drawing to be made hereunder does not exceed
the amount of the Contributing Partner Equity Contribution
which is due and payable on the Date of Commercial Operation
of the Final Units by [__________] to the Beneficiary pursuant
to the Agreement and has not been paid.
B-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed and delivered this Drawing
Certificate as of this _____ day of __________, ____.
The Chase Manhattan Bank,
New York Branch
BY:
------------------------------------
Name:
Title:
B-2
<PAGE>
EXHIBIT 5.1
January 31, 2000
Tenaska Georgia Partners, L.P.
1044 N. 115 Street, Suite 400
Omaha, Nebraska 68154-4446
Ladies and Gentlemen:
We have acted as counsel to Tenaska Georgia Partners, L.P., a Delaware
limited partnership (the "Partnership"), in connection with the offer to
exchange (the "Exchange Offer") up to $275,000,000 aggregate principal amount of
its 9.50% Senior Secured Bonds due 2030 (the "New Bonds"), pursuant to an
offering registered under the Securities Act of 1933 (the "Act"), for an equal
principal amount of its outstanding 9.50% Senior Secured Bonds due 2030 (the
"Old Bonds"), including the preparation of the prospectus relating to the New
Bonds (the "Prospectus") contained in the Registration Statement on Form S-4
(the "Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") by the Partnership for the purpose of such registration. The
Old Bonds have been, and the New Bonds will be, issued pursuant to a Trust
Indenture dated as of November 1, 1999 (the "Indenture") between the Partnership
and The Chase Manhattan Bank, as Trustee and Depositary Bank (the "Trustee").
In our capacity as such counsel, we have reviewed the Indenture, the form of
the New Bonds, the Registration Statement and such other partnership records,
agreements, documents and other instruments of the Partnership as in effect on
the date hereof, and satisfied ourselves as to such other matters, as we have
deemed necessary or appropriate as a basis for this opinion. In such review, we
have assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity to the originals of all documents submitted to us as certified,
conformed or photostatic copies or forms and the authenticity of the originals
of such latter documents. We have assumed that the Indenture constitutes
(subject to the same qualifications as are contained in this opinion) the valid
and legally binding agreement of the Trustee.
Based on the foregoing, and subject to the qualifications, assumptions and
limitations stated herein, we are of the opinion that, when the New Bonds are
duly executed by the Partnership and authenticated by the Trustee in accordance
with the provisions of the Indenture and delivered in exchange for the Old Bonds
in accordance with the Exchange Offer as described in the Registration
Statement, which shall have been declared effective by the Commission, the New
Bonds will constitute the valid and legally binding obligations of the
Partnership enforceable against the Partnership in accordance with their terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or other laws affecting creditors' rights generally,
general equitable principles (regardless of whether considered in a proceeding
in equity or at law) and requirements of reasonableness, good faith and fair
dealing.
We are members of the Bar of the State of New York and, for purposes of this
opinion, do not hold ourselves out as experts on the law of any jurisdiction
other than the law of the State of New York and the Delaware General Corporation
Law. We are generally familiar with the Delaware Revised Uniform Limited
Partnership Act and have made such inquiries in respect thereof as we consider
necessary to render this opinion. This opinion is limited to matters governed by
the law of the State of New York, the Delaware General Corporation Law and the
Delaware Revised Uniform Limited Partnership Act.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus. In giving this consent, we do not thereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Winthrop, Stimson, Putnam &
Roberts
2
<PAGE>
EXHIBIT 8.1
January 31, 2000
Tenaska Georgia Partners, L.P.
1044 N. 115 Street, Suite 400
Omaha, Nebraska 68154-4446
Ladies and Gentlemen:
We have acted as counsel to Tenaska Georgia Partners, L.P., a Delaware limited
partnership (the "Partnership"), in connection with the offer to exchange up to
$275,000,000 aggregate principal amount of its 9.50% Senior Secured Bonds due
2030, pursuant to an offering registered under the Securities Act of 1933 (the
"Act"), for an equal principal amount of its outstanding 9.50% Senior Secured
Bonds due 2030, including the preparation of the prospectus (the "Prospectus")
contained in the Registration Statement on Form S-4 (the "Registration
Statement") filed with the Securities and Exchange Commission (the "Commission")
by the Partnership for the purpose of such registration.
In our capacity as such counsel, we have reviewed the Registration Statement
and such other partnership records, agreements, documents and other instruments
of the Partnership as in effect on the date hereof, and satisfied ourselves as
to such other matters, as we have deemed necessary or appropriate as a basis for
this opinion.
Based on the foregoing and upon consideration of applicable law, and subject
to the qualifications, assumptions and limitations stated herein, the
discussions of United States federal income tax considerations set forth under
the captions "Prospectus Summary--The Exchange Offer--Certain U.S. Federal
Income Tax Consequences" and "Certain United States Federal Income Tax
Consequences" in the Prospectus, insofar as they relate to provisions of United
States federal income tax law, are, taken as a whole, accurate in all material
respects.
This opinion is limited to the federal income tax laws of the United States
and does not consider the effects of any foreign, state or local laws or any
federal law of the United States other than those pertaining to income taxation.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Certain United States Federal Income Tax Consequences" in the Prospectus. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
<PAGE>
Exhibit 10.1
H. B. ZACHRY COMPANY.
GUARANTY OF OBLIGATION
This Guaranty is made by H. B. Zachry Company, a Delaware corporation
("Guarantor"), in favor of Tenaska Georgia Partners, L.P., a Delaware limited
partnership ("Owner") with respect to that certain Engineering, Procurement and
Construction Agreement dated the 15th day of September, 1999, between Tenaska
Georgia I, L.P., a Delaware limited partnership ("Tenaska") and Zachry
Construction Corporation, a Delaware corporation ("Contractor") for the
construction of the Tenaska Georgia Generation Station in Heard County, Georgia,
as amended, supplemented or otherwise modified from time to time, (hereinafter
called the "EPC Agreement"). Tenaska, having assigned the EPC Agreement to
Owner, effective November 10, 1999, and such assignment having been consented to
by Contractor, now requires this Guaranty, as provided in the EPC Agreement.
Contractor is an affiliate of Guarantor. Guarantor will derive direct and
indirect benefit from the making of the Guaranty.
NOW, THEREFORE, for good and valuable consideration, Guarantor hereby covenants
and agrees as follows:
1. Guarantor hereby unconditionally guarantees the full and timely
performance by Contractor of all of its obligations under the EPC
Agreement, as it from time to time may be amended, and hereby
undertakes that if Contractor shall in any respect fail to perform and
observe all of the terms, provisions, conditions, and stipulations of
the EPC Agreement, Guarantor warrants the faithful performance of all
of such terms and conditions and will fully indemnify and keep
indemnified Owner against all claims, losses, damages, costs and
expenses whatsoever which Owner may incur by reason of Contractor's
failure to perform and observe any of the terms, provisions,
conditions, and stipulations of the EPC Agreement and in addition
against all claims, losses, damages, costs and expenses which Owner may
incur by reason of Contractor's breach of any other duty to Owner,
(collectively the "Guaranteed Obligations"). THE OBLIGATIONS OF
GUARANTOR HEREUNDER SHALL NOT BE REDUCED, LIMITED OR TERMINATED, NOR
SHALL THE GUARANTOR BE DISCHARGED FROM ANY THEREOF, FOR ANY REASON
WHATSOEVER (other than, the payment, observance and performance of the
Guaranteed Obligations and other than as provided in Section 9 of this
Guaranty), including (and whether or not the same shall have occurred
or failed to occur once or more than once and whether or not Guarantor
shall have received notice thereof):
(a) (i) any increase in, (ii) any extension of the time of
payment, observance or performance of, (iii) any other
amendment or modification of any of the other terms and
provisions of, (iv) any release, composition or settlement
(whether by way of acceptance of a plan of reorganization or
otherwise) of, (v) any subordination (whether present or
future or contractual or otherwise) of, or (vi) any discharge,
disallowance, invalidity, illegality, voidness or other
unenforceability of, the Guaranteed Obligations;
<PAGE>
(b) (i) any failure to obtain, (ii) any release, composition or
settlement of, (iii) any amendment or modification of any of
the terms and provisions of, (iv) any subordination of, or (v)
any discharge, disallowance, invalidity, illegality, voidness
or other enforceability of, any other guaranties of the
Guaranteed Obligations;
(c) any termination of or change in any relationship between
Guarantor and Contractor, including any such termination or
change resulting from a change in the ownership of Guarantor
or from the cessation of any commercial relationship between
Guarantor and Contractor;
(d) any exercise of, or any election not or failure to exercise,
delay in the exercise of, waiver of, or forbearance or other
indulgence with respect to, any right, remedy or power
available to Owner, including (i) any election not or failure
to exercise any right of set-off, recoupment or counterclaim,
and (ii) any election of remedies effected by Owner, and
(e) ANY OTHER ACT OR FAILURE TO ACT OR ANY OTHER EVENT OR
CIRCUMSTANCE THAT (i) VARIES THE RISK OF GUARANTOR HEREUNDER
OR (ii) BUT FOR THE PROVISIONS HEREOF, WOULD, AS A MATTER OF
STATUTE OR RULE OF LAW OR EQUITY, OPERATE TO REDUCE, LIMIT OR
TERMINATE THE OBLIGATIONS OF THE GUARANTOR HEREUNDER OR
DISCHARGE GUARANTOR FROM ANY THEREOF.
2. Guarantor represents and warrants to Owner and Owner's successors and
assigns that:
(a) Guarantor is duly organized and validly existing as a Delaware
corporation;
(b) Guarantor directly or indirectly owns all of the issued and
outstanding shares of the capital stock of Contractor;
(c) Guarantor is authorized and has all necessary power and
authority, corporate and other, to execute and deliver this
Guaranty and to perform the obligations of Guarantor,
including all obligations of Contractor pursuant to the EPC
Agreement, this Guaranty reasonably may be expected to benefit
directly or indirectly, Guarantor, and this Guaranty has been
duly executed and delivered by Guarantor and is the valid,
binding, and enforceable contract of Guarantor, and;
(d) The execution and delivery of this Guaranty by Guarantor and
its performance of its obligations under the Guaranty, do not
(and, to the best of Guarantor's knowledge, will not) conflict
with any law, rule or regulation, or any agreement,
instrument, indenture, deed or any other restriction, to which
Guarantor is subject or a party, or accelerate or affect any
of its obligations under any thereof.
2
<PAGE>
3. Guarantor shall cause Contractor to duly and timely perform all of the
Guaranteed Obligations including the obligations of Contractor under
the EPC Agreement, as it may from time to time be amended.
4. The obligations of Guarantor hereunder include, without limitation, all
liabilities for liquidated or similar damages and warranty obligations
of Contractor.
5. Owner may enforce against Guarantor any and all of the rights of Owner
under this Guaranty without having instituted or completed any legal,
arbitration or other proceedings against Contractor.
6. This Guaranty shall be governed by and construed according to the laws
of the State of Texas. Guarantor designates Zachry Construction
Corporation, a Delaware corporation, as agent for service of process in
any action by Owner under this Guaranty, submits to personal
jurisdiction in the State of Texas and further agrees that the
non-exclusive venue for any such action may be Texas.
7. Guarantor waives: (a) any requirement, and any right to require, that
any right or power be exercised or any action be taken against the
Contractor, or any other guarantor or any collateral for the Guaranteed
Obligations; (b) (i) notice of acceptance of and intention to rely on
this Agreement, and (ii) all other notices that may be required by
Applicable Law or otherwise to preserve any rights against Guarantor
under this Agreement, including any notice of default, demand,
dishonor, presentment and protest; and, (c) diligence.
8. Guarantor shall not assert any right to set off against claims by Owner
hereunder other than claims which Contractor has a right to set off
under the EPC Agreement.
9. Notwithstanding any other provision to the contrary set forth herein,
Guarantor retains the right to assert any and all claims, defenses and
limitations of liability possessed by Contractor under the terms of the
EPC Agreement (including without limitation, Section 14.2 of the EPC
Agreement, but excluding any defense based upon absence of binding
effect of the EPC Agreement) or arising from the parties' performance
or failure to perform thereunder.
10. Guarantor's obligations hereunder (a) are absolute and unconditional,
(b) subject to Section 9 above, are unlimited in amount, (c) constitute
a guaranty of payment and performance and not a guaranty of collection,
(d) are as primary obligor and not as a surety only (e) shall be a
continuing guaranty of all present and future Guaranteed Obligations
and (f) shall be irrevocable.
11. This Guaranty may be assigned by Owner to Owner's lenders for the
project and shall inure to the benefit of such assignee(s).
12. Notice to Guarantor shall be to:
3
<PAGE>
H.B. Zachry Company
527 Logwood (78221-1738)
P.O. Box 240130
San Antonio, TX 78224-0130
Attn: R.J. Kalt
Telefax: (210) 458-8572
Telephone: (210)458-8050
With a copy to:
Murray L. Johnston, Jr.
General Counsel
310 S. St. Mary's Street, Suite 2600
San Antonio, TX 78205
Telefax: (210) 258-2699
Telephone: (210)258-2600
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed
and delivered to Owner in the name and on behalf of Guarantor by one of its
officers who is duly authorized to do so, for the benefit of Owner, as of this
22nd day of October, 1999.
Guarantor
H. B. Zachry Company
By: /S/________________________
(Name)
VICE PRESIDENT
------------------------
(Title)
ATTEST:
By: /S/________________________
Title: Assistant Secretary
4
<PAGE>
CERTIFIED COPY OF RESOLUTION
"RESOLVED: H. B. Zachry Company ("Guarantor") is authorized to provide
a Guaranty of the obligations of Zachry Construction Corporation, a Delaware
corporation ("Contractor"), to Tenaska Georgia Partners, L.P., a Delaware
limited partnership ("Owner") in connection with the agreement between Tenaska
Georgia I, L.P., a Delaware limited partnership, and Contractor for the
construction of the Tenaska Georgia Generation Station in Heard County, Georgia,
which agreement has subsequently been assigned to Owner with the consent of
Contractor. Guarantor states and acknowledges that such Guaranty reasonably may
be expected to benefit, directly or indirectly, Guarantor."
***********
I, Murray L. Johnston, Jr., certify that I am the Secretary of H. B.
Zachry Company, a Delaware corporation.
I certify that:
(1) The resolution quoted above was adopted on September 13, 1999
by Unanimous Written Consent of the Executive Committee of the
Board of Directors.
(2) This action of the Executive Committee of this corporation may
be taken without a meeting if all of the members of the
Executive Committee consent in writing.
(3) The signed Consent has been filed in the minute book of the
corporation.
(4) I have compared the resolution quoted above with the
resolution in the minute book and verify that the language is
identical.
(5) The resolution has not been revoked or amended and is now in
full force and effect.
SIGNED AND SEALED on behalf of the corporation October 22, 1999.
[SEAL] ______________________________
Murray L. Johnston, Jr.
Secretary
ZACHRYGUARANTY
<PAGE>
Exhibit 10.2
UNITED STATES FIDELITY AND GUARANTY COMPANY
BALTIMORE MARYLAND
(A STOCK COMPANY)
PERFORMANCE BOND
Approved by the American Institute of Architects
A.I.A. Document No. A-311 (February 1970 Edition)
BOND NUMBER 72-0120-48944-99-8
KNOW ALL MEN BY THESE PRESENTS:
That ZACHRY CONSTRUCTION CORPORATION, 527 LOGWOOD AVENUE, P.O. BOX
240130, SAN ANTONIO, TEXAS 78224-0130 as Principal, hereinafter called
Contractor, and UNITED STATES FIDELITY AND GUARANTY COMPANY**, a corporation
organized and existing under the laws of the State of Maryland, Baltimore,
Maryland, as Surety, hereinafter called Surety, are held and firmly bound unto
TENASKA GEORGIA I, L. P. as Obligee, hereinafter called Owner, in the amount of
TWO HUNDRED TWENTY-NINE MILLION, ONE HUNDRED EIGHTY NINE THOUSAND, EIGHT HUNDRED
THIRTY-TWO Dollars ($229,189,832.), for the payment whereof Contractor and
Surety bind themselves, their heirs, executors, administrators, successors and
assigns, jointly and severally, firmly by these presents.
WHEREAS, Contractor has by written agreement dated SEPTEMBER 15, 1999,
entered into a contract with Owner for ENGINEERING, PROCUREMENT AND
CONSTRUCTION OF AN ELECTRIC GENERATING FACILITY LOCATED IN HEARD
COUNTY, GEORGIA
In accordance with drawings and specifications prepared by UTILITY ENGINEERING,
UTILITY ENGINEERING PLAZA, 5601 I 40 WEST, AMARILLO, TEXAS 79106-4605, which
contract is by reference made a part hereof, and is hereinafter referred to as
the Contract.
NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION is such that, if
Contractor shall promptly and faithfully perform said Contract, then this
obligation shall be null and void; otherwise it shall remain in full force and
effect.
The Surety hereby waives notice of any alteration or extension of time
made by the Owner.
Whenever Contractor shall be, and declared by Owner to be in default
under the Contract, the Owner having performed Owner's obligations thereunder,
the Surety may promptly remedy the default, or shall promptly
(1) Complete the Contract in accordance with its terms and conditions,
or
(2) Obtain a bid or bids for completing the Contract in accordance
with its terms and conditions, and upon determination by the Owner
and the Surety jointly of the lowest responsible bidder, arrange
for a contract between such bidder and Owner, and make available
as Work progresses (even though there should be a default or a
succession of defaults under the contract or contracts of
completion arranged under this paragraph) sufficient funds to pay
the cost of completion less the balance of the contract price; but
not exceeding, including other costs and damages for which the
Surety may be liable hereunder, the amount set forth in the first
paragraph hereof. The term "balance of the contract price," as
used in this paragraph, shall mean the total amount payable by
Owner to Contractor under the Contract and any amendments thereto,
less the amount properly paid by Owner to Contractor.
Any suit under this bond must be instituted before the expiration of
two (2) years from the date on which final payment under the Contract falls due.
No right of action shall accrue on this bond to or for the use of any
person or corporation other than the Owner named herein or the heirs,
executors, administrators or successors of the Owner.
Signed and sealed this 5th day of NOVEMBER , 1999
ZACHRY CONSTRUCTION CORPORATION
In the presence of:
Myrna Montgomery By Raymond C. Wenz Jr. (Seal)
(Witness) Principal
UNITED STATE FIDELITY AND GUARANTY COMPANY**
By Terry W. Nielsen (Seal)
(Witness) Attorney-in-Fact
Contract 211 (2-70) ** St. Paul Fire and Marine Insurance Company;
Seaboard Surety Company; St. Paul Guardian Insurance
Company; St. Paul Mercury Insurance Company
<PAGE>
RIDER NUMBER 1
TO BE ATTACHED AND FORM A PART OF Performance Bond Number
72-0120-48944-99-8 issued by UNITED STATES FIDELITY AND GUARANTY COMPANY; ST.
PAUL FIRE AND MARINE INSURANCE COMPANY; SEABOARD SURETY COMPANY; ST. PAUL
GUARDIAN INSURANCE COMPANY; ST. PAUL MERCURY INSURANCE COMPANY, as Sureties on
the 15th day of September, 1999 on behalf of ZACHRY CONSTRUCTION CORPORATION, as
Principal, in favor of TENASKA GEORGIA I, L.P., as Obligee.
PROVIDED HOWEVER, if the Owner/Obligee assigns or collaterally assigns
the Contract to Lender (as defined in the Contract), then Owner/Obligee may
assign or collaterally assign this bond to Lender.
IN WHICH EVENT, Surety shall (upon written demand by Lender), subject
to the terms and conditions of the bond, perform all obligations of Surety under
the bond for the benefit of Lender as if Lender were the Owner/Obligee
thereunder;
PROVIDED, FURTHER, HOWEVER, that prior to such written demand by
Lender, Owner/Obligee shall be entitled to enforce all of the rights of the
Owner/Obligee under the bond, which shall remain unaffected by the assignment or
collateral assignment thereof to Lender.
IT IS UNDERSTOOD AND AGREED that nothing herein contained shall be held
to change, alter or vary the terms of the above described bond(s) except as
herein set forth.
SIGNED, SEALED AND DATED this 5th day of November, 1999.
UNITED STATES FIDELITY AND GUARANTY COMPANY
ST. PAUL FIRE AND MARINE INSURANCE COMPANY
SEABOARD SURETY COMPANY
ST. PAUL GUARDIAN INSURANCE COMPANY
ST. PAUL MERCURY INSURANCE COMPANY
By: Terry W. Nielsen
Attorney-in-Fact
ACCEPTED: ZACHRY CONSTRUCTION CORPORATION (Principal)
By: Raymond C. Wenz Jr.
<PAGE>
UNITED STATES FIDELITY AND GUARANTY COMPANY
Baltimore Maryland
(A Stock Company)
LABOR AND MATERIAL PAYMENT BOND
Approved by the American Institute of Architects
A.I.A. Document No. A-311 (February 1970 Edition)
BOND NUMBER 72-0120-48944-99-8
KNOW ALL MEN BY THESE PRESENTS:
That ZACHRY CONSTRUCTION CORPORATION, 527 LOGWOOD AVENUE, P.O. BOX
240130, SAN ANTONIO, TEXAS 78224-0130 as Principal, hereinafter called
Principal, and UNITED STATES FIDELITY AND GUARANTY COMPANY**, a corporation
organized and existing under the laws of the State of Maryland, Baltimore,
Maryland, as Surety, hereinafter called Surety, are held and firmly bound unto
TENASKA GEORGIA I, L. P. as Obligee, hereinafter called Owner, in the amount of
TWO HUNDRED TWENTY-NINE MILLION, ONE HUNDRED EIGHTY NINE THOUSAND, EIGHT HUNDRED
THIRTY-TWO Dollars ($229,189,832.), for the payment whereof Principal and Surety
bind themselves, their heirs, executors, administrators, successors and assigns,
jointly and severally, firmly by these presents.
WHEREAS, Principal has by written agreement dated SEPTEMBER 15, 1999,
entered into a contract with Owner for ENGINEERING, PROCUREMENT AND
CONSTRUCTION OF AN ELECTRIC GENERATING FACILITY LOCATED IN HEARD
COUNTY, GEORGIA
In accordance with drawings and specifications prepared by UTILITY ENGINEERING,
UTILITY ENGINEERING PLAZA, 5601 I 40 WEST, AMARILLO, TEXAS 79106-4605, which
contract is by reference made a part hereof, and is hereinafter referred to as
the Contract.
NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION is such that if the
Principal shall promptly make Payment to all claimants as hereinafter
defined, for all labor and material used or reasonably required for use in
the performance of the Contract, then this obligation shall be void;
otherwise it shall remain in full force and effect, subject, however, to the
following conditions:
(1) A claimant is defined as one having a direct contract with the
Principal or with a sub-contractor of the Principal for labor,
material, or both, used or reasonably required for use in the
performance of the contract, labor and material being construed to
include that part of water, gas, power, light, heat, oil,
gasoline, telephone service or rental of equipment directly
applicable to the Contract.
(2) The above-named Principal and Surety hereby jointly and severally
agree with the Owner that every claimant as herein defined, who
has not been paid in full before the expiration of a period of
ninety (90) days after the date on which the last of such
claimant's work or labor was done or performed, or materials were
furnished by such claimant, may sue on this bond for the use of
such claimant, prosecute the suit to final judgment for such sum
or sums as may be justly due claimant, and have execution thereon.
The Owner shall not be liable for the payment of any costs or
expenses of any suit.
(3) No suit or action shall be commenced hereunder by any claimant,
(a) Unless claimant, other than one having a direct contract with
the Principal, shall have given written notice to any two of
the following: The Principal, the Owner, or the Surety above
named, within ninety (90) days after such claimant did or
performed the last of the work or labor, or furnished the
last of the materials for which said claim is made, stating
with substantial accuracy the amount claimed and the name of
the party to whom the materials were furnished, or for whom
the work or labor was done or performed. Such notice shall be
served by mailing the same by registered mail or certified
mail, postage prepaid, in an envelope addressed to the
Principal, Owner or Surety, at any place where an office is
regularly maintained for the transaction of business, or
served in any manner in which legal process may be served in
the state in which the aforesaid project is located, save
that such service need not be made by a public officer.
(b) After the expiration of one (1) year following the date on
which Principal ceased work on said Contract, it being
understood, however, that if any limitation embodied in this
bond is prohibited by any law controlling the construction
hereof such limitation shall be deemed to be amended so as to
be equal to the minimum period of limitation permitted by
such law.
(c) Other than in a state court of competent jurisdiction in and
for the county or other political subdivision of the state in
which the project, or any part thereof, is situated, or in
the United States District Court for the district in which
the project, or any part thereof, is situated, and not
elsewhere.
(4) The amount of this bond shall be reduced by and to the extent of
any payment or payments made in good faith hereunder, inclusive of
the payment by Surety if mechanics' liens which may be filed of
record against said improvement, whether or not claim for the
amount of such lien be presented under and against the bond.
Signed and sealed this 5th day of NOVEMBER , 1999
ZACHRY CONSTRUCTION CORPORATION
In the presence of:
Myrna Montgomery By Raymond C. Wenz Jr. (Seal)
(Witness) Principal
UNITED STATE FIDELITY AND GUARANTY COMPANY**
By Terry W. Nielsen (Seal)
(Witness) Attorney-in-Fact
This bond is issued simultaneously with performance bond in favor of the Owner
conditioned on the full and faithful performance of the Contract.
Contract 211 (2-70) ** St. Paul Fire and Marine Insurance Company;
Seaboard Surety Company; St. Paul Guardian Insurance
Company; St. Paul Mercury Insurance Company
<PAGE>
RIDER NUMBER 1
TO BE ATTACHED AND FORM A PART OF Payment Bond Number
72-0120-48944-99-8 issued by UNITED STATES FIDELITY AND GUARANTY COMPANY; ST.
PAUL FIRE AND MARINE INSURANCE COMPANY; SEABOARD SURETY COMPANY; ST. PAUL
GUARDIAN INSURANCE COMPANY; ST. PAUL MERCURY INSURANCE COMPANY, as Sureties on
the 15th day of September, 1999 on behalf of ZACHRY CONSTRUCTION CORPORATION, as
Principal, in favor of TENASKA GEORGIA I, L.P., as Obligee.
PROVIDED HOWEVER, if the Owner/Obligee assigns or collaterally assigns
the Contract to Lender (as defined in the Contract), then Owner/Obligee may
assign or collaterally assign this bond to Lender.
IN WHICH EVENT, Surety shall (upon written demand by Lender), subject
to the terms and conditions of the bond, perform all obligations of Surety under
the bond for the benefit of Lender as if Lender were the Owner/Obligee
thereunder;
PROVIDED, FURTHER, HOWEVER, that prior to such written demand by
Lender, Owner/Obligee shall be entitled to enforce all of the rights of the
Owner/Obligee under the bond, which shall remain unaffected by the assignment or
collateral assignment thereof to Lender.
IT IS UNDERSTOOD AND AGREED that nothing herein contained shall be held
to change, alter or vary the terms of the above described bond(s) except as
herein set forth.
SIGNED, SEALED AND DATED This 5th day of November, 1999.
UNITED STATES FIDELITY AND GUARANTY COMPANY
ST. PAUL FIRE AND MARINE INSURANCE COMPANY
SEABOARD SURETY COMPANY
ST. PAUL GUARDIAN INSURANCE COMPANY
ST. PAUL MERCURY INSURANCE COMPANY
By: Terry W. Nielsen
Attorney-in-Fact
ACCEPTED: ZACHRY CONSTRUCTION CORPORATION (Principal)
By: Raymond C. Wenz Jr.
<PAGE>
Exhibit 10.3
An asterisk ([*]) indicates that confidential information has been omitted
and filed separately with the Securities and Exchange Commission as part of a
Confidential Treatment Request.
================================================================================
POWER PURCHASE AGREEMENT
DATED AUGUST 24, 1999
BY AND BETWEEN
TENASKA GEORGIA PARTNERS, L.P.
AND
PECO ENERGY COMPANY
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01 Parties........................................................1
Section 1.02 Other Definitions..............................................1
ARTICLE II
ROLES; FACILITIES, EQUIPMENT AND EASEMENTS
Section 2.01 Roles.........................................................14
Section 2.02 Plant Description.............................................15
Section 2.03 Inspections and Documents.....................................16
Section 2.04 Fuel Oil Measurement..........................................17
ARTICLE III
EFFECTIVENESS AND TERMINATION
Section 3.01 Effectiveness.................................................17
Section 3.02 Termination of Agreement......................................18
Section 3.03 Termination Option; Plant Financing...........................18
Section 3.04 Termination Option; Commercial Operation......................18
Section 3.05 Termination Option - Following Event of Default...............19
Section 3.06 Termination Option; Shortened Operating Term..................20
Section 3.07 Termination due to Inadequate Availability....................21
ARTICLE IV
COMMERCIAL OPERATION OF PLANT
Section 4.01 Commercial Operation..........................................21
Section 4.02 Liquidated Damages for Failure to Achieve Commercial Operation21
<PAGE>
ARTICLE V
CONTRACT CAPACITY AND TESTS
Section 5.01 Annual Testing Procedure to Establish Contract Capacity.......22
Section 5.02 Establishment of Contract Capacity............................23
Section 5.03 Tests other than Capacity Tests...............................24
ARTICLE VI
OPERATION OF THE PLANT
Section 6.01 Peak Availability Periods.....................................24
Section 6.02 Required Generating Unit Availability.........................25
Section 6.03 Notification of Unit Availability by Tenaska..................25
Section 6.04 Notification of Generating Unit Call by PECO..................25
Section 6.05 Plant Maintenance.............................................26
Section 6.06 Startup Power.................................................27
Section 6.07 Delivery of Fuel..............................................28
Section 6.08 Oil-Fired Operation Availability Requirements.................28
Section 6.09 Energy Requests...............................................29
Section 6.10 Delivery of Power.............................................32
Section 6.11 Replacement Energy............................................33
Section 6.12 Dispatch......................................................34
Section 6.13 Automatic Generation Control..................................34
Section 6.14 Estimated Fuel Efficiency.....................................35
Section 6.15 Unit Starts...................................................35
ARTICLE VII
AVAILABILITY DETERMINATIONS
Section 7.01 Determination of Hourly Availability Inputs...................36
Section 7.02 Computation of Availability Percentages.......................39
Section 7.03 Availability Standards........................................39
ARTICLE VIII
PAYMENTS
Section 8.01 Monthly Payments..............................................39
ii
<PAGE>
Section 8.02 Reservation Payments..........................................39
Section 8.03 Energy Payments...............................................40
Section 8.04 Start Charges.................................................41
Section 8.05 Standby Mode Charge...........................................41
Section 8.06 Start up Power Cost...........................................41
Section 8.07 Availability Incentive Payment................................41
Section 8.08 Availability Adjustments......................................42
Section 8.09 Payment of Availability Adjustment Amounts....................42
Section 8.10 Efficiency Adjustment.........................................44
Section 8.11 Fuel Tax Payments.............................................44
Section 8.12 Replacement Energy Payment....................................46
ARTICLE IX
BILLING AND PAYMENT
Section 9.01 Confirmation of Amounts Owed..................................46
Section 9.02 Monthly Statement.............................................47
Section 9.03 Availability Adjustment Statements............................48
Section 9.04 Corrections and Disputes......................................48
Section 9.05 Interest on Past Due Amounts..................................49
Section 9.06 Regulation....................................................49
ARTICLE X
[RESERVED]................................50
ARTICLE XI
RECORDS
Section 11.01 Records.......................................................50
ARTICLE XII
ASSIGNMENT
Section 12.01 Assignment....................................................50
iii
<PAGE>
ARTICLE XIII
INDEMNITIES
Section 13.01 Indemnification...............................................51
Section 13.02 Release by Tenaska............................................51
Section 13.03 Release by PECO...............................................52
ARTICLE XIV
DEFAULT
Section 14.01 Events of Default.............................................52
Section 14.02 Notices for Defaults and Force Majeure Events.................54
Section 14.03 Default Cure Rights and Timeframes............................55
ARTICLE XV
[[RESERVED]]................................56
ARTICLE XVI
CONFIDENTIALITY
Section 16.01 Scope.........................................................56
Section 16.02 Exceptions....................................................56
Section 16.03 Schedules of Energy or Gas....................................57
ARTICLE XVII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES
Section 17.01 Tenaska's Representations and Warranties......................57
Section 17.02 PECO's Representations and Warranties.........................57
Section 17.03 Covenants of Tenaska..........................................58
Section 17.04 Covenants of PECO.............................................59
Section 17.05 Covenants of PECO and Tenaska.................................59
iv
<PAGE>
ARTICLE XVIII
MISCELLANEOUS
Section 18.01 Limitation on Punitive and Consequential Damages..............60
Section 18.02 Notices.......................................................60
Section 18.03 No Rights of Third Parties....................................61
Section 18.04 Subject to Applicable Laws....................................61
Section 18.05 No Partnership................................................61
Section 18.06 Amendment.....................................................61
Section 18.07 No Waiver.....................................................61
Section 18.08 Captions......................................................61
Section 18.09 Complete Agreement............................................61
Section 18.10 Currency of Account...........................................61
Section 18.11 Choice of Laws................................................62
Section 18.12 Severability..................................................62
Section 18.13 Arbitration...................................................62
Section 18.14 Exhibits......................................................63
v
<PAGE>
TABLE OF EXHIBITS
Annex A Acceptable Guarantors
Annex A-1 Form of Letter of Credit
Exhibit A Drawing Certificate
Exhibit B Consent to Reduction of Letter of Credit
Exhibit C Consent to Termination of Letter of Credit
Annex A-2 Form of Guaranty
Exhibit 1.01 Fuel Specifications
Exhibit 2.01 Designated Contractors
Exhibit 3.06 Letter of Credit
Exhibit 5.01 Performance Test Guidelines and Procedures
Exhibit 8.02 Monthly Reservation Payments
Exhibit 8.03 Energy Payments
Exhibit 17.03(d) Insurance
Exhibit 17.04(a)-1 &-2 Consent and Opinion
vi
<PAGE>
Execution Copy
POWER PURCHASE AGREEMENT
THIS POWER PURCHASE AGREEMENT (this "Agreement") dated August 24, 1999
("Contract Date"), is entered into by and between TENASKA GEORGIA PARTNERS,
L.P., a Delaware limited partnership (hereinafter called "Tenaska"), and PECO
ENERGY COMPANY, a Pennsylvania corporation (hereinafter called "PECO").
In consideration of the promises herein made, and intending to be
legally bound, Tenaska agrees to deliver and sell to PECO, and PECO agrees to
take and purchase from Tenaska, electric capacity and energy, subject to the
terms and conditions contained herein, as follows:
ARTICLE I
DEFINITIONS
Section 1.01 PARTIES. As used herein, the term "Party" or "Parties"
means Tenaska, PECO and their respective permitted successors and assigns.
Section 1.02 OTHER DEFINITIONS. Capitalized terms used herein have the
respective meanings, for all purposes in this Agreement, set forth below:
"ACCEPTABLE CREDIT SUPPORT" shall mean (a) one or more letters of
credit substantially in the form of Annex A-1 issued by one or more domestic or
foreign banks whose long term debt is rated at the Financial Closing Date at
least BBB+ or the equivalent by Standard & Poor's or Moody's or any successor
Ratings Organization (PROVIDED THAT if Acceptable Credit Support is issued prior
to the Financial Closing Date, then for the period prior to the Financial
Closing Date such Acceptable Credit Support may be issued by The First National
Bank of Omaha PROVIDED THAT its long term debt is rated on the date of issuance
of the letter of credit no lower than BBB- or the equivalent) or (b) a guaranty
or several guaranties substantially in the form of Annex A-2 issued by parties
identified in Annex A or by other creditworthy parties reasonably satisfactory
to PECO.
"ACCRUED AVAILABILITY ADJUSTMENT" shall have the meaning set forth in
Section 8.09.
"ACCRUED AVAILABILITY ADJUSTMENT STATEMENT" shall mean the statement
showing the Accrued Availability Adjustment and Availability Incentive Payment,
if any, provided in accordance with Section 9.03.
"AFFILIATE" means, when used with reference to a specified Person or
entity, any other Person or entity that directly, or indirectly through one or
more intermediaries, controls, is controlled by or is under common control with
the specified Person or entity. For purposes of the foregoing, "control",
"controlled" and "under common control" with respect to any Person or entity
means the possession, directly or indirectly, or the power to direct or cause
the direction of
<PAGE>
the management and policies of such Person or entity, whether through the
ownership of voting securities or partnership interests, by contract or
otherwise.
"AGC" shall mean equipment at the Plant site necessary to enable a
transmission control area operator to adjust the Plant's output automatically
from the control area's system control center.
"AGREEMENT" shall have the meaning given it in the introductory
paragraph of this Agreement.
"AIR PERMIT" shall mean Air Quality Permit No. 4911-149-0004-P-01-0
issued by the Georgia Department of Natural Resources, with an effective date of
December 18, 1998, a copy of which Tenaska has provided to PECO, as amended by
Amendment No. 4911-149-0004-P-01-1, dated April 21, 1999 and as further amended
from time to time.
"ANNUAL AVAILABILITY ADJUSTMENT" shall mean for a Contract Year the
amount, if any, owed by Tenaska to PECO, calculated under Section 8.08, if the
Annual Availability Percentage for such Contract Year is less than 97%.
"ANNUAL AVAILABILITY ADJUSTMENT STATEMENT" shall mean the statement
showing the Annual Availability Adjustment provided in accordance with Section
9.03.
"ANNUAL AVAILABILITY PERCENTAGE" shall have the meaning set forth in
Section 7.02(b).
"ANNUAL OUTPUT" shall have the meaning set forth in Section 7.02(b)(i).
"ANNUAL POTENTIAL" shall have the meaning set forth in Section 7.02
(b)(ii).
"APPLICABLE LAWS" shall mean all laws, ordinances, rules, regulations,
orders, interpretations, licenses, permits, judgments, decrees, injunctions,
writs and orders of any court, arbitrator, or governmental agency, body,
instrumentality or authority that are applicable to either or both of the
Parties, the Plant or the terms of this Agreement.
"AVAILABILITY ADJUSTMENTS" shall mean Summer Availability Adjustments
and Annual Availability Adjustments.
"AVAILABILITY INCENTIVE PAYMENT" shall have the meaning set forth in
Section 8.07.
"AVAILABILITY PERCENTAGES" shall mean the Summer Availability
Percentage and the Annual Availability Percentage.
"AVAILABILITY SCHEDULE" shall mean the information provided in writing
by Tenaska pursuant to Section 6.03 listing for each hour of the applicable Day
in Summer Months and Non-Summer Months (i) the number of Generating Units
available to deliver energy in accordance with Section 6.09, (ii) Tenaska's good
faith estimate of maximum available output from the Plant per Unit, and (iii)
the number of Generating Units available which are in Fuel Oil Capable Mode.
2
<PAGE>
"BARREL" shall mean forty-two (42) gallons including any adjustments to
meet industry standards.
"BASE UNIT OUTPUT" shall mean a mode of Plant operation during which
(i) each Unit in operation during such hour is operated entirely on Natural Gas
for the entire hour, and (ii) each operating Unit generates energy for the
entire hour at an output equal to or greater than Unit Capacity for such
Contract Year less 5 MW.
"BTU" shall mean British Thermal Unit.
"CAPACITY TEST" shall mean the test(s) of the Plant's generating
capability as performed pursuant to Article V and EXHIBIT 5.01.
"CAPACITY TEST RESULT" shall have the meaning set forth in Section
5.01(e).
"COLD SHUTDOWN" shall mean, for any Unit, a situation in which the Unit
has been producing 0 MW of energy for 50 or more consecutive hours.
"COLD START" shall have the meaning set forth in Section
6.09(a)(ii)(A).
"COMMERCIAL OPERATION" of a Unit shall be deemed to be achieved at
00:01 hours on the Day next following the Day (i) such Unit has been declared to
have a generating capacity of at least 150 MW if such Unit is one of the Initial
Units or at least 146 MW if such Generating Unit is one of the Final Units, (ii)
the Unit shall be capable of producing energy through "firing" with Natural Gas,
(iii) interconnection of the Unit and the Primary Point of Delivery shall have
been achieved, (iv) sufficient Gas Supply Facilities and Interconnection
Facilities shall be in operation to accept Unit Capacity from that Unit
simultaneously with Unit Capacity from all other Units which have achieved
Commercial Operation and (v) Tenaska shall have delivered written notice to PECO
that such Unit is placed in commercial operation. Notwithstanding the foregoing,
no Unit shall be deemed to have achieved Commercial Operation prior to June 1 of
its Start Year.
"COMMUNICATIONS AND TELEMETRY EQUIPMENT" shall have the meaning set
forth in Section 2.02(a)(ix).
"COMPETITOR" shall mean any of the three Persons (together with any
Affiliates of such Persons at the time of designation) designated at any time by
PECO in accordance with Section 12.01(c).
"CONFIDENTIAL" shall mean that information or documents, including the
content or substance of such information or document (together with any document
or information which reflects upon such content or substance), shall not be
disclosed, discovered or distributed to any other Person, corporation or other
entity except pursuant to the valid order of an administrative or judicial
officer having jurisdiction, which order shall be opposed unless opposition with
respect thereto is waived by each of the Parties to this Agreement and except as
hereinafter provided.
"CONTRACT CAPACITY" shall mean the capacity of the Plant, expressed in
MWs, to be purchased by PECO under this Agreement, as determined in accordance
with Article V.
3
<PAGE>
"CONTRACT YEAR" shall mean the period beginning on the Date of
Commercial Operation ending on the next May 31, each one-year period thereafter
during the Operating Term, and the period from the last June 1 during the
Operating Term until the last day of the Operating Term.
"CREDIT DOCUMENTS" shall mean the loan agreements, notes, indentures,
security agreements, interest rate hedging arrangements, and other documents
entered into by Tenaska or its Affiliates with the Financial Institutions or
entered into by the Financial Institutions relating to the financing or
refinancing of the Plant, as any of them may be amended, supplemented or
modified in whole or in part from time to time.
"CURRENT CONTRACT CAPACITY" shall mean with respect to any Contract
Year the Contract Capacity for such Contract Year as determined pursuant to the
testing procedure set forth in Section 5.01 and EXHIBIT 5.01 in which a Capacity
Test is conducted.
"DAILY CONFIRMATION LETTER" shall mean a letter delivered pursuant to
Section 9.01(a).
"DAILY GAS PRICE" shall be the amount in $/MMBtu equal to the daily
midpoint of the Daily Index Citation.
"DAILY INDEX CITATION" shall mean for a Day the citation labeled
"Transco, St. 85" as published by Gas Daily for such Day. If the Gas Daily index
for "Transco, St. 85" ceases to be published, such index shall be replaced by
such other comparable index mutually agreed upon by the Parties, or failing such
mutual agreement, by an index as determined by arbitration pursuant to Section
18.13. In the event that the Daily Index Citation is not published for the day
on which the Natural Gas is purchased, the published index citation for the
immediately preceding day for which an index citation is published shall be
used. For example, the gas price published on Monday for transactions on Friday
would be applicable for Saturday, Sunday and Monday.
"DATE OF COMMERCIAL OPERATION" shall mean the date not earlier than
June 1 of the Start Year of the Initial Units on which the Initial Units shall
have achieved Commercial Operation.
"DAY" shall mean a 24 consecutive hour period commencing at 00:01 hours
on a calendar day.
"DELAY TERMINATION DATE" means either Delay Termination Date for the
Initial Units or Delay Termination Date for the Final Units, as applicable.
"DELAY TERMINATION DATE FOR THE FINAL UNITS" shall mean the 365th
calendar day following the Scheduled Date of Commercial Operation for the Final
Units.
"DELAY TERMINATION DATE FOR THE INITIAL UNITS" shall mean the 365th
calendar day following the Scheduled Date of Commercial Operation for the
Initial Units.
"DELIVERED ENERGY" for a period of time shall mean the amount of energy
expressed in MWh (rounded to the nearest whole MWh, with .50 MWh's being rounded
to the next highest MWh) delivered to PECO at the applicable Points of Delivery
during such period pursuant to an Energy Request.
4
<PAGE>
"DESIGNATED CONTRACTORS" shall mean any one or more of the Persons
detailed on EXHIBIT 2.01 and any one or more of the Affiliates of any such
Persons.
"DISPATCH CONTROL SYSTEMS" shall have the meaning set forth in Section
2.02(a)(viii).
"DUFF & PHELPS" shall mean Duff & Phelps Credit Rating Co.
"EASTERN INTERCONNECTION" shall mean the area known as the Eastern
Interconnected Grid currently consisting of the following National Electricity
Reliability Council Regions: NEPOOL, NYPP, MAAC, SERC, FRCC, ECAR, MAIN, MAPP
and SPP.
"EASTERN PREVAILING TIME" OR "EPT" shall mean Eastern Daylight Savings
Time when such time is applicable in Heard County, Georgia, and otherwise shall
mean Eastern Standard Time.
"EMERGENCY FUEL CURTAILMENT" shall mean the general prohibition by
Georgia or Federal regulatory or law enforcement authorities of delivery or
consumption of some or all Fuel to or by electricity generating stations in
Georgia (including the Plant) due to an emergency situation, including for
example a severe winter storm leading authorities to require Fuel to be used
only in hospitals or to heat residential homes.
"ENERGY DELIVERY TOLERANCE" shall mean, with respect to an hour, the
greater of 1% of the Energy Request or 2 MWhs.
"ENERGY PAYMENTS" shall mean the monthly energy payments payable
hereunder by PECO to Tenaska in accordance with Section 8.03 of this Agreement.
"ENERGY REQUEST" shall mean a request by PECO to Tenaska for energy,
including a request for 0 MW of energy, pursuant to Section 6.09.
"EXCESS RUN TIME PAYMENT" shall mean the payment calculated in
accordance with Section 8.03(b)(i) or (ii).
"FERC" shall mean the Federal Energy Regulatory Commission or any
successor agency.
"FINAL UNITS" shall have the meaning set forth in Section 4.01.
"FINANCIAL CLOSING DATE" shall mean the date on which binding
commitments to provide the Non-Recourse Financing for the construction of the
Plant are issued and effective, conditions on initial borrowings are satisfied,
and amounts become available for borrowing from the Financial Institutions or
the issuance of industrial development revenue bonds by The Development
Authority of Heard County the proceeds of which are guaranteed to be used in
substantial part for the construction of the Plant.
"FINANCIAL INSTITUTIONS" shall mean the Persons providing financing or
refinancing either directly or indirectly through the purchase of industrial
development bonds issued by The Development Authority of Heard County to Tenaska
or its Affiliates for a majority of the costs for the development, design,
construction and operation of the Plant and for the purchase of
5
<PAGE>
equipment and supplies in connection with the Plant or those Persons, providing
Acceptable Credit Support or other lines or letters of credit.
"FITCH" shall mean Fitch Investors Service, Inc.
"FORCE MAJEURE" shall mean any cause beyond the control of the Party
affected, including, but not restricted to, failure or threat of failure of
facilities (but excluding such failures or threats of failures caused by
Tenaska's or the O&M Contractor's failure to comply with Prudent Utility
Practice), flood, earthquake, storm, fire, lightning, Acts of God, explosions,
transportation accidents, epidemic, war, acts of the public enemy, riot, civil
disturbance or disobedience, strike, lockout, work stoppage, or other industrial
disturbance or dispute whether or not determined to have arisen out of an unfair
labor practice of any Party, sabotage, restraint by court order or other public
authority, and action or nonaction by, or failure to obtain the necessary
authorizations or approvals from, any governmental agency or authority, which by
the exercise of due diligence such Party could not reasonably have been expected
to avoid. Nothing contained herein shall be construed so as to require a Party
to settle any strike, lockout, work stoppage, or other industrial disturbance or
dispute in which it may be involved. Late delivery of plant, machinery,
equipment, materials, spare parts and consumables for the Plant or a delay in
the performance of any of the affected Parties' contractors or suppliers shall
constitute Force Majeure if the existence of such circumstance is the result of
Force Majeure as described above. Force Majeure shall not include (a) changes in
market conditions, including but not limited to changes that affect the cost or
demand for electricity, Fuel, or Plant equipment, (b) lack of finances or (c) an
inability to accept power due to transmission constraints.
"FORCED OUTAGE" shall mean any circumstance including a Force Majeure
event which causes the amount of energy capable of being delivered to the
Primary Point of Delivery during an hour to be less than Contract Capacity for
reasons other than a Scheduled Outage.
"FUEL" shall mean Fuel Oil and Natural Gas.
"FUEL ADJUSTMENT PAYMENT" shall mean a payment pursuant to Section
8.10.
"FUEL CONTROL SYSTEMS" shall have the meaning set forth in Section
2.02(a)(vi).
"FUEL OIL" shall mean low sulfur No. 2 Fuel Oil that satisfies the
Colonial Pipeline Company Product Specifications for Fungible Low Sulfur Diesel
Fuel (GRADE 74) as set forth for Fuel Oil in Exhibit 1.01, and contains less
than 0.05 weight % sulfur, or if more restrictive, specifications for Fuel Oil
included in the Air Permit, as required by Applicable Law and contains no more
than .017 weight % fuel bound nitrogen.
"FUEL OIL CAPABLE MODE" shall mean a Unit that is available for
dispatch by PECO for firing on Fuel Oil within the Start times provided in this
Agreement.
"FUEL OIL DELIVERY PERMITS" shall mean all permits necessary for
delivery, transporting, handling or storing of such Fuel Oil to or at the Plant.
6
<PAGE>
"FUEL OIL ENERGY RATE" shall mean for each Month in a Contract Year the
amount (in $/MWh) set forth in the column with heading "Fuel Oil Energy Rate"
opposite to such Contract Year in EXHIBIT 8.03.
"FUEL OIL INVENTORY" shall mean the amount, in Barrels, of Fuel Oil in
the Fuel Oil Storage Tank.
"FUEL OIL STORAGE TANK" shall have the meaning set forth in Section
2.02 (a)(iv).
"FUEL OIL UNLOADING FACILITIES" shall have the meaning set forth in
Section 2.02(a)(v).
"FUEL OIL VALUE" shall have the meaning set forth in Section 8.11(d).
"FUEL TAX OBLIGATION" shall have the meaning set forth in Section
8.11(c).
"FUEL TAX PAYMENTS" shall mean payments made by PECO to Tenaska with
respect to taxes on Fuel delivered to or consumed at the Plant pursuant to
Section 8.11.
"FUEL TAX RATE" shall have the meaning set forth in Section 8.11.
"FULLY LOADED DAILY GAS PRICE" shall mean for any Day the sum of: (i)
the Daily Index Citation for such Day and (ii) $0.03 per MMBtu
"GAS DELIVERY POINT" shall mean the isolating flange immediately
downstream of the Transco meter at which the Gas Supply Facilities interconnect
with the Interstate Pipeline.
"GAS ENERGY RATE" shall mean for each Month in a Contract Year the
amount (in $/MWh) set forth in the column with heading "Gas Energy Rate"
opposite to such Contract Year in EXHIBIT 8.03.
"GAS SUPPLY FACILITIES" shall have the meaning set forth in Section
2.02(a)(iii).
"GAS VALUE" shall have the meaning set forth in Section 8.11(d).
"GENERATING UNIT" or "UNIT" shall mean a GE-7FA combustion turbine
generator utilizing dry low NOx combustors, with a nominal design net electric
generating capacity of approximately 150MW-160MW per turbine generator at an
ambient temperature of 94 degrees Fahrenheit dry bulb and 74 degrees Fahrenheit
wet bulb.
"GITS" shall mean Georgia Integrated Transmission System.
"HOLIDAY" shall mean any day (other than a Saturday or Sunday) on which
banks in Atlanta, Georgia, are not required or authorized to conduct the
business of banking.
"HOT SHUTDOWN" shall mean, for any Unit, a situation in which the Unit
has been producing 0 MW of energy for fewer than 50 consecutive hours.
"HOT START" shall have the meaning set forth in Section 6.09(a)(ii)(B).
7
<PAGE>
"HOURLY ENERGY REQUEST" shall mean the integrated amount of energy (in
MWh) to be delivered to PECO in an hour pursuant to all Energy Requests
submitted prior to or during such hour in compliance with Section 6.09(d) which
can, according to the Generating Unit and Plant performance requirements set
forth in Section 6.09(a), be met by the Plant during such hour.
"HOURLY OUTPUT" shall have the meaning set forth in Section 7.01.
"HOURLY POTENTIAL" shall have the meaning set forth in Section 7.01.
"IMMEDIATELY FOLLOWING CONTRACT YEAR" shall mean with respect to any
Day the Contract Year commencing on June 1st next following such Day.
"INITIAL UNITS" shall have the meaning set forth in Section 4.01.
"INTERCONNECTION AGREEMENT" shall mean the agreement dated July [ ],
1999 between Tenaska and the Local Utility, providing for the construction and
operation of Interconnection Facilities necessary for the delivery of energy to
PECO pursuant to this Agreement at the Primary Point of Delivery.
"INTERCONNECTION FACILITIES" shall mean the facilities including the
Power Metering Equipment constructed or modified pursuant to the Interconnection
Agreement or as otherwise necessary during the Operating Term, sufficient to (i)
deliver the maximum amount of energy capable of being produced by the Plant at
an ambient temperature at the Plant of 20(degree)F dry bulb, but no less than
1,100 MW, to the Primary Point of Delivery and (ii) allow changes in the amounts
of energy delivered through the Primary Point of Delivery as PECO may request
pursuant to Section 6.09.
"INTERSTATE PIPELINE" shall mean the gas pipeline currently owned by
Transcontinental Gas Pipe Line Corporation, the closest part of which pipeline
is located approximately one (1) mile south of the Plant.
"LOCAL UTILITY" shall mean Georgia Transmission Corporation or any
successor, assign, owner or operator of the electric transmission facilities to
which the Interconnection Facilities are or will be connected.
"METERING EQUIPMENT" shall mean the Natural Gas Metering Facilities and
the Power Metering Equipment.
"MINIMUM LOAD" has the meaning set forth in Section 6.09(a)(v).
"MMBTU" shall mean million Btu.
"MMCF" shall mean million cubic feet.
"MONTH" shall mean the period starting on the Date of Commercial
Operation and ending at 00:00 hours on the last day of the same calendar month
and each calendar month thereafter during the Operating Term.
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"MONTHLY STATEMENT" shall mean the statement to be delivered by Tenaska
each Month to PECO in accordance with Section 9.02.
"MOODY'S" shall mean Moody's Investor Services, Inc.
"MW" shall mean megawatt.
"MWH" shall mean megawatt-hour.
"NATURAL GAS" shall mean gaseous fuel that complies with the quality
specification set forth in the applicable tariff of the Interstate Pipeline,
delivered to the Natural Gas Metering Facilities at a pressure which is the
lower of (i) 550 psig or (ii) the minimum gas pressure at the Generating Unit
inlet control valve module recommended by the manufacturer to operate a
Generating Unit, as may be modified from time to time, plus 90 psig.
"NATURAL GAS METERING FACILITIES" shall mean the Natural Gas
measurement station and related facilities, including chromatograph, capable of
providing real-time information on the volume of gas flowing through the Natural
Gas Metering Facilities, and the BTU content of such gas, and as further
provided for pursuant to the FERC-approved General Terms and Conditions for
service on the Interstate Pipeline.
"NATURAL GAS OPERATION" shall mean the Plant's production of energy by
combustion of Natural Gas.
"NET REVENUE" shall mean the amounts actually paid to Tenaska by third
parties for capacity and energy minus (i) all charges that would have applied
under this Agreement to the generation of energy sold to such third party,
including Start Charges and Energy Payments, (ii) the Fully Loaded Daily Gas
Price with respect to all Fuel paid for by Tenaska consumed in producing such
energy, (iii) all transmission charges paid by Tenaska.
"NON-CONFORMING ENERGY REQUEST" has the meaning set forth in Section
6.09(e).
"NON-INSURABLE FORCE MAJEURE" shall mean any events or conditions of
Force Majeure against which at the time in question business interruption
insurance is not customarily obtained by independent power companies with gas
fired power production facilities in the U.S. and shall include without
limitation such Force Majeure events as war, riot, civil disturbance, strikes,
epidemic or regulatory curtailment of Fuel transportation to or usage in the
Plant. The Parties recognize that during the term of this Agreement the types
and amounts of insurance maintained by independent power companies may change,
such that Force Majeure events that are not customarily insured against at
present may become customarily insured against in the future, and Force Majeure
events that are customarily insured against at present may not be customarily
insured against in the future.
"NON-RECOURSE FINANCING" shall mean the completion of project financing
of the costs of the Plant, without recourse to Tenaska's owners and Affiliates,
other than for equity contribution commitments of Tenaska not exceeding 30% (or
such higher percentage as may be acceptable to Tenaska) of estimated capital
costs.
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"NON-SUMMER MONTHS" shall mean Shoulder Months and Winter Months.
"NON-SUMMER OUTPUT" shall have the meaning set forth in Section
7.02(b)(i).
"NON-SUMMER PEAK HOUR" shall mean with respect to a Unit each of the
one hour periods during the Non-Summer Months in which (i) PECO makes an Energy
Request for at least the Minimum Load, or (ii) such Unit is on the Unit Call
Schedule.
"NON-SUMMER POTENTIAL" shall have the meaning set forth in Section
7.02(b)(ii).
"O&M CONTRACTOR" shall mean the operation and maintenance contractor,
if any, retained by Tenaska to operate the Plant.
"OFF PEAK DISPATCHABLE HOUR" shall have the meaning set forth in
Sections 6.02(d) and (e).
"OIL-FIRED OPERATION" shall mean the Plant's production of capacity and
energy by firing Fuel Oil.
"ON-PEAK ENERGY PRICE" shall mean, for a Day, the arithmetic average of
the entries for "Daily Price Indexes On- Peak" (measured in $/MWh) corresponding
to the price citations corresponding to the regional labels of "SERC," "Into
TVA," "Into Entergy," and "Florida-Georgia Border", as published in DAILY PRICE
REPORT, a McGraw-Hill publication, PROVIDED THAT if such publication or any of
such citations, shall cease to be currently available the parties shall endeavor
in good faith to select an alternative publication or alternate citations, as
the case may be, and failing such an agreed selection the alternative
publication or alternative citations will be determined by arbitration pursuant
to Section 18.13 or such other publication mutually agreed in writing by the
Parties.
"OPERATING TERM" shall mean the period commencing on the Date of
Commercial Operation and ending on the 29th anniversary thereof, unless earlier
terminated as provided in Section 3.02.
"PEAK AVAILABILITY OPTION #1" shall have the meaning set forth in
Section 6.01(a)(i).
"PEAK AVAILABILITY OPTION #2" shall have the meaning set forth in
Section 6.01(a)(ii).
"PEAK DAYS AVAILABILITY" shall mean a measurement of the Plant's
availability during the five highest-priced Days of the Summer Months of each
Contract Year, as calculated pursuant to Section 8.07(b)(ii).
"PERSONS" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or political
subdivision thereof.
"PLANT" shall mean the facilities described in Section 2.02.
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"POINT OF DELIVERY" shall mean the Primary Point of Delivery, or such
other point of delivery as may be applicable pursuant to Section 6.11; and
"Points of Delivery" shall mean the Primary Point of Delivery and such other
points of delivery. Such point shall be located on a tract of land contained in
lots 236 and 237 of the Third Land District of Heard County, Georgia.
"POWER METERING EQUIPMENT" shall mean the meters and measuring
equipment at the Points of Delivery to measure energy delivered by Tenaska to
PECO.
"PRIMARY POINT OF DELIVERY" shall mean the point at which the Plant
synchronously interconnects, through the Interconnection Facilities, with the
GITS at a point along the 500kV transmission line extending between the Wansley
and Fortson substations of the GITS.
"PRUDENT UTILITY PRACTICE" shall mean any of the practices, methods and
acts engaged in or approved by a significant portion of the independent power
industry from time to time or any of the practices, methods and acts which, in
the exercise of reasonable judgment in light of the facts known (or which should
have been known) at the time the decision was made, would have been expected to
accomplish the desired results at the lowest reasonable cost consistent with
good business practices, taking into account (without limitation) such factors
as reliability, safety and expedition. Prudent Utility Practice is not intended
to be limited to the optimum practice, method or act to the exclusion of all
others, but rather to be a spectrum of possible practices, methods or acts
having due regard for, among other things, manufacturers' warranties and other
contractual obligations, the requirements or guidance of governmental agencies
of competent jurisdiction, requirements of insurers, and the requirements of
this Agreement.
"RATINGS ORGANIZATION" shall mean Standard & Poor's, Moody's, Fitch or
Duff & Phelps, or if any such organization ceases to be a "nationally recognized
statistical rating organization" as defined by the United States Securities and
Exchange Commission for purposes of Rule 436(g)(2) under the Securities Act of
1933, a substitute organization meeting such definition and mutually agreed upon
by the Parties, or failing such mutual agreement, a substitute organization
meeting such definition and determined by arbitration pursuant to Section 18.13.
"RELIABILITY COUNCIL" shall mean the Southeastern Electric Reliability
Council, or similar or successor organization.
"REPLACEMENT ACCEPTABLE CREDIT SUPPORT" shall mean, following the
drawing upon an Acceptable Credit Support, the restoration of the full amount
drawn within the available amount to be drawn.
"REPLACEMENT ENERGY" shall have the meaning set forth in Section
6.11(a).
"REPLACEMENT ENERGY COST" shall have the meaning set forth in Section
8.12.
"REQUESTED ENERGY" for a given period shall mean the amount of energy
(in MWh) requested by PECO in accordance with this Agreement during such period.
"REQUIRED POTENTIAL" shall have the meaning set forth in Section 7.01.
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"RESERVATION PAYMENTS" shall mean the monthly reservation payments
payable hereunder by PECO to Tenaska in accordance with Articles VIII and IX of
this Agreement.
"RESERVATION RATE" shall mean, for each Month in a Contract Year, the
amount (in $/kw- month) set forth in the column with the heading "Reservation
Rate" opposite to such Contract Year in EXHIBIT 8.02.
"SCHEDULED DATE OF COMMERCIAL OPERATION" shall mean either the
Scheduled Date of Commercial Operation for the Initial Units or the Scheduled
Date of Commercial Operation for the Final Units, as applicable.
"SCHEDULED DATE OF COMMERCIAL OPERATION FOR THE FINAL UNITS" shall mean
June 1, 2002.
"SCHEDULED DATE OF COMMERCIAL OPERATION FOR THE INITIAL UNITS" shall
mean June 1, 2001.
"SCHEDULED OUTAGES" shall mean planned outages or reductions in
availability or output in order to perform maintenance in accordance with
manufacturers' recommendations and Prudent Utility Practices scheduled pursuant
to Section 6.05(a).
"SHOULDER MONTHS" shall mean October, November, March, April and May.
"SHUTDOWN" shall mean the process of moving a Unit from a Minimum Load
to a zero energy output.
"SPONSOR" shall mean Tenaska, Inc. and its partners in Tenaska or any
other Affiliate of any such Person.
"STANDARD & POOR'S" shall mean Standard & Poor's Ratings Service, a
division of McGraw Hill Incorporated.
"STANDBY MODE" shall mean the status of a Unit when it is kept ready
while not generating energy.
"START" shall mean the commencement of firing of a Generating Unit in
response to an Energy Request.
"START CHARGE" shall have the meaning set forth in Section 8.04.
"START YEAR" shall mean (i) for the Initial Units calendar year 2001
and (ii) for the Final Units calendar year 2002.
"SUMMER AVAILABILITY ADJUSTMENT" shall mean for a Contract Year the
amount, if any, owed by Tenaska to PECO, calculated under Section 8.08(b).
"SUMMER AVAILABILITY PERCENTAGE" shall have the meaning set forth in
Section 7.02.
"SUMMER MONTHS" shall mean June, July, August and September.
"SUMMER MONTHS BASE HEAT RATE" shall have the meaning set forth in
Section 8.10.
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"SUMMER OUTPUT" shall have the meaning set forth in Section 7.02(a)(i).
"SUMMER PEAK HOUR" shall mean each of the one hour periods during the
Summer Months of each Contract Year as such peak availability periods are
specified from time to time by PECO pursuant to Section 6.01.
"SUMMER POTENTIAL" shall have the meaning set forth in Section 7.02.
"TAX STATUTE" shall mean Title 48, Chapter 8 of the Official Code of
Georgia Annotated as amended from time to time.
"TIER 1 AVAILABILITY ADJUSTMENT" shall have the meaning set forth in
Section 8.08.
"TIER 1 AVAILABILITY FACTOR" shall have the meaning set forth in
Section 8.08.
"TIER 2 AVAILABILITY ADJUSTMENT" shall have the meaning set forth in
Section 8.08.
"TIER 2 AVAILABILITY FACTOR" shall have the meaning set forth in
Section 8.08.
"TRANSCO" shall mean Transcontinental Gas Pipe Line Corporation.
"UNIT CALL SCHEDULE" shall mean with respect to a Unit the schedule
detailing the hours of the following Day in which the Unit is requested to be
available in accordance with the dispatch principles set forth in Section 6.11
and detailing during which hours, if any, during the following Day such Unit is
to be in a Standby Mode.
"UNIT CAPACITY" shall mean for the first Contract Year the greater of
(i) Contract Capacity divided by the number of Generating Units that have
achieved Commercial Operation or (ii) 150 MW, and for each Contract Year
thereafter the greater of (i) Contract Capacity divided by six (6) or (ii) 146
MW.
"UNIT HOUR" shall mean each one hour period during which a Generating
Unit produces energy pursuant to an Energy Request, regardless of the level of
dispatch of such energy. For the purposes of calculating Unit Hours, each
continuous period of time during which a Generating Unit produces energy
pursuant to an Energy Request, regardless of the level of dispatch of such
energy, shall be rounded to the nearest tenth of an hour.
"WATER FACILITIES" shall have the meaning set forth in Section
2.02(a)(vii).
"WINTER MONTHS" shall mean December, January, and February.
ARTICLE II
ROLES; FACILITIES, EQUIPMENT AND EASEMENTS
Section 2.01 ROLES.(a) Subject to the terms of this Agreement, Tenaska
shall, at its sole cost and expense, and either directly or through one or more
Designated Contractors, or through other contractors that are not Competitors,
design, engineer, finance, construct, operate,
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lease, own or otherwise contractually control use of the Plant. Tenaska shall,
at its sole cost and expense, and either directly or through one or more
Designated Contractors or through other contractors that are not Competitors,
design, engineer, finance, and arrange for ownership, construction, and
operation of Interconnection Facilities.
(b) Tenaska shall enter into and maintain the Interconnection
Agreement. Tenaska shall be solely responsible for the cost of the
Interconnection Facilities. PECO shall be solely responsible for (i) arranging
transmission of Delivered Energy from the Primary Point of Delivery to PECO's
customers, and (ii) compensating transmission providers for the cost of such
transmission service, including the scope and cost of upgrades to such
transmission provider's system which the transmission provider determines to be
necessary to provide transmission service from the Primary Point of Delivery.
(c) Tenaska shall obtain or shall cause to be obtained all
environmental or regulatory permits or allowances necessary to design,
construct, operate, and maintain the Plant in accordance with this Agreement,
including but not limited to, the Air Permit and shall keep all such permits and
allowances in full force and effect. Tenaska's obligation to secure permits
shall include any permits necessary for Tenaska to own and operate the Fuel Oil
Storage Tank and the Fuel Oil Unloading Facilities; provided, however, that PECO
shall obtain Fuel Oil Delivery Permits, or contract with third-parties with Fuel
Oil Delivery Permits, necessary to deliver Fuel Oil to the Plant.
(d) Except as Tenaska may otherwise elect if Tenaska is selling energy
to other parties pursuant to Section 6.10(b), PECO shall be the exclusive
recipient of all capacity, energy, and ancillary products or services available
from the Plant during the Operating Term except any ancillary services that are
required to be furnished by Tenaska as a requirement of the Interconnection
Agreement or by order of a regulatory body with jurisdictional authority over
the Local Utility, an independent system operator or similar entity having
control of the transmission system at the Point of Delivery. Tenaska shall not
sell energy or capacity from an Initial Unit to a third party between June, 1,
2001 and such Unit achieving Commercial Operation, or from a Final Unit between
June 1, 2002 and such Unit achieving Commercial Operation, in each case except
for bona fide testing purposes.
(e) PECO shall obtain and supply all Fuel to be used to generate
electricity during the Operating Term.
(f) Tenaska shall be responsible for preparing and filing tax returns
for taxes on Fuel purchased for or consumed at the Plant and for paying and
remitting all such taxes as may be imposed by the State of Georgia and shown due
on such returns, PROVIDED THAT PECO shall prepare and file such returns if
required to do so by the Tax Statute and the regulations thereunder. The
preparation and filing of such returns by PECO shall not alter the allocation of
responsibility for taxes as between the parties or the sharing of the benefits
and burdens of increases and decreases in taxes, in each case in accordance with
Section 8.11
(g) Tenaska shall enter into an agreement with the Interstate Pipeline
prior to Financial Closing for the design, construction, installation, of the
Natural Gas Metering Facilities, which shall be located at the point of
interconnection between the Interstate Pipeline
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and the Plant's Gas Supply Facilities. Tenaska shall be solely responsible for
compensating the Interstate Pipeline for any and all costs of such design,
construction, and installation, as agreed by Tenaska and the Interstate
Pipeline. As PECO's sole obligation for the design, construction and
installation of the Natural Gas Metering Facilities, PECO shall pay Tenaska, at
the time of PECO's payment for the first Month of Commercial Operation of the
Initial Units, pursuant to Section 9.02 herein, an amount equal to 56% of the
total amount that Tenaska is required to pay Transco with respect to the
installation of the Natural Gas Metering Facilities, PROVIDED THAT such payment
by PECO to Tenaska shall not exceed $784,000.
Section 2.02 PLANT DESCRIPTION. (a) The Plant shall be located at
George Brown Road (one mile north of Highway 34) near the Town of Franklin, on a
tract of land contained in lots 236 and 237 of the Third Land District in Heard
County, Georgia and shall include:
(i) Six Generating Units, of which at least three Generating
Units shall achieve Commercial Operation during the first Contract
Year, and all six of which Generating Units shall be in Commercial
Operation on the first day of the second Contract Year.
(ii) Interconnection Facilities.
(iii) "Gas Supply Facilities," which shall mean a lateral
pipeline and related equipment necessary to transport an amount of
Natural Gas from the Gas Delivery Point to the Generating Units in
quantities sufficient to operate the Plant at Contract Capacity.
(iv) "Fuel Oil Storage Tank," which shall mean a storage tank
capable of providing 160,000 usable Barrels of Fuel Oil storage
capacity, being an amount of Fuel Oil sufficient for Oil-Fired
Operation at Contract Capacity for 16 hours of each day for five (5)
consecutive Days.
(v) "Fuel Oil Unloading Facilities," which shall mean
facilities and equipment capable of unloading trucks with loads of
7,000 gallons or more each at an aggregate rate of 41,600 gallons of
Fuel Oil each hour with each truck unloading station equipped with a
meter to measure Fuel Oil received by Tenaska.
(vi) "Fuel Control Systems," which shall mean equipment and
controls enabling the Plant to switch from Natural Gas to Oil-Fired
Operation, or from Oil-Fired Operation to Natural Gas, subject to the
requirements of Section 6.09(a)(vi).
(vii) "Water Facilities," which shall mean water supply,
storage, treatment and regeneration facilities enabling Oil-Fired
Operation at Contract Capacity for 16 hours of each day for two periods
each of five consecutive days within a two (2) week period. The five
consecutive day periods shall be separated by a minimum of two twenty
four hour days.
(viii) "Dispatch Control Systems," which shall mean
information and control systems at the Plant enabling the Plant to (i)
receive AGC signals from two control areas in the Eastern
Interconnection, (ii) to provide AGC, with the amounts of
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AGC provided subject to Section 6.13(c), and (iii) follow load signals
provided by control areas to the Plant.
(ix) "Communications and Telemetry Equipment," which shall
mean one remote terminal unit (RTU) on a separate communication circuit
from the Plant control room to PECO providing instantaneous MW and
megavolt-ampere reactive (MVAR), hourly MWh readings, ambient
temperature conditions, bus voltage, switchyard and generator breaker
positions, Fuel Oil Storage Tank level (in Barrels) and such other
information relating to the Plant's condition as the Parties may agree.
(x) A physical layout which allows for subsequent installation
of up to five emergency blackstart diesel generators capable of
starting a Generating Unit without electric power service taken from
the transmission grid. Tenaska and PECO will work in good faith to seek
mutual agreement upon financial and operating arrangements under which
such generators could be installed and operated.
Section 2.03 INSPECTIONS AND DOCUMENTS. (a) To the extent allowed under
the Interconnection Agreement, PECO shall have the right to inspect and test the
Power Metering Equipment during business hours in the Operating Term. PECO shall
have the right to monitor performance of the Plant through Communications and
Telemetry Equipment throughout the Operating Term. To the extent allowed under
the Interconnection Agreement, Tenaska shall inspect and test the Power Metering
Equipment upon its installation and at least once every year thereafter and at
any other reasonable time upon the request of PECO, PROVIDED THAT PECO shall pay
for any costs of additional tests of the Power Metering Equipment if PECO
requires more than one test during a Contract Year. If the Power Metering
Equipment is found by PECO or by Tenaska to be not within the standards
established by the latest revision of Standard C12.1 Code for Electricity
Metering of the American National Standards Institute, Incorporated, Tenaska
will cause the Power Metering Equipment to be repaired or replaced at its sole
cost and expense. If the Power Metering Equipment is found by PECO or by Tenaska
to be not within the accuracy standards established in such standard, an
adjustment shall be made correcting all measurements made by the inaccurate
portion of the Power Metering Equipment for:
(i) the actual period during which inaccurate measurements
were made, if such period can be determined, or, if not,
(ii) the period immediately preceding the test of the Power
Metering Equipment equal to one-half (1/2) the time from the date of
the last previous test of the Metering Equipment, PROVIDED THAT the
period covered ------------- by any such correction shall not exceed
six (6) calendar months.
(b) Tenaska shall give PECO reasonable advance notice of any such
tests, and PECO shall have the right to observe the test and to conduct its own
tests to verify Tenaska's procedures and results.
(c) Tenaska shall make available to PECO copies of any manufacturers'
performance specifications, warranties, guarantees, standards and any other
documents
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pertaining to the operation of the Plant or its major component parts that PECO
reasonably requests in writing with reasonable specificity.
(d) Tenaska and PECO shall each have the right to receive signals from
the metering and related facilities, and each Party shall provide the other
Party access to records and metering information associated with delivery of
Natural Gas to the Plant through the Natural Gas Metering Facilities, including
providing PECO with real-time telemetry information on the volume of gas flowing
through the Natural Gas Metering Facilities, and the BTU content of such gas.
Each Party shall provide the other Party with the same abilities to inspect the
Natural Gas Metering Facilities or verify the Natural Gas Metering Facilities'
accuracy that either Party receives pursuant to its agreements with the
Interstate Pipeline relating to interconnection, construction and operation of
the Natural Gas Metering Facilities or relating to transportation of Natural Gas
on the Interstate Pipeline to the Plant.
Section 2.04 FUEL OIL MEASUREMENT. Tenaska will include with each
Monthly Statement delivered pursuant to Section 9.02(a), a report of Fuel Oil
consumed during the Month for which the Monthly Statement is being provided. The
quantity of Fuel Oil consumed will be calculated by:
(i) Subtracting the quantity of Fuel Oil in Barrels in the
Fuel Oil Storage Tank on the last day of the Month from
(ii) the quantity of Fuel Oil in Barrels in the Fuel Oil
Storage Tank at 00:01 hours of the first Day of the Month, plus
(iii) any deliveries of Fuel Oil made to the Fuel Oil Storage
Tank during such Month as reflected by the delivery invoice provided by
the Fuel Oil transporter. Tenaska shall provide PECO promptly, but in
no event later than three (3) business days, after receiving delivery
of Fuel Oil, with a copy of the delivery invoice received by Tenaska at
the time Tenaska accepted such Fuel Oil delivery. The quantity of Fuel
Oil in the Fuel Oil Storage Tank on the last day of the month shall be
the quantity used for the quantity at the beginning of the next
following month.
ARTICLE III
EFFECTIVENESS AND TERMINATION
Section 3.01 EFFECTIVENESS. This Agreement shall become effective upon
execution and delivery hereof by both Parties, PROVIDED THAT Article VI and
Article VIII shall not be effective until Tenaska receives FERC approval to sell
capacity and energy to PECO pursuant to this Agreement.
Section 3.02 TERMINATION OF AGREEMENT. This Agreement shall continue in
effect until the earliest of the following dates: (a) the date the Agreement is
terminated by mutual agreement of the Parties, (b) the date the Agreement is
terminated in accordance with Sections 3.03 through 3.07 hereof or (c) the 29th
anniversary of the Date of Commercial Operation.
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Section 3.03 TERMINATION OPTION; PLANT FINANCING. Following execution
of this Agreement, Tenaska shall endeavor in good faith to obtain Non-Recourse
Financing for the Plant. Tenaska may terminate this Agreement including all
obligations hereunder by written notice to PECO beginning on January 1, 2000 and
continuing for the following 120 days if, (a)(i) Financial Closing Date has not
occurred as of the date of such notice, (ii) PECO's senior unsecured debt has
been downgraded below BBB (or its equivalent) by (A) either Standard & Poor's or
Moody's and (B) one other Rating Organization (the withdrawal of a rating being
treated as a downgrading for this purpose) and (iii) PECO has not agreed in
writing to provide on the Financial Closing Date either (A) such credit support
as may be reasonably necessary to obtain Non-Recourse Financing on terms at
least as favorable as could have been obtained if PECO's rating had not been
downgraded, PROVIDED THAT any undertaking required from Tenaska in connection
with such credit support shall be on terms satisfactory to Tenaska in its sole
discretion, or (B) cash financing, on terms satisfactory to Tenaska in its sole
discretion, for the Plant in lieu of the amount of Non-Recourse Financing sought
by Tenaska from Financial Institutions or (b)(i) PECO has refused to agree to a
reasonable request by prospective Financial Institutions to a change (from the
form set forth in Exhibit 17.04(a)-1) in the consent to assignment of this
Agreement as security for the Non-Recourse Financing and (ii) the Financial
Closing Date has not occurred as of the date of such notice, PROVIDED THAT if
Tenaska terminates this Agreement pursuant to Section 3.03(b), Tenaska shall pay
to PECO, at the time of termination, an amount determined by Tenaska to
compensate PECO for commitments made by PECO between the date of this Agreement
and the date on which Tenaska terminates this Agreement pursuant to this Section
3.03.
Section 3.04 TERMINATION OPTION; COMMERCIAL OPERATION. (a) If all of
the Initial Units have not achieved Commercial Operation by the Delay
Termination Date for the Initial Units, PECO may at any time thereafter until
all of the Initial Units have achieved Commercial Operation terminate its
obligations with respect to the Initial Units by providing fifteen (15) days
prior written notice of termination to Tenaska. If all of the Initial Units
shall not have achieved Commercial Operation by such 15th day, then on said day
all rights and obligations of the parties under this Agreement with respect to
all of the Initial Units shall terminate (including, but not limited to rights
or obligations under Article VIII) and from and after such date the Initial
Units will not constitute a part of the "Plant" for purposes of this Agreement.
Payment obligations that arise with respect to the Initial Units prior to the
date of termination shall not terminate. If PECO terminates its obligations with
respect to the Initial Units and the Final Units have not achieved Commercial
Operation, Tenaska will have the right to terminate this Agreement at any time
thereafter up until the time at which the Final Units achieve Commercial
Operation by providing PECO with fifteen (15) days prior written notice of such
termination.
(b) If any of the Final Units have not achieved Commercial Operation by
the Delay Termination Date for the Final Units, PECO may, at any time thereafter
until the Final Units have achieved Commercial Operation, terminate its
obligations with respect to the Final Units by providing fifteen (15) days prior
written notice of termination to Tenaska on such date if they have not achieved
Commercial Operation. Such obligations will then terminate unless all Final
Units achieve Commercial Operation by the end of such fifteen (15) day notice
period.
(c) The Delay Termination Date for the Initial Units and the Delay
Termination Date for the Final Units are subject to adjustment for an event of
Force Majeure as
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provided in section 14.02(d), PROVIDED THAT (i) notwithstanding section
14.02(d), no adjustment shall be made to the Delay Termination Date for the
Initial Units associated with an event of Force Majeure which commences after
the Scheduled Date of Commercial Operation for the Initial Units, and (ii) the
maximum aggregate adjustment to a Delay Termination Date for purposes of Section
3.04(a) and Section 3.04(b) shall be, in each case, twelve months unless at the
end of such twelve-month adjustment at least two-thirds of the Units required to
achieve Commercial Operation by the end of such period are in Commercial
Operation, in which case the maximum aggregate period of adjustment for each of
Section 3.04(a) and 3.04(b) shall be an additional six months to enable Tenaska
to achieve Commercial Operation of the Unit which is required to be in, but has
not achieved, Commercial Operation.
(d) If an event of Force Majeure commences after the Scheduled Date of
Commercial Operation for the Final Units and extends for more than 12 months,
then, for purposes of calculating Reservation Payments and Energy Payments
pursuant to Article VIII, the initial Contract Year for the Final Units shall be
Contract Year 2 set forth on Exhibit 8.02 regardless of when the Final Units
actually enter Commercial Operation and the Operating Term of the Final Units
shall terminate on the last day of the Operating Term of the Initial Units.
Section 3.05 TERMINATION OPTION - FOLLOWING EVENT OF DEFAULT. (a)
Should any event of default described in Article XIV not be cured by the
defaulting Party within the period, if any, set forth in Section 14.01 or
Section 14.03, or if any Party should wrongfully repudiate this Agreement and
fail to withdraw such repudiation within five (5) Days of receipt of notice from
the other Party requesting such withdrawal, then the other Party (the
"Terminating Party") may immediately terminate this Agreement without further
notice. In addition, the Parties may recover claims as follows:
(i) PECO, if the Terminating Party, shall be entitled to
recover (A) any accrued liquidated damages owed to it under Section
4.02 as the exclusive remedy for claims based on Failure to Achieve
Commercial Operation, (B) any accrued Availability Adjustments owed to
it under Section 8.08 through the date of termination as the exclusive
recourse for not achieving the availability standards specified in
Section 7.03 (without limiting the applicability of Section 3.07), (C)
any other accrued amounts owed to it under the Agreement at the time of
termination, and (D) with respect to any other claims arising from the
breach, repudiation or resulting termination of this Agreement, all
direct damages and amounts as may be recoverable at law or in equity
under Applicable Law, including but not limited to (and whether or not
classified as direct damages under Applicable Law) (1) the cost of
cover for replacement capacity and replacement energy obtained to
replace Contract Capacity and energy that would otherwise have been
made available to PECO under this Agreement from the date of
termination through the remainder of the scheduled Operating Term, less
the amount of Reservation Payments and Energy Payments and other
payments that would otherwise have been due hereunder, in each case
discounted to present value at the same appropriate discount rate and
(2) obligations, liabilities and costs that were incurred as a result
of, or in a reasonable effort to mitigate damages resulting from,
Tenaska's breach or repudiation or the resulting termination of this
Agreement, but excluding any obligations, liabilities or costs to
PECO's customers based on PECO's failure to supply capacity or energy,
PROVIDED THAT nothing herein shall prevent Tenaska from asserting any
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counterclaims or offsets arising from any duty to mitigate that may be
available at law or in equity;
(ii) Tenaska, if the Terminating Party, shall be entitled to
recover (A) any accrued amounts owed to it under the Agreement at the
time of termination, and (B) with respect to any other claims resulting
from the breach, repudiation or resulting termination of this
Agreement, all direct damages and amounts as may be recoverable at law
or in equity under Applicable Law, including but not limited to (and
whether or not classified as direct damages under Applicable Law) (1)
Reservation Payments that PECO would otherwise have been liable to make
to Tenaska from the date of termination through the remainder of the
scheduled Operating Term, discounted to present value at an appropriate
discount rate and (2) obligations, liabilities and costs to third party
contractors providing engineering, procurement, construction,
operations or maintenance services or associated supplies that were
incurred as a result of, or in a reasonable effort to mitigate damages
resulting from, PECO's breach or repudiation or the resulting
termination of this Agreement, PROVIDED THAT nothing herein shall
prevent PECO from asserting, subject to the limitation expressed in
Section 3.05(a)(i) herein, any counterclaims or offsets arising from
any duty to mitigate that may be available at law or in equity;
Notwithstanding the foregoing, in the event that one Party fails to cure an
event of default under Article XIV within the period, if any, set forth in
Section 14.01 or Section 14.03, or if a Party wrongfully repudiates this
Agreement, the other Party is not in any way obligated to terminate this
Agreement but may instead assert its claims and rights at law or in equity under
this Agreement and under Applicable Law.
(b) PECO will not terminate this Agreement pursuant to a default by
Tenaska until it first provides written notice of such default to the Financial
Institutions and affords the Financial Institutions an opportunity to cure
pursuant to Section 14.03. Tenaska will not terminate the Agreement pursuant to
a default by PECO until it first provides written notice of such default to PECO
pursuant to Section 14.02 and affords PECO an opportunity to cure pursuant to
Section 14.03.
Section 3.06 TERMINATION OPTION; SHORTENED OPERATING TERM. PECO may
terminate this Agreement effective on the 20th anniversary of the Date of
Commercial Operation PROVIDED THAT PECO shall have provided Tenaska at least one
year's prior written notice of termination and shall have delivered to Tenaska
by not later than the 30th day prior to the 20th anniversary of the Date of
Commercial Operation a letter of credit in the amount of $175,000,000
substantially in the form of Exhibit 3.06 hereto issued by a bank that meets the
credit standard on the date of issuance of clause (a) for a bank issuing a
letter of credit on the Financial Closing Date of the definition of "Acceptable
Credit Support". Upon the effective date of termination of this Agreement
pursuant to this Section 3.06, PECO shall pay Tenaska the sum of $175,000,000.
Section 3.07 TERMINATION DUE TO INADEQUATE AVAILABLITY. PECO may
terminate this Agreement upon sixty (60) days prior written notice to Tenaska if
(i) the Summer Availability Percentage for any Contract Year, determined in
accordance with Section 7.02, is less than 67% for two consecutive Contract
Years and (ii) the Capacity Test Result of the December 1 Capacity
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Test (after giving effect to any permitted retests) conducted during such second
Contract Year pursuant to Section 5.01 is less than 550 MW. PECO's rights under
this Section 3.07 shall not be limited, impaired, or affected in any way by a
Force Majeure event which renders Tenaska wholly or in part unable to perform
any of its obligations under this Agreement.
ARTICLE IV
COMMERCIAL OPERATION OF PLANT
Section 4.01 COMMERCIAL OPERATION. Tenaska shall schedule three (3)
Generating Units to achieve Commercial Operation on June 1, 2001 (the "Initial
Units"), and shall schedule three (3) additional Generating Units to achieve
Commercial Operation on June 1, 2002 (the "Final Units") such that the total
number of Units to be in Commercial Operation on June 1, 2002 is six (6).
Section 4.02. LIQUIDATED DAMAGES FOR FAILURE TO ACHIEVE COMMERCIAL
OPERATION. (a) If any Generating Unit does not achieve Commercial Operation on
June 1 of its Start Year (herein "Failure to Achieve Commercial Operation"),
Tenaska shall pay PECO the following amounts as liquidated damages as its
exclusive damages remedy which have been agreed upon as a reasonable
pre-estimate of the probable loss to be suffered by PECO on account thereof,
(and not as a penalty) for each such Generating Unit that has not achieved
Commercial Operation:
(i) $25,000 for each day Commercial Operation of such
Generating Unit is delayed from its Scheduled Date of Commercial
Operation through its Scheduled Date of Commercial Operation plus 15
days;
(ii) $50,000 for each day Commercial Operation of such
Generating Unit is delayed from and including its Scheduled Date of
Commercial Operation plus 15 days through its Scheduled Date of
Commercial Operation plus 30 days; and
(iii) $66,667 for each day Commercial Operation of such
Generating Unit is delayed after its Scheduled Date of Commercial
Operation plus 30 days;
(b) The aggregate amount of liquidated damages payable by Tenaska to
PECO pursuant to Section 4.02(a) shall not exceed $8,000,000 per Generating Unit
and $25,000,000 in the aggregate. Any liquidated damages which arise pursuant to
this Section 4.02(b) shall be paid by Tenaska to PECO by wire transfer on the
15th day of the month following the month which includes the day of delay which
gives rise to such liquidated damages.
(c) For the purposes of illustration only, if two (2) Generating Units
achieve Commercial Operation on the date which is the Scheduled Date of
Commercial Operation for such Units plus 15 days, two (2) Generating Units
achieve Commercial Operation on the date which is the Scheduled Date of
Commercial Operation for such Units plus 30 days; and two (2) Generating Units
achieve Commercial Operation on the date which is the Scheduled Date of
Commercial Operation for such Units plus 44 days; the total amount of liquidated
damages payable by Tenaska to PECO pursuant to Section 4.02(a) shall be
$6,833,342 (($25,000/day x 6
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Generating Units x 14 days) + ($50,000/day x 4 Generating Units x 15 days) +
($66,667/day x 2 Generating Units x 13 days)).
(d) The June 1 date set forth in Section 4.02(a) is not subject to
adjustment by either Party, except if an event of Non-Insurable Force Majeure
occurs, such date is subject to adjustment in the same manner as provided in
Section 14.02(d) for a Force Majeure event, subject to a maximum adjustment of
12 months, after which the provisions of Section 4.02(a) shall apply.
(e) PECO's right to receive liquidated damages or exercise its
termination right under Article III shall not be affected or impaired by any
Generating Unit subsequently being able to achieve Commercial Operation. PECO's
right to receive any liquidated damages that accrued prior to termination shall
not be affected or impaired by either Party's exercise of its termination rights
under Article III.
ARTICLE V
CONTRACT CAPACITY AND TESTS
Section 5.01 ANNUAL TESTING PROCEDURE TO ESTABLISH CONTRACT CAPACITY.
(a) Not later than the Scheduled Date of Commercial Operation for the Initial
Units, Tenaska shall provide PECO with its written declaration of Contract
Capacity for the first Contract Year, and no capacity test will be required for
such declaration. During each Contract Year except the last Contract Year,
following the Summer Months but not later than each December 1st thereafter,
Tenaska shall conduct a Capacity Test (the "December 1 Capacity Test") of all
Units in Commercial Operation in accordance with EXHIBIT 5.01. Upon conclusion
of each such Capacity Test, Tenaska shall declare Contract Capacity for the
Immediately Following Contract Year in accordance with the parameters of Section
5.02 and such declaration shall apply to any Unit that achieves Commercial
Operation as of the first day of the Immediately Following Contract Year.
(b) If Tenaska declares a level of Contract Capacity which (i) conforms
to the parameters of Section 5.02 but (ii) exceeds the most recent Capacity Test
Result, PECO shall have the right to request a Capacity Test during the
immediately following May 15th through May 31st period. If the Capacity Test
Result from such a Capacity Test is less than the Contract Capacity declared by
Tenaska (excluding for this purpose the Unit Capacity of any Unit that has not
yet achieved Commercial Operation), Contract Capacity for the Immediately
Following Contract Year shall equal the most recent Capacity Test Result.
Tenaska shall conduct additional tests of Plant capacity as requested by PECO to
meet Reliability Council requirements, but such tests shall not be used to
adjust Contract Capacity. PECO shall deliver all Fuel and accept all energy
required to conduct all Capacity Tests.
(c) Tenaska shall give PECO ten (10) days prior written notice of the
performance of any Capacity Test (except that no notice shall be required in the
case of any retest that commences the same day as the original test ended and
only 24 hours notice shall be required in the case of a retest that occurs
within three days of a prior test). PECO shall have the right to observe the
Capacity Test. PECO shall request and accept energy sufficient to allow, during
the Capacity Test, a test of the Plant's maximum capability. Energy delivered to
PECO
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during such tests will be treated as Delivered Energy and paid for by PECO as
such under this Agreement. Any applicable adjustment of Capacity Test results
provided for in EXHIBIT 5.01 shall be determined in accordance with manufacturer
specifications of Plant performance using the methodologies provided in EXHIBIT
5.01.
(d) If the output of the Plant is adversely affected by an equipment
failure or malfunction at the time a Capacity Test is scheduled to take place or
during a Capacity Test, Tenaska has the right to reschedule the Capacity Test
after such failure or malfunction has been remedied, PROVIDED THAT until the
rescheduled Capacity Test is completed, the Contract Capacity for the prior or
current Contract Year will remain in effect. If PECO in good faith questions the
accuracy or reliability of any Capacity Test, it shall so notify Tenaska, and if
Tenaska and PECO are unable to resolve the question, Tenaska shall promptly
schedule a second test. If after such second test, PECO continues to question
the accuracy or reliability of such test, the determination of Contract Capacity
shall be settled by arbitration pursuant to Section 18.13. The Contract Capacity
as determined by Tenaska will be effective until the dispute is settled by the
arbitration, subject to retroactive adjustment if a different level of Contract
Capacity is determined through arbitration.
(e) "Capacity Test Result" shall mean, the result of a Capacity Test
conducted in accordance with EXHIBIT 5.01.
Section 5.02 ESTABLISHMENT OF CONTRACT CAPACITY. (a) Contract Capacity
declared by Tenaska for the first Contract Year shall be not less than the
product of (i) 150 MW and (ii) the number of Generating Units that have achieved
Commercial Operation.
(b) Contract Capacity declared by Tenaska for the second Contract Year
shall be not less than 875 MW and not more than 950 MW, based on six Units
having achieved Commercial Operation, with such minimum and maximum Contract
Capacity to be reduced pro rata for any period during which less than six Units
have achieved Commercial Operation. Upon an additional Unit achieving Commercial
Operation during a Contract Year, Contract Capacity shall increase for the
remainder of such Contract Year by declared capacity of such Unit in accordance
with Section 5.01, or if no such declaration was made in accordance with Section
5.01, then by the applicable Unit Capacity
(c) Contract Capacity declared by Tenaska for Contract Years after the
second Contract Year shall be in accordance with the following:
(i) Contract Capacity declared by Tenaska shall be (A) not
less than 875 MW, and (B) within 50 MW (plus or minus) of the Current
Contract Capacity based on six Units having achieved Commercial
Operation, with such minimum and maximum Contract Capacity to be
reduced pro rata for any period during which less than six Units have
achieved Commercial Operation. Upon an additional Unit achieving
Commercial Operation during a Contract Year, Contract Capacity shall
increase for the remainder of such Contract Year by declared capacity
of such Unit in accordance with Section 5.01, or if no such declaration
was made in accordance with Section 5.01, then by the applicable Unit
Capacity. Tenaska may not sell energy or capacity from additional Units
to third
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parties prior to such Units achieving Commercial Operation except for
bona fide testing purposes.
(ii) If the Capacity Test Result is more than 50 MW above the
Current Contract Capacity, Contract Capacity declared by Tenaska in the
Immediately Following Contract Year shall be no less than the Current
Contract Capacity and no more than the Current Contract Capacity plus
50 MW.
(iii) If the Capacity Test Result is more than 50 MW below the
Current Contract Capacity, Contract Capacity declared by Tenaska for
the Immediately Following Contract Year shall be no less than the
greater of (A) 875 MW and (B) the Current Contract Capacity minus 50
MW.
(iv) If the Capacity Test Result is less than 875 MW, the
Contract Capacity declared by Tenaska for the Immediately Following
Contract Year shall be 875 MW.
Section 5.03 TESTS OTHER THAN CAPACITY TESTS. The Parties shall
cooperate in good faith in all reasonable respects in order to schedule and
undertake emission compliance tests, or such other tests including preventative
maintenance activities, as Tenaska may perform from time to time PROVIDED THAT
such tests, other than regulatorily-ordered emission compliance tests, which
would reduce the availability of Generating Units from the level specified in
the Availability Schedule for such Day, or which would occur during an hour in
which PECO has submitted an Energy Request to receive 90% or more of the output
available from the Plant, shall not commence without PECO's prior consent. PECO
shall not be required to incur any economic loss or cost or to purchase any
energy produced as a result of such testing or preventative maintenance
activities. Tenaska shall, if so required by PECO, pay the net loss incurred by
PECO on any such energy so produced during such tests or preventative
maintenance activities.
ARTICLE VI
OPERATION OF THE PLANT
Section 6.01 PEAK AVAILABLITY PERIODS. (a) On or before April 15 of the
Start Year for the Initial Units and on or before April 15 each year during the
Operating Term, PECO shall by providing fifteen (15) Days written notice to
Tenaska elect one of the following options during Summer Months:
(i) Peak Availability Option #1: PECO shall be entitled to
request in such notice of election, energy for sixteen (16) hours of
each Day; the specific hours of each Day to be identified in the notice
of election of Peak Availability Option #1 PROVIDED THAT such specified
hours may be varied by up to two hours earlier or later on the Unit
Call Schedule on a permanent or temporary basis by PECO pursuant to
Section 6.04; or
(ii) Peak Availability Option #2: PECO shall be entitled to
request in such notice of election, energy (A) for twenty (20) hours on
each Monday through Friday, and (B) for sixteen (16) hours on each
Saturday and Sunday; the specific hours of each Day to
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be identified in the notice of election of Peak Availability Option #2
PROVIDED THAT such specified hours may be varied by up to two hours
earlier or later on the Unit Call Schedule on a permanent or temporary
basis by PECO pursuant to Section 6.04.
(b) If PECO elects Peak Availability Option # 1 PECO shall be required
to place Units on the Unit Call Schedule from the Plant during Non-Summer Months
for a minimum of the lesser of (i) 2091 Unit Hours, or (ii)(B) the number of
Unit Hours during Non-Summer Months allowed pursuant to the Air Permit.
Section 6.02 REQUIRED GENERATING UNIT AVAILABLITY. Tenaska shall make
Generating Units available for dispatch by PECO as follows:
(a) During the Summer Peak Hours of the Summer Months, Tenaska shall
make all Generating Units in Commercial Operation available for dispatch by
PECO.
(b) During the Non-Summer Peak Hours in the Shoulder Months, Tenaska
shall make four (4) Generating Units available for dispatch by PECO, unless only
the Initial Units or the Final Units have achieved Commercial Operation in which
case Tenaska shall make two (2) Generating Units available.
(c) During Non-Summer Peak Hours of Winter Months of each Contract
Year, Tenaska shall make all Generating Units in Commercial Operation available
for dispatch by PECO.
Section 6.03 NOTIFICATION OF UNIT AVAILABLITY BY TENASKA. Tenaska shall
provide PECO with an Availability Schedule as follows:
(a) The Availability Schedule for each Saturday, Sunday, and Monday
during the Operating Term shall be provided by Tenaska to PECO by 12:00 noon EPT
on the immediately preceding Thursday.
(b) For each Holiday during the Operating Term, Tenaska will provide
the Availability Schedule for the Holiday and the immediately following Day by
12:00 noon EPT two week Days prior to the Holiday.
(c) For all other Days during the Operating Term, the Availability
Schedule shall be provided by 12:00 noon EPT two Days prior to the relevant Day.
Section 6.04 NOTIFICATION OF GENERATING UNIT CALL BY PECO. PECO shall
provide Tenaska with a Unit Call Schedule for each Generating Unit for each Day
during the Operating Term by 12:00 noon EPT of the preceding Day.
(a) PECO will place all Units in Commercial Operation on the Unit Call
Schedule for each Summer Peak Hour of each Contract Year.
(b) During each Day of the Winter Months of each Contract Year, PECO
may place up to all Generating Units in Commercial Operation on the Unit Call
Schedule for the immediately following Day. Each Generating Unit specified by
PECO on the Unit Call
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Schedule pursuant to this section will, be included in availability
calculations, pursuant to Section 7.01.
(c) During each Day of the Shoulder Months, PECO may place up to four
(4) Generating Units in Commercial Operation on the Unit Call Schedule for the
immediately following day, unless Commercial Operation of either Initial or
Final Units has not occurred, in which case PECO may place up to two (2)
Generating Units on the Unit Call Schedule for the immediately following Day.
Each Generating Unit specified by PECO on the Unit Call Schedule pursuant to
this section will, be included in availability calculations pursuant to Article
VII.
(d) During each Day of the Non-Summer Months, PECO may designate
Generating Units to be in Standby Mode, PROVIDED THAT unless otherwise agreed by
the Parties, the combined number of Units placed on the Unit Call Schedule by
PECO or placed in Standby Mode shall not exceed four (4) in the Shoulder Months.
During Non-Summer Months, PECO shall pay to Tenaska a standby charge of $10 for
each hour or part thereof with respect to each Generating Unit designated by
PECO to be in Standby Mode for the period from 00:01 hours of the Day for which
the Unit Call Schedule is submitted until the earlier of (i) 00:00 hours of such
Day or (ii) submittal of an Energy Request requiring output from Generating
Unit(s) in Standby Mode, ("Standby Mode Charge"). If PECO requests energy from a
Generating Unit in Standby Mode, such Requested Energy will be included in
availability calculations pursuant to Section 7.01.
Section 6.05 PLANT MAINTENANCE. (a) On or before March 1st of each
Contract Year, PECO shall provide Tenaska with an estimate of the range of
potential Plant dispatch and potential Starts during the Immediately Following
Contract Year, although this notification shall not be binding on PECO to
dispatch energy from the Plant within the estimated range, or to incur Starts
within the estimated range. On or before April 1st of each Contract Year,
Tenaska shall provide PECO with a plan for Scheduled Outages for the next five
(5) Contract Years. The Scheduled Outages for the Immediately Following Contract
Year shall be binding on Tenaska and may not be changed unless approved in
writing by PECO, such approval not to be unreasonably withheld or delayed. The
Scheduled Outages for the last four Contract Years in this notification shall be
estimates only and shall not be binding on Tenaska.
(b) Except as otherwise approved in writing by PECO, Tenaska shall
complete or shall cause the completion of all scheduled maintenance for each
major item of equipment constituting a part of the Plant between March 15th and
May 15th or between October 1st and November 30th each year during the Operating
Term; PROVIDED, HOWEVER, that twice during the Operating Term Tenaska may by
written request to PECO at least one year in advance, which request shall not be
unreasonably denied, complete or shall cause the completion all scheduled
maintenance for each major item of equipment constituting a part of the Plant
between March 1st and May 31st or between October 1st and November 30th.
(c) Tenaska may shift the start date of a Scheduled Outage by up to
seven days, or extend a Scheduled Outage by up to seven days, by providing PECO
with written notice forty-five (45) days before the earlier of (A) the original
Scheduled Outage start date or (B) the new Scheduled Outage start date, PROVIDED
THAT the last Day of the new Scheduled Outage does not
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occur after May 15th (or May 31st if an extended maintenance period under
Section 6.05(b) has been approved), if the Scheduled Outage began in March,
April or May of a Contract Year, or after November 30th, if the Scheduled Outage
began in October or November of a Contract Year. Written notice will include (i)
the new dates and duration of the Scheduled Outage, and (ii) the reason for the
change in dates.
(d) If a Scheduled Outage extends beyond May 15th (or May 31st if an
extended maintenance period under Section 6.05(b) has been approved), and the
Scheduled Outage began in March, April or May of a Contract Year, or if a
Scheduled Outage extends beyond November 30th and the Scheduled Outage began in
October or November of a Contract Year, additional time beyond such dates will
be treated as a Forced Outage for the purpose of calculating the Availability
Percentages unless in response to a written request from Tenaska, PECO states
that it would not have dispatched such Units during the extension. Tenaska shall
not be entitled to require any supporting documentation from PECO if PECO is
unwilling to provide such a statement. Tenaska shall provide updates to PECO
during each Scheduled Outage, as requested by PECO, regarding progress on
completion of maintenance tasks and a projected completion time and date.
(e) Coincident with Tenaska's submission to PECO of the first plan for
Scheduled Outage, Tenaska shall provide PECO with the long-term preventive
maintenance program for each major item of equipment constituting a part of the
Plant. Such program shall reflect planned outages for inspection, repair,
maintenance and overhaul and will be based, at least in part, on manufacturers'
recommendations and may be altered from time to time by reason of later
manufacturer's releases pertaining to major items of equipment of the Plant and
Plant operating experience.
Section 6.06 STARTUP POWER. (a) At any time the Plant is being started
from a zero output condition, PECO shall arrange for the delivery to the Plant
of capacity and energy sufficient to start simultaneously the number of
Generating Units, up to three Generating Units, required to meet the Energy
Request for the hour immediately following the hour in which startup occurs.
When one or more Generating Units are producing energy, the Plant shall supply
energy to start additional Generating Units.
(b) Tenaska shall reimburse PECO for any payments made by PECO to third
parties for power to start-up a single Generating Unit in excess of the cost of
procuring 10 MW of capacity and 2 MWh of energy or a total of 30 MW of capacity
and 6 MWh of energy to start-up three Generating Units simultaneously.
(c) If startup power required by a Generating Unit exceeds the amounts
provided in Section 6.06(a), PECO will provide Tenaska with copies of tariffs
under which PECO procures startup power, for the purpose of verifying cost
reimbursement owed by Tenaska to PECO under Section 8.06.
Section 6.07 DELIVERY OF FUEL. (a) PECO shall be solely responsible for
procuring Natural Gas and Fuel Oil in sufficient quantities and at rates of
delivery sufficient to meet the Plant's Fuel requirements as it may be operated
and tested in accordance with this Agreement,
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such Fuel to conform to (A) the specifications set forth in EXHIBIT 1.01
attached to this Agreement and (B) any requirements of Applicable Laws.
(b) PECO shall be solely responsible for transporting all Natural Gas
to be fired at the Plant during the Operating Term to the Gas Delivery Point and
shall be solely responsible for maintaining all Fuel Oil Delivery Permits.
Tenaska shall take title to all Natural Gas at the Gas Delivery Point. Tenaska
shall be solely responsible for transporting, handling, using, and disposing of
such Natural Gas after it is delivered to Tenaska at the Gas Delivery Point.
(c) PECO shall be solely responsible for transporting to the Fuel Oil
Unloading Facilities by tanker trucks all Fuel Oil to be fired at the Plant
during the Operating Term. Tenaska shall take title to all Fuel Oil when
delivered to Tenaska at the Fuel Oil Unloading Facilities. Tenaska shall be
solely responsible for (i) unloading the Fuel Oil from such tanker trucks, (ii)
transporting, handling, using, managing, and storing of such Fuel Oil as soon as
it is delivered to Tenaska at the Fuel Oil Unloading Facilities, (iii) verifying
the quality of Fuel Oil delivered to the Plant, and (iv) ensuring that the Fuel
Oil Unloading Facilities are sufficient to enable Tenaska to unload Fuel at a
rate of 41,600 gallons of Fuel Oil each hour. If during any Contract Year PECO
fails to make sufficient Energy Requests for energy fired by Fuel Oil so that an
amount of Fuel Oil equal to at least 20% of the Fuel Oil Inventory at the
beginning of such Contract Year is consumed, PECO shall reimburse Tenaska for
all costs of maintaining the quality of the Fuel Oil Inventory so that it may be
burned in the Plant. Such costs may include but not be limited to the cost of
disposing of any degraded Fuel Oil, blending fresh Fuel Oil and the cost of
remedial chemical additives. PECO may request from Tenaska an estimate of cost
for blending and/or other applicable remediation techniques to restore Fuel Oil
which has degraded in quality as a result of failure to deplete 20% from
inventory in the current Contract Year on April 1st and receive such cost
estimates by April 15th, pursuant to which PECO shall inform Tenaska by May 1st
of its decision, if any, to burn additional Fuel Oil or pay for remediation.
(d) Tenaska shall provide PECO with telemetric indications of the Fuel
Oil Storage Tank level on a real time basis.
(e) PECO shall provide Tenaska with (i) estimated Fuel Oil deliveries
to the Plant by 12:00 noon EPT the Day preceding deliveries, and (ii) updated
delivery estimates during any day deliveries are reasonably anticipated. Tenaska
shall within the limitations of the Fuel Oil Storage Tank and the Fuel Oil
Unloading Facilities accept Fuel Oil deliveries at the Plant during all hours of
the Day.
Section 6.08 OIL-FIRED OPERATION AVAILABLITY REQUIREMENTS. For purposes
of calculating the Availability Percentages, an Energy Request that requests
that a Generating Unit be fired on Fuel Oil may, at Tenaska's option, be
disregarded unless such Generating Unit should have been in Fuel Oil Capable
Mode in accordance with Sections 6.08(a), (b), (c) and (d).
(a) Subject to Section 6.08(d), by no later than October 1st, PECO will
notify Tenaska of how many Generating Units will be operated in Fuel Oil Capable
Mode from November 1 through March 31 of each Contract Year. By no later than
March 15 in the Initial Units Start Year and by no later than each March 15
during the Operating Term, PECO will
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notify Tenaska of how many Generating Units will be operated in Fuel Oil Capable
Mode from April 1 of that Contract Year through October 31 of the Immediately
Following Contract Year.
(b) Generating Units not designated by PECO to be operated in Fuel Oil
Capable Mode shall be returned to Fuel Oil Capable Mode by Tenaska within 48
hours after such notice by PECO.
(c) Fuel Oil may only be fired at the Plant at the express direction of
PECO, except (i) during the Shutdown of a Unit or Units which are in Fuel Oil
Capable Mode but are not being fired on Fuel Oil and (ii) as reasonably
necessary in connection with air emissions compliance testing. During (i) and
(ii) Tenaska may fire such Units on Fuel Oil; provided, however, that the
aggregate amount of Fuel Oil consumed by the Plant during such periods on a
rolling twelve-month basis shall not exceed 26,200 Barrels.
(d) Not more than one Unit shall be requested to be in Fuel Oil Capable
Mode from June 1 through December 1 of 2001.
Section 6.09 ENERGY REQUESTS. (a) Subject to Article VI, PECO shall
request energy from Generating Units which have achieved Commercial Operation by
providing Tenaska with an Energy Request, with the amount of energy which PECO
may request at any point in time to comply with the following Generating Unit
and Plant operating performance requirements:
(i) If a Generating Unit called pursuant to PECO's daily Unit
Call Schedule is producing zero MW, the Unit will have the capability
to dispatch from 0 MW and be delivering Unit Capacity on a continuous
basis as follows:
A. If the Generating Unit is in a Cold Shutdown and
is in Standby Mode, the Generating Unit shall be able to
deliver energy equivalent to Unit Capacity on a continuous
basis within 60 minutes (such a Start being a Cold Start, as
further defined below) of dispatch notification by PECO.
B. If the Generating Unit is in a Hot Shutdown and is
in Standby Mode, the Generating Unit shall be able to deliver
energy equivalent to Unit Capacity on a continuous basis
within 30 minutes (such a Start being a Hot Start, as further
defined below) of dispatch notification by PECO.
C. The Plant will be capable of starting no more than
three Units simultaneously.
D. No Energy Request shall require that more than
three Generating Units be in the first 15 minutes of their
respective Start durations at any moment in time.
E. PROVIDED THAT with respect to any Unit in Standby
Mode such Unit must have been in Standby Mode for at least
three (3) hours before such times apply or such lesser time as
the Parties may agree to being consistent with manufacturers'
recommendations and Prudent Utility Practice.
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(ii) During the Summer Months and during any Day of the Winter
Months in which PECO calls all Generating Units in Commercial Operation
to be available, the Plant will have the capability to dispatch from 0
MW and be delivering Contract Capacity on a continuous basis as
follows:
A. If all Generating Units are in Cold Shutdown, the
Plant shall deliver energy equivalent to the Unit Capacity of
three Generating Units within 60 minutes of dispatch
notification by PECO. The Plant shall be able to deliver the
Unit Capacity of the remaining three Generating Units within
75 minutes of dispatch notification by PECO. For purposes of
illustration only, if Unit Capacity equals 150 MW and PECO
requests 900 MW of power, the Plant will be producing 450 MW
at the end of 60 minutes, and an additional 450 MW 15 minutes
later ("Cold Start"), PROVIDED THAT PECO provides Fuel and the
necessary startup capacity and energy pursuant to Section
6.06.
B. If all of Generating Units are in Hot Shutdown,
the Plant shall be able to deliver energy equivalent to the
Unit Capacity of three Generating Units within 30 minutes of
dispatch notification by PECO. The Plant shall be able to
deliver the Unit Capacity of the remaining three Generating
Units within 45 minutes of dispatch notification by PECO. For
purposes of illustration only, if Unit Capacity equals 150 MW,
and PECO requests 900 MW of power, the Plant shall be
producing 450 MW at the end of 30 minutes, and an additional
450 MW 15 minutes thereafter ("Hot Start"), PROVIDED THAT PECO
provides Fuel and the necessary startup capacity and energy
pursuant to Section 6.06.
C. If one or more of the Plant's Generating Units are
in Cold Shutdown and one or more Generating Units are in Hot
Shutdown, each respective Generating Unit shall have start-up
characteristics associated with such Generating Unit's
shutdown time. For purposes of illustration only, if four
units have been off-line for 25 hours and two units have been
off-line for 100 hours, and PECO requests Contract Capacity,
the Plant shall be able to deliver the Unit Capacity of three
units within 30 minutes, Unit Capacity of an additional unit
15 minutes later, and Unit Capacity of the remaining two units
30 minutes after the latter Unit, PROVIDED THAT PECO provides
Fuel and the necessary startup capacity and energy pursuant to
Section 6.06.
(iii) For each day during the Non-Summer Months, the startup
notification times described in paragraphs (i) and (ii) above shall
only apply (A) to the number of Generating Units called by PECO
pursuant to the Unit Call Schedule for that day and (B) the number of
Generating Units which PECO elects to place in Standby Mode. During the
Non-Summer Months, for each Generating Unit which PECO does not include
in the Unit Call Schedule or elect to place in Standby Mode, such
Generating Unit shall within three (3) hours after an Energy Request
requiring such Unit to deliver energy, subject to Section 6.05, be
capable of either a Hot Start or Cold Start, as applicable or such
lesser time as the Parties may agree to being consistent with
manufacturers' recommendations and Prudent Utility Practice.
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(iv) When making an Energy Request which requires the Start of
a Unit, PECO will submit such Energy Request to Tenaska for 0 MW per
Unit to be Started for the first 30 minutes following the Start of
Units in Hot Shutdown, and PECO will submit an Energy Request for 0 MW
per Unit being Started for the 60 minutes following the Start of Units
in Cold Shutdown. PECO's Energy Request for the period immediately
following the end of the 30 minute or 60 minute timeframe, as
applicable, will be based on the Unit being, at that point in time, at
Minimum Load.
(v) The Minimum Load for a single Generating Unit will be 90
MW when fired by Natural Gas and 95 MW when fired by Fuel Oil.
(vi) Subject to Section 6.08, PECO may submit Energy Requests
requiring each Unit to be switched from Natural Gas Operation to
Oil-Fired Operation, at PECO's discretion PROVIDED THAT any such Energy
Request shall be consistent with the constraint that for each Unit at
Minimum Load to switch from Natural Gas Operation to Oil-Fired
Operation and achieve Minimum Load requires 15 minutes and produces 15
MWh and for each Unit at Minimum Load to switch from Oil-Fired
Operation to Natural Gas Operation and achieve Minimum Load requires 20
minutes and produces 17 MWh. . PECO may request a Fuel switch on one or
more Generating Units, up to the number of Generating Units on-line.
(vii) PECO will submit an Energy Request to Tenaska for any
hour during which a Unit or Units is being Shutdown which allows each
such Unit to produce an amount of energy at least equal to 60 MWh
during Shutdown of that Unit. Tenaska will satisfy all such Energy
Requests within the applicable time frame, but decreases in energy
during the time allowed need not be on a straight line or proportional
basis.
(viii) The Plant will be able to ramp energy output upwards to
an amount equal to the product of Unit Capacity multiplied by the
number of Generating Units on-line and downwards to an amount equal to
the product of Minimum Load multiplied by the number of Generating
Units on-line at a rate of 10 MW/minute multiplied by the number of
Generating Units on-line.
(ix) When operating between an amount equal to the product of
Minimum Load multiplied by the number of Generating Units on-line plus
5 MW and an amount equal to the product of Unit Capacity multiplied by
the number of Generating Units on-line minus 5 MW, the Plant will be
able to provide net AGC in the amount of 5 MW/minute multiplied by the
number of Generating Units on-line.
(b) Except for the portion of an Energy Request subject to AGC, each
Energy Request shall continue in force throughout the hour in which the Energy
Request is applicable until PECO communicates a modification to the Energy
Request via phone or telefax or until ordered to reduce or increase the
Requested Energy pursuant to the Interconnection Agreement with the Local
Utility, PROVIDED HOWEVER, that any such modification or order must provide
Tenaska with sufficient notice for the Plant to respond to such modification
within the Plant operating parameters provided in Sections 6.08 and 6.09 hereof.
If, for any hour, PECO does not submit an Energy Request, the Energy Request for
such hour shall be deemed to be 0 MW.
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PECO shall work on a good faith basis to inform the Plant operators of
anticipated hourly deviations from previously submitted Energy Requests. Tenaska
shall work on a good faith basis to inform PECO via phone or telefax of
anticipated deviations from the Availability Schedule previously provided to
PECO.
(c) PECO and Tenaska will work together prior to Commercial Operation
to develop reliable telephone dispatch procedures for intra-day scheduling which
will ensure that telephone dispatch notices are not given by or on behalf of
PECO without proper authorization. Tenaska is entitled to rely upon telephone
dispatch orders which it believes in good faith to have been properly authorized
by PECO, and any such telephone dispatch order shall constitute an Energy
Request.
(d) PECO will not request energy (1) for which it does not arrange for
transmission service, from the applicable Point of Delivery, (2) during any
Scheduled Outage, at a level greater than the capacity level designated by
Tenaska in the notice of such Scheduled Outage, (3) during any Generating Unit
start-up or Shutdown, at a level inconsistent with the applicable output for
such Unit as specified in Section 6.09(a)(iv) or Section 6.09(a)(vii), (4) at a
level below the Minimum Load as determined in accordance with Section
6.09(a)(v), Section 6.09(a)(vi), or Section 6.09(a)(ix) except for Energy
Requests for 0MW and Energy Requests during any Unit start up or Shutdown, or
(5) at a level greater than the Current Contract Capacity. AGC requests shall be
in accordance with Section 6.09(a)(ix).
(e) If PECO makes an Energy Request that is not in compliance with
criteria set forth in Sections 6.08 and 6.09 of this Agreement, (a
"Non-Conforming Energy Request"), Tenaska shall inform PECO promptly after it is
actually aware that an Energy Request is a Non-Conforming Energy Request, and
shall provide PECO with a specific change to the Non-Conforming Energy Request
which would allow it to be in compliance with Sections 6.08 and 6.09. Pending
receipt of a new Energy Request from PECO, Tenaska may in good faith deliver
energy up to the amount of Non-Conforming Energy Request (plus the Energy
Delivery Tolerance), but shall not be penalized in the availability calculation
or suffer any other penalty under this Agreement if, in attempting to comply
with the Non-Conforming Energy Request, Tenaska causes Delivered Energy to
exceed the Energy Request by more than the Energy Delivery Tolerance, or if
Delivered Energy is less than the Energy Request by more than the Energy
Delivery Tolerance. PECO's submission of an Energy Request which is a
Non-Conforming Energy Request, shall not be a material default by PECO.
Section 6.10 DELIVERY OF POWER. (a) Subject to the provisions of this
Section 6.10, Tenaska shall sell all of the Contract Capacity and sell and
deliver all of the energy generated by the Plant during the Operating Term, net
of that required for operation of the Plant, to PECO at the Point of Delivery,
and PECO shall accept and purchase from Tenaska Contract Capacity and Delivered
Energy; provided, however, PECO shall not be required to accept and purchase any
energy that is not delivered pursuant to an Energy Request or within the Energy
Delivery Tolerance of an Energy Request.
(b) Notwithstanding PECO's right to be the exclusive recipient of
capacity and energy for the Plant, at any time when an event of default by PECO
under Section 14.01(b)(i) of this Agreement has occurred and is continuing,
Tenaska may enter into (and then perform)
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agreements with terms of up to thirty days to sell capacity and/or energy to
other parties, and with the Net Revenue from such sales credited against amounts
payable by PECO to Tenaska under this Agreement. Tenaska shall be excused from
responding to any Energy Request to the extent that it is not able to comply
therewith due to its permitted sales to third parties under this section, and
for purposes of calculating Availability Percentages shall be deemed to have
delivered Delivered Energy equal to Summer Potential or Non-Summer Potential, as
applicable, during such period. In such event, PECO shall use good faith efforts
not to block transmission of energy to such third parties.
(c) Tenaska shall not be required to generate power in violation of
Applicable Law or in contravention of Prudent Utility Practice, or at a level in
excess of that which PECO or the applicable Local Utility can prudently receive
as a result of any prohibition or limitation of PECO's or the applicable Local
Utility's ability to receive such power, whether as a result of Force Majeure or
otherwise.
Section 6.11 REPLACEMENT ENERGY. (a) If the Plant cannot fulfill an
Energy Request due to a Forced Outage, Tenaska shall have the right to request
PECO to accept and purchase capacity and energy from sources other than the
Plant and at Points of Delivery other than the Primary Point of Delivery
("Replacement Energy") with at least six hours prior notice, subject to clauses
(i) through (v) of this Section 6.11.
(i) Tenaska's proposal to deliver Replacement Energy shall
include the amount of energy to be delivered; the duration that
Replacement Energy will be provided, up to the duration of the Forced
Outage; the source of the Replacement Energy; a representation that the
Replacement Energy cannot be recalled by a third party and cannot be
claimed by a third party as being the energy component of a separate
capacity purchase arrangement. Unless otherwise mutually agreed to by
the Parties, Replacement Energy will be deemed to be Delivered Energy
as if it were delivered from the Plant under this Agreement.
(ii) PECO will be responsible for arranging transmission from
the Replacement Energy source to PECO's customer unless Tenaska offers
the use of transmission rights controlled by Tenaska which PECO agrees
to use, and which require Tenaska as transmission purchaser to provide
scheduling information to affected control area operators.
(iii) PECO may decline to receive Replacement Energy by
providing two hours prior notice to Tenaska, and Tenaska will not
receive credit under the calculation of Availability Percentages (A) if
PECO's customer or an affected control area operator is unwilling to,
and is not required to, accept a source change pursuant to the
agreement between PECO and such customer or such control area operator;
(B) if necessary scheduling and documentary notifications for the
schedule change cannot reasonably be completed in a timely manner; (C)
if the amount of the Replacement Energy is less than 50 MW; or (D) if
delivery of Replacement Energy to PECO's customers uses a less reliable
transmission delivery path than the transmission of energy from the
Plant and Tenaska has not agreed to compensate PECO for transmission
interruptions which PECO would not have incurred for energy deliveries
from the Plant. PECO may also decline to
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receive Replacement Energy by providing as much prior notice as is
practicable, (which in any event shall not be less than 2 hours) to
Tenaska if PECO determines that Replacement Energy is less economic
than another source of energy available to PECO. If PECO declines to
receive Replacement Energy for economic reasons, Tenaska will receive
credit under the calculation of Availability Percentages in an amount
equal to the amount of Replacement Energy offered by Tenaska to PECO.
(iv) PECO may terminate receipt of Replacement Energy from a
particular source during a Month if such deliveries are interrupted
during such Month and PECO determines in good faith that the source of
generation or transmission of such Replacement Energy is not as
reliable as alternate energy sources that PECO would use as a
replacement for energy deliveries from the Plant.
(v) PECO shall pay Tenaska for Replacement Energy pursuant to
Section 8.12.
(b) Any sales of capacity or energy from the Plant that are above
Contract Capacity shall be at prices and on terms mutually agreed between the
Parties, PROVIDED THAT if the Parties do not agree on terms for such sales,
Tenaska may not sell such capacity or energy to itself, to its Affiliates or to
third parties.
Section 6.12 DISPATCH. (a) Unless otherwise directed by PECO pursuant
to Section 6.12(b), Tenaska shall dispatch available Generating Units to respond
to Energy Requests on a substantially proportional basis, such that if PECO
requests 850 MW, and six (6) Generating Units are available, Tenaska shall
dispatch all six Generating Units at approximately 142 MW each. Notwithstanding
the foregoing, Tenaska may choose to dispatch the Generating Units in a
different manner, PROVIDED THAT Tenaska shall still be required to deliver the
amount of energy specified in PECO's Energy Request with any deviation from such
Energy Request to be addressed pursuant to Section 7.01, and Tenaska shall be
limited to the Start Charges that would have applied if Tenaska did dispatch the
Generating Units in the manner contemplated by this Section 6.12(a).
(b) PECO shall have the right to direct Tenaska to dispatch Generating
Units individually from time to time (but without having the right to designate
which specific Unit is to be started) and all Generating Units that are not
dispatched individually shall be dispatched on a proportional basis to respond
to any Energy Requests. Notwithstanding the foregoing, Tenaska may choose to
dispatch the Generating Units other than as directed by PECO above, PROVIDED
THAT Tenaska shall then be held to the Availability Percentage calculations, and
shall be limited to the Start Charges that would have applied if Tenaska had
dispatched the Generating Units in the manner contemplated by this Section
6.12(b).
Section 6.13 AUTOMATIC GENERATION CONTROL. (a) At least six (6) months
prior to the Scheduled Date of Commercial Operation for the Initial Units, PECO
will designate two applicable control areas from which AGC signals will be
received.
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(b) If PECO wishes to add control areas from which Tenaska will accept
receipt of AGC signals, PECO will provide at least six months notice of such
additional control areas and pay the reasonable costs, if any, associated with
such additions.
(c) If PECO wishes to change a control area from which Tenaska will
accept AGC signals, PECO will provide at least six months notice of such change.
Tenaska will accommodate up to eight such changes during the Operating Term at
no charge if the changed control area communicates with the Plant control system
via a dedicated telephone line(s). If a PECO-selected control area requires
another type of communication link (e.g. microwave, fiber optic or power line
carrier) or if PECO requests more than eight control area changes during the
Operating Term, PECO will pay the costs associated with the other type of
communication link or associated with changes in excess of eight during the
Operating Term.
(d) The integrated net effect of AGC during an hour will be treated as
an Energy Request and subject to all limitations that otherwise apply to Energy
Requests except for notice procedures.
Section 6.14 ESTIMATED FUEL EFFICIENCY. Tenaska shall notify PECO
whenever Tenaska expects the actual heat rate to deviate significantly from the
normal heat rate over one or more following Days as a result of an equipment
failure, malfunction or repair, with such notice to be provided to PECO as
promptly as possible, but in no event later than two hours after the equipment
malfunction, failure or repair in question.
Section 6.15 UNIT STARTS. (a) Subject to this Section 6.15, PECO will
incur a Start or Starts for each Energy Request which requires a Generating Unit
not currently on-line to be started-up to meet the Energy Request. In no event
will the number of Starts incurred by PECO for an Energy Request exceed the
number of Starts provided in the following:
[GRAPHIC OMITTED]
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(b) PECO will not incur a Start for a Generating Unit which trips
within four (4) hours after a Start provided that the Energy Request requiring
such Start exceeds four (4) consecutive hours.
(c) PECO may incur one less Start for an Energy Request than provided
in Section 6.09(a) if ambient conditions at the time of the Energy Request allow
each Unit to produce a sufficient amount of energy in excess of Unit Capacity
for the operating Generating Units to satisfy such Energy Request without
starting an additional Generating Unit.
(d) Notwithstanding anything contained herein to the contrary, PECO
shall not be liable to Tenaska for Starts that would not have occurred but for
Tenaska's failure to operate the Plant in accordance with the provisions of this
Agreement and Prudent Utility Practice.
(e) Energy Requests that require a Start or Shutdown for a Generating
Unit will become effective at the quarter hour point immediately following
Tenaska's receipt of such request. For example if PECO issues an Energy Request
at 20 minutes past the top of an hour which requires the Start of a Generating
Unit, Tenaska will implement the Start of the Generating Unit at 30 minutes past
the hour.
(f) If Tenaska is delivering Replacement Energy, Start Charges shall be
payable by PECO as if the Delivered Energy were sourced from the Plant.
(g) In the case of short term increases and decreases in Energy
Requests, PECO shall have the right to request that Tenaska not make a Start (or
that it not stop such Generating Unit, as the case may be), and Tenaska shall
comply with such request if it is reasonably able to do so, having due regard
for manufacturers' warranties and other contractual obligations, the
requirements or guidance of governmental agencies of competent jurisdiction, and
requirements of insurers, and if PECO undertakes to pay any incremental Fuel
costs of operating in a less efficient mode during such short term period. If a
response to AGC signal(s) would require a Shutdown or a Start of an additional
Unit, Tenaska shall use good faith efforts to contact PECO to determine whether
PECO desires the additional Unit to be Shutdown or started or wishes to override
such signal and not Shutdown or Start the Unit. Pending a response from PECO,
the Energy Request shall be deemed to be reduced or increased, as the case may
be, to the Energy Request that can be in effect without resulting in a Start or
a Shutdown, as the case may be.
ARTICLE VII
AVAILABILITY DETERMINATIONS
Section 7.01 DETERMINATION OF HOURLY AVAILABLITY INPUTS. The Parties
shall calculate Availability Percentages by determining inputs on an hourly
basis pursuant to this Section 7.01.
(a) For each Contract Year, Required Potential shall be an amount of
energy (in MWh) which shall equal (i) during each Summer Peak Hour, Contract
Capacity, and (ii) during each Non-Summer Peak Hour, the product of (A) Unit
Capacity in that Contract Year and (B) the number of Generating Units on the
Unit Call Schedule for such hour.
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(b) For each hour of each Contract Year, the inputs to availability
calculations shall be Hourly Output and Hourly Potential. These amounts (each in
MWh) shall be determined for each hour by categorizing such hour into one of the
following categories:
(i) If (A) Delivered Energy during such hour varies above or
below the Hourly Energy Request by more than the Energy Delivery
Tolerance and (B) the Plant delivers 0 MWh to the Primary Point of
Delivery during the immediately preceding hour, Hourly Output shall
equal Delivered Energy and Hourly Potential shall equal the Hourly
Energy Request.
(ii) If (A) Delivered Energy for such hour varies above or
below the Hourly Energy Request by an amount equal to or less than the
Energy Delivery Tolerance and (B) the Plant produced 0 MWh during the
immediately preceding hour, Hourly Output and Hourly Potential shall
both equal Required Potential.
(iii) If (A) Delivered Energy for such hour varies above or
below the Hourly Energy Request by more than the Energy Delivery
Tolerance and (B) the Plant is reduced to 0 MW during such hour
pursuant to an Energy Request, Hourly Output shall equal Delivered
Energy and Hourly Potential shall equal the Hourly Energy Request for
such hour.
(iv) If (A) Delivered Energy for such hour varies above or
below the Hourly Energy Request by less than the Energy Delivery
Tolerance and (B) the Plant is reduced to 0 MW during such hour
pursuant to an Energy Request, Hourly Output and Hourly Potential shall
both equal the Hourly Energy Request for such hour.
(v) If (A) Delivered Energy for such hour varies above or
below the Hourly Energy Request by more than the Energy Delivery
Tolerance and (B) the Plant produced more than 0 MWh during the
immediately preceding hour, Hourly Output shall equal Delivered Energy
and Hourly Potential shall equal Required Potential.
(vi) If (A) Delivered Energy for such hour varies above or
below the Hourly Energy Request by an amount equal to or less than the
Energy Delivery Tolerance, and (B) the Plant produced more than 0 MWh
during the immediately preceding hour, Hourly Output and Hourly
Potential shall equal Required Potential.
(vii) If (A) the Hourly Energy Request for an hour is 0 MW but
(B) Delivered Energy is equal to or greater than 1 MWh, Hourly Output
shall be 0 MWh and Hourly Potential shall equal Required Potential.
(viii) If (A) the Hourly Energy Request for an hour is 0 MW
and (B) Delivered Energy is 0 MWh, Hourly Output and Hourly Potential
shall equal Required Potential.
(ix) If (A) the Hourly Energy Request for an hour is greater
than 0 MWh but (B) the ability to deliver or consume Fuel to or at the
Plant is prohibited due to an Emergency Fuel Curtailment, Hourly Output
and Hourly Potential shall equal Delivered
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Energy. If 0 MWh of energy can be delivered due to an Emergency Fuel
Curtailment, the hour will not be included in calculating Availability
Percentages pursuant to Section 7.02.
(x) If for a Contract Year PECO elects Peak Availability
Option #1 and then requests less than the number of Unit Hours of
energy that it is entitled to request from Units required to be on the
Unit Call Schedule pursuant to Section 6.01(b) during Non-Summer Months
of such Contract Year ("Maximum Available Energy Hours"), the
difference between the Maximum Available Energy Hours (expressed in
MWhs) and the number of actual MWhs requested by PECO in such
Non-Summer Peak Hours of the Non-Summer Months shall be credited to
Tenaska at full Contract Capacity for the purpose of calculating the
Annual Availability Adjustment.
(c) If PECO submits a Non-Conforming Energy Request and PECO does not
amend such Non-Conforming Energy Request pursuant to a notification by Tenaska
under Section 6.09(e), the Plant's performance during such hour shall be
considered to be within the parameters of Section 7.01(b)(vi), and Hourly Output
and Hourly Potential for such hour shall equal Required Potential.
(d) If the Plant is starting up from 0 MW output and PECO fails to
deliver energy necessary to start Generating Units pursuant to Section 6.06,
Delivered Energy shall equal PECO's Energy Request for such portion of the hour
until startup power is delivered. If the Plant is starting up from 0 MW output
and Tenaska is unable to accept delivery of startup power at the Plant,
Delivered Energy shall equal 0 MW for such portion of the hour until startup
power is received.
(e) For any hour in which the Plant is not able to fulfill an Energy
Request as a result of PECO's failure, for reasons of Force Majeure or
otherwise, to deliver Natural Gas at the Gas Delivery Point in sufficient
quantities and at a sufficient pressure to meet the Plant's requirements as it
may be operated in accordance with this Agreement and (i) PECO elects not to
fire Fuel Oil at the Plant if Natural Gas supplies are insufficient or
interrupted, or (ii) PECO fails, for reasons of Force Majeure or otherwise, to
timely procure Fuel Oil or deliver Fuel Oil in sufficient quantities and at a
sufficient rate to meet the Plant's requirements as it may be operated in
accordance with this Agreement, Delivered Energy during such hour will be deemed
to be equal to Requested Energy for the purposes of calculating the Availability
Percentages, unless such Generating Unit incurred a Forced Outage prior to
interruption of Fuel deliveries and would not be available if the Fuel were
available.
(f) For any hour in which the Plant is (i) not able to fulfill an
Energy Request due to a curtailment or reduction of transmission from the
Primary Point of Delivery by an entity directly operating or controlling the
transmission facilities (including the Wansley-Fortson 500kV transmission line)
interconnected with the Interconnection Facilities at the Primary Point of
Delivery, and (ii) such curtailment or reduction is not due to Tenaska's failure
to operate and maintain or to cause the operation and maintenance of the Plant
in accordance with either the Interconnection Agreement, this Agreement, or
Prudent Utility Practice, then Tenaska will be credited in the calculation of
Delivered Energy under this Section 7.01 for the curtailment or reduction;
provided, however, that the amount of such credit shall not exceed the lesser of
(A) the product of (1) Unit Capacity and (2) the number of Units on the
Availability Schedule for
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such hour or (B) Delivered Energy during the hour preceding the curtailment or
reduction if Delivered Energy during such hour was lower than the Hourly Energy
Request less the Energy Delivery Tolerance unless, in the case of a transmission
curtailment or reduction that extends beyond the end of the day in which such
curtailment or reduction begins, the condition that resulted in such shortfall
in Delivered Energy has been remedied.
Section 7.02 COMPUTATION OF AVAILABILITY PERCENTAGES. (a) Summer
Availability Percentage shall be calculated at the end of the Summer Months of
each Contract Year and shall equal the quotient of Summer Output divided by
Summer Potential.
(i) Summer Output shall equal the sum of Hourly Output for all
Summer Peak Hours.
(ii) Summer Potential shall equal the sum of Hourly Potential
for all Summer Peak Hours.
(b) Annual Availability Percentage shall be calculated at the end of
each Contract Year and shall equal the quotient of (i) Annual Output divided by
(ii) Annual Potential.
(i) Annual Output shall equal the sum of Summer Output and
Non-Summer Output. For each Contract Year, Non-Summer Output shall
equal the sum of Hourly Output for all Non-Summer Peak Hours.
(ii) Annual Potential shall equal the sum of Summer Potential
and Non-Summer Potential. Non-Summer Potential shall equal the sum of
Hourly Potential for all Non-Summer Peak Hours.
Section 7.03 AVAILABILITY STANDARDS. Tenaska shall endeavor in good
faith to cause the Plant to achieve a Summer Availability Percentage of at least
97% during the Summer Months of each Contract Year, and an Annual Availability
Percentage of at least 97% during all Months of each Contract Year.
(a) PECO shall compensate Tenaska for achieving Summer Availability
Percentage in excess of 97% as provided in Section 8.07.
(b) Tenaska shall compensate PECO for failing to achieve a Summer
Availability Percentage and/or an Annual Availability Percentage of 97% as
provided in Section 8.08.
ARTICLE VIII
PAYMENTS
Section 8.01 MONTHLY PAYMENTS. PECO shall pay Tenaska monthly for
capacity and energy in accordance with the provisions of this Article VIII.
Section 8.02 RESERVATION PAYMENTS. PECO shall, during the Operating
Term, make monthly Reservation Payments to Tenaska in accordance with the
provisions of Section 9.02 of
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this Agreement in an amount equal to the product of (i) the number of Generating
Units that have achieved Commercial Operation, (ii) Unit Capacity, (iii) the
Reservation Rate measured in dollars per kilowatt month applicable for such
Contract Year as set forth in EXHIBIT 8.02, and (iv) 1000. If any Generating
Unit achieves Commercial Operation on any Day after June 1 of the applicable
Start Year, the Reservation Payment with respect to such Unit for that Month
shall be prorated to reflect the number of days in such Month that the Unit is
in Commercial Operation.
Section 8.03 ENERGY PAYMENTS. (a) During the Operating Term, PECO shall
make Energy Payments to Tenaska in accordance with the provisions of Section
9.01 of this Agreement in an amount equal to the sum of the Fuel Oil Energy
Payment, the Natural Gas Energy Payment and the Replacement Energy Payment. If,
during any hour, both Fuel Oil and Natural Gas are combusted in any Unit, the
Fuel Oil Energy Rate shall be applied to such hour for such Unit if, Fuel Oil,
represents 50% or more of the Fuel (calculated on a Btu basis) so consumed by
the Unit; otherwise the Gas Energy Rate shall apply to such Unit for such hour.
(i) The Fuel Oil Energy Payment shall equal for each Month the
product of (i) the total amount of Delivered Energy received by PECO
during that month to the extent that such Delivered Energy was
generated by Generating Units fired by Fuel Oil and (ii) the Fuel Oil
Energy Rate applicable for that Contract Year, as set forth in EXHIBIT
8.03.
(ii) The Natural Gas Energy Payment shall equal for each Month
the product of (i) the total amount of Delivered Energy received by
PECO during that month to the extent that such Delivered Energy was
generated by Generating Units fired by Natural Gas or as Replacement
Energy and (ii) the Gas Energy Rate applicable for that Contract Year,
as set forth in EXHIBIT 8.03.
(b) The Replacement Energy Payment shall equal for each month the
aggregate Replacement Fuel Cost for all days in such month.
(i) An Excess Run Time Payment shall apply to each Unit which
pursuant to an Energy Request (A) delivers energy for longer than 16
consecutive hours immediately following the Start of such Unit, and (B)
is fired in whole or in part with Natural Gas during the whole period
following such Start. The Excess Run Time following each Unit Start
shall be the number of consecutive hours in excess of sixteen that such
Unit delivered energy before being Shutdown. The Excess Run Time
Payment under this Section 8.03(b)(i) shall equal the sum for all Units
of the product for each Unit of (i) the Delivered Energy produced
during each Excess Run Time and (ii) $2.00/MWh. For example, if an
Energy Request for 600 MWh begins at the hour ending 06:00 on a day and
remains unchanged until an Energy Request reduces the Units on-line to
0MW at hour 00:00 (midnight), the Excess Run Time would be 2 hours,
with 600 MWh of Delivered Energy during each hour, or 1200 MWh, times
$2.00/MWh. ends at hour 00:00 (midnight) for 600 MWh's, the Excess Run
Time would be 2 hours at 600 MWhs or 1200 MWhs times $2.00/MWh.
(ii) An Excess Run Time Payment shall apply to each Unit which
pursuant to an Energy Request (A) delivers energy for longer than 13
consecutive hours
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immediately following the Start of such Unit, and (B) is fired only
with Fuel Oil during the period following such Start. The Excess Run
Time following each Unit Start shall be the number of consecutive hours
in excess of thirteen that such Unit delivered energy before being
Shutdown. The Excess Run Time Payment under this Section 8.03(b)(ii)
shall equal the sum for all Units of the product for each Unit of (i)
the Delivered Energy produced during each Excess Run Time and (ii)
$3.00/MWh. For example, if an Energy Request for 600 MWh begins at hour
ending 06:00 on a day and remains unchanged until an Energy Request
reduces the Units on-line to 0 MW at hour 00:00 (midnight), the Excess
Run Time would be 5 hours, with at 600 MWh of Delivered Energy during
each hour, or 3000 MWh, times $3.00/MWh.
(c) Except in the case of Replacement Energy, Energy Payments will not
include a charge for Fuel because Tenaska is not charged for such Fuel by PECO.
Section 8.04 START CHARGES. (a) During the Operating Term, PECO shall
pay Start Charges to Tenaska, in accordance with Section 9.01(a)(viii) herein,
in an amount equal to the product of (i) the number of Starts incurred by PECO
during the month pursuant to Section 6.15 and (ii) the Start Charges for the
Contract Year in which the month occurs, as set forth in this Section 8.04.
(b) PECO shall incur a Start Charge of $11,000 for each Start during
the first Contract Year, with such amount to escalate by 3% on the first Day of
each subsequent Contract Year.
Section 8.05 STANDBY MODE CHARGE. PECO shall, during the Operating
Term, pay monthly the Standby Mode Charge pursuant to Section 6.04(d) to Tenaska
in accordance with the provisions of Section 9.02.
Section 8.06 START UP POWER COST. Tenaska shall, during the Operating
Term, reimburse PECO in accordance with Section 6.06(b) as and when sums are due
under such Section.
Section 8.07 AVAILABILITY INCENTIVE PAYMENT. If the Summer Availability
Percentage exceeds 97%, PECO at the end of the Summer Months shall owe to
Tenaska (the "AVAILABILITY INCENTIVE PAYMENT"), to be determined as follows:
(a) PECO shall calculate and include in the Accrued Availability
Adjustment Statement of each Contract Year, (i) a list of the five (5) Days
during the immediately preceding Summer Period with the highest On-Peak Energy
Prices for such period, and (ii) the Plant's Peak Days Availability. The Peak
Days Availability shall equal (A) the sum of all Hourly Output results for the
Summer Peak Hours during the five highest-price Days divided by (B) the sum of
all Hourly Potential results for the Summer Peak Hours during such Days.
(b) If the Summer Availability Percentage exceeds 97% but the Peak Days
Availability is less than 99%, the Availability Incentive Payment shall equal
the product of (A) the positive difference between the Summer Availability
Percentage and 97% up to a maximum of 3%, (B) 100, and (C) $150,000.
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(c) If the Summer Availability Percentage exceeds 97% and the Peak Days
Availability is 99% or greater, the Availability Incentive Payment shall equal
the product (A) the positive difference between the Summer Availability
Percentage and 97% up to a maximum of 3%, (B) 100, and (C) $500,000.
Section 8.08 AVAILABILITY ADJUSTMENTS. (a) The Tier 1 Availability
Factor for each Contract Year shall equal the product of (i) 0.0334, (ii) the
average monthly Reservation Payment for that Contract Year, and (iii) 12. The
Tier 2 Availability Factor for each Contract Year shall equal the product of (i)
0.00432, (ii) the average monthly Reservation Payment for that Contract Year,
and (iii) 12. For example for purposes of calculating average monthly
Reservation Payment, if two Units (each with a Unit Capacity of 150 MW) achieve
Commercial Operation on June 1, 2001 and a third Unit (with a Unit Capacity of
150 MW) achieves Commercial Operation on July 15, 2001, the average monthly
Reservation Payment for purposes of this Section 8.08(a) would be: ((2 Units x
150 MW/unit x12 months x 1000 kW/MW x $3.50/kw-month) + ( 1 Unit x 150 MW/unit x
10.5 months x 1000kW/MW x $3.50/kw-month))/12 = $1,509,375.
(b) The Summer Availability Percentage shall be calculated at the end
of the Summer Months of each Contract Year. If the Summer Availability
Percentage is less than 87.0%, Tenaska shall owe PECO a Summer Availability
Adjustment equal to the product of (i) the positive difference between 97% and
the Summer Availability Percentage, (ii) 100, and (iii) the Tier 1 Availability
Factor in that Contract Year. Subject to Section 8.09 herein, Tenaska shall make
payment of such Summer Availability Adjustment by offsetting all amounts payable
by PECO to Tenaska during subsequent Months until the amount offset equals the
Summer Availability Adjustment but not to exceed the Tier 1 Availability
Adjustment.
(c) The Annual Availability Percentage shall be calculated at the end
of each Contract Year. If the Annual Availability Percentage is less than 97.0%
but greater than 76.9%, Tenaska shall owe PECO an Annual Availability Adjustment
equal to the product of (i) the positive difference between 97.0% and the Annual
Availability Percentage, (ii) 100, and (iii) the Tier 1 Availability Factor for
that Contract Year.
(d) If the Annual Availability Percentage is less than or equal to
76.9%, Tenaska shall owe PECO an Annual Availability Adjustment equal to the sum
of the Tier 1 Availability Adjustment and the Tier 2 Availability Adjustment.
(i) The Tier 1 Availability Adjustment shall equal the product
of (i) the Tier 1 Availability Factor for that Contract Year and (ii)
20.
(ii) The Tier 2 Availability Adjustment shall equal the
product of (a) the positive difference between 77.0 % and Annual
Availability, (b) 100, and (c) the Tier 2 Availability Factor for that
Contract Year.
(iii)The Annual Availability Adjustment for any Contract Year
shall not exceed the product of (i) the monthly Reservation Payment and
(ii) 12.
Section 8.09 PAYMENT OF AVAILABILITY ADJUSTMENT AMOUNTS. (a) At the end
of the Summer Months of each Contract Year, PECO shall calculate the "Accrued
Availability
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Adjustment", which shall equal (i) at the end of the Summer Months of the first
Contract Year, the Summer Availability Adjustment, and (ii) for all other
Contract Years, the sum of Annual Availability Adjustments incurred by Tenaska
in prior Contract Years which have not been fully rebated to PECO, and any
Summer Availability Adjustment owed to PECO pursuant to Section 8.08 or.
(b) Tenaska shall make Availability Adjustment payments to PECO at the
end of the Summer Months of each Contract Year as follows:
(i) If the Accrued Availability Adjustment set forth in the
Accrued Availability Adjustment Statement is less than the available
amount of the Acceptable Credit Support provided by Tenaska in an
amount equal to the amounts detailed in Section 17.03(e)(i) and (ii),
Tenaska shall make payment of the Accrued Availability Adjustment by
offsetting all amounts payable by PECO to Tenaska during the
immediately following months until the amount offset equals the Accrued
Availability Adjustment.
(ii) If the Accrued Availability Adjustment set forth in the
Accrued Availability Adjustment Statement exceeds the available amount
of the Acceptable Credit Support, Tenaska shall pay to PECO an amount
equal to such excess over the available amount of the Acceptable Credit
Support by wire transfer in immediately available funds within twenty
(20) days of receiving such statement from PECO. Payment of the
remaining Accrued Availability Adjustment will be made by offsetting
all amounts payable by PECO to Tenaska during subsequent months, until
the amount of payments and offsets by Tenaska equals the Accrued
Availability Adjustment.
(c) The Parties shall make Availability Adjustment payments to each
other at the end of each Contract Year as follows:
(i) If the Summer Availability Adjustment exceeds the Annual
Availability Adjustment, and there is no Accrued Availability
Adjustment outstanding which has not been rebated to PECO, PECO shall
make payment of such difference to Tenaska by wire transfer in
immediately available funds within twenty (20) days of the end of a
Contract Year.
(ii) If the Annual Availability Adjustment exceeds the Summer
Availability Adjustment, Tenaska shall make payment to PECO of such
difference by offsetting all amounts payable by PECO to Tenaska during
succeeding months of the next Contract Year until the amount of such
offsets equals the Annual Availability Adjustment; provided, however,
that any Availability Adjustment payable to PECO at the end of the
Operating Term shall be paid by wire transfer in immediately available
funds within twenty (20) days of the end of such Operating Term.
(d) Failure by Tenaska to make timely payment pursuant to Section
8.09(b) or (c) will entitle PECO to draw upon the Acceptable Credit Support. If
Tenaska fails to make timely payment and PECO draws upon the Acceptable Credit
Support, Tenaska will be required
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to post Replacement Acceptable Credit Support within fifteen (15) days. Failure
to post Replacement Acceptable Credit Support will be a monetary default by
Tenaska.
Section 8.10 EFFICIENCY ADJUSTMENT. (a) As both Parties' exclusive
recourse for the Plant achieving a worse than expected heat rate or a better
than expected heat rate, for each Contract Year in which the Plant is operated
during the Summer Months at Base Unit Output for at least 2000 Unit Hours, the
Parties will make a Fuel Adjustment Payment, to be calculated and paid as
follows:
(i) The Summer Months Base Heat Rate shall be expressed in MM
BTU/MWh and shall equal for all hours of Base Unit Output, the quotient
of (i) the total amount of Natural Gas consumed by the Plant during
such hours (as measured by the Metering Equipment and expressed in MM
BTU) divided by (ii) the total amount of Delivered Energy during such
hours (as measured by the Metering Equipment and expressed in MWh).
(ii) If the Summer Months Base Heat Rate is greater than 10.8
MM BTU/MWh and less than 11.3 MM BTU/MWh, neither Party shall owe the
other Party a Fuel Adjustment Payment for such Contract Year.
(iii) If the Summer Months Base Heat Rate is greater than 11.3
MM BTu/MWh, Tenaska shall make a Fuel Adjustment Payment to PECO in an
amount equal to the sum of the products for each Day in such Contract
Year of (A) the Daily Index Citation for such Day in $/MMBtu, times (B)
the positive difference between the Summer Months Base Heat Rate and
11.3 MM Btu/MWh times (C) the Delivered Energy during such Day.
(iv) If the Summer Months Base Heat Rate is less than 10.8 MM
BTu/MWh, PECO shall make a Fuel Adjustment Payment to Tenaska in an
amount equal to the sum of the products for each Day in such Contract
Year of (A) the Daily Index Citation for such Day in $/MMBtu, times (B)
the positive difference between 10.8 MM BTU/MWh and the Summer Months
Base Heat Rate, times (C) the Delivered Energy during such Day.
(b) Any amount payable for a Contract Year pursuant to this Section
8.10 shall be invoiced with the amounts due for the last month for such Contract
Year. Failure by Tenaska to make timely payment of a Fuel Adjustment Payment
pursuant to Section 8.10 will entitle PECO to draw upon the Acceptable Credit
Support. If Tenaska fails to make timely payment and PECO draws upon the
Acceptable Credit Support, Tenaska will be required to post Replacement
Acceptable Credit Support within fifteen (15) days. Failure to post Replacement
Acceptable Credit Support will be a monetary default by Tenaska.
Section 8.11 FUEL TAX PAYMENTS. (a) The Parties shall make payments to
each other with respect to taxes imposed by the State of Georgia (or any
political subdivision thereof) on Fuel delivered to or consumed by the Plant in
accordance with this Section 8.
(b) Payments by PECO to Tenaska under this Section 8.11 shall be made
on a monthly basis pursuant to Section 9.02. Payments by Tenaska to PECO under
this Section 8.11
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shall be made on a monthly basis by offsetting any other amounts owed by PECO to
Tenaska under this Article VIII.
(c) If Tenaska is responsible for preparing, filing, and paying taxes
on Fuel delivered to or consumed by the Plant in a Month, PECO shall make a Fuel
Tax Payment to Tenaska equal to PECO's Fuel Tax Obligation for such Month, as
determined pursuant to Section 8.11(d). If PECO is responsible for preparing,
filing, and paying taxes on Fuel delivered to or consumed by the Plant, Tenaska
shall reimburse PECO for the positive difference between (i) the total amount of
such taxes imposed by the State of Georgia (or any political subdivision
thereof) on Fuel delivered to or consumed by the Plant payable for such Month as
shown due on such tax returns and (ii) PECO's Fuel Tax Obligation for such
Month; PROVIDED HOWEVER, that if such difference is negative, PECO shall make a
Fuel Tax Payment to Tenaska equal to such negative difference.
(d) PECO's Fuel Tax Obligation shall equal, for each Month, the Fuel
Tax Rate times the sum of the Gas Value and the Fuel Oil Value for such Month.
(i) Fuel Tax Rate for a month shall equal the sum of (A) 6%
and (B) one-half the difference between (1) the tax rate applicable to
sales and/or use tax on Fuel in Heard County, Georgia under the Tax
Statute and (2) 6%. If Fuel becomes exempt from the sales and use tax
under the Tax Statute, the Tax Rate shall be 3%. For illustration, if
the tax rate for Heard County, Georgia under the Tax Statute is 9%, the
Fuel Tax Rate shall be 6% + [1/2*(9%-6%)], or 7.5%, and if the tax rate
for Heard County, Georgia under the Tax Statute is 3%, the Fuel Tax
Rate shall be 6% + [1/2*(3%-6%)], or 4.5%.
(ii) The Gas Value for a Month shall equal the product of (A)
the volume of Natural Gas (measured in millions of cubic feet) which is
delivered to or consumed at the Plant in the applicable Month times (B)
the Daily Index Citation (measured in $/million cubic feet) or such
other price or value for such Natural Gas accepted or required by the
applicable taxing authority for the purpose of determining the sales
and use tax on the Fuel under the Tax Statute. For the purposes of this
Subsection 8.11(d)(ii)(A), the volume of Natural Gas delivered or
consumed by the Plant shall be deemed to include a notional volume of
Natural Gas associated with Replacement Energy delivered to PECO
pursuant to Section 6.11 during such Month, which notional volume of
Natural Gas shall equal, for a Month, the product of (x) the amount of
Replacement Energy (in MWh) delivered to PECO during such Month and (y)
11.1 million BTU/MWh.
(iii) The Fuel Oil Value for a Month shall equal the product
of (A) the volume of Fuel Oil (measured in Barrels) as delivered to or
consumed at the Plant in the applicable Month times (B) the value of
such Fuel Oil (measured in $/Barrel) as determined in accordance with
applicable Georgia tax law, rules and regulations or such other price
or value for such Fuel Oil accepted or required by the applicable
taxing authority for the purpose of determining the sales and use tax
on the Fuel under the Tax Statute.
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(e) Tenaska shall notify PECO in writing within a reasonable period of
time after it learns of any amendments to the Tax Statute introduced at a
session of the Georgia General Assembly, including but not limited to a repeal
in whole or in part of the Tax Statute, which would have the effect of changing
the 6% sales and use tax rate currently in effect in Heard County Georgia
Section 8.12 REPLACEMENT ENERGY PAYMENT. (a)PECO shall pay Tenaska
monthly in accordance with Section 9.02 for Replacement Energy delivered
pursuant to Section 6.11, in an amount equal to aggregate Replacement Energy
Payments for all Days in such Month.
(b) The Replacement Energy Payment for a Day shall equal the sum of (i)
Replacement Energy Cost for such Day and (ii) any Start Charges that PECO would
have incurred in accordance with Section 6.15 had the Replacement Energy been
delivered from the Plant in addition to Delivered Energy, if any, actually
delivered during such period, less (iii) any damages incurred by PECO to any
Fuel supplier(s) as a result of Tenaska's failure to fulfill an Energy Request
from the Plant which PECO is unable to mitigate with reasonable commercial
efforts. PECO will cooperate with Tenaska to provide good faith estimates of
such damages that would be incurred as a result of Tenaska's delivery of
Replacement Energy. PECO anticipates that such damages will not exceed the most
recently published charges under the Transco tariff for imbalance and/or
scheduling penalties in effect at such time.
(c) The Replacement Energy Cost for a Day shall be (in $/MWh) equal to
the product of (i) the total amount of Replacement Energy delivered during such
Day (in MWh) and (ii) the sum of (A) the Gas Energy Rate for such Day (in $/MWh)
and (B) the product of the Fully Loaded Gas Price (in $/million BTU) and 11.1
million BTU/MWh.
ARTICLE IX
BILLING AND PAYMENT
Section 9.01 CONFIRMATION OF AMOUNTS OWED. (a) Each Day on or before
11:00 a.m. EPT during the Operating Term, PECO shall provide a Daily
Confirmation Letter to Tenaska specifying, for the previous Day:
(i) The Requested Energy during each hour of such Day;
(ii) Delivered Energy during each hour of such Day from
Generating Units fired by Natural Gas;
(iii) Delivered Energy during each hour of such Day from
Generating Units fired by Fuel Oil;
(iv) Total Delivered Energy from the Plant during each hour of
such Day excluding Replacement Energy;
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(v) The total amount of Replacement Energy accepted by PECO
and delivered by Tenaska pursuant to Section 6.11, including the
applicable Replacement Fuel Cost for such Replacement Energy;
(vi) For each Day in a Summer Month, which hours, if any,
during such Day were Base Unit Output hours and for each such hour the
amount of energy produced by the Plant and the applicable Summer Months
Base Heat Rate;
(vii) [Reserved];
(viii) The number of Starts incurred by PECO pursuant to
Energy Requests during such Day;
(b) The information that is needed to calculate Annual Output and
Annual Potential for each hour of such Day.
(c) Tenaska shall counter-sign and return via facsimile or any manner
of delivery as may be agreed by the Parties an executed copy of each Daily
Confirmation Letter within two (2) Days of receipt if it agrees with information
contained in the Daily Confirmation Letter. If Tenaska in good faith disputes
the Daily Confirmation Letter, it shall provide a written response to PECO
within two (2) Days of receipt to PECO (i) describing the dispute and (ii)
providing any documentary evidence supporting Tenaska's position. PECO shall
provide Tenaska with a written response including documentary supporting
evidence within two (2) Days of receipt of such notice disputing the Daily
Confirmation Letter. The Parties shall endeavor in good faith to resolve such a
dispute within five (5) Days thereafter.
(d) The Daily Confirmation Letter and any communications under Section
9.01(b) shall constitute good faith exchanges of information but shall not
preclude either Party from disputing or correcting an error in the Monthly
Statement.
Section 9.02 MONTHLY STATEMENT. (a) Within ten (10) days after the end
of each Month, Tenaska shall deliver to PECO a Monthly Statement detailing:
(i) All amounts due from PECO to Tenaska under Article VIII
for such Month and all amounts due from Tenaska to PECO under Article
VIII;
(ii) The integrated amount of Requested Energy for each hour
of such Month;
(iii) The total amount of Delivered Energy produced by
Generating Units fired by Natural Gas during such Month;
(iv) The total amount of Delivered Energy produced by
Generating Units fired by Fuel Oil during such Month;
(v) The total amount of Delivered Energy from the Plant during
each hour of such Month excluding Replacement Energy accepted by PECO
and delivered by Tenaska pursuant to 6.11;
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(vi) The total amount of Replacement Energy during each hour
of such Month accepted by PECO and delivered by Tenaska pursuant to
Section 6.11, including for each such hour, the applicable amount of
Replacement Energy delivered and the Fully Loaded Daily Gas Price.
(vii) The number of Starts incurred by PECO pursuant to Energy
Requests during such Month; the amount of Natural Gas and Fuel Oil
actually consumed at the Plant during the Month and such other
necessary information for calculating the Fuel Efficiency Adjustment
Payment due pursuant to Section 8.10;
(viii) The total amount of Standby Mode Charges during such
Month pursuant to Section 6.04;
(ix) The total amount of the Excess Run Time Payment for such
Month pursuant to Section 8.03(b);
(x) For each Summer Month, the total number of Base Unit
Output Hours for such Month, and the aggregate Summer Months Base Heat
Rate during all such hours;
(xi) The total amount of Start up energy for such Month
pursuant to Section 6.06 and where possible detailing any amounts due
to PECO pursuant to Section 6.06(a) for such Month or the immediately
preceding Month.
(b) Within ten (10) days of receiving Tenaska's Monthly Statement, PECO
shall make payment by wire transfer in immediately available funds an amount
equal to (A) the amount due Tenaska from PECO as stated in the Monthly Statement
less (B) the amount due PECO from Tenaska as stated in the Monthly Statement
less (C) amounts which PECO, in good faith, disputes, with the total of such
disputed amounts subject to Section 9.04 herein. If the Monthly Statement shows
an amount due from Tenaska to PECO, payment shall, subject to Section 8.09, be
made by offsetting such amount against any amount owed by PECO to Tenaska.
Section 9.03 AVAILABILITY ADJUSTMENT STATEMENTS. (a) Within ten (10)
days of the end the Summer Months of each Contract Year, PECO shall provide an
Accrued Availability Adjustment Statement to Tenaska, determined pursuant to
Sections 8.08 and 8.09 and any Availability Incentive Payment determined
pursuant to Section 8.07. Tenaska and PECO shall make payment, as required, to
the other of the Accrued Availability Adjustment or Availability Incentive
Payment as provided in Sections 8.09 and 8.07 respectively.
(b) Within ten (10) days of the end of each Contract Year, PECO shall
provide an Annual Availability Adjustment Statement to Tenaska, determined
pursuant to Sections 8.08 and 8.09. Tenaska and PECO shall make payment as
required to the other of the Annual Availability Adjustment as provided in
Section 8.09.
Section 9.04 CORRECTIONS AND DISPUTES. (a) Billings and payments shall
be subject to correction for metering and billing errors for a period of two (2)
years.
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(b) If either Party disputes the correctness of a statement (including
any assertion of an offset not shown in such statement), the disputing Party
alleged to owe the disputed amount shall pay the disputed amount into an escrow
account established with a bank mutually agreed by both Parties and acceptable
to the Financial Institutions or, if Tenaska is the disputing party with respect
to an Accrued Availability Adjustment Statement or a Annual Availability
Adjustment Statement and, pursuant to Section 8.08 PECO is entitled to offset
its payment obligation against amounts becoming due from Tenaska, then PECO
shall deposit such offsetting amounts into escrow.
(c) In such cases, such disputes shall be resolved by arbitration in
accordance with the arbitration procedures of Section 18.13, PROVIDED THAT
disputes regarding amounts that can reasonably be expected to aggregate to more
than $7,500,000 on either a recurring or a non-recurring basis shall not be
subject to arbitration.
(d) The disputed amount, or the appropriate portion, together with any
interest earned thereon shall be transferred to, or credited to, the Party or
Parties in whose favor the dispute shall have been resolved.
(e) Interest on all such amounts in dispute shall accrue at the rate
specified in Section 9.05.
Section 9.05 INTEREST ON PAST DUE AMOUNTS. Any bills tendered by
Tenaska to PECO under this Agreement which are not paid when due and any
obligation to refund an amount wrongfully drawn under a letter of credit (which
obligation shall be due on the date of drawing) shall bear interest, compounded
monthly, from the due date until paid, at the lesser of (a) the maximum rate of
interest permitted by Applicable Law and (b) two per cent plus the rate of
interest then most recently announced by The Chase Manhattan Bank as its prime
rate, or equivalent (regardless of whether such bank actually charges such
rate), in effect on the first business day of each Month in which interest
accrues hereunder. Notwithstanding the provisions for calculating interest on
late payments, failure to make payments when due as specified in Section 9.02
shall be a default under this Agreement by the non-paying Party.
Section 9.06 REGULATION. PECO acknowledges and agrees that,
notwithstanding any adverse treatment or burdensome rate regulation that may
apply under any applicable federal, state or local law with respect to the
purchase of capacity and energy under this Agreement or to sales by PECO of
capacity and energy furnished under this Agreement, its obligations to make
payments required under this Agreement and otherwise to perform its other
obligations under this Agreement shall not be diminished or reduced and shall
remain valid and binding, in accordance with the terms of this Agreement.
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ARTICLE X
[RESERVED]
ARTICLE XI
RECORDS
Section 11.01 RECORDS. Tenaska shall maintain records needed to reflect
power and energy delivered to PECO under this Agreement including (i) the amount
and quality of Fuel delivered to the Plant, (ii) the amount of such Fuel used in
the production of energy and power, (iii) records of taxes assessed and paid on
Fuel in accordance with Section 8.11 and (iv) records of all pertinent Fuel and
electrical parameters of the Plant, with all records referenced herein to be
available to PECO for inspection at all reasonable times. All such records will
be maintained in accordance with industry accepted procedures consistently
applied and will be, for a period of two (2) calendar years after the respective
records are created, subject to inspection and audit by PECO during normal
business hours upon reasonable advance written notice.
ARTICLE XII
ASSIGNMENT
Section 12.01 ASSIGNMENT. (a) Neither Party shall assign this Agreement
without the prior written consent of the other Party, PROVIDED THAT in the event
that PECO sells or otherwise transfers its power marketing business, PECO may
assign this Agreement without Tenaska's consent to the buyer or transferee of
such business if (A) the buyer or transferee has a senior unsecured public debt
rating by Moody's or Standard & Poor's or any successor thereto which is a
Rating Organization that is not lower than PECO's comparable unsecured senior
debt rating at the time of such transfer and (B) such Rating Organization shall
have confirmed that such rating shall remain in effect following the buyer's or
transferee's assumption of this Agreement.
(b) Nothing contained in this Section 12.01 shall be construed to
prevent the Parties from making a collateral assignment of the revenues due
under the terms of this Agreement, PROVIDED THAT this Agreement may not be
transferred to any purchaser of the Plant upon foreclosure or at a sale in lieu
of foreclosure to, and the Plant shall not be operated during the pendency of
any foreclosure by, any party which is (i) a Competitor or (ii) in PECO's
reasonable judgment does not possess a satisfactory level of experience in
electric power plant operations. Except as provided above, no assignment, merger
or consolidation shall relieve any Party of any obligation under this Agreement.
Subject to the foregoing restrictions in this Section, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and assigns.
(c) For the purposes of this Agreement, PECO shall at all times from
the date hereof during the term of this Agreement maintain a list (which shall
not be amended without PECO providing 90 days prior written notice to Tenaska of
any proposed change) which designates up to three (3) Competitors, PROVIDED THAT
in respect of each Person designated as a
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Competitor, PECO has determined in good faith that such Person is a competitor
of PECO in the sale, brokering or marketing of electrical energy or capacity and
(i) the sale, assignment or other transfer of the Plant to such Competitor would
be detrimental to PECO's competitive interests in the sale, brokering or
marketing of electrical energy and capacity or (ii) the operation or maintenance
of the Plant by such Competitor would be detrimental to PECO's competitive
interests in the sale, brokering or marketing of electrical energy and capacity
PROVIDED THAT in no event shall PECO designate any of the Sponsors as a
Competitor.
ARTICLE XIII
INDEMNITIES
Section 13.01 INDEMNIFICATION. (a) Neither Party shall hold the other
Party or its partners (including the corporate Affiliates, parent, subsidiaries,
directors, officers, stockholders, employees and agents of such other Party or
the partners in such other Party) liable for any claims, losses, costs and
expenses of any kind or character, (including, without limitation, loss of
earnings and attorneys' fees) on account of bodily injury to the personnel of or
damage to property of PECO or Tenaska in any way occurring incident to, arising
out of, or in connection with a Party's performance under this Agreement, except
as provided in subsection (b) below.
(b) PECO and Tenaska will each protect and indemnify the other Party
and its partners (including the corporate Affiliates, parent, subsidiaries,
directors, officers, stockholders, employees and agents of such other Party or
the partners in such other Party) from and against any liability or loss
(including reasonable expenses and attorneys' fees) because of bodily injury or
property damage arising out of or in connection with PECO's or Tenaska's,
respective performance hereunder; except that neither shall be obligated to
indemnify the other for injury or damage caused by the negligence or willful
misconduct of the other Party. This provision is for the sole benefit of the
Parties hereto and other Persons named herein and is not intended and shall not
be construed to confer any rights or benefits on any third party.
(c) Nothing in the foregoing provisions of this Section 13.01 shall be
construed to require one Party to this Agreement to indemnify the other Party to
this Agreement for any cost or expense that is to be borne by such other Party
pursuant to any express provision of this Agreement.
Section 13.02 RELEASE BY TENASKA. Tenaska releases PECO, its successors
and assigns and the respective directors, officers, employees, agents and
representatives of PECO and their successors and assigns from any and all
claims, losses, harm, liabilities, damages, costs and expenses to the extent
resulting from any:
(a) Force Majeure (but not from damages otherwise recoverable under
this Agreement);
(b) operation of the Plant in parallel with Local Utility's electrical
systems;
(c) transfer, transmission, use or disposition of energy delivered
pursuant to this Agreement prior to its delivery to PECO at the applicable Point
of Delivery;
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(d) transportation, handling, use, or disposition of all Natural Gas to
be fired at the Plant after it is delivered to Tenaska at the Gas Delivery
Point; or
(e) transportation, handling, use, management or disposition of all
Fuel Oil to be fired at the Plant after it is delivered to Tenaska at the Fuel
Oil Unloading Facilities by tanker truck.
Section 13.03 RELEASE BY PECO. PECO releases Tenaska and its partners
or shareholders, Tenaska's successors and assigns (and their partners and
shareholders), and the respective Affiliates, directors, officers, employees,
agents and representatives of Tenaska, its partners and their Affiliates,
successors and assigns from any and all claims, losses, harm, liabilities,
damages, costs and expenses to the extent resulting from any:
(a) Force Majeure (but not from damages otherwise recoverable under
this Agreement);
(b) operation of the Plant in parallel with the Local Utility's
electric systems;
(c) transfer, transmission, use or disposition of energy after it is
delivered pursuant to this Agreement to PECO at the applicable Point of
Delivery;
(d) interruption, suspension or curtailment of delivery of power
pursuant to this Agreement to the Local Utility' electric systems, which
interruption, suspension or curtailment is caused by the Local Utility' electric
systems;
(e) transportation, handling, use, or disposition of all Natural Gas to
be fired at the Plant prior to it being delivered to Tenaska at the Gas Delivery
Point; or
(f) transportation, handling, use, management or disposition of all
Fuel Oil to be fired at the Plant prior to it being delivered to Tenaska at the
Fuel Oil Unloading Facilities by tanker truck.
ARTICLE XIV
DEFAULT
Section 14.01 (a) Events that shall be considered defaults by Tenaska
under this Section 14.01 are as follows:
(i) Abandonment of the construction of the Plant for any
period in excess of 60 consecutive days.
(ii) Abandonment of the operation of the Plant for any period
in excess of 10 consecutive days.
(iii) A material breach of any representation, warranty or
covenant of Tenaska set forth in Article XVII.
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(iv) Tenaska makes a general assignment of substantially all
of its assets for the benefit of its creditors, files a petition for
bankruptcy or reorganization or seeks other relief under any applicable
insolvency laws, PROVIDED THAT the collateral assignment by Tenaska of
its interest in the Plant and this Agreement shall not be considered an
assignment for the benefit of creditors for purpose of this Section
14.01.
(v) Tenaska has filed against it a petition for bankruptcy,
reorganization or other relief under any applicable insolvency laws and
such petition is not dismissed within sixty (60) days after it is
filed.
(vi) Any other material breach by Tenaska of any material
provision under this Agreement.
Notwithstanding the foregoing, the failure (i) of Tenaska to deliver the amount
of energy requested in Energy Requests in accordance with this Agreement, or to
have the number of Generating Units specified by Section 6.02 available at Unit
Capacity on the Availability Schedule for any period or (ii) of the Plant to
achieve an expected heat rate in accordance with Section 8.10, shall not
constitute a default hereunder, and PECO shall not be entitled to assert any
termination rights as set forth in Section 3.05(a) therefor, but such failure
shall entitle PECO, as its exclusive damages remedy, to recover Availability
Adjustments and Fuel Adjustment Payments, respectively, as provided in Sections
8.08, 8.09 and 8.10, and PECO shall retain its termination rights pursuant to
Section 3.07; provided, however, that upon termination under Section 3.07,
PECO's exclusive damages remedy shall be to recover any accrued amounts owed to
PECO as of the date of such termination including, but not limited to, any
Availability Adjustment payable under Section 8.09, and in such event PECO shall
have no right to assert claims against Tenaska under Section 3.05. The
limitation on damages arising from failures described in clause (i) of the
preceding sentence applies only to failures that cause Tenaska to be unable to
deliver or to cause the Plant to be able to deliver amounts of Energy that are
or may be requested by PECO pursuant to an Energy Request in accordance with
this Agreement. Such limitation does not apply to any material breach of any
material provision of this Agreement independent of shortages in the amount of
energy delivered or available for delivery, including by way of illustration and
not by way of limitation, any material breach by Tenaska of Sections 2.02, 6.03,
6.08 and if Tenaska does not cure any such material breaches PECO shall be
entitled to such recourse and remedies as are set forth in this Section 14.01
and Section 3.05.
(b) Events that shall be considered defaults by PECO under this Section
14.01 include the following:
(i) Failure to make any payment to Tenaska when due, provided,
however, that the failure by PECO to make payments due to Tenaska up to
an aggregate limit of $7,500,000 shall not constitute an event of
default if such amount is disputed in good faith and is deposited by
PECO into an escrow account pursuant to Section 9.04.
(ii) A material breach of any representation or warranty of
PECO set forth in Article XVII.
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(iii) PECO makes a general assignment of substantially all of
its assets for the benefit of its creditors, files a petition for
bankruptcy or reorganization or seeks other relief under any applicable
insolvency laws.
(iv) PECO has filed against it a petition for bankruptcy,
reorganization or other relief under any applicable insolvency laws and
such petition is not dismissed within sixty (60) days after it is
filed.
(v) Any other material breach by PECO of any material
provision under this Agreement.
Section 14.02 NOTICES FOR DEFAULTS AND FORCE MAJEURE EVENTS. (a) If
either Party defaults under this Agreement, then the other Party shall give the
defaulting Party (i) written notice describing such default within forty-five
(45) Days of the occurrence of such default, and (ii) the specific default cure
desired by the notifying Party. For any Tenaska default, PECO shall provide the
Financial Institutions with a copy of the notification of default at the same
time that it is delivered to the defaulting Party.
(b) In the event either Party to this Agreement is rendered unable,
wholly or in part, by Force Majeure to perform any of its obligations under this
Agreement (other than obligations to make payments), such Party shall provide
notice and the full particulars of such Force Majeure in writing or by telephone
to the other Party as soon as reasonably possible after the occurrence of the
event of Force Majeure. Telephone notices, allowable under the provisions of
this Section, shall be confirmed in writing as soon as reasonably possible and
shall specifically state full particulars of the Force Majeure or such breach,
the time and date when the Force Majeure or such breach occurred. The Party
receiving such notice may request such additional information reasonably
necessary to understand the full particulars and implications of the Force
Majeure event. The obligations of the Party giving such notice, so far as they
are affected by such Force Majeure shall be suspended during the continuance of
any inability of performance so caused, PROVIDED THAT the Party giving notice of
a Force Majeure event shall provide the other Party, as promptly as reasonably
practical (but in any case within 14 Days) of the Force Majeure occurrence, a
plan of action to remedy the Force Majeure, which the Party incurring the Force
Majeure shall then proceed, in good faith, to implement PROVIDED THAT as and
when further facts become available, such plan may be amended from time to time.
(c) Any Party rendered unable to fulfill any of its obligations under
this Agreement by reason of Force Majeure shall exercise due diligence to remove
such inability with all reasonable dispatch. PECO's obligation to pay the
Reservation Payment, Tenaska's obligation to pay Availability Adjustments
pursuant to Section 8.09, and the Parties' obligations to pay other amounts due
under this Agreement shall not be excused by Force Majeure; provided, however,
that PECO may terminate this Agreement pursuant to Section 3.07 without regard
to the occurrence of any Force Majeure event.
(d) If a Party is unable to meet a date established under this
Agreement due to an event of Force Majeure that causes such failure, or due to a
breach of this Agreement by the other Party, the date shall be adjusted, subject
to Sections 3.04(c) and 4.02(d), to the extent
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necessary so that the affected Party will have the same opportunity to meet the
readjusted date without making expediting or similar payments to accelerate
work.
Section 14.03 DEFAULT CURE RIGHTS AND TIMEFRAMES. (a) The timeframes
for a defaulting Party to cure a default shall be as follows:
(i) For defaults listed in Section 14.01(a)(i) and (ii),
Tenaska shall be given fifteen (15) days from the receipt of such
notice to cure such default.
(ii) For defaults listed in Section 14.01(a) (other than
(a)(i) or (ii)) and Section 14.01(b)(other than (b)(i)), the defaulting
Party shall be given sixty (60) days from the receipt of such notice to
cure such default.
(iii) If a default listed in Section 14.01(a) (other than
(a)(i) or (ii)) or Section 14.01(b) (other than (b)(i)) cannot be cured
within sixty (60) days of receipt of such notice with the exercise of
reasonable diligence, however, the defaulting Party shall have the
right to provide the non-defaulting Party with a plan within such sixty
(60) day period for the appropriate actions to cure the breach or
default. Immediately following the submission of the plan to the
non-defaulting Party, the defaulting Party must diligently commence
pursuit of the appropriate action under the plan to cure and shall be
granted the additional time to cure in accordance with the plan.
(b) The Financial Institutions shall be permitted to cure non-monetary
defaults by Tenaska within 75 days after the receipt of such notice or of the
termination of Tenaska's right to cure hereunder, whichever comes later.
(c) The Financial Institutions shall be allowed to cure monetary
defaults by Tenaska within 30 days of the receipt of such notice or the
termination of Tenaska's right to cure, whichever comes later.
(d) Additionally, the Financial Institutions may cure by assuming, or
causing a new lessee or purchaser of the Plant to assume, Tenaska's rights and
obligations under this Agreement, PROVIDED THAT no entity may assume Tenaska's
rights and obligations if, in PECO's reasonable judgment, such entity (i) does
not possess a satisfactory level of experience in electric power plant
operations or (ii) is a Competitor; and further PROVIDED THAT PECO receives the
written assumption agreement of the Financial Institutions, the new lessee or
purchaser within sixty (60) days of the Financial Institutions' receipt of
default notice from PECO or of the termination of Tenaska's right to cure,
whichever comes later. The Party assuming this Agreement shall have forty-five
(45) days from the effective date of such assumption to cure the material breach
or default or if the default is a nonmonetary default, such longer period as is
required so long as the Party who assumes this Agreement has commenced and is
diligently pursuing appropriate action to cure such default.
(e) If Tenaska or the Party assuming this Agreement from Tenaska are
prohibited from curing any such default by any process, stay or injunction
issued by any governmental authority or pursuant to any bankruptcy or insolvency
proceeding involving Tenaska or the Financial Institutions or any of them, then
the time periods specified herein for curing a default shall be extended for the
period of such prohibition.
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(f) In no event shall the cure rights provided for in this Section
14.02 continue beyond (A) twelve calendar months if the default is a nonmonetary
default (except that Tenaska or the Financial Institutions may extend cure
rights beyond twelve (12) months by posting an additional $10,000,000 in
Acceptable Credit Support), or (B) four (4) calendar months if the default is a
monetary default, from the date of written notice of the default to the
Financial Institutions or their designee.
ARTICLE XV
[[RESERVED]]
ARTICLE XVI
CONFIDENTIALITY
Section 16.01 SCOPE. Each Party agrees, for itself, its wholly-owned
subsidiaries, and their respective directors, officers, employees and
representatives, including, without limitation, attorneys, accountants and
consultants, to keep Confidential (a) this Agreement, (b) all negotiations
concerning this Agreement, and (c) all documents, data, drawings, studies,
projections, plans and other information, whether written or oral, which relate
to economic benefits to or amounts payable by either Party pursuant to this
Agreement or costs of design, construction and operations of the Plant,
including, without limitation, cost of Fuel. In addition, PECO will keep
Confidential all plans, designs, drawings, documents, studies and other
information relating to design, construction and operation of the Plant.
Section 16.02 EXCEPTIONS. Either Party may, without violating this
Article, disclose matters that are made Confidential by this Agreement:
(a) to actual or prospective co-owners, lenders, financiers, lessors,
insurance brokers and underwriters, contractors, suppliers and others involved
in financing, construction, operation and maintenance of the Plant, or to such
Party's subsidiaries or parent, or to actual or prospective Fuel suppliers or
Fuel transporters, provided, that the Party making the disclosure obtains, as a
condition precedent to the disclosure, a confidentiality agreement with the
Person, corporation or other entity to whom the disclosure is being made with
terms substantially the same as this Article;
(b) to governmental officials and parties involved in any proceeding
whereby either Party is seeking a permit, certificate or other regulatory
approval or order necessary or appropriate to carry out this Agreement; PROVIDED
THAT the Party making the disclosure will exercise reasonable efforts to
restrict public access of the information disclosed by way of protective order
or otherwise;
(c) to governmental officials or the public as required by any law,
regulation or order, including, without limitation, laws or regulations
requiring disclosure of financial information, information material to financial
matters and filing of financial reports; provided, that the Party making the
disclosure will exercise reasonable efforts to restrict public access to the
information disclosed by way of protective order or otherwise.
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Section 16.03 SCHEDULES OF ENERGY OR GAS. Energy Requests shall be
delivered directly to the Plant operators by PECO with a copy to Tenaska.
Tenaska shall keep confidential notices of Energy Requests for any given Day and
any intra-day adjustments of energy to be delivered under this Agreement for
such Day from the power marketing groups of (a) Tenaska, Inc. (b) any affiliate
of Tenaska, Inc. or (c) any equity partners of Tenaska, PROVIDED THAT Tenaska
may provide to its equity partners and their shareholders information on the
aggregate amount of energy delivered to each Point of Delivery after the bill
for such Month has been issued to PECO.
ARTICLE XVII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES
Section 17.01 TENASKA'S REPRESENTATIONS AND WARRANTIES. (a) Tenaska
represents and warrants that it is a limited partnership validly existing and in
good standing under the laws of the State of Delaware and is duly registered to
do business in the State of Georgia and that it has all requisite power and
authority to carry on the business to be conducted by it and to enter into this
Agreement. The execution and delivery of this Agreement and the performance of
Tenaska's obligations hereunder have been duly authorized in accordance with the
procedures of Tenaska's limited partnership agreement.
(b) To the knowledge of Tenaska, there is no threatened or pending
action or proceeding affecting Tenaska before any court, governmental agency or
arbitrator that could reasonably be expected to affect materially and adversely
the financial condition or operations of Tenaska or the ability of Tenaska to
perform its obligations hereunder, or which purports to affect the legality,
validity or enforceability of this Agreement (as is in effect on the date
hereof).
(c) Until this Agreement is terminated in whole or in part as provided
in Article III, and except as expressly provided in Section 6.10(b), Tenaska
covenants and agrees not to negotiate with any other party with respect to (a)
the purchase of any Fuel for the Plant during the Operating Term, or (b) the
sale of any capacity and energy or ancillary products to be produced by the
Plant during the Operating Term.
Section 17.02 PECO'S REPRESENTATIONS AND WARRANTIES. (a) PECO
represents and warrants that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Pennsylvania and
has all requisite corporate power and authority to carry on the business
presently conducted by it and to enter into this Agreement. The execution and
delivery of this Agreement and the performance of PECO's obligations hereunder
have been duly authorized by PECO and all necessary action to consummate the
transactions contemplated hereunder has been taken.
(b) To the knowledge of PECO, there is no threatened or pending action
or proceeding affecting PECO before any court, government agency or arbitrator
that could reasonably be expected to affect materially and adversely the
financial condition or operations of PECO or the ability of PECO to perform its
obligations hereunder, or which purports to affect, the legality, validity or
enforceability of this Agreement (as is in effect on the date hereof).
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Section 17.03 COVENANTS OF TENASKA. (a) Tenaska shall, at all times,
and at its sole cost, comply in all material respects with all material
Applicable Laws. Tenaska shall give all required notices, shall procure and
maintain all governmental permits, licenses and inspections necessary for the
performance of its obligations under this Agreement, and shall at all times and
at its sole cost pay all charges and fees in connection therewith.
(b) Tenaska shall use Prudent Utility Practice to maximize satisfaction
of Energy Requests and to end any Forced Outage that limits Tenaska's ability to
deliver Contract Capacity.
(c) Without limiting generality of the foregoing, in the event that the
Plant shall suffer an insured casualty loss, Tenaska shall promptly comply with
any procedures under the Credit Documents to obtain access to the applicable
insurance proceeds and to otherwise proceed in accordance with Prudent Utility
Practice to restore the Plant to reliable operating condition as quickly as
possible.
(d) Tenaska shall maintain insurance coverage for the Plant as
described in EXHIBIT 17.03(D), PROVIDED THAT in the event that such coverage
shall not be available on reasonable commercial terms, Tenaska shall maintain
such substitute coverage as it reasonably selects in good faith.
(e) Tenaska shall deliver to PECO and maintain in full force and effect
not more than five instruments of Acceptable Credit Support or cash collateral
(with a minimum amount of $500,000 for any single instrument of Acceptable
Credit Support) as follows:
(i) On the earlier to occur of (A) the Financial Closing Date
and (B) January 1, 2000, Tenaska shall deliver to PECO Acceptable
Credit Support in the amount of $15,000,000 as security for Tenaska's
obligations under this Agreement. Such Acceptable Credit Support may be
drawn upon by PECO if Tenaska shall have failed to pay amounts due
under Section 4.02.
(ii) On April 1 of the Start Year for the Initial Units,
Tenaska shall deliver to PECO additional Acceptable Credit Support in
the amount of $10,000,000 as security for Tenaska's obligations under
this Agreement. Up to the full $25,000,000 of total Acceptable Credit
Support may be drawn upon by PECO if Tenaska shall have failed to pay
amounts due under Sections 4.02, 8.08, 8.09, 8.10 or 8.11.
(iii) Notwithstanding anything contained in this Agreement to
the contrary, no opportunity to cure or grace period shall apply with
respect to Tenaska's failure to deliver to PECO the Acceptable Credit
Support which is required under this Section 17.03(e) above.
(f) Tenaska shall ensure that the O&M Contractor is not, at the time
such contract is entered into, a Competitor of PECO and that the O&M Contract
contains a covenant that the O&M Contractor shall not undertake the sale,
brokering or marketing of electrical energy or capacity and any Affiliate of the
O&M Contractor that is not an Affiliate of Tenaska shall not during such O&M
Contract, conduct business in the ordinary course from the same offices as are
being used by an Affiliate of the O&M Contractor that is engaging in the sale,
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brokering or marketing of electrical energy or capacity. Tenaska shall in good
faith use all reasonable commercial efforts to enforce the above mentioned
covenants in the O&M Contract against the O&M Contractor.
(g) Tenaska shall not consent to modifications to the Air Permit that
adversely affect the rights of Tenaska under Section No. 2 thereof, unless the
failure to so agree, in Tenaska's reasonable judgment, would likely result in
adverse effects at least as severe as those resulting from the modification.
PECO shall have the right to direct Tenaska (and Tenaska shall cooperate with
any reasonable direction given by PECO) to contest any modifications to the Fuel
specifications contained in the Air Permit, PROVIDED THAT any such contest shall
be at PECO's sole cost and expense.
(h) Tenaska shall use commercially reasonable efforts to maintain the
Air Permit without any adverse modification. Tenaska shall, at no cost or
expense to Tenaska, act in good faith to assist PECO with the maintenance of
Fuel Oil Delivery Permits.
Section 17.04 COVENANTS OF PECO. (a) PECO undertakes (i) to enter into
a consent to assignment of this Agreement to the Financial Institutions in
connection with the financing or refinancing of the Plant, and (ii) to provide
for the issuance to the Financial Institutions and to Tenaska of an opinion of
counsel from PECO as to the due authorization, delivery and enforceability of
this Agreement and as to other customary matters. The consent and opinion of
counsel shall in substance be in accordance with the forms attached as Exhibits
17.04(a)-1 and 17.04(a)-2, and PECO shall be under no obligation to engage in
further negotiations with respect to, or to alter or amend, the substantive
terms of such consent and opinion of counsel.
(b) PECO shall request energy under this Agreement in good faith and
will cooperate with Tenaska to limit dispatch of the Plant at levels that are
not economically efficient, PROVIDED THAT PECO shall not be required to incur
any economic loss or cost in avoiding dispatch at uneconomic levels.
Section 17.05 COVENANTS OF PECO AND TENASKA. (a) The Parties shall
cooperate in good faith in all reasonable respects in matters involving the
construction of the Plant, the Interconnection Facilities, and the Metering
Equipment, and in the operation of the Plant, the Interconnection Facilities,
and the Metering Equipment during the term of this Agreement. Each Party shall
act, in all reasonable respects, in good faith toward the other Party and when
dealing with governmental regulatory bodies and other third parties regarding
matters arising under or in connection with this Agreement. The Parties shall
cooperate in good faith in all reasonable respects in matters involving
environmental or regulatory permits and each Party shall act in good faith to
assist the other Party with the maintenance of all environmental or regulatory
permits during the term of this Agreement.
(b) PECO, at Tenaska's sole cost and expense, will cooperate with
Tenaska efforts to claim and otherwise benefit from any pollution allowances or
credits related to the Plant, all of which such allowances and credits shall be
the property of Tenaska.
(c) Tenaska shall promptly notify PECO in writing upon becoming aware
of any proposal to modify in any way any of the Fuel Oil Delivery Permits. Each
Party shall act, in all
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reasonable respects, in good faith toward the other Party and when dealing with
governmental regulatory bodies and other third parties regarding matters arising
under or in connection with this Agreement.
ARTICLE XVIII
MISCELLANEOUS
Section 18.01 LIMITATION ON PUNITIVE AND CONSEQUENTIAL DAMAGES. Neither
Party shall be liable to the other for indirect, consequential, or punitive
damages. For the purpose of this Section 18.01, remedies under Section 3.05(a)
shall not be deemed as a compensation for punitive, indirect or consequential
damage. The limitation in this Section 18.01 shall not apply in the case of bad
faith, gross negligence or willful misconduct.
Section 18.02 NOTICE. Except as provided in Section 16.03, any notices,
elections, demands or requests required or authorized by this Agreement, or any
other instrument or document or information required to be tendered or delivered
by either Party, shall be in writing, and personally delivered or sent by
certified mail, return receipt requested, postage prepaid, or by fax (confirmed
by regular mail) to:
(a) If to PECO:
(i) If by Mail or by Overnight Delivery:
PECO Energy Company - Power Team
2004 Renaissance Blvd.
King of Prussia, PA 19406
(ii) If by Fax:
610-292-6630
(b) If to Tenaska:
(i) If by Mail or by Overnight Delivery:
Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, NE 68154
(ii) If by Fax:
402-691-9575
or such other address as either Party shall provide. Any notice given hereunder
shall be deemed to be given upon the earlier of (A) actual receipt, or (B) three
days after deposit in a properly addressed envelope in the U.S. mail, postage
prepaid, certified mail, return receipt requested.
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Routine operational notices and communications and notices during an Emergency
or other unforeseen event may be made in person or by telephone.
Section 18.03 NO RIGHTS OF THIRD PARTIES. This Agreement is intended
for the benefit of the Parties. Except as provided in Article XIII, nothing in
this Agreement shall be construed to create any duty to, any standard of care
with reference to, or any liability to, any Person not a party to this
Agreement.
Section 18.04 SUBJECT TO APPLICABLE LAWS. This Agreement is subject to
applicable federal, state and local laws, ordinances, rules and regulations.
Subject to Section 13.01(b), nothing herein contained shall be construed as a
waiver of any right to question or contest any such law, ordinance, rule or
regulation or asserted regulatory jurisdiction. The Parties shall cooperate,
each at its own expense, in securing the approval of FERC for this Agreement in
its entirety and, if it is approved materially unchanged, in defending against
rehearing and appeals of such approvals, and against any litigation affecting
the validity and enforceability of this Agreement. The Parties expressly agree
that they will neither challenge nor aid others in challenging the tariff
filings implementing the FERC order or orders approving this Agreement.
Section 18.05 NO PARTNERSHIP. This Agreement shall not be interpreted
or construed to create an association, joint venture, or partnership between the
Parties or to impose any partnership obligation or liability upon either Party.
Neither Party shall have any right, power or authority to enter in any agreement
or undertaking for, or act on behalf of, or to act as or be an agent or
representative of, or to otherwise bind, the other Party.
Section 18.06 AMENDMENT. This Agreement may be amended at any time, but
only upon written agreement of the Parties.
Section 18.07 NO WAIVER. Failure of a Party to insist, on any occasion,
upon strict performance of this Agreement shall not be a waiver of the right to
insist upon strict performance of any provision on any other occasion.
Section 18.08 CAPTIONS. The captions of the various articles and
sections of this Agreement are for convenience and reference only and shall not
limit or define any of the terms and provisions hereof.
Section 18.09 COMPLETE AGREEMENT. This Agreement (together with the
Exhibits, Schedules and Annexes attached hereto) embodies the complete agreement
between the Parties hereto and supersedes all other oral or written
understandings and agreements. Each Party acknowledges that no representations,
inducements, promises, or agreements, oral or otherwise, have been relied upon
or made by any Party, or anyone on behalf of a Party, which are not embodied
herein, and that no other agreement, statement, or promise not contained in this
Agreement shall be valid or binding.
Section 18.10 CURRENCY OF ACCOUNT. All payments due to Tenaska or PECO
hereunder shall be made in United States Dollars.
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Section 18.11 CHOICE OF LAWS. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia, excluding any
choice of law provisions or conflict of law principles which would require
reference to the laws of any other jurisdiction.
Section 18.12 SEVERABILITY. If any term or provision of this Agreement,
or the application thereof to any Person or circumstance, shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to Persons or circumstances other than those as to
which it is held invited or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
Section 18.13 ARBITRATION. (a) In the case of any dispute between the
Parties (i) as to the selection of an alternative publication or index as basis
for Daily Gas Price, (ii) arising under Article V, or (iii) arising under
Section 9.02 (subject to Section 9.04(c)), the matter shall be referred to and
determined by a single arbitrator appointed by the parties in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
("AAA"), subject to the following:
A. Arbitration proceedings shall be commenced by the delivery
by either party to the other of a written notice demanding arbitration.
Upon the delivery of a written demand of either Party to the other, the
Parties shall jointly, within fifteen (15) days, choose a single
arbitrator.
B. If the Parties fail to choose a single arbitrator within
the time period allowed, then upon the written application from either
Party, the single arbitrator shall be chosen by the AAA in accordance
with the Commercial Arbitration Rules of the AAA.
C. The single arbitrator shall be a disinterested person and
knowledgeable of the domestic independent power industry.
D. The venue for arbitrations shall be Dallas, Texas or such
other venue as the parties may mutually agree upon.
Disputes that, pursuant to Section 9.04(c) are not subject to arbitration, shall
be subject to resolution through judicial proceedings.
(b) Within seven (7) days after the single arbitrator is chosen, each
Party shall each independently present to the single arbitrator a "final offer"
with supporting rationale, for (i) the alternative publication or index to be
selected if the dispute relates to selection of a new gas index to calculate the
Daily Gas Price, (ii) the appropriate Contract Capacity for a Contract Year if
the dispute relates to Article V; or (iii) the appropriate amount of payments
owed if the disputes relates to Section 9.02.
(c) The single arbitrator shall proceed immediately to hear the matter.
The single arbitrator shall be required to select either the position of Tenaska
or the position of PECO and may not make any other determination. The award of
the single arbitrator shall be made within thirty (30) days after appointment,
subject to any reasonable delay due to unforeseen
62
<PAGE>
circumstances. If the single arbitrator fails to make a decision within thirty
(30) days after appointment, then either Party may void the appointment of the
single arbitrator and elect to have a new single arbitrator chosen in like
manner as if none had previously been selected.
(d) The award of the single arbitrator shall be formalized in writing
and signed by the single arbitrator and shall be final and binding on the
Parties, and the Parties shall abide by the award and perform the terms and
conditions thereof.
(e) The fees and expenses of the single arbitrator and the arbitration
process shall be shared equally by Tenaska and PECO.
(f) Except as otherwise provided herein, the arbitration shall be
governed and administered exclusively by the AAA in accordance with the
Commercial Arbitration Rules of the AAA.
Section 18.14 EXHIBITS. The exhibits, annexes and schedules attached to
this Agreement are incorporated herein by reference and made a part of this
Agreement as if fully set forth herein.
EXECUTED this 24th of August, 1999.
PECO ENERGY COMPANY
By: /s/ Nancy J. Bessey
---------------------------------------
Name: Nancy J. Bessey
Title: President, Power Team
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Managing General Partner
By: /s/ Darrell Bevelhyman
---------------------------------
Name: Darrell Bevelhyman
Title: Vice President
63
<PAGE>
ANNEX A
ACCEPTABLE GUARANTORS
<PAGE>
ANNEX A-1
FORM OF LETTER OF CREDIT
IRREVOCABLE STAND-BY LETTER OF CREDIT NO.________
[BANK]
PECO ENERGY COMPANY
[ADDRESS]
[Date]
Dear Sirs:
For the account of [TENASKA]. ("Tenaska"), we hereby authorize you to
draw on us at sight $_______________ (the "Credit Amount").
Funds under this Letter of Credit are available to you against your
sight draft(s) drawn on us and accompanied by a certificate purportedly signed
by your authorized representative in the form of EXHIBIT A attached hereto.
Presentation of such draft(s) and certificate(s) shall be made at our
office located at ________________, ________________, Attention: ______________
or at any other location _______________ which may be designated by us by
written notice delivered to you. Drafts must be marked "Drawn under [BANK]
Irrevocable Letter of Credit No. ________________". We hereby agree that all
drafts drawn under and in compliance with the terms of this Letter of Credit
will be duly honored by us upon due delivery of the draft(s) and certificate(s)
if presented at such office on or before the termination date hereof.
Payment under this Letter of Credit shall be made in accordance with
the payment instructions set forth in your certificate in the form of EXHIBIT A.
All drafts, certificates and notices shall be personally delivered to
us.
Upon our receipt of a certificate in the form of EXHIBIT B attached
hereto from your authorized representative, the Credit Amount will be reduced in
accordance with such certificate.
This Letter of Credit shall automatically terminate and be delivered to
us for cancellation upon the earliest of (i) the making by you of a drawing
hereunder in the full Credit Amount, (ii) our receipt of a certificate signed by
your authorized representative in the form of EXHIBIT C attached hereto, and
(iii) the close of business on [DATE], the Expiry Date.
Partial drawings under this Letter of Credit are permitted. Each
drawing hereunder shall permanently reduce the Credit Amount by the amount paid
on such drawing.
<PAGE>
This Letter of Credit is subject to the International Standby Practices
(ISP98). This Letter of Credit shall be deemed to be made under the laws of the
State of ____, including Article 5 of the Uniform Commercial Code, and shall, as
to matters not governed by the International Standby Practices (ISP98), be
governed by and construed in accordance with the laws of the State of ____,
excluding any choice of law provisions or conflict of law principles which would
require reference to the laws of any other jurisdiction.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein; and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for the certificate(s) and such sight
draft(s) referred to herein.
Very truly yours,
[BANK]
By:
-----------------------------------
<PAGE>
EXHIBIT A
DRAWING CERTIFICATE
The undersigned, a duly authorized representative of PECO Energy
Company ("PECO"), as the beneficiary of the Irrevocable Letter of Credit No. ___
(the "Letter of Credit") issued by [BANK] (the "Bank") for the account of
[ ] ("Tenaska"), certifies as follows to the Bank:
1. Tenaska and PECO are parties to a Power Purchase Agreement dated
_____, 1999 (the "PPA"). [TENASKA HAS FAILED TO PAY PECO CERTAIN LIQUIDATED
DAMAGES PAYABLE UNDER SECTION 4.02, 8.08, 8.09, 8.10 OR 8.11 OF THE PPA] OR
[TENASKA HAS FAILED TO PAY AN AVAILABILITY ADJUSTMENT DUE UNDER THE PPA.] OR
[THE EXPIRY DATE OF THE LETTER OF CREDIT IS TO OCCUR WITHIN 10 DAYS OF THE DATE
OF THIS DRAWING CERTIFICATE AND THE LETTER OF CREDIT HAS NOT BEEN RENEWED OR
REPLACED BY AN ACCEPTABLE CREDIT SUPPORT (AS DEFINED IN THE PPA).]
2. PECO is entitled to make a drawing under the Letter of Credit in the
amount of $_____. The amount of drawing to be made hereunder does not exceed (a)
the amount of the obligations due and payable by Tenaska to PECO, or (b) the
amount required to be posted as cash collateral upon the expiration of an
Acceptable Credit Support to PECO, pursuant to the PPA.
3. All payments to PECO under the Letter of Credit shall be made by
wire transfer of immediately available funds to PECO at [PECO'S BANK], for
credit to account no. _____.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT B
CONSENT TO REDUCTION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by [BANK] for the account of [TENASKA]. The
undersigned beneficiary of such Letter of Credit hereby consents to a permanent
reduction in the amount available to be drawn under the Letter of Credit,
effective immediately, to $_____________.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT C
CONSENT TO TERMINATION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by [BANK] for the account of [TENASKA]. The
undersigned beneficiary of such Letter of Credit hereby consents to the
termination of the Letter of Credit, effective immediately, and is surrendering
the Letter of Credit for cancellation.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________, 199_.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
-----------------------------------
Name:
Title:
<PAGE>
ANNEX A-2
FORM OF GUARANTY
This GUARANTY (this "Guaranty") is dated and effective as of
____________, by and between ___________, a ___________ corporation (the
"Guarantor") and PECO ENERGY COMPANY, a Pennsylvania corporation (the
"Beneficiary").
WHEREAS, the Beneficiary and [TENASKA] ("Tenaska") are parties to a
Power Purchase Agreement dated _________, 1999 (as amended from time to time,
the "Power Purchase Agreement") under which Tenaska undertakes to develop a
power plant in Heard County, Georgia, and sell capacity and energy to the
Beneficiary; and
WHEREAS, it is a condition for the Beneficiary [NOT TO TERMINATE THE
POWER PURCHASE AGREEMENT BEFORE THE FINANCIAL CLOSING DATE HAS OCCURRED] OR [NOT
TO TERMINATE THE POWER PURCHASE AGREEMENT BEFORE ALL SIX (6) GENERATING UNITS TO
BE LOCATED AT THE POWER PLANT HAVE ACHIEVED COMMERCIAL OPERATION] OR [ALLOW
TENASKA TO EXTEND THE PERIOD TO CURE A DEFAULT UNDER THE POWER PURCHASE
AGREEMENT BEYOND THE PERIODS SET FORTH IN SECTIONS OF THE POWER PURCHASE
AGREEMENT] that the Guarantor shall have executed and delivered this Guaranty.
(Unless otherwise defined herein, terms defined in the Power Purchase Agreement
shall have such defined meanings when used herein).
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Guarantor hereby agrees with the Beneficiary as
follows:
1. (a) Subject to Section 1(b) below, the Guarantor does hereby
absolutely, irrevocably and unconditionally guarantee and undertake and assure
to the Beneficiary, its successors and assigns, the full, prompt and complete
payment by Tenaska, its successors and assigns (a) the liquidated damages under
Section 4.02 of the Power Purchase Agreement and (b) the Availability
Adjustments, each when due and payable by Tenaska under the Power Purchase
Agreement (all the obligations listed in clauses (a) and (b) above, the
"Obligations"), which undertaking and assurance are unconditional and absolute.
The Guarantor agrees that the undertaking and assurance as set forth herein are
and shall be primary obligations of, and fully and completely enforceable
against, the Guarantor and shall constitute a continuing guaranty of payment and
not a guaranty of collection only and shall remain in full force and effect
until the Obligations are paid in full. The Guarantor acknowledges the receipt
and adequacy of the consideration hereinabove recited and agrees that such
consideration fully supports this Guaranty.
(b) The maximum amount payable under this Guaranty shall be $_______.
2. (a) The obligations of the Guarantor hereunder are primary,
unconditional and absolute, and shall be valid and enforceable regardless of:
<PAGE>
(i) the genuineness, validity, regularity, or any future
amendment of, or change in, this Guaranty, the Power Purchase
Agreement, or any other agreement, document or instrument related to
the transactions contemplated hereby or thereby (including, without
limitation, any amendment extending the manner, place or terms of
payment, renewal, or alteration of all or any portion of the
obligations thereunder), or the enforceability of the Power Purchase
Agreement, or any other agreement, document, or instrument related to
the transactions contemplated thereby;
(ii) any action taken or failed to be taken to enforce this
Guaranty or the Power Purchase Agreement or any other Acceptable Credit
Support, or the waiver or consent by the Beneficiary with respect to
any of the provisions thereof;
(iii) any law, regulation or decree now or hereafter in effect
which might in any manner affect any of the terms or provisions of this
Guaranty;
(iv) any bankruptcy, insolvency, reorganization, arrangement,
adjustment, composition, liquidation or the like of Tenaska or the
Guarantor;
(v) any merger or consolidation of Tenaska or the Guarantor
into or with any other Person, or any sale, lease or transfer of any or
all of the assets of Tenaska or the Guarantor to any other Person;
(vi) any circumstance other than indefeasible payment and
performance which might constitute a defense available to, or a
discharge of the Guarantor, or any other surety;
(vii) any sale, transfer or other disposition by the Guarantor
of any direct or indirect interest it may have in Tenaska;
(viii) absence of any notice to, or knowledge by, the
Guarantor of the existence or occurrence of any of the matters of
events set forth in the foregoing subdivisions (i) through (vi); or
(ix) any other circumstance whatsoever;
it being agreed by the Guarantor that its obligations under this Guaranty shall
not be discharged until all Obligations have been paid or performed in full or
the full amount of this Guaranty ($________) has been paid in full.
(b) The Guarantor hereby waives, and agrees that it shall not at any
time insist upon, plead or in any manner whatever claim or take the benefit or
advantage of:
(i) notices, diligence, presentment and demand (whether for
non-payment or protest or of acceptance, maturity, extension of time,
change in nature of form of the Obligations, acceptance of security,
release of security, composition or agreement arrived at as to the
amount of, or the terms of, the Obligations, notice of adverse change
in Tenaska's financial condition or any other fact which might
materially increase the risk to the Guarantor) with respect to any of
the Obligations and all other demands
2
<PAGE>
whatsoever and waives the benefit of all provisions of law (to the
extent that may be waived under applicable law) which are or might be
in conflict with the terms of this Guaranty; or
(ii) any requirement on the part of the Beneficiary to
mitigate the damages resulting from any default by Tenaska under the
Power Purchase Agreement.
(c) The Guarantor shall not exercise any rights which it may have
acquired by way of subrogation under this Guaranty, by any payment made
hereunder or otherwise, or seek any reimbursement from the Beneficiary in
respect of payments made by such the Guarantor hereunder, unless and until the
Guarantor's Share of all of the Obligations shall have been paid to the
Beneficiary and discharged, in full, and if any payment shall be made to the
Guarantor on account of such subrogation or reimbursement rights at any time
when the Obligations shall not have been paid and discharged, in full, each and
every amount so paid shall forthwith be paid to the Beneficiary to be credited
and applied against the Obligations, whether matured or unmatured.
(d) The Beneficiary shall be authorized and empowered to institute any
proceedings in law or equity against the Guarantor.
(e) Except as specifically stated in clauses (b)(i) and (ii) above,
nothing in this Section 2 or elsewhere in this Guaranty shall constitute a
waiver of any defense available to Tenaska under the Power Purchase Agreement,
and any such defense may be asserted by the Guarantor to the same extent that it
may be asserted by Tenaska.
3. In the event that the Beneficiary elects to take proceedings
hereunder directly against the Guarantor, it shall endeavor to notify the
Guarantor as soon after making such election as is reasonable and practicable to
the Beneficiary. The foregoing undertaking does not impair the unconditional and
absolute nature of this Guaranty and the delivery of such notification does not
constitute a condition to the liability of the Guarantor hereunder, nor shall
any failure to give such notice constitute a defense to or otherwise discharge
the Guarantor's obligations hereunder.
4. The terms of the Guaranty shall be construed according to the laws
of the State of ______, excluding any choice of law provisions or conflict of
law principles that would require reference to the laws of any other
jurisdiction.
5. The terms and provisions of this Guaranty shall be binding upon and
inure to the benefit of the successors, assigns and legal representations of the
parties hereto. Except as hereinafter provided, Guarantor may not assign this
Guaranty or any of its rights or obligations hereunder, without the prior
written consent of the Beneficiary.
6. The Guarantor hereby makes unconditionally the following
representations and warranties:
(a) The Guarantor is a corporation duly organized and in good standing
under the laws of the jurisdiction specified for the Guarantor in the first
paragraph of this Guaranty.
3
<PAGE>
(b) The Guarantor has the corporate authority to execute, deliver and
fully perform its obligations under this Guaranty and all resolutions, if any,
of directors and shareholders required to authorize execution and delivery of
this Guaranty have been obtained.
(c) This Guaranty constitutes a valid, legal and binding obligation of
the Guarantor enforceable in accordance with its terms.
(d) Execution of and performance by the Guarantor under this Guaranty
does not require the consent or approval of any Person or governmental agency
and does not conflict with or breach any terms or conditions of:
(i) any order, writ or decree of any court or governmental
authority by which said the Guarantor is bound, or
(ii) any agreement to which the Guarantor is a party or by
which it is bound.
7. Any notice under this Guaranty shall be in writing and shall be
deemed given on the earlier of (i) the date received by the addressee when
delivered by hand, or (ii) the day following the date sent by telecommunication
means to the numbers set forth below, or (iii) five (5) days after mailing by
prepaid registered United States mail, directed to the post office address of
the parties as follows (PROVIDED THAT, at any time when there is a strike
affecting delivery of either United States mail, all such deliveries shall be
made by hand or by telecommunications):
GUARANTOR:
Attention:
Telephone:
Telecopy:
BENEFICIARY: PECO ENERGY COMPANY.
Attention:
Telephone:
Telecopy:
Any party may from time to time designate as the address for
notification under this Guaranty any other address of its choice by delivery of
registered mail to the other Parties.
4
<PAGE>
IN WITNESS WHEREOF, each of the Guarantor and the Beneficiary have
caused this Guaranty to be executed and delivered in their respective names and
on their behalf, as of the date first above written.
GUARANTOR:
By:
-----------------------------------
Name:
Title:
BENEFICIARY:
PECO ENERGY COMPANY
By:
-----------------------------------
Name:
Title:
5
<PAGE>
EXHIBIT 1.01
COLONIAL PIPELINE COMPANY
3.32.1 SPECIFICATIONS FOR FUNGIBLE LOW SULFUR DIESEL FUEL
Issue No. 3: Grade 74
Cancels Previous Issues of Grade 74
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Test Results
ASTM Test
Produce Property Method Minimum Maximum Note
- ------------------------------------- ------------------- ------------------ -------------- -----------
<S> <C> <C> <C> <C>
Gravity API D287 30 Report
- ------------------------------------- ------------------- ------------------ -------------- -----------
Flash Point, (0)F
Ponsky-Martin D93 130
- ------------------------------------- ------------------- ------------------ -------------- -----------
Distillation, (0)F D86
50% Report
90% 540 640
End Point 690
- ------------------------------------- ------------------- ------------------ -------------- -----------
*Color ASTM D1500, D6045 2.5
- ------------------------------------- ------------------- ------------------ -------------- -----------
Color Visual Undyed
- ------------------------------------- ------------------- ------------------ -------------- -----------
Viscosity, cSt @ 38(0)C (100(0)F) D445 2.0 3.6
- ------------------------------------- ------------------- ------------------ -------------- -----------
Pour Point D97 2
- ------------------------------------- ------------------- ------------------ -------------- -----------
Cloud Point D2500 2
- ------------------------------------- ------------------- ------------------ -------------- -----------
Corrosion, 3 hrs. @ 50(0)C D130
(122(0)F)
- ------------------------------------- ------------------- ------------------ -------------- -----------
Total Sulfur, wt. % D1266
D2622
or D4294 0.047 3
- ------------------------------------- ------------------- ------------------ -------------- -----------
tane Number D613 40 4
- ------------------------------------- ------------------- ------------------ -------------- -----------
Cetane Index D976 42
- ------------------------------------- ------------------- ------------------ -------------- -----------
Ash, wt. % D482 0.01
- ------------------------------------- ------------------- ------------------ -------------- -----------
Carbon Residue: Ramsbottom
on 10% Bottom D524 0.35
- ------------------------------------- ------------------- ------------------ -------------- -----------
BS&W, vol. % D1796
- ---------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Test Results
ASTM Test
Produce Property Method Minimum Maximum Note
- ------------------------------------- ------------------- ------------------ -------------- -----------
<S> <C> <C> <C> <C>
or equivalent < 0.05
- ------------------------------------- ------------------- ------------------ -------------- -----------
Thermal stability, 90 minutes
150(0)C Pad rating,
DuPont scale 7
OR
Oxidation stability, mg/100 ml D2274 2.5
- ------------------------------------- ------------------- ------------------ -------------- -----------
Haze rating @ 25(0)C (77(0)F) D4176
Procedure 2 2
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1. Concentration and type of additives permitted only as approved by
Colonial.
2. This schedule denotes the fluidity of the distillate at the time and
place of use.
Pour Point--September, October, November, December,
January, February, March: Maximum-18(0)C (0(0)F)
Pour Point--April, May, June, July, August: Maximum-12(0)C (+10(0)F)
Cloud Point-- September, October, November, December,
January, February, March: Maximum-9(0)C (+15(0)F)
Cloud Point--April, May, June, July, August: Maximum-7(0)C (+20(0)F)
3. Test method D2622 or D4294 must be used to certify sulfur content at
origin locations.
4. When cetane number by test method D613 is not available, test method
D976 or D4737 can be used as an approximation. 40CFR80.29 allows a
minimum cetane index of 40 by ASTM D976-80 as an approximation of
aromatics content. Minimum cetane index of 42 accounts for +/-2
accuracy of the cetane index methods in approximating cetane number and
satisfies 40CFR80.29 as well.
<PAGE>
EXHIBIT 2.01
<TABLE>
<CAPTION>
- --------------------------- ------------------------------- -------------------------- ------------------------------
1 2 3
- --------------------------- ------------------------------- -------------------------- ------------------------------
<S> <C> <C> <C>
EPC Construction Contractor Zachry Construction Corporation TIC The Industrial Company Gilbert Industrial Corporation
- --------------------------- ------------------------------- -------------------------- ------------------------------
Parent Company H.B. Zachry Company TIC The Industrial Company Kiewit
- --------------------------- ------------------------------- -------------------------- ------------------------------
EPC Engineer Utility Engineering Corporation Burns & McDonnell Bibb & Associates Inc.
- --------------------------- ------------------------------- -------------------------- ------------------------------
</TABLE>
<PAGE>
EXHIBIT 3.06
FORM OF LETTER OF CREDIT
IRREVOCABLE STAND-BY LETTER OF CREDIT NO.________
[BANK]
TENASKA GEORGIA PARTNERS, L.P.,
[ADDRESS]
[Date]
Dear Sirs:
For the account of [PECO]. ("PECO"), we hereby authorize you to draw on
us at sight $175,000,000 (the "Credit Amount").
Funds under this Letter of Credit are available to you against your
sight draft drawn on us and accompanied by a certificate purportedly signed by
your authorized representative in the form of EXHIBIT A attached hereto.
Presentation of such draft and certificate shall be made at our office
located at ________________, ________________, Attention: ______________ or at
any other location _______________ which may be designated by us by written
notice delivered to you. The Draft must be marked "Drawn under [BANK]
Irrevocable Letter of Credit No. ________________". We hereby agree that the
draft drawn under and in compliance with the terms of this Letter of Credit will
be duly honored by us upon due delivery of the draft and certificate if
presented at such office on or before the termination date hereof.
Payment under this Letter of Credit shall be made in accordance with
the payment instructions set forth in your certificate in the form of EXHIBIT A.
The draft and certificate shall be personally delivered to us.
This Letter of Credit shall automatically terminate and be delivered to
us for cancellation upon the earliest of (i) the making by you of a drawing
hereunder in the full Credit Amount and (ii) the close of business on [DATE],
the Expiry Date.
Partial drawings under this Letter of Credit are not permitted.
This Letter of Credit is subject to the International Standby Practices
(ISP98). This Letter of Credit shall be deemed to be made under the laws of the
State of ____, including Article 5 of the Uniform Commercial Code, and shall, as
to matters not governed by the International Standby Practices (ISP98), be
governed by and construed in accordance with the laws of the
<PAGE>
State of ____, excluding any choice of law provisions or conflict of law
principles which would require reference to the laws of any other jurisdiction.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein; and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for the certificate and such sight
draft referred to herein.
Very truly yours,
[BANK]
By:
-----------------------------------
2
<PAGE>
EXHIBIT A
DRAWING CERTIFICATE
The undersigned, a duly authorized representative of TENASKA GEORGIA
PARTNERS, L.P. ("Tenaska"), as the beneficiary of the Irrevocable Letter of
Credit No. ___ (the "Letter of Credit") issued by [BANK] (the "Bank") for the
account of [ ] ("PECO"), certifies as follows to the Bank:
1. Tenaska and PECO are parties to a Power Purchase Agreement
dated _____, 1999 (the "PPA"). PECO has notified Tenaska that it
intends to exercise its right to terminate the PPA effective on the
20th anniversary of the Date of Commercial Operation (the "Termination
Date"). PECO has failed to pay part or all of $175,000,000 that was due
from PECO on the Termination Date.
2. Tenaska is entitled to make a drawing under the Letter of
Credit in the amount of the drawing of $__________________, which is
the amount that PECO failed to pay on the Termination Date.
3. Payment to Tenaska under the Letter of Credit shall be made
by wire transfer of immediately available funds to Tenaska at
[TENASKA'S BANK], for credit to account no. _____.
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Managing General Partner
By:
-------------------------------------
Name:
Title:
<PAGE>
EXHIBIT 5.01
PERFORMANCE TEST GUIDELINES AND PROCEDURES
Annual Capacity Tests shall be conducted by Tenaska in accordance with
Georgia PPA Capacity Test Procedures.
Temperature measurements for the Capacity Test will comply with
ASME Performance Test Codes PTC 19.3, PTC 22 and PTC 46.
CAPACITY TEST PROCEDURE
1.0 INTRODUCTION
Following is the procedure for conducting the Capacity Test. The Plant
is comprised of gas turbine generators and associated plant equipment.
2.0 CAPACITY TEST
2.1 CAPACITY TEST OBJECTIVE
The objective of the Capacity Test is to determine the net electrical
output capability of the plant to be used in establishing Contract
Capacity.
2.2 CAPACITY TEST PERIOD
The Capacity Test will be conducted over a minimum 4-hour operating
period. As-tested plant capacity will be based on data recorded during
two 60-minute intervals. Results from each of the two one-hour
intervals will be corrected to the rating conditions shown in Table
2-1. The evaporative cooler effectiveness will be calculated from data
taken during the test period, unless the ambient temperature and wet
bulb temperatures are outside the limits specified in Section 2.3.2.2.
If necessary, the Evaporative Cooler Effectiveness Testing can be
performed independent of the Capacity Test at a time mutually agreeable
to PECO and Tenaska. The effectiveness will be used to establish the
standard condition compressor inlet temperature (CIT).
2.3 CAPACITY TEST PROTOCOL
This section outlines the detailed procedures for conducting the
Capacity Test.
2.3.1 RESPONSIBILITIES
Tenaska will have overall responsibility for conducting the Capacity
Test and for directing operation of the unit during testing. A Test
Coordinator will be assigned by Tenaska. The responsibilities during
and following the conclusion of the Capacity Test will include the
following:
<PAGE>
-- Collection of test data.
-- Input manual measurements and calculate specified performance
parameters for test conditions.
-- Preparation and submittal of a preliminary report to PECO
within 48 hours of completing the Capacity Test.
-- Preparation and submittal of the final report to PECO two
weeks after completion of the test.
2.3.2 TEST CONDITIONS
2.3.2.1 GENERAL. General test conditions are as follows:
-- The rating parameters for the Capacity Test herein referred to
as Standard Operating Conditions are shown in Table 2-1.
-- Since test conditions will differ from those shown in Table
2-1, corrections will be calculated and applied to test data.
-- To increase the potential for utilizing the evaporative
cooler, the continuous two-hour test period will be selected
during the afternoon hours.
-- If the Evaporative Cooler Effectiveness Testing cannot be
performed due to not meeting the conditions stated in 2.3.2.2,
the Evaporative Cooler Effectiveness Testing will be conducted
at a time mutually agreeable to Tenaska and PECO. For the
initial Capacity Test (if an Evaporative Cooler Effectiveness
Testing has not already been performed), the manufacturer's
design evaporative cooler effectiveness will be used for the
interim to establish the standard condition CIT as defined in
Section 2.7.1. For subsequent Capacity Tests, the evaporative
cooler effectiveness determined in the previous Capacity Test
will be used for the interim to establish the standard CIT as
defined in Section 2.7.1.
2.3.2.2 PREREQUISITES. The following items represent prerequisites for the
initiation of testing:
-- The gas turbine compressor section will be inspected and
cleaned following manufacturers' instructions, if deemed
necessary by Tenaska.
-- The gas turbine Evaporative Cooler Effectiveness Testing will
be performed only when: (1) the dry bulb temperature exceeds
60oF, and (2) there is a minimum of 10oF difference between
the wet bulb and dry bulb temperatures.
<PAGE>
TABLE 2-1
STANDARD OPERATING CONDITIONS
- ---------------------------------- --------------------------------------------
PARAMETER VALUE
- ---------------------------------- --------------------------------------------
Ambient Dry Bulb Temperature, 94
DEGREES-F
- ---------------------------------- --------------------------------------------
Compressor Inlet Temperature, To be determined based on the Evaporative
DEGREES-F (each gas turbine) Cooler Effectiveness Testing described in
Section 2.7.1.
- ---------------------------------- --------------------------------------------
Barometric Pressure, Psia 14.29
- ---------------------------------- --------------------------------------------
Ambient Wet Bulb Temperature, oF 74
- ---------------------------------- --------------------------------------------
Fuel Natural Gas
- ---------------------------------- --------------------------------------------
Generator Power Factor 0.95 leading to 0.95 lagging
- ---------------------------------- --------------------------------------------
2.3.2.3 PRETEST ACTIVITIES. The following describe pre-test activities that
must be completed prior to beginning the Capacity Test:
-- Notify PECO as required in Section 5.01(c) of the Power
Purchase Agreement. Notify Local Utility prior to start of the
test.
-- The plant shall be brought on-line and the load increased to
the desired load conditions, which is gas turbine base firing
mode and evaporative cooler in service if conditions are
right.
-- Once the gas turbine reaches the exhaust temperature control,
the plant shall be allowed to stabilize and reach steady-state
conditions. The gas turbine will be considered to be in a
steady-state condition when the turbine exhaust temperatures
do not change more than 5oF in 15 minutes.
-- Determine instrumentation status.
-- Check critical cycle parameters via the plant control system
and the gas turbine control system to resolve parameters which
demonstrate significant variance to expected values.
-- After the period of time allowed for unit stabilization has
elapsed, recording of test data shall begin, as determined by
the Test Coordinator.
2.3.2.4 CAPACITY TEST. The plant will be operated with the following activities
to be performed during the Capacity Test:
<PAGE>
-- Equipment status will be determined in order to establish that
all necessary systems and equipment are operational and
functional prior to the commencement of the test. Changes in
equipment status and the time of status change will be
recorded in the operator log. A copy of the operator log will
be provided to the test coordinator by operations personnel
during the Capacity Test.
-- The facility and equipment will be operated within normal
design limits of the equipment and in a manner consistent with
good utility practices for continuous long-term operation.
-- During testing the plant will be operated with all normally
operated auxiliaries in service.
-- The gas turbine will be operated on natural gas and at the
manufacturers rating for continuous service.
-- The Test Coordinator will announce the start of the Capacity
Test to all test personnel.
2.3.2.5 ONE-HOUR RUNS. Each one-hour run will be conducted at the desired load
conditions determined by the Test Coordinator prior to the test.
The following activities will be performed during each one-hour run:
-- The Test Coordinator will announce the start of each one-hour
run.
-- Manual data will be taken at intervals of 10 minutes.
-- Automated data collection will occur at pre-defined intervals
as shown in Table 2-2.
-- The Test Coordinator will announce the end of each one-hour
run.
2.4 DATA COLLECTION
The data collected during the Capacity Test shall include unit
capacity, the test start and stop times, and output data. The data
collected during each one-hour run period shall include the following:
-- Data taken manually from temporary test instrumentation, if
applicable.
-- Data for plant instruments via the plant data acquisition
system (DAS).
-- Record of all alarms and logs from the DAS.
-- Data from plant instruments from the turbine control systems.
Access to data collected manually and data collected through the DAS
will be controlled by Tenaska and will provide all data necessary for
determining the corrected net plant capacity. At the conclusion of the
Capacity Test, preliminary sets of pertinent data will be provided to
PECO. Final performance data will be provided in the Test Report.
If the test is suspended due to anything outside the control of
Tenaska's responsibilities such as interruption of service from Georgia
Transmission Corporation or the gas supplier, the duration of the
Capacity Test will be extended as mutually agreed upon by Tenaska and
PECO.
<PAGE>
2.5 TEST DATA REQUIREMENTS
The measurements required to determine the level of achievement during
the Capacity Test are listed in Table 2-2. Additional measurements will
be monitored in order to confirm normal plant performance.
2.5.1 PERFORMANCE MONITORING AND MEASURING FREQUENCY
Where practical, those parameters listed in Table 2-2 will be monitored
using the DAS. The data will be collected as shown in the Table. Data
collected through the DAS will be logged and printed on one-minute
intervals. The manual data will be collected on ten-minute intervals
during each one-hour period.
TABLE 2-2
REQUIRED PERFORMANCE TEST MEASUREMENTS LOG
<TABLE>
<CAPTION>
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
INSTRUMENTATION MEAS. SAMPLING TEST
DESCRIPTION INSTRUMENT/REMARKS 3 METHOD 2 METHOD FREQUENCY REQT.1
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
<S> <C> <C> <C> <C> <C>
ELECTRICAL POWER MEASUREMENTS
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
Net Plant Output (HV custody transfer
meters), kWh's/Pulse Power Meters (2)3 Plant Instrument DAS N/A C
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
Gross Gas Turbine Electrical Output, MW GT reading at generator terminals (6)3 Plant Instrument DAS 1 Minute C
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
Gross Gas Turbine Electrical Output, MVar GT reading at generator terminals (3)3 Plant Instrument DAS 1 Minute
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
Auxiliary Power consumption, kW 4160V Switchgear 1 & 2 (2)3 Plant Instrument DAS 1 Minute B
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
CORRECTION MEASUREMENTS
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
CT Compressor Inlet Temperature, oF Min. of 2 temp indicators per GT (12+)3 Plant or Test DAS or 1 or 10 C
Instrument Manual Minutes
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
Ambient Dry Bulb Temperature, oF RTD Plant or Test DAS or 1 or 10 C
Instrument Manual Minutes
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
Ambient Wet Bulb Temperature, oF Psychrometer Plant or Test DAS or 1 or 10 C
Instrument Manual Minutes
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
Ambient Barometric Pressure, psia Barometer Plant or Test DAS or 1 or 10 C
Instrument Manual Minutes
- ----------------------------------------- --------------------------------------- ---------------- ----------- ---------- ------
NOTES:
1 Test requirements refers to whether the measurement will be used for correction calculations or used for backup measurement
C = Used in calculation of net plant capacity; B = Backup measurement
2 DAS = Data acquisition system
3 Number of primary instruments if greater than one
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2.5.2 AMBIENT CONDITIONS REQUIREMENTS
The rating conditions (Table 2-1) contain ambient weather conditions at
the plant which are the basis for performance corrections and for
determining the evaporative cooler effectiveness. Tenaska will use
plant and test instrumentation as required to measure compressor inlet
temperature, ambient dry bulb temperature, ambient wet bulb
temperature, and ambient barometric pressure.
2.6 INSTRUMENTATION/DATA ACQUISITION
The test procedures described in these documents are based on use of
plant instrumentation, supplemented with any special test
instrumentation required.
<PAGE>
To assure the best possible accuracy with the available
instrumentation, the following procedures should be used:
-- Instrumentation to be used to measure the parameters shown in
Table 2-2 shall be calibrated as near as practical to the
initiation of the test. Calibration records will be prepared
at the time of calibration.
-- Two independent measurements will be taken for critical data
points when possible in order to facilitate detection of
instrument reading errors and to provide backup
instrumentation in case of on-line device malfunctions during
the course of the test.
If during the test run, or during the evaluation of the data after the
run, obvious errors are found in the recorded data, those readings will
be disregarded. The test run will be considered valid provided Tenaska
and PECO agree to evaluation using data considered to be correct.
2.6.1 POWER MEASUREMENTS
Net plant electrical output will be measured using the Utility (Georgia
Transmission Corporation) kilowatt-hour meters on the high side of the
generator step-up transformers.
Auxiliary power will be calculated for use in the plant corrections and
will be measured as a backup on the low side of the auxiliary
transformer.
Individual gas turbine power output will be measured for use in plant
corrections.
2.6.2 AMBIENT CONDITION MEASUREMENTS
Ambient conditions used to correct for variations in the nominal
operating conditions will be measured with plant and test
instrumentation as described in Table 2-2. Compressor inlet temperature
will be measured with a minimum of two calibrated RTD's in the
compressor inlet of the gas turbine. Ambient dry bulb and wet bulb
temperatures, and barometric pressure will be measured with test
instruments and plant weather instrumentation.
2.7 EVALUATION OF TEST RESULTS
Each measured parameter collected by the DAS during the test period
will be averaged for each of the one-hour tests. Data collected
manually will also be based on 10-minute intervals. From this data, the
ten-minute logged data will be averaged into a one-hour average. This
one-hour average will represent the as-tested performance. The
determination of evaporative cooler effectiveness will be based on the
calculation method in Section 2.7.1. The plant capacity will be
determined based on performance calculations using the performance
correction curves provided by the equipment manufacturers.
<PAGE>
2.7.1 EVAPORATIVE COOLER EFFECTIVENESS TESTING
For each gas turbine the evaporative cooler effectiveness will be
determined by test data as follows:
X = (DBt - CITt) / (DBt - WBt)
The test evaporative cooler effectiveness will be used to determine the
compressor inlet temperature at Standard Operating Conditions as
follows:
CITSC = DBSC - X (DBSC - WBSC) = 94 - X(20)
where:
X = Tested evaporative cooler effectiveness
DB = Dry bulb temperature, oF
CIT = Compressor inlet temperature, oF
WB = Wet bulb temperature, oF
t = At test conditions
sc = At standard conditions
DBSC = 94 oF
WBSC = 74 oF
2.7.2 AS-TESTED NET PLANT CAPACITY
The as-tested measured values of electrical power are determined from
the gas turbines watt meter readings and the utility meters. The
turbine generator electrical output is considered to be gross
electrical output. The electrical output will be determined as follows:
kWaux = kWGT - kWneta
where:
kWneta = As-tested (Power Metering Equipment)
measured simple cycle net electrical
output, kW. Megawatt-hour pulses will be
summed for each of one-hour period. The
total megawatt-hours will be calculated
and converted to kW.
kWGT = Measured gas turbine electrical output at
generator terminals, kW (the sum of all
gas turbine measurements).
kWaux = Auxiliary electrical consumption
(calculated by difference), including
transformer losses kW.
<PAGE>
2.7.3 CORRECTED NET PLANT CAPACITY OUTPUT
The net, as-tested, Capacity output, determined during the test, is
based on plant operating conditions. These operating conditions may be
different from Standard Operating Conditions (Table 2-1). Net capacity
depends on ambient conditions, which are beyond the control of Tenaska.
Because of this, if the values of these conditions are different from
the Standard Operating Conditions, adjustments will be made to the
as-tested generator output to account for these differences.
After the as-tested values for each of the one-hour performance runs
are calculated, the adjustments will be performed. The correction
factors that will be applied to the as-tested gross generator output
include the following:
-- Compressor inlet temperature
-- Barometric pressure
A description of the correction method is as follows:
kWnetc = kWGTc - kWaux
where:
kWnetc = Corrected net plant output, kW
kWGTc = Gas turbine adjusted gross electrical output,
kW (the sum of all corrected gas turbine
outputs with each corrected independently such
that kWGTc=kWGTxCgtkwCITxCgtkwBP for each unit)
kWaux = Auxiliary electrical consumption, including
transformer losses, kW
CgtkwCIT = Gas turbine electrical output correction for
compressor inlet temperature (for each unit)
CgtkwBP = Gas turbine electrical output correction for
barometric pressure
The specific curves used for correcting the Capacity Test to be
provided by manufacturers include: Gas Turbine Output vs CIT and Gas
Turbine Output vs Barometric Pressure.
Corrected net plant output results from the two one-hour performance
runs will be arithmetically averaged and rounded off to the nearest 100
kW. This value will be referred to as Corrected Capacity Test Output.
No correction for measurement uncertainty will be allowed.
2.8 TEST REPORT FORMAT AND REQUIREMENTS
A written test report will document the results of the Capacity Test.
The report will include the following as a minimum:
-- Date and time of test start and finish
<PAGE>
-- Description of the conditions of the tests
-- Summary of instrument calibration data
-- Performance data from each of the test runs including data
sheets, DAS printouts and guaranteed emissions
-- Summary sheet tabulating corrected capacity for each 60-minute
test run, an average of the capacity values, and a statement
that reads, (Corrected Capacity Test Output is __________ MW.)
-- A list of any abnormal occurrences that could affect results
of the test
-- Summary of applied corrections and corrected test results
-- Conclusions from test results
The data recorded during the Capacity Test and the calculations of the
results will be included as appendices to the report.
<PAGE>
EXHIBIT 8.02
MONTHLY RESERVATION RATE
Contract Year Reservation Rate
(In $/kWm)
1 $3.50
2 [*]
3 [*]
4 [*]
5 [*]
6 [*]
7 [*]
8 [*]
9 [*]
10 [*]
11 [*]
12 [*]
13 [*]
14 [*]
15 [*]
16 [*]
17 [*]
18 [*]
19 [*]
20 [*]
21 [*]
22 [*]
23 [*]
24 [*]
25 [*]
26 [*]
27 [*]
28 [*]
29 $6.00
<PAGE>
EXHIBIT 8.03
ENERGY PAYMENTS
- --------------------------------------------------------------------------------
Gas Energy Rate Fuel Oil Energy Rate
Contract Year ($/MWh) ($/MWh)
- --------------------------------------------------------------------------------
1 $0.16 $1.06
2 [*] [*]
3 [*] [*]
4 [*] [*]
5 [*] [*]
6 [*] [*]
7 [*] [*]
8 [*] [*]
9 [*] [*]
10 [*] [*]
11 [*] [*]
12 [*] [*]
13 [*] [*]
14 [*] [*]
15 [*] [*]
16 [*] [*]
17 [*] [*]
18 [*] [*]
19 [*] [*]
20 [*] [*]
21 [*] [*]
22 [*] [*]
23 [*] [*]
24 [*] [*]
25 [*] [*]
26 [*] [*]
27 [*] [*]
28 [*] [*]
29 $0.56 $1.46
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 17.03(D)
INSURANCE COVERAGES
On and following the Date of Commercial Operation and continuing
throughout the term of this Agreement, Tenaska shall maintain the following
insurance coverages subject to availability on commercially reasonable terms.
1. PROPERTY/BOILER & MACHINERY COVERAGE - Tenaska shall maintain
all-risk property and boiler and machinery coverage on a broad form basis in an
amount equal to the replacement value of the Plant for Contract Years 1 through
15 and equal to or greater than 80% of the replacement value of the Plant
thereafter except for flood, earthquake transit and debris removal perils which
may have lower sublimits.
2. BUSINESS INTERRUPTION COVERAGE - Tenaska shall maintain business
interruption coverage in an amount approximately equal to 12 months of the
Reservation Payments that otherwise would have been owed by PECO under section
8.02 of this Agreement during such 12 month period.
3. COMPREHENSIVE GENERAL LIABILITY COVERAGE - Tenaska shall maintain
comprehensive general liability coverage on a broad form basis for third party
bodily injury/property damage of not less than $1,000,000 each occurrence and ,
$1,000,000 annual aggregate.
4. WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY - If Tenaska has any
potential liability with respect to employees, then Tenaska shall maintain
workers' compensation coverage for the relevant state of employment and
employer's liability insurance coverage subject to the statutory limit of
primary bodily injury liability insurance required to support the purchase of
the insurance described in EXHIBIT 17.03(D)(6).
5. AUTOMOBILE LIABILITY - Tenaska shall maintain comprehensive
automobile liability coverage for any owned vehicles, non-owned and hired
vehicles with a combined single limit for bodily injury and property damage of
not less than $1,000,000.
6. UMBRELLA LIABILITY - Tenaska shall maintain excess or umbrella
liability coverage providing limits in excess of the coverages described in
paragraphs 3, 4 and 5 above. The limits of such policy and this excess or
umbrella coverage when combined shall not be less than $15,000,000 each
occurrence and $15,000,000 annual aggregate.
<PAGE>
EXHIBIT 17.04(A)
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "CONSENT"), dated as of [ ] among PECO
Energy Company, a Pennsylvania corporation (the "CONSENTING PARTY"), Tenaska
Georgia Partners, L.P., a Delaware limited partnership (the "BORROWER"), and [
], a banking corporation organized and existing under the laws of the [ ] as
agent (together with its successors in such capacity, the "Agent") for the
financial institutions (the "Banks") which are or from time to time may become a
party to the Loan Agreement (as defined below).
RECITALS
WHEREAS, the Borrower proposes to develop, construct, own and operate a
[900] MW natural gas-fired electric generating plant, together with related
facilities at George Brown Road (one mile north of Highway 34) near the Town of
Franklin, in Heard County, Georgia (the "PROJECT");
WHEREAS, the Consenting Party and the Borrower have entered into a
Power Purchase Agreement, dated as of [July __, 1999] (the "ASSIGNED AGREEMENT")
pursuant to which the Borrower will sell and the Consenting Party will purchase
the capacity and associated energy from the Project;
WHEREAS, the Borrower, the Agent and the Banks have entered into a
Construction and Term Loan and Reimbursement Agreement, dated as of [ ] (as
amended, restated, modified or otherwise supplemented from time to time, the
"Loan Agreement"), pursuant to which the Banks will make loans and extend other
credit to the Borrower for the purpose of financing the cost of, and providing
certain other credit support for, the construction and operation of the Project
and certain related expenses (the "Loans");
WHEREAS, as security for the Loans and all other obligations under the
Loan Agreement, the Borrower has assigned as security for the Loans and certain
other obligations, all of its right, title and interest in, to and under, and
granted a security interest in, the Assigned Agreement to the Agent pursuant to
the Assignment and Security Agreement, dated as of the date hereof, between the
Borrower and the Agent (as amended, restated, modified or otherwise supplemented
from time to time, the "Security Agreement"); and
WHEREAS, it is a condition precedent to the Banks' obligations to make
the Loans under the Loan Agreement that the Consenting Party execute and deliver
this Consent.
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt of which is hereby acknowledged, and intending to be legally bound,
the parties hereby agree as follows:
Section 1 CONSENT TO ASSIGNMENT, ETC.
<PAGE>
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a) consents in all
respects to the pledge and assignment to the Agent of all of the Borrower's
right, title and interest in, to and under the Assigned Agreement pursuant to
the Security Agreement and (b) acknowledges the right, but not the
obligation, of the Agent or a Qualified Agent's Designee (as defined below),
in the exercise of the Agent's rights and remedies under the Security
Agreement, to make all demands, give all notices, take all actions and
exercise all rights of the Borrower in accordance with the Assigned
Agreement, and agrees that in such event the Consenting Party shall continue
to perform its obligations under the Assigned Agreement in accordance with
its terms.
For purposes of this Consent, a "QUALIFIED AGENT'S DESIGNEE" means a
corporation, partnership, joint venture, firm, a person or other legal entity
("PERSON") that is designated by the Agent and that possesses a satisfactory
level of experience in electric power plant operations to operate the Plant for
a period of two hundred seventy (270) days or such longer period of time as may
reasonably be necessary for the Agent to complete foreclosure proceedings upon,
or otherwise obtain title to, the Plant (as defined in the Assigned Agreement)
and to sell the Plant in a commercially reasonably manner to a third party in
order to maximize the sale price.
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the Agent
shall notify the Consenting Party that an event of default under the Loan
Agreement has occurred and is continuing and that the Agent has exercised its
rights (a) to have itself or a Qualified Agent's Designee substituted for the
Borrower under the Assigned Agreement or (b) to sell, assign, transfer or
otherwise dispose of the Assigned Agreement to (i) a Person that possesses a
satisfactory level of experience in electric power plant operations (a
"PERMITTED TRANSFEREE") or (ii) any Person which has acquired a partnership
interest in the Borrower without contravening the terms of the Assigned
Agreement or this Consent, and any other Person under common control with any
of such Persons (each, a "SPONSOR") then the Agent, the Qualified Agent's
Designee, such Permitted Transferee or such Sponsor shall be substituted for
the Borrower under the Assigned Agreement upon the assumption by the Agent,
the Qualified Agent's Designee, such Permitted Transferee or such Sponsor, as
the case may be, of all of the rights and obligations of the Borrower under
the Assigned Agreement pursuant to a written assumption agreement (each a
"SUBSTITUTE OWNER") and that, in such event, the Consenting Party will
continue to perform its obligations under the Assigned Agreement in
accordance with its terms in favor of the Substitute Owner.
Notwithstanding the foregoing, in no event shall a Substitute Owner
be any of the Persons (each, a "DISQUALIFIED PERSON") that the Consenting
Party so designates in accordance with this sentence in writing to the Agent
within ten (10) days of delivery of written notice by the Agent to the
Consenting Party that the Agent intends to seek a purchaser for the Plant
following an event of default under the Loan Agreement, provided that (i) the
Consenting Party may only designate up to three (3) Disqualified Persons
(together with any Persons under common control with any such Disqualified
Persons) but only to the extent that the Consenting Party has determined in
good faith (and certified in writing to the Agent) that such Disqualified
Person is a competitor of the Consenting Party in the sale, brokering or
marketing of electrical energy or capacity and that the sale, assignment or
other transfer of the Plant to such Disqualified Person would be detrimental
to the Consenting Party's competitive interests in the sale, brokering or
marketing of electrical energy and capacity and (ii) in no event shall the
Consenting Party
3 <PAGE>
designate any of the Sponsors as a Disqualified Person. No Person (other than
the Agent, the Agent's Qualified Designee or a Sponsor) that otherwise
qualifies as a Substitute Owner pursuant to this Section 1.2 shall be a
Substitute Owner for purposes of this Consent until eleven (11) days after
the Agent has delivered to the Consenting Party the above written notice.
1.3 RIGHT TO CURE. The Consenting Party agrees that in the event of
a default by the Borrower in the performance of any of its obligations under
the Assigned Agreement, or upon the occurrence or non-occurrence of any event
or condition under the Assigned Agreement which would immediately or with the
passage of any applicable grace period or the giving of notice, or both,
enable the Consenting Party to terminate or suspend its obligations or
exercise any other right or remedy under the Assigned Agreement or under
applicable law (hereinafter a "DEFAULT"), the Consenting Party will continue
to perform its obligations under the Assigned Agreement and will not exercise
any such right or remedy until it gives written notice of such default to the
Agent (a "Default Notice") and, as set forth in Section 14.03(b) and (c) of
the Assigned Agreement, affords the Agent, the Qualified Agent's Designee and
the Banks a period to cure such default. Such cure period will be no less
than thirty (30) days (in the case of a monetary default) and seventy-five
(75) days (in the case of a non-monetary default) beginning upon the later of
(a) the Agent's receipt of the Default Notice and (b) the termination of the
Borrower's right to cure such default under the Assigned Agreement, provided
that in the event that a Substitute Owner assumes the rights and obligations
of the Borrower under the Assigned Agreement pursuant to a written assumption
agreement (a copy of which is provided to the Consenting Party by the later
of (i) sixty (60) days after receipt of the Default Notice and (ii) the
termination of the Borrower's right to cure such default under the Assigned
Agreement), such Substitute Owner shall have forty-five (45) days from the
effective date of the assumption of the rights and obligations of the
Borrower under the Assigned Agreement to cure such default or if such default
is a non-monetary default, such longer period as is required so long as such
Substitute Owner has commenced and is diligently pursuing appropriate action
to cure such default; provided, however, that if such Substitute Owner is
prohibited from curing any such default by any process, stay or injunction
issued by any governmental authority or pursuant to any bankruptcy or
insolvency proceeding involving the Borrower, the Agent, the Qualified
Agent's Designee, the Banks or such Substitute Owner, then the time periods
specified in this Section 1.3 for curing a default shall be extended for the
period of such prohibition. In no event shall the cure rights provided in
this Section 1.3 continue beyond (x) twelve (12) calendar months from the
date of the Default Notice in the case of a non-monetary default (unless the
Borrower or the Agent, the Qualified Agent's Designee or the Banks post
$10,000,000 in Acceptable Credit Support (as defined in the Assigned
Agreement), in which case the cure rights provided in this Section 1.3 shall
extend beyond such twelve (12) calendar months) or (y) four (4) calendar
months from the date of the Default Notice in the case of a monetary default.
1.4 NO AMENDMENTS. The Consenting Party will not, without the prior
written consent of the Agent, enter into any consensual cancellation or
termination of the Assigned Agreement, or assign or otherwise transfer any of
its right, title and interest thereunder or consent to any such assignment or
transfer by the Borrower, provided that the Consenting Party may assign the
Assigned Agreement without the consent of the Agent in the event that (i) the
Consenting Party sells or otherwise transfers its power marketing business to
a buyer or transferee whose senior unsecured public debt is rated by Moody's
Investor Services, Inc. or
4 <PAGE>
Standard & Poors (each, a "RATING AGENCY") at not less than the comparable
rating of the Consenting Party's unsecured senior debt at the time of such
transfer and (ii) such Rating Agency has confirmed in writing delivered to
the Agent that the senior unsecured public debt rating of such buyer or
transferee shall remain in effect following the assumption of the Assigned
Agreement by such buyer or transferee. The Consenting Party will not enter
into any material amendment, supplement or other modification of the Assigned
Agreement (an "AMENDMENT") until after the Agent has been given ten (10) days
(excluding Saturdays, Sundays and any days which are a legal holiday in New
York or any days on which banking institutions are authorized or required by
law or government action to close) prior written notice of the proposed
Amendment by the Borrower (a copy of which notice will be provided to the
Consenting Party by the Borrower), and will not then enter into such
Amendment if the Consenting Party has, within such ten (10) day period,
received a copy of (i) the Agent's objection to such Amendment or (ii) the
Agent's request to the Borrower for additional information with respect to
such Amendment.
1.5 NO LIABILITY. The Consenting Party acknowledges and agrees that
neither the Agent, the Qualified Agent's Designee or the Banks shall have any
liability or obligation to the Consenting Party under the Assigned Agreement
as a result of this Consent or the assignment of the Assigned Agreement to
the Agent as security for the Loans, nor shall the Agent, the Qualified
Agent's Designee or the Banks be obligated or required to (a) perform any of
the Borrower's obligations under the Assigned Agreement, except, in the case
of the Agent or the Qualified Agent's Designee, during any period in which
the Agent or the Qualified Agent's Designee is a Substitute Owner pursuant to
Section 1.2, in which case (i) the obligations of such Substitute Owner shall
be no more than that of the Borrower under such Assigned Agreement, and (ii)
the sole recourse of the Consenting Party shall be to such Substituted Owner
and its interest in the Project, or (b) take any action to collect or enforce
any claim for payment assigned as security for the Loans.
1.6 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party shall
perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the
Assigned Agreement in full force and effect in accordance with its terms and
with all of the Consenting Party's rights and remedies thereunder, subject to
this Consent.
1.7 DELIVERY OF NOTICES. The Consenting Party shall deliver to the
Agent, concurrently with the delivery thereof to the Borrower, a copy of each
notice, request or demand given by the Consenting Party pursuant to the Assigned
Agreement.
1.8 ACKNOWLEDGEMENTS. The Consenting Party agrees to execute such
acknowledgments or other similar instruments as the Agent shall reasonably
request in connection with the transactions provided for in this Consent.
Section 2 PAYMENTS UNDER THE ASSIGNED AGREEMENT
2.1 PAYMENTS. The Consenting Party will pay all amounts payable by it
under the Assigned Agreement, if any, in the manner required by the Assigned
Agreement directly into the account specified on Exhibit A hereto, or to such
other person or account as shall be specified
5
<PAGE>
from time to time by the Agent to the Consenting Party by not less than 7
business days prior written notice. Amounts paid by the Consenting Party
pursuant to Section 9.04 of the Assigned Agreement shall be paid to the Agent in
trust for deposit into a PPA Disputed Payments Account Depositary Agreement in
the form of Exhibit D, to be entered into with the bank specified pursuant to
Section 9.04(b) as the depositary for payments under the Assigned Agreement,
pending resolution of the dispute or the issuance of a final and binding
arbitral award or a binding court order directing a disposition of such funds,
in each case, in accordance with the terms of the Assigned Agreement.
Section 3 REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
The Consenting Party makes the following representations and warranties
(as of the date hereof), which shall survive the execution and delivery of this
Consent and the Assigned Agreement and the consummation of the transactions
contemplated hereby and thereby.
3.1 ORGANIZATION; POWER AND AUTHORITY. The Consenting Party is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and is duly qualified, authorized to do
business and in good standing in every jurisdiction in which it owns or leases
real property or in which the nature of its business requires it to be so
qualified, and has all requisite power and authority, corporate and otherwise,
to enter into and to perform its obligations hereunder and under the Assigned
Agreement, and to carry out the terms hereof and thereof and the transactions
contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by the
Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate action on the part of the Consenting Party
and do not require any approval or consent of any holder (or any trustee for any
holder) of any indebtedness or other obligation of (a) the Consenting Party or
(b) any other person or entity, except approvals or consents which have
previously been obtained.
3.3 EXECUTION AND DELIVERY; BINDING AGREEMENTS. Each of this Consent
and the Assigned Agreement is in full force and effect, has been duly executed
and delivered on behalf of the Consenting Party by the appropriate officers of
the Consenting Party, and constitutes the legal, valid and binding obligation of
the Consenting Party, enforceable against the Consenting Party in accordance
with its terms except as the enforceability thereof may be limited by (a)
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no litigation, action, suit, proceeding or
investigation pending or (to the best of the Consenting Party's knowledge)
threatened against the Consenting Party before or by any court, administrative
agency, arbitrator or governmental authority, body or agency which, if adversely
determined, individually or in the aggregate, (a) is reasonably likely to have a
materially adverse effect upon the performance by the Consenting Party of its
obligations hereunder or under the Assigned Agreement, or which could modify or
otherwise adversely affect the Approvals (as defined in Section 3.6), (b)
questions the validity, binding
6
<PAGE>
effect or enforceability hereof or of the Assigned Agreement, any action taken
or to be taken pursuant hereto or thereto or any of the transactions
contemplated hereby or thereby or (c) is reasonably likely to have a material
adverse effect upon (i) the business, operations, properties, assets, or
condition (financial or otherwise) of the Consenting Party, (ii) the ability of
the Consenting Party to perform under the Assigned Agreement or this Consent,
(iii) the business, operations, properties, assets, prospects or condition
(financial or otherwise) of the Project, (iv) the value, validity, perfection
and enforceability of the liens granted to the Agent under the Security
Agreement and other security documents or (v) the ability of the Agent or the
Banks to enforce any of their material rights and remedies under the Assigned
Agreement or this Consent (collectively, a "MATERIAL ADVERSE EFFECT").
3.5 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. The Consenting Party is not
in violation of its charter or by-laws, and the execution, delivery and
performance by the Consenting Party of this Consent and the Assigned Agreement
and the consummation of the transactions contemplated hereby and thereby will
not result in any violation of, breach of or default under any term of its
charter or by-laws, or of any contract or agreement to which it is a party or by
which it or its property is bound, or of any license, permit, franchise,
judgment, writ, injunction, decree, order, charter, law, ordinance, rule or
regulation applicable to it, except for any such violations which, individually
or in the aggregate, would not have a Material Adverse Effect on the Consenting
Party.
3.6 GOVERNMENT CONSENT. No consent, order, authorization, waiver,
approval or any other action, or registration, declaration or filing with,
any person, board or body, public or private (collectively, the "APPROVALS"),
is required to be obtained by the Consenting Party in connection with the
execution, delivery or performance of the Assigned Agreement or the
consummation of the transactions between the Borrower and the Consenting
Party contemplated thereunder, except as listed in Exhibit B hereto. All such
Approvals listed on Exhibit B, except for those set forth in Part II thereof
(the "DEFERRED APPROVALS"), are Final (as defined below). An Approval shall
be "FINAL" if it has been validly issued, is in full force and effect, is not
subject to any condition (other than compliance with the terms thereof), does
not impose restrictions or requirements inconsistent with the terms of the
Assigned Agreement, and is final and not subject to any appeal. The
Consenting Party reasonably believes that each Deferred Approval will be
obtained in the ordinary course of business prior to the time when such
Deferred Approval is required to be Final.
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor, to
the best of the Consenting Party's knowledge, any other party to the Assigned
Agreement is in default of any of its obligations thereunder. The Consenting
Party has no existing counterclaims, offsets or defenses against the
Borrower. The Consenting Party and, to the best of the Consenting Party's
knowledge, each other party to the Assigned Agreement have complied with all
conditions precedent to the respective obligations of such party to perform
under the Assigned Agreement. To the best of the Consenting Party's
knowledge, no event or condition exists which would either immediately or
with the passage of any applicable grace period or giving of notice, or both,
enable either the Consenting Party or the Borrower to terminate or suspend
its obligations under the Assigned Agreement. The Assigned Agreement has not
been amended, modified or supplemented in any manner.
7
<PAGE>
3.8 REGULATION. The Consenting Party acknowledges and agrees that,
notwithstanding any adverse treatment or burdensome rate regulation that may
apply under any applicable federal, state or local law with respect to sales by
the Consenting Party of capacity and energy furnished under the Assigned
Agreement, its obligations to make payments required under the Assigned
Agreement and otherwise to perform its other obligations under the Assigned
Agreement shall not be diminished or reduced and shall remain valid and binding,
in accordance with the terms of the Assigned Agreement.
3.9 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no notice of,
and has not consented to, any previous assignment of all or any part of its
rights under the Assigned Agreement.
3.10 REPRESENTATIONS AND WARRANTIES. All representations, warranties
and other statements made by the Consenting Party in the Assigned Agreement
were true and correct as of the date when made and are true and correct in
all material respects as of the date of this Consent.
Section 4 OPINION OF COUNSEL
The Consenting Party shall deliver an opinion of counsel relating to
the Assigned Agreement and this Consent, which opinion shall be substantially in
the form attached hereto as Exhibit C.
Section 5 CLARIFICATIONS
5.1 "CREDIT DOCUMENTS" AND "FINANCIAL INSTITUTIONS". The Consenting
Party acknowledges and agrees that each of this Consent, the Loan Agreement and
the Security Agreement shall be deemed "CREDIT DOCUMENTS" for all purposes of
the Assigned Agreement. The Consenting Party further acknowledges and agrees
that each of the Banks, the Agent and their respective successors and assigns
shall be deemed "FINANCIAL INSTITUTIONS" for all purposes of the Assigned
Agreement.
5.2 USE OF CASUALTY PROCEEDS. The Consenting Party hereby agrees
that Section ____* of the [Loan Agreement] dealing with the treatment of
casualty insurance proceeds, a copy of which is attached hereto as Exhibit E,
constitutes arrangements satisfactory to the Consenting Party under Section
17.03(c) of the Assigned Agreement. The Consenting Party further agrees that,
notwithstanding anything to the contrary in Section 17.03(c) of the Assigned
Agreement, the Borrower shall not be obligated (and shall not be in default
under the Assigned Agreement for failure) to restore the Plant with any
casualty insurance proceeds resulting from an insured casualty loss to the
Plant if and to the extent that such casualty insurance proceeds are not
released to the Borrower for such purpose in accordance with the provisions
of the [Loan Agreement] attached hereto as Exhibit E. This Section 5.2 shall
not otherwise alter or amend the Borrower's obligations under Section
17.03(c) of the Assigned Agreement.
- ------------------
* The applicable provision from the [Loan Agreement] will not be materially
less favorable to the Borrower than the provision attached as
Exhibit E hereto.
8
<PAGE>
5.3 ASSIGNMENTS BY THE BORROWER. The Consenting Party confirms that
the prohibition on assignments in Section 12.01 of the Assigned Agreement
applies to assignments of the Assigned Agreement by the Consenting Party and
by the Borrower and not to transfers of partnership interests in the
Borrower, provided that PECO does not waive any right it may have to contend
that transfers after the date of this Consent of more than fifty percent
(50%) of the partnership interests of the Borrower to parties that are not in
common control with a Sponsor as of the date of this Consent is prohibited by
Section 12.01.
Section 6 MISCELLANEOUS
6.1 NOTICES. All notices and other communications hereunder shall be in
writing, shall be deemed given upon receipt thereof by the party or parties to
whom such notice is addressed, shall refer on their face to the Assigned
Agreement (although failure to so refer shall not render any such notice of
communication ineffective), shall be sent by first class mail, by personal
delivery or by a nationally recognized courier service, and shall be directed as
follows:
If to the Consenting Party:
PECO Energy Company - Power Team
2004 Renaissance Blvd.
King of Prussia, PA 19406
Attention: ______________
Fax: (610) 292-6630
If to the Borrower:
Tenaska Georgia Partners, L.P.
1044 N. 115th Street, Suite 400
Omaha, Nebraska 68154
Attention: Michael F. Lawler
Fax: 402-691-9550
If to the Agent:
[ ]
Attention:
Fax
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
6.2 GOVERNING LAW; SUBMISSION TO JURISDICTION. (i) THIS
CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES
9
<PAGE>
THEREOF RELATING TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
(b) Any legal action or proceeding with respect to this
Consent and any action for enforcement of any judgment in respect
thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Consent, each of the Consenting Party,
the Borrower and the Agent hereby accepts for itself and in respect of
its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any
appeal thereof. Each of the Consenting Party and the Borrower hereby
irrevocably designates, appoints and empowers CT Corporation System,
1633 Broadway, New York, New York, 10019, as its designee, appointee
and agent to receive, accept and acknowledge for and on its behalf, and
in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any action or
proceeding. If for any reason such designee, appointee and agent shall
cease to be available to act as such, the Borrower or the Consenting
Party, as applicable, agrees to designate a new designee, appointee and
agent in New York City on the terms and for the purposes of this
provision satisfactory to the Agent. Each of the Consenting Party, the
Borrower and the Agent irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Consenting Party at its notice address
provided pursuant to Section 6.1 hereof. Each of the Consenting Party,
the Borrower and the Agent hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Consent brought in the courts referred to above and hereby further
irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right
of the Agent or its designees to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed
against the Consenting Party in any other jurisdiction.
6.3 COUNTERPARTS. This Consent may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
6.4 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.
6.5 SEVERABILITY. In case any provision in or obligation under this
Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10
<PAGE>
6.6 AMENDMENT, WAIVER. Neither this Consent nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified except by an
instrument in writing signed by the Consenting Party and the Agent.
6.7 TERMINATION; REFINANCING. (i) The Consenting Party's
obligations hereunder are absolute and unconditional, and the
Consenting Party has no right, and shall have no right, to terminate
this Consent or to be released, relieved or discharged from any
obligation or liability hereunder until all Loans and all other
obligations under the Loan Agreement have been indefeasibly satisfied
in full, notice of which shall be provided by the Agent when all such
obligations have been satisfied (the "TERMINATION NOTICE").
Notwithstanding the foregoing or anything else to the contrary
contained herein, this Consent shall terminate on the earlier of (i)
the termination of the original term of the Loan Agreement or one year
after the termination of the original term of the Loan Agreement if the
Borrower has refinanced the original Loan Agreement through a Rule 144A
financing or (ii) the termination of the Assigned Agreement in
accordance with this Consent.
(b) In the event that the Agent delivers the Termination
Notice to the Consenting Party pursuant to Section 6.7(a) of this
Consent, this Consent shall terminate for all purposes as to the Agent
and the Loan Agreement identified in the first paragraph of this
Consent, and the Agent, the Banks and the Consenting Party shall have
no further rights or obligations under this Consent, provided, however
that the Consenting Party agrees that this Consent shall continue to
apply for the benefit of the Borrower and the providers of any new
credit facilities (the "NEW LENDER") entered into by the Borrower to
replace the Loan Agreement, provided that (i) within five days
following delivery by the Agent to the Consenting Party of the
Termination Notice as provided in Section 6.7(a) the New Lender or an
agent, trustee or other representative of the New Lender, shall have
notified the Consenting Party that it undertakes the prospective
obligations of the "AGENT" under this Consent and Agreement, and shall
have supplied substitute notice address information for Section 6.1 and
new payment instructions (countersigned on behalf of the Borrower) for
Exhibit A, (ii) the amount of the new credit facilities do not exceed
the original amount of commitments by the Banks to make loans and
extend other credit facilities under the original Loan Agreement, and
(iii) thereafter, (a) the term "LOANS" under this Consent and Agreement
will be deemed to refer to the new credit facilities, (b) the term
"AGENT" or "BANKS" shall be deemed to refer to the New Lender or any
agent or trustee for the New Lender, (c) the term "LOAN AGREEMENT"
shall be deemed to refer to the credit agreement, indenture or other
instrument providing for the new credit facilities and (d) the term
"SECURITY AGREEMENT" shall be deemed to refer to the security agreement
under which the Assigned Agreement is assigned as collateral to secure
performance of the obligations of the Borrower under the new credit
facilities.
6.8 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon the
parties hereto and their permitted successors and assigns and shall inure to the
benefit of the parties, their designees and their respective permitted
successors and assigns.
11
<PAGE>
6.9 FURTHER ASSURANCES. The parties hereto hereby agree to execute and
deliver all such instruments and take all such action as may be necessary to
effectuate fully the purposes of this Consent.
6.10 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE CONSENTING PARTY, THE BORROWER AND THE AGENT HEREBY IRREVOCABLY
WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT.
6.11 SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have
been relied upon by the Agent and the Banks and shall survive the execution
and delivery of this Consent.
6.12 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Agent in exercising any right, power or privilege hereunder and no course of
dealing between the Consenting Party and the Agent shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other exercise, or the further exercise, of any
other right, power or privilege hereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Agent would otherwise have.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
12
<PAGE>
IN WITNESS WHEREOF, the Consenting Party, the Borrower and the Agent
have caused this Consent to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
PECO ENERGY COMPANY
By:
---------------------------------------
Name:
Title:
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Managing General Partner
By:
---------------------------------------
Name:
Title:
[ ]
as Agent
By:
---------------------------------------
Name:
Title:
<PAGE>
Exhibit A to
Consent And Agreement
---------------------
PAYMENT INSTRUCTIONS
- ---------------------------------------- --------------------------------------
- ---------------------------------------- --------------------------------------
<PAGE>
Exhibit B to
Consent And Agreement
---------------------
APPROVALS
[None]
<PAGE>
Exhibit 17(a)-2
Exhibit C to
Consent And Agreement
---------------------
FORM OF OPINION OF COUNSEL
[ ]
Tenaska Georgia Partners, L.P.
1044 N. 115th Street
Omaha, Nebraska 68154
Re: The [900] MW natural gas-fired electric generating facility
located in Heard County, Georgia (the "PROJECT"). -------
Dear Ladies and Gentlemen:
I have acted as [__________] to PECO Energy Company, a Pennsylvania corporation
("PECO"), in connection with the Project to be constructed by Tenaska Georgia
Partners, L.P., a Delaware limited partnership (the "BORROWER"), from which PECO
will purchase capacity and energy pursuant to a Power Purchase Agreement, dated
as of [ ] between the Borrower and PECO (the "AGREEMENT"). This opinion is being
provided in connection with the [describe Financing].
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of the following:
(i) the Agreement;
(ii) the Consent and Agreement of PECO, dated as of the date
hereof (the "CONSENT");
(iii) the Certificate of Incorporation and By-laws of PECO;
and
(iv) general resolutions adopted by the Board of Directors of
PECO authorizing the President, and delegations of authority to other
officers, to take such actions as may be necessary or convenient to
execute contracts and other instruments.
The documents referred to in items (iii) and (iv) above are hereinafter
collectively referred to as the "GOVERNING DOCUMENTS" and the Agreement and the
Consent are hereinafter collectively referred to as the "DOCUMENTS". In
addition, I have examined and am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of such other documents as I have
deemed necessary or appropriate as a basis for the opinions set forth below. As
to all factual matters, I have relied, to the extent appropriate, upon
statements and certificates of PECO officers and appropriate public officials.
In my examination I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all
<PAGE>
documents submitted to me as certified or photostatic copies, and the
authenticity of the originals of such copies. In rendering the opinions
expressed below, I have further assumed, without any independent investigation
or verification of any kind, that each Document I have examined is the valid and
binding obligation of each party thereto other than PECO.
I am admitted to the Bar of the State of Pennsylvania. I express no
opinion as to the law of any jurisdiction other than (i) the laws of the State
of Pennsylvania and (ii) the federal laws of the United States of America.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. PECO is a corporation duly organized, validly existing and in good
standing under the laws of the State of Pennsylvania. PECO is duly qualified to
transact business in each jurisdiction in which it owns or leases real property
or in which the nature of its business requires it to be so qualified.
2. PECO has full corporate power and authority to enter into, deliver
and perform its obligations under each of the Documents.
3. PECO has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each Document.
4. PECO has duly executed and delivered each Document.
5. Each Document constitutes the valid and binding obligation of PECO
enforceable against PECO in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
6. The execution, delivery and performance by PECO of the Documents
will not (i) contravene any applicable provision of any currently effective law,
regulation, ruling, order or decree of any governmental authority having
jurisdiction over PECO and to which or by which PECO or any of its property or
assets is subject or bound or (ii) violate any provision of the Governing
Documents of PECO. The execution, delivery or performance by PECO of the
Documents do not and will not, to the best of my knowledge, materially conflict
with, result in any material breach of, or constitute a material default under,
or result in the creation or imposition of (or the obligation to create or
impose) any material lien or encumbrance upon any of the property or assets of
PECO pursuant to any provision of any securities issued by PECO, or under any
indenture, mortgage, deed of trust, contract, undertaking, document, instrument
or other agreement to which PECO is a party or by which it or any of its
property or assets is bound.
7. No consent, order, authorization, waiver, approval or any other
action, or registration, declaration or filing with, any person, board or body,
public or private (collectively, the "APPROVALS"), is required to be obtained by
PECO in connection with the execution, delivery
2
<PAGE>
or performance of the Documents or the consummation of the transactions
contemplated thereby, except as listed on Schedule A hereto. All such Approvals
listed on Schedule A, except for those set forth in Part II thereof, are Final
(as defined below). An Approval shall be Final if it has been validly issued, is
in full force and effect, is not subject to any condition (other than compliance
with terms thereof), doe s not impose restrictions or requirements inconsistent
with the terms of the Documents, and is final and not subject to any appeal.
8. To the best of my knowledge after due inquiry, there are no pending
or threatened actions or proceedings affecting PECO or any of its properties or
assets that individually or in the aggregate could prohibit or limit in any way
the execution, delivery and performance by PECO of any of the Documents.
This opinion is being furnished only to the Agent, the Borrower, the
parties identified on Schedule B hereto and their respective successors and
assigns and is solely for the benefit of such parties; provided that assignees
of, or participants in, the interests of the Banks may rely on this opinion as
if it were addressed to them.
Very truly yours,
3
<PAGE>
Schedule A
APPROVALS
None
<PAGE>
Schedule B
<PAGE>
Exhibit D to the
Consent and Agreement
PPA DISPUTED
AMOUNTS DEPOSITARY AGREEMENT
among
TENASKA GEORGIA PARTNERS, L.P.,
as Borrower,
PECO ENERGY COMPANY
and
[ ],
as Agent
Dated as of [ ], [ ]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I ..........................................................................DEFINITIONS/INTERPRETATION
SECTION 1.1 Definitions.................................................................................. 1
SECTION 1.2 Certain Principles of Interpretation......................................................... 3
SECTION 1.3 UCC Terms.................................................................................... 3
ARTICLE II .......................................................GOVERNMENT AND ESTABLISHMENT OF THE ACCOUNT
SECTION 2.1 [Reserved]....................................................................................3
SECTION 2.2 Procedures Governing the Account..............................................................3
SECTION 2.3 Establishment of the PPA Disputed Payments Account............................................5
SECTION 2.4 Security Interest.............................................................................5
SECTION 2.5 Termination...................................................................................6
SECTION 2.6 Dominion and Control of the Account, Funds, and Permitted Investments.........................6
SECTION 2.7 Certificates; Method and Timing of Payments and Transfers.....................................6
SECTION 2.8 Security Interest Absolute....................................................................7
SECTION 2.9 Identification and Confirmation of Proceeds of the
Account.......................................................................................7
SECTION 2.10 Account Balance Statements....................................................................8
ARTICLE III ....................................................DEPOSITS TO AND DISTRIBUTIONS FROM THE ACCOUNT
SECTION 3.1 Deposits into the Account.................................................................... 8
SECTION 3.2 Distributions from the Account............................................................... 8
ARTICLE IV ....................................................................................DEPOSITARY BANK
SECTION 4.1 Appointment of Agent, Powers and Immunities.................................................. 8
SECTION 4.2 Reliance by Agent............................................................................ 9
SECTION 4.3 Court Orders................................................................................. 9
ARTICLE V .....................................................................EXPENSES; INDEMNIFICATION; FEES
SECTION 5.1 Expenses.................................................................................... 10
SECTION 5.2 Indemnification............................................................................. 10
i
<PAGE>
ARTICLE VI ......................................................................................MISCELLANEOUS
SECTION 6.1 Amendments; Etc............................................................................. 10
SECTION 6.2 Addresses for Notices....................................................................... 10
SECTION 6.3 Governing Law............................................................................... 11
SECTION 6.4 Headings.................................................................................... 12
SECTION 6.5 No Third Party Beneficiaries................................................................ 12
SECTION 6.6 No Waiver................................................................................... 12
SECTION 6.7 Severability................................................................................ 12
SECTION 6.8 Successors and Assigns...................................................................... 12
SECTION 6.9 Execution in Counterparts................................................................... 13
SECTION 6.10 Consequential Damages....................................................................... 13
SECTION 6.11 Conflict with Other Agreements.............................................................. 13
</TABLE>
Exhibit A Form of PPA Disputed Payments
Withdrawal Certificate
ii
<PAGE>
This PPA DISPUTED AMOUNTS DEPOSITARY AGREEMENT (this "AGREEMENT") is
dated as of [ ], [ ] among TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership (the "BORROWER"), PECO ENERGY COMPANY, a Pennsylvania corporation
("PECO"), [ ], a banking corporation organized and existing under the laws of
the [ ] as agent (together with its successors and permitted assigns, the
"AGENT"), for itself, the banks that are the issuers of certain letters of
credit (the "ISSUING BANKS") and the banks (the "BANKS"), in each case that are
parties to the Loan Agreement (as hereinafter defined) and each of the Secured
Interest Rate Protection Providers (as hereinafter defined) (collectively, the
Agent, the Issuing Banks, the Banks and the Secured Interest Rate Protection
Providers being the "SECURED PARTIES").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Borrower, the Agent, the Banks, and the Issuing Banks have
entered into that certain Construction and Term Loan and Reimbursement
Agreement, dated as of [ ] (as amended, supplemented or otherwise modified from
time to time, the "LOAN AGREEMENT"), which provides for the making of certain
loans (the "LOANS") by the Banks to the Borrower and the issuance by the Issuing
Banks of certain letters of credit (the "LETTERS OF CREDIT") in connection with
the financing of a [900]MW (net) electric power plant located at George Brown
Road (one mile north of Highway 34) near the town of Franklin, in Heard County,
Georgia (as more particularly described in the Loan Agreement, the "PROJECT") in
accordance with the terms and conditions set forth therein;
WHEREAS, the Borrower and PECO have entered into a Power Purchase
Agreement, dated as of [ ] (the "PPA"), pursuant to which Borrower
will sell and PECO will purchase the electrical capacity and associated energy
from the Project in accordance with the terms and conditions set forth therein;
WHEREAS, it is a condition precedent to the making of the Loans by the
Banks and the issuance of the Letters of Credit by the Issuing Banks pursuant to
the Loan Agreement that the parties hereto enter into this Agreement;
NOW THEREFORE, in consideration of the premises and the covenants and
agreements as herein set forth and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS/INTERPRETATION
Section 1.1 DEFINITIONS.
(a) In addition to such other defined terms as may be set forth in this
Agreement, as used in this Agreement, the following terms shall have the
following respective meanings and all other capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in the Loan
Agreement:
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"Account Collateral" shall have the meaning set forth in Section 2.4.
"Authorized Officer" shall mean (i) with respect to any Person that is
a corporation, the president, any vice president, the treasurer or the chief
financial officer of such Person, (ii) with respect to any Person that is a
partnership, an Authorized Officer of a general partner of such Person or (iii)
with respect to any Person, such other representative of such Person that is
approved by the Agent in writing. No Person shall be deemed to be an Authorized
Officer unless named on a certificate of incumbency of such Person delivered to
the Agent.
"Date of Commercial Operation" shall have the meaning set forth in the
Power Purchase Agreement.
"Governmental Authority" shall mean any nation, state, sovereign, or
government, any federal, regional, state, local or political subdivision and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Permitted Investments" shall mean (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having a maturity not exceeding
one year from the date of issuance, (ii) time deposits and certificates of
deposit of any Bank or any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000, (iii) commercial paper
issued by the parent corporation of any domestic commercial bank of recognized
standing having capital and surplus in excess of $500,000,000, the parent
corporation of any Bank, and commercial paper of any domestic corporation rated
at least A-1 or the equivalent thereof by Standard & Poor's Corporation (or any
successor thereto which is a nationally recognized rating agency) or at least
P-1 or the equivalent thereof by Moody's Investors Services, Inc. (or any
successor thereto which is a nationally recognized rating agency) and, in each
case, having a maturity not exceeding ninety (90) days from the date of
acquisition, (iv) fully secured repurchase obligations with a term of not more
than seven (7) days for underlying securities of the types described in clause
(i) above entered into with any bank meeting the qualifications established in
clause (ii) above and (v) investments in money market funds or mutual funds
sponsored by any securities broker-dealer of a recognized national standing
having an investment policy that requires substantially all of the invested
assets of such fund to be invested in investments described in (i), (ii), (iii)
and (iv) above.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any Governmental
Authority.
"PPA Disputed Payments" shall mean the amount of any payments requested
by Borrower under the Power Purchase Agreement that have been disputed by PECO
in accordance with Section 9.04(b) of the Power Purchase Agreement.
"PPA Disputed Payments Account" shall have the meaning set forth in
Section 2.3.
"PPA Disputed Payments Withdrawal Certificate" shall mean the
instrument in the form of Exhibit A.
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"Secured Interest Rate Protection Providers" shall mean any Bank that
is a party to a Secured Interest Rate Protection Agreement.
"UCC" shall meaning the Uniform Commercial Code of the State of New
York.
Section 1.2 CERTAIN PRINCIPLES OF INTERPRETATION.
(a) Unless the context requires otherwise, any reference in this
Agreement to any agreement or contract shall mean such agreement or document and
all schedules, exhibits and attachments thereto as amended, supplemented or
otherwise modified and in effect from time to time. Unless otherwise stated, any
reference in this Agreement to any person shall include its permitted successors
and assigns and, in the case of any Government Authority, any Person succeeding
to its functions and capacities.
(b) Defined terms in this Agreement shall include in the singular
number the plural and in the plural number the singular.
(c) The words "herein," "hereof" and "hereunder" and words of similar
import when used in this Agreement shall, unless otherwise expressly specified,
refer to this Agreement as a whole and not to any particular provision of this
Agreement and all references to Sections, Schedule and Exhibits shall be
references to Sections of, and Schedules and Exhibits to, this Agreement unless
otherwise specified.
(d) Unless otherwise expressly specified, any agreement, contract or
document defined or referred to herein shall mean such agreement, contract or
document in the form (including amendments and clarification letters relating
thereto) delivered to the Agent on the date hereof, as the same may thereafter
be amended, supplemented or otherwise modified from time to time in accordance
with the terms of the Loan Agreement and the other Loan Documents.
Section 1.3 UCC TERMS. Unless otherwise defined herein or in the Loan
Agreement, terms defined in the UCC as in effect from time to time in the State
of New York which we used herein shall have the respective meanings given to
those terms in the UCC as in effect from time to time in the State of New York.
ARTICLE II
GOVERNMENT AND ESTABLISHMENT OF THE ACCOUNT
Section 2.1 [RESERVED].
Section 2.2 PROCEDURES GOVERNING THE ACCOUNT.
(a) The Agent hereby agrees to act and to accept all amounts and
Permitted Investments received or held by the Agent pursuant to the terms of
this Agreement and to promptly deposit or credit all such amounts and Permitted
Investments received into the PPA Disputed Payments Account established
hereunder. The Agent shall hold and safeguard the PPA
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Disputed Payments Account (and the PPA Disputed Payments, cash, payments,
securities, investments and other amounts on deposit therein) during the term of
this Agreement for disbursement strictly in accordance with the terms hereof.
(b) The Agent shall treat the amounts and Permitted Investments and any
other property, and all rights related thereto, now or hereafter deposited in or
credited to the PPA Disputed Payments Account as "financial assets" (as defined
in Section 8-102(a)(9) of the UCC), to be held by the Agent, acting as a
"securities intermediary" (as defined in the UCC).
(c) All of the Borrower's right, title and interest, whether now
existing or hereafter acquired or arising, in, to and under all such amounts and
Permitted Investments and other property held in or credited to the PPA Disputed
Payments Account shall constitute a part of the Collateral and shall not
constitute payment of any Indebtedness or any other obligation of the Borrower
until applied as provided in the Loan Documents. Except as otherwise expressly
provided for herein, the PPA Disputed Payments Account shall at all times be in
the exclusive possession of, and under the exclusive dominion and control of,
the Agent, acting at the direction of the Agent. The Borrower and PECO agree
that each of their rights to amounts, Permitted Investments and any other
property held in or credited to the PPA Disputed Payments Account are subject to
and controlled by the terms of this Agreement.
(d) The Agent hereby represents that it has not entered into, and,
hereby agrees that until each of the Loan Documents has been terminated, it will
not enter into, any agreement with any other Person (other than the Borrower and
PECO) relating to the PPA Disputed Payments Account (or the amounts or Permitted
Investments or other property deposited therein or credited thereto) pursuant to
which it has agreed to comply with entitlement orders made by such Person. The
Agent hereby represents that it has not entered into any other agreement with
the Borrower or PECO purporting to limit or condition the obligation of the
Agent to comply with entitlement orders as set forth in this Section 2.2(d).
(e) The PPA Disputed Payments Account established pursuant to Section
2.3 shall be in the name of the Agent for the benefit of the Secured Parties.
All amounts and Permitted Investments and any other property from time to time
held in or credited to the PPA Disputed Payments Account shall be (i) registered
in the name of the Agent or (ii) endorsed to the Agent or in blank or credited
to another account maintained in the name of Agent. In no case will any amounts
or Permitted Investments or other property deposited in or credited to the PPA
Disputed Payments Account be registered in the name of the Borrower or PECO,
payable to the order of the Borrower or PECO or specially endorsed to the
Borrower or PECO, except to the extent the foregoing have been specially
endorsed to the Agent or in blank.
(f) Except for the claims and interest of the Borrower and PECO in the
PPA Disputed Payments Account, no officer of the Agent with direct
responsibility for administering this Agreement has actual knowledge of any
claim to, or interest in, the PPA Disputed Payments Account or any monies or any
other property deposited therein or credited thereto. If an officer of the Agent
with direct responsibility for administering this Agreement obtains actual
knowledge that any Person has asserted any lien, encumbrance or adverse claim
against the PPA Disputed Payments Account or in any amounts, Permitted
Investments or any other property deposited therein or credited thereto, the
Agent will promptly notify the Borrower and PECO
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thereof. The Agent agrees that all property delivered to the Agent as a Disputed
Payment Amount pursuant to the Power Purchase Agreement will be promptly
credited to the PPA Disputed Payments Account.
Section 2.3 ESTABLISHMENT OF THE PPA DISPUTED PAYMENTS ACCOUNT. The
Agent hereby creates and establishes a special, segregated and irrevocable
account of the Borrower and PECO entitled the "PPA Disputed Payments Account for
the benefit of [Agent]", initially having account number [ ], to be maintained
with the Agent (the "PPA DISPUTED PAYMENTS ACCOUNT"). The PPA Disputed Payments
Account shall be a "securities account" (as such term is defined in Section
8-501(a) of the UCC) and shall be maintained at all times in accordance with
Section 2.2 until the termination of this Agreement. No payments shall be made
out of the PPA Disputed Payments Account except for the purposes and on the
terms herein stated. The Agent shall not change the name or account number of
the PPA Disputed Payments Account without the prior written consent of the
Borrower and PECO. In the event that, in accordance with this Agreement, the
Agent is required to segregate certain monies in the PPA Disputed Payments
Account from any other amounts on deposit in such Account pending transfer or
withdrawal in accordance with this Agreement, the Agent shall either (i) hold
such monies in such Account for use solely for such transfer or withdrawal, or
(ii) create a separate sub-account in such Account for such purpose (and the
Agent shall give notice to the Borrower and PECO promptly after the creation
thereof).
Section 2.4 SECURITY INTEREST.
(a) As collateral security for the prompt and complete payment and
performance when due of all of the Borrower's obligations owing to any of the
Secured Parties under the Loan Documents including the Obligations, the Borrower
hereby pledges, assigns, hypothecates and transfers to the Agent for the benefit
of the Secured Parties, and grants to the Agent for the benefit of the Secured
Parties a Lien on and security interest in and to, all of the Borrower's right,
title and interest, whether now existing or hereafter acquired or arising, in,
to and under the PPA Disputed Payments Account (including any successor accounts
to the PPA Disputed Payments Account) and all amounts, Permitted Investments and
any other property (including, but not limited to, securities, financial assets,
investment property, security entitlements and instruments) at any time
deposited in or credited to the PPA Disputed Payments Account and all security
entitlements with respect thereto, including all income or gain earned thereon
and any proceeds thereof (collectively, the "ACCOUNT COLLATERAL").
(b) The Borrower, PECO and the Secured Parties hereby authorize the
Agent to set off against and/or debit the Account Collateral to the extent of
any and all fees and charges owing to the Agent directly related to the Account
Collateral or the Agent's duties hereunder. Except with respect to the amounts
described in the preceding sentence, the Agent hereby waives any right of
set-off or recoupment that it may have or obtain with respect to the PPA
Disputed Payments Account or any amounts, Permitted Investments and any other
property deposited therein or credited thereto and agrees that in the event that
the Agent has or subsequently obtains by agreement, by operation of law or
otherwise a security interest in the Account Collateral or any security
entitlement credited thereto, the Agent hereby agrees that such security
interest shall be subordinate to the security interest of the Secured Parties.
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Section 2.5 TERMINATION. The rights and powers granted herein to the
Agent have been granted in order to perfect its security interest in the PPA
Disputed Payments Account, are powers coupled with an interest and will neither
be affected by the bankruptcy of the Borrower or PECO nor by the lapse of time.
The obligations of the Agent hereunder shall continue in effect until the
termination of the Loan Documents.
Section 2.6 DOMINION AND CONTROL OF THE ACCOUNT, FUNDS, AND PERMITTED
INVESTMENTS.
(a) Except as expressly provided herein, the PPA Disputed Payments
Account (and the amounts, Permitted Investments and property on deposit or held
therein) shall be under the sole dominion and control of the Agent, and the
Borrower or PECO shall have no right of withdrawal in respect of any of the PPA
Disputed Payments Account. The Borrower and PECO hereby irrevocably direct and
authorize the Agent to deposit into and withdraw funds from the PPA Disputed
Payments Account in accordance with the terms and conditions of this Agreement.
(b) Pending disbursement of any funds held in the PPA Disputed Payments
Account by the Agent pursuant to this Agreement, such funds shall be invested
and reinvested in Permitted Investments, and such Permitted Investments held
therein liquidated, at the risk and expense of the Borrower and PECO by the
Agent in accordance with written joint instructions given to the Agent by an
Authorized Officer of the Borrower and an Authorized Officer of PECO; PROVIDED
that if the Borrower and PECO fail to instruct the Agent, amounts on deposit in
the PPA Disputed Payments Account shall be invested and reinvested in Permitted
Investments, and Permitted Investments held therein liquidated, at the risk and
expense of the Borrower and PECO. The Agent shall not be liable for any loss
resulting from any Permitted Investment (or any investment or reinvestment
therein or liquidation or redemption thereof) in the PPA Disputed Payments
Account or the sale or redemption thereof except to the extent that such loss
results solely from the gross negligence or willful misconduct of the Agent, it
being understood and agreed that in no event shall the Agent be liable for any
loss resulting from any investment made, or any sale or redemption of any
investment made, in accordance with instructions received from the Borrower and
PECO or in accordance with paragraph (c) of this Section 2.6. The Agent, the
Borrower and PECO agree that the interest paid or other earnings on Permitted
Investments made hereunder shall be credited to the PPA Disputed Payments
Account.
(c) If and when cash is required to be disbursed in accordance with
Article III of this Agreement, and cash is not otherwise available in the PPA
Disputed Payments Account, the Agent is authorized, without instructions from
the Borrower or PECO, to cause Permitted Investments to be sold or otherwise
liquidated into cash (without regard to maturity) in such manner as the Agent
shall deem reasonable and prudent under the circumstances. All of the Borrower's
right, title and interest, whether now existing or hereafter acquired or
arising, in, to and under the PPA Disputed Payments Account and all funds held
therein and all such Permitted Investments made in respect thereof, shall
constitute part of the Collateral subject to the security interests created by
this Agreement and the other Security Documents and shall not constitute payment
of any of the Obligations or any other obligations of the Borrower until applied
as provided in the Loan Documents.
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Section 2.7 CERTIFICATES; METHOD AND TIMING OF PAYMENTS AND
TRANSFERS.
(a) Any certificate or written instruction required to be delivered
hereunder by the Borrower and PECO shall be delivered to the Agent prior to
12:00 noon (New York City time) at least five (5) Business Days prior to the
date of any transfer or distribution contemplated by such certificate or written
instruction. Such certificate or instructions may be delivered by telecopy
pursuant to Section 6.2 and shall be considered delivered upon receipt
confirmation. In no event shall a certificate be considered delivered hereunder
if it is incomplete or inaccurate, is not substantially in the form of the
corresponding Exhibit or does not otherwise meet the requirements set forth in
this Agreement, including any set forth in any Exhibit.
(b) Subject to the timely receipt of a certificate or written notice,
if and as prescribed herein, and to the availability of cash in the PPA Disputed
Payments Account, the Agent shall make any payment or transfer hereunder
required by means of wire transfer of immediately available funds, to the
account of the payee set forth in such certificate or written instructions or
Schedule thereto, prior to 1:00 p.m. (New York City time) on the date specified
in such certificate or instruction for such payment, or by such other means of
payment, to such other address or at such later time as shall be specified by
such payee. Notwithstanding the foregoing, the Agent shall not be responsible in
any manner for the truth and accuracy of any information contained in any
certificate or written information provided by the Borrower and PECO.
Section 2.8 SECURITY INTEREST ABSOLUTE. All rights of the Agent and
security interests hereunder, shall be absolute and unconditional irrespective
of:
(a) any lack of validity or enforceability of the Power Purchase
Agreement or any of the Loan Documents or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the payment obligations of PECO under the Power
Purchase Agreement, or any other amendment or waiver of or any consent to any
departure from the Power Purchase Agreement or any other agreement or instrument
relating thereto;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the payment Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Documents or any other
agreement or instrument relating thereto;
(d) any exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to any departure from any
guaranty, for all or any of the Obligations; or
(e) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Borrower, PECO or a third party pledgor.
Section 2.9 IDENTIFICATION AND CONFIRMATION OF PROCEEDS OF THE
ACCOUNT. The Agent agrees to cause each Permitted Investment to be promptly
identified to the PPA Disputed Payments Account from which it was invested in
accordance with the terms hereof, and to no
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other account and in no other name. No interest of any Person other than the
interests of the Secured Parties, the Borrower and PECO shall be identified to
the PPA Disputed Payments Account or the Permitted Investments therein.
Section 2.10 ACCOUNT BALANCE STATEMENTS. The Agent shall, on a monthly
basis and at such other times as the Borrower or PECO may from time to time
reasonably request, provide to the Borrower and PECO account balance statements
in respect of the PPA Disputed Payments Account. Such balance statements shall
also include deposits and transfers to, withdrawals from, and the net investment
income or gain received and collected for, the PPA Disputed Payments Account.
ARTICLE III
DEPOSITS TO AND DISTRIBUTIONS FROM THE ACCOUNT
Section 3.1 DEPOSITS INTO THE ACCOUNT. PECO shall promptly deposit or
cause to be deposited all PPA Disputed Payments into the PPA Disputed Payments
Account at such time as it disputes any such amount in accordance with the
provisions of Section 9.04(b) of the Power Purchase Agreement.
Section 3.2 DISTRIBUTIONS FROM THE ACCOUNT. Upon receipt of a PPA
Disputed Payments Withdrawal Certificate, delivered in accordance with Section
2.7, stating that (i) PECO and the Borrower have reached a mutually satisfactory
resolution of their dispute with respect to any or all of the PPA Disputed
Payments, and directing the disposition of such funds, or (ii) a final and
binding arbitration award or court order has been issued with respect to any or
all of the PPA Disputed Payments and the disposition of such funds, the Agent
shall transfer the amount of the PPA Disputed Payments indicated in such
certificate, together with any interest on or earnings from Permitted
Investments with respect thereto, as follows:
(a) if and to the extent such funds are stated in the PPA Disputed
Payments Withdrawal Certificate to be for the account of the Borrower, to the
Revenue Account; and
(b) if and to the extent such funds are stated in the PPA Disputed
Payments Withdrawal Certificate to be for the account of PECO, to such account
or accounts as designated by PECO in such certificate.
ARTICLE IV
DEPOSITARY BANK
Section 4.1 APPOINTMENT OF AGENT, POWERS AND IMMUNITIES.
(a) The Agent may execute any of its duties under this Agreement by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining hereto.
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(b) The Agent shall not have any duties or responsibilities, except
those expressly set forth in this Agreement. Notwithstanding anything to the
contrary contained herein, the Agent shall not be required to take any action
which is contrary to this Agreement or applicable Law. Neither the Agent nor any
of its Affiliates shall be responsible to any Secured Party for any recitals,
statements, representations or warranties made by the Borrower or PECO contained
in this Agreement or the Power Purchase Agreement or in any certificate or other
document referred to or provided for in, or received by any Secured Party under,
this Agreement or the Power Purchase Agreement for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, the
Power Purchase Agreement or any other document referred to or provided for
herein or therein or for any failure by the Borrower or PECO to perform its
obligations hereunder or thereunder or for the perfection or priority of any
Lien on the Collateral (including the Account Collateral). The Agent shall not
be required to ascertain or inquire as to the performance by the Borrower or
PECO of any of its obligations under this Agreement or the Power Purchase
Agreement or any other document or agreement contemplated hereby or thereby. The
Agent shall not (a) be required to initiate or conduct any litigation or
collection proceeding hereunder or (b) be responsible for any action taken or
omitted to be taken by it hereunder (except for its own gross negligence or
willful misconduct). Whenever in the administration of this Agreement the Agent
shall deem it necessary or desirable that a factual matter be proved or
established in connection with the Agent taking, suffering or omitting to take
any action hereunder, such matter (unless other evidence in respect thereof is
herein specifically prescribed) may be deemed to be conclusively proved or
established by a certificate of an Authorized Officer of the Borrower, PECO, if
appropriate. The Agent shall have the right at any time to seek instructions
concerning the administration of this Agreement from any court of competent
jurisdiction. The Agent shall have no obligation to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder.
Section 4.2 RELIANCE BY AGENT. The Agent shall be entitled to rely
upon and shall not be bound to make any investigation into the facts or matters
stated in any certificate, or any other notice or other document (including any
cable, telegram, telecopy or telex) believed by it to be genuine and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice or statement of legal counsel, independent accountants and other experts
selected by the Agent and shall have no liability for its actions taken
thereupon, unless due to the Agent's willful misconduct or gross negligence.
Without limiting the foregoing, the Agent shall be required to make payments for
the benefit of the Secured Parties only as set forth herein. The Agent shall be
fully justified in failing or refusing to take any action under this Agreement
(i) if such action would, in the reasonable opinion of the Agent, be contrary to
applicable Law or the terms of this Agreement, (ii) if such action is not
specifically provided for in this Agreement, it shall not have received any such
advice or concurrence of the Agent as it deems appropriate or (iii) if the
taking of any such action could expose it to potential liability (whether such
action is or is intended to be an action of the Agent), it shall not first be
indemnified to its satisfaction by the Borrower against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 4.3 COURT ORDERS. The Agent is hereby authorized, in its
exclusive discretion, to obey and comply with all writs, orders, judgments or
decrees issued by any court or
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administrative agency affecting any money, documents or things held by the
Agent. The Agent shall not be liable to any of the parties hereto, their
successors, heirs or personal representatives by reason of the Agent's
compliance with such writs, orders, judgments or decrees, notwithstanding that
such writ, order, judgment or decree is later reversed, modified, set aside or
vacated.
ARTICLE V
EXPENSES; INDEMNIFICATION; FEES
Section 5.1 EXPENSES. The Borrower agrees to pay or reimburse all
out-of-pocket expenses of the Agent (including reasonable fees and expenses for
legal services) in respect of, or incident to, the execution, administration or
enforcement of any of the provisions of this Agreement or in connection with any
amendment, waiver or consent relating to this Agreement. The obligations
contained in this Section 5.1 shall survive the termination of this Agreement or
the resignation or removal of the Agent.
Section 5.2 INDEMNIFICATION. The Borrower agrees to indemnify the
Agent in its capacity as such, and, in their capacity as such, its officers,
directors, shareholders, controlling persons, employees, agents and servants
(each an "INDEMNIFIED AGENT PARTY"), from and against any and all claims,
losses, liabilities and expenses (including the reasonable fees and expenses of
counsel) arising out of or resulting from this Agreement (including, without
limitation, performance under or enforcement of this Agreement, but excluding
any such claims, losses or liabilities resulting from the Indemnified Agent
Party's gross negligence or willful misconduct). This indemnity shall survive
the termination of this Agreement, and the resignation or removal of the Agent.
ARTICLE VI
MISCELLANEOUS
Section 6.1 AMENDMENTS. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Borrower or PECO herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Agent and the other parties to this Agreement. Any such amendment, waiver
or consent shall be effective only in the specific instance and for the
specified purpose for which given.
Section 6.2 ADDRESSES FOR NOTICES. All notices, requests and other
communications provided for hereunder shall be in writing and, except as
otherwise required by the provisions of this Agreement, shall be sufficiently
given and shall be deemed given when delivered or mailed by registered or
certified mail, postage prepaid, or sent by overnight delivery, telecopy,
telegram or telex, addressed to the parties as follows (or to such other address
as such party may hereafter provide in accordance with this Section 6.2):
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Borrower: Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154
Attention: [ ]
-----------------------------
Telephone: [ ]
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Fax: [ ]
-----------------------------
PECO: PECO ENERGY COMPANY
PECO Energy Company- Power Team
2004 Renaissance Blvd.
King of Prussia, Pennsylvania 19406
Attention: [ ]
-----------------------------
Telephone: [ ]
-----------------------------
Fax: [ ]
-----------------------------
Agent: [ ]
-----------------------------
[ ]
-----------------------------
[ ]
-----------------------------
Attention: [ ]
-----------------------------
Telephone: [ ]
-----------------------------
Fax: [ ]
-----------------------------
Section 6.3 GOVERNING LAW.
(a) THIS AGREEMENT AND THE PPA DISPUTED PAYMENTS ACCOUNT ESTABLISHED
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW PROVISIONS
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) THAT MIGHT
CAUSE THIS AGREEMENT OR ANY ACCOUNT ESTABLISHED HEREUNDER TO BE GOVERNED BY OR
CONSTRUED OR ENFORCED IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION.
REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR PURPOSES OF THE UCC, THE
STATE OF NEW YORK SHALL BE DEEMED TO BE THE AGENT'S JURISDICTION AND ANY ACCOUNT
HEREUNDER (AS WELL AS THE SECURITIES ENTITLEMENTS RELATED THERETO) SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAW PROVISIONS THAT MIGHT CAUSE ANY ACCOUNT OR ANY SECURITY
ENTITLEMENTS RELATED THERETO TO BE GOVERNED BY THE LAWS OF ANY OTHER
JURISDICTION.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND
ANY ACTION FOR ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE BORROWER AND PECO HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
11
<PAGE>
JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS FROM ANY THEREOF. EACH
OF THE BORROWER AND PECO HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT
CORPORATION SYSTEM AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT
SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH OF THE BORROWER AND PECO AGREES
TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS
AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT. EACH OF THE
BORROWER AND PECO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO EACH SUCH
PARTY AT ITS ADDRESS REFERRED TO IN SECTION 6.2. EACH OF THE BORROWER AND PECO
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED IN ANY OTHER JURISDICTION.
(c) THE BORROWER AND PECO HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.
Section 6.4 HEADINGS. Headings used in this Agreement are for
convenience of reference only and do not constitute part of this Agreement for
any purpose.
Section 6.5 NO THIRD PARTY BENEFICIARIES. The agreements of the
parties hereto are solely for the benefit of the Borrower, PECO, the Agent and
the Secured Parties and their respective successors and assigns and no Person
(other than the parties hereto and such Secured Parties) shall have any rights
hereunder.
Section 6.6 NO WAIVERS. No failure on the part of the Agent or any
Secured Party or any of their nominees or representatives to exercise, and no
course of dealing with respect to, and no delay in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by the Agent or any Secured Party or any of their nominees or
representatives of any right, power or remedy.
12
<PAGE>
Section 6.7 SEVERABILITY. If any provision of this Agreement or the
application thereof shall be invalid or unenforceable to any extent, (a) the
remainder of this Agreement and the application of such remaining provisions
shall not be affected thereby and (b) each such remaining provision shall be
enforced to the greatest extent permitted by law.
Section 6.8 SUCCESSORS AND ASSIGNS. All covenants, agreements,
representations and warranties in this Agreement by the Agent, the Borrower and
PECO shall bind and, to the extent permitted hereby, shall inure to the benefit
of and be enforceable by their respective successors and assigns, whether so
expressed or not, PROVIDED that the Borrower may not assign any of its rights or
obligations hereunder (except pursuant to the Security Documents).
Section 6.9 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original, but all such counterparts shall together constitute but one and
the same instrument.
Section 6.10 CONSEQUENTIAL DAMAGES. In no event (other than with
respect to its own gross negligence or willful misconduct) shall the Agent be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Agent has
been advised of the likelihood of such loss or damage and regardless of the form
of action.
Section 6.11 CONFLICT WITH OTHER AGREEMENTS. There are no other
agreements entered into between the Agent, the Borrower and PECO with respect to
the PPA Disputed Payments Account. In the event of any conflict between this
Agreement (or any portion thereof) and any other agreement now existing or
hereafter entered into, the terms of this Agreement shall prevail.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TENASKA GEORGIA PARTNERS, L.P.,
as Borrower
By: Tenaska Georgia Inc.,
Managing General Partner
By: Tenaska Georgia I, L.P.,
Managing General Partner
By:
----------------------------------------
Name:
Title:
PECO ENERGY COMPANY
By:
----------------------------------------
Name:
Title:
14
<PAGE>
EXHIBIT A TO
PPA DISPUTED AMOUNTS
DEPOSITARY AGREEMENT
FORM OF
PPA DISPUTED PAYMENTS WITHDRAWAL CERTIFICATE
Date: [ , ]
Reference is made to Section 3.2 of the PPA Disputed Amounts Depositary
Agreement, dated as of [ ] (as amended, supplemented or otherwise modified from
time to time, the "DEPOSITARY Agreement"), by and among Tenaska Georgia
Partners, L.P., a Delaware limited partnership (the "BORROWER"), PECO Energy
Company, a Pennsylvania corporation ("PECO"), and [ ], a banking corporation
organized and existing under the laws of [ ], as agent (together with its
successors and permitted assigns, the "AGENT") for itself, the banks that are
issuers of certain letters of credit (the "ISSUING BANKS") and the banks (the
"BANKS"), in each case that are parties to the Construction and Term Loan and
Reimbursement Agreement, dated as of [ ] (as amended, supplemented or otherwise
modified from time to time, the "LOAN AGREEMENT"), and the Secured Interest Rate
Protection Providers (as defined in the Loan Agreement) (collectively, the
"SECURED PARTIES"). Capitalized terms used herein but not defined herein shall
have the respective meanings as signed thereto in the Depositary Agreement.
The Borrower and PECO hereby request that the Agent withdraw from the
PPA Disputed Payments Account on [INSERT REQUESTED DATE OF WITHDRAWAL] (the
"WITHDRAWAL DATE") the amounts set forth on Schedule 1 attached hereto and, as
applicable, transfer the same to such accounts as are also set forth on Schedule
1.
In support of such request, each of the undersigned on behalf of the
Borrower and PECO, respectively, hereby represents and certifies to the Agent as
follows:
(a) Each of the undersigned is an Authorized Officer of the Borrower
and PECO, respectively.
(b) This PPA Disputed Payments Withdrawal Certificate is being
delivered to the Agent prior to 12:00 noon (New York City time) at least five
(5) Business Days prior to the Withdrawal Date and such Withdrawal Date is a
Business Day.
[(c) PECO and the Borrower have reached a mutually satisfactory
resolution of their dispute with respect to any or all of the PPA Disputed
Payments, according to which resolution the amount of such PPA Disputed
Payments, as more specifically set forth on Schedule 1 hereto, together with any
interest on or earnings from Permitted Investments with respect thereto, shall
be withdrawn from the PPA Disputed Payments Account and transferred to [the
Revenue Account] [such account or accounts as are designated by PECO in Schedule
1]]
<PAGE>
[(d) A final and binding [arbitration award][court order] has been
issued with respect to any or all of the PPA Disputed Payments and the
disposition of such funds, a certified copy of which is attached hereto. In
accordance with such [arbitration award][court order], the amount of such PPA
Disputed Payments, as more specifically set forth on Schedule 1 hereto, together
with any interest on or earnings from Permitted Investments with respect
thereto, shall be withdrawn from the PPA Disputed Payments Account and
transferred to [the Revenue Account][such account or accounts as are designated
by PECO in Schedule 1]]
16
<PAGE>
IN WITNESS WHEREOF, the Borrower and PECO have each caused
this PPA Disputed Payments Withdrawal Certificate to be executed and delivered
as of the day and year first above written.
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia Inc.,
Managing General Partner
By: Tenaska Georgia I, L.P.,
Managing General Partner
By:
----------------------------------------
Name:
Title:
PECO ENERGY COMPANY
By:
----------------------------------------
Name:
Title:
17
<PAGE>
Schedule 1 to
PPA Disputed Payments
Withdrawal Certificate
WITHDRAWALS FROM
PPA DISPUTED PAYMENTS ACCOUNT
I. Transfers to the Revenue Account for the account of the Borrower:
Payee Amount
----- ------
Tenaska Georgia Partners, L.P. $
II. Transfers for the account of PECO:
Payee Amount Wire Instructions
----- ------ -----------------
$
<PAGE>
Exhibit E to
Consent And Agreement
---------------------
CASUALTY INSURANCE PROVISIONS
SECTION [ ] LOSS PROCEEDS ACCOUNT. All Loss Proceeds (other than the
proceeds of business interruption insurance or delayed opening insurance) and
Condemnation Proceeds received by the Borrower shall be deposited in the Loss
Proceeds Account. The Agent shall separately segregate such Loss Proceeds and
Condemnation Proceeds for distribution in the manner as set forth below:
(a) All proceeds in respect of any property insurance policy (other
than proceeds of business interruption or delayed opening insurance) covering
the Borrower or the Project ("Insurance Proceeds") shall be paid by the
respective insurers directly to the Loss Proceeds Account, PROVIDED, HOWEVER,
that all proceeds in respect of any insurance policy providing business
interruption or delayed opening coverage shall be paid directly to the Revenue
Account.* The Borrower shall use its best efforts to ensure that all proceeds in
respect of any action to condemn, seize or appropriate all or any part of the
Project (any such action, a "Condemnation," and any such proceeds, "Condemnation
Proceeds") shall be paid to the Loss Proceeds Account. If any Insurance Proceeds
or Condemnation Proceeds (collectively, "Loss Proceeds") are received by the
Borrower, such Loss Proceeds shall be received in trust for the Agent, shall be
segregated from other funds of the Borrower, and shall be forthwith paid into
the Loss Proceeds Account in the same form as received (with any necessary
endorsement). If the conditions set forth in clauses (b), (c) and (d) of this
Section [ ] are satisfied as certified in a Loss Proceeds Account Withdrawal
Certificate delivered in accordance with Section [ ], the Agent shall distribute
amounts on deposit in the Loss Proceeds Account in accordance with such Loss
Proceeds Account Withdrawal Certificate. Upon written notification by the Agent
to the Agent that the conditions set forth in paragraph (e) of this Section [ ]
exist, the Agent shall transfer the funds in the Loss Proceeds Account to the
Agent.
(b) In the event of a casualty loss involving Insurance Proceeds not
exceeding $10,000,000 (such $ 10,000,000 to be escalated at a rate of 3% per
year using 2001 as a base year) in respect of any single claim with respect to
the Project (a "Section [ ](b) Event"), the Borrower shall provide written
information to the Agent describing the use to which such Insurance Proceeds are
to be put and demonstrating to the reasonable satisfaction of the Required Banks
that the Project can be Repaired Feasibly (as defined below). Following the
Agent's confirmation of the satisfaction of such conditions, and if no Event of
Default shall have occurred and be continuing, such Insurance Proceeds shall,
upon delivery by the Borrower of a Loss Proceeds Account Withdrawal Certificate
delivered in accordance with Section [ ], be paid to the Borrower out of the
Loss Proceeds Account (up to a maximum of $10,000,000 (escalated as above) with
respect to any single claim) and applied by the Borrower in its reasonable
- ----------------------
* Note- The Revenue Account is the account specified on Exhibit A
to the Consent and Agreement.
<PAGE>
discretion to the cost of the repair or restoration of such damage or
destruction described in such notice.
(c) "Repaired Feasibly" means:
(1) The Project can be repaired or restored in a manner that
is technically feasible to at least as good condition or state of
repair as it was in prior to the Event of Loss or a Section [ ](b)
Event;
(2) None of the following circumstances exists:
(A) the repair or restoration of the Project, with
available Insurance Proceeds or other funds available for such
purpose and otherwise permitted by the terms of this
Agreement, or the operation of the Project as repaired or
restored with available Insurance Proceeds or other moneys
available for such purpose as permitted by the terms of this
Agreement, would violate applicable law or otherwise not be
permitted under existing permits or other replacement permits
that have been obtained;
(B) The Event of Loss or Section [ ](b) Event
(including the non-operation of the Project during any period
of repair or restoration) has resulted or may reasonably be
expected to result in a default giving rise to a termination
of, or a materially adverse modification of one or more
material Project Documents, and such material Project
Documents have not been replaced by replacement Project
Documents on economic terms and conditions reasonably expected
to permit the Borrower to pay Mandatory Debt Service [defined
as interest, fees and regularly scheduled loan repayments] and
to make payments under Secured Interest Rate Protection
Agreements then in effect when due and on such other terms and
conditions as are reasonably acceptable to the Required Banks;
(C) After taking into consideration the availability
of Insurance Proceeds and such other proceeds available for
the repair or restoration of the Project (including delayed
opening and business interruption insurance proceeds) there
will not be adequate funds available to pay all ongoing
expenses including Mandatory Debt Service and to make payments
under Secured Interest Rate Protection Agreements then in
effect during the period of repair or restoration, or the
Borrower's ability to pay all ongoing expenses including
Mandatory Debt Service and to make payments under Secured
Interest Rate Protection Agreements then in effect when due,
subsequent to the completion of the repair or restoration of
the Project has been materially adversely impaired, provided
that for purposes of the foregoing, it shall be assumed that
delayed opening and business interruption insurance proceeds
will be sufficient to pay Mandatory Debt Service and to make
payments under Secured Interest Rate Protection Agreements
then in effect during the period of restoration or repair
unless the insurer obligated to pay such proceeds is the
subject of an insolvency proceeding or is contesting (whether
by litigation, arbitration or by way of seeking compromises,
releases or settlement
2
<PAGE>
of) its obligations to make payments in the amounts, at the
times and otherwise in accordance with the policy; and
(3) Construction contractors and vendors of
recognized skill, reputation and credit worthiness have
executed reconstruction contracts and purchase orders on terms
and conditions reasonably acceptable to the Required Banks.
(d) If there shall occur any event of damage, destruction,
condemnation, seizure or appropriation of all or any portion of the Project
other than a Section [ ](b) Event (an "Event of Loss") and (i) an Authorized
Officer of the Borrower and the Engineering Advisor shall deliver to the Agent
written information acceptable to the Required Banks that the Project can be
Repaired Feasibly and (ii) the Agent shall receive an opinion of counsel
acceptable to the Required Banks covering such matters in connection with such
proposed repair and replacement as the Required Banks shall reasonably require,
including, without limitation, that all Governmental Approvals, amendments to
Transaction Documents and all other instruments necessary for the purpose of
completing such repairs or restoration or granting the Agent a Lien thereon have
been obtained or delivered, then the Borrower shall use its best efforts to
cause any repairs or restoration to be commenced and completed promptly and
diligently at its own cost and expense (including from funds on deposit in the
Loss Proceeds Account). From time to time after the Agent shall have received
the documents required to be delivered under clauses (i) and (ii) above, any
Loss Proceeds held in the Loss Proceeds Account arising out of the applicable
Event of Loss shall be paid over to or upon the order of the Borrower to pay for
the cost of such repairs or restoration actually incurred by the Borrower, upon
the delivery by the Borrower to the Agent of a Loss Proceeds Account Withdrawal
Certificate (reviewed and certified by the Engineering Advisor) in accordance
with Section [ ], and (v) describing in reasonable detail the nature of the
repairs or restoration, (w) stating that the Borrower has available funds
through Loss Proceeds or otherwise, to complete such repair or restoration in
compliance with this Section [ ], (x) stating the cost of such repairs or
restoration and the specific amount requested to be paid over to or upon the
order of the Borrower, the timing of such payments, and that such amount is
requested to pay the cost thereof (together with any documentation supporting
such statement as the Required Banks may reasonably request), (y) stating that
the Project can be Repaired Feasibly and (z) stating that there has occurred and
is continuing no Event of Default.
(e) If (i) with respect to Loss Proceeds the disposition of which is
covered under clause (d) of this Section, the conditions specified in clauses
(i) and (ii) thereof are not satisfied within the later of: (x) 45 days after
receipt of such Loss Proceeds or (y) 90 days after the Event of Loss, or (ii)
with respect to any Loss Proceeds the disposition of which is covered under
clauses (b) or (c) of this Section, any of such Loss Proceeds shall remain in
the Loss Proceeds Account after the Event of Loss in respect of which such Loss
Proceeds were received has been fully repaired or restored (as certified by the
Borrower and the Engineering Advisor), then an amount equal to all of the
applicable unused Loss Proceeds in the Loss Proceeds Account shall be applied to
the prepayment of the unpaid Loans and Reimbursement Obligations and accrued
interest thereon.
3
<PAGE>
(f) The Banks shall respond promptly to requests for approval or for
indications of satisfaction or acceptability of the matters under this Section [
] that must be satisfactory or acceptable to the Required Banks; PROVIDED, that
the effect of any unreasonable delay by the Banks in so responding shall be to
extend the time periods set forth above in Section [ ](e).
4
<PAGE>
Exhibit 10.4
CONFIDENTIAL
FINAL
ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT
Between
TENASKA GEORGIA I, L.P.
(Owner)
and
ZACHRY CONSTRUCTION CORPORATION
(Contractor)
DATED: September 15, 1999
CONFIDENTIAL
An asterisk ([*]) indicates that confidential information has been omitted
and filed separately with the Securities and Exchange Commission as part of a
Confidential Treatment Request.
<PAGE>
CONFIDENTIAL
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Article 1. Definitions...........................................................................................1
Acceptance Testing.......................................................................................1
Acceptance Testing Notice................................................................................1
Acceptance Certificate for Commercial Operation..........................................................1
Affiliate................................................................................................1
Agreement................................................................................................2
Applicable Laws..........................................................................................2
Applicable Insurance Policies............................................................................2
Associated Company.......................................................................................2
Authorization to Proceed.................................................................................2
Authorization to Proceed Date............................................................................2
Availability Guarantee...................................................................................2
Availability Test........................................................................................3
Business Days............................................................................................3
Cancellation Notice......................................................................................3
CEMS Requirements........................................................................................3
Certificate of Mechanical Completion.....................................................................3
Change of Law............................................................................................3
Change Order.............................................................................................3
Check Out................................................................................................3
Combustion Turbine Evaporative Cooler Test...............................................................3
Commercial Operation.....................................................................................4
Commercial Operation Net Heat Rate.......................................................................4
Commercial Operation Output..............................................................................4
Confidential.............................................................................................4
Confidentiality Agreement................................................................................4
Construction Financing...................................................................................4
Construction Lender......................................................................................4
Construction Loan Agreement..............................................................................4
Contractor...............................................................................................4
Contractor Consent and Agreement.........................................................................4
Contractor Default.......................................................................................4
Contractor's Fixed Price.................................................................................4
Contractor's Intellectual Property.......................................................................4
Contractor's Representative..............................................................................4
Contractor's Site Representative (or Construction Manager)...............................................4
Contractor's Work Schedule...............................................................................4
Day or Days..............................................................................................4
Defect(s)................................................................................................4
Delivery Point...........................................................................................5
Demonstration Tests......................................................................................5
</TABLE>
i
<PAGE>
CONFIDENTIAL
<TABLE>
<S> <C> <C>
Directed Work Order......................................................................................5
Dispute..................................................................................................5
Dispute Notice...........................................................................................5
Drawings.................................................................................................5
Emission Tests...........................................................................................5
Equipment................................................................................................5
Exempt Property..........................................................................................6
Extension Period.........................................................................................6
Final Acceptance.........................................................................................6
Force Majeure............................................................................................6
Functional Testing.......................................................................................6
Gas Purchase Agreements..................................................................................6
Good Utility Practice....................................................................................6
Guarantee................................................................................................6
Guarantors...............................................................................................6
Guaranteed Lump Sum Price................................................................................6
Hazardous Materials......................................................................................6
Indemnitees..............................................................................................7
Independent Engineer.....................................................................................7
Interconnection Points...................................................................................7
Landscaping..............................................................................................7
Limited Notice to Proceed................................................................................7
Lower-tier Subcontractor.................................................................................7
Mechanical Completion....................................................................................7
Monthly Progress Report..................................................................................7
MW.......................................................................................................7
New Schedule.............................................................................................7
Notice of Mechanical Completion..........................................................................7
Old Schedule.............................................................................................7
Owner....................................................................................................7
Owner Caused Delay.......................................................................................8
Owner IP Indemnified Parties.............................................................................8
Owner's Agent............................................................................................8
Owner's Project Manager..................................................................................8
Owner's Security.........................................................................................8
Owner's Site Representative..............................................................................8
Owner Tests..............................................................................................8
P&ID's...................................................................................................8
PECO.....................................................................................................8
PECO Tests...............................................................................................8
Performance Minimums.....................................................................................8
Performance Tests........................................................................................8
Person...................................................................................................8
Phases...................................................................................................8
Phase I..................................................................................................8
Phase II.................................................................................................8
Plant....................................................................................................9
Plant Premises...........................................................................................9
</TABLE>
ii
<PAGE>
CONFIDENTIAL
<TABLE>
<S> <C> <C>
Power Purchase Agreement.................................................................................9
Pre-existing Hazardous Materials.........................................................................9
Public Sector Entity.....................................................................................9
Punch List...............................................................................................9
Request for Directed Work Order..........................................................................9
Retainage................................................................................................9
Retest Period............................................................................................9
Scheduled Date of Commercial Operation...................................................................9
Scope of Work...........................................................................................10
Section 12.3(c) Notice..................................................................................10
Subcontractor...........................................................................................10
Suspension Notice.......................................................................................10
System..................................................................................................10
System Testing for Mechanical Completion................................................................10
Turbine Contract........................................................................................10
Work....................................................................................................10
Article 2. Scope of Work........................................................................................11
Article 3. Payment..............................................................................................22
Section 3.1. Contract Price and Payment - Liens - Retainage............................................22
Article 4. Change Order.........................................................................................36
Article 5. Owner's Responsibility...............................................................................41
Article 6. Owner Review.........................................................................................43
Article 7. Power Contract Design and Operating Requirements.....................................................45
Article 8. Construction Financing...............................................................................46
Section 8.1 Construction Lender's Requirements.........................................................46
Article 9. Warranties............................................................................................49
Section 9.1 Engineering Design and Performance Warranties..............................................49
Section 9.2 Equipment Warranties.......................................................................49
Section 9.3 Construction Warranties....................................................................50
Section 9.5 Emission Warranty..........................................................................51
</TABLE>
iii
<PAGE>
CONFIDENTIAL
<TABLE>
<S> <C> <C>
Section 9.6 Water Discharge Warranty...................................................................51
Section 9.7 Noise Pollution Warranty...................................................................51
Section 9.8 Other Warranties...........................................................................53
Section 9.9 Corrections................................................................................55
Section 9.10 Warranty Period...........................................................................56
Article 10. Owner's Right to Cure Work and Set Off..............................................................58
Article 11. Mechanical Completion, Functional Testing...........................................................60
Section 11.1 Mechanical Completion.....................................................................60
Section 11.2 Issuance of a Certificate of Mechanical Completion........................................62
Article 12. Acceptance Testing, Commercial Operation and Final Acceptance.......................................65
Section 12.1 Acceptance Testing Procedures.............................................................65
Section 12.2 Requirements and Notification for Acceptance Testing - Commercial Operation Defined.......66
Section 12.3 Acceptance Testing to Achieve Commercial Operation........................................70
Section 12.4 Final Acceptance..........................................................................78
Article 13. Liquidated Damages...................................................................................80
Section 13.1 Late Commercial Operation Liquidated Damages..............................................80
Section 13.2 Effect of Liquidated Damages for Late Commercial Operation................................82
Section 13.3 Output Liquidated Damages.................................................................83
Section 13.4 Commercial Operation Net Heat Rate Liquidated Damages.....................................83
Section 13.5 Effect of Liquidated Damages for Output and Heat Rate.....................................85
Section 13.6 Reduction of Guaranteed Lump Sum Price for Liquidated Damages - Interest..................85
Section 13.7 Liquidated Damages for Late Delivery of Loan Documents....................................86
Section 13.8 Reasonableness of Liquidated Damages......................................................86
Article 14. Limitation of Liabilities...........................................................................88
Section 14.1 Limitation of Liquidated Damages.........................................................88
Section 14.2 Damage Disclaimer.........................................................................88
Section 14.3 Limitations Valid in All Events...........................................................89
Section 14.4 Warranty Limitation.......................................................................89
Section 14.5 Limitation of Liability for Turbines......................................................90
Section 14.6 Survival..................................................................................90
Article 15. Insurance...........................................................................................91
Section 15.1 Proof of Coverage.........................................................................91
Section 15.2 Insurance Policies........................................................................91
</TABLE>
iv
<PAGE>
CONFIDENTIAL
<TABLE>
<S> <C> <C>
Section 15.3 Limitation of Liability...................................................................92
Section 15.4 Coverage and Limits of Liability..........................................................92
Section 15.5 All Risk Builder's Risk Coverage..........................................................93
Section 15.6 Major Loss Termination....................................................................96
Section 15.7 Risk of Loss..............................................................................96
Section 15.8 Contractor Equipment......................................................................97
Section 15.9 Foreign Sourced Equipment.................................................................97
Article 16. Force Majeure.......................................................................................99
Article 17. Indemnifications...................................................................................103
Section 17.1 Indemnification of Owner.................................................................103
Section 17.2 Intellectual Property Infringement Indemnification.......................................103
Section 17.3 Limitation on Contractor's Indemnification...............................................104
Section 17.4 Notice of Claim for Indemnification......................................................104
Section 17.5 Failure to Defend........................................................................105
Section 17.6 Industrial Insurance Waiver..............................................................105
Section 17.7 Survival.................................................................................106
Article 18. Termination - Suspension by Contractor - Dispute Procedure.........................................107
(a) Termination Prior to Authorization to Proceed............................................107
(b) Termination Subsequent to Authorization to Proceed.......................................107
(c) Effect of Termination Other Than for Contractor's Default................................108
Section 18.1 Termination by Owner for Contractor's Default.............................................108
Section 18.2 Termination for Insolvency of a Party....................................................111
Section 18.3 Nonpayment by Owner......................................................................111
(a) Default..................................................................................111
(b) Termination - Suspension by Contractor...................................................112
Section 18.4 Limitation of Termination and Suspension by Contractor...................................113
Section 18.5 Dispute - Continuing Agreement Performance...............................................113
Section 18.6 Payment Requirements.....................................................................114
Section 18.7 Termination - Suspension of the Turbine Contract.........................................114
Article 19. Suspension of Work by Owner........................................................................115
Section 19.1 Suspension of Work by Owner..............................................................115
Article 20. Limited Notice to Proceed; Authorization to Proceed................................................119
Section 20.1 Limited Notice to Proceed................................................................119
Section 20.2 Authorization to Proceed.................................................................119
</TABLE>
v
<PAGE>
CONFIDENTIAL
<TABLE>
<S> <C> <C>
(a) Requirement of Authorization to Proceed..................................................119
(b) Authority................................................................................120
(c) Time Extensions..........................................................................120
(d) Late Delivery of Authorization to Proceed................................................120
Article 21. Assignment.........................................................................................121
Article 22. Confidentiality....................................................................................123
Article 23. Compliance with Law and Venue......................................................................127
Article 24. Plant Accounting...................................................................................128
Article 25. Availability Guarantee.............................................................................129
Article 26. Owner and Contractor Representative................................................................130
Section 26.1 Owner's Project Manager..................................................................130
Section 26.2. Owner's Site Representative..............................................................130
Section 26.3. Owner's Agent............................................................................130
Section 26.4. Owner's Representatives; Miscellaneous...................................................130
Section 26.5. Contractor's Site Representative.........................................................132
Section 26.6. Contractor's Representative..............................................................133
Section 26.7. Contractor's Representatives; Miscellaneous..............................................133
Article 27. General Provisions..................................................................................135
Section 27.1. Royalties and License Fees...............................................................135
Section 27.2. Notices..................................................................................135
Section 27.3. Independent Contractor...................................................................136
Section 27.4. Safety Precautions.......................................................................137
Section 27.5. Title to the Plant Premises..............................................................138
Section 27.6. Quality Assurance........................................................................139
Section 27.7. Severability of Provisions...............................................................139
Section 27.8. Entire Agreement.........................................................................139
Section 27.9. Counterparts.............................................................................140
Section 27.10. Applicable Law..........................................................................140
Section 27.11. Headings and Construction...............................................................140
Section 27.12. Sole Benefit............................................................................141
Section 27.13. Successors and Assigns..................................................................141
Section 27.14. Limitation of Owner's Liability.........................................................141
</TABLE>
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<TABLE>
<S> <C> <C>
Section 27.15. Contractor Responsibility...............................................................
Section 27.16. Survival................................................................................142
</TABLE>
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LIST OF EXHIBITS AND ATTACHMENTS
<TABLE>
<S> <C>
EXHIBIT A PROJECT DESCRIPTION
Attachment I Site Location
Attachment II Preliminary Water Balance & Preliminary Water Analysis
Attachment III Preliminary Services Building Arrangement
Attachment IV Preliminary Geotech Report
Attachment V Site Legal Descriptions and Topo Map
EXHIBIT B SCOPE OF WORK
Attachment I Design Guide Drawings
Attachment II Redacted Electrical Utility Interconnection Agreements
Attachment III Not Used
Attachment IV Redacted Power Purchase Agreement
Attachment V Control system Configuration Block diagram
Attachment VI Extended Warranty Equipment List
EXHIBIT C LIMITED NOTICE TO PROCEED
EXHIBIT D ACCEPTANCE TEST GUIDELINES, PROCEDURES AND SPECIFICATIONS
EXHIBIT E NOT USED
EXHIBIT F PROJECT SCHEDULE
EXHIBIT G OWNER SUPPLIED PERMITS
EXHIBIT H TURBINE CONTRACT
Appendix A Combustion Turbine Generator and Steam Turbine Generator
Specifications
Appendix B GE Payment and Cancellation Charge Schedules
Appendix C GE Guaranteed Performance Criteria
Appendix D GE Option Pricing
Appendix E GE Training
Appendix F Not Used
</TABLE>
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<TABLE>
<S> <C> <C>
Appendix G Documentation and Special Requirements
Appendix H EPC Project Schedule
Appendix I Technical Advisory Services and Commissioning Assistance
Appendix J Not Used
Appendix K Site Legal Description
Appendix L Customer Witness Plan
Appendix M Rights and Obligations Retained by Buyer
EXHIBIT I MONTHLY PROGRESS REPORT/SCHEDULE OF VALUES
EXHIBIT J SCOPE CHANGE, UNITS, RATES AND OPTION PRICING
EXHIBIT K GUARANTEES
EXHIBIT L DOCUMENT DISTRIBUTION
EXHIBIT M APPROVED SUBCONTRACTORS AND VENDORS
EXHIBIT N LENDER DOCUMENTS REQUIRED OF CONTRACTOR
EXHIBIT O GE PAYMENT PROCEDURES
EXHIBIT P CALCULATION OF ESCALATION
EXHIBIT Q LETTER OF CREDIT
EXHIBIT R CERTIFICATE OF CONSTRUCTION CONTRACTOR
</TABLE>
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AGREEMENT
THIS AGREEMENT ("Agreement") dated September 15, 1999 is made and
entered into by and between TENASKA GEORGIA I, L.P., a Delaware limited
partnership (hereinafter "Owner"), and ZACHRY CONSTRUCTION CORPORATION, a
Delaware corporation (hereinafter "Contractor").
W I T N E S S E T H
WHEREAS, Owner desires to build an electric generating facility (the
"Plant" as hereinafter defined) on Owner's Plant Premises, located in Heard
County, Georgia; and
WHEREAS, Contractor desires and is willing to design the Plant, procure
all necessary Equipment and manuals for the Plant, construct and start-up the
Plant under the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the parties, intending to be legally bound, agree as
follows:
Article 1. DEFINITIONS.
The defined terms used in this Agreement and in all Exhibits shall have
the meanings specified in this Article 1.
ACCEPTANCE TESTING has the meaning set forth in Section 12.1.
ACCEPTANCE TESTING NOTICE has the meaning set forth in Section 12.2(b).
ACCEPTANCE CERTIFICATE FOR COMMERCIAL OPERATION has the meaning set
forth in Section 12.3(e).
AFFILIATE of a party means any person or entity that directly or
indirectly controls, is controlled by, or is under common control with such
party. For the purposes of this definition "control" shall mean the power and
authority to direct the management and operations of the
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controlled person or entity either through ownership of or control of 50% or
more of the voting interests thereof or otherwise through control of the
managing group.
AGREEMENT means this document, as amended from time to time, which
includes the Drawings and attached Exhibits. In the event of any conflict,
inconsistency or variation between this document and any of such Exhibits or
Drawings, the terms and provisions of this document shall prevail; in the
event of any conflict, inconsistency or variation between the Exhibits and
the Drawings, the Exhibits shall prevail.
APPLICABLE LAWS means all laws, ordinances, rules, regulations,
orders, interpretations, requirements, standards, codes, resolutions,
licenses, permits, judgments, decrees, injunctions, writs and orders of any
court, arbitrator, or governmental (federal, national, state, municipal,
local or other), agency, body, instrumentality or authority that are
applicable to either or both of the Parties, the Plant, the Plant Premises,
the Work or the terms of this Agreement, including all environmental and
Hazardous Materials laws which are applicable to the Plant Premises and which
are at any time applicable to performing the Work; provided however, with
respect to air emissions from the Plant, Applicable Laws mean those
requirements set forth in Exhibit G, and with respect to noise emissions form
the Plant, Applicable Laws means those requirements set forth in Section 3.25
of Exhibit A.
APPLICABLE INSURANCE POLICIES means all policies of insurance
procured or obtained by Contractor and Subcontractors in respect of the Plant
or the performance of the Work and, to the extent applicable to the Work, the
provisions of those insurance policies procured or to be procured by Owner,
copies of which Owner has delivered to Contractor prior to the date of this
Agreement or thereafter.
ASSOCIATED COMPANY means, with respect to a certain Person (a) any
Person which has a right to vote directly or indirectly more than 20% of the
voting interests of such Person, (b) any Person which has voting interests
which are more than 20% owned or controlled directly or indirectly by such
Person, and (c) any Person which has voting interests which are more than 20%
owned by more than 20% of the direct or indirect owners of such Person.
AUTHORIZATION TO PROCEED has the meaning set forth in Section 20.2
AUTHORIZATION TO PROCEED DATE has the meaning set forth in Section
20.2(c).
AVAILABILITY GUARANTEE means with respect to the Plant, the
guarantee described in Article 25.
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AVAILABILITY TEST shall have the meaning set forth in Section 12.1.
BUSINESS DAYS mean all calendar days except Saturdays, Sundays and
all legal holidays of the United States or the State of Georgia.
CANCELLATION NOTICE has the meaning set forth in Section 12.2(b).
CEMS REQUIREMENTS has the meaning set forth in Section 12.2(c).
CERTIFICATE OF MECHANICAL COMPLETION has the meaning set forth in
Section 11.1. The issuance of a Certificate of Mechanical Completion by Owner
means the acceptance of delivery by Owner, in accordance with Section 11.2,
of some or all of a particular System or Unit, and later when applicable,
Phase I or Phase II of the Plant, but does not mean or imply acceptance,
approval or acquiescence of all or any part of the Plant or the Work and
shall not mean nor imply the transfer of risk of loss to Owner.
CHANGE OF APPLICABLE INSURANCE POLICY means the modification to or
addition of an Applicable Insurance Policy after the date of this Agreement
that establishes requirements for the Work that are materially more
restrictive than the most restrictive requirements (i) in effect as of the
date of this Agreement or (ii) agreed to by Contractor in this Agreement or
in any agreement with the Construction Lender.
CHANGE OF LAW means the adoption, promulgation, modification or
reinterpretation of Applicable Laws by any Public Sector Entity after the
date of this Agreement, that establishes requirements for the Work that are
materially more restrictive than the most restrictive requirements (i) in
effect as of the date of this Agreement, (ii) specified in any applications
filed by Contractor or other documents filed by Contractor in connection with
such applications for any permits required to be obtained by Contractor under
this Agreement, so long as such requirements are not more restrictive than
Applicable Laws in effect as of the date of this Agreement, or (iii) agreed
to by Contractor in this Agreement or in any agreement with the Construction
Lender.
CHANGE ORDER has the meaning set forth in Section 4(a).
CHECK OUT means the physical inspection, component testing and
verification of a System in preparation of determining Mechanical Completion
and subsequently its readiness for Functional Testing.
COMBUSTION TURBINE EVAPORATIVE COOLER TEST has the meaning set forth
in Section 12.1.
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COMMERCIAL OPERATION has the meaning set forth in Section 12.2(c).
COMMERCIAL OPERATION NET HEAT RATE has the meaning set forth in
Section 13.4.
COMMERCIAL OPERATION OUTPUT has the meaning set forth in Section
13.3.
CONFIDENTIAL has the meaning set forth in Section 22(b).
CONFIDENTIALITY AGREEMENT has the meaning set forth in Section
22(c)(i).
CONSTRUCTION FINANCING means the financing obtained or committed to
by Owner for the purpose of financing the construction of the Plant.
CONSTRUCTION LENDER means any Person providing Construction
Financing (including any agent or representative thereof).
CONSTRUCTION LOAN AGREEMENT means the agreement entered into by
Owner with one or more financial institutions for financing the construction
of the Plant.
CONTRACTOR means Zachry Construction Corporation, a Delaware
corporation.
CONTRACTOR CONSENT AND AGREEMENT means the Consent and Agreement to
be entered into by and between Contractor and Construction Lender.
CONTRACTOR DEFAULT has the meaning set forth in Section 18.1.
CONTRACTOR'S FIXED PRICE has the meaning set forth in Section 3.1(a).
CONTRACTOR'S INTELLECTUAL PROPERTY has the meaning set forth in
Section 22(e).
CONTRACTOR'S REPRESENTATIVE means the individual designated by the
Contractor as agent to perform those responsibilities and duties identified
in Section 26.6.
CONTRACTOR'S SITE REPRESENTATIVE (or CONSTRUCTION MANAGER) means the
individual designated by the Contractor as its agent to perform those
responsibilities and duties identified in Section 26.5.
CONTRACTOR'S WORK SCHEDULE means the schedule for performing the
Work, prepared by Contractor in good faith and supported by critical path
analysis, as revised by Contractor from time to time to reflect changing
conditions. The initial Contractor's Work Schedule is attached to this
Agreement as Exhibit "F."
DAY or DAYS shall mean calendar days unless otherwise specifically
defined.
DEFECT(S) means any and all design, engineering, construction,
manufacturing, installation, materials, Equipment, Work, tools, or supplies
which (i) does not conform to the Scope of Work, the
4
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Drawings or the terms of this Agreement, including the requirements
identified in Exhibit "D", (ii) fails to comply with Good Utility Practice,
(iii) is not of specified quality, (iv) is of improper or inferior
workmanship, and/or (iv) is not suitable for use under the climatic and range
of operating conditions applicable to the Plant.
DELIVERY POINT shall mean the locations where electric power is
delivered to PECO, as shown on Attachment I to Exhibit B.
DEMONSTRATION TESTS has the meaning set forth in Section 12.1(b)(ii).
DESIGNATED CONTRACTS means those contracts which are entered into
for the purchase of Designated Equipment.
DESIGNATED EQUIPMENT means any Equipment (other than Equipment
subject to the Turbine Contract) which Owner designates in writing to
Contractor for purchase in Owner's name by Contractor, as attorney-in-fact or
agent for Owner.
DEVELOPMENT AUTHORITY means the Development Authority of Heard
County, Georgia.
DIRECTED WORK ORDER has the meaning set forth in Section 9.9(a).
DISPUTE has the meaning set forth in Section 18.5.
DISPUTE NOTICE has the meaning set forth in Section 18.5.
DRAWINGS include, without limitation: all renderings, technical and
design drawings, specifications, plans, layouts, diagrams, illustrations,
System descriptions, calculations, schedules, graphs, performance charts;
graphic or pictorial material needed to show locations, dimensions,
elevations, sections, and details; all documents necessary to fix and
describe the size, quality and composition of the Plant and its
architectural, structural, mechanical, electrical and other systems; supplier
operating and maintenance manuals, recommended spare parts lists, all
documents required to support permitting and licensing and, all other
operations data pertinent to the Plant. The Drawings shall set forth and
detail all requirements for the construction of the Plant, provide all
instructions customarily necessary in the trade and shall include all
documents required for regulatory agency approval. At the time the Drawings
are delivered to Owner, they become the property of Owner and Contractor
shall only maintain drawings in support of this Agreement.
EMISSION TESTS has the meaning set forth in Section 12.1(b)(iii).
EQUIPMENT means the gas turbine generators and all other engineered,
manufactured and
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produced items, materials, supplies and goods required to be incorporated
into the Plant for the construction and operation of the Plant in accordance
with this Agreement.
EXEMPT PROPERTY has the meaning set forth in Section 3.1(c).
EXTENSION PERIOD has the meaning set forth in Section 12.3(c).
FINAL ACCEPTANCE has the meaning set forth in Section 12.4.
FORCE MAJEURE has the meaning set forth in Section 16(a) and 16(c).
FUNCTIONAL TESTING means operational tests of a System which occur
after Mechanical Completion and which verify that the controls for a System
are tested, tuned and operate efficiently and that a System works properly
and as designed in accordance with the specifications and is ready for
Acceptance Testing and for normal and continuous operation.
GAS PURCHASE AGREEMENTS means agreements between Owner and fuel
suppliers for the purchase of fuel for operating the Plant.
GOOD UTILITY PRACTICE means the professional practices, methods,
acts, standards and industry codes accepted by the majority of the electric
power generating industry in the United States of America. Good Utility
Practice is not intended to be limited to the optimum practice or method to
the exclusion of all others, but rather to be a spectrum of reasonable and
prudent practices and methods. In applying the standard to any matter under
this Agreement, equitable consideration should be given to the circumstances,
requirements and obligations of each of the parties.
GUARANTEE has the meaning set forth in Section 8.1(b).
GUARANTOR has the meaning set forth in Section 8.1(b).
GUARANTEED LUMP SUM PRICE has the meaning set forth in Section 3(a).
HAZARDOUS MATERIALS means (i) "hazardous materials", "hazardous
substances", or "toxic substances" or "contaminants" as those terms are
defined under any applicable environmental law, including, but not limited to
Applicable Laws of the United States or of the State of Georgia, as the same
may be amended from time to time, and in the rules and regulations adopted or
promulgated in respect thereof, (ii) petroleum and petroleum products,
including crude oil and fractions thereof, (iii) any other hazardous,
radioactive, toxic or noxious substance, material, pollutant or solid, liquid
or gaseous waste, and (iv) any substance that, whether by its nature or its
use, is subject to regulation under any environmental law or with respect to
which any applicable environmental law or any Public
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Sector Entity requires environmental investigation, monitoring or remediation.
INDEMNITEES shall have the meaning set forth in Section 17.1.
INDEPENDENT ENGINEER means the engineering adviser selected by the
Construction Lender under the Construction Loan Agreement.
INTERCONNECTION AGREEMENT means the agreement for interconnection of
the Plant with the electric transmission system, a copy of which shall be
provided to Contractor in redacted form within fifteen (15) days after
execution, and which upon delivery to Contractor as provided in this
Agreement shall automatically constitute Attachment II to Exhibit B.
INTERCONNECTION POINTS means the points at which the Plant
interconnects with (a) the electric transmission system , (b) the pipeline
for the receipt of natural gas, (c) the water main for the receipt of water,
and (d) the wastewater line for the outflow of wastewater, each of which is
identified in Attachment I of Exhibit "B."
INTERIM PERFORMANCE REQUIREMENTS means the Interim Performance
Requirement for net power output for a Unit set forth in Section 2.1.3.1 of
Exhibit "D" and the Interim Performance Requirement for net heat rate for a
Unit set forth in Section 2.1.3.1 of Exhibit "D."
LANDSCAPING includes all plantings, berms, greenspaces and stone for
the Plant Premises which are required by this Agreement.
LIMITED NOTICE TO PROCEED has the meaning set forth in Section 20.1.
LOWER-TIER SUBCONTRACTOR means any Person other than Contractor or a
Subcontractor that performs any obligation of Contractor under this
Agreement, including all suppliers and manufacturers of Equipment.
MECHANICAL COMPLETION has the meaning set forth in Section 11.1.
MONTHLY PROGRESS REPORT has the meaning set forth in Section
3.1(d)(ii).
MW means megawatts.
NEW SCHEDULE has the meaning set forth in Section 4(h) and 16
(b)(vi).
NOTICE OF MECHANICAL COMPLETION has the meaning set forth in Section
11.1(b).
O.C.G.A. means the Official Code of Georgia Annotated.
OLD SCHEDULE has the meaning set forth in Section 4(h) and
16(b)(vi).
OWNER means Tenaska Georgia I, L.P., a Delaware limited partnership,
its successors and assigns.
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OWNER CAUSED DELAY has the meaning set forth in Section 5.
OWNER IP INDEMNIFIED PARTIES has the meaning set forth in Section
17.2.
OWNER'S AGENT means the individual designated by Owner as agent
pursuant to Sections 26.3 and 26.4.
OWNER'S PROJECT MANAGER means the individual designated by Owner to
be its agent pursuant to Sections 26.2 and 26.4.
OWNER'S SECURITY means the aggregate amount of any Letter(s) of
Credit provided by Contractor to Owner, and any Retainage or other amounts
retained by Owner from payment(s) due to Contractor under this Agreement, as
security for completion of the Project as provided in Section 3.1(d).
OWNER'S SITE REPRESENTATIVE means the individual to be designated in
writing by Owner to be its agent pursuant to Sections 26.1 and 26.4.
OWNER TESTS has the meaning set forth in Section 12.1(b).
P&ID's has The meaning set forth in Section 2(h).
PECO means PECO Energy Company, a Pennsylvania corporation.
PECO TESTS has the meaning set forth in Section 12.1(a).
PERFORMANCE MINIMUMS has the meaning set forth in Section 13.5.
PERFORMANCE TESTS has the meaning set forth in Section 12.1(b)(i).
PERSON means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental entity or authority or agency or any other entity of whatever
nature.
PHASE means either Phase I or Phase II of the Project.
PHASE I means the engineering, design and construction of Units #1,
#2 and #3 and shall be completed upon the achievement of Commercial Operation
of all of Units #1, #2 and #3 and the satisfactory completion of the tests
set forth in Section 2.1.4 of Exhibit D with respect to such Units.
PHASE II means the engineering, design and construction of Units #4,
#5 and #6 and the remainder of the Plant and shall be completed upon
achievement of Commercial Operation for all of the Units #1 through #6 and
the satisfactory completion of the tests set forth in Sections 2.1.4 and
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2.4.2 of Exhibit D with respect to Plant Commercial Operation.
PLANT means the dispatchable electric generating facility together
with all Equipment, including those items described in Exhibit "A", and
including all Systems, buildings and other structures, wiring, foundations,
supports, controls, piping, valves, paving and fencing, which are a part of
the Work, existing structures and elements below and above ground which are
to be incorporated in the facility, and all other necessary items to
construct the electric generating facility on the Plant Premises and to the
Interconnection Points which are not on the Plant Premises as required by
this Agreement.
PLANT COMMERCIAL OPERATION means the achievement of Commercial
Operation for all of the Units #1 through #6, plus the satisfaction by the
Plant of those tests identified in Section 2.1.4 and 2.4.2 of Exhibit "D."
PLANT PREMISES means the site as described in Exhibit "A" on, over
or under which the Plant will be located.
POWER PURCHASE AGREEMENT means the agreement dated August 24, 1999
between Tenaska Inc., a Delaware corporation and PECO.
PRE-EXISTING HAZARDOUS MATERIALS has the meaning set forth in
Section 2(n).
PUBLIC SECTOR ENTITY means any governmental authority, agency or
court (state, county, municipal, local or other) of the State of Georgia that
has lawful jurisdiction over the Plant, the Work or any part thereof.
PUNCH LIST means unfinished items such as painting, fine-finish
grading, clean-up or other Work which does not affect the operation, safety
or integrity of a Unit or System or the Plant, as applicable, and does not
impact the performance or life of the Equipment, but is included in the Work.
REQUEST FOR DIRECTED WORK ORDER has the meaning set forth in Section
9.8(a).
RETAINAGE means the aggregate amount withheld from monthly progress
payments to Contractor as provided in Section 3.1(d).
RETEST PERIOD has the meaning set forth in Section 12.3(c).
SCHEDULED DATE OF COMMERCIAL OPERATION means that date corresponding
to each Unit which is the number of months shown in the following table after
the Authorization to Proceed Date (as determined pursuant to Section
20.2(c)), subject to any extension in accordance with Sections 2(n),
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4, 16, 18.3(b), or 19(a).
<TABLE>
<CAPTION>
Unit # Number of Months
------ ----------------
<S> <C>
1 17
2 17
3 17
4 29
5 29
6 29
</TABLE>
SCOPE OF WORK has the meaning set forth in Article 2 of this
Agreement.
SECTION 12.3(C) NOTICE has the meaning set forth in Section 12.3(c).
SUBCONTRACTOR means any Person who has a contract with Contractor to
perform any obligation of Contractor under this Agreement, including all
suppliers and manufacturers of Equipment and specifically including the
supplier of the turbines under the Turbine Contract.
SUSPENSION NOTICE has the meaning set forth in Section 19(a).
SYSTEM means the Equipment and associated components, or defined
portions thereof, including piping, valves, wiring, controls and supports
described in Exhibit "B" and others as are agreed to in writing by the
parties, which are required to perform a given function or combination of
functions of a Unit or the Plant.
SYSTEM TESTING FOR MECHANICAL COMPLETION means the tests, including
hydrostatic testing, electrical testing, loop checks and motor rotation
checks necessary to determine that a System conforms to the requirements of
this Agreement and is Mechanically Complete and ready for Functional Testing.
TURBINE CONTRACT means the Turbine Purchase Contract attached as
Exhibit H.
UNIT means each of the six General Electric 7F simple cycle
combustion turbine generators furnished under the Turbine Contract together
with such associated and ancillary Equipment as is necessary, directly or
indirectly, for such Unit to achieve Commercial Operation.
UNIT HEAT RATE REQUIREMENTS has the meaning set forth in Section
13.4.
UNIT OUTPUT REQUIREMENT has the meaning set forth in Section 13.3.
WORK has the meaning set forth in Article 2.
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Article 2. SCOPE OF WORK.
Scope of Work means all of the obligations of Contractor pursuant to
this Agreement ("Work") including the following:
(a) Contractor shall furnish the design and engineering for the
Plant and the Plant Premises, including the preparation of
all Drawings, which design and engineering shall meet the
requirements of this Agreement and shall be prepared and
implemented in accordance with Applicable Laws, Applicable
Insurance Policies and Good Utility Practice; provide and
implement purchasing, construction, expediting, inspection,
start-up and testing in accordance with all performance and
other requirements of this Agreement and all Applicable
Laws and Applicable Insurance Policies (together with all
services related thereto) as required by this Agreement or
as may be necessary to provide Owner with the Plant meeting
all terms, conditions, specifications and standards set
forth in this Agreement; provide all labor, Equipment,
procurement of Equipment, (together with all services
provided or to be provided by Contractor) to fulfill the
Contractor's obligations to provide the Plant; perform all
Change Orders; and, perform in accordance with all of
Contractor's representations, covenants and warranties as
set forth in this Agreement. Notwithstanding the preceding
provisions of this Section 2(a), Contractor shall have no
greater responsibility to Owner for compliance with
Applicable Laws with respect to Equipment supplied or
services performed pursuant to the Turbine Contract, than
General Electric Company has to Contractor, as assignee of
the Turbine Contract, for such Equipment supplied and
service performed pursuant to the Turbine Contract.
(b) Contractor shall prepare and update Contractor's Work
Schedule in a timely manner and include such in the Monthly
Progress Report. Contractor shall at all times keep Owner
informed of the current progress of the Work. Contractor
shall furnish all labor, supervision, construction
utilities, and tools necessary to procure for, construct,
and direct and support start-up of the Plant. Contractor
shall, in accordance with the provisions of Article 9,
correct all Work that fails to conform to the requirements
of this Agreement and any Defects relating to the Plant or
the Work. Contractor shall have sole responsibility for
dealing with, coordinating and handling all
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communications, negotiations and resolutions of disputes
concerning all Equipment or other matters related to the
Work with all Subcontractors and Lower-tier Subcontractors,
including proper administration of all warranties on
Owner's behalf prior to and during the warranty period.
During construction, Contractor shall replace or repair
to conforming status any inadequate, nonconforming,
damaged or defective Equipment or Work.
(c) Contractor shall (i) supervise and direct the Work, (ii) be
responsible to coordinate the Work with respect to all
obligations of Owner which are specifically identified in
this Agreement, (iii) be responsible for and coordinate all
Work of all Subcontractors and Lower-tier Subcontractors,
(iv) be responsible for keeping the Work on schedule, (v)
timely report the status of the progress of the Work to
Owner and (vi) pay Subcontractors in a timely manner.
Unless otherwise specifically provided in this Agreement,
Contractor shall be solely responsible for and have control
over Subcontractors, labor, construction means, materials,
material suppliers, methods, techniques, sequences, and
procedures and for supervising and directing all portions
of the Work. Contractor is responsible for carrying out its
obligations so that each of the Units and the Plant shall
operate safely and be in compliance with all Applicable
Laws and fully satisfy all operating requirements set forth
in this Agreement.
(d) Contractor shall be fully responsible for any part of the
Work accomplished by Subcontractors and Lower-tier
Subcontractors and for the acts and omissions of
Subcontractors and Lower-tier Subcontractors, including
Persons either directly or indirectly employed by them to
the same extent as Contractor is responsible for the acts
and omissions of Persons directly employed by it.
(e) Contractor shall be responsible for procurement of all
Equipment including the Equipment listed in Exhibit "B",
portions of which may be Designated Equipment. (The parties
acknowledge and agree that Exhibit "B" includes major
Equipment and related Drawings for some of the Systems and
Equipment and is not an exhaustive listing of all parts and
materials which are included in the Work..) Within thirty
(30) Days of ordering any Equipment, Contractor shall
provide to Owner a list of spare parts for all such
Equipment, identifying the supplier of such spare parts and
including
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current pricing for such spare parts. Contractor shall use
all reasonable efforts to secure for Owner the lowest price
for spare parts, and shall use reasonable efforts to cause
each major Equipment manufacturer to agree to supply spare
or replacement parts for such Equipment for a minimum of
ten (10) years after the date of Plant Commercial
Operation. Owner shall identify and purchase all spare
parts for the Equipment and, prior to Commercial Operation,
Contractor shall receive all spare parts for Owner at the
Plant Premises. Risk of loss shall remain with Contractor
for spare parts until such spare parts are delivered to
Owner's designated operator for the Plant at or before
Commercial Operation of the last Unit. Owner will make
reasonable efforts to have spare parts available during
commissioning of the Units. Owner's spare parts may be used
by Contractor to fulfill Contractor's obligations under
this Agreement and Contractor shall, at no cost to Owner,
promptly replace such spare parts.
(f) Contractor shall report to Owner on the progress of
production and installation of Equipment under the Turbine
Contract, shall provide Owner with advance notice of
testing under the Turbine Contract and shall arrange for
Owner and Independent Engineer to observe such testing.
Contractor, with the written agreement of Owner, shall
reject any nonconforming or defective Equipment supplied
under the Turbine Contract and require correction, repair
or replacement of such Equipment by General Electric
Company, provided that Owner shall have the right to direct
Contractor to reject any nonconforming or defective
Equipment supplied under the Turbine Contract and to direct
Contractor to require correction, repair or replacement of
such Equipment by General Electric Company. Contractor
shall not change or amend the Turbine Contract, without the
written consent of Owner. Owner and Contractor will
cooperate with each other in connection with the assignment
of rights under the Turbine Contract to Contractor so as to
permit Owner to retain such rights in the Turbine Contract
as are necessary such that no sales or use tax is required
to be paid upon the purchase of the Equipment supplied
under the Turbine Contract, and for such purpose Owner and
Contractor will take such actions as are reasonably
necessary to obtain such result, including providing for
the transfer of title to any Equipment supplied under the
Turbine Contract directly from General Electric Company to
Owner
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and the remittance of payments for all Equipment under the
Turbine Contract directly by Owner to General Electric
Company.
(g) Unless otherwise provided in this Agreement, Contractor
shall, as part of the Guaranteed Lump Sum Price secure and
pay for all for all necessary permits, including all
building and construction permits, but excluding any (i)
Department of Energy, (ii) zoning, subdivision or similar
permits, and (iii) environmental permits required,
including those listed in Exhibit "G," which shall be the
responsibility of Owner.
(h) Contractor shall immediately, as such documents become
available, furnish Owner in accordance with Exhibit "L",
clearly legible copies of the Drawings which include
drawings of all final (including revisions, addenda and
modifications) Subcontractor furnished shop drawings;
performance data for all engineered Equipment; civil,
electrical, mechanical, and structural construction
drawings; piping and instrumentation diagrams ("P&ID's");
general arrangement drawings; electrical one-line diagrams;
relay and metering drawings and all other drawings and
documents prepared by Contractor, Subcontractors or
Lower-tier Subcontractors relating to the Plant; and
complete documentation of control system logic and programs
including distributed controls; and three (3) copies of
design calculations. Contractor shall maintain a set of
Drawings at the Plant Premises which shall be
continuously maintained and updated to reflect the "As
Built" conditions of the Work.
(i) Contractor shall complete the Work in a good and
workmanlike manner in accordance with the construction
practices used by a prudent construction contractor under
similar types of contracts for the construction of an
electric power generating facility under similar
circumstances and conditions and in a manner which upon
completion of the Work enables Owner, without modification
of the Work, to meet its obligations in the copy of the
Power Purchase Agreement (as redacted by Owner)
attached hereto as Attachment 2 to Exhibit "B" and shall
perform all tests included in Exhibit "D" and Article 12
hereof and such additional tests as are reasonably
required by Owner to insure the safe and orderly start-up
of the Units and the Plant. Additional tests, other
than incidental tests required by Owner, shall be governed
by Article 4 of this Agreement.
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(j) Contractor shall perform this Agreement in accordance with
and fulfill any and all Applicable Laws and the
requirements of any and all Applicable Insurance
Policies. Contractor shall initiate, maintain, and
supervise all safety precautions and programs in
connection with the performance of this Agreement.
Contractor shall also comply with all reasonable
safety standards, rules or requirements promulgated by
Owner, if any. Contractor shall take all reasonable
precautions for the safety of and shall provide
reasonable protection to prevent damage, injury or loss
to: (i) employees performing the Work and all Persons
who may be affected thereby; (ii) all Persons
performing Work at the Plant Premises; (iii) the Work
and Equipment to be incorporated in the Plant, whether
in storage off or on the Plant Premises, under care,
custody or control of the Contractor or the Subcontractors;
(iv) all other property on the Plant Premises or adjacent
thereto such as trees, shrubs, lawns, walks, pavements,
roadways, structures and utilities not designated for
removal, relocation or replacement in the course of
construction; and (v) public road and rail systems used in
performing the Work.
(k) Contractor shall provide discipline engineers to support
the Owner's Plant operator training program as provided
in Section 1.1 of Exhibit B. Classroom training and
site specific training shall be completed on all Systems
before Mechanical Completion of the first System. All
training shall be conducted at the Plant Premises, in a
classroom lecture format. The Contractor shall utilize
System descriptions, Plant P&ID's, schematic diagrams and
Equipment Subcontractor supplied illustrations to
instruct the trainees. Operators shall be taught
System overviews, design concepts, control philosophy,
limitations and performance optimization of the various
Systems. Contractor will submit all drawings pertaining to
the Systems, training materials, a course plan and
qualifications of disciplined engineers to Owner for
approval thirty (30) Days prior to the commencement of
classroom training. Training furnished under the
Turbine Contract shall be as provided in the Turbine
Contract.
(l) Contractor shall be entitled to subcontract any portion
of the Work but shall not subcontract the whole of the
Work; provided, however, that Owner shall have the right
to disapprove in writing any Subcontractor, including any
Associated Company of Contractor, contracting to do Work
in excess of an aggregated sum in the amount of
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ONE HUNDRED THOUSAND DOLLARS ($100,000). Contractor
shall not allow any Subcontractor or Lower-tier
Subcontractor to do Work on the Plant Premises or to supply
Equipment for the Work without a written agreement and,
in the case of Work to be performed at the Plant Premises,
a valid insurance certificate acceptable to Contractor.
Contractor shall furnish Owner with a copy of the
technical and warranty portions of all such
subcontracts as each is executed. Exhibit "M" sets forth
a list of those Subcontractors which to date have been
approved by Contractor and Owner. Notwithstanding the
first sentence of this Section 2(l), Contractor shall
submit to Owner for approval any additions or changes
to Exhibit M fifteen (15) Days before entering into an
agreement with any such newly identified Subcontractor.
Contractor shall not employ or permit the employment of
unfit Persons or Persons not skilled in tasks assigned to
them. All subcontracts shall provide that the
subcontracts shall be assignable to Owner as required in
Section 18.1(d)(i). The creation of any subcontract
relationship shall not relieve Contractor of any of its
obligations under this Agreement. Contractor represents
that no Subcontractor is or will be a third party
beneficiary under this Agreement except as otherwise
expressly provided in this Agreement.
(m) Owner has supplied certain information to Contractor
("Owner Supplied Information") which is the following:
Attachment IV to Exhibit "A." Contractor represents to
Owner that it has verified conditions at the Plant
Premises by completing such visual inspections as
Contractor deems necessary, including investigation of
the general and local conditions with respect to
environment, transportation, access, waste disposal,
handling and storage of materials, availability and quality
of electric power, availability and condition of roads,
climatic conditions and seasons, physical conditions at
the Plant Premises and the surrounding area as a whole,
topography and ground surface conditions, nature and
quantity of surface and subsurface materials (as
represented in Owner Supplied Information) to be
encountered (other than Hazardous Materials), and will
make such adjustments as are necessary to complete the Work
to be performed.
(n) Contractor shall be responsible for all site preparation
of the Plant Premises. Site preparation shall include:
preparation of Plant Premises for construction of the
Plant, including demolition and proper removal of any
existing man-made structures
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(including subsurface structures for which Owner has
given Contractor notice); clearing, grubbing and
disposal of brush, trees and other vegetation; providing
temporary and permanent drainage and drainage structures;
removal of debris and rubble; all necessary
investigation, analysis, testing and determination
concerning the condition, contents or integrity of: (i)
the subsurface, underground and/or soils conditions of the
Plant Premises; (ii) the location and adequacy of
utilities (surface and subsurface) for the Work; and (iii)
the existing condition of any improvements on the Plant
Premises. In performing site preparation, Contractor
shall be responsible for and, except as provided in this
subsection (n) below, assumes the cost of any construction,
engineering or structural conditions, including those
caused by the presence of organic materials (except (A)
Hazardous Materials which were present prior to the
execution of this Agreement ("Pre-existing Hazardous
Materials"), (B) Hazardous Materials which are brought
to the Plant Premises after the execution of this Agreement
by Owner or its agents, provided that Contractor, it
Subcontractors and Lower-tier Subcontractors are not
considered to be Owner's agents, and (C) archaeological
remains and artifacts), inadequate soil bearing
qualities or underground water. Contractor represents
that it is satisfied as to the general and local
conditions and circumstances affecting the Work,
particularly including the following:
conditions affecting transportation, access,
disposal, handling, and storage of Equipment at the
Plant Premises; availability and conditions of roads;
availability of housing; climatic conditions and
seasons; physical conditions at the Plant Premises;
topography and ground surface and subsurface
materials to be encountered (as represented in Owner
Supplied Information); and equipment and facilities
needed for performance of the Work.
Contractor's failure to acquaint itself with any general or
local condition listed above or otherwise or circumstances
affecting the Work existing as of the date of this
Agreement will neither relieve it from the responsibility
for successfully performing this Agreement, nor entitle
Contractor to an adjustment to the Guaranteed Lump Sum
Price or the Scheduled Date of Commercial Operation. Owner
will not entertain, nor have any liability for, claims
relating to, or arising out of, unknown or unforeseen
subsurface
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conditions (other than with respect to Pre-existing
Hazardous Materials, archaeological remains or
artifacts) and except only as specifically provided and
limited in this Section 2(n) if the Scope of Work and/or
schedule is increased due to information contained in the
Owner Supplied Information being in error. To the extent
Contractor encounters Pre-existing Hazardous Materials,
archaeological remains or artifacts, Contractor shall use
all reasonable efforts to minimize the consequences to
Contractor's Work Schedule of dealing with those
substances, remains or artifacts, consistent with
considerations of safety and prudence and Contractor shall
use all reasonable efforts to mitigate further
contamination by Hazardous Materials and in the case of
such substances, archaeological remains or artifacts, to
mitigate the impact on the Guaranteed Lump Sum Price.
Notwithstanding the foregoing, Contractor (i) shall have no
obligation under this Agreement for dealing with or
disposing of such Pre-existing Hazardous Materials,
archaeological remains or artifacts, and (ii) shall be
entitled to propose a Change Order to the extent that,
despite appropriate mitigation efforts, the Work and/or
schedule is increased. Contractor shall not be responsible
for the removal, handling, transportation, or disposal of
any Pre-Existing Hazardous Materials located on the Plant
Premises or any environmentally unsound condition caused by
Owner, provided that Contractor shall immediately notify
Owner of any indication of such Pre-Existing Hazardous
Materials or any environmentally unsound condition known to
Contractor. Contractor shall specifically not be deemed or
held responsible as a "generator" or a "transporter" for
such Pre-existing Hazardous Materials or Owner caused
environmental conditions. Contractor acknowledges the
limitations and descriptions of the Owner Supplied
Information. Owner makes no representation as to the
completeness of the Owner Supplied Information or that it
applies generally to subsurface conditions of the Plant
Premises. Contractor shall notify Owner, in writing, of the
following conditions ("Unforeseen Conditions"), promptly
upon discovery by Contractor and before such conditions are
disturbed: (1) subsurface or latent physical conditions at
the Plant Premises of an unusual nature differing
materially from those represented in the Owner Supplied
Information; (2) rock excavation requiring blasting or saw
cutting; or (3) the existence of man-made obstructions
which require relocation.
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After receipt of notice from Contractor, Owner will
promptly investigate any Unforeseen Conditions and within
two (2) Days will issue appropriate orders or instructions
to Contractor. If such Unforeseen Conditions will increase
or decrease the cost of the Work or the Plant by more than
FORTY THOUSAND DOLLARS ($40,000) in the aggregate, or cause
a delay in the Scheduled Date of Commercial Operation, then
Owner shall issue a change order in accordance with Section
4 adjusting the Guaranteed Lump Sum Price either up or
down, as appropriate by the amount of increase or decrease
in the cost of the Work or Plant in excess of FORTY
THOUSAND DOLLARS ($40,000) or extending the Scheduled Date
of Commercial Operation, or both, as appropriate.
Notwithstanding the fact that Contractor's increased cost
due to Unforeseen Conditions might exceed ONE MILLION FIVE
HUNDRED THOUSAND DOLLARS ($1,500,000), nevertheless the
total dollar amount for all Change Orders to be approved
and paid by Owner under this Section 2(n) due to Unforeseen
Conditions shall not exceed the sum of ONE MILLION FIVE
HUNDRED THOUSAND DOLLARS ($1,500,000). Except for Change
Orders not to exceed [*] as provided hereafter, a Change Order
under this Section 2(n) due to Unforeseen Conditions must be
proposed by Contractor pursuant to Section 4 not later than
the date of completion of foundations for all of the
following items: gas turbine generators, pipe rack,
generator step-up transformers, field erected tanks, and
major buildings. Owner shall not grant an adjustment to the
Guaranteed Lump Sum Price for Change Orders in excess of
[*] due to Unforeseen Conditions after completion of all of
the above-listed foundations and the total aggregate change in
the Guaranteed Lump Sum Price pursuant to this Section 2(n)
due to incorrect information in the Owner Supplied
Information shall in no event exceed ONE MILLION FIVE
HUNDRED THOUSAND DOLLARS ($1,500,000).
(o) Contractor shall keep the Plant Premises and surrounding area
free from accumulation of waste materials or rubbish caused
by the Work. At completion of the Work the Contractor shall
remove from and about the Plant Premises all waste materials,
debris, rubble, rubbish, Contractor's tools, construction
equipment, machinery and surplus
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materials. If the Contractor fails to clean up as so
provided herein, the Owner may do so and the cost thereof
shall be charged to the Contractor.
(p) The Plant shall include the following to be constructed on
the Plant Premises: 500 KV power to the Interconnection
Point for the transmission system; a natural gas line to the
Interconnection Point for the natural gas pipeline; and a
water line to the Interconnection Point for the water main.
(q) Contractor shall meet environmental and permit commitments
made by Owner and/or Contractor and other requirements,
including the draft environmental permits set forth in
Exhibit "G" as modified by the final environmental
permits, provided that Owner shall provide copies of
the final environmental permits to Contractor as soon as
reasonably possible following receipt by Owner of such
permits. Upon delivery of copies of the final
environmental permits to Contractor, Exhibit "G" shall
be automatically deemed amended to reflect the form
and contents of such final environmental permits. If
the final environmental permits change or modify the
Work or the schedule so as to require a Change Order then
Contractor upon compliance with the requirements of
Section 4 shall be entitled to a Change Order,
provided that Contractor shall, as soon as reasonably
possible after receipt of such permits, propose such
Change Order. Contractor shall, during construction:
(i) limit fugitive dust; (ii) avoid run off of contaminated
surface water and silt; and (iii) comply with the safety
guidelines and requirements set forth in the safety
manual developed pursuant to Section 27.4 and (iv) not
contaminate ground water, in any manner including by
spilling Hazardous Materials. All Hazardous Materials
introduced to the Plant Premises by Contractor or any
Subcontractor or Lower-tier Subcontractor shall be
properly used and stored. All spills or releases of
Hazardous Materials by Contractor or any Subcontractor
or Lower-tier Subcontractor shall be properly disposed of
and/or remedied by Contractor, at Contractor's expense.
(r) As part of the Guaranteed Lump Sum Price, Contractor shall
provide: an office area approximately 750 square feet in
size on the Plant Premises with furniture, other than
office equipment, to accommodate Owner's Site
Representative; and, beginning prior to the delivery of any
Equipment, security for the Plant Premises consisting of a
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perimeter fence adequate to protect Equipment and a
twenty-four (24) hour security guard.
(s) If Shipment (as defined in the Turbine Contract) of one
or both of Units #2 and #3 has not occurred on or before
December 31, 2000, Contractor may arrange for
transportation of those Unit(s) for which Shipment has
not occurred by one or more dedicated trains which have
been retained by Contractor specifically to pickup such
Units at the General Electric Company manufacturing
facility, or if the Units are manufactured outside of the
United States at the port of entry for such Units(s) into
the United States, and deliver such Unit(s) to a railroad
siding near the Plant Premises. Contractor shall use
reasonable good faith efforts to minimize the costs for
such transportation, including using only one train if
reasonably possible. If Contractor elects to utilize one
or more dedicated trains, Contractor shall be entitled to
a Change Order increasing the Guaranteed Lump Sum Price by
the actual net cost (after considering any reduction in
the price under the Turbine Contract as a result of
Contractor supplying transportation for the Unit(s)
instead of General Electric Company) of such trains(s), up
to a maximum amount of One Hundred Seventy Thousand Dollars
($170,000) and no extension of the Scheduled Date of
Commercial Operation shall be made as a result of such
Change Order.
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Article 3. PAYMENT
Section 3.1 GUARANTEED LUMP SUM PRICE AND PAYMENT - LIENS - RETAINAGE.
(a) The Owner shall pay the Contractor for the Contractor's performance of this
Agreement a lump sum amount of TWO HUNDRED TWENTY TWO MILLION FIVE HUNDRED
THIRTY FOUR THOUSAND TWO HUNDRED FORTY SEVEN DOLLARS ($222,534,247) (the
"Guaranteed Lump Sum Price"), subject to adjustment in accordance with
Section 4, Exhibit "P"(Escalation) and Exhibit "J" (Scope Change Unit Rates
and Option Pricing). The Guaranteed Lump Sum Price is comprised of (i) the
Turbine Contract in the amount of ONE HUNDRED SIXTY SEVEN MILLION THREE
HUNDRED FORTY THREE THOUSAND SEVEN HUNDRED TWENTY EIGHT DOLLARS
($167,343,728), and (ii) the "Contractor's Fixed Price" in the amount of
FIFTY FIVE MILLION ONE HUNDRED NINETY THOUSAND FIVE HUNDRED NINETEEN
DOLLARS ($55,190,519). No escalation of the Guaranteed Lump Sum Price will
be required if the Authorization to Proceed is given to Contractor on or
before July 1, 2000. Responsibility for the payment of sales and use taxes
shall be allocated between Owner and Contractor as set forth in Section
3.1(c). All taxes levied in connection with the performance of the Work,
including occupational, excise, unemployment, FICA, income taxes, state and
federal gasoline and fuel taxes, property taxes on Contractor's equipment,
tools and supplies necessary for performance of the Work, and customs
duties on materials and supplies and all other taxes on any item or service
that is a part of the Work, whether such tax is normally included in the
price of such item or service or is normally separately stated, shall be
the responsibility of Contractor and are included in the Guaranteed Lump
Sum Price. With respect to all personal property, services or materials
that are subject to sales and use tax, Contractor shall follow the
procedures set forth in Section 3.1(c).
(b) The Guaranteed Lump Sum Price includes the cost of obtaining and using
temporary construction utilities, including chemicals required for
construction, electric power and water required for construction, cleaning
and testing, and the initial fill for flushing and initial operation
through Commercial Operation of all lubricants, fluids (including
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glycol and transformer oil), grease and hydraulic fluids for the Equipment,
excluding turbine lube oil. Except for the following consumables which are
not included in the Guaranteed Lump Sum Price: (i) turbine lube oil for
flushing and initial fill, (ii) bulk CO(2) and hydrogen for generator purge
and cooling, (iii) bulk CO(2) and FM200 for the turbine fire protection
systems and (iv) bulk water treatment chemicals, if any, Contractor shall
supply all consumables required in connection with the performance of the
Work. Contractor shall budget for and use reasonable efforts to consume
not more than [*] of fuel during the performance of the Work, including
start-up, commissioning, Acceptance Testing, diagnostic testing, or
retesting pursuant to Section 12.3 and including all fuel requirements
under the Turbine Contract through the date of Commercial Operation of
the last Unit to achieve Commercial Operation. The Guaranteed Lump Sum
Price will be increased by change order for all technical services
used under the Turbine Contract in excess of 600 man-weeks by [*] of such
services with Contractor being responsible for the payment to General
Electric of all additional payments required under the Turbine Contract
for man-weeks of such services in excess of 600 man-weeks. The Guaranteed
Lump Sum Price will be decreased by change order if less than 600
man-weeks of technical services are used under the Turbine Contract by [*]
for each man-week of such services less than 600 man-weeks, with Contractor
retaining the benefit of any reduced payments to General Electric under the
Turbine Contract arising from the use of less than 600 man-weeks of such
services. The Guaranteed Lump Sum Price does not include the cost of All
Risk Builder's Risk insurance. The Guaranteed Lump Sum Price will not be
changed except as specifically provided for in this Agreement.
(c) Contractor is responsible for the payment of all sales and use taxes with
respect to any purchases made by Contractor in order to perform the Work,
except as otherwise expressly provided herein. Owner shall file or cause to
be filed in the name of Owner or in the name of Contractor applications for
exemptions from sales and use taxes for machinery and equipment used
directly in the manufacturing process, pursuant to
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O.C.G.A. Section 48-8-34, and for machinery and equipment used for the
primary purpose of eliminating air or water pollution, pursuant to O.C.G.A.
Section 48-8-36. Upon receiving exemption certificates with respect to the
purchase of manufacturing equipment and/or pollution control equipment (the
property covered by such certificates, "Exempt Property"), Owner shall
deliver a copy of such certificates to Contractor. Thereafter, Contractor
shall employ such certificates in all purchases of Exempt Property to be
incorporated into the Work so as to avoid the imposition of sales and use
tax on the purchase of Exempt Property. Contractor shall make purchases of
Exempt Property in Contractor's name or, if designated by Owner as
Designated Equipment, in Owner's name pursuant to a power of attorney or
agency granted by Owner to Contractor for this purpose and will permit
Owner to make payments directly for Designated Equipment, which direct
payments will be credited against amounts otherwise due to Contractor from
Owner under this Agreement. The Guaranteed Lump Sum Price is based upon
Owner obtaining exemption certificates for all of the Equipment as
anticipated Exempt Property and includes all applicable sales and use taxes
other than with respect to such Exempt Property. In the event that,
notwithstanding such exemption certificates, Contractor is required to pay
sales or use tax on more or less than all of the Equipment, then a Change
Order shall be issued increasing or decreasing the Guaranteed Lump Sum
Price by the amount of any increase or decrease in such sales and use
taxes. Contractor shall pay any applicable Georgia sales and use tax and
the amounts so paid shall be part of the Guaranteed Lump Sum Price.
Contractor shall cooperate with Owner in lawfully avoiding the payment of
sales and use tax on Exempt Property; however, in the event that Contractor
is required to pay and does pay any sales and use tax on Exempt Property,
then Owner may apply for, receive and retain a refund of all of the sales
and use taxes paid in respect of the Exempt Property, and Contractor
assigns to Owner all right to receive any such refund. Owner and its
representatives may, at Owner's discretion, participate in relevant
portions of all audits and examinations of Contractor, formal and informal
administrative proceedings, or judicial proceedings
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that concern or relate to the payment of Georgia sales and use tax for the
purposes of the Work ("Tax Proceeding"). Contractor shall cooperate fully
with Owner and its representatives in connection with any Tax Proceedings
and shall notify Owner on a timely basis when Contractor receives notice
that the Georgia Department of Revenue intends to perform a sales and use
tax audit of the Contractor for any period in which this agreement is in
effect.
(d) The Guaranteed Lump Sum Price shall be invoiced and paid in accordance with
the following procedure:
(i) On the first Business Day after delivery of the Authorization to
Proceed, Owner shall pay fifty percent (50%) of the Mobilization
Payment set forth in Exhibit I.
(ii) On or before the last Day of each calendar month during the term of
this Agreement, an invoice for the Work completed to such date shall
be documented by Contractor in the form of Exhibit "I" and submitted
to Owner for verification and payment, which invoice shall include (a)
a specific reference to the amount due under the Turbine Contract
payment schedule, (b) a separate specific reference to the amount due
under the Designated Contracts with respect to Designated Equipment,
(c) a separate specific reference to the amount due with respect to
the balance of the Contractor's Fixed Price and (d) an itemization by
item, for both the amount due under the Turbine Contract, the amount
due under the Designated Contracts for Designated Equipment and the
amount due under the Contractor's Fixed Price. Within four (4)
Business Days after the end of each month, Contractor shall submit its
report of the progress and status of the Work ("Monthly Progress
Report"). Owner will pay to General Electric Company, directly or by
joint check with Contractor, the amount designated on Contractor's
invoice as due under the Turbine Contract in accordance with the GE
Payment Procedures set forth in Exhibit "O", subject to any deduction
from such payment made pursuant to Section 3.1(e) which Owner
designates as resulting from performance or non-performance under the
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Turbine Contract. Contractor shall be responsible for any additional
amounts due to General Electric Company as a result of additional
work, equipment or services requested by Contractor or for any
additional charges incurred beyond the price set forth in this
Agreement for the Turbine Contract unless Owner and Contractor shall
have executed a change order under this Agreement for such additional
charges. At the request of Owner, Contractor shall dispute amounts
otherwise due to General Electric Company under the Turbine Contract
in accordance with the rights of Buyer set forth in Section 3.5 of the
Turbine Contract and, as between Owner and Contractor, Owner shall
have the same right to withhold payment to General Electric Company as
is provided to Buyer in Section 3.5 of the Turbine Contract and shall
not, as a result of withholding such payments, be in breach of this
Agreement. In the event that Owner intends to request Contractor to
dispute payment with General Electric Company, Owner shall provide
prompt notice of such intent to Contractor. All amounts paid to
General Electric Company by Owner shall be credited against the
Turbine Contract portion of the Guaranteed Lump Sum Price. Owner shall
further pay directly, or by joint check with Contractor, to the
respective vendors of the Designated Equipment, the amount designated
on Contractor's invoice as due under the Designated Contracts, subject
to any deduction from such payment made pursuant to Section 3.1(e)
which Owner designates as resulting from performance or
non-performance under the Designated Contracts. Contractor shall be
responsible for any additional amounts due to the vendors of the
Designated Equipment as a result of additional work, equipment or
services requested by Contractor or for any additional charges
incurred beyond the prices set forth in the Designated Contracts
unless Owner and Contractor shall have executed a Change Order under
this Agreement for such additional charges.
(iii) At the end of each month during the term of this Agreement,
Contractor shall submit to Owner with Contractor's invoice an executed
Certificate of
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Construction Contractor in the form of Exhibit "R."
(iv) The Monthly Progress Report shall also include, but not be limited to:
(a) Contractor's report of actual versus scheduled progress status
for the Work.
(b) Procurement and delivery status summary for Equipment.
(c) Contractor's and Subcontractors' progress reports and a
consolidated Contractor's Work Schedule including a report of
budgeted and expended man-hours.
(d) All Work performed during such time in furtherance of any Change
Order approved pursuant to Article 4.
(e) Authorization of payments under the Turbine Contract and under
the Designated Contracts.
(v) After receipt of an invoice for the Work by Owner and if Contractor
has complied with the above requirements of Section 3.1(d)(ii) through
3.1(d)(iv) and subject to the provisions of Section 3.1(e), Owner will
have twenty-five (25) Days (if the 25th Day is not a Business Day, the
25th Day will be deemed to be the next Business Day) to approve said
invoice and pay Contractor a progress payment of ninety-five percent
(95%) of the amount specified in the invoice to be due to Contractor,
not including any amounts due pursuant to the Turbine Contract or
Designated Contracts, the remaining five percent (5%) of such amount
to be Retainage. If a lien is filed by a Subcontractor or any
Lower-tier Subcontractor against the Plant or Plant Premises,
Contractor shall within twenty (20) Days of a written request of Owner
or Construction Lender provide a lien bond in accordance with O.C.G.A.
Section 44-14-364 or other arrangement containing such terms and
conditions as are satisfactory and acceptable to Owner and
Construction Lender to remove such lien, or upon Contractor's failure
to do so, Owner may obtain (but is not obligated to obtain) such bond
or other arrangement and remove such lien and pay the cost, including
reasonable attorney fees and the amount of or cost for providing for
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security, from the monthly progress payments otherwise due Contractor
and from the Owner's Security, if necessary. After any such
withholding, any amount remaining unpaid shall be the obligation of
Contractor. Owner shall have the right to withhold an amount equal to
one hundred fifty percent (150%) of the amount of any lien filed
against the Plant or the Plant Premises from the monthly progress
payments as a part of Owner's Security, until such lien is removed.
All such progress payments made by the Owner shall be made by wire
transfer to the Contractor.
(e) All progress payments provided for in Section 3.1(d) are subject to
deductions by Owner for (i) any overpayments (as a result of later
determined inadequacy of some Work, Work not performed or miscalculations)
made by Owner for any previous progress payment or period, (ii) any
liquidated damages due Owner under this Agreement, (iii) such amount as
Owner reasonably determines to be the cost to remedy any Work not done or
which is defective or does not conform to this Agreement (including breach
of Warranty) and the amount of any unsettled claims against Contractor or
Owner and/or the amounts Owner is entitled to withhold or expend pursuant
to Sections 3.1(d)(ii) or 3.1(d)(v) and unpaid amounts which are due from
Contractor to any Person and which are related to performance of this
Agreement, (iv) the amount by which any progress payment is in good faith
disputed by Owner, (v) the cost of any loss or damage to the Owner caused
by Contractor and (vi) any amounts due to Owner or other indemnified
parties pursuant to the indemnification provisions of this Agreement. At or
prior to the time such progress payment would otherwise be due, Owner will
notify Contractor in writing, of any such deduction or expenditure from a
progress payment and Owner will provide a detailed explanation of the
reason for such deduction or expenditure. If Contractor disputes such
deduction or expenditure, Contractor shall notify the Owner, Contractor
shall continue performance of the Work, and the parties shall resolve such
dispute in good faith in accordance with the provisions set forth at
Section 18.5. While resolving any disputed amounts, and pending final
resolution of a Dispute, Owner and Contractor shall continue to fulfill
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their obligations under this Agreement. Contractor shall indemnify and hold
Owner harmless from and against any and all loss, cost, expense, liability
and damage incurred by Owner arising from Subcontractor liens or Lower-tier
Subcontractor liens filed against the Plant or Plant Premises. Owner may
exercise the rights described in Sections 3.1(d)(v) and this 3.1(e) without
waiving or releasing any other right, remedy or recourse which Owner may
have at law or equity.
(f) The amount of undisputed Retainage, interest not accruing thereon,
accumulated throughout the term of this Agreement until the Commercial
Operation of all of the Units in Phase I (not to exceed two and one half
percent (2 1/2%) of Contractor's Fixed Price), shall be paid to Contractor
within seven (7) Days after the achievement of Commercial Operation by all
of the Units in Phase I and completion of the PECO Tests for Phase I,
provided that as a condition to Owner's obligation to pay such Retainage to
Contractor, Contractor shall, at Contractor's cost, deliver an irrevocable
letter of credit issued to Owner by a bank or other financial institution
acceptable to Buyer in the form attached as Exhibit Q to Buyer, in a face
amount equal to the amount of Retainage to be paid to Contractor. The
amount of undisputed Retainage, interest not accruing thereon, accumulated
during the term of this Agreement, less any amount paid to Contract after
the Commercial Operation of all of the Units in Phase I, shall be paid to
Contractor upon Plant Commercial Operation, provided that as a condition to
Owner's obligation to pay such Retainage to Contractor, Contractor shall,
at Contractor's cost, increase the face amount of the irrevocable letter of
credit previously issued to Owner to an amount equal to the total of the
amount of Retainage paid to Contractor under this Section 3.1(f). Owner
shall have the right to draw upon the Letter of Credit held as Owner's
Security at such times as are permitted in this Agreement. Owner's Security
shall be released at such time as (i) the Contractor delivers to Owner (a)
a final adjusted invoice (not including amounts withheld pursuant to
Sections 3.1(e) or 3.1(f) or withheld or expended from Owner's Security as
authorized by Sections 3.1(d)(ii) and 3.1(d)(v)), (b) releases of recorded
liens and claims of any Person arising out of or related to the performance
of this
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Agreement, (c) from each Subcontractor who has Punch List items
outstanding and unpaid or has amounts in dispute or claims asserted against
Contractor, an interim waiver and release upon payment in compliance with
O.C.G.A. Section 44-14-366(c), a separate written acknowledgment of payment
as provided in O.C.G.A. Section 44-14-366(f) and a Subcontractor Interim
Waiver, Release and Assignment of Liens and Claims contained in Exhibit
"N," each such form to be acceptable to Owner and Construction Lender, (d)
from each Subcontractor who has completed all of such Subcontractor's work
on the Plant Premises and has no outstanding Punch List items or disputed
claims, an unconditional waiver and release upon final payment in
compliance with O.C.G.A. Section 44-14-366(d), a separate written
acknowledgment of payment as provided in O.C.G.A. Section 44-14-366(f), and
a Subcontractor Final Waiver, Release and Assignment of Liens and Claims
contained in Exhibit "N," each such form acceptable to Owner and
Construction Lender, (e) from Contractor, an interim waiver and release
upon payment in compliance with O.C.G.A. Section 44-14-366(c), a separate
written acknowledgment of payment as provided in compliance with O.C.G.A.
Section 44-14-366(f) and a Contractor Interim Waiver, Release and
Assignment of Liens and Claims contained in Exhibit "N" each such form
acceptable to Owner and Construction Lender, (the final lien releases to be
delivered to Owner by Contractor as provided below) and (f) releases of any
other known potential encumbrance against the Plant or the Plant Premises
and any other obligations or claims arising out of Contractor's performance
of this Agreement, except due to Punch List items until corrected and paid
for, the amount withheld for disputes pending pursuant to Section 18.5
unless otherwise agreed to by the parties in writing, and any sums not yet
due under this Agreement; or arrangements satisfactory to Owner and
Construction Lender for the handling of any such matters which are not
released, all of such documents to be in form satisfactory to Owner; (ii)
the Contractor submits an affidavit to Owner, satisfactory to Owner,
listing, to the best of Contractor's information and belief, the aggregate
dollar amount of all retainage and other payments which Contractor owes its
Subcontractors which have not signed an unconditional waiver and release
upon final
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payment and a separate written acknowledgment as provided above and the
aggregate dollar amount of all disputes with or claims asserted by
Subcontractors, Lower-tier Subcontractors and others and stating that all
performance has been completed in accordance with this Agreement, except
for the Combustion Turbine Evaporative Cooler Test as described in Section
3.2.2 of Exhibit "D," and Punch List items, but if Owner reasonably
believes any part of an affidavit so submitted is not true, Owner shall
have the right to require Contractor to correct such condition(s) and
resubmit the affidavit before Owner releases Owner's Security; (iii) all
inspections by Owner and System Testing for Mechanical Completion have been
completed, except the Combustion Turbine Evaporative Cooler Test which may
be delayed in accordance with Exhibit "D"; and (iv) Owner has issued a
Certificate of Final Acceptance as provided in Section 12. In the event
Contractor does not provide a release of a recorded lien and the items
required in Section 3.1(f)(i)(c) and (d), Owner shall have the right to
withhold up to one hundred fifty percent (150%) of the amount of such
recorded liens or any amounts claimed by each such Subcontractor which may
result in a lien, or Owner may follow the statutory procedure for the
removal of any recorded liens and the costs and expenses related thereto,
including reasonable attorney fees and the costs of any security to be
provided, shall be paid from the Owner's Security; provided that no waiver
of any other right or remedy is intended or shall be effected by such
withholding and after such withholding, any amount remaining unpaid shall
be the obligation of Contractor. After Final Acceptance and before Owner
releases Owner's Security, Contractor shall furnish to Owner a current and
accurate drawn to scale "as built" survey of the Plant Premises, prepared
and certified to by a licensed real estate surveyor, or equivalent under
the laws of Georgia, certified by and licensed in the State of Georgia and
in form and substance satisfactory to Owner's title insurance company
showing:
(i) all visible and/or known structures, facilities, high-voltage cables,
improvements and the Plant and their location on the Plant Premises;
and
(ii) any encroachment or projection of the Plant or Equipment on adjoining
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property and any encroachment on the Plant Premises; and
(iii) any violation on the Plant Premises of building set back requirements
or of use or other restrictions; and
(iv) all recorded and apparent easements and any other interests in the
Plant Premises; and
(v) all Contractor installations to the Interconnection Points.
After Final Acceptance and as a precondition to the payment or release of
Owner's Security, Contractor shall also furnish to Owner two (2) sets of
final specifications (including addenda and modifications) and design
calculations; three (3) blue line copy sets, one (1) reproducible set, and
(1) full set of final CADD drawing files on computer discs, of final
drawings for the following: general arrangements, P&ID's, all mechanical
and electrical drawings, control system logic and programs, electrical
one-lines, instrument index, relay and metering drawings, electrical
termination list by circuit number, piping line list and any documentation
relating to the design, construction, check out or operation of the Plant.
Final documents which reflect the condition of the Plant as constructed
shall be individually identified as such by clearly marking "as-built" on
the face of each document. Final documents which must be "as-built" include
general arrangement drawings, P&ID's, all underground mechanical and
electrical drawings, control system logic including DCS configuration,
electrical one-line diagrams, relay and metering diagrams, electrical
termination lists by circuit number and termination point, and piping line
list. Owner shall have the right to extend the time to complete any of the
above contractual requirements, partially or in total, and to withhold
funds as provided hereafter in this Section 3.1(f) and in Section 12.4. In
addition to the amount withheld for Punch List items pursuant to Section
12.4, Owner may, in the event Owner elects to make a partial release,
withhold from the release of Owner's Security the following amounts: (i)
two (2) times the amount which Owner in good faith determines to be the
reasonable cost, based on the estimated cost of completion by a third party
contractor, of Defects in Work items and/or incomplete Work items in
dispute between Owner and Contractor; (ii) two (2) times the reasonable
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amount of any claims for damage, loss and expense which Owner has against
Contractor; (iii) the amount which Construction Lenders require be withheld
for liens, notices of lien, claims and obligations related to the Work;
(iv) liquidated damages, indemnities and other amounts due Owner; (v) any
amounts as described in Section 3.1(d)(v) for which there has been no
deduction from a progress payment; and (vi) the cost to remove liens as
provided in this Section 3.1(f). After Contractor has complied with the
requirements for the release of Owner's Security, release shall be made
following Final Acceptance, pursuant to the final adjusted invoice which
shall not include any amounts which Owner has the right to withhold.
Acceptance of the release of Owner's Security by the Contractor shall
constitute a waiver and release of all claims against Owner and/or disputes
with Owner of the Contractor except due to Punch List items until corrected
and paid for, for disputes pending pursuant to Section 18.5 unless
otherwise agreed to by the parties in writing, and any sums withheld or not
yet due under this Agreement. When the Combustion Turbine Evaporative
Cooler Test and the Punch List items are complete and approved by Owner,
and if other amounts have been withheld as provided in this Agreement, then
when such matters for which such other amounts are withheld are resolved,
Owner shall pay or release the remainder of Owner's Security, as adjusted
by amounts withheld or expended from Owner's Security as permitted by this
Agreement, at such time as Contractor delivers to Owner (i) form each and
every Subcontractor who has performed Work on the Plant Premises, an
unconditional waiver and release upon final payment in compliance with
O.C.G.A. Section 44-14-366(d), a separate written acknowledgment of payment
as provided in O.C.G.A. Section 44-14-366(f) and a Subcontractor Final
Waiver, Release and Assignment of Liens and Claims contained in Exhibit
"N," each such form to be acceptable to Owner and Construction Lender (ii)
from the Contractor, an unconditional waiver and release upon payment in
compliance with O.C.G.A. Section 44-14-366(d), a separate written
acknowledgment of payment as provided in O.C.G.A. Section 44-14-366(f), and
a Contractor Final Waiver, Release and Assignment of Liens and Claims
substantially in compliance with O.C.G.A. Section 44-14-361.2 and Exhibit
"N" and stating that the agreed
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price or reasonable value of all labor, services, or materials have been
paid or waived in writing by all such Subcontractors and Lower-tier
Subcontractors and all others with a lien right against the Plant Premises,
each such form to be acceptable to Owner and Construction Lender, and (iii)
release of any other obligations or claims arising out of Contractor's
performance of this Agreement, unless otherwise agreed to by the parties in
writing, all of such documents to be in form satisfactory to Owner and
Construction Lender.
(g) The making of any full or partial progress payment or the payment or
release of any Owner's Security under this Agreement by Owner shall not
constitute an admission by Owner that the Work paid for thereby (or any
Work previously performed) is accepted or approved, and Owner shall have
the same right to challenge the adequacy of such Work as Owner would have
had if it had not made such payment or release. The making of any full or
partial progress payment or the payment or release of any Owner's Security
under this Agreement shall not mean that the Owner (i) made exhaustive or
continuous on-site inspections to check the quality or quantity of the
Work, (ii) reviewed construction means, methods, techniques, sequences or
procedures, (iii) reviewed copies of requisitions received from Contractor
and other data requested by the Owner to substantiate the Contractor's
right to payment, (iv) made examination to ascertain how or for what
purpose the Contractor has used money previously paid on account of the
Guaranteed Lump Sum Price, or (v) waived any claim for nonperformance of
the Work or any other obligation of Contractor hereunder including claims
for faulty, defective or omitted Work appearing after the payment of any
progress payment or the release or payment of Owner's Security.
(h) Owner is not required to invoke the Dispute procedure of Section 18.5 in
order to withhold amounts permitted by this Agreement to be withheld by
Owner from a progress payment invoice or an Owner's Security invoice or to
draw upon a Letter of Credit included in Owner's Security.
(i) Contractor shall be entitled to payment or release of any undisputed
Owner's Security upon satisfaction of the requirements of Section 3.1(f)
and Section 12.4 and subject to
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the provisions of Section 10(c). Upon termination of this Agreement, for
reasons other than Contractor default, Contractor shall be entitled to
payment or release of undisputed Owner's Security subject to the provisions
of Section 18.6 and Section 10(c) of this Agreement. Contractor shall be
entitled to interest on the amount of undisputed Retainage, subject to
Section 18.6 and Section 10(c), from the date due, and on disputed
Retainage, subject to Section 18.6 and Section 10(c), from the date finally
determined to be the date due, at the annual prime rate of The Chase
Manhattan Bank on the date due, plus one percent (1%), but not in excess of
the lawful maximum rate.
(j) Notwithstanding any other provision to the contrary in this Agreement, at
any time when Contractor is in material breach of this Agreement and Owner
has given Contractor notice thereof, Owner may withhold, all or such
portion of any payment due to Contractor as may be reasonable, in the
judgment of Owner, considering the nature of the material breach. On the
payment date next succeeding the date on which all such material breaches
of Contractor have been remedied, Owner shall make all payments withheld
during the continuation of any such material breaches, subject to the other
provisions and requirements of this Article 3, less any amounts paid by or
on behalf of Owner in an effort to remedy any such material breaches or the
costs incurred as a result thereof.
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Article 4. CHANGE ORDER.
(a) A proposed Change Order is a change in the Work and/or a change in the
Scheduled Date of Commercial Operation:
(i) proposed in writing by Owner to Contractor; or
(ii) proposed in writing by Contractor to Owner; or
(iii) proposed in writing by Owner or Contractor as a result of a Change of
Law or Change in Applicable Insurance Policy which materially changes
the Work and materially increases or decreases Contractor's cost of
performance under this Agreement.
No proposed Change Order shall be effective unless first approved by
Owner pursuant to Section 4(b).
(b) In the event that a Change Order is proposed then, no later than fifteen
(15) Business Days (unless otherwise extended by agreement, in writing)
following the proposal of the Change Order, Contractor shall prepare, in
writing, and send to Owner: (i) a full description of the scope of work,
(ii) a detailed estimate of the cost adjustment (increase or decrease) in
the Guaranteed Lump Sum Price, if any, caused by the proposed Change Order
and (iii) a detailed description of the cause of the Change Order, if
proposed by Contractor, and (iv) all effect(s), if any, of the Change Order
on the critical and noncritical elements of the Contractor's Work Schedule,
including any proposed change to the Scheduled Date of Commercial Operation
and (v) all estimates and effects required by Section 4(d). The effect of
the Change Order on the Scheduled Date of Commercial Operation shall be
determined pursuant to Section 4(h). Contractor shall also include in such
estimates and descriptions, the following information in accordance with
Exhibit "J": man-hours; billing rates for man-hours; the cost of design,
labor, Equipment, materials, and any other relevant cost element. Owner
shall have fifteen (15) Business Days from the date of receipt of such
information to either approve or disapprove, in writing, the proposed
Change Order, or to request additional information and/or additional time
to consider the proposed Change Order. Owner's failure to timely respond to
Contractor in writing shall constitute such disapproval by Owner. Owner
shall have the right to direct Contractor,
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in writing, to perform all or a part of the change in the Work pursuant to
Section 4(e). If Owner approves the Change Order, then Owner shall execute
the Change Order which shall operate as an amendment to this Agreement.
Upon the execution of the Change Order, Contractor shall immediately
proceed to perform the change in the Work and the Scheduled Date of
Commercial Operation shall be extended by the number of Days set forth in
the Change Order.
(c) Owner shall not be obligated for any Work or Equipment costs unless
undertaken pursuant to a Change Order duly approved in writing and
delivered to Contractor. Contractor shall not perform any Work or purchase
any Equipment in connection with a Change Order until Contractor has
received a Change Order duly approved in writing by Owner pursuant to
Section 4(b) or unless directed to perform the change in the Work pursuant
to Section 4(e). Any change in the Work performed or Equipment purchased by
Contractor without an approved Change Order executed by Owner will be at
Contractor's sole non-reimbursable expense and will not result in an
extension in the Scheduled Date of Commercial Operation.
(d) The detailed cost estimate of a Change Order shall be prepared in
accordance with Exhibit "J" and shall include a breakdown of man-hours,
material quantities, unit costs and markups as provided for in Exhibit "J."
Owner shall receive the benefit of any cost savings to the Guaranteed Lump
Sum Price resulting from a Change Order which savings shall be calculated
in the manner previously described in this Section 4(d). All costs and
adjustments shall be subject to verification by Owner.
(e) In addition to and without limitation to any of the foregoing provisions of
this Section 4, Owner shall have the right to direct Contractor to perform
any additional work which may in Owner's sole discretion be related to the
Plant either directly or indirectly, and/or the Plant Premises, and if such
additional work requires a change in the Scheduled Date of Commercial
Operation, such date shall be adjusted in accordance with Section 4(b).
(i) All additional Work performed by Contractor pursuant to this Section
4(e) shall be subject to verification by the Owner's Site
Representative. Notwithstanding any provision in this Agreement to the
contrary, Contractor shall not be
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compensated any amount for such Work unless time, supplies, and/or
materials have been verified by Owner's Site Representative.
Contractor shall provide Owner's Site Representative all necessary
information to verify such time, supplies and/or materials.
(ii) In the event Work is performed pursuant to this Section 4(e), the cost
will be prepared in accordance with Exhibit "J," and shall include a
breakdown of man-hours, material quantities, unit costs and markups as
provided for in Exhibit "J".
(iii) Owner shall approve the method of pricing prior to the start of any
related Work.
(f) Charges for Change Orders that have been approved in writing by Owner and
other Work required by Section 4(e) shall be included in the invoice for
progress payments and such invoices shall be paid in the same manner,
including Retainage withheld, and as described in Article 3. Change Orders
that result in a deduct or credit shall reduce the Guaranteed Lump Sum
Price by the amount of the decrease or credit.
(g) Any savings realized in the cost of the Work as a result of future
alternate designs which are proposed by Contractor and approved by Owner
which do not change or which improve the capacity, performance or quality
of the Equipment as designed shall be divided equally by the Contractor and
Owner.
(h) Contractor shall not be entitled to an extension of the Scheduled Date of
Commercial Operation as a result of Owner Caused Delay, a Force Majeure
event or a Change Order unless each of the following criteria is satisfied:
(A) Contractor demonstrates that such delay, event or order will
proximately cause Contractor to fail to achieve Commercial Operation
by the Scheduled Date of Commercial Operation;
(B) Contractor provides reasonable detailed support for the number of
Days of change requested in the Scheduled Date of Commercial Operation
as a result of such delay, event or order;
(C) Contractor demonstrates that it will use all reasonable efforts to
maintain the Scheduled Date of Commercial Operation as if the delay,
event or order had
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not occurred; and
(D) Contractor demonstrates specific actions which will be taken to
work around or mitigate the impact of the delay, event or order on the
Scheduled Date of Commercial Operation. Owner shall have the right to
analyze and Contractor shall, upon Owner's request provide, (a) the
most recent Contractor's Work Schedule prepared prior to the delay,
event or order (the "Old Schedule"), (b) Contractor's data sufficient
to support the Old Schedule, (c) the revised Contractor's Work
Schedule prepared after such delay, event or order (the "New
Schedule"), (d) Contractor's data sufficient to support the New
Schedule and (e) information concerning each change, event and
occurrence affecting the Contractor's Work Schedule from the date of
the Old Schedule through the date of the New Schedule. Unless
otherwise agreed, in the event of an Owner Caused Delay, a Force
Majeure event or Change Order, the Scheduled Date of Commercial
Operation shall be extended by the number of Days demonstrated as set
forth in this Section 4(h). A change in the Scheduled Date of
Commercial Operation which occurs pursuant to Sections 18.3(b), 19(a),
20.2(c) or 20.2(d) shall be governed by the specific procedures set
forth in such respective Sections.
(i) If Owner fails to obtain permits or licenses identified in Section 5(b)
when required, or fails to maintain such permits or licenses in force
(unless such failure is caused by Contractor), Owner shall have ten (10)
Days in which to cure such failure, and if Owner does not cure such
failure, Contractor shall be entitled to a Change Order to the extent that
such failure materially increases Contractor's cost of performance under
this Agreement or entitles Contractor to an extension of the Scheduled Date
of Commercial Operation (in accordance with Section 4(h)) on account of
such failure.
(j) To the extent that any Change Order issued under this Agreement affects the
Equipment or services furnished under the Turbine Contract, such Change
Order shall be subject to the prior approval of General Electric Company,
but only to the extent required under the Turbine Contract; provided that
Owner shall have the right to negotiate directly with General Electric
Company regarding approval of such Change
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Order.
(k) If local laws, rules and regulations necessitate modifications to any
Equipment supplied pursuant to the Turbine Contract or changes any services
to be supplied pursuant to the Turbine Contract, and a change order is
issued under the Turbine Contract as a result of such modification to
Equipment or change to services, a Change Order shall be issued under this
Agreement which passes through any change in price received under the
Turbine Contract and Owner or Contractor may request additional changes
arising because of any such modification to Equipment or changes to
services or revision in the schedule under Turbine Contract, subject to
compliance with all of the provisions of Article 4.
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Article 5. OWNER'S RESPONSIBILITY.
Owner shall, at its own expense:
(a) Provide ("as is") the Plant Premises, which are legally described and
generally depicted in Attachment V of Exhibit "A";
(b) Apply for and obtain the permits and licenses necessary in the prosecution
of the Work or the operation of the Plant as listed on Page 1 of Exhibit
"G";
(c) Pay all taxes associated with income or earned surplus generated by the
Plant or Plant Premises, as well as all real property taxes or personal
property taxes levied on the Equipment, Plant, Plant Premises, and all
component parts thereof;
(d) Be responsible for sales and use taxes as provided in Section 3.1(c);
(e) Provide access to the Plant Premises together with construction easements
covering any property not included in the Plant Premises on, over or under
which Contractor is required to perform any Work, so as to allow Contractor
to perform the Work;
(f) Furnish, at Owner's cost, qualified operating and maintenance personnel to
operate and maintain the Plant in accordance with Section 11.2;
(g) Provide start-up and operating fuels, turbine lube oil for flushing and
initial fill, bulk CO2 and hydrogen for generator purge and cooling, bulk
CO2 and FM200 for the turbine fire protection systems and bulk water
treatment chemicals, if any; pay for start-up power off the permanent
auxiliary transformer for the permanent Equipment; and make available spare
parts in accordance with Section 2(e) of this Agreement;
(h) Provide and pay for tools, materials and supplies for normal maintenance of
the System after Owner issues a Certificate of Mechanical Completion for
such System;
(i) Provide sufficient water (excluding water used for construction) and access
to wastewater disposal to permit normal and continuous operation of the
Plant;
(j) Supply the following:
(1) Reserved;
(2) all office furniture, maintenance shop and instrument shop tools, lab
tools and analytical equipment, warehouse shelving, storage bins and window
treatments; and
(3) backfeed power from an Interconnection Point selected by Owner by
fourteen (14)
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months after Authorization to Proceed is given to Contractor (as adjusted
pursuant to Section 20.2(c)); water supply for up to four hundred thirty
two thousand (432,000) gallons per day at the end of twelve (12) months
after Authorization to Proceed is given to Contractor (as adjusted pursuant
to Section 20.2(c)), and natural gas supply by thirteen (13) months after
Authorization to Proceed is given to Contractor (as adjusted pursuant to
Section 20.2(c);
(k) Provide for acceptance of electric power when requested by Contractor in
order for Contractor to fulfill its obligations in accordance with Sections
11 and 12; and
(l) Use reasonable efforts to operate the Plant after Commercial Operation so
as to permit Contractor to expeditiously complete the Work.
Contractor must diligently pursue all of its obligations under this Agreement,
notwithstanding any act or failure to act by Owner, including any acts in
connection with Acceptance Testing, tests, inspections, approvals required or
performed by Persons other than Contractor, Mechanical Completion, Final
Acceptance or the release of Owner's Security unless specifically provided for
in this Agreement, provided that the failure of Owner to perform any of the
obligations set forth in this Section 5, or the occurrence of any intentional
active interference by Owner to prevent or delay the performance of Contractor
under this Agreement, which failure or interference shall materially adversely
affect the Work, shall be an "Owner Caused Delay." In the event that an Owner
Caused Delay materially increases Contractor's cost of performance under this
Agreement and/or justifies an extension of the Scheduled Date of Commercial
Operation (in accordance with Section 4(h)) then Contractor shall be entitled to
a Change Order upon compliance with the provisions of Section 4. In the event
that as a result of an Owner Caused Delay, Contractor is unable to proceed with
any Work for a period of forty-five (45) days or more, then Owner shall be
deemed to have suspended the Work in accordance with the notice provisions of
Section 19.1 (b) and except as specifically set forth in this Section such
suspension shall be governed by the provisions of Section 19.1 (b).
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Article 6. OWNER REVIEW.
(a) Owner reserves the right throughout the term of this Agreement to review
all Drawings and to inspect Work at all stages at the Plant Premises,
Contractor's premises and Subcontractors' premises and to designate others
to review the drawings and inspect the work as may be necessary. Contractor
shall include the requirement of the immediately preceding sentence in all
subcontracts entered into by Contractor with respect to the Plant.
Inspection by Owner shall in no way relieve Contractor from its obligations
to furnish Work in accordance with this Agreement. Subject to compliance
with Contractor's reasonable rules for security of the Plant Premises,
Contractor shall afford access to the Plant Premises to the Independent
Engineer, and to others designated by Owner, as may be necessary or
appropriate to the servicing, maintaining, modifying, or upgrading of the
land or facilities located thereon. Contractor shall provide the
Independent Engineer, upon reasonable prior notice to Contractor, the right
to review and inspect the Work.
(b) Before any Work as required or inferred from any Drawing is commenced,
Contractor will submit such Drawing to Owner for review and Owner shall
respond to Contractor with any changes or comments on the Drawing within
eight (8) Business Days of receipt of the Drawing. Contractor may proceed,
at Contractor's risk, with Work required or inferred from a Drawing, prior
to the completion of review of such Drawing by Owner, if Contractor
determines that it is necessary to proceed in order to meet the schedule.
If Owner does not respond within eight (8) Business Days, Contractor shall
proceed as though the Owner has no comments on the Drawing, provided that
Owner's review or failure to review any Drawing shall not constitute an
admission or agreement by Owner that the Work to be provided or performed
in accordance with such Drawing is approved or is in conformance with the
representations, covenants and warranties of Contractor under this
Agreement. Whether or not specified in this Agreement, review, approval or
acceptance by Owner or its Representatives, of all or any part of the Work,
including Drawings or Plant shall not relieve Contractor from any
obligation under this Agreement. Review by Owner of any Drawing shall not
be deemed a waiver by Owner
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of any claim for nonperformance of the Work or any other obligation of
Contractor hereunder. It is the sole responsibility of Contractor to
properly design the Work and to provide proper Drawings and Owner shall
have no responsibility for the adequacy of design of the Plant or Drawings.
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Article 7. POWER CONTRACT DESIGN AND OPERATING REQUIREMENTS.
Contractor shall meet all the requirements and specifications applicable to the
Work in accordance with the excerpts from the Power Purchase Agreement in
Attachment IV to Exhibit B and the Interconnection Agreement which, when signed,
will be included as Attachment II to Exhibit "B." The Plant shall be designed
and constructed so as to meet or exceed the PECO Test requirements set forth in
Attachment IV to Exhibit "B."
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Article 8. CONSTRUCTION FINANCING.
Section 8.1 CONSTRUCTION LENDER'S REQUIREMENTS.
(a) Owner intends to borrow funds to finance the construction of the Plant. As
a condition precedent to loaning funds to Owner, the Construction Lender
may require certain documents as to the Work under this Agreement.
Contractor shall obtain and furnish to Owner and Construction Lender all
documents reasonably requested by Construction Lender.
(b) Contractor shall provide one or more duly executed corporate
indemnifications and guarantees (the "Guarantee(s)") from entities whose
financial responsibility is acceptable to Owner (the "Guarantors"), as a
condition precedent to and at the time of execution of this Agreement. The
duly executed Guarantee(s) must be delivered to Owner at the time of the
execution of this Agreement. The Guarantee(s) shall be provided to the
Owner and Construction Lender in the form of Exhibit "K," attached hereto
and by this reference made a part hereof. If Construction Lender requires
reasonable modifications to the Guarantee(s) as a condition to financial
closing of the construction loan for the Plant, Contractor, as a condition
precedent to continuing performance of this Agreement, shall furnish Owner
and Construction Lender with such modified documents. Contractor shall,
when requested by Owner, provide to Owner copies of the most recent audited
balance sheets of each Guarantor (or other documents reasonably
satisfactory to Owner and Construction Lender in place of audited balance
sheets) and such other documents reasonably requested by Owner with respect
to each Guarantor. Contractor shall also furnish a performance bond in such
form and with such surety and on such terms as are satisfactory to Owner in
the amount of Two Hundred Twenty Two Million Five Hundred Thirty Four
Thousand Two Hundred Forty Seven Dollars ($222,534,247) guaranteeing the
full and faithful performance of the Work by Contractor and a payment bond
in such form and with such surety and on such terms as are satisfactory to
Owner in the amount of Two Hundred Twenty Two Million Five Hundred Thirty
Four Thousand Two Hundred
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Forty Seven Dollars ($222,534,247) guaranteeing the payment by Contractor
of all amounts due Owner and all liens of all persons performing labor or
providing services, materials, equipment, supplies, machinery, utilities,
insurance or any other items in connection with the performance of the
Work.
(c) Upon written request from Owner, Contractor shall deliver to Owner an
interim waiver and release upon payment and a separate written
acknowledgment of payment from the Subcontractor, both in compliance with
O.C.G.A. Section 44-14-366 for all payments made to each Subcontractor and
any waiver or release of lien, encumbrance, claim or security interest of
Contractor deemed necessary by Owner or Construction Lender to the extent
of payments made to Contractor. Such documents shall be in a form
reasonably acceptable to the Owner and the Construction Lender and in
compliance with Applicable Laws.
(d) Any liens or security interests to which Contractor may be entitled by
Applicable Laws shall be subject to and subordinate to any Mortgage, Deed
of Trust, lien or security interest granted in favor of the Construction
Lender and/or subsequent lenders and all modifications, consolidations,
replacements and extensions thereof. This subordination clause applies to
the extent that the funds secured by the above listed encumbrance(s) of
said lender(s) are used for the development, purchase and construction of
the Plant and the Plant Premises, facilities and activities related
directly or indirectly thereto, including management expense, interest,
fees, reserve funds, parts, Equipment, interconnections, payments to gas
suppliers and transporters, lender reimbursable costs, start-up costs,
contingency funds, real estate and capital requirements (the "Purposes").
Contractor shall, at any time, upon request of Owner, execute and deliver
an Indemnity Agreement in form similar to the Contractor's Indemnity
contained in Exhibit "N." Contractor shall, at any time, upon request from
Owner execute a subordination agreement in form similar to the Contractor
Priority Agreement contained in Exhibit "N" so that the interests or
potential interests of Contractor are subordinate to the interests of
Construction Lender and any subsequent lender. Contractor shall require in
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each contract of a Subcontractor which is in the amount of FIVE HUNDRED
THOUSAND DOLLARS ($500,000) or more, a subordination provision as described
in this Section. In addition, Contractor shall require each Subcontractor
to execute and deliver to Contractor an interim waiver and release waiving
such Subcontractor's lien for all Work for which payment has been received,
a separate written acknowledgment of payment and Assignment of All Liens
and Claims substantially in the same form as contained in Exhibit "N" and
all of which will be in such form as is acceptable to Construction Lender,
each time a payment is made to such Subcontractor for Work. Contractor
shall secure and deliver to Owner an executed Subcontractor Priority
Agreement as required by Construction Lender's title insurance company in
form similar to the form contained in Exhibit "N" from each Subcontractor
which may have acquired lien rights prior to the recording of Construction
Lender's security documents.
(e) The Contractor Consent and Agreement, which is to be executed between
Contractor and Construction Lender, shall require that the Construction
Lender give duplicate copies to Contractor of any formal notices of default
given pursuant to the Construction Loan Agreement.
(f) COMMENCEMENT, NOTICE.
Except as otherwise provided under a Limited Notice to Proceed, Contractor
shall commence Work pursuant to this Agreement on the date the
Authorization to Proceed is given to Contractor pursuant to Section
20.2(b).
(g) Prior to the time of the issuance of the title insurance policy by
Construction Lender's title insurance company and upon written request from
Owner, Contractor, within five (5) Days of its receipt of such request,
shall deliver to Construction Lender's title insurance company a list (in
the form of an affidavit), identifying all Subcontractors and Lower-tier
Subcontractors who, to the best of Contractor's knowledge, have performed
Work including the preparation of Drawings or delivered materials or
supplies in connection with the Plant or the Plant Premises.
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Article 9. WARRANTIES.
Section 9.1 ENGINEERING, DESIGN AND PERFORMANCE WARRANTIES. In addition to and
not in limitation of any representations, covenants, and warranties of
Contractor set forth elsewhere in this Agreement, Contractor further represents,
covenants and warrants to Owner each of the following:
(a) The engineering and design of the Plant, including the preparation of the
Drawings, shall (i) meet the requirements of this Agreement, (ii) be in
accordance with Applicable Laws, Applicable Insurance Policies and Good
Utility Practice and (iii) conform to the requirements set forth in
Exhibits "A", "B" and "D."
(b) Contractor will use best efforts to obtain Subcontractor warranties of
[*], or longer, at no additional cost to Contractor, running in favor of
Owner, as are required to meet the requirements as set forth in Exhibits
"A" and "B." Subcontractor warranties shall be assigned to Owner upon
Owner's request, without prejudice to Contractor's rights to enforce such
Subcontractor warranties during the warranty period. In no event will
Subcontractor warranties for engineered Equipment be for less than a
period of the greater of [*] after the Scheduled Date of Commercial
Operation (as determined on the date on which the Authorization to Proceed
is delivered under this Agreement and without any extensions otherwise
applicable to such date) or [*] after the date of Commercial Operation.
Owner shall be entitled to rely on and enforce: Contractor warranties and
other Contractor obligations; or Subcontractor warranties, or both; or any
combination of such warranties and obligations.
(c) The performance of the Equipment specified in Exhibits "A" and "B" shall
meet or exceed the performance requirements as set forth in Exhibit "D."
(d) The Systems shall be designed and constructed so as not to interfere with
or limit the performance of the Equipment to meet the requirements as set
forth in Exhibit "D."
(e) The Units and the Plant shall meet the performance warranties set forth in
Article 13.
Section 9.2 EQUIPMENT WARRANTIES. Contractor represents, covenants and warrants
each of
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the following:
(a) All Equipment shall be new, in strict accordance with specifications,
Applicable Laws and Good Utility Practice, free of Defects in material and
workmanship (including all Defects or malfunctions which may arise as a
result of the occurrence of the year 2000) and suitable for use under the
climatic and range of operating conditions as set forth in Exhibits "A",
"B" and "D."
(b) The Plant will be fit for the purposes, as described in this Agreement, for
which it is intended.
(c) Contractor shall execute, submit and otherwise fulfill all obligations
required in connection with all Subcontractor warranty documents, and for
the length of the warranty period set forth in Section 9.9 of this
Agreement, administer, litigate and process any disputes, disagreements or
claims with the person issuing such warranty concerning the breach thereof;
provided such obligations shall not include the right to release or
diminish Subcontractors' ongoing warranty obligations without express
written consent of Owner, and Contractor shall cooperate with Owner and
allow Owner to participate in all decisions which materially affect Owner
or the operation of the Plant. The warranties of Contractor with respect to
Work or Equipment supplied pursuant to the Turbine Contract shall be equal
to the warranties provided pursuant to the Turbine Contract, including the
warranty limitation set forth in Section 10.4 of the Turbine Contract
concerning "collateral damage" as defined therein, provided that if
Contractor recovers all or part of the costs of such "collateral damage"
from General Electric Company under any other provision of the Turbine
Contract, Contractor shall, to the extent of such recovery, be responsible
for correcting such "collateral damage."
Section 9.3 CONSTRUCTION WARRANTIES. Contractor represents, covenants and
warrants each of the following:
(a) Contractor will perform and complete the Work in a good and workmanlike
manner, in accordance with Applicable Laws, Applicable Insurance Policies,
Good Utility Practice and this Agreement and free from Defects in
materials, workmanship and title;
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(b) Contractor will diligently and continuously prosecute the Work; and
(c) The Plant will conform to the Drawings.
Section 9.4 EMISSION WARRANTY. Contractor represents, covenants and warrants
during all Acceptance Testing that when operating the combustion turbines in
accordance with manufacturers' requirements, that the hourly average air
emissions for each Unit and the Plant as a whole will not exceed the values set
forth in the permits attached as a part of Exhibit G.
Section 9.5 WATER DISCHARGE WARRANTY. Contractor represents, covenants and
warrants that during all Acceptance Testing that the Plant's water discharge
during operation shall comply with the NPDES Permit and the representations made
in the NPDES Permit Application as provided in Exhibit "G."
Section 9.6 NOISE POLLUTION WARRANTY. Contractor represents, covenants and
warrants that during all Acceptance Testing that operation of the Units and the
Plant shall meet the applicable noise emission requirements as shown in Section
3.25 in Exhibit "A."
Section 9.7 OTHER WARRANTIES. Contractor represents, covenants and warrants each
of the following:
(a) The Plant will be designed and completed in a manner such that the Plant is
capable of operation that will not result in a revocation or suspension of
its status as an Exempt Wholesale Generator, as that term is defined in
Section 32 (a) (1) of the Public Utility Holding Company Act of 1935, as
amended, 15 U.S.C. Section 79 z. - 5 a. and regulations thereunder.
(b) The Work and the Plant shall be in compliance with Applicable Laws,
Applicable Insurance Policies and this Agreement.
(c) This Agreement has been executed on behalf of Contractor with proper
authority in accordance with the laws of the State of Delaware, as well as
in accordance with the articles of organization of Contractor. Each
Guarantor has full power to enter into the Guarantee. Each Guarantee has
been executed with full authority in accordance with the laws of the state
of organization of each of the respective Guarantors, as well as in
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accordance with the articles of organization and governing instruments or
documents of such Guarantor.
(d) Contractor is a corporation, duly organized in accordance with the laws of
the State of Delaware. Contractor (i) has the power and authority to own
its property and assets and to transact the business in which it is engaged
or presently proposes to engage, and (ii) is authorized to do business as a
corporation and is in good standing in each jurisdiction in which it is
required to be authorized to do business. No governmental approval (other
than those already obtained) is necessary or appropriate in connection with
the formation and continued existence of Contractor.
(e) Contractor has full power, authority and legal right to execute, deliver,
and perform this Agreement and any subcontracts to be entered into by it.
(f) Contractor has taken all necessary action to authorize the execution,
delivery and performance of this Agreement. No necessary action on the part
of Contractor, and no consent of or authorization of, filing with or any
other act by or in respect of any governmental authority or other person is
required in connection with the execution and delivery by Contractor of
this Agreement.
(g) This Agreement has been duly executed and delivered on behalf of Contractor
and constitutes a legal, valid and binding obligation of Contractor
enforceable against Contractor in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of rights of creditors generally and
except to the extent that enforcement of rights and remedies set forth
therein may be limited by equitable principles (regardless of whether
enforcement is considered in a court of law or a proceeding in equity).
(h) Neither the execution, delivery or performance by Contractor of this
Agreement nor compliance by it with the terms and provisions hereof will
(i) to the best of Contractor's knowledge contravene any Applicable Laws,
(ii) conflict with or result in any breach of any of the terms and
conditions of, or result in the creation or imposition of (or the
obligations to create or impose) any lien upon any of the property or
assets of
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Contractor under, any agreement or instrument to which Contractor is a
party or by which it or any of its property or assets is bound, or (iii)
violate any provision of Contractor's charter or other organizational
documents.
(i) All Work and the Plant will conform to the design, construction,
engineering and performance standards described in this Agreement.
(j) Upon transfer of title to the Work to Owner, Owner shall have title to all
Work free and clear of claims and liens of all Persons, as provided in
Section 27.5 of this Agreement, subject however, to the interest of the
Development Authority pursuant to bond financing obtained from the
Development Authority.
(k) There is no outstanding litigation against Contractor which is likely to
materially impair its ability to perform its obligations under this
Agreement and, to the best of Contractor's knowledge, there is no expected
litigation against Contractor which is likely to materially impair its
ability to perform its obligations under this Agreement.
(l) Contractor will promptly comply with all requirements of O.C.G.A. Section
44-14-361.5, including filing a Notice of Commencement in the real estate
records of the Clerk of Superior Court of Heard County, Georgia and posting
a Notice of Commencement on the Plant Premises.
Section 9.8 CORRECTIONS.
(a) Contractor shall promptly, upon written notice from Owner, correct Work
rejected by the Owner for failing to conform to the requirements of this
Agreement, including warranties, observed before or during the warranty
period set forth in Section 9.10 of this Agreement whether or not
fabricated, installed or completed. Contractor shall bear the costs of
correcting all rejected Work. If Contractor disagrees with any rejection of
Work by Owner, Contractor shall promptly submit to Owner a "Request for
Directed Work Order." If Owner issues a "Directed Work Order," Contractor
shall proceed without undue delay to repair or replace Work which Owner has
rejected, as set out in such order and consistent with this Article 9.
Within fourteen (14) Days after Contractor's submittal of a Request for
Directed Work Order, Contractor may submit a
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"Dispute Notice" to Owner setting out the reasons for Contractor's
disagreement with Owner's rejection of Work and the parties shall resolve
such disagreement as a Dispute in accordance with the procedures of Section
18.5.
(b) Contractor shall commence action to correct any Defects in engineering
and/or design as soon as reasonably possible but in no event more than
seventy-two (72) hours after Contractor becomes aware of such Defects
whether on its own or by receipt of notice from Owner, unless otherwise
agreed to by Owner, in writing.
(c) Contractor shall bear the installed cost of any and all repairs,
replacements and corrections required for Work not in accordance with
Contractor's obligations, including any warranty made under this Agreement,
including the cost to remove or replace walls and barriers and the cost of
equipment to complete the repairs.
(d) Except for Work and Equipment provided by General Electric Company pursuant
to the Turbine Contract, which shall be governed by the warranties set
forth in the Turbine Contract, any repaired or replaced Work shall be
rewarranted for an additional [*] warranty period, or the balance of the
[*] warranty period, whichever is greater; but in no event shall any
Contractor warranty or rewarranty extend beyond [*] after the date of
Commercial Operation. Any repaired or replaced Work and/or Equipment
supplied pursuant to the Turbine Contract shall be rewarranted by
Contractor as provided for in the Turbine Contract.
(e) No extension of time or increase in the Guaranteed Lump Sum Price will be
allowed for corrections made in accordance with this Agreement. In
performing its warranty obligations, Contractor shall coordinate with
Owner's schedule of operation to minimize any adverse effect on the Plant's
operations. The warranties set forth in this Agreement shall apply to any
changes in the design or construction of the Plant performed pursuant to
this Agreement unless Contractor reasonably disputes such changes as not
being in accordance with good workmanship or generally accepted
professional engineering standards, provided that Contractor gives Owner
written notice of its dispute with the change prior to Contractor
performing any such change
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and such dispute ultimately is resolved in Contractor's favor.
(f) Contractor shall not cover any of the following portions of the Work
without providing Owner's Site Representative with notice of covering at
least twenty-four (24) hours before such portion of the Work is to be
covered: fire water piping; oil storage tank area; sanitary sewer; waste
water line and such other items reasonably requested. If any portion of the
Work is covered without Contractor complying with such a request, that
portion of the Work must, if required in writing by the Owner, at
Contractor's expense, be uncovered for observation and shall be recovered.
If any portion of the Work has been covered which the Owner has not
specifically requested to observe prior to being covered, the Owner may
request to see such Work and it shall be uncovered by Contractor. If such
Work is found to be in accordance with the Drawings, the cost of uncovering
and recovering shall, by appropriate Change Order, be charged to Owner. If
such Work is not found to be in accordance with the Drawings, Contractor
shall bear such uncovering and recovering costs.
(g) If Contractor does not provide Owner the right to inspect any portion of
the Work as required by Section 6(a), Contractor must, if required in
writing by Owner, dismantle such portion of the Work as is required for
inspection and Contractor shall bear the expense of such dismantling and
reassembly. If Owner requests the dismantling of Work for which it failed
to request inspection or failed to inspect despite the availability of such
Work for inspection and such Work proves to be in accordance with this
Agreement, the expense of dismantling and reassembly shall, by appropriate
Change Order, be charged to Owner. If such Work proves to be not in
accordance with this Agreement, Contractor shall bear such dismantling and
reassembly costs.
Section 9.9 WARRANTY PERIOD.
Except as provided in Section 9.8(d) of this Agreement, Contractor shall be
obligated for all warranties under this Article 9 for a period commencing with
execution of this Agreement and continuing for a period of the greater of
[*] after the Scheduled Date of Commercial Operation (as determined on the date
on which the Authorization to Proceed is
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delivered under this Agreement and without any extensions otherwise
applicable to such date) or [*] after the date of Commercial Operation of a
Unit; provided that notwithstanding the immediately preceding warranty
periods, Contractor shall be obligated for warranties for any design defect
for a period of [*] after Commercial Operation of the last Unit and for those
specific items listed in Attachment VI of Exhibit B for the period set forth
after such specific item; and further provided, that, with respect to the
Equipment warranted pursuant to the Turbine Contract, Contractor's warranty
shall be limited to the warranty period(s) set forth in such Contract.
Contractor shall assign all warranties under the Turbine Contract to Owner
immediately following Commercial Operation. In addition to all other remedies
available to Owner, if there is a breach of Contractor's warranty, Contractor
shall immediately begin corrective action, pursuant to Section 9.8, after
receipt of written notice from the Owner to do so. Contractor shall not be
entitled to rely upon the warranties of its Subcontractors in determining the
extent or limitation of any of Contractor's warranties, nor shall Owner be
limited thereby. This Section 9.9 shall not be a time limitation for any
action under this Agreement which arises by reason of the violation of or
failure to perform under any provision or Section other than this Article 9.
Section 9.10 WARRANTY LIMITATIONS.
The warranties and remedies for each warranted item under this Article 9 shall
be inoperative with respect to a Defect in such warranted item if:
(a) such Defect in such warranted item is caused by Owner's failure to operate
and maintain the warranted item (i) in conformance with applicable
operating and maintenance instructions and other reasonable written
recommendations supplied by Contractor (to the extent such instructions are
not inconsistent with the terms, conditions, specifications or standards
set forth in this Agreement) or, in the absence of thereof, (ii) in
accordance with generally accepted operating practices of the electric
power producing industry;
(b) the warranted item is materially altered without the written consent of
Contractor and the alteration causes such Defect in such warranted item; or
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(c) Contractor, in writing, requests operating and maintenance data from Owner
with respect to a defective warranted item and Owner fails to provide
Contractor with reasonable access to any such available operating and
maintenance data.
Contractor shall have no warranty responsibility for (i) any repairs,
adjustments, alterations, replacement or maintenance that may be required to any
warranted item as a result of normal corrosion, erosion or wear and tear, or
(ii) any Defect in a computer program, or portion thereof, which has been
modified (excluding revisions of data or changes in configuration of the
programs typically allowed by the manufacturer) without the written consent of
Contractor. The limitations set forth in this Section 9.10 shall not limit or
modify the warranties set forth in the Turbine Contract. With respect to all
warranties and rewarranties made by General Electric Company pursuant to the
Turbine Contract, all of which are incorporated by reference into this
Agreement, Contractor shall have the primary, separate and direct obligation to
Owner for such warranties and rewarranties; provided, however, that as between
Owner and Contractor, Contractor shall not have the benefit of any conditions,
exclusions or exceptions to such warranties and rewarranties under the Turbine
Contract or this Agreement which arise as a result of the actions or failures to
act of Contractor (including actions or failures to act of Subcontractors other
than General Electric Company and Lower-tier Subcontractors), including any
breach by Contractor of the standards of performance set forth for Buyer in the
Turbine Contract or for Contractor in this Agreement.
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Article 10. OWNER'S RIGHT TO CURE WORK AND SET OFF.
(a) If Contractor shall fail, refuse or neglect to make any payment related to
the Work due by Contractor (excluding non-payment to Subcontractors as a
result of a good faith dispute) or perform any of its obligations required
by this Agreement and Contractor fails to commence in good faith and with
due diligence to remedy any such non-payment or non-performance within
seventy-two (72) hours after notice from Owner, then at any time thereafter
Owner may without waiving or releasing any other right, remedy or recourse
which Owner may have (but Owner shall not be obligated to do so) make such
payment or perform such act or acts for the account of and at the expense
of Contractor. In making any payment on behalf of Contractor, Owner shall
have the right to take all such action as Owner may deem necessary or
appropriate, including the use of proprietary data, upon the execution of a
reasonable Confidentiality Agreement if requested by a Subcontractor owning
such data, in order to remedy such failure, refusal or neglect of
Contractor. Contractor shall indemnify and hold Owner harmless from and
against any and all loss, cost, expense, liability, damage and claims and
causes of action, including reasonable attorney's fees, incurred or
accruing by or as a result of any acts performed by Owner pursuant to the
provisions of this Section 10(a), except in the event of Owner's sole
negligence, and for funds advanced by Owner pursuant to this Section 10(a)
or any other provision of this Agreement. If Contractor and Owner agree in
advance to have Owner perform certain acts otherwise required to be
performed by Contractor, Owner shall not be entitled to indemnification
under this Section 10(a) with respect to such acts unless Owner and
Contractor specifically agree to such indemnification. All sums advanced or
debts incurred by Owner pursuant to this Section 10(a) shall have added to
the sum advanced, as an additional amount to be paid by Contractor to
Owner, interest at the less of the rate of fifteen percent (15%) per annum
or the largest rate allowable under Applicable Laws, until such advance or
debt is repaid by Contractor to Owner. Contractor shall pay Owner for such
sums no later than fifteen (15) Days after written demand by Owner. The
rights of Owner under this Section 10(a) are in addition to and not in lieu
of rights provided to
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Owner in Article 18 of this Agreement.
(b) Owner shall notify Contractor of any breach of a provision of this
Agreement and the rejection of any Work and/or Equipment that are not in
accordance with the Exhibits or the Drawings; provided, however, that
failure, on the part of Owner to report any breach of a provision of this
Agreement which Owner may know of to Contractor shall not relieve
Contractor of any of its responsibilities as provided in this Agreement nor
give Contractor any additional rights.
(c) Owner shall have the right to set off any claim of Owner for liability of
Contractor to Owner arising under this Section or any other provision of
this Agreement against any debt or obligation of Owner to Contractor
arising under this Agreement.
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Article 11. MECHANICAL COMPLETION, FUNCTIONAL TESTING.
Section 11.1 MECHANICAL COMPLETION.
(a) Contractor shall give Owner three (3) Days notice prior to any testing or
checkout, which is required as a condition for Contractor's delivery of
Notice of Mechanical Completion, including all checkout and Equipment
testing. Owner may witness all such testing and checkout.
(b) When Contractor determines that a particular System, Unit or Phase (i) has
been assembled, constructed or completed in accordance with the Drawings,
(ii) has successfully passed checkout and System Testing for Mechanical
Completion (including functional testing of all components of the System)
and necessary non-performance testing, including hydrostatic testing, loop
checks, relay checks, calibration and continuity checks, (iii) is
sufficiently identified, including all records or other documents of
whatever nature pertaining to the assembly or construction of the System,
and (iv) is ready for Functional Testing, Contractor shall notify Owner in
writing that the System, Unit or Phase is mechanically complete ("Notice of
Mechanical Completion"). The Notice of Mechanical Completion shall include:
a marked up P&ID to show the extent of the System, Unit or Phase; all
results of System, Unit or Phase checkout and all System, Unit or Phase
Testing for Mechanical Completion; and other checkout sheets and setting
data, and, with respect to each Unit, shall list in detail the Equipment
for which Owner shall assume risk of loss upon achievement of Commercial
Operation by such Unit. Owner shall respond in writing to Contractor's
Notice of Mechanical Completion within ten (10) Days from its receipt of
the Notice of Mechanical Completion setting forth one of the following: (1)
an indication that the particular System or Unit (and later, when
applicable, Phase I or Phase II) appears to be mechanically complete,
except for Punch List items ("Mechanical Completion"), as evidenced by
Owner's signature on and return of such Notice to Contractor ("Certificate
of Mechanical Completion") accompanied by Owner's Punch List, satisfactory
completion of which shall be accomplished by Contractor within a reasonable
time period identified by Owner; or (2) rejection of the
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particular System or Unit (and later, when applicable, Phase I or Phase II)
as mechanically complete by giving a written notice to Contractor stating
with reasonable particularity the facts upon which such rejection is based,
and stating the specific Work which it appears that Contractor must perform
and the specific conditions which should be met in order for the System or
Unit (and later, when applicable, Phase I or Phase II) to become
mechanically complete. The existence of Punch List items shall not delay
Mechanical Completion of a System if Owner agrees that the items or items
on the Punch List are in accordance with the definition of Punch List set
forth in Article 1. The date of Mechanical Completion is the date on which
Owner signs such notice indicating Mechanical Completion. Upon receipt by
Contractor of Owner's rejection as provided by Section 11.1(b)(2),
Contractor shall take immediate action and proceed with due diligence and
in good faith to remedy the conditions described in such rejection. After
receipt of a rejection notice and correction of the items described in such
notice, Contractor shall recommence the process in this Section 11.1 by
giving a new Notice of Mechanical Completion to Owner and Owner shall have
five (5) days after receipt of such new Notice of Mechanical Completion in
which to respond.
(c) Contractor shall obtain written approval from Owner in accordance with
Owner's requirements, including safe clearance procedures, prior to
performing any Work on a System or Unit (and later, when applicable, Phase
I or Phase II) for which a Certificate of Mechanical Completion has been
issued.
(d) In no event shall a Certificate of Mechanical Completion be issued for a
Unit unless and until a Certificate of Mechanical Completion for all
Systems associated with such Unit has been issued, all Systems associated
with such Unit have been completed and the Unit is ready for Functional
Testing, provided however, the existence of Punch List items shall not
delay Mechanical Completion of the Unit if Owner agrees that the items or
items on the Punch List are in accordance with the definition of Punch List
set forth in Article 1. In no event shall a Certificate of Mechanical
Completion be issued for a Phase unless and until Certificates of
Mechanical Completion for all Units associated with such Phase have been
issued, all Units associated with such Phase have been
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completed and the Phase is ready for PECO Tests, provided however, the
existence of Punch List items shall not delay Mechanical Completion of the
Phase if Owner agrees that the items or items on the Punch List are in
accordance with the definition of Punch List set forth in Article 1.
(e) Functional Testing for each System or any group of Systems may commence
upon certification of Mechanical Completion of such System or group of
Systems, provided that such System or group of Systems shall have its
control systems tested for efficient operation prior to the commencement of
such Functional Testing. Functional Testing of a critical System may
proceed upon Notice of Mechanical Completion of such System and
verification by Owner that Functional Testing may proceed even if
certification of Mechanical Completion for such System is not finalized,
provided that such critical System shall have its control systems tested
for efficient operation prior to the commencement of such Functional
Testing. Functional Testing of a Unit may proceed upon Notice of Mechanical
Completion of the Unit and verification by Owner that Functional Testing
may proceed even if certification of Mechanical Completion of the Unit is
not finalized. Verification that Functional Testing may proceed shall not
be unreasonably delayed. Contractor shall prepare Functional Test
procedures and submit the procedures to Owner not less than ninety (90)
Days prior to the scheduled date to begin Functional Testing. Owner shall
provide comments on the Functional Test procedures not later than thirty
(30) Days after the final Functional Test procedures are submitted. Final
Functional Test procedures incorporating Owner's comments shall be issued
by Contractor within thirty (30) Days of receiving Owner's comments. Prior
to the commencement of Functional Testing, Contractor shall complete and
Owner shall approve all written operating procedures, maintenance manuals
and operator training as set forth in this Agreement.
Section 11.2 ISSUANCE OF A CERTIFICATE OF MECHANICAL COMPLETION.
(a) Notwithstanding the issuance of a Certificate of Mechanical Completion by
Owner with respect to a System or a Unit, prior to Commercial Operation of
a Unit, the operation and maintenance of the Unit shall be under the
direction and control of the
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Contractor through the Contractor's start-up manager. Contractor's start-up
manager and other Contractor personnel used in connection with the
start-up, adjustment or other operation of the Unit prior to Commercial
Operation shall be qualified and trained to start-up, adjust and operate
the Unit and shall perform their duties in accordance with Good Utility
Practice. During the period between the issuance of a Certificate of
Mechanical Completion for a System or a Unit and prior to Commercial
Operation of such Unit, the operation and maintenance of the System or Unit
shall be performed by operations and maintenance personnel provided by
Owner on a full-time basis, subject to the direction of Contractor's
start-up manager, using tools, materials and supplies of Owner (to the
extent that this Agreement provides for Owner to supply or have available
such tools, materials and supplies), provided that Contractor's start-up
manager shall utilize personnel provided by Owner in accordance with Good
Utility Practice in connection with normal operation and maintenance
activities and in accordance with the applicable job scope of each
individual. Contractor's start-up manager shall be responsible for
maintaining proper System protection in general and in particular with
regard to weather and for start-up scheduling. On the date on which
Commercial Operation of a Unit occurs, control of the operation and
maintenance of the Unit and risk of loss to such Unit shall transfer from
Contractor to Owner and thereafter Owner shall be in charge if issuing "hot
work permits" at such times as Contractor requires access to such Unit.
(b) Contractor shall provide Owner with written notice to Owner's Site
Representative prior to performing any Work on a System or Unit (and later,
when applicable, an entire Phase) for which Owner has issued a Certificate
of Mechanical Completion, and such Work shall be performed in accordance
with Owner's requirements, including safe clearance procedures.
(c) Notwithstanding anything in this Section 11.2 to the contrary, Contractor
shall not be responsible or liable for damage or loss caused by the Owner's
operator's employees when acting contrary to or outside the direction of
Contractor. This Section 11.2(c) shall not change any obligation of
Contractor nor its responsibility for its own
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negligence or for breach of any obligation provided in this Agreement,
including the obligations of this Section 11.2.
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Article 12. ACCEPTANCE TESTING, COMMERCIAL OPERATION AND FINAL
ACCEPTANCE.
Section 12.1 ACCEPTANCE TESTING PROCEDURES.
In conformance with Exhibit "D," specific test procedures for all
Acceptance Testing will be developed by Contractor and shall be jointly
reviewed and, if necessary, revised by Owner and Contractor, subject to
final approval by Owner and Contractor. Acceptance Testing means the
performance of:
(a) PECO Tests which will be developed encompassing the
requirements of PECO, all of which are specifically
identified in Section 3.0 of Exhibit "D". The PECO Tests will
include a test determining capacity output after completion
of each Phase and tests which demonstrate various Plant and
component capabilities, including a test of the combustion
turbine evaporative cooler as set forth in Section 2.2.3.4 of
Exhibit "D" (the "Combustion Turbine Evaporative Cooler Test");
(b) Owner Tests to confirm that each Unit and the Plant will meet
the requirements of Owner under this Agreement, all of which
are specifically identified in Exhibit "D." The Owner Tests
will include:
(i) tests to measure net power output and net heat rate of
each Unit and the entire Plant as set forth in
Section 2.1 of Exhibit "D" ("Performance Tests");
(ii) tests to demonstrate satisfaction of the requirements
for Unit, Plant and component capabilities as set forth
in Section 2.2 of Exhibit "D" ("Demonstration Tests");
(iii) air permit compliance tests to satisfy the requirements
of Section 2.3 of Exhibit "D" with respect to each Unit
("Emissions Test"); and
(iv) an availability test for each Unit to satisfy the
requirements set forth in Section 2.4.1 of Exhibit
"D" ("Unit Availability Test") and an availability
test for the Plant ("Plant Availability Test") to
satisfy the requirements set forth in Section 2.4.2
of Exhibit "D".
Contractor shall submit final detailed test procedures to Owner and the
Independent Engineer at least ninety (90) Days prior to the start of
Acceptance Testing.
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Section 12.2 REQUIREMENTS AND NOTIFICATION FOR ACCEPTANCE TESTING -
COMMERCIAL OPERATION DEFINED.
A Unit will not be deemed to be ready for Acceptance Testing until all the
requirements of Sections 12.2 (a) and (b) are satisfied.
(a) Prior to the commencement of Acceptance Testing for a Unit,
Contractor shall achieve each of the following (each of which continues
to be true at the time of commencement of such Acceptance Testing):
(i) Mechanical Completion of each System of the Unit individually
and of the entire Unit except for Punch List items;
(ii) satisfaction of all Functional Testing requirements
for the Unit, as provided in Section 11.1(e);
(iii) the availability of the Unit for normal and continuous
operation;
(iv) issuance of all permits required to be obtained by
Contractor; and
(v) calibration of the continuous emissions monitoring
systems instrumentation for such Unit.
(b) At least seven (7) Days prior to the commencement of Acceptance
Testing for a Unit, Contractor shall give notice to Owner, the party
acting as agent for the Construction Lender and the Independent
Engineer proposing the date upon which Acceptance Testing for such
Unit will begin and including a schedule for all of the required tests
(an "Acceptance Testing Notice"). Contractor may schedule any tests
required by this Agreement, but not scheduled in the first Acceptance
Testing Notice for a Unit, by giving a subsequent Acceptance
Testing Notice to Owner, the party acting as agent for the Construction
Lender and the Independent Engineer at least seven (7) Days prior to
commencement of such tests proposing the date upon which such tests
will begin for such Unit and including a schedule for such tests.
The first Acceptance Test Notice for a Unit shall be given by
Contractor at the same time as or after the Notice of Mechanical
Completion of the Unit is given to Owner by Contractor and Acceptance
Testing shall not commence prior to satisfaction of all Functional
Testing requirements
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for such Unit. At the time when each Acceptance Testing Notice is
given, Contractor shall reasonably believe that during Acceptance
Testing for such Unit, Unit emissions will be in compliance with the
requirements of all applicable air permits as set forth in
Exhibit "G." Owner shall notify PECO and all other Persons, except
those notified by Contractor pursuant to this Section 12.2(b), that
are required to witness any such testing. Contractor shall provide
Owner and all Persons receiving notice the opportunity to observe the
tests included in the Acceptance Testing Notice at the time specified
for such tests in the notice. If Owner determines that all of the
requirements of Sections 12.2(a) and (b) have been met, Owner will
confirm to Contractor that Acceptance Testing may begin for such Unit
on the date proposed in the Acceptance Testing Notice. If Owner
determines that one or more of the requirements of Sections 12.2(a)
and (b) have not been met, Owner may reject the Acceptance Testing
Notice by giving notice to Contractor, within five (5) Days of receipt
of the Acceptance Testing Notice, setting forth one or more of the
requirements of Section 12.2(a) or Section 12.2(b) which Contractor
has failed to meet ("Cancellation Notice"). The Cancellation Notice
shall state with particularity the facts upon which cancellation of
Acceptance Testing is based, and state the specific conditions which
must be met before the Acceptance Testing for such Unit can proceed.
Contractor shall take such action as is appropriate to remedy the
conditions described in the Cancellation Notice. Owner's failure to
give a Cancellation Notice to Contractor within five (5) Days after
receipt of the Acceptance Testing Notice shall be deemed to be Owner's
approval for Acceptance Testing to proceed for a Unit as indicated in
the Acceptance Testing Notice. After Contractor has taken action to
remedy any condition or conditions which Owner has stated in a
Cancellation Notice, Contractor shall give Owner a new Acceptance
Testing Notice for such Unit conforming to the requirements of this
Section 12.2(b), and the provisions of this Section 12.2(b) shall apply
with respect to such new Acceptance Testing Notice in the same manner
as they applied to the original Acceptance Testing Notice, except:
(i) the date for the commencement of Acceptance Testing for such Unit
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shall be no earlier than seventy-two (72) hours after the receipt
of such new notice by Owner, and (ii) Owner shall have forty-eight
(48) hours after the Owner's receipt of the new notice within which
Owner may reject the Acceptance Testing Notice for such Unit by
giving a new Cancellation Notice to Contractor. The foregoing
procedure shall be repeated as often as necessary until Owner no
longer reasonably rejects the Acceptance Testing Notice. If one of
the tests required as a part of Acceptance Testing for a Unit is
failed or is terminated prior to completion of such test and such
test is not restarted within forty-eight (48) hours, the notice
requirements of (i) and (ii) above shall apply prior to restarting
any test which was failed or terminated or beginning any tests
which were postponed.
(c) Commercial Operation for a Unit as used in this Agreement
shall mean the Unit and Contractor having met all of the
following requirements, as determined pursuant to Section 12.2(d):
(i) the requirements of Section 12.2(a),
(ii) the satisfaction of all of the requirements of:
A. the Unit Output Requirement and the Unit
Heat Rate Requirements, subject to the right
of Contractor to proceed in accordance with
Section 12.3(c) upon compliance with the
requirements set forth in such section;
B. the Unit Availability Test identified in Section 2.4
of Exhibit D;
C. those Demonstration Tests identified in Section 2.2.2
of Exhibit D as being requirements for Commercial
Operation; and
D. the air permit compliance requirements of Section 1.4
of Exhibit D as measured by the continuous emissions
monitoring system instrumentation during Acceptance
Testing of such Unit (the "CEMS Requirements"); and
(iii) the Unit must, upon satisfaction of all the requirements of
the immediately preceding subsection (ii), be available for
normal and continuous operation
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and must be capable of delivering the electric output of the
Unit at the Interconnection Points for electric power
transmission.
(d) When Contractor, in good faith, considers that a Unit has
achieved all of the requirements of Section 12.2(c)(i)-(iii),
Contractor shall notify Owner and Construction Lender, in
writing, by delivering Contractor's Notice of Commercial
Operation. Within three (3) Days after receipt of Contractor's
Notice of Commercial Operation, Owner shall respond to such
notice by either (i) accepting that the Unit has achieved
Commercial Operation or (ii) rejecting such notice and
specifying the reasons for such rejection. The date of
Commercial Operation for a Unit shall be the date on which all
of the requirements of Section 12.2(c)(i) through (iii) have
been achieved, as agreed by Owner, Contractor, the
Construction Lender and the Independent Engineer. Agreement
shall not be unreasonably withheld. When Contractor, in good
faith, considers that the Plant has achieved all of the
requirements of Plant Commercial Operation, Contractor shall
notify Owner and Construction Lender, in writing, by
delivering Contractor's Notice of Plant Commercial Operation.
Within three (3) Days after receipt of Contractor's Notice of
Plant Commercial Operation, Owner shall respond to such notice
by either (i) accepting that the Plant has achieved Commercial
Operation or (ii) rejecting such notice and specifying the
reasons for such rejection. The date of Commercial Operation
for the Plant shall be the date on which all of the
requirements of Plant Commercial Operation have been achieved,
as agreed by Owner, Contractor, the Construction Lender and
the Independent Engineer. Agreement shall not be unreasonably
withheld. Owner shall cooperate with Contractor in an effort
to reach agreement with the Construction Lender and the
Independent Engineer on the achievement of Commercial
Operation for a Unit or the achievement of Plant Commercial
Operation as soon as any required data becomes available from
the Acceptance Testing whether the requirements of such test
have been achieved and, if not achieved, to identify the
specific failures.
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Section 12.3 ACCEPTANCE TESTING TO ACHIEVE COMMERCIAL OPERATION.
(a) After an Acceptance Testing Notice has been given by Contractor,
without rejection by Owner, and Contractor has concluded all
test preparation procedures, then Contractor shall proceed to
perform all of the tests set forth in such notice in
accordance with the test schedule contained in the Acceptance
Testing Notice, provided that the PECO Tests shall be
scheduled and performed on (1) all of the Units in Phase I
only after all other Acceptance Testing has been
satisfactorily completed with respect to the Units in Phase I
and (2) all of the Units in Plant only after all other
Acceptance Testing has been satisfactorily completed with
respect to all of the Units in the Plant.
(b) Acceptance Testing shall be carried out in accordance with the
specifications and procedures provided in this Agreement or
developed pursuant to this Agreement. If after Acceptance
Testing is stopped, the Unit has failed to achieve all of the
requirements of Section 12.2(c)(ii), Contractor shall, subject
to the right of the Contractor to proceed in accordance with
Section 12.3(c) upon compliance with the requirements set
forth in such section, use all reasonable efforts and
diligently make such changes to or adjustments in the Unit as
Contractor deems necessary to achieve all of the requirements
of Section 12.2(c)(ii). Upon completion of Contractor's
changes to or adjustments in the Unit, and Contractor giving a
new Acceptance Testing Notice to Owner which is not rejected
by Owner, Contractor shall repeat such failed tests for such
Unit. Prior to achievement of all of the requirements of
Section 12.2(c)(ii), Contractor shall remain subject to
liquidated damages for such Unit as provided in Section 13.1,
unless Contractor is eligible to and elects to proceed in
accordance with the requirements of Section 12.3(c) for such
Unit. Any such changes and adjustments to the Unit and
retesting shall be at Contractor's expense. With Contractor's
consent, which shall not be unreasonably withheld, Owner may
operate the Unit between retests. If the Unit fails any
retest, subject to the right of the Contractor to proceed in
accordance with Section 12.3(c) upon compliance with the
requirements set forth in such section, Contractor shall use
all reasonable efforts and diligently take appropriate
corrective actions and continue retesting until all of the
requirements under Section
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12.2(c)(ii) are achieved. When Contractor has completed all
changes to and adjustments in the Unit, Owner reserves the
right to require Contractor to reconduct any of the Acceptance
Testing which Owner reasonably believes necessary based upon the
modifications made to the Unit, to confirm that the Unit as
changed and adjusted meets all requirements for Commercial
Operation while meeting CEMS Requirements and to confirm that no
Acceptance Testing results for such Unit have been invalidated
or compromised by such changes or adjustments. Contractor's
obligations and rights to retest under this Section 12.3(b)
are expressly subject to the rights of Owner under Section 18.1(c).
(c) If Owner, Contractor, Construction Lender and Independent
Engineer agree that all of the requirements of Section
12.2(c)(i) through (iii) have been satisfied for a Unit,
except for the Unit Output Requirement and/or the Unit Heat
Rate Requirements, then Contractor may give notice to Owner
that Contractor elects to proceed under this Section 12.3(c)
with respect to such Unit (the "Section 12.3(c) Notice")
provided the following requirements are satisfied:
(i) The Unit has achieved the Interim Performance Requirements for
net power output and net heat rate set forth in
Section 2.1.3.1 of Exhibit "D."
(ii) Contractor's corrective actions and retesting of the Unit
shall not interfere with the normal and continuous operation
of the Unit during the one hundred eighty (180) Day period
immediately following such notice.
(iii) Contractor immediately pays liquidated damages pursuant to
Sections 13.1 (if any), 13.3 and 13.4 (based upon failure to
achieve the Unit Output Requirement and/or the Unit Heat Rate
Requirements based upon the results of the most recent tests
for such Unit); provided that if General Electric Company has
made an election under Section 17.2(d) of the Turbine Contract
to stop the accrual of liquidated damages under the Turbine
Contract, Contractor may deduct from the liquidated damages to
be paid under this provision, the amount of liquidated damages
calculated as provided in Section 17.2(d) of the Turbine Contract
which General Electric Company is potentially liable
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for at the time when General Electric Company makes such election,
and the amount so deducted shall be deferred until a final
determination of liquidated damages is made under this Agreement.
Upon satisfying the conditions for giving the Section 12.3(c)
Notice and the giving of such notice to Owner, the Unit will
be deemed to have achieved Commercial Operation on the date of
such notice. After giving the Section 12.3(c) Notice,
Contractor shall use all reasonable efforts to achieve the
Unit Output Requirement and the Unit Heat Rate Requirements
while satisfying the CEMS Requirements, making such changes
and adjustments to the Unit as Contractor deems necessary and
diligently retesting (i) until the Unit Output Requirement and
the Unit Heat Rate Requirements have been achieved while
satisfying the CEMS Requirements and/or (ii) until the later
of (A) one hundred eighty (180) Days have expired from the
date of the giving of the Section 12.3(c) Notice or (B) the
end of the first two consecutive non-peak months after the
date of the giving of the Section 12.3(c) Notice, whichever of
(i) or (ii) occurs first ("Retest Period"). Any changes in or
adjustments to the Unit and any retesting shall be at
Contractor's expense. Prior to Contractor making any material
changes or corrective actions with respect to the Unit,
Contractor shall consult with Owner regarding such changes or
corrective actions and shall permit Owner to review and
inspect such changes or corrective actions as they are made to
the Unit. Owner, in its sole discretion, shall have the right
to limit or stop Unit operation, including stopping or
limiting Unit operation if the Unit ceases to satisfy CEMS
Requirements following any changes in or adjustments to the
Unit. No liquidated damages shall accrue pursuant to Section
13.1 during the Retest Period or any extension thereof granted
by Owner in its sole discretion ("Extension Period") unless
the Unit is not available for normal and continuous operation
due to Contractor's changes and adjustments or retesting;
provided that Owner will in good faith use reasonable efforts
to make the Unit(s) available to Contractor for changes and
adjustments or retesting during scheduled outages and/or
non-peak months (as defined in the Power Purchase Agreement)
which
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occur during any Retest Period or Extension Period in
order to avoid or minimize any modified liquidated damages (as
described below in this Section). If during the Retest Period
or the Extension Period, Owner operates a Unit more than a
total of two hundred fifty (250) hours to satisfy the
requirements of the Power Purchase Agreement, the Unit Output
Requirement and the Unit Heat Rate Requirements, and the
Commercial Operation Output and Commercial Operation Net Heat
Rate guarantees in Sections 13.3 and 13.4 will be adjusted in
accordance with any degradation schedule which may be agreed
upon in accordance with Appendix C of Exhibit H to this
Agreement. If at the end of the Retest Period, test results
agreed to by Owner, Contractor, the Construction Lender and
the Independent Engineer, establish improvement in the net
power output and net heat rate for such Unit, and the CEMS
Requirements are satisfied at such levels, then, subject to
the exercise of Owner's rights pursuant to the last sentence
of this Section 12.3(c) and any additional payments to or
refunds from Owner with respect thereto, Owner shall refund to
Contractor that portion of the previously paid Section 13.3
and 13.4 liquidated damages (for failure to achieve the Unit
Output Requirement and/or the Unit Heat Rate Requirements), if
any, which are representative of such improvement, within
fifteen (15) Days. If one hundred eighty (180) Days have
elapsed from the date of the giving of the Section 12.3(c)
Notice for a Unit and all retests during such Retest Period
fail to result in meeting the Unit Output Requirement and the
Unit Heat Rate Requirements for such Unit while satisfying
CEMS requirements, Owner may, in its sole discretion,
terminate retesting or may extend the time for retesting of
such Unit. If Owner terminates retesting of a Unit, liquidated
damages pursuant to Section 13.3 and/or 13.4 (for failure to
achieve the Unit Output Requirement and/or the Unit Heat Rate
Requirements) shall be determined based on the most recent
test results and then, subject to the exercise of Owner's
rights pursuant to the last sentence of this Section 12.3(c)
and any additional payments to or refunds from Owner with
respect thereto, any additional payments or refunds relating
to such liquidated damages for such Unit shall be made within
fifteen
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(15) Days of Owner's notice to Contractor terminating
retesting. If Owner extends the time for retesting, Contractor
shall make changes and adjustments as it deems necessary to
achieve the Unit Output Requirement and the Unit Heat Rate
Requirements for the Unit while satisfying the CEMS
Requirements, and shall use all reasonable efforts and shall
diligently retest until the Unit Output Requirement and the
Unit Heat Rate Requirements for the Unit are achieved while
satisfying the CEMS Requirements or until such Extension
Period has expired, whichever comes first. Any such changes,
adjustments and retesting shall be at Contractor's expense.
If, at the end of any Extension Period, test results agreed to
by Owner, Contractor, the Construction Lender and the
Independent Engineer, establish improvement in the net power
output and net heat rate for such Unit, and the CEMS
Requirements are satisfied at such levels, then, subject to
the exercise of Owner's rights pursuant to the last sentence
of this Section 12.3(c) and any additional payments to or
refunds from Owner with respect thereto, liquidated damages
for such Unit shall be determined by Owner based upon the
provisions of Sections 13.3 and 13.4 (for failure to achieve
the Unit Output Requirement and/or the Unit Heat Rate
Requirements), and any liquidated damages due from Contractor
or refunds of previously paid liquidated damages due from
Owner, as applicable, shall be paid with respect to such Unit
within fifteen (15) days of receipt from Owner of such
determination of liquidated damages. If at the end of such
Extension Period all retests have failed to result in meeting
one or both of the Unit Output Requirement and the Unit Heat
Rate Requirements for such Unit while satisfying the CEMS
Requirements, Owner shall terminate retesting of such Unit by
giving notice to Contractor of such termination and liquidated
damages for such Unit pursuant to Section 13.3 and 13.4 (for
failure to achieve the Unit Output Requirement and/or the Unit
Heat Rate Requirements) shall be determined based on the most
recent test results and, subject to the exercise of Owner's
rights pursuant to the last sentence of this Section 12.3(c)
and any additional payments to or refunds from Owner with
respect thereto, any payments or refunds of liquidated damages
based upon the most
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recent test results shall be made within
fifteen (15) Days of such notice. During the Retest Period and
any Extension Period, Owner shall make reasonable efforts to
schedule an outage for such Unit within thirty (30) Days of
any written request by Contractor in order to accommodate
Contractor's proposed changes or adjustments to the Unit. If
during the Retest Period, or any Extension Period, the Unit is
not available to Owner for normal and continuous operation due
to Contractor's changes and adjustments or retesting,
including limitation or stoppage of the Unit as a result of
non-compliance with the CEMS Requirements, then Contractor
shall be required to pay modified liquidated damages for any
period that the Unit is unavailable for the generation of
electric power, including all preparation time and other
directly related downtime and any stoppage due to failure of
the Unit to meet the CEMS Requirements. Modified liquidated
damages shall be calculated on a daily basis with respect to
each Day that the Unit was not fully available, using the
following formula (this value shall not be less than zero):
$/Day x (1 - Actual Daily Net Power Output in KW/HRS/3,763,120)
The $/Day in the above formula is the full daily amount of
liquidated damages per Unit as stipulated in the liquidated
damages schedule in Section 13.1 and considering the number of
Days, if any, previously used in such schedule, provided that
for any Day during any Off Peak Month (as defined in the Power
Purchase Agreement) the daily amount of liquidated damages of
$40,000, $65,000 and $82,000 as stipulated in the liquidated
damages schedule in Section 13.1 shall be reduced to zero for
those Days when Owner does not otherwise require the operation
of such Unit(s). Actual Daily Net Power Output is the total
power in KW-HR's, if any, available for sale from such Unit by
Owner during such Day. When Contractor has completed all
changes to and adjustments in the Unit, Owner reserves the
right to require Contractor to reconduct any of the Acceptance
Testing for such Unit which Owner reasonably believes
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necessary based upon the modifications made to the Unit, to
confirm that the Unit as changed and adjusted meets all
requirements for Commercial Operation while meeting CEMS
Requirements and to confirm that no Acceptance Testing results
have been invalidated or compromised.
(d) Prior to Final Acceptance of the Plant, Contractor shall
demonstrate that, during the applicable tests, each of the
Units satisfies the requirements of:
(i) the Emissions Tests; and
(ii) any Demonstration Tests identified in
Section 2.2.3 of Exhibit D as not being
requirements for Commercial Operation.
Acceptance Testing for the purpose of satisfying the
requirements of the foregoing Tests may be conducted before or
after Commercial Operation of a Unit, in any sequence, at the
option of Contractor, subject to the giving of an Acceptance
Testing Notice as required by Section 12.2(b). Such Acceptance
Testing shall be carried out in accordance with the
specifications and procedures provided in this Agreement or
developed pursuant to this Agreement. If any such Acceptance
Testing discloses a failure of the Unit to satisfy any of the
applicable requirements of the Emissions Tests or applicable
Demonstration Tests, then Contractor shall make such changes
and adjustments to the Unit as Contractor deems necessary and
shall repeat such Emissions Tests or applicable Demonstration
Tests as are required by the Owner to be repeated until the
requirements of such tests are achieved. Any modifications and
adjustments to the Unit in order to meet the requirements of
the Emissions Tests or applicable Demonstration Tests shall be
at Contractor's expense. Prior to Final Acceptance of the
Plant, Owner reserves the right to require Contractor to
reconduct any of the Acceptance Testing which Owner reasonably
believes necessary based upon any modifications made to any
Unit or changes which have occurred in the Unit, to confirm
that the Unit as changed or modified meets all requirements
for Final Acceptance and to confirm that no Acceptance Testing
results have been invalidated or compromised.
(e) After Commercial Operation of a Unit is achieved, Owner shall
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issue an Acceptance Certificate for Commercial Operation for
such Unit which shall not relieve Contractor of its
obligations to complete its performance under this Agreement
with respect to such Unit, including Contractor's obligations
pursuant to Section 12.3(c), if Contractor has elected to
proceed under Section 12.3(c).
(f) After Commercial Operation of all of the Units #1 through #6
have been achieved, Contractor shall conduct those tests
identified in Section 2.1.4 and Section 2.4.2 of Exhibit "D"
as being necessary for Plant Commercial Operation. Following
the completion of those tests identified in Section 2.1.4 and
Section 2.4.2 of Exhibit "D" as being necessary for Plant
Commercial Operation, Owner and Contractor shall calculate (i)
the net power output for the Plant by aggregating the net
power output for the six Units (based upon the final
Performance Test for each Unit) and (ii) the net heat rate for
the Plant by averaging the net heat rate for the six Units
(with separate averages for natural gas and fuel oil) (based
upon the final Performance Tests for each Unit), and by and
adjusting the net power output and net heat rate for the Plant
for transformer losses, auxiliary loads and balance of plant
restrictions determined during the tests for Plant Commercial
Operation. In the event that the Plant has failed to achieve
the Commercial Operation Output and Commercial Operation Net
Heat Rates as set forth in Section 13.3 and 13.4, Contractor
shall be permitted to perform modifications and adjustments to
the Plant in order to improve transformer losses, auxiliary
loads and balance of plant restrictions, for a period not to
exceed one hundred eighty (180) Days, after which Contractor
shall reconduct those tests identified in Section 2.1.4 and
Section 2.4.2 of Exhibit "D" as being necessary for Plant
Commercial Operation and the net power output and net heat
rate for the Plant shall be recalculated based upon any
changes in transformer losses, auxiliary loads and balance of
plant restrictions measured in such tests, and liquidated
damages, if any, under Sections 13.3 and 13.4 shall be finally
determined.
(g) Contractor shall require General Electric Company to conduct
Acceptance Testing (as defined in the Turbine Contract)
pursuant to Section 17.2 of the Turbine Contract
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unless Owner consents to the waiver of such requirement and
shall, at the request of Owner, require General Electric Company
to reconduct, as applicable, any Acceptance Testing pursuant to
Section 17.2(c)(iii) of the Turbine Contract. Prior to the
earlier of (a) Contractor having satisfied the performance
guarantees for Commercial Operation Output in Section 13.3 and
Commercial Operation Net Heat Rate in Section 13.4 or (b) all
of the obligations of Contractor for retesting under the
Section 12.3(c) having terminated, Contractor will not,
without the consent of Owner, provide written notice to
General Electric Company that (I) General Electric Company has
satisfied the Liquidated Damages Performance Guarantees (as
defined in the Turbine Contract) pursuant to Sections
16.2(a)(i)(C) or 16.2(a)(ii)(C) of the Turbine Contract (II)
General Electric Company has satisfied the Performance
Guarantees (as defined in the Turbine Contract) pursuant to
Sections 16.2(b)(i)(B) or 16.2(b)(ii)(B) of the Turbine
Contract, (III) General Electric Company has satisfied the
Demonstration Test Requirements (as defined in the Turbine
Contract) pursuant to Section 16.3(ii) of the Turbine Contract
and (IV) General Electric Company has satisfied the
Availability Test Requirement (as defined in the Turbine
Contract) pursuant to Section 16.4(ii) of the Turbine
Contract. Prior to the earlier of such time as (a) Contractor
has satisfied the requirements of the Unit Output Requirement
and the Unit Heat Rate Requirements for a Unit, or (b) all
obligations of Contractor for retesting of a Unit under
Section 12.3(c) have terminated, Owner may direct Contractor
to require General Electric Company under the Turbine Contract
to continue remedy and testing activities for such Unit in
accordance with Section 17.2(c)(ii) of the Turbine Contract.
Section 12.4 FINAL ACCEPTANCE.
After (i) all of the Units #1 though #6 have achieved Commercial
Operation, (ii) all retesting under Section 12.3(c) for any Unit, if
applicable, is terminated, (iii) the requirements set forth in Section
12.3(d) have been achieved for all the Units #1 through #6, (iv) all
tests required for Plant Commercial Operation have been satisfied, and
(v) the Work is complete except for the Combustion Turbine Evaporative
Cooler Test and for Punch List items (provided that the total
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estimated cost of the Punch List items does not exceed ONE HUNDRED
FIFTY THOUSAND DOLLARS ($150,000)), Owner shall, upon written request
by Contractor, issue to Contractor a Certificate of Final Acceptance
evidencing that all Work has been completed except for the
aforementioned Combustion Turbine Evaporative Cooler Test or
Punch List items, as applicable ("Final Acceptance"). Upon Final
Acceptance, provided Contractor has met the requirements for the
payment or release of Owner's Security, Owner shall release to
Contractor the Owner's Security less two times the estimated cost of
Punch List items, and less any amounts withheld pursuant to
Section 3.1(f). When all remaining Punch List items are complete
and approved by Owner, Owner shall release the remainder of the
amount withheld for the Punch List. If other amounts are withheld,
as the matters for which such other amounts were withheld are resolved,
Owner shall release additional amounts accordingly. Final Acceptance
shall not constitute a release or waiver by Owner of claims arising
from punch list items, any work related to or arising out of the
Combustion Turbine Evaporative Cooler (including Work on other
Equipment which may result from repairs or adjustments which are
determined to be necessary or desirable following the Combustion
Turbine Evaporative Cooler Test); unsettled liens; the terms of any
warranty contained in or required by this Agreement; or any other
unsettled claims of Owner.
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Article 13. LIQUIDATED DAMAGES.
Section 13.1 LATE COMMERCIAL OPERATION LIQUIDATED DAMAGES.
(a) Should Contractor fail to achieve Commercial Operation of a Unit by the
Scheduled Date of Commercial Operation for such Unit, Contractor shall be
subject to liquidated damages in the amount of FORTY THOUSAND DOLLARS
($40,000) per Unit for each full Day or part thereof by which Commercial
Operation of such Unit occurs later than the Scheduled Date of Commercial
Operation for such Unit up to and including the fourteenth (14th) Day after
the Scheduled Date of Commercial Operation for such Unit. For each full Day
or part thereof by which Commercial Operation of a Unit occurs later than
the fourteenth (14th) Day after the Scheduled Date of Commercial Operation
for such Unit up to and including the thirtieth (30th) Day after the
Scheduled Date of Commercial Operation for such Unit, Contractor shall be
subject to liquidated damages in the amount of SIXTY FIVE THOUSAND DOLLARS
($65,000) per Unit. For each full Day or part thereof by which Commercial
Operation of a Unit occurs later than the thirtieth(30th) Day after the
Scheduled Date of Commercial Operation for such Unit, Contractor shall be
subject to liquidated damages in the amount of EIGHTY TWO THOUSAND DOLLARS
($82,000) per Unit. Such liquidated damages shall continue to accrue until
Commercial Operation for such Unit is achieved or the limit set forth in
Section 14.1 is reached, whichever is earlier; provided that, if Contractor
has not previously achieved Commercial Operation of a Unit under this
Agreement, Contractor shall be deemed to have achieved Commercial Operation
of a Unit (but only for purpose of determining liquidated damages under
this Section) on the date on which Owner achieves Commercial Operation of
such Unit under the Power Purchase Agreement, but only if net power output
for such Unit is at least 148,590 KW of electricity and the net heat rate
for such Unit is not greater than 11,217 BTU/KW-HR (HHV) on natural gas and
11,362 BTU/KW-HR (HHV) on fuel oil as measured in the most recent
Performance Test for such Unit. Liquidated Damages under this Section 13.1
shall be calculated and become due to Owner fifteen (15) days after the
Scheduled Date of Commercial Operation for such Unit and shall continue to
accrue and be
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subject to recalculation on the same day of each succeeding month until
Commercial Operation is achieved for such Unit or the limit set forth in
Section 14.1 is reached. Any liquidated damages due from Contractor
pursuant to this Section 13.1 with respect to a Unit shall be offset by Net
Revenue, if any, received by Owner from the operation of such Unit prior to
the Commercial Operation of such Unit or the deemed Commercial Operation of
the Unit under Section 12.3(c). Net Revenue for such purpose shall mean an
amount equal to gross revenue (less any taxes payable on the receipt of
such revenue) received or accrued by Owner for such Days from the sale of
power, to the extent properly allocable to such Days in accordance with
generally accepted accounting principles, consistently applied, less the
sum of all costs incurred or accrued by Owner in generating such revenue,
including costs of labor, fuel (including transportation), maintenance,
consumables, and supplies (but not including any financing costs or
charges), to the extent properly allocable to such Days in accordance with
generally accepted accounting principles, consistently applied and less any
liquidated damages paid by Owner under the Power Purchase Agreement as a
result of the delay in Commercial Operation of such Unit. Contractor's
total aggregate liability for liquidated damages under this Section 13.1
shall not exceed twenty two and one half percent (22 1/2%) of the
Guaranteed Lump Sum Price.
(b) The amount of liquidated damages payable by Contractor pursuant to Section
13.1(a) shall be limited as follows:
(i) The total liquidated damages accrued by Contractor pursuant to Section
13.1(a), prior to any reduction under this Section 13.1(b), shall be
multiplied by a fraction, the numerator of which is the number of days
of delay in which the Facility does not achieve Commercial Operation
by the Scheduled Date of Commercial Operation and for which the
performance of General Electric Company under the Turbine Contract is
the primary cause of such delay and the denominator of which is the
total number of days of delay in which the Facility does not achieve
Commercial Operation by the Scheduled Date of
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Commercial Operation ( the "Turbine Portion of Commercial Operation
LDs"). The difference, if any, between total liquidated damages
accrued by Contractor pursuant to Section 13.1(a) and the Turbine
Portion of Commercial Operation LDs shall be the "Non-Turbine Portion
of Commercial Operation LDs." Contractor shall provide reasonable
evidence to Owner to support the number of days of delay in which the
Facility does not achieve Commercial Operation by the Scheduled Date
of Commercial Operation and for which the performance of General
Electric Company under the Turbine Contract is the primary cause of
such delay.
(ii) If the Turbine Portion of Commercial Operation LDs is less than or
equal to the aggregate liquidated damages which accrue under Section
17.1 of the Turbine Contract, as limited by the GE Cap, Contractor
shall be responsible for the full amount of liquidated damages
determined pursuant to Section 13.1(a).
(iii) If the Turbine Portion of Commercial Operation LDs is greater than
the aggregate liquidated damages which accrue under Section 17.1 of
the Turbine Contract, the liquidated damages determined pursuant to
Section 13.1(a) shall be reduced to an amount which is equal the
aggregate liquidated damages which accrue under Section 17.1 of the
Turbine Contract and such amount shall be added to Non-Turbine Portion
of Commercial Operation LDs to determine the total amount of
liquidated damages to be paid by Contractor pursuant to Section 13.1.
Section 13.2 EFFECT OF LIQUIDATED DAMAGES FOR LATE COMMERCIAL OPERATION.
Subject to Owner's right to terminate this Agreement and pursue applicable
remedies, which is governed by Sections 18.1 through 18.6 and 15.6, liquidated
damages as provided in Section 13.1 shall be the sole remedy of Owner for
failure of Contractor to achieve Commercial Operation of any Unit by the
Scheduled Date of Commercial Operation for such Unit. Liquidated damages as
provided in Section 13.1 shall relieve Contractor of liability for delays only
with respect to Days for which such liquidated damages are paid, and Owner
reserves any and all other rights and remedies it may have under this Agreement
for additional delays in the
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achievement of Commercial Operation, including the right and remedies of Owner
under Article 18.
Section 13.3 OUTPUT LIQUIDATED DAMAGES.
Contractor represents, covenants and warrants that the Plant shall produce and
deliver for sale a net power output ("Commercial Operation Output") of at least
938,460 KW of electricity when measured in Performance Tests in accordance with
Exhibit D. Contractor shall be subject to liquidated damages of THREE HUNDRED
DOLLARS ($300) per KW for each KW that Commercial Operation Output is less than
938,460 KW as measured in the most recent Performance Tests; provided that for
the purpose of finally determining liquidated damages related to Commercial
Operation Output, Commercial Operation Output shall be aggregated for the six
Units (based upon the final Performance Test for each Unit) as adjusted for
transformer losses, auxiliary loads and balance of plant restrictions determined
during the tests for Plant Commercial Operation set forth in Section 2.1.4 and
2.4.2 of Exhibit D, and liquidated damages, if any, shall be computed based upon
the aggregate Commercial Operation Output. Prior to the computation of
liquidated damages for net power output of all six Units as set forth above in
this Section 13.3, Contractor shall, at such times as are provided in this
Agreement, pay to Owner liquidated damages of THREE HUNDRED DOLLARS ($300) per
KW for each KW that the net power output of a Unit is less than 156,410 KW
("Unit Output Requirement") as measured in the most recent Performance Tests for
such Unit, with such amounts of liquidated damages being subject to adjustment
as set forth above based upon the net power output of all of the Units in the
Plant. Contractor shall have the right to retest as set forth in Section
12.3(b), (c) and (d). Contractor's total aggregate liability for liquidated
damages under this Section 13.3 shall not exceed twenty two and one half percent
(22 1/2%) of the Guaranteed Lump Sum Price.
Section 13.4 COMMERCIAL OPERATION NET HEAT RATE LIQUIDATED DAMAGES.
Contractor represents, covenants and warrants that the Units shall operate at a
net heat rate ("Commercial Operation Net Heat Rates") Ten Thousand Six Hundred
Eighty Three (10,683) BTU/KW-HR (HHV) or less per Unit when operated on natural
gas and Ten Thousand Eight Hundred Twenty One (10,821) BTU/KW-HR (HHV) or less
per Unit when operated on fuel
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oil when measured in Performance Tests in accordance with Exhibit "D."
Contractor shall be subject to liquidated damages of FIVE THOUSAND EIGHT HUNDRED
SIXTY DOLLARS ($5,860) per BTU/KW-HR for each BTU/KW-HR that Commercial Net Heat
Rate exceeds Ten Thousand Six Hundred Eighty Three (10,683) BTU/KW-HR (HHV) per
Unit when operated on natural gas plus NINE HUNDRED FIFTY DOLLARS ($950) per
BTU/KW-HR for each BTU/KW-HR that Commercial Net Heat Rate exceeds Ten Thousand
Eight Hundred Twenty One (10,821) BTU/KW-HR (HHV) per Unit when operated on fuel
oil as measured in the most recent Performance Tests; provided that for the
purpose of finally determining any liquidated damages related to Commercial Net
Heat Rate, Commercial Net Heat Rate shall be averaged (with separate averages
for natural gas and fuel oil) for the six Units (based upon the final
Performance Tests for each Unit) as adjusted for transformer losses, auxiliary
loads and balance of plant restrictions determined during the tests for Plant
Commercial Operation set forth in Section 2.1.4 and 2.4.2 of Exhibit D, and
liquidated damages, if any, shall be computed based upon the per Unit average
Commercial Net Heat Rate for natural gas and fuel oil. Prior to the computation
of liquidated damages for net heat rate of the entire Plant as set forth above
in this Section 13.4, Contractor shall, at such times as are provided in this
Agreement, pay to Owner liquidated damages of FIVE THOUSAND EIGHT HUNDRED SIXTY
DOLLARS ($5,860) per BTU/KW-HR for each BTU/KW-HR that the net heat rate of a
Unit exceeds Ten Thousand Six Hundred Eighty Three (10,683) BTU/KW-HR (HHV) when
operated on natural gas, plus NINE HUNDRED FIFTY DOLLARS ($950) per BTU/KW-HR
for each BTU/KW-HR that the net heat rate of a Unit exceeds Ten Thousand Eight
Hundred Twenty One (10,821) BTU/KW-HR (HHV) ("Unit Heat Rate Requirements") when
operated on fuel oil, as measured in the most recent Performance Tests for such
Unit, with such amounts of liquidated damages being subject to adjustment as set
forth above based upon the net heat rate of all of the Units in the Plant when
operated on natural gas and fuel oil. Contractor shall have the right to retest
as set forth in Section 12.3(b), (c) and (d). Contractor's total aggregate
liability for liquidated damages under this Section 13.4 shall not exceed twenty
two and one half percent (22 1/2%) of the Guaranteed Lump Sum Price.
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Section 13.5 EFFECT OF LIQUIDATED DAMAGES FOR OUTPUT AND HEAT RATE.
In addition to the guarantees for Commercial Operation Output and Commercial
Operation Net Heat Rate set forth in Sections 13.3 and 13.4, which shall be
applicable for the purpose of determining liquidated damages, Contractor
warrants and represents that the net power output of all Units (as finally
determined pursuant to Section 13.3) shall be at least 891,540 KW of electricity
and the net heat rate for all Units (as finally determined pursuant to Section
13.4) shall be not greater than 11,217 BTU/KW-HR (HHV) per Unit when operated on
natural gas and than 11,362 BTU/KW-HR (HHV) per Unit when operated on fuel oil
("Performance Minimums"). If Commercial Operation Output and Commercial
Operation Net Heat Rate for all of the Units as determined by the most recent
Performance Tests achieve the Performance Minimums, then subject to compliance
with Section 12.3 (d), liquidated damages as provided in Sections 13.3 and 13.4
shall relieve Contractor of further liability for failure to comply with the
performance requirements for Commercial Operation Output and Commercial
Operation Net Heat Rate for such Units. Subject to the right of Owner to
terminate this Agreement pursuant to Section 18.1(c), if Contractor achieves the
Performance Minimums for all Units, liquidated damages as provided in Section
13.3 and Section 13.4 shall be the sole remedy of Owner for failure of
Contractor to meet the Section 13.3 and Section 13.4 guarantees. Upon reduction
of the Guaranteed Lump Price or payment in accordance with Section 13.6 for
final liquidated damages under Section 13.3 and/or Section 13.4, the guarantees
set forth in Section 13.3 and Section 13.4 for Commercial Operation Output and
Commercial Operation Net Heat Rate shall be satisfied, and Contractor shall have
no further liability for such guarantees.
Section 13.6 REDUCTION OF GUARANTEED LUMP SUM PRICE FOR LIQUIDATED
DAMAGES - INTEREST.
The amount of liquidated damages Contractor is subject to, or is liable for
pursuant to the terms of this Agreement, except for liquidated damages under
Section 13.7, shall be a reduction to the Guaranteed Lump Sum Price. Except as
otherwise provided in Sections 12.3(c) and 13.7, liquidated damages which accrue
pursuant to Sections 13.3, 13.4 and 13.5 for each Unit shall become due to Owner
on the later of the fifth (5th) Business Day after (i) the conclusion of
Performance Testing for such Unit, and (ii) the date of Commercial Operations
for such Unit, subject to final adjustment pursuant to Sections 13.3 and 13.4
following Commercial Operation of the last Unit. Liquidated damages payable
pursuant to Section 13.7
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become due as provided in such section. With respect to the amount of liquidated
damages which is a reduction to the Guaranteed Lump Sum Price, Owner shall have
the right to deduct the amount(s) of such liquidated damages from the next
payment(s) due to Contractor after the due date of the liquidated damages and
from Owner's Security, until the total amount of the liquidated damages has been
deducted; provided however, Contractor shall, within fifteen (15) Days after
written demand, refund to Owner the payments made by Owner on the Guaranteed
Lump Sum Price to the extent the payments made to Contractor exceed the
Guaranteed Lump Sum Price reduced pursuant to this Section 13.6 and the Owner's
Security which is not needed to satisfy other claims against Owner's Security as
provided herein. If the aggregate liquidated damages paid by Contractor on a
Unit by Unit basis exceeds the final liquidated damages determined as set forth
in Sections 13.3 and 13.4, Owner shall pay to Contractor such excess amount
within fifteen (15) days of the final determination of such liquidated damages.
That portion of any payment or refund of liquidated damages which is not paid
when due, as provided in Section 12.3(c), 13.6 and 13.7, shall bear interest at
the prime rate as determined by the annual prime rate of The Chase Manhattan
Bank as of the date due, plus one percent (1%), but not in excess of the lawful
maximum rate.
Section 13.7 LIQUIDATED DAMAGES FOR LATE DELIVERY OF LOAN DOCUMENTS.
Contractor shall provide all documents reasonably required for the conversion
of the loan (sample documents illustrating the type and general intent of
said documents are included in Exhibit "N") within thirty (30) Days of the
written request by Owner. The documents shall be in a form acceptable to the
Construction Lender, provided, however, that such documents shall not
materially increase Contractor's obligations as set forth in this Agreement.
Contractor shall pay to Owner [*] for each Day that Contractor exceeds the
thirty (30) Days to supply all of the required documents. Such sum shall be
payable within fifteen (15) Days of receipt of invoice from Owner. Liquidated
damages as provided in this Section 13.7 shall relieve Contractor of
liability for only its failure to comply with the requirement to provide
documents required for conversion as provided in this Section 13.7.
Section 13.8 REASONABLENESS OF LIQUIDATED DAMAGES.
It is understood and agreed between the parties that the terms, conditions and
amounts fixed
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pursuant to Article 13 for liquidated damages are reasonable, considering the
damages that Owner will sustain in the event of Contractor's failure to meet the
requirements set forth in Article 13 and that these amounts are agreed upon and
fixed as liquidated damages because of the difficulty of ascertaining the exact
amount of damages that may be sustained by Owner and shall be applicable
regardless of the actual amount of damages sustained. Once the Guaranteed Lump
Sum Price has been adjusted for liquidated damages as provided in Section 13.6
and all refunds, if any, completed, Contractor shall be relieved of any further
liability but only with respect to the obligation(s) for which such damages are
assessed. Subject to the termination rights of Owner pursuant to Section
18.1(c), if the limits set forth in Section 14.1 have been reached and the
Guaranteed Lump Sum Price has been adjusted for liquidated damages as provided
in Section 13.6 and all refunds, if any, completed, Contractor shall be relieved
of any further liability for damages arising out of excessive heat rate, output
short falls and/or delay in achieving Commercial Operation. Nothing in this
Section 13.8 is intended to limit the damages provided for in Section 14.2(a).
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Article 14. LIMITATION OF LIABILITIES.
Section 14.1 LIMITATION OF LIQUIDATED DAMAGES.
The aggregate liability of Contractor for liquidated damages under this
Agreement shall not exceed an amount equal to thirty percent (30%) of the
Guaranteed Lump Sum Price, as amended pursuant to this Agreement, excluding any
reduction in the Guaranteed Lump Sum Price made for liquidated damages pursuant
to Section 13.6.
Section 14.2 DAMAGE DISCLAIMER.
(a) In no event shall Contractor or Subcontractors be liable to Owner under any
theory of recovery, whether based on contract, on tort (including
negligence of any kind), on strict liability, or otherwise, for replacement
power or for any consequential, indirect, special or incidental damages
resulting in any way from or in connection with this Agreement, whether
such act or omission constitutes a breach of this Agreement or results in a
different cause of action. The limitation on Contractor's liability as set
forth in this Section 14.2(a) shall not apply to claims based upon:
(i) willful misconduct, gross negligence or fraud by Contractor or any
Subcontractor,
(ii) tortious interference by Contractor with Construction Lender,
(iii) claims for bodily injury, death or damage to property of third
parties, including strict liability or tort liability, subject to
indemnification under Article 17.
The limitations on Contractor's liability set forth in this Section 14.2(a)
shall not affect Contractors liability for the payment of liquidated
damages under this Agreement. Notwithstanding any provision to the contrary
in this Agreement, Contractor shall not be liable to Owner for
consequential damages of any kind arising from the acts or omissions of, or
breach of contract by, General Electric Company under the Turbine Contract
to the extent that General Electric Company is not liable to Contractor for
such consequential damages under the Turbine Contract.
(b) In no event shall Owner be liable to Contractor or its Subcontractors under
any theory of recovery, whether based on contract, on tort (including
negligence of any kind), on
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strict liability, or otherwise, for losses or damages caused by loss of
profit or any consequential damages resulting in any way from or in
connection with this Agreement, whether such act or omission constitutes a
breach of this Agreement or results in a different cause of action.
(c) Contractor's total liability to Owner for all claims, losses, damages, and
expenses resulting in any way from the performance or breach of this
Agreement, other than third party claims for bodily injury, death or damage
to property, which are, subject to indemnification under Article 17, shall
not exceed the Guaranteed Lump Sum Price, as adjusted pursuant to this
Agreement. Liabilities of Contractor which are reimbursed or paid from the
proceeds of any "All Risk Builder's Risk" insurance policy shall not reduce
Contractor's maximum liability under this Section 14.2.
Section 14.3 LIMITATIONS VALID IN ALL EVENTS.
TO THE EXTENT PERMITTED BY APPLICABLE LAW AND APPLICABLE INSURANCE POLICIES, AND
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, RELEASES, DISCLAIMERS AND
LIMITATIONS ON LIABILITY EXPRESSED HEREIN SHALL APPLY EVEN IN THE EVENT OF THE
NEGLIGENCE, STRICT LIABILITY, FAULT OR BREACH OF THIS AGREEMENT (INCLUDING OTHER
LEGAL BASIS OF RESPONSIBILITY SUCH AS FUNDAMENTAL BREACH) OF THE PARTY WHOSE
LIABILITY IS LIMITED.
Section 14.4 WARRANTY LIMITATION.
THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND NO OTHER
WARRANTIES OF ANY KIND, WHETHER STATUTORY, ORAL, WRITTEN, EXPRESSED OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE SHALL APPLY. CONTRACTOR'S ONLY OBLIGATIONS ARISING OUT OF OR FOR
DEFECTIVE DESIGN, EQUIPMENT OR WORKMANSHIP, ARE THOSE STATED IN THIS AGREEMENT.
THE REMEDIES SET FORTH IN THIS AGREEMENT ARE THE EXCLUSIVE REMEDIES OF OWNER,
WHETHER THE CLAIMS OF OWNER ARE BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE
AND STRICT LIABILITY), OR OTHERWISE, FOR ANY FAILURE BY CONTRACTOR TO COMPLY
WITH ITS OBLIGATIONS FOR DEFECTIVE DESIGN, EQUIPMENT OR
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WORKMANSHIP, PROVIDED THAT THE LIMITATIONS OF REMEDIES SET FORTH IN THIS
SENTENCE SHALL NOT AFFECT CONTRACTOR'S INDEMNIFICATION OBLIGATIONS AS SET FORTH
IN THIS AGREEMENT.
Section 14.5 LIMITATION OF LIABILITY FOR TURBINES.
To the extent that General Electric Company is excused from liability with
respect to any Unit (as defined in the Turbine Contract) upon the first to
occur of: (a) [*], (b) [*] after Substantial Completion (as defined in the
Turbine Contract) of the Unit, or (c) [*] after Delivery (as defined in the
Turbine Contract) of the Unit, Contractor shall also be excused from
liability with respect to such Unit, provided that the foregoing shall not
excuse Contractor with respect to any liability which arises out of the acts
or omissions of Contractor, Subcontractors (other than General Electric
Company) or Lower-tier Subcontractors under this Agreement.
Section 14.6 SURVIVAL.
The limitations and waivers of liability and waivers of damages expressed in
this Article 14 shall survive the expiration or termination of this Agreement.
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Article 15. INSURANCE.
Section 15.1 PROOF OF COVERAGE.
Contractor shall provide to Owner and Construction Lender, and to such other
Persons as are reasonably requested by Owner or Construction Lender,
certificates of insurance for all coverages provided by Contractor in accordance
with this Article 15. If requested by Owner or Construction Lender, Contractor
will provide or make available to Owner or Construction Lender summaries of
insurance coverages for all policies required to be provided by Contractor in
accordance with this Article 15. All insurance policies provided by Contractor
shall be written with insurers acceptable to Owner and Construction Lender, and
the certificates or other documentation evidencing such insurance shall be
delivered to and approved by Owner and Construction Lender prior to proceeding
under the Limited Notice to Proceed, provided that such approval by Owner and
Construction Lender shall not be unreasonably withheld. All insurance
certificates and the underlying policies provided by Contractor shall state that
there will be thirty (30) Days advance written notice given to Owner and
Construction Lender before any material change in, termination, non-renewal or
cancellation of any insurance policy which is (i) required of the Contractor by
Section 15.4 or (ii) purchased by Contractor pursuant to Section 15.5. From the
date on which the Work is to commence pursuant to the Limited Notice to Proceed,
Contractor shall provide and maintain the required coverages with the indicated
limits as set forth in Section 15.4 and Contractor shall require and shall be
responsible to ensure that all Subcontractors provide and maintain insurance
with limits in accordance with the Contractor's usual practice and all such
Contractor and Subcontractor insurance shall be with insurance carriers
authorized to do business in the State of Georgia.
Section 15.2 INSURANCE POLICIES.
All insurance policies required under Section 15.4 shall be written on an
occurrence basis and shall, to the extent of Contractor's obligations under this
Agreement (i) (except for Workers' Compensation) include as additional insureds
Owner and its Affiliates, Construction Lender, Independent Engineer and such
other Persons as are reasonably requested by Owner or Construction Lender to the
extent of Contractor's indemnification obligations for third party
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bodily injury and property damage under this Agreement (ii) provide that such
insurance is primary as respects Contractor's operations without right of
contribution from any other insurance, except for All Risk Builder's Risk and/or
Property Insurance and/or marine cargo insurance covering the Work and/or other
property of the additional insureds which might otherwise be available to the
additional insureds, (iii) provide that to the maximum extent permissible by
law, the insurer shall waive all rights of subrogation against the Owner, the
partners in Owner and its Affiliates, their stockholders, officers and
directors, Construction Lender, Independent Engineer and such other Persons as
are reasonably requested by Owner or Construction Lender, and (iv) with respect
to the Liability Policies include a severability of interests provision
(separation of insured). Contractor and Owner (including their respective
insurer(s)) waive all rights against each other and their directors, officers,
partners, commissioners, officials, agents, Subcontractors, and employees for
losses or damages covered by property insurance during and after the completion
of the Work, except for vendors and suppliers as described in Section 15.5,
including losses or damages resulting from or caused by any Defects in Work,
excluding the cost of repairing any Defects in Work.
Section 15.3 LIMITATION OF LIABILITY.
Contractor's liability is not limited by the fact that this Agreement sets forth
the coverage and limits of the insurance policies required herein.
Section 15.4 COVERAGE AND LIMITS OF LIABILITY.
Contractor at its sole expense shall maintain the following types of coverage
and limits of liability, provided that the required limits may be satisfied by
any combination of primary or excess insurance in Contractor's sole discretion.
(a) (i) Worker's Compensation insurance which complies with the statutory
limits of the workers' compensation laws of the State of Georgia and (ii)
Employers Liability insurance with limits of ONE MILLION DOLLARS
($1,000,000) each accident/ONE MILLION DOLLARS ($1,000,000)disease policy
limit/disease each employee.
(b) Commercial General Liability insurance for Contractor's legal liability for
claims arising out of the engineering, procurement and construction
activities of the Contractor, Subcontractors and Lower-tier Subcontractors
with bodily injury (including
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death) and property damage of ONE MILLION DOLLARS ($1,000,000) per
occurrence and TWO MILLION DOLLARS ($2,000,000) in the aggregate, provided
that the aggregate limit, if any, shall apply separately to claims
occurring with respect to this Project. Such insurance shall include, but
not necessarily be limited to, coverage for broad form contractual
liability encompassing (subject to the policy terms and conditions) the
indemnification provisions of Article 17 of this Agreement, broad form
property damage liability, personal injury liability, independent
contractors, explosion, collapse, underground hazard property coverage,
products and completed operations liability, and sudden and accidental
pollution liability. All of the immediately foregoing coverages to extend
for the period of two (2) years after Contractor receives a Certificate of
Final Acceptance.
(c) Comprehensive Automobile Liability insurance with bodily injury (including
death) and property damage combined single limits of ONE MILLION DOLLARS
($1,000,000) per occurrence covering Contractor's legal liability for
vehicles owned, hired or non-owned utilized by Contractor, Subcontractors
and/or any Lower-tier Subcontractors in the performance of the Work.
(d) Excess Umbrella Liability insurance with a limit of NINETEEN MILLION
DOLLARS ($19,000,000) per occurrence and in the aggregate (provided that
the aggregate limit shall be fully available for Contractor's legal
liability to claims occurring with respect to this Project) in excess of
the limits of insurance provided in subparagraphs (a)(ii), (b) and (c)
above.
Section 15.5 ALL RISK BUILDER'S RISK COVERAGE
Owner shall pay for and provide All Risk Builder's Risk insurance including
coverage of the Work and the Plant during startup and testing, inland transit,
off-site storage and delayed opening coverage against all risk (except for those
items specifically excluded) of direct physical loss or damage to property of
every kind and description to be used in the fabrication, assembly,
installation, erection, or alteration of the Work, including domestic sourced
equipment and material and transported within the continental United States,
under an all risk builder's risk form, including the perils of fire and
lightning, the perils included in the standard
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extended coverage endorsement, and the perils of lifting, collapse, earthquake,
flood, debris removal and testing, from the date of Authorization to Proceed to
the date of Commercial Operation of the final Unit in form reasonably acceptable
to Contractor. Coverage under the All Risk Builder's Risk insurance shall remain
in place for each Unit following Commercial Operation of such Unit until Plant
Commercial Operation is achieved. Coverage shall not exclude resulting loss or
damage due to faulty workmanship, materials or design, except for related costs
for rectification of such faulty workmanship, materials or design. Coverage
shall be written on a completed value basis in an amount not less than 100% of
the replacement value of the Plant, including the Equipment under the Turbine
Contract and the Designated Equipment plus other values Owner requires to be
insured. The inland transit limit shall be written in an amount sufficient to
insure the value of the largest single shipment. The off-site storage limit
shall be in an amount necessary to insure the full replacement value of the
property or equipment not stored on the Plant Premises. Owner, Contractor and
Construction Lender shall be named insureds and shall be provided a waiver of
subrogation; provided that vendors or suppliers of Equipment will not be
provided a waiver of subrogation for faulty design or materials. The policy
shall include as insureds and provide coverage for Contractor, Subcontractors,
Lower-tier Subcontractors, Owner and Construction Lender against risks of
physical loss or damage to buildings, temporary structures, materials, supplies
and Equipment, subject to the following limits and deductibles:
<TABLE>
<S> <C>
Deductibles: Maximum Amount
Testing (to apply only to losses arising out of hot testing)
$ 500,000 each occurrence gas turbines
$ 100,000 each occurrence all other Equipment
Flood $ 100,000 each occurrence
Earthquake $ 100,000 each occurrence
Transit $ 25,000 each occurrence
All Other Perils $ 25,000 each occurrence
Delayed opening
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Loss limit: $72,000,000 each occurrence/aggregate 15 month delay opening period
Deductible: 30 Day waiting period
</TABLE>
If any loss or damage which is covered and payable by the All Risk Builder's
Risk policy or Ocean/Transit/Air Shipment Policy causes Contractor to fail to
achieve Commercial Operation by the Scheduled Date of Commercial Operation and
to be subject to liquidated damages under Section 13.1 and such delay is covered
under any delay in opening insurance, then, except for liquidated damages due
from Contractor during the delayed opening insurance deductible period,
liquidated damages due from Contractor under Section 13.1 for the period of
delay caused by such covered loss or damage shall be waived. The payment of
liquidated damages pursuant to Section 13.1 shall not be delayed beyond the time
specified in this Agreement because of any delay in the receipt of any insurance
proceeds from delayed opening coverage. Owner shall provide Contractor with a
sample policy of such All Risk Builder's Risk policy, including delayed opening
coverage at least ten (10) Business Days prior to the delivery to Contractor of
the Authorization to Proceed, provided that the failure of Owner to provide such
sample policy a full ten (10) Business Days prior to the delivery to Contractor
of the Authorization to Proceed shall not delay the effective date of the
Authorization to Proceed if Owner indemnifies Contractor for any loss which may
occur prior to the expiration of ten (10) Business Days after such delivery as a
result of coverage pursuant to the All Risk Builder's Risk policy which is not
in compliance with this Agreement. With respect to the Plant and all Equipment
covered by this Agreement, Contractor shall bear the risk of and be responsible
for paying for losses not covered by such All Risk Builder's Risk insurance,
including uninsured losses and deductibles, until risk of loss for such Plant or
Equipment transfers to Owner. Contractor and Owner shall fully cooperate in good
faith to meet all terms and conditions of the All Risk Builder's Risk policy
including claims reporting, claims adjustments with carrier and other provisions
of the policy. All insured claims, including delayed opening claims, will be
adjusted directly with the carrier by Owner and Contractor with the assistance
and approval of the Construction Lender. Any premiums for extension of the All
Risk Builder's Risk policy beyond the initial term of the policy shall be paid
by
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Contractor, provided that Owner shall be responsible for a proportionate share
of any premiums for an extension based upon the portion of such extension which
results from (i) delays caused by Owner and (ii) Force Majeure event(s) which
delay Owner's performance of its obligations under this Agreement. Owner shall
provide evidence of the insurance provided by Owner pursuant to this Section
15.5 to Contractor in such manner consistent with Section 15.1.
Section 15.6 MAJOR LOSS TERMINATION.
In the event of any major loss or damage to the Work, Owner shall have the
right, in its discretion, to apply the proceeds from the All Risk Builder's Risk
policy to repair the Work or Owner shall have the right to retain the proceeds
for its benefit and terminate this Agreement. In the event of termination, such
termination shall be treated as termination of this Agreement under Section
18(b).
Section 15.7 RISK OF LOSS.
Prior to any transfer of risk of loss to Owner as provided under this Agreement,
Owner will not, except for:
(a) intentional wrongful or negligent acts of Owner, and
(b) any "collateral damage" as defined in the Turbine Contract caused by
Equipment supplied by General Electric Company under the Turbine
Contract which is not covered by insurance and for which General
Electric Company is not responsible,
be accountable or responsible for any loss or damage to any part of the Plant,
the Plant Premises or Work, including the Designated Equipment even if purchased
in Owner's name, and then only to the extent such loss or damage is not covered
by the All Risk Builders' Risk policy, including but not limited to uninsured
losses and deductibles. Except for Owner's liability as provided in the
immediately preceding sentence, to the extent any loss or damage to any part of
the Plant, Plant Premises or Work is not covered by the All Risk Builders' Risk
insurance or Ocean/Transit/Air Shipment Policy, the risk of loss or damage to
any part of the Plant, Plant Premises or Work prior to Commercial Operation is
and shall be the sole obligation of Contractor, including risk of loss to the
Equipment, including the Designated
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Equipment, owned by Owner. On the date of Commercial Operation of a Unit, Owner
shall assume the risk of loss or damage to such Unit, unless such loss or damage
is caused by the negligent acts or omissions of Contractor, including any
failure of Contractor to act in accordance with Good Utility Practice, in which
event Contractor shall be responsible for applicable uninsured losses and
deductibles. On the date of Plant Commercial Operation, Owner shall assume the
risk of loss or damage to the Plant, Plant Premises and the Work.
Section 15.8 CONTRACTOR EQUIPMENT.
Contractor and its Subcontractors shall provide and maintain insurance or shall
self-insure, against loss or damage to all tools, construction equipment, mobile
equipment, protective fencing, scaffolding, temporary structures, which are
owned, rented, or leased by Contractor and its Subcontractors, property of
employees and any other similar owned property, the capital cost of which is not
included in the cost of the Plant.
Section 15.9 FOREIGN SOURCED EQUIPMENT.
Owner shall procure Ocean Transit and Air Cargo Insurance. If Contractor elects
to procure Equipment from foreign vendors (other than Equipment supplied by
General Electric Company) and if Owner reasonably determines that delayed
opening coverage is necessary to protect the interests of the Owner, Contractor
and Construction Lender, then the cost of the delayed opening coverage
(including insurance inspections) or the costs of any applicable riders
reasonably necessary to protect the interests of Owner, Contractor and
Construction Lender which are attributable to the ocean transit or air shipment
of the foreign sourced Equipment shall be paid by the Contractor. Contractor
shall provide to Owner a list and anticipated delivery schedule of all foreign
sourced Equipment which will involve ocean transit or air shipment that
Contractor expects to procure with respect to this Agreement for purposes of
determining the impact on the delayed opening coverage in sufficient time prior
to shipment for Owner and Construction Lender to determine and obtain the
insurance coverage required pursuant to this Section 15.9. No adjustment shall
be made to the Guaranteed Lump Sum Price for the amount of any payments for
insurance premiums to be paid by Contractor pursuant to this Section 15.9. Owner
shall be responsible for the cost of any applicable riders reasonably necessary
to protect the interests of Owner, Contractor and Construction Lender
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which are attributable to the ocean transit or air shipment of foreign-sourced
Equipment supplied by General Electric Company and for any deductibles required
by Ocean Transit and Air Cargo Insurance related to foreign-sourced Equipment
supplied by General Electric Company under the Turbine Contract prior to such
foreign-sourced Equipment being loaded on a carrier for transport within the
United States. Contractor shall be responsible for (i) any deductibles required
by Ocean Transit and Air Cargo Insurance related to foreign-sourced Equipment
supplied by Contractor or any Subcontractor or Lower-tier Subcontractor other
than General Electric Company and (ii) any deductibles required by Ocean Transit
and Air Cargo Insurance related to foreign-sourced Equipment supplied by General
Electric Company under the Turbine Contract after such foreign-sourced Equipment
is loaded on a carrier for transport within the United States. Owner shall
provide Contractor with a Certificate of Insurance for such ocean transit and
air cargo insurance and advise Contractor within thirty (30) days of any policy
changes or cancellations of said policy.
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Article 16. FORCE MAJEURE.
(a) Delay in or failure to carry out the duties imposed upon either party under
the Agreement shall not be deemed breaches of the Agreement and may be
cause for time extension if such delay or if such failure is caused by the
following causes and no others: [*] Force Majeure means any of the above
events if such event in fact materially interferes with the performance of
the obligations of Contractor or Owner (except payment) pursuant to this
Agreement. A party claiming Force Majeure shall give notice thereof to the
other party and shall make reasonable attempts to remedy the cause or
causes constituting the Force Majeure, keeping the other party reasonably
informed. Such Notice shall be given as promptly as possible but in no
event later than seven (7) Days after becoming (or when reasonably should
have become) aware of such occurrence or event. Except as provided in
Section 16(d), there shall be no increase in the Guaranteed Lump Sum Price
on account of an event of Force Majeure, however time extensions may be
granted in accordance with Section 16(b). Only extensions of schedule shall
be granted. In addition to the above requirements, to qualify for a time
extension to the Scheduled Date of Commercial Operation, a Force Majeure
event, including an Excusable Delay pursuant to Section 16(c), must satisfy
all of the requirements of Section 16(b). A Force Majeure event includes
the failure of a Subcontractor to
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complete obligations of this Agreement in a timely manner if such failure
is itself due to a Force Majeure event as defined in this Section 16(a).
Force Majeure shall include fire and explosion, provided that such fire or
explosion did not occur as a result of the negligence or intentional acts
of the party claiming Force Majeure, its employees, agents, or
subcontractors or did not occur as a result of the failure of the Equipment
unless such failure was beyond the control of the claiming party, its
employees, agents or subcontractors. The notice described shall include
documentation as to the cause of the fire or explosion and a statement from
all facts available that such fire or explosion was not caused by the
negligence or intentional acts of the declaring party, its employees,
agents or subcontractors. If the non-declaring party believes that the fire
or explosion does not meet the requirements of this Section 16(a) or was
caused by the negligence or intentional acts of the declaring party, its
employees, agents, or subcontractors or by the failure of Equipment (as
described above), then that non-declaring party shall so notify the
declaring party. Abnormally severe weather conditions are defined as only
conditions which are at the Plant Premises and are shown to be conditions
which are more severe than any event in the most recent ten (10) year
historical profile of U.S. Meteorological Society weather data from the
nearest reporting station to the Plant Premises.
(b) If either party, because of a Force Majeure event, is rendered wholly or
partly unable to perform any of its obligations under this Agreement (other
than an obligation to pay sums due to the other party), that party shall be
excused from whatever performance is affected by the Force Majeure event to
the extent so affected. Time extensions will be granted, pursuant to
Section 4, to the extent of the delay actually caused, provided that:
(i) as a condition of Force Majeure the non-performing party must provide
written notice, no later than seven (7) Days after the beginning of
the Force Majeure event and delineate its effect on that party's
performance including its specific effect on critical activities and
when (date and time) the non-performing party is anticipating that it
will be able to resume performance;
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and,
(ii) a Force Majeure event shall not entitle the Contractor to an extension
of the Scheduled Date of Commercial Operation unless such event
proximately causes a change in the ability of Contractor to achieve
Commercial Operation by the Scheduled Date of Commercial Operation;
and,
(iii) the period of non-performance shall be of no greater scope and of no
longer duration than is required by the Force Majeure event; and,
(iv) unless otherwise agreed to by Owner, in writing, the non-performing
party shall continue to perform the Work in good faith and with due
diligence and use all reasonable efforts to limit delays caused by
such Force Majeure event and remedy Contractor's inability to perform
during and after the Force Majeure event; and
(v) when the non-performing party is able to resume performance of its
obligations under this Agreement, that party shall give the other
party written notice to that effect; and,
(vi) it is the duty of the claiming party to prove all the elements of
Force Majeure including (i) specific action taken to work around or
mitigate the impact, (ii) specific event dates, durations and logic to
support the claim and (iii) specific cause for the claim of Force
Majeure as set forth in this Article 16 and to provide written
documentation of such proof to the other party as soon as reasonably
possible. Owner shall have the right to analyze and Contractor shall,
upon Owner's request provide, (a) the most recent Contractor's Work
Schedule prepared prior to the Force Majeure event (the "Old
Schedule"), (b) Contractor's data sufficient to support the Old
Schedule, (c) the revised Contractor's Work Schedule prepared after
such Force Majeure event (the "New Schedule"), (d) Contractor's data
sufficient to support the New Schedule and (e) information concerning
all changes, events and occurrences affecting the Contractor's Work
Schedule from the
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date of the Old Schedule through the date of the New Schedule. A party
is not required to grant or deny a request for Force Majeure until
such documentation has been supplied.
(c) If there is an event which meets all of the requirements of an Excusable
Delay under the Turbine Contract and the supplier of the turbines under the
Turbine Agreement is not liable for a delay in delivery, as provided in the
Turbine Agreement, Contractor shall not be liable to Owner for the same
delay in delivery. A time extension will be granted pursuant to Article 4,
to the extent of the delay caused provided that there is compliance with
Section 16(b)(i) through (vii), except for the notice requirement in (i),
and such Excusable Delay must be an event beyond the control of Contractor
and not caused by an act or a failure to act on the part of Contractor, its
employees, agents or Subcontractors.
(d) If one or more Force Majeure events cause delays of more than forty-five
(45) Days, in the aggregate, then beginning with costs incurred for the
forty-sixth (46th) and following Days of delay, Owner shall reimburse
Contractor for its reasonable out-of-pocket costs actually and necessarily
incurred as a result of such Force Majeure event(s), including
demobilization, remobilization, insurance, standby and escalation costs.
Contractor may submit invoices to Owner for such costs monthly along with
such supporting information and documentation as Owner may reasonably
request. Owner shall pay such invoices within thirty (30) Days after
receipt.
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Article 17. INDEMNIFICATIONS.
Section 17.1 INDEMNIFICATION OF OWNER.
Contractor shall defend, protect, indemnify, and save harmless Owner, the
partners in Owner, Construction Lender, Independent Engineer and their
respective Associated Companies and Affiliates, their stockholders, officers and
directors; and PECO, its successors and assigns, and the respective
stockholders, officers and directors of PECO; (the "Indemnitees") from and
against any and all damages, losses, liabilities, claims, causes of action of
every kind and character (including strict liability and tort liability)
expenses (including reasonable attorney fees), demands, judgments, and
settlements, arising in favor of any Person (including Subcontractors'
employees, Lower-tier Subcontractors' employees, Contractor's employees and
PECO's employees) for bodily injury, death or damage to property of any Person
(other than an Indemnitee) arising out of the operations of Contractor,
Subcontractors, Lower-tier Subcontractors (and their respective employees,
officers, etc.), including performance or non-performance of the Work. If such
damage or loss was caused by or results from the concurrent negligence of
Contractor and/or Contractor's agents or employees and any Indemnitee,
Contractor shall indemnify such Indemnitee only to the extent of the negligence
of Contractor and/or Contractor's agents or employees.
Section 17.2 INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION.
Contractor shall fully indemnify and save harmless and defend Owner, the
partners in Owner, Construction Lender, Independent Engineer, PECO and their
respective directors, officers, agents and employees (the "Owner IP Indemnified
Parties") from and against any and all damages awarded against any Owner IP
Indemnified Party by a court of competent jurisdiction or arising out of a
settlement made in accordance with this Article 17 to the extent that the claim
is based on the infringement (or assertions of infringement) of any patent
rights, copyrights or other intellectual property right, with respect to
Equipment, materials, designs, techniques, processes and information supplied or
used by Contractor or any Subcontractor or Lower-tier Subcontractor in
performing the Work hereunder other than any such Equipment, material, designs,
techniques, processes and information provided by the Owner IP Indemnified
Parties. If, in any suit or claim relating to the foregoing, a
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temporary restraining order or preliminary injunction is granted, Contractor
shall make every reasonable effort to secure the suspension of the injunction or
restraining order. If, in any such suit or claim, the Plant or any part,
combination or process thereof, is held to constitute an infringement and its
use is enjoined, Contractor shall immediately (a) pay the reasonable direct
out-of-pocket costs and expenses to secure a license to use such infringing
work, replace the infringing work or modify the same so that it becomes
non-infringing, and (b) make every reasonable effort to secure for Owner a
license, at no cost to Owner, authorizing continued use of the infringing work.
If Contractor is unable to secure such license within a reasonable time,
Contractor shall, at its own expense and without impairing performance
requirements, either replace the affected work, or part, combination or process
thereof, with non-infringing components or parts or modify the same so that they
become non-infringing.
Section 17.3 LIMITATION ON CONTRACTOR'S INDEMNIFICATION.
In no event shall Contractor's obligation to indemnify Owner under this Article
17 for any actual or alleged infringement attributable to any Equipment supplied
by General Electric Company or services performed by General Electric Company
pursuant to the Turbine Contract be greater than the obligation of General
Electric Company to indemnify Contractor with respect to such matter under the
Turbine Contract.
Section 17.4 NOTICE OF CLAIM FOR INDEMNIFICATION.
Promptly upon knowledge by Owner of any claim or notice of the commencement of
any action, administrative or legal proceeding, or investigation as to which the
indemnities provided for in Sections 17.1 or 17.2 may apply, Owner shall notify
Contractor in writing of such fact; provided that the failure of Owner to give
any such notice promptly shall not excuse Contractor from its indemnification
obligations hereunder, except to the extent that Contractor has been directly
and materially adversely affected by such late notice. With respect to all
matters which are subject to indemnification under Article 17, Contractor shall,
at its expense (including attorneys' fees and expenses, all other costs and
expenses of litigation and costs of settlement) assume, on behalf of Owner and
any other indemnified party, and conduct with due diligence and in good faith,
the defense thereof with counsel
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reasonably satisfactory to Owner; provided that Owner shall have the right to be
represented therein by advisory counsel of its own selection and at its own
expense; and provided further, that if the defendants in any such action include
both the Owner and Contractor and Owner shall have reasonably concluded that
there may be legal defenses available to it which are different from, additional
to, or inconsistent with, those available to Contractor, Owner shall have the
right to select separate counsel to participate in the defense of such action on
its own behalf. Owner shall, at the request of Contractor, provide all
reasonably available assistance in the defense or settlement of any such claim,
action, proceeding or investigation and all reasonable out-of-pocket costs and
expenses incurred by Owner in connection with the defense or settlement of any
such claim, action, proceeding or investigation shall be reimbursed by
Contractor promptly upon demand therefor. Neither Owner nor Contractor shall
settle or compromise any claim, action or proceeding without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
Section 17.5 FAILURE TO DEFEND.
Notwithstanding anything to the contrary in this Article 17, if any claim,
action , proceeding or investigation arises as to which the indemnities provided
for in Sections 17.1 or 17.2 apply, and Contractor fails to assume the defense
of such claim, action, proceeding or investigation, then Owner may in good
faith, at the expense of Contractor, contest or reasonably settle such claim. To
the extent Contractor's indemnity obligation arises out of the Equipment or
services furnished under the Turbine Contract, Contractor's indemnity obligation
shall be no greater than the corresponding indemnity obligation of the
Subcontractor under the Turbine Contract.
Section 17.6 INDUSTRIAL INSURANCE WAIVER.
In any action against Owner and any other Person indemnified in accordance with
this Article 17, by any employee of Contractor, Subcontractors, Lower-tier
Subcontractors, agents, or anyone directly or indirectly employed by any of
them, the indemnification obligation of this Article 17 shall not be limited by
a limit on the amount or type of damages, compensation, or benefits payable by
or for Contractor or any Subcontractor or Lower-tier Subcontractor under the
Georgia Workers' Compensation Act, or any other employee benefit acts. In
addition,
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Contractor waives any immunity provided under the Georgia Workers' Compensation
Act; however, such waiver shall be effective only as to Owner and any other
indemnitees and not as to any employee of Contractor, Subcontractors, Lower-tier
Subcontractors, agents or anyone directly or indirectly employed by any of them.
This provision has been mutually negotiated by the parties.
Section 17.7 SURVIVAL.
The provisions of this Article 17 shall survive Final Acceptance and the
termination of this Agreement.
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Article 18. TERMINATION - SUSPENSION BY CONTRACTOR - DISPUTE PROCEDURE.
Owner shall have the right to terminate this Agreement for any reason in its
sole and absolute discretion upon written notice to the Contractor as follows:
(a) TERMINATION PRIOR TO AUTHORIZATION TO PROCEED.
Prior to the Authorization to Proceed, Owner may terminate this Agreement
without further recourse by Contractor to Owner except reimbursement
pursuant to the schedule of Cancellation Charges as set forth in Exhibit
"C" and Contractor shall be entitled to receive no other payment or
reimbursement from the Owner. If an Authorization to Proceed is not given
to Contractor on or before December 31, 2000, either party may, by written
notice to the other party, terminate this Agreement, without further
liability except that Contractor shall be entitled to reimbursement
pursuant to the schedule of Cancellation Charges as set forth in Exhibit
"C.
(b) TERMINATION SUBSEQUENT TO AUTHORIZATION TO PROCEED.
Following the issuance of the Authorization to Proceed, Owner may terminate
this Agreement for convenience. In the event of termination of this
Agreement by Owner for convenience following issuance of the Authorization
to Proceed, for any reason other than Contractor's default, Contractor
shall have no recourse against Owner except as follows: Contractor shall be
entitled to receive reimbursement from Owner of an amount equal to the sum
of: (i) that portion of the Guaranteed Lump Sum Price which is applicable
to the Work performed to the date of termination, as determined in
accordance with Monthly Progress Reports and which has not been previously
paid to Contractor (including release of Owner's Security on such amounts,
subject to Owner's right to draw upon and use Owner's Security for the
satisfaction of any threatened or existing liens); (ii) the reasonable
out-of-pocket costs actually and necessarily incurred by Contractor in
withdrawing its equipment and personnel from the Plant Premises and
otherwise demobilizing; and (iii) the actual, reasonable and necessary
costs reasonably incurred by Contractor in terminating those contracts, not
assumed by Owner, with Subcontractors pertaining to the Work. Contractor
shall document any cost claimed by it under this Section and the necessity
of incurring such costs to Owner's reasonable
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satisfaction and shall supply Owner with copies of all Subcontractor
invoices covering the amounts claimed as costs under this Section.
Contractor shall submit an invoice to Owner for the amount of reimbursement
claimed by Contractor with all supporting information and requisite
documents. Owner shall pay such invoice no later than twenty-five (25) Days
after receipt unless Owner disputes certain elements thereof, in which
event only the undisputed portion of such invoice will be paid within such
period.
(c) EFFECT OF TERMINATION OTHER THAN FOR CONTRACTOR'S DEFAULT. In the event of
any termination by Owner pursuant to Section 18(a) or (b), Contractor
shall, upon receipt of the notice of termination, immediately cease all
performance including services undertaken pursuant to any Limited Notice to
Proceed, and all other acts on Owner's behalf in connection with this
Agreement. Contractor shall thereafter commit to no further expenses or
costs other than as necessary to demobilize and safeguard the Work nor
shall Contractor otherwise obligate Owner. All (i) Work and Equipment
delivered to the Plant Premises, (ii) other Equipment which Contractor can
arrange to deliver to Owner, and (iii) contracts, subcontracts, or Drawings
made or entered into by Contractor in connection with this Agreement,
including such matters undertaken pursuant to any Limited Notice to
Proceed, shall be delivered to Owner within ten (10) Business Days after
receipt of such notice. In addition, if so directed by the Owner,
Contractor shall to the extent possible assign, cancel, rescind or revoke
any subcontracts or orders for the procurement of Equipment and shall
terminate the subcontracts and orders as directed by the Owner.
Section 18.1 TERMINATION BY OWNER FOR CONTRACTOR'S DEFAULT.
(a) The following, upon the giving of proper notice by Owner, are Contractor
defaults:
(i) Contractor refuses or fails to timely perform the Work;
(ii) Contractor refuses or fails to supply enough properly skilled workers,
or proper materials or Subcontractors to timely perform the Work;
(iii) Contractor fails to make payment (not reasonably in dispute) to
Subcontractors for materials or labor in accordance with the
respective
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agreements pertaining to the Work between the Contractor and
Subcontractors, provided that if Contractor contends any payment due
to Subcontractors for materials or labor is reasonably in dispute, the
failure by Contractor to make such payment shall not be a default
under this paragraph if a lien is not filed in connection with such
dispute, or if filed, is removed by a lien bond or other acceptable
arrangement by Contractor within twenty (20) Days of a written request
by Owner or Construction Lender;
(iv) Contractor is in violation or breach of any Applicable Laws,
Applicable Insurance Policies or orders of a public authority having
jurisdiction;
(v) Contractor fails to comply promptly with rejection notices or notices
to correct Defects; (vi) Contractor causes or permits any repudiation,
lapse or cancellation of performance security;
(vii) Contractor fails to commence Work promptly following Authorization to
Proceed under this Agreement;
(viii) Contractor assigns this Agreement in violation of the terms of this
Agreement;
(ix) Contractor fails to pay liquidated damages when due; or
(x) Contractor otherwise materially breaches this Agreement. A material
breach of this Agreement by Contractor includes those acts or non-acts
of Contractor specifically designated herein as material breaches or
acts of default.
(b) If Contractor does not cure any default under Sections 18.1(a)(i) through
(x) within thirty (30) Days after notice or, if the default is such that it
cannot be cured within such period of time and Contractor does not promptly
commence action which is calculated to cure such default within a
reasonable period of time and thereafter diligently pursue such action to
completion and achieve such cure within ninety (90) Days after such notice,
Owner shall have the right to terminate this Agreement by written notice to
Contractor without prejudice to any remedies of Owner by reason of
Contractor's default.
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(c) Owner may terminate this Agreement for Contractor's default, without
prejudice to any remedies of Owner, by giving notice to Contractor, if
Contractor fails to achieve Commercial Operation of any Unit within one
hundred eighty (180) Days after the Scheduled Date of Commercial Operation
for such Unit.
(d) Whenever this Agreement is terminated for Contractor's default and if Owner
decides to complete the Work:
(i) Owner may then without prejudice to any other rights or remedies of
the Owner also: (a) take possession of the Plant Premises and of all
the Equipment and Contractor's equipment and all materials, tools, and
construction machinery thereon which may be owned by the Contractor
for use by Owner or its designee to complete the Work; (b) mandate
assignment by Contractor of other contracts or subcontracts to Owner
or its designee for Work; and (c) finish the Work by whatever
reasonable method Owner, in its absolute discretion, may deem
expedient.
(ii) Contractor shall not be entitled to receive further payment.
(iii) Notwithstanding any provision in this Agreement to the contrary and
without waiving, limiting or releasing any other right, remedy or
recourse which Owner may have, Contractor shall also be liable to
Owner for the additional costs of debt service (from and after the
date of termination), as hereinafter defined, plus all costs and
expenses reasonably incurred and damages sustained, except as limited
by Section 14.2, by Owner including those which are included in
continuing construction of the Plant to Final Acceptance and in
correcting Defects in the Work and paying for the repair and/or
replacement of items under any warranty. The additional costs of debt
service for which Contractor shall be liable to Owner under this
Section shall be the additional interest accrued on the Construction
Financing prior to Final Acceptance which is incurred by Owner as a
result of the default of Contractor for which Owner terminates this
Agreement.
(e) Subject to the limitations in Section 14.2 and Section 14.4, Owner retains
its
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right to all remedies at law or in equity, including remedies specifically
provided in this Agreement, in the event this Agreement is terminated for
Contractor's default.
Section 18.2 TERMINATION FOR INSOLVENCY OF A PARTY.
Except as is otherwise provided by law and subject to the rights of the
Construction Lender to cure such default, either party may terminate this
Agreement by written notice to the other party if the other party: (i) commences
a voluntary proceeding (including a petition of bankruptcy, winding-up,
moratorium or analogous relief) under any jurisdiction's Applicable Laws
relating to bankruptcy, insolvency or reorganization law; (ii) has a bankruptcy,
insolvency or reorganization proceeding filed against it and fails to have such
proceeding stayed or vacated within forty-five (45) Days after such filing;
(iii) upon the end of any such stay fails to have such involuntary proceeding
vacated within thirty (30) Days thereafter; (iv) admits the material allegations
of any petition in any bankruptcy filed against it; (v) is adjudged bankrupt; or
(vi) is the subject of a winding-up order made by a court with jurisdiction over
it which is not stayed or reversed by a court of competent jurisdiction with
thirty (30) Days; or (vii) makes a general assignment for the benefit of its
creditors (assignment for construction financing excluded), or a receiver is
appointed for all or a substantial portion of such party's assets and such
receiver is not discharged within sixty (60) Days after his appointment.
Pursuant to this Section, any such termination of this Agreement shall be
considered to be by reason of anticipatory breach of contract and such
termination shall be without prejudice to any rights and remedies that the
terminating party may have by reason of such anticipatory breach.
Section 18.3 NONPAYMENT BY OWNER.
(a) DEFAULT.
Owner shall be in default to Contractor if Owner fails to timely pay
Contractor any undisputed amounts due pursuant to the terms of this
Agreement following receipt by Owner from Contractor of a written notice of
such default. An amount disputed by Owner must be disputed in good faith.
Owner shall be allowed thirty (30) Days from receipt of a notice of default
to remedy such default and interest will be charged on all
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late payments from the date due at the annual prime rate of The Chase
Manhattan Bank on the date due, plus one percent (1%), but not in excess of
the lawful maximum rate.
(b) TERMINATION - SUSPENSION BY CONTRACTOR.
In the event of a default as set forth in Section 18.3(a) above, and after
fifteen (15) Days from receipt of the notice of Default, if Owner has
failed to pay the amount(s) due pursuant to the terms of this Agreement,
Contractor shall have the right to suspend the Work. If Contractor elects
to suspend the Work and such suspension is subsequently removed and the
Work is continued by Contractor, the Guaranteed Lump Sum Price will be
increased by an amount equal to the increase, if any, in the cost actually
incurred by Contractor and demonstrated to the reasonable satisfaction of
Owner by Contractor to be over and above those in the Guaranteed Lump Sum
Price, but only to the extent such costs are reasonable and necessary and
result directly from such suspension. If Contractor suspends performance of
Work and, unless Owner has exercised its right to require assignments,
Contractor shall notify Subcontractors of such suspension and otherwise
proceed in accordance with the provisions of Section 19(b)(ii) and the
Scheduled Date of Commercial Operation shall be extended on a Day-for-Day
basis by Change Order for the number of Days of delay caused by the
suspension. Owner shall have the right to cure at any time during
suspension and Contractor shall immediately proceed with the Work,
provided, however, if Owner has not cured such default within seventy-five
(75) Days after Contractor's suspension, Contractor shall have the right to
terminate this Agreement. In the event of termination of this Agreement by
Contractor, Contractor shall be paid the costs actually incurred by
Contractor and demonstrated to the reasonable satisfaction of Owner by
Contractor to be over and above those incurred and included in the
Guaranteed Lump Sum Price, but only to the extent such costs are reasonable
and necessary and result directly from such suspension and Contractor shall
be entitled to receive reimbursement from Owner as provided in Section
18(b) and Contractor shall be subject to the obligations of Contractor as
provided in Section 18(c). The Contractor will provide written notice to
Owner twenty-four (24) hours prior to such suspension or termination.
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Section 18.4 LIMITATION OF TERMINATION AND SUSPENSION BY CONTRACTOR.
Except as specifically provided in Sections 18.2, 18.3 and 20.2(d), Contractor
shall have no right to terminate this Agreement or suspend the Work for any
reason.
Section 18.5 DISPUTE - CONTINUING AGREEMENT PERFORMANCE.
In the event of a dispute between Owner and Contractor with respect to the
interpretation of this Agreement or the performance required by this Agreement,
including any dispute which may result in a claim, (a "Dispute"), the aggrieved
party shall notify the other in writing of the Dispute then existing (the
"Dispute Notice"). In order for a party to proceed under this Section, the
Dispute Notice must specifically state that the aggrieved party is invoking the
Dispute procedure of this Section 18.5. The parties shall then make a good faith
attempt to resolve the Dispute, first through direct discussions between their
respective representatives, provided that the provisions of this Section 18.5
shall not override, delay or in any way prevent termination of this Agreement by
Owner pursuant to Section 18 or 18.1 or by Contractor pursuant to Section 18.3
(except with respect to amounts disputed in good faith as provided in Section
18.3(a)). In the event a Dispute is not resolved within thirty (30) Days
following the date of the Dispute Notice, the parties agree to proceed to
mediation under the Construction Industry Mediation Rules of the American
Arbitration Association and to conclude such mediation within ninety (90) Days
following the date of the Dispute Notice. If the parties are unable to agree
upon a mutually convenient place for the mediation, the mediation shall take
place at the offices of the AAA in Atlanta, Georgia. Each party will pay its own
costs, plus an equal share of the cost of the mediator and mediation facilities.
If any Dispute is not resolved by mediation, then either party in its sole
discretion may invoke litigation, provided that failure to invoke litigation
shall not be a waiver of any such Dispute except as otherwise provided in this
Agreement. During any mediation or litigation which arises out of a Dispute, all
parties will continue to proceed pursuant to the provisions of this Agreement
without prejudice to the rights of Owner or Contractor to terminate as provided
herein. In addition to the specific rights of termination and suspension as set
forth in this Agreement and except as limited in this Agreement, Owner or
Contractor shall have also available the remedies, among others, of an action
for damages, restraining order, temporary injunction, permanent injunction, or
specific
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performance of all or any provision hereof together with any other rights
accruing to it at law or in equity.
Section 18.6 PAYMENT REQUIREMENTS.
In the event of termination by Owner pursuant to Section 18.1 or 18.2, Owner's
Security shall remain subject to the rights of Owner and to the requirements set
forth in Section 3.1(f), provided that in the event of termination pursuant to
Section 18 (a) or (b), termination by Contractor pursuant to Section 18.2, or
termination pursuant to Section 18.3, Owner shall pay or release all Owner's
Security to Contractor.
Section 18.7 TERMINATION - SUSPENSION OF THE TURBINE CONTRACT.
Unless Contractor has exercised its rights to terminate this Agreement pursuant
to Section 18.2 or 18.3, Contractor shall not terminate or suspend the Turbine
Contract without the prior written consent of Owner. In the event Contractor has
terminated this Agreement pursuant to Section 18.2 or 18.3 and if Contractor
intends to terminate the Turbine Contract, Contractor shall give Owner fifteen
(15) Days notice of its intent to terminate the Turbine Contract and if Owner
does not exercise its right to require the Contractor to assign the Turbine
Contract to Owner within such fifteen (15) Day period, Contractor shall have the
right to terminate the Turbine Contract. Upon such termination, Owner will pay
to General Electric Company any amounts due to General Electric Company pursuant
to Section 14.1 of the Turbine Contract, subject to compliance with the
procedures set forth in Section 3.1(d)(ii) of this Agreement.
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Article 19. SUSPENSION OF WORK BY OWNER.
Section 19.1 SUSPENSION OF WORK BY OWNER.
(a) Without prejudice to any other right of Owner to terminate this Agreement
as provided in Article 18, following the issuance of the Authorization to
Proceed or any Limited Notice to Proceed, Owner has the right to suspend
Work for convenience upon giving seven (7) Days prior notice to Contractor
("Suspension Notice"). Seven (7) Days after receipt of a Suspension Notice,
Contractor shall suspend performance of all Work and, unless Owner has
exercised its right to require assignments, Contractor shall notify
Subcontractors of said suspension and the Scheduled Date of Commercial
Operation shall be extended on a Day-for-Day basis by Change Order for the
number of Days of delay caused by the suspension; provided, that Contractor
may be required by Owner to continue to receive Equipment and if Owner
elects to require Contractor to do so, then Owner will give Contractor
notice of such election at the time the Suspension Notice is given.
(b) In the event of a suspension of this Agreement by Owner, the rights and
obligations of the parties shall be governed by the following:
(i) The period of suspension shall begin seven (7) Days after the receipt
of said Notice of Suspension.
(ii) Except as specifically set forth in this Agreement, neither Owner nor
Contractor shall be required to take further action regarding
performance under this Agreement. Owner and Contractor shall cooperate
in good faith to maintain the commitments of Subcontractors and
Lower-tier Subcontractors relating to this Agreement; provided, that
Contractor shall not incur any obligation or liability, whether
financial, performance or otherwise for which Owner shall be liable,
with respect to any of Contractor's efforts to maintain such
commitments. If Owner so elects, notwithstanding such suspension,
Contractor shall take reasonable actions to preserve the work and any
equipment provided that Owner shall pay a reasonable fee to Contractor
for
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such services.
(iii) Subject to Owner's rights to obtain assignments from Contractor of
orders and subcontracts as provided in this Agreement, Contractor
shall suspend subcontracts including orders, and in the event
Contractor is unable after its best efforts to suspend any
subcontracts, Contractor may, with Owner's written consent, which
shall not be unreasonably withheld, cancel such subcontracts and other
commitments made to the date of suspension.
(iv) The Guaranteed Lump Sum Price will be increased by an amount equal to
the increase, if any, in the costs actually incurred by Contractor and
demonstrated to the reasonable satisfaction of Owner by Contractor to
be over and above those in the Guaranteed Lump Sum Price, but only to
the extent such costs are reasonable and necessary and result directly
from Owner's suspension under this Article 19. Owner will notify
Contractor at least seven (7) Days before the date when the Work shall
start again. Contractor will resume full performance of the Work
within such seven (7) Day period, unless Owner and Contractor
otherwise mutually agree in writing.
(v) Owner shall continue to make payment in accordance with Article 3 for
Work which Owner and Contractor agree in writing was satisfactorily
performed and for which Contractor has not been previously paid unless
Construction Lender refuses to make funds available for such payment,
in which event Contractor shall be entitled to receive interest on the
unpaid amount at the annual prime rate of The Chase Manhattan Bank on
the date due, plus one percent (1%), but not in excess of the lawful
maximum rate. Notwithstanding the foregoing sentence, in the event
that General Electric Company presents a valid invoice to Contractor
under the Turbine Contract, Owner shall be responsible for the timely
payment to General Electric Company of the amount of such invoice.
(vi) In the event that Owner is current on payments to Contractor for Work
which Owner and Contractor agree in writing was satisfactorily
performed, Contractor
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shall not terminate this Agreement prior to the expiration of two (2)
years after the date of such suspension; provided that if Owner does
not pay Contractor for Work, which Owner and Contractor agree in
writing was satisfactorily performed, within ninety (90) Days of the
date of such suspension, Contractor and Owner shall negotiate
provisions for the payment of Contractor or termination of this
Agreement.
(vii) Contractor shall be paid the reasonable out-of-pocket costs actually
and necessarily incurred by Contractor in withdrawing its equipment
and personnel from the Plant Premises and otherwise demobilizing as a
result of such suspension. Contractor shall document any cost claimed
by it for demobilization and the necessity of incurring such costs to
Owner's reasonable satisfaction. Contractor shall submit an invoice to
Owner for the amount of reimbursement claimed by Contractor for
demobilization with all supporting information and requisite
documents. Owner shall pay such invoice no later than forty-five (45)
Days after receipt unless Owner disputes certain elements thereof, in
which event only the undisputed portion of such invoice will be paid
within such period. During the period of such suspension Contractor
shall invoice Owner monthly for standby charges actually and
necessarily incurred by Contractor and Contractor shall document any
cost claimed by it for standby and the necessity of incurring such
costs to Owner's reasonable satisfaction. To the maximum extent
possible Contractor shall mitigate standby charges to Owner. Owner
shall pay such invoice for standby charges no later than forty-five
(45) Days after receipt unless Owner disputes certain elements
thereof, in which event only the undisputed portion of such invoice
will be paid within such period. Upon removal of such suspension
Contractor shall immediately remobilize. Contractor shall be paid the
reasonable out-of-pocket costs actually and necessarily incurred by
Contractor in remobilizing. Contractor shall document any cost claimed
by it for remobilization and the necessity of
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incurring such costs to Owner's reasonable satisfaction. Contractor
shall submit an invoice to Owner for the amount of reimbursement
claimed by Contractor for remobilization with all supporting
information and requisite documents. Owner shall pay such invoice no
later than forty-five (45) Days after receipt unless Owner disputes
certain elements thereof, in which event only the undisputed portion
of such invoice will be paid within such period. (v)
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Article 20. LIMITED NOTICE TO PROCEED; AUTHORIZATION TO PROCEED.
Section 20.1 LIMITED NOTICE TO PROCEED.
Owner has given Contractor a Limited Notice to Proceed, effective September 10,
1999. The scope of Work to be performed pursuant to the Limited Notice to
Proceed is the Work described in Exhibit "C."
Section 20.2 AUTHORIZATION TO PROCEED.
(a) REQUIREMENT OF AUTHORIZATION TO PROCEED. This Agreement is not
authorization for Contractor to proceed with performance of the Work.
Contractor shall not obligate Owner in any way pursuant to this Agreement,
nor shall Contractor perform any Work at the Plant Premises or permit any
Subcontractor or Lower-tier Subcontractor to perform any Work at the Plant
Premises, except as specifically authorized under a Limited Notice to
Proceed as set forth in Section 20.1, until the Authorization to Proceed
has been given by Owner. Prior to or concurrent with delivery of the
Authorization to Proceed to Contractor, Owner shall (i) furnish to
Contractor reasonably satisfactory evidence that Owner has arranged
adequate financing for the Project, or, in the alternative, provide
Contractor with adequate security, in a form reasonably acceptable to
Contractor, for all payments which may become due from Owner under this
Agreement prior to close of financing for the Project, and (ii) assign, or
cause to be assigned, to Contractor, the Turbine Contract, provided that
upon the termination of this Agreement prior to close of financing for the
Project, Contractor shall, at the request of Tenaska, Inc., assign the
Turbine Contract to Tenaska, Inc. or a party to be designated by Tenaska,
Inc., in exchange for a release of all obligations of Contractor under the
Turbine Contract, as applicable. Contractor shall deliver to Owner and
Construction Lender copies of (i) any technical information letters or
other information delivered to Contractor pursuant to Section 22.11 of the
Turbine Contract, any Dispute Notices (as defined in the Turbine Contract)
delivered or received by Contractor pursuant to Section 22.10 of the
Turbine Contract and (iii) all
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Documentation (as defined in the Turbine Contract) delivered by General
Electric Company pursuant to Section 20.1 of the Turbine Contract.
(b) AUTHORITY.
The Authorization to Proceed, when given to Contractor, grants Contractor
the authority to proceed with performance pursuant to all provisions of
this Agreement. Subject to compliance by Owner with Section 20.2(a),
Authorization to Proceed shall be effective at the time properly given to
Contractor in the manner set forth in Section 27.2. Upon issuance of the
Authorization to Proceed, Contractor will execute an Affidavit of
Commencement of Construction in the form attached to Exhibit "N," setting
forth as the date of commencement of Work at the Plant Premises a date
which is on or after the date on which the Authorization to Proceed is
given to Contractor.
(c) TIME EXTENSIONS.
Solely for the purpose of determining the Scheduled Date of Commercial
Operation for any Unit and dates for Owner's obligations pursuant to
Section 5(j)(3), upon Owner delivering the Authorization to Proceed to
Contractor, the Authorization to Proceed Date shall be deemed to be the
later of (a) the date on which the Authorization to Proceed was actually
delivered to Contractor and (b) one hundred thirteen (113) Days after the
date on which the Limited Notice to Proceed was delivered to Contractor,
provided that if a Limited Notice to Proceed has not been delivered to
Contractor prior to the delivery of the Authorization to Proceed, the
Authorization to Proceed Date shall be deemed to be one hundred thirteen
(113) Days after the date on which the Authorization to Proceed was
actually delivered to Contractor.
(d) LATE DELIVERY OF AUTHORIZATION TO PROCEED.
If the Authorization to Proceed has not been delivered by December 31,
2000, Contractor shall have the right to terminate this Agreement by
written notice to Owner.
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Article 21. ASSIGNMENT.
(a) Owner may assign any or all of its rights or obligations
under this Agreement to an Affiliate of Tenaska, Inc.
or an entity in which an Affiliate of Tenaska, Inc. has
an ownership interest, provided such assignee has
adequate resources (as determined by Contractor in the
exercise of its reasonable judgment) to fulfill those
obligations of Owner which are assigned, and any defaults
of Owner existing at such time are cured. Upon
completion of such assignment and the delivery of an
assumption agreement (in a form reasonably satisfactory to
Contractor) executed by such assignee to Contractor, Owner
shall automatically, without further action, be
released from any and all obligations and liabilities
therefor under this Agreement which are assumed by the
assignee, provided, however, Owner shall not be released
from those obligations, if any, which Owner elects to
reserve from such assignment. Notwithstanding any
provision of this Agreement to the contrary, Owner and
Owner's assignee, if applicable, shall have the absolute
right, without the consent of Contractor, to assign this
Agreement, or any rights reserved by Owner after
assignment, to the Construction Lender and subsequent
lenders for collateral security purposes.
(b) All Contractor's subcontracts including material supply
contracts and orders for Equipment shall be in writing and
assignable by Contractor to the Owner and/or Construction
Lender, without the consent of the Subcontractor.
(c) If this Agreement is suspended or terminated by either
party, regardless of the cause for such suspension or
termination, whether one time or more, Owner shall have
the absolute right in each event to require the Contractor
to assign to Owner all of Contractor's right, title and
interest in and to any of Contractor's then outstanding
subcontracts including material supply contracts and
orders. Owner may exercise such right by giving
Contractor notice thereof within twenty (20) Days after
each such suspension and/or termination. Contractor
shall duly execute such assignments and deliver them and
the assigned subcontracts to Owner within seven (7) Days
after
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Contractor receives Owner's notice. Failure of Contractor
to assign to Owner all of Contractor's right, title and
interest in and to any of Contractor's then
outstanding subcontracts in accordance with this
subsection (c) is a default under this Agreement, except
in the case of termination by Contractor pursuant to
Section 18.2 or 18.3.
(d) Due to the nature of the Work and the reliance of Owner on
Contractor's ability, neither this Agreement nor benefits nor
obligations herein are assignable by Contractor.
(e) Contractor shall not assign the Turbine Contract without
the prior written consent of Owner.
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Article 22. CONFIDENTIALITY.
(a) Contractor and its Associated Companies, directors,
officers, employees and representatives, including
attorneys, accountants and consultants, shall keep
confidential (i) this Agreement, (ii) all negotiations
concerning this Agreement and documents exchanged by
Contractor and Owner during negotiation, and (iii) all
documents, data, Drawings, contracts, studies, projections,
photographs, video and audio recordings, computer files
and programs, and other information, whether written or
oral, which relate to economic benefits to or amounts
payable by either party pursuant to this Agreement or
costs of the Work, operations of the Plant, and Plant
Premises, and including cost and quantities of fuel. In
addition, Contractor will keep confidential all Drawings,
studies and other information relating to design,
construction and operation of the Plant except as
hereinafter stated. Contractor also agrees to keep
confidential: (i) the Power Purchase Agreement by and
between Owner and PECO, and (ii) the Gas Purchase
Agreements between Owner and fuel suppliers and
transporters. Owner and its Associated Companies,
directors, officers, employees and representatives,
including attorneys, accountants and consultants, shall
keep confidential all financial information concerning
the parent of Contractor supplied by Contractor,
provided that such parties may disclose such matters to the
extent reasonably necessary in connection with the
financing and development of the Project, subject to
obtaining a confidentiality and non-disclosure agreement
from the receiving party. The terms of this Section
shall survive this Agreement and shall continue
indefinitely for any of such information that is a trade
secret of the Owner with the meaning of O.C.G.A. Section
10-1-761, and for such information which is not a trade
secret within such definition, for a period of two (2)
years after the earlier of Final Acceptance of the
Plant or termination of this Agreement.
(b) "Confidential", as used in this Article 22, means that the
information or any document described in Section 22(a),
including the content, substance or effect of such
information or document, shall not be disclosed,
discovered or distributed to any other Person; except
such information or document may be disclosed pursuant
to the valid
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order of any court or tribunal of competent
jurisdiction. The obtaining of such order and the order
shall be opposed by the party by whom it will be carried
out unless opposition thereto is waived by each of the
parties to this Agreement and except as hereinafter
provided. No party shall be required to oppose any
order requiring disclosure by appeal, separate legal
proceeding or extraordinary measures in any judicial or
administrative proceedings unless the other party, after
notice, agrees to pay the costs of such opposition.
(c) Contractor may, without violating this Article 22, disclose
information or a document described in Section 22(a):
(i) to Contractor's lenders, underwriters,
Subcontractors and subsidiaries, Associated
Companies or parent; provided, except as set forth
in Section 22(g), that Contractor shall disclose
only that information which such Person needs to
know in connection with the Project and Contract
shall obtain as a condition precedent to the
disclosure, a confidentiality agreement with the
Person to whom the disclosure is being made with
terms substantially the same as this Section 22
("Confidentiality Agreement");
(ii) to governmental officials and parties involved in
any proceeding whereby either the Contractor or
Owner is seeking a permit, certificate or other
regulatory approval or order necessary or
appropriate to carry out this Agreement; provided,
that the party making the disclosure will exercise
reasonable efforts to restrict public access to
the information disclosed by way of protective
order, Confidentiality Agreement or otherwise;
(iii) to governmental officials or the public as
required by any Law; provided, that Contractor
will exercise reasonable efforts to restrict
public access to the information disclosed by way
of protective order, Confidentiality Agreement
or otherwise.
(iv) if such information or document (a) is, or
becomes, publicly known otherwise than through a
wrongful act of Contractor, its employees, or
agents; (b) was in the rightful possession of
Contractor, its employees, or agents prior to
receipt
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from Owner without restriction of
confidentiality; (c) is developed independently
by Contractor, its agents or employees without
use of Owner's confidential information; or (d)
is approved in writing by Owner for disclosure by
Contractor, its agents or employees to a third
party not bound by the confidentiality
obligations afforded to Owner under this
Agreement.
(d) Contractor and Owner each represent, covenant and warrant
that as of the date of this Agreement it has made no
disclosures which would violate this Article 22.
(e) All Drawings at the time of their delivery to Owner and
copies thereof are and shall remain the property of the
Owner. They are to be used by Contractor only with
respect to this Plant and are not to be used by Contractor
on any other project. With the exception of one contract
set for each party to this Agreement, such documents are
to be returned or suitably accounted for to the Owner on
request at the Final Acceptance of the Plant. Owner may
use the Drawings and shall not be in violation of any
duty or obligation to Contractor; provided, that in doing
so, Owner shall not for any reason, other than as set
forth in Section 22(c), disclose information to a
third party concerning economic benefits to either
party and amounts paid or payable pursuant to this
Agreement. Contractor shall not photograph, videotape
or otherwise reproduce in any form whatsoever all or
any part of the Work, or work product related to the
Work, including the operational Plant, without Owner's
prior written consent. Notwithstanding the fact that
the Drawings remain the property of Owner, Contractor
shall retain its rights, for use on other work, in its
computer software, standard details, designs, data bases,
specifications, other proprietary property and any
copyrighted document or trademark material
("Contractor's Intellectual Property"). Contractor
shall retain its rights in its computer software
except the computer software for Plant control systems
and instrumentation installed in the Plant shall be the
property of the Owner. Rights to Contractor's Intellectual
Property developed, utilized or modified in the
performance of the Work shall remain the property of the
Contractor, subject to a non-exclusive license hereby
granted to Owner to use Contractor's Intellectual
Property, when applicable, in connection with the
operation of the Plant. All computer software
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prepared by Contractor pursuant to this Agreement is an
instrument of service in respect to the Plant. Computer
software and Drawings prepared by Contractor pursuant to
this Agreement are not intended or represented to be
suitable for reuse by Owner on extensions of the Plant or
on any other project. Any reuse of such computer
software or Drawings prepared by Contractor without prior
written consent by Contractor for the specific purpose
intended will be at Owner's sole risk and without
liability or legal exposure to Contractor and Owner shall
defend, indemnify and hold harmless Contractor against
all claims, losses, damages, injuries, and expenses,
including attorneys fees, arising out of or resulting
from such reuse. Notwithstanding the foregoing provision
of this Section 22(e), Owner's rights in and to computer
programs provided under the Turbine Contract shall be
as set forth therein.
(f) The parties hereby agree that it will be impossible to
measure in terms of money the damages which may or will
accrue by reason of any breach of the obligations set forth
in this Article 22 and, for that reason, among others, the
parties agree that each party is entitled to specific
performance of the provisions of this Section and any other
remedies allowed by Applicable Laws. In the event either
party institutes any proceeding to enforce any of the
provisions of this Section, the other party hereby waives
any claim or defense that an adequate remedy at law exists.
(g) Subject to compliance with Section 22(c) (i), the
dissemination by Contractor of plans, specifications and
parts of this Agreement, not including Exhibits, to
potential Subcontractors in the ordinary course of business
will not constitute a violation of this Agreement and
Contractor shall redact from such plans, specifications and
parts of this Agreement those provisions which are not
required to be disclosed.
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Article 23. COMPLIANCE WITH LAW AND VENUE.
(a) Contractor shall comply and secure compliance by
Subcontractors with all Applicable Laws and Applicable
Insurance Policies in connection with the Work. If
Contractor, Subcontractors or Lower-tier Subcontractors
perform any part of the Work contrary to Applicable Laws or
Applicable Insurance Policies, then Contractor shall bear
any additional costs resulting from said violation and
correction thereof and shall not be reimbursed by Owner.
(b) It is the duty of Contractor to ascertain whether the Work,
Exhibits and Drawings are in accordance with all Applicable
Laws and Applicable Insurance Policies before
Contractor contracts for the purchase of Equipment or
contracts with Subcontractors or starts construction
and to indemnify Owner for all loss, liability, expense
and damage caused by its failure to do so. If Contractor
determines that any Work, Exhibits or Drawings are not
in compliance with Applicable Laws or Applicable
Insurance Policies, then Contractor shall: (i) immediately
notify Owner of the variance, and (ii) make any necessary
revisions to comply with such Applicable Laws or
Applicable Insurance Policies, and (iii) follow the
Change Order procedure in Section 4 if Contractor believes
there has been a Change of Law or Change of Applicable
Insurance Policy and advise the Owner of any
additional time of performance of the Work, or any
change in the performance guarantees. Such actions by
Contractor shall be at Contractor's nonreimbursable
expense unless such expense is included in an approved
Change Order.
(c) Contractor shall not, under any circumstance, enter into
negotiations with any governmental authority or agency to
develop variations or revisions to Applicable Laws without
Owner's prior written approval.
(d) Contractor and Guarantors shall obtain all certificates of
authority and licenses required by law to do business in the
State of Georgia and the county or political subdivision
thereof wherein any part of the Work is performed.
Contractor shall obtain all state and local building,
construction, and hauling permits which are required by
Applicable Laws for performance of the Work.
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Article 24. PLANT ACCOUNTING.
(a) Contractor shall assist Owner in preparing the property
accounting system following the Code of Federal Regulations
(CFR), Conservation of Power and Water Resources, Title 18,
Subchapter C-Accounts, Federal Power Act. Such activities in
this Section 24(a) are included in the Guaranteed Lump Sum
Price, are to be undertaken concurrently with Plant
operations, and are to be completed no later than six (6)
months following the date of Plant Commercial Operation.
(b) Contractor shall maintain proper and complete records
substantiating all expenses and charges. Contractor agrees
to cooperate with Owner in supplying summary cost data so
Owner can properly place the cost of the Work on its books.
128
Article 24
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Article 25. AVAILABILITY GUARANTEE.
Contractor shall prepare a detailed engineering study of
anticipated Plant Availability which shall calculate the
anticipated availability for the Plant, including Equipment
supplied by General Electric Company, and will demonstrate
that the balance of Plant, excluding Equipment supplied by
General Electric Company, will be designed to achieve an
average availability, excluding planned outages, of
ninety-nine percent (99%) or more.
129
Article 25
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Article 26. OWNER AND CONTRACTOR REPRESENTATIVE.
Section 26.1 OWNER'S PROJECT MANAGER.
(a) Owner's Project Manager shall have authority to bind the
Owner only as specifically authorized in this Article 26.
In the event of any conflict between the actions of the
Owner's Project Manager and Owner's Site Representative,
those of Owner's Project Manager shall control. Owner's
Project Manager shall have authority to provide direction
to Contractor as permitted or required of Owner by this
Agreement.
(b) Owner's Project Manager shall have authority to review and
to submit comments on Contractor's design documents and to
reject Work which does not conform to this Agreement.
Whenever Owner's Project Manager considers it necessary or
advisable for the implementation of the intent or to
determine conformity of the Work with this Agreement,
Owner's Project Manager shall have authority to direct the
Contractor to require special inspection or testing of the
Work whether or not such Work shall then be fabricated,
installed or completed, provided that Owner shall bear the
costs of any such special inspections or testing if the
Work satisfactorily passes such tests.
Section 26.2. OWNER'S SITE REPRESENTATIVE.
(a) Owner's Site Representative will maintain an office on the
Plant Premises during construction. Owner's Site
Representative will not have authority to act on behalf of
the Owner or to bind the Owner, except as specifically
authorized in this Article 26.
(b) Owner's Site Representative has no obligation or right or
authority whatsoever to render interpretations of this
Agreement or Drawings. However, Owner's Site Representative
may discuss the requirements of this Agreement with the
Contractor's Site Representative and Owner.
Section 26.3 OWNER'S AGENT.
Owner shall designate an Owner's Agent who shall have authority to act
on behalf of Owner on all matters relating to this Agreement. Owner's
Agent shall have authority to provide notice to and receive notice
from Contractor and to exercise all other authority of Owner as
permitted or required by this Agreement.
Section 26.4 OWNER'S REPRESENTATIVES; MISCELLANEOUS.
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(a) Neither the Owner's Site Representative's nor Owner's Project
Manager's authority to act under Section 26.1 or 26.2 nor any
decision made either to exercise or not to exercise such
authority shall change the obligations of this Agreement, nor
shall any action taken pursuant to such authority relieve
Contractor of any responsibility or obligation in this
Agreement.
(b) Owner shall not be responsible for and will not have control
or charge of, nor shall Owner's Site Representative, Owner's
Project Manager or Owner's Agent have authority with respect
to, construction means, methods, techniques, sequences or
procedures, or for safety precautions and programs in
connection with the Work. Owner's Site Representatives,
Owner's Project Manager and Owner's Agent have no
responsibility with respect to the Contractor's failure to
carry out the Work or with respect to other acts or omissions
of the Contractor in accordance with this Agreement nor with
respect to Contractor's failure to carry out instructions of
the Owner.
(c) The duties, responsibilities and limitations of authority of
the Owner's Site Representative, Owner's Project Manager or
Owner's Agent during performance of this Agreement will not be
modified or extended without written notice to Contractor.
(d) Owner may change the Owner's Site Representative or Owner's
Project Manager by giving Contractor ten (10) Days prior
notice. In the case of any such change, Owner shall appoint a
replacement representative whose status under this Agreement
shall be that of the former.
(e) Owner's Site Representative, Owner's Project Manager and
Owner's Agent shall at all times have access to the Work. All
instructions to Contractor concerning the Work will be given
by Owner's Project Manager or Owner's Agent directly to
Contractor's Site Representative or Contractor's
Representative.
(f) Contractor shall not be relieved of obligations to perform
the Work in accordance with this Agreement by any action
taken by Owner's Site Representative or Owner's Project
Manager, or by tests, inspections or approvals required or
performed by Persons other than the Contractor.
(g) Owner's Project Manager shall be:
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ANDREW R. JONES (402) 691-9530
----------------------------------- ---------------------
Name Telecopy
1044 NORTH 115TH STREET, SUITE 400 (402) 691-9722
----------------------------------- ---------------------
Address Phone
OMAHA, NEBRASKA 68154
-----------------------------------
City, State, Zip
(h) Owner's Agent shall be:
MICHAEL C. LEBENS (402) 691-9530
---------------------------------- ---------------------
Name Telecopy
1044 NORTH 115TH STREET, SUITE 400 (402) 691-9515
---------------------------------- ---------------------
Address Phone
OMAHA, NEBRASKA 68154
----------------------------------
City, State, Zip
(i) Owner's Site Representative shall be identified in writing
to Contractor.
Section 26.5. CONTRACTOR'S SITE REPRESENTATIVE.
(a) Contractor's Site Representative will represent Contractor
on the Plant Premises during construction. Contractor's
Site Representative will maintain an office on the Plant
Premises for purposes of remaining in close proximity to
the Work and communicating with Owner's Site Representative
and/or Owner's Agent. Contractor's Site Representative will
advise and consult with Owner's Agent and Owner's Site
Representative as to the performance of the Work under this
Agreement. Contractor's instructions to Owner shall be
forwarded only through Owner's Agent. Contractor's Site
Representative will have authority to act on behalf of
Contractor and to bind Contractor. All communications given
to Contractor's Site Representative shall be as
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binding as if given to Contractor.
(b) Contractor's Site Representative will be and will remain
thoroughly familiar with the progress and quality of the
Work and will assure that the Work is proceeding in
accordance with this Agreement. Contractor's Site
Representative will be required to make extensive and
continuous inspections at the Plant Premises to check the
quality, adherence to the Drawings and Applicable Laws, and
quantity of the Work. On the basis of Contractor's Site
Representative's observations, Contractor's Site
Representative will keep Owner's Site Representative
informed of the progress of the Work and will guard Owner
against Defects in the Work of the Contractor.
(c) Contractor's Site Representative shall have knowledge of the
Work, the construction means, methods, techniques, sequences
or procedures, and for safety precautions and programs in
connection with the Work.
Section 26.6 CONTRACTOR'S REPRESENTATIVE.
Contractor shall designate a Contractor's Representative who shall
communicate with Owner's Representative. Contractor's Representative
shall be responsible for Contractor's performance of this Agreement
and shall assist Owner whenever necessary to ensure Contractor's
complete and satisfactory performance of this Agreement. Contractor's
Representative will have authority to act on behalf of Contractor and
to bind Contractor on all matters relating to this Agreement.
Section 26.7 CONTRACTOR'S REPRESENTATIVES; MISCELLANEOUS.
(a) The duties, responsibilities and limitations of authority of
the Contractor's Site Representative and the Contractor's
Representative as set forth in this Agreement will not be
modified or extended without written consent of Owner, which
will not be unreasonably withheld.
(b) Contractor may not change Contractor's Site Representative or
Contractor's Representative without obtaining the prior
written consent of Owner's Agent, which shall not be
unreasonably withheld, and thereafter by giving ten (10) Days
prior notice to Owner. In the case of any such change,
Contractor shall appoint a replacement representative whose
status under this Agreement shall be that of the former
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Contractor's Representative.
(c) In the event Contractor's Site Representative is for any
reason unacceptable to Owner, the parties agree to cooperate
in good faith to resolve Owner's objection and if the
objection cannot be resolved, such Representative shall be
replaced by Contractor.
(d) No act or omission of Contractor's Site Representative shall
excuse any obligation to perform this Agreement in
accordance with all of its terms and conditions.
(e) Contractor's Site Representative shall be:
JOE USSERY
------------------------- ---------------------
Name Telecopy
------------------------- ---------------------
Address Phone
------------------------- ---------------------
City, State, Zip
(f) Contractor's Representative shall be:
MIKE MOSLEY (210) 475 8572
------------------------- ---------------------
Name Telecopy
527 LOGWOOD (210) 475-8411
------------------------ ----------------------
Address Phone
SAN ANTONIO, TX 78224-0130
------------------------
City, State, Zip
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Article 27. GENERAL PROVISIONS.
Section 27.1 ROYALTIES AND LICENSE FEES.
Contractor shall pay all required royalties and license fees with respect to
proprietary rights and intellectual property licenses and agreements, and shall
procure, as required, the appropriate proprietary rights, intellectual property
licenses and agreements, for materials, methods, processes, systems and services
incorporated into the Plant or otherwise relating to the performance of the
Work. In performing the Work, Contractor shall not knowingly incorporate into
the Plant, or use in connection with the Plant or the performance of the Work,
any materials, methods, processes, systems or services that involve the use of
any confidential information, intellectual property or proprietary right that
Contractor does not have the right to use and incorporate or that may result in
claims or suits against Owner, Contractor or any Subcontractor or Lower-tier
Subcontractor for infringement of any domestic or foreign patent rights,
copyrights, other proprietary rights, or intellectual property licenses or
agreements, or applications for any thereof, or misuse of confidential
information.
Section 27.2 NOTICES.
All notices or other communications required or permitted by this Agreement
shall be in writing and shall be considered properly given at the time: (i) one
Day after delivery to an overnight courier, correctly addressed and postage
prepaid, (ii) delivered in person, (iii) a return receipt is signed when sent by
certified mail, or (iv) sent by facsimile machine or reproduction, regardless of
when received or delivered. Except as provided in (i) and (iv) hereof, Notices
or other communications given in accordance with (ii) or (iii) shall be
effective only when actually received by the addressee. Neither the day of the
week nor the time of day or night at which the notice or other communication is
delivered to overnight courier or addressee nor the time sent by facsimile
machine nor reproduction shall affect the validity of same.
Notice shall be given to Owner and Contractor as follows:
135 Article 27
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Owner: Contractor:
Tenaska Georgia I, L.P. Zachry Construction Company
1044 North 115th Street 527 Logwood
Omaha, Nebraska 68154 San Antonio, TX 78224-0130
Facsimile No: (402) 691-9530 Facsimile No: (210) 475 8572
Attn: Michael C. Lebens Attn: Robert J. Kalt
In the event the parties utilize "facsimile" transmitted notices or other signed
communications (by telecopy, Panafax, telefax, etc.) the parties hereby agree to
accept and to rely upon such notices or other signed communications as if they
bore original signatures. Each party acknowledges and agrees to provide to the
other party, within seventy-two (72) hours of transmission of same, such notice
or documents bearing the original signatures; however, failure of the sending
party to timely follow up with a notice bearing the original signature will not
void the notice or document. For purposes of notice by "facsimile," the numbers
of the parties shall be as follows:
Owner: (402) 691-9530 Attn: Michael C. Lebens
Contractor: (210) 472-8572 Attn: Robert J. Kalt
Owner and Contractor shall have the right to change their address for notice or
other communication hereunder to any other location within the continental
United States by giving written notice to the other party in the manner set
forth herein.
Section 27.3 INDEPENDENT CONTRACTOR.
Contractor is an independent contractor engaged in an independent business and
is not the agent, employee or servant of Owner for any purpose. Contractor shall
have full control and supervision over the Work, employment, direction,
compensation and discharge of all Persons assisting it in the Work, subject to
the rights of Owner provided in this Agreement. Contractor agrees to be solely
responsible for: (i) maintaining the required insurance under any Worker's
Compensation Act or Employee's Liability laws and in accordance with
requirements of this
136 Article 27
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Agreement; (ii) timely payment of all federal, state, and local taxes or
contributions imposed or required under unemployment insurance, social security,
income tax laws and other Applicable Laws with respect to Contractor's employees
engaged in the performance of this Agreement; (iii) duly and timely filing all
federal, state and local tax returns and forms to reflect all income derived
from activities performed under this Agreement; and (iv) all matters relating to
the payment of its employees, including compliance with social security,
withholding and all other regulations governing such matters. As between Owner
and Contractor, Contractor agrees to be responsible for its own actions and
those of its employees, Subcontractors and Lower-tier Subcontractors during the
term of this Agreement. Contractor shall bear and be solely responsible for all
expenses of any kind which it may incur in the performance of its
responsibilities under this Agreement and shall hold the Owner harmless from any
claims with respect thereto. Contractor does not have, and shall not hold itself
out as having, any authority to enter into any contract or create any obligation
or liability on behalf of, in the name of, or binding upon Owner except as
specifically provided in this Agreement; and Contractor shall hold Owner
harmless from any loss, liability, damage and claims resulting from any action
taken by Contractor which is inconsistent with the provisions of this Section
27.3.
Section 27.4 SAFETY PRECAUTIONS. Contractor shall, and shall cause all
Subcontractors to, implement and administer a safety and health program for the
Plant, subject to the approval of Owner (which shall not be unreasonably
withheld), which shall include:
(a) development of a safety manual within ninety (90) days of issue of the
Authorization to Proceed establishing Contractor and Subcontractor safety
guidelines and requirements, a copy of which manual shall be provided to
Owner immediately upon its development; provided that Contractor shall
incorporate into such manual any and all reasonable comments of Owner;
(b) conducting of weekly safety meetings, in association with Owner, with the
employees and agents of Owner, Contractor, Subcontractors and Lower-tier
Subcontractors;
(c) development, implementation and enforcement of procedures for advising
Owner (including prompt provision of safety reports concerning all
accidents which take place on the Plant Premises) and employees and agents
of Contractor and
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Subcontractors of, and correction of, safety violations and deficiencies;
and
(d) actions necessary to provide a safe work environment in accordance with
Applicable Laws and Applicable Insurance Policies.
Contractor shall take all reasonable precautions for the safety of, and shall
provide all reasonable protection to avoid damage, injury or loss as a result of
Contractor's or any Subcontractor's performance of the Work to:
(i) all persons employed by Owner, Contractor, Subcontractors and
Lower-tier Subcontractors in connection with the Work or Owner
(whether in the performance of their obligations hereunder or
otherwise) and all other persons who may be affected by the
performance of the Work or any of such persons;
(ii) all supplies used in connection with the Plant or the Work and all
materials and Equipment to be incorporated into the Plant, whether in
storage on or off the Plant Premises, and whether under the care,
custody or control of Owner, Contractor, any Subcontractor or
Lower-tier Subcontractors; and
(iii) other physical property at the Plant Premises or adjacent thereto,
including trees, shrubs, lawns, walks, pavements, roadways, structures
and utilities not designated for removal, relocation or replacement in
the course of construction hereunder.
At all times (including during Start-up, Testing and initial operation of a
Unit), Contractor shall require all Subcontractors and Lower-tier Subcontractors
working on or supplying materials, supplies or Equipment to the Plant Premises
to comply with all safety requirements in effect at all such times.
Section 27.5 TITLE TO THE PLANT PREMISES.
The title (direct or indirect, in name and beneficially) of all Work, completed
or in the course of construction, and of all the Equipment on the Plant Premises
for which any monthly progress payment has been made shall be in Owner, subject
to the interest of the Development Authority pursuant to bond financing obtained
by Owner from the Development Authority. It is expressly understood and agreed
that the passage of title shall not be a release of Contractor's responsibility
to fully carry out its obligations under this Agreement or otherwise affect the
provisions respecting risk of loss set forth in this Agreement.
138 Article 27
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Section 27.6 QUALITY ASSURANCE. Contractor shall implement and administer a
quality assurance program for the Plant, subject to the approval of Owner (which
shall not be unreasonably withheld), which shall include:
(a) development of a Quality Assurance Manual within 60 days of issue of the
Authorization to Proceed establishing Contractor and Subcontractor
guidelines, procedures and requirements for quality assurance, a copy of
which manual shall be provided to Owner immediately upon its development;
provided that Contractor shall incorporate into such manual any and all
reasonable comments of Owner;
(b) development, implementation and enforcement of procedures for quality
assurance including advising and monitoring employees and agents of
Contractor and Subcontractors with respect to quality assurance compliance
procedures; and
(c) provision by Contractor on a quarterly basis of quality assurance reports
in the form set out in the Quality Procedures Manual with respect to all
design, engineering, construction, start-up and testing activity at the
Plant Premises.
Section 27.7 SEVERABILITY OF PROVISIONS.
In the event that any provision of this Agreement, or the application thereof,
is held by any court of competent jurisdiction to be illegal or unenforceable,
the parties shall attempt in good faith to agree upon an equitable adjustment to
this Agreement in order to overcome to the extent possible the effect of such
illegality or unenforceability. The provisions of this Agreement are intended to
be performed in accordance with, and only to the extent permitted by, the
requirements of all Applicable Laws. If any provision of any of the Agreement or
the application thereof to any Persons or circumstance shall, for any reason and
to any extent, be invalid or unenforceable, neither the remainder of the
Agreement nor the application of such provision to other Persons or
circumstances or other instruments referred to in the Agreement shall be
affected thereby but, rather, the same shall be enforced to the greatest extent
permitted by Applicable Laws.
Section 27.8 ENTIRE AGREEMENT.
This Agreement sets forth the full, complete and entire understanding of the
parties as of the date first above stated except for the following which may be
executed prior to or at the same time as this Agreement: an Assignment of the
Turbine Contract by Owner to the Contractor; an
139 Article 27
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assumption agreement to be executed between the supplier under the Turbine
Contract and the Contractor; a Priority Agreement to be executed between
Contractor and the title insurance company; an Indemnification Agreement to be
executed between Contractor and the title insurance company; and the Guarantee.
Except as otherwise provided in this Section 27.8, this Agreement supersedes any
agreements and representations made or dated prior hereto. There shall be no
oral modification of this Agreement, whether or not executed and performed on
one side. Any written modification or agreement dated subsequent to the date of
this Agreement shall constitute a modification or amendment hereof only to the
extent that said modification or agreement is duly executed by both parties to
this Agreement.
Section 27.9 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, or by use of faxed
counterpart signature pages, each of which shall be an original, but all of
which together shall constitute but one instrument.
Section 27.10 APPLICABLE LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAWS OF THE
STATE OF TEXAS EXCLUDING THEIR CONFLICT OF LAWS PROVISIONS TO THE MAXIMUM EXTENT
PERMITTED BY SECTION 35.51 OF THE TEXAS BUSINESS AND COMMERCE CODE AND OWNER AND
CONTRACTOR AGREE DALLAS COUNTY, TEXAS SHALL BE THE MOST CONVENIENT FORUM FOR
JURISDICTION AND RESOLUTION OF ANY LEGAL DISPUTE HEREUNDER AND IRREVOCABLY
SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN SUCH
COUNTY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND HEREBY IRREVOCABLY AGREE THAT THE VENUE FOR SUCH CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING SHALL BE IN SUCH COURT. FOR ANY CLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT WHICH MUST BY STATUTE BE DETERMINED IN THE COURTS OF
THE STATE OF GEORGIA, OWNER AND CONTRACTOR HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA AND HEREBY
IRREVOCABLY AGREE THAT THE VENUE FOR SUCH CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING SHALL BE IN SUCH COURT.
Section 27.11 HEADINGS AND CONSTRUCTION.
The section headings are inserted for convenience of reference only and shall in
no way effect, modify, define, or be used in construing the text of this
Agreement. Where the context
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requires, all singular words in this Agreement shall be construed to include
their plural and all words of neuter gender shall be construed to include the
masculine and feminine forms of such words. The terms "include," "including"
and similar terms shall be construed as if followed by the phrase "without
limitation." Notwithstanding the fact that this Agreement has been prepared
by one of the parties, all of the parties confirm that they and their
respective counsel have reviewed, negotiated and adopted this Agreement as
the joint agreement and understanding of the parties. This Agreement is to be
construed as a whole and any presumption that ambiguities are to be resolved
against the primary drafting party shall not apply.
Section 27.12 SOLE BENEFIT.
This Agreement and all rights hereunder are intended for the sole benefit of the
parties hereto and, except (i) to the extent expressly provided in this
Agreement, for the benefit of the Construction Lender and (ii) to the extent
expressly provided in this Agreement, for the benefit of additional Persons to
be indemnified, shall not imply or create any rights on the part of, or
obligations to, any other person. No other party shall have rights under this
Agreement or be entitled to assume that the parties thereto will insist upon
strict performance of their mutual obligations hereunder, any of which may be
waived from time to time.
Section 27.13 SUCCESSORS AND ASSIGNS.
All of the terms of this Agreement shall apply to, be binding upon and inure to
the benefit of the parties hereto, their respective successors, permitted
assigns and all other Persons claiming by, through or under them.
Section 27.14 LIMITATION OF OWNER'S LIABILITY.
By its execution and delivery of this Agreement, Contractor agrees for itself
and its successors and assigns that any claim, judgment or order against the
Owner or any partner in Owner which may arise under this Agreement shall be
enforceable against only Owner and Owner's Assets. No judgment, order or
execution entered in any suit, action or proceeding in favor of Contractor,
whether legal or equitable, relating in any way to this Agreement, shall be
obtained or enforced against any Associated Company of either Owner or any
partner in Owner, against any officer, director or stockholder of Owner or any
partner in Owner or their Associated Companies, or against the individual assets
of any such Persons for the purpose of obtaining
141 Article 27
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release and satisfaction of any obligation arising under this Agreement and any
right to proceed against such Persons is hereby expressly waived, renounced and
remitted by Contractor for itself and its successors and assigns. Nothing in
this Agreement shall increase the liability of a limited partner in Owner beyond
the liability of a limited partner as provided by law.
Section 27.15 CONTRACTOR RESPONSIBILITY.
Contractor has full responsibility for engineering, procurement and
construction. Contractor shall coordinate all Work and shall be responsible for
the performance of any obligations of Contractor under this Agreement, whether
the Work is performed by Contractor, by Subcontractors, by Lower-tier
Subcontractors or any other persons, either directly or indirectly, employed or
used by Contractor or Subcontractors. Contractor warrants and represents that
the design, engineering and Equipment meet the requirements of this Agreement
and that Contractor has relied only upon its own investigation, research,
analysis and preparation, including a thorough assessment of all factors and
conditions which may affect its performance, including conditions at the Plant
Premises.
Section 27.16 SURVIVAL. Termination of this Agreement (a) shall not relieve
either party of any obligation hereunder that expressly survives termination of
this Agreement, (b) shall not relive either party of any obligation hereunder
which by its nature would normally survive a termination, including warranty and
indemnification, and (c) except as otherwise provided in any provision of this
Agreement expressly limiting the liability of either party, shall not relieve
either party of any obligation or liabilities for loss or damage to the other
party arising out of or caused by acts or omissions of such Party prior to the
date of such termination. The provisions of Article 17, Article 22 and Section
27.16 shall expressly survive the termination of this Agreement.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be executed
in its name and on its behalf by a duly authorized officer in duplicate
originals and effective as of the date first above written
CONTRACTOR:
ZACHRY CONSTRUCTION CORPORATION, a Delaware corporation
By: /S/
-------------------------------------------------
Title: Vice President
/S/_________________________
Witness
OWNER:
TENASKA GEORGIA I, L.P.
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /S/
-------------------------------------------------
Title: Vice President
/S/________________________
Witness
143
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
------------------------
Page 1 of 23
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TABLE OF CONTENTS
<TABLE>
<S> <C>
ATTACHMENTS.......................................................................................................3
1.0 INTRODUCTION................................................................................................4
2.0 SITE DESCRIPTION AND CONDITIONS.............................................................................4
3.0 PROJECT DESCRIPTION.........................................................................................5
3.1 Gas Turbine.................................................................................................5
3.2 Continuous Emissions Monitoring.............................................................................5
3.3 Fuel System.................................................................................................6
3.4 Water Supply and Treatment Systems..........................................................................7
3.5 Fire Protection System......................................................................................7
3.6 Plant High Voltage Power System............................................................................10
3.7 Plant Auxiliary Power System...............................................................................10
3.8 Emergency Diesel Generator.................................................................................12
3.9 DC Power Supply............................................................................................12
3.10 Uninterruptible Power Supply...............................................................................12
3.11 Plant Control Systems......................................................................................13
3.12 Plant Control System.......................................................................................14
3.13 Communications Systems.....................................................................................16
3.14 Area Classification........................................................................................16
3.15 Security System............................................................................................17
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3.16 Lighting/Receptacles.......................................................................................17
3.17 Grounding/Lightning Protection.............................................................................18
3.18 Cathodic Protection........................................................................................18
3.19 Miscellaneous Equipment....................................................................................19
3.20 Plant Water Discharge System...............................................................................19
3.21 Storm Water Drainage System................................................................................19
3.22 Civil......................................................................................................20
3.23 Structural/Architectural...................................................................................21
3.24 Interconnections...........................................................................................23
3.25 Noise Control..............................................................................................23
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ATTACHMENTS
I. Site Location Map
II. Preliminary Water Balances and Preliminary Water Analyses
III. Preliminary Building Arrangement
IV. Preliminary Geotechnical Engineering Report
V. Site Legal Descriptions and Topographic Map
VI. Not Used
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PROJECT DESCRIPTION
1.0 INTRODUCTION
Tenaska is proposing to construct, own and operate a simple cycle
independent power production facility in Heard County, Georgia.
The power production facility and ancillary facilities are
described below.
The Tenaska facility has contracted to sell the entire net plant
electrical output to PECO Energy Company (PECO). The firm contract
capacity of the plant is 950 MW net.
The plant will be designed with the best available control
technology (BACT) to limit emissions. Tenaska proposes that BACT
for this facility will be the combustion of natural gas or No. 2
fuel oil to limit SO2 and particulate emissions, the use of dry
low NOx combustors to control NOx to 25 ppmvdc when firing natural
gas, and water injection when firing oil to control NOx to 42
ppmvdc.
Commercial operation of the plant is scheduled as defined in the
EPC Agreement.
2.0 SITE DESCRIPTION AND CONDITIONS
The site for the proposed facility is located in Heard County,
Georgia approximately nine miles northeast of Franklin and
approximately 40 miles southeast of Atlanta. The site location is
shown on a section of a USGS topographical map included as
Attachment I. A 500 kV transmission line owned by Georgia
Transmission Corporation (GTC) runs through the site and will be
used to interconnect the Project into the transmission system.
Transco's natural gas pipelines run approximately one mile south
of the site. The site is being purchased from Temple Inland and is
currently forested. Temple Inland, a forest products company, will
harvest the trees from the plant site, leaving a buffer zone of
trees around the plant. The site is currently zoned for
"RFA-Residential, Forest and Agricultural" by Heard County, and
will be rezoned for industrial and power plant use. Plant
elevation is approximately 785 feet above mean sea level. The site
is bounded on the south and the west by Hilly Mill Creek and on
the north and west by an unnamed tributary. A portion of the site
is within the 100-year flood plain. A site topographic map with
wetlands delineation is included as Attachment III. A preliminary
geotechnical report by EMCON is included as Attachment IV.
The following information shall be used for plant design:
<TABLE>
<CAPTION>
Parameter Summer Winter*
--------- ------ -------
<S> <C> <C>
Dry-bulb temperature, F 95 18
Wet-bulb temperature, F 78 15
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*Freeze protection and HVAC to be designed in accordance with
design criteria specified in Exhibit B.
Precipitation: 51 inches annual average
Frost Line: 12 inches
Wind pressure and seismic design loads will be in accordance with
the Standard Building Code, for an 80 mph basic wind speed and
Seismic Risk Zone 2A.
Site Elevation 785 feet above mean sea level
3.0 PROJECT DESCRIPTION
The following subsections briefly describe key plant components.
These components are shown on the Plot Plan, Plot Plan Detail,
P&IDs, One-Line, and Heat Balance/Process Flow Sheet in Exhibit B.
Water requirements are shown on the maximum and average Water
Balances provided in Attachment II. Scope of work and detailed
technical requirements are specified in Exhibit B.
3.1 GAS TURBINE
Six (6) General Electric Frame 7FA heavy-duty, single-shaft gas
turbine generator units and auxiliary equipment as described in
Exhibit H. CT stacks and silencers shall be provided by the
Contractor.
3.2 CONTINUOUS EMISSIONS MONITORING
Continuous Emissions Monitoring (CEM) for NOx, O2, and stack flow
in conformance with 40 CFR Part 60 Appendix B and 40 CFR 75 shall
be provided at the stacks. SO2, CO and CO2 emissions will be
calculated using fuel flow rate and fuel composition data.
Contractor shall develop a CEM quality control plan in compliance
with 40 CFR 60 Appendix F and 40 CFR 75 and a reporting system
which generates monthly reports.
The Continuous Emissions Monitoring System (CEMS) will consist of
six individual extractive-type systems. The systems will be housed
in two shelters, each with a group of three systems. The
extractive sample conditioning will
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consist of heated sample probe and line with moisture removal at
the analyzer racks.
3.3 FUEL SYSTEM
Natural gas shall be the primary fuel, with low sulfur No. 2 fuel
oil used for backup fuel. The gas turbines shall be capable of
switching fuels on-line and shall be capable of start-up on either
natural gas or fuel oil.
Natural gas will be regulated and delivered to the plant at a
nominal pressure of 470 psig. A gas supply inlet pressure signal
shall be provided in the control room by the Contractor. Natural
gas will be metered by Transco at the gas pipeline tap,
approximately one mile south of the site. The meter signal,
(containing gas pressure, flowrate, delta-P, and temperature) will
be transmitted to a radio receiver at the site via a radio
transmitter located at the meter. The meter signal will be
converted to a digital signal by the radio receiver. The
Contractor shall connect to the radio receiver and transmit the
meter signal into the control room for monitoring and recording.
The Contractor shall provide a gas chromatograph and two 50%
capacity, indirect bath type gas heaters for the gas supply to the
turbines. The gas heaters will be sized to provide a minimum of 50
degrees Fahrenheit of superheat in the gas to the turbines.
A 165,000 barrel fuel oil storage tank shall be provided. The fuel
oil tank shall be located within a dike sized to contain the full
content of the fuel oil tank plus 12 inch freeboard. An impervious
lining shall be placed within the diked area to prevent fuel oil
from entering the soil. Four (4) fuel oil pumps shall be provided
to pump from the fuel oil storage tank to the gas turbines. Each
pump shall be capable of meeting the maximum fuel oil requirements
of two gas turbines. Tank location is shown on the Site
Arrangement Drawing. Any underground fuel oil piping shall be
installed in a concrete trench with removable covers or within a
secondary containment pipe. The trench or containment pipe shall
be sloped to drain to the oil/water separator. The fuel oil tank
will be in accordance with API 650.
Fuel oil deliveries will be made by truck. Unloading systems and
pumps shall be provided to unload four trucks at the same time and
up to six (6) trucks per hour, with each truck having a capacity
of 6000 gallons. Flowmeters shall be provided to measure unloaded
fuel oil quantities. The unloading area shall be curbed and
surfaced to contain oil spills, with drains from the unloading
areas piped to an oil/water separator. A roof over the unloading
area shall be provided to reduce rainwater flow to the oil/water
separator.
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3.4 WATER SUPPLY AND TREATMENT SYSTEMS
Water for the plant will be supplied from the Heard County Water
Authority. The water will be of potable water quality. An
interconnection will be made to a six inch diameter water main at
George Brown Road immediately north of the plant site. The major
water demands in the power plant are water for the gas turbine
inlet air evaporative coolers and water for injection into the gas
turbine combustion chambers for NOx control when firing fuel oil
The plant will be designed to minimize water consumption.
Attachment II shows a preliminary water balance for the plant. The
evaporative coolers will only operate when the ambient temperature
is 60oF or greater and the gas turbines are operating. If
necessary, the plant can be operated without the evaporative
coolers in service. Water for injection into the gas turbine
combustion chambers will be required only when natural gas is
curtailed and the plant operates on fuel oil.
Truck mounted demineralizer systems will be used to provide
demineralized water for NOx control when burning fuel oil.
Regenerated demineralizer systems will be brought to the site as
needed and returned to their supplier for regeneration. No
chemicals will be required on-site.
A Fresh Water Storage Tank shall be provided on-site for storage
of fresh water, and a Demineralized Water Storage Tank shall be
provided for storage of demineralized water. The Fresh Water
Storage Tank shall have 2,000,000 gallon capacity and the
Demineralized Water Storage Tank shall have 7,000,000 gallon
capacity. The water tanks will be in accordance with AWWA D100.
The tanks will be internally coated to protect against corrosion
and contamination of the water.
A fire water system shall be installed within the plant with water
supplied from Fresh Water Storage Tank. The bottom 200,000 gallons
of the Fresh Water Storage Tank shall be reserved for fire water.
3.5 FIRE PROTECTION SYSTEM
The fire protection system for the generation facility shall be
designed in conformance with National Fire Protection Association
(NFPA) 850, Recommended Practice for Fire Protection for Electric
Generating Plants. The system's design shall be reviewed with the
local fire department to ensure conformance with applicable codes
and standards. All equipment installed in the plant for fire
protection shall be compatible with the local fire department's
firefighting equipment. The fire protection system shall include a
fire water loop
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and monitors, water sprinkler systems for selected areas, and
portable fire extinguishers. General Electric will provide the
FM200 and CO2 fire extinguishing systems for the gas turbines as
described in Exhibit H,
Any additional fire protection equipment and systems which may be
required by the local authority having jurisdiction or Owner's
insurance carrier requirements shall be provided by the Contractor
at the Owner's cost.
3.5.1 FIRE WATER SYSTEM
A fire water system sized to deliver a minimum of 1,500 gpm of
water shall be provided to protect plant facilities against fire.
The fire water system shall be supplied from the Fresh Water
Storage Tanks. Electric motor driven and Diesel engine driven fire
pumps shall provide 125 psig pressure at their discharge. An
electric motor driven jockey pump will operate on continuous
standby and shall start or stop to maintain fire water pressure
between low-pressure and high-pressure points. The electric motor
driven main fire pump shall start when system pressure drops below
a lower set point. The diesel engine driven fire pump shall start
if system pressure drops to a second lower set point. The fire
pumps and controllers shall be Factory Mutual approved. The system
shall include a fire water supply loop, fire hydrants, fire
monitors, and hoses located at appropriate locations. Multiple
flow paths shall be provided in the loop piping so that if one
pipe fails, another pipe can supply sufficient fire water to other
outlets. Sectionalizing post indicator valves shall enable
isolation of any failed section. Hose connections at hydrants
shall be compatible with the local fire department's firefighting
equipment. Fire hoses shall be sized for two-man operation.
3.5.2 GAS TURBINE, BUILDING, AND EQUIPMENT FIRE EXTINGUISHING SYSTEM
The gas turbine mechanical package, turbine enclosure, and
electrical control package shall be protected by an automatically
actuated CO2 & FM200 systems supplied by General Electric as
described in Exhibit H. When either the FM200 or CO2 system is
actuated, alarms or indications at the control panels shall be
activated.
The control room battery room, Power Distribution Center (PDC),
and electrical/electronic equipment rooms shall be protected by
dry pipe, pre-action sprinkler systems. Upon actuation, an alarm
or visual indicator will be activated at a fire protection alarm
panel.
Wet pipe sprinkler system shall be provided for the administration
and office areas and for the fire water pump buildings. The
sprinkler piping shall be filled with water under pressure from
the fire water system. System activation shall occur when
thermally-sensitive sprinkler heads open due to high temperature.
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Dry pipe sprinkler systems shall be provided in the maintenance
and warehouse areas. The sprinkler piping shall use
thermally-sensitive sprinkler heads attached to a piping system
containing air under pressure. When a sprinkler head opens due to
high temperature, the air in the system is released, opening a
diaphragm-operated valve. With the valve open, water flows into
the piping and discharges from the nozzles.
Deluge sprinkler systems shall be provided at the main
transformers and the auxiliary transformers. Deluge spray
subsystems use open spray nozzles attached to piping connected to
the fire water supply through a deluge valve. The deluge subsystem
is activated by a dry pilot detection system installed in the same
area as the spray nozzles. Thermally-sensitive sprinkler heads are
attached to a piping system containing air under pressure. When a
sprinkler head opens due to high temperature, the air in the
system is released, actuating a deluge valve. With the deluge
valve open, water flows into the piping and discharges from all
nozzles. Fire walls shall separate the main transformers and
auxiliary transformers from each other and from the rest of the
plant.
A semi-fixed foam system shall be provided at the fuel oil storage
tank. Connections shall be provided at a safe and convenient
location outside of the containment area for attaching a portable
foam system (by others) to deliver fire suppression foam to the
fuel oil storage tank.
Portable fire extinguishers shall be provided throughout the plant
and within buildings or structures. The type and number of
extinguishers shall be appropriate for the area of the plant. Fire
extinguishers shall be sized for one-man operation.
3.5.3 FIRE DETECTION AND ALARM SYSTEM
Fire detection equipment shall consist of fixed temperature heat
detectors, rate compensated heat detectors, and ionization type
smoke detectors which respond to both visible and invisible
products of combustion.
A fire protective signaling system shall be provided to monitor
the various fixed fire protection systems throughout the power
plant. The system shall include local supervisory panels at the
local valve stations and a main fire alarm annunciator panel
(FAAP) in the control room to monitor system status. Audible fire
and trouble alarms shall be provided at the local supervisory
panels for the hazard areas and at the FAAP.
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3.6 PLANT HIGH VOLTAGE POWER SYSTEM
The high voltage system receives 18.0 kV electrical power produced
by the gas turbine generators and transforms it to 500 kV for
transmission to Georgia Transmission Corporation's system. The 500
kV system and switchyard from the main step-up transformer high
side bushings to the 500 kV GTC transmission lines will be
furnished and installed by others.
The plant site high voltage power system shall include the
following equipment:
o Isophase bus ducts connecting the gas turbine generator to
the main step-up transformers.
o Six (6) generator unit breakers on the 18 kV side of the
main transformers.
o Three (3) 18.0 k V to 500 kV, three winding, main step-up
transformers.
o Three (3) 18.0 kV/4160 V auxiliary transformers.
o Control equipment including CT's and protective relays.
The generation facility shall be supplied by three (3) identical
18.0/4.16 kV transformers, each connected to the 18.0 kV bus on
the primary side and each relay protected. The secondary side
shall be cable connected to the 5 kV switchgear. Auxiliary power
for plant startup and shutdown and during plant outages and
maintenance periods, will be backfed from the 500 kV
interconnection.
3.7 PLANT AUXILIARY POWER SYSTEM
The plant auxiliary power system shall include transformers, bus
circuit breakers, switches, motor starters, and other necessary
electrical equipment and controls for supplying power at 4160 V,
480 V, and lower voltages to the various plant auxiliary power and
lighting loads. The plant auxiliary power system shall be capable
of supplying sufficient power to start three gas turbines
simultaneously. These in-plant loads shall include the following:
o Gas turbine auxiliary loads
o 4160 V - motors larger than 250 hp
o 480 V - motors 250 hp and smaller
o Lighting and miscellaneous loads
Plant power shall be distributed from the Switchgear at 4160 V and
480 V via cable in cable trays throughout the plant. Three
4160-480 V transformers, with appropriate protection, shall be
connected to the 480 V switchgear with normally open tie-breakers
to supply the plant low voltage power system.
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The 5 kV metal clad switchgear shall have copper bus and be cable
connected to the secondary of the auxiliary transformers. It shall
be relay protected, have a tie-breaker, provided with local
kilowatt, volt, and ampere metering, have provisions for remote
status monitoring and supply the 4160-480 V transformers. The 5 kV
switchgear shall contain motor controllers with solid state
protective relays which supply 4000 V motors and 4160-480 V
transformers. Motor protection shall include, but not be limited
to, over-current, under-current, single phase, phase unbalance,
and over-temperature. Each unit shall have local-remote control
selection with remote permissive control allowing only the central
control station to relinquish control once the motor has been
started and placed in operation. They shall also have red
(running) and green (off) indicating lights and provisions for
locking in the deenergized position.
The 480 V switchgear shall be bus connected to the three identical
transformers and cable connected to 480 V motor control centers
(MCC). The 480 V switchgear shall have relay protection, a
tie-breaker, provisions for local volt, ampere, and kilowatt
metering, and remote status monitoring. The motor starters in the
MCCs shall have overload protection and indicating lights. It
shall also have provisions for locking the circuit breakers in the
deenergized position. The Contractor shall provide two 480 V
feeders from two separate load centers to the 480 V panel in the
switchyard and control building.
General Electric will provide motor control centers for all
equipment provided with the gas turbine generators as described in
Exhibit H. Contractor shall provide motor control centers for all
other equipment.
The 480 V system shall generally be used to serve all plant
buildings, turbine auxiliary power, motors 250 hp and smaller and
area lighting systems. Auxiliary power for the plant during plant
outages and maintenance periods will be supplied through the
interconnect with Georgia Transmission Corporation, refer to
Electrical One-Line Drawing in Exhibit B.
The remote control and monitoring of the 500 kV switchyard and GTC
Substation (monitoring only) circuit breakers and metering, 5 kV
and 480 V switchgear and 480 V motor control centers shall be
accomplished through the plant control system (PCS). The
Contractor shall provide the cable from the plant PCS system to
the control panels in the switchyard control building.
Generally, motors 25 hp and larger not in continuous service shall
have motor winding heaters. Motor heaters over 1000 W shall be
rated for 208 V operation. Motor heaters shall be energized when
the motors are not operating. When standby or alternate motors are
supplied, the main motor shall be connected to one MCC and the
standby, or alternate, to the other.
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3.8 EMERGENCY DIESEL GENERATOR
Provision shall be made on the 480 V bus for connecting a portable
1000 KW/1250 kVa, 480 volt, three phase diesel engine driven
generator in case of an emergency. The diesel engine will burn the
No. 2 fuel oil used for the gas turbine. The emergency diesel
generator will be furnished by the owner.
3.9 DC POWER SUPPLY
The DC power supply system provides a reliable source of power for
critical control and power functions during normal and emergency
plant operating conditions and shall provide the normal source of
power for the uninterruptible power supply system. The plant shall
be provided with one 120-volt DC batteries. Under normal operating
conditions, two full-capacity battery chargers shall operate in
parallel and supply DC power to the DC loads. The battery chargers
shall receive 480 volt, three-phase, AC power from the low voltage
power supply system and continuously float charge the unit battery
while simultaneously supplying power to the DC loads. The
batteries shall operate ungrounded. A ground detection scheme
shall be provided to detect grounds on either polarity of the DC
power supply system for annunciation in the control room.
Under abnormal or emergency conditions when 480 volt power from
the low voltage power supply system is unavailable, the unit
batteries shall supply DC power to the DC power supply system
loads and the uninterruptible power supply (UPS). Recharging of
discharged batteries shall occur whenever 480 volt power becomes
available from the low voltage power supply system.
The 120 volt DC batteries and the battery charges shall be
connected together in the station battery panel. DC loads shall be
fed from individual molded case circuit breakers in this panel.
The 120 volt DC batteries shall be sized to provide power after
loss of AC power. The battery chargers shall be sized so a
completely discharged battery can be recharged in less than 24
hours while still supplying all normal DC loads plus the largest
anticipated emergency load on a continuous basis.
3.10 UNINTERRUPTIBLE POWER SUPPLY
The uninterruptible power supply (UPS) system provides 240/120
volt AC, single-phase, 60 hertz power to essential instrumentation
and equipment loads that require noninterruptible AC power. The
normal source of power for the UPS shall be from the DC power
supply system. A full-capacity inverter will be connected
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to a 240/120 volt AC panelboard through a static transfer switch
and a manual bypass switch. The inverter shall be in a
free-standing, floor-mounted enclosure and use solid state silicon
controlled rectifier switching assemblies and other devices to
invert DC to AC power. Protecting, monitoring, regulating and
phasing devices shall be included with the inverter. During normal
operation, the inverter shall supply the essential AC loads.
A solid-state switch connected to the output of the inverter shall
continuously monitor both the inverter output and the alternate AC
source. Upon loss of the inverter output, the static switch shall
automatically transfer essential AC loads without interruption
from the inverter output to the alternate source. The power supply
for the alternate source transformer and regulator shall be the
low voltage power supply system.
During normal operation, the inverter-static switch-power panel
combinations shall be dedicated to furnishing the power required
by the UPS. The low voltage power supply system shall be utilized
as a backup to the inverter systems. A manual bypass switch shall
be provided to enable isolation of the inverter-static switch from
service for testing and maintenance without interruption to the
UPS system loads. UPS system loads shall be fed from the UPS AC
panelboards through fast tripping circuit breakers. The inverter
shall be maintained in synchronism with alternate AC power source.
3.11 PLANT CONTROL SYSTEMS
The plant shall be controlled from a central control room. In
addition, the gas turbines shall have local redundant control
stations comprising the following:
o Turbine control panel
o Generator control panel
o Generator auxiliary panel
o Protective relay panel
The control system shall be a microprocessor-based, -control
system designed with redundancy for safety, reliability and
efficiency. All essential control data and alarms shall be
indicated in the central control room.
The gas turbine-generator supplier will provide controls for the
gas turbines and the equipment provided with the gas
turbine-generators. The Contractor shall provide the PCS system
and controls for all equipment not provided by the gas turbine
supplier, and be responsible for integrating the control equipment
into a workable control system.
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3.12 PLANT CONTROL SYSTEM
The plant control system (PCS) shall provide modulating control,
digital control, monitoring, alarming, logging, data archiving,
and indicating functions for the plant systems. The following
functions shall be provided:
o Overall control of the combustion turbine generators and
other systems in a coordinated response to unit load
demands
o Plant startups and shutdowns initiated by the plant
operators
o Operator interface for the turbine generator controls for
normal or automatic operation
o Operator interface for the auxiliary electric system and
switchyard
o Visual and discernible audible alarms for abnormal events
based on field signals or software generated signals
(including out-of-limit parameters) from the systems,
processes or equipment
o Consolidated sequence-of-events recording for the
combustion turbine and balance-of-plant systems to assist
with diagnostic evaluation of plant upsets, trips and plant
operation
o Operator interface through control consoles consisting of
CRTs, keyboards, trackballs, and printers
o On-line hardware and software diagnostics with tuning
capability
o On-line programming and logic changes
o Monitoring of plant equipment and process parameters and
providing this information to the plant operators in a
meaningful format
The Balance of Plant (BOP) equipment will be controlled from a
redundant GE Fanuc PLC added to the Combustion Turbine (CT)
controls data highway. All of the CT Mark V controls will be
linked together by an t ethernet data highway. The GE CT operator
interfaces will be upgraded to the Cimplicity software, running on
a NT PC platform. The Cimplicity software PCS creates a single
level, integrated control system for the plant, which combines the
Mark V turbine control HMI and the PLC controller to provide BOP
control on a single operator interface. It's ethernet
communication capabilities allow it to communicate directly with
the turbine controller without the need for hardwired I/O. In
addition, the PCS Human Machine Interface (HMI) can communicate
with the BOP controllers and the turbine controllers without the
need for any foreign device interface hardware. Three PCs will be
provided for the operator interface. This will allow the control
room operator to access any of the CTs from one location. This
will also provide the platform requested for coordinated response
to unit load commands. An additional PC for "engineering"
activities will be provided. The contractor shall provide, at no
additional cost to Owner, a Data Historian. The Owner will
provide, at Owners cost, the conversion to the HMI Mark V's.
The majority of plant equipment control and information functions
shall be implemented in the PSC . The combustion turbine control
systems shall interface
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with the PCS through data links and a limited complement of
hard-wired I/O for operator actions and information display;
however, the equipment control and protection logic shall be
implemented in the proprietary control systems provided by the
respective equipment suppliers.
Input/output (I/O) modules shall be used for interfacing with
transmitters and other sensors, final control elements, motor
starters, breakers, and other plant equipment located throughout
the plant. The I/O modules containing inputs/outputs used for
control functions shall normally be connected directly to the
individual control processors such that a failure of the
communications network shall not affect the availability of the
inputs/outputs necessary for execution of the control functions of
the system. Where control information is transmitted between
processors via the data highway, the overall security and response
times of the control loops and digital control operations shall be
evaluated for acceptability. To the extent practical, the system
shall be organized so that the program within a processing unit
shall stand alone without dependence upon another processing unit
or loop communications. Where remote I/O cabinets are used, they
shall be located in protected, ventilated (or air conditioned)
environments as appropriate for solid-state electronics, in
accordance with the manufacturer's recommendations.
Each processing unit shall be backed up by a redundant, fully
capable processing unit, operating in a "hot standby" mode, with
automatic transfer of function to the standby unit in the event of
failure of the operating processing unit.
Visual display work stations shall be provided to allow for ease
of operation of the plant control systems, while simultaneously
maintaining separate dedicated CRT displays for alarming and data
acquisition functions. All PCS displays and operator interface
functions shall be available on at least two independent work
stations. The work stations shall include keyboards for entering
operator-initiated control commands. "Hard-wired" devices such as
push buttons and indicators shall be limited to those required by
codes and regulations, and those provided for hard-wired emergency
shutdown push buttons in the unlikely event of control system
failure.
The PCS shall be designed such that no single failure of any
equipment or power source will interrupt or disrupt any system
function, nor will any single failure cause any controlled
equipment to change status unless specifically required in
accordance with the design. System outputs controlling redundant
or parallel process equipment shall be assigned to minimize the
impact of an output card failure. In general, the use of redundant
PCS outputs shall be avoided. In cases of a failure of a single
system input transducer or of an input module serving only that
transducer, a predicted PCS system control response to the failure
shall be allowable. All such failures, however, shall be alarmed.
The PCS shall be equipped with a diagnostic package that includes
both
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hardware and software to detect system malfunction and equipment
failure. The occurrence of any malfunction or equipment failure
shall be immediately alarmed. The diagnostic package shall be
capable of pinpointing the defective component down to the card
level.
The PCS shall be designed to react in a predictable manner to
certain failure:
o Upon system logic failure, as detected by system
diagnostics, a controller shall transfer to its backup. If
the backup is unavailable, the controller outputs shall
fail to a predictable state and shall enable any manual
shutdown facilities which are appropriate to provide
orderly shutdown of equipment.
o Upon system logic power supply failure, the controller
shall transfer to its backup. If the backup is unavailable,
the system outputs shall fail to a de-energized state.
o Upon power failure to an active or running controlled
device or equipment, the system shall react in a
predetermined manner, either to command a restart of the
equipment upon power resumption, or to cycle the logic to a
status requiring equipment shutdown.
The response time of the system shall be sufficient to maintain
control over the plant processes under all system operating
conditions including extreme plant upset conditions with all
points in alarm.
3.13 COMMUNICATIONS SYSTEMS
Provisions will be made for communication with Georgia
Transmission Corporation and other electric utilities over power
line carrier and by telephone. The plant control system shall be
capable of interacting with digital signals from the microwave
control and the communications systems as required.
A page/party system with local handsets and paging speakers shall
be provided for communication within the plant. Telephones shall
be provided in office areas and the control room.
3.14 AREA CLASSIFICATION
Hazardous areas in the facility shall be classified in accordance
with the appropriate sections of the NEC and API RP-500 series. A
preliminary determination of such areas follows. Contractor is
responsible for making final determinations and designing
accordingly.
Class 1, Group D and/or B, Division 1 (Explosion Proof)
<PAGE>
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
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Page 17 of 23
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Within 5 ft of fuel relief valves. Dumps or drains, or
other below grade facilities within the process area.
Class 1, Group D and/or B, Division 2 (Explosion Proof)
Metering and Regulator Area
Metering and Separator Area
Scrubber and Separator Area
Lube Oil Storage Tank
Fuel Oil Storage Tank
Areas adjacent to Division 1 Areas
Gas Turbine Fuel Oil Forwarding Area
Gas Turbine Fuel Gas Metering and Control Area
Non-Hazardous (Any area not otherwise classified)
Control Building
Office Buildings
Switchyard Control Building
Warehouse Buildings
Pressurized Buildings, Cubicles, or Panels
3.15 SECURITY SYSTEM
The plant security system shall consist of an electrically
operated main gate with remote open, stop, and close controls. The
secondary gate will be opened manually.
The main gate shall be capable of being operated at either the
office or control room and have Closed Circuit TV (CCTV) and
two-way speakers with on-off control. Contractor shall provide all
permanent surveillance facilities, including CCTV. Contractor
shall provide security monitor (minimum 14" screen) in the control
room and provide CCTV cabling between gates and the control room.
CCTV's shall have remote pan and zoom capabilities.
Both gates shall be equipped with either card keys or key switches
for use by plant employees.
Owner's responsibility for security will commence on the
commercial operation date and when the plant security system is
completed.
3.16 LIGHTING/RECEPTACLES
The plant roadway and parking areas shall be provided with high
pressure sodium area lighting with photo electric relay control
suitable to the specific area being illuminated.
<PAGE>
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
------------------------
Page 18 of 23
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All high-intensity lighting shall be directed downward and inward,
not outward from the facility towards off-site locations. There
shall be no adverse effects on safety or interference with
existing views.
Indoor low ceiling areas shall be provided with fluorescent
lighting suitable to the task being illuminated. Illumination
levels shall be designed using the latest IES recommendations.
Wall mounted emergency lighting futures with integral battery,
trickle charger, and two incandescent lamps shall be provided for
egress routes. Lighting duration shall be in accordance with the
latest NFPA 101 Life Safety Code. Optionally, emergency lighting
may be powered from the plant 125 Vdc system.
Power receptacles shall be provided in all finished and unfinished
building areas. Receptacles shall be provided throughout the plant
area to provide suitable coverage for maintenance activities.
Welding receptacles shall be provided throughout the plant area
for maintenance activities and shall be supplied from 480 V MCCS.
The telephone system, telecopier, and control room computer will
be powered from the UPS to provide a regulated, uninterruptible
source of power.
3.17 GROUNDING/LIGHTNING PROTECTION
A grounding grid system(s) consisting of driven copper clad ground
rods and stranded copper cable shall be installed at the facility.
All major electrical equipment, major structural steel members,
stacks, tanks, cooling tower, fencing, etc. shall be bonded to the
ground system. The Contractor shall provide the final site soil
resistivity survey for use in the grounding system design.
Lightning protection shall be provided for all buildings,
structures and equipment provided by the Contractor. Lightning
terminals with roof conductors and down conductors shall be
installed on building roofs, stack, and other areas as required.
3.18 CATHODIC PROTECTION
Cathodic protection system shall be provided on equipment and
tanks as required and on all underground metallic piping systems.
The system shall be of the impressed grid type with surface
coatings for the piping. The cathodic protection systems shall be
designed in accordance with NACE requirements and shall be based
on the results of the Contractor's soils testing.
<PAGE>
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
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Page 19 of 23
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3.19 MISCELLANEOUS EQUIPMENT
The proposed generation facility shall include the following
miscellaneous equipment:
o Air compressors, dryers, and receivers for instrument and
plant air systems. Two air compressor systems capable of
producing air as required (at 125 psig) shall be provided,
with the plant air system piped to provide backup for the
instrument air system. The air receiver shall be 1,000
gallons minimum to minimize cycling of the air compressors.
o Safety showers and eyewash stations shall be provided in
chemical handling areas and in battery room.
o Mechanical equipment including air handling units, heating
and air conditioning units, hot water heater, locker rooms,
and fire extinguishers as required for plant buildings.
o Monorail hoists in the maintenance shop rated at 5 tons
3.20 PLANT WATER DISCHARGE SYSTEM
Process equipment areas shall be surfaced and curbed, with drains
directed to sumps. Sump pumps shall be provided to deliver water
collected in the oil/water sumps to an oil/water separator. Oil
removed from the water will be collected and disposed of by a
qualified contractor. Design shall accommodate the disposal
contractor connection.
Water from the gas turbine evaporative coolers will discharge to a
300,000 gallon retention pond. Treated water and other oil-free
wastewater streams from the oil/water separator shall discharge to
a 5,000 gallon plant sump. Water from the plant sump shall be
combined with evaporative cooler blowdown at a metering/sampling
structure and sent to Hilly Mill Creek.
Sanitary wastewater from the plant shall be discharged to a septic
tank field system in conformance with local regulations.
3.21 STORM WATER DRAINAGE SYSTEM
A storm water collection and drainage system shall be provided to
collect storm water from non-process areas, and control and
discharge storm water runoff from the site in accordance with the
NPDES Permit and County regulations. A system of ditches and
culverts, or catch basins, and storm sewers shall be provided as
required to collect and control the storm water runoff. The storm
water runoff from non-process areas shall be directed to the
biofiltration swale. The water cleaned by the biofiltration swale
will discharge to Hilly Mill Creek. Storm water
<PAGE>
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
------------------------
Page 20 of 23
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- --------------------------------------------------------------------------------
runoff from process areas shall be routed directly to the
oil/water separators.
The diked area around the fuel oil storage tank shall connect to
the plant oil/water separator system through a control structure
with a shutoff valve that will remain closed to contain any oil
spill. An impervious lining shall be placed within the diked area
to prevent fuel oil from entering the soil and ground water.
3.22 CIVIL
The site of the proposed facility is currently undeveloped and
forested. A forest products company will harvest the trees from
the plant site leaving a buffer zone around the plant. The
remaining trees on the site shall not be removed or disturbed.
A preliminary site Grading and Draining Drawing has been included
in Attachment IV to show existing site topography and the
preliminary site drainage plan. The Contractor shall prepare the
final grading plan for Owner's review and approval. As part of the
final grading plan the Contractor shall provide landscaping berms
approximately 8-10 feet above finished grade, along the north side
of the entrance road to the site. Contractor is only obligated to
provide the landscaping berms to the extent that cut exceeds fill.
The Owner will plant trees and shrubs on the berms as part of the
final landscaping plan.
On-site surfacing shall be in accordance with Exhibit B. On-site
plant roads and parking areas shall be asphalt. Plant parking
areas shall accommodate 10 cars. Areas where leaks or containments
may occur shall be concrete slab and isolated to retain spillage.
The plant switchyard area and areas around the equipment shall be
surfaced with crushed stone. Other areas of the plant not
receiving paving or crushed stone shall be finish graded and
seeded as specified in Exhibit B.
Fencing shall be installed around the plant proper main step-up
transformers and the switchyard. The fence for the plant proper
shall have one motor operated main gate and one secondary gate.
The switchyard shall have three vehicle access gates.
During construction activities the Contractor shall comply with
the mitigation measures as outlined in the environmental permits
for this project.
The project work scope does not include wetlands delineation or
mitigation. All wetlands delineation and mitigation will be the
Owner's responsibility. Contractor's work scope does not include
the salvage, relocation, or replanting of any trees.
<PAGE>
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
------------------------
Page 21 of 23
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3.23 STRUCTURAL/ARCHITECTURAL
3.23.1 FOUNDATIONS
For purposes of preliminary design, the foundation design as
recommended in the Preliminary Soils Survey, Attachment VI, shall
be utilized. The Contractor shall obtain a final geotechnical
report from a qualified firm for the designing of foundations.
Outdoor equipment and structural steel foundations shall be a
minimum of 1 foot above finished grade. Equipment installed
indoors shall be set on equipment pads or foundations which are a
minimum of 6 inches above the finished floor elevation.
The gas turbines shall be installed on reinforced concrete
pedestals or foundations isolated from other structures or
foundations.
3.23.2 BUILDINGS AND STRUCTURES
A building enclosing the following areas shall be provided for the
facility:
o Control Room, Switchgear, Offices, Maintenance and
Warehouse Areas
o Firewater and Water Pump Building(s)
o Continuous Emissions Monitoring Building(s)
o 4160/480 Switchgear Building(s)
The Control Area shall contain areas for 480 V switchgear, and
motor control centers, UPS battery system, and control room.
The Maintenance and Office Areas shall contain the main entrance
vestibule, offices, restrooms/locker rooms, conference/lunchroom,
electrical/instrument shop, general storage warehouse, mechanical
equipment room, storage and maintenance workshop area, and
janitor's closet.
The Contractor shall design the maintenance, office, warehouse,
control and switchgear areas of the plant to provide the following
areas as a minimum:
<TABLE>
<CAPTION>
AREA/ROOMS MINIMUM SIZE/FT2
---------- ----------------
<S> <C>
One office 190
Four offices 120 (ea)
Administrative Area Conference Room 200
Administrative Assistant Area 100
Entry/Reception Area 150
Library 120
Office Area Storage Room 75
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
------------------------
Page 22 of 23
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- --------------------------------------------------------------------------------
Janitor's Closet 40
Employee Lunch/Conference Room 250
Men's Locker Room/Restroom 250
Women's Locker Room/Restroom 175
Electrical/I & C Shop 300
Maintenance Shop 2800
Warehouse 1500
Control Room By Contractor
Electrical Equipment Room By Contractor
Battery Room By Contractor
Mechanical Equipment Room By Contractor
</TABLE>
A preliminary building layout is included in Attachment V to
indicate the conceptual layout of the building. The Contractor
shall develop a final building layout during detail design. The
final building layout shall be acceptable to the Owner.
In addition to the main building, the following special purpose
buildings shall be provided:
o The location and number of pump buildings and the location
of pumps shall be finalized by the Contractor during the
Contractor's detail design.
o A CEM building(s) shall enclose the Continuous Emissions
Monitoring equipment.
o Any additional buildings required by Contractor's design.
3.23.3 ARCHITECTURE
The architectural design shall be based on the aesthetic
requirements, the functional building and spatial requirements,
and the provision for low maintenance materials which are
compatible with the Project and desired aesthetic treatment.
A preliminary layout of the buildings is shown in the Plot Plan.
The Contractor shall generally follow the arrangement shown. The
Contractor may offer alternate arrangements based on the actual
equipment offered and based on the Contractor's experience.
All buildings shall be steel framed or pre-engineered metal
structures with insulated metal siding and roofing. Masonry
buildings with steel truss roofs will be considered as an
alternative.
3.23.3.1 SIGNAGE AND FLAGPOLES
Signs and graphic designs for identification and directions shall
be incorporated into the finishing of spaces. Signage shall be
employed for safety, ease of
<PAGE>
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
------------------------
Page 23 of 23
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- --------------------------------------------------------------------------------
operation and direction. The signage system utilized shall provide
simple and direct indications using both graphics and text.
A lighted sign shall be installed at the main entrance gate to the
facility. The sign shall be a minimum of 5' x 10'. An aluminum
flagpole shall be installed on the front lawn of the office
facility. All signage shall be subject to Owner approval.
3.24 INTERCONNECTIONS
Contractor shall provide the following interconnections. Points
will be located as shown on the Site Interconnection Drawing in
Exhibit B, Attachment I. Contractor shall be responsible for
coordinating interconnection design and construction as required
for proper tie-in suitable to Owner and affected parties. The
Contractor is responsible for determining actual distances
required.
o Natural Gas - Provide a tie-in to the Transco pipeline at
the southern portion of the site.
o Waste Water - Provide a discharge from the
sampling/metering structure to Hilly Mill Creek as shown on
Attachment I of Exhibit B.
o Storm Water - Provide a discharge from the biofiltration
swale to Hilly Mill Creek as shown on Attachment I of
Exhibit B.
o City Water - Provide a tie-in to the Heard County, Georgia
water main on Attachment I of Exhibit B.
o Electrical - Provide an electrical tie-in point at the high
side bushings of the main step-up transformers for the 500
kV system. Provide two 480 V power supplies to the
switchyard control building.
o Control Signals - Provide cabling from plant control room
to the switchyard control building for relay signals,
monitoring switchyard meters and circuit breaker positions
and from the control room to the gas meter signal receiver
(located on the plant site).
o Telephone - Provide suitable raceway from telecommunication
closet to the telephone company tie-in location. The
telephone company will install telephone company owned
circuits into the telecommunications closet.
3.25 NOISE CONTROL
The Plant shall be designed to comply with a 58 dBA far field
sound level limitation at 1200 feet. Sound level limitations are
exclusive of startup, shutdown, transients and off normal
operating conditions. The noise levels shall be met and guaranteed
with the plant equipment including building ventilation systems in
normal operation.
<PAGE>
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TENASKA GEORGIA GENERATION PROJECT EPC - Exhibit A
------------------------
Page 24 of 23
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- --------------------------------------------------------------------------------
Plant equipment shall be designed for sound levels not to exceed
90 dBA measured at three feet from the equipment or equipment
enclosure, exclusive of startup, shutdown, transients and off
normal operating conditions and sound emissions attributable from
the combustion turbine exhaust. The combustion turbine/generator
equipment will be furnished by General Electric with near field
noise levels in accordance with Exhibit H.
Noise control during construction shall include limiting noise
levels produced by construction equipment and restricting
construction activities at night.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT A
ATTACHMENT I
SITE LOCATION
The following is a description of the information which cannot be submitted
electronically:
MAP OF TENASKA GEORGIA GENERATION FACILITY SITE LOCATION
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT A
ATTACHMENT II
PRELIMINARY WATER BALANCE &
PRELIMINARY WATER ANALYSIS
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT A
ATTACHMENT III
PRELIMINARY SERVICES BUILDING ARRANGEMENT
The following is a description of the information which cannot be submitted
electronically:
DRAWING OF TENASKA GENERATION PROJECT ADMINISTRATION/MAINTENANCE WAREHOUSE
BUILDING
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT A
ATTACHMENT IV
PRELIMINARY GEOTECH REPORT
The following is a description of the information which cannot be submitted
electronically:
PRELIMINARY GEOTECHNICAL EVALUATION OF THE HEARD COUNTY GEORGIA POWER GENERATION
FACILITY IN HEARD COUNTY, GEORGIA PREPARED FOR TENASKA, INC. ON JUNE OF 1998 BY
EMCON - 18 PAGES
EMCON TOPOGRAPHIC/SITE LOCATION MAP - FIGURE 1 OF HEARD COUNTY POWER GENERATION
FACILITY
EMCON DRAWING OF BORING LOCATION PLAN - FIGURE 2
APPENDIX A - EMCON BORING LOGS - 19 PAGES
APPENDIX B - EMCON LABORATORY TEST RESULTS
A) GRADATION CURVE - 5 PAGES
B) MOISTURE-DENSITY RELATIONSHIP TEST - 2 PAGES
C) SOIL/WASTE ANALYSIS - 1 PAGE
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION FOR TENASKA PLANT SITE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY, GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY, 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY RIGHT OF WAY LINE
OF GEORGE BROWN ROAD SOUTH 72 DEGREES 57 MINUTES 18 SECONDS WEST FOR A DISTANCE
OF 916.24 FEET TO A STEEL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE
POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND. THENCE SOUTH 00
DEGREES 16 MINUTES 00 SECONDS WEST FOR A DISTANCE OF 902.40 FEET TO A STEEL
FENCE POST; THENCE SOUTH 02 DEGREES 39 MINUTES 49 SECONDS EAST FOR A DISTANCE OF
321.00 FEET TO A ONE INCH PIPE; THENCE SOUTH 00 DEGREES 34 MINUTES 44 SECONDS
EAST FOR A DISTANCE OF 802.62 FEET TO A ONE INCH PIPE; THENCE SOUTH 00 DEGREES
34 MINUTES 44 SECONDS EAST FOR A DISTANCE OF 291.17 FEET TO A POINT IN THE
CENTERLINE OF HILLY MILL CREEK; THENCE FOLLOWING THE COURSE OF THE CENTERLINE OF
HILLY MILL CREEK IN A WESTERLY DIRECTION, TRAVERSED AS FOLLOWS; NORTH 62 DEGREES
07 MINUTES 20 SECONDS WEST FOR A DISTANCE OF 98.34 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK; THENCE SOUTH 20 DEGREES 00 MINUTES 44 SECONDS WEST FOR
A DISTANCE OF 136.80 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE
NORTH 74 DEGREES 21 MINUTES 03 SECONDS WEST FOR A DISTANCE OF 223.86 FEET TO A
POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION LINE RIGHT OF
WAY (150 FOOT WIDTH); THENCE NORTH 74 DEGREES 21 MINUTES 03 SECONDS WEST FOR A
DISTANCE OF 36.90 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH
47 DEGREES 24 MINUTES 20 SECONDS WEST FOR A DISTANCE OF 127.90 FEET TO A POINT
IN THE CENTERLINE OF THE CREEK; THENCE NORTH 79 DEGREES 16 MINUTES 25 SECONDS
WEST FOR A DISTANCE OF 274.76 FEET TO A POINT IN THE CENTERLINE OF THE CREEK;
THENCE NORTH 54 DEGREES 59 MINUTES 10 SECONDS WEST FOR A DISTANCE OF 188.31 FEET
TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE LEAVING THE CENTERLINE OF THE
CREEK NORTH 27 DEGREES 08 MINUTES 04 SECONDS WEST FOR A DISTANCE OF 142.40 FEET
TO A POINT; THENCE NORTH 76 DEGREES 02 MINUTES 42 SECONDS WEST FOR A DISTANCE OF
170.99 FEET TO A POINT; THENCE NORTH 54 DEGREES 14 MINUTES 27 SECONDS WEST FOR A
DISTANCE OF 280.96 FEET TO A POINT; THENCE NORTH 66 DEGREES 49 MINUTES 01
SECONDS WEST FOR A DISTANCE OF 101.90 FEET TO A POINT; THENCE SOUTH 55 DEGREES
21 MINUTES 00 SECONDS WEST FOR A DISTANCE OF 162.95 FEET TO A POINT; THENCE
NORTH 81 DEGREES
<PAGE>
39 MINUTES 29 SECONDS WEST FOR A DISTANCE OF 406.05 FEET TO A POINT; THENCE
NORTH 30 DEGREES 16 MINUTES 39 SECONDS WEST FOR A DISTANCE OF 496.12 FEET TO AN
INTERSECTION OF SAID LINE WITH THE CENTERLINE OF AN UNNAMED CREEK FROM THE
NORTHEAST; THENCE FOLLOWING THE CENTERLINE OF SAID UNNAMED CREEK TO THE
NORTHEAST, TRAVERSED AS FOLLOWS; NORTH 67 DEGREES 00 MINUTES 13 SECONDS EAST FOR
A DISTANCE OF 336.28 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE
NORTH 64 DEGREES 26 MINUTES 52 SECONDS EAST FOR A DISTANCE OF 296.07 FEET TO A
POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 53 DEGREES 40 MINUTES 03
SECONDS EAST FOR A DISTANCE OF 67.68 FEET TO A POINT IN THE CENTERLINE OF THE
CREEK; THENCE NORTH 16 DEGREES 14 MINUTES 29 SECONDS EAST FOR A DISTANCE OF
228.26 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 22 DEGREES
18 MINUTES 47 SECONDS EAST FOR A DISTANCE OF 241.49 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK; THENCE NORTH 06 DEGREES 14 MINUTES 09 SECONDS EAST FOR
A DISTANCE OF 71.42 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH
78 DEGREES 23 MINUTES 44 SECONDS EAST FOR A DISTANCE OF 307.88 FEET TO A POINT
IN THE CENTERLINE OF THE CREEK; THENCE NORTH 47 DEGREES 11 MINUTES 56 SECONDS
EAST FOR A DISTANCE OF 157.63 FEET TO A POINT IN THE CENTERLINE OF THE CREEK;
THENCE NORTH 26 DEGREES 01 MINUTES 20 SECONDS EAST FOR A DISTANCE OF 111.97 FEET
TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 54 DEGREES 06 MINUTES 33
SECONDS EAST FOR A DISTANCE OF 128.35 FEET TO A POINT IN THE CENTERLINE OF THE
CREEK; THENCE NORTH 07 DEGREES 03 MINUTES 45 SECONDS EAST FOR A DISTANCE OF
34.61 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE LEAVING THE CREEK
SOUTH 89 DEGREES 40 MINUTES 10 SECONDS EAST FOR A DISTANCE OF 290.53 FEET TO
POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION LINE EASEMENT
(150 FOOT WIDTH); THENCE SOUTH 89 DEGREES 40 MINUTES 10 SECONDS EAST FOR A
DISTANCE OF 177.44 FEET TO A 12 INCH DIAMETER WOOD POST; THENCE NORTH 71 DEGREES
45 MINUTES 00 SECONDS EAST FOR A DISTANCE OF 405.46 FEET TO A STEEL FENCE POST
FLUSH WITH THE GROUND; SAID POINT BEING THE POINT OF BEGINNING.
SAID PARCEL CONTAINS 73.53 ACRES OF LAND, AND IS MORE PARTICULARLY SHOWN AS
TRACT "A" ON SHEET 1 OF 2 OF THAT CERTAIN ALTA/ACSM LAND TITLE SURVEY FOR
TENASKA, INC., FIRST AMERICAN TITLE INSURANCE COMPANY AND OTHER PARTIES TO BE
NAMED, PREPARED BY DONALDSON, GARRET & ASSOCIATES, INC., MACON, GEORGIA, DATED
APRIL 3, 1998.
<PAGE>
The following is a description of information which cannot be submitted
electronically:
TOPO MAP OF TENASKA GEORGIA GENERATION FACILITY SITE PLAN
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT A
ATTACHMENT V
SITE LEGAL DESCRIPTION AND TOPO MAP
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT A
ATTACHMENT VI
NOT USED
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT B
SCOPE OF WORK
<PAGE>
- --------------------------------------------------- ------------------------
EPC - Exhibit B
------------------------
TENASKA GEORGIA GENERATION PROJECT Page 1 of 132
- --------------------------------------------------- ------------------------
- --------------------------------------------------- ------------------------
<TABLE>
TABLE OF CONTENTS
<S> <C> <C>
1.0 SCOPE OF WORK.....................................................................................2
1.1 Introduction..................................................................................2
1.2 Engineering and Design........................................................................4
1.3 Construction, Erection and Commissioning.....................................................10
1.4 Project Management...........................................................................15
2.0 TECHNICAL REQUIREMENTS AND SPECIFICATIONS........................................................16
2.1 General......................................................................................16
2.2 Civil........................................................................................18
2.3 Structural...................................................................................28
2.4 Architectural................................................................................40
2.5 Mechanical...................................................................................46
2.6 Electrical...................................................................................84
2.7 Instrumentation and Control.................................................................113
</TABLE>
ATTACHMENTS
Attachment I - Design Guide Drawings
Attachment II - Redacted Electric Utility Interconnection Agreement
Attachment III - Not Used
Attachment IV - Redacted Power Purchase Agreement
Attachment V - Control System Configuration Black Diagram
Attachment VI - Extended Warranty Equipment List
<PAGE>
- --------------------------------------------------- ------------------------
EPC - Exhibit B
------------------------
TENASKA GEORGIA GENERATION PROJECT Page 2 of 132
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- --------------------------------------------------- ------------------------
1.0 SCOPE OF WORK
1.1 INTRODUCTION
The Contractor shall be responsible for the design,
engineering, equipment and materials procurement,
construction, commissioning, start-up, and testing of the
plant. The scope of work shall include all tasks necessary to
provide to the Owner with a complete and functional facility
in conformance with the performance parameters indicated in
this document and acceptable to the Owner. The design guide
drawings included in Attachment I shall be used as a guide.
They may be modified by the Contractor as his design requires,
subject to approval of the Owner.
The engineering, procurement and construction services to be
performed by the Contractor shall include, but not be limited
to, the following:
- Review of and compliance with local, state and
federal codes, regulations and standards
- Coordinate with the appropriate regulatory officials
for design submittals and interpretation of codes,
regulations, and standards
- Obtain all building, construction and occupancy
permits
- Prepare and issue plot plans and general arrangement
drawings
- Prepare and issue energy and mass balances
- Prepare and issue P&IDs
- Prepare and issue electrical one-lines
- Prepare and issue plant control system block diagrams
- Provide schedule for use by Owner in developing
overall project schedule
- Provide written facility description and system
descriptions
- Prepare and issue equipment list
- Conduct final soils investigations
- Develop civil and structural design criteria based
upon geotechnical program
<PAGE>
- --------------------------------------------------- ------------------------
EPC - Exhibit B
------------------------
TENASKA GEORGIA GENERATION PROJECT Page 3 of 132
- --------------------------------------------------- ------------------------
- --------------------------------------------------- ------------------------
- Prepare engineering analysis and calculations by
discipline (mechanical, project, electrical,
civil/structural and instrumentation)
- Prepare equipment and material specifications
- Prepare construction drawings
- Procure and install all equipment and material
between the tie-in points necessary for a complete
generation facility
- Prepare requisitions for equipment and material,
review bids and issue purchase orders for equipment
and materials, except for the combustion
turbine-generators
- Provide technical personnel for interface during
field construction, checkout and start-up
- Process and review vendor drawings and maintain a
vendor document control system
- Provide support to construction contractors as
required during construction
- Provide start-up and checkout services and
supervision as required, supplemented as necessary by
vendor personnel
- Provide system descriptions and class room training
support by the project mechanical engineer and the
project electrical/control engineer for a period of
two weeks each for the Owner's operator training
program for up to ten (10)operators
- Provide 10 sets of Operating and Maintenance manuals
in English and U.S. units for all equipment
- Provide Plant Startup Procedures
- Publish monthly progress report for Owner review
- Expedite vendors as required to maintain project
schedule
- Specify and conduct performance test(s)
- Participate in monthly project meeting conducted by
Owner
- Maintain detailed drawing schedules and overall
project schedules
- Provide quality control and quality assurance
programs
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1.2 ENGINEERING AND DESIGN
1.2.1 General Requirements
The Contractor shall be responsible for providing all
engineering and design services required for the
construction of the generation facility. Detail
engineering shall include the preparation of
equipment and material specifications, construction
drawings based on calculations, studies and vendor
information, and final as-built drawings.
The Contractor shall review and comply with all
applicable local, state and federal codes,
regulations and standards. Coordination with the
appropriate regulatory officials shall be the
Contractor's responsibility.
The engineering and design shall assure that all
equipment and systems fit and work together as
integrated systems and that the design and
installation are compatible with systems provided by
others such that their function, operation, safety
and performance are not impaired.
The Contractor shall keep one (1) copy of all
drawings, specifications, amendments, O&M manuals,
and other pertinent data at the jobsite and engineers
office, which shall be kept in good order and
available for use by the Owner.
All Contractor specifications and design and
construction drawings shall be stamped and signed by
a professional engineer registered in the State of
Georgia.
The Contractor shall prepare and maintain, on a
current basis, drawing and specification lists,
engineering and design schedule, and purchasing and
delivery schedules to help monitor and expedite the
progress of the work. The engineering/design and
purchase/delivery schedules shall be prepared using
the critical path method (CPM) scheduling technique
and shall be coordinated with the Contractor's
construction schedule.
The Contractor shall prepare and maintain complete
plot plans, underground utility plans and plant
general arrangement drawings showing the exact
location and elevation of the equipment, apparatus,
roadways, access/maintenance aisles, platforms,
walkways, stairs, etc. These drawings will be updated
to agree with the final equipment outline drawings as
they become available from the vendors.
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1.2.2 Civil Work
The Contractor shall be responsible for the full
development of the civil engineering and design for
the facility. This shall include, but not be limited
to, the preparation of calculations, drawings and
specifications for the following:
- Site layout and arrangement
- Site preparation, clearing and grubbing
- Grading, excavation and backfill
- Erosion and sedimentation control
- Surface and underground drainage systems
- Roadways, parking and walkways
- Site security, fencing and gates
- Oil and chemical spill containment
- All underground utilities and yard piping
The Contractor shall prepare specifications for final
soils exploration and site survey as required for the
engineering and design of the foundations for
buildings, auxiliary structures, and equipment and
preparation of site work drawings.
1.2.3 Structural Work
The Contractor shall be responsible for the full
development of the structural engineering and design
including preparation of calculations, drawings and
specifications for all equipment and building
foundations, sub-structures, slabs and pedestals;
plant buildings including structural steel and floor
systems; and steel structures including equipment
supports, pipe racks, platforms, stairways and
handrails.
1.2.4 Architectural Work
The Contractor shall be responsible for the full
development of the architectural design. The
architectural design and specifications shall include
all power plant buildings, including roofing systems,
wall systems, interior and exterior finishes, finish
and hardware schedules, window and doors, and
architectural materials.
The design of the Facility shall include the fire
protection provisions as specified in Exhibit A.
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Materials shall be selected and design criteria
developed based on aesthetics, durability and ease of
maintenance. Finish materials and colors shall be
approved by the Owner. Finish and color schedules
shall include, but not be limited to, the following:
- All areas including floor, base, walls and
ceilings
- Handrails
- Doors
- Windows and glazing
- Cabinets and countertops
- Lockers
- Toilet partitions and accessories
- Equipment and piping
1.2.5 Mechanical WorkERROR! BOOKMARK NOT DEFINED.
The Contractor shall be responsible for the full
development of the mechanical engineering and design.
The mechanical design shall include, but not be
limited to, the following:
- Preparation of piping and instrument
diagrams (P&ID's) for each piping system
indicating all equipment tag numbers, line
sizing, valving, specialties, flow elements
and instrumentation.
- Design of piping systems included in the
scope of supply. Preparation of piping
drawings as necessary to establish
clearances and locate pipeline connections
to major components of equipment as well as
to evaluate location of any supports.
Preparation of stress, vibration, pulsation
and flexibility analysis as required. Piping
drawings shall locate required valves,
fittings, specialties and connections.
Drawings shall be suitable for general pipe
fabrication and erection. Pipe support and
pipe hanger drawings shall be provided as
necessary for construction.
- Specifications and lists of necessary
valves, piping materials, specialties and
miscellaneous items.
- Specification requirements for heat
insulation and freeze protection and
covering both for heat retention and
personnel protection. These
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specifications shall define materials,
thicknesses and type of finish and
jacket materials.
- Preparation of heating, ventilation, and air
conditioning equipment schedules and
installation drawings.
- Preparation of lists of mechanical
equipment, lubricants, spare parts, and
chemicals as specified by equipment vendors.
All lube oils for the gas turbine lube oil
systems shall meet the turbine
manufacturer's requirements.
- Preparation of plumbing plans and details.
- Preparation of facility general arrangement
drawings showing equipment location, access
for maintenance, repair and removal, and
administration/maintenance area
arrangements.
- Preparation of mass and energy balance
diagrams for the entire operating range of
the equipment being supplied. The diagrams
shall be updated as design progresses to use
actual turbine data, etc.
1.2.6 Electrical Work
The Contractor shall be responsible for the full
development of the electrical engineering and design.
The electrical design, as a minimum, shall include
the following:
- Preparation of detailed one-line diagrams,
illustrating major power equipment and power
circuitry. These drawings shall also
indicate the ratings of the major electrical
apparatus as well as indicate the
instrumentation and protective relaying
functions and cable size and numbers being
provided.
- Development of arrangement drawings locating
the electrical apparatus. This design effort
shall consider access for the installation
of the equipment. These drawings shall be
utilized in defining the configuration of
the electrical equipment, determining
material lengths and fittings, etc.
- Preparation of conduit and cable schedules
for the interconnecting power, control and
instrumentation cables. These lists shall
define terminating points, sizes and types
of cables, lengths, routing, and, where
applicable, color coding.
- Preparation of installation drawings for the
electrical equipment and associated
interconnecting cables. Such drawings shall
define conduit routing, cable tray routing,
duct bank routing, grounding, manhole,
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pullboxes and other details as necessary to
guide the installation effort and determine
the installation material requirements.
- Preparation of specifications required for
the installation of equipment and materials.
- Preparation of drawings for lighting within
the scope of this contract. These drawings
shall indicate the approximate location and
types of lighting fixtures. They shall
consist of wiring diagrams, schedules,
plans, sections and lists, providing for all
the associated switches, conduit and wiring.
- Preparation of electrical equipment, motor
and electrical load lists.
- Preparation of termination, elementary and
interconnection drawings.
- Preparation of three-line diagrams of
3-phase electrical systems showing all
relaying, metering and synchronizing
connections down through 4.16 kV
transformers.
- Preparation of grounding drawings showing
grounding method and connections to
equipment and structures.
- Preparation of cathodic protection drawings
showing electrical connection diagrams and
locations of equipment and materials.
- Perform the required basic electrical
studies such as short circuit, voltage drop,
relay coordination, grounding, load flow and
motor starting.
- Preparation of lightning protection system
design.
- Design of plant security and communication
system.
- Design of the uninterruptible power supply
(UPS) and DC systems.
1.2.7 Instrumentation and Control
The Contractor shall be responsible for the full
development of the instrumentation and control (I&C)
engineering and design. The I&C design shall include,
but not be limited to, the following:
- Preparation of specifications for the
procurement and installation of instruments,
control systems, PCS, CEM system, control
valves and control panels
- Preparation of instrument list with
instrument tag numbers, service,
manufacturer, model number, location, set
points, etc.
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- Preparation of logic diagrams and control
loop diagrams per ISA Standards
- Instrument installation details
- Preparation of detailed block diagrams
illustrating the major components of the
plant control system (PCS). All CRT display
screens shall be included.
- Preparation of the control room arrangement
drawing showing arrangement of PCS consoles,
printers, and auxiliary control
panels/consoles.
- CRT graphic display sketches and I/O list
for the PCS
1.2.8 Drawings
The Contractor shall prepare all drawings required
for procurement of equipment and materials, for
construction of the facility, and for obtaining the
required construction and building permits. The
drawings shall show complete details of all
components and types and location of all materials
and equipment.
The Contractor shall prepare, and maintain up to
date, a master drawing list of all drawings, both
design and vendor, for the project.
The Contractor shall review and approve all vendor
documents including outline drawings, diagrams, shop
drawings, inspection and test procedures, samples and
other vendor submissions for conformance with the
design concepts and quality levels of the plant and
for compliance and consistency with the Contractor's
engineering calculations, drawings, and
specifications.
The Contractor shall furnish to Owner three (3)
copies of each drawing, including vendor drawings, in
accordance with Exhibit L.
Upon completion of the work, Contractor shall update
all approved working drawings, so that they show the
final installation (as built) complete in all
respects, and shall provide Owner with one (1) set of
full size reproducibles on 3-mil Mylar base, bond
paper, or similar material, with matte finish on both
sides and on computer disk (CD) one (1) set of final
CADD drawings if available to the Contractor. Certain
vendor documents and catalog type cut sheets need not
be submitted on Mylar or as CADD files. All drawings,
drawing notes, design data, and calculations, etc.
shall be in English and use the units of weights and
measures commonly employed by engineers in the United
States.
Owner shall be allowed 8 business days for review of
drawings, equipment specifications, etc. without
compromising project schedule.
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Approval or failure to approve and/or comment by
Owner on any of the Contractor drawings, drawing
notes, design data, and calculations, etc. will not
relieve and shall not waive any of Contractor rights,
obligations, duties, and responsibilities under the
terms of the contract or applicable law.
1.2.9 Specifications and Procurement
The Contractor shall prepare specifications for the
procurement of all equipment and materials required
for the project, except for the gas turbine
generators. The Owner will purchase the gas turbine
generators and assign the Owner's Purchase Agreement
to the Contractor.
The Contractor shall obtain equipment and materials
from suppliers acceptable to the Owner. Contractor
may submit non-pre-approved suppliers to the Owner
for review and approval. Where vendor engineering is
used, the Contractor is responsible for all aspects
of the vendor's design.
The Contractor shall furnish copies of the technical
portions of all Purchase Orders for equipment and
materials.
The Contractor shall monitor and expedite the
submittal of vendor documents and delivery of
equipment and material to maintain the Project
Schedule.
The Contractor shall conduct shop inspections and
witness shop tests on selected equipment including,
but not limited to, turbine generators, switchgear,
PCS, and unit substations. The Owner shall have the
right to inspect or witness the inspection of any
equipment, materials, test, etc. The witnessing or
inspection by the Owner does not in any way relieve
the Contractor of his obligations.
1.3 CONSTRUCTION, ERECTION AND COMMISSIONING
1.3.1 General RequirementsERROR! BOOKMARK NOT DEFINED.
The construction, erection and commissioning services
shall consist of necessary management, materials,
technical advisory services, supervision, labor and
construction aids to install and make ready for
turnover all the equipment and materials being
provided in this project.
The Contractor shall maintain a quality control
program which provides that the engineering,
manufacture, fabrication and construction are
controlled at all points required to provide a
facility meeting the requirements of the project.
1.3.2 General Field ServicesERROR! BOOKMARK NOT DEFINED.
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- The Contractor shall provide construction
management for the overall plant site
construction and scheduling.
- The Contractor shall provide surveying as
necessary to construct the project.
- The Contractor shall be responsible for the
overall plant site construction and
scheduling, and shall coordinate
construction activities with the switchyard
and gas pipeline contractors.
- The Contractor shall prepare and maintain,
on a current basis, a detailed construction
schedule using the critical path method
(CPM) scheduling technique.
- The Contractor shall be responsible for
loading all equipment and materials included
in its scope, onto suitable conveyances and
transporting the equipment to the work site
as well as unloading, sorting, inspecting,
storing and cataloging of all received
items. The Contractor shall receive
equipment delivered to local rail sidings,
such as the combustion turbine-generators
and transport the equipment to the work
site. The Owner will provide a ten (10) acre
site near the plant site for the
Contractor's use for temporary laydown and
storage.
- The Contractor shall store all materials and
equipment normally requiring protection on
arrival at the site under weatherproof
coverings and will protect the materials
from injury during construction until
Commercial Operation.
- The Contractor shall provide temporary
office space, warehouse, sanitation,
heating, telephone, site security, staff
accommodations and housing and tool room
facilities and supplies as required for the
performance of the field services included
in its scope of supply.
- The Contractor shall provide the necessary
temporary distribution system for utilities
such as water, electric lighting, electric
power, fire protection, and sanitary
facilities.
- The Contractor shall provide all necessary
erection aids including cranes, scaffolding,
tools, consumable supplies and expendable
devices as required for the scope of work.
- The Contractor shall conduct welder's
qualification tests, as required, to meet
the appropriate welding code standards
stipulated herein.
- The Contractor shall be responsible for the
clean-up, removal, and disposal of trash,
litter, garbage, and for the restoration of
all above areas used during the course of
this contract.
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- The Contractor shall be responsible for
compliance with all federal, state and local
ordinances including noise and stormwater
runoff regulations.
- The Contractor shall obtain and pay for all
building permits, fees, and inspections
required by federal, state, and city or
local authorities.
1.3.3 Equipment Related Erection Services
- The Contractor shall unpack, uncrate, and
place on foundations, all of the equipment
furnished as part of the EPC Agreement.
- The Contractor shall assemble and align, at
the job site, all the equipment and
materials included in this offering. Piping
materials and insulation, electrical
conduit, wires and cable shall be assembled
and connected as described on the
construction drawings.
- The Contractor shall provide touch-up
painting of equipment shipped already
finished painted, where required, in
accordance with its painting system and
shall prime and finish painting all other
plant equipment and materials.
- The Contractor shall provide technical
advisory personnel for the erection of the
power plant, its appurtenances, and other
equipment as required.
1.3.4 Procurement and Construction Services
1.3.4.1 Civil/Structural/Architectural
- The Contractor shall supply and
erect all structural supports for
platforms, ladders, stairs and
railings for this equipment.
- The Contractor shall supply and
install the foundation embedded
materials such as anchor bolts,
baseplates, anchoring devices and
conduits.
1.3.4.2 Mechanical
- The Contractor shall supply and
install all piping systems and
equipment.
- The Contractor shall supply and
install all HVAC systems and
equipment.
- The Contractor shall supply and
install all rotating equipment
required for the plant.
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- The Contractor shall supply and
install all process related
equipment and materials.
- The Contractor shall supply and
install all auxiliary and
miscellaneous equipment and
materials.
1.3.4.3 Electrical/Instrumentation and Control
- The Contractor shall supply and
install all electrical equipment
such as HV and LV transformers,
switchgear, control panels,
breakers, and all auxiliary
equipment.
- The Contractor shall supply and
install all PCS equipment such as
computers, CRT terminals, printers,
data highway, local PCS drops
(remote I/O cabinets) and all
auxiliary equipment.
- The Contractor shall supply and
install all conduit, cable trays,
wiring and cables.
- The Contractor shall supply and
install all lighting switches,
controls, and lighting fixtures and
supports.
- The Contractor shall supply and
install all electrical grounding
within the plant. Grounding in the
switchyard will be by others.
- The Contractor shall supply and
install all electrical measuring,
metering, controlling interlock and
warning system within the plant.
- The Contractor shall supply and
install all auxiliary equipment or
accessories incidental to the safe
and efficient operation of all major
equipment supplied under the EPC
Agreement.
1.3.4.4 Commissioning Services
Upon completion of the erection of the
equipment:
- The Contractor shall develop
detailed startup procedures.
- The Contractor shall perform a
checkout of the complete
installation.
- The Contractor shall provide for
start-up and testing of equipment
and systems included in this
project.
- The Contractor shall complete the
as-built drawings.
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- The Contractor shall provide the
project mechanical engineer and the
project electrical/control engineer
for a period of two weeks each to
support the Owner's classroom
training of the Owner's operating
personnel in the operation of the
plant. The engineer shall cover
system overviews, design and
control philosophy, system
limitations, and performance
optimization.
- The Contractor shall dispose of
flushing, testing, and cleaning
media in a manner acceptable to
Owner and local authorities.
1.3.4.5 General
The Contractor shall provide:
- On-site Construction Management
Team
- Field Quality Control and Testing
- Concrete
- Soil compaction, moisture
control
- Weld inspection; visual,
penetrant, X-ray, sonic
testing, magnetic
penetrant, etc.
- Weld preheat and stress
relieving
- Visual inspection for HV
electrical connections
(including stress cones)
and LV connections for
frayed wires and loose
terminations
- Cleaning, and disposal
(chemical or otherwise)
- Electrical
Pre-Commissioning Testing
- Instrumentation
calibrating
- Field safety program
- Receipt and control of Owner
furnished spare parts, and all
equipment and materials furnished
and installed under the EPC
Agreement
- Checkout and start-up
- Scheduling (weekly look-ahead,
monthly and total project CPM)
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- Monthly project meeting with Owner
- Normal painting and touch up of
equipment, steel, pipe, tanks, etc.
- Constructibility reviews during
design phase
- Establish Field Procedures
- Provide support for performance
test(s)
1.4 PROJECT MANAGEMENT
The management of the project will be under the direction of
the Contractor's project manager who will be in charge of all
aspects of the project. He will be in direct contact with
Owner's designated representative and will report to the
Contractor's corporate management. His responsibility and
authority for the project will be limited only by terms of the
contract, by company policies, and by directives from
management. The principal functions of the project manager
throughout the course of the project can be summarized as
follows:
- Organize the project work; select and assign
qualified staff; delegate responsibility and
authority to key staff; establish effective working
relationships within the project group, the vendors,
construction contractor(s), and with Owner's
designated project manager.
- Plan the work so it can be effectively accomplished
by the project staff in accordance with a clearly
defined scope of work and overall schedule.
- Supervise project activities and ensure close contact
is maintained with the Owner, that departments
providing support services have all necessary
relevant information and that effective project wide
communications are established.
- Provide the overall project management to direct the
engineering, procurement and other services through
project completion and start-up of the facilities.
- Publish a monthly progress report for Owner's review.
- Coordinate project administrative activities.
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2.0 TECHNICAL REQUIREMENTS AND SPECIFICATIONS
2.1 GENERAL
The Contractor shall furnish all engineering, procurement and
construction work, and all equipment, materials, tools and
other requirements necessary to provide a complete facility in
accordance with the requirements and scope of work as
described in the contract documents. The technical
requirements and specifications in this section describe the
design basis and minimum level of quality for equipment,
systems, materials and work.
The Contractor is encouraged to propose to the Owner any
deviations from these specifications which, in the opinion of
the Contractor, would improve the quality, appearance or
performance of the facility. The deviations from these
documents require written approval by the Owner.
All electrical equipment supplied shall bear the label of
Underwriters Laboratories, or equal, as approved by the Owner.
If such label is not available the equipment shall conform to
ANSI standards and be acceptable to the Owner.
It is the Contractor's responsibility that equipment and
materials furnished and the design and construction work be in
conformance with all applicable codes, regulations and
standards. If not otherwise specified in this document, the
following general codes and standards shall apply:
(a) Welding shall conform with American Welding Society
(AWS) requirements.
(b) Structural steel shall conform with American
Institute of Steel Construction (AISC) requirements.
(c) Concrete shall conform with American Concrete
Institute (ACI) requirements.
(d) Pressure vessels shall conform to ASME Pressure
Vessel Code.
(e) Federal Occupation Safety and Health Act of 1970
(OSHA) including all amendments and supplements and
State of Georgia Occupational Safety and Health
requirements.
(f) Domestic piping and plumbing shall conform with the
Standard Plumbing Code (SPC). (Note: local codes
which may supersede shall be used).
(g) Power piping shall conform with the Power Piping
Code, ASME B31.1.
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(i) Work which is within the scope of codes or standards
comprising the American National Standards Institute
(ANSI) shall conform to the minimum applicable
requirements of such codes or standards.
(j) Instrumentation, controls and related work shall
conform to the Instrument Society of America (ISA)
standards.
(k) Fire protection shall meet the recommendations of the
National Fire Protection Association (NFPA) and local
fire codes.
(l) Electrical power distribution, grounding and related
work shall conform to the National Electric Code
(NEC) and the National Electric Safety Code (NESC) or
any local codes.
<TABLE>
<S><C>
CODES AND STANDARDS LIST
Americans with Disabilities Act (ADA)
American Boiler Manufacturers Association (ABMA)
American Concrete Institute (ACI)
American Electrical Association (AEA)
American Gear Manufacturers Association (AGMA)
American Institute of Steel Construction (AISC)
American National Standards Institute (ANSI)
ANSI A58.1 Building Code Requirements for Minimum
Design Loads in Buildings & Other Structures
American Society of Civil Engineers (ASCE)
American Petroleum Institute (API)
American Society of Heating, Air Conditioning,
Refrigeration Engineers (ASHRAE)
American Society of Mechanical Engineers (ASME)
American Society of Testing and Materials (ASTM)
ASTM Annual Book of Standards
American Water Works Association (AWWA)
American Welding Society (AWS)
American National Standards Institute (ANSI)
Crane Manufacturers Association of America (CMAA)
Electrical Construction Materials List (ECML)
Factory Mutual Engineering Corp. (FM)
Heat Exchange Institute (HEI)
Hydraulics Institute (HI)
Illuminating Engineering Society (IES)
Institute of Electrical and Electronics Engineers (IEEE)
Instrument Society of America (ISA)
National Electric Code (NEC)
National Electric Safety Code (NESC)
National Electric Manufacturers Association (NEMA)
National Fire Protection Association (NFPA)
National Plumbing Code (NPC)
</TABLE>
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Occupational Safety and Health Administration (OSHA)
Steel Structures Painting Council (SSPC)
Tubular Exchangers Manufacturers Association (TEMA)
Underwriters Laboratory (UL)
Southern Building Code (SBCCI)
Standard Plumbing Code (SPC)
Standard Gas Code
Standard Mechanical Code
2.2 CIVIL
2.2.1 Site Clearing
The Contractor shall furnish all labor, materials,
tools, equipment and services for all site clearing,
tree protection and stripping of topsoil.
The Contractor shall clear from within the limits of
construction all shrubs, brush, downed timber, rotten
wood, heavy growth of grass and weeds, rubbish,
structures and debris. Stumps, roots, root mats, logs
and debris below the surface encountered within the
limits of construction shall be grubbed (removed) if
they are within areas to be paved or where fill is
less than 3 feet in depth. The Owner has arranged to
have a forest products company harvest the trees from
the plant site and leave a buffer zone of trees
around the plant.
The Contractor shall strip topsoil to whatever depths
encountered and in a manner to prevent intermingling
with underlying subsoils or objectionable materials.
Where trees are to remain stop topsoil stripping
sufficient distance from trees to prevent damage to
the main root system. The topsoil shall be stockpiled
on-site with the pile being constructed to freely
drain surface water. The stockpile shall be seeded,
covered, or have a silt fence installed around
perimeter.
The Contractor shall protect existing trees or other
vegetation to remain against damage. Do not smother
trees by stockpiling construction materials or
excavated materials within the dripline. Foot or
vehicular traffic or parking of vehicles within the
tree dripline shall be avoided. Temporary protection
shall be provided. All trees or vegetation damaged by
construction operations shall be repaired or
replaced.
All waste shall be removed from the site including
any rubble, discarded junk or other debris
encountered within the limits of construction.
Combustible materials shall not be burned or organic
matter buried on the site. On-site burning of cleared
vegetation is acceptable if done in compliance with
local codes and regulations.
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2.2.2 Earthwork
Furnish all labor, materials, tools, equipment, and
perform all work and services in connection with site
excavation and grading and excavation, filling and
compacting for structures:
2.2.2.1 Site Excavation and Grading
The work shall include all operations such
as excavation, borrow, construction of fills
and embankments, rough grading and disposal
of excess materials in connection with the
preparation of the site for construction of
the proposed facility.
The Contractor may use suitable on site
soils for back fill. Spoil material may be
disposed of on site. The borrow and spoil
areas shall be graded and seeded. The final
contours of the disturbed areas shall
conform to existing terrain and ensure
proper drainage.
Prior to starting fill operation, the ground
surface shall be scarified to a minimum
depth of 6 inches in all proposed
embankments and fill areas. Where the ground
surface is steeper than one vertical to four
horizontal, the ground surface shall be
plowed in a manner to bench and break up the
surface so that fill material will bind to
the existing surface.
Maintain existing utility lines (either
overhead or underground), sidewalks or
pavement, indicated on drawings, or as
specified. Repair any item, unknown or not,
that is inadvertently damaged, to original
condition. Protect and maintain benchmarks,
monuments or other established reference
points.
Shape and drain embankments and excavation
to protect rough grading during
construction. Maintain ditches and drains to
provide proper drainage at all times.
Protect graded areas against the action of
the elements and reestablish grade where
settlement or washing occurs. All work shall
be performed in accordance with an approved
erosion and sedimentation control plan.
The Contractor shall provide fill which is
free from roots, organic matter, trash,
frozen material, and stones having a maximum
dimension greater than 2 inches. Do not
place material in layers greater than 8
inches loose thickness unless the Contractor
demonstrates to the Owner that placement of
thicker layers will result in achieving the
specified compaction. All layers shall be
placed horizontally and compacted prior to
placing additional fill. The fill shall be
compacted by sheepsfoot, pneumatic roller,
vibrators or other equipment as required to
obtain the specified density. Control the
moisture for each layer necessary to meet
requirements of compaction.
<PAGE>
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2.2.2.2 Excavation, Filling and Compaction for
Structures
In general, work includes, but is not
necessarily limited to, excavation for
structures and retaining walls, removal of
underground obstructions and undesirable
soils, fill, backfill, and subgrade
compaction.
Excavations shall be made to dimensions and
elevations as shown on Contractor design
plans and shall allow space as required for
construction operations and inspection of
foundations. The bottoms of excavations to
receive foundations, floor slabs, equipment
support pads or compacted fill shall be
leveled off. Remove loose materials and
bring excavations into satisfactory
condition to receive concrete or fill
materials.
Fill material, foundations, retaining wall
footings, floor slabs-on-grade, and
equipment support pads shall be placed as
soon as weather conditions permit after
excavation is completed and after forms and
reinforcing are placed. Before concrete or
fill material is placed, protect subgrades
from becoming loose, wet, frozen or soft due
to weather conditions, construction
operations or other reasons. Where
compacted, fill material must be placed to
bring subgrade elevations up to the
underside of construction. The existing
subgrade shall be scarified to a depth of 6
inches and compacted to the required
density.
Where groundwater is or is expected to be
encountered during excavation, install a
dewatering system to prevent softening and
disturbance of subgrade below foundations
and fill material, to allow foundations and
fill material to be placed in the dry, and
to maintain a stable excavation side slope.
Groundwater shall be maintained below the
bottom of any excavation. Review soils
investigation before beginning excavation
and determine where groundwater is likely to
be encountered during excavation. Keep
dewatering system in operation until dead
load of structure exceeds possible buoyant
uplift force on structure. Dispose of
groundwater to an area which will not
interfere with construction operations or
damage existing construction. Install
groundwater monitoring wells as necessary.
Shut off dewatering system at such a rate to
prevent a quick upsurge of water that might
weaken the subgrade.
If subgrade under foundations, fill
material, floor slabs-on-grade, or equipment
support pads is in a frozen, loose, wet, or
soft condition before construction is placed
thereon, remove frozen, loose, wet, or soft
material and replace with approved compacted
material. Provide compaction density of
replacement material required. Loose, wet,
or soft materials may be stabilized by a
compacted working mat of well graded crushed
stone. Compact the stone mat thoroughly into
subgrade to avoid future
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migration of fines into the stone voids.
Remove and replace frozen materials. Do
not place floor slabs-on-grade including
equipment support pads until piping has been
tested and reinforcement placement. Building
floor slabs-on-grade including equipment
support pads shall be installed in
accordance with ACI.
Shore, sheet pile, slope, or brace
excavations as required to prevent
collapsing. Remove shoring as backfilling
progresses but only when banks are stable
and safe from caving and collapse.
Control grading around structures so that
the ground is pitched to prevent water from
running into excavated areas or damaging
structures. Maintain excavations where
foundations, floor slabs, equipment support
pads or fill material are to be placed free
of water. Provide pumping as required to
keep excavated spaces clear of water during
construction. Provide free discharge of
water by trenches, pumps, wells, well
points, or other means as necessary and
drain to point of disposal that will not
damage existing or new construction or
interfere with construction operations.
Do not place foundations, slabs-on-grade,
equipment support pads, or fill material on
frozen ground. When freezing temperatures
may be expected, do not excavate to full
depth indicated unless foundations, floor
slabs, equipment support pads, or fill
material can be placed immediately after
excavation has been completed and approved.
Protect excavation from frost if placing of
concrete or fill is delayed.
A minimum of 6 inches of granular fill shall
be placed under building floor
slabs-on-grade. Also, a continuous vapor
barrier shall be installed as required under
building floor slabs-on grade.
Fill and backfill material shall be placed
in lifts as necessary to obtain the required
compaction density. Fill and backfill shall
not be placed when the subgrade is frozen,
wet, loose or soft. Compact material to
obtain the required compaction densities by
means of equipment of sufficient size and
type. Use hand-operated equipment for
filling and backfilling next to walls.
Vibratory equipment shall be used to compact
granular fill. Water shall not be used as a
means of compaction or consolidation.
2.2.2.3 Quality Assurance
The Contractor shall hire an independent
soils laboratory, acceptable to the Owner,
to conduct in-place moisture-density tests
for the work.
Compaction densities shall comply with the
following requirements:
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<TABLE>
<S> <C>
a. Site Work
Under Paved Areas,
Sidewalks and Piping:
- Cohesive Soils 95%, ASTM D1557 or D698
- Cohesionless Soils 75%, ASTM D4253 & D4254
Unpaved Areas:
- Cohesive Soils 85%, ASTM D1557 OR D698-
- Cohesionless Soils 60%, ASTM D4253 & D4254
b. Structures
Inside Structures 95%, ASTM D1557 or D698
Outside Structures 90%, ASTM D1557 or D698
next to walls, piers,
etc.
c. Special Areas
Outside Structures 95%, ASTM D1557 or D698
under foundations
Under Void Forms 85%, ASTM D1557 or D698
Granular Fill Under 75% relative,
slabs per ASTM D4253 & D4254
</TABLE>
2.2.3 Trenching, Backfilling and Compacting for Utilities
The Contractor shall furnish all labor, materials,
tools, equipment and services for the excavation,
trenching, backfilling and compacting for all
underground utilities.
Trenches shall be excavated by open cut method to the
depth required to accommodate the work. The
Contractor shall verify the location of all utilities
prior to excavation and shall comply with local rules
and regulations governing the respective utilities.
Open trenching outside of building, units or
structures generally shall be limited to 600 linear
feet or the distance between manholes, whichever is
less at any one time. Open trenching within buildings
shall be limited to no more than 100 linear feet at
any time.
Trenches shall be kept free of water.
Where allowed by the design and/or construction
sequence, the trenches shall not be backfilled more
than 6 inches above the utility until tests to be
performed on the system show that the system is in
compliance with the specified requirements. All
piping will be tested. The Contractor may test the
pipe at the
<PAGE>
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Contractor's risk after backfill if required by the
design and/or construction sequence.
Backfill shall be placed in lifts not exceeding 8
inches in loose depth unless the Contractor
demonstrates to the Owner that placement of thicker
lifts will result in achieving the specified
compaction. The backfill shall be placed so pipe is
fully bedded without bridging or voids and compacted
to the required densities. Water flushing for
consolidation is not permitted.
Backfill shall be free of rock cobbles, roots, sod or
other organic matter and frozen material. The
moisture content at the time of placement shall be
within +3% of the optimum content in accordance with
ASTM D1557 or D698. Well-graded pea gravel or crushed
rock can be used for subgrade stabilization.
Compact all trench backfill in areas under paved
roads, parking areas, sidewalks and other structures
to at least 95% of maximum dry density per ASTM 1557
or D698. In locations where trenches will not be
under paved areas, the backfill shall be compacted to
a minimum of 85% of the maximum dry density per ASTM
1557 or D698.
The Contractor shall hire an independent soils
laboratory, acceptable to the Owner, to conduct
in-place, moisture-density tests for the work.
2.2.4 Top Soiling, Finish Grading and Seeding
The Contractor shall furnish all labor, materials,
tools, equipment and perform all work and services
for top soiling, finish grading and seeding.
Prior to top soiling and finish grading, all rough
graded areas shall be corrected, adjusted and/or
repaired. All mounds and ridges shall be cut off,
gullies and depressions filled and other necessary
repairs made.
The finished surface shall be free of stones,
sticks or other material 1 inch or more in any
dimension and shall be smooth and true to
required grades. The topsoil stockpile area shall
be restored to the condition of the rest of the
work. Finish grade tolerances shall be plus or
minus 0.1 foot from the required finish elevation.
After finish grading is completed the Contractor
shall seed all areas that were disturbed during
construction and which will not be paved or covered
with crushed rock. In general the work shall include
soil preparation, fertilizing, seeding, laying sod
and mulching. The seeding shall be in accordance with
local requirements and recommendations, including
watering to establish the growth.
<PAGE>
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2.2.5 Soil Erosion and Sedimentation Control
The Contractor shall provide a soil erosion and
sedimentation control plan design that complies with
local requirements. The approved system shall be
furnished, installed and maintained by the Contractor
through Commercial Operation of Phase II.
In addition to local requirements the system shall
comply with the "Standards and Specifications for
Soil Erosion and Sedimentation Control in Developing
Areas" by the U.S. Department of Agriculture, Soil
Conservation Service.
In accordance with the allowance of Section 1.2.1,
the Contractor shall complete the required
notification forms and assist the Owner in obtaining
the required stormwater NPDES permit for construction
of the facility from the Federal, state and local
agencies.
2.2.6 Chain Link Fence and Gates
The Contractor shall furnish and install all chain
link fence and gates required for the plant and
construction areas.
All fences, except for the switchyard and fencing
around the main step-up transformers, shall be 6 foot
high chain link with a 1 foot extension with 3
strands of barbed wire. Eight-foot fences with 3
strands of barbed wire shall enclose the switchyard
and main step-up transformers. Fence shall enclose
the plant so that access is prohibited without
passing through gates.
The fence surrounding the switchyard shall have at
least three 20-foot gates. The fence surrounding the
plant proper shall have one 35-foot main gate and one
20-foot secondary gate. The main gate shall be motor
operated by a card reader and shall have provisions
to be operated remotely from the control room. One
personnel gate and one 15- foot gate shall be
provided on each of the main step-up transformer
fenced areas.
Road sensors shall be provided such that as an
exiting vehicle approaches the main gate from inside
the plant, the gate shall automatically open.
The fencing and gates shall comply with the Chain
Link Manufacturers' Institute for "Galvanized Steel
Chain Link Fence Fabric and Accessories" and
applicable ASTM standards. All fencing fabric, posts,
braces, rails, gates, barbed wire and fittings shall
be hot dipped galvanized steel.
All posts shall be set in concrete footings. The
fencing shall be grounded per the electrical
requirements of this Exhibit.
2.2.7 Paving
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This specification sets forth the requirements for
all paving, both asphaltic and concrete, and curbs
and sidewalks for the project. The Contractor shall
furnish all labor, materials, tools, equipment, and
perform all work and services required in connection
with paving. All paved or curbed equipment areas
where oil or other chemicals could spill shall be
sloped and drained to the oily water separator and
kept separate from the storm drainage system.
Roadway pavement and subgrades designs shall be
reviewed and designed for appropriate load
requirements. Typically, the roadway pavement and
subgrading shall be designed for HS-20 loading.
Heavier loadings for cranes, stator transporter
trailers, etc. shall be considered where appropriate.
Unless otherwise specified paving shall comply with
Georgia State Department of Highways, American
Association of State Highway and Transportation
Officials (AASHTO) and American Society for Testing
Materials (ASTM) standards.
2.2.7.1 Asphaltic Paving
The work shall include, but not be limited
to, grading, stabilizing subgrade, placing
sub-base course, applying prime and tack
coats, and placing wearing surface courses
and painting traffic and parking lines.
The Contractor shall not place asphaltic
concrete when the ambient temperature is
below 40 DEG. F. Also, materials shall
not be placed when the underlying
surface is muddy, frozen or is wet.
The Contractor shall protect adjacent
surfaces from damage by equipment and
deposits of asphalt material.
The Contractor shall hire an independent
testing laboratory, acceptable to the Owner,
to inspect construction and to perform
density and thickness testing and core
sampling.
The areas to be paved are as follows:
- Total CT Power Block area - 6"
base, 2" asphalt
- On-site main access road, and other
access roads, driveways and parking
- 8" base, 4" asphalt
2.2.7.2 Concrete Paving, Curbs and Sidewalks
The work shall include, but not be limited
to, grading and preparation of subgrade,
placing and finishing concrete and painting
traffic and parking lines.
The materials for paving, curbs and
sidewalks shall be in accordance with
Section 2.3.2 of this document.
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Forms for paving and curbs shall be of rigid
wood or steel forms except for curves and
returns. Flexible or wood forms shall be
used for curves and returns. For sidewalks,
forms may be wood. The depth of the forms
shall be equal to the thickness of the
concrete.
All concrete surfaces shall be screed,
floated and broom finished. Curing and
sealing compounds shall be applied as
required. Expansion and construction joints
shall be provided as required by layout and
Contractor's design.
The Contractor shall hire an independent
testing laboratory, acceptable to the Owner,
to inspect construction and to perform slump
and strength testing.
2.2.8 Aggregate Surfacing
This section covers the furnishing and installation
of materials for aggregate surfaced areas including,
but not limited to, 3 foot shoulders along all roads.
The Contract shall furnish all labor, materials,
equipment and perform all work and services required
in connection with aggregate surfacing.
The materials, application of aggregate surfacing,
sampling and testing shall comply with Georgia State
Department of Highway Specifications.
The subgrade shall be prepared and shaped to the
required grade and cross-section prior to surfacing.
Subgrade preparation shall be in accordance with
Section 2.2.2 of this document. Aggregate material
shall not be placed on soft, muddy or frozen
subgrade.
The areas to receive aggregate surfacing shall
receive a minimum of 6 inches of graded crushed rock
free from lumps or balls of clay and other
objectionable material. The aggregate shall meet the
following specifications:
<TABLE>
<CAPTION>
Sieve Percent
Screen Size Retained On Screen
----------- ------------------
<S> <C>
1-1/2 in 0
1-1/4 in 10
1 in 40
3/4 in 75
3/8 in 100
</TABLE>
2.2.9 Storm Drainage System
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The work covered by this specification consists of
furnishing all labor, material, equipment, tools and
performing all work in connection with the design,
installation and construction of the storm drainage
system.
The Contractor shall design the final storm drainage
system. The system shall comply with the applicable
local and state regulations, including testing if
required.
The fuel oil containment area shall have provisions
to allow stormwater from within the containment area
to the storm drainage system. The fuel oil
containment drain pipe shall be provided with a drain
valve which is normally locked shut.
Site grading, earthwork, etc. shall be in accordance
with the requirements of Section 2.2.2 of this
document. The liner for biofiltration swales, if
required by local regulations, shall be in accordance
with Section 2.2.10. Piping, manholes, and catch
basins shall meet the requirements of the following
ASTM standards:
- Reinforced Concrete Pipe - ASTM C76
- Polyvinyl Chloride Pipe (PVC) - ASTM D3034
and D2729
- Manholes and Catch Basins - Circular precast
concrete, ASTM C478
- Corrugated High Density Polyethylene
Pipe-AASHTO M294
All piping shall be laid true to lines and grades
based on the Contractor's design. Pipe grades between
manholes and structures shall be uniform to eliminate
low spots and provide unrestricted flow. Piping shall
not be laid in water or when trench conditions or
weather are unsuitable for such work.
The construction of forms, mixing, placing, finishing
and curing of concrete for drainage structures shall
be in accordance with Section 2.3.3.
The Contractor shall conduct
infiltration-exfiltration testing on each section of
the drainage system. The total
infiltration-exfiltration shall not exceed 4 gallons
per inch diameter per 100 feet.
2.2.10 Liners
This section covers the furnishing, installation and
testing of geotextile and high-density polyethylene
(HDPE) liners for fuel oil storage tank area,
wastewater retention ponds, berms, biofiltration
swales if required by local regulations, and
infiltration trenches if required by local
regulations. The Contractor shall furnish all labor,
material, equipment, tools and perform all work in
connection with the design, installation and
construction of the liners. Liners shall be weighted
down at the toe of the slope with sand or weight
sealed into cavities or pockets.
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Page 28 of 132
The liners shall be manufactured and installed by
firms and subcontractors which have a minimum of 5
years of experience in the satisfactory production
and installation of liners similar to the types
specified.
The Contractor shall provide a 20-year warranty
against manufacturing defects and material
degradation and a 5-year warranty against
installation defects.
The liners shall be installed in accordance with
manufacturers' recommendations. Subgrades shall be
properly prepared and compacted and shall have all
sharp rocks, objects, vegetation and stubble removed.
The subgrade shall be sterilized prior to application
of the liners.
Geotextiles for the liner subgrade, liner protection
or filter fabric as required by the liner
manufacture's recommendations shall be a non-woven
fabric inert to common chemicals and hydrocarbons and
resistant to ultraviolet radiation, mildew, rot and
insects.
HDPE liners shall be extruded in uniform sheets free
of holes, tears, or other manufacturing defects. HDPE
liners shall have a minimum thickness of 40 mils.
Geotextiles and HDPE liners shall conform to
applicable ASTM standards.
2.2.11 Sanitary Waste System
All sanitary sewage shall be collected and disposed
on-site via mounded septic system in accordance with
local requirements.
2.3 STRUCTURAL
2.3.1 Design BasisERROR! BOOKMARK NOT DEFINED.
The intent of this section is to provide the basic
structural parameters and guidelines for this
Project. Design loads for all structures shall be in
accordance with the Southern Building Code (SBCCI) or
ANSI A58.1, "Building Code Requirements for Minimum
Design Loads in Buildings and Other Structures" or
the following requirements, whichever is the more
stringent:
2.3.1.1 Dead Loads
The structures shall be designed to support
dead loads such as weight of structure,
roofing, piping systems, electrical systems,
flooring, ceilings, partition loads,
mechanical/electrical equipment, and other
built-in or attached installations.
<PAGE>
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2.3.1.2 Live Loads
Live loads shall consist of uniform live
loads and equipment live loads. These
uniform live loads shall not be applied to
floor areas which will be permanently
covered with equipment.
Equipment live loads are calculated loads
based upon the actual weight and size of the
equipment and parts. Equipment live loads
shall also include loading to be placed on
floors during dismantling, or temporarily
placed on or moved over floors during
installation.
Floors and supporting members which are
subject to heavy equipment live loads shall
be designed on the basis of the weight of
the equipment in addition to a uniform load
of 50 psf, or specifically defined live
loads, whichever is greater. Each member in
the floor which may carry these loads shall
be designed for the heaviest piece or pieces
of equipment arranged in the most critical
position.
- FLOOR LIVE LOADS. Ground floor
slabs shall be designed for a
minimum of 250 psf in equipment
laydown areas and all areas where
2-ton forklift operation is
determined during the design.
Consideration shall be given to
designing appropriate areas of the
ground floor for support of heavy
equipment such as construction and
maintenance cranes. Slabs for
control and switchgear areas shall
be designed for a minimum of 150
psf, or the actual weight plus 50
psf for surrounding open areas.
Ground floor slabs for shops and
auxiliary buildings shall be
designed for 150 psf. Storage areas
shall be designed for the actual
weight of the stored material, but
no less than 150 psf in light
storage areas and 250 psf in heavy
storage areas (maintenance shop).
Suspended grating floors shall be
designed for a loading of 100 psf
to supporting members. The grating
itself shall be designed for 150
psf (dead plus live loads) to
minimize deflection.
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- SUSPENDED FLOORS. Suspended floors
shall be designed for the following
load conditions:
<TABLE>
<CAPTION>
Minimum
Uniform Load
------------
psf
<S> <C>
Maintenance Platforms 150
Stairways, Landings/Corridors 100
Access Grating Platform 100
</TABLE>
- ROOF LOADS. All roof areas shall be
designed for wind loads as indicated
in Wind Loads. Ponding loading
effect due to roof deck and framing
deflections shall be determined in
accordance with AISC. All roof areas
shall be designed for a minimum of
30 psf live load in addition to dead
loads.
- IMPACT LOADS. Impact loads shall be
added to other loads for components
supporting reciprocating or rotating
machines, elevators, hoists, cranes,
or other equipment creating dynamic
forces. The following impact loads
shall be used, unless manufacturers
recommend higher values or analysis
indicates higher or lower values.
- Hoists and cranes
Vertical--25 percent of the
maximum static wheel load.
Horizontal-lateral--20
percent of the sum of the
lifted load plus the
weights of the hoisting
component.
Horizontal-longitudinal--10
percent of the total moving
load.
- Railroads and roadways--25
percent of the wheel or
crawler loads.
- Rotating and reciprocating
equipment--50 percent of
the machine weight.
- Hangers supporting floors
and platforms--33 percent
of the sum of the dead load
and reduced live load.
- PIPE HANGER LOADS. Pipe hanger loads
for the major piping systems, shall
be specifically determined and
located. Piping expansion and
dynamic loads shall be considered on
an individual basis for their effect
on the structural systems. Loads
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imposed on perimeter beams around
pipe chase areas shall also be
considered on an individual basis.
Pipe loads for other areas shall be
treated as uniform loads per unit
floor area, and shall be carried to
the columns and foundations as dead
loads. Pipe loads shall not be
considered as reliable dead load for
uplift. In addition to the uniform
dead load, a concentrated "phantom"
load shall be placed at the center
of all primary beams for the purpose
of sizing the member. This load
shall not be carried over to the
sizing of other members. Both the
uniform loads and phantom loads
shall vary in accordance with piping
layout and design.
- EQUIPMENT LOADS. Equipment loads
shall be specifically determined and
located. For major equipment,
structural members and bases shall
be specifically located and designed
to carry the equipment load into the
structural system. For equipment
weighing less than the minimum live
load, the structural system shall be
designed for the minimum live load.
- WIND LOADS. Wind loads for all
structures, except the steel stacks,
shall be based on SBCCI. A step
function of pressure with height
under Exposure C conditions shall be
used.
- SEISMIC LOADS. The seismic risk zone
for this site is Zone 2A as
determined from UBC. Seismic loading
shall be used in the design of
structures only when they are
greater than the computed wind
loads.
2.3.1.3 Vertical Clearances
The following minimum vertical clearances
shall be used in the design of the facility:
<TABLE>
<S> <C>
- Walkways and platforms 7 ft
- Work areas and aisles for forklifts 10 ft
- Work areas and access routes at grade 10 ft
- Pipe rack road crossing 18 ft
</TABLE>
2.3.2 Foundations
The Contractor shall furnish labor, materials, tools,
equipment, and services for all foundations. Detailed
design criteria and types of foundation support
methods
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shall be determined by the Contractor based on the
final geotechnical investigation provided by the
Contractor.
Except for storage tanks, allowable settlements,
elastic plus consolidation, shall be limited as
follows:
- Total settlement--1/2 inch.
- Differential settlement--0.1 percent slope
between adjacent concentrated load points or
loaded areas.
The turbine foundation support mats shall be designed
to meet the total and differential settlement
established by the turbine manufacturers if more
stringent than the allowable settlements listed
above.
The ground floor slabs shall be subdivided into pours
by designating construction joints on the drawings.
Major drain system headers shall be encased in the
floor slabs or buried beneath the floor slabs.
Pressurized process piping shall not be encased in
the floor slab. Cast iron soil pipe, polyvinyl
chloride pipe, or high density polyethylene pipe
shall be used on drain lines inside the power block
area except where fiberglass reinforced pipe is
required for chemical drainage. Equipment drains,
conduit, and miscellaneous piping shall be generally
embedded or buried. The foundations for the
transformers shall be designed as individual
foundation structures separate from the turbine mats.
The turbine area mats shall be reviewed for support
of cranes for erection of the equipment. No areas of
standing water will be allowed.
Miscellaneous structures include the transformer
area, pipe racks, plant wastewater/oil separator and
sump, tanks, secondary unit substations, and other
facilities for which a foundation shall be provided.
Geotechnical data shall be analyzed to predict the
bearing and settlement characteristics of the soils.
Criteria shall be established to permit design of the
most economical foundation that is compatible with
life expectancy and service of the building or
structure. Spread footings, slabs on grade, and
foundation components used on other buildings in the
project shall be utilized.
All equipment shall be supplied with an equipment
base suitable for its operation. Where the equipment
could induce vibration problems, the base shall have
adequate mass to dampen vibration motions. Special
consideration shall be given to vibration and
stiffness criteria where specified by the equipment
manufacturer.
Equipment that does not require a special base shall
be placed on a nominal 6-inch high equipment pad to
keep the equipment off the floor surface. Bases shall
have minimum temperature and shrinkage reinforcing
unless it is determined that additional reinforcement
is required for the equipment loads. The bases shall
be
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designed to develop the yield strength of the
equipment anchor bolts embedded therein as a minimum.
2.3.3 Concrete
This section covers the requirements for concrete
materials and mixing, placing, jointing and curing
concrete. The materials for concrete shall be as
follows:
- Cement used in all concrete mixes shall be
portland cement meeting the requirements of
ASTM C150, Type I or II. At the Contractor's
option , high-early strength cement, ASTM
C150 Type III, may be used to achieve 28-day
strength in 7 days.
- All aggregates shall meet the requirements
of ASTM C33.
- Plasticizers and retarders may be used to
control setting times and to obtain optimum
workability. Air entrainment of 4-6% by
volume shall be used in all mixes. The use
of calcium chloride is not permitted.
Admixtures shall conform to ASTM C260 and
ASTM C494.
- Clean water of potable quality shall be used
in all mixes.
- Expansion joint filler shall be premolded
conforming to ASTM D1751.
- Water stops shall be polyvinyl chloride
(PVC) conforming to U.S. Corps of Engineers
Specification CRD-C572, or water swelling
rubber or bentonite seals.
- Curing materials shall conform to ACI-301.
Waterproof sheet material shall meet ASTM
C171 requirements and curing compounds shall
conform to ASTM C307.
- Non-shrink grout shall be used where
specifically required by design, i.e., where
close tolerances are required to be
maintained, such as required for the proper
installation of rotating equipment.
Structural steel column base plates need not
be set with non-shrink grout. Grout shall be
non-metallic, non-corrosive, non-staining
and have a 28-day strength of 5000 psi
minimum.
The Contractor shall furnish all materials, labor,
supervision, services, tools and equipment required
for all design fabrication and construction for
concrete work required for all foundations, equipment
pedestals and bases, concrete pavement, sidewalks,
curbs, floor slabs and other plant structures.
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Reinforced concrete structures shall be designed in
accordance with ACI 318, Building Code Requirements
for Reinforced Concrete and the Southern Building
Code (SBCCI).
The system of concrete and steel strength (at 28
days) combination shall be as follows:
- Most Applications 4,000 psi
- Duct Banks 2,000 psi
The concrete shall be mixed, transported, and placed
in accordance with ACI standards 304, 305R, 306R, 309
and 318 and ASTM Standard C94.
Construction, expansion and control joints shall be
located and constructed based on the Contractor's
approved design drawings.
The Contractor shall hire an independent testing
laboratory, acceptable to the Owner, to perform the
following tests:
- Two sets of compression test cylinders,
three cylinders per set, will be made from
each proposed concrete mix. One set of three
cylinders will be tested at an age of 7
days, and the other set will be tested at an
age of 28 days. Tests will be in conformity
with ASTM C39.
- A slump test shall be made from each of the
first three batches mixed each day. An
additional test shall be made for each 50
cubic yards placed in any one day. Slump
tests shall be in accordance with ASTM C143.
- An air content test shall be made from one
of the first three batches mixed each day
and from each batch of concrete from which
compression test cylinders are made. Air
content tests shall be in accordance with
ASTM C231.
- Two sets of three concrete compression test
cylinders shall be made each day from each
class of concrete being placed. Two
additional sets of cylinders shall be made
when from 25 to 100 cubic yards of each
class of concrete are placed. For each
additional 100 cubic yards of each class, or
major fraction thereof, placed in any one
day, two additional sets of cylinders shall
be made. One cylinder of each set shall be
tested at an age of 7 days, and the cylinder
of each set shall be tested at an age of 28
days. The third cylinder shall be kept as a
backup. Compression tests shall be in
accordance with ASTM C39.
2.3.3.1 Form Work
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Forms shall be used wherever required to
confine concrete and shape it to the
required dimensions. Forms shall be of
sufficient strength to withstand the
pressure resulting from the placement and
vibration of concrete and of sufficient
rigidity to maintain required dimensions.
Forms shall be constructed of either plywood
or metal. The forms shall be tight to
prevent leakage, straight, and without
dents.
Before placing either reinforcing steel or
concrete, clean all form surfaces of mortar,
grout and foreign material and cover the
surfaces of forms with a coating (form
release agents) that will prevent the
absorption of moisture and prevent bonding
with concrete.
2.3.3.2 Reinforcement
Reinforcing steel shall meet the
requirements of ASTM A615, Grade 60
including Supplementary Requirements S1.
Welded wire fabric shall conform to ASTM
A185 and be fabricated of cold drawn steel
wire having nongalvanized finish.
Reinforcing steel shall be handled, stored
and placed in such fashion as to prevent
their being bent or sprung and becoming
excessively rusted or contaminated with
earth, oil or other foreign material which
is detrimental to bonding. Reinforcing steel
shall be placed in accordance with the
requirements of ACI 301 and CRSI
"Recommended Practice for Placing
Reinforcing Bars."
Reinforcing steel shall be supported and
fastened together to prevent displacement.
Rebar shall not be welded.
Unless otherwise required by the
Contractor's design, the minimum concrete
protective covering for reinforcement shall
be:
- 3 inches for concrete deposited
against earth
- 2 inches for #6 bars or larger and
1-1/2 inches for bars less than #6
for formed surfaces exposed to
weather or in contact with earth
- 2 inches for all rebar for formed
surfaces exposed to or located
above any liquid
- 1-1/2 inches for interior beams,
girders and columns
- 3/4 inch for interior slabs, walls
or joists
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2.3.4 Masonry
The Contractor shall furnish all materials, labor,
supervision, tools and equipment required to design,
furnish and install block masonry work, precast sills
and lintels, mortar, grout, reinforcing, etc. as
required for unit masonry work required for the
project and building design.
Materials for masonry work shall be as follows:
- Concrete block units shall be normal weight
moisture controlled units conforming to ASTM
C90 and shall have smooth face.
- Mortar and mortar materials shall conform to
ASTM C270, Type S. General purpose grout
mixes shall comply with ASTM C476, Table I.
- Joint reinforcement shall be galvanized cold
drawn steel wire in accordance with ASTM A82
and ASTM A153.
- Reinforcing steel shall be ASTM A615, Grade
60.
All masonry units and accessories shall be handled,
stored and set in such a manner as to prevent their
soiling, chipping or damage of any kind.
All masonry shall be installed in accordance with ACI
530.1 requirements and National Concrete Masonry
Association's (NCMA) "Guide Specification for
Concrete Masonry."
Walls shall be laid out in advance of installing
masonry units to provide uniform and accurate spacing
on patterns and joints and to properly locate
openings. Masonry shall be laid to a line with wall
being plumb and straight and in level courses.
During adverse or cold weather masonry shall be
properly perfected by suitable enclosures or
weatherproof coverings and heated as required to
prevent freezing. In freezing weather the masonry
shall be kept warm for 3 days after laying.
All cutting of masonry units shall be by masonry
saws.
All masonry required to be painted shall be
thoroughly cleaned before being painted. All exposed
masonry walls shall be painted unless finished brick.
2.3.5 Structural and Miscellaneous Steel
The Contractor shall furnish all materials, labor,
services, tools and equipment required for the
design, fabrication and erection of all structural
and miscellaneous steel required for the project.
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The work shall include, but not be limited to, the
following:
- Prepare general framing design and drawings,
detailed design and shop fabrication
drawings for structural and miscellaneous
steel, joists and metal decking.
- Structural steel shall include columns,
beams, bracing, bolts, nuts, washers, steel
joists, metal decking, base plates, etc.
- Miscellaneous steel shall include grating,
checkered plate, handrail, stair treads,
ladders, kick plates, manhole covers and
frames, anchor bolts, bollards, etc.
2.3.5.1 Structural Steel
Steel framed structures shall be designed in
accordance with Southern Building Code
(SBCCI); AISC Specification for the Design,
Fabrication, and Erection of Structural
Steel for Buildings, and all supplements
thereto; Steel Deck Institute (SDI) design
manual for Composite Decks, Form Decks and
Roof Decks; and Steel Joist Institute (SJI)
Recommended Code of Standard Practice for
Steel Joists and Joist Girders.
Structural steel shapes, plates, and
appurtenances for general use shall conform
to ASTM A36 or A36 modified to 50,000 psi
yield. Connection bolts shall conform to
ASTM A325. Connections shall conform to AISC
Specification for Structural Joints. Welding
electrodes shall be as specified by AWS.
Steel decking shall be ASTM A446, Grade A
sheet steel with G90 galvanized coating
conforming to ASTM A525. Steel joists shall
be fabricated of ASTM A36 steel and be in
accordance with SJI. All exterior steel
shall be galvanized. All interior structural
steel shall be shop primed. The shop coat of
primer paint shall be blocked out at all
structural connections so that no paint is
present on the surfaces of the connection,
if required by the design. All exposed
interior structural steel shall be finished
painted in the field.
Mill test reports or reports of tests made
by the fabricator shall be required
certifying that all material is in
conformance with the applicable ASTM
specification. In addition, the fabricator
shall provide an affidavit stating that all
steel specified has been provided at yield
stresses in accordance with the drawings and
the specifications.
All steel framed structures shall be
designed as "rigid frame" (AISC
Specification Type 1) or "simple" space
frames (AISC Specification Type 2),
utilizing single-span beam systems, vertical
diagonal bracing at main column lines and
horizontal bracing at the roof and major
floor levels. The use of Type 1 rigid frames
shall be limited to one-story, open garage,
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warehouse or shed type structures, or to
pre-engineered buildings. All other framed
structures shall utilize Type 2 design and
construction.
Connections shall be in accordance with
standard connection design for shop welded
and field bolted connections. Connections
shall be designed for 3/4-in bolts for
bearing type connections with threads
permitted in the shear plane, except for
slip-critical connections which shall be
friction type joints. The connection bolts
shall be pre-tensioned in accordance with
slip-critical type joint requirements.
Structural steel shall be fabricated in
accordance with AISC "Code of Standard
Practice for Steel Buildings and Bridges"
and "Specification for Steel Buildings."
The erection of structural steel shall
conform to the applicable requirements of
the "Code of Standard Practice for Steel
Buildings and Bridges" and "Specification
for the Design, Fabrication and Erection of
Structural Steel for Buildings" of AISC.
Bolts shall be tightened by the
"turn-of-nut" method or other methods
approved by the Owner. Bolts tightened by
the "turn-of-nut" method shall have the
outer face of the nut match-marked with the
protruding bolt point before final
tightening. Tightened bolts shall be checked
for proper torque with a direct reading
torque wrench.
Inspection of welding shall be in accordance
with the provisions of the current welding
code AWS D1.1.
2.3.5.2 Miscellaneous Steel
- STEEL GRATING. Steel grating floors
shall use grating manufactured in
accordance with applicable
requirements of the "Metal Bar
Grating Manual" published by
National Association of
Architectural Metal Manufacturers
(NAAMM).
Steel grating shall be welded bar
grating, with 3/16-inch wide by
1-1/4 inch deep bearing bars.
Spacing for bearing bars shall be
1-3/16 inch center-to-center.
Grating shall be galvanized and
fabricated from ASTM A36 steel.
All gratings shall lie flat with no
tendency to rock when installed. For
each panel, the transverse bow shall
not exceed 1/8 inch per foot of
panel width, with no transverse bow
to exceed 3/8 inch. The longitudinal
bow shall not exceed 1/200 of the
panel length. Gratings shall be
bolted down using studs and
galvanized clip fasteners.
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- KICKPLATE. Kickplate shall be
applied to all platform areas as
required to satisfy OSHA standards
for protection of personnel. It
shall consist of 1/4-inch thick
steel plate, ASTM A36, and shall
project 4 inches above the platform
surface. Kickplate shall receive the
same type of coating as the material
to which it is attached.
- HANDRAILS. Handrails shall confirm
to the requirements of OSHA and
SBCCI. Handrails shall be
fabricated of 1-1/4 inch ASTM A53
steel pipe. The top rail shall be
42 inches above the walkway surface
and 34 inches above the nose of a
tread. Post spacing shall be
proportioned to the length of the
protected horizontal opening, but
shall not exceed 6 feet
center-to-center of posts. Hand
railing shall be shop fabricated
for specific locations and field
welded or bolted to the erected
structural steel. Handrails shall
be galvanized for outdoor locations
and painted for interior locations.
- STAIR TREADS. Grating for stair
treads shall be as specified for
steel grating except that bearing
(main load carrying) bars shall not
be less than 3/16 inch by 1 inch
for tread lengths up to and
including 3 feet. Each tread shall
be serrated non-slip grating or
provided with a continuous
one-piece cast aluminum abrasive
nosing attached to the tread with
galvanized flat heat bolts, lock
washers and nuts. All stair treads
shall be hot-dip galvanized.
- LADDERS. Ladders shall be
fabricated of ASTM A36 steel and
not less than 20 inches wide, with
1 inch diameter solid steel rungs
spaced 12 inches center-to-center.
Ladder side rails shall be steel
bars 2-1/2 inches by 1/2 inch.
Ladder side rails shall be punched
for the rungs. Ladders shall extend
3 feet 6 inches above the top of
the grating or floor. Cages shall
be provided per OSHA. All ladders
shall be hot-dipped galvanized
after fabrication.
- FLOOR PLATE. Checkered floor plate
shall be fabricated from ASTM A786
carbon steel with a skid resistant
pattern. Floor plates shall be
designed so that there are no
recesses or pockets that might
collect water or debris. Each
section of floor plate shall be
anchored with not less than four
machine screws. Maximum spacing of
machine screws shall not exceed 1
foot 6 inches. All floor plate
shall be hot-dip galvanized.
- BOLLARDS. Bollards shall be
fabricated of 8 inch diameter,
concrete filled, extra-strength
steel pipe. Bollards shall be
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installed at roll up doors to
buildings and at other locations as
required to protect equipment and
fire hydrants.
- MANHOLES AND TRENCH COVERS.
Manholes and trench covers shall be
of prefabricated heavy duty
castings conforming to ASTM A48 or
A536. They shall be designed for
AASHTO HS-20 wheel loading.
2.4 ARCHITECTURAL
2.4.1 Pre-Engineered Metal Buildings
The Contractor shall furnish all materials, labor,
services, tools and equipment for the design,
fabrication and construction of all pre-engineered
(rigid frame) buildings provided for the project.
Pre-engineered metal buildings shall include all
steel, siding, roofing, exterior doors, exterior
windows and wall louvers. All work required to finish
the building such as the floors, interior walls and
partitions, ceilings, plumbing, HVAC, lighting,
electrical work and interior finishes shall be
furnished and installed on-site by the Contractor.
The building shall be designed to meet the
requirements of local building codes, Seismic Zone2A,
ASCE, and Metal Building Manufacturers Association
(MBMA).
The buildings shall be of manufacturer's standard
modular rigid frame type construction with tapered or
uniform depth rafters rigidly connected at their ends
to vertical, pinned-base, tapered or uniform depth
columns. Purlins and girts shall be cold-formed "C"
or "Z" sections conforming to the "Specifications for
the Design of Cold-Formed Steel Structural Members"
of AISI. All other members shall be of ASTM A36 or
A36 modified steel hot-rolled shapes in accordance
with the "Specification for the Design, Fabrication
and Erection of Structural Steel for Buildings" of
AISC.
Roof slopes shall be within the range of 1/2 inch to
1 inch of rise per 12 inches of run. Basic design
criteria and loading shall be in accordance with
those stated in Section 2.3 of this Exhibit. Exposed
metal roof coverings shall consist of galvanized
pre-finished standing seam panels of 24-gauge
minimum. Edge and end joint details shall be such
that, when erected, the roof covering system shall be
completely watertight. Roof panel gauge and shape of
panels shall be sufficient to withstand all design
loadings without excessive deflection or vibration.
Wall coverings shall consist of factory-assembled,
galvanized, pre-finished panels. Interior liner
panels shall be provided in exposed unfinished areas
and shall be 24-gauge minimum. Interior panel
surfaces shall be coated with 1.0 mil minimum dry
film thickness of the manufacturer's standard
baked-on finish. Face
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panels shall be 24-gauge minimum galvanized steel and
factory coated. Interior surface of the face panel
shall be finished with a minimum 1.0 mil minimum dry
film thickness of the manufacturer's standard baked-
on enamel finish. The profile of the face panels
shall be ribbed with overlapping joints. Installed
walls shall be weather tight.
Flashing and trim shall be furnished at rake,
corners, eaves, framed openings, etc., to provide
weather tightness and finished appearance, and shall
be of same material and finish as the materials to
which they are attached. Formed panels, matching the
profile and slope of adjoining panels, shall be
provided along the building ridge. Rubber or neoprene
closure strips (solid or closed cell), matching the
profile of the panel, shall be installed along roof
eave lines and metal closure strips shall be
installed along wall, eave, or rake lines as required
to provide weather tightness.
Roof and wall fasteners shall be self-tapping,
stainless steel or cadmium plated steel screws with
recessed hex head, stainless steel or cadmium plated
steel washers, and aluminum cupped neoprene washers.
Wall fasteners shall be color coated to match the
wall panels. Sheet metal screws for miscellaneous,
light gauge flashings, trim, and cover panels shall
be stainless steel. The manufacturer=s standard
fasteners can be used if approved by the Owner.
Secondary steel framing (purlins, girts, eave struts,
rake channel, joints and bridging, base angles, girt
or sill bars; eave, rake, brace and adaptor angles;
roof and wall brace angles or rods and compression
struts; fastening clips, etc.) shall be of hot-rolled
ASTM A36 or A36 modified steel, or of cold-formed
steel. Cold-formed panels and decks shall be
manufactured by precision roll forming.
All structural steel and secondary members shall be
factory primed and exposed members shall be either
factory finish painted or field finish painted.
Factory finish shall be field touched up as necessary
and subject to Owner approval.
Finish color coatings will be applied to all roof and
wall panels and decks, wall louvers, flashings, trim
and other exposed surfaces. The coating shall be of
the manufacturer's standard color approved by the
Owner. Finish shall be guaranteed for a minimum of 20
years against crazing, chipping, cracking, peeling,
or loss of color.
Gutters shall be a 26-gauge minimum, galvanized steel
with cross-sectional area not less than 33 square
inches. Gutters shall be supported with 16-gauge
minimum, galvanized steel straps to the eave member
at a maximum of 3-foot centers. Downspouts shall be
24-gauge minimum, galvanized steel of rectangular
configuration. Gutters and downspouts shall be
adequate for the maximum rainfall anticipated at the
plant site.
Doors and windows shall be furnished in accordance
with the requirements of Section 2.4.5 of this
Exhibit.
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All structural steel sections, welded plate members,
and cold-formed structural sections shall be securely
and rigidly connected to the frames and members.
Necessary bracing will be included to transfer wind
and earthquake forces on the building to the
foundation. Frames shall be plumb and vertical to
receive exterior roof and wall panels. Roof panels
shall be continuous from ridge to eave wherever
practicable. Laps of roof panels will be sealed with
a continuous ribbon of tape sealer before lapping
panels. Side laps shall be sealed, lapped, and
secured according to erection drawings. Fasteners
shall be installed as recommended by the building
manufacturer. Wall panels shall be continuous from
roof line to 1-1/2 inches below the concrete
foundation floor line.
2.4.2 Walls and Partitions
The Contractor shall furnish all materials, labor,
services, tools and equipment required to design,
furnish, deliver and install all interior walls and
partitions.
All interior masonry walls shall be in accordance
with Section 2.3.4 of this document.
Drywall and stud walls and partitions shall be
constructed of 5/8 inch thick gypsum wallboard and
roll formed metal studs and tracks.
Gypsum wallboard shall have tapered edges and conform
to ASTM C36. Fire rated wallboard shall be used on
all fire rated walls in accordance with UL
requirements. Wallboard in wet areas shall be water
resistant and shall be sealed along the floor to
prevent seepage into the wall or adjacent rooms.
Metal studs and tracks shall be 25 gauge roll formed
galvanized steel conforming to ASTM C645
requirements. Two 20 gauge metal studs shall be used
as jambs of openings. Metal studs shall be attached
to top and bottom runner tracks with screw fasteners.
Studs shall be placed 16 inches on center maximum.
Corner beads, PVC and metal trim shall be provided at
all exterior corners between abutting materials and
as required for proper installation of the wallboard
finish.
As an option, Contractor can submit to the Owner for
approval, specifications for prefinished,
prefabricated wall and partition panels.
2.4.3 Carpentry
The Contractor shall furnish all materials, labor,
services, tools and equipment required for all rough
carpentry, finish carpentry and millwork.
Lumber for framing, blocking, nailers, furring, cant
strips, etc. shall be well-seasoned, free of warps
and comply with the dry size requirements of U.S.
Department of Commerce Product Standard PS-20,
Western Wood Products
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Association (WWPA) No. 3 for Douglas Fir, or Southern
Forest Products Association (SFPA) No. 2. Plywood for
rough carpentry shall be PS1, exterior type, A-C
Grade.
Lumber for finish carpentry, millwork and cabinetry
shall be as follows:
- Softwood shall be kiln dried B or better,
vertical grain S4S Douglas Fir for interior
work and construction grade for exterior
- Hardwood shall be premium grain with closed,
tight, non-raised grain and smooth finish.
- Plywood shall be custom grade interior type
AD grade with "A" face exposed and "D" face
concealed.
2.4.4 Thermal and Moisture Protection
The Contractor shall furnish all materials, labor,
services, tools and equipment required for the supply
and application or installation of thermal and
moisture protection as required for the project. This
includes, but is not limited to, waterproofing, vapor
barriers, thermal building insulation, caulking and
sealants.
The exterior of concrete vertical wall surfaces which
will be below grade, shall be coated with coal tar
type waterproofing. This shall include, but not be
limited to, manholes.
Vapor barrier for all interior concrete floors on
grade shall be minimum 6 mil polyethylene film.
Insulation for buildings shall be noncombustible
mineral wool or glass fiber blankets with minimum 4
mil vinyl film facing carrying an Underwriter's
Laboratories fire hazard rating indicating a flame
spread rating of 25 or less. Roof insulation shall be
a minimum of R-33. Interior walls and partitions for
locker rooms, restrooms, and conference rooms shall
be insulated for sound isolation. Joints in the film
facing shall be cemented or taped to provide a
continuous vapor barrier.
Caulking and sealants shall be applied on the
exterior and interior perimeter of all window and
door frames, louvers, grills and other building
penetrations; paving and sidewalk joints; flooring
joints; and masonry joints. Caulking and sealants
shall be applied per manufacturer recommendations.
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2.4.5 Doors and Windows
The Contractor shall furnish all materials, labor,
services, tools and equipment required for the supply
and installation of hollow metal doors, rolling steel
doors, windows, glass and glazing, and hardware for
the project.
Hollow metal doors, frames and components shall be
manufactured from hot-dipped galvanized cold rolled
steel. Doors shall have insulated cores. The doors
and frames shall be shop primed and field finish
painted. Doors shall have vision lites, louvers,
dampers, etc. as required by their location. The
doors and frames shall be furnished and installed per
Steel Door Institute (SDI) requirements. Fire rated
doors shall comply with NFPA Standard No. 80 and be
tested and labeled per UL requirements. All hinged
exterior doors shall have automatic door closures.
Rolling steel doors and frames shall be manufactured
from hot-dipped galvanized cold rolled steel and have
insulated interlocking slats. All rolling steel doors
shall be motor operated with chain backup. Doors
shall be factory primed and field finish painted.
Windows shall be manufactured of extruded aluminum
frames and ventilator sections. Windows shall be
either horizontal sliding type or fixed type
depending on location. In general, exterior windows
shall be sliding type with screens and storm sash,
and interior windows shall be fixed type. Frames
shall meet standards of Architectural Aluminum
Manufacturer's Association. Hardware shall provide
locking capability for all sliding windows. Finish
shall be selected by the Owner from the
Manufacturer's standard finishes.
The main entrance to main building shall be a double
doored vestibule with glass doors and walls.
Glass and glazing for windows and doors shall comply
with applicable ASTM standards, Federal
Specifications and Flat Glass Marketing Association.
Glass for fire rated applications shall comply with
NFPA No. 80 standard for Fire Doors and Windows.
Glass for exterior applications shall be tinted
insulating glass.
Hardware for doors shall comply with applicable
sections of Americans with Disabilities Act (ADA),
ANSI standards, Builders Hardware Manufacturers
Association (BHMA) and SDI. Hardware for fire doors
shall comply with NFPA 80 and UL requirements. All
hardware shall be installed per manufacturer's
recommendations. All locksets shall be master keyed
with no more than two master key groups.
2.4.6 Finishes
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The Contractor shall furnish all materials, labor,
services, tools and equipment required for the
installation and applications of finishes, such as
acoustic ceiling, floor tile, ceramic tile and
painting for the project.
Ceilings in finished areas will generally consist of
a suspended, fire rated, exposed grid, acoustic lay
in panels. For high moisture areas such as showers,
locker rooms and restrooms, ceilings will have
moisture resistant type suspended acoustic tile.
Ceilings in unfinished areas shall be painted exposed
structure.
Floor coverings in locker rooms, toilets, offices and
other finished areas shall be resilient floor tile.
Unglazed ceramic tile shall be used for high moisture
areas such as showers.
Walls in finished areas will generally consist of
painted gypsum board or masonry. The lower four feet
of the walls in locker rooms and restrooms shall be
finished with glazed ceramic tile. Walls in showers
shall be finished with glazed ceramic tile. As an
alternative to glazed tile, a one-piece prefabricated
shower assembly with handicap rails may be used with
Owner's approval. Concrete floors in all areas prone
to chemical attack, such as battery room, shall be
finished with special resistant coatings. Epoxy floor
coating shall be provided for the electrical room.
All exposed wall surfaces, doors, and exposed steel
surfaces which are not pre-finished shall be field
painted. Aluminum, brass, stainless steel or plastic
surfaces shall not be painted. Concrete will
generally not be painted. Concrete sealer shall be
applied to exposed concrete surfaces in the shop and
warehouse. All equipment which is not shop finish
painted shall be finish painted in the field. The
painting systems provided by the Contractor shall be
of adequate thickness and suitable for the
environment and location to provide durability. The
Contractor's paint specifications and color selection
charts shall be submitted to the Owner for approval.
All coatings shall be applied per manufacturer's
instructions. Surface preparation and cleaning shall
be per coating manufacturer instructions and
applicable SSPC requirements.
Prior to purchasing and installing any finishes, the
Contractor shall provide for Owner's review and
approval a finish schedule for the project.
2.4.7 Specialties and Furnishings
The Contractor shall furnish and install all
architectural specialties, such as toilet partitions
and accessories, lockers, locker room benches, signs,
flagpole, kitchenette, conference/training room
accessories, horizontal window blinds, and fire
extinguishers for the facility.
Toilet partitions and urinal screens for restrooms
and locker rooms shall be 1 inch thick fabricated of
sheet steel over sound deadening core insulation. The
partitions shall be finished with the manufacturer's
standard baked enamel finish.
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The color shall be approved by the Owner. The
partitions shall be furnished with doors and assist
bars which comply with Americans with Disabilities
Act (ADA) requirements and ANSI standards.
Toilet and locker room accessories shall include but
not be limited to robe hooks, towel bars, toilet
tissue dispensers, feminine napkin-tampon dispensers
and disposals, mirrors, metal shelves, mop and broom
rack, soap dispensers, paper towel dispensers, shower
curtain and rods, grab bars and shower seats. These
accessories shall comply with ADA requirements.
Steel lockers shall be 15 inches wide by 18 inches
deep by 72 inches high without legs, single tier
type, arranged for mounting on a nominal 4 inch high
concrete base. Locker accessories shall include coat
hooks, hanger bar, locker handles to receive padlocks
and top shelf. The lockers shall be finished with the
manufacturer's standard baked on enamel finish with
the color being selected by the Owner.
Benches shall be installed near the front of the
lockers. The benches shall be 12 inches wide by 1-1/4
inches thick full finished laminated maple with pipe
pedestals for anchoring to the floor.
A lighted thirty (30) foot flagpole shall be located
at the main entrance to the administration building.
A lighted facility identification sign shall be
located at the main plant road entrance. Other
exterior signs shall be installed for traffic
direction and information. Interior signs shall be
installed as required to identify rooms, provide
direction and meet ADA and ANSI A117.1 requirements.
All exterior windows for offices, conference room,
etc. shall be provided with adjustable blinds.
Fire extinguishers and cabinets shall be installed
throughout the facility as required by applicable
codes.
A kitchenette unit with cabinets, sink, refrigerator,
cook top, microwave, exhaust fan and garbage disposal
shall be installed in the lunch room.
Laboratory furniture and equipment will be provided
by Owner.
2.5 MECHANICAL
2.5.1 General Requirements
The Contractor shall furnish all engineering, design,
labor, materials, equipment and construction services
required to provide a totally functional mechanical
systems associated with the project. The work shall
comply with applicable codes and standards,
including, but not necessarily limited to, the
following:
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- State and local codes, laws, ordinances,
rules and regulations
- Anti-Friction Bearing Manufacturers
Association (AFBMA)
- American Gear Manufacturers Association
(AGMA)
- American Institute of Steel Construction
(AISC)
- Air Moving and Conditioning Association
(AMCA)
- American National Standards Institute (ANSI)
- American Society of Mechanical Engineers
(ASME)
- American Society for Testing and Materials
(ASTM)
- American Water Works Association (AWWA)
- American Welding Society (AWS)
- Crane Manufacturer's Association of America
(CMAA)
- Heat Exchange Institute (HEI)
- Hydraulics Institute (HI)
- Tubular Exchangers Manufacturers Association
(TEMA)
- National Fire Protection Association (NFPA)
- Occupational Safety and Health
Administration (OSHA)
- Factory Mutual System (FM)
- Underwriters Laboratories (UL)
In case of conflict or disagreement between codes and
standards, the more stringent conditions shall
govern.
Equipment will be designed, sized, and manufactured
in accordance with applicable codes.
Redundancy will be provided for such equipment as
lubricating oil pumps and transfer pumps. Clearances
will be provided around equipment for easy operation
and maintenance in accordance with OSHA requirements
and good engineering practices. Manually operated
valves will be located such that
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operation can be readily performed from grade,
properly located platforms or chain operators.
All process piping external to the ASME Section I,
Division I boiler piping will be designed in
accordance with ANSI B31.1 Code, Power Piping. Fluid
velocities during normal and continuous operation
will be maintained within good engineering design
practices such as those listed below:
Water, FPM 300 - 600
Pump Suction piping shall be at one-half the
above velocities.
Critical piping will be subjected to thermal
flexibility analysis in order to locate hangers,
supports and anchors. Piping for systems operating at
elevated temperatures will be insulated for thermal
conservation and personnel protection.
Tanks and vessels operating at pressure greater than
15 psig will be designed and stamped in accordance
with ASME Section VIII, Division I. Safety valve vent
piping will be designed in accordance with ASME
requirements and will be routed clear of working
areas for personnel protection.
All underground piping is to be installed with a
minimum of 3 feet of cover, unless unique design
circumstances dictate less cover. Any exceptions
shall be approved by the Owner.
Equipment shall be designed, fabricated, and
assembled in accordance with the latest, commonly
accepted quality, industrial, engineering and shop
practices. Individual parts shall be manufactured to
standard sizes and gauges so that repair parts,
furnished at any time, can be installed in the field.
Like parts of duplicate units shall be
interchangeable. Equipment shall not have been in
service at any time prior to delivery, except as
required for tests.
Materials not specified herein shall be selected by
Contractor and shall be suitable for service
conditions.
Except where otherwise specified, structural and
miscellaneous fabricated steel shall conform to the
Standards of the American Institute of Steel
Construction.
Mechanical equipment, accessory equipment, piping,
and ductwork shall be set and located in accordance
with the Contractor's drawings. Work shall be done by
mechanics and craftsmen skilled in their various
trades under the direction of experienced supervisors
and manufacturer's representation. Changes or
adjustments which are found necessary during the
installation shall be subject to the approval of the
Owner. The Contractor shall obtain installation
instruction booklets and/or other recommendations
from the equipment manufacturers as to installation
procedures, sequence of installation, and tolerances
allowed in installation. A copy of this information
shall be submitted to the Owner. In
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particular, the manufacturer's recommendations as to
grout spaces required and tolerances for level and
alignment shall be obtained and followed.
All preliminary and final measurements and settings
of equipment shall be able to be witnessed by the
Owner. Upon completion of all installation, the
Contractor shall furnish to the Owner a record of all
initial clearance measurements and settings on
mechanical equipment.
The Contractor shall test and place in successful
operation all equipment provided by the Contractor.
All defects in the erection or in the equipment
itself shall be corrected by the Contractor to the
satisfaction of the Owner. Rotating equipment shall
be checked for proper direction of rotation, shaft
alignment, and balance. Equipment subject to
pressures shall be carefully examined for leakage.
Electric motors shall be set in position, properly
aligned, secured in place and grouted. Motors shall
be lubricated; lubrication shall include flushing of
bearings and other activities required by
manufacturer's instructions. The electrical
connections shall be completed and the motors bumped
electrically to check for correct rotation prior to
the shaft couplings being connected.
Machines and equipment shall be aligned and leveled
using wedges, blocks, shims, or leveling bolts. All
shim material which will be embedded in concrete
grout under sole plates shall be carbon steel;
exposed shims and those placed between the sole plate
and equipment bases shall be stainless steel with no
exception. Shims for concrete foundations shall be
random size carbon steel plate and bars. Shims shall
be located adjacent to anchor bolts and at sufficient
intermediate points to assure complete alignment and
support of equipment.
Leveling of equipment bases shall be performed using
precision levels or equivalent, placed on machined
surfaces, such as baseplates or nozzle faces on
larger items. Where specific manufacturer's
instructions are given for leveling of equipment,
they shall govern.
Machines and equipment shall be grouted securely to
the bases and foundations with non-shrink grout.
Care shall be taken to assure that piping connections
are made to equipment and machinery so that no
reactions or moments in excess of those allowed by
the manufacturer are imposed during installation,
test, or operation.
After alignment and grouting have been completed,
grout has set, and attachments have been made but
prior to placing any piece of equipment or machine in
service, the equipment or machine shall be rechecked
for alignment. Discrepancies disclosed by this check
shall be corrected and rechecked until the item is
found to be properly aligned. When required by the
manufacturer and after the item has been checked by
the Contractor to be in proper alignment, one
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dowel shall be placed in each of two opposite corners
of each piece of machinery or equipment to facilitate
future realignment. Dowels shall be carefully placed,
vertical in position and fitted with jacking threads
and nut to facilitate removal.
Before initial operation, all equipment shall be
thoroughly cleaned, all shipping blocks and
restraints removed and all moving or rotating parts
checked for clearances and freedom from foreign
matter. Lubricants of suitable quality and grade
shall be furnished by the Contractor for application
by the Contractor. All lubricating oils shall be as
recommended by the equipment manufacturer and shall
have an RBOT number greater than 450. Lubricants
required for the combustion turbine will be supplied
by Owner.
The Contractor shall provide the Owner, prior to
equipment start-up, a list showing the proper
lubricants for each item of mechanical equipment,
approximate quantities needed per year of continuous
operation, and recommended lubrication intervals.
Wherever possible, the types of lubricants shall be
consolidated (with the manufacturer's approval) to
minimize the number of different lubricants required
for plant maintenance. Equipment lubrication fittings
shall be extended with tubing or piping beyond
obstructions such as guards or covers to allow
lubrication without disassembly of the unit.
In addition to ASME and other official code stamp
nameplates, a nameplate shall be securely fastened in
a readily visible location on each item of equipment
by means of rivets, welding or screws. Nameplate
shall minimally contain: design flow and conditions,
rpm, horsepower, manufacturer's name and serial
number, model number, recommended lubricant, and
packing or mechanical seal identification, and other
pertinent identifying design and operating data.
Nameplate shall be extended out from the surface to
be visible after insulation installation if required.
The Contractor shall not use permanent plant
equipment for construction purposes without first
securing permission in writing from the Owner. Such
permission may be granted for the use of some
equipment but may not be extended to the use of
pumps, compressors, and similar equipment. When use
is made of the plant equipment, the Contractor shall
take all precautions to avoid overload or damage to
such equipment and shall be responsible for the
satisfactory repair or replacement of any parts
suffering damage due to the use of the equipment by
the Contractor. Use of plant equipment by Contractor
shall not alter the time or enforcement of guarantee
and warranties.
Equipment requiring periodic repair and adjustment
shall be furnished complete with special tools,
instruments, and accessories required for
maintenance. Equipment requiring special devices for
lifting or handling shall be furnished complete with
those devices.
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The Contractor shall furnish equipment and materials
required and perform tests necessary to demonstrate
proper installation and operation of the equipment.
Owner shall be notified in reasonable time prior to
test. These tests shall include, but not be limited
to, the following:
a. Running tests for all rotating equipment.
b. Equipment having moving parts shall be
tested for freedom of movement and for
function.
c. Weight and movement tests for all lifting
devices installed by the Contractor.
d. Correct alignment of all equipment, motors,
and couplings.
e. Hydrostatic testing, proof, leak and/or
tightness tests.
Nondestructive examinations shall be performed by the
Contractor wherever required by design,
specification, applicable code, or manufacturer's
requirements including instances when a visual
inspection suggests an obvious or a possible defect.
Inspectors for nondestructive examinations shall be
qualified in accordance with the applicable codes and
standards. The record of qualification for each
inspector and a listing of his area(s) of the
qualification shall be submitted to the Owner for
approval.
The highest degree of cleanliness practically
achievable shall be maintained throughout this
project, keeping in mind that the piping materials
and equipment are to be handled, opened up, examined,
assembled, heated, and welded under project
construction conditions. Foreign matter, construction
debris, welding rods and other consumables,
miscellaneous hardware and excess materials whose
presence might lead to operational difficulties or
material failure shall be removed.
Touch-up paint shall be applied to all painted
equipment as required.
2.5.2 Gas Turbine Generator Erection
This section covers the receiving, unloading,
storage, protection, installation, erection, finish
painting, start-up and testing of the gas turbines
and auxiliary equipment as described under Exhibit H.
The Contractor shall furnish all labor, tools,
services, equipment and material for this work.
The Contractor's erection methods and procedures
shall conform with accepted good engineering
practice, the requirements of applicable codes and
standards and in accordance with the procedures
furnished and approved by the manufacturer.
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2.5.3 Pumps
This section covers the design, manufacture, testing,
delivery, unloading, and erection of fuel oil pumps,
water pumps, sump pumps and other miscellaneous pumps
required for the project. The pumps shall be
furnished complete with motors, couplings, guards and
baseplates.
Equipment, material, design, fabrication, inspection
and testing shall comply with applicable industry
codes, standards and specifications including, but
not limited to, ASME, ANSI, AWS, NEMA, NEC, HI, and
OSHA.
Pumps and equipment shall be selected and designed,
including heads, capacities and margins, based on the
Contractor's piping arrangement, system requirements
and type of fluid being handled. The materials of
construction of the pumps shall be compatible with
the fluid pumped. The Contractor shall be fully
responsible for the applicability, quality and
compatibility of these materials. The selection of
the pumps shall be subject to Owner's approval.
Similar parts of duplicate pumps shall be completely
interchangeable.
Equipment and piping arrangement, and nozzle
orientation, shall be selected for ease of
maintenance and to minimize the dismantling or
removal of piping and electrical connections for
maintenance.
Shafts shall be accurately ground and polished
throughout their entire lengths and furnished with
shaft sleeves. They shall be designed so that the
critical speed will not occur within a safe margin of
operating speed of the pump.
Casings and nozzles shall be designed to withstand a
minimum of 1 1/2 times the pump shutoff pressure.
Wear rings for casing and impellers shall be
replaceable.
In general pumps shall have mechanical seals. Where
packing is utilized the stuffing boxes shall be
integral with pump casing and furnished with lantern
rings and leakoff piping.
Pumps shall be subject to shop inspection and
manufacturer's standard shop tests.
The pumps, motors, baseplates shall be thoroughly
cleaned, primed and finish coated with manufacturer's
standard procedures and paint. Aluminum, galvanized
steel and stainless steel surfaces shall not be
painted.
Equipment shall be furnished with permanently mounted
non-corroding metallic name plates.
Motors shall comply with Section 2.6.19 of this
Exhibit.
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2.5.3.1 Miscellaneous Pumps
The following miscellaneous pumps shall be
provided for the project:
- Two (2) one hundred percent
capacity demineralized raw water
pumps.
- Two (2) one hundred percent
capacity demineralized water
injection pumps.
- Two (2) one hundred percent
capacity retention basin transfer
pumps
- Four (4) fuel oil supply pumps,
with each pump capable of meeting
the maximum fuel oil requirements
of two gas turbines
- Four (4) fuel oil unloading pumps.
The total capacity of all pumps
shall allow the unloading of six
(6), 8,000 gallon, trucks in a one
hour period.
- Two (2) one hundred percent
capacity evaporative cooler supply
pumps.
- One (1) one hundred percent
capacity motor driven fire water
pump.
- One (1) one hundred percent
capacity diesel driven fire water
pump.
- One (1) firewater jockey pump.
Each pump shall be a centrifugal type pump
and shall be mounted together with its drive
on a base plate. The pump shall be connected
to its drive through a flexible coupling
with OSHA approved coupling guard.
The pumps shall be mechanically and
hydraulically balanced.
Pump bearings shall be of the ring oil ball
bearing type with external constant level
lubricating devices.
Where the pumps have vertically split casing
the Contractor shall provide heavy duty,
ANSI design end suction, self-venting
volute, back pullout unit with spacer
coupling.
Where the pumps have horizontally split
casing the suction and discharge connections
shall be located in the lower casing.
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The suction and discharge nozzles shall be
tapped for pressure gauge connections.
Casings shall be provided with vent and
drain connections.
2.5.3.2 Miscellaneous Sump Pumps
If required by design, the following sump
pumps shall be provided for the project.
Pumps shall be provided based on the
Contractor's design.
- Two (2) one hundred percent
capacity oil/water separator sump
pumps.
- Two (2) one hundred percent
capacity fuel oil unloading area
sump pumps.
- Two (2) one hundred percent
capacity demineralized area sump
pumps.
- Two (2) one hundred percent
capacity plant sump pumps.
Sump pumps shall be duplex vertical,
wet-basin submerged, single suction volute
type complete with support plates, motors,
suction strainers, and level control floats.
Pumps shall be enclosed-shaft, fully water
lubricated and designed to preclude oil or
grease from mixing with pumped fluid.
Discharge piping shall extend above cover
plate.
Shaft gland and leakoff piping shall be
arranged to return all leakage to the sump.
Sump pumps shall be provided in each
underground cable vault if required for
adequate drainage.
2.5.4 Air Compressors, Dryers and Accessories
This section covers the design, manufacture,
delivery, unloading and installation of two (2) air
compressors, one (1) air receiver, two (2) air
dryers, controls, and associated accessories.
The plant will be provided with one air system for
both plant and instrument air, with one air receiver
and with all air dried to instrument air
specifications. Adequate controls will be provided to
prevent surges in air demand from causing instability
in the air system.
The air dryer absorber vessels and air receivers
shall have the ASME Code stamps in accordance with
the latest revision of the applicable code.
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The equipment shall be subject to the manufacturer's
standard shop tests prior to shipment.
The air compressors shall be skid mounted, rotary
screw air cooled type units with piping, valves,
fittings, controls, inlet filter, oil reservoir,
water/oil cooler, intercooler, aftercooler and
accessories.
The compressors shall be designed to meet the
following conditions:
- Discharge pressure, psig 125
- Maximum motor speed, rpm 1780
- Capacity Per Contractor's design
The air receivers shall be of the vertical type with
inlet and outlet connections, automatic drains,
instrument connections, safety valves and manhole.
The receiver shall be a minimum of 1,000 gallon
capacity.
The air dryers shall be of the desiccant heatless
type, twin towers on a steel frame, with required
control, valves, piping, instrumentation prefitters
and after fitters. The dryer shall be designed for an
outlet dew point temperature of -40 Deg. F.
All equipment shall be cleaned and shop primed and
finish painted with the manufacturer's standard
paint. All machine surfaces shall be properly
protected against corrosion.
2.5.5 Water Treatment System
This section covers the design and installation of
water treatment system required for the use of truck
mounted demineralizers to be used for supplying
demineralized water for NOx control when burning fuel
oil. Space, piping and support facilities shall be
provide for five, 350 gpm, truck mounted
demineralizers.
The water treatment system shall include, but not be
limited to, the following:
- Piping and valves for the supply of raw
water, discharge of demineralized water, and
initial rinse water discharge.
- Compressed air connections.
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2.5.6 TanksERROR! BOOKMARK NOT DEFINED.
This section covers the design, manufacture,
delivery, unloading and installation or erection of
shop fabricated tanks and field erected tanks. The
tanks shall include, but not be limited to, the
following:
- One (1) demineralized water storage tank
with 7,000,000 gallon storage capacity.
- One (1) raw water storage tank with
2,000,000 gallon storage capacity which
includes 200,000 gallons of Raw Water
Storage Tank reserved for fire water.
- One (1) fuel oil storage tank with 165,000
barrel capacity.
The tank shall be furnished complete including all
interior and exterior coatings, supports, manholes,
gaskets, belts, vents, standpipes, interior and
exterior piping, overflows, wear plates, nozzles,
piping connections, level gauges and as required
ladders, platforms, stairs and walkways.
Tanks shall be designed and constructed in accordance
with applicable codes and standards for each tank and
OSHA. The fuel oil storage tank shall conform to API
650 requirements. The demineralized water storage
tank, and raw water storage tanks shall comply with
AWWA Standard D100.
The water storage tanks shall have a minimum
corrosion allowance of 1/16 inch.
The fuel oil storage tank shall be furnished with a
floating suction, vent flame arrestor and foam
chamber. Piping shall be provided to a safe location
outside of the containment berm for connection of the
foam chamber to a semi-fixed foam system.
All carbon steel tanks shall be thoroughly cleaned
and painted or coated to prevent corrosion. The
exterior of the other carbon steel tanks shall be
finished painted with the color being approved by the
Owner.
2.5.7 Cranes and Hoists
This section covers the design, manufacture,
delivery, unloading and installation of one
maintenance shop hoist for the facility.
The crane and hoists shall be shop primed and finish
painted with manufacturer's standard paint.
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A five (5) ton, electrically operated, monorail hoist
shall be provided in the facility maintenance shop.
The hoist shall include trolley, motors, hoist,
cable, hook, pendant controls and auxiliary
equipment.
The pendant control shall include as a minimum an
"ON/OFF" switch for main power, separate "UP" and
"DOWN" buttons for hoist and separate "FORWARD" and
"BACKWARD" buttons for trolley.
2.5.8 Fire Protection System
This section covers the engineering, design, and
installation of the fire protection systems and
equipment for the project. The Contractor shall
perform all engineering and design, and furnish,
install and test the fire protection system specified
in Exhibit A in accordance with applicable NFPA codes
and standards, local codes, authorities having
jurisdiction, and the Owner's insurance carrier
requirements. All system components shall be UL
listed and FM approved for fire service.
The major components of the fire protection system
shall be in accordance with Exhibit A.
A fire detection and alarm system, per NFPA and local
requirements, shall be provided throughout the plant
to provide early warning and personnel safety. The
detection system shall identify the area and activate
the appropriate equipment. Detection of a fuel oil
tank fire shall be by fixed temperature, explosion
proof type detectors. The control panel shall be
located in the control room.
CO(2) or dry chemical portable fire extinguishers
shall be provided throughout the plant and within
buildings and structures. The extinguishers shall be
sized for one-man operation.
The use of halon gas systems shall not be permitted.
2.5.9 Piping, Valves and Specialties
This section covers the general requirements for
piping systems including valves, fittings and piping
specialties. The Contractor shall engineer, design,
furnish materials and equipment, install, clean and
test all piping systems for the project.
2.5.9.1 General Requirements
All equipment, material, design,
fabrication, erection, inspection, cleaning
and testing shall comply with applicable
state, federal, local and industry codes,
standards, and specifications, including,
but not limited to:
- ANSI B31.1, Power Piping
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- ASME Boiler and Pressure Vessel
Codes, Sections I, V, VIII and IX.
- Pipe Fabrication Institute (PFI)
- American Water Works Association
(AWWA)
- American Society for Testing and
Materials (ASTM)
- American National Standards
Institute (ANSI)
- American Welding Society (AWS)
- Manufacturer's Standardization
Society (MSS)
- American Concrete Institute (ACI)
The Contractor shall perform stress
analysis for all piping 2 1/2 inches and
larger, and 250 DEG. F or higher in
operating temperature, and a pressure over
300 psig. Thermal flexibility analysis
shall be performed for piping 250 DEG. F or
higher in operating temperature in order to
locate hangers, supports, and anchors.
Stress, flexibility, vibration and water
hammer analysis shall be performed as
required by good engineering practice.
The design pressure and temperature for
piping shall be consistent with conditions
established for each system. The design
pressure of a piping system shall generally
be based on the maximum sustained pressure
plus 25 psi. The design temperature shall be
based on the maximum sustained temperature
plus 10 DEG. F.
Above-ground pipelines 2-1/2 inches and
larger shall be provided with an
identification system indicating the pipe
contents and direction of flow. The
identification shall be easily visible and
readable from floors or platforms. The
system used by the Contractor shall be
approved by the Owner.
Insulation and lagging of piping shall
comply with Section 2.5.10.
The exterior of exposed carbon steel piping
which is not insulated or galvanized shall
be cleaned and painted.
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2.5.9.2 Materials
Material selection shall be based on the
design pressure, temperature and service
conditions. Piping materials shall be in
accordance with applicable ASTM and ANSI
standards and local codes. Materials
selected for use with the main cycle systems
shall be free of copper materials to allow
the cycle to be treated at the optimum pH
for corrosion protection of carbon steel
components. Piping materials shall generally
be in accordance with the following:
- CARBON STEEL PIPING. Carbon steel
piping 2-1/2 inches through
28-inches nominal size shall be
seamless ungalvanized ASTM A53 or
A106. Carbon steel piping larger
than 28 inches nominal size shall
be ATSM A672 Grade B70, Class 21,
for steam service, and ASTM A134
(with ASTM A283 plate material) for
cold water service, with the
industrial grades as a minimum.
Schedules, sizes and dimensions
shall conform to ANSI B36.10.
- ALLOY STEEL PIPING. Alloy steel
pipe, including large diameter
special wall pipe, shall be
ungalvanized seamless type. Alloy
steel pipe with a 2-1/4 percent
chromium content shall conform to
ASTM A335, Grade P22. Alloy steel
pipe with a 5 percent chromium
content shall conform to ASTM A335,
Grade P5. Alloy steel pipe with a 9
percent chromium content shall
conform to ASTM A335, Grade P91.
Schedules, sizes and dimensions
shall conform to ANSI B36.10.
- STAINLESS STEEL PIPING. Stainless
steel pipe shall be ASTM A312
Grades TP 304, TP 304L, TP 316, or
TP 316L, seamless piping. All
stainless steel piping materials
shall be fully solution annealed
prior to fabrication. Type 316
materials shall be utilized for
high resistance to corrosion. The
Type 316L materials shall be
utilized for applications requiring
hot working (welding, etc.) when
the piping will handle solutions
that are high in chlorides.
Schedules, sizes and dimensions
shall conform to ANSI B36.10 or
B36.19 as applicable.
- GALVANIZED CARBON STEEL PIPE.
Galvanized steel pipe shall be ASTM
A120 or A53. Schedules, sizes and
dimensions shall conform to ANSI
B36.10.
- RUBBER LINED PIPE. Lining materials
for rubber lined carbon steel pipe,
method of application, and lining
manufacturer shall be chosen in
accordance with service
requirements.
- COPPER ALLOY PIPE. Copper alloy
pipe shall conform to ASTM B43,
Seamless Red Brass Pipe.
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- POLYPROPYLENE LINED PIPE.
Polypropylene lined pipe shall be
ASTM A53 steel pipe with an applied
liner of polypropylene.
- FIBERGLASS REINFORCED PLASTIC PIPE.
Fiberglass reinforced plastic pipe
shall be chosen in accordance with
the specific service requirements.
- POLYVINYL CHLORIDE PIPE. Polyvinyl
chloride (PVC) pipe shall conform
to ASTM D1785 or ASTM D2241.
- ALLOY 20 OR ALLOY 20Cb-3. Alloy 20
piping shall conform to ASTM B464
UNSN 08020.
- HIGH DENSITY POLYETHYLENE (HDPE)
PIPE. High density polyethylene
piping shall conform to ASTM D3350.
- DUCTILE IRON PIPE. Underground
ductile iron pipe shall conform to
ANSI A21.51 and AWWA C151.
Aboveground ductile iron pipe shall
conform to AWWA C151 Class 53. Shop
applied cement mortar lining shall
be per AWWA C104.
- CAST IRON SOIL PIPE. Cast iron soil
pipe shall conform to ASTM A74,
Class 5V.
- PRESTRESSED CONCRETE PIPE.
Prestressed concrete pipe shall
conform to AWWA C301.
- STAINLESS STEEL TUBING. Stainless
steel tubing shall conform to ATM
A213, Type 316. All stainless steel
tubing shall be of the fully
annealed type. Stainless steel
tubing for use with tubing fittings
shall not exceed Rockwell B80
hardness.
- COPPER TUBING. Copper tubing 3/8
inch and smaller shall be light
drawn temper tubing conforming to
ASTM B75. Copper tubing 1/2 inch
and larger shall be ASTM B88 Type K
drawn temper. Copper tubing shall
be oxygen free or phosphorus
deoxidized copper. Oxygen bearing
tough pitch copper tubing shall not
be used.
Fittings shall be constructed of materials
equivalent to the pipe with which they are
used, except for polypropylene lined cast
iron or ductile iron fittings which shall be
used with polypropylene lined steel pipe,
and rubber lined cast iron or ductile iron
fittings which shall be used with rubber
lined steel pipe.
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- STEEL FITTINGS. Steel fittings
2-1/2 inches and larger shall be of
the butt welding type and steel
fittings 2 inches and smaller shall
be of the socket welding type.
- BUTT WELDING FITTINGS. The wall
thicknesses of butt welding
fittings will be equal to the pipe
wall thickness. The fittings shall
be in accordance with ANSI B16.9,
ANSI B16.28, and ASTM A234 or ASTM
A403.
- FORGED STEEL FITTINGS. Forged steel
fittings shall be used for socket
weld and steel threaded connections
and shall conform to ANSI B16.11.
- CAST STEEL FLANGED FITTINGS. Cast
carbon steel flanged fittings shall
conform to ANSI B16.5 and shall be
of materials conforming to ASTM
A216 WCB.
- ADAPTERS. Reducing outlet tees
should be used in lieu of specially
designed adapters for branch piping
2-1/2 inches and larger whenever
possible. Specially designed
adapters may be used in lieu of
reducing outlet tees if standard
reducing outlet tees are not
available for the run and branch
sizes specified. Specially-designed
adapters must be postweld heat
treated as specified in ASME B31.1.
Branch connections 2 inches and
smaller shall be made with special
reinforced welding adapters, or
shall be special welded and drilled
pads.
- GALVANIZED PIPE FITTINGS. Fittings
for galvanized steel pipe shall be
screwed malleable iron conforming
to ASTM A197 or grooved per ASTM
A536.
- RUBBER LINED PIPE FITTINGS. Flanged
cast iron or ductile iron fittings
used with rubber lined pipe shall
be lined with the same materials as
the pipe with which they are used.
- BRASS AND BRONZE FITTINGS. Screwed
brass and bronze pipe fittings
shall conform to ANSI B16.15.
Flanged brass and bronze pipe
fittings shall conform to ANSI
B16.24.
- POLYPROPYLENE LINED DUCTILE IRON
FITTINGS. Flanged ductile iron
fittings used with polypropylene
lined steel pipe shall be the
ductile iron fittings conforming to
ANSI A21.10, and shall be lined
with the same material as the pipe
with which they are used.
- FIBERGLASS REINFORCED PLASTIC
FITTINGS. Fittings for use with
fiberglass reinforced plastic pipe
shall be manufactured from
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material of the same type as the
pipe. Joints shall be as required
by the application.
- POLYVINYL CHLORIDE FITTINGS.
Polyvinyl chloride pipe fittings
shall be manufactured from PVC
material of the same type as the
pipe with which they are used. The
fittings shall have socket ends
with internal shoulders designed
for solvent cementing.
- HIGH DENSITY POLYETHYLENE FITTINGS.
High density polyethylene (HDPE)
fittings shall be manufactured from
HDPE material of the same type as
the pipe with which they are used.
The fittings shall have butt fusion
ends.
- TUBING FITTINGS. Stainless steel
fittings shall be used with
stainless steel tubing. Fittings
for use with stainless steel tubing
in sizes smaller than 3/4 inch
shall be of the flareless "bite"
type, and fittings for use with
tubing in sizes 3/4 inch and larger
shall be socket weld type
conforming in general design to
ANSI B16.11. Fitting material and
bursting strength shall be
equivalent to the tubing with which
they are used.
Brass fittings shall be used with
ASTM B75 copper tubing, and shall
be of the flareless "bite" type.
Braze joint fittings shall be used
with ASTM B88 Type K copper tubing
and shall be wrought copper,
bronze, or brass, conforming to
ANSI B16.22.
- DUCTILE OR GRAY IRON FITTINGS.
Fittings for ductile iron pipe
shall conform to AWWA C110.
- CONCRETE PIPE FITTINGS. Concrete
pipe fittings shall conform to AWWA
C301, C303 and C308.
Flanged joints shall be in accordance with
the following requirements.
- FLANGE SELECTION. Flanges mating
with flanges on piping, valves, and
equipment shall be of sizes,
drillings, and facings which match
the connecting flanges of the
piping, valves, and equipment.
Flange class ratings shall be
adequate to meet the design
pressure and temperature values
specified for the piping with which
they are used. Flanges shall be
constructed of materials equivalent
to the pipe with which they are
used.
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- STEEL FLANGES. Steel flanges shall
conform to ANSI B16.5.
Steel flanges 2-1/2 inches and
larger except for grooved pipe shall
be of the weld neck or slip-on type
and all steel flanges 2 inches and
smaller shall be of the socket type.
Slip-on flanges shall generally be
used only when the use of weld neck
flanges is impractical. Steel
flanges shall have raised face
flange preparation. Flat face
flanges shall be used to mate with
cast iron, ductile iron, fiberglass
reinforced plastic, polyvinyl
chloride, or bronze flanges.
Carbon steel flanges shall be of
ASTM A105 material. Carbon steel
flanges shall not be used for
temperatures exceeding 750 DEG. F.
Chromium alloy steel and stainless
steel flanges shall conform to ASTM
A182.
- BRASS AND BRONZE FLANGES. Brass and
bronze screwed companion flanges
shall be plain faced and shall
conform to Class 150 or Class 300
classifications of ANSI B16.24.
Drilling shall be in accordance with
ANSI Class 125 or Class 250
standards.
Compressed fiber gaskets shall be used with
flat face flanges, Class 150 socket weld
flanges, and raised face slip-on flanges.
Spiral wound gaskets shall be used with
raised face flanges, except for Class 150
socket weld flanges and raised face slip-on
flanges. Gaskets containing asbestos are not
acceptable.
Flange bolting shall conform to the
following requirements.
- Alloy steel bolting shall be used
for joining all steel flanges,
except steel slip-on flanges, with
Class 150 or greater ratings.
Bolting shall conform to the
requirements of ANSI B16.5.
Material for studs shall be ASTM
A193 Grade B16 for piping design
temperatures 750 DEG. F and
above, and Grade B7 for piping
design temperatures less than 750
DEG. F.
Material for nuts shall be ASTM A194
Grade 3 for piping design
temperatures 750 DEG. F and
above, and Grade 2H for piping
design temperatures less than 750
DEG. F.
- Carbon steel bolting shall be used
for joining all other flanges,
including steel slip-on flanges, and
shall conform to the following.
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Bolting shall conform to the
requirements of ANSI B16.1 and ANSI
B16.24.
Bolting for bolt sizes 1-1/2 inches
and larger shall consist of threaded
studs and two nuts. Bolting for bolt
sizes less than 1-1/2 inches may be
threaded studs and nuts or bolts and
nuts.
Bolts and nuts shall be heavy
hexagonal head conforming to ANSI
B18.2.
Materials shall be ASTM A307 Grade
B.
- Buried bolting shall be cadmium
plated in accordance with ASTM A165
or zinc plated in accordance with
ASTM A153.
Piping unions shall be of the ground joint
type constructed of materials equivalent in
alloy composition and strength to other
fittings in the piping systems in which they
are installed. Union class ratings and end
connections shall be the same as the
fittings in the piping systems in which they
are installed.
2.5.9.3 Installation
All piping shall be installed in a neat,
rectangular form, except for piping
specifically designated to be sloped. All
piping shall be installed perpendicular or
parallel to the equipment, structures or
floors.
Piping shall not be installed above, or
within a horizontal distance of 3 feet from
electrical equipment. Piping shall be
installed with a minimum of 7 foot 6 inches
of headroom over passageways and walkways
and 10 feet over maintenance aisles. Routing
shall be selected to avoid interference with
locations of lighting fixtures, electrical
trays, rackways or conduits.
Valves shall be installed in such a manner
that they can be operated from floors or
platforms without the use of ladders. Valves
which are inaccessible from a platform or
floor shall be provided with chain operators
to the nearest platform or floor below the
valve.
Vent and drain piping shall generally be in
accordance with the following criteria:
- Vent and drain piping through an
isolation valve to the vent or drain
line termination shall be as
described for miscellaneous piping.
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- Vent connections shall be provided
at all high points in water and oil
piping, and all high points in other
piping including steam lines, which
will be hydrostatically tested.
- Drain connections shall be provided
at all nondrainable points in steam,
water, and oil piping, and all other
piping which will be hydrostatically
tested.
- Drain connections shall be provided
at all control valve stations
between the inlet isolation valve
and the control valve.
- Vent and drain connections shall
normally be provided with isolation
valves. Vents shall normally use
gate or globe valves and drains
shall use gate valves to resist
pluggage, if possible. Vents shall
be provided with screwed caps or
plugs.
- Vent and drain connections that
require frequent operation or which
may discharge significant quantities
of fluid shall be piped to a
suitable drain. Vent or drain
connections that shall normally
require operation at a time when hot
fluids shall be discharged shall be
piped to a safe termination point
(drain funnel or floor area
discharge).
All equipment, piping and valves of a
temporary nature shall be installed in a
safe and workmanlike manner. This shall
include such lines as temporary vents for
hydrostatic test lines, lube oil flush
lines, and all other temporary lines
required to successfully complete the work.
When the temporary piping is no longer
required, the Contractor-furnished temporary
piping shall be dismantled and removed from
the site.
All piping shall be installed so that
excessive or destructive expansion forces
will not exist either in the cold condition
or under conditions of maximum temperatures.
All bends, expansion joints, and special
fittings necessary to provide proper
expansion shall be furnished.
Piping for instrumentation, including gauge
glasses, condensing reservoirs, and
instrument piping to instrument enclosures
shall be installed and shall be certified by
the Contractor to be in accordance with the
latest requirements of the ASME Code.
Where expansion joints are used, anchors or
tie rods shall be installed as required to
prevent damage from the forces generated by
the fluid pressure in the line. Care must be
taken in installing expansion joint anchors
that full design movement is allowed at all
times from maximum to minimum temperatures.
Expansion joints shall be installed in
accordance with the latest requirements of
the ANSI-ASME Power Piping
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Code B31.1 and in accordance with the
recommendations of the expansion joint
manufacturer.
All necessary flange isolating materials and
insulated bushings, unions and couplings
shall be installed as required to properly
isolate below grade piping from above grade
piping at the combustion turbine generator
units. Bolting at insulated flanges shall
consist of studs and nuts with sufficient
stud length to allow at least one full stud
thread protruding through each nut. Sleeves
shall extend into the insulating washers.
After installation, insulated flanges,
bushings, unions, and couplings shall be
tested to determine that the piping is
properly electrically isolated to the
satisfaction of the Owner.
The Contractor shall electrically isolate
the designated piping from connecting piping
and equipment, reinforcing steel, structural
steel, the station grounding system, and
other buried piping.
The Contractor shall not use permanent plant
equipment for erection, testing, lifting,
support, or other similar activity during
erection unless approved by the Owner.
Flange faces shall be thoroughly cleaned and
faces checked and dressed, if necessary,
before making up joints in the field. Bolts
and/or bolt-studs of the proper size and
length shall be used. Identical bolts and
nuts shall be used on each individual joint.
For threaded joints, clean taper threads
shall be cut on the pipe of proper length
and depth to insure the drawing up of a
pressure-tight joint without the use of
packing materials and without excessive
length of male thread showing outside of the
fitting. Cut and threaded ends shall be
reamed and free of burrs or obstructions.
Teflon tape shall not be used on instrument
air system threaded connections.
Prior to erecting fabricated assemblies, the
Contractor shall inspect all exterior
surfaces and interior surfaces, where
possible, for cleanliness, damage, welding,
and coating. Unsatisfactory fabrication
shall be repaired prior to rigging into
position to minimize erection delays.
After rigging and prior to welding, piping
locations shall be checked for conformity to
design dimensions, equipment location, and
weld or gasket gaps by the Contractor.
Approved welding procedures shall be used
and qualified welders shall perform all
welding operations. The Owner shall have the
authority to halt welding operations, if, in
the opinion of the Owner, the above checks
have not been properly made or documented.
Final connections to equipment and valve
flanges or nozzles shall be accomplished by
adjustment of the piping and supports to
provide
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accurate alignment at these joints without
stressing of the pipe, equipment, or valves.
Springing, heating or bending to align the
connection will not be permitted. Welding or
bolting of connections at equipment shall
require the approval of the Owner prior to
starting of this operation, and record of
such approval shall be maintained by the
Contractor.
2.5.9.4 Welding and Joints
Welding procedures, welders, and welding
operators shall be qualified in accordance
with code requirements. Records of the names
of the welders who make each weld shall be
maintained.
Documentation relative to the welder,
welding operator, and procedure
qualification shall be made available at a
location where the work is being performed
and shall be available for audit.
Site facilities shall be provided where all
welders shall perform qualification tests.
The Contractor shall provide for on-site
weld qualifications.
Welding shall be performed using an electric
arc welding process. Only the following
welding processes shall be permitted,
subject to proper code qualification.
- Shielded metal arc
- Gas tungsten arc
- Flux cored arc (except
self-shielded electrodes)
- Gas metal arc (except
short-circuiting transfer mode)
- Submerged arc
Field welds in piping systems requiring a
high degree of cleanliness and a relatively
smooth contour at the inside of the welded
joint (Compressed Air, Lube Oil) shall be
made using the gas tungsten arc process for
the first welding pass. The remaining weld
passes shall be made using one of the
processes listed above. All gas tungsten arc
welds shall be made with the addition of
filler metal.
The application of heat to correct weld
distortion and dimensional deviations in
austenitic stainless steels shall be
prohibited.
Preparation of weld ends and fit-up shall be
in accordance with the requirements of PFI
standards. Base metals for butt weld joints
shall be
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prepared by machining or mechanized oxygen
cutting. In specific instances where the use
of the above equipment is impractical,
permission must be secured if hand oxygen
cutting is to be substituted. All slag and
irregularities shall be removed from oxygen
cut ends and hand cut ends shall be ground
smooth.
Backing rings shall not be used in any
piping system without approval of the Owner.
Backing rings, where allowed by Owner, shall
be of the flat split ring type. The material
of the backing rings shall be compatible
with the composition of the pipe with which
it is used.
Welding preheat and interpass temperature
shall be maintained in accordance with the
requirements of the applicable code.
Electric or gas heat sources which provide a
uniform application of heat over the weld
area shall be used in accordance with ASME
B31.1 Section 1.3.1.
Stress relieving of all welds shall be
performed in accordance with the
requirements of the applicable code. All
welding zones, bends, and hot formed
sections shall be fully stress relieved as
required by the code.
Wherever possible, stress relieving shall be
performed by slowly heating the entire
assembly to the specified temperature,
holding the temperature for the required
length of time, and then allowing the
assembly to cool. Where this procedure is
impractical, local stress relieving may be
employed.
Pipe bending shall be used only when
specifically required or where the use of
elbows is impractical. All bends shall be
smooth, without buckles, and truly circular.
The allowable flattening, as determined by
the difference between the minor and major
axes, shall not be greater than 5 percent of
the nominal diameter. Allowance shall be
made for thinning of the pipe wall in
accordance with the requirements of
Paragraph 102.4.5 of the ASME B31.1 to
assure that minimum wall thickness after
bending is not less than the minimum wall
thickness required.
All lugs, ears, and other attachments for
support of piping shall be welded to the
piping. Attachments for piping systems which
must be stress relieved shall be welded to
the pipe prior to final stress relieving.
Attachments on shop fabricated piping which
must be stress relieved shall be shop welded
to the piping.
BRAZED JOINTS. Brazing shall be accomplished
in accordance with the requirements
specified in ASME B31.1. Brazing filler
metals shall be either silver or
copper-phosphorus alloys. Filler metals
containing phosphorus shall not be used for
brazing steel or nickel base materials.
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FIBERGLASS REINFORCED PLASTIC PIPE JOINTS.
Joints in fiberglass reinforced plastic
piping shall be as required by the
application. All joints shall be made by
certified joiners. Individual joiners shall
be trained and certified by the manufacturer
for the specific pipe brand, type of joint,
and pipe sizes to be used.
PVC PIPE JOINTS. Joints in polyvinyl
chloride (PVC) pressure piping shall be of
the solvent cemented type and shall be
carefully made using methods recommended by
the pipe manufacturer. All joints shall be
seal welded after solvent cementing by using
PVC filler rod and hot air welding equipment
designed for this purpose. The above
requirements do not apply to plumbing,
piping or underground push joint PVC pipe.
HDPE PIPE JOINTS. Joints in High Density
Polyethylene (HDPE) pipe shall be of the
butt fusion weld type and shall be made in
accordance with the manufacturer's
procedures.
2.5.9.5 Inspection and Testing
Inspection and testing of piping shall be
performed in accordance with the
requirements of the applicable code, and in
accordance with the following criteria.
Pressure testing of piping assemblies,
including hydrostatic, pneumatic, and
in-service leak testing, shall be performed
on the system assemblies upon the completion
of erection. Shop leak testing of piping
shall not be required. Underground piping to
be tested shall be tested prior to covering
the line, except for underground push joint
piping.
Hydrostatic testing of all piping, except as
otherwise discussed herein or for which a
pneumatic leak test will be provided, shall
be performed with cold water at 1-1/2 times
the design pressure of the piping.
During pipe system pressure tests, large
safety valves shall be gagged. Small safety
and relief valves shall be temporarily
removed and replaced by plugs, caps or blind
flanges. Provision shall be made to limit
the maximum pressure applied during pressure
tests. Increasing the spring compression on
safety valves shall not be permitted. Test
pressure shall be maintained for a
sufficient length of time to permit
inspection of all joints and connections.
Piping that will be hydrostatically tested,
but which would be adversely affected by
rust, shall be tested with
chemically-treated water. After the
completion of testing and acceptance, this
piping shall be dewatered and dried. This
shall generally include high-pressure
(design pressure above 150 psig) compressed
gas piping and other high-pressure systems
requiring a high degree of cleanliness.
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Pneumatic testing shall be provided for all
pressure piping that should not be subject
to water filling. This shall generally
include the following piping:
- Lube oil transfer piping
- Low-pressure (design pressure less
than or equal to 150 psi)
compressed gas piping conveying
carbon dioxide, nitrogen, and
chlorine
- Station air and control air piping
Lines to be leak tested by pneumatic testing
shall be given an application of a leak
detection fluid which shall reveal the
presence of leaks by an easily visible
means, such as bubble formation. The
pneumatic test pressure shall generally be
limited to 100 psig, with the chemically
treated water hydrostatic test to be
preferred for higher pressure applications.
For pneumatic tests with a code required
test pressure that is above 100 psig, the
piping shall be completely tested at 100
psig before the pressure is elevated to the
final value.
Leak tolerances in control and instrument
piping shall be determined in conformance
with ISA Tentative Recommended Practice
RP-7.1. Instruments shall be protected
against overpressure during testing of
piping.
Nondestructive testing shall generally
include visual, radiographic, magnetic
particle and liquid penetrant, and
ultrasonic examinations. Visual examination
of welds shall be performed by personnel
qualified and certified in accordance with
AWS QC1, Standard for Qualification and
Certification of Welding Inspectors.
Radiographic examination shall be performed
on welds requiring examination under the
code. Magnetic particle and liquid penetrant
examination shall be performed as required
by the applicable code. Ultrasonic tests
shall be performed as required by the
applicable code.
The exterior and interior surfaces of all
piping shall be thoroughly cleaned of all
sand, mill scale, greases, oils, dirt, and
other foreign materials. The interior
surfaces of carbon steel piping if used for
lubricating oil systems shall be pickled.
After drying, a suitable rust preventive
shall be applied to the inside of the pipe.
The rust preventive shall be readily soluble
in oil for oil piping and water soluble for
water and steam piping.
During field assembly, foreign matter shall
be removed from the piping and associated
equipment as the work progresses. Protective
plastic covers shall be placed and
maintained over open piping or equipment
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connections to prevent the introduction of
extraneous material. The Contractor shall
make every effort to keep the plastic covers
in tact during construction and shall make
any and all repair necessary to maintain the
plastic covers.
The Contractor shall furnish supervisory
services, all labor, temporary piping and
specialties, special equipment, and
chemicals required to cold flush, and
chemically clean, as required, the piping
systems. The cleaning of the piping systems
is for the purpose of removing oil, grease,
mill scale, and debris as would be found in
a newly erected system.
The Contractor shall submit detailed
procedures to the Owner for approval at an
appropriate time prior to the cleaning
operation.
After approval of hydrostatic tested piping,
the Contractor shall flush until clean the
systems not chemically cleaned with cold
service, demineral- ized or other clean
water. Water for flushing will be supplied
in sufficient quantity and at adequate
pressure (system pumps or other means) to
suit the flushing requirements. Systems
which will operate with air or gas shall be
blown out with dry air or gas.
When the flushing medium is water, the
system shall be flushed until the discharge
is free of turbidity and color. The
Contractor shall provide temporary strainers
to protect all pumps. During flushing
operations, the Contractor shall
periodically remove and clean temporary and
permanent strainers. Should differential
pressures or restricted flow indicate the
presence of a major obstruction in the
system, the Contractor shall dismantle
portions of the system required to locate
and extricate the obstruction. After Owner's
approval of cold flushing, the Contractor
shall remove, clean and replace strainers,
remove the temporary piping and supports,
make up all final connections, and prepare
the systems for operation.
Water used for flushing and cleaning shall
be disposed of in compliance with
environmental permits, state and local
regulations, and with the Owner=s approval.
After completion of cleaning and flushing
procedures, the Contractor shall remove
temporary piping and appurtenances, replace
valve covers using new gaskets, and make
final piping connections and adjustments to
place the piping systems in first-class
operating condition.
2.5.9.6 Pipe Supports and Hangers
The term "pipe supports" includes all
assemblies such as hangers, floor stands,
anchors, guides, brackets, sway braces,
vibration dampeners,
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positioners, and any supplementary steel
required to attach pipe supports.
All support materials, design, and
construction shall be in accordance with the
latest applicable provisions of ANSI B31.1,
Power Piping.
Support assemblies shall have a minimum
yield strength safety factor of two, and a
minimum ultimate strength safety factor of
four. The safety factor shall be relative to
either the minimum service strength, or the
load, whichever is greater.
Structure attachment components shall be
fastened by welding or bolting. Pipe
supports shall be attached to concrete by
cast-in-place studs or plates. Where it is
not practical to cast studs or plates into
the concrete, anchor bolts with a minimum
pullout safety factor of five shall be used.
Pipe attachments shall generally be pipe
clamps or lugs. Pipe attachments shall be
rigid relative to the piping and insulation
and shall extend sufficiently outside
insulation, if any, to permit free
installation and operation of other support
components. Insulation saddles, securely
attached by welding or bolted clamps, shall
be used where required to prevent damage to
insulation. No welding will be allowed on
lined piping. On piping other than steel or
iron, the piping manufacturer's
recommendations shall be followed.
Turnbuckles shall be provided near the
center of rod assemblies unless the
arrangement provides other means of vertical
adjustment under load. Turnbuckles and other
threaded adjustment components shall be
provided with locknuts.
Except as approved otherwise, spring
assemblies shall be enclosed and shall have
a load and position indicator scale.
Counterweight supports shall not be used.
Spring assemblies which support the pipe by
use of an intermediate rod shall incorporate
an adjustable rod coupling or turnbuckle
with locknut. Spring assemblies shall be
suitable for inside or outside installation.
A field adjustment feature for varying
support effort shall be provided on spring
assemblies. Spring assemblies shall be
provided with a means to lock the springs.
When so locked, the assemblies shall be
capable of carrying any hydrostatic test or
chemical cleaning load. Locking devices for
spring assemblies on steam piping requiring
hydrostatic test shall be attached to the
spring casing by means of pins or chain.
Spring housing shall have nameplates with
permanently stamped markings indicating
their corresponding hanger number.
Support component and materials shall be
suitable for service at the operating
temperature of the pipe to which they are
attached. Where
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support components temperature is below
750oF, component material shall be carbon
steel. Where support components temperature
is 750oF to 950oF, components material shall
be chromium-molybdenum alloy steel equal or
better than ASTM A335 P11.
2.5.9.7 Valves
Control Valves are specified in Section
2.7.3.7.
Valve pressure classes, sizes, types, body
materials, and end preparations shall
generally be as described herein. Special
features and special application valves
shall be utilized where required. Valves
having butt weld, flanged, socket welded, or
screwed connections shall have ends prepared
in accordance with the applicable ANSI
standards. Steel flanges shall be raised
face type unless otherwise required. Cast
iron and bronze flanges shall be flat faced
type.
Steel body gate, globe, angle, and check
valves shall be designed and constructed in
accordance with ANSI B16.34 as applicable.
Valve bodies and bonnets shall be designed
to support the valve operators (handwheel,
gear, or motor) with the valve in any
position without external support.
STEEL BODY VALVES 2 INCHES AND SMALLER.
Steel body valves 2 inches and smaller will
have forged steel bodies with socket weld
ends. Forged steel valves complying with the
standards and specifications ASME B31.1
shall be used within the manufacturer's
specified pressure temperature ratings. The
use of Class 1500 and 2500 forged steel
valves will be limited in accordance with
the pressure temperature ratings specified
in ANSI B16.34, and the criteria established
in MSS SP-84.
STEEL BODY VALVES 2-1/2 INCHES AND LARGER.
Steel body valves 2-1/2 inch and larger
shall have cast steel bodies with butt weld
ends. The face-to-face and end-to-end
dimensions shall conform ANSI B16.10. The
use of these valves shall be in accordance
with the pressure temperature ratings
specified in ANSI B16.34 as applicable.
Gate, globe and angle valves shall be
provided with back seating construction.
Gate, globe, and angle valves shall be
outside screw and yoke construction. Gate
valves 4 inches and larger shall have
flexible wedge disks. Split disks shall not
be permitted. Valves shall have full size
ports, except where venturi ports are
specifically permitted. The use of valves
with venturi ports shall be limited to
selected large diameter, high-pressure valve
applications.
Check valves used on pump discharge
installations, and on other applications in
which the valves may be subjected to
significant reverse
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flow water hammer or fluid surges, shall be
of the non-slam tilting disk type. All other
check valves shall be of the guided piston,
swing disk, or double-disk spring check
type. The use of double-disk spring check
valves shall be limited to 14-inches and
larger cold water services. All check valves
shall be designed for installation in either
horizontal or vertical piping with upward
flow. Stop check valves, where specified,
shall be Y-pattern globe type.
IRON BODY VALVES. Iron body gate, globe, and
check valves shall have iron bodies and
shall be bronze mounted. The face-to-face
dimensions shall be in accordance with ANSI
B16.10. These valves shall have flanged
bonnet joints. Gate and globe valves shall
be of the outside screw and yoke
construction. Body seats shall be of the
renewable type. Gate valves shall be of the
wedge disk type.
BUTTERFLY VALVES. Rubber-seated butterfly
valves shall be generally constructed in
accordance with AWWA C504 Standard for
Rubber-Seated Butterfly Valves. The valves
shall also generally conform to the
requirements of MSS Standard Practice SP-67,
Butterfly Valves. Valves of the wafer or
lugwafer type shall be designed for
installation between two ANSI flanges.
Valves with flanged ends shall be faced and
drilled in accordance with ANSI B16.1. The
selected use of butterfly valves shall be in
accordance with the pressure temperature
ratings specified in AWWA C504and the
pressure temperature ratings specified by
the manufacturer.
BRONZE BODY VALVES. Bronze gate and globe
valve 2 inches and smaller shall have union
bonnet joints and screwed ends. Bronze gate
and glove valves used in control air service
shall have braze joint ends. Gate valves
shall be inside screw, rising stem type with
solid wedge disks. Globe valves shall have
renewable seats and disks.
Bronze check valves 2 inches and smaller
shall be Y-pattern swing disk type or guided
piston type designed for satisfactory
operating in both horizontal piping and
vertical piping with upward flow.
Bronze valves 2-1/2 inches and larger shall
have bolted flange bonnet joints and flanged
ends. Gate and globe valves shall be of the
outside screw rising stem construction. Gate
valves shall have either integral or
renewable seats. Globe valves shall have
renewable seats.
The use of these valves shall be in
accordance with the pressure temperature
ratings specified by the manufacturer and in
accordance with the criteria established in
MSS SP-80. Bronze valves shall generally be
Class 200, and shall be limited to service
with piping systems having design pressures
of 200 psi or less, and design temperatures
of 150 F or less.
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PLUG VALVES. Plug valves shall be of the
eccentric, lubricated, or Teflon sleeve plug
type, as required by the service. Plug
valves bodies shall conform to the
requirements of ANSI for dimensions,
material thicknesses, and material
specifications. Bonnets shall be of the
bolted flange type. Body ends shall be
flanged, faced, and drilled for installation
between ANSI flanges. The use of these
valves shall be in accordance with the
pressure temperature ratings specified by
the manufacturer.
BALL VALVES. All ball valves shall have full
area ports, Teflon seats and seals, and
chrome plated carbon steel or stainless
steel balls. Ball valve bodies 2 inches and
smaller shall have threaded end connections.
Ball valves 2-1/2 inches and larger shall
have flanged ends. The valves shall not
require lubrication.
DIAPHRAGM VALVES. Diaphragm valves shall be
straightway or weir bodies with flanged ends
faced and drilled for installation between
ANSI flanges.
POLYVINYL CHLORIDE (PVC) AND CHLORINATED
POLYVINYL CHLORIDE (CPVC) VALVES. PVC and
CPVC valves will be constructed entirely
from polyvinyl chloride, chlorinated
polyvinyl chloride, and Teflon. Bodies will
be double entry flanged or true union
screwed type.
VALVE OPERATORS. Valves shall be provided
with manual or automatic operators as
required for the service application and
system control philosophy. Automatic
operators shall be motor, piston, or
diaphragm type. Manual operators shall be
lever, handwheel, or gear type, with the use
of lever operators to be limited to valves
requiring a maximum of 90-degree stem
rotation from full open to full closed
position on valve sizes 6 inches and
smaller. All operators shall be sized to
operate the valve with the valve exposed to
maximum differential pressure. The force
required to manually operate valves shall
not exceed 75 pounds. Isolation valves
installed in areas inaccessible to platforms
shall be furnished with chain wheels. Large
motor operators on small bore piping will
require additional support.
VALVE SPECIAL FEATURES. Valves shall be
provided with locking devices, handwheel
extensions, vacuum service packings, limit
switches, and other special features as
required. Locking devices, when furnished,
shall allow the valve to be locked either
open or closed with a standard padlock.
Limit switches, when furnished, shall be
provided for the open and closed position of
the valve.
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All valve bonnets for valves potentially
exposed to high temperatures (over 150 F)
shall be provided with internal drains. The
drains shall prevent the bonnets from being
exposed to excessive pressure when the
bonnet is full of water and the valve is
exposed to elevated temperatures.
Valves used for isolation purposes shall be
designed for as tight a shutoff as
practical.
Valves shall not be equipped with bypasses
unless specifically required.
2.5.9.8 Specialties
The Contractor shall furnish and install
miscellaneous mechanical specialties
including, but not limited to, the
following:
- Expansion joints
- Strainers
- Safety and relief valves
EXPANSION JOINTS. Expansion joints shall be
suitable for the pressure, temperature and
axial/lateral movements required by the
system design. All joints shall be designed
for full vacuum. End connections, size and
material shall be compatible with adjacent
piping or equipment.
Metal expansion joints shall have stainless
steel bellows and carbon or alloy steel pipe
ends. Bellows shall be ASTM A-316 stainless
steel. Joints shall be supplied with
internal liners, protective outer shrouds
and restraining rods. Metal expansion joints
shall conform with Expansion Joint
Manufacturer's Association (EJMA), ASME, and
ANSI standards.
Rubber expansion joints shall be constructed
of multiple layers of fabric duck
impregnated with rubber and reinforced with
steel as required. Expansion joints shall be
furnished with tie rods. Rubber expansion
joints shall be in accordance with Rubber
Expansion Joint Division of the Fluid
Sealing Association.
STRAINERS. Strainers shall be furnished and
installed based on system requirements. This
shall include all permanent and temporary
start-up strainers. Strainer type, size,
body material and inlet/outlet connections
shall be selected based on system design
requirements. Basket strainers shall be in
accordance with applicable ASME and ANSI
standards. All strainer bodes, except tee
type strainers, shall have tapped and
plugged drain connections.
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SAFETY AND RELIEF VALVES. Safety and relief
valves shall be provided as required to
protect piping systems and equipment and as
required by code. The valve type and
materials of construction shall be selected
based on system pressure and temperature
requirements. The valves shall be designed
to allow an adjustment range of 10 percent
above and below set pressure. All valves
shall be designed to relieve to atmospheric
pressure unless a back pressure or
differential is required. Relief valve vent
stacks for steam service shall be sized to
prevent blowback and shall be routed
vertically and away from platforms and
walkways for personnel safety.
2.5.10 Insulation and Lagging
The insulation and lagging to be applied to piping,
equipment, and ductwork for the purposes of reducing
heat loss, reducing sweating, and personnel
protection shall be in accordance with the following
criteria.
2.5.10.1 Insulation Materials and Installation
Insulation materials shall be inhibited and
of a low halogen content so that the
insulation meets the requirements of
MIL-I-24244 Amendment 3 regarding
stress-corrosion cracking of austenitic
stainless steel. Insulation materials shall
contain no asbestos.
All piping shall be insulated as required to
meet OSHA requirements. All piping operating
above 140oF shall be insulated with calcium
silicate molded insulation, mineral fiber
insulation, or high density fiberglass.
Equipment and ductwork operating at elevated
temperatures shall be insulated with calcium
silicate block or mineral fiber block
insulation.
For equipment operating above 140oF where
retention of heat is not necessary for
proper and efficient operation, insulation
or other measures such as guards will be
provided for personnel protection only.
Mineral fiber block insulation for use on
equipment surfaces shall be in accordance
with ASTM C612, Class 3, and have a density
of 8 to 12 pcf.
Mineral fiber blanket insulation shall not
be used, except for selected applications
for practicality.
Insulating cements shall be mineral fiber
thermal insulating cements and will conform
with ASTM C195.
Antisweat insulation shall be flexible
elastomeric cellular thermal insulation.
Above grade indoor water piping will be
provided with
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antisweat insulation. Outdoor antisweat
insulation will be protected with paint
or lagging in accordance with the
manufacturer's recommendations.
Piping and small diameter cylindrical
equipment insulation shall be hollow
cylindrical shapes split in half lengthwise,
or curved segments. Large diameter
cylindrical equipment and other items of
equipment shall be insulated with block or
scored block insulation as required to
obtain a close fit to the contour. Pipe
fittings and accessories shall be insulated
using either molded insulation or by
insulation fabricated from straight pipe
insulation segments.
Weatherproof protective coatings shall be
applied in accordance with the
manufacturer's recommendations.
Insulation shall be securely tied and laced
in place with stainless steel wire. Blocks
shall be reinforced on the exterior face
with expanded metal, if necessary, to
prevent sagging or cutting of insulation by
lacing wire.
Studs used for attachment of insulation
shall be Nelson stainless steel studs in
lengths suitable for the insulation
thickness. Studs shall be spaced on centers
not exceeding 12 inches. Washers for
attachment of lacing wire shall be spaced on
centers not exceeding 18 inches. All block
insulation shall have joints broken and
pointed up with plastic insulation.
Ducts with external stiffeners shall have
insulation installed between the stiffeners,
and a second layers of insulation installed
thereon, so that stiffeners are insulated
and a level surface achieved.
Vertical runs of piping shall utilize
support lugs and collars to prevent slippage
of the insulation.
2.5.10.2 Lagging Materials and Installation
All insulated surfaces of equipment,
ductwork, piping, and valves shall be lagged
except for antisweat insulation.
All aluminum lagging shall be stucco pattern
embossed. Ribbed or fluted aluminum lagging
for equipment and ductwork shall be
0.040-inch minimum thickness. Flat aluminum
lagging shall be 0.050-inch minimum
thickness, except in areas where personnel
may walk thereon. In these areas, 0.080-inch
minimum thickness shall be used, unless
steel walkways are provided.
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Piping lagging shall be stucco embossed
finish sheet aluminum, 0.020-inch minimum
thickness on applications up to 13-inch
outside diameter, and 0.024-inch minimum
thickness on all other applications.
Outdoor lagging shall be installed to secure
a weatherproof installation. Lagging shall
be carefully fabricated and fitted to ensure
a neat appearance. Open ends of all fluted
sections shall be provided with tight
fitting closure pieces.
All areas of contact between dissimilar
metals shall be protected against galvanic
corrosion by a suitable insulating coating.
All lagging on curved surfaces shall be
machine rolled and formed to fit the
insulation curvatures. All joints shall be
lapped a minimum of 2 inches and placed to
shed water.
Removable insulated covers shall be provided
over all equipment manholes. Access doors
through lagging will be provided as
required.
All lagging shall be secured in place using
panhead self-tapping screws, fitted with
neoprene washers. All joints shall be placed
to shed water. On outdoor piping, in
addition to screws, lagging will be secured
by machine attached stainless steel bands
spaced on not greater than 24-inch centers.
Top horizontal surfaces of designated ducts
and designated areas on equipment shall
generally be provided with a system of
walkways to prevent damage to the lagging
during operation and maintenance. Walkways
generally shall be constructed of grating
and shall be supported directly from the
duct or equipment with specially designed
support lugs on not greater than 24-inch
centers. Support lugs shall be attached to
the ducts or equipment prior to placement of
insulation and lagging. Grating shall be
attached to the support lugs with flathead
countersunk screws.
2.5.11 Heating, Ventilation and Air Conditioning (HVAC)
This section covers the design, furnishing,
installation, testing and balancing of air
conditioning, heating and ventilation equipment,
systems and accessories for the plant. The HVAC
systems shall include, but not be limited to, the
following:
- The control room and electronics/computer
room shall be heated, cooled and ventilated
by a duct system with two, 100 percent
redundant packaged air handling units.
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- All offices, restrooms, locker rooms,
reception area, lunchroom, conference room
and electrical and instrument shop shall be
heated, cooled and ventilated with packaged
air handling unit(s).
- The motor control center (MCC) room,
switchgear room, and other electrical
equipment rooms shall be ventilated by duct
work and fans and heated with unit heaters
as required to maintain the design
temperatures.
- The maintenance shop shall be ventilated
with ductwork and fan system. Unit heaters
shall be installed to maintain minimum
temperature.
- Exhaust fans shall be provided in restrooms,
locker rooms, and battery room.
All equipment, material, design, fabrication,
erection, start-up and testing shall conform to
applicable local building codes and the following
industry codes and standards.
- American Society of Heating, Refrigeration
and Air Conditioning Engineer (ASHRAE)
- Air Moving and Conditioning Association
(AMCA)
- Air Filter Institute (AFI)
- Air Diffusion Council (ADC)
- Sheet Metal and Air Conditioning Contractors
National Association (SMACNA)
- ASME, ANSI, ASTM, NEMA, NFPA and OSHA.
The various HVAC systems shall be designed for the
following conditions:
- Ambient Air Design Conditions:
Summer: 95 DEG.F DB, 78 DEG.F WB
Winter: 18 DEG.F DB, 15 DEG.F WB
- Building Design Conditions (Indoors):
<TABLE>
<CAPTION>
SUMMER WINTER
------ ------
<S> <C> <C>
Control/Electronic Rooms 78 DEG.F 70 DEG.F
Office Area 78 DEG.F 70 DEG.F
Conference/Lunch Rooms 78 DEG.F 70 DEG.F
Electrical/I&C Maint. Shop 78 DEG.F 70 DEG.F
Water Treatment Bldg 104 DEG.F 50 DEG.F
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Maintenance Shop 104 DEG.F 50 DEG.F
MCC/Switchgear Rooms 104 DEG.F 50 DEG.F
Warehouse 104 DEG.F 50 DEG.F
</TABLE>
- The relative humidity shall not exceed 60%
in the control/electronic rooms, office
area, locker rooms, restrooms, lunch room,
Conference room, laboratory and electrical
I&C maintenance shop.
Ductwork shall be constructed of galvanized sheet
steel and in accordance with SMACNA standards.
Plenums, ducts, equipment shall be acoustically lined
internally to prevent noise transmission. The liner
shall be semi-rigid fiberglass with high density
matte faced fire resistant coating.
Dampers shall be provided to permit balancing of the
systems, prevent back drafts and fire rated
isolations in walls and floors. All fire dampers
shall comply with NFPA 90A and local regulations and
shall carry UL label. Ceiling diffusers and return
air grilles in finished areas shall be lay-in type.
A complete system of automatic temperature control
hardware, thermostats, valves, dampers and associated
controls shall be provided for each system.
Thermostats and control switches shall be installed
in readily accessible locations.
The Contractor shall have the HVAC systems checked
and tested by an independent agency specializing in
balancing and testing HVAC systems.
Ventilation inlet areas to the water treatment
building, boiler feed pump building(s), maintenance
shop, MCC/switchgear room(s), and warehouse shall
have removable and cleanable 3 micron filters.
2.5.12 Plumbing
This section covers the design, furnishing of
equipment and materials, installation, testing and
placing into service of plumbing systems for the
project. This shall include, but not be limited to,
the following:
- Plumbing fixtures, equipment, piping,
fittings and hardware for restrooms, locker
rooms, sanitary facilities and potable water
system
- Hot water heater
- Electric water coolers
- Piping, fittings and hardware for chemical
waste system
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- Piping, fittings and hardware for roof and
floor drain systems
- Emergency shower and eye wash stations
- Backflow preventers and water meters
- Wall hydrants and hose bibbs
All equipment, material, design, installation,
testing and placing into service shall comply with
applicable plumbing and building codes and industry
codes and standards such as ASME, ANSI, ASTM, OSHA
and NFPA.
All restroom, locker room, lunch room and other
sanitary wastes will flow to a septic field in
conformance with local regulations.
Plant roof drains shall carry water to the storm
water drainage system.
Plant floor drains, trench drains and equipment
drains shall discharge to the plant waste water sump.
The waste water shall be pumped to the Plant
retention basin.
Emergency shower and eyewash stations shall, as a
minimum, be installed at the following locations:
- Battery Room
Back flow preventers and water meters for incoming
raw water shall be furnished and installed per the
requirements of the Heard County Water Authority.
Pipe and fittings in accordance with code
requirements, shall be installed for sanitary and
waste water systems. PVC or ABS piping may be used
for above ground vents and drains where permitted by
code. Miscellaneous equipment drains shall be
provided with galvanized or stainless steel metal
funnels fabricated to fit the bell and accommodate
drain lines from nearby equipment.
Potable water piping shall be Type L or K hard copper
with lead free solder joints. Fittings shall be
either wrought copper or cast brass.
Chemical waste drain piping shall be polyvinyl
chloride or fiberglass reinforced plastic as required
by application and allowed by code.
The potable water system shall be hydrostatically
tested, flushed and disinfected per code
requirements.
All waste drain piping shall be leak tested.
2.5.13 Sampling System
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This section covers the engineering, design,
manufacture and installation of a sampling system of
local grab samples for the project.
The sampling system will extract samples from
selected points to enable a chemist to perform
specific analysis.
Manual grab sample points shall be provided on
demineralized water, waste drains, fuel oil and raw
water.
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2.6 ELECTRICAL
2.6.1 General Requirements
The Contractor shall furnish all engineering, design,
labor, materials, equipment, and construction
services required to provide a totally functional
electrical system associated with the project. The
work shall comply with applicable codes and standards
including, but not necessarily limited to, the
following:
- State and local codes, laws, ordinances,
rules and regulations
- Underwriters' Laboratories (UL)
- Factory Mutual System (FM)
- Institute of Electrical and Electronic
Engineers (IEEE)
- National Electrical Manufacturer's
Association (NEMA)
- National Fire Protection Association (NFPA)
- American National Standards Institute (ANSI)
- American Society for Testing and Materials
(ASTM)
- Insulated Cable Engineers Association (ICEA)
- Illuminating Engineering Society of North
America (IES)
- Instrument Society of America (ISA)
- Lightning Protection Institute (LPI)
- Occupational, Health and Safety
Administration (OSHA)
In case of conflict or disagreement between codes and
standards, the more stringent conditions shall
govern.
Area classifications shall be in accordance with NEC
Articles 500, 501, 502 and 503. Enclosures for use
with electrical equipment shall be as follows:
- NEMA 12 for use in unclassified indoor
locations,
- NEMA 3R for use with HVAC equipment in wet
outdoor locations,
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- NEMA 4 for use in wet indoor and outdoor
locations except for outdoor HVAC
equipment,
- NEMA 4X for use in all corrosive locations,
- NEMA 7 for use in all Class I, Division 1 or
2, Group A, B, C or D locations unless other
enclosures are approved and UL-listed for
the application, and
- NEMA 9 for use in all Class II, Division 1
or 2, Group E, F or G and Class III,
Division 1 or 2 locations.
Where UL test procedures have been established for
the product type, electrical equipment shall be
UL-approved and shall be provided with the UL label.
The manufacturer's standard factory-applied paint
coating system(s) shall be provided on all electrical
equipment. Interiors of panelboards, motor control
centers, relay panels, control panels, etc., shall be
either white or light gray.
Electrical equipment shall be provided with
nameplates, appropriate warning signs, and equipment
identification tags.
Equipment shall be installed so it is readily
accessible for operation and maintenance. Equipment
shall not be blocked or concealed. Do not install
electrical equipment such that it interferes with
normal maintenance requirements of other equipment.
Outdoor wall-mounted equipment and indoor equipment
mounted on earth or water bearing walls shall be
provided with corrosion resistant spacers to maintain
1/4 inch separation between equipment and wall.
All openings into outdoor equipment shall be screened
or sealed to prevent the entrance of rodents or
insects.
Concrete foundations or pads shall be provided for
all free-standing electrical equipment not provided
as an integral part of a factory-engineered and
fabricated skid or module. Floor-mounted equipment
shall be mounted on four-inch to six-inch raised
concrete housekeeping pads.
Warning tape shall be placed in the trench directly
over duct banks, direct-buried conduit and
direct-buried wire and cable.
After installation, all equipment shall be tested as
recommended by the manufacturer or as required by
code. A ground-fault performance test shall be
performed as required by NEC Article 230-95(c). All
adjustable protective devices shall be set as
recommended by the Contractor=s System Coordination
Study. Ground continuity shall be verified for all
systems and equipment.
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All surfaces shall be cleaned of dirt and debris.
Touch-up paint shall be applied to all painted
equipment. The interior of all enclosures shall be
thoroughly vacuumed to remove dirt and debris.
Each electrical system shall be designed for maximum
economy consistent with reliability of service,
safety of personnel and equipment, ease of operation
and maintenance, and high efficiency.
Insulation levels, continuous and short circuit
current capabilities, protective relay schemes and
mechanical strengths of all equipment shall be
selected and coordinated in accordance with good
utility and engineering practice.
2.6.2 Power Transformers
This section covers the engineering, design,
fabrication, delivery and installation of main power
transformers (MPT) and auxiliary power transformers
(APT), as shown on the electrical one-line,
Attachment I.
The transformers shall be of the outdoor,
oil-filled, self and forced air-cooled type dual
55/65 DEG. C rating with supplementary fan
cooling. As an alternate to the 4.16kV-480/277 V
oil-filled transformers, the Contractor may
utilize an open, dry-type power transformer. The
main step-up transformers shall be rated such
that the top 55 DEG. C rating shall match the
turbine-generator output at 30 DEG. C ambient
and 0.85 power factor.
Angular displacement of voltages shall be standard as
defined by ANSI C57.12.00, Section 7.2. Note that
bushing numbering may or may not be in accordance
with ANSI C57.12.70.
The audible sound level of each transformer shall not
exceed 85 dBA at three feet when the transformer is
operating at no load, rated tap voltage and rated
frequency in accordance with ANSI C57.12.90.
Oil inside the transformer tank shall be isolated
from atmosphere by means of a positive pressure
inert gas system or an elevated expansion tank
with enclosed air cell. The system shall be
suitable for operation over an ambient
temperature range of minus 37 DEG. C to plus 40
DEG. C. All transformer oil shall conform to the
requirements of ASTM D 3487-82a and ANSI C
57.106. The oil shall be high grade and have no
detectable or measurable amounts of inorganic
acids, alkalines, corrosive sulfurs or PCB's.
Impedances shall be as required by the Contractor to
satisfy electrical equipment fault ratings and comply
with voltage limitations during motor starting and
normal operation. The impedance and the base rating
shall be clearly stated on the nameplate.
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The transformer parts shall be adequately sized,
insulated and braced to meet the short circuit
requirements of ANSI/IEEE Standard C57.12.00 and to
withstand the short circuit test code as defined in
ANSI/IEEE Standard C57.12.90. The transformer shall
be capable of withstanding, without injury, the
mechanical and thermal stresses caused by faults with
110% rated voltage maintained across the terminals of
the HV winding and zero external transformer
impedance used in calculating the short circuit
current; the transformer impedance used shall be the
minimum within tolerances. The thermal time duration
shall be in accordance with ANSI C57.12.00, Sections
10.1.1 and 10.4.
The transformers shall have a high voltage tap
changer suitable for operation from ground level when
the transformers are deenergized. Four full load taps
of two, 22% above and two, 22% below the transformer
nominal kV rating shall be provided. The tap changer
handle shall have provisions for padlocking, and
visible indication of tap position shall be provided.
All control devices and appurtenances for the
transformers shall be provided as required and in
accordance with the specification and shall meet the
requirements of NEMA ICS1 and 2. Additional alarms,
auxiliary contacts, and control devices deemed
necessary or desirable shall be recommended by
Contractor.
All alarms, contacts and control devices shall be
completely connected, and all wiring shall be
connected with closed-ring type terminal lugs to
terminal blocks located in the control cabinet.
Terminal blocks shall be plainly marked to identify
all connections.
All terminal blocks shall be designed to accommodate
control cable of at least size No. 10 AWG and shall
be provided with washer head screws to accept
closed-ring type lugs. All wires shall be identified
at the terminal blocks. All wiring external to the
control cabinet shall be installed in a weatherproof
rigid metallic conduit system.
Two grounding pads shall be furnished, located
diagonally opposite on the transformer case of frame.
Grounding pads shall be made of copper-faced steel or
stainless steel without copper facing (NEMA 2-hole
flat pad). The Contractor shall provide and connect
copper ground cable from the transformer ground pad
to the plant ground system.
The transformer base shall be designed for skidding
or rolling in a direction parallel to either
centerline.
As far as practicable, gaskets below the oil level
shall be eliminated unless isolating valves are
provided to permit replacement of gaskets during
operation.
The tank shall have a welded cover, be suitable for
vacuum filling in the field, and be equipped with
lugs for lifting the complete transformer. One or
more
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manholes shall be provided in the cover. The
transformer shall be provided with jacking lugs with
13-inch minimum lift.
A single core-grounding connection shall be provided
for a core-form transformer. The connection shall be
made to a core-grounding bushing on the tank cover at
a location accessible through a manhole and shall be
removable for test purposes.
The following accessory equipment shall be provided:
1. Detachable radiator coolers with valves,
drain, and vent plugs. The transformer
cooling equipment shall be designed and
arranged to allow individual radiators to be
removed from the transformer without
removing the transformer from service or
draining oil from any other transformer
component.
2. Hot spot resistance temperature detector for
use with the Owner's remote instrumentation.
The RTD shall be a 100 ohm platinum-type
(MPT only).
3. Fault pressure relay (MPT only).
4. Provisions only for gas detection equipment.
5. Cover-mounted pressure relief device with
target visible from ground.
6. Tank-mounted, station-type lightning
arresters on the HV side with a discharge
counter (MPT only).
7. Oil level gauge.
8. Top oil thermometer.
9. If required by design, high voltage bushing
capacitive potential devices (MPT only).
10. Pressure-vacuum bleeder.
11. Pressure-vacuum gauge with maximum pressure
reading between 60 and 100% full scale.
12. Upper and lower filter connection.
13. Drain valve.
14. Oil sampling valve.
Note: If drain and sampling valves are
furnished combined in one unit, the sampling
device shall be on the discharge side of the
main valve and
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a pipe plug for the valve shall be
furnished. The drain valve shall have a
two-inch diameter.
15. Pressure test and gas sampling valve.
16. Vacuum connection.
17. Ungrounded alarm contacts for the following
(MPT only):
a. high oil temperature
b. pressure relief device
c. fault pressure relay
d. hot spot temperature
All control cabinets shall be weatherproof,
fabricated of steel plate of sufficient thickness to
prevent warping or buckling and shall have drip-proof
hoods. All doors shall be vertically hinged and
arranged to permit ready access to the inside of the
control cabinet. Bracing shall be provided for
cabinet and doors, as required, and devices shall be
included to secure doors in the full open position.
Should design of cabinets be such that door width in
excess of 30 inches is required, double doors shall
be provided and the doors shall be hinged for center
opening. All doors shall have latches for the closed
position and shall include provisions for attaching
padlocks. Control cabinets shall be easily accessible
from the ground level. A removable plate shall be
provided in the bottom of each control cabinet to
permit field drilling and installation of control
system conduits. Where two doors are used, a seal
shall be provided at the door interface.
The transformer control cabinets shall be equipped
with a heater. The heater shall be automatically
controlled by an adjustable temperature device set to
maintain the cabinet temperature above the dew point.
A manual control switch shall be provided to activate
and deactivate the space heater. The voltage rating
of the heaters shall be at least twice its operating
voltage of 120 V ac, single phase.
Terminal bushings shall meet the requirements of IEEE
21 and IEEE 24.
All bushing current transformers shall meet the
requirements of ANSI C57.13.
Fire walls shall be provided to isolate each main
transformer and auxiliary transformer from nearby
equipment and buildings.
2.6.3 Dry-Type Transformers
This section covers the furnishing and installation
of dry-type transformers required for distribution
power throughout the plant.
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The transformers shall be indoor, ventilated or
non-ventilated, air-cooled, two winding-type
transformers with a voltage rating of 480V-208/120V,
delta/wye, 60 hertz. The kVA rating shall be as
required by the Contractor's design.
Transformers shall meet or exceed ANSI C89.2 and NEMA
20 requirements.
Taps for the transformers shall be as follows:
- 1 PH, 25 kVA and below. Two, 2% FCAN and
two, 2 percent FCBN.
- 3 PH, 30 kVA and below. Two, 2 percent
FCAN and two, 2 percent FCBN.
- 3 PH, 3 kVA and below. Two, 2 percent
FCAN and four, 2 percent FCBN.
2.6.4 Switchgear
This section covers the engineering, design,
manufacture, installation and testing of 4160 volt
and 480 volt switchgear as required for the project.
The 4160 volt switchgear is to deliver power to the
4000 volt motor and 480 volt auxiliary power system.
The 480 volt switchgear shall deliver power to large
460 volt motors and 480 volt motor control centers.
All equipment furnished shall conform to applicable
standards of IEEE, NEMA, ANSI and OSHA. The
switchgear shall be UL-labeled.
The switchgear shall be designed for use on 4160 volt
or 480 volt, three phase, 60 hertz, three wire,
resistance grounded systems. Grounding may be
provided through a grounding transformer.
Switchgear shall be housed in suitable enclosures for
indoor service and of the metal-clad, drawout type.
Switchgear may be located in weather tight,
walk-through, outdoor enclosures. The arrangement of
breakers and starters shall be determined by the
Contractor.
All switchgear shall have interrupting and bus
bracing ratings that are adequate to withstand the
worst case fault conditions.
The spaces above switchgear and motor control centers
shall be kept free of piping to avoid contaminants
from entering the housings in the event of leaks.
At least one equipped spare breaker of maximum rating
shall be provided for each 4160V switchgear lineup,
and at least one spare feeder breaker and one
equipped spare shall be provided for each 480V SUS
lineup.
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Sufficient space shall be provided to allow easy
withdrawal of breakers for operation or maintenance.
Doors for equipment rooms shall be sized for the
largest piece of equipment to pass through.
All multiple breaker metal-clad switchgear assemblies
shall consist of vertical sections mounted
side-by-side and connected mechanically and
electrically together. Each vertical section shall
consist of separate compartments where all live parts
are completely enclosed within grounded metal
barriers. The switchgear assembly shall be suitable
for bolting to the switchgear room floor.
Each vertical section shall be of rigid
self-supporting steel of welded construction. Access
to high voltage equipment compartments shall be
provided by bolted-on metal covers. Hinged panels
shall enclose the front of the vertical section.
Panels shall be used to mount relays and instruments
and also serve to cover the circuit breaker
compartment. When it is not possible to install all
of the equipment in a breaker unit housing, an
auxiliary unit shall be furnished. The auxiliary unit
shall have no provision for accepting a circuit
breaker and shall be used to house equipment such as
potential transformers, lightning arresters, control
power transformers, etc., as required.
The circuit breaker compartment shall house a
removable circuit breaker element and include primary
and secondary disconnecting contacts. The stationary
primary disconnecting contacts shall be electroplated
copper and recessed within insulated supports.
Automatic safety shutters shall cover the stationary
primary disconnecting contacts when the breaker
element is withdrawn from the connected position.
The instrument compartment shall have a hinged panel
for mounting instruments, control and protective
devices. Terminal blocks, fuse blocks and some
control devices shall be mounted inside the enclosure
on the side sheets. The hinged panel shall have
doorstops to hold the panel in the open position.
Strong hinges of the disappearing or internal type
shall be used in sufficient number per panel to
ensure freedom from sagging, binding, or general
distortion of door or hinged parts. Opening of
adjacent hinged panels to any position shall not
cause shorting or grounding of electric terminals or
damage to panel-mounted equipment.
The main buses shall be enclosed in a metal
compartment with removable front and back covers to
provide accessibility. The bus compartment shall be
designed to permit future extension of the bus.
The cable termination compartments shall have two
side panels bolted to the rear of breaker compartment
along with a roof cover and rear sheet. The rear
sheet shall be bolted to the frame and be easily
removed by removing the bolts. The compartment shall
be suitable for line termination by nonsegregated
phase bus or solderless-type cable connectors.
Insulating clamps shall be furnished to separate the
cables for solderless-type connectors.
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The auxiliary compartment shall be used to mount
current transformers, potential transformers with
associated primary fuses, surge arresters, control
power transformers, etc. Where rollout trays are
provided to mount potential or control power
transformers, the movable carriage shall be equipped
with primary and secondary disconnecting devices,
grounding and a safety barrier. Auxiliary
compartments shall be furnished when all auxiliary
equipment cannot be accommodated in the breaker unit.
The circuit breakers shall be a removable
air-magnetic or vacuum-type circuit breaker element.
Breakers of the same rating shall be interchangeable
and of standard drawout design.
The breakers shall be operated by motor-charged,
spring-type stored energy mechanism. The electric
motor shall be rated at 125 V dc.
The circuit breaker shall be furnished with
mechanical indicators for:
1. Positive indication of the breaker open or
closed position, and
2. Breaker closing spring, charged or
discharged.
The stored energy closing springs shall be suitable
for manual as well as electrical charging, and a
front-operated manual spring charging handle shall be
furnished for emergency charging.
Trip and close levers for manual operation shall be
furnished on the circuit breaker element.
All secondary contact surfaces and the main contact
surfaces of all air magnetic-type circuit breakers
shall be silver-plated and be designed and fabricated
to be self-aligning and to resist burning and
deterioration. No breakers shall be forced cooled.
2.6.5 Motor Control Centers
This section covers the engineering, design,
manufacture, installation and testing of indoor motor
control centers. The motor control centers shall
supply the 480 volt station auxiliary loads. The
equipment shall be suitable for operation on a
480/277 volt, three-phase, 60 hertz, grounded
service.
Motor control centers shall conform to the
requirements of UL 845, NEMA ICS1, NEMA ICS2, NEMA
ICS4, and NEMA ICS6.
Each Motor Control Center shall consist of one or
more vertical sections and shall be designed to
permit future additions, changes, or regrouping. As a
minimum, one equipped spare space for a size 2
starter shall be provided for each vertical section.
In addition, one spare combination starter of each
size and
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type less than size 5 shall be supplied in each Motor
Control Center. The Motor Control Center assembly
shall be of a nonventilating type. All enclosure
vertical sections shall be mounted on continuous
front and back channel iron sills and bolted firmly
together to form a rigid, freestanding, dead-front,
completely enclosed, front line assembly.
Vertical sections shall be formed of manufacturer's
standard gauge sheet steel with uniform, blemish-free
surfaces. Each vertical section may contain a maximum
of six unit compartments. End sections shall have
removable end closing plates, and provisions shall be
provided for access to horizontal bus and horizontal
wireways. Easily removable blank hinged doors shall
cover all unused unit spaces. Bolted covers shall be
furnished on the rear of the section. The vertical
bus and its insulation in the rear section shall be
covered with sheet metal plates suitable for mounting
control and other devices.
Conduit entrance space and wire entry room greater or
equal to cross-sectional area of vertical wireways
shall be provided at both the top and bottom of each
section. Top and bottom horizontal wireways with full
length continuity shall be provided. Wireways shall
be isolated from the bus bars by barriers.
A vertical wireway shall extend from the top
horizontal wireway to the bottom horizontal wireway
for the purpose of routing cables to control units.
The wireway shall be isolated from all units and the
bus bars to guard against accidental contact. A
separate hinged door shall cover the vertical wireway
for easy and safe access to wiring without disturbing
control units. The vertical wireway shall be greater
than a 24 square inch cross sectional area. The
vertical wireway shall have one hole, two inches or
larger per unit compartment, for cables from the rear
of the section to unit compartments. Hole edges shall
be suitably covered to safeguard against injury to
cables.
Each unit compartment shall have a front door,
securely mounted with rugged hinges which allow the
door to swing open to facilitate maintenance. Unit
doors shall be fastened to the stationary structure
so they may be closed to cover the unit space when
the units have been temporarily removed. A panel for
any required pilot devices shall be attached to the
control unit, not the unit compartment door. Panels
for pilot devices shall be furnished even when pilot
devices are not originally specified for control
units. Motor starting and feeder tap unit doors shall
be interlocked mechanically with the unit disconnect
device to prevent unintentional opening of the door
while energized and unintentional application of
power while the door is open. Means shall be provided
for releasing the interlock for intentional operation
while the door is open. Provision shall be made to
lock the disconnect device in the OFF position with
two separate padlocks. The unit disconnect operating
switch shall not be mounted on the unit door. The
disconnect switch shall indicate ON, OFF, and
automatic trip position with the door open or closed.
Means shall be provided for padlocking the unit in
the partially withdrawn and disconnected positions.
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Each plug-in unit shall be supported and guided so
that unit installation is easily accomplished.
Support and guidance devices shall be easily
transferred from one location to another to
facilitate rearrangement of the Motor Control Center.
Each unit shall be isolated from the bus compartment,
wireways, and adjacent unit compartments by grounded
sheet metal barriers. Hand holds shall be provided on
each unit to facilitate installation and removal.
Wireway holes shall be grommeted.
A continuous main three-conductor copper horizontal
bus shall be provided over the full length of the
control center. Buses shall be mounted edgewise and
supported on insulated bus supports. Front removable
or sliding barriers shall be provided to prevent
accidental contact with the horizontal bus. Bus bars,
removable top plate, and all bolted connections shall
be accessible from the front of each vertical
section.
The main horizontal bus and vertical bus rating shall
be minimum 600 amp and 300 amp rms continuous,
respectively. All buses shall be braced for an rms
symmetrical interrupting current consistent with the
electrical system design (e.g. 25,000 or 42,000
amps).
A continuous copper ground bus capable of carrying
short circuit current shall be rigidly bolted to the
structure across the full length of the Motor Control
Center. Equipment requiring grounding shall be
connected to the ground bus.
Motor Control Centers shall be Class 1, Type B.
Wiring between front unit compartments and
rear-mounted equipment shall be done by the equipment
supplier.
All power wiring insulation shall be 90 DEG. C
thermosetting material, shall be non-propagating and
fire-resistant, and shall meet test requirements of
NEMA WC-3, Part 6. Minimum wire size shall be No. 12
AWG for power cables and No. 14 AWG for control
cables. Wire ties shall be furnished in vertical wire
troughs to group and securely hold wires in place.
A sufficient number of terminal blocks (TB) shall be
installed to provide no less than 20 percent unused
terminal points for Owner's use, distributed
throughout the Motor Control Center. All connections
to internal equipment shall be made on one side of
the TB, and not more than two wires shall be
connected under a single terminal.
A combination motor control unit shall consist of an
external disconnect that operates a molded-case
circuit breaker and a magnetic starter. They shall be
any of the following types: (a) full voltage,
non-reversing, (b) full voltage reversing, or (c)
full voltage, two-speed, one-winding.
Feeder tap units shall be used principally for
non-motor loads. They shall consist of molded-case
circuit breakers. Feeder tap units shall have an
interrupting or
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short circuit rating which equals or exceeds
available short circuit current at the horizontal
main bus.
Circuit breakers of the same frame size shall be
physically interchangeable.
The Contractor shall select appropriate heater sizes
and furnish heater selection tables and time current
characteristic curves. Short circuit withstand
ratings of heaters shall also be furnished by the
Contractor. Overload relays shall be provided with a
manual reset bar for operation from outside the
enclosure. Heater elements shall be front accessible.
By changing heater elements, it shall be possible to
change relay ratings with ease. The heater element
design shall permit its installation only in the
proper position (e.g. not backwards, facing out of
the overload relay). Heater characteristic curves
shall closely resemble the temperature rise curve of
standard induction motors.
One normally closed overload relay contact shall be
furnished in the control circuit. If an overload
condition occurs in any phase, it shall cause the
magnetic relay to trip the starter by opening
normally closed contacts.
Control power transformers shall be the
pressure-molded type. The voltage ratio shall be
600/120 V ac, 60 Hz. Rated secondary current of
control power transformers shall exceed the
continuous duty current of the control circuit. The
transformer VA rating shall be a minimum of 100 VA in
excess of the requirements for the Contractor and
equipment supplier needs.
Each control transformer secondary circuit shall have
one leg fused and the other leg grounded. The
Contractor shall provide time-current characteristic
curves covering all fuse sizes and types.
The Contractor shall furnish safe thermal capability
curves for Control Power Transformers.
Four auxiliary contacts, in addition to holding coil
contacts, two normally open and two normally closed,
shall be provided in each non-reversing motor starter
for interlocking, PCS and Owner's use. Similarly, two
auxiliary contacts, in addition to holding coil
contacts, one normally open and one normally closed,
shall be provided in each contactor in each reversing
motor starter.
2.6.6 NOT USED.
2.6.7 Utility Interconnect and Switchyard
This section covers the engineering, design,
furnishing, installation and testing of the
interconnection of the plant with Georgia
Transmission Corporation Switchyard.
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The one-line diagram included in Exhibit B,
Attachment I shows the overall general arrangement.
The design, procurement and construction of the
switchyard facilities will be by others, except as
noted herein.
The Contractor shall furnish and install the fencing
around the switchyard and the areas around the three
main step-up transformers, and the aggregate
surfacing within the areas.
The switchyard contractor will furnish and install
all equipment and structures from the high voltage
bushings of the main step-up transformers to the GTC
transmission line including the grounding grid in the
switchyard.
2.6.8 Wire and Cable
This section covers the furnishing and installation
of all power, control and instrument cable for the
project. Wire and cable shall comply with ICEA, IEEE,
NFPA, UL, ANSI and IPCEA codes, standards and
specifications.
Cables shall be sized to withstand the anticipated
fault current at the load terminals for the
anticipated fault duration or 0.5 seconds, whichever
is greater.
Cables routed through a combination of different
raceways or environments, such as cable tray,
conduit, underground or high ambient areas, shall be
sized in a manner resulting in the largest conductor
size.
Cable ampacities shall be based upon 125 percent of motor
nameplate rating or maximum running load, whichever is
greater; 125 percent of a transformer's highest continuous
rating; and the maximum ambient temperature to which they
shall be subjected.
Cables shall be suitable for installation in wet or dry
locations, indoors and outdoors, in cable tray, conduit or
duct banks.
Power cable shall be provided with Class B, uncoated, annealed
copper conductor. Control and instrument cable shall be
provided with Class B, uncoated annealed copper conductor.
Medium voltage cable shall be shielded in accordance with ICEA
S-68-516.
The Contractor shall provide cable types as follows:
<TABLE>
<CAPTION>
Cable Type Insulation Jacket (flame retardant)
---------- ---------- ------------------------
<S> <C> <C>
8kV/5kV Single Cond EPR PVC or CPE
shielded Power
600V single cond EPR or XLP PVC, CPE, or None
Power
Multi conductor EPR, XLP CPE or PVC
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Power
Control Cable EPR, XLP, PVC-Nylon CPE or PVC
Instrument Cable EPR/XLP/PVC-Nylon CPE or PVC
Thermocouple XLP, PVC-Nylon CPE or PVC
</TABLE>
Shielding tape for instrumentation cable shall be copper or
aluminum providing 100 percent coverage.
Individual raceway systems shall be established for each of
the following services:
(1) Instrumentation and Low Voltage (GE Level 1)
(2) High Level Signals and Control (GE Level 3)
(3) 480V Power and 120V Control (GE Level 4)
(4) 4.16 kV and higher power cables (GE Level 4s)
Spare instrumentation and control wires at control panels and
motor control centers may be left unterminated. Conductors
shall be left long enough to terminate on any terminal strips.
Conductors shall be taped at both ends.
Control and secondary wiring in the control box shall not be
spliced in the control box. Control and secondary cable that
pass through conduit shall not be spliced inside the conduit.
Weatherproof junction boxes with terminal blocks may be used
to extend secondary wiring passing through conduit.
Every terminal block, every terminal point, and every wire
terminated thereon shall be clearly identified and labeled,
with permanent labels.
Cable and wire shall be color coded per ICEA standards.
Stress cones shall be used on all medium voltage cable.
No wire smaller than #12 AWG shall be used except that pilot
control and signal may be #14 AWG unless ampacity or voltage
drop dictates otherwise.
Termination of wires shall be made with full compression
ring-tongue or spade type with hooked ends lugs with insulated
ferrules.
Each cable type shall be given voltage tests, insulation
resistance tests, conductor resistance tests and flame tests
per applicable codes.
Each medium voltage cable shall be given a high potential test
after installation. All cable shall be given megger and
continuity tests.
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2.6.9 Conduit, Wireways, Raceways, Cable Tray and Duct Bank
This section covers the design and installation of conduit,
wireways, raceways, cable tray and underground duct tanks for
the project. The Contractor shall furnish and install all
equipment and material required for a complete system and in
accordance with applicable codes.
Above grade conduits shall be galvanized rigid steel conduit,
except that electrical metal tubing (EMT) or intermediate
galvanized steel conduit may be used for indoor concealed
location such as office areas, warehouse, lunch room, locker
rooms, restrooms, etc. Above ground conduit in corrosive areas
shall be PVC-coated galvanized rigid steel. Conduit in duct
banks shall be schedule 40 PVC with steel risers and elbows.
Flexible conduit shall be used for connection of all motors
and instruments. Conduit in duct banks shall be continuously
sloped toward manholes to prevent accumulation of water within
the conduits.
Cable tray shall be either hot-dipped galvanized steel or
extruded aluminum alloy with an inside depth of three inches
and an overall depth of four inches.
Wireways shall be aluminum and of the lay-in type with
full-length hinged covers.
Conduit and cable tray shall be sized in accordance with NEC
requirements. Cable tray, conduit and cable shall be installed
in accordance with recommendations contained in IEEE Standards
422, 518 and 525. Conduit smaller than [X]-inch shall not be
used except that 2-inch conduit may be used for connection to
control devices, thermocouples and light fixtures. Maintain
adequate spacing between conduits and cable trays for
different types of wiring to prevent noise interference among
high, medium and low susceptibility wiring and medium and low
voltage power feeders.
Cable tray systems shall be utilized within the facility
wherever possible. Separate cable trays shall be provided for
instrumentation, control, and power cable, 480 volts and
higher.
Cable tray and metallic conduit systems shall be electrically
continuous in their entirety in accordance with NEMA and NEC
requirements. A 1/0 bare copper grounding conductor shall be
installed throughout the length of the cable tray system on
600V power and medium voltage power cable trays only.
Conduit and cable tray shall be run parallel or at right angle
with beams, walls, columns and building lines. All conduit and
cable tray shall clear steam or other hot process piping by a
minimum of 12 inches and shall clear all other piping or hot
piping in congested areas by a minimum of six inches. Group
parallel runs of conduit in aligned banks. Horizontal runs of
conduit or cable tray shall be as high above the floor as
possible, and in no case lower than seven foot, six inches
above floors, walkway or platforms.
The total number of bends in a conduit run shall not exceed
360 degrees.
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Conduits shall be installed to eliminate moisture pockets.
Where water cannot drain to openings, provide drain fittings
in the low spots of the conduit run.
Provide air and water seals for holes and openings in floors,
walls, ceilings and roofs between interior and exterior areas
and between temperature-controlled areas and
nontemperature-controlled areas. Fire stops shall be provided
where conduit or cable tray penetrate firewalls or floors.
Cable tray installed outdoors shall be covered (instrument
cable tray and top tray), nonventilated to prevent "nesting
perches" for rodents and birds. Cable tray entrances to
structures and modules shall be completely sealed to prevent
entrance by rodents and birds.
Cables, in vertical runs of cable trays, shall be secured with
cable clamps or ties. Tray covers shall be installed on all
vertical cable tray runs to a minimum of eight feet above
finished floor and walkways, on all tray-carrying cables rated
at 15 kV and above, and vertical risers from MCC and
switchgear. Cable tray systems passing under grating, walkways
and platforms shall be covered to a distance of six feet on
both sides of grating, walkway and platform.
Underground duct banks shall be encased in red concrete. Red
dye stirred into the top few inches of concrete immediately
following final pour is acceptable. The minimum size of the
conduit shall be two inches. Conduits for main feeders shall
be at least three inches in diameter, and shall be grouped in
duct banks of no fewer than three conduits.
Conduit duct banks shall not be installed under turbine
foundations or in area of excessive vibration. Conduit duct
banks shall be installed a minimum of two feet from finished
grade to the tops of the ducts.
Where required for above grade extensions, non-metallic
conduit shall be provided with approved adapters for
connection to galvanized steel conduit. Adapters shall be
installed directly below grade within the concrete encasement.
Conduit embedded in turbine foundations shall be RGS.
Cable tray and conduit shall be thoroughly cleaned prior to
pulling of cable.
2.6.10 Bus Duct
This section covers the design, manufacture and installation
of completely coordinated isolated phase bus duct for the gas
turbine generator and, if required by Contractor's design,
4.16kV nonsegregated bus duct for station auxiliaries. The bus
duct shall be designed, manufactured and tested in accordance
with the latest applicable ANSI, IEEE and NEMA standards.
The Contractor shall furnish and install the bus duct system
complete with all equipment and accessories including, but not
limited to, the following:
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- isolated phase bus duct between the gas turbine
generators and main step-up power transformers,
- if required by the Contractor's design, the three (3)
4.16kV nonsegregated bus ducts from the auxiliary
power transformers to the 4.16kV switchgear,
- supporting structures, and
- disconnect links.
The phase bus conductors shall be either copper or aluminum
alloy.
The bus enclosures shall be steel or aluminum alloy with
manufacturer's standard hardware for indoor sections and
stainless steel for outdoor sections. Supporting structures
shall be ASTM A36 steel with the outdoor structures being
hot-dipped galvanized.
Outdoor bus duct section shall be provided with space heaters
to maintain an internal duct temperature above the dew point.
All bolted connections of the bus conductors shall be
silver-plated for copper bus and tin-plated for aluminum.
Provide continuous copper bar ground bus the full length of
the bus duct and electrically connecting all enclosure
sections. If the bus duct is constructed to provide a
continuous path for ground current the enclosure may serve as
the ground bus.
Taps or connections shall be provided, as required, to
accommodate auxiliary equipment such as lightning and surge
protection, generator controls, metering and relaying, and
current and potential transformers.
Removable covers shall be provided to permit access to the
interior of the enclosure.
After fabrication, all metalwork of the enclosures shall be
thoroughly cleaned and any steel work shall be phosphorized,
or equivalent, and shall be painted with gray ANSI 61, or
equivalent, paint.
Design and production tests shall be per ANSI requirements.
2.6.11 Panelboards and Switchboards
This section covers the furnishing and installation of
panelboards and switchboards for low-voltage power and
lighting systems. Panelboards and switchboards shall comply
with applicable NEMA, NFPA, NEC and UL requirements and be
UL-listed and labeled.
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Panelboards shall be constructed of hot-dipped galvanized
sheet metal boxes. Switchboards shall be constructed of sheet
metal for floor mounting. Panelboards and switchboards shall
be finished with a rust-inhibiting coating, ANSI 61 light
gray.
Panelboards shall be provided with hinged doors and lock and
catch combinations.
Nameplates shall be provided on the front of all panelboards
and switchboards. In addition, nameplates above each
switchboard breaker handle shall be installed.
The short circuit current rating of the assembled panelboard
or switchboard shall be equal to or greater than the
interrupting capacity of the highest rated branch breaker.
A circuit directory cardholder and card with a clear plastic
covering shall be provided on the inside of each panelboard
door.
Breakers shall be provided per Contractor's design. Space for
spare breakers shall be provided.
Switchboards shall be provided with flush or semi-flush meters
with shatterproof case. Indicating instruments shall be 250
degree nonparallel scale, uniformly scaled with accuracy of
one percent in multiples of 10 or 100 of standard scale.
Scales shall match with current and potential transformer
ratings.
Switchboards shall be provided with space heaters to minimize
internal condensation.
2.6.12 Grounding and Lightning Protection
This section covers the design, furnishing, and installation
of the grounding system and lightning protection system for
the plant.
2.6.12.1 Grounding
The Contractor shall furnish and install a grounding
system, complete with grounding grid, rods and all
connections. The grounding within the switchyard,
except for fencing, will be by others. The grounding
system shall include, but not be limited to, the
following:
- Buried ground grids and ground rods for the
main plant, stacks, fencing, miscellaneous
yard structures and duct banks, and
- Extension and connection of ground risers to
structures, electrical equipment, raceways
and systems.
The grounding network for the facility shall
accomplish the following:
- Limit the difference of potential between
all uninsulated conducting objects in the
facility,
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- Provide for isolation of equipment and
circuits when a fault occurs, and
- Limit overvoltages appearing on the system
under various conditions.
Facilities shall be provided to eliminate the
transfer of hazardous potentials beyond the facility
boundary limits.
A site soil resistivity survey shall be conducted for
use in system design.
Equipment grounding shall be provided to meet the
following objectives:
- Tensor freedom from dangerous electric shock
voltage (touch potentials) exposure to
personnel in the area,
- Provide current-carrying capability, both in
magnitude and duration, adequate to accept
the ground fault permitted by the protection
system devices without creating a fire or
explosive hazard to buildings or contents,
and
- To contribute to superior performance of the
electrical system.
The grounding system shall be designed in accordance
with IEEE requirements. Equipment grounding shall be
in accordance with Article 250 of the NEC where
applicable.
Grounding of the power systems shall be as follows:
- The generator neutral point shall be
grounded through a distribution-type
transformer with a resistance-loaded
secondary.
- The star points of the 4.16kV windings on
480/4.16 kV and 18.0 kV/4.16V auxiliary
transformers shall be grounded directly.
- The midpoints of the 240 V windings on
lighting and power transformers shall be
solidly grounded.
A separate instrument ground bus shall be provided in
the Control Room and shall be used only for
connecting instrument ground terminals and instrument
cable shields. The purpose of this ground bus is to
prevent noise in the instrument signals due to
multi-purpose grounds.
Each ground rod and system ground shall be tested for
ground resistance.
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2.6.12.2 Lightning Protection
The Contractor shall furnish and install complete
lightning protection systems for the stacks, main
plant building, gas turbines, and other outdoor
facility equipment and structures, as required.
Lightning protection for the switchyard equipment and
structures will be by others.
The systems shall be complete with air terminals,
conductors and ground rods.
The installation shall be accomplished by an
experienced installer. Design, installation and
materials shall be in accordance with LPI and NFPA
standards.
Surge arresters shall be placed on electric and
telephone service entrances, utility lines to the
main transformer, service entrances in which overhead
lines are utilized, and on all generator leads.
2.6.13 Cathodic Protection
This section covers the design, furnishing, installation and
testing of the cathodic protection system.
All buried metallic pressure piping shall be electrically
isolated from the copper ground grid and dielectric insulation
flanges, or unions, shall be installed at connecting points of
the buried-to-above grade piping.
Electrical isolation from the copper grounding grid shall be
provided for storage tanks resting on grade. Such tanks shall
have separate grounds connected to buried sacrificial anodes.
Piping connections to above-ground storage tanks shall be made
with isolating flanges at the tanks.
Motors, motor-operated valves and other tank-mounted devices
shall be isolated from the facility grounding grid.
Mechanical joints and Dresser-coupled joints in buried piping,
for which cathodic protection is provided, shall be bonded to
ensure electrical continuity.
Cathodic protection systems shall be designed and installed to
meet the criteria of the National Association of Corrosion
Engineers (NACE). Based on the results of soil resistivity
testing, Contractor shall determine whether cathodic
protection systems shall be of the sacrificial or impressed
current types.
Test stations shall be installed to monitor the effectiveness
of the cathodic protection systems and the integrity of the
electrical isolation means.
2.6.14 Lighting and Receptacles
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This section covers the design, materials and equipment,
installation and placing into service of interior and exterior
lighting, emergency lighting, and convenience and welding
receptacles.
2.6.14.1 Lighting
Lighting fixtures shall be located to obtain uniform
illumination and for ease of relamping and
maintenance. On walkways and other outdoor areas,
lighting fixtures shall favor landings of stairs and
ladders, gauges, flow meters, panel boards and other
equipment requiring adequate illumination.
Fixtures shall not be mounted directly over equipment
having exposed moving parts or which emit appreciable
heat or fumes.
Lights on walkways shall not be more than eight feet
above the walkway in order to permit relamping
without the use of a ladder.
Indoor low ceiling areas shall be provided with
fluorescent lighting suitable to the task being
illuminated. Illumination levels shall be designed
using the latest IES recommendations. Lighting
fixtures for general illumination shall be mounted 12
feet or more above finished grade or a floor.
High pressure sodium floodlights shall be used for
lighting of general outside areas. The outdoor plant,
roadway and parking areas shall be provided with high
pressure sodium area lighting with photo electric
relay control. Indoor lighting shall be high pressure
sodium or fluorescent fixtures. Incandescent lighting
may be used only for incidental, switched low level
or low usage lighting. High pressure sodium lighting
shall be 208 V, and incandescent and fluorescent
lighting shall be 120 V.
High intensity discharge lamps shall not be used in
areas where the length of the restrike time after a
voltage dip may be a safety hazard to personnel,
unless an adequate number of fixtures are equipped
with instantaneous auxiliary lights or by using
incandescent or fluorescent fixtures to supplement
the high pressure sodium lighting. All high-intensity
lighting shall be directed downward and inward, not
outward from the facility towards off-site locations.
There shall be no adverse effects on safety.
Outdoor and indoor lighting fixtures shall have
adequate design for the environment. Poles used for
outdoor lighting supports shall be galvanized steel
installed in accordance with manufacturers
specifications.
All lighting shall be fed from local lighting panels.
High pressure sodium lamps shall be used for roadway
lighting. The lighting shall be fed from 480 V motor
control centers with photocell control. Luminaries
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EPC - Exhibit B
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shall be mounted at a sufficient height to satisfy
the minimum clearances for the area exterior.
The instrument control panels in the Control Room
shall be illuminated to provide the required
foot-candle intensity on the face of the instruments,
without glare, either directly from the lighting
fixtures or reflected from the instruments or panels.
Fixtures shall be four tube fluorescent fixtures, two
feet by four feet, recessed with parabolic plastic
cube (12" x 12 " x 1") louvers.
Emergency dc lighting shall be provided in the
Control Room, relay room, battery room, stairways,
exits, and other critical areas of the facility. The
egress route lighting shall consist of wall-mounted
dual seal beam lights. Lighting duration shall be in
accordance with the latest NFPA 101 Life Safety Code.
Optionally, emergency lighting may be powered from
the plant 125 Vdc system.
The lighting system shall be designed to provide the
following minimum maintained illumination:
<TABLE>
<CAPTION>
LOCATION FOOT-CANDLES
-------- ------------
<S> <C>
Offices 50
Conference/Lunch Rooms 40
Platforms, Stairs & Walkways 10
Maintenance Areas 50
Toilets and Locker Rooms 40
Warehouse, Mechanical Room 20-30
Control Room (Luminous Ceiling) 30/70 two level
Water Treatment 30
General Outside Area Illumination 0.5-2
Roadway and Parking Areas 1-2
Electrical Rooms 40-50
</TABLE>
Lighting and power panels shall be located in the
area served and shall be conveniently accessible for
operation. Lighting and power panels shall be used
for the control of lighting, convenience receptacles
and other similar loads. Lighting and power panels
shall be provided with minimum 20 ampere plug-in
circuit breakers and a 225 ampere bus. Each panel
shall be provided with
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approximately 20 percent spare breaker capacity, and
a directory indicating the circuit numbers and
services. Exterior lighting shall be controlled with
a photocell with ON-OFF auto selector switch.
2.6.14.2 Receptacles
Convenience receptacles shall be limited to eight per
circuit, with a circuit loading of 180 watts for each
receptacle, unless specific conditions necessitate
other requirements. Maximum spacing of receptacles
along walls in office areas and maintenance shop
shall not exceed 12 feet. Each office shall have a
minimum of two receptacles. 120 V convenience
receptacles shall be installed in operating areas at
70 foot intervals, on the basis of 50-foot extension
cords. Convenience receptacles shall be provided at
each manway platform. Office and administration areas
shall have a duplex receptacle, two wire, three pole,
grounded type, rated 15 amperes, 125 volts ac.
Welding outlet circuits shall consist of No. 4 AWG or
larger conductors with circuit protective devices
located in the low voltage motor control centers.
Each circuit shall supply a maximum of three welding
receptacles. Outlets shall be provided in the
operating areas and shall be located at points that
may require the greatest service. Outlets shall be
located so that no point in that area requires a
welding cable in excess of 125 feet. Welding
receptacles shall be three wire, four pole, rated 60
amperes, 600 volts ac, three phase.
2.6.15 Freeze Protection
This section covers the design, furnishing and installation of
freeze protection systems for plant process piping systems,
equipment, and instrumentation. The systems shall include
control panels, transformers, thermostats, heating cable and
accessories.
Heat tracing conductors shall be self-limiting parallel
circuit construction with adjustable thermostats.
The heat trace control panels shall be complete with branch
circuit breakers, annunciator, control transformer, contactors
and relays totally wired for a 480 volt, three-phase supply.
The required heat density in watts per foot shall be
calculated based on service, required temperature to be
maintained, minimum anticipated ambient temperature of
0 DEG. F in a 20-mph wind, pipe size and type and thickness
of insulation.
The heat tracing shall maintain a minimum temperature of
35 DEG. F for water.
Installation procedures shall be in accordance with
manufacturer's recommendations.
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2.6.16 Uninterruptible Power Supply and DC Systems
This section covers the engineering, design, furnishing and
installation of the uninterruptible power supply (UPS) system
and DC battery system. The systems shall include batteries,
battery racks, battery charger(s), invertor(s), controls and
accessories for the facility.
The UPS system and DC battery system shall be provided as
required to permit an orderly and safe shutdown of the plant
and to supply power for emergency lighting and operating
emergency equipment in the event of loss of AC power. The
system, equipment and batteries shall have sufficient
capability to supply the demand of the connected loads for a
period of not less than 90 minutes. The 90 minute period shall
be predicated on turning off all nonessential power during
that period.
The DC system shall operate at a nominal 125 vdc, ungrounded.
The battery charger(s) shall be capable of recharging
completely discharged batteries within 12 hours at normal
loads. The charger shall be of the automatic constant-voltage,
self-regulating and self-compensating type with control panel
for control and indication. The battery charger shall operate
with a 480 volt, three phase, 60 hertz input power supply.
The battery chargers shall be sized to amply cover the normal
operating loads connected to the battery and to maintain the
batteries in a ten percent overcharged condition.
Batteries shall have a minimum design life of 20 years.
The batteries and free standing racks shall be installed in an
enclosed, ventilated battery room. A continuously operated
exhaust fan shall be installed to prevent hydrogen buildup.
The UPS system shall use station batteries and associated
charger as its DC source. Any connected AC loads shall
normally be powered by the plant's Inverter AC supply and upon
failure of normal AC supply, the load shall automatically
transfer any required AC loads through a transfer switch to
the invertor. Upon restoration of normal AC supply the
invertor shall automatically synchronize with the plant AC
power supply and automatically reconnect the load to the
normal AC power supply.
The telephone system, one telecopier, and control room
computer will be powered from the UPS to provide a regulated,
uninterruptible source of power.
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2.6.17 Fire Detection and Alarm System
This section covers the design, fabrication, installation, and
testing of the plant automatic and manual pre-signal, zoned,
non-coded evacuation alarm, supervised, closed circuit,
positive non-interfering 24 V DC fire detection and alarm
system including, but not limited to, the following:
- Main fire alarm control panel in the control room,
- Non-coded zoned evacuation manual stations with key
operated auxiliary non-coded evacuation alarm
contacts located in the main building and other areas
as required,
- Evacuation alarm bells,
- Automatic heat or infrared detectors,
- Duct work smoke detectors,
- Carbon dioxide fire protection system alarms,
- Water flow alarms, and
- Fan shutdown relays.
The system shall comply with NFPA standards and local
authority requirements.
The complete fire detection and alarm layouts, wiring diagrams
and operational details shall be provided by the system
manufacturer or authorized technical representative. Typical
layouts are not permitted.
Activation of any signal initiating device shall activate a
pre-signal alarm to sound a local alarm bell in the control
room and illuminate a specific zone light on the panel
annunciator.
A representative of the system manufacturer shall test the
system.
2.6.18 Communication System
This section covers the design, installation and placing into
service of the plant communication system which shall include
commercial telephone system and page/party communication
system.
The commercial telephone system shall be a
microprocessor-based system with a minimum capacity of 15
trunk connections to the telephone company lines in the
telephone closet. Conduit is provided by the contractor for
circuit installation and terminations by others. Dedicated
direct lines (conduit and circuits) shall be installed by
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the Contractor from the property line (referenced on the
Interconnection Drawing in Exhibit B, Attachment I) to the
Switchyard Control building, and on into the main control
room. Also, a connection for the plant PCS direct dial-up port
shall be provided.
All phone lines shall be routed in an independent conduit
system.
The actual location of the telephone communication stations
shall be coordinated with Owner during design.
At least six lines shall be available for fax machines,
modems, or other equipment.
2.6.19 Motors
This section covers the general requirements of motors for the
generation facility.
Except as specified herein, all motors shall conform to NEMA
MG1, with respect to material, workmanship, design, and tests.
All motors shall be designed for the environmental atmosphere
of their location.
The specific requirements for each motor shall be shown on the
Motor Data Sheets. One data sheet shall be completed for each
motor type and frame size.
Motors shall permit the driven equipment to develop its
specified capacity continuously without exceeding the
specified temperature and without encroaching on the service
factor.
When motors are furnished with driven equipment, the driven
equipment supplier shall be responsible for mounting motor and
driven equipment as a complete unit.
Motor enclosures shall be as follows:
- 460 V and 4000 V motor enclosures shall be
weather-protected Type II or totally enclosed fan
cooled (TEFC) for outdoor locations and TEFC for
indoor locations,
- 115 V motor enclosures shall be totally enclosed
non-ventilated (TENV) or TEFC,
All motors rated 1/2 hp and larger shall be three-phase,
squirrel cage induction type, 230/460 V, up to and including
250 hp, and 4,000 v above 300 hp, 60 Hz. All motors rated
below 1/2 hp shall be single phase, 115 v, 60 Hz. DC motors
shall be rated at 125 v for service from the
Contractor-supplied battery system.
Motors shall be provided with Class F insulation limited to
Class B rise suitable for the conditions encountered at this
power generating station, except for fractional horsepower
motors which may be furnished with Class B insulation.
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Motors shall be designed for across-the-line starting and
shall be capable of accelerating the connected load to full
load speed with the calculated voltage drop at the motor
terminals.
DC motors shall be capable of accelerating the connected load
running continuously for supply varying in accordance with the
unit battery cyclic operating conditions.
The full load current when operating at 90 percent of rated
voltage shall not exceed 1.11 times rated full load current.
Motor safe locked rotor time at rated locked rotor current
shall be equal to or greater than the maximum accelerating
time at minimum specified starting voltage.
Motors shall be selected to permit the connected load to
develop its specified output continuously without encroaching
on the service factor under normal operating conditions.
Motors shall be selected to permit operation up to, but not to
exceed, their service factor rating during infrequent and
short periods of operation.
Motors 15 hp and smaller shall have a service factor of 1.15,
or a service factor of 1.0 with 15 percent sizing margin.
Bearings shall be conservatively sized, suitable for
continuous service under the conditions specified, and sealed
against the entrance of dirt and the escapement of lubricant.
Bearings shall be insulated to prevent the passage of shaft
currents through the bearings, wherever necessary. The life
for anti-friction bearings is the L-10 service life calculated
in accordance with AFBMA 9 and AFBMA 11 for the design speed
and applied load conditions.
All motors shall produce sound levels of 85 dBA or less when
measured at 3 feet.
Space heaters shall be provided for all motors 25 hp and
larger.
Resistance-type temperature detectors or thermocouples shall
be provided in each bearing for motors 250 hp and larger.
4,000V motors shall have resistance-type winding temperature
protection in each phase winding to detect hot spots.
Separate terminal boxes shall be provided for main leads,
space heater leads, and temperature device leads for all
4,000V motors. All 460V motor terminal boxes shall be the
manufacturers standard. Main terminal boxes shall be capable
of rotation in 90 degree steps.
2.6.20 Protective Relays, Synchronizing and Metering
This section covers the furnishing and installation of
protective relays, synchronizing and metering for the plant
electrical systems and equipment. Protective relays for the
switchyard will be furnished and installed by others. The
Contractor shall coordinate with
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the switchyard Contractor to ensure that protective relays for
the total plant are coordinated.
Protective relays shall be provided for optimum protection of
the gas turbine generator, step-up transformers, station
auxiliaries, and personnel in the event of electrical faults
or abnormal system conditions. Protective relays for the gas
turbine generators shall be provided as described in Exhibit
H.
The protection system shall be designed such that the
protective device nearest the fault operates first, with
backup protection being provided by subsequent relay stages.
Selectivity shall apply to phase-to-phase and three phase, as
well as to ground faults.
The generator zone protection or turbine trip shall shut down
the GTG and isolate them from the electric power system.
Transformer differential, overcurrent protection and sudden
pressure relays shall be applied to the main and auxiliary
transformers.
The generator and overall system protection relay devices
supplied for the project shall consist of the minimum level of
protection as follows:
<TABLE>
<CAPTION>
Description Function
----------- --------
<S> <C>
Overexcitation Volts per Hertz 24
Sync Check 25
Bus Undervoltage 27B
Undervoltage 27
Reverse Power or Anti-Motoring 32
Loss of Excitation 40
Negative Sequence Current 46
Transformer Neutral Overcurrent 51N
Generator Ground Fault 59GN
Voltage Balance 60
Bus Ground Fault 59B
Generator Differential 87G
Transformer Differential 87T
Generator Lockout 86G
Transformer Lockout 86T
DC Field Ground 64
Phase Fault 51V
Over/Under Frequency 81 O/U
Auxiliary Power Running Trip 94AR
Auxiliary Power Transformer Overcurrent 50/51
Out of Step 78
</TABLE>
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Protective relays shall be electrical-mechanical or solid
state type electric utility grade in individual semi-flush
draw out cases. Relay selection and calibration range and
settings shall be determined by the Contractor in a complete
relay coordination study and report.
The Contractor shall provide three test plugs of each type
required for each different relay style.
The Contractor will be responsible for the total integration
(including assigned gas turbine generators and accessories)
when addressing the project system protection, metering,
breakers, etc.
Motors fed from switchgear buses shall be protected against
overcurrent caused by short circuits and overloads. The relay
settings shall be calculated to afford the maximum overload
protection for the motor combined with the ability to ride
through starting current without nuisance tripping. The
following values are typical:
1. Maximum trip: 1.15-1.4 times the full
load current
2. Instantaneous trip: 2.5 times the locked rotor
current
3. Timed trip: 2-5 seconds more than the
motor starting time at the
locked rotor current
Motors fed from motor control centers shall be protected
against short circuit and overload by combination starters
using motor circuit protectors and thermal overload devices.
Overload settings shall be in accordance with NEC, except that
certain critical valve motor operators may not be provided
with overload protection.
The following points shall be included with outputs to the
digital control system (PCS):
- Generator gross watts
- Generator gross VARS
- Auxiliary load watts
- Auxiliary load VARS
- Generator stator amps
- Generator gross watthours (pulse to PCS)
- Auxiliary watthours (pulse to PCS)
A synchronizing system shall be provided that will prevent the
closing of any breaker in an out-of-phase condition. Automatic
and manual synchronizing will be provided for the following
breakers:
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- Generator breakers
- Synchrocheck provisions shall be included for all
other breakers where the possibility exists for the
voltage being out-of-phase.
- Manual and automatic synchronization of the gas
turbine will be accomplished via the Mark V gas
turbine control systems as described in Exhibit H.
2.7 INSTRUMENTATION AND CONTROL
2.7.1 General Requirements
The Contractor shall furnish all engineering, design, labor,
materials, equipment, and construction services required to
provide a totally functional instrumentation and control
systems associated with the project. The work shall comply
with applicable codes and standards including, but not
necessarily limited to, the following:
- State and local codes, laws, ordinances, rules and
regulations
- American Society of Mechanical Engineers (ASME)
- American Society for Testing and Materials (ASTM)
- American National Standards Institute (ANSI)
- Institute of Electrical and Electronic Engineers
(IEEE)
- Instrument Society of America (ISA)
- National Bureau of Standards (NBS)
- National Fire Protection Association (NFPA)
- Underwriters' Laboratories (UL)
- Scientific Apparatus Manufacturers Association (SAMA)
The Contractor shall furnish an integrated control system that
interfaces with the control system furnished for the gas
turbine generators. The integrated control system shall be a
state of the art microprocessor based system. The integrated
control system is intended to provide control for other
balance of plant items such as the circuit breakers, air
switches, and miscellaneous control loops. The Contractor
shall supply all instrumentation required to monitor and
control all process variables. This shall include, but not be
limited to, primary elements, transmitters, temperature sensor
devices, flow meters, control valves, control drive units and
all other instrumentation and controls
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required to make a complete system. The integrated control
system shall interface with other control systems in the plant
and shall tie all the control systems and devices together so
that the plant may be controlled and monitored from one common
location in the control building.
The integrated control system as well as all PCs and PLCs
provided throughout the plant shall include the necessary
hardware/software changes to accommodate and recognize date
stamps for the year 2000 and beyond.
Normal operation of the system shall be capable of being
accomplished by a full time operator from the centralized
control room.
The control system shall provide all the necessary control and
monitoring functions for manual/automatic operation of the
plant. All process starts and stops shall be initiated from
the centralized control room. The Contractor shall be
responsible for the application, loading and debugging of all
software, and for testing, calibration, and start-up of the
control system.
A block diagram showing the control system configuration is
included as Attachment V of this Exhibit. The diagram defines
what control and monitoring functions will be provided at the
centralized control panel, and at various locations throughout
the system.
All control and instrumentation design will be performed under
the supervision of a Professional Engineer.
The controls and instrumentation provided shall be complete in
all respects, requiring no further additions. Redundancy of
all important measurements shall be provided to increase
reliability. Annunciation shall ensure that the operator is
alerted to any abnormal condition or equipment failure. The
system shall function automatically over the entire turndown
range of the plant. Operator action shall be required for
normal start-up and shut-down of the plant. All process
variables and alarms shall be monitored and trended in the
centralized control room. Interlocks shall be provided to
ensure an orderly shutdown of the system in the event of
operation of a protective device, or equipment failure.
Transfer between manual and automatic operation shall be
bumpless, with automatic tracking while in the manual mode.
When dual pumps (or devices) are provided for lead-lag
operation, provisions shall be made to select either pump (or
device) for lead operation.
Local controls shall be provided for equipment as required.
The control system and its components shall be designed to
operate in the temperature ranges and humidity conditions
noted in Exhibit A.
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Electrical housings for all instrumentation and control system
auxiliary devices shall be designed for the environmental
conditions in which they are installed (e.g. weatherproof,
hazardous). See Section 2.6.1 for NEMA ratings.
Unless otherwise required for instrument compatibility,
electric control signals shall be 4 to 20 ma and pneumatic
signals shall be 3 to 15 psig.
The Contractor shall provide a documented failsafe analysis of
gas flow controls, related power supplies, backups, and
interlocks.
The Contractor shall select a single supplier of each category
of instruments furnished. Additional suppliers for a given
category will be considered only if the primary supplier
cannot meet the design requirements for a specific instrument.
All instruments shall bear an instrument data plate which
gives the salient technical data for the instrument.
The Contractor shall verify that all instruments and control
devices are calibrated. Calibration shall be certified by an
independent laboratory or agency with traceability to the
National Bureau of Standards.
The Contractor shall check control signal generation,
transmission, reception and response for all control loops
under simulated conditions.
System electronics shall be shielded against electromagnetic
interferences and shall be capable of withstanding surges in
power supplies.
2.7.2 Plant control system
This section covers the design, fabrication, installation and
testing of the plant control system as specified in Exhibit A
.
The Balance of Plant (BOP) equipment will be controlled from a
redundant GE Fanuc PLC added to the Combustion Turbine (CT)
controls data highway. All of the CT Mark V controls will be
linked together by a redundant ethernet data highway. The GE
CT operator interfaces will be upgraded to the Simplicity
software, running on a NT PC platform. Three PCs will be
provided for the operator interface in addition to the Mark V
< I >'s. This will allow the control room operator to access
any of the CTs from one location. This will also provide the
platform requested for coordinated response to unit load
commands. An additional PC for "engineering" activities will
be provided.
The system will be physically distributed throughout the plant
site with interconnection via a redundant data highway. The
following locations and equipment are identified as minimum
requirements:
- Control Room
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Four operator work stations, each consisting of dual
color CRT monitor, keyboard, touch screen, and a
mouse or trackball.
One engineer work station consisting of processor,
color CRT monitor, keyboard, mouse or trackball, hard
disk drive, floppy disk drive, color printer, and
other necessary programming software and facilities.
One color utility printer, switchable between the
operator work stations.
One color alarm printer.
One log printer.
Magnetic tape drive or optical disk drive for data
archival.
All operator interface functions related to the PCS
shall be conducted from the operator work stations.
Each work station shall be mounted in a low profile
desk type control console. CRTs shall be 19 inches
nominal diagonal dimension. CRT resolution shall be
at least 1024 pixels horizontal by 768 pixels
vertical.
- Control Building Electrical Equipment Room
System cabinets for analog and digital input/output
devices, controllers/logic modules and associated
equipment for control and monitoring of switchgear
motor control center (MCC), 480 V Loadcenter as well
as control and monitoring of a majority of the power
plant systems.
System cabinets (if required) for Sequence of Event
recording. All inputs shall be time tagged at the
cabinet prior to dumping on the data highway.
Approximately 100 sequence of events points will be
provided and the maximum scan time shall not be
greater than 1 millisecond.
- The PCS shall utilize Microsoft Windows NT version
4.0 (or higher) operating system for the Operator
Interface and Engineering Workstation Consoles.
- The redundant PCS network shall have a 100 Mega bit
per second capacity.
- The PCS shall be capable of having any configuration
changes downloaded to the control processors while
on-line without jeopardizing system integrity
(bumpless transfer and bumpless configuration
download capability).
- The PCS shall be capable of having all Operator
Interface and Engineer Workstation functions
implemented by an optional Remote Engineering
Workstation connected over the Wide-Area-Network
interface using TC/IP network protocol.
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- The PCS shall be equipped with dual Ethernet links to
an external plant network. A software application
will be provided with the PCS that is capable of
supplying high speed process data over the Ethernet
link using TCP/IP protocol to either OLE, Active-X or
NetDDE clients on the external plant network. The PCS
shall be capable of supplying all available process
analog and digital values at the configured I/O
hardware scanning frequency to the client
applications without overloading the PCS network.
The PCS shall be designed to control, monitor and alarm the
various power plant systems and shall be capable of
interfacing with external devices in a convenient matter. Its
operation shall be easy to understand by operating personnel
with a basic knowledge of the process and without special
programming skills. The PCS shall be of a field proven design
utilizing standard equipment and programming techniques. The
input/output components shall be mounted in free-standing
cabinets with connections via a redundant data highway to
CRT/keyboard and printers. Flexibility is to be allowed in
location of all devices. Field connections shall be readily
accessible without disturbing electronic components.
The PCS shall be 32 bit microprocessor based and shall include
analog control (PID), discrete digital (on-off) control, data
acquisition and alarm capabilities. The operator interface
with the total system shall be by 19 inch color CRT consoles.
The CRT consoles shall include dedicated push-button keyboards
with operator and engineering functions including process
overview displays, process group displays, control loop detail
displays, alarm summary and control loop configuration and
tuning functions. Hard copy data logging shall be provided by
the printers. The printers will be used for alarm, logging and
demand printouts.
The microprocessor based control system shall have built-in
self checking and diagnostic features provided. These features
should include detection of failures and equipment degradation
associated with power supplies, memory, CPU programming,
analog and digital I/O systems and peripheral devices.
The system should be modularly configured for ease of
maintenance, trouble shooting and field modifications and
shall provide the capability for in-service checkout and
maintenance without impairing the availability of the overall
system. Controller failures shall result in an automatic
switchover to the redundant unit for multi-loop controllers or
transfer to manual with all process outputs maintained at
their last value prior to failure for single loop controllers.
The control system shall incorporate self diagnostics to
detect failures or off normal conditions and to alert the
operator to these conditions. Data shall be displayed which
identifies the component which has malfunctioned and gives
sufficient location information for trouble shooting. No
failure of a single component shall cause failure of more than
one control loop. All components, except the I/O termination
cards, shall have a 100% fully redundant hot backup with
automatic switchover on failure of the primary component.
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Capability shall be provided, when a control loop is
transferred to manual, which allows replacement of a defective
module e.g. logic or control card, while maintaining full
manual control of the affected loop from the CRT.
Provisions shall be made for the prevention of unauthorized or
accidental changes to system configuration. System data
logging and recovery capability shall be provided so that
control system configuration and data base can be quickly
restored in the event of an operator error or system failure.
The system shall have the capacity for up to 20 percent
increase in size in the future.
The PCS will be controlling and monitoring the gas turbine
generator as well as the balance of plant. There will be
several remote I/O locations. Each of the remotes must be able
to communicate with the other remotes, as well as the CRT's
over the redundant data highway.
The system shall have a control console which shall consist of
CRT's with sealed keyboards and auxiliary console sections,
which shall be physically similar to the CRT consoles. The
CRT's and auxiliary consoles shall be supplied as one
integrated control panel assembly.
The CRT's shall each be capable of controlling and monitoring
all of that unit's systems. Under normal operation, one CRT
will be dedicated as an alarm CRT for all system alarms. The
other CRT's will be used for control and monitoring. These two
functions shall be interchangeable between the CRT's.
An ethernet link, necessary hardware, and software shall be
provided to allow interface between the PCS Data Highway and a
Contractor furnished personal computer based Performance
Monitoring System and Data Historian.
The system shall have one master clock which shall synchronize
all clocks within the system including the sequence of events
recorders and the digital display clocks mounted on the
auxiliary control consoles. The system shall also synchronize
the gas turbine control system clocks to the PCS clock.
There will be several systems which will be controlled and/or
monitored by the PCS. These systems will be identified by the
three (3) letter code at the beginning of each I/O point
number. The operator interface unit shall have, in addition to
the keys necessary to perform all the operator functions, a
labeled key for each plant system which the operator can use
to gain access to information alarms or control functions
within that plant system.
The PCS shall be capable of automatic generation control (AGC)
of each of the gas turbine generator unit over the full load
range from approximately 50% load to base without
interruption.
2.7.2.1 Input and Output Devices (I/O)
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All inputs to and outputs from the Plant control
system shall be identified by a point ID. The point
ID shall have up to nine (9) characters and
information about the point shall be obtained from
the CRT keyboard using this point ID.
All I/O to and from the PCS shall comply with ANSI
C37.90A.
To permit removal of I/O modules without removing
field wiring, all I/O field terminations shall be
terminated on separate field termination blocks in
I/O cabinets provided by the Contractor. Cabinets and
enclosures shall shield against RFI pickup and high
voltage electrical noise.
The Contractor shall include a minimum of 20% spare
of each type of I/O point at each of the I/O
locations which shall be wired to the termination
cabinets.
The system shall be designed to perform data
acquisition functions for all process inputs as
described herein.
The scan rate of all process inputs shall be as
follows:
- Analog Inputs - Once per 1.0 second average,
with provisions for scanning at least 5
percent of the analog inputs at a rate of
once per 0.1 second.
- Contact Inputs (low resolution) - Once per
second.
- Contact Inputs (high resolution) - Once per
millisecond.
The system shall have the capability to
perform real-time calculations using the
input data processed. The system shall be
capable of further performing real-time
calculations using the calculated variables.
All analog inputs, digital inputs, and
calculated variables shall be available for
use by the system to perform the control,
alarm, display, and logging functions.
The Contractor shall provide a complete set
of programmed instructions and displays with
the system to execute the modulating type
control algorithms as defined in SAMA
Standard SR22-11-1966.
During transient conditions causing
deviations of process variables, the control
system shall not permit deviations which
exceed those permitted by manufacturers of
controlled process equipment. In no event
shall the performance of the control system
become the limiting factor on unit
responsiveness. The PCS shall be capable of
producing smooth load changes without
overshoot, unless these changes are not
achievable because of plant equipment
limitations.
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In cases where the PCS modulates more than
one similar auxiliary device, the system
logic shall automatically compensate the
tuning constants of all affected control
loops so as to provide equally responsive
control no matter which combination of
auxiliary devices may be in service.
The PCS shall include provisions to apply
function generator compensation to outputs
so as to linearize control response when
modulating final devices which may be
nonlinear (e.g., control valves).
The arrangement and type of input and output
devices shall be as follows:
- Process transmitters shall be
located in the process area and
shall measure pressure, flow, level
and temperature.
- Electrical transducers shall be
located at the electrical equipment
and shall measure voltage and
current and determine watthour,
varhour, watt and var. All
transducers shall be of the
electronic type and shall be
self-powered.
- Process switches shall be located in
the process area and shall monitor,
alarm and sequence various
equipment. All switches shall be
voltage sensed from the PCS. All
switches shall be electrically
isolated from ground and from one
another.
- Thermocouples, and RTDs and 100 ohm
platinum RTDs shall be located in
the process area and shall be
directly terminated in the I/O
Cabinets.
- Control transducers shall be located
in the process area and in response
to signals configured in the PCS
shall actuate valves and dampers,
etc. All transducers shall accept a
4-20 mA DC signal from the PCS and
shall be electrically isolated from
ground and from one another.
- Switchgear, Load Centers, and Motor
Control Centers located locally and
in the Control Building shall
control circuit breakers, motors,
and motor operated valves in
response to signals configured in
the PCS. All of these shall accept
dry contacts from the PCS.
2.7.2.2 Operator Interface
The operator interface equipment shall be
located in the Control Building and shall
provide the operator access to the process
utilizing CRT display terminals with
functional sealed keyboards and one alarm
printer,
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one demand printer and one log printer. In
the event of loss of electrical power the
unit shall be capable of maintaining memory
functions for a minimum of two (2) hours and
shall provide fail-save outputs.
The PCS shall provide the following minimum
features.
- The PCS Operator Interface consoles
shall utilize Microsoft Windows NT
version 4.0 (or higher) operating
system.
- Be conveniently programmable and
capable of controlling from any of
the CRT/keyboard operator interface
terminals. A security system shall
be provided to prevent unauthorized
entries.
- Provide graphically an overview of
all setpoints, process variables and
deviations from limits with dynamic
updating.
- Provide graphic display of several
control loops including setpoint,
process variable control output and
control mode status with dynamic
updating.
- Provide display and operator control
of individual loops setpoint,
process variable, control output,
control mode status, and alarms with
dynamic updating.
- Provide visual, audible indication
and high speed printout of all
deviations from limits and alarm
conditions.
- Provide sequence of events display
and hard copy.
- Provide process variable trend
displays.
- Provide two EIA/RS-232C ports for
interfacing with devices such as
telephone modems, computer, etc.
- Provide periodic and trip logs in
Purchaser-configurable format up to
25 logs of 100 items each.
- Provide trending capability for all
of the analog points in the system.
- Provide self-checking diagnostic
display of PCS malfunctions.
- Provide redundant facilities for
storing and loading the system
program and short term data storage
i.e., magnetic tape drive or
optical drive for date archived.
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- Provide custom graphics displays
for up to 50 schematic diagram
arrangements with dynamic updating.
- Provide long term data storage for
plant record. As a minimum the long
term data storage shall collect all
trended data, all logs, all alarms,
and all operator actions. In
addition, the transfer of
information from short term to long
term data storage shall be fully
automatic and the control system
shall remain completely operational
during the data transfer.
2.7.2.3 Load Control
The PCS shall utilize the revenue meter
(MWH) to trim the load on gas turbines
selected by the operator to match the
preselected load (energy) setpoint entered
by the operator. The system will continously
monitor, project, and adjust the load on the
selected gas turbines to maintain a
deviation between the setpoint and the
actual delivered energy which does not
exceed 1.8 MWh, or 0.9% of the Energy
Request for a given hour (as defined in the
Power Purchase Agreement), which ever is
greater.
2.7.2.4 Power Supplies
Plant control system power shall be supplied
by the Contractor from the following
sources:
- Primary - 120 V a-c, 60 Hz, not
exceeding PLUS OR MINUS 2% voltage
variation, PLUS OR MINUS 0.5%
frequency variation, and less
than 5% harmonic distortion.
- Backup - 125V d-c, Battery System
through the 120V ac UPS.
The Contractor shall supply within his
cabinet loss-of-power alarms to monitor each
of the above power sources. These alarms
shall be mounted ahead of any distribution
panels and internal power supplies.
The Contractor shall supply whatever power
supplies that are required to operate the
Plant control system. Each of these power
supplies shall have a full capacity on-line
backup power supply. Each power supply shall
have an associated failure alarm. Power
distribution within the PCS shall be
arranged such that the loss of power at an
individual subsystem does not impair the
correct operation of other subsystems or
create an unsafe condition.
Ground fault detection shall be provided for
systems utilizing floating power supplies.
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Power distribution circuit breakers shall be
provided with individual trip indication.
Fuses shall be of the indicating type.
Each cabinet shall be provided with
convenience outlets to facilitate
maintenance work. These convenience outlets
shall be powered from a separate 120 V a-c
supply provided by the Contractor. The
Contractor shall also provide redundant
cooling fans and cartridge filters in each
cabinet and the fans shall be fed from the
primary and backup power supplies.
A tinned coated copper ground bus shall be
installed at the bottom and across the full
width of each enclosure. It shall be drilled
at each end for extension and shall have a
suitable indent-compression type lug bolted
to it near each end for the Contractor's
ground cable to the plant ground grid. A
flexible strap or bar link shall be provided
at each shipping split. This ground bus
shall be connected to all enclosure steel.
A second similar ground bus shall be
installed above the first and insulated from
all enclosure steel. When instrument loops
require signal points or cable shields to be
grounded, this bus shall be used. All other
grounds shall be connected to the
uninsulated ground bus unless otherwise
noted.
Ground wires, if used, shall be so installed
as to be visible and accessible after all
other wiring has been completed.
2.7.2.5 System Configuration
The Contractor shall configure, load and
debug the PCS data base at the factory. A
printout of the data base and detailed
configuration diagrams shall be supplied to
the Owner for review and comment prior to
finalization of system configuration.
2.7.2.6 Programmable Logic Controller (PLC)
Digital logic, sequential control, and
emergency shutdown systems may be done
through microprocessor controllers
distributed throughout the plant. The
microprocessor controllers shall interface
with the PCS, and be capable of performing
efficiently the digital function. Specific
complete systems with local operator
interfaces could be proposed to be
microprocessor based PLC systems as
manufactured by Modicon and Allen-Bradley,
but shall be provided with the necessary
interface to the central PCS to allow for
higher level coordination and central
control room remote operation and
monitoring.
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2.7.3 Instrumentation and Control Valves
This section covers the instrumentation and controls
furnished and installed for the project.
All instrument scales shall be calibrated and printed
in the system of units as specified by the
Contractor. All scales shall be graduated and marked
in English units only. Scales and charts shall have
linear graduations.
Instrument scales shall be white with black division
marks and, where practical, the divisions shall be
based on multiples of 10.
Preferably instrument ranges shall be selected to
have the "normal" reading at 75% of full scale.
2.7.3.1 Transmitters
Transmitters shall be 4-20 mA dc two-wire,
solid-state type, with plug-in circuit
board. External zero and span adjustments
are required.
All parts of the transmitter in contact with
the process medium shall be constructed of
materials suitable for the application and
the pressure-temperature conditions
encountered.
Transmitters utilized for measuring
differential pressure, flow, and level shall
be furnished with a preassembled valve
manifold suitable for mounting directly on
the transmitter.
All transmitters shall be designed to
prevent the process medium from contacting
the electronics or from entering the wiring
circuit if the measuring element fails.
The accuracy of all transmitters shall be
"0.5 percent of the calibrated range or
better. Repeatability shall be "0.1 percent
or better.
Each transmitter shall have an integral
junction box with terminal strip, integral
test jacks, and conduit connection, and
shall be complete with all mounting
accessories.
When transmitters are required to provide
multiple outputs to recorders, indicators,
etc, as well as providing an input to the
control system, the circuit shall be
arranged so that disconnecting an input to a
recorder, indicator, etc, shall not cause an
upset in the control system, or a change in
transmitter calibration.
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It shall be possible to ground either output
terminal of a transmitter or its receiver
without affecting transmitter
characteristics. There shall be no signal
grounds within the transmitters.
Reservoirs shall be furnished by the
Contractor when required by the service or
type of transmitter supplied.
The dynamic response of transmitters and
converters shall be compatible with the
performance requirements of the loops or
systems.
2.7.3.2 Thermocouples, RTD's and Thermowells
Thermocouples shall be stainless steel
sheathed, magnesium oxide insulated with an
overall sheath. Thermocouples used in
thermowells shall be ungrounded. The sheath
shall be spring-loaded to maintain thermal
and electrical contact. Where safety
requirements dictate, the hot junctions
shall be grounded.
Chromel Constantan Type E or Chromel Alumel
Type K shall be used for temperature
sensing.
Thermocouple limits of error shall be
PLUS 2 DEG. F up to 600 DEG. F and PLUS 3/8
percent above 600 DEG. F. Where such
accuracy is not satisfactory for the
process, ungrounded 100 ohm platinum RTDs
may be used.
The overall horizontal and vertical
dimensions of the head shall be not less
than 4 inches. The internal arrangement
shall be such that rotation of the screw
cover does not damage the internal
components. A grounding terminal shall be
provided in the connection head. Complete
thermocouple parts shall be shop-assembled
to form a thermocouple assembly including
the protection wells. The bore of each well
must be concentric with the outside diameter
within PLUS 10 percent of the wall
thickness. Wells shall be of the same
material as the pipe.
2.7.3.3 Local Temperature Indicators
Normally, local temperature indication shall
be by bimetallic type indicators with
universal joint and 5-inch diameter dial.
Each thermometer shall be supplied with a
thermowell.
2.7.3.4 Pressure Switches
Pressure sensing switches for alarm and
shutdown shall have separate housings.
Switch contacts shall be rated at 125-V ac,
10A resistive and 125-V dc 0.5A resistive.
Switch contacts shall have separate
terminals. Alarm
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switches shall close to alarm. Switches
used for shutdown and control shall close
to cause desired action.
Switches shall be snap-acting type. All
wetted parts shall be Series 300 stainless
steel. Pressure connections shall be
1/2-inch FNPT. Alarm and shutdown switch
settings shall not be adjustable from
outside the housing.
Instruments and controls shall be installed
with suitable isolation valves to permit
removal while the system is in operation.
2.7.3.5 Level Switches
Level switches provided by the Contractor to
monitor process level conditions shall be of
the externally mounted float type, suitable
for the pressure temperature and general
service conditions and functions specified.
Floats shall be fabricated of stainless
steel and shall be encased in a cage. All
cages shall have a flanged connection to
permit removal of the float.
Piping connections shall be made on the side
and bottom of the cage and shall have 1 inch
socket weld ends. All electrical conduit
connections shall be 3/4 inch NPT.
Electrical switches shall have the following
minimum inductive load ratings:
125 VDC - 0.5 amp (break)
(resistive) 120 VAC - 5.0 amp
(break)
The individual switches provided with each
level switch shall be electrically isolated.
2.7.3.6 Local Pressure Indicators
Pressure indicators shall be bourdon type,
accurate to within 1 percent of span. Dials
shall be white with black markings and shall
be 4-1/2 inches in diameter with markings
for 170 degrees of the dial. Units of
measurement shall be specified on the dial
face. Pointer shall be externally
adjustable. Gage movements shall be
stainless steel, geared type. Case shall
have a blowout disc in the back. Bourdon
tubes shall not contain copper material.
2.7.3.7 Control Valves
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit B
--------------------
TENASKA GEORGIA GENERATION PROJECT Page 127 of 132
- --------------------------------------------------------------------------------
The entire operating load range of the plant
shall be fully considered when developing
the control valve specification sheets.
Control valve body sizes shall not be more
than one pipe size smaller than the nominal
pipeline size up to eight (8) inches. For
nominal line sizes greater than eight (8)
inches, control valve body sizes shall not
be more than 2 pipe sizes smaller than the
nominal pipeline size. Valve travel shall
not exceed 80 percent at the maximum
operating condition. Valve noise (excluding
steam conditioning valves) shall not exceed
95 dBA @ three (3) feet.
Control valve sizing and detailed
requirements shall be the responsibility of
the Contractor. ISA Format Data Sheets shall
be used to specify the valves.
Control valves shall conform to the
requirements of ANSI B31.1, Code for Power
Piping and be suitable for use under the
specific operating conditions.
Handwheels shall be provided on all
air-operated valves.
The control valve body shall be no more than
two nominal sizes smaller than the line in
which the valve is installed.
Body fluid velocities shall be limited to 40
fps as liquid and 0.3 mach as vapor or gas.
Trim sizes may be reduced to 0.4 factor trim
minimum when pipe size or velocities are
limiting.
Valves shall be capable of passing 125
percent of the normal capacity. If the
maximum capacity is listed, the valve shall
be capable of passing 105 percent of that
figure.
Globe and angle type valves will have cage,
top and bottom, or top guiding (no skirt
guiding). Bonnets shall be flanged or of
integral construction. The packing gland
shall be the bolted type.
Under the normal range of operating
conditions the sound level at any point 3 ft
radially from the surface of the downstream
pipe at a distance of 3 ft downstream of the
valve outlet should not exceed 90 dBA
(excluding steam conditioning valves).
Valve materials shall be ASTM or ASME type
carbon steel, chrome moly, or stainless
steel, as required by the service
conditions.
All trim materials shall be stainless steel,
as a minimum, with hardened 400 Series
stainless steel or Stellite hard surfaced
trim where pressure drops exceed 100 psi or
wear is expected from erosion.
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit B
--------------------
TENASKA GEORGIA GENERATION PROJECT Page 128 of 132
- --------------------------------------------------------------------------------
Rotary valves may have plugs similar to body
materials but must have alloy steel shafts
for corrosion and shear resistance.
2.7.3.8 Solenoid Valves
Valves shall be selected to incorporate body
construction, trim materials, and internal
arrangements suitable to the application.
Solenoid enclosures shall be NEMA 4 unless
otherwise required. Solenoid coils shall be
Class H high temperature construction and
shall be suitable for continuous duty.
2.7.3.9 Flow Elements
Flowmeters shall preferably be those of the
differential pressure type with an accuracy
of "1 percent of the span maintained over a
10:1 flow turndown. The materials of the
meters and their associated parts shall not
be deteriorated by the working fluid. Flow
transmitters shall have output linear with
differential pressure with an accuracy of
within "0.5 percent of full scale range.
Flow metering primary elements and
installations shall be designed in
accordance with ASME "Fluid Meters" Part
Two, "Application of Fluid Meters". Primary
elements shall be ASME long radius flow
nozzles or thin plate square edge concentric
orifices as appropriate to system operating
conditions and as described herein. Steam
flows shall be measured with ASME long
radius flow nozzles. Annubars are not
acceptable.
The Contractor shall be responsible for
verifying that sufficient length of straight
pipe is provided on each side of all primary
elements. Any internal boring of adjacent
pipe shall be by the Contractor. The
pressure taps for flow nozzles shall be
installed in the pipe well as described in
"Fluid Meters" Part Two. Orifices shall be
installed between specially designed orifice
flanges.
Where required, flow metering shall be
temperature and/or pressure compensated. For
flow metering of oil, positive displacement
meters or area meters shall be provided. For
flow metering of fuel gas to the gas
turbine, an orifice plate meter run shall be
provided.
Condensing reservoirs shall be provided on
all flow transmitter services where low
differential pressures relative to the
static pressure are present in steam
service. Condensing reservoir inlet and
outlet connections shall be a minimum of 20
mm.
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit B
--------------------
TENASKA GEORGIA GENERATION PROJECT Page 129 of 132
- --------------------------------------------------------------------------------
- Nozzles - Flow nozzles shall be
constructed of Type 304 stainless
steel and shall be designed in
accordance with Paragraphs II-III-20
through II-III-26 of the ASME report
"Fluid Meters," Part Two Application
of Fluid Meters - Especially
Differential Pressure types.
- Orifice Plates - Orifice plates
shall be constructed of Type 304 or
316 stainless steel. Orifice plates
shall not be less than 1/8 inch
thick for nominal pipe diameters up
to and including 12 inches, and
shall not be less than 1/4 inch
thick for nominal pipe diameters
above 12 inches. Orifice plates
shall be constructed in accordance
with ASME/AGA standards.
- Fuel Flow Meters - Individual fuel
gas flow and fuel oil flow metering
systems shall be provided for the
gas turbine. A fuel gas check
metering system shall be installed
in the main gas lines. The check
meter shall be installed per API
standards. The metering systems
shall be complete with all required
transducers, including, but not
necessarily limited to, the
following:
Flow meter
Density or specific gravity
transmitters
Pressure transmitters
Temperature elements
The Contractor's Plant control
system programs shall include the
proper algorithms to continuously
provide the determination of heat
input to the gas turbine in
accordance with methods described in
the ASME PTC 22-1985 references
contained herein.
2.7.3.10 Gas Chromatograph and Flow Computer
An on-line gas chromatograph and flow
computer (Daniel or Owner approved equal)
shall be provided in the main gas line for
measuring plant gas flow, heating value
(Btu/Scf), relative density (specific
gravity), and compressibility of the fuel
gas. The chromatograph shall employ thermal
conductivity detection with an accuracy of
0.1% over an operating range of 0oF to
130oF. The data shall be transmitted to a
gas computer (provided by the Contractor)
and then to the PCS for gas flow and
equipment performance calculations. The
Contractor shall incorporate reference
conditions common to the gas suppliers. The
orifice metering run shall meet the straight
length requirements of ISO-
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit B
--------------------
TENASKA GEORGIA GENERATION PROJECT Page 130 of 132
- --------------------------------------------------------------------------------
5167 and the manufacturing and installation
requirements of ASME MFC-3M-1989. Meter
shall be designed for 10:1 turndown and
shall contain stacked transmitters.
2.7.3.11 Installation
All instruments shall be installed in
accordance with Contractor's drawings and
manufacturers' recommendation. All
instruments shall be located where they will
be accessible from ladders, platforms, or
grade. All locally mounted indicating
instruments shall face forward toward the
normal operating area and shall be within
reading distance and in the line of sight.
The Contractor shall mount instruments level
and plumb, rigidly supported and in such a
manner as to provide protection from heat,
shock and vibration; accessibility for
maintenance; and freedom from interference
with piping, conduit and equipment.
Current-to-pressure transducers shall not be
mounted on the control valves unless the
transducers are received from the
manufacturer already valve mounted and
tubed, or specific instructions to valve
mount the transducers are given on the
drawings.
Single tubes and multitube bundles shall be
installed in a neat, workmanlike manner and
show no sign of crumpling, bends of too
short a radius, flattening, etc. Extreme
care shall be exercised to keep foreign
matter out of the system. All open tubing
ends and connections shall be kept plugged
to keep out dust, dirt, moisture, oil, etc.
Tube benders shall be of the proper
dimensions. Tubing shall not be installed
with damaged walls or flattened ends.
2.7.4 Control Panels
This section covers the design, fabrication and
installation of floor and wall mounted control panels
for the project.
Control panels shall meet applicable requirements of
NEMA as defined in Paragraph 2.6.1.
Panels shall be of all welded steel construction.
Exterior surfaces shall be smooth and free of defects
and imperfections. All welds shall be ground smooth.
Exposed edges, corners and edges of cutouts shall be
smooth and rounded.
Control panel doors shall be provided with full
length piano type hinges and three point latching
system fasteners with stainless steel handles. the
locks shall be keyed alike.
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit B
--------------------
TENASKA GEORGIA GENERATION PROJECT Page 131 of 132
- --------------------------------------------------------------------------------
Braces and stiffening members shall be provided as
required to prevent any panel distortion. Braces and
stiffeners shall not interfere with instrument
locations.
Panel tubing and wiring shall be neatly routed and
supported and shall not block access to instruments.
Tubing and wiring shall be terminated on tubing
terminal plates or terminal strips, respectively.
Twenty (20) percent spare connections shall be
provided.
All devices and components in the rear or interior of
the panel, as well as back of front mounted
equipment, shall be identified. Name plates shall be
installed on the front of the panels to identify all
instruments, gauges, etc.
Free standing panels shall be provided with internal
lighting fixtures and electrical outlets.
Panels shall be ventilated or air conditioned as
required to prevent overheating and moisture
condensation.
Control panels shall be cleaned, primed, and finish
painted with the manufacturer's standard painting
system.
2.7.5 Continuous Emission Monitoring System
This section covers the design, procurement,
installation, testing and certification of the
continuous emission monitoring system (CEMS) for the
plant. The CEMS equipment shall comply with NEMA,
ASME, ISA, ANSI, IEEE and OSHA codes and standards as
applicable; Environmental Protection Agency (EPA)
requirements in 40 CFR Part 60, and 40 CFR Part 75;
State of Georgia Department of Natural Resources,
Environmental Protection Division (DNR) requirements
including air permit requirements; and the
requirements of other local and state regulations.
All CEMS equipment shall be provided as a complete
and operational system designed to function as a
coordinated unit. The equipment and system shall
include, but not be limited to, all probes, sample
lines, analyzers, enclosures, data acquisition
system, heaters, piping, instrumentation valves,
supports, blowers, gas dryers, pumps, filters,
coolers and other equipment and materials for a
complete system.
The CEMS system shall utilize only dry extractive or
wet extractive type monitoring equipment. Dilution
extractive type systems are not acceptable.
The CEMS system shall monitor for the following stack
flue gas constituents:
- NO(2)
- O(2)
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit B
--------------------
TENASKA GEORGIA GENERATION PROJECT Page 132 of 132
- --------------------------------------------------------------------------------
- Stack flue gas flow rate
SO2, CO and CO2 emissions will be calculated using
fuel flow and fuel composition data.
The system accuracy, span, and specifications and
test procedures shall meet 40 CFR 60, 40 CFR 75, and
performance specifications established by DNR.
All probes and all material exposed to the flue gas
shall, as a minimum, be 316L stainless steel.
The sample lines from the stack sample probes to the
analyzers shall be heat traced and insulated for
freeze protection. Sample lines shall be shop
fabricated as a continuous length. Splicing of the
lines is not acceptable.
The Continuous Emissions Monitoring System (CEMS)
will consist of six individual extractive-type
systems. The systems will be housed in two
enclosures, each with a group of three systems. The
extractive sample conditioning will consist of heated
sample probe and line with moisture removal at the
analyzer racks. The enclosures shall be insulated,
dust tight, and environmentally controlled. The
enclosures shall be sized to provide maintenance
access around the cabinets and racks. A minimum of 30
inches clearance shall be provided between the
outside walls and the cabinets/racks. A minimum of a
48 inches access aisle shall be provided at the front
of the cabinets/racks. A 30 inch by 60 inch work
bench shall also be provided in the enclosure.
Adequate lighting and electrical outlets shall be
provided in the interior of the enclosure. The
enclosure shall conform to applicable state and local
codes.
An integrated system for CEMS control and data
acquisition shall be provided and shall be capable of
interfacing with the plant plant control system. The
data acquisition system (DAS) shall be separate,
dedicated, IBM compatible personal computer system
located in the plant control room. The DAS shall
collect and store CEMS data, perform required
calculations and generate reports as required for
plant operations and regulatory compliance.
The DAS computer shall, as a minimum, be provided as follows:
- Pentium II, 400 MHz microprocessor (minimum)
- Internal memory of at least 32 MB RAM with a
minimum 5 GB hard disk drive
- One 3-1/2 inch floppy drive and one compact
disk drive
- 15 inch VGA color monitor
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit B
--------------------
TENASKA GEORGIA GENERATION PROJECT Page 133 of 132
- --------------------------------------------------------------------------------
- High speed, letter-quality wide carriage
printer
- 56k baud telephone modem
- Utilize WINDOWS NT Version 4.0 or later and
software required for all
calculations and report generation
The Contractor shall perform all required factory and
field tests required to certify the CEMS equipment
according to 40 CFR 60, 40 CFR 75 and TNRCC
requirements.
2.7.6 Plant Weather Instrumentation
A plant weather station shall be provided to monitor
plant ambient dry bulb temperature, wet bulb
temperature, relative humidity, barometric pressure,
wind speed, and wind direction. Hardware will
basically consist of a wind monitor and mast,
temperature/RH sensor with solar radiation shield,
barometric pressure sensor, programmable translator,
and sensor cabling. The translator device shall
provide 4-20 mA output signals to the PCS for wind
speed, wind direction, dry bulb temperature, relative
humidity, barometric pressure, and wet bulb
temperature (calculated). The weather station
instruments shall be located such that plant
equipment does not impact the readings.
2.7.7 Security System
The main gate shall be capable of being operated at
the control room and have Closed Circuit TV (CCTV)
and two-way speakers with on-off control. Contractor
shall provide all permanent surveillance facilities,
including CCTV with two cameras. Contractor shall
provide space for security monitor (minimum 14"
screen) in the control room and provide CCTV cabling
between gates and the control room. CCTV's shall have
remote pan and zoom capabilities.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT B
ATTACHMENT I
DESIGN GUIDE DRAWING
The following is a description of information which cannot be submitted
electronically:
DRAWINGS:
1) TENASKA GEORGIA GENERATION FACILITY SITE PLAN
2) TENASKA GEORGIA GENERATION FACILITY PLOT PLAN
3) TENASKA GEORGIA GENERATION FACILITY EXISTING CONTOURS
4) TENASKA GEORGIA GENERATION FACILITY ONE LINE DIAGRAM
5) TENASKA GEORGIA GENERATION FACILITY DEMINERALIZED WATER SYSTEM - P&ID
6) TENASKA GEORGIA GENERATION FACILITY CO2 & HYDROGEN SYSTEM - P&ID
7) TENASKA GEORGIA GENERATION FACILITY NATURAL GAS SYSTEM - P&ID
8) TENASKA GEORGIA GENERATION FACILITY WATER DISCHARGE/DRAINAGE
SYSTEM - P&ID
9) TENASKA GEORGIA GENERATION FACILITY FUEL OIL SYSTEM - P&ID
10) TENASKA GEORGIA GENERATION FACILITY FIRE PROTECTION SYSTEM - P&ID
11) TENASKA GEORGIA GENERATION FACILITY COMPRESSED AIR SYSTEM - P&ID
12) TENASKA GEORGIA GENERATION FACILITY ELECTRICAL SYSTEM - DC AND UPS
POWER SYSTEM - ONE LINE DIAGRAM
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT B
ATTACHMENT II
ELECTRIC UTILITY INTERCONNECTION AGREEMENT
[LATER]
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT B
ATTACHMENT III
NOT USED
<PAGE>
EXHIBIT B
ATTACHMENT IV
[Form of Power Purchase Agreement Removed]
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT B
ATTACHMENT V
CONTROL SYSTEM CONFIGURATION-BLOCK
The following is a description of information which cannot be submitted
electronically:
DRAWING OF TENASKA GEORGIA GENERATION PROJECT CONTROL AND MONITORING SYSTEM -
PLANT CONTROL SYSTEM - ARCHITECTURE
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT B
ATTACHMENT VI
EXTENDED WARRANTY EQUIPMENT LIST
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT B
ATTACHMENT VI
EXTENDED WARRANTY EQUIPMENT LIST
In accordance with Article 9.9 of the EPC Agreement, the following equipment
shall have extended warrantees such that the warranty shall not expire prior
to the longer of [*] after the Scheduled Commercial Operation of the last
Unit in Phase II or [*] after Commercial Operation of the last Unit in Phase
II. This equipment is expected to enter commercial service with Phase I.
<TABLE>
<CAPTION>
- -------------- ---------------------------------------------------------- -----------------------------------
Item Description Warrantee Period
- -------------- ---------------------------------------------------------- -----------------------------------
<S> <C> <C>
Item 1 Generator 18kV/500kV Step-up Transformer serving Units The longer of [*] after the
3 and 4. T2 per the Contract One-Line Diagram. Scheduled Commercial Operation of
the last Unit in Phase II or [*]
after Commercial Operation of the
last Unit in Phase II.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 2 Power Distribution Center (PDC) including installed Same as Item 1 above.
equipment.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 3 Fuel Gas Supply System gas preheaters and gas Same as Item 1 above.
chromatograph
- -------------- ---------------------------------------------------------- -----------------------------------
Item 4 Fuel Oil Supply System fuel oil unloading pumps and Same as Item 1 above.
forwarding pumps
- -------------- ---------------------------------------------------------- -----------------------------------
Item 5 DC Electrical system including battery, battery charger, Same as Item 1 above.
and UPS including inverter.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 6 Air compressors and air dryers. Same as Item 1 above.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 7 Oil/water seperator Same as Item 1 above.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 8 Water Injection Supply Pumps Same as Item 1 above.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 9 Evaporative Cooler Supply Pumps Same as Item 1 above.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 10 Auxiliary Transformers 18kV/4160V. Transformers T7 & Same as Item 1 above.
T8 per the Contract One-Line Diagram.
- -------------- ---------------------------------------------------------- -----------------------------------
Item 11 Auxiliary Transformers 4160V/480V. Transformers T10 & Same as Item 1 above.
T11 per the Contract One-Line Diagram.
- -------------- ---------------------------------------------------------- -----------------------------------
</TABLE>
Page 1
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT C
LIMITED NOTICE TO PROCEED
<PAGE>
September 10, 1999
Mr. Gerald P. Burke Via Facsimile #210 475 8096
Zachry Construction Company
527 Logwood
PO Box 240130
San Antonio TX 78221-0130
RE: Limited Notice to Proceed
Dear Gerald:
Tenaska Georgia I, L.P., a Delaware limited partnership ("Owner") and Zachry
Construction Corporation, a Delaware corporation ("Contractor") have
negotiated a draft of an Engineering, Procurement and Construction Agreement
for a dispatchable electric generating plant to be located on Owner's
premises in Heard County in the State of Georgia (the "EPC Agreement"). This
letter authorizes Contractor to proceed with the scope of Work set forth in
Exhibit C attached to this letter for the compensation set forth in Exhibit C
and below. In performing such Work, Contractor shall be governed by the terms
set forth in the September 10, 1999 draft of the EPC Agreement. In the event
that the EPC Agreement is finally approved and executed by Owner and
Contractor, this letter will serve as the Limited Notice to Proceed under the
EPC Agreement, effective as of September 10, 1999; all payments made pursuant
to this letter shall be applied against the Guaranteed Lump Sum Price in such
EPC Agreement and to any applicable cancellation charges provided for in
Exhibit C or in such EPC Agreement; and all services performed by Contractor
shall be considered as having been performed under such EPC Agreement. If
Contractor has not received an Authorization to Proceed under the EPC
Agreement by November 15, 1999, or such EPC Agreement has not been finally
approved and executed by such date, Contractor may invoice Owner for [*] and
Owner shall pay such invoice within fifteen (15) days of receipt, provided
that this Limited Notice to Proceed shall remain in full force and effect
notwithstanding such invoice and payment, pending final approval and
execution of the EPC Agreement and delivery of an Authorization to Proceed
thereunder. If Contractor has not received an Authorization to Proceed under
the EPC Agreement by December 15, 1999, or such EPC Agreement has not been
finally approved and executed by such date, Contractor may invoice Owner for
an additional [*] and Owner shall pay such invoice within fifteen (15) days
of receipt, provided that this Limited Notice to Proceed shall remain in full
force and effect notwithstanding such invoice and payment, pending final
approval and execution of the EPC Agreement and delivery of an Authorization
to Proceed thereunder. This
<PAGE>
Mr. Gerald P. Burke
September 10, 1999
Page 2
letter does not release Contractor to perform any other services anticipated
under the EPC Agreement, except at its sole risk, and Contractor specifically
agrees not to perform any additional services at Owner's premises until released
by Owner with respect to such additional services.
Owner and Contractor agree to use good faith efforts to proceed with
the negotiation, approval and execution of the EPC Agreement. Notwithstanding
this letter, or any past or future discussions or other communications between
the Parties, neither of the Parties will have any liability or obligation
whatsoever to the other with respect to entering into the EPC Agreement. If
either Party chooses to rely to its detriment on the expectation that the other
will, in fact, enter into the EPC Agreement, such reliance is undertaken at that
Party's sole risk, and the other Party will have no liability or responsibility
for any adverse consequences if no such agreement is signed, regardless of the
reason.
TENASKA GEORGIA I, L.P.
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /S/
------------------------
Title: Vice President
This Limited Release is acknowledged and accepted, effective as of September 10,
1999.
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation
By: /S/
------------------------
Title: Sr. Vice President
Attachment
<PAGE>
- --------------------------------------------------------------------------------
EPC-Exhibit C
TENASKA GEORGIA I, L.P.
Page 1 of 2
TENASKA GEORGIA GENERATING PROJECT Date 09/10/99
- --------------------------------------------------------------------------------
As described in Article 20 of the draft EPC Agreement of September 10, 1999,
Owner may issue a Limited Notice to Proceed prior to the issuance of an
Authorization to Proceed. During this Limited Notice to Proceed, the Contractor
will start engineering and procurement functions in preparation for construction
activities. The following activities are expressly authorized during this
Limited Notice to Proceed.
1. Perform geotechnical investigations at the plant site.
2. Proceed with engineering and procurement functions, as the Contractor
deems necessary to support the Project Schedule. These activities may
include the following:
- Geotechnical investigation subcontract.
- Engineering to evaluate geotechnical data and develop
foundation design criteria.
- Project planning and schedule.
- Develop engineering design criteria.
- Coordinate General Electric Engineering Services.
- Prepare General Arrangement Drawings.
- Issue site preparation drawings.
- Initiate turbine generator foundations.
- Initiate building architectural design.
- Finalize Project Schedule.
- Prepare Project Design Manual.
- Prepare General Construction Specifications.
- Prepare Project Execution Strategy (i.e., Project procedures
manual)
- Prepare Site Specific Construction Manuals - (Environmental,
Health & Safety and QA).
- Prepare preliminary P&ID's.
- Initiate underground utility drawings.
- Initiate piping layouts.
- Prepare electrical one-lines.
- Prepare electrical load flow studies.
- Initiate electrical grounding design.
- Perform necessary design, specification preparation, bidding,
contract negotiations, and awards for procurement of stacks,
silencers, field erected tanks, generator breakers, iso-phase
bus, power distribution center (MCC, switchgear, etc.),
auxiliary transformers, and step-up transformers.
- Perform necessary design and specification preparation for the
compressed air system, plant control system, and CEMS.
<PAGE>
- --------------------------------------------------------------------------------
EPC-Exhibit C
TENASKA GEORGIA I, L.P.
Page 2 of 2
TENASKA GEORGIA GENERATING PROJECT Date 09/10/99
- --------------------------------------------------------------------------------
- Perform engineering functions, as required, to support Owner's
permit applications.
3. Support GE ODM Meeting.
Owner may terminate this contract during the Limited Notice to Proceed
period provided that the following cancellation charges are paid at the
time of termination. Contractor shall be paid (1) actual termination
costs incurred by Contractor in terminating all equipment purchase
orders; and (2) Contractor's actual costs of termination which are in
addition to item (1) plus 10%, provided Contractor's actual costs of
termination shall not include any charges for direct or indirect
general and administrative costs or allocations of overhead, but in no
event shall Contractor be entitled to receive more than the applicable
Cumulative Cancellation Charge listed below.
<TABLE>
<CAPTION>
Cumulative
Event Cancellation Charge
<S> <C>
September 15, 1999 $100,000
October 1, 1999 $225,000
October 15, 1999 $325,000
November 1, 1999 $425,000
November 15, 1999 $1,147,500
December 1, 1999 $2,662,809
December 15, 1999 $2,917,809
After Authorization to Proceed See Article 18 EPC Agreement
</TABLE>
The Cumulative Cancellation Charge shown above for any date shall
remain in effect until the next date shown on the chart at which time
the Cumulative Cancellation Charge shall be increased to the amount
shown.
During the period from September 10, 1999 until the earlier of (1)
delivery of an Authorization to Proceed under the EPC Agreement or (2)
December 31, 1999, Owner shall have the right, prior to execution of
each of Contractor's purchase orders, to review the cancellation
provisions of such purchase order.
The above cancellation charges do not include any cancellation charges
related to the Turbine Contract. In the event that, after the
assignment of the Turbine Contract, Contractor must pay any
cancellation charges that are currently provided for under the Turbine
Contract, the above charges will be increased by an amount equal to
such cancellation charges.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT D
ACCEPTANCE TEST GUIDELINES,
PROCEDURES AND SPECIFICATIONS
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit D
TENASKA GEORGIA GENERATION PROJECT
Page 1 of 20
- --------------------------------------------------------------------------------
ACCEPTANCE TEST GUIDELINES, PROCEDURES AND SPECIFCATIONS Date 9/13/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Section
- --------
<S> <C> <C>
1 Introduction and General Requirements....................................................................2
2 Owner Tests..............................................................................................5
2.1 Performance Tests...............................................................................5
2.1.1 Concepts and Objectives................................................................5
2.1.2 General Requirements...................................................................5
2.1.3 Guaranteed Commercial Operation Performance............................................7
2.1.4 Integrated Plant Systems Tests.........................................................9
2.1.5 Final Report...........................................................................9
2.2 Demonstration Tests............................................................................10
2.2.1 General Requirements..................................................................10
2.2.2 Demonstration Tests Required for Commercial Operation.................................11
2.2.3 Demonstration Tests Not Required for Commercial Operation.............................12
2.2.4 Final Report..........................................................................13
2.3 Emissions Tests................................................................................13
2.3.1 General Requirements..................................................................13
2.3.2 Compliance Test Report................................................................15
2.4 Availability Tests.............................................................................15
2.4.1 Unit AvailabilityTests...................................................................15
2.4.2 Plant Availablity Test...................................................................16
3 PECO Tests..............................................................................................17
3.1 Utility Capacity Test..........................................................................17
3.2 Procedures and Test Requirements...............................................................17
3.3 Standard Conditions............................................................................20
3.4 Final Report...................................................................................20
</TABLE>
<PAGE>
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EPC - Exhibit D
TENASKA GEORGIA GENERATION PROJECT
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ACCEPTANCE TEST GUIDELINES, PROCEDURES AND SPECIFCATIONS Date 9/13/99
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All Section references in this Exhibit D shall be to Sections in this Exhibit D
unless otherwise specifically stated.
SECTION 1 INTRODUCTION AND GENERAL REQUIREMENTS
1.l This Exhibit describes the Acceptance Test procedures, guidelines and
specifications for the Georgia Generation Project located in Heard
County, Georgia. The simple cycle generation plant is comprised of six
(6) General Electric PG7241FA gas turbine-generators.
1.2 The Acceptance Tests described in this Exhibit fall into two (2)
categories: Owner Tests and PECO Tests. The Owner Tests, which are
covered under Section 2.0 of this Exhibit D, consist of Performance
Tests (including Component Tests) if required, Demonstration Tests,
Emissions Test and Availability Test. The PECO Tests, which are covered
under Section 3.0 of this Exhibit D, consist of a Utility Capacity Test
and an Evaporative Cooler Test.
1.3 During all Acceptance Testing the plant and equipment will be operated
within normal design limits of the equipment and in a manner consistent
with Good Utility Practice for continuous long-term operation, and the
gas turbine control temperatures shall not exceed manufacturer's
recommendation for continuous long-term operation. During testing, the
Plant will be operated from the control room with systems normally
operated in automatic operating in the automatic mode.
During the Acceptance Testing period, the Contractor will develop a
daily testing schedule and submit it to Owner at least twelve (12)
hours prior to testing. Contractor will notify owner of any changes in
the schedule as soon as possible. Contractor will always notify Owner
at least one (1) hour prior to start of any given test.
1.4 During the Performance Tests (Exhibit D, Section 2.1), the Gas Turbine
Fuel Oil Firing Test (Section 2.2.2.1), the Minimum Load Test (Section
2.2.2.8), the Unit Availability Test (Section 2.4), and the Utility
Capacity Test, (Section 3.0) stack emissions shall be equal to or less
than the permit limits included in Exhibit G.
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Verification of stack emissions shall be performed using the CEMS
(referred to as the "CEMS Requirements" in Section 12.2(d) of the EPC
Agreement). CEMS equipment shall be tested in accordance with the
applicable requirements of 40 CFR Pt. 60, Appendix F and 40 CFR Pt. 75,
Appendix A, as appropriate, prior to the start of Acceptance Testing
and the CEMS shall be in service throughout the tests.
Contractor shall be responsible for the field functional testing,
calibration testing of the CEMS prior to all Acceptance Testing.
Contractor shall be responsible for developing CEMS certification
protocol and calibration. The certification protocol shall be submitted
to the Owner for Georgia Department of Natural Resources approval at
least 90 days in advance of the certification and calibration.
1.5 For the purposes of this exhibit, the term "Unit" refers to the gas
turbine being tested at one time. The "Plant" refers to all completely
installed gas turbines at the time of the Plant test.
1.6 Acceptance Testing will be conducted on the Unit. The tests will be
conducted after installation of equipment for each gas turbine.
Temporary instrumentation will be used if permanent plant
instrumentation is not available and if data is required. During
Acceptance Testing the Unit will operate with normal plant staffing.
All operating functions will be conducted by the permanent operating
staff and the Contractor's personnel will provide supervision only and
will not perform any hands-on operating functions. The Unit will run in
a normal manner with no required equipment shutdown to reduce auxiliary
load. Only equipment required for normal operation will be in
operation. During the Performance Test for both natural gas and oil
operation, the demineralizer raw water pumps and the portable
demineralizer trains will not be in service.
1.7 During all Acceptance Testing the Unit shall be capable of operating in
compliance with all permit limits and requirements as measured by plant
instrumentation.
1.8 The Owner will cooperate with Contractor to attempt to complete the
Performance and PECO Tests before [*] of gas turbine operation have
accumulated on each of the six gas turbine Units. If more than [*] have
elapsed before the Performance and PECO Tests are completed, then the
gas turbine manufacturer's representative may inspect the equipment to
determine whether the units are in the new and clean condition. If the
manufacturer's representative determines that the Units are not in the
new
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EPC - Exhibit D
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and clean condition, the Contractor shall clean the Units by off-line
water washing per the manufacturer's instruction manual. If the Owner
at it's sole discretion operates the Plant in excess of [*] , the
performance degradation schedule included as an attachment to Appendix
C in Exhibit H shall be used.
1.9 The general methods outlined in the applicable ASME Performance Test
Codes will be used as a guide to the extent not in conflict with other
requirements of the Agreement. Acceptance Testing procedures for all
plant Acceptance Testing (including Component Testing) shall be
developed by the Contractor and shall be generally as described in the
General Electric Contract for Purchase, Exhibit H, Appendix C.
1.10 The gas turbine net electrical output will be measured using the
utility kilowatt hour meter(s) on the 500 kVhigh voltage (secondary)
side of the generator step-up transformers. The Metering Equipment will
meet the accuracy standards established in the latest revision of
Standard C12.1 of the American National Standards Institute. Inc.
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Section 2 Owner Tests
2.1 Performance Tests
2.1.1 Concepts and Objectives
2.1.1.1 The objective of the Performance Tests will be to determine if each gas
turbine achieves the guarantees of Commercial Operation Net Output
operating on natural gas as set forth in Section 13.3 of the Agreement
and of Commercial Operation Net Heat Rate operating on both natural gas
and fuel oil set forth in Section 13.4 of the Agreement.
2.1.1.2 The Performance Tests will be an input/output Test for individual gas
turbines generally in accordance with ASME PTC 22-1997, and where
applicable ASME PTC 46-1996, Performance Test Code on Gas Turbine
Performance and Overall Plant Performance respectively, with
measurements of additional parameters required to assure that the gas
turbines are operating at the Basis of Guarantee or to enable
correction of measured performance to the Basis of Guarantee.
Concurrent with the input/output Performance Test and Net Equipment
Maximum Electrical Output Test, measurements shall be taken as required
to allow calculation of Component performance for the gas turbines.
2.1.1.3 During the performance Test, the conditions that each gas turbine are
operating under, will most likely not be equal to design. For this reason
Correction Factors will be applied to the as-tested values of gas turbine
Net Electrical Output and Heat Rate. The following parameters will be
corrected for during the Performance Tests are:
- Compressor Inlet Dry bulb Temperature
- Compressor Inlet Relative Humidity
- Ambient Barometric Pressure
- Fuel Analysis & Temperature
- Power Factor
2.1.2 General Requirements
Data for each Performance Test will consist of instrument readings taken at no
greater than ten-minute intervals over a two (2) hour continuous time span after
steady-state conditions and
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following a one (1) hour pretest stabilization period have been
established. Four consecutive thirty minute tests will be conducted,
and the average of the four tests' results will be used to determine
the achievement of the Preliminary Liquidated Damages Performance
Guarantees.
2.1.2.2 The gas turbine will be considered to be in a steady-state condition
when the turbine wheel space temperatures do not change more than 5
degrees F in 15 minutes prior to the test point.
2.1.2.3 Barometric pressure at the Plant premises will be located near the CTG
inlet and measured with a digital barometer with a calibration
certificate. The accuracy will be in accordance with paragraph 4.13.8
of ASME PTC-22 (1997).
2.1.2.4 To monitor compressor inlet temperature for the Performance test, a
minimum of four RTD's or thermocouples will be mounted directly into
ductwork through nipple connections upstream of the compressor inlet.
If the evaporative cooler is in service, the compressor inlet relative
humidity shall be determined by analysis, using the ambient dry bulb,
ambient wet bulb, and the compressor inlet wet bulb temperatures. If
the evaporative cooler is not in service, the compressor inlet relative
humidity shall be the measured ambient relative humidity.
2.1.2.5 Ambient conditions will be measured near the gas turbine inlet air
filter. Ambient dry bulb temperature will be measured with a
thermometer or thermocouple. Ambient relative humidity or wet bulb
temperatures will be determined using a psychometer.
2.1.2.6 The Transco natural gas custody transfer meter will be used for the
combustion turbine performance related calculations applicable when
burning gas. If all parties agree, the GE installed individual
combustion turbine high accuracy inlet orifice plate meters will be
used for performance calculations in lieu of the Transco meter. Gas
fuel flow to the plant will be measured with a flat plate orifice
installed in accordance with the requirements of ASME MFC-3M-1989 and
ISO-5157-1. Tenaska/Transco may consider AGA-3 as the preferred
standard. The upstream pressure will be measured with a precision test
instrument, calibrated differential pressure transducer or gauge, and
the gas temperature with a thermometer or thermocouple.
2.1.2.7 . Gas samples will be taken from the fuel gas system during the gas
fired tests for laboratory measurement of higher heating value and
specific gravity. The higher and
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lower heating value will be determined from the laboratory gas analysis
per ASTM D3588. At least one gas sample will be taken every 30 minutes
during the tests. The gas chromatograph on site will be used for backup
and verification of analyses. If mutually agreed by all parties, the
chromatograph results may be used for the fuel gas constituent
analysis, the heating value will than be determined by Table 4.12.6 of
ASME PTC-22.
2.1.2.8 Calculation of gas flow will be done in accordance with the latest AGA
standards using compressibility factors calculated from Detail Method
of AGA Report No. 8 - 1994.
2.1.2.9 Corrected Commercial Operation Output for each CTG will be determined
using the CTG net revenue kilowatt-hour meter on the high voltage
(secondary) side of the generator step-up transformers. The As-tested
power will be corrected for ambient conditions. The corrected value of
Commercial Operation Output will be determined as outlined in
Attachment I of this Exhibit. An example calculation is included as
Attachment II of this Exhibit.
2.1.2.10 The Corrected Commercial Operation Heat Rate for each CTG will be
determined as outlined in Attachment I of this Exhibit:
2.1.3 Guaranteed Commercial Operation Performance
The total Plant performance will be determined at the conclusion of the
six (6) individual gas turbine performance tests. The total Plant
As-Tested Output will be determined by the sum of the six (6)
individual CTG Corrected Commercial Operation Output values. The total
Plant heat rate will be determined by dividing the sum of the six
individual corrected Heat Consumption values by the total facility
output (as determined above).
The guaranteed performance may be summarized on an individual Unit
basis as follows.
- Commercial Operation Net Output for each Unit (natural gas):
156,410 kW
- Commercial Operation Heat Rate for each Unit (natural gas):
10,683 Btu/kW-Hr (HHV)
- Commercial Operation Heat Rate for each Unit (oil): 10,821
Btu/kW-Hr (HHV)
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2.1.3.1 Interim Performance Requirements
- Unit Net Power Output (natural gas): [*]
- Unit Net Heat Rate (natural gas): [*]
- Unit Net Heat Rate (oil) [*]
2.1.3.2 Basis of Guarantee: The following parameters will define the base
operating conditions for the Performance Tests. This will be the basis
for any corrections or adjustments to the "as-tested" values for
Commercial Operation Output and Commercial Operation Net Heat Rate
parameters.
- Customer Gas composition Fuel Gas Analysis included in Exhibit
H, Appendix A.
- Gas turbine compressor inlet temperature: 77 DEGREE F
- Gas turbine compressor inlet relative humidity 88%
- Fuel Gas Temperature 60 DEGREE F
- Fuel oil will be considered to be a Light Distillate or Diesel
Fuel as defined in Appendix A in GEI-41047H.
- Ambient conditions
Dry bulb temperature: 94 DEGREE F
Wet bulb temperature: 74 DEGREE F
- Barometric pressure: 14.29 psia (785 ft el)
- Generator power factor as
measured at generator terminals 0.95 lagging
- Generator terminal frequency 60 Hertz
- Evaporative coolers are in service
- Inlet loss (Corrections will be 4 inches of water
allowed only to the extent applied to
GE performance test results)
- Gas Heaters are not in service (Correction for gas heater fuel
consumption will be permitted if heaters are required during
the test).
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2.1.3.3 Instrument measurement uncertainty will be applied to the results of
the Performance Tests based on the accuracy of the individual test
measurements. Measurement uncertainty shall be applied to the test
results before comparison to guaranteed parameters set forth in
Sections 2.1.3.1 and 2.1.3.2. An evaluation of the instrument
uncertainty will be included in the proposed detailed test procedure
and mutually agreed upon by Owner and Contractor prior to conducting
the Performance Tests. Total measurement Uncertainty (including effects
from bias and precision errors) shall not exceed 1.0% on Commercial
Operation Net Output and 1.5% on Commercial Operation Net Heat Rate.
The maximum values of the uncertainty (stated above) shall be applied
as a tolerance to the Guarantee Output and Heat Rate values for the
purposes of determination of successful Performance Tests.
All kWh measurements used for determining test results will have an
accuracy of + 0.35% or less. All Fuel Gas flow measurements will have
an accuracy of + 0.8% or less.
2.1.4 Integrated Plant Systems Tests
Three (3) Integrated Plant Systems Tests will be performed as part of
the Acceptance Testing for the Plant. At the conclusion of the
individual testing of the initial three (3) Units, a Phase I Integrated
Plant Systems performance test run will be performed with Units 1, 2,
and 3 operating simultaneously.
At the conclusion of the individual testing of the final set of three
(3) Units, a Phase II Integrated Plant Systems performance test run
will be formed with Units 4, 5, and 6 operating simultaneously.
The Phase I and II Integrated Plant Systems tests, described above may
be considered to be the Phase I and II PECO Tests described in Section
3.1.1.
The final Integrated Plant Systems performance test will be performed
with all six (6) units operating simultaneously.
The Integrated Plant Systems Tests will be performed in accordance with
Section 2.1.1 and 2.1.2 of this Exhibit.
The Integrated Plant Systems Performance Tests will verify that the
Plant, when operated
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at the conclusion of Phases I and II and later the entire Plant as a
whole, is not limited in its capability to produce the Commercial
Operation Output. The Integrated Plant Systems Tests will also be used
to confirm that the plant auxiliary loads including generator step up
transformer losses associated with the individual Unit performance
tests were properly accounted for and any corrections were made
accurately.
2.1.5 Final Report
A written report of the results of the Performance Tests for each gas
turbine will be prepared. The report will include, as a minimum, the
following:
- A copy of the approved test procedure with uncertainty
analysis.
- Date and time of the test start and finish.
- Description of the conditions under which the tests were
performed including meteorological information.
- Summary of instrument calibration data including signed and
approved instrument calibration forms.
- Summary of all test data and results including any tests
conducted on individual components.
- Summary of test instrument measurement uncertainties.
- Comparison of test results to the performance guarantees.
- Conclusions from the test results.
2.2 Demonstration Tests
Demonstration Tests will be conducted to demonstrate satisfaction of
the requirements for plant or system capabilities set forth in Section
2.2.2 and 2.2.3.
2.2.1 General Requirements
Demonstration Tests required for Commercial Operation as delineated in
Section 2.2.2 below will be conducted in accordance with the
requirements for notification for Acceptance Testing as described in
Section 12.2(b) of the Agreement. Demonstration Tests not required for
Commercial Operation delineated in Section 2.2.3 below; will be
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conducted in accordance with the requirements for notification for
Acceptance Testing described in Section 12.2 of the Agreement.
Units # 2 and # 3 will not require commissioning or testing on fuel oil
as a condition of Commercial Operation. Commissioning on fuel oil and
completion of the Deferred Tests shall be performed after Commercial
Operation. The Deferred Tests are those tests which require fuel oil
firing as follows:
a. Net Equipment Heat Rate Test (Section 2.1) on fuel oil.
b. Air Emissions Test (Section 2.3) on fuel oil.
c. Gas Turbine Fuel Switching Test (Section 2.2.2.2).
d. Minimum Load Operation at 50% Base Load on fuel oil (Section
2.2.2.8)
e. Gas Turbine Startup on fuel oil (Section 2.2.2.3).
f. Gas Turbine Load Rate Change on fuel oil (Section 2.2.2.5).
g. Gas Turbine Fuel Oil Firing (Section 2.2.2.1).
2.2.2 Demonstration Tests Required for Commercial Operation
The Demonstration tests required for commercial operation is summarized
as follows.
- Gas Turbine Fuel Oil Firing
- Gas Turbine Fuel Switching
- Gas Turbine Startup
- Startup Durations
- CTG Response Characteristics
- Generators Leading/Lagging Operation
- Minimum Load Operation
- Automatic Generation Control
The following will be the acceptance criteria for the Owner
Demonstration Tests required for Commercial Operation unless noted
otherwise.
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2.2.2.1 Gas Turbine Fuel Oil Firing
The gas turbine-generators shall operate for one (1) hour at base load
in accordance with the Demonstration Test included in Exhibit H,
Appendix C, Section 6.8, while fired 100% with fuel oil without any
combustion system or gas turbine temperature alarms.
2.2.2.2 Gas Turbine Fuel Switching
Each gas turbine shall switch fuel (natural gas to fuel oil and back
from fuel oil to natural gas) at conditions in accordance with the
Demonstration Test included in the General Electric Contract for
Purchase, Exhibit H, Appendix C, Section 6.2.
2.2.2.3 Gas Turbine Startup
Each gas turbine shall startup on natural gas and fuel oil in
accordance with the Demonstration Test included in Exhibit H, Appendix
C, Section 6.4.
2.2.2.4 Reserved
2.2.2.5 Gas Turbine Response Characteristics
The gas turbine-generators shall demonstrate the loading/unloading rate
in accordance with the Demonstration Test included in Exhibit H,
Appendix C, Section 6.5.
2.2.2.6 Reserved
2.2.2.7 Generators Leading/Lagging Operation
The gas turbine-generators shall operate at the power factors in
accordance with the Demonstration Test included in Exhibit H, Appendix
C, Section 6.1.
2.2.2.8 Minimum Load Operation
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Each gas turbine shall operate stably at 50% of base load, for a period
of two (2) hours while maintaining emissions compliance in accordance
with the Demonstration Test included in Exhibit H, Appendix C, Section
6.3..
2.2.2.9 Automatic Generation Control
Automatic generation control shall be demonstrated for the entire
facility and individual gas turbines from 50% base load to maximum
output. Two separate tests (each in Phase I and again in Phase II) will
be performed; the first, with the gas turbine being tested, and second
with all of the installed gas turbines for that Phase in service. In
each test the automatic generation control equipment will be used to
balance load on the gas turbine(s) ramping the unit(s) from 50% to base
load. Plant response characteristics shall meet and can be used to
satisfy the AGC requirements referred to in item 2.2.2.5 above.
2.2.2.10 Reserved
2.2.3 Demonstration Tests Not Required for Commercial Operation
The Demonstration tests not required for commercial operation is
summarized as follows.
- Noise
The following will be the acceptance criteria for the Owner
Demonstration Tests not required for Commercial Operation unless noted
otherwise.
2.2.3.1 Noise
Noise emission audits for each Phase shall be conducted by the
Contractor during operation of the Facility to verify that plant noise
emissions do not exceed the noise emissions limits as defined in
Section 3.25 of Exhibit A. The noise emissions audit shall be conducted
at maximum plant output with normal operating equipment in service and
building ventilation fans in operation. Satisfactory demonstration that
the noise emissions with all six units in operation at the completion
of Phase II shall be a condition for Final Acceptance.
2.2.4 Final Report
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A written report of the Demonstration Tests performed under Section
2.2.2 and Section 2.2.3 will be prepared. The report will include, as a
minimum, the following:
2.2.4.1 Date and time of each test
2.2.4.2 Names of the participants who witnessed the tests
2.2.4.3 Description of the conditions under which the tests were performed
2.2.4.4 Summary of all test data and results
2.2.4.5 Conclusions from the test results
2.3 Emissions Tests
2.3.1 General Requirements
The Initial Determination of Compliance (Source Emission Test) and
Continuous Determination of Compliance for CO and NOx (CEMS design and
Quality Assurance Testing) shall be conducted by the Contractor for the
gas turbine stacks in accordance with Georgia Department of Natural
Resources (GDNR) and Prevention of Significant Deterioration (PSD)
permit to construct as included in Exhibit G of this Agreement.
Conducting the Emission Test shall not be a precedent condition for
Commercial Operation of the Plant..
Fuel fired during the Emission Tests shall be in accordance with the
Fuel Analyses, GE Gas Fuel Specification GEI-41040F, and GE Gas Turbine
Liquid Fuel Specifications GEI-41047H, included in Exhibit H, Appendix
A.
2.3.1.1 The Source Emission Test must be conducted no later than 60 days after
achieving the maximum production rate at which each gas turbine will be
operated but no later than 180 days after initial startup of each unit.
Tests will be made for the following pollutants:
a. NOx and O2 - EPA Method 20 (or equivalent)
b. CO - EPA Method 10 or 10B
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c. PM-10 - EPA Method 201A and 202 or Method 5 modified
to include back-half condensables, including an
allowance for ambients
d. VOC - EPA Method 25A modified to exclude methane and
ethane
f. Opacity - EPA Method 9
g. Moisture - EPA Method 4
h. Flue Gas flow - EPA Method 2
Combustion turbine emissions testing and system adjustments are
conducted in accordance with GE document GEK-28172D, Standard Field
Testing Procedure for Emissions Compliance, included in Exhibit H;
provided that in the event of a conflict between the foregoing document
and the GDNR Emission Test requirements, the GDNR requirements shall
prevail.
2.3.1.2 The Contractor shall submit a Source Emission Test plan to the Owner
for GDNR approval at least 45 days in advance of the test date and
notify the Owner and the GDNR at least thirty (30) days in advance of
the exact scheduled test date.
Consistent with the Air Permit in Exhibit G, Contractor guarantees that
the hourly average exhaust emissions from each of the six GT units
shall not exceed the following concentrations or emission rates in
steady-state operation from base load down to 50% of gas turbine base
load as verified by GDNR-approved compliance testing.
2.3.1.3 The CEMS shall measure NOx, CO, and O2 and meet the applicable
quality-assurance requirements specified in 40 CFR Pt. 60, Appendix F,
Procedure 1 and any other requirements of the Air Quality permit
attached as Exhibit G. If applicable, the CEMS will be required to meet
the design and performance specifications, pass the field tests, and
meet the installation requirements and data analysis and reporting
requirements specified in the applicable performance specifications in
40 CFR Pt. 75, Appendix A.
The Contractor shall notify the customer at least 30 days prior to any
required relative Accuracy Test audit to provide them the opportunity
to observe the testing.
2.3.2 Compliance Test Report
The Compliance Test report shall be prepared by the Contractor and be
submitted to the Owner for submittal to the GDNR within 60 days after
successful completion of the test.
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All original monitoring and quality assurance data on the CEMS will be
maintained by and become the property of the Owner.
2.4 Availability Tests
2.4.1 Unit Availability Tests
The Unit Availability Test will demonstrate the ability of each gas turbine Unit
to operate reliably with a 99% availability or greater. The Unit Availability
Test will be deemed satisfied when each Unit operates reliably and with a 99%
availability for 12 consecutive hours per day over a period of 2 consecutive
days or Owner provides Contractor written notification that the Availability
Test is satisfied
During each hour of the Unit Availability Test, the Unit will be expected to
operate above the applicable gas-fired, base load Guaranteed Net Equipment
Electrical Output value shown in Exhibit H, Appendix C, Table 1-1. Credit for
Unit output above the applicable value in the tables will not be allowed. No
corrections to Unit output will be made unless ambient conditions exceed the
test rating conditions in Section 2.1.3.3. The Unit Availability Test will be
deemed successful if the corrected net energy (kWh) value divided by the number
of hours operated during the Availability Test is greater than 0.99 multiplied
by the the applicable Guaranteed Net Equipment Electrical Output value from
Exhibit H, Appendix C, Table 1-1.
If the gas turbine Units are available to run but cannot due to reasons beyond
Contractor's control, the Availability Test will be deemed satisfied when :
1) each Unit operates reliably and with a 99% availability for 40 hours, or
2) 30 calendar days have passed since Contractor has made the Units available
for the Availability Test.
During the test all necessary systems for normal and continuous
operation for the Phase shall be in final configuration.
At the Contractor's option, the PECO Tests (Section 3.0) may be
conducted during the Availability Test.
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2.4.2 Plant Availability Test
A Plant Availability Test will be performed prior to Plant Commercial Operation.
The Plant Availability Test will demonstrate the ability of the Plant to operate
reliably with a 99% availability or greater. The Plant Availability Test will be
deemed satisfied when the Plant operates reliably and with an availability of
99% for 12 consecutive hours per day over a period of 2 consecutive days or
Owner provides Contractor written notification that the Plant Availability Test
is satisfied. For purposes of the Plant Availability Test, any non-availability
attributed to the Equipment supplied by General Electric in accordance with
Exhibit H will be excused and such Equipment will be deemed to have an
availability of 99%.
If the Plant is available to run but cannot due to reasons beyond Contractor's
control, the Availability Test will be deemed satisfied when :
2) the Plant operates reliably and with a 99% availability for 40 hours, or
3) 30 calendar days have passed since Contractor has made the Plant available
for the Availability Test.
SECTION 3 PECO TESTS
The PECO Tests shall consist of a Utility Capacity Test and a Gas
Turbine Evaporative Cooler Test.
3.1 Utility Capacity Test
In general, the Utility Capacity Test herein will comply with Exhibit
5.01, Section 5.01 of the Power Purchase Agreement (PPA) included as an
Attachment III to this Exhibit.
3.1.1 The objective of the Utility Capacity Test is to determine the maximum
Net Output of the facility as measured, based on actual performance of
the facility, and use test data to
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit D
TENASKA GEORGIA GENERATION PROJECT
Page 18 of 20
- --------------------------------------------------------------------------------
ACCEPTANCE TEST GUIDELINES, PROCEDURES AND SPECIFCATIONS Date 9/13/99
- --------------------------------------------------------------------------------
assist Owner in establishing Contract Capacity as outlined in the PPA.
The test shall be conducted with the simultaneous operation of all the
gas turbines associated with each Phase (Units 1, 2, & 3 in Phase I,
Units 4,5, & 6 in Phase II) at their guaranteed output as established
in Exhibit H, Appendix C. The evaporative cooler shall be in service
provided ambient temperatures exceed 60oF. As part of the Utility
Capacity Test, a Gas Turbine Evaporative Cooler Test shall be conducted
as specified in Section 3.2.2.
3.1.2 In-plant station instrumentation and metering in conjunction with
precision instrumentation will be used so that the PECO Tests can be
conducted with minimal special preparation.
3.1.3 Test corrections will be used to adjust the tested output capability of
the Plant to Standard Conditions listed in Section 3.3. These Standard
Conditions include the variables which most significantly affect the
capacity capability of the Plant.
3.1.4 Manufacturer's data and performance curves will be used for correcting
test data to Standard Conditions listed in Section 3.3.
3.2 Procedures and Test Requirements
3.2.1 General Requirements for the Utility Capacity Test
3.2.1.1 Contractor will develop in coordination with Owner, detailed
Performance Test Procedures thirty (30) days prior to the commencement
of Acceptance Testing.
3.2.1.2 The Capacity Test will be two (2) hours in duration. Data will be
collected during two (2) 60-minute intervals during the Capacity Test.
3.2.1.3 The Capacity Test will be conducted with all normally operated
auxiliaries in service and with the Plant operated at a power factor
between 0.95 leading to 0.95 lagging.
3.2.1.4 The Plant will be operated on natural gas.
3.2.1.5 Owner will provide notice to PECO at least ten (10) days before the
Capacity Test. Utility personnel will be allowed to witness the
Capacity Test.
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit D
TENASKA GEORGIA GENERATION PROJECT
Page 19 of 20
- --------------------------------------------------------------------------------
ACCEPTANCE TEST GUIDELINES, PROCEDURES AND SPECIFCATIONS Date 9/13/99
- --------------------------------------------------------------------------------
3.2.1.6 Contractor will provide qualified test engineers to direct the Utility
Test, assist with data collection and perform calculations.
3.2.1.7 Reactive power data will be collected from the Utility (kWh) meter used
for measuring net reactive power output to the transmission system. The
change in meter readings over a set time period will be used to
calculate a net capacity value.
3.2.1.8 The output of the gas turbine generators shall be corrected in
accordance with the conditions specified herein. The corrections will
then be applied to the Utility kWh meter readings.
3.2.1.9 Calculated contract capacity shall be rounded off to the nearest 100
kW.
3.2.1.10 No adjustments shall be made to the capacity calculations for
tolerances due to measurement uncertainties.
3.2.1.11 Data shall be collected at ten minute intervals for each one (1) hour
test run.
3.2.1.12 Computations for correcting capacity shall be performed immediately
following each test run.
3.2.1.13 The preliminary corrected capacity results shall be available upon
completion of the test run calculations.
3.2.1.14 The Plant Net Capacity shall be the average of the Net Plant Output
corrected to Standard Conditions (Section 3.3) calculated for each test
run.
3.2.1.15 A preliminary report summarizing the test results will be prepared and
issued by the Contractor within 24 hours upon which the test is
completed. Contractor shall issue Final Report within two (2) weeks of
test completion.
3.2.1.16 Contractor may retest if not satisfied with the test results.
3.2.2 Gas Turbine Evaporative Cooler
Gas turbine evaporative cooler effectiveness shall be determined by
test data as follows:
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit D
TENASKA GEORGIA GENERATION PROJECT
Page 20 of 20
- --------------------------------------------------------------------------------
ACCEPTANCE TEST GUIDELINES, PROCEDURES AND SPECIFCATIONS Date 9/10/99
- --------------------------------------------------------------------------------
X (Dbt - CITt) / (Dbt - WBt)
Test evaporative cooler effectiveness will be used to determine the
compressor inlet temperature at Standard Conditions (Section 3.3) as
follows:
CITsc - Dbsc - X (Dbsc - Wbsc) = 94 - X (20)
where:
X = tested evaporative cooler effectiveness
DBt = dry bulb temperature, DEGREE F
CITt = compressor inlet temperature, DEGREE F
WBt = wet bulb temperature, DEGREE F
t = at test conditions
sc = at standard conditions
DBsc = 94 DEGREE F
WBsc = 74 DEGREE F
The Evaporative Cooler Test shall be performed only if : (1) the dry
bulb temperature exceeds 60 DEGREE F, and (2) there is a minimum
10 DEGREE F difference between wet bulb and dry bulb temperatures.
If the Evaporative Cooler Utility Test cannot be performed due to
ambient restrictions in stated above, then the design evaporative
cooler effectiveness (85%) will be used during the interim to determine
Plant Net Capacity. The evaporative cooler will be tested independently
at earliest time acceptable to all parties (PECO, Owner and EPC
Contractor).
3.3 Standard Conditions
Test data from the Utility Test described in this Section 3.0, shall be
corrected to the Standard Conditions set forth in Exhibit 5.01 of the
PPA. Correction factors shall be developed by the Contractor with the
participation of the turbine manufacturer as part of the procedure for
performing the test and at the Contractor's option, in accordance with
the guidelines set forth in ASME PTC-22 for the gas turbine unit.
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit D
TENASKA GEORGIA GENERATION PROJECT
Page 21 of 20
- --------------------------------------------------------------------------------
ACCEPTANCE TEST GUIDELINES, PROCEDURES AND SPECIFCATIONS Date 9/10/99
- --------------------------------------------------------------------------------
(a) 3.3.1 Test data from the Utility Test described in this
Section 3, shall be corrected to the Standard Conditions set forth in
Exhibit 5.01 of the PPA.
3.4 Final Report
3.4.1 A Final Report will be provided in writing to the Owner within fourteen
(14) days of the test completion.
3.4.2 A written report of the results of the PECO Tests for the facility will
be prepared. The report will include, as a minimum, the following:
- A copy of the approved test procedure .
- Date and time of the test start and finish.
- Description of the conditions under which the tests were
performed including meteorological information.
- Summary of instrument calibration data including signed and
approved instrument calibration forms.
- Summary of all test data and results including any tests
conducted on individual components.
- Summary of test instrument measurement uncertainties.
- Comparison of test results to the performance guarantees.
- Conclusions from the test results.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT D
ATTACHMENT I
<PAGE>
[*] The following five (5) pages have been omitted and filed separately with
the Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT D
ATTACHMENT II
<PAGE>
[*] The following nine (9) pages have been omitted and filed separately with
the Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT D
ATTACHMENT III
PERFORMANCE TEST GUIDELINES AND PROCEDURES
<PAGE>
EXHIBIT 5.01
PERFORMANCE TEST GUIDELINES AND PROCEDURES
Annual Capacity Tests shall be conducted by Tenaska in accordance with Georgia
PPA Capacity Test Procedures.
Temperature measurements for the Capacity Test will comply with ASME Performance
Test Codes PTC 19.3, PTC 22 and PTC 46.
CAPACITY TEST PROCEDURE
1.0 INTRODUCTION
Following is the procedure for conducting the Capacity Test. The Plant
is comprised of gas turbine generators and associated plant equipment.
2.0 CAPACITY TEST
2.1 CAPACITY TEST OBJECTIVE
The objective of the Capacity Test is to determine the net electrical
output capability of the plant to be used in establishing Contract
Capacity.
2.2 CAPACITY TEST PERIOD
The Capacity Test will be conducted over a minimum 4-hour operating
period. As-tested plant capacity will be based on data recorded during
two 60-minute intervals. Results from each of the two one-hour
intervals will be corrected to the rating conditions shown in Table
2-1. The evaporative cooler effectiveness will be calculated from data
taken during the test period, unless the ambient temperature and wet
bulb temperatures are outside the limits specified in Section 2.3.2.2.
If necessary, the Evaporative Cooler Effectiveness Testing can be
performed independent of the Capacity Test at a time mutually agreeable
to PECO and Tenaska. The effectiveness will be used to establish the
standard condition compressor inlet temperature (CIT).
2.3 CAPACITY TEST PROTOCOL
This section outlines the detailed procedures for conducting the
Capacity Test.
<PAGE>
2.3.1 RESPONSIBILITIES
Tenaska will have overall responsibility for conducting the Capacity
Test and for directing operation of the unit during testing. A Test
Coordinator will be assigned by Tenaska. The responsibilities during
and following the conclusion of the Capacity Test will include the
following:
-- Collection of test data.
-- Input manual measurements and calculate specified performance
parameters for test conditions.
-- Preparation and submittal of a preliminary report to PECO
within 48 hours of completing the Capacity Test.
-- Preparation and submittal of the final report to PECO two
weeks after completion of the test.
2.3.2 TEST CONDITIONS
2.3.2.1 GENERAL. General test conditions are as follows:
-- The rating parameters for the Capacity Test herein referred to
as Standard Operating Conditions are shown in Table 2-1.
-- Since test conditions will differ from those shown in Table
2-1, corrections will be calculated and applied to test data.
-- To increase the potential for utilizing the evaporative
cooler, the continuous two-hour test period will be selected
during the afternoon hours.
-- If the Evaporative Cooler Effectiveness Testing cannot be
performed due to not meeting the conditions stated in 2.3.2.2,
the Evaporative Cooler Effectiveness Testing will be conducted
at a time mutually agreeable to Tenaska and PECO. For the
initial Capacity Test (if an Evaporative Cooler Effectiveness
Testing has not already been performed), the manufacturer's
design evaporative cooler effectiveness will be used for the
interim to establish the standard condition CIT as defined in
Section 2.7.1. For subsequent Capacity Tests, the evaporative
cooler
<PAGE>
effectiveness determined in the previous Capacity Test will be
used for the interim to establish the standard CIT as defined
in Section 2.7.1.
2.3.2.2 PREREQUISITES. The following items represent prerequisites for the
initiation of testing:
-- The gas turbine compressor section will be inspected and
cleaned following manufacturers' instructions, if deemed
necessary by Tenaska.
-- The gas turbine Evaporative Cooler Effectiveness Testing will
be performed only when: (1) the dry bulb temperature exceeds
60 DEGREE F, and (2) there is a minimum of 10 DEGREE F
difference between the wet bulb and dry bulb temperatures.
TABLE 2-1
STANDARD OPERATING CONDITIONS
<TABLE>
- ---------------------------------------------------------- ------------------------------------
PARAMETER VALUE
- ---------------------------------------------------------- ------------------------------------
<S> <C>
Ambient Dry Bulb Temperature, DEGREE F 94
- ---------------------------------------------------------- ------------------------------------
Compressor Inlet Temperature, DEGREE F (each gas turbine) To be determined based on the
Evaporative Cooler Effectiveness
Testing described in Section 2.7.1.
- ---------------------------------------------------------- ------------------------------------
Barometric Pressure, Psia 14.29
- ---------------------------------------------------------- ------------------------------------
Ambient Wet Bulb Temperature, DEGREE F 74
- ---------------------------------------------------------- ------------------------------------
Fuel Natural Gas
- ---------------------------------------------------------- ------------------------------------
Generator Power Factor 0.95 leading to 0.95 lagging
- ---------------------------------------------------------- ------------------------------------
</TABLE>
2.3.2.3 PRETEST ACTIVITIES. The following describe pre-test activities that
must be completed prior to beginning the Capacity Test:
-- Notify PECO as required in Section 5.01(c) of the Power
Purchase Agreement. Notify Local Utility prior to start of the
test.
<PAGE>
-- The plant shall be brought on-line and the load increased to
the desired load conditions, which is gas turbine base firing
mode and evaporative cooler in service if conditions are
right.
-- Once the gas turbine reaches the exhaust temperature control,
the plant shall be allowed to stabilize and reach steady-state
conditions. The gas turbine will be considered to be in a
steady-state condition when the turbine exhaust temperatures
do not change more than 5 DEGREE F in 15 minutes.
-- Determine instrumentation status.
-- Check critical cycle parameters via the plant control system
and the gas turbine control system to resolve parameters which
demonstrate significant variance to expected values.
-- After the period of time allowed for unit stabilization has
elapsed, recording of test data shall begin, as determined by
the Test Coordinator.
2.3.2.4 CAPACITY TEST. The plant will be operated with the following
activities to be performed during the Capacity Test:
-- Equipment status will be determined in order to establish that
all necessary systems and equipment are operational and
functional prior to the commencement of the test. Changes in
equipment status and the time of status change will be
recorded in the operator log. A copy of the operator log will
be provided to the test coordinator by operations personnel
during the Capacity Test.
-- The facility and equipment will be operated within normal
design limits of the equipment and in a manner consistent with
good utility practices for continuous long-term operation.
-- During testing the plant will be operated with all normally
operated auxiliaries in service.
-- The gas turbine will be operated on natural gas and at the
manufacturers rating for continuous service.
-- The Test Coordinator will announce the start of the Capacity
Test to all test personnel.
<PAGE>
2.3.2.5 ONE-HOUR RUNS. Each one-hour run will be conducted at the desired load
conditions determined by the Test Coordinator prior to the test.
The following activities will be performed during each one-hour run:
-- The Test Coordinator will announce the start of each one-hour
run.
-- Manual data will be taken at intervals of 10 minutes.
-- Automated data collection will occur at pre-defined intervals
as shown in Table 2-2.
-- The Test Coordinator will announce the end of each one-hour
run.
2.4 DATA COLLECTION
The data collected during the Capacity Test shall include unit
capacity, the test start and stop times, and output data. The data
collected during each one-hour run period shall include the following:
-- Data taken manually from temporary test instrumentation, if
applicable.
-- Data for plant instruments via the plant data acquisition system
(DAS).
-- Record of all alarms and logs from the DAS.
-- Data from plant instruments from the turbine control systems.
Access to data collected manually and data collected through the DAS
will be controlled by Tenaska and will provide all data necessary for
determining the corrected net plant capacity. At the conclusion of the
Capacity Test, preliminary sets of pertinent data will be provided to
PECO. Final performance data will be provided in the Test Report.
If the test is suspended due to anything outside the control of
Tenaska's responsibilities such as interruption of service from Georgia
Transmission Corporation or the gas supplier, the duration of the
Capacity Test will be extended as mutually agreed upon by Tenaska and
PECO.
2.5 TEST DATA REQUIREMENTS
The measurements required to determine the level of achievement during
the Capacity Test are listed in Table 2-2. Additional measurements will
be monitored in order to confirm normal plant performance.
<PAGE>
2.5.1 PERFORMANCE MONITORING AND MEASURING FREQUENCY
Where practical, those parameters listed in Table 2-2 will be monitored
using the DAS. The data will be collected as shown in the Table. Data
collected through the DAS will be logged and printed on one-minute
intervals. The manual data will be collected on ten-minute intervals
during each one-hour period.
TABLE 2-2
REQUIRED PERFORMANCE TEST MEASUREMENTS LOG
<TABLE>
<CAPTION>
- --------------------------------------------------- -------------------------------------------------------------------------------
INSTRUMENTATION MEAS. SAMPLING TEST
DESCRIPTION INSTRUMENT/REMARKS(3) METHOD(2) METHOD FREQUENCY REQT.(1)
- ----------- --------------------- ---------------- ------- ----------- --------
<S> <C> <C> <C> <C> <C>
ELECTRICAL POWER MEASUREMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
Net Plant Output (HV custody transfer meters), Power Meters (2)3 Plant DAS N/A C
kWh's/Pulse Instrument
- -----------------------------------------------------------------------------------------------------------------------------------
Gross Gas Turbine Electrical Output, MW GT reading at generator Plant DAS 1 Minute C
terminals (6)3 Instrument
- -----------------------------------------------------------------------------------------------------------------------------------
Gross Gas Turbine Electrical Output, MVar GT reading at generator Plant DAS 1 Minute
terminals (3)3 Instrument
- ------------------------------------------------------------------------------------------------------------------------------------
Auxiliary Power consumption, kW 4160V Switchgear 1 & 2 (2)3 Plant DAS 1 Minute B
Instrument
- -----------------------------------------------------------------------------------------------------------------------------------
CORRECTION MEASUREMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
CT Compressor Inlet Temperature, DEGREE F Min. of 2 temp indicators per Plant or Test DAS or Manual 1 or 10 C
GT (12+)3 Instrument Minutes
- --------------------------------------------------- -------------------------------- --------------- --------------- ------------ --
Ambient Dry Bulb Temperature, DEGREE F RTD Plant or Test DAS or Manual 1 or 10 C
Instrument Minutes
- --------------------------------------------------- -------------------------------- --------------- --------------- ------------ --
Ambient Wet Bulb Temperature, DEGREE F Psychrometer Plant or Test DAS or Manual 1 or 10 C
Instrument Minutes
- --------------------------------------------------- -------------------------------- --------------- --------------- ------------ --
Ambient Barometric Pressure, psia Barometer Plant or Test DAS or Manual 1 or 10 C
Instrument Minutes
- --------------------------------------------------- -------------------------------- --------------- --------------- ------------ --
</TABLE>
Notes:
(1) Test requirements refers to whether the measurement will be used for
correction calculations or used for backup measurement
C = Used in calculation of net plant capacity; B = Backup measurement
(2) DAS = Data acquisition system
(3) Number of primary instruments if greater than one
- --------------------------------------------------------------------------------
2.5.2 AMBIENT CONDITIONS REQUIREMENTS
The rating conditions (Table 2-1) contain ambient weather conditions at
the plant which are the basis for performance corrections and for
determining the evaporative cooler effectiveness. Tenaska will use
plant and test instrumentation as required to measure compressor inlet
temperature, ambient dry bulb temperature, ambient wet bulb
temperature, and ambient barometric pressure.
2.6 INSTRUMENTATION/DATA ACQUISITION
<PAGE>
The test procedures described in these documents are based on use of
plant instrumentation, supplemented with any special test
instrumentation required.
To assure the best possible accuracy with the available
instrumentation, the following procedures should be used:
-- Instrumentation to be used to measure the parameters shown in
Table 2-2 shall be calibrated as near as practical to the
initiation of the test. Calibration records will be prepared at
the time of calibration.
-- Two independent measurements will be taken for critical data
points when possible in order to facilitate detection of
instrument reading errors and to provide backup instrumentation
in case of on-line device malfunctions during the course of the
test.
If during the test run, or during the evaluation of the data after the
run, obvious errors are found in the recorded data, those readings will
be disregarded. The test run will be considered valid provided Tenaska
and PECO agree to evaluation using data considered to be correct.
2.6.1 POWER MEASUREMENTS
Net plant electrical output will be measured using the Utility (Georgia
Transmission Corporation) kilowatt-hour meters on the high side of the
generator step-up transformers.
Auxiliary power will be calculated for use in the plant corrections and
will be measured as a backup on the low side of the auxiliary
transformer.
Individual gas turbine power output will be measured for use in plant
corrections.
2.6.2 AMBIENT CONDITION MEASUREMENTS
Ambient conditions used to correct for variations in the nominal
operating conditions will be measured with plant and test
instrumentation as described in Table 2-2. Compressor inlet temperature
will be measured with a minimum of two calibrated RTD's in the
<PAGE>
compressor inlet of the gas turbine. Ambient dry bulb and wet bulb
temperatures, and barometric pressure will be measured with test
instruments and plant weather instrumentation.
2.7 EVALUATION OF TEST RESULTS
Each measured parameter collected by the DAS during the test period
will be averaged for each of the one-hour tests. Data collected
manually will also be based on 10-minute intervals. From this data, the
ten-minute logged data will be averaged into a one-hour average. This
one-hour average will represent the as-tested performance. The
determination of evaporative cooler effectiveness will be based on the
calculation method in Section 2.7.1. The plant capacity will be
determined based on performance calculations using the performance
correction curves provided by the equipment manufacturers.
2.7.1 EVAPORATIVE COOLER EFFECTIVENESS TESTING
For each gas turbine the evaporative cooler effectiveness will be
determined by test data as follows:
X = (DBt - CITt) / (DBt - WBt)
The test evaporative cooler effectiveness will be used to determine the
compressor inlet temperature at Standard Operating Conditions as
follows:
CITSC = DBSC - X (DBSC - WBSC) = 94 - X(20)
where:
X = Tested evaporative cooler
effectiveness
DB = Dry bulb temperature, DEGREE F
CIT = Compressor inlet temperature,
DEGREE F
WB = Wet bulb temperature, DEGREE F
t = At test conditions
sc = At standard conditions
DBSC = 94 DEGREE F
<PAGE>
WBSC = 74 DEGREE F
2.7.2 AS-TESTED NET PLANT CAPACITY
The as-tested measured values of electrical power are determined from
the gas turbines watt meter readings and the utility meters. The
turbine generator electrical output is considered to be gross
electrical output. The electrical output will be determined as follows:
kWaux = kWGT - kWneta
where:
kWneta = As-tested (Power Metering Equipment)
measured simple cycle net electrical output,
kW. Megawatt-hour pulses will be summed for
each of one-hour period. The total
megawatt-hours will be calculated and
converted to kW.
kWGT = Measured gas turbine electrical output at
generator terminals, kW (the sum of all
gas turbine measurements).
kWaux = Auxiliary electrical consumption (calculated
by difference), including transformer losses
kW.
2.7.3 CORRECTED NET PLANT CAPACITY OUTPUT
The net, as-tested, Capacity output, determined during the test, is
based on plant operating conditions. These operating conditions may be
different from Standard Operating Conditions (Table 2-1). Net capacity
depends on ambient conditions, which are beyond the control of Tenaska.
Because of this, if the values of these conditions are different from
the Standard Operating Conditions, adjustments will be made to the
as-tested generator output to account for these differences.
After the as-tested values for each of the one-hour performance runs
are calculated, the adjustments will be performed. The correction
factors that will be applied to the as-tested gross generator output
include the following:
-- Compressor inlet temperature
<PAGE>
-- Barometric pressure
A description of the correction method is as follows:
kWnetc = kWGTc - kWaux
where:
kWnetc = Corrected net plant output, kW
kWGTc = Gas turbine adjusted gross electrical
output, kW (the sum of all corrected gas
turbine outputs with each corrected
independently such that kWGTc=
kWGTxCgtkwCITxCgtkwBP for each unit)
kWaux = Auxiliary electrical consumption, including
transformer losses, kW CgtkwCIT = Gas turbine
electrical output correction for compressor
inlet temperature (for each unit)
CgtkwBP = Gas turbine electrical output correction for
barometric pressure
The specific curves used for correcting the Capacity Test to be
provided by manufacturers include: Gas Turbine Output vs CIT and Gas
Turbine Output vs Barometric Pressure.
Corrected net plant output results from the two one-hour performance
runs will be arithmetically averaged and rounded off to the nearest 100
kW. This value will be referred to as Corrected Capacity Test Output.
No correction for measurement uncertainty will be allowed.
2.8 TEST REPORT FORMAT AND REQUIREMENTS
A written test report will document the results of the Capacity Test.
The report will include the following as a minimum:
-- Date and time of test start and finish
-- Description of the conditions of the tests
-- Summary of instrument calibration data
<PAGE>
-- Performance data from each of the test runs including data
sheets, DAS printouts and guaranteed emissions
-- Summary sheet tabulating corrected capacity for each 60-minute
test run, an average of the capacity values, and a statement
that reads, (Corrected Capacity
Test Output is
MW.)
---------------------
-- A list of any abnormal occurrences that could affect results of
the test
-- Summary of applied corrections and corrected test results
-- Conclusions from test results
The data recorded during the Capacity Test and the calculations of the
results will be included as appendices to the report.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT E
NOT USED
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT F
The following is a description of information which cannot be submitted
electronically:
PROJECT SCHEDULE - 10 Pages
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT G
OWNER SUPPLIED PERMITS
<PAGE>
OWNER SUPPLIED PERMITS
<TABLE>
<CAPTION>
AGENCY APPROVAL/PERMITS
-------- ----------------------
<S> <C>
FEDERAL
Federal Energy Regulatory Certification of Exempt Wholesale Generator Status
Commission
Order Accepting Filing related to Market Based Rates
U.S. Environmental Protection Certificate of Representation (Acid Rain Prevention Program)
Agency
Oil Pollution Act Facility Response Plan
U.S. Army Corps of Engineers Authorization for wetland fill under Nationwide Permit 26,
Clean Water Act Section 404
Federal Aviation Administration Obstruction to Navigation Notice
STATE
Georgia Department of Natural Air Quality Permit
Resources Environmental
Protection Division (EPD) Phase II Acid Rain Permit
Air Operating Permit per Title V of the Clean air Act
Amendments of 1990
LOCAL
Heard County Zoning approval
Heard County Water Authority Water supply agreement.
</TABLE>
The following is a description of information which cannot be submitted
electronically:
A COPY OF THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM (NPDES) PERMIT NO.
GA0037893 DATED JULY 9, 1999 - 33 PAGES
<PAGE>
EXHIBIT H
[Form of Turbine Contract Removed]
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT I
MONTHLY PROGRESS REPORT/SCHEDULE OF VALUE
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit I
TENASKA GEORGIA GENERATING PROJECT Page 1 of 2
- --------------------------------------------------------------------------------
SCHEDULE OF VALUES
Payment Schedule - Owner to pay Contractor in accordance with the following:
<TABLE>
<S> <C>
Limited Notice to Proceed (LNTP) [*] Paid 66 days after LNTP
[*] Paid 96 days after LNTP
Mobilization 50% Paid at ATP
50% Paid 30 days following ATP
Payment & Performance Bond 100% Paid at ATP
Engineering Actual Progress in billing period based
upon mutually agreed progress of
engineering deliverables.
Equipment Procurement 10% Upon issuance of P.O. or Contract
5% Upon receipt of vendor drawings
10% Upon drawing approval and manufacturing
release
55% During Manufacture
10% Upon final assembly, shop test or ready for
delivery
10% Upon delivery
Civil/Mechanical/Electrical Bulk Materials - 100% following site
Startup and Testing delivery
Construction - actual progress in billing
period based upon mutually agreed
actual construction erected in place.
Construction Overheads Payable starting on ATP at 1/29 of the
total overhead amount until 100% paid.
Taxes At the aggregate percent of above items.
ATP = Authorization to Proceed
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit I
TENASKA GEORGIA GENERATING PROJECT Page 2 of 2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT
DESCRIPTION TOTAL DOLLARS OF TOTAL
- ----------- ------------- -----------
<S> <C> <C>
LIMITED NOTICE TO PROCEED (LNTP) [*] 0.28%
MOBILIZATION (ATP) [*] 0.60%
PURCHASE PAYMENT & PERFORMANCE BOND [*] 0.29%
ENGINEERING [*] 1.21%
EQUIPMENT PROCUREMENT [*] 84.95%
Combustion Turbines [*] 75.20%
Mechanical Equipment [*] 3.92%
Electrical Equipment [*] 5.83%
CIVIL CONSTRUCTION [*] 4.74%
Site Preparation [*] 0.67%
Site Improvements [*] 0.75%
Structural Concrete [*] 2.26%
Structural Steel [*] 0.19%
Buildings/Architectural Work [*] 0.46%
Fire Protection Work [*] 0.37%
Painting [*] 0.04%
MECHANICAL CONSTRUCTION [*] 3.43%
Combustion Turbine Erection [*] 2.00%
Purchase Piping Materails [*] 0.29%
Underground Piping [*] 0.16%
Aboveground Piping [*] 0.28%
Instrumentation [*] 0.57%
Insulation [*] 0.13%
ELECTRICAL CONSTRUCTION [*] 2.56%
Misc U/G Electrical Systems [*] 0.32%
Electrical Equipment Installation [*] 0.42%
Purchase Electrical Materials [*] 0.18%
Misc A/G Electrical Systems [*] 0.29%
Ductbank Installation [*] 0.55%
Conduit Installation [*] 0.09%
Cable Tray Installation [*] 0.03%
Cable Installation & Terminations [*] 0.67%
START UP AND TEST ACTIVITIES [*] 0.32%
CONSTRUCTION OVERHEADS [*] 1.62%
SUBTOTAL [*] 100.00%
Less Allowance for CTG's [*]
ZACHRY TOTAL [*]
</TABLE>
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT J
SCOPE CHANGE, UNITS, RATES AND
OPTION PRICING
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit J
TENASKA GEORGIA GENERATING PROJECT
Page 1 of 3
- -------------------------------------------------------------------------------
1. PROJECT TEAM UNIT RATES
The following rates shall be used for engineering cost adjustments for
scope of work changes:
<TABLE>
<CAPTION>
POSITION CATEGORY HOURLY BILLING RATE
------------------- ---------------------
<S> <C>
A. Engineering Team
Project Management [*]
Project Department Engineer [*]
Project Control Manager [*]
Legal/Environment Coordinator [*]
Senior Engineer [*]
Design Engineer [*]
Associate Design Engineer [*]
Project Secretary [*]
Planner/Scheduler [*]
Designer [*]
Drafter [*]
Drafting Supervisor [*]
PC Usage Rate [*]
CADD Usage Rate [*]
B. SITE MANAGEMENT TEAM
Construction Management [*]
Site Department Manager/Superintendent [*]
Senior Engineer [*]
Engineer [*]
Associate Engineer [*]
Field Engineer [*]
Secretary/Clerical [*]
</TABLE>
The above hourly rates are all inclusive of indirect labor cost, overhead and
profit. Direct expenses such as long distance telephone expenses, computer
charges, prints,
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit J
TENASKA GEORGIA GENERATING PROJECT
Page 2 of 3
- -------------------------------------------------------------------------------
reproduction, traveling, and living expenses, cost paid by the Contractor to
third parties, and other direct expenses associated with scope of work changes
shall be charged in accordance with the Contractor's standard expense rates.
The above hourly rates are valid through an Authorization to Proceed of April
17, 2000. Hourly rates shall be escalated in accordance with Exhibit P of the
EPC Agreement if Authorization to Proceed occurs after April 17, 2000.
The following rates shall be used for construction cost adjustments for scope of
work changes:
<TABLE>
<CAPTION>
POSITION CATEGORY HOURLY BILLING RATE
- ---------------------------------------------------------------------------------------------
<S> <C>
General Foreman [*]
Foreman [*]
Journeyman [*]
Helper B [*]
Helper A [*]
Laborer - Common [*]
</TABLE>
The above rates are all inclusive of indirect costs, hand tools and consumables,
overhead and profit; however, these rates do not include construction equipment
costs. When using the above unit rates, normal changes will be supervised by
on-site staff at no charge. However, in the event the scope of change requires
additional Contractor staff to be assigned, or current staff to be assigned
longer to the Project, the Owner will be billed at the Site Management Team
rates.
The above rates are valid for an Authorization to Proceed date of April 17,
2000, and for work performed through May 1, 2002. Rates shall be escalated in
accordance with Exhibit P of the EPC Agreement if Authorization to Proceed
occurs after April 17, 2000, or if extra work is performed after May 1, 2002.
<PAGE>
- --------------------------------------------------------------------------------
EPC - Exhibit J
TENASKA GEORGIA GENERATING PROJECT
Page 3 of 3
- -------------------------------------------------------------------------------
III. OTHER RATES
On-site Subcontractor's Work [*]
Construction Equipment
Contractor Owned [*]
Outside Rent [*]
Engineered Equipment and [*]
Material (Non-Subcontract)
General Electric Changes [*]
IV. OPTION PRICING
1. DELETE GAS CHROMATOGRAPH [*]
2. DEDICATED TRAIN (NOT TO EXCEED) [*]
In accordance with Article 2(s) of the EPC Agreement.
3. 55 DBA NOISE LEVEL AT 1,200 FEET [*]
If noise option is not exercised prior to June 1, 2002, escalation
charges of [*] shall be added to the above price.
4. REDUCE BUILDERS ALL RISK DEDUCTIBLE [*]
If Owner obtains All Risk Builder's Risk insurance policy with a
deductible amount for Testing (to apply only to losses arising out of
hot testing) of [*], rather than [*]. (Refer to Art 15.5 of the EPC
Agreement.)
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT K
GUARANTEES
<PAGE>
H. B. ZACHRY COMPANY.
GUARANTY OF OBLIGATION
This Guaranty is made by H. B. Zachry Company, a Delaware corporation
("Guarantor"), in favor of Tenaska Georgia Partners, L.P., a Delaware limited
partnership ("Owner") with respect to that certain Engineering, Procurement and
Construction Agreement dated the 15th day of September, 1999, between Tenaska
Georgia I, L.P., a Delaware limited partnership ("Tenaska") and Zachry
Construction Corporation, a Delaware corporation ("Contractor") for the
construction of the Tenaska Georgia Generation Station in Heard County, Georgia,
as amended, supplemented or otherwise modified from time to time, (hereinafter
called the "EPC Agreement"). Tenaska, having assigned the EPC Agreement to
Owner, effective November 10, 1999, and such assignment having been consented to
by Contractor, now requires this Guaranty, as provided in the EPC Agreement.
Contractor is an affiliate of Guarantor. Guarantor will derive direct and
indirect benefit from the making of the Guaranty.
NOW, THEREFORE, for good and valuable consideration, Guarantor hereby covenants
and agrees as follows:
1. Guarantor hereby unconditionally guarantees the full and timely performance
by Contractor of all of its obligations under the EPC Agreement, as it from
time to time may be amended, and hereby undertakes that if Contractor shall
in any respect fail to perform and observe all of the terms, provisions,
conditions, and stipulations of the EPC Agreement, Guarantor warrants the
faithful performance of all of such terms and conditions and will fully
indemnify and keep indemnified Owner against all claims, losses, damages,
costs and expenses whatsoever which Owner may incur by reason of
Contractor's failure to perform and observe any of the terms, provisions,
conditions, and stipulations of the EPC Agreement and in addition against
all claims, losses, damages, costs and expenses which Owner may incur by
reason of Contractor's breach of any other duty to Owner, (collectively the
"Guaranteed Obligations"). THE OBLIGATIONS OF GUARANTOR HEREUNDER SHALL NOT
BE REDUCED, LIMITED OR TERMINATED, NOR SHALL THE GUARANTOR BE DISCHARGED
FROM ANY THEREOF, FOR ANY REASON WHATSOEVER (other than, the payment,
observance and performance of the Guaranteed Obligations and other than as
provided in Section 9 of this Guaranty), including (and whether or not the
same shall have occurred or failed to occur once or more than once and
whether or not Guarantor shall have received notice thereof):
(a) (i) any increase in, (ii) any extension of the time of
payment, observance or performance of, (iii) any other
amendment or modification of any of the other terms and
provisions of, (iv) any release, composition or settlement
(whether by way of acceptance of a plan of reorganization or
otherwise) of, (v) any subordination (whether present or
future or contractual or otherwise) of, or (vi) any discharge,
disallowance, invalidity, illegality, voidness or other
unenforceability of, the Guaranteed Obligations;
<PAGE>
(b) (i) any failure to obtain, (ii) any release, composition or
settlement of, (iii) any amendment or modification of any of
the terms and provisions of, (iv) any subordination of, or (v)
any discharge, disallowance, invalidity, illegality, voidness
or other enforceability of, any other guaranties of the
Guaranteed Obligations;
(c) any termination of or change in any relationship between
Guarantor and Contractor, including any such termination or
change resulting from a change in the ownership of Guarantor
or from the cessation of any commercial relationship between
Guarantor and Contractor;
(d) any exercise of, or any election not or failure to exercise,
delay in the exercise of, waiver of, or forbearance or other
indulgence with respect to, any right, remedy or power
available to Owner, including (i) any election not or failure
to exercise any right of set-off, recoupment or counterclaim,
and (ii) any election of remedies effected by Owner, and
(e) ANY OTHER ACT OR FAILURE TO ACT OR ANY OTHER EVENT OR
CIRCUMSTANCE THAT (i) VARIES THE RISK OF GUARANTOR HEREUNDER
OR (ii) BUT FOR THE PROVISIONS HEREOF, WOULD, AS A MATTER OF
STATUTE OR RULE OF LAW OR EQUITY, OPERATE TO REDUCE, LIMIT OR
TERMINATE THE OBLIGATIONS OF THE GUARANTOR HEREUNDER OR
DISCHARGE GUARANTOR FROM ANY THEREOF.
2. Guarantor represents and warrants to Owner and Owner's successors and assigns
that:
(a) Guarantor is duly organized and validly existing as a Delaware
corporation;
(b) Guarantor directly or indirectly owns all of the issued and
outstanding shares of the capital stock of Contractor;
(c) Guarantor is authorized and has all necessary power and
authority, corporate and other, to execute and deliver this
Guaranty and to perform the obligations of Guarantor,
including all obligations of Contractor pursuant to the EPC
Agreement, this Guaranty reasonably may be expected to benefit
directly or indirectly, Guarantor, and this Guaranty has been
duly executed and delivered by Guarantor and is the valid,
binding, and enforceable contract of Guarantor, and;
(d) The execution and delivery of this Guaranty by Guarantor and
its performance of its obligations under the Guaranty, do not
(and, to the best of Guarantor's knowledge, will not) conflict
with any law, rule or regulation, or any agreement,
instrument, indenture, deed or any other restriction, to which
Guarantor is subject or a party, or accelerate or affect any
of its obligations under any thereof.
2
<PAGE>
3. Guarantor shall cause Contractor to duly and timely perform all of the
Guaranteed Obligations including the obligations of Contractor under
the EPC Agreement, as it may from time to time be amended.
4. The obligations of Guarantor hereunder include, without limitation, all
liabilities for liquidated or similar damages and warranty obligations
of Contractor.
5. Owner may enforce against Guarantor any and all of the rights of Owner
under this Guaranty without having instituted or completed any legal,
arbitration or other proceedings against Contractor.
6. This Guaranty shall be governed by and construed according to the laws
of the State of Texas. Guarantor designates Zachry Construction
Corporation, a Delaware corporation, as agent for service of process in
any action by Owner under this Guaranty, submits to personal
jurisdiction in the State of Texas and further agrees that the
non-exclusive venue for any such action may be Texas.
7. Guarantor waives: (a) any requirement, and any right to require, that
any right or power be exercised or any action be taken against the
Contractor, or any other guarantor or any collateral for the Guaranteed
Obligations; (b) (i) notice of acceptance of and intention to rely on
this Agreement, and (ii) all other notices that may be required by
Applicable Law or otherwise to preserve any rights against Guarantor
under this Agreement, including any notice of default, demand,
dishonor, presentment and protest; and, (c) diligence.
8. Guarantor shall not assert any right to set off against claims by Owner
hereunder other than claims which Contractor has a right to set off
under the EPC Agreement.
9. Notwithstanding any other provision to the contrary set forth herein,
Guarantor retains the right to assert any and all claims, defenses and
limitations of liability possessed by Contractor under the terms of the
EPC Agreement (including without limitation, Section 14.2 of the EPC
Agreement, but excluding any defense based upon absence of binding
effect of the EPC Agreement) or arising from the parties' performance
or failure to perform thereunder.
10. Guarantor's obligations hereunder (a) are absolute and unconditional,
(b) subject to Section 9 above, are unlimited in amount, (c) constitute
a guaranty of payment and performance and not a guaranty of collection,
(d) are as primary obligor and not as a surety only (e) shall be a
continuing guaranty of all present and future Guaranteed Obligations
and (f) shall be irrevocable.
11. This Guaranty may be assigned by Owner to Owner's lenders for the
project and shall inure to the benefit of such assignee(s).
12. Notice to Guarantor shall be to:
3
<PAGE>
H.B. Zachry Company
527 Logwood (78221-1738)
P.O. Box 240130
San Antonio, TX 78224-0130
Attn: R.J. Kalt
Telefax: (210) 458-8572
Telephone: (210)458-8050
With a copy to:
Murray L. Johnston, Jr.
General Counsel
310 S. St. Mary's Street, Suite 2600
San Antonio, TX 78205
Telefax: (210) 258-2699
Telephone: (210)258-2600
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed
and delivered to Owner in the name and on behalf of Guarantor by one of its
officers who is duly authorized to do so, for the benefit of Owner, as of this
day of , 1999.
- ---- -----------
Guarantor
H. B. Zachry Company
By:
-------------------------
(Name)
---------------------------
(Title)
ATTEST:
By:
--------------------------
Title:
4
<PAGE>
CERTIFIED COPY OF RESOLUTION
"RESOLVED: H. B. Zachry Company ("Guarantor") is authorized to provide
a Guaranty of the obligations of Zachry Construction Corporation, a Delaware
corporation ("Contractor"), to Tenaska Georgia Partners, L.P., a Delaware
limited partnership ("Owner") in connection with the agreement between Tenaska
Georgia I, L.P., a Delaware limited partnership, and Contractor for the
construction of the Tenaska Georgia Generation Station in Heard County, Georgia,
which agreement has subsequently been assigned to Owner with the consent of
Contractor. Guarantor states and acknowledges that such Guaranty reasonably may
be expected to benefit, directly or indirectly, Guarantor."
***********
I, , certify that I am the Secretary of H. B. Zachry
-------------
Company, a Delaware corporation.
I certify that:
(1) The resolution quoted above was adopted on September 13, 1999
by Unanimous Written Consent of the Executive Committee of the
Board of Directors.
(2) This action of the Executive Committee of this corporation may
be taken without a meeting if all of the members of the
Executive Committee consent in writing.
(3) The signed Consent has been filed in the minute book of the
corporation.
(4) I have compared the resolution quoted above with the
resolution in the minute book and verify that the language is
identical.
(5) The resolution has not been revoked or amended and is now in
full force and effect.
SIGNED AND SEALED on behalf of the corporation ,
--------------------
1999.
[SEAL]
-----------------------------
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT L
DOCUMENT DISTRIBUTION
<PAGE>
- -------------------------------------------------------------------------------
EPC - Exhibit L
TENASKA GEORGIA GENERATION PROJECT
Page 1 of 3
- --------------------------------------------------------------------------------
DOCUMENT DISTRIBUTION
<TABLE>
<CAPTION>
NUMBER OF COPIES 500KV
DOCUMENT OWNER LENDER'S ENG. UTILITY*
- -------- ------ ------------------ ----------
<S> <C> <C> <C>
ARCHITECTURAL
Building Plans and Elevations 3
Arch Finish Schedules 3
CIVIL
Site Plans 3 1
Paving, Drainage & Fencing Plans 3 1
Underground Piping 3
Construction Specifications 2
Calculations See Note 1(c)
STRUCTURAL
Foundation Plans/Details 3
Steel Plans, Elevations & Details 3
Construction Specifications 2
Calculations See Note 1(c)
ELECTRICAL
One-Line Diagrams 3 1 1
UPS One-Line Diagrams 3
Protective Relaying Functional Diagrams 3
Protective Relaying Calculations & Settings 2 1
Transformer Three-Line Diagram 3
500kV Utility One-Line 3 1 1
18kV Bus One-Line 3 1 1
4160V Three-Line 3 1 1
480V One-Line 3 1 1
MCC One-Line 3 1
Sync Circuit Diagram 3 1
Telephone, Security System Diag. 3
Grounding Plans 3
Underground Bus Duct/Conduit Plans 3 1
Metering and Relaying Diagrams 3 1
Equipment Specifications & POs 2
Construction Specifications 2
Cable & Raceway Schedules 3
Interconnection & Wiring Diagrams 3
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
EPC - Exhibit L
TENASKA GEORGIA GENERATION PROJECT
Page 2 of 3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF COPIES 500KV
DOCUMENT OWNER LENDER'S ENG. UTILITY*
- -------- ------ ------------------ ----------
<S> <C> <C> <C>
ELECTRICAL (Cont'd)
Motor List 3
Vendor Shop Drawings 1
Calculations See Note 1(c)
MECHANICAL
Plot & General Arrangement Plans 3 1 1
Key Piping Plans 3
Piping Plans 3
Underground Piping Plans 3
Cathodic Protection Specs & Plans 2
Pipe Support Plans 3
Pipeline Lists 3
Valve Lists 3
Mechanical Specialty Lists 3
Equipment Lists 3
Hanger Lists 3
Fire Protection Specs & Plans 2 1
Insulation Specifications & Plans 2
P&ID's 3 1
Heat & Mass Balances 3 1
Process Flow Diagrams 3 1
Construction Specifications 2
Equipment Specifications & P.O.'s 2 1
Vendor Shop Drawings 1
Calculations See Note 1(c)
INSTRUMENTATION & CONTROL
DCS/PLC Block Diagrams 3
DCS Cab Interconnect Wiring Diagrams 3
Control Wiring Diagrams 3
Logic Diagrams 3
Loop Diagrams (DCS Vendor Drawings) 1
Instrument Plans 3
I/O Lists 3
Panel Drawings 3
Vendor Shop Drawings 1
Calculations See Note 1(c)
PROJECT MANAGEMENT
Drawing Lists/Status (Monthly) 3
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
EPC - Exhibit L
TENASKA GEORGIA GENERATION PROJECT
Page 3 of 3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF COPIES 500KV
DOCUMENT OWNER LENDER'S ENG. UTILITY*
- -------- ------ ------------------ ----------
<S> <C> <C> <C>
PROJECT MGMT. (Cont'd)
Monthly Progress Reports with Project Schedule 3 1 1
Procurement/Vendor Expediting Reports 2 1
Vendor Manual List (Monthly) 2
Vendor Drawing List (Monthly) 2 1
STARTUP & COMMISSIONING
Startup & Commissioning Procedures/Schedules 3 1
Commissioning Tests 3 1
Equipment Checkout 3 1
Performance Test Procedures 3 1
Performance Test Reports 3 1
Plant Capability Curves 2 1
Operator Training Manuals 10
Vendor O&M Manuals 10
Lube Oil Lists 3
Spare Parts Lists 3 1
System Turnover Packages 2
</TABLE>
GENERAL NOTES:
1. Owner Distribution:
a) Where three (3) copies are designated above, distribution will
be as follows:
- Owner's Project Manager - 1 Copy Tenaska - Omaha, NE)
- Owner's Site Representative - 2 Copies (Tenaska - Project
Site)
The Owner's Site Representative will make distribution to the
Owner's Operations and Maintenance Manager.
Where less than 3 copies are designated above, the copies will
be transmitted to the Owner's Project Manager (Tenaska -
Omaha, NE)
b) Copies of bid and construction issue drawings are to be
distributed as indicated above. Large drawings will generally
be reduced to half-size for distribution to Owner.
c) The Contractor shall provide final drawings, including
as-builts and final calculations, as set forth is Section 3 of
the EPC Agreement.
* - The 500kV Utility shall be the entity responsible for
design approval for the 500kV switchyard.
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT M
APROVED SUBCONTRACTORS AND VENDORS
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT M
SUBCONTRACTORS AND VENDORS
APPROVED AT DATE
OF EXECUTION
I. SUBCONTRACTORS
As set forth in Section 2 (l) of the EPC Agreement, the following subcontractors
are approved at the date of execution of the EPC Agreement.
<TABLE>
<CAPTION>
ITEM ACCEPTABLE SUBCONTRACTOR
-------------------------------------------------------------------------------
<S> <C>
Engineering Utility Engineering Corporation
Sitework (Drilled Piers) [*]
[*]
[*]
Concrete Supply [*]
[*]
[*]
Insulation [*]
[*]
[*]
HVAC [*]
Equipment, Heavy Haul [*]
[*]
[*]
[*]
[*]
Radiography/Stress Relief [*]
[*]
[*]
[*]
Painting [*]
[*]
[*]
[*]
Substation/Switchyard [*]
</TABLE>
Page 1
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT M
SUBCONTRACTORS AND VENDORS
APPROVED AT DATE
OF EXECUTION
I. SUBCONTRACTORS (CONT.)
<TABLE>
<CAPTION>
ITEM ACCEPTABLE SUBCONTRACTOR
------------------------------------------------------------------------------
<S> <C>
Trucking (Excavation Hauling) [*]
[*]
Mechanical Erection [*]
Concrete Pumping [*]
[*]
Fencing [*]
[*]
[*]
Rebar Fabrication [*]
[*]
[*]
Concrete Testing [*]
[*]
[*]
Fire Protection [*]
[*]
[*]
Seeding [*]
[*]
[*]
Liners [*]
Soil Testing [*]
[*]
[*]
Paving [*]
[*]
</TABLE>
Page 2
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT M
SUBCONTRACTORS AND VENDORS
APPROVED AT DATE
OF EXECUTION
I. SUBCONTRACTORS (CONT.)
<TABLE>
<CAPTION>
ITEM ACCEPTABLE SUBCONTRACTOR
-----------------------------------------------------------------------------
<S> <C>
Field Fabricated Tanks [*]
[*]
[*]
[*]
[*]
[*]
</TABLE>
II. VENDORS
The following are acceptable manufacturers approved at the date of execution of
the EPC Contract.
<TABLE>
<CAPTION>
ITEM ACCEPTABLE MANUFACTURER
-----------------------------------------------------------------------------
<S> <C>
Embeds [*]
Air Compressors [*]
[*]
[*]
[*]
Air Dryers [*]
[*]
[*]
[*]
Miscellaneous Horizontal Pumps [*]
[*]
[*]
Fire Water Pumps [*]
[*]
[*]
[*]
[*]
</TABLE>
Page 3
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT M
SUBCONTRACTORS AND VENDORS
APPROVED AT DATE
OF EXECUTION
<TABLE>
<CAPTION>
II. VENDORS (CONT.)
ITEM ACCEPTABLE MANUFACTURER
-------------------------------------------------------------------------------
<S> <C>
Sump Pumps [*]
[*]
[*]
[*]
Control Valves [*]
[*]
[*]
Transformers [*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
Circuit Breakers [*]
[*]
[*]
[*]
[*]
[*]
Distributed Control System [*]
(CTG Controls by GE) [*]
[*]
[*]
Programmable Logic Controllers [*]
[*]
[*]
</TABLE>
Page 4
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT M
SUBCONTRACTORS AND VENDORS
APPROVED AT DATE
OF EXECUTION
II. VENDORS (CONT.)
<TABLE>
<CAPTION>
ITEM ACCEPTABLE MANUFACTURER
-----------------------------------------------------------------------------
<S> <C>
Continuous Emission Monitoring System [*]
[*]
[*]
[*]
[*]
Pre-Engineered Metal Buildings [*]
[*]
[*]
[*]
Motors [*]
[*]
[*]
[*]
[*]
[*]
[*]
Uninterruptible Power Supply [*]
[*]
[*]
[*]
[*]
[*]
[*]
Batteries and Battery Chargers [*]
[*]
[*]
[*]
[*]
[*]
</TABLE>
Page 5
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT M
SUBCONTRACTORS AND VENDORS
APPROVED AT DATE
OF EXECUTION
II. VENDORS (CONT.)
<TABLE>
<CAPTION>
ITEM ACCEPTABLE MANUFACTURER
- -----------------------------------------------------------------------------
<S> <C>
Motor Control Centers [*]
[*]
[*]
[*]
[*]
[*]
Nonsegregated and Isophase [*]
Bus Duct [*]
[*]
[*]
[*]
[*]
[*]
[*]
Metal Clad Switchgear [*]
[*]
[*]
[*]
[*]
[*]
Pipe Fabrication [*]
[*]
[*]
Cable [*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
</TABLE>
Page 6
<PAGE>
TENASKA GEORGIA GENERATING PROJECT
EXHIBIT N
LENDER DOCUMENTS REQUIRED OF CONTRACTOR
<PAGE>
EXHIBIT "N-1"
-------------
STATE OF GEORGIA
COUNTY OF
---------
INTERIM WAIVER AND RELEASE UPON PAYMENT
The undersigned mechanic and/or materialman and/or subcontractor has
been employed by Zachry Construction Corporation to furnish labor, materials, or
services for the construction of improvements known as the Tenaska Georgia
Generation Station which is located in the County of Heard, Georgia, and is
owned by the Development Authority of Heard County, Georgia and is leased to
Tenaska Georgia Partners, L.P. and more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Property").
Upon the receipt of the sum of $____________________, the undersigned
mechanic and/or materialman and/or subcontractor waives and releases any and all
liens or claims of liens it has upon the foregoing described Property through
the date of __________________________ (date) and excepting those rights and
liens that the mechanic and/or materialman and/or subcontractor might have in
any retained amounts, on account of labor or materials, or both, furnished by
the undersigned to or on account of said contractor for said building or
premises.
Given under hand and seal this day of , 19 .
------- ------------------- ---
-------------------------------
By: .(Seal)
-----------------------
Print Name:
----------------------
Its:
-----------------------------
- ----------------------------
(Witness)
- ----------------------------
- ----------------------------
(Address)
Page 1 of 3
<PAGE>
EXHIBIT "N-1"
--------------
STATE OF GEORGIA
COUNTY OF
------------
WRITTEN ACKNOWLEDGMENT OF PAYMENT
The undersigned mechanic and/or materialman and/or subcontractor has
been employed by Zachry Construction Corporation to furnish labor, materials, or
services for the construction of improvements known as the Tenaska Georgia
Generation Station which is located in the County of Heard, Georgia, and is
owned by the Development Authority of Heard County, Georgia and is leased to
Tenaska Georgia Partners, L.P. and more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Property").
The undersigned mechanic and/or materialman and/or subcontractor
acknowledges receipt of the sum of $___________________, which represents
payment in full of the amount owed which is described in that Interim Waiver and
Release Upon Payment, dated ______________, executed by the undersigned. This
Written Acknowledgment is given pursuant to O.C.G.A. Section 44-14-366(f)(2)(B).
Given under hand and seal this day of ,19 .
------- ---------------------- ---
-------------------------------
By: .(Seal)
-----------------------
Print Name:
---------------------
Its:
----------------------------
- -------------------------------
(Witness)
- -------------------------------
- -------------------------------
(Address)
Page 2 of 3
<PAGE>
Page 3 of 3
<PAGE>
EXHIBIT "N-2"
STATE OF GEORGIA
COUNTY OF FULTON
UNCONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT
The undersigned mechanic and/or materialman and/or subcontractor has
been employed by Zachry Construction Corporation to furnish labor, materials or
services for the construction of improvements known as the Tenaska Georgia
Generation Station which is located in the County of Heard, Georgia, and is
owned by the Development Authority of Heard County, Georgia and is leased to
Tenaska Georgia Partners, L.P. and more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Property").
Upon the receipt of the sum of $ , the undersigned mechanic and/or
materialman and/or subcontractor waives and releases any and all liens or claims
of liens or any right against any labor and/or material bond, or both, the
undersigned has against the Property.
Given under hand and seal this day of , 19 .
_______________________________
By: ____________________ (Seal)
Print Name:____________________
Its: __________________________
____________________________
(Witness)
_____________________________
_____________________________
(Address)
NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU
HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE
AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT
YET BEEN PAID, USE A CONDITIONAL RELEASE FORM.
<PAGE>
EXHIBIT "N-2"
STATE OF GEORGIA
COUNTY OF __________
WRITTEN ACKNOWLEDGMENT OF PAYMENT
The undersigned mechanic and/or materialman and/or subcontractor has
been employed by Zachry Construction Corporation ("Zachry") to furnish labor,
materials or services for the construction of improvements known as the Tenaska
Georgia Generation Station which is located in the County of Heard, Georgia, and
is owned by Tenaska Georgia Partners, L.P. and more particularly described on
Exhibit "A" attached hereto and made a part hereof (the "Property").
The undersigned mechanic and/or materialman and/or subcontractor
acknowledges receipt of the total sum of $___________________, which represents
payment in full of the amount owed pursuant to that ______________________
Agreement by and between Zachry and the undersigned, dated ______________, as
amended. This Written Acknowledgment is given pursuant to O.C.G.A.
Sections 44-14-366(f)(2)(B).
Given under hand and seal this _____ day of __________________, 19__.
______________________________
By: ___________________ (Seal)
Print Name:___________________
Its: _________________________
____________________________
(Witness)
____________________________
____________________________
(Address)
<PAGE>
Exhibit "N-3"
STATE OF GEORGIA
COUNTY OF ________________
INTERIM WAIVER AND RELEASE UPON PAYMENT
The undersigned mechanic and/or materialman and/or contractor has been
employed by Tenaska Georgia Partners, L.P. to furnish labor, materials, or
services for the construction of improvements known as the Tenaska Georgia
Generation Station which is located in the County of Heard, Georgia, and is
owned by the Development Authority of Heard County, Georgia and is leased to
Tenaska Georgia Partners, L.P. and more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Property").
Upon the receipt of the sum of $ , the undersigned mechanic and/or
materialman and/or contractor waives and releases any and all liens or claims of
liens it has upon the foregoing described Property through the date of
(date) and excepting those rights and liens that the mechanic and/or materialman
and/or contractor might have in any retained amounts, on account of labor or
materials, or both, furnished by the undersigned to or on account of said
contractor for said building or premises.
Given under hand and seal this _____ day of ________________, 19__.
Zachry Construction Corporation
By: _____________________ (Seal)
Print Name:_____________________
Its: ___________________________
____________________________
(Witness)
____________________________
____________________________
(Address)
<PAGE>
Exhibit "N-3"
STATE OF GEORGIA
COUNTY OF __________________
WRITTEN ACKNOWLEDGEMENT OF PAYMENT
The undersigned mechanic and/or materialman and/or contractor has been
employed by Tenaska Georgia Partners, L.P. to furnish labor, materials, or
services for the construction of improvements known as the Tenaska Georgia
Generation Station which is located in the County of Heard, Georgia, and is
owned by the Development Authority of Heard County, Georgia and is leased to
Tenaska Georgia Partners, L.P. and more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Property").
The undersigned mechanic and/or materialman and/or contractor
acknowledges receipt of the sum of $___________________, which represents
payment in full of the amount owed which is described in that Interim Waiver and
Release Upon Payment, dated ______________, executed by the undersigned. This
Written Acknowledgement is given pursuant to O.C.G.A. ss.44-14-366(f)(2)(B).
Given under hand and seal this ___ day of _________________, 19___.
Zachry Construction Corporation
By: ______________________ (Seal)
Print Name:______________________
Its: ____________________________
______________________________
(Witness)
______________________________
______________________________
(Address)
<PAGE>
Exhibit "N-4"
STATE OF GEORGIA
COUNTY OF FULTON
UNCONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT
The undersigned mechanic and/or materialman and/or contractor has been
employed by Tenaska Georgia Partners, L.P. to furnish labor, materials, or
services for the construction of improvements known as the Tenaska Georgia
Generation Station which is located in the County of Heard, Georgia, and is
owned by the Development Authority of Heard County, Georgia and is leased to
Tenaska Georgia Partners, L.P. and more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Property").
Upon the receipt of the sum of $___________, the undersigned mechanic
and/or materialman and/or contractor waives and releases any and all liens or
claims of liens or any right against any labor and/or material bond, or both,
the undersigned has against the Property.
Given under hand and seal this ____ day of _________________, 19___.
Zachry Construction Corporation
By: ______________________ (Seal)
Print Name:______________________
Its: ____________________________
______________________________
(Witness)
______________________________
______________________________
(Address)
NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU
HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE
AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT
YET BEEN PAID, USE A CONDITIONAL RELEASE FORM.
<PAGE>
Exhibit "N-4"
STATE OF GEORGIA
COUNTY OF ________________
WRITTEN ACKNOWLEDGMENT OF PAYMENT
The undersigned mechanic and/or materialman and/or contractor has been
employed by Tenaska Georgia Partners, L.P. ("Tenaska") to furnish labor,
materials, or services for the construction of improvements known as the Tenaska
Georgia Generation Station which is located in the County of Heard, Georgia, and
is owned by the Development Authority of Heard County, Georgia, and is leased to
Tenaska Georgia Partners, L.P. and more particularly described on Exhibit "A"
attached hereto and made a part hereof (the "Property").
The undersigned mechanic and/or materialman and/or contractor
acknowledges receipt of the total sum of $___________________, which represents
payment in full of the amount owed pursuant to that Engineering, Procurement and
Construction Agreement by and between Tenaska Georgia I, L.P. and the
undersigned, dated ______________, as assigned to Tenaska and amended. This
Written Acknowledgment is given pursuant to O.C.G.A. ss.44-14-366(f)(2)(B).
Given under hand and seal this ____ day of ________________, 19___.
Zachry Construction Corporation
By: _____________________ (Seal)
Print Name:_____________________
Its: ___________________________
_____________________________
(Witness)
_____________________________
_____________________________
(Address)
<PAGE>
Exhibit N-5
CONTRACTOR'S INDEMNITY
THIS INDEMNITY IS EXECUTED BY ZACHRY CONSTRUCTION CORPORATION, a Delaware
corporation ("Indemnitor").
With reference to the following facts:
(a) Certain works of improvement have been or will be commenced upon
the land, as defined in Section 2.1.
(b) Indemnitor has an interest in the works of improvement on the land,
or thereon to be constructed, as contractor, and desires that Title Company
issue its policies of title insurance without mechanic's lien exclusions,
insuring marketability of title and/or priority of encumbrances upon the terms
and conditions hereinafter set forth.
NOW THEREFORE, Indemnitor agrees as follows.
1. COVENANTS.
1.1 Indemnitor will hold harmless, protect and indemnify Title Company
from and against any and all liabilities, losses, damages, expenses, and charges
including attorney's fees and expenses of litigation, which Title Company may
sustain under any policy of insurance respecting the land resulting directly
from any Mechanic's Lien or claim thereof filed by Indemnitor and/or any of
Indemnitor's subcontractors or suppliers at any tier and which arise from
Indemnitor's failure to comply with the requirement of 1.1.2 herein.
1.1.1 Indemnitor will pay, or cause to be paid, all bills, charges, or
expenses of any works of improvements on the land, which Indemnitor, in its
reasonable judgment, determine to be valid bills, charges, or expenses which
Indemnitor is obligated to pay.
1.1.2. If a Mechanic's Lien affecting the land for which a title policy
has been issued in reliance on this Agreement is filed, a Priority Lien
established, or an action to foreclose a Priority Lien commenced, Indemnitor
shall in the case of a Mechanic's Lien filed by Indemnitor's subcontractors and
suppliers at any tier, with or without privity of contract with Indemnitor,
cause such lien to be released of record and/or such action to be dismissed with
prejudice; and in the case of a Mechanic's Lien filed by Indemnitor shall
execute and deliver such instruments as may be necessary to subordinate such
Mechanic's Lien to the lien insured by the mortgagee policy of title insurance.
1.1.3 Title Company shall have the right at any time after thirty (30)
days written notice to Indemnitor to pay, discharge, satisfy, or remove from the
title to the land any Mechanic's Lien or claim thereon; and Indemnitor covenants
and agrees to pay to Title Company on demand all amounts expended by Title
Company to pay, discharge, satisfy, or remove any Mechanic's Lien or claim
thereof resulting from a valid (as determined by Indemnitor's reasonable
judgment) bill,
<PAGE>
charge, or expense which Indemnitor is obligated to pay.
1.2 If a Mechanic's Lien affecting the land for which a title policy
has been issued in reliance on this Agreement is filed, a Priority Lien
established, or an action to foreclose a Priority Lien commenced, Indemnitor
shall, upon request of Title Company, promptly furnish Title Company with copies
of all receipted bills or other evidence of payment or set-off for works of
improvement upon the land, but only to the extent that any such bills or other
evidence of payment or set-off relate to the lien or claim of lien in question.
1.3 Title Company is hereby granted the right to rely upon this
Agreement whether or not an indemnitor is the person ordering the title policy,
regardless of any change in ownership, title, or interest in the land or the
works of improvement thereon, or any change in Indemnitor's interest therein.
Said right shall extend to subsequent policies issued with respect to the land.
However, nothing contained herein shall be construed so as to obligate Title
Company to issue any policies of title insurance in the form above desired, but,
should Title Company issue any such policies of title insurance it will do so in
reliance upon the undertakings of the undersigned and in consideration thereof.
2. ADDITIONAL PROVISIONS.
2.1 As used herein the term "land" includes the real property described
on Exhibit "A", and any part, parcel, or subdivision of the described real
property and any part, parcel, or subdivision of the legal or equitable interest
in said real property.
2.2 As used herein the term "Mechanic's Lien" shall be deemed to refer
to the applicable statutes of the state (including, without limitation, O.C.G.A.
ss.44-14-360 et seq.) in which the land is situated that enable mechanics,
materialmen, artisans, and laborers to have a lien and/or enforce such lien
against the land and any improvements constructed thereon for the value of labor
bestowed thereon and/or materials furnished thereto; provided that such term as
used herein shall exclude any liens actually of record as of the date of
issuance of the policies of title insurance which Indemnitor is not obligated to
pay.
2.3 The term "policy of title insurance" includes such policies as are
customarily issued by title companies insuring priority of liens and
marketability of title, and all endorsements thereon. The term also includes
other documents and reports customarily issued by title companies concerning the
state of title, ownership, or interest in real property.
2.4 The term "Priority Lien" means a Mechanic's Lien asserting priority
over the lien of the deed to secure debt insured by the policy of title
insurance.
2.5 The term "Title Company" means _________________________________ or
any other title company which issues the policy of title insurance referred
herein.
2.6 Whenever the context so requires, the singular includes the plural;
the masculine, the feminine or neuter.
2
<PAGE>
INDEMNITOR EXECUTES THIS AGREEMENT BECAUSE OF THE BENEFITS DIRECTLY AND
INDIRECTLY ACCRUING TO INDEMNITOR BY REASON OF THE ISSUANCE OF SAID POLICIES.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this
____ day of _______________, 1999.
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation
By:_________________________________
Title:______________________________
STATE OF __________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on ___________________ by
_____________________, _____________________ of ______________________, a(n)
_____________________ corporation, on behalf of said corporation.
______________________________________
Notary Public, State of ______________
______________________________________
Notary's Printed Name
My commission Expires: _______________
3
<PAGE>
Exhibit N-6
SUBCONTRACTOR
PARTIAL WAIVER, RELEASE AND
ASSIGNMENT OF ALL LIENS AND CLAIMS
STATE OF _____________ )
) SS.
COUNTY OF ___________ )
I, the undersigned Affiant, being of lawful age, under oath do
hereby swear that the following statements are true:
1. I am the ___________________________ of ________________________,
a(n) __________________________ [corporation] [proprietorship] (the "Firm") and
have personal knowledge of the truthfulness of all statements made herein and I
am duly authorized to make such statements and execute and deliver this Partial
Waiver, Release and Assignment of All Liens and Claims by and on behalf of said
Firm.
2. Pursuant to that certain subcontract (the "Subcontract") dated the
____ day of _______________, 19___, between Firm and Zachry Construction
Corporation, a Delaware corporation (the "Contractor"), Firm has directly and
through sub-subcontractors and material suppliers, performed labor and/or
furnished materials for the construction of the Tenaska Georgia Generation
Station (the "Improvements") located upon real property located in Heard County,
Georgia and legally described on the attached Exhibit "A" (the "Property"). The
Improvements and the Property are hereinafter sometimes collectively referred to
as the "Project". The Firm is requesting payment of its invoice number
______________ (the "Invoice") for labor, materials, equipment, machinery,
goods, and/or Services furnished by the Firm in connection with the Improvements
during the period beginning _______________________ and ending
_______________________ (the "Invoice Period").
3. All sub-subcontractors (of whatever tier or level), laborers,
mechanics, materialmen, suppliers, agents, brokers, attorneys and other persons
or entities whatsoever who have furnished or agreed to furnish labor, materials,
equipment, machinery, goods and/or services to the Firm in connection with the
Improvements and the above described Property have been paid in full for all
periods prior to the Invoice Period (except for retainages which are not yet due
and payable and for those claims specifically listed in Item 10 below) and have
fully waived and released all claims, demands, suits and rights to any and all
liens or claims, legal or equitable, contractual, statutory, constitutional or
otherwise, regardless of whether evidenced by lien affidavit or statement, upon
the Improvements and the above described Property whatsoever arising out of the
furnishing of or the agreements to furnish such items for all periods prior to
the Invoice Period (except for retainages which are not yet due and payable and
for those claims specifically listed in Item 10 below). Further, no security
interest, conditional bill of sale or retention of title agreement has been
given or executed by the Firm or any laborer, service provider or materialman
acting by, through or under
<PAGE>
the Firm for or in connection with any materials, machinery and/or equipment
placed upon or installed on the Property.
4. The Firm, for valuable consideration described herein, does hereby
waive, assign and release to and for the benefit of Contractor and
____________________ (the "Owner" of the Project), and the Owner's partners,
affiliated companies, lessees, successors, assigns, secured lenders and title
insurance companies, and each of the above mentioned parties' officers,
directors, shareholders, employees and agents (hereinafter collectively referred
to as "Released Parties") all right of the Firm to claim a mechanic's or
materialman's lien or laborer's lien or any similar lien or claim, legal or
equitable, contractual, statutory, constitutional or otherwise, regardless or
whether evidenced by lien affidavit or statement, for material furnished for use
in, for services or labor performed upon or in connection with, and/or for,
machinery, tools or equipment supplied or leased in connection with the Project
for all periods prior to the Invoice Period (except for retainages which are not
yet due and payable and which have not been paid for by Contractor and except
for those claims specifically listed in Item 10 below). Effective upon payment
by Contractor to the Firm of the Invoice, the Firm waives, assigns and releases
to and for the benefit of the Released Parties all right of the Firm to claim a
mechanic's or materialman's lien or laborer's lien or any similar lien or claim,
legal or equitable, contractual, statutory, constitutional or otherwise,
regardless or whether evidenced by lien affidavit or statement, for material
furnished for use in, for services or labor performed upon or in connection
with, and/or for, machinery, tools or equipment supplied or leased in connection
with the Project for the Invoice Period (except for retainages which are not yet
due and payable and which have not been paid for by Contractor and for those
claims specifically listed in Item 10 below).
5. The Firm will undertake no work in addition to that called for by
the subcontract between the Firm and the Contractor nor make any changes in any
contract for the furnishing of labor or materials to the Project without written
approval of the Contractor.
6. The Firm has not, other than pursuant to this Subcontractor Partial
Waiver, Release and Assignment of All Liens and Claims, assigned and will not
assign any right to perfect a lien against the Project, and the undersigned has
the right, power and authority to execute this Subcontractor Partial Waiver,
Release and Assignment of All Liens and Claims on behalf of the Firm.
7. The Firm warrants that all applicable taxes, fees and benefits,
including contributions to any employee benefit plan, relating directly or
indirectly to the Firm's work and with respect to all of its employees have been
paid in full or are current.
8. This instrument is made and delivered with full authority on behalf
of the Firm for the reliance and benefit of the Released Parties to induce
Contractor to make payment of the Invoice to the Firm. The Firm, for valuable
consideration described herein, does hereby agree to defend against, indemnify
and hold the Released Parties absolutely harmless from any and all claims,
demands, liabilities, suits and liens herein waived, assigned or released under
this Partial Waiver, Release and Assignment of All Liens and Claims or brought
by any third party for material furnished for use in, for services or labor
performed upon or in connection with and/or for machinery, tools, or equipment
supplied or leased in connection with the Project for all periods prior to the
Invoice Period and to remove, pay, and release any such lien on the Property or
the
2
<PAGE>
Improvements thereon immediately upon notice of the filing of any such lien.
Effective upon payment by Contractor to the Firm of the Invoice, the Firm agrees
to defend against, indemnify and hold the Released Parties absolutely harmless
from any and all claims, demands, liabilities, suits and liens herein waived,
assigned or released under this Partial Waiver, Release and Assignment of All
Liens and Claims or brought by any third party for material furnished for use
in, for services or labor performed upon or in connection with and/or for
machinery, tools, or equipment supplied or leased in connection with the Project
for the Invoice Period and to remove, pay, and release any such lien on the
Property or the Improvements thereon immediately upon notice of the filing of
any such lien.
9. Notwithstanding anything herein to the contrary, a sum of
$_______________ has been withheld from the Firm to date as a retainage in
accordance with the terms and conditions of the Subcontract between Contractor
and Firm (the "Retainage"). It is understood and agreed that nothing contained
in this Partial Waiver, Release and Assignment of All Liens and Claims shall
prejudice the Firm's rights with respect to the Retainage.
10. Open claims and disputes, if any, are as follows:
EXECUTED BY THE AFFIANT this ___ day of ____________________, 19___.
________________________________
AFFIANT
EXECUTED BY THE FIRM this ___ day of _______________________, 19___.
____________________________________
By:_________________________________
Title:______________________________
Note: Both Jurat and Acknowledgements must be completed by a Notary Public.
SWORN AND SUBSCRIBED before me by ________________________ on this ___
day of ________________, 19___.
____________________________________
Notary Public, State of ____________
____________________________________
Notary's Printed Name
My commission Expires: _____________
3
<PAGE>
(AFFIANT)
THE STATE OF _______ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on ___________________ by
____________________________________.
____________________________________
Notary Public, State of ____________
____________________________________
Notary's Printed Name
My commission Expires: _____________
(FIRM, if Corporation)
STATE OF __________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on ______________________ by
____________________, _____________________ of ________________________, a(n)
___________________ corporation, on behalf of said corporation.
____________________________________
Notary Public, State of ____________
____________________________________
Notary's Printed Name
My commission Expires: _____________
4
<PAGE>
(FIRM, if Partnership)
STATE OF ________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on ______________________ by
____________________, general partner of _______________________, a(n)
____________________ partnership, on behalf of said partnership.
____________________________________
Notary Public, State of ____________
____________________________________
Notary's Printed Name
My commission Expires: _____________
(FIRM, If Sole Proprietorship)
STATE OF _________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on ___________________ by
____________________________.
____________________________________
Notary Public, State of ____________
____________________________________
Notary's Printed Name
My commission Expires: _____________
5
<PAGE>
Exhibit N-7
CONTRACTOR
PARTIAL WAIVER, RELEASE AND
ASSIGNMENT OF ALL LIENS AND CLAIMS
1. The undersigned has personal knowledge of the truthfulness
of all statements made herein and is duly authorized to make such statements and
execute and deliver this Partial Waiver, Release and Assignment of All Liens and
Claims by and on behalf of Zachry Construction Corporation, a Delaware
corporation (the "Firm").
2. Pursuant to that certain contract (the "Contract") dated
the ______ day of ________________, 1999, between Firm and _________________
(the "Owner"), Firm has directly and through sub-subcontractors and material
suppliers, performed labor and/or furnished materials for the construction of
the Tenaska Georgia Generation Station (the "Improvements") located upon real
property located in Heard County, Georgia and legally described on the attached
Exhibit "A" (the "Property"). The Improvements and the Property are hereinafter
sometimes collectively referred to as the "Project". The Firm is requesting
payment of its invoice number _____________________ (the "Invoice") for labor
performed and/or materials furnished in connection with the Improvements during
the period beginning ______________________ and ending _______________________
(the "Invoice Period").
3. All subcontractors, laborers, mechanics, materialmen,
suppliers, agents, brokers, attorneys and other persons or entities whatsoever
(collectively, the "Subcontractors") who have furnished to the Firm labor or
services at the Property or delivered to the Firm at the Property materials,
equipment, machinery and/or goods or have specially fabricated materials for the
Project in connection with the Improvements and the above described Property
have been paid in full for all periods prior to the Invoice Period (except for
retainages which are not yet due and payable and for those claims specifically
listed in Item 12 below) and have fully waived and released all claims, demands,
suits and rights to any and all liens or claims, legal or equitable,
contractual, statutory, constitutional or otherwise, regardless of whether
evidenced by lien affidavit or statement, upon the Improvements and the above
described Property whatsoever arising out of the furnishing of or the agreements
to furnish such items for all periods prior to the Invoice Period (except for
retainages which are not yet due and payable and for those claims specifically
listed in Item 12 below). All other Subcontractors who have furnished or agreed
to furnish labor, materials, equipment, machinery, goods and/or services to the
Firm in connection with the Improvements and the above described Property will
be paid in full by the Firm in accordance with the payment terms agreed to by
the Firm and such Subcontractors; and each time a payment is made by the Firm to
any of such Subcontractors, the Firm will cause such Subcontractors to fully
waive and release all claims, demands, suits and rights to any and all liens or
claims, legal or equitable, contractual, statutory, constitutional or otherwise,
regardless of whether evidenced by lien affidavit or statement, upon the
Improvements and the above described Property whatsoever for all such items for
which payment was received by such Subcontractor. Further, no security interest,
conditional bill of sale or retention of title agreement has been given or
executed by the Firm or any laborer, service provider or materialman acting by,
through or under the Firm for or in connection with any materials, machinery
and/or equipment placed upon or installed on the Property.
<PAGE>
4. The Firm, for valuable consideration, described herein,
does hereby waive, assign and release to and for the benefit of Owner and
Owner's partners, affiliated companies, lessees, successors, assigns, secured
lenders and title insurance companies and each of the above parties' officers,
directors, shareholders, employees and agents (hereinafter collectively referred
to as "Released Parties") all right of the Firm to claim a mechanic's or
materialman's lien or laborer's lien or any similar lien or claim, legal or
equitable, contractual, statutory, constitutional or otherwise, regardless or
whether evidenced by lien affidavit or statement, for material furnished for use
in, for services or labor performed upon or in connection with, and/or for,
machinery, tools or equipment supplied or leased in connection with the Project
for all periods prior to the Invoice Period (except for retainages which are not
yet due and payable and which have not been paid for by Owner and except for
those claims specifically listed in Item 12 below). Effective upon payment by
Owner to the Firm of the Invoice, the Firm waives, assigns and releases to and
for the benefit of Released Parties all right of the Firm to claim a mechanic's
or materialman's lien or laborer's lien or any similar lien or claim, legal or
equitable, contractual, statutory, constitutional or otherwise, regardless or
whether evidenced by lien affidavit or statement, for material furnished for use
in, for services or labor performed upon or in connection with, and/or for,
machinery, tools or equipment supplied or leased in connection with the Project
for the Invoice Period (except for retainages which are not yet due and payable
and which have not been paid for by Owner and for those claims specifically
listed in Item 12 below).
5. The Firm will undertake no work in addition to that called
for by the contract between the Firm and the Owner nor make any changes in any
contract for the furnishing of labor or materials to the Project without written
approval of the Owner.
6. The Firm has not, other than pursuant to this Contractor
Partial Waiver, Release and Assignment of All Liens and Claims, assigned and
will not assign any right to perfect a lien against the Project, and the
undersigned has the right, power and authority to execute this Contractor
Partial Waiver, Release and Assignment of All Liens and Claims on behalf of the
Firm.
7. The Firm warrants that all applicable taxes, fees and
benefits, including contributions to any employee benefit plan, relating
directly or indirectly to the Firm's work and with respect to all of its
employees have been paid in full or are current.
8. The contracted amount of work to be performed or materials
to be supplied by and through the Firm is as follows:
<TABLE>
<S> <C>
Original contract amount $__________________
Change orders approved to date (+ or -) $__________________
TOTAL CONTRACT AMOUNT $__________________
</TABLE>
9. The total amount paid to the undersigned to date on account
of work performed and materials furnished to the Project is $_________________.
2
<PAGE>
10. The total unpaid amount of any retainage and which has
been earned to date (subject to the provisions of the Contract) and not yet paid
is $________________.
11. This instrument is made and delivered with full authority
on behalf of the Firm for the reliance and benefit of the Released Parties to
induce Owner to make payment of the Invoice to the Firm. The Firm, for valuable
consideration, described herein, does hereby agree to defend against, indemnify
and hold the Released Parties absolutely harmless from any and all claims,
demands, liabilities, suits and liens (i) herein waived, assigned or released
under this Partial Waiver, Release and Assignment of All Liens and Claims or
(ii) brought or filed by any third party or Subcontractor for material furnished
for use in, for services or, labor performed upon or in connection with and/or
for machinery, tools, or equipment supplied or leased in connection with the
Project for all periods prior to the Invoice Period and to remove, pay, and
release any such lien on the Property or the Improvements thereon immediately
upon notice of the filing of any such lien. Effective upon payment by Owner to
the Firm of the Invoice, the Firm agrees to defend against, indemnify and hold
the Released Parties absolutely harmless from any and all claims, demands,
liabilities, suits and liens (i) herein waived, assigned or released under this
Partial Waiver, Release and Assignment of All Liens and Claims or (ii) brought
or filed by any third party or Subcontractor for material furnished for use in,
for services or, labor performed upon or in connection with and/or for
machinery, tools, or equipment supplied or leased in connection with the Project
for the Invoice Period and to remove, pay, and release any such lien on the
Property or the Improvements thereon immediately upon notice of the filing of
any such lien.
12. Open claims and disputes, if any, are as follows:
EXECUTED this ___ day of __________________, 19___.
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation
By:______________________________
Title:___________________________
3
<PAGE>
STATE OF _______________ )
) ss.
COUNTY OF ______________ )
On this ___ day of _________________, ____, before me personally
appeared ___________________________________, to me known to be the
______________________ of Zachry Construction Corporation, a Delaware
corporation and acknowledged the said instrument to be his free and voluntary
act and deed on behalf of Zachry Construction Corporation, a Delaware
corporation, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
___________________________________
Notary Public
My commission expires:_____________
4
<PAGE>
Exhibit N-8
CONTRACTOR'S AFFIDAVIT
On behalf of Zachry Construction Corporation, a Delaware corporation,
the undersigned, being the Authorized Representatives of said corporation, upon
being duly sworn on oath, depose and state that, to the best of the
undersigneds' knowledge, the attached Exhibit "A" contains a list of all parties
who have performed site work or delivered materials or supplies in connection
with the construction of a power generation facility on the real property
described on the attached Exhibit "B" as of the date of this Affidavit.
Dated: ________________
Zachry Construction Corporation,
a Delaware corporation
By: ____________________________
Title:__________________________
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
Sworn to and subscribed before me by ____________________ on this
______ day of ______________, _____.
________________________________
Notary Public
My commission expires:__________
<PAGE>
Exhibit N-9
After Recording Return to:
SUBCONTRACTOR PRIORITY AGREEMENT
WHEREAS, ________________ (the "Owner"), the owner of the land
described on the attached Exhibit "A" in Heard County, State of Georgia,
proposes to erect thereon certain improvements and for the purpose of raising
necessary funds has applied to a group of banks led by __________________, as
Agent (hereinafter collectively called the "Lender") for a loan to be secured by
a first priority Deed to Secure Debt and Security Agreement (hereinafter
referred to as the "Security Deed") on the said described premises; and
WHEREAS, the Lender has applied to Title Company (as defined below) for
a policy of title insurance to be issued to the Lender insuring the priority of
lien of the Mortgage;
WHEREAS, "Title Company" means ______________________ or any other
title company which issues the policy of title insurance referred to herein;
WHEREAS, the undersigned has been employed by the contractor, Zachry
Construction Corporation, a Delaware corporation, to furnish materials or to
perform labor or both thereof incident to the said improvements, for which the
undersigned may have a statutory or constitutional right of lien; and
WHEREAS, the undersigned is desirous of said mortgage loan being
consummated and said title insurance being issued.
NOW, THEREFORE, in consideration of the premises and as an inducement
to the Lender to enter into a loan agreement with the Owner and to the Title
Company to issue the said policy of title insurance, respectively, the
undersigned does hereby agree that the lien of the proposed Security Deed shall
be and at all times remain prior, paramount and superior to any statutory or
constitutional right of lien that the undersigned may now have or hereafter
acquire, whether for
<PAGE>
materials furnished or labor performed or for both thereof.
IN WITNESS WHEREOF, the undersigned has executed this Priority
Agreement this ____ day of _________, 199__.
________________________________
Subcontractor
_________________________ By:_____________________________
Unofficial Witness
Title:__________________________
ACKNOWLEDGEMENT
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
On this ___ day of _______, 1999, before me personally appeared , to me
known to be the ______________________ of Zachry Construction Corporation, a
Delaware corporation and acknowledged the said instrument to be his free and
voluntary act and deed on behalf of Zachry Construction Corporation, a Delaware
corporation, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
________________________________
Notary Public
My commission expires:__________
2
<PAGE>
EXHIBIT N-10
CONTRACTOR PRIORITY AGREEMENT
WHEREAS, ___________________ (the "Owner"), the owner of the land
described in Schedule A attached hereto, proposes to erect thereon certain
improvements (the "Project") and for the purpose of raising necessary funds has
applied to a group of banks led by _________________, as Agent (hereinafter
collectively called the "Lender") for a loan to be secured by a first priority
Deed to Secure Debt and Security Agreement (hereinafter referred to as the
"Security Deed") on said described premises; and
WHEREAS, the Lender has applied to Title Company (as defined below) for
a policy of title insurance to be Issued to the Lender insuring the first
priority of the lien of the Mortgage;
WHEREAS, "Title Company" means _______________________ or any other
title company which issues the policy of title insurance referred to herein;
WHEREAS, the undersigned (the "Contractor") and Owner entered into an
Engineering, Procurement and Construction Agreement dated _________, 1999, (as
further amended, supplemented or otherwise modified from time to time, the
"EPC");
WHEREAS, the undersigned has been employed to furnish materials or to
perform labor or both thereof incident to the said improvements, for which the
undersigned may have a statutory or constitutional right of lien; and
WHEREAS, the undersigned is desirous of said mortgage loan being
consummated and said title insurance being issued.
NOW, THEREFORE, in consideration of the premises and an inducement to
the Lender to enter into a loan agreement with the Owner and to the Title
Company to issue the said policy of title insurance, respectively, the
undersigned does hereby agree that the lien of the proposed Security Deed shall
be and at all times remain prior, paramount and superior to any statutory or
constitutional right of lien that the undersigned may now have or hereafter
acquire, whether for materials furnished or labor performed or for both thereof.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Contractor
Priority Agreement this day of , 1999.
----- ---------
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation.
By:
-------------------------------
- --------------------
Unofficial Witness Title:
----------------------------
2
<PAGE>
STATE OF _____________ )
) ss.
COUNTY OF ___________ )
On this ___ day of _______, 1999, before me personally appeared
______________, to me known to be the _______________________of Zachry
Construction Corporation, a Delaware corporation and acknowledged the said
instrument to be his free and voluntary act and deed on behalf of Zachry
Construction Corporation, a Delaware corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
---------------------------------------
Notary Public
My commission expires:
------------------
3
<PAGE>
EXHIBIT N-11
SUBCONTRACTOR
FINAL WAIVER, RELEASE AND
ASSIGNMENT OF ALL LIENS AND CLAIMS
THE STATE OF ________ )
) SS.
COUNTY OF ___________ )
I, the undersigned Affiant, being of lawful age, under oath do hereby
swear that the following statements are true:
1. I am the __________________________ of _______________________,
a(n) _______________ [corporation] [partnership] [sole proprietorship] (the
"Firm") and have personal knowledge of the truthfulness of all statements made
herein, and I am duly authorized to make such statements and execute and deliver
this Final Waiver, Release and Assignment of All Liens and Claims by and on
behalf for said Firm.
2. Pursuant to that certain subcontract (the "Subcontract") dated the
____ day of ____________, 19__, between Firm and Zachry Construction
Corporation, a Delaware corporation ("Contractor"), Firm has directly and
through sub-subcontractors and material suppliers, performed labor and/or
furnished materials for the construction of the Tenaska Georgia Generation
Station (the "Improvements") located upon real property located in Heard County,
Georgia and legally described on the attached Exhibit "A" (the "Property"). The
Improvements and the Property are hereinafter sometimes collectively referred to
as the "Project". The Firm is requesting payment of its final invoice (the
"Invoice") for payment under the Subcontract.
3. All sub-subcontractors (of whatever tier or level), laborers,
mechanics, materialmen, suppliers, agents, brokers, attorneys and other persons
or entities whatsoever who have furnished or agreed to furnish labor, materials,
equipment, machinery, goods and/or services to the Firm in connection with the
Improvements and the above described Property have been paid in full and have
fully waived and released all claims, demands, suits and rights to any and all
liens or claims, legal or equitable, contractual, statutory, or constitutional,
or otherwise, regardless of whether evidenced by lien affidavit or statement,
upon the Improvements and the above described Property whatsoever arising out of
the furnishing of or the agreements to furnish such items. Further, no security
interest, conditional bill of sale or retention of title agreement has been
given or executed by the Firm or any laborer, service provider or materialman
acting by, through or under the Firm for or in connection with any materials,
machinery and/or equipment placed upon or installed on the Property.
4. The Firm, for valuable consideration described herein, does hereby
waive, assign and release to and for the benefit of the Contractor and
___________________ ("Owner" of the Project), and the Owner's partners,
affiliated companies, lessees, successors, assigns, secured lenders and title
insurance companies, and each of the above mentioned parties' officers,
directors, shareholders, employees and agents (hereinafter collectively referred
to as the "Released Parties"), all right of the
<PAGE>
Firm to claim a mechanic's or materialman's lien or laborer's lien or any
similar lien or claim, legal or equitable, contractual, statutory,
constitutional, or otherwise regardless of whether evidenced by lien affidavit
or statement, for material furnished for use in, for services or labor performed
upon or in connection with, and/or for machinery, tools and equipment supplied
or leased in connection with the Project. The Firm by this instrument further
releases and discharges the Released Parties from all obligations,
responsibilities, liabilities, commitments and duties directly or indirectly
arising out of or existing by virtue of the Subcontract between the Firm and
Contractor and acknowledges that it has been paid in full. Nothing contained
herein shall, however, operate to release or relieve Firm from any of its
continuing obligations, liabilities or responsibilities which would otherwise
survive completion and acceptance of the Project and final payment by Contractor
including, but not limited to, the Released Parties' rights of indemnity, audit
rights and all warranties and guaranties.
5. The Firm has not assigned and will not assign, other than as set
forth in this Subcontractor Final Waiver, Release and Assignment of All Liens
and Claims, any right to perfect a lien against the Project.
6. The Firm warrants that all applicable taxes, fees and benefits,
including contributions to any employee benefit plan, relating directly or
indirectly to the Firm's work and with respect to all of its employees have been
paid in full.
7. This instrument is made and delivered with full authority on behalf
of the Firm for the reliance and benefit of the above named Released Parties to
induce Contractor to make payment to the Firm for material furnished for use in,
for services or labor performed upon or in connection with, and/or for
machinery, tools or equipment supplied or leased in connection with the Project.
In consideration of such payment, the Firm does hereby agree to defend against,
indemnify and hold the Released Parties absolutely harmless from any and all
claims, demands, liabilities, suits and liens herein waived, released or
assigned under this Final Waiver, Release and Assignment of All Liens and Claims
or brought by any third party for material furnished for use in, for services or
labor performed upon or in connection with, and/or for machinery, tools or
equipment supplied or leased in connection with the Project, and to pay, remove
and release any such lien on the Property or the Improvements thereon
immediately upon notice of the filing of any such lien.
EXECUTED BY THE AFFIANT this day of , 19 .
---- -------------------- ----
-----------------------------------------
AFFIANT
EXECUTED BY THE FIRM this day of , 19 .
--- ------------------------ ----
By:
----------------------------------
Title:
-------------------------------
2
<PAGE>
Note: Both Jurat and Acknowledgements must be completed by a Notary Public.
SWORN AND SUBSCRIBED before me by on this
------------------------- ----
day of , 19 .
----------------- ----
------------------------------------
Notary Public, State of
-------------
------------------------------------
Notary's Printed Name
My commission Expires:
--------------
(AFFIANT)
STATE OF ___________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on by
--------------------
- --------------------------------------------------------.
------------------------------------
Notary Public, State of
-------------
------------------------------------
Notary's Printed Name
My commission Expires:
--------------
3
<PAGE>
(FIRM, if Corporation)
STATE OF __________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on by
----------------------
, of ,a(n)
- ------------------------------- ------------------- ----------------------
corporation, on behalf of said corporation.
- --------------------
------------------------------------
Notary Public, State of
-------------
------------------------------------
Notary's Printed Name
My commission Expires:
--------------
(FIRM, if Partnership)
STATE OF __________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on by
-----------------------
- ---------------------------------------, general partner of ,
--------------------
a(n) partnership,on behalf of said partnership.
----------------
------------------------------------
Notary Public, State of
-------------
------------------------------------
Notary's Printed Name
My commission Expires:
--------------
4
<PAGE>
(FIRM, If Sole Proprietorship)
STATE OF __________ )
) SS.
COUNTY OF _________ )
This instrument was acknowledged before me on by
--------------------
- --------------------------------------------------------.
------------------------------------
Notary Public, State of
-------------
------------------------------------
Notary's Printed Name
My commission Expires:
--------------
5
<PAGE>
EXHIBIT N-12
CONTRACTOR
FINAL WAIVER, RELEASE, AFFIDAVIT AND
ASSIGNMENT OF ALL LIENS AND CLAIMS
THE STATE OF ___________ )
)ss.
COUNTY OF ______________ )
I, the undersigned Affiant, being of lawful age, under oath do hereby
swear that the following statements are true:
1. I have personal knowledge of the truthfulness of all statements made
herein, and I am duly authorized to make such statements and execute and deliver
this Final Waiver, Release and Assignment of All Liens and Claims by and on
behalf of Zachry Construction Corporation, a Delaware corporation (the "Firm").
2. Pursuant to that certain contract (the "Contract") dated the __ day
of ____________, 1999, between Firm and _______________ ("Owner"), Firm has
directly and through subcontractors and material suppliers, performed labor
and/or furnished materials for the construction of the Tenaska Georgia
Generation Station (the "Improvements") located upon real property located in
Heard County, Georgia and legally described on the attached Exhibit "A" (the
"Property"). The Improvements and the Property are hereinafter sometimes
collectively referred to as the "Project". The Firm requests payment of its
final invoice (the "Invoice") for payment under the Contract.
3. All subcontractors, laborers, mechanics, materialmen, suppliers,
agents, brokers, attorneys and other persons or entities whatsoever who have
furnished or agreed to furnish labor, materials, fixtures, equipment, machinery,
goods, supplies and/or services to the Firm in connection with the Improvements
and the above described Property have been paid in full, the agreed or
reasonable value and have fully waived and released all claims, demands, suits
and rights to any and all liens or claims, legal or equitable, contractual,
statutory, constitutional, or otherwise, regardless of whether evidenced by lien
affidavit or statement, upon the Improvements and the above described Property
whatsoever arising out of the furnishing of or the agreements to furnish such
items. Further, that there are no fixtures now installed in the Improvements or
on the Property pursuant to the Contract that have not been paid for in full and
that no security interest, conditional bill of sale or retention of title
agreement has been given or executed by the Firm or any laborer, service
provider or materialman acting by, through or under the Firm for or in
connection with any materials, machinery and/or equipment, and/or other personal
property placed upon or installed on the Property.
4. The Firm, for valuable consideration described herein, (i) hereby
acknowledges receipt of payment in full of the agreed price or the reasonable
value for all amounts due and owing to Firm for the Improvements on the Property
as required by the Contract, and further (ii) does hereby waive, assign and
release to and for the benefit of the Owner, and the Owner's partners,
affiliated companies, lessees, successors, assigns, secured lenders and title
insurance companies, and each of
<PAGE>
the above mentioned parties' officers, directors, shareholders, employees and
agents (hereinafter collectively referred to as the "Released Parties"), all
right of the Firm to claim a mechanic's or materialman's lien or laborer's lien
or any similar lien or claim, legal or equitable, contractual, statutory,
constitutional, or otherwise, regardless of whether evidenced by lien affidavit
or statement, for material furnished for use in, for services or labor performed
upon or in connection with, and/or for machinery, tools and equipment supplied
or leased in connection with the Project. The Firm by this instrument further
releases and discharges the Released Parties from all obligations for payment
directly or indirectly arising out of or existing by virtue of the Contract
between the Firm and Owner. Nothing contained herein shall, however, operate to
release or relieve Firm or Owner from any continuing obligations for payment,
liabilities or responsibilities which would otherwise survive completion and
acceptance of the Project and final payment by Owner including, but not limited
to, rights of indemnity, audit rights and all warranties and guaranties.
5. The Firm has not assigned and will not assign, other than as set
forth in this Contractor Final Waiver, Release and Assignment of All Liens and
Claims, any right to perfect a lien against the Project.
6. The Firm warrants that all applicable taxes, fees and benefits,
including contributions to any employee benefit plan, relating directly or
indirectly to the Firm's work and with respect to all of its employees have been
paid in full.
7. This instrument is made and delivered with full authority on behalf
of the Firm for the reliance and benefit of the above named Released Parties to
induce Owner to make payment to the Firm for material furnished for use in, for
services or labor performed upon or in connection with, and/or for machinery,
tools or equipment supplied or leased in connection with the Project. In
consideration of such payment, the Firm does hereby agree to defend against,
indemnify and hold the Released Parties absolutely harmless from any and all
claims, demands, liabilities, suits and liens herein waived, released or
assigned under this Final Waiver, Release and Assignment of All Liens and Claims
or brought by any third party for material furnished for use in, for services or
labor performed upon or in connection with, and/or for machinery, tools or
equipment supplied or leased in connection with the Project, and to pay, remove
and release any such lien on the Property or the Improvements thereon
immediately upon notice of the filing of any such lien.
8. This sworn statement is made to Owner and to the holder of any
security deed which security deed secures an indebtedness advanced by such
holder as construction or purchase money with respect to said Property, in
accordance with the provisions of O.C.G.A. ss.44-14-361.2, to induce Owner to
make final disbursement to Firm and in connection with a loan in which the
Property in part secures the repayment thereof.
EXECUTED BY THE AFFIANT this day of , 199 .
----- ------------------- ---
------------------------------------------
AFFIANT
EXECUTED BY THE FIRM this day of , 199 .
----- ------------------ ---
2
<PAGE>
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation
By:
-----------------------------
Title:
--------------------------
3
<PAGE>
NOTE: Both Jurat and Acknowledgements must be completed by a Notary Public.
SWORN TO AND SUBSCRIBED before me by on this day
--------------------- ------
of ,199 .
--------------- ---
------------------------------------
Notary Public, State of
-------------
------------------------------------
Notary's Printed Name
My commission Expires:
--------------
(AFFIANT)
THE STATE OF __________ )
)
COUNTY OF _____________ )
This instrument was acknowledged before me on by
--------------------
- --------------------------------------------------------.
------------------------------------
Notary Public, State of
-------------
------------------------------------
Notary's Printed Name
My commission Expires:
--------------
(FIRM)
STATE OF _______________ )
) ss.
COUNTY OF ______________ )
On this day of , 199 , before me personally
----- ------------------ ---
appeared , to me known to be the
-----------------------------------
of Zachry Construction Corporation, a Delaware
- ----------------------
corporation, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
---------------------------------------
Notary Public
My commission expires:
-----------------
4
<PAGE>
NOTICE OF COMMENCEMENT
TO: Clerk of the Superior Court of Heard County, Georgia
Pursuant to O.C.G.A. Section 44-14-361.5, not later than 15 days
after physically commencing work on the property, the undersigned gives
Notice of Commencement of improvements to property including the following
information:
(1) NAME, ADDRESS AND TELEPHONE NUMBER OF CONTRACTOR:
Zachary Construction Corporation
--------------------------------
--------------------------------
--------------------------------
--------------------------------
Attn:
----------------------------
(2) NAME AND LOCATION OF PROJECT AND LEGAL DESCRIPTION OF THE PROPERTY:
Tenaska Georgia Generation Station, development of a power plant to be
constructed on certain land located in Land Lots 236 and 237 of the 4th
District of Heard County, Georgia and being more particularly described
in EXHIBIT "A" attached hereto and incorporated herein by this
reference.
5
<PAGE>
(3) NAME AND ADDRESS OF TRUE OWNER OF THE PROPERTY:
LESSOR:
The Development Authority of Heard County, Georgia
c/o Glover & Davis
10 Brown Street
Newnan, Georgia 30264-1038
Telephone: 770-683-6000
Fax: 770-683-6010
LESSEE:
Tenaska Georgia Partners, L.P.
--------------------------------
--------------------------------
--------------------------------
--------------------------------
Attn:
----------------------------
Telephone:
----------------------
Fax:
-----------------------------
(4) NAME AND ADDRESS OF PERSON OTHER THAN OWNER AT WHOSE INSTANCE THE
IMPROVEMENTS ARE BEING MADE, IF NOT THE TRUE OWNER:
Tenaska Georgia Partners, L.P.
--------------------------------
--------------------------------
--------------------------------
--------------------------------
Attn:
----------------------------
Telephone:
-----------------------
Fax:
------------------------------
6
<PAGE>
(5) NAME AND ADDRESS FOR SURETY FOR THE PERFORMANCE AND PAYMENT BONDS, IF
ANY:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
(6) NAME AND ADDRESS OF CONSTRUCTION LENDER, IF ANY:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
Zachary Construction Corporation
By:
--------------------------------
Print Name:
--------------------------------
Its:
--------------------------------
Dated: , 2000
--------------------------------
* This document must be filed with the clerk of the superior court for the
county in which the project is located and a copy of this document must be
posted at the project site not later than 15 days after the contractor
physically commences work on the property.
** Within 10 calendar days of receipt of a written request, the contractor must
give a copy of this Notice of Commencement to any subcontractor, materialman, or
person making the request.
7
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
8
<PAGE>
Tenaska Georgia Generating Project
EXHIBIT O
GE PAYMENT PROCEDURES
<PAGE>
- --------------------------------------------------------- ----------------------
EPC - Exhibit O
TENASKA GEORGIA GENERATION PROJECT ----------------------
Page 1 of 3
- --------------------------------------------------------- ----------------------
GE Payment Procedures
The following terms and conditions shall apply regarding payment to General
Electric Company for the six (6) gas turbines and associated equipment as
defined in Exhibit H.
1. Contractor will accept assignment of the Turbine Contract attached as
Exhibit H subject to any specific restrictions contained in the EPC
Agreement.
2. Owner will pay General Electric Company directly in accordance with the
payment schedule contained in Exhibit H and General Electric's Progress
Payment Invoice that has been approved by the Contractor. Contractor shall
certify that the Project is progressing in accordance with the payment
schedule contained in Exhibit H.
3. Included in the Monthly Progress Report, as described in Article 3 of the
EPC Agreement, Contractor will furnish a separate Progress Payment Invoice
for General Electric Company equipment included in Exhibit H. Retainage
shall not be withheld from sums due to Contractor as a result of sums paid
to General Electric Company.
4. Except for the payments to General Electric Company, and specific
exclusions contained in the EPC Agreement, Contractor will remain
responsible for the supply, installation, and performance of the equipment
furnished pursuant to the Turbine Contract as if this Exhibit did not
exist.
5. The scope of supply for which the Owner will provide direct payment to
General Electric Company is outlined in the following:
Turbine Contract attached as Exhibit H
<PAGE>
Tenaska Georgia Generating Project
EXHIBIT P
CALCULATION Of ESCALATION
<PAGE>
[*] The following three (3) pages have been omitted and filed sepaprately
with the Securities and Exchange Commission as part of a Confidential
Treatment Request.
<PAGE>
Tenaska Georgia Generating Project
EXHIBIT Q
LETTER OF CREDIT
<PAGE>
EXHIBIT Q
[BANK LETTERHEAD]
DATE: [ISSUANCE DATE]
IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: ____________
<TABLE>
<CAPTION>
BENEFICIARY: APPLICANT:
<S> <C>
__________________________________ _____________________________
__________________________________ _____________________________
__________________________________ _____________________________
__________________________________ _____________________________
ATTENTION:________________________ ATTENTION: ________________
AMOUNT: USD ________________
____________ AND 00/100'S US DOLLARS
EXPIRATION: ____________
</TABLE>
GENTLEMEN:
BY ORDER OF OUR CLIENT, THE ("APPLICANT"), FOR THE ACCOUNT OF [TO BE
DETERMINED], WE ("BANK") HEREBY ISSUE OUR IRREVOCABLE LETTER OF CREDIT NUMBER
________ IN THE AMOUNT OF, BUT NOT EXCEEDING USD _________________
(__________________________________ NO/100 UNITED STATES DOLLARS). IT IS OUR
UNDERSTANDING THAT THIS LETTER OF CREDIT IS ISSUED IN LIEU OF RETENTION AND IN
CONNECTION WITH YOUR AGREEMENT FOR CONSTRUCTION WITH {NAME} DATED AS OF
{DATE}(AS THE SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME IN
ACCORDANCE WITH ITS TERMS) REGARDING THE CONSTRUCTION OF {THE PROJECT},
PERFORMED AT YOUR SITE IN {CITY, STATE}.
FUNDS ARE AVAILABLE UNDER THIS LETTER OF CREDIT UPON PRESENTATION OF YOUR SIGHT
DRAFT DRAWN ON US ACCOMPANIED BY THE FOLLOWING DOCUMENTS:
A LETTER, PURPORTEDLY SIGNED BY AN AUTHORIZED OFFICER OF {BENEFICIARY}, STATING
THAT EITHER (A) {APPLICANT} HAS FAILED TO COMPLY WITH AN OBLIGATION UNDER THE
AGREEMENT FOR ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES, DATED
________, 1999 BETWEEN _____________________ ("OWNER" / BENEFICIARY) AFTER ANY
APPLICABLE NOTICE AND CURE PERIOD REQUIRED BY THE AGREEMENT WITH {BENEFICIARY},
AND {APPLICANT}, AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO
TIME OR (B) {APPLICANT} HAS NOT COMPLETED ALL PERFORMANCE DUE FROM {APPLICANT}
UNDER THE ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT AND A SATISFACTORY
SUBSTITUTE LETTER OF CREDIT HAS NOT BEEN DELIVERED ON BEHALF OF {APPLICANT} TO
{BENEFICIARY} WITHIN 15 DAYS OF THE EXPIRATION DATE OF THE LETTER OF CREDIT. THE
LETTER SHALL FURTHER STATE THAT WRITTEN NOTICE HAS BEEN DELIVERED TO CONTRACTOR
OF BENEFICIARY'S INTENT TO DRAW UNDER THIS LETTER OF CREDIT NO. ______________
AT LEAST FIVE (5) CALENDAR DAYS PRIOR TO THE DATE OF SUCH SIGHT DRAFT.
<PAGE>
WE HEREBY AGREE THAT MULTIPLE PARTIAL DRAWINGS MAY BE MADE AND THAT ALL DRAFTS
DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT WILL BE
DULY HONORED IF DRAWN AND PRESENTED FOR PAYMENT AT OUR COUNTERS ON OR BEFORE THE
EXPIRATION DATE, AS DEFINED BELOW.
PRESENTATION OF SUCH DRAFT(S) AND DOCUMENT(S) SHALL BE MADE AT OUR OFFICE
LOCATED AT {ADDRESS, CITY, STATE, ZIP CODE}.
COMMUNICATIONS WITH RESPECT TO THIS LETTER OF CREDIT SHALL BE IN WRITING AND
SHALL BE ADDRESSED TO US AT {ADDRESS, CITY, STATE, ZIP CODE}, ATTENTION: LETTER
OF CREDIT DEPARTMENT, SPECIFICALLY REFERRING TO THE NUMBER OF THIS LETTER OF
CREDIT.
THIS LETTER OF CREDIT IS EFFECTIVE IMMEDIATELY AND EXPIRES UPON THE EARLIER OF
(A) {DATE}, OR (B) THE DATE ON WHICH THE AMOUNT OF THE LETTER OF CREDIT IS
REDUCED TO ZERO BY BENEFICIARY'S DRAWS HEREUNDER, OR (C) THE DATE ON WHICH THE
LETTER OF CREDIT HAS BEEN RETURNED TO US TOGETHER WITH IRREVOCABLE INSTRUCTIONS
FROM BENEFICIARY TO CANCEL THIS LETTER OF CREDIT (THE "EXPIRATION DATE").
TO THE EXTENT NOT CONTRARY TO THE EXPRESS TERMS HEREOF, THIS LETTER OF CREDIT
SHALL BE GOVERNED BY THE UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY CREDITS
(1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500 (HEREIN
REFERRED TO AS THE "UCP"), OR BY SUBSEQUENT UNIFORM CUSTOMS AND PRACTICE FIXED
BY SUBSEQUENT CONGRESSES OF THE INTERNATIONAL CHAMBER OF COMMERCE. THIS LETTER
OF CREDIT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
TEXAS AND SHALL, AS TO MATTERS NOT GOVERNED BY THE UCP, BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
EXCEPT AS OTHERWISE STATED HEREIN, THIS LETTER OF CREDIT MAY NOT BE AMENDED,
MODIFIED, TERMINATED, REVOKED OR CANCELLED WITHOUT OUR WRITTEN CONSENT, AND THE
WRITTEN CONSENT OF APPLICANT AND BENEFICIARY.
YOURS VERY TRULY,
BY: ________________________
AUTHORIZED SIGNATURE
<PAGE>
Tenaska Georgia Generating Project
EXHIBIT R
CERTIFICATE OF CONSTRUCTION CONTRACTOR
<PAGE>
EXHIBIT R
________________________, 19_____
Tenaska Georgia Partners, L.P.
1044 North 115th Street
Omaha, Nebraska 68154
Attn: _________________
Project: Tenaska Georgia Generation Facility
This certificate is delivered to you pursuant to Section 3.1(d)(iii) of
the Engineering, Procurement and Construction Agreement dated September 15,
1999, between Tenaska Georgia I, L.P., a Delaware limited partnership
("Tenaska"), and Zachry Construction Corporation, a Delaware corporation
("Contractor"), as assigned by Tenaska to Tenaska Georgia Partners, L.P., a
Delaware limited partnership.
Unless otherwise indicated, capitalized terms used herein shall have
the meaning set forth in the above-referenced Engineering, Procurement and
Construction Agreement (the "EPC").
(1) Contractor hereby certifies that all work for which payment is
sought by the Contractor has been completed in accordance with
the Drawings.
(2) The work for which payment is requested has been performed by
Contractor in accordance with the EPC.
(3) Contractor reasonably believes Commercial Operation is
achievable by the Scheduled Date of Commercial Operation, as
such terms are defined in the EPC, or Contractor has attached
a statement outlining the causes of any substantial delays.
<PAGE>
______________, as Agent -2- ______________, 19___
The undersigned certifies that he is duly authorized to execute and
deliver this certificate on behalf of Contractor.
Zachry Construction Corporation,
a Delaware corporation
By: _______________________________
Name: ____________________________
Title: ___________________________
By: _______________________________
Name: ____________________________
Title: ___________________________
<PAGE>
FIRST AMENDMENT TO
ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT
THIS FIRST AMENDMENT ("Amendment") dated October 8, 1999 is made and entered
into by and between Tenaska Georgia I, L.P., a Delaware limited partnership
(hereinafter "Owner"), and Zachry Construction Corporation, a Delaware
corporation (hereinafter "Contractor").
WHEREAS, Owner and Contractor entered into an Engineering, Procurement And
Construction Agreement, dated September 15, 1999, for the engineering,
procurement and construction of a dispatchable electric generating facility to
be located in Heard County in the State of Georgia (the "EPC Agreement"); and
WHEREAS, Owner and Contractor desire to amend the EPC Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the parties, intending to be legally bound, agree as
follows:
1. Capitalized terms used but not defined in this Amendment shall have the
meaning assigned to them in the EPC Agreement.
2. The definition for "Interconnection Points" is amended in its entirety to
read as follows:
"INTERCONNECTION POINTS" means the points at which the Plant interconnects
with (a) the electric transmission system , (b) the pipeline for the
receipt of natural gas, (c) the water main for the receipt of water, and
(d) the wastewater line for the outflow of wastewater, each of which is
identified in Attachment I of Exhibit "B," provided that if Owner exercises
Option 5 in Exhibit J, "500kV Switchyard" the point at which the Plant
interconnects with the electric transmission system shall be the points at
which the 500kV transmission system terminates at the switchyard deadend
structures.
3. Exhibit J, entitled "SCOPE CHANGE, UNITS, RATES AND OPTION PRICING" is
hereby amended by deleting the prior exhibit in its entirety and replacing
such exhibit with Exhibit J attached to this Amendment.
4. Section 8.1(b) of the EPC Agreement is amended by adding the following
language at the end of such Section:
"In the event that Owner exercises one or more options set forth in Exhibit
J which increase the Guaranteed Lump Sum Price by $1,000,000 or more, in
the aggregate, Contractor shall, within thirty (30) days after the exercise
of such option(s), furnish to Owner an amendment or rider to the payment
and performance bonds previously furnished by Contractor, increasing the
face amount of such bonds by the amount of increase in the Guaranteed Lump
Sum Price which occurs as a result of the exercise of such option(s),
provided that Contractor shall not be required to again increase the face
amount of such bonds as the result of the further exercise of any options
by Owner unless the Guaranteed Lump Sum Price is again increased by
$1,000,000 or more."
<PAGE>
5. Section 13.1(b) of the EPC Agreement is amended in its entirety to read as
follows:
"(b) The amount of liquidated damages payable by Contractor pursuant to
Section 13.1(a) shall be limited as follows:
(i) The total liquidated damages accrued by Contractor pursuant to
Section 13.1(a), prior to any reduction under this Section
13.1(b), shall be multiplied by a fraction, the numerator of
which is the aggregate number of days of delay in which the
Unit(s) do not achieve Commercial Operation by the Scheduled
Date(s) of Commercial Operation and for which the performance of
General Electric Company under the Turbine Contract is the
primary cause of such delay and the denominator of which is the
aggregate number of days of delay in which the Unit(s) do not
achieve Commercial Operation by the Scheduled Date(s) of
Commercial Operation ( the "Turbine Portion of Commercial
Operation LDs"). The difference, if any, between total liquidated
damages accrued by Contractor pursuant to Section 13.1(a) and the
Turbine Portion of Commercial Operation LDs shall be the
"Non-Turbine Portion of Commercial Operation LDs." Contractor
shall provide reasonable evidence to Owner to support the number
of days of delay in which the Unit(s) do not achieve Commercial
Operation by the Scheduled Date(s) of Commercial Operation and
for which the performance of General Electric Company under the
Turbine Contract is the primary cause of such delay.
(ii) If the Turbine Portion of Commercial Operation LDs is less than
or equal to the aggregate liquidated damages which accrue under
Section 17.1 of the Turbine Contract, as limited by the GE Cap,
Contractor shall be responsible for the full amount of liquidated
damages determined pursuant to Section 13.1(a).
(iii) If the Turbine Portion of Commercial Operation LDs is greater
than the aggregate liquidated damages which accrue under Section
17.1 of the Turbine Contract, the liquidated damages determined
pursuant to Section 13.1(a) shall be reduced to an amount which
is equal the aggregate liquidated damages which accrue under
Section 17.1 of the Turbine Contract and such amount shall be
added to the Non-Turbine Portion of Commercial Operation LDs to
determine the total amount of liquidated damages to be paid by
Contractor pursuant to Section 13.1."
6. The EPC Agreement as amended by this Amendment shall remain in full force
and effect.
IN WITNESS WHEREOF, each party hereto has caused this Amendment to be executed
in its name and on its behalf by a duly authorized officer in duplicate
originals and effective as of the date first above written.
CONTRACTOR:
2
<PAGE>
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation
/S/_________________________ By: /S/_____________________________
Witness Title: Vice President
OWNER:
TENASKA GEORGIA I, L.P.,
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
Managing General Partner
/s/_________________________ By: /S/_____________________________
Witness Title: Vice President
3
<PAGE>
- --------------------------------------------------------- ----------------------
EPC - Exhibit J
TENASKA GEORGIA GENERATING PROJECT ----------------------
Page 1 of 3
- --------------------------------------------------------- ----------------------
1. PROJECT TEAM UNIT RATES
The following rates shall be used for engineering cost adjustments for
scope of work changes:
<TABLE>
<CAPTION>
POSITION CATEGORY HOURLY BILLING RATE
---------------------------------------------------------------------------------
<S> <C>
A. ENGINEERING TEAM
Project Management $109.50
Project Department Engineer $ 98.50
Project Control Manager $ 89.50
Legal/Environment Coordinator $ 95.00
Senior Engineer $ 89.50
Design Engineer $ 81.50
Associate Design Engineer $ 73.00
Project Secretary $ 40.00
Planner/Scheduler $ 70.00
Designer $ 70.00
Drafter $ 51.50
Drafting Supervisor $ 77.00
PC Usage Rate $ 2.80
CADD Usage Rate $ 12.60
B. SITE MANAGEMENT TEAM
Construction Management $109.50
Site Department Manager/Superintendent $106.00
Senior Engineer $ 99.50
Engineer $ 90.50
Associate Engineer $ 81.00
Field Engineer $ 81.00
Secretary/Clerical $ 40.00
</TABLE>
The above hourly rates are all inclusive of indirect labor cost, overhead and
profit. Direct expenses such as long distance telephone expenses, computer
charges, prints,
<PAGE>
- --------------------------------------------------------- ----------------------
EPC - Exhibit J
TENASKA GEORGIA GENERATING PROJECT ----------------------
Page 2 of 3
- --------------------------------------------------------- ----------------------
reproduction, traveling, and living expenses, cost paid by the Contractor to
third parties, and other direct expenses associated with scope of work changes
shall be charged in accordance with the Contractor's standard expense rates.
The above hourly rates are valid through an Authorization to Proceed of April
17, 2000. Hourly rates shall be escalated in accordance with Exhibit P of the
EPC Agreement if Authorization to Proceed occurs after April 17, 2000.
The following rates shall be used for construction cost adjustments for scope of
work changes:
<TABLE>
<CAPTION>
POSITION CATEGORY HOURLY BILLING RATE
- ------------------------------------------------------------------------------------------
<S> <C>
General Foreman $42.36
Foreman $39.79
Journeyman $37.22
Helper B $24.39
Helper A $34.53
Laborer - Common $16.62
</TABLE>
The above rates are all inclusive of indirect costs, hand tools and consumables,
overhead and profit; however, these rates do not include construction equipment
costs. When using the above unit rates, normal changes will be supervised by
on-site staff at no charge. However, in the event the scope of change requires
additional Contractor staff to be assigned, or current staff to be assigned
longer to the Project, the Owner will be billed at the Site Management Team
rates.
The above rates are valid for an Authorization to Proceed date of April 17,
2000, and for work performed through May 1, 2002. Rates shall be escalated in
accordance with Exhibit P of the EPC Agreement if Authorization to Proceed
occurs after April 17, 2000, or if extra work is performed after May 1, 2002.
<PAGE>
- --------------------------------------------------------- ----------------------
EPC - Exhibit J
TENASKA GEORGIA GENERATING PROJECT ----------------------
Page 3 of 3
- --------------------------------------------------------- ----------------------
III. OTHER RATES
<TABLE>
<S> <C>
On-site Subcontractor's Work Subcontractor's Invoice + 10%
Construction Equipment
Contractor Owned 100% of Blue Book for operating
cost. 85% of Blue Book for owner-
ship cost.
Outside Rent Cost + 10%
Engineered Equipment and Invoice + 5%
Material (Non-Subcontract)
General Electric Changes At Invoice
</TABLE>
IV. OPTION PRICING
1. DELETE GAS CHROMATOGRAPH -$45,000
2. DEDICATED TRAIN (NOT TO EXCEED) $170,000
In accordance with Article 2(s) of the EPC Agreement.
3. 55 DBA NOISE LEVEL AT 1,200 FEET $600,000
If noise option is not exercised prior to June 1, 2002, escalation
charges of $30,000 shall be added to the above price.
4. REDUCE BUILDERS ALL RISK DEDUCTIBLE -$125,000
If Owner obtains All Risk Builder's Risk insurance policy with a
deductible amount for Testing (to apply only to losses arising out of
hot testing) of $250,000, rather than $500,000. (Refer to Art 15.5 of
the EPC Agreement.)
5. 500kV SWITCHYARD $6,655,585
Contractor to provide 500kV switchyard in accordance with the attached
"Specification for 500kV Switchyard" dated 10/6/99. Price includes the
payment and performance bond premium.
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 1 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
1.0 SCOPE OF WORK
1.1 INTRODUCTION
The Contractor shall be responsible for the design, engineering,
equipment and materials procurement, construction, commissioning,
start-up, and testing of the work. The scope of work shall include
all tasks necessary to provide the Georgia Integrated Transmission
System (ITS) and the Interconnecting Utility (IU) a complete and
functional switchyard in conformance with the performance
parameters indicated in this Specification and acceptable to the
IU. The electrical one line and site plan drawings included in
Attachment I & II shall be used as a guide. The Contractor may
modify them, as his design requires, subject to approval of the
Owner and the IU. The engineering, procurement and construction
services to be performed by the Contractor shall meet the
requirements of IU. Where references are made in this document to
the Interconnecting Utility (IU), such references shall include
the Utility with which the Owner has contracted for
interconnection, and the Georgia Integrated Transmission System
(ITS) and it's members.
1.2 ENGINEERING AND DESIGN
1.2.1 GENERAL REQUIREMENTS
The Contractor shall be responsible for providing all
engineering and design services required for the
construction of the switchyard. Detail engineering shall
include the preparation of equipment and material
specifications, construction drawings based on
calculations, studies and vendor information, and final
as-built drawings.
The Contractor shall review and comply with all applicable
local, state and federal codes, regulations and standards.
Coordination with the appropriate regulatory officials, and
the IU shall be the Contractor's responsibility.
The engineering and design shall assure that all equipment
and systems fit and work together as integrated systems and
that the design and installation are compatible with
systems provided by others such that their function,
operation, safety and performance are not impaired.
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 2 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
All Contractor specifications and design and construction
drawings shall be stamped and signed by a professional
engineer registered in the State of Georgia.
1.2.2 CIVIL WORK
The Contractor shall be responsible for the full
development of the civil engineering and design for the
switchyard. The Contractor shall be responsible for all
underground utilities within the switchyard, final grading
and all other civil work.
The Contractor shall prepare specifications for final soils
exploration and site survey as required for the engineering
and design of the foundations for buildings, structures,
and equipment.
1.2.3 STRUCTURAL WORK
The Contractor shall be responsible for the full
development of the structural engineering and design
including preparation of calculations, drawings and
specifications for all equipment and building foundations,
sub-structures, slabs, switchyard buildings, and steel
structures.
1.2.4 ARCHITECTURAL WORK
The Contractor shall be responsible for the full
development of the architectural design. The architectural
design and specifications shall include switchyard control
building, including roofing systems, wall systems, interior
and exterior finishes, finish and hardware schedules,
window and doors, and architectural materials.
1.2.5 MECHANICAL WORK
The Contractor shall be responsible for the full
development of the mechanical engineering and design within
the switchyard.
1.2.6 ELECTRICAL WORK
The Contractor shall be responsible for the full
development of the electrical engineering and design. The
electrical design, as a minimum, shall include the
following:
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 3 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
o Preparation of detailed one-line diagrams of
switchyard showing all relaying and its functions.
o Development of arrangement drawings locating the
electrical apparatus including structural steel and
buswork design, as well as the deadend structures,
bus supports, equipment & switch stands.
o Preparation of relay drawings, wiring diagrams, AC
and DC schematics and metering diagrams.
o Preparation of detailed three-line diagram showing
the phasing and current and potential transformer
connections.
o Preparation of conduit and cable schedules for
control and instrumentation cables.
o Preparation of installation drawings for the
electrical equipment and associated interconnecting
cables.
o Preparation of specifications required for the
installation of equipment and materials.
o Preparation of drawings for lighting.
o Preparation of electrical equipment, motor and
electrical load lists.
o Preparation of grounding drawings showing grounding
method and connections to equipment and structures.
o Preparation of specifications for the lightning
protection system.
o Design of switchyard communication system.
o Design of the DC systems associated with the
switchyard.
o Coordination of tie-in points with the IU.
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 4 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
1.2.7 DELIVERY PLACE
The project site is located approximately 2 miles north of
Georgia Highway 34 between Franklin and Newnan, Georgia.
The contractor will be responsible for receiving and safely
transporting the equipment to the plant site.
1.3 CONSTRUCTION, ERECTION AND COMMISSIONING
The construction, erection and commissioning services shall
consist of necessary management, materials, technical advisory
services, supervision, labor and construction aids to install and
make ready for turnover all the equipment and materials being
provided for the switchyard.
2.0 TECHNICAL REQUIREMENTS AND SPECIFICATIONS
2.1 GENERAL
The Contractor shall furnish all engineering, procurement and
construction work, and all equipment, materials, tools and other
requirements necessary to provide a complete switchyard in accordance
with the requirements of the scope of work of this RFP. The technical
requirements and specifications in this section describe the design basis
and minimum level of quality for equipment, systems, materials and work.
The switchyard and associated equipment and facilities shall be designed
and constructed in accordance with the Interconnecting Utility (IU)
standards.
The Contractor is encouraged to define to any deviations from these
specifications which, in the opinion of the Contractor, would improve the
quality, appearance or performance of the facility. The deviations from
these documents require written approval by IU.
It is the Contractor's responsibility that equipment and materials
furnished and the design and construction work be in conformance with all
applicable codes, regulations and standards.
2.2 HIGH VOLTAGE 500kV SWITCHYARD
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 5 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
This section covers the engineering, design, materials, installation, and
testing of the 500kV switchyard for the Power Plant. The switchyard shall
be arranged in a ring-bus configuration with all necessary buses,
dead-end structures, breakers, insulators, switches, communication
equipment, protective relaying, indication & revenue metering, yard
lighting (sufficient for operation & maintenance) and other related
equipment necessary for connecting the three (3) 18/500kV three winding
transformers to the IU 500kV transmission system. The switchyard shall
have provisions for the IU local and remote permissive and trip control
and metering indication and for Tenaska's remote metering and breaker
position indication. The electrical one-line diagram, Attachment IV,
shows the conceptual configuration of the switchyard.
The switchyard shall be designed to meet the requirements of the IU and
all applicable local and national codes and standards.
The Contractor will be responsible for providing and installing the 500kV
dead-end structures for terminating the IU 500kV Forston and Plant
Wansely transmission lines at the switchyard. The location of the
dead-end structures shall prevent the crossing of the switchyard
equipment with the transmission lines. The IU will be responsible for
making any changes to the existing transmission lines and connecting the
lines to the dead-end structures. The Contractor will be responsible for
making the connection from the transmission lines to the switchyard
equipment and providing coupling capacitor voltage transformers, line
traps and line tuners at each transmission line termination. The
Contractor shall coordinate all work with the IU.
The Contractor will be responsible for providing and installing the
disconnect switches and take-off structures at each of the plant
generator step-up transformers. The 500kV bus will terminate at the 500kV
bushings of the transformers with the surge arrestors tapped off the bus.
Also, the Contractor shall make provisions for transmitting signals from
the switchyard revenue meters and breaker positions to the power plant
control room.
The Contractor will provide fencing and crushed rock for the switchyard
area and area around the step-up transformers, disconnect switches and
take-off structure. The switchyard Contractor will provide finish grading
within the switchyard area prior to the placement of crushed rock
surfacing.
All switchyard structures, dead-end structures, and take-off structures
shall be designed to comply with the IU standards and specifications. All
structures shall be
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 6 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
designed for short circuit duty of 63kA, extreme wind loading per ANSI
A58.1 - 1982, and extreme ice loading per NESC Heavy ANSI C2 - 1997
version. The transmission line dead-end structures shall be self
supporting and shall be designed for the following:
- Conductor Configuration on Line Horizontal
- Conductor Size 1113mcm, 45/7 ACSR
- Conductors per Phase Three
- Shield Wire Size 3/8 inch EHS Steel
- Number of Shield Wires Two
- Maximum Line Tension per Phase 42,000 lb. (14,000
lb./conductor)
- Maximum Line Angle at Dead-end 15 degrees
- Minimum Phase Spacing at 30 feet
Dead-end
The power circuit breakers shall be three phase, 60 Hertz for
outdoor use on an effectively grounded system. The breakers shall
be of the dead-tank type with required IPO's. Live-tank breakers
are not acceptable. The breakers shall be designed for the
following:
- Seismic Rating Zone 1
- Nominal Voltage 500kV
- Rated Maximum Voltage 550kV
- Basic Impulse Level (BIL) 1800kV
- External Creep Phase to Ground 318 inches (min)
- Interrupting Capability 63 kA
- Interrupting Time 2 Cycles
- Trip Coils - Independent 2
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 7 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
The switchyard bus shall have a BIL rating of 1800kV and shall be
designed to withstand a short circuit of 63 kA. All connections,
buswork, hardware, and fittings shall be of the corona free type.
The bus shall be aluminum.
Primary and secondary relaying shall be provided for any fault in
the 500kV switchyard and associated transmission lines such that
at least two independent relays will operate to initiate action to
isolate the fault. The general relaying requirements are as
follows:
- Primary Pilot: Ultras High Speed Stand-Alone Unblocking
Pilot Scheme
- Primary Non-Pilot: Independent Non-Pilot Phase Step
Distance Scheme
- Secondary Pilot/Non-Pilot: Independent Ground Step Distance
Scheme with Unclocking Channel
- Independent Dual Channel Bi-Directional Transfer Trip
Scheme
- Independent Breaker-Failure Scheme for Each Breaker
- Primary and Secondary High Speed Bus Differential Scheme
The primary and secondary relaying system must be connected to
separate bushing current transformers and to separate trip coils
in the circuit breakers and shall operate from two (2) battery
sources. Primary, secondary and auxiliary relays must be connected
so that the failure of one relay will not disable both trip
circuits to a circuit breaker. All pilot channels and pilot
relaying systems must be compatible with the pilot relays and
channel equipment at the remote end of the 500kV line. An
independent Sequence of Events Recorder (SER) and Remote Terminal
Unit (RTU) are required to meet operational requirements.
Out-of-Step relaying and Digital Fault Recorder may be required to
meet system stability and operational requirements.
The controls and relays shall be powered from a dedicated,
redundant, 125 V dc power system consisting of two battery
chargers and the two (2) station batteries located in the battery
room of the Control Building. Two (2) 480 V power feeds from
redundant dry-type transformers and panels in the power plant
shall be installed to provide power to the switchyard control
building.
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 8 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
The Contractor shall provide the electrical panels and
transformers at the switchyard for use at the required voltage
within the switchyard facility.
A complete ground grid shall be designed and installed for the
substation. The ground grid shall be designed for 63 kA short
circuit duty for1/4second. The touch and step potential of the
ground grid shall be less that the allowable shown in IEEE
Standard 80.
The Contractor shall perform the required grounding study.
The following is a preliminary list of equipment and materials for
the 500kV switchyard. The Contractor shall be responsible for
determining the actual quantities required subject to IU approval:
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 9 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
<TABLE>
<CAPTION>
EQUIPMENT/MATERIAL LIST FOR 500kV SWITCHYARD
DESCRIPTION QUANTITY
----------- -------------
<S> <C>
CIRCUIT BREAKER, 500kV, 1800kV BIL, 3000A. continuous, 3
63kA interrupting, 2 cycle interrupting time, w/4 sets of BCT's relay
accuracy, 2-trip coils
TRANSFORMER, potential 500kV-120V. w/2 secondary windings 9
TRANSFORMER, current, 500kV (for metering) 6
SWITCH, airbreak, motor operated, 500kV, 3000A continuous, 1 lot
100kA mom. (See one line diagram)
RELAYING, transmission line, pilot (primary and secondary) 4 lots
RELAYING, transmission line, non-pilot (primary and secondary) 4 lots
RELAYING, bus differential (primary and secondary) 2 lots
RELAYING, breaker failure 3 lots
TRANSFER TRIP EQUIPMENT (dual channel, bi-directional) 4 lots
DCS EQUIPMENT (To be installed in Generator Control Room) 1 lot
SCADA equipment 1 lot
FAULT RECORDER, DIGITAL 1 lot
SEQUENCE OF EVENTS RECORDER 1 lot
FERRORSONANCE PROTECTION 1 lot
COMMUNICATION EQUIPMENT PER IU SPECIFICATIONS 1 lot
REVENUE METERING complete with bi-directional registers (primary and backup) 2 lots
BUSWORK AND CONNECTORS 1 lot
INSULATORS, 500kV 1 lot
CONDUIT AND CABLE TRENCH 1 lot
POWER & CONTROL CABLE with Cu shielded insulation 1 lot
CONTROL BUILDING AND ACCESSORIES, climate controlled 1 lot
BATTERY AND BATTERY CHARGER, 125 volts 2 lots
STRUCTURAL STEEL 1 lot
GROUNDING 1 lot
HARDWARE 1 lot
REINFORCING STEEL, ANCHOR BOLTS AND CONCRETE 1 lot
FENCE 8' Minimum (7' fabric, 1' barb wire) 1 lot
MISCELLANEOUS 1 lot
</TABLE>
<PAGE>
- ----------------------------------------------------- --------------------------
TENASKA GEORGIA GENERATION PROJECT Specification for
500 kV Switchyard
--------------------------
Page 10 of 10
- ----------------------------------------------------- --------------------------
Date: 10/6/99
- ----------------------------------------------------- --------------------------
<PAGE>
Exhibit 10.4.2
October 20, 1999
Zachry Construction Company
527 Logwood
San Antonio, Texas 78224-0130
Attn: Robert J. Kalt
RE: TENASKA GEORGIA GENERATING STATION
Exercise of Option 5 to Exhibit J - 500 kV switchyard
Dear Mr. Kalt:
Tenaska Georgia Partners, L.P. hereby exercises Option 5 to Exhibit J of the EPC
Contract, 500 kV Switchyard. Please acknowledge receipt of this notice by
signing below and returning the letter to me.
Sincerely,
TENASKA GEORGIA PARTNERS, L.P.
BY: TENASKA GEORGIA, INC.
MANAGING GENERAL PARTNER
BY:
MICHAEL F. LAWLER
VICE PRESIDENT OF FINANCE ----------------------------------
AND TREASURER FOR: ZACHRY CONSTRUCTION CO.
JOHN G. BERRA, VICE PRESIDENT
CC: HAROLD MOSLEY, ZACHRY CONSTRUCTION CO.
ANDY JONES
<PAGE>
EXHIBIT 10.4.3
AGREEMENT FOR ASSIGNMENT AND ASSUMPTION
OF
EPC AGREEMENT TO TENASKA GEORGIA
This Agreement for Assignment and Assumption of EPC Agreement (this
"Agreement") entered into by and between Tenaska Georgia I, L.P., a Delaware
limited partnership ("Tenaska") and Tenaska Georgia Partners, L.P., a Delaware
limited partnership ("Tenaska Georgia"), this 10th day of November, 1999.
WHEREAS, Tenaska and Zachry Construction Corporation, a Delaware
corporation ("Zachry") entered into an Engineering, Procurement and Construction
Agreement dated September 15, 1999, which provides for the design and
construction of a dispatchable electric generating facility on a Plant Premises
located in Heard County in the State of Georgia ("EPC Agreement"); and
WHEREAS, Article 21 of the EPC Agreement provides that such agreement
may be assigned to an Affiliate of Tenaska or an entity in which an Affiliate of
Tenaska has an ownership interest; and
WHEREAS, by a First Amendment to Engineering, Procurement and
Assignment Agreement, dated October 8, 1999, Tenaska and Zachry have amended the
EPC Agreement, such reference to the EPC Agreement when made hereinafter
including such amendment; and
WHEREAS, pursuant to Article 21 of the EPC Agreement, Tenaska desires
to assign the EPC Agreement to Tenaska Georgia.
NOW, THEREFORE, the parties agree as follows:
1. In consideration of payments received, Tenaska assigns to Tenaska Georgia
all of its rights and benefits under the EPC Agreement and Tenaska further
assigns and delegates all of its duties and obligations under the EPC
Agreement to Tenaska Georgia.
2. Tenaska Georgia accepts the assignment from Tenaska of all rights and
benefits under the EPC Agreement, and assumes all of the duties and
obligations of Tenaska as contained in the EPC Agreement.
3. Notwithstanding the assignment and assumptions made in this Agreement,
Tenaska retains the perpetual right for Tenaska to use any and all Drawings
(as defined in the EPC Agreement) prepared by Zachry under the EPC
Agreement, subject to any limitations on such use which may arise under the
EPC Agreement, and for such purpose Tenaska Georgia grants and confirms
such perpetual license to Tenaska to use such Drawings for any and all
purposes which Tenaska may desire, including such other projects as Tenaska
may determine, subject to any limitations on such use which may arise under
the EPC Agreement.
4. Tenaska Georgia hereby releases Tenaska from any and all duties,
obligations and liabilities under the EPC Agreement.
5. Notwithstanding this Agreement, Tenaska agrees to (a) continue to be bound
by the confidentiality provisions applicable to Owner pursuant to Article
22 of the EPC Agreement (b) remain liable to Zachry under the EPC Agreement
for its acts and omissions prior to the date of this Agreement and (c) be
bound by the terms of the EPC Agreement, including all limitations on
liability with respect to any rights or actions which may have accrued in
favor of Tenaska prior to the date of this Agreement
6. This Agreement shall not become effective until a fully executed copy of
this Agreement, including the Agreement and Consent of Zachry, attached
hereto, is executed and delivered to Tenaska and Tenaska Georgia.
7. This Agreement shall inure to and be binding upon the successors and
assigns of the parties.
8. This Agreement shall be governed by and construed according to the laws of
the State of Texas.
TENASKA GEORGIA I, L.P.,
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
Managing General Partner
/S/___________________ By: /S/____________________________
Witness Michael F. Lawler
Title: Vice President of Finance
& Treasurer
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
Managing General Partner
/S/___________________ By: /S/____________________________
Witness Michael F. Lawler
Title: Vice President of Finance
& Treasurer
<PAGE>
AGREEMENT AND CONSENT
Zachry Construction Corporation, a Delaware corporation ("Zachry")
consents to the assignment of the Engineering, Procurement and Construction
Agreement between Zachry and Tenaska Georgia I, L.P., a Delaware limited
partnership ("Tenaska"), dated September 15, 1999, ("EPC Agreement") as
subsequently amended by a First Amendment to Engineering, Procurement and
Assignment Agreement, dated October 8, 1999, between Tenaska and Zachry
(reference to the EPC Agreement hereinafter to include such amendment) to
Tenaska Georgia Partners, L.P., a Delaware limited partnership ("Tenaska
Georgia") and the assumption by Tenaska Georgia of the EPC Agreement as set
forth in the Agreement for Assignment and Assumption of EPC Agreement to Tenaska
Georgia attached hereto.
Zachry hereby releases Tenaska from any and all duties, obligations and
liabilities under the EPC Agreement except that Tenaska shall (a) continue to be
bound by the confidentiality provisions applicable to Owner pursuant to Article
22 of the EPC Agreement (b) remain liable to Zachry under the EPC Agreement for
it's acts and omissions prior to the date of this Agreement and (c) be bound by
the terms of the EPC Agreement, including all limitations on liability with
respect to any rights or actions which may have accrued in favor of Tenaska
prior to the date of this Agreement.
Dated this 10th day of November, 1999.
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation
/S/_________________________ By: /S/______________________________
Witness Robert J. Kalt
Vice President
<PAGE>
EXHIBIT 10.5
GUARANTY OF OBLIGATION
This Guaranty is made by Willbros Group, Inc., a Panama corporation,
("Guarantor"), in favor of TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership ("Tenaska"), with respect to that certain Engineering, Procurement
and Construction Agreement dated the 23rd day of September, 1999, between
Tenaska and WILLBROS ENGINEERS, INC., a Delaware corporation ("Contractor"), for
the construction of a natural gas transmission pipeline from the
Transcontinental Gas Pipeline Corporation meter station to the Tenaska Georgia
Generation Station, as amended, supplemented or otherwise modified from time to
time (hereinafter called the "EPC Agreement"), in consideration of the execution
of the EPC Agreement by Tenaska with Contractor.
Guarantor states and represents that Guarantor will derive direct and indirect
benefit from the making of the Guaranty.
NOW, THEREFORE, for good and valuable consideration, Guarantor hereby covenants
and agrees as follows:
1. Guarantor hereby unconditionally guarantees the full and timely
performance by Contractor of all of its obligations under the EPC
Agreement, as it from time to time may be amended, and hereby
undertakes that if Contractor shall in any respect fail to perform and
observe all of the terms, provisions, conditions, and stipulations of
the EPC Agreement, Guarantor warrants the faithful performance of all
of such terms and conditions and will fully indemnify and keep
indemnified Tenaska against all claims, losses, damages, costs and
expenses whatsoever which Tenaska may incur by reason of Contractor's
failure to perform and observe any of the terms, provisions,
conditions, and stipulations of the EPC Agreement (collectively, the
"Guaranteed Obligations"). THE OBLIGATIONS OF GUARANTOR HEREUNDER SHALL
NOT BE REDUCED, LIMITED OR TERMINATED, NOR SHALL GUARANTOR BE
DISCHARGED FROM ANY THEREOF, FOR ANY REASON WHATSOEVER (other than the
payment, observance and performance of the Guaranteed Obligations and
other than as provided in Section 9 of this Guaranty), including (and
whether or not the same shall have occurred or failed to occur once or
more than once and whether or not Guarantor shall have received notice
thereof):
(a) (i) any increase in, (ii) any extension of the time of
payment, observance or performance of, (iii) any other
amendment or modification of any of the other terms and
provisions of, (iv) any release, composition or settlement
(whether by way of acceptance of a plan of reorganization or
otherwise) of, (v) any subordination (whether present or
future or contractual or otherwise) of, or (vi) any discharge,
disallowance, invalidity, illegality, voidness or other
unenforceability of, the Guaranteed Obligations;
<PAGE>
(b) (i) any failure to obtain, (ii) any release, composition or
settlement of, (iii) any amendment or modification of any of
the terms and provisions of, (iv) any subordination of, or (v)
any discharge, disallowance, invalidity, illegality, voidness
or other enforceability of, any other guaranties of the
Guaranteed Obligations;
(c) any termination of or change in any relationship between
Guarantor and Contractor, including any such termination or
change resulting from a change in the ownership of Guarantor
or from the cessation of any commercial relationship between
Guarantor and Contractor;
(d) any exercise of, or any election not or failure to exercise,
delay in the exercise of, waiver of, or forbearance or other
indulgence with respect to, any right, remedy or power
available to Tenaska, including (i) any election not or
failure to exercise any right of set-off, recoupment or
counterclaim, and (ii) any election of remedies effected by
Tenaska, and
(e) ANY OTHER ACT OR FAILURE TO ACT OR ANY OTHER EVENT OR
CIRCUMSTANCE THAT (i) VARIES THE RISK OF GUARANTOR HEREUNDER
OR (ii) BUT FOR THE PROVISIONS HEREOF, WOULD, AS A MATTER OF
STATUTE OR RULE OF LAW OR EQUITY, OPERATE TO REDUCE, LIMIT OR
TERMINATE THE OBLIGATIONS OF THE GUARANTOR HEREUNDER OR
DISCHARGE GUARANTOR FROM ANY THEREOF.
2. Guarantor represents and warrants to Tenaska and Tenaska's successors
and assigns that:
(a) Guarantor is duly organized and validly existing as a Panama
corporation;
(b) Guarantor is authorized and has all necessary power and
authority, corporate and other, to execute and deliver this
Guaranty and to perform the obligations of Guarantor,
including all obligations of Contractor pursuant to the EPC
Agreement;
(c) This Guaranty reasonably may be expected to benefit directly
or indirectly, Guarantor;
(d) This Guaranty has been duly executed and delivered by
Guarantor and is the valid, binding, and enforceable contract
of Guarantor;
(e) The execution and delivery of this Guaranty by Guarantor and
its performance of its obligations under the Guaranty, do not
(and, to the best of Guarantor's knowledge, will not) conflict
with any law, rule or regulation, or any agreement,
instrument, indenture, deed or any other restriction, to which
such Guarantor is subject or a party, or accelerate or affect
any of its obligations under any thereof.
<PAGE>
3. Guarantor shall cause Contractor to duly and timely perform all of the
Guaranteed Obligations including the obligations of Contractor under
the EPC Agreement, as it may from time to time be amended.
4. The obligations of Guarantor hereunder include, without limitation, all
liabilities for liquidated or similar damages and warranty obligations
of Contractor.
5. Tenaska may enforce against Guarantor any and all of the rights of
Tenaska under this Guaranty without having instituted or completed any
legal, arbitration or other proceedings against Contractor or any
partner or joint venturer in Contractor.
6. This Guaranty shall be governed by and construed according to the laws
of the State of Texas. Guarantor submits to personal jurisdiction in
the State of Texas and further agrees that the non-exclusive venue for
any such action may be in the state and federal courts located in
Dallas County, Texas.
7. Guarantor waives: (a) any requirement, and any right to require, that
any right or power be exercised or any action be taken against the
Contractor, any partner or joint venturer in Contractor, or any other
guarantor or any collateral for the Guaranteed Obligations; (b) (i)
notice of acceptance of and intention to rely on this Agreement, and
(ii) all other notices that may be required by applicable law or
otherwise to preserve any rights against Guarantor under this
Agreement, including any notice of default, demand, dishonor,
presentment and protest; and, (c) diligence.
8. Guarantor shall not assert any right to set off against claims by
Tenaska hereunder other than claims which Contractor has a right to set
off under the EPC Agreement.
9. Notwithstanding any other provision to the contrary set forth herein,
Guarantor retains the right to assert any and all claims, defenses and
limitations of liability possessed by Contractor under the terms of the
EPC Agreement, (but excluding any defense based upon absence of binding
effect of the EPC Agreement).
10. Guarantor's obligations hereunder (a) are absolute and unconditional,
(b) subject to Section 9 above, are unlimited in amount, except as
provided in the EPC Agreement, (c) constitute a guaranty of payment and
performance and not a guaranty of collection, (d) are as primary
obligor and not as a surety only, (e) shall be a continuing guaranty of
all present and future Guaranteed Obligations, and (f) shall be
irrevocable.
<PAGE>
11. This Guaranty may be assigned by Tenaska to Tenaska's lenders for the
project and shall inure to the benefit of such assignee(s).
12. Notice to Guarantor shall be to:
Willbros Group, Inc.
%Willbros USA, Inc.
600 Willbros Place
2431 East 61st Street
Tulsa, Oklahoma 74136
Attn: John Hove
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered to Tenaska in the name and on behalf of Guarantor by one
of its officers who is duly authorized to do so, for the benefit of Tenaska, as
of this 23rd day of Septmber, 1999.
Guarantor
WILLBROS GROUP, INC.
ATTEST:
By: /s/ By: /s/
----------------------- ------------------------
(Name)
Title: Assistant Secretary Executive Vice President
-------------------- ------------------------
(Title)
<PAGE>
CERTIFICATE OF SECRETARY
WILLBROS GROUP, INC.
I, John N. Hove, being the duly elected and acting Corporate Secretary
of WILLBROS GROUP. INC., a corporation organized and existing under and by
virtue of the laws of the Republic of Panama (hereinafter referred to as the
"Corporation"), do hereby
C E R T I F Y :
1. THAT the following preambles and resolutions are a true, correct and
complete copy of the same duly adopted by Memorandum of Action signed by all of
the members of the Executive Committee of the Board of Directors of the
Corporation on September 23, 1999, and that such resolutions have not been
rescinded since their adoption and are in full force and effect on the date
hereof:
EXECUTION OF GUARANTEE
WHEREAS, Willbros Engineers, Inc., a Delaware corporation ("WEI"),
is an indirect wholly-owned subsidiary of the Corporation; and
WHEREAS, WEI has entered into an Engineering, Procurement and
Construction Agreement dated September 23, 1999, with Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("Tenaska"), with
respect to the construction of a natural gas transmission pipeline from
the Transcontinental Gas Pipeline Corporation meter station to the
Tenaska Georgia Generation Station (the "EPC Agreement"); and
WHEREAS, WEI has certain obligations to Tenaska under the EPC
Agreement; and
WHEREAS, Tenaska has requested the provision of a parent company
guarantee by the Corporation with respect of the obligations of WEI
under the EPC Agreement, such guarantee to be substantially in the same
form attached hereto (the "Guarantee"); and
WHEREAS, the provision of the Guarantee is deemed to be in the
best interests of the Corporation;
<PAGE>
NOW, THEREFORE, BE IT
RESOLVED, that the form of, and the terms and conditions contained
in, the Guarantee be, and the same hereby are, authorized and approved
in all respects; and further
RESOLVED, that the execution, delivery and performance by the
Corporation of the Guarantee be, and the same hereby are, authorized
and approved in all respects; and further
RESOLVED, that the Chairman, the President and each of the Vice
Presidents of the Corporation be, and each of them individually hereby
is, authorized and empowered to negotiate and make such changes,
modifications, additions and deletions to the Guarantee as they, or any
of them, in their sole discretion, may deem appropriate, and to execute
and deliver, for and on behalf of the Corporation, the Guarantee, in
such form as the officer or officers executing the same shall deem
necessary, advisable or appropriate, as shall be conclusively evidenced
by his signature affixed thereon; and further
RESOLVED, that the officers of the Corporation be, and each of
them individually hereby is, authorized and empowered, for and on
behalf of the Corporation, to execute and deliver any and all
additional documents, instruments and papers, and to take or cause to
be taken such additional actions, as they or any of them, in their sole
discretion, may deem necessary, convenient or appropriate in connection
with the negotiation, execution and deliver of the Guarantee and to
carry out the purposes of the foregoing resolutions, and in this
connection to take such action and to execute, deliver, acknowledge,
record, file and certify all such further instruments, certificates,
letters, agreements, documents, papers and undertakings as the officer
or officers so acting may consider and determine necessary, advisable
or convenient, as shall be conclusively evidenced by his signature
affixed thereon.
2. THAT the persons identified below are duly elected, qualified and
acting Officers of the Corporation; and that they hold the office or offices set
forth opposite their names on the date hereof:
<TABLE>
<CAPTION>
NAME TITLE
<S> <C>
Larry J. Bump Chairman of the Board and Chief
Executive Officer
Paul A. Huber President and Chief Operating Officer
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE
<S> <C>
Melvin F. Spreitzer Executive Vice President, Treasurer
And Chief Financial Officer
Lawrence R. Fisher, Jr. Senior Vice President
John N. Hove Corporate Secretary
J.T. Dalton Assistant Secretary
Kathy E. Alexander Assistant Secretary
Thomas B. Reilly Assistant Treasurer
David W. Arneson Assistant Treasurer
</TABLE>
3. AND I FURTHER CERTIFY THAT I am authorized to execute this Certificate
on behalf of the Corporation.
IN WITNESS WHEREOF, I have hereunto executed this Certificate and
affixed the seal of the Corporation, this 27th day of September, 1999
By: /s/ John N. Hove
------------------------------------
John N. Hove
Corporate Secretary
I Paul A. Huber, President of the Corporation, do hereby certify that
John N. Hove is the duly elected, qualified and acting Corporate Secretary of
the Corporation, and that the signature set forth above his name is his true and
genuine signature.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 27th
day of September, 1999.
/s/ Paul A. Huber
-----------------------------------
Paul A. Huber
President
3
<PAGE>
County of Tulsa )
State of Oklahoma ) Section
United States of America )
Before me, the undersigned, a Notary Public in and for the aforementioned
County, State and Country, on this 27th day of September, 1999, personally
appeared Paul A. Huber and John N. Hove, President and Corporate Secretary,
respectively, of WILLBROS GROUP, INC., to me known to be the identical persons
who executed the foregoing instrument, and acknowledged that they executed the
same as their free and voluntary act and deed, and as the free and voluntary act
and deed of said Corporation.
In Witness Whereof, I have hereunto set my official signature and affixed
my notarial seal the day and year last above written.
/s/ Kathy E. Alexander
-------------------------------------
Kathy E. Alexander
Notary Public
My Commission Expires:
February 27, 2001
- ----------------------
4
<PAGE>
Exhibit 10.6
OPERATIONS AND MAINTENANCE AGREEMENT
BETWEEN
TENASKA GEORGIA PARTNERS, L.P.
AND
TENASKA OPERATIONS, INC.
DATED September 10, 1999
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
1. DEFINITIONS .............................................................................................. 1
2. SCOPE OF SERVICES ........................................................................................ 5
2.1 PURPOSE ............................................................................................... 5
2.2 CHANGES IN OPERATION AND MAINTENANCE .................................................................. 5
2.3 OPERATIONAL SERVICES .................................................................................. 5
2.3.1 General Requirements ............................................................................ 5
(a) Pre-Commercial Operating Period ................................................................. 6
(b) Commercial Operating Period ..................................................................... 9
2.3.2 Operating Reports ............................................................................... 12
2.3.3 Opening the Interconnections .................................................................... 13
2.3.4 Staffing ........................................................................................ 13
2.3.5 General Operation ............................................................................... 13
2.4 ELECTRICAL GENERATING OPERATIONS ........................................................................ 13
2.4.1 Energy Delivery .................................................................................... 13
2.4.2 Coordination with PECO ............................................................................. 13
2.4.3 Plant Maintenance and Scheduled Outages ............................................................ 14
(a) Scheduled Outages ............................................................................... 14
(b) Forced Outage. .................................................................................. 15
2.4.4 Operation on Backup Fuel ........................................................................ 16
2.4.5 Metering ........................................................................................ 16
2.4.6 Disconnection by Utility ........................................................................ 16
2.4.7 Inspection ...................................................................................... 16
2.4.8 Access .......................................................................................... 17
2.4.9 Inspection of Charts and Records ................................................................ 17
2.5 PROCESS WASTE WATER DISPOSAL .......................................................................... 17
2.6 PLANT MAINTENANCE ..................................................................................... 17
2.6.1 Monthly Maintenance Reports ..................................................................... 19
2.7 INVENTORY AND TESTED CAPACITY ......................................................................... 19
2.7.1 Tests ........................................................................................... 20
2.8 PLANT PERMITS ......................................................................................... 20
3. TERM OF THE AGREEMENT .................................................................................... 20
3.1 TERM .................................................................................................. 20
4. TESTING OF THE PLANT ..................................................................................... 21
4.1 ACCESS DURING TESTING ................................................................................. 21
5. COMPENSATION AND PAYMENT ................................................................................. 21
5.1 OPERATING ACCOUNT ..................................................................................... 21
5.2 PRE-COMMERCIAL OPERATING PERIOD BUDGET AND COMPENSATION ............................................... 21
5.3 OPERATING BUDGET ...................................................................................... 23
5.4 COMPENSATION DURING COMMERCIAL OPERATING PERIOD ....................................................... 24
5.5 DETERMINATION OF AVAILABILITY PERCENTAGES ............................................................. 26
5.6 ADJUSTMENT FOR ESCALATION ............................................................................. 26
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
6. FURTHER AGREEMENTS ....................................................................................... 27
6.1 LICENSES, APPROVALS AND PERMITS ....................................................................... 27
6.2 FUEL AND WATER ........................................................................................ 27
6.3 ACCESS ................................................................................................ 27
7. WARRANTIES ............................................................................................... 28
7.1 WARRANTY OF OPERATOR .................................................................................. 28
7.2 REMEDIES .............................................................................................. 29
7.3 NO IMPLIED WARRANTIES ................................................................................. 29
8. TERMINATION OF AGREEMENT ................................................................................. 29
8.1 OWNER TERMINATION ..................................................................................... 29
8.2 TERMINATION DUE TO PLANT SALE, LEASE OR OPERATOR'S DEFAULT ........................................... 29
8.3 CONTINUED PERFORMANCE DURING DISPUTE .................................................................. 31
8.5 TERMINATION - PROJECT AGREEMENTS ...................................................................... 32
8.6 TERMINATION -CHANGE IN OWNERSHIP ...................................................................... 33
9. INDEMNITY ................................................................................................ 33
9.1 INDEMNIFICATION OF OWNER .............................................................................. 33
9.2 INDEMNIFICATION OF OPERATOR ........................................................................... 33
9.3 NOTICE OF CLAIM AND CLAIM FOR INDEMNITY ............................................................... 34
10. INSURANCE ................................................................................................ 34
10.1 CONSTRUCTION CONTRACTOR INSURANCE ..................................................................... 34
10.2 OPERATOR INSURANCE .................................................................................... 34
(a) Worker's Compensation .............................................................................. 34
(b) Liability Insurance ................................................................................ 35
10.3 OWNER INSURANCE ........................................................................................ 35
10.3.1 All Risk Property and Boiler and Machinery Insurance .............................................. 35
10.3.2 Liability Insurance ............................................................................... 36
10.4 SUBMISSION OF CERTIFICATES OF INSURANCE ............................................................ 36
10.5 WAIVER OF SUBROGATION .............................................................................. 37
10.6 UNAVAILABILITY OF COVERAGE ......................................................................... 37
10.7 NO LIMITATION OF LIABILITY ......................................................................... 37
10.8 INDEPENDENT CONTRACTOR'S INSURANCE ................................................................. 38
10.9 OWNER'S EQUIPMENT .................................................................................. 38
10.10 FAILURE TO INSURE .................................................................................. 38
11. LIABILITY LIMITATIONS .................................................................................... 38
11.1 DAMAGES ............................................................................................ 38
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
12. DISPUTE - CONTINUING AGREEMENT PERFORMANCE ............................................................... 39
12.1 UNASSISTED SETTLEMENT .............................................................................. 39
12.2 MEDIATION .......................................................................................... 39
12.3 LITIGATION ......................................................................................... 40
13. FORCE MAJEURE ............................................................................................ 40
13.1 FORCE MAJEURE ...................................................................................... 40
13.2 CHANGE OF LAW ...................................................................................... 42
13.3 REMEDY FOR FORCE MAJEURE TERMINATION ............................................................... 42
14. MISCELLANEOUS PROVISIONS ................................................................................. 43
14.1 ASSIGNMENT ......................................................................................... 43
14.2 AUTHORITY TO PROCURE GOODS AND SERVICES ............................................................ 44
14.3 CONFIDENTIALITY OF INFORMATION ..................................................................... 45
14.4 CONFIDENTIAL ....................................................................................... 45
14.5 EXCEPTIONS TO CONFIDENTIALITY ...................................................................... 46
14.6 LENDER APPROVAL .................................................................................... 46
14.7 BOOKS, RECORDS, ACCESS THERETO ..................................................................... 46
14.8 NOTICES ............................................................................................ 47
14.9 REPRESENTATIVES .................................................................................... 48
14.10 EQUAL EMPLOYMENT OPPORTUNITY ....................................................................... 48
14.11 ENTIRE AGREEMENT ................................................................................... 48
14.12 NO WAIVER .......................................................................................... 48
14.13 SEVERABILITY ....................................................................................... 49
14.14 APPLICABLE LAW ..................................................................................... 49
14.15 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS .......................................................... 49
14.16 EXCLUDED REPRESENTATIONS AND INTERESTS ............................................................. 49
14.17 LIMIT OF LIABILITY ................................................................................. 49
14.18 COUNTERPARTS ....................................................................................... 50
14.19 PROJECT AGREEMENTS ................................................................................. 50
14.20 NO JOINT VENTURE ................................................................................... 50
14.21 CORPORATE AUTHORIZATION ............................................................................ 51
14.22 LIENS .............................................................................................. 52
14.23 SET OFF ............................................................................................ 52
14.24 RELEASE OF INFORMATION AND SITE VISIT APPROVAL ..................................................... 52
14.25 CONTRACTS WITH AFFILIATES .......................................................................... 53
</TABLE>
<PAGE>
OPERATIONS AND MAINTENANCE AGREEMENT
THIS OPERATIONS AND MAINTENANCE AGREEMENT ("AGREEMENT") dated as of
this 10th day of September, 1999, is by and between Tenaska Georgia Partners,
L.P., a Georgia limited partnership, having its principal place of business at
Omaha, Nebraska, hereinafter called "Owner", and Tenaska Operations, Inc., a
Delaware corporation, having its principal place of business at Omaha,
Nebraska,hereinafter called "Operator."
WHEREAS, Owner desires that Operator provide initial startup support
during turnover, testing and operation, operate and maintain the completed Plant
and perform certain other defined services under the terms and conditions set
forth in this Operations and Maintenance Agreement (the "Agreement");
NOW THEREFORE, in consideration of the premises contained in this
Agreement, the Parties hereto, intending to be legally bound, agree as follows:
1. DEFINITIONS
The following terms when used in this Agreement shall have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):
"AFFILIATE" means, as to any Person, another Person which, directly or
indirectly, controls or is controlled by or under common control with,
such other Person. For purposes of this definition, the concept of
"control", when used with respect to any specified Person, shall
signify the possession of the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities or partnership or other ownership
interests, by contract or otherwise.
"AGENCY SUPPLIERS" means those entities with whom contractual
agreements for Materials and services have been entered into by
Operator acting as agent for Owner pursuant to Section 14.2.
"AGREEMENT" means this agreement as amended, supplemented, restated, or
otherwise modified from time to time.
"ANNUAL AVAILABILITY PERCENTAGE" is defined in the Power Purchase
Agreement,, except that, for purposes of this Agreement, adjustments
shall be made in the computation of the Annual Availability Percentage
so that Operator is in no way penalized or disadvantaged by
unavailability of the Plant due to (i) turbine malfunction (the cause
of which is not contributed to by Operator), (ii) unavailability of
natural gas as fuel for the Plant caused by a failure of gas supply or
transportation, or (iii) the inability to export energy from the Plant
because of the unavailability of the Utility's transmission system.
"AVAILABILITY ADJUSTMENT" is defined in Section 5.4(c).
<PAGE>
"BANKRUPTCY EVENT" means, with respect to a Party, (a) a general
assignment by that Party for the benefit of its creditors, (b) any
action taken or initiated for the winding-up or liquidation of that
Party or for the appointment of a receiver, trustee or similar officer
for it or any of its revenues or assets, or (c) the institution by or
against that Party of liquidation proceedings or other proceedings for
relief under any bankruptcy Law or any other Law for the relief of
debtors.
"CHANGE OF LAW" is defined in Section 13.2(a).
"COMMERCIAL OPERATING PERIOD" means the period of time between
Commercial Operation and the termination of this Agreement.
"CONFIDENTIAL" is defined in Section 14.4.
"CONSTRUCTION AGREEMENT" means the Engineering, Procurement and
Construction Agreement between Owner and Construction Contractor for
construction of the Plant as from time to time amended, supplemented,
or otherwise modified.
"CONSTRUCTION CONTRACTOR" means the prime contractor for construction
of the Plant that is party signatory to the Construction Agreement.
"CONTRACT YEAR" is defined in the Power Purchase Agreement.
"CREDIT AGREEMENT" means the Construction and Term Loan and
Reimbursement Agreement among Owner and the Lenders, as from time to
time amended, supplemented, otherwise modified, for financing
construction of the Plant.
"DATE OF COMMERCIAL OPERATION" is defined in the Power Purchase
Agreement.
"DISPUTE" is defined in Section 12.
"DISPUTE NOTICE" is defined in Section 12.1.
"DISPUTE PROCEDURE" is defined in Section 12.
"EFFECTIVE DATE" means the date set forth in the first paragraph of
this Agreement.
"FORCE MAJEURE" is defined in Section 13.1(a).
"FORCED OUTAGE" is defined in the Power Purchase Agreement.
"INTERCONNECTION AGREEMENT" is defined in the Power Purchase Agreement.
"INTERCONNECTION FACILITIES" is defined in the Power Purchase
Agreement.
<PAGE>
"LAW" means any act and any requirement, permit, ordinance, standard,
code, rule, resolution or regulation of any governmental authority or
agency (federal, national, state, municipal, local or other) including
all environmental and hazardous waste laws which are applicable to the
Plant and which are at any time applicable to performing the services.
"LENDERS" means all construction lenders and all subsequent lenders
that provide financing for the Plant.
"LONG TERM SERVICE AGREEMENT" means the Long Term Parts & Long Term
Service Contract between Owner and General Electric International
Incorporated, as from time to time amended, supplemented, or otherwise
modified.
"MAINTENANCE SERVICES" is defined in Section 2.6(a).
"MATERIALS" means all consumables, tools and spare parts required to
operate and maintain the Plant.
"MEDIATION NOTICE" is defined in Section 12.2.
"METERING EQUIPMENT" means the meters and measuring equipment at each
Point of Delivery to measure capacity and energy delivered by the Plant
to PECO
"OPERATING ACCOUNT" is defined in Section 5.1.
"OPERATING BUDGET" is defined in Section 5.3(a).
"OPERATOR'S REPRESENTATIVE" means the person designated in writing by
Operator and authorized to act on behalf of Operator under this
Agreement.
"OWNER'S REPRESENTATIVE" means the person designated in writing by
Owner and authorized to act on behalf of Owner under this Agreement.
"PARTY(IES)" means Owner or Operator, or both, as appropriate.
"PECO" means PECO Energy Company, a Pennsylvania corporation.
"PERSON" means an individual, partnership, limited liability company,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of
whatever nature.
"PLANT" is defined in Article I of the Power Purchase Agreement.
"PLANT MANUALS" means the manuals prepared by Operator and approved by
Owner, including but not limited to operation, maintenance,
administration, chemistry, environmental quality assurance/quality
control and safety manuals using information from the equipment
manufacturers, Construction Contractor, Operator's experience and other
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sources which are to be used as the basis for operation of the Plant in
accordance with generally acceptable industry practices and Prudent
Utility Practice.
"PLANT PERMITS" is defined in Section 6.1.
"POINTS OF DELIVERY" is defined in the Power Purchase Agreement.
"POWER PURCHASE AGREEMENT" means the Power Purchase Agreement between
Owner and, PECO as from time to time amended, supplemented, or
otherwise modified, a composite conformed copy of which is attached
hereto as Exhibit A.
"PRE-COMMERCIAL OPERATING BUDGET" is defined in Section 5.2(a).
"PRE-COMMERCIAL OPERATING PERIOD" means the time period between the
Effective Date of this Agreement and the Date of Commercial Operation.
"PROJECT AGREEMENTS" is defined in Section 14.19.
"PRUDENT UTILITY PRACTICE" is defined in the Power Purchase Agreement.
"REQUEST FOR PAYMENT" is defined in Section 7.1.
"SCHEDULED DATE OF COMMERCIAL OPERATION" is defined in the Power
Purchase Agreement.
"SCHEDULED OUTAGES" is defined in the Power Purchase Agreement.
"SCOPE OF SERVICES" means the services set out in Section 2.
"SERC" means the Southeastern Electric Reliability Council.
"SITE" OR "PLANT SITE" means the real property related to the Plant.
"SUBCONTRACTOR" means any entity, including but not limited to
Affiliates of Operator, contracting directly with Operator or with any
contractor or subcontractor of any tier under Operator (not including
Agency Suppliers) to perform service or supply material to the Plant.
"SYSTEM" means the equipment and all associated components including
but not limited to piping, valves, wiring, controls and components
required to perform a given function or combination of functions of the
Plant.
"TERM" is defined in Section 3.1.
"TERMINATION PAYMENT" is defined in Section 8.2(d).
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"TESTED CAPACITY" is defined in Section 2.7(b).
"TESTING PERIOD" is defined in Section 4.1.
"TRANSITION PERIOD" defined in Section 8.2(c).
"UTILITY" shall have the meaning set forth for the term "Local Utility"
in the Power Purchase Agreement.
"YEAR" means calendar year from January 1 through December 31.
2. SCOPE OF SERVICES
2.1 PURPOSE
The purpose of this Agreement is to establish the terms and conditions
pursuant to which Operator shall perform its management and operating
and maintenance services including providing initial startup support
during the Pre-Commercial Operating Period, testing, operation,
maintenance and management of the Plant, all of which Operator shall
perform in accordance with the terms and conditions of this Agreement
and in accordance with Owner's obligations under the Project
Agreements.
2.2 CHANGES IN OPERATION AND MAINTENANCE
Owner may request Operator to make reasonable changes to the services
outlined in this Section 2 and Operator shall use reasonable efforts to
make such requested changes, so long as such changes are reasonably
related to the operation and maintenance of the Plant, and Operator is
technically capable of making such changes. Owner shall bear the cost
for the changes on a cost reimbursement basis.
2.3 OPERATIONAL SERVICES
2.3.1 GENERAL REQUIREMENTS
Operator shall provide skilled personnel, procedures, training, and
administrative, management, and professional/technical services
necessary for the safe and reliable start-up, commissioning, operation,
and maintenance of the Plant, in accordance with this Agreement.
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(a) PRE-COMMERCIAL OPERATING PERIOD
During the Pre-Commercial Operating Period, without limitation
of its other obligations contained in this Agreement, Operator
shall, in accordance with the standards set forth in this
Agreement:
(i) Provide the services of a plant manager and a project
manager to represent Operator during the
Pre-Commercial Operating Period to implement the
obligations of this Section 2.3.1(a) and to oversee
the smooth transition of the Plant from construction
to Commercial Operation;
(ii) Provide assistance to Owner, as reasonably requested,
with the execution of Owner's responsibilities
relative to construction and operation of the Plant.
This task includes, but is not limited to, such
things as the preparation of punch lists related to
construction deficiencies, preparation of
applications for licenses and permits, and oversight
of warranty and punch list repairs;
(iii) Review Construction Contractor planning and Plant
engineering design with regard to Plant reliability,
availability and maintainability and provide comments
to Owner. Operator shall review design manuals,
system descriptions, tool lists, spare parts lists,
training programs, and operation methodology of the
Plant prepared by Construction Contractor and provide
comments to Owner;
(iv) Review Plant/machinery plans, specifications and
drawings with respect to their impact on long term
Plant operations and maintenance and provide
recommendations to Owner;
(v) Plan implementation programs to meet the operating
and reporting requirements set forth in this
Agreement, including references from the Power
Purchase Agreement, Interconnection Agreement, Plant
Permits, and all applicable Laws;
(vi) Provide site-specific Plant Manuals related to
operation of the Plant including operations and
maintenance procedures, and policies and procedures
related to administration, safety, training,
environmental quality assurance and quality control,
and water chemistry control. In order to facilitate
the preparation of the Plant Manuals, Owner shall
provide the following data and information to
Operator seven (7) months prior to the Scheduled Date
of Commercial Operation: (1) P&IDs of Plant systems,
(2) electrical drawings of Plant equipment, (3) logic
diagrams, (4) control wiring diagrams and drawings,
(5) vendor manuals and drawings of Plant Systems and
equipment, (6) hard copies of control System screens,
(7) Plant layout drawings, and (8) System
descriptions;
<PAGE>
(vii) Develop an overall plan for the operation of the
Plant including procedures to be developed and
implemented, in accordance with the Project
Agreements, Plant Permits, all applicable Laws and
environmental controls, and submit for Owner
approval;
(viii) Prepare the Pre-Commercial Operating Budget nine (9)
months prior to the Scheduled Date of Commercial
Operation and submit it for Owner approval;
(ix) Work with the Owner and Construction Contractor to
develop mutually agreeable procedures for Systems
turnover, including appropriate tagging and lockout
protocols;
(x) Under supervision of the Construction Contractor,
support the Construction Contractor with Plant
startup and testing activities. Operator shall not be
responsible to provide supervision, construction
utilities, procure for, construct or direct startup
of the Plant. This task includes operating the Plant
under the direction of the Construction Contractor in
accordance with the Construction Agreement and in
accordance with this Agreement and operating and
maintaining Plant Systems as they are turned over to
Operator. Any disagreement between Operator and
Construction Contractor with respect to Operator's
obligations shall immediately be referred by Operator
to Owner's Representative;
(xi) Perform routine maintenance and scheduled maintenance
actions on Plant Systems and equipment as they are
turned over to Operator;
(xii) Prepare a maintenance plan for the Plant to include
planning for Scheduled Outages, handling of Forced
Outages, preventive and predictive maintenance
philosophy, and implementation of the Long Term
Service Agreement;
(xiii) Prepare lists of the initial inventory of tools and
spare parts to be purchased for maintenance and
repair of the Plant and its equipment. Set up the
Owner/Operator-approved procurement system at the
Plant and purchase as agent for Owner the initial
inventory of tools, spare parts, consumables, and
other supplies required for operation and maintenance
of the Plant;
(xiv) Set up and implement the inventory control system for
the Plant. Install computer software as required,
train user personnel, integrate the software with the
Plant's purchasing and accounting systems and
initiate vendor contacts;
(xv) Recruit, hire, transfer, or otherwise obtain
qualified personnel in accordance with the
Owner-approved mobilization plan prepared by Operator
for the Plant;
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(xvi) Implement all personnel and human resources functions
including payroll, personnel records, benefit plans,
and insurance, and establish an Owner-approved
employee relations and community relations program;
(xvii) Set up and implement in accordance with the
requirements of the Owner, and government agencies,
the Owner/Operator-approved accounting and payroll
systems, and Plant performance monitoring systems at
the Plant. Install computer software as required,
train office personnel and initiate all reporting
systems for accounting, budgeting and Plant
performance;
(xviii) Develop an Owner approved Plant safety program and
implement Plant safety procedures in accordance with
the Plant safety manual;
(xix) Review all Plant processes and equipment for their
impact on water chemistry/environmental control and
develop an overall plan and reporting system for the
Plant chemistry program;
(xx) Prepare a plan nine (9) months prior to the Scheduled
Date of Commercial Operation to conduct initial
training of Plant personnel and submit it to Owner
for Owner approval. This pre-operational training
shall include, among other things, the following
subjects: Plant overview, Plant systems, major
equipment items, Plant safety, Plant environmental,
Plant emergency response, Plant control and emission
monitoring systems, water chemistry control, and
integrated Plant operations. Prepare training
materials, conduct classes, conduct system walkdowns,
and coordinate vendor training with overall operator
and maintenance training program. Training shall be
scheduled to be completed in time for Plant personnel
to support Plant startup and testing activities;
(xxi) Send selected operations and maintenance personnel to
outside specialty schools to develop the skills
required for proper operation and maintenance of the
Plant;
(xxii) Implement an employee qualification program that will
ensure continuous certification/qualification of all
operations and maintenance personnel;
(xxiii) Set up a regulatory reporting program in accordance
with the Plant Permits and all applicable Laws;
(xxiv) Develop a Spill Prevention Control and Countermeasure
Plan that meets the requirements of 40 CFR Part 112
and other applicable Laws;
(xxv) Prepare a Solid and Hazardous Waste Management Plan
that describes the management of Plant-generated
wastes and meets all applicable Laws;
<PAGE>
(xxvi) Prepare a plan to comply with Federal, State and
local noise standards and regulations;
(xxvii) Establish contact with PECO, General Electric
International Incorporated and the Utility and
maintain good working relations with each of such
entities;
(xxviii) Create a filing system to store and retrieve all
information related to design, operation and
maintenance of the Plant;
(xxix) Procure, for the account of the Owner, all Materials,
equipment, chemicals, supplies, services, and parts
required for daily operation and maintenance of the
Plant in accordance with the Owner-approved
Pre-Commercial Operating Budget;
(xxx) In the event of personal injury or property damage
accident or incident, or mechanical failure or
breakdown at the Plant, act in accordance with
Prudent Utility Practice to minimize personal injury
or property damage accident or incident or mechanical
failure or breakdown at the Plant and to mitigate any
loss, injury and damage resulting from such event
provided that Operator shall be compensated by Owner
for reasonable costs outside the Pre-Commercial
Operating Budget incurred by Operator in complying
with this Section 2.3(a)(xxx); and
(xxxi) Provide such other reasonable functions and services
as may be directed by Owner. Prior to implementation
of any such functions and services, Owner shall agree
to an appropriate amendment to the Pre-Commercial
Operating Budget covering any incremental operating
expenses to be incurred by Operator.
(b) COMMERCIAL OPERATING PERIOD
During the Commercial Operating Period, Operator will operate
and maintain the Plant in accordance with the standards set
forth in this Agreement. Operator shall continue applicable
services of the Pre-Commercial Operating Period and, without
limitation of its other obligations contained herein, shall:
(i) Provide assistance to Owner pursuant to this
Agreement, including the preparation and coordination
of warranty claims, insurance claims, and license and
permit renewals;
(ii) Maintain a filing system and update all Plant Manuals
and vendor service manuals, and arrange for updating
Plant facilities/System drawings to reflect the
Plant's current "as-built" configuration;
<PAGE>
(iii) Prepare annual Operating Budgets in accordance with
this Agreement. Report to Owner monthly on the status
of the Operating Budget and process budget variance
reports, as required. To the extent Operator has the
information, Operator will meet requirements of Owner
for providing information to Lenders regarding the
operation of the Plant as set forth in the Credit
Agreement;
(iv) Perform or arrange for all maintenance required on
all Plant Systems and equipment;
(v) Maintain a predictive maintenance program and oversee
services provided by the predictive maintenance
Subcontractor and perform routine testing, record
keeping and performance/failure reporting activities;
(vi) Arrange for scheduled inspections and overhauls on
major equipment items in accordance with the Long
Term Service Agreement and other maintenance
schedules. This shall include subcontracting for
major repairs between Owner and equipment suppliers
in accordance with the Owner's instructions and/or
coordinating unplanned maintenance and planned
maintenance under the Long Term Service Agreement;
(vii) Arrange for necessary janitorial, garbage pickup,
snow removal, and landscape services and maintain all
access roads within the Plant Site in good repair and
open to traffic at all times;
(viii) Schedule, coordinate and implement, as required,
calibration/testing of all gauges, meters and
recording devices related to the consumption of fuels
and water, and to the sale of electricity;
(ix) Recruit, hire, transfer or otherwise obtain and
retain qualified personnel to maintain the staffing
levels and skill mix required for successful
long-term operation of the Plant;
(x) Implement accounting procedures for the Plant
including payroll, cash disbursements and journals,
client accounting, accounts payable and fixed asset
management;
(xi) Implement a cost-effective inventory control system
and install a computerized inventory management
system designed to ensure that equipment, spare
parts, Materials, supplies and tools are properly
stored, maintained in operable condition and
accounted for and that adequate supplies are
available at all times to support daily operation and
maintenance of the Plant;
(xii) Install and commission a computerized maintenance
management system to effectively plan and control
maintenance operations for the Plant, including
<PAGE>
emergency maintenance, corrective maintenance,
preventative maintenance, safety inspections and
Scheduled Outages. The inventory control and
management system and maintenance management system
will be fully integrated with the Plant's purchasing
and accounting systems.
(xiii) Conduct a community relations program with activities
coordinated with Owner and an employee relations
program designed to maintain an enhanced image of the
Plant in the community and maintain good employee
relations;
(xiv) Prepare and submit periodic reports relative to daily
operation and maintenance of the Plant including
environmental compliance records, maintenance and
repair status, Plant operating data, and any other
information reasonably requested by Owner;
(xv) Implement Spill Prevention Control and Countermeasure
Plan in compliance with the requirements of 40 CFR
Part 112 and other applicable Laws;
(xvi) Comply with all applicable Laws regarding solid and
hazardous wastes;
(xvii) Comply with Federal, State and local noise standards
and regulations;
(xviii) Implement, or arrange for implementation of, Plant
security measures in accordance with an
Owner-approved Plant security plan;
(xix) Implement a Plant safety program and report any
injuries in accordance with the requirements of Law
and to Owner;
(xx) Implement a continuing program of training designed
to orient new employees, refresh/cross-train existing
employees, qualify/re-qualify operating personnel,
and keep all Plant personnel abreast of Plant safety
and environmental requirements and emergency
procedures;
(xxi) Send new/replacement operations and maintenance
personnel to outside specialty schools to maintain
the skill levels required for proper operation and
maintenance of the Plant. Examples: I&E technicians
to DCS School and mechanics to turbine maintenance
school;
(xxii) Implement a Plant chemistry program which shall
include minimizing chemical use and maximizing resin
life;
(xxiii) Recommend Plant improvements and supervise
contractors, subcontractors and suppliers; and
<PAGE>
(xxiv) Provide such other reasonable functions and services
as may be directed by Owner.
2.3.2 OPERATING AND MAINTENANCE REPORTS
(a) Operator shall report to Owner electronically or in writing, on a
monthly basis, the following information:
(i) Hourly, daily and weekly electric energy generated and
the electric energy exported from the Plant to the
Utility grid and in total;
(ii) Hourly, daily and weekly fuel consumption (natural gas
and fuel oil) stating by unit fuel flow and calorific
value;
(iii) Daily and weekly makeup water received and pipeline
status;
(iv) Weekly and monthly consumption of chemicals for water
treatment plant;
(v) Annual inventory accounting;
(vi) Daily personnel status;
(vii) Records and results of any performance test requested
pursuant to Section 2.7(b) of this Agreement;
(viii) Emissions data in support of federal and state and
local reporting requirements;
(ix) Wastewater effluent data in support of federal, state
and local permits; and
(x) Any other information and report regarding the
operation of the Plant reasonably requested by Owner or
required by the Power Purchase Agreement; and
(xi) All significant maintenance activities, summarized on a
monthly basis.
(b) Operator shall maintain performance data in accordance with
the then current standard Generating Availability Data System
(GADS) of the North American Electric Reliability Council
(NERC) and/or similar requirements. All GADS data is to be
reported on a monthly basis to Owner.
<PAGE>
2.3.3 OPENING THE INTERCONNECTIONS
Operator shall immediately open the electrical connection between the
Plant and the Interconnection Facilities upon request of Owner when
inspection of the Plant has revealed a lack of maintenance or the
records required by this Agreement, if Operator has been notified by
Owner of such lack, and such lack has not been corrected within a
reasonable period considering the circumstances of each request after
such notice.
2.3.4 STAFFING
Operator shall staff the Plant with experienced and competent personnel
to monitor, operate and maintain the equipment, train and supervise
personnel in the specific operation of the Plant in accordance with the
equipment and the Project Agreements, and staff the control room of the
Plant with at least one qualified operator during all hours when the
Plant and/or switchyard is in operation.
2.3.5 GENERAL OPERATION
Operator shall operate the Plant on a continuous, reliable and
sustained basis and in a good and workmanlike manner in accordance
with: (i) the terms and conditions of this Agreement and the Project
Agreements, (ii) the Plant Manuals and written procedures, (iii)
generally accepted practices for the operation of similar facilities,
(iv) all equipment manufacturers' recommended procedures and
warranties, (v) Prudent Utility Practice, (vi) applicable Law, (vii)
the limitations of the design and construction of the Plant, (viii)
Plant Permits and (ix) the requirements of insurance policies
applicable to the Plant.
2.4 ELECTRICAL GENERATING OPERATIONS
2.4.1 ENERGY DELIVERY
Operator shall operate the Plant so that all electrical energy
generated at the Plant and delivered to PECO at each Point of Delivery
shall be in accordance with the Power Purchase Agreement.
2.4.2 COORDINATION WITH PECO
(a) Owner shall notify PECO and the Utility of the identity of and
contact information for Operator's Representative. Operator's
Representative so designated will be authorized by Owner to
administer the terms of these Sections 2.4.2 and 2.4.3 with
any representatives properly designated by PECO and/or the
Utility.
<PAGE>
(b) Operator shall maintain 24-hour telephone numbers (voice and
fax) that can be used by representatives of PECO and the
Utility to contact Operator's Representative.
(c) Notification under Sections 2.4.2 and 2.4.3 shall be by
telephone followed by telecopy unless explicitly stated
otherwise for a particular application.
(d) Operator shall timely perform all of the obligations and
requirements of Owner set forth in the Power Purchase
Agreement in order to coordinate scheduling with PECO.
Operator will work with PECO prior to Commercial Operation to
develop reliable telephone dispatch procedures for intra-day
scheduling which will ensure that telephonic dispatch notices
are not given by or on behalf of PECO without proper
authorization. Operator is entitled to rely upon telephonic
dispatch orders which it believes in good faith to have been
properly authorized by PECO.
(e) Operator shall operate the Plant on a continuous, reliable and
sustained basis until the end of the Commercial Operating
Period, subject to the following:
(i) Shutdowns or interruptions at the direction of Owner,
PECO or the Utility; and
(ii) Displacements and outages in accordance with Section
2.4.3. Operator shall, with Owner, PECO and the
Utility, coordinate operation of the Plant with the
Utility's electric system in accordance with Sections
2.4.2, 2.4.3 and 2.4.4.
2.4.3 PLANT MAINTENANCE AND SCHEDULED OUTAGES
(a) SCHEDULED OUTAGES
(i) LONG TERM PREVENTIVE MAINTENANCE PROGRAM. Within
ninety (90) days after Commercial Operation,
Operator, with the approval of Owner, will furnish
PECO with a long-term preventative maintenance
program for each major item of equipment constituting
a part of the Plant. Such program shall reflect
planned outages for inspection, repair, maintenance
and overhaul and will be based, at least in part, on
manufacturer's recommendations and may be altered,
with the approval of Owner, from time to time by
reason of later manufacturers' releases pertaining to
major items of equipment of the Plant and Plant
operating experience.
(ii) ANNUAL FORECAST OF SCHEDULE OUTAGE. No later than
ninety (90) days prior to April 1 of each Year,
Operator shall submit to PECO a schedule, as approved
by Owner, for the annual maintenance for the next
five (5) Contract Years and the level of capacity
available, if any, during such maintenance. The
annual maintenance will be scheduled in accordance
with the provisions of the Power Purchase Agreement
and submitted to
<PAGE>
PECO for approval in accordance with the Power
Purchase Agreement. In the event that PECO does not
approve the proposed annual maintenance schedule,
Operator shall work with PECO to arrive at an annual
schedule which is acceptable to PECO and Owner.
(iii) RESCHEDULING OF OUTAGES. Operator, with the approval
of Owner, may shift the start date of an outage up to
seven (7) days, or extend a Scheduled Outage by up to
seven (7) days, by providing PECO with written notice
forty-five (45) days before the earlier of the
original Scheduled Outage start date or the new
Scheduled Outage start date, unless the change in the
outage start date or duration would result in more
units of the Plant being in a Scheduled Outage than
would have occurred under the original schedule, in
which case Operator will provide PECO with sixty-five
(65) days prior written notice for the outage change.
(iv) NOTIFICATION. Not less than seven (7) days prior to a
Scheduled Outage, Operator shall notify PECO and the
Utility of the timing, expected duration and the
impact upon the Plant output. Prior to reducing the
Plant output for a Scheduled Outage, Operator shall
notify PECO and the Utility of the latest information
regarding the timing, the rate at which the Plant
will be removed, or ramped down, from service,
expected duration and the impact upon Plant output.
During the Scheduled Outage, Operator shall notify
PECO and the Utility of any changes to the expected
duration of the Scheduled Outage as soon as
practicable.
(v) RETURN TO SERVICE. Operator shall notify PECO and the
Utility prior to returning the Plant to service
following a Scheduled Outage. Operator shall notify
Owner of all plans to return the Plant to service,
but shall not let such notification delay returning
the Plant to service. Such notification shall include
the timing of the start-up and the rate at which the
Plant will be returned, or ramped up, to service.
(b) FORCED OUTAGE
(i) NOTIFICATION. Upon the occurrence of an event
necessitating a Forced Outage, Operator shall as soon as
practicable notify PECO, the Utility and Owner of the
reason, timing, expected duration, the impact upon Plant
output, and the scheduling flexibility of each Forced
Outage.
(ii) UPDATES. During any Forced Outage, Operator shall
notify Owner, PECO and the Utility of any changes to the
expected duration of the outage as they become known.
(iii) RETURN TO SERVICE. Operator shall not return the Plant
to service following a full or partial outage without
notifying PECO and the Utility. Operator shall
<PAGE>
notify Owner of all plans to return the Plant to
service, but shall not let such notification delay
returning the Plant to service. Such notification shall
include the timing of the start-up and the ramp up rate
of that portion of the Plant returning to service.
(c) OUTAGE REPORTS
PECO may, from time to time, request a report of the cause of
any Plant outage and the actions taken by Operator to correct
the situation. Operator shall provide such reports upon
request of PECO and with Owner approval.
2.4.4 OPERATION ON BACKUP FUEL
During the period of any interruption of the Plant's primary fuel
supply, Operator shall include, with hourly generation forecasts
prepared under Section 2.4.2(d), updated estimates of the remaining
backup fuel supply.
2.4.5 METERING
(a) Operator shall perform all inspections and testing of meters
required of Owner under the Interconnection Agreement in
accordance with the requirements of such agreement and shall
provide the Utility and PECO with access to observe such
inspection and testing, as applicable. Operator, with approval
from Owner, may request a Utility to perform additional tests
of its meters at any time.
(b) The Utility is to give reasonable notice to Operator of the
time when any inspection or test of relevant meters shall take
place, and Operator and PECO may have representatives present
at the test or inspection.
2.4.6 DISCONNECTION BY UTILITY
The Utility has the right to disconnect the Plant from the Utility's
electric system or interrupt, suspend or curtail delivery, receipt or
acceptance of delivery of energy at the applicable Points of Delivery
in accordance with the provisions of the applicable Interconnection
Agreement. Operator shall notify Owner immediately of any notice from
the Utility of any such disconnection, interruption, suspension or
curtailment and of the reasons for any such disconnection,
interruption, suspension or curtailment.
2.4.7 INSPECTION
Operator shall permit PECO to be present at the capacity test of the
Plant pursuant to Section 5.01 of the Power Purchase Agreement.
<PAGE>
2.4.8 ACCESS
Operator shall provide PECO and the Utility the right of sufficient
access to the Plant for those purposes provided in the Power Purchase
Agreement and the Interconnection Agreement, as applicable. Owner shall
receive reasonable advance notice from Operator of any access required
under this Section. Further, Operator shall provide such access subject
to limitations required by Prudent Utility Practice.
2.4.9 INSPECTION OF CHARTS AND RECORDS
The charts and records from the Metering Equipment shall remain the
property of Owner and shall be kept on file by Operator for a period of
not less than six (6) years. At any time, upon request of the Owner,
the Operator will submit records and charts from the Metering
Equipment, together with calculations therefrom, for inspection,
verification and copying by Owner.
2.5 PROCESS WASTE WATER DISPOSAL
(a) Operator shall comply with the wastewater discharge permit for
the Plant and those agreements entered into by Owner with
adjacent landowners.
(b) Process wastewater will be metered and sampled by Operator
within the Plant according to requirements of the agencies
issuing wastewater permits. Operator will monitor ground water
quality according to any applicable requirements of the
wastewater discharge permit for the Plant and those agreements
entered into by Owner with adjacent landowners.
(c) Operator shall operate, inspect, repair and maintain all
equipment, structures and work necessary for the processing
and delivery of the Plant waste water from the Plant in
accordance with the limitations and specifications of any
wastewater permit and all other Laws regarding water disposal
now and hereafter in effect.
2.6 PLANT MAINTENANCE
Operator shall perform Maintenance Services (as defined below) pursuant
to Prudent Utility Practice and in a good and workmanlike manner, with
competent personnel trained and experienced in those services which
they perform, in accordance with: (i) the terms and conditions of this
Agreement and the Project Agreements, including the Long Term Service
Agreement, (ii) the Plant Manuals and written procedures, (iii)
generally accepted practices for the maintenance of similar facilities,
(iv) applicable Laws and Plant Permits, (v) manufacturer's recommended
procedures and tolerances, and (vi) proper safety procedures and
requirements for such services.
<PAGE>
With respect to the Maintenance Services, Operator agrees that no used
parts, equipment or components will be used without the consent of
Owner. Operator shall secure, when possible, the regular and extended
manufacturer/supplier warranties for new parts and equipment without
additional cost. Operator shall secure regular warranties for used
parts and equipment whenever possible. Operator shall cooperate with
Owner to enforce manufacturer/supplier parts and equipment warranties.
(a) As used in this Agreement, the term "Maintenance Services" has
reference to the Plant, the Site and the Plant wastewater
and communication lines to the Utility's substation
(excluding the items for which the Utility is responsible
under the Interconnection Agreement) and means, in relation
to the Plant, normal maintenance services required in order
to keep the Plant in good working order and prevent the
Plant from prematurely deteriorating or wearing out. Such
normal maintenance services include visual inspection of the
Plant, cleaning and lubrication of parts thereof as
required, keeping the Plant Site safe and free of debris,
and taking of any other generally accepted protective
measures with respect thereto. Operator shall repair or
replace those parts of the Plant which have worn out,
deteriorated or ceased to function properly so as to restore
the component being replaced or repaired to good working
order. Operator shall procure on behalf of the Owner such
special tools, toolings and assembly devices as are required
to perform such services after obtaining budget approval
from Owner. Operator shall be responsible for all the
repairs, replacements, maintenance and upkeep of the Site,
the Plant and all other structures located thereon
including, without limitation: structural repair and
interior and exterior maintenance of buildings; repair of
access and Site roads or sidewalks; upkeep of trees,
underground systems and appurtenances, shrubbery, lawns or
other aesthetic improvements to land; and upkeep of sewers
and drainage systems.
(b) Operator will furnish Owner as part of each annual Operating
Budget its long-term (not less than five (5) years)
preventive maintenance program for each major item of
equipment of the Plant reflecting Scheduled Outages for
inspection, repair, maintenance and overhaul and coordinated
with the provisions of the Long Term Service Agreement. Such
program will be based, at least in part, on manufacturers'
recommendations and may be altered from time to time, upon
mutual agreement of Owner and Operator, by reason of more
recent manufacturers' releases pertaining to major items of
equipment of the Plant and experience of Operator in
operating the Plant; Owner or Operator will promptly advise
the other of any such changes. The specific times for
Scheduled Outages of the Plant will be scheduled annually in
advance by agreement of Owner and Operator so as to
coordinate Scheduled Outages with PECO as described in
Section 2.4.3(a) of this Agreement. Owner may, upon
reasonable advance written notice to Operator, require
Operator to adjust the projected time schedule for such
major Scheduled Outages (other than emergency repairs) as
necessary in order to comply with Owner's obligations under
the Long Term Service Agreement, the Power Purchase
Agreement and other Project Agreements.
<PAGE>
2.6.1 MONTHLY MAINTENANCE REPORTS
Operator shall provide Owner on a monthly basis with a written report
in a form acceptable to Owner of all repairs, replacements or
maintenance performed on the Plant or any portion thereof within the
previous month and of all major repairs or maintenance projected during
the next month, together with the projected time schedule for such
intended major repairs or maintenance. With respect to any such repair,
replacement or maintenance performed, the report shall specify the
equipment repaired, replaced or maintained and the reason therefor.
2.7 INVENTORY AND TESTED CAPACITY
(a) Operator, as agent for Owner, shall purchase with Owner's
approval an adequate initial inventory of spare parts, tools
and supplies, the adequacy of such inventory to be determined
with reference to the recommendations of Operator, equipment
manufacturers and providers of extended service agreements
including the Long Term Service Agreement and to minimize the
duration of outages. Operator shall provide Owner on an annual
basis a written report, in a form reasonably acceptable to
Owner, of all spare parts, tools and supplies.
(b) On an annual basis in accordance with the Power Purchase
Agreement, at the direction of Owner, Operator shall determine
the electrical output capability of the Plant ("Tested
Capacity"). Owner, at any time, may request and Operator shall
perform a performance test of the Plant using in-place station
meters. Determination of Tested Capacity shall be in
accordance with the procedures set forth in the Power Purchase
Agreement.
(c) Owner shall be given reasonable prior notice by Operator of
any performance test planned by Operator and shall have the
right to have representatives present during any performance
test. Operator shall furnish Owner with preliminary results
within forty-eight (48) hours after any performance test is
completed and final written results of any performance test
within ten (10) days after the test is completed.
(d) If either Owner or Operator determines that the performance
test was conducted in a manner or under conditions that make
the results of the test unrepresentative or inaccurate, then,
upon written notice to Owner or Operator, as the case may be,
which specifies the defects in the test and requests a retest,
Operator will rerun the test, with the defects corrected,
within a reasonable time after the notice; such notice must be
given within ten (10) days after the test results are provided
to Owner in a performance test final report.
(e) Operator shall operate the Plant in synchronization with the
Utility's system and subject to and in compliance with the
then-current established guidelines of the Utility and subject
to the Utility's reasonable directions. Operator shall be
responsible for the proper synchronization of the Plant
generators with the Utility's system. Operator shall indemnify
Owner for loss due to damages to the Utility's
<PAGE>
physical plant, electric system, or equipment to the extent
that any breach of this Agreement by Operator or negligence
on the part of Operator causes improper synchronization. The
provisions of Section 11 shall apply to this Section.
2.7.1 TESTS
The tests to be performed by Operator shall include tests required
under Project Agreements and other tests requested by Owner.
2.8 PLANT PERMITS
As the same are procured, Owner will supply Operator with copies of all
Plant Permits and copies of all applicable agreements with adjacent
landowners. Operator shall become familiar with the Plant Permits and
agreements with adjacent landowners. Operator shall operate and
maintain the Plant, including the requirement to monitor, maintain
quality assurance/quality control of monitoring equipment, keep
records, notify proper authorities and Owner of any non-compliance, and
report, with a copy to Owner, in such a manner as to comply with the
Plant Permits and agreements with adjacent landowners.
3. TERM OF THE AGREEMENT
3.1 TERM
The primary term of this Agreement shall commence on the Effective Date
and shall continue, subject to the provisions of this Agreement on
termination, for a period of twenty-nine (29) years from the Date of
Commercial Operation, except that the primary term shall automatically
be extended thereafter in annual increments unless either Party
notifies the other in writing no later than ninety (90) days prior to
the end of the primary term or the anniversary of any subsequent
extension term. The primary term and any extension term are sometimes
collectively referred to herein as the "Term".
3.2 Both Owner and Operator shall have all rights provided by this
Agreement, including their rights of termination, during any such
extension.
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4. TESTING OF THE PLANT
4.1 ACCESS DURING TESTING
Prior to the period when the Plant is being tested for Commercial
Operation, Operator shall have personnel trained and prepared to assist
Construction Contractor and Owner in determining Mechanical Completion
as defined in the Construction Agreement and to start the Plant for
testing ("Testing Period"). Operator shall be responsible for the
startup support of the Plant at Commercial Operation under the
direction of a start-up manager selected by the Construction
Contractor. After testing, Operator's responsibilities in respect to
the Systems shall commence pursuant to Section 2.3.1(b).
5. COMPENSATION AND PAYMENT
5.1 OPERATING ACCOUNT
Operator shall not be required to bear the expense of funding the
reimbursable operating expenses to the extent approved in the Operating
Budget. Owner shall establish a bank account ("Operating Account") for
the funding of reimbursable operating expenses. Owner shall deposit,
once each month, sufficient funds in the Operating Account to cover all
expenses set forth in the approved Operating Budget and anticipated to
be paid during such month. Operator shall nominate officers or
employees of Operator, to be approved by Owner, who shall have the
written authority to sign checks against the Operating Account.
Operator's expenditures shall be made in accordance with the guidelines
established by the Operating Budget. Operator shall not make any
unauthorized expenditures or withdrawals from the Operating Account and
shall be responsible for such sums. In the event that there are
insufficient funds in the Operating Account to satisfy expenses set
forth in the approved Operating Budget, Operator shall notify Owner of
such condition immediately after Operator has notice or knowledge
thereof and Owner shall immediately make sufficient funds available in
the Operating Account to cover such expenses. Operator shall submit
documentation to Owner of expenditures by the fifteenth (15th) day of
the subsequent month for the previous month.
5.2 PRE-COMMERCIAL OPERATING PERIOD BUDGET AND COMPENSATION
(a) Eleven (11) months prior to the Scheduled Date of Commercial
Operation, Operator shall submit the anticipated costs
associated with Operator's planned salary and benefit program
to Owner for Owner's approval, which approval shall not be
unreasonably withheld. If requested by Owner, and not later
than thirty (30) days prior to the date upon which Operator is
obliged to submit the Pre-Commercial Operating Budget (as
defined below) to Owner, Operator and Owner shall meet to
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discuss the anticipated costs associated with planned salary
and benefits program. The approved salary and benefits program
shall form the basis for the pre-commercial operating budget
(the "Pre-Commercial Operating Budget").
(b) Nine (9) months prior to the Scheduled Date of Commercial
Operation, Operator shall submit to Owner the
Pre-Commercial Operating Budget for approval by Owner. Owner
and Operator shall use all reasonable efforts to resolve all
budget differences. All documented and approved costs
described hereafter and included in the approved
Pre-Commercial Operating Budget and costs not included in
the Pre-Commercial Operating Budget but approved by Owner,
which are incurred by Operator pursuant to this Agreement,
shall be paid through the Operating Account: (i)(A) the
actual payroll cost in accordance with the approved
Pre-Commercial Operating Budget, for all of Operator's
employees involved in the operation of the Plant, including
paid absences; (B) the cost of payroll burden in accordance
with the following: (1) the actual cost of payroll taxes,
unemployment, insurance, and disability/workers'
compensation insurance; (2) the actual cost of
medical/dental/vision, life, long term disability and
accidental death and dismemberment insurance; (3) the actual
cost of the retirement and 401(k) plans, including plan
administration expenses, provided that such cost shall not
exceed nine percent (9%) of the actual payroll cost
described in Section 5.2(b)(i)(A) above; and (4) the actual
cost of any Owner-approved employee assistance and education
assistance plans, and (C) specific additional costs approved
by Owner in the Pre-Commercial Operating Budget; (ii)
non-labor expenses directly related to the operation of the
Plant as follows: (A) the actual cost of insurance premiums
for coverage required by Section 10, including deductibles
and self-insured retentions for loss directly arising out of
the Scope of Services, if paid by Operator, except as
otherwise provided in Section 5.2(c), (B) the relocation and
recruitment costs of employees, (C) training costs approved
by Owner, (D) costs for community and employee relations
services provided by non-Operator personnel approved by
Owner, (E) all costs, including attorneys' fees, expenses
and judgments and advisor costs associated with union and
organizing activities and contesting such activities and (F)
all costs associated with Plant employee disputes and
litigation, including attorneys' fees, expenses and judgments
and (iii) costs for non-incidental services related directly
to the operation of the Plant approved by Owner at rates
approved by Owner. In addition to the above costs during the
Pre-Commercial Operating Period, Operator shall invoice
Owner within fifteen (15) days of the commencement of the
Pre-Commercial Operating Period, for the amount of
Seventy-Five Thousand Dollars ($75,000) to cover all costs
of overhead during the Pre-Commercial Operating Period
("Fixed Management Fee") which amount shall be paid to
Operator by Owner within twenty-five (25) days of receipt of
invoice.
(c) During or prior to the Pre-Commercial Operating Period, Owner
and Operator shall mutually agree upon the incentive criteria
for the Operator to earn an Incentive Fee (defined in Section
5.4(b) during the Pre-Commercial Operating Period and Owner
shall advise Operator of the information required to be
submitted by Operator to enable Owner to determine the amount
of the Incentive Fee. The maximum value
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of the Incentive Fee shall be Seventy-Five Thousand Dollars
($75,000). The Incentive Fee criteria shall include, but not
be limited to, the performance of Operator in following a
manpower plan, availability of the Plant during the
Pre-Commercial Operating Period, training personnel to run the
Plant and the ability of Operator to control spending in
accordance with the approved Pre-Commercial Operating Budget.
The Incentive Fee shall be paid to Operator within twenty (20)
days after Owner receives the information provided by Operator
to determine the amount of such Incentive Fee earned.
5.3 OPERATING BUDGET
(a) Ninety (90) days prior to the Scheduled Date of Commercial
Operation, Operator shall prepare and submit to Owner an
Operating Budget for approval by Owner for the period from the
Date of Commercial Operation until December 31 of the Year in
which the Date of Commercial Operation occurred which shall
include information required by the Credit Agreement. After
the Date of Commercial Operation and at least one hundred
twenty (120) days prior to the effective date of each annual
budget, Operator shall submit to Owner a budget, which shall
include the information required by the Credit Agreement, for
approval by Owner for the next Year. Such budget shall be for
all reimbursable costs to be incurred in the operation of the
Plant and shall include, but not be limited to, all
reimbursable labor costs, expendable supplies, parts, office
equipment and supplies, training and travel expenses, tools,
subcontract maintenance, insurance and chemicals required to
operate the Plant in accordance with this Agreement
("Operating Budget"). Owner and Operator shall use all
reasonable efforts to resolve all budget differences. If, with
respect to any operating year, Owner and Operator do not
resolve all budget differences, the most recently approved
Operating Budget (escalated by three and one-half percent
(3.5%)), without regard to amounts budgeted for extraordinary
or non-recurring items, but including all costs for the Long
Term Service Agreement and all contingency funds, shall be
applicable until an Operating Budget is approved for such
operating year.
(b) During any Operating Budget period Operator may request Owner
to approve an increase or decrease in the approved Operating
Budget, which approval shall not be unreasonably withheld.
Operator shall not make a change in the quality of the
services and/or equipment, alter the Scope of Services or
alter the equipment described in the approved Operating Budget
without the written consent of the Owner.
(c) Operator shall make payments from the Operating Account only
for expenses which are in the approved Operating Budget or
which are approved in writing by Owner.
(d) For the purposes of reviewing the performance of Operator in
managing the Operating Budget, such reimbursable costs as
fuel, service fees charged by the
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Utility, property and ad valorem taxes, shall not be
considered. Operator will include and report all costs to
Owner as a part of the Operating Budget.
5.4 COMPENSATION DURING COMMERCIAL OPERATING PERIOD
(a) During the Commercial Operating Period, the following actual
expenses shall be included in the annual Operating Budget and
paid through the Operating Account: (i)(A) the actual payroll
cost included in the approved Operating Budget, for all
Operator's employees directly involved in the operation of the
Plant, including paid absences in accordance with Operator's
normal policy; (B) the cost of payroll burden in accordance
with the following: (1) the actual cost of payroll taxes,
unemployment insurance premiums, and disability/workers'
compensation insurance premiums; (2) the actual cost of
medical/dental/ vision, life, long term disability and
accidental death and dismemberment insurance premiums; (3) the
actual cost of the retirement and 401(k) plans, including plan
administration expenses, provided that such cost shall not
exceed nine percent (9%) of the actual payroll cost described
in Section 5.4(a)(i)(A) above; and (4) the actual cost of any
Owner-approved employee assistance and education assistance
plans, and (C) specific additional costs approved by Owner in
the Operating Budget; (ii) non-labor expenses directly related
to the operation of the Plant as follows: (A) the actual cost
of insurance premiums for coverage required by Section 10,
including deductibles and self-insured retentions for loss
directly arising out of the Scope of Services, if paid by
Operator, (B) the relocation and recruitment costs of
employees, (C) training costs approved by Owner, and (D) costs
for community and employee relations services provided by
non-Operator personnel and approved by Owner, (E) all costs,
including attorneys' fees, expenses and judgments, and advisor
costs associated with union and organizing activities and
contesting such activities, and (F) all costs associated with
Plant employee disputes and litigation, including attorneys'
fees, expenses and judgments; and (iii) costs for
non-incidental services related directly to the operation of
the Plant approved by Owner at rates approved by Owner. In
addition to the above costs, Owner shall pay to Operator an
annual Fixed Management Fee of Two Hundred Twenty-Five
Thousand Dollars ($225,000). Operator shall invoice Owner for
the annual Fixed Management Fee at the rate of Eighteen
Thousand Seven Hundred Fifty Dollars ($18,750.00) per month
adjusted annually in accordance with Section 5.6(a) to cover
all costs of overhead which amount shall be paid to Operator
by Owner within twenty-five (25) days of receipt of invoice.
(b) Annually during the Commercial Operating Period, Operator
shall be eligible to earn an incentive fee which shall be paid
on the basis of Owner's assessment of Operator's performance
against mutually agreed upon incentive criteria including, but
not limited to, Operator's ability to maintain spending within
the Operating Budget and manage the operation of the Plant in
an effective, efficient and professional manner ("Incentive
Fee"). The maximum value of the Incentive Fee to be earned for
the first full Year of the Commercial Operating Period and
each subsequent Year of this Agreement shall be One Hundred
Thousand Dollars
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<PAGE>
($100,000) for each such period and shall be adjusted annually
for escalation in each subsequent Year in accordance with
Section 5.6(b). Each month the Incentive Fee will be invoiced
and paid at five percent (5%) of the maximum Incentive Fee
value for the current Year and in the event Operator does not
earn at least sixty percent (60%) of the maximum Incentive
Fee, then the unearned portion shall be returned to Owner. The
incentive criteria shall be determined prior to the beginning
of each Year other than the first partial year of the
Commercial Operating Period. The criteria for such partial
year will be developed seven (7) months prior to the Date of
Commercial Operation. Concurrently with developing the
incentive criteria, Owner and Operator shall develop the type
of information and the method of reporting to be used by
Operator to enable Owner to determine the amount of the
Incentive Fee. Operator's performance shall be evaluated and
reviewed with Operator on a quarterly basis. If Owner requests
additional information, Owner shall notify Operator within
seven (7) business days after receipt of the information by
Owner. The Incentive Fee earned for the Year shall be paid to
Operator within twenty (20) days after Owner receives
acceptable information or within twenty (20) days after the
expiration of such seven (7) business days if no request for
further information is made by Owner. In the event that the
period of Operator's performance being assessed by Owner ends
other than at the end of a calendar year, Owner shall pay
Operator for the earned Incentive Fee within sixty (60) days
of the end of such period. In the event that the period of
Operator's performance being assessed by Owner is less than a
full calendar year, the maximum Incentive Fee available for
payment to Operator shall be prorated on the basis of the
number of days in the period of Operator's performance being
assessed in relation to the number 365. The maximum Incentive
Fee available for payment to Operator shall be adjusted
annually for escalation in accordance with Section 5.6(b).
(c) For each Contract Year during the Commercial Operating Period,
there shall be an availability adjustment which shall vary
with the performance of Operator in maintaining the Annual
Availability Percentage for the Plant during the Contract Year
(the "Availability Adjustment"). If the Annual Availability
Percentage for the Contract Year is greater than ninety-seven
percent (97%) Operator shall be paid an Availability
Adjustment determined from the formula:
[(A-97%) x 100/100%] x $25,000
where A is the Annual Availability Percentage for such
Contract Year.
If the Annual Availability Percentage for the Contract Year is
less than ninety-seven percent (97%), Operator shall pay an
Availability Adjustment to Owner determined from the formula:
[(97%-A)x100/100%] x $25,000
where A is the Annual Availability Percentage for such
Contract Year, provided that for purposes of such formula, A
shall not be less than ninety-three percent 93%.
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The maximum value of the Availability Adjustment to be paid
shall be Seventy-Five Thousand Dollars ($75,000) with the
maximum value adjusted annually for escalation in accordance
with Section 5.6(b).
Operator shall provide Owner with all information requested by
Owner to determine the Availability Adjustment. The
Availability Adjustment shall be paid annually by Owner or
Operator, as applicable, within thirty (30) days after the end
of each Contract Year. For any Contract Year of more or less
than 365 days duration, the amount of the Availability
Adjustment shall be adjusted by multiplying the Availability
Adjustment by a fraction, the numerator of which is the number
of days in such Contract Year and the denominator of which is
the number 365.
5.5 DETERMINATION OF AVAILABILITY PERCENTAGES
(a) The "Annual Availability Percentage" shall mean the Annual
Availability Percentage for the Contract Year as determined
pursuant to the Power Purchase Agreement.
(b) For purposes of computing the Availability Adjustment payable
by Operator to Owner as set forth in Section 5.4(c),
adjustments shall be made in the computation of the Annual
Availability Percentage so that Operator is in no way
penalized or disadvantaged by unavailability of the Plant due
to (i) turbine malfunction (the cause of which is not
contributed to by Operator), (ii) unavailability of natural
gas as fuel for the Plant caused by a failure of gas supply or
transportation, or (iii) the inability to export energy from
the Plant because of the unavailability of a Utility's
transmission system.
5.6 ADJUSTMENT FOR ESCALATION
(a) The amount of the Fixed Management Fee, as set forth in
Sections 5.2(b) and 5.4(a) shall be adjusted annually. The
annual adjustment of each amount shall be in accordance with
the following equation:
FIXED MANAGEMENT FEE X (INDEX IN YEAR N)
Base Index
The Base Index shall be Compensation per Hour-Non farm
Business for the Year 1999 as reported by the Department of
Labor, Bureau of Labor Statistics. The Index in Year N
represents the value of the index in each Year subsequent to
Year 1999. Since the index value may be revised after the
initial reporting, any effects of revision shall be made for
the prior year and credited or debited from future payments.
If no future payments are pending, then Owner and Operator
shall reconcile the difference within
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one hundred eighty (180) days of first reporting of the index
using the most current value. In no year shall the value of
the Fixed Management Fee be less than the previous Year.
(b) The maximum annual amounts of the Incentive Fee, the
Availability Bonus and the Availability Adjustment shall be
escalated by three and one-half percent (3.5%) per Year
compounded on the first day of each Year beginning with
January 1, 2001.
6. FURTHER AGREEMENTS
6.1 LICENSES, APPROVALS AND PERMITS
Owner shall be responsible for obtaining and maintaining all federal,
state and local permits, authorizations, franchises, licenses and other
approvals necessary for the Plant to be legally authorized to operate.
Operator shall provide full and reasonable continuing cooperation in
obtaining and maintaining in effect all such permits, authorizations,
franchises, licenses and other approvals necessary to permit it to
operate the Plant ("Plant Permits"). Operator shall review Owner's
applications for accuracy and completeness, as required. Operator shall
be responsible for obtaining and maintaining all permits,
authorizations, franchises, licenses and other approvals required for
performance of Operator's services under this Agreement.
6.2 FUEL AND WATER
Operator shall report to Owner the daily volume of natural gas and fuel
oil consumed and the correlation of such with the forecasted electric
generation plan. Owner shall supply Operator with water of sufficient
quality and quantity to permit the uninterrupted operation of the
Plant.
6.3 ACCESS
Owner shall provide Operator and the agents, employees, Subcontractors
and consultants of Operator access to the Plant to perform the services
under this Agreement, provided that Operator shall give Owner
reasonable prior notice to approve access to the Plant of any persons
(other than direct employees of Operator) that Operator proposes to
give access to the Plant to perform such services. Owner will notify
Operator at least two (2) hours prior to the need for employees of PECO
or the Utility to access the Plant site. As of the submission of the
Pre-Commercial Operating Budget, Operator shall furnish Owner with a
list of the employees engaged in the day-to-day operation of the Plant
and shall inform Owner prior to changes in the list.
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7. WARRANTIES
7.1 WARRANTY OF OPERATOR
Operator warrants and represents that the services performed by
Operator and/or Subcontractors and Agency Suppliers shall be done in a
good and workmanlike manner in accordance with the requirements of this
Agreement, Prudent Utility Practice and standard industry practice and
in accordance with the Plant Manuals. Operator, Subcontractors and
Agency Suppliers shall be competent and appropriately licensed, to
perform services and/or furnish Materials and equipment. Operator shall
monitor all services performed by Operator and Subcontractors and
Agency Suppliers. Operator shall carry out its obligations under
Section 14.2 and shall utilize its best judgment, recognizing Owner's
interest, to obtain the best warranty reasonably available from each
Subcontractor and Agency Supplier. Operator shall require and use
reasonable efforts to verify that all parts and equipment furnished
meet manufacturer's description specifications and performance
specifications and that the Suppliers comply with the terms and
conditions of their contracts. Operator shall pay Subcontractors and
Agency Suppliers in a timely manner and, subject to Owner's prior
approval, all disputes with Subcontractors and Agency Suppliers shall
be resolved expeditiously by Operator. Operator shall cooperate with
Owner in the prosecution of any claims against such Subcontractors and
Agency Suppliers.
Operator shall operate the Plant in compliance with the Interconnection
Agreement. Operator shall indemnify Owner for loss due to damages to
any Utility's physical plant, electric system, or equipment to the
extent that any breach of this Agreement or the Interconnection
Agreement by Operator, such indemnity to be limited to damage amounts
not covered by Owner's insurance. The provisions of Section 11 shall
apply to this Section.
Operator warrants and agrees, and by submission of each reimbursement
request or invoice for payment of Subcontractors (a "Request for
Payment") rewarrants, that:
(i) Title to all Materials (including spare parts, operating
manuals and procedures, and consumables) covered by a Request
for Payment will pass to Owner either by incorporation into
the Plant in the case of parts and consumables or upon payment
for any of such items, whichever occurs first;
(ii) Materials covered by previous Requests for Payment are free
and clear of liens, claims, security interests and
encumbrances and upon payment for equipment and other services
covered by a Request for Payment, no person shall have a right
to file a lien against the Plant or have a claim or security
interest with respect to such Materials and/or services; and
(iii) No interest in nor encumbrance on any Materials covered by a
Request for Payment will have been acquired or imposed or
retained by Operator or any other Person performing any
services or supplying any Materials with respect to the Plant.
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7.2 REMEDIES
Owner's remedies for Operator's breach of warranty set out in Section
7.1 shall be the same as those set forth in this Agreement for default
by Operator.
7.3 NO IMPLIED WARRANTIES
ANY IMPLIED WARRANTIES BY OPERATOR OF MERCHANTABILITY, QUALITY,
SUITABILITY AND FITNESS ARE EXCLUDED. OPERATOR'S WARRANTIES IN
SECTION 7.1 ARE EXCLUSIVE AND IN LIEU OF ANY OTHER WARRANTIES, EXPRESS
OR IMPLIED.
8. TERMINATION OF AGREEMENT
8.1 OWNER TERMINATION
Each right of Owner to terminate this Agreement, as set forth in this
Agreement, is in addition to and not in lieu of any other right of
Owner to terminate this Agreement. In the event of termination by
Owner, Owner shall have the right to require Operator to remove itself,
its employees, Subcontractors, and equipment from the Plant and the
right to specify the Transition Period in accordance with Section
8.2(c).
8.2 OWNER TERMINATION EVENTS
(a) At any time after the Effective Date of this Agreement, Owner
may terminate this Agreement if the Plant is sold or leased to
a third party (other than an Affiliate), or if Owner's
interest in said Plant is sold to a third party (other than an
Affiliate), or if the Plant or a material portion of the Plant
is condemned or taken by a public authority by giving Operator
at least thirty (30) days prior written notice.
(b) Owner shall have the right to terminate this Agreement after
thirty (30) days' notice to Operator if any of the following
events occur, by delivering a written notice of termination to
Operator:
(i) Operator undergoes a Bankruptcy Event;
(ii) Operator fails in any material respect to comply
with applicable Laws or Plant Permits other than a
failure to file any report required thereunder, or
any Plant permit is lost or is no longer in effect by
fault of Operator and is not subject to renewal
(including by way of refusal by the permitting
authority to renew any material Plant Permit as a
result of an act or omission of Operator);
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(iii) A material default or breach occurs (and is not
cured or curable) under any Project Agreement as a
result of any failure by Operator to comply with the
provisions of this Agreement;
(iv) Operator fails in any material respect to obtain
or maintain in effect any insurance required to be
obtained by Operator under Section 10, and such
failure continues for fifteen (15) days;
(v) Operator fails to pay any amount when due under this
Agreement and such failure continues for fifteen (15)
days;
(vi) Any lien or other encumbrance is filed against or
attaches to the Plant or any portion thereof or the
Plant Site as a result of any failure by Operator or
any Subcontractor or any Agency Supplier to comply
with the provisions of this Agreement and such lien
or other encumbrance is not removed or appropriate
security therefor is not provided within fifteen (15)
days; or
(vii) Operator fails in any material respect to perform
its obligations hereunder (other than any failure
that is the subject of another event of default) and
such failure continues for thirty (30) days after
receipt from Owner of notice specifying such failure;
(c) Owner has the right to specify a reasonable period not to
exceed six (6) months following the effective date of
termination of this Agreement as a period of transition
("Transition Period") during which Operator will continue to
operate the Plant in accordance with this Agreement. During
this Transition Period, Operator shall also cooperate with
Owner in planning and implementing the closing of the Plant or
cooperate with Owner's lessee or purchaser or a successor
operator, as applicable to facilitate the transition. The
Parties shall mutually agree to a schedule for the orderly
removal of Operator from its operational responsibilities.
Operator shall also provide Owner, Owner's lessee or purchaser
or a successor operator (if such operator is some entity other
than Owner) reasonable access to the Plant to facilitate the
orderly transition of responsibilities.
(d) Upon Owner's termination of this Agreement pursuant to
Section 8.2(a) above and in addition to all reimbursement
costs otherwise authorized under this Agreement, Operator
shall be entitled to receive a termination payment (the
"Termination Payment") equal to the sum of: (i) the direct
cost reasonably incurred by Operator in withdrawing its
personnel and retaining its personnel during the Transition
Period (including any reasonable severance expenses and
employee retainage bonus expenses incurred by Operator, if
such expenses were approved by Owner in advance, which
approval shall not be unreasonably withheld) are consistent
with Operator's corporate policies and result solely from
termination of this Agreement) from the Site and otherwise
demobilizing its operations at the Plant, and (ii) the direct
costs, including damages, attorney fees, expenses and
judgments reasonably incurred by Operator in terminating
contracts entered into by Operator with
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Subcontractors to carry out Operator's contractual obligations
under this Agreement. Operator shall not voluntarily modify or
terminate any contract entered into by Operator pursuant to
Section 14.2 without the prior written consent of Owner,
except as ordered by a court of competent jurisdiction.
Operator shall document the costs claimed under clause (i)
above to Owner's reasonable satisfaction and shall supply
Owner with copies of the Subcontractor invoices covering
amounts claimed under clause (ii) above. After the effective
date of termination, Operator shall submit an invoice to Owner
for the Termination Payment with the supporting information
and documents referred to above and Owner shall pay such
invoice within thirty (30) days after receipt of same unless
it disputes certain elements thereof, in which event only the
undisputed portion of the Termination Payment needs to be paid
within such 30-day period and the dispute over the remainder
of the Termination Payment shall be submitted to the Dispute
Procedure pursuant to Section 12.
(e) Operator shall have no further obligations to Owner under this
Agreement after Operator has vacated the Plant, except
pursuant to Sections 7, 14.3, 14.4, 14.5, 14.7, 14.22 and
14.24. Notwithstanding this cessation of obligations, neither
Party shall be relieved from any obligations or liabilities
for actions or inactions prior to the effective date of
termination and during the Transition Period.
8.3 CONTINUED PERFORMANCE DURING DISPUTES
During the Dispute Procedure, as described in Section 12, all
terms of this Agreement including the application of Section
13 shall remain in full force and effect and the Parties shall
continue to perform their obligations. If Operator has been
terminated and Owner has demanded that Operator vacate the
Plant premises in accordance with Section 8.1 then only
Sections 7, 8, 14.3, 14.4, 14.5, 14.7, 14.22 and 14.24 shall
survive the termination of this Agreement. Notwithstanding
this cessation of obligations, neither Party shall be relieved
from any obligations or liabilities for actions or inaction
prior to the effective date of termination or during the
Transition Period.
8.4 OWNER'S DEFAULT
Owner shall be in default, except as otherwise provided in Section
8.4(a), under this Agreement (i) if Owner undergoes a Bankruptcy Event
, (ii) in the event that it fails to make payment of all amounts
payable in accordance with this Agreement, or (iii) in the event of a
material breach hereunder or an unexcused failure to perform any of its
other obligations hereunder whether by repudiation, anticipatory breach
or otherwise.
(a) Any alleged default for nonpayment by Owner may be remedied
within fifteen (15) days after Operator tenders notice of such
default to Owner and the Lenders. Operator agrees not to
exercise its rights under this Section 8.4 if the Lenders pay
to
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Operator the sums due Operator under this Agreement within the
time specified in the consent and agreement between Operator
and the Lenders.
(b) Any alleged events of default other than default for
nonpayment may be remedied within fifteen (15) days after
Operator notifies Owner and the Lenders' collateral agent of
such breach, specifying the acts or omission on which the
notice is based, or if the remedy would reasonably take more
than fifteen (15) days then Owner or such collateral agent
shall have such additional period of time to remedy such
default as may be reasonable under the circumstances so long
as Owner commences to remedy same within such 15-day period
and thereafter continues diligently to remedy same within a
reasonable time consistent with the exercise of best efforts
in the prosecution thereof.
8.5 TERMINATION - PROJECT AGREEMENTS
If any permit or license is not granted or if after being granted is,
for any reason, no longer in effect, or if any executed Project
Agreement is legally terminated by a party to such agreement, and as a
result of any of the foregoing actions, Owner elects to terminate
operation of the Plant, Owner may terminate this Agreement by delivery
of written notice to Operator within thirty (30) days after the
occurrence of such event.
(a) Upon Owner's termination of this Agreement under this Section
8.8, in addition to all rights for reimbursement of costs set
forth in this Agreement, Operator shall be entitled to receive
the Termination Payment as set forth in Section 8.2(c),
provided Operator complies with Section 8.2(c) and subject to
the rights of Owner set forth in Section 8.2(c).
(b) If, after such termination, the operation of the Plant is to
be restarted and if Owner is in control of the hiring of the
Plant operator, Owner shall give Operator notice of such
restart as soon as Owner knows of the Plant restart and shall
also notify Operator of the date by which Operator must begin
operation. Operator shall have two (2) calendar days within
which to notify Owner that Operator will accept the
obligations to operate the Plant. In the event of such
acceptance by Operator within the time provided, Owner and
Operator shall enter into a new agreement having terms
identical to the terms of this Agreement, excluding those
terms which are no longer applicable because of a passage of
time and the revision of those terms which are affected by
changes to Lenders agreements, permits, licenses, which shall
be agreed upon by the Parties.
(c) Owner may not terminate this Agreement pursuant to this
Section 8.5 if any Project Agreement is terminated by Owner
solely for the purpose of terminating this Agreement or if any
Project Agreement is terminated as a plan or arrangement,
between Owner and any Person, to replace Operator.
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8.6 TERMINATION - CHANGE IN OWNERSHIP
Operator may elect to terminate this Agreement upon sixty (60) days
advance written notice to Owner in the event that (i) twenty percent
(20%) or more of the equity ownership percentage (as set forth in
Owner's partnership agreement) in Owner is transferred by any partner
in Owner during any six (6) month period during the term of this
Agreement or (ii) an Affiliate of Tenaska, Inc., ceases to act as the
managing partner of Owner. Owner has the right to specify a reasonable
period, not to exceed six (6) months following the effective date of
notice of termination, as a period of transition ("Transition Period")
during which Operator will continue to operate the Plant in accordance
with this Agreement. During this Transition Period, Operator shall also
cooperate with Owner in planning and implementing an orderly and
efficient transition of Operator's obligations and responsibilities
under this Agreement to the replacement operator selected by Owner. The
Parties shall mutually agree to a schedule for the orderly removal of
the Operator from its operational responsibilities. Operator shall also
provide Owner and the successor operator (if such operator is some
entity other than Owner) reasonable access to the Plant to facilitate
the orderly transition of responsibilities. Operator shall have no
further obligations to Owner under this Agreement after the date of
termination, except for Sections 7, 14.3, 14.4, 14.5, 14.7, 14.22 and
14.24. Notwithstanding this cessation of obligations, neither Party
shall be relieved from any obligations or liabilities for actions or
inactions prior to the effective date of termination and during the
Transition Period.
9. INDEMNITY
9.1 INDEMNIFICATION OF OWNER
Subject to the limitations set forth in Section 11, Operator agrees to
protect, indemnify, and save harmless Owner, partners in Owner, their
Affiliates, parents, their respective agents, servants, officers,
directors, stockholders, employees, successors and assigns from and
against all claims, losses, liabilities, damages, costs, expenses,
demands, judgments, and causes of action of every kind and character
for personal injury to any Person, death or damage to property of any
Person, including without limitation, PECO and the Utility, Operator's
agents, servants, and employees, as well as Subcontractors and the
agents, servants, and employees of Subcontractors and Agency Suppliers,
to the extent that the claim, loss, liability, damage, cost, expense,
demand, judgment or cause of action shall have resulted from or in any
manner arises out of or in connection with the negligence or willful
misconduct of Operator or Subcontractors or breach of this Agreement by
Operator.
9.2 INDEMNIFICATION OF OPERATOR
Subject to the limitations set forth in Section 11, Owner shall
protect, indemnify and save harmless Operator, its subsidiaries,
Affiliates and parents, and their respective agents, servants,
officers, directors, stockholders employees, successors and assigns
from and against any and all claims, losses, liabilities, damages,
costs, expenses, demands,
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judgments, and causes of action of every kind and character for
personal injury to any Person or death or damage to property of any
Person, including without limitation, PECO and the Utility, Operator's
agents, servants, and employees, as well as Subcontractors and the
agents, servants, and employees of Subcontractors, to the extent that
the claim, loss, liability, damage, cost, expense, demand, judgment, or
cause of action shall have resulted from or in any manner arises out of
or in connection with the negligence or willful misconduct of Owner or
Owner's subcontractors (other than Operator) or the breach of this
Agreement by Owner.
9.3 NOTICE OF CLAIM AND CLAIM FOR INDEMNITY
Promptly after receipt by an indemnified party of any claim or notice
of the commencement of any proceeding as to which the indemnity
provided for in Section 9.1 or 9.2 applies, the indemnified party shall
notify the Party providing the indemnity of such fact. The indemnifying
Party shall assume on behalf of the indemnified party and conduct with
due diligence and in good faith the defense thereof with counsel
reasonably satisfactory to the indemnified party; provided, that the
indemnified party shall have the right to be represented therein by
advisory counsel of its own selection and at its own expense; and
provided further, that if the defendants in any such action include
both the indemnifying Party and one or more indemnified parties and an
indemnified party shall have reasonably concluded that there may be
legal defenses available to the indemnifying party, the indemnified
party shall have the right to select up to one separate counsel to
participate in the defense of such action on its own behalf at the
indemnifying Party's expense.
10. INSURANCE
10.1 CONSTRUCTION CONTRACTOR INSURANCE
Throughout the Pre-Commercial Operating Period, Owner shall maintain
and/or cause Construction Contractor to maintain in effect commercial
general liability insurance, automobile liability insurance, workers'
compensation insurance and excess or umbrella liability insurance, and
Owner shall cause Operator to be included as an additional insured on
all general liability policies.
10.2 OPERATOR INSURANCE
(a) WORKER'S COMPENSATION
Prior to hiring any employees, and continuing throughout the
term of this Agreement, Operator shall maintain in effect
workers' compensation insurance as required by the laws of the
State of Georgia. In addition Operator shall maintain
employer's liability coverage in the minimum amount of
$5,000,000.
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(b) LIABILITY INSURANCE
During the term of this Agreement, Operator shall obtain and
maintain in effect the following liability insurance, provided
that the required limits may be satisfied by any combination
of primary or excess insurance at Operator's sole discretion.
(i) Commercial General Liability Insurance, including
broad form third party property damage, personal
injury, premises-operations, independent contractors,
products-completed operations, blanket broad form
contractual liability, third party bodily injury and
explosion, collapse and underground damage (XCU)
coverage. The policy shall contain limits of
$1,000,000 each occurrence and in the aggregate.
(ii) Automobile Liability Insurance for all owned,
non-owned and hired vehicles with limits of liability
of $1,000,000 combined single limit.
(iii) Excess or umbrella liability insurance following the
terms of the primary insurance set forth in Section
10.2 (a) and Section 10.2 (b)(i) and (ii) above, with
a combined single limit of $15,000,000 per occurrence
and in the aggregate.
(iv) Owner shall review coverages to be obtained by
Operator hereunder from time to time and shall have
the right to change such coverages provided that
Operator shall be reimbursed by Owner for any cost
associated with said change.
10.3 OWNER INSURANCE
10.3.1 ALL RISK PROPERTY AND BOILER AND MACHINERY INSURANCE
(a) Prior to Commercial Operation and throughout the Commercial
Operating Period, Owner shall provide and maintain in effect
insurance for "all risk" property damage including boiler and
machinery with limits determined by Owner in its sole
discretion. Owner shall provide or cause the Builder's Risk
policy provided by Construction Contractor to provide coverage
to include any performance and hot testing prior to the
successful testing of the Plant for Commercial Operation.
(b) The Builders' Risk and the All Risk Property and Boiler and
Machinery insurance policies shall be endorsed to include
Operator as an additional insured with respect to any damage
that may ensue from a covered peril as a result of, or in
connection with, services performed by Operator under this
Agreement.
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10.3.2 LIABILITY INSURANCE
Prior to Commercial Operation and throughout the Commercial Operating
Period, Owner shall provide and maintain in effect the following
liability insurance, provided that the required limits may be satisfied
by any combination of primary or excess insurance at Owner's sole
discretion.
(a) Commercial General Liability Insurance, including broad form
third party property damage, personal injury,
premises-operations, independent contractors,
products-completed operations, blanket broad form contractual
liability, third party property damage and explosion, collapse
and underground damage (XCU) coverage. The policy shall
contain limits of $1,000,000 each occurrence and in the
aggregate.
(b) Automobile Liability Insurance for all owned, non-owned and
hired vehicles with limits of liability of $1,000,000 combined
single limit.
(c) Excess or umbrella liability insurance following the terms of
the primary insurance set forth in Section (a) and Section (b)
above, with a combined single limit of $15,000,000 per
occurrence and in the aggregate.
10.4 SUBMISSION OF CERTIFICATES OF INSURANCE
Within thirty (30) days of the Effective Date, the Party required to
provide insurance shall furnish to the other Party certificates of
insurance evidencing the required coverages, and providing that the
Party not carrying the insurance must be given at least thirty (30)
days' prior written notice of any change in, nonrenewal or cancellation
of such coverages, except for nonpayment of premiums, which shall be
cancelable within ten (10) days prior written notice. If requested each
such insurance policy, or of an insurance policy renewal, shall be
accompanied by evidence which is reasonably satisfactory to the Party
not carrying the insurance of the payment in full of the premium (or
the current premium installment, if the premium is payable in
installments) for such insurance policy or insurance policy renewal.
Certificates of insurance shall be sent or delivered to:
If to Owner:
Tenaska Georgia Partners, L.P.
c/o Tenaska, Inc.
Suite 400
1044 North 115th Street
Omaha, Nebraska 68154-4446
Attention: Michael C. Lebens, Vice President
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If to Operator:
Tenaska Operations, Inc.
Suite 400
1044 North 115th Street
Omaha, Nebraska 68154-4446
Attention: H. Dwight Howell, Vice President
10.5 WAIVER OF SUBROGATION
Owner and Operator will require the issuers of the insurance policies
required by this Section 10 to waive, by endorsement on such policies,
any rights of subrogation against the other Party and its directors,
officers or employees and the officers, directors, stockholders and
employees of the partners in Owner, arising from payments made by such
insurers under such policies. In addition, all policies, except
Worker's Compensation Insurance, shall provide for waivers of
subrogation in favor of the Lenders, and any other parties requested by
Owner including the Utility.
10.6 UNAVAILABILITY OF COVERAGE
The foregoing provisions of this Section 10 notwithstanding, if any
insurance coverage specified above is unavailable or is available only
in an amount less than that required, the Party required to provide
such insurance shall:
(i) In the event that any insurance policy required to be obtained
by either Party shall become commercially unreasonable either
as to price or deductible amount, at the option of the other
Party, the Party obligated to provide such insurance shall
insure for such lesser amount or the other Party shall take
out such insurance in an amount agreed upon by the Party
obligated to provide such insurance.
(ii) The Party obligated to provide such insurance shall have a
duty to semi-annually confirm that such required insurance is
still unavailable on commercially reasonable terms. To the
extent such insurance again becomes available, the Party
obligated to provide such insurance shall immediately become
obligated to secure the same after coordinating with the other
Party to avoid creating a duplication of coverage if insurance
has been provided pursuant to (i) above.
10.7 NO LIMITATION OF LIABILITY
The provisions of any insurance hereunder shall not be construed to
limit the liability of either Party under this Agreement. The
provisions of this Section 10.7 shall not limit the provisions of
Section 11.
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10.8 INDEPENDENT CONTRACTOR'S INSURANCE
(a) Owner shall require all of Owner's independent contractors
(other than Operator and Agency Suppliers) to obtain, maintain
and keep in force during the time in which they are engaged in
performing services at the Plant Site reasonably adequate
coverage in accordance with Owner's normal practice and
reasonably acceptable to Operator and furnish Operator with
acceptable evidence of such insurance upon its request. Such
insurance carrier shall have no recourse against Operator for
payment of premiums and claims.
(b) Operator shall require all Subcontractors and Agency Suppliers
to obtain, maintain and keep in force during the time in which
they are engaged in performing services at the Plant Site
reasonably adequate coverage in accordance with Operator's
normal practice and reasonably acceptable to Owner and furnish
Owner with acceptable evidence of such insurance upon its
request.
10.9 OWNER'S EQUIPMENT
All equipment, supplies and Materials belonging to Owner or used by or
on behalf of Owner shall be brought to and kept at the Plant at Owner's
sole expense and Operator shall be responsible for the care and custody
of such equipment, supplies and Materials.
10.10 FAILURE TO INSURE
In the event that the Party obligated to provide insurance hereunder
fails to provide any of the insurance or the coverage amounts required
by this Section 10, the other Party shall have the option of paying the
premium to secure the same and charging the reasonable cost of the same
to the Party obligated to provide insurance pursuant to the limits of
coverage in this Agreement.
11. LIABILITY LIMITATIONS
11.1 DAMAGES
IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, INDEMNITY, OR OTHERWISE,
SHALL A PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY
DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF REVENUE,
LOSS OF PROFIT, LOSS OF TAX BENEFIT, LOSS OF USE, LOSS ARISING FROM
OWNER'S PAYMENT TO PECO OF AN AVAILABILITY ADJUSTMENT UNDER THE POWER
PURCHASE AGREEMENT, LOSS ARISING FROM
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OWNER'S FAILURE TO RECEIVE AN AVAILABILITY INCENTIVE PAYMENT FROM
PECO UNDER THE POWER PURCHASE AGREEMENT OR THE COST OF REPLACEMENT
POWER.
12. DISPUTE - CONTINUING AGREEMENT PERFORMANCE
In the event of a dispute between Owner and Operator with respect to
the interpretation or performance of this Agreement, including any
dispute which may result in a claim ("Dispute"), the procedures
contained in Sections 12.1, 12.2 and 12.3 shall apply ("Dispute
Procedure"). Throughout the Dispute Procedure and during litigation,
the Parties shall continue to carry out their respective obligations in
good faith pursuant to the provisions of this Agreement without
prejudice to the rights of Owner and Operator to terminate as
specifically provided in this Agreement and the rights of Owner as
provided in Section 8.1.
12.1 UNASSISTED SETTLEMENT
Prior to litigation, an aggrieved Party must institute and complete
this Section 12.1 of the Dispute Procedure. The aggrieved Party shall
notify the other Party in writing of the Dispute then existing
("Dispute Notice"). To institute the Dispute Procedure, the Dispute
Notice must specifically state that the aggrieved Party is invoking the
Dispute Procedure of this Section 12. Within thirty (30) days following
the date of such Dispute Notice, Owner and Operator shall meet to
confer and negotiate in good faith to resolve the Dispute.
12.2 MEDIATION
If the Dispute is not resolved after compliance with the requirements
of Section 12.1, either Party may, within thirty (30) days, submit the
Dispute for mediation before a single impartial mediator selected by
the American Intermediation Service, upon written notice to the other
party ("Mediation Notice"). If the Dispute is timely submitted to a
mediator, within thirty (30) days following the date of such Mediation
Notice, the mediator shall meet in Dallas, Texas with an officer of
each Party who shall be duly authorized, on behalf of the Party he or
she represents, to settle such Dispute. Owner and Operator agree to
participate in good faith in such mediation meetings and negotiations
related thereto. Neither Party shall institute litigation with respect
to a Dispute prior to the earlier of (a) the conclusion of mediation
proceedings or (b) the date which is sixty (60) days after the date of
the Mediation Notice, provided that if litigation is instituted before
a Mediation Notice is given pursuant to Section 14.8, the Mediation
Notice shall be of no effect and the Parties shall proceed with the
litigation.
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12.3 LITIGATION
If the Dispute is not resolved after compliance with the requirements
of Sections 12.1 and 12.2, either Party may, in its sole discretion, submit the
Dispute to litigation.
In addition to the specific rights of termination and suspension as set
forth in this Agreement and except as limited in this Agreement, Owner
and Operator shall also have available the remedies, among others, of
an action for damages, restraining order, temporary or permanent
injunction, or specific performance of all or any provision hereof
together with any other rights accruing to it at law or in equity.
13. FORCE MAJEURE
13.1 FORCE MAJEURE
(a) A delay in or failure to carry out the duties imposed upon
either Party under this Agreement (except payment) shall not
be deemed a breach of this Agreement, if such delay or such
failure is caused by any cause beyond the control of the Party
affected, including, but not restricted to, failure or threat
of failure of facilities (but excluding such failures or
threats of failures caused by Owner's or Operator's failure to
comply with Prudent Utility Practice), Change of Law, flood,
earthquake, storm, fire, lightning, epidemic, war, acts of the
public enemy, riot, civil disturbance or disobedience, strike,
lockout, work stoppages, other industrial disturbance or
dispute, whether determined to have arisen out of an unfair
labor practice of any Party, sabotage, restraint by court
order or other public authority, and action or nonaction by,
or failure to obtain the necessary authorizations or approvals
from, any governmental agency or authority, which by the
exercise of due diligence such Party could not reasonably have
been expected to avoid ("Force Majeure"). Nothing contained
herein shall be construed so as to require a Party to settle
any strike, lockout, work stoppage, or other industrial
disturbance or dispute in which it may be involved.
A party claiming Force Majeure shall make reasonable attempts
to remedy the cause or causes constituting the Force Majeure,
keeping the other Party reasonably informed. Any notice of
Force Majeure as required by Section 13.1(b)(i) shall include
documentation as to the cause of the Force Majeure and a
statement of all facts available that such Force Majeure was
not caused by and was beyond the control of acts of the
declaring Party. If the non-declaring Party believes that the
Force Majeure does not meet the requirements of this Section
13.1(a), then that non-declaring Party shall so notify the
declaring Party.
(b) If either Party because of a Force Majeure event is rendered
wholly or partly unable to perform any of its obligations
under this Agreement, that Party shall be excused
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from whatever performance is affected by the Force Majeure
event to the extent so affected, provided however:
(i) as a condition of Force Majeure the non-performing
Party must provide written notice no later than seven
(7) days after becoming aware or when such Party
reasonably should have become aware of the Force
Majeure event;
(ii) the period of non-performance shall be of no greater
scope and of no longer duration than is required by
the Force Majeure event;
(iii) the non-performing Party shall continue to perform
the services in good faith and with due diligence and
use its best efforts to limit and remedy its
inability to perform during and after the Force
Majeure event, Operator will use its best efforts to
fulfill its obligations in accordance with this
Agreement;
(iv) when the non-performing Party is able to resume
performance of its obligations under this Agreement,
that Party shall give the other Party written notice
to that effect; and
(v) it is the duty of the claiming Party to prove all the
elements of Force Majeure including but not limited
to (i) specific action taken to work around or
mitigate the impact, (ii) specific event dates,
directions, logic and schedule float to support the
claim, and (iii) specific cause for the claim of
Force Majeure as set forth in this Section 13 and to
provide written documentation of such proof to the
other Party as soon as reasonably possible. A Party
is not required to grant or deny a request for Force
Majeure until such documentation has been supplied.
(d) No condition of Force Majeure shall extend this Agreement
beyond its stated term, nor shall any excuse of performance by
reason of a condition of Force Majeure extend for a time
period greater than one hundred eighty (180) days except upon
the written consent of the performing Party, which the
performing Party may give or withhold in its sole discretion;
provided, however, that if the condition of Force Majeure is
not removed within one hundred eighty (180) days plus any
extension upon such written consent of the performing Party,
the performing Party may, at its sole option and discretion,
terminate this Agreement.
(e) Force Majeure shall include, subject to all Force Majeure
requirements (i) the inability of Operator to perform due to
an inadequate supply of fuel, either natural gas or fuel oil,
which was under the control of a Person other than Operator,
(the inability to deliver because of late ordering is not an
event of Force Majeure), and (ii) design or construction
defects or limitations caused by Construction Contractor, and
(iii) actions or constraints of the Utility to the extent that
they adversely affect the performance of an obligation of this
Agreement.
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(f) During the Transition Period, if a Force Majeure occurs,
Operator shall not be considered in default of this Agreement
with respect to any obligation of Operator affected by or
attributable to such Force Majeure.
(g) Any dispute as to a Force Majeure or its effect shall be
resolved in accordance with Section 12. Operator shall
continue to fulfill its other obligations under this Agreement
which are not affected by the Force Majeure.
13.2 CHANGE OF LAW
(a) A change of Law which materially alters the obligations or
requirements of Operator which occurs after the Effective Date
is a "Change of Law." In the event that the Force Majeure is a
Change of Law, Owner shall have the option to terminate this
Agreement by written notice to Operator within three (3)
months of such Change of Law (or when Owner became aware of
such Change of Law) if Owner decides that to continue the
operation of the Plant considering the cost of implementing
and observing such Change of Law would not be exercising good
business judgment. If such written notice is not received
within such three-(3) month period, this opportunity to
terminate pursuant to this Section 13.2 (a) shall be deemed
waived.
(b) If the operation of the Plant ceases because of a Change of
Law, Operator is terminated, and the operation of the Plant is
to be restarted within one hundred eighty (180) days of the
date of termination and if Owner is in control of the hiring
of the Plant operator, Owner shall give Operator notice of
such restart and shall also notify Operator of the date by
which Operator must begin operation. Operator shall have
fifteen (15) calendar days within which to notify Owner that
Operator will accept the obligations to operate the Plant. In
the event of such acceptance by Operator within the time
provided, Owner and Operator shall enter into a new agreement
having terms identical to the terms of this Agreement.
13.3 REMEDY FOR FORCE MAJEURE TERMINATION
In the event of termination by Owner pursuant to Section 13.2, in
addition to any reimbursement of costs which Operator is entitled to
receive under the terms of this Agreement, Operator shall be entitled
to receive a Termination Payment as set forth in Section 8.2(d).
Operator shall thereafter be relieved of all obligations under this
Agreement other than the obligations specified in Sections 7, 14.3,
14.4, 14.5, 14.7 and 14.22. Notwithstanding this cessation of
obligations, neither Party shall be relieved from any obligations or
liabilities for actions or inaction prior to the effective date of
termination.
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14. MISCELLANEOUS PROVISIONS
14.1 ASSIGNMENT
(a) Except as provided in this Agreement, neither Party shall
assign this Agreement without first obtaining the prior
written consent of the other Party. Owner shall be entitled to
assign its rights hereunder to any Lender or Lenders or any
successor owner of the Plant without the consent of Operator
and Operator shall be entitled to assign its right to receive
payments under this Agreement upon ten (10) days notice to
Owner and shall remain responsible for performance of all
obligations under this Agreement. Operator shall be free to
subcontract any portion of its obligations hereunder to any
third party. Operator shall be free to assign any or all of
its obligations hereunder to a wholly-owned subsidiary of
Operator, if such subsidiary is capable of performing the
obligations of Operator. Operator may assign all of its rights
and obligations under this Agreement to a third party, and
upon such assignment and the written assumption by such third
party of all of the obligations of Operator under this
Agreement, Operator shall be fully released from all of the
obligations of Operator under this Agreement; provided that
Operator shall first obtain the written consent of Owner to
any such assignment and assumption, which consent shall not be
unreasonably withheld. Anything in this Section 14.1(a) to the
contrary notwithstanding, Operator agrees that Owner may sell,
convey or assign its interest in the Plant and its rights, or
any part thereof, under this Agreement, or that Owner may
lease the Plant, to one or more Persons, and such sale,
conveyance, assignment or lease shall include without
prejudice to Owner's rights in Section 8.2, the transfer of
the rights, duties and obligations of Owner, but only such
rights, duties and obligations as are contained in this
Agreement. The rights, duties and obligations of Operator
contained in this Agreement shall not be affected by such
sale, conveyance, assignment or lease. Operator shall agree in
writing to such sale, conveyance or assignment, and shall
release Owner in writing from all obligations hereunder.
(b) Except as provided in Section 14.1(a) above, no assignment of
Owner's obligations hereunder shall be permitted unless:
(i) the assignee is solvent (its assets exceed its
liabilities) at the time of the assignment and will
not be rendered insolvent by reason of the
assignment;
(ii) assigned by an instrument reasonably satisfactory to
Operator's counsel, the assignee represents and
warrants that it is solvent, assumes the obligations
of Owner hereunder, and agrees to be bound by all of
the terms, conditions, covenants and provisions of
this Agreement to the same extent as if it were
Owner; and
(iii) such assignment is accompanied by a simultaneous
assignment of all other Project Agreements to the
same assignee or an Affiliate, of Owner's rights
under all other Project Agreements relating to the
Plant.
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(c) Upon assignment by Owner, except an assignment to Lenders
solely as collateral security, Operator shall deliver to Owner
a written release of all of Owner's obligations under this
Agreement.
(d) This Agreement shall inure to the benefit of and be binding
upon Owner and Operator and their respective successors and
permitted assigns.
14.2 AUTHORITY TO PROCURE GOODS AND SERVICES
(a) Operator shall be authorized to enter into and administer
purchase orders and contracts on behalf of and as agent for
Owner subject to the following:
(i) Any such purchase order or contract shall be made in the name
of Owner and not for the benefit of Operator.
(ii) Any such purchase order or contract shall be in
writing, or a written memorandum containing all
essential terms thereof shall be prepared and signed
by the parties to be bound.
(iii) Wherever appropriate, Operator shall attempt to
obtain quotations from Agency Suppliers for extended
warranty provisions for Owner's consideration prior
to execution of purchase orders or contracts.
(iv) Operator shall not enter into any purchase order or
contract by the terms of which Operator will exceed
the amount budgeted therefor without the prior
approval of Owner.
(v) All purchase orders or contracts obligating Owner to
pay money for goods or services valued in excess of
Seven Thousand Five Hundred Dollars ($7,500) shall be
approved in advance by Owner.
(vi) Purchase orders or contracts for the same or similar
goods or services with the same or substantially the
same parties which in the aggregate for one (1) year
would obligate Owner in excess of Seven Thousand Five
Hundred Dollars ($7,500) shall be approved in advance
by Owner.
(vii) Within ten (10) calendar days following execution a
true copy of each purchase order, contract or
memorandum executed by Operator shall be sent to
Owner.
(viii) Operator may make payments from the Operating Account
for such purchase orders and contracts, provided,
however, that Operator shall not make any payments in
excess of the amounts shown in the applicable
requisition and purchase order or contract without
first obtaining Owner's approval;
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(b) Owner shall have the right to modify or revoke the authority
of Operator under this Section 14.2 at any time by written
notice to Operator and Operator shall immediately give written
notice of any such modification or revocation to any persons
with whom Operator conducts business on behalf of Owner and
shall send Owner true copies of each such notice sent by
Operator within ten (10) calendar days of receipt of such
notice from Owner.
14.3 CONFIDENTIALITY OF INFORMATION
(a) Each Party agrees, for itself, its Affiliates and their
respective directors, officers, employees and representatives
including, without limitation, attorneys, accountants and
consultants, to keep confidential: (i) this Agreement, (ii)
all negotiations concerning this Agreement, and (iii) all
documents, data, drawings, studies, projections, plans and
other information, whether written or oral, which relate to
economic benefits to or amounts payable by either Party
pursuant to this Agreement or costs of design, construction,
and operations of the Plant including, without limitation,
cost and quantities of fuel used at the Plant.
(b) Each Party agrees, for itself, its Affiliates and their
respective directors, officers, employees and representatives
including, without limitation, attorneys, accountants and
consultants that no adequate remedy at law exists for a
material breach or threatened material breach of any of the
provisions of this Section 14.3, the continuation of which
unremedied will cause the injured Party to suffer irreparable
harm. Accordingly, the Parties agree that the injured Party
shall be entitled, in addition to other remedies which may be
available to it, to immediate injunctive relief from any
material breach of any of the provisions of this Section 14.3
and to specific performance of its rights hereunder, as well
as to any other remedies available at law or in equity.
14.4 CONFIDENTIAL
"Confidential", as used herein, means that information or a document,
including the content, substance or effect of such information or
document shall not be disclosed, discovered or distributed to any other
person, corporation or other entity except pursuant to the valid order
of an administrative or judicial officer having jurisdiction, which
order shall be opposed unless opposition with respect thereto is waived
by each of the Parties and except as hereinafter provided nor shall the
information or documents of a Party be used by the other Party for any
purpose not directly related to such other Party's obligations
hereunder. No Party shall be required to oppose any order requiring
disclosure by appeal, separate legal proceeding or extraordinary
measures in any judicial or administrative proceeding unless the other
Party, after notice, agrees to pay the costs of such opposition.
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14.5 EXCEPTIONS TO CONFIDENTIALITY
The Parties may, without violating this Section 14, disclose matters
which are made confidential by this Agreement as follows:
(a) Owner may make such disclosures to actual or prospective
co-owners, lenders, underwriters, contractors, suppliers and
others involved in financing, construction and operations
transactions or arrangements or its partners, Affiliates, or
to actual or prospective purchase or lessees of the Plant.
Operator may make such disclosures, if and as is necessary to
carry out its obligations hereunder, to its Affiliates and to
those directly involved in the operation of the Plant,
provided that Operator obtains, as a condition precedent to
the disclosure, a confidentiality agreement with the Person,
corporation or other entity to whom the disclosure is being
made with terms substantially the same as are required under
this Agreement.
(b) A Party may make such disclosures to governmental officials
and parties involved in any proceeding whereby such Party is
seeking a permit, certificate or other regulatory approval or
order necessary or appropriate to carry out this Agreement,
provided that the Party making the disclosure will exercise
reasonable efforts to restrict public access to the
information disclosed by way of protective order or otherwise.
(c) A Party may make such disclosures to governmental officials or
the public as required by any law, regulation or order,
including, without limitation, Laws requiring disclosure of
financial information, information material to financial
matters and filing of financial reports, provided that such
Party will exercise reasonable efforts to restrict public
access to the information disclosed by way of protective order
or otherwise.
Any disclosure permitted by this Section 14.5 will be only to the
extent such disclosure is necessary or required.
14.6 LENDER APPROVAL
This Agreement is subject to review and approval by the Lenders and,
as such, this Agreement is not effective as to, or binding upon,
Owner until the Lenders have given the written approval of this
Agreement.
14.7 BOOKS, RECORDS, ACCESS THERETO
The Parties agree to maintain adequate books, accounts and records with
respect to the operation and maintenance of the Plant and the
collection of revenues therefrom in accordance with generally accepted
accounting principles consistently applied, and in compliance with the
regulations of any governmental regulatory body having jurisdiction
thereof; and to permit employees or agents of the other Party at any
reasonable time and upon
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reasonable prior notice to inspect such Party's properties, and to
examine or audit such Party's books, accounts and records and make
copies and memoranda thereof provided that such agents enter into a
confidentiality agreement if so requested by the other Party.
14.8 NOTICES
Except as provided in Section 2.4.2(c), any notice or other
communication, including approvals, by one Party to the other required
or permitted by this Agreement shall be in writing and shall be deemed
to have been given when delivered by hand, or when: (a) deposited in
the United States mails with postage prepaid for transmittal by
registered or certified mail, return receipt requested, (b) or
telecopied with telephone confirmation of receipt or (c) placed in the
hands of a recognized commercial courier service for overnight
delivery, addressed as follows:
If to Owner:
Tenaska Georgia Partners, L.P.
c/o Tenaska, Inc.
Suite 400
1044 North 115th Street
Omaha, Nebraska 68154-4446
Attention: Michael C. Lebens, Vice President
If to Operator:
Tenaska Operations, Inc.
Suite 400
1044 North 115th Street
Omaha, Nebraska 68154-4446
Attention: H. Dwight Howell, Vice President
Operations
If to PECO:
PECO Energy Company
2004 Renaissance Blvd.
King of Prussia, Pennsylvania 19406
Attention: Power Contracts Manager
However, either Party may at any time and from time to time change the
address for communications to it by delivering written notice of the
change of address to the other Party.
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14.9 REPRESENTATIVES
(a) Owner shall designate an Owner's Representative who shall have
authority to act on behalf of Owner on all matters relating to
this Agreement. Owner's Representative shall have authority to
provide notice to and receive notice from Operator and to
exercise all other authority of Owner as permitted or required
by this Agreement.
(b) Operator shall designate an Operator's Representative who
shall have authority to act on behalf of Operator on all
matters relating to this Agreement. Operator's Representative
shall have authority to provide notice to and receive notice
from Owner and to exercise all other authority of Operator as
permitted or required by this Agreement.
14.10 EQUAL EMPLOYMENT OPPORTUNITY
In furtherance of its obligations under Section 2, Operator undertakes
and agrees in the performance of its services pursuant to this
Agreement not to violate any law of the State of Georgia or of the
United States of America relating to equal employment opportunity.
14.11 ENTIRE AGREEMENT
This Agreement contains the entire agreement of the Parties and
supersedes and replaces any prior or contemporaneous oral or written
agreements or understandings between them relating to its subject
matter. No amendment or modification of this Agreement shall be
effective unless set forth in writing and signed by both Parties except
as provided in Section 14.2 in respect to Owner's right to modify or
revoke the authority of Operator. By entering into this Agreement the
Parties do not intend to create third party rights herein or hereto.
14.12 NO WAIVER
No failure by either Party to insist upon the strict performance of any
term, covenant or condition of this Agreement, or to exercise any right
or remedy upon breach of any provision hereof, and no acceptance of
payment for performance during the continuation of any such breach and
no payment under this Agreement by a Party, shall constitute a waiver
of any term, covenant or condition herein or waiver of any subsequent
breach or default in the performance of any term, covenant or condition
herein, or prevent such Party from seeking recovery of any amount paid
through the Dispute Procedure as set out in Section 12.
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14.13 SEVERABILITY
In the event that any provision of this Agreement, or application
thereof, is held by any court of competent jurisdiction to be illegal
or unenforceable, the Parties shall attempt in good faith to agree upon
an equitable adjustment to this Agreement in order to overcome to the
extent possible the effect of such illegality or unenforceability and,
in any event, the validity and enforceability of the remaining portions
of this Agreement shall not be affected.
14.14 APPLICABLE LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF GEORGIA, EXCLUDING CONFLICT OF LAW RULES WHICH
MAY CALL FOR THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
14.15 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS
Operator shall comply with all applicable Laws, and the applicable
requirements, guidelines, documents and standards referenced throughout
this Agreement existing at the Effective Date, and Operator shall
comply with any changes in or additions to such applicable Laws and
other requirements which become effective after the Effective Date of
this Agreement. In the event that compliance with such change results
in an increase in Operator's operating expenses relating to this
Agreement, Owner shall approve an appropriate increase in the Operating
Budget to cover such expenses.
14.16 EXCLUDED REPRESENTATIONS AND INTERESTS
Neither Owner nor Operator has made any representations, warranties or
covenants other than as expressly set forth in this Agreement. The
execution of this Agreement shall not be deemed to convey any estate or
interest in the Plant or the Site or any right to exclusive possession
thereof, to Operator. The execution of the Agreement shall not be
construed to impose any liability on Operator which it has not
expressly assumed pursuant to this Agreement.
14.17 LIMIT OF LIABILITY
Any claim asserted by Operator under this Agreement against the Owner
shall be limited to the assets of Owner, and Operator expressly waives
any right to proceed in law or equity against any partners in Owner
(unless a partner is a necessary party in an action against the Owner
in which case Operator agrees that no judgment shall be enforced
against such partner), their Affiliates, or their respective officers,
directors, stockholders, agents, servants
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and employees of the partners and the Affiliates. Any claim asserted
by Owner under this Agreement against the Operator shall be limited to
the assets of Operator, and Owner expressly waives any right to
proceed in law or equity against any shareholders in Operator (unless
a shareholder is a necessary party in an action against the Operator
in which case Owner agrees that no judgement shall be enforced against
such shareholders), their affiliates, or their respective officers,
directors, stockholders, agents, servants and employees of the
shareholders and the affiliates.
14.18 COUNTERPARTS
This Agreement may be executed by the Parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one
and the same instrument.
14.19 PROJECT AGREEMENTS
Owner shall provide to Operator in a timely manner a copy of the
executed Power Purchase Agreement, the executed Construction Agreement,
the executed Credit Agreement, the executed Interconnection Agreement,
and the executed Long Term Service Agreement, ("Project Agreements").
Operator shall familiarize itself with the terms and conditions of each
of the Project Agreements so as to enable Operator to perform its
services hereunder in accordance with the applicable terms and
conditions of this Agreement and the Project Agreements.
If any Project Agreement is amended or if Owner enters into any
additional agreements applicable to the Plant and Operator's services
hereunder or if applicable laws, Plant Permits or manufacturer's
recommended procedures or the requirements of insurance policies
relating to the Plant are changed, Operator shall perform its services
in accordance with such amendments and changes provided that if such
additional or modified services will cause Operator to incur additional
expense, then an appropriate increase in the Operating Budget shall be
made and Owner's approval of such increase shall not be unreasonably
withheld. The Parties shall make amendments or modifications to this
Agreement as required by the changes contemplated herein.
14.20 NO JOINT VENTURE
Operator is performing this Agreement as an independent contractor
except as otherwise explicitly set forth in this Agreement. Nothing
contained in this Agreement shall be construed as creating a joint
venture or partnership relationship between Operator and Owner.
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14.21 CORPORATE AUTHORIZATION
(a) Operator is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
Operator is duly qualified, authorized to do business and in
good standing in every jurisdiction in which the nature of its
business requires it to be so qualified, and has all requisite
power and authority, to enter into and to perform its
obligations hereunder, and to carry out the terms hereof and
the transactions contemplated hereby.
(b) The execution, delivery and performance by Operator of this
Agreement have been duly authorized by all necessary corporate
action on the part of Operator and do not require any approval
or consent of any holder (or any trustee for any holder) of
any indebtedness or other contractual obligation of Operator
or any other Person, except approvals or consents which have
previously been obtained.
(c) This Agreement is in full force and effect, has been duly
executed and delivered on behalf of, and by the appropriate
officers or agents of Operator and constitutes the legal,
valid and binding obligation of Operator, enforceable against
it in accordance with its terms except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement
of creditors' rights generally and (ii general principals of
equity whether considered in a proceeding in equity or at law.
(d) There is no litigation, action, suit, proceeding or
investigation by any third party pending or, to Operator's
knowledge after due inquiry, threatened against Operator
before or by a court, administrative agency, arbitrator or
governmental authority, body or agency which, if adversely
determined, individually or in the aggregate, (i) could be
reasonably expected to affect adversely the performance by
Operator of its obligations hereunder, or which could be
reasonably expected to modify or otherwise affect adversely
the authorizations to enable Operator to perform this
Agreement, (ii) could be reasonably expected to have a
material adverse effect on the condition (financial or
otherwise), business or operations of Operator, or (iii) could
be reasonably expected to impair the validity, binding effect
or enforceability hereof, against Operator or of any action
taken or to be taken pursuant hereto or any of the
transactions contemplated hereby.
(e) The execution, delivery and performance by Operator of this
Agreement and the consummation of the transactions
contemplated hereby will not result in any violation of,
breach of or default under any term of (i) Operator's
organizational documents, (ii) any contract or agreement to
which Operator is a party or by which it is bound, or (iii)
any license, permit, franchise, judgment, writ, injunction,
decree, order, charter, law, ordinance, rule or regulation
applicable to Operator, except for any such violations,
breaches or defaults which, individually or in the aggregate,
would not adversely affect the performance by Operator of its
obligations under this Agreement.
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(f) No consent, order, authorization, waiver, approval or any
other action, or registration, declaration or filing with, any
Person, board or body, public or private, is required to be
obtained by Operator in connection with the execution,
delivery or performance of this Agreement or the consummation
of the transactions contemplated thereunder.
14.22 LIENS
Operator shall not suffer, and Operator shall not permit any of its
Subcontractors or Agency Suppliers to impose or file any laborers',
materialmen's, mechanics', construction or other lien, claim or
encumbrance on any part of the Plant or the Site, provided however,
that the restriction imposed on Operator with respect to liens by
Operator pursuant to this Section 14.22 shall not apply to a judgment
lien duly obtained by Operator and to those liens, if any, which
Operator is not permitted under the laws of the State of Georgia to
waive or forfeit. If Operator or any Subcontractor or Agency Supplier
imposes or files any laborers', materialmen's, mechanics', construction
or other lien, claim or encumbrance against the Plant or Site and if
Operator does not cause such lien, claim or encumbrance to be released
and discharged within ten (10) days, or file a bond and cause such lien
to be released within ten (10) days, Owner shall have the right to pay
all sums necessary to obtain such release or to secure such bond and
all amounts so paid and all costs incurred, including the cost of such
bond and security required plus attorney fees and administrative
expenses, shall be charged to Operator. Owner shall have the right to
deduct all amounts so paid from any amount then or thereafter due
Operator, or deduct the same from any compensation due Operator under
this Agreement until the total amount of same shall be recouped, as
Owner may elect at its sole discretion. Any unpaid balance shall be
charged to Operator. Operator shall defend, at its expense, and pay all
attorney's fees and costs of all actions commenced against Owner and
its property for the enforcement of any such lien arising out of this
Agreement. If Operator shall fail to defend any such action or
discharge any such lien, claim or encumbrance, it shall pay to Owner
all money that Owner may be compelled to pay in defending and
discharging such lien, claim or encumbrance including all costs and
attorney's fees.
14.23 SET OFF
Owner shall have the right to set off any claim of Owner for liability
of Operator to Owner arising under any provision of this Agreement
against any debt or obligation of Owner to Operator arising under any
provision of this Agreement.
14.24 RELEASE OF INFORMATION AND SITE VISIT APPROVAL
(a) Prior to the release of any information in any form, to any
person, with respect to the Plant, Operator shall obtain
written approval from Owner. This includes without limitation,
(i) press releases which incorporate photos or descriptions of
the Plant, the name Tenaska or the Owner or any affiliated
entity of a partner in Owner; and (ii)
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public relations material, including advertising and
photographs, which refer to the Plant or any other project
of the Tenaska, Inc. affiliated companies.
(b) Prior to allowing access to the Plant of any parties not
directly related to the operation or maintenance of the Plant
or regulatory authorities with jurisdiction over permits or
safety, Operator shall obtain written Owner approval. Such
request for approval shall include the names of the
individuals who will be on the Site including the name of each
such individuals employer or company with whom the individual
is affiliated, the intent of the Site visit, the information
to be provided to such individuals during such visit and any
other information required by Owner for approval.
14.25 CONTRACTS WITH AFFILIATES
Any contract entered into pursuant to this Agreement by Operator with
an Affiliate shall have terms no less favorable to the Owner than are
generally available on an arms-length basis from an unaffiliated party,
and Operator shall notify Owner of any such contract as soon as
reasonably practicable.
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IN WITNESS WHEREOF, each Party has caused this Agreement to be
signed in its name and on its behalf by a duly authorized officer, as of the
day and year first above written.
OWNER:
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
By: Tenaska Georgia I, L.P.
Its: Managing General Partner
By: Tenaska Georgia, Inc.
Its: Managing General Partner
By: /s/__________________________
Title: Vice President
OPERATOR:
TENASKA OPERATIONS, INC.,
a Delaware corporation
By: /s/_____________________________
Title: Vice President
54
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LIST OF EXHIBITS
EXHIBIT A POWER PURCHASE AGREEMENT
55
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Exhibit 10.6.1
AMENDMENT TO
OPERATIONS AND MAINTENANCE AGREEMENT
THIS AMENDMENT to Operations and Maintenance Agreement ("Amendment")
dated as of this 26th day of October, 1999, is by and between Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("Owner") and Tenaska Operations,
Inc., a Delaware corporation ("Operator").
WHEREAS, Owner and Operator desire to amend that certain Operations and
Maintenance Agreement by and between them, dated September 10, 1999 ("O&M
Agreement") to prohibit, among other things, Operator's undertaking of certain
sales and brokering activities.
NOW, THEREFORE, in consideration of the premises contained in this
Amendment, the Parties hereto, intending to be legally bound, agree as follows:
1. AMENDMENT
Article 14 of the O&M Agreement is hereby amended by adding thereto a
new Section 14.26, which reads as follows:
"14.26 BROKERING AND MARKETING
Operator shall not undertake the sale, brokering or marketing of
electrical energy or capacity. Further, any Affiliate (as defined
in the Power Purchase Agreement) of Operator that is not an
Affiliate of Tenaska (as defined in the Power Purchase Agreement)
shall not conduct business in the ordinary course from the same
offices as are being used by an Affiliate of Operator that is
engaging in the sale, brokering or marketing of such electrical
energy or capacity."
2. ENTIRE AGREEMENT
This Amendment contains all of the understandings and agreements
existing between the Parties with respect to the subject matter of this
Amendment. All provisions of the O&M Agreement not modified by this
Amendment shall remain in full force and effect.
3. GOVERNING LAW
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF GEORGIA, EXCLUDING CONFLICT OF LAW RULES WHICH
MAY CALL FOR THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
1
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IN WITNESS WHEREOF, each Party has caused this Amendment to be signed
in its name and on its behalf by a duly authorized officer, as of the day and
year first above written.
OWNER:
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
By: Tenaska Georgia I, L.P.
Its Managing General Partner
By: Tenaska Georgia, Inc.
Its: Managing General Partner
By: /S/________________________________
Title: Vice President
OPERATOR:
TENASKA OPERATIONS, INC.,
a Delaware corporation
By: /S/________________________________
Title: Vice President
2
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Exhibit 10.6.2
SECOND AMENDMENT TO
OPERATIONS AND MAINTENANCE AGREEMENT
THIS AMENDMENT to Operations and Maintenance Agreement ("Amendment")
dated as of this 4th day of November, 1999, is by and between Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("Owner") and Tenaska Operations,
Inc., a Delaware corporation ("Operator").
WHEREAS, Owner and Operator desire to further amend that certain
Operations and Maintenance Agreement by and between them, dated September 10,
1999, as amended by Amendment dated October 26, 1999 ("O&M Agreement"), whereby
Operator will waive its right to receive the annual Fixed Management Fee for the
Year 2003.
NOW, THEREFORE, in consideration of the premises contained in this
Amendment, the Parties hereto, intending to be legally bound, agree as follows:
1. AMENDMENT
Section 5.4(a) of the O&M Agreement is hereby amended by adding thereto
as the final sentence the following:
"Notwithstanding any provision in this Section 5.4(a) to the
contrary, Operator hereby forever waives, releases and
discharges Owner from any and all obligation to pay to
Operator the annual Fixed Management Fee for Year 2003 only."
2. ENTIRE AGREEMENT
This Amendment contains all of the understandings and agreements
existing between the Parties with respect to the subject matter of this
Amendment. All provisions of the O&M Agreement not modified by this
Amendment shall remain in full force and effect.
3. GOVERNING LAW
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF GEORGIA, EXCLUDING CONFLICT OF LAW RULES WHICH
MAY CALL FOR THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
1
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IN WITNESS WHEREOF, each Party has caused this Amendment to be signed
in its name and on its behalf by a duly authorized officer, as of the day and
year first above written.
OWNER:
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
By: Tenaska Georgia, Inc.
Its: Managing General Partner
By: /s/
------------------------------
Title:Vice President
OPERATOR:
TENASKA OPERATIONS, INC.,
a Delaware corporation
By: /s/
------------------------------
Title:Vice President
2
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Exhibit 10.7
INTERCONNECTION AGREEMENT
BY AND BETWEEN
TENASKA GEORGIA PARTNERS, L.P.
AND
GEORGIA POWER COMPANY
DATED AS OF OCTOBER 19, 1999
<PAGE>
INTERCONNECTION AGREEMENT
This Agreement ("Agreement") is made and entered into by and between
Tenaska Georgia Partners, L.P., a partnership organized and existing under the
laws of the State of Delaware and having its principal place of business at 1044
N. 115 Street, Omaha, Nebraska 68154 (hereinafter referred to as "Tenaska"), and
Georgia Power Company, a corporation organized and existing under the laws of
the State of Georgia and having its principal place of business at 241 Ralph
McGill Boulevard, Atlanta, Georgia 30308 (hereinafter referred to as "Georgia
Power"). Tenaska and Georgia Power may be hereinafter referred to individually
as a "Party" and collectively as the "Parties."
W I T N E S S E T H:
WHEREAS, Tenaska desires to engage in the interconnected operation of
Tenaska's generating facility with the Georgia Power Electric System; and
WHEREAS, Tenaska desires to engage in wholesale sales of electric
energy to be generated by Tenaska's generating facility, located within the
Georgia Power Electric System.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, and other good and valuable consideration, the receipt,
sufficiency and adequacy of which are hereby acknowledged, the Parties covenant
and agree as follows:
SECTION 1: DEFINITIONS
In addition to the initially capitalized terms and phrases defined in
the preamble of this Agreement, the following initially capitalized terms and
phrases as and when used in this Agreement shall have the respective meanings
set forth below:
1.1 "Affiliate" - shall mean , with respect to any Person, another
Person (i) which directly, or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such Person,
(ii) which, directly or indirectly, of record or beneficially, owns or holds 10%
or more of the shares of any class of capital stock or other ownership interest
of such Person having voting power or (iii) as to which 10% or more of the
shares of any of the capital stock or other ownership interest of the Affiliate
having voting power is owned or held, directly or indirectly, of record or
beneficially, by or for such Person. For purposes of this definition, "control"
when used with respect to any entity means the power to direct the
Appendix A
<PAGE>
management and policies of such entity, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
1.2 "Appendix" or "Appendices" - means any of the schedules, exhibits
and attachments, including the Interconnection Procedures, which are appended
hereto and are incorporated by reference herein and made a part of this
Agreement.
1.3 "Business Day" - means any Day excluding Saturday and Sunday and
excluding any Day on which banking institutions in Atlanta, Georgia are closed
because of a federal holiday.
1.4 "Day" or "Calendar Day" - means a calendar day unless otherwise
specified.
1.5 "Emergency" - means a condition or situation associated with the
transmission and distribution of electricity, including voltage abnormalities,
that, in the sole reasonable judgment of Georgia Power, adversely affects or is
imminently likely to adversely affect: (i) public health, life or property; (ii)
Georgia Power's employees, agents or property; or (iii) Georgia Power's ability
to maintain safe, adequate, and continuous electric service to its customers and
the customers of any member of NERC.
1.6 "Execution Date" - means the date on which this Agreement is
executed and delivered by both Georgia Power and Tenaska.
1.7 "Facility" - means all of Tenaska's equipment, as described in this
Agreement, used to produce electric energy and required for parallel operation
with Georgia Power.
1.8 "FERC" - means the Federal Energy Regulatory Commission and any
successor.
1.9 "Force Majeure Event" - shall have the meaning ascribed to it in
Section 14.1.
1.10 "Georgia ITS" - means the Georgia Integrated Transmission System,
the transmission system owned by Georgia Power, Georgia Transmission
Corporation, the Municipal Electric Authority of Georgia and the City of Dalton,
Georgia and operated as an integrated transmission system.
1.11 "Georgia Power" - shall have the meaning ascribed to it in the
first paragraph of this Agreement, including any of its agents or its permitted
successors and assigns.
1.12 "Georgia Power Electric System" - means collectively, the entire
network of electric generation, transmission and distribution facilities,
equipment and other devices owned (in
Appendix A
<PAGE>
whole or in part) or controlled by Georgia Power, including the Georgia ITS, for
the purposes of generating, transmitting, receiving, and distributing electric
energy.
1.13 "Good Utility Practices" - mean, at a particular time, any of the
practices, methods and acts engaged in or approved by a significant portion of
the electric utility industry prior to such time, or any of the practices,
methods and acts which, in the exercise of reasonable judgment in light of the
facts known at the time the decision was made, could have been expected to
accomplish the desired result(s) at a reasonable cost consistent with good
business practices, reliability, safety and expedition. Good Utility Practices
are not intended to be limited to the optimum practice, method or act to the
exclusion of all others, but rather to be a spectrum of possible practices,
methods or acts expected to accomplish the desired results, having due regard
for, among other things, manufacturers' warranties, Legal Requirements, NERC and
SERC guides, applicable safety and maintenance codes, and the requirements of
this Agreement.
1.14 "Governmental Authority" - means any local, state, regional or
federal administrative, legal, judicial or executive agency, court, commission,
department , taxing authority, or other authority having jurisdiction over
either Party, the Facility, the Interconnection Facilities, Tenaska's
Interconnection Equipment, or the Georgia Power Electric System, whether acting
under actual or assumed authority.
1.15 "Indenture Trustee" - means a trust company chartered or other
Person incorporated under the laws of the United States or a state of the United
States and based in the United States which is the indenture trustee, mortgagee
or secured party under any Indenture.
1.16 "Initial Synchronization Date" - means the date that includes the
first instant in time when energy generated by the Facility is delivered to the
Interconnection Point in accordance with Appendix A.
Appendix A is appended hereto and incorporated into this Agreement by reference.
1.17 "Interconnection Facilities" - mean all equipment which is owned,
operated, or maintained by or for Georgia Power, as identified in Appendix B
(including without limitation, equipment for connection, switching,
transmission, distribution, protective relaying and safety) that, in Georgia
Power's reasonable judgment, is required to be installed for the delivery of
electric energy onto the Georgia Power Electric System on behalf of Tenaska.
1.18 "Interconnection Point" - means the point of interconnection of
Tenaska's Facility to the Georgia Power Electric System as defined in the
Specifications to this Agreement (Appendix B).
1.19 "Interconnection Procedures" - mean the procedures for
interconnection and operations set forth in Appendix A and incorporated herein
by reference.
Appendix A
<PAGE>
1.20 "Interconnection Service" - means the services provided by Georgia
Power to Tenaska to interconnect Tenaska's Facility to the Georgia Power
Electric System pursuant to the terms of this Agreement.
1.21 "Interest Rate" - means the prime rate of interest as published
from time to time in the Wall Street Journal or comparable successor
publication.
1.22 "kW" - means kilowatts. In addition, "MW" may be used to mean
megawatts, which are 1000 kilowatts.
1.23 "kWh" - means kilowatt-hours. In addition, "MWh" may be used to
mean megawatt-hours, which are 1000 kilowatt-hours.
1.24 "Legal Requirement" - means any law, code, statute, regulation,
rule, ordinance, treaty, judgment, injunction, order or other legally binding
announcement, directive, published practice or requirement enacted, issued or
promulgated by a Governmental Authority having jurisdiction over the matter in
question, which is valid and applicable to the matter in question at the time of
the Execution Date or anytime thereafter during the Term of this Agreement.
1.25 "Lien" - means any and all liens, mortgages, encumbrances,
pledges, claims, leases, charges and security interests of any kind.
1.26 "Month" - means a calendar Month, or such other period as may be
mutually agreed by the Parties. "Monthly" has a meaning correlative to that of
Month.
1.27 "Monthly Administration Charge" - for a particular Month of the
Term, means the Monthly amount to be paid by Tenaska to Georgia Power as set
forth in Section 9.
1.28 "NERC" - means the North American Electric Reliability Council,
including any successor thereto and subdivisions thereof.
1.29 "Party" or "Parties" - means either Georgia Power or Tenaska or
both.
1.30 "Permitted Liens" shall mean:
(a) any Lien on this Agreement and/or Georgia Power's rights,
obligations, title or interest in, to and under this Agreement pursuant to that
certain Indenture from Georgia Power to Chemical Bank & Trust Company, Trustee,
dated as of January 1, 1942, or pursuant to any other mortgage or security
agreement as heretofore and hereafter amended (the "Indenture");
(b) any Lien for taxes, assessments or other governmental
charges which are not
Appendix A
<PAGE>
delinquent or the validity of which is being contested in good faith by
appropriate proceedings diligently prosecuted so long as appropriate reserves
are maintained in respect of such taxes, assessments or charges; and
(c) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that within sixty (60) days of the
attachment thereof (but not less than five (5) days prior to any execution or
sale pursuant thereto), the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being contested in good
faith and by appropriate proceedings so long as any material risk of liability
is covered by a bond, or appropriate reserves are maintained in respect of such
proceedings.
1.31 "Person" - means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
trustee(s) of a trust, unincorporated organization, or any federal, state,
county, municipal or regional governmental authority, agency, board, body,
instrumentality or court.
1.32 "Persons Indemnified" - means, collectively or individually (as
the context might indicate), Georgia Power, Georgia Power's Affiliates, and The
Southern Company, and the directors, officers, representatives, agents and
employees of each of them.
1.33 "Qualified Person" - means any individual, corporation, limited
liability company, partnership, joint venture, association, joint stock company,
trust, trustee(s) of a trust, unincorporated organization, or any federal,
state, county, municipal or regional governmental authority, agency, board,
body, instrumentality or court who is an owner or operator of transmission
facilities.
1.34 "Quarter" - means for each year of the Term four distinct time
periods for planning and budgeting purposes comprised of January through March,
April through June, July through September, and October through December.
"Quarterly" has a meaning correlative to that of Quarter. In the event that this
Agreement becomes effective during any Quarter, the obligations herein that
arise on a Quarterly basis shall begin in the Quarter immediately following the
initial effective date of this Agreement.
1.35 "SERC" - means the Southeastern Electric Reliability Council,
including any successor thereto and subdivisions thereof.
1.36 "Specifications" - mean the interconnection specifications
provided in Appendix B to this Agreement and incorporated herein by reference.
1.37 "Tenaska" - shall have the meaning ascribed to it in the first
paragraph of this Agreement, including any of its agents or its permitted
successors and assigns.
Appendix A
<PAGE>
1.38 "Tenaska's Interconnection Equipment" - means all equipment owned,
operated or maintained by or for Tenaska (including, without limitation,
equipment for connection, switching, protective relaying and safety) that is
required to be installed for the delivery of electric energy on to the Georgia
Electric System on behalf of Tenaska.
1.39 "Term" - means the duration of this Agreement as specified in
Section 3.1.
SECTION 2: INTERCONNECTION SERVICE
2.1 SERVICE. Georgia Power shall supply Tenaska with Interconnection
Service at the Interconnection Point for the Facility in accordance with and for
the Term of this Agreement. Georgia Power shall have no obligation to pay
Tenaska any wheeling or other charges for electric power and/or energy
transferred through Tenaska's equipment.
2.2 FACILITY. The Facility includes combustion turbine generators
located near Franklin, Georgia in Heard County.
2.3 PERMITS. Tenaska, and not Georgia Power, shall be responsible at
its sole expense, for any and all governmental permits, certificates or
authorizations that Tenaska is required to obtain and maintain for the
operation, maintenance, testing and any necessary modification of the Facility.
2.4 GEORGIA POWER EASEMENTS AND ACCESS RIGHTS TO THE FACILITY.
2.4.1 Tenaska shall convey to Georgia Power any and all
necessary rights of way and easements, including adequate and continued access
rights to property of Tenaska for the purpose of providing Interconnection
Service. Tenaska agrees that such rights of way and easements shall survive
termination or expiration of this Agreement, if and to the extent necessary for
the continued use or the removal of the Interconnection Facilities. Such
easements and access rights specifically include, but are not limited to, the
right to install, operate, maintain, replace and/or remove the Interconnection
Facilities. Tenaska shall also convey to Georgia Power such rights of way for
transmission and distribution lines and easements for such transformer
substations on, over and across Tenaska's property and premises as may be
required for rendering service to Tenaska and to others who may be economically
served from such lines and substations, provided that such conveyance shall not
materially adversely affect Tenaska's use or future use of its property.
2.4.2 Upon reasonable advance notice given to Tenaska,
representatives of Georgia Power shall at all reasonable times have access to
Tenaska's Interconnection Equipment
Appendix A
<PAGE>
and to property owned or controlled by Tenaska in order to: (i) inspect,
maintain, and test meters and other Georgia Power equipment; (ii) interconnect,
interrupt, monitor, or measure energy generated by the Facility; (iii) inspect
the operations, maintenance or testing of Tenaska's Interconnection Equipment;
or (iv) take such other action as may be reasonably necessary to exercise
Georgia Power's rights under this Agreement. Georgia Power shall take reasonable
steps to ensure such access does not materially interfere with the operations,
maintenance or testing of the Facility, and Georgia Power shall be responsible
for complying with material Legal Requirements with respect to the Facility as
well as with Tenaska's reasonable policies and procedures applicable to the
Facility, including those regarding safety. Tenaska shall cooperate in such
physical inspections of Tenaska's Interconnection Equipment as may be reasonably
required by Georgia Power. Georgia Power's technical review and inspection of
Tenaska's Interconnection Equipment shall not be construed as endorsing the
design thereof nor as any warranty of the safety, durability or reliability of
the Facility, and shall not cause Georgia Power to assume any liability for
accidents, injuries or damages of any kind.
2.5 SAFETY. Tenaska shall comply with the National Fire Protection
Association Code, the American National Electrical Code, the National Electrical
Safety Code and other applicable code requirements in the same manner as
required by the Georgia Power Electric System for generating plants owned and/or
operated by Georgia Power.
2.6 INTERCONNECTION POINT. Georgia Power shall maintain the
Interconnection Point in Heard County, Georgia, as described in the
Specifications to this Agreement (Appendix B).
2.7 STATION SERVICE ARRANGEMENTS. Tenaska is responsible for making all
arrangements for station service requirements either through (i) self-supply (in
accordance with applicable Legal Requirements) or (ii) retail service
arrangements. Tenaska must demonstrate, to Georgia Power's reasonable
satisfaction, that it has adequate arrangements in place to supply its station
service requirements. The Parties acknowledge that station service is not being
provided to Tenaska under this Agreement.
2.8 GENERATOR BACKUP ARRANGEMENTS. Tenaska is responsible for ensuring
that its actual generation matches its scheduled delivery, on an integrated
hourly basis (in whole MW), to the Georgia Power Electric System at the
Interconnection Point. Tenaska shall make arrangements for the supply of energy
and/or capacity when there is a difference between the actual generation and the
scheduled delivery. Generator backup service arrangements may be through either
self-supply, purchase from others or dynamic scheduling from another control
area. Tenaska must demonstrate, to Georgia Power's reasonable satisfaction, that
it has adequate generator backup service arrangements in place to match
scheduled energy flows with actual supply. The requirements of this section
shall be satisfied if Tenaska's Facility is electrically located in a control
area other than Southern Company's control area. Tenaska shall not be required
to make arrangements for generator backup service as contemplated by this
Section if generator backup
Appendix A
<PAGE>
service is offered under Southern Companies' Open Access Transmission Tariff and
each transmission customer receiving electric power from the Facility is
required by FERC to purchase such service.
2.9 INTERCONNECTION PROCEDURES. Tenaska shall comply with the
Interconnection Procedures (Appendix A) for the Facility at all times, in the
same manner as required by the Georgia Power Electric System for generating
plants owned and/or operated by Georgia Power.
SECTION 3: TERM AND TERMINATION
3.1 TERM. This Agreement shall become effective when signed by the
Parties and shall continue in effect until terminated by mutual written
agreement of the Parties, a filing pursuant to Section 12.3 or otherwise
pursuant to the provisions of this Agreement. In addition, Tenaska at its
unilateral election may by written notice to Georgia Power terminate this
Agreement prior to commercial operation of the Facility, provided that Tenaska
shall pay to Georgia Power all amounts then due and owing to Georgia Power under
this Agreement.
3.2 TERMINATION UPON DEFAULT. This Agreement may be terminated by
either Party, immediately upon written notice, if the other Party has breached
any of its material obligations hereunder and has not cured (or begun taking
diligent actions to cure) such breach within thirty (30) Days following written
notice of such breach to the other Party.
3.3 ADDITIONAL REMEDIES. In the event of a default by either Party, the
non-defaulting Party may pursue any and all judicial and administrative remedies
and relief available to it.
3.4 PERMANENT DISCONNECTION.
3.4.1 DISCONNECTION AFTER AGREEMENT TERMINATES. Upon
termination of the Agreement by its terms, Georgia Power may disconnect the
Facility from the Georgia Power Electric System in accordance with Good Utility
Practices.
3.4.2 DISCONNECTION UPON UNCURED BREACH OR DEFAULT. After
providing notice in conformity with Section 3.2, Georgia Power may discontinue
service, remove the Interconnection Facilities and treat this Agreement as
terminated by Tenaska in the event: (i) of a breach by Tenaska of the material
terms and conditions of this Agreement; (ii) any representation or warranty of
Tenaska pursuant to this Agreement shall prove to be false or misleading in any
material respect when made or deemed made and for which Tenaska does not
correct, provided that such uncorrected representation or warranty adversely
affects the rights of Georgia Power under this Agreement; or (iii) Tenaska makes
an assignment for the benefit of Tenaska's creditors, or voluntary or
involuntary proceedings in bankruptcy are instituted seeking to adjudge Tenaska
a
Appendix A
<PAGE>
bankrupt, or if Tenaska be adjudged a bankrupt, or if Tenaska's affairs are
placed in the hands of any court for administration.
3.5 TEMPORARY DISCONNECTION.
3.5.1 Georgia Power may direct that the Facility be
temporarily disconnected from the Georgia Power Electric System: (i) during an
Emergency; (ii) if the operation and output do not meet the requirements of this
Agreement (even if Tenaska has commenced actions to cure such default); (iii) if
a hazardous condition exists on Tenaska's premises or in Tenaska's equipment
that could reasonably be expected to adversely affect the safe and reliable
operation of the Georgia Power Electric System; (iv) if Tenaska has modified
Tenaska's Interconnection Equipment or interconnection protective devices in a
manner that could reasonably be expected to adversely affect the safe and
reliable operation of the Georgia Power Electric System; (v) if Georgia Power
determines it is necessary to temporarily disconnect the Facility in order to
construct, install, maintain, repair, replace, remove, investigate, inspect or
test any part of the Interconnection Facilities or the Georgia Power Electric
System; (vi) in the event of tampering with, or unauthorized use of, Georgia
Power's equipment; or (vii) if Tenaska fails to pay in full the undisputed
amounts billed by Georgia Power in accordance with Section 10.
3.5.2 In the event of the occurrence of the conditions
described in Section 3.5.1, Georgia Power shall give as much advance notice as
practicable under the circumstances of the disconnection of the Facility to
employees of Tenaska designated from time to time by Tenaska to receive such
notice. Upon receipt of notice directing disconnection, Tenaska shall carry out
the required action without delay. Where circumstances do not permit such
advance notice to Tenaska or Tenaska's employees, Georgia Power may disconnect
the Facility from the Georgia Power Electric System. Georgia Power shall
reconnect the Facility as soon as reasonably practicable following the cessation
or the remedy of the event that led to the temporary disconnection.
3.5.3 Tenaska shall bear any cost incurred by Georgia Power as
a result of any disconnection or reconnection caused by Tenaska's negligence
and/or non-compliance with Appendix A whether by affirmative act or omission of
Tenaska.
3.6 SURVIVAL OF RIGHTS. Upon termination of this Agreement, the Parties
shall be relieved of their obligations under this Agreement except for the
following obligations which shall survive termination: (i) the obligation to pay
each other all amounts owed and not paid under this Agreement; (ii) obligations
arising from indemnities provided for in this Agreement; and (iii) any other
obligations which the Agreement specifically indicates shall survive
termination.
SECTION 4: OPERATION AND MAINTENANCE OF TENASKA'S FACILITY
Appendix A
<PAGE>
4.1 GENERAL STANDARDS. During the Term, Tenaska shall have the sole
responsibility to, and at its sole expense, shall manage, control, operate and
maintain the Facility in accordance with Good Utility Practices, the
Interconnection Procedures and the requirements set forth in this Agreement.
Tenaska shall operate its generating equipment in parallel with the Georgia
Power Electric System only in accordance with mutually acceptable operating
procedures, including those shown in Appendix A to this Agreement and those
established by the Operating Committee. All wiring, apparatus and other
equipment necessary to receive or deliver electric energy on Tenaska's side of
the Interconnection Point shall be supplied, maintained and operated by and at
the expense of Tenaska.
4.2 MAINTENANCE AND OPERATION. Tenaska shall maintain and operate the
Facility in accordance with Good Utility Practices such that it does not in any
way affect the safe and reliable operation of the Georgia Power Electric System.
Tenaska shall not, without Georgia Power's prior written approval, make any
change to its Facility which might affect such operation of the Georgia Power
Electric System.
4.3 AVAILABILITY OF RECORDS. Tenaska shall keep complete and accurate
records and all other data for the purposes of proper administration of this
Agreement in accordance with the following guidelines:
4.3.1 All such records shall be maintained for a minimum of
five (5) years after the creation of such record or data and for any additional
period of time required by any Legal Requirement; provided, however, that
Tenaska shall not dispose of or destroy any such records even after the five (5)
years without thirty (30) Days prior written notice to Georgia Power.
4.3.2 Tenaska shall maintain an accurate and up-to-date
operating log at the Facility with records of: (i) real and reactive power
production and station service consumption for each clock hour; (ii) changes in
operating status and scheduled maintenance; (iii) any unusual conditions found
during inspections; and (iv) any significant events related to the operation of
the Facility.
4.3.3 Upon reasonable advance notice, Georgia Power shall have
the right to examine the records and data of Tenaska in order to facilitate any
determination that Georgia Power is required or permitted to make under this
Agreement or related to Georgia Power's compliance with any Legal Requirement.
SECTION 5: INTERCONNECTION FACILITIES
5.1 INTERCONNECTION FACILITIES.
Appendix A
<PAGE>
5.1.1 Tenaska shall design, procure and install all facilities
needed for Georgia Power to provide Interconnection Service to Tenaska, as set
forth in Appendix B. Such facilities shall conform to Good Utility Practices and
the requirements of the Georgia Power Electric System. Prior to commercial
operation of the Facility, Tenaska shall convey, at no cost, such facilities to
Georgia Power pursuant to an instrument in form and substance acceptable to
Georgia Power. Tenaska shall not be required to pay taxes associated with such
transfer unless Georgia Power is required to pay such tax. With respect to the
payment by Tenaska of taxes associated with the referenced transfer, Georgia
Power commits that in the event that any taxing authority, including but not
limited to the Department of the Treasury, Internal Revenue Service, taxes or
attempts to tax the transfer, Georgia Power shall (i) exercise reasonable
efforts to contest and defeat the taxation or attempted taxation of the transfer
and (ii) promptly notify Tenaska in writing of that event in the manner provided
in Paragraph 17.9 of this Agreement.
5.1.2 Following commencement of commercial operation of the
Facility and throughout the Term, Georgia Power shall be responsible for
determining the need for, design, construction, installation, operation,
maintenance and testing of any equipment that may be required for
Interconnection Service in a manner consistent with Good Utility Practices, the
Interconnection Procedures and the requirements set forth in this Agreement. All
Interconnection Facilities shall be and remain the property of Georgia Power.
Georgia Power's obligations hereunder are dependent upon its securing and
retaining the necessary rights, easements, privileges, franchises, permits and
equipment for meeting such obligations; provided, however, Georgia Power shall
make reasonable efforts to secure and retain these rights, easements,
privileges, franchises, permits and equipment.
5.2 COSTS OF INTERCONNECTION FACILITIES.
5.2.1 Tenaska shall be responsible for, and shall reimburse
Georgia Power for, all costs and expenses incurred by or on behalf of Georgia
Power in connection with any planning, design, construction, installation,
testing, inspection, ownership, operation and maintenance of the Interconnection
Facilities.
5.2.2 In the instance where an entity other than Tenaska seeks
to be the first additional interconnector to interconnect to the Georgia Power
Electric System through the Interconnection Facilities that have been paid for
by Tenaska (for purposes of this subparagraph, such other entity seeking such
first additional interconnection is referred to as "the Additional
Interconnector"), Georgia Power agrees that the Additional Interconnector shall
be charged a pro rata share of the cost of its interconnection, as defined
hereafter. For purposes of this subparagraph, the Additional Interconnector's
pro rata share of its cost of interconnection shall be computed by adding the
incremental cost of physically interconnecting the Additional Interconnector to
the Interconnection Facilities to the original cost of the Interconnection
Facilities paid by Tenaska (the sum of the incremental cost and the original
cost hereafter referred to as
Appendix A
<PAGE>
"Subsequent Cost of Interconnection") and then dividing the Subsequent Cost of
Interconnection by two in order to determine both Tenaska's and the Additional
Interconnector's "Pro Rata Share of the Combined Cost of Interconnection."
Georgia Power shall then pay to Tenaska, or have the Additional Interconnector
pay to Tenaska, the difference between the original cost of the Interconnection
Facilities paid by Tenaska and Tenaska's Pro Rata Share of the Combined Cost of
Interconnection. In the event that entities additional and subsequent to the
Additional Interconnector seek to interconnect to the Georgia Power Electric
System through the Interconnection Facilities that have been paid for by Tenaska
(such additional interconnectors referred to as "Subsequent Additional
Interconnectors"), Georgia Power agrees that the Subsequent Additional
Interconnectors shall be charged a pro rata share of the cost of their
respective interconnection, such cost to be determined in accordance with the
methodology described above and Georgia Power agrees further that in such event
it shall pay to Tenaska, or have such Subsequent Additional Interconnectors pay
to Tenaska, reimbursement calculated based on the method described above, taking
into account Tenaska's Pro Rata Share of the Combined Cost of Interconnection.
5.3 PAYMENT OF COST OF THE INTERCONNECTION FACILITIES.
5.3.1 Georgia Power shall develop and provide to Tenaska an
estimate of all costs and expenses to be paid by Tenaska under Section 5.2.
Georgia Power shall obtain Tenaska's consent thereto prior to proceeding with
planning, construction, installation or testing of the Interconnection
Facilities. Tenaska shall pay such estimated costs in accordance with Section
10.
5.3.2 Georgia Power shall true-up this estimate to Georgia
Power's actual costs and expenses within a reasonable period of time after such
actual costs and expenses are known, but not less often than annually. In the
event that the actual costs and expenses to be paid by Tenaska under Section 5.2
are more or less than Georgia Power's initial estimate, the difference (either a
credit or additional charge) shall be reflected on a subsequent invoice.
5.4 PAYMENT OF COST OF ON-GOING MAINTENANCE AND OPERATION OF THE
INTERCONNECTION FACILITIES.
5.4.1 Georgia Power shall develop and provide to Tenaska an
estimate of all costs and expenses to be paid by Tenaska for the operation and
maintenance of the Interconnection Facilities on an annual basis. Tenaska shall
pay one-twelfth (1/12) of such estimated costs in accordance with Section 10. In
addition, Tenaska shall pay all costs incurred by Georgia Power to repair and
restore the Interconnection Facilities caused by any Force Majeure Event.
5.4.2 Georgia Power shall true-up this estimate to Georgia
Power's actual costs and expenses within a reasonable period of time after such
actual costs and expenses are known, but not less often than annually. In the
event that the actual costs and expenses to be paid by
Appendix A
<PAGE>
Tenaska under this Section 5.4 are more or less than Georgia Power's initial
estimate, the difference (either a credit or additional charge) shall be
reflected on a subsequent invoice.
5.5 CARE OF EQUIPMENT. Tenaska shall exercise care in accordance with
Good Utility Practices to protect the Interconnection Facilities located on
Tenaska's premises, and agrees to pay the cost of repairs or replacement in the
event of loss or damage to the Interconnection Facilities arising from the
failure of Tenaska to properly protect the Interconnection Facilities in
accordance with Good Utility Practices.
SECTION 6: LIABILITY AND INDEMNIFICATION
6.1 REMEDIES FOR BREACH. Either Party shall be liable to the other for
any loss resulting directly from any breach of this Agreement.
6.2 LIMITATION OF LIABILITY. Notwithstanding any other provision of
this Agreement, neither Party nor their respective officers, directors, agents,
employees, parents, affiliates, or successors or assigns of any of them, shall
be liable to the other Party or its parent, subsidiaries, affiliates, officers,
directors, agents, employees, successors or assigns for claims, suits, actions
or causes of action for incidental, punitive, special, indirect, or
consequential damages (including, without limitation, damages in the character
of loss of profits or revenues, damages suffered by Tenaska's customers due to
service interruptions, cost of capital, attorneys' fees or litigation costs)
connected with, relating to, or arising out of this Agreement, including,
without limitation, any such damages which are based upon causes of action for
breach of contract, tort (including negligence and misrepresentation), breach of
warranty, strict liability or otherwise. The provisions of this Section 6.2
shall apply regardless of fault and shall survive termination, cancellation,
suspension, completion, or expiration of this Agreement.
6.3 NO LIABILITY FOR TENASKA'S RESPONSIBILITIES. The Persons
Indemnified do not assume any obligation or responsibility of any kind with
respect to Tenaska's Facility, including, without limitation, obligation or
responsibility with respect to the condition or operation of said Facility. The
Persons Indemnified shall not be responsible for the transmission, distribution
or control of electrical energy on Tenaska's side of the Interconnection Point.
6.4 INDEMNIFICATION.
6.4.1 Tenaska shall reimburse, indemnify, and hold harmless
the Persons Indemnified for all injury or damage suffered by the Persons
Indemnified and resulting from: (i) defects or events on Tenaska's side of the
Interconnection Point; (ii) negligence (including strict liability) or
intentional wrongful act or destruction of the Persons
Appendix A
<PAGE>
Indemnified's property by Tenaska, its agents or representatives; (iii) misuse,
damage to or destruction of the Persons Indemnified's property by Tenaska, its
agents or representatives; or (iv) misuse, damage to or destruction of the
Persons Indemnified's property located on premises owned, leased or controlled
by Tenaska, its agents or representatives, in whatever manner any of the
foregoing may be caused, and whether or not the same be caused by or arise out
of the joint, concurrent or contributory negligence of the Persons Indemnified.
Tenaska also shall indemnify, reimburse, and hold harmless the Persons
Indemnified from and against all claims, actions and liability of any kind
arising from damage to property or bodily injury to person, including death, due
in whole or in part to the installation, maintenance or operation of any
electrical equipment on Tenaska's premises or arising out of, or in any way
connected with, the service furnished or to be furnished Tenaska, and whether or
not caused by or arising out of the joint, concurrent or contributory negligence
of the Persons Indemnified.
6.4.2 Tenaska agrees to indemnify and save harmless the
Persons Indemnified against any and all liability, loss, damage, costs or
expense which the Persons Indemnified may hereafter incur, suffer or be required
to pay by reason of negligence on the part of Tenaska in performing its
obligations pursuant to this Agreement or Tenaska's failure to abide by the
provisions of this Agreement, and whether or not caused by or arising out of the
joint, concurrent, or contributory negligence of the Persons Indemnified.
6.4.3 Georgia Power agrees to indemnify and save harmless
Tenaska, Tenaska's Affiliates and the partners, directors, officers,
representatives, agents and employees of each of them, against any and all
liability, loss, damage, cost or expense which Tenaska, its employees, officers,
and directors may hereafter incur, suffer, or be required to pay by reason of
the sole negligence of Georgia Power in performing its obligations pursuant to
this Agreement or Georgia Power's failure to abide by the provisions of this
Agreement.
6.4.4 Georgia Power shall not be liable for accidents or
injuries or damages of any kind due to the condition of Tenaska's Facility or
the operation, maintenance, repair or replacement thereof. Tenaska shall
indemnify and hold harmless the Persons Indemnified from and against all claims,
actions, and alleged liability of any kind arising directly or indirectly, in
whole or in part, from Tenaska's failure to properly and adequately maintain or
operate its Facility in accordance with Good Utility Practices, and whether or
not caused by or arising out of the joint, concurrent or contributory negligence
of the Persons Indemnified. Tenaska agrees that Tenaska alone is solely
responsible for its wholesale power sales to third parties and that Tenaska
shall indemnify Georgia Power for any claim made against Georgia Power by such
third party.
SECTION 7: METERING, DATA ACQUISITION, AND PROTECTION EQUIPMENT
7.1 METERING.
7.1.1 Tenaska shall be responsible for the purchase,
installation, operation, maintenance, repair and replacement of all metering
equipment necessary to provide information regarding power flow and voltage
conditions at the Interconnection Point. All metering equipment of Tenaska shall
conform to Good Utility Practices. Prior to its installation, Georgia Power and
Tenaska shall review the metering equipment to ensure conformance with Good
Utility Practices and Tenaska shall maintain the metering equipment in
conformance with Good Utility Practices throughout the Term. The metering
equipment described herein does not include running or starting station service
metering equipment provided for in accordance with Tenaska's retail service
arrangements.
7.1.2 Electric capacity and energy received by Georgia Power
from Tenaska shall be measured by meters installed at the Interconnection Point.
If and to the extent Tenaska's meters are not measuring deliveries of energy
physically at the Interconnection Point, the metered amount of energy shall be
adjusted for losses from the point of metering to the Interconnection Point as
determined by Georgia Power, in accordance with Good Utility Practices. Any
Party performing such a study to determine the loss adjustment shall provide a
copy of the study to the other Party.
7.1.3 Tenaska shall provide, as required by Georgia Power,
real-time telemetered load signals of its energy delivered to the
Interconnection Point. Tenaska shall also read the meters owned by it and shall
furnish to Georgia Power all meter readings and other information required for
operations and for billing purposes. Such information shall remain available to
Georgia Power for five (5) years or such longer period as may be required by any
Legal Requirement.
7.1.4 The Parties agree that the meter readings provided by
Tenaska to Georgia Power, under normal circumstances, shall be used as the
official measurement between the Parties of the amount of capacity and energy
delivered from the Facility to the Interconnection Point.
7.1.5 Any time during the Term and after initial acceptance of
the accuracy of Tenaska's telemetered information, if telemetered information is
unavailable to Georgia Power, for any reason, Tenaska shall provide integrated
hourly meter readings to Georgia Power each hour until telemetry is returned to
service in conformance with Good Utility Practice.
7.2 DATA ACQUISITION AND PROTECTION EQUIPMENT.
7.2.1 Tenaska shall be responsible for the purchase,
installation, operation, maintenance, repair and replacement of all data
acquisition equipment, protection equipment, and any other associated equipment
and software, which may be reasonably required at any time during the Term by
either Party for Tenaska to operate its facilities in parallel with Georgia
Power. Such equipment shall conform to Good Utility Practices. Prior to its
installation, Georgia Power
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and Tenaska shall review the equipment and software required by this Section to
ensure conformance with Good Utility Practices.
7.2.2 The selection of real time telemetry and data to be
received by Georgia Power and Tenaska shall be at the reasonable discretion of
Georgia Power, as deemed necessary by Georgia Power for reliability, security,
economics, and/or monitoring of the Facility's operations. This telemetry
includes, but is not limited to, voltages, Tenaska's output (MW, MVAR, and MWh),
and breaker status at the Interconnection Point. To the extent telemetry is
required, Tenaska shall, at its own expense, install any telemetering equipment,
data acquisition equipment, or other equipment and software necessary at the
Facility for the telemetry of information to Georgia Power.
7.2.3 Tenaska shall be responsible for the cost that Georgia
Power incurs in making any computer modifications or changes necessary to
implement this Section.
7.3 PAYMENT OF COST OF METERING, DATA ACQUISITION, AND PROTECTION
EQUIPMENT.
7.3.1 Georgia Power shall develop and provide Tenaska
estimates of all costs and expenses that may be incurred by Georgia Power in
connection with the installation of equipment and software under Sections 7.1
and 7.2. Georgia Power shall obtain Tenaska's consent thereto prior to
proceeding with construction, installation or testing of metering, data
acquisition, protection equipment, and software. Tenaska shall pay such
estimated costs in accordance with Section 10.
7.3.2 Georgia Power shall true-up this estimate to Georgia
Power's actual costs and expenses within a reasonable period of time after such
actual costs and expenses are known, but not less often than annually. In the
event that the actual costs and expenses to be paid by Tenaska under Section 7.1
and 7.2 are more or less than Georgia Power's initial estimate, the difference
(either a credit or an additional charge) shall be reflected on a subsequent
invoice.
7.4 CARE OF EQUIPMENT. Tenaska shall exercise proper care to protect
all equipment of Georgia Power located on Tenaska's premises, and agrees to pay
the cost of repairs or replacement in the event of loss or damage to the
equipment arising from the failure of Tenaska to properly protect the equipment
in accordance with Good Utility Practices.
7.5 INSPECTION AND TESTING.
7.5.1 Meters, data acquisition, and protection equipment at
Tenaska's Interconnection Point shall be tested at least biennially.
Representatives of each Party shall be afforded an opportunity to witness such
tests.
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7.5.2 Tenaska shall, upon reasonable request of Georgia Power,
test its meters and data acquisition equipment at the Interconnection Point used
for determining the receipt or delivery of capacity and energy by Georgia Power.
In the event a test shows such equipment to be inaccurate, Tenaska shall make
any necessary adjustments, repairs or replacements thereon.
7.6 INACCURACIES. If the metering fails to register, or if the
measurement made by a metering device is found upon testing to vary by more than
one percent (1.0%) from the measurement made by the standard meter used in the
test, an adjustment shall be made correcting all measurements of energy made by
the metering during (i) the actual period when measurements were made by the
metering, if that period can be determined to the mutual satisfaction of the
Parties, or (ii) one-half of the period from the date of the last test of the
metering to the date such failure is discovered or such test is made if the
actual period cannot be determined to the mutual satisfaction of the Parties
(such period herein the "Adjustment Period"). If the Parties are unable to agree
on the amount of the adjustment to be applied to the Adjustment Period, the
amount of the adjustment shall be determined (a) by correcting the error if the
percentage of error is ascertainable by calibration, tests or mathematical
calculation or (b), if not so ascertainable, by estimating the measurement on
the basis of deliveries under similar conditions during the period since the
last test. In the event Tenaska's metering equipment is found to be
insufficiently reliable and/or inaccurate during any consecutive three (3) Month
period, Georgia Power shall have the right to install suitable metering
equipment at the Interconnection Point for the purpose of checking the meters
installed by Tenaska, and Tenaska shall pay all costs related to such metering
equipment.
SECTION 8: INITIAL SYNCHRONIZATION
8.1 PRE-PARALLEL OPERATION. Prior to the parallel operation of the
Facility with the Georgia Power Electric System, all equipment modifications
and/or additions shall be complete. As soon as practicable after notice is given
to Georgia Power by Tenaska, an inspection shall be performed by Georgia Power
to insure the proper installation and operation of the interconnection
protective devices. The inspection shall include but not be limited to
verification: (i) that the installation is in accordance with the
interconnection study; and (ii) of proper voltage and phase rotation. Upon
successful completion of the pre-parallel inspection, Tenaska shall be granted
approval for operation of the Facility in parallel with the Georgia Power
Electric System. Neither the inspection nor the granting of approval to Tenaska
shall serve to relieve Tenaska of liability for injury, death or damage
attributable to the negligence of Tenaska, and Georgia Power shall not be
responsible in that regard.
8.2 INITIAL SYNCHRONIZATION. Tenaska shall not commence initial
deliveries of energy to the Interconnection Point without the prior written
consent of Georgia Power, which shall not be unreasonably withheld, conditioned
or delayed. Representatives of Georgia Power shall have the right to be present
during any Facility and start-up testing. Tenaska shall provide Georgia Power
not less than thirty (30) Days written notice prior to the Initial
Synchronization Date.
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SECTION 9: ADMINISTRATION CHARGE
Tenaska shall pay Georgia Power a Monthly Administration Charge of
$5,000 per Month for all costs and expenses incurred by Georgia Power during
such Month in connection with: (i) Georgia Power's administration of this
Agreement; (ii) any taxes, assessments or other impositions for which Georgia
Power may be liable as a result of any activity undertaken pursuant to this
Agreement; (iii) reading meters; and (iv) accounting for capacity and energy
flowing into or out of Tenaska's Facility. Georgia Power may revise the amount
of the Monthly Administration Charge from time to time pursuant to the
provisions of Section 12.3.
SECTION 10: PAYMENT PROCEDURE
Bills shall be issued Monthly to Tenaska in accordance with the
following procedures:
10.1 BILLING. Georgia Power shall issue a Monthly invoice to Tenaska
for the charges determined pursuant to this Agreement as soon as practicable
following the close of the Month the charges were incurred. All amounts owing to
Georgia Power from Tenaska shall be due and payable in immediately available
funds through wire transfer of funds or other means acceptable to Georgia Power
within twenty (20) Calendar Days after the date of Georgia Power's invoice.
10.2 FAILURE TO TIMELY PAY. If Tenaska fails to pay the amount billed
by Georgia Power within twenty (20) Calendar Days after the date of Georgia
Power's invoice, Georgia Power may, at any time thereafter, temporarily
disconnect Tenaska in accordance with Section 3.5. If the amount billed is not
paid within fifteen (15) Calendar Days after such temporary disconnection,
Georgia Power may, at its option, treat this Agreement as breached by Tenaska.
The right to temporarily disconnect or to take other action for non-payment
shall not affect Georgia Power's rights under this Agreement, including the
right to draw upon the letter of credit required under Section 10.4.
10.3 INTEREST. Any amount due and payable from Tenaska to Georgia Power
pursuant to this Agreement that is not received by the due date shall accrue
interest from the due date at the Interest Rate.
10.4 CREDITWORTHINESS. Tenaska shall provide and maintain in effect
during the Term of this Agreement an unconditional and irrevocable letter of
credit (or other form of security acceptable to Georgia Power) in the amount of
$100,000 as security to meet its responsibilities and obligations under this
Agreement.
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10.5 AUDIT RIGHTS. Either Party shall have the right, during normal
business hours, and upon prior reasonable notice to the other Party to audit
each other's accounts and records pertaining to either Party's performance
and/or satisfaction of obligations arising under this Agreement within one (1)
year from the date of such performance or satisfaction of such obligation. Said
audit shall be performed at the offices where such accounts and records are
maintained and shall be limited to those portions of such accounts and records
that specifically relate to obligations under this Agreement. To the extent such
accounts and records contain confidential information, the Parties agree to
execute an appropriate confidentiality agreement to protect the information
before the audit may proceed.
10.6 DISPUTED BILLS. In the event of a billing dispute between Tenaska
and Georgia Power, Georgia Power shall not terminate for failure to pay the
disputed amount if Tenaska (i) continues to make all payments not in dispute and
(ii) pays into an independent escrow account the portion of the invoice in
dispute.
SECTION 11: REPRESENTATIONS, WARRANTIES AND COVENANTS
11.1 TENASKA REPRESENTATIONS, WARRANTIES AND COVENANTS. Tenaska makes
the following additional representations, warranties and covenants as the basis
for the benefits and obligations contained in this Agreement:
11.1.1 Tenaska is a partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, that it
is qualified to do business in the State of Georgia and that it has the
corporate power and authority to own its properties, to carry on its business as
now being conducted and to enter into this Agreement and carry out the
transactions contemplated hereby and perform and carry out all covenants and
obligations on its part to be performed under and pursuant to this Agreement.
11.1.2 The execution, delivery and performance by Tenaska of
this Agreement has been duly authorized by all necessary action, and does not
and shall not require any additional consent or approval.
11.1.3 The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement, do not and shall not conflict
with or constitute a breach of or a default under any partnership agreement,
deed of trust, mortgage, loan agreement, other evidence of indebtedness or any
other agreement or instrument to which Tenaska is a party or by which it or any
of its property is bound, or result in a breach of or a default under any of the
foregoing.
11.1.4 This Agreement is the legal, valid and binding
obligation of Tenaska and is
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enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally or by general equitable
principles, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
11.1.5 There is no pending or, to the knowledge of Tenaska,
threatened action or proceeding affecting Tenaska before any Governmental
Authority which purports to affect the legality, validity or enforceability of
this Agreement as in effect on the date hereof.
11.1.6 Tenaska covenants to Georgia Power that it shall at all
times during the Term pay all charges, taxes, assessments and fees which may be
assessed upon or against the Facility or upon or against the Tenaska through the
Georgia Power by reason of the sale or purchase of electricity by Tenaska or
from Tenaska's Facility.
11.2 GEORGIA POWER REPRESENTATIONS, WARRANTIES AND COVENANTS. Georgia
Power makes the following additional representations, warranties and covenants
as the basis for the benefits and obligations contained in this Agreement:
11.2.1 Georgia Power is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia, that it is
qualified to do business in the State of Georgia and that it has the corporate
power and authority to own its properties, to carry on its business as now being
conducted and to enter into this Agreement and carry out the transactions
contemplated hereby and perform and carry out all covenants and obligations on
its part to be performed under and pursuant to this Agreement.
11.2.2 The execution, delivery and performance by Georgia
Power of this Agreement has been duly authorized by all necessary corporate
action, and does not and shall not require any additional consent or approval.
11.2.3 The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement, do not and shall not conflict
with or constitute a breach of or a default under any partnership agreement,
deed of trust, mortgage, loan agreement, other evidence of indebtedness or any
other agreement or instrument to which Georgia Power is a party or by which it
or any of its property is bound, or result in a breach of or a default under any
of the foregoing.
11.2.4 This Agreement is the legal, valid and binding
obligation of the Georgia Power and is enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally or by general equitable principles, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
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11.2.5 There is no pending or, to the knowledge of Georgia
Power, threatened action or proceeding affecting Georgia Power before any
Governmental Authority which purports to affect the legality, validity or
enforceability of this Agreement as in effect on the date hereof.
11.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants made by Tenaska and by Georgia Power
(as the case may be ) in Sections 11.1.1, 11.1.3, 11.1.4, 11.1.6, 11.1.7,
11.2.1, 11.2.3 and 11.2.4 shall survive the execution and delivery of this
Agreement and any action taken pursuant hereto. The representations, warranties
and covenants made by Tenaska and Georgia Power (as the case may be) in Sections
11.1.2, 11.1.5, 11.2.2 and 11.2.5 shall be true and accurate as of the date of
execution of this Agreement.
SECTION 12: COMPLIANCE WITH LAWS
12.1 COMPLIANCE. Tenaska represents, warrants and covenants that as of
the Initial Synchronization Date and for the Term, Tenaska shall (i) be in
compliance with all Legal Requirements as are necessary for the ownership,
operation and maintenance of the Facility and power sales therefrom, including
without limitation, all requirements to seek, obtain, maintain, comply with and
renew and modify from time to time, any and all applicable certificates,
licenses, permits and government approvals and all applicable environmental
certificates, licenses, permits and approvals, environmental impact analysis,
and if applicable, the mitigation of environmental impacts, and (ii) pay all
costs, expenses, charges and fees in connection therewith.
12.2 CHANGE OF LAW. In the event that after the Execution Date there
are changes to Legal Requirements, including, without limitation, changes to
laws or regulations regulating or imposing a tax, fee or other charge on
discharges, omissions or disposals from the Facility, which cause Georgia Power
to incur additional costs in carrying out its obligations under this Agreement,
Tenaska agrees to pay all costs associated with such changes to Legal
Requirements.
12.3 REGULATORY FILINGS. This Agreement is subject to approval by any
Governmental Authority having jurisdiction over the matters provided herein.
Nothing in this Agreement shall be construed as affecting in any way the right
of either Party to unilaterally make application to any and all Governmental
Authorities (including FERC) that may have jurisdiction over this Agreement for
a change in terms and conditions, charges, classification of service or the
Agreement in its entirety, or for termination of this Agreement pursuant to
applicable statutes (including Sections 205 and 206 Federal Power Act) and those
Governmental Authorities' rules and regulations. Prior to making a filing under
this Section, the filing Party shall notify the other Party of its intent to
make a filing at least thirty (30) days in advance and representatives of the
Parties shall attempt to meet to discuss the intended filing; provided, however,
that the failure of the Parties to meet or to agree on any intended filing shall
not limit a Party's right to make such a
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filing. Tenaska agrees to reasonably cooperate with Georgia Power with respect
to such filings and to provide any information reasonably required by Georgia
Power to comply with applicable filing requirements; provided, however, such
cooperation shall not require Tenaska to support a filing with which it
disagrees before a Governmental Authority.
SECTION 13: INSURANCE
13.1 GENERATOR'S INSURANCE. Tenaska, at its expense, shall procure and
maintain in effect during the Term, with insurance companies authorized to
transact insurance in the State of Georgia and acceptable to Georgia Power,
policies of insurance providing, at a minimum, the coverage and limits
specified, and complying with the requirements stated below:
13.1.1 Worker's Compensation in statutory amounts and
Employer's Liability with a minimum limit of $1,000,000 each accident,
$1,000,000 each employee by disease and a policy limit of $1,000,000 by disease.
13.1.2 Commercial General Liability Insurance with the
following coverage and limits:
<TABLE>
<S> <C>
General Aggregate $1,000,000
Products-Completed Operations-Aggregate $1,000,000
Personal & Advertising Injury $1,000,000
Each Occurrence $1,000,000
Fire Damage (any one fire) $50,000
Medical Expense (any one person) $5,000
</TABLE>
Tenaska shall maintain such Insurance in effect for a period of at least three
(3) years following termination of this Agreement.
13.1.3 Business Automobile Liability covering autos of
Tenaska, including owned, hired and non-owned autos, for Bodily Injury and
Property Damage with a combined single limit of $1,000,000 each occurrence.
13.1.4 Excess Liability in Umbrella Form with a limit of
$4,000,000 each occurrence, $4,000,000 Aggregate.
13.1.5 By signing this Agreement, Tenaska thereby waives all
rights of subrogation against the Persons Indemnified with respect to any claim
or loss payable or paid under each of the policies set forth in 13.1.1, 13.1.2,
13.1.3, and 13.1.4 above and under any
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property insurance policy for the Facility that Tenaska has or acquires.
13.1.6 Tenaska shall cause its insurer(s) to issue
endorsements to add the Persons Indemnified as an Additional Insured on the
policies set forth in 13.1.2, 13.1.3., and 13.1.4 above with respect to
liability of the Persons Indemnified (a) arising out of the performance of
operations, maintenance, work or services under this Agreement, and (b) arising
out of the conduct contemplated in the ownership, maintenance or use of
Tenaska's autos.
13.1.7 Tenaska's insurance shall be primary insurance with
respect to the operations, maintenance, work, or services described herein and
insurance of Persons Indemnified shall be excess of the Tenaska's insurance and
shall not contribute with it.
13.1.8 To the extent that Tenaska utilizes deductibles or
self-insurance in connection with the insurance coverage required herein, all
such deductible and self-insured amounts shall be for the account and expense of
Tenaska and shall not be considered as costs or fees provided for in this
Agreement.
13.2 NOTICE AND CERTIFICATION. Each of the above required policies
shall contain a provision whereby the insurance carrier shall notify the Persons
Indemnified at least thirty (30) Days prior to the effective date of
cancellation, nonrenewal or material change in any of said policies. Tenaska
shall submit to the Persons Indemnified a Certificate, signed by an authorized
representative of the insurance carrier, listing the policies, coverage and
limits and certifying that the said policies shall be in effect for the time
periods stated in the Certificate. The obligations for Tenaska to procure and
maintain insurance shall not be construed to waive or restrict other
obligations. For purposes of notifications and deliveries referenced in this
subparagraph, Tenaska shall be deemed to have met its obligations when it
provides notice or delivery in accordance with Section 17.9 of this Agreement.
SECTION 14: FORCE MAJEURE
14.1 DEFINITION OF FORCE MAJEURE EVENT. For the purposes of this
Agreement, a "Force Majeure Event" as to a Party means any occurrence,
nonoccurrence or set of circumstances that is beyond the reasonable control of
such Party and is not caused by such Party's fault, negligence or lack of due
diligence, including, without limitation, flood, ice, lightning, earthquake,
windstorm or eruption; fire; explosion; invasion, war, civil disturbance,
commotion or insurrection; sabotage or vandalism; military or usurped power; or
act of God or of a public enemy; provided, however, in no event shall (i) the
inability to meet a Legal Requirement or the change in a Legal Requirement; or
(ii) a site specific strike, walkout, lockout or other labor dispute constitute
a Force Majeure Event.
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14.2 NO BREACH OR LIABILITY. The Parties shall be excused from
performing their respective obligations under this Agreement and shall not be
liable in damages or otherwise if and to the extent that they are unable to so
perform or are prevented from performing by a Force Majeure Event, provided that
the non-performing Party shall:
14.2.1 give the other Party notice thereof, followed by
written notice if the first notice is not written, as promptly as possible after
such Party becomes aware of such Force Majeure Event, describing the particulars
of such Force Majeure Event;
14.2.2 use its reasonable best efforts to remedy its inability
to perform as soon as practicable; provided, however, that this Section 14.2.2
shall not require the settlement of any strike, walkout, lockout or other labor
dispute on terms which, in the sole judgment of the Party involved in the
dispute, are contrary to its interest; provided further, that the settlement of
strikes, lockouts or other labor disputes shall be entirely within the
discretion of the Party having the difficulty; and
14.2.3 resume performance of its obligations under this
Agreement and give the other Party written notice to that effect, as soon as
reasonably practicable following cessation of the Force Majeure Event.
14.3 SUSPENSION OF PERFORMANCE. The suspension of performance due to a
Force Majeure Event shall be of no greater scope and of no longer duration than
is required by such Force Majeure Event. No Force Majeure Event shall extend
this Agreement beyond its stated Term.
SECTION 15: OPERATING COMMITTEE
Tenaska and Georgia Power shall each appoint one representative and one
alternate to the Georgia Power - Tenaska Operating Committee ("Committee"). Each
Party shall notify the other party of its appointment in writing. Such
appointments may be changed at any time by similar notice. The Committee shall
meet as necessary, but not less than once each calendar year, to carry out the
duties set forth herein. The Committee shall hold a meeting at the request of
either Party, at a time and place agreed upon by the representatives. Each
representative and alternate shall be a responsible person familiar with the
day-to-day operations of their respective electrical facilities. The Committee
shall represent the Parties in all matters arising under this Agreement that may
be delegated to it by mutual agreement of the Parties. The duties of the
Committee may include the following:
(a) Establish and maintain control and operating procedures, including
those pertaining to information transfers between the Facility and Georgia Power
consistent with the provisions of this Agreement.
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(b) Establish data requirements and operating record requirements in
accordance with the terms and conditions of this Agreement.
(c) Review requirements, standards, and procedures for data acquisition
equipment, protective equipment, and any other equipment or software.
(d) Annually review five (5) year forecast of maintenance and
availability schedules of Georgia Power's and Tenaska's facilities at the
Interconnection Point.
(e) Ensure that information is being provided by each Party regarding
equipment availability.
(f) Perform such other duties as may be conferred upon it by mutual
agreement of the Parties.
(g) Each Party shall cooperate in providing to the Committee all
information required in the performance of the Committee's duties. All decisions
and agreements, if any, made by the Committee shall be evidenced in writing. The
Committee shall have no power to amend or alter the provisions of this
Agreement.
SECTION 16: ASSIGNMENT
16.1 ASSIGNMENT BY TENASKA. (a) EXCEPT AS EXPRESSLY PERMITTED BELOW,
TENASKA SHALL NOT ASSIGN, TRANSFER, DELEGATE OR ENCUMBER THIS AGREEMENT AND/OR
ANY OR ALL OF ITS RIGHTS, INTERESTS OR OBLIGATIONS UNDER THIS AGREEMENT AND ANY
ASSIGNMENT, TRANSFER, DELEGATION OR ENCUMBERING BY TENASKA (EXCEPT AS PERMITTED
BELOW) SHALL BE NULL AND VOID. Notwithstanding the foregoing, so long as Tenaska
is not in default under or breach of this Agreement, upon prior written notice
to Georgia Power, Tenaska may collaterally assign its rights, interests and
obligations under this Agreement to its lender or an agent for the benefit of
its lenders providing financing or refinancing for the design, construction or
operation of Tenaska's facility near Franklin, Georgia in Heard County, Georgia
(a "Permitted Financing Assignee"); provided, however, that TENASKA'S
OBLIGATIONS (FINANCIAL OR OTHERWISE) UNDER THIS AGREEMENT SHALL CONTINUE IN
THEIR ENTIRETY IN FULL FORCE AND EFFECT AS THE OBLIGATIONS OF A PRINCIPAL AND
NOT AS A SURETY. Tenaska shall remain fully liable for all of its obligations
under or relating to this Agreement. At no time shall there be more than one
Permitted Financing Assignee. Each such collateral assignment shall be subject
to Georgia Power's rights hereunder.
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(b) The Permitted Financing Assignee shall not be entitled to foreclose
or exercise its rights and remedies with respect to any collateral assignment
permitted hereby unless and until the purchaser at foreclosure, purchaser in
lieu of foreclosure or similar purchaser or transferee ("Purchaser in
Foreclosure") has (i) executed and delivered to Georgia Power and is in
compliance with an agreement in form and substance acceptable to Georgia Power
(which such acceptance will not be unreasonably withheld, conditioned, or
delayed) whereby such Purchaser in Foreclosure assumes and agrees to pay and
perform all then outstanding and thereafter arising obligations of Tenaska under
this Agreement and (ii) established to Georgia Power's reasonable satisfaction
that such Purchaser in Foreclosure has all licenses, permits and approvals and
financial and technical wherewithal as may be required to execute, deliver and
perform such agreement. Notwithstanding the foregoing, all obligations of
Tenaska to Georgia Power under this Agreement shall also be and remain
enforceable by Georgia Power against Tenaska. Each foreclosure or other exercise
of rights and remedies and any assignment to a Purchaser in Foreclosure shall be
subject to Georgia Power's rights hereunder.
(c) So long as Tenaska is not in default under or breach of this
Agreement, upon prior written notice to Georgia Power, Tenaska may absolutely
assign all, but not less than all, of its rights, interests and obligations
under this Agreement to another Person ("Outright Assignee") provided however,
that Tenaska's obligations under this Agreement shall continue and Georgia Power
shall have no obligations to such Outright Assignee unless and until such
Outright Assignee has (i) executed and delivered to Georgia Power and is in
compliance with an agreement in form and substance acceptable to Georgia Power
whereby such Outright Assignee assumes and agrees to pay and perform all
thereafter arising obligations of Tenaska under this Agreement and (ii)
established to Georgia Power's reasonable satisfaction that such Outright
Asssignee has all licenses, permits and approvals and financial and technical
wherewithal as may be required to execute, deliver and perform such agreement.
Any assignment to a Outright Assignee shall be subject to Georgia Power's rights
hereunder.
(d) Tenaska shall indemnify, defend and hold harmless Georgia Power
from and against any and all losses, liabilities, obligations, claims, demands,
damages, penalties, judgments, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, howsoever and by whomsoever
asserted, arising out of or in any way connected with any collateral, outright
or other assignment by Tenaska or any foreclosure or other exercise of remedies
by the Permitted Financing Assignee of this Agreement or Tenaska's or the
Permitted Financing Assignee's rights or interests under this Agreement.
Notwithstanding any other provision of this Section 16.1, Tenaska shall not be
obligated to indemnify and hold harmless Georgia Power from and against any
loss, liability, obligation, claim, demand, damage, penalty, judgment, cost or
expense to the extent caused by Georgia Power's sole negligence or willful
misconduct.
16.2 ASSIGNMENT BY GEORGIA POWER. Georgia Power may, at any time,
without notice to, or the consent of, Tenaska or any other Person, including,
without limitation, any Permitted
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Financing Assignee, Purchaser in Foreclosure or Outright Assignee, sell, assign,
delegate, encumber or transfer to any Indenture Trustee, Affiliate of Georgia
Power, any successor by merger or otherwise of Georgia Power or any Qualified
Person, and/or create or permit to exist Permitted Liens against all or any part
of this Agreement and/or Georgia Power's rights, obligations, title or interest
in, to and under this Agreement.
SECTION 17: MISCELLANEOUS
17.1 GEORGIA POWER'S AGENT. Wherever this Agreement requires Tenaska to
provide information, schedules, notice or the like to, or to take direction
from, Georgia Power, Tenaska shall provide information, schedules, notice or the
like to, or receive direction from, Georgia Power or such agent of Georgia Power
as Georgia Power may direct from time to time.
17.2 NO PARTNERSHIP. Tenaska and Georgia Power do not intend for this
Agreement to, and this Agreement shall not, create any joint venture,
partnership, association taxable as a corporation, or other entity for the
conduct of any business for profit.
17.3 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon any respective successors and assigns of Tenaska and
Georgia Power.
17.4 NO THIRD PARTY BENEFIT. Nothing in this Agreement shall be
construed to create any duty, obligation or liability of Georgia Power to any
person or entity not a Party to this Agreement.
17.5 NO AFFILIATE LIABILITY. Notwithstanding any other provision of
this Agreement, no Affiliate of Georgia Power (including without limitation any
Affiliate of Georgia Power acting as Georgia Power's agent where Georgia Power's
agent is given certain authorities pursuant hereto) shall have any liability
whatsoever for any Party's performance, nonperformance or delay in performance
under this Agreement.
17.6 TIME OF ESSENCE. Time is of the essence of this Agreement.
17.7 NO WAIVER. Neither Georgia Power's nor Tenaska's failure to
enforce any provision or provisions of this Agreement shall in any way be
construed as a waiver of any such provision or provisions as to any future
violation thereof, nor prevent it from enforcing each and every other provision
of this Agreement at such time or at any time thereafter. The waiver by either
Georgia Power or Tenaska of any right or remedy shall not constitute a waiver of
its right to assert said right or remedy, at any time thereafter, or any other
rights or remedies available to it at the time of or any time after such waiver.
Appendix A
<PAGE>
17.8 AMENDMENTS. Except as contemplated by Section 12.3, this Agreement
may be amended by and only by a written instrument duly executed by each of
Tenaska and Georgia Power, which has received all approvals of Governmental
Authorities of competent jurisdiction necessary for the effectiveness thereof.
17.9 NOTICE. Any notice, request, consent or other communication
permitted or required by this Agreement shall be in writing and shall be deemed
given on the Day hand-delivered to the representative identified below, or the
third (3rd) Day after the same is deposited in the United States Mail, first
class postage prepaid, and if given to Georgia Power shall be addressed to:
Georgia Power Company
Attn: Senior Vice President, Power Delivery
241 Ralph McGill Boulevard, NE
Atlanta, GA 30308
with a copy to:
Southern Company Services, Inc.
Attn: Manager, Transmission Services
600 North 18th Street
Birmingham, AL 35203
and if given to Tenaska shall be addressed to:
Tenaska Georgia Partners, L.P.
Attn: Contract Administrator
1044 N. 115 Street, Suite 400
Omaha, Nebraska 68154
unless Georgia Power or Tenaska shall have designated a different representative
or address for itself by written notice to the other. Tenaska shall comply with
reasonable requirements of Georgia Power regarding communications with Georgia
Power relative to the performance of this Agreement.
17.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17.11 CROSS-REFERENCES. All cross-references contained in this
Agreement to Sections,
Appendix A
<PAGE>
are to the Sections of this Agreement, unless otherwise expressly noted.
17.12 ARTICLE AND SECTION HEADINGS. The descriptive headings of the
various Articles and Sections of this Agreement have been inserted for
convenience of reference only and shall in no way modify or restrict any of the
terms or provisions hereof.
17.13 INCLUDING. Wherever the term "including" is used in this
Agreement, such term shall not be construed as limiting the generality of any
statement, clause, phrase or term.
17.14 GOVERNING LAW. The validity, interpretation and performance of
this Agreement, and each of its provisions, are subject to and shall be governed
by the laws of the State of Georgia , without giving effect to conflict of laws
principles.
17.15 MERGER. This Agreement represents the entire agreement between
the Parties and all previous communications, representations and agreements
between the Parties with reference to the subject matter of this Agreement,
whether oral or written, are hereby abrogated.
17.16 NERC. To the extent not inconsistent herewith, Tenaska shall
comply with any operational specifications and requirements specified by Georgia
Power and all planning standards and operating guidelines of the North American
Electric Reliability Council or its successor.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Appendix A
<PAGE>
IN WITNESS WHEREOF, Tenaska and Georgia Power have caused this
Agreement to be executed by their duly authorized representatives on the day and
year first above written.
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia, Inc.
Title: Managing General Partner
/s/
-------------------------------
By: Darrell Bevelhymer
Vice President
Date: 10/21/99
GEORGIA POWER COMPANY
/s/
--------------------------------
By: Wayne T. Dahlke
Title: Senior Vice President, Power Delivery
Date: October 19, 1999
Appendix A
<PAGE>
APPENDIX A
INTERCONNECTION PROCEDURES
The following requirements apply to Tenaska's Facility when operated in
parallel with the Georgia Power Electric System.
A. OPERATING LIMITS.
In order to minimize objectionable and adverse operating
conditions on the electric service provided to other customers by Georgia Power,
the Facility shall meet the following operating criteria:
1. VOLTAGE.
When Tenaska is connected or delivering power to the
Georgia Power Electric System, Tenaska shall operate its generation to meet the
voltage schedule communicated by the Georgia ITS system operator from time to
time. If Tenaska cannot hold voltage schedule but is producing its maximum
amount of MVARS, then that is acceptable performance. It is anticipated that the
Tenaska shall be producing MVARS below its maximum capability under normal
system conditions.
2. FREQUENCY.
The Facility shall maintain a nominal operating frequency
of 60 hertz. Tenaska may be required to assist in supporting system frequency if
requested by Georgia Power.
3. GOVERNOR CHARACTERISTICS.
The Facility shall be capable of providing an immediate and
sustained response to abnormal frequency excursions within the machine design
parameters. The governors shall be properly maintained and shall provide droop
characteristics consistent with the requirements of NERC, SERC and the Southern
Company control area. At a minimum, governors shall be fully responsive to
frequency deviations specified by NERC, SERC and the Southern Company control
area during normal operating conditions only, as defined by Good Utility
Practices. In no event shall the governors be blocked by Tenaska without the
express written permission of Georgia Power.
Appendix A
<PAGE>
4. MINIMUM ACCEPTABLE REACTIVE CAPABILITY.
a. REACTIVE POWER PRODUCTION. At continuous rated output,
simulations must show that the Tenaska's Facility shall have the capability of
dynamically supplying at least 0.33 MVARS at the 500 kV Interconnection Point
for each MW supplied when the Facility is tested at 102% of nominal voltage.
b. REACTIVE POWER ABSORPTION. The Facility shall also be
capable of dynamically absorbing 0.23 MVARs from the transmission system for
each MW supplied at the 500 kV Interconnection Point during simulations when the
Facility is tested at 105% of nominal voltage.
Simple Cycle combustion turbines used as peaking generation
may be exempted from the MVAR absorption requirements.
5. HARMONICS.
The Facility shall not introduce excessive distortion to
the Georgia Power Electric System's voltage and current waveforms. The harmonic
distortion measurements shall be made at transmission facility serving the
Facility and be within the limits specified in the tables below.
5.1. CURRENT HARMONICS.
MAXIMUM ALLOWABLE HARMONIC CONTENT (CURRENT)
(IN PERCENT OF TOTAL CURRENT)
HARMONIC ORDER NUMBER (H)
<TABLE>
<CAPTION>
11 LESS THAN 17 LESS THAN 24 LESS THAN
OR EQUAL TO OR EQUAL TO OR EQUAL TO
H LESS THAN 11 H LESS THAN 16 H LESS THAN 23 H LESS THAN 35 36 LESS THAN H
<S> <C> <C> <C> <C> <C>
ODD 2.0 1.0 0.75 0.30 0.15
EVEN 0.50 0.25 0.19 0.075 0.04
</TABLE>
Total current harmonic distortion may not exceed 2.5%
Appendix A
<PAGE>
5.2. VOLTAGE HARMONICS.
MAXIMUM ALLOWABLE HARMONIC CONTENT (VOLTAGE)
(IN PERCENT)
For nominal voltage at interconnection point of 69 kV to 115 kV
Maximum Individual Harmonic: 1.50
Maximum Total Harmonic Distortion: 2.50
For nominal voltage at interconnection point of 161 kV and above
Maximum Individual Harmonic: 1.00
Maximum Total Harmonic Distortion: 1.50
B. TENASKA STEP-UP TRANSFORMER.
To minimize possible adverse effects on other Georgia Power
customers, a power transformer is required between the Facility and the Georgia
Power Electric System. This transformer's windings shall be connected according
to the requirements of Georgia Power.
C. ENERGIZATION OF GEORGIA POWER EQUIPMENT BY TENASKA.
Tenaska shall not energize, or de-energize, Georgia Power
equipment. The necessary control devices shall be installed by Tenaska on the
Facility to prevent the energization of de-energized Georgia Power equipment by
Tenaska's Facility.
D. SYNCHRONIZATION OF TENASKA'S FACILITY.
Tenaska is responsible for the synchronization of the Facility
to the Georgia Power Electric System. Georgia Power shall have bus differential
relaying at the Interconnection Point and Tenaska must insure that its Facility
is disconnected from Georgia Power whenever the bus is de-energized. Georgia
Power may re-energize the bus by remote control and Georgia Power shall not be
responsible for damage to the Facility due to an out-of-phase condition during
re-energization.
E. TELEMETERED QUANTITIES.
Georgia Power shall provide the data protocol, and Tenaska
shall install as part of the Interconnection Facilities any equipment necessary
to deliver telemetered signals to Georgia Power specifying the voltage and
watts, vars, and watthours delivered to the Georgia Power Electric System at the
Interconnection Point.
Appendix A
<PAGE>
Appendix B-2 of 2
APPENDIX B
SPECIFICATIONS
TO
INTERCONNECTION AGREEMENT
BETWEEN
TENASKA
AND
GEORGIA POWER COMPANY
1) LOCATION OF INTERCONNECTION POINT:
Adjacent to the Wansley - Fortson 500 kV ITS transmission line in Heard
County, Georgia near the City of Franklin, Georgia.
2) DESCRIPTION OF INTERCONNECTION POINT:
The point at which the conductors from Generator's high side step-up
transformers connect to Company's 500 kV generator disconnect devices.
3) DESCRIPTION OF STATION SERVICE CONNECTIONS:
Generator's station service facilities are provided by Generator.
Generator will arrange for starting station service power supply as a
retail customer.
4) INTERCONNECTION FACILITY REQUIREMENTS:
The interconnection facilities are sufficient to accommodate 900 MWs upon
completion in 2001.
5) DESCRIPTION OF INTERCONNECTION FACILITIES:
Interconnection facilities at the point of interconnection consist of:
- Two 500 kV connections to the existing Wansley - Fortson 500 kV ITS
transmission line
- A 500 kV ring bus with three 500 kV line circuit breakers complete with
disconnect switches, relaying and controls
- Three 500 kV disconnect devices for Generator's high side step-up
transformers
Additional interconnection facilities consist of:
- Protective relaying equipment at Wansley substation
Appendix B-1 of 2
<PAGE>
- Protective relaying equipment at Fortson substation
6) DESCRIPTION OF GENERATOR'S FACILITIES AT THE INTERCONNECTION POINT
- Three 500 kV generator step-up transformers connected grounded wye at
500 kV and connected delta at the generator voltage;
- Three sets of 500 kV lightening arresters located adjacent to the
generator step up transformers.
<PAGE>
APPENDIX C
PLANNED MAINTENANCE WORK SCOPE FOR THE COVERED UNITS
<PAGE>
APPENDIX C
PLANNED MAINTENANCE WORK SCOPE FOR THE COVERED UNITS
C.1 SELLER'S WORK SCOPE DURING PLANNED MAINTENANCE
This section contains a description of the work scope that is typical for each
type of Planned Maintenance event on the Covered Units. These work scopes are
TYPICAL and in no way represent the exact detailed scope to be followed in each
maintenance event. In all cases the actual work scope for a Planned Maintenance
event inspection will be governed by the nature of the Parts and Services which
are required and by the definitions of the items covered by Planned Maintenance
as set forth in this Contract. For manpower loading and duration's for each Gas
Turbine maintenance event refer to GE Publication GER - 3620F.
Typical Inspections:
<TABLE>
<CAPTION>
Gas Turbine Steam Turbine Generator
<S> <C> <C>
Combustion Inspection Minor Minor
Hot Gas Path Inspection Major Major
Major Inspection
</TABLE>
During Planned Maintenance the following components are always inspected with
repair or replacement performed as necessary:
<TABLE>
<CAPTION>
Gas Turbine Steam Turbine Generator
<S> <C> <C>
Buckets Buckets Bearing
Nozzles Diaphragms Hydrogen Seals
Combustion Liners Valve Components Oil Deflectors
Transition Pieces Packing Generator Field
Packing Auxiliary Equipment Stator Windings
Auxiliary Equipment
</TABLE>
If Buyer performs maintenance on the Auxiliary Equipment at any time except
during Planned Maintenance Outages, then Buyer will be responsible for repair
and replacement and replenishment of inventory of those parts used to the extent
that repair, replacement and replenishment of inventory is not covered by Seller
in accordance with Appendix A, Article 3.3. Seller will be responsible for
repair and replacement and replenishment of inventory of those parts used during
a Planned Maintenance inspection. The foregoing may also be treated as Unplanned
Maintenance depending upon the nature of the occurrence as set forth in the
definition of Unplanned Maintenance.
The following components of a Covered Unit are included in Planned Maintenance
as Inspect Only:
C-1
<PAGE>
Rotor
Shells
Casing
The compressor will be included as follows:
Compressor inspections for fouling, damage, corrosion and leakage is included as
inspect only during Planned Maintenance. The compressor blading is expected to
last through the term of this Contract and therefore Planned Maintenance only
consists of inspection services, replacement of inlet guide vane bushings, and
cleaning and blending of compressor blades, as may be required. Any replacements
of the blades or repairs to the compressor will be covered as Unplanned
Maintenance.
Heavy lift equipment to be provided in accordance with Section 3.9 of Appendix
A.
C-2
<PAGE>
I. COMBUSTION INSPECTION WORK SCOPE
A. PRE-SHUTDOWN CHECKS
The following will be reviewed, checked and recorded jointly
by Buyer and Seller personnel prior to or at the shutdown:
1. Review active TILs.
2. Record baseline operating data.
3. Record vibration readings from control room panel.
4. Review diagnostic alarm log on the Speedtronic Mark
V, Gas Turbine Control System and the Generator
Excitation Control System.
B. MOBILIZATION
1. Move on job site, marshal tools and equipment
adjacent to the unit.
2. Establish work crews.
3. Conduct site safety meeting and confirm random drug
testing compliance if requested by Buyer.
4. Prepare site for work.
5. Before proceeding with the inspection ensure that the
gas turbine is shutdown, electrical power is locked
out and is tagged out, CO2 system is deactivated, and
the gas and steam supplies are blanked off (work to
be performed by others).
C. DISASSEMBLY
1. Remove turbine compartment roof and side panels.
2. Remove gas fuel lines.
3. Unbolt and open up combustion casing covers.
4. Remove fuel nozzles.
5. Remove crossfire tube retainers, combustion liners,
crossfire tubes, and flow sleeves. 6. Remove
combustion casings.
7. Remove transition pieces.
8. Remove inlet plenum access panel.
D. INSPECTION
1. Visually inspect all removed combustion hardware.
2. Inspect inlet guide vanes and bushings.
C-3
<PAGE>
3. Clean and stone all horizontal and vertical joints.
4. Visually inspect all fuel gas and water piping before
reinstalling.
5. Perform Borescope Inspections and associated checks.
6. Visually inspect leading face of first stage nozzle.
7. Visually inspect exit of compressor.
E. REASSEMBLY
1. Install transition pieces.
2. Install combustion casings.
3. Install crossfire tubes and retainers, combustion
liners, and flow sleeves.
4. Install combustion casing covers.
5. Install fuel nozzles.
6. Install fuel gas lines (pig-tail piping).
7. Install turbine compartment roof and side panels.
8. Perform start-up activities including functional
check of Mark V Control System and calibration of Dry
Low Nox Control System, gas control valves, IGVs,
etc.
F. COMPLETION
1. Leak check all areas of turbine at first operational
run.
2. Stand by for start-up (delays beyond GEII control
greater than 8 hours will be considered Extra Work).
3. Record baseline data with turbine on-line.
4. Move off job site.
5. Furnish inspection report within one (1) month after
the Covered Unit is returned to service.
II. HOT GAS PATH INSPECTION WORK SCOPE
A. PRE-SHUTDOWN CHECKS
The following will be reviewed, checked and recorded jointly
by Buyer and Seller personnel prior to or at the shutdown:
1. Review active TILs.
2. Record baseline operating data.
3. Record vibration readings from control room panel.
C-4
<PAGE>
4. Review diagnostic alarm log on the Speedtronic Mark
V, Gas Turbine Control System and the Generator
Excitation Control System.
B. MOBILIZATION
1. Move on job site, marshal tools and equipment
adjacent to the unit.
2. Establish work crews.
3. Conduct site safety meeting and confirm random drug
testing compliance if requested by Buyer.
4. Prepare site for work.
5. Before proceeding with the inspection ensure that the
gas turbine is shutdown, electrical power is locked
out and is tagged out, CO2 system is deactivated and
the gas and steam supplies are blanked off (work to
be performed by others).
C. DISASSEMBLY
1. Remove turbine compartment roof and side panels.
2. Remove gas fuel lines.
3. Remove fuel nozzles.
4. Remove cooling and sealing air lines.
5. Unbolt and open up combustion casing covers.
6. Remove crossfire tube retainers, combustion liners,
crossfire tubes, and flow sleeves.
7. Remove combustion casings.
8. Remove transition pieces.
9. Place mechanical jacks under the turbine casing.
10. Remove turbine casing bolts.
11. Remove upper half turbine casing.
12. Remove upper and lower halves of the first stage
nozzle.
13. Remove inlet plenum access panel.
D. INSPECTION
1. Visually inspect all removed combustion hardware.
2. Measure and record initial turbine clearances, rotor
thrust, and 2nd and 3rd stage nozzle deflection.
3. Measure and record first stage nozzle concentricity
and ellipticity.
4. Visually inspect first stage nozzle and replace if
necessary.
C-5
<PAGE>
5. Visually inspect the second and third stage nozzles
in place and replace if necessary.
6. Visually inspect first, second and third stage
turbine buckets and replace if necessary.
7. Visually inspect inlet guide vanes and bushings.
8. Clean and visually inspect upper and lower half
casings for pitting, corrosion and erosion.
9. Clean and stone all horizontal and vertical joints.
10. Visually inspect all fuel gas and water piping before
reinstalling.
E. REASSEMBLY
1. Install the lower half of the first stage nozzle.
2. Install the upper half of the first stage nozzle.
3. Install upper half turbine casing.
4. Remove mechanical jacks from under the turbine
casing.
5. Install transition pieces.
6. Install combustion casings.
7. Install crossfire tubes and retainers, combustion
liners, and flow sleeves.
8. Install combustion casing covers.
9. Install cooling and sealing air lines.
10. Install fuel nozzles.
11. Install fuel gas lines (pigtail piping).
12. Install turbine compartment roof and side panels.
13. Perform start-up activities including functional
check of Mark V Control System and calibration of Dry
Low Nox Control System, gas control valves, IGVs,
etc.
F. COMPLETION
1. Leak check all areas of turbine at first operational
run.
2. Stand by for start-up (delays beyond GEII control
greater than 8 hours will be considered Extra Work).
3. Record baseline data with turbine on-line.
4. Move off job site.
5. Furnish inspection report within one (1) month after
the Covered Unit is returned to service.
C-6
<PAGE>
III. MAJOR INSPECTION WORK SCOPE
A. PRE-SHUTDOWN CHECKS
The following will be reviewed, checked and recorded jointly
by Buyer and Seller personnel prior to or at the shutdown:
1. Review active TILs.
2. Record baseline operating data.
3. Record vibration readings from control room panel.
4. Review diagnostic alarm log on the Speedtronic Mark
V, Gas Turbine Control System and the Generator
Excitation Control System.
B. MOBILIZATION
1. Move on job site, marshal tools and equipment
adjacent to the unit.
2. Establish work crews.
3. Conduct site safety meeting and confirm random drug
testing compliance if requested by Buyer.
4. Prepare site for work.
5. Before proceeding with the inspection ensure that the
gas turbine is shutdown, electrical power is locked
out and is tagged out, CO2 system is deactivated and
the gas and steam supplies are blanked off (work to
be performed by others).
C. DISASSEMBLY
1. Separate load coupling for alignment check. Perform
alignment checks.
2. Remove turbine compartment roof and side panels.
3. Remove gas fuel lines and fuel nozzles.
4. Remove cooling and sealing air lines.
5. Unbolt and open up combustion casing covers.
6. Remove crossfire tube retainers, combustion liners,
crossfire tubes, and flow sleeves.
7. Remove combustion casings and transition pieces.
8. Place mechanical jacks under the turbine casing.
9. Remove turbine casing bolts and upper half turbine
casing.
10. Unbolt and remove upper half inlet plenum.
C-7
<PAGE>
11. Unbolt and remove upper half exhaust frame.
12. Unbolt and remove inlet, compressor and compressor
discharge casings.
13. Remove upper and lower halves of the first stage
nozzle, second stage nozzle and third stage nozzle.
14. Remove the upper half inner compressor discharge
casing.
15. Disassemble the upper half number one and two bearing
housings. Disassemble thrust bearing.
16. Remove the gas turbine rotor.
17. Remove the generator end shields on the turbine and
exciter ends.
18. Disassemble generator bearings and remove generator
field.
D. INSPECTION
1. Inspect load coupling.
2. Visually inspect all removed combustion hardware.
3. Measure and record initial turbine clearances, rotor
thrust, and second and third stage nozzle deflection.
4. Visually inspect first, second and third stage
nozzles.
5. Visually inspect first, second and third stage
turbine buckets and compressor rotor and stator
blading.
6. Measure and record compressor clearances.
7. Inspect number one and number two bearings and their
associated oil deflectors.
8. Visually inspect the hot gas path.
9. Inspect inlet guide vanes and bushings.
10. Clean and visually inspect upper and lower half
casings for pitting, corrosion and erosion.
11. Clean and stone all horizontal and vertical joints.
12. Visually inspect all fuel gas and water piping before
reinstalling.
13. Measure and record thrust clearance, assembly
compressor clearances, and assembly turbine
clearances.
14. Measure and record final alignment readings (any
alignment correction of the bases will be performed
on an extra work basis - refer to section 5).
15. Inspect generator bearings and their associated oil
deflectors.
E. REASSEMBLY
1. Lower half
C-8
<PAGE>
a) Install the lower half #1 and #2 gas turbine
bearings.
b) Install gas turbine rotor.
c) Assemble the #1 and #2 gas turbine bearings.
d) Assemble thrust bearing.
e) Install the lower halves of the first,
second and third stage nozzles.
2. Upper half
a) Install the upper halves of the first,
second and third stage nozzles.
b) Install the upper half inner compressor
discharge casing.
c) Install inlet, compressor, and compressor
discharge casings.
d) Install upper half exhaust frame.
e) Install upper half inlet plenum.
f) Install upper half turbine casing.
g) Remove mechanical jacks from under the
compressor and turbine casings.
h) Install inlet and exhaust plenum access
panels.
i) Install transition pieces.
j) Install outer combustion casings and aft
flow sleeves.
k) Install crossfire tubes and retainers,
combustion liners, and forward flow sleeves.
l) Install combustion outer casing covers.
m) Install cooling and sealing air lines.
n) Install fuel nozzles.
o) Install fuel gas lines (pigtail piping).
p) Install turbine compartment roof and side
panels.
q) Install generator field.
r) Assemble generator bearings.
s) Check alignment and make up load coupling.
t) Install the turbine end and the collector
end, generator end shields.
u) Install collector enclosure back on
foundation, if applicable.
v) Perform start-up activities including
functional check of Mark V Control System
and calibration of Dry Low Nox Control
System, gas control valves, IGVs, etc.
C-9
<PAGE>
F. COMPLETION
1. Leak check all areas of turbine at first operational
run.
2. Stand by for start-up (delays beyond GEII control
greater than 8 hours will be considered Extra Work).
3. Record baseline data with turbine on-line.
4. Move off job site.
5. Furnish inspection report within one (1) month after
the Covered Unit is returned to service.
IV. GENERATOR MINOR INSPECTION
A. PRE-SHUTDOWN CHECKS
The following will be checked and recorded prior to shutdown:
1. Check double insulated bearings.
2. Recurring problems and discrepancies review
3. Present annunciator drops 4. Operating data 5. Review
active TILs.
B. MOBILIZE
1. Marshal tools and equipment adjacent to the unit.
2. Establish work crews.
3. Prepare site for work.
4. Conduct site safety meeting.
C. REMOVE LAGGING
1. Upper end shield lagging
D. DISASSEMBLE GENERATOR
1. Disassemble journal bearings, visually inspect, and
record clearances and condition, including ball seat
contact and pinch checks.
2. Disassemble oil deflectors and hydrogen seals.
3. Disassemble/remove collector brush holder rigging.
E. INSPECTION
1. All results will be recorded on standard inspection
forms.
2. Visually Inspect/Clean.
a) Bearings
b) Oil deflectors
c) Hydrogen seals
C-10
<PAGE>
3. Perform MAGIC visual inspection within the Stator and
Field air gap to inspect stator core laminations,
stator wedges, field wedges and surface on the
inboard ends of the retaining rings provided the gap
is 1.2" or greater.
F. ASSEMBLE GENERATOR
1. Hydrogen seals
2. Bearings
3. Oil deflectors
4. Collector brush rigging
G. ASSEMBLE LAGGING
1. Upper end shield lagging
H. PRE-START AND OPERATIONAL CHECKS
1. Check slow roll operation.
2. Record start-up and operational data.
I. DEMOBILIZE
1. Clean up the work area.
2. Remove tools.
J. REPORT
1. A final typewritten report of the inspection,
including: conditions found, work performed,
inspection data, clearance data, operational data,
recommendations, and spare and renewal parts, will be
prepared and submitted within 1 month after the unit
is returned to service.
V. GENERATOR MAJOR INSPECTION
A. PRE-SHUTDOWN CHECKS
The following will be checked and recorded prior to shutdown:
1. Check double insulated bearings.
2. Recurring problems and discrepancies review
3. Present annunciator drops 4. Operating data 5. Review
active TILs.
B. MOBILIZE
1. Marshal tools and equipment adjacent to the unit.
2. Establish work crews.
3. Prepare site for work.
4. Conduct site safety meeting.
C. REMOVE LAGGING
C-11
<PAGE>
1. Upper end shield lagging
2. Upper cooler dome lagging
D. DISASSEMBLE GENERATOR
1. Disassemble journal bearings, visually inspect, and
record clearances and condition, including ball seat
contact and pinch checks.
2. Disassemble oil deflectors and hydrogen seals.
3. Disassemble end shield piping.
4. Disassemble/remove collector brush holder rigging.
5. Remove end shields and generator field.
6. Remove stator cooler heads.
E. INSPECTION
1. All results will be recorded on standard inspection
forms.
2. Visually Inspect/Clean.
a) Bearings
b) Oil deflectors
c) Hydrogen seals
d) Coolers
e) Generator field
f) Stator windings
3. It is recommended at each major inspection on either
a gas turbine generator or steam turbine generator to
perform the following inspections and tests:
F. ELECTRICAL TESTS
1. Stator
a) 10-Minute Insulation Resistance with
Polarization Index
b) Winding Copper Resistance
c) RTD Resistance Check and Insulation
Resistance
d) DC Leakage
2. Field
a) 10-Minute Insulation Resistance with
Polarization Index
b) Winding Copper Resistance
c) AC Impedance Test
G. VISUAL INSPECTION
1. Stator, including High Voltage bushings
2. Field
3. Excitation equipment
C-12
<PAGE>
H. COMPREHENSIVE FORMAL REPORT
1. Unit Maintenance History
2. Test Data
3. Visual Inspection
4. Analysis of Conditions
5. Recommendations
I. REPORT OF GENERATOR INSPECTION AND TEST
1. A comprehensive Generator Inspection and Test Report,
with evaluations and recommendations, is an integral
part of the service package. Such a report, by
providing a meaningful description of the generator
condition, will be useful in planning current and
future maintenance projects and parts ordering
requirements.
J. PURCHASER RESPONSIBILITIES
1. Offload, locate and reload test equipment.
2. Tag-out all equipment.
3. Make necessary disconnection of generator line and
neutral leads and RTD's at their terminal board prior
to the arrival of the Generator Specialist.
4. Reconnect items disconnected in (C.1.VIII.J.3).
5. Supply power (220V AC, single-phase, approximately 30
amps) to test equipment. 6. Provide weatherproof
enclosure.
K. ASSEMBLE GENERATOR
1. Install stator cooler heads.
2. Generator field
3. Hydrogen seals
4. Bearings
5. Oil deflectors
6. End shields
7. Collector brush rigging
L. ASSEMBLE LAGGING
1. Upper end shield lagging
2. Stator cooler dome lagging
M. PRE-START AND OPERATIONAL CHECKS
1. Check slow roll operation.
2. Record start-up and operational data.
N. DEMOBILIZE
1. Clean up the work area.
C-13
<PAGE>
2. Remove tools.
O. REPORT
1. A final typewritten report of the inspection,
including: conditions found, work performed,
inspection data, clearance data, operational data,
recommendations, and spare and renewal parts, will be
prepared and submitted within 1 month after the unit
is returned to service.
C.2 BUYER'S WORK SCOPE DURING PLANNED MAINTENANCE
In addition to the Buyer's Responsibilities described in Part 4 of Appendix A,
Buyer shall perform the following specific work scope items during Planned
Maintenance Inspections:
I. GT COMBUSTION INSPECTION
Assist with functional check of Mark V Control System, and calibration
of Dry Low NOx Control System, gas control valves, IGVs, etc.
Replace all filters when necessary.
II. GT HOT GAS PATH INSPECTIONS
A. Check and replace faulty wheel space thermocouples.
B. Upon reconnection of electrical and instrumentation verify
connections, calibrations and rotation check.
III. GT MAJOR INSPECTION
Inspect inlet systems for corrosion cracked silencers, bleed heat
manifold inspection and loose parts.
IV. GENERATOR MINOR
A. Perform instrument calibrations, such as vibration probes,
temperature switches, etc.
B. Direct its instrument technicians to remove and install
electrical components and instruments.
C-14
<PAGE>
V. GENERATOR MAJOR INSPECTIONS
A. Inspect terminal box hardware, high voltage bushings, bushing
terminals, terminal box bushings seals, and current
transformer assembly.
B. Perform electrical disconnects on 18/20 kV Bus work to support
generator testing for GE
ALL OUTAGES OWNER'S/OPERATOR'S PLANNED WORK SCOPE
A. Routine Maintenance on auxiliary equipment
B. Assist Seller with functional check of Mark V controls, and
calibration of turbine supervisory instrumentation
C. Lube oil pumps, sumps and equipment
D. Hydraulic pump, sumps and equipment
E. Seal oil pumps
F. Emergency oil pumps
C-15
<PAGE>
APPENDIX D
The following is a description of information which cannot be submitted
electronically:
GE COMPANY - GEI41040F - PROCESS SPECIFICATION: FUEL GASES FOR COMBUSTION IN
HEAVY GAS TURBINES (GEI41040F) - NOVEMBER 1998 - 14 PAGES
<PAGE>
APPENDIX E
The following is a description of information which cannot be submitted
electronically:
GE COMPANY GEI41047H - GAS TURBINE FUEL SPECIFICATIONS - JUNE 1992 - 22 PAGES
<PAGE>
APPENDIX F
The following is a description of information which cannot be submitted
electronically:
GE COMPANY - GEK101944 - REQUIREMENTS FOR WATER/STEAM PURITY IN GAS TURBINES -
APRIL 1995 - 6 PAGES
<PAGE>
APPENDIX G
(RESERVED)
<PAGE>
APPENDIX H
M&D SYSTEM CONDITIONS
As part of the M&D System, Seller or one of its affiliates shall place On-Site
Monitors (OSM) on the Covered Units. These OSMs will be connected by a telephone
line to the GE Monitoring and Diagnostic Center located in Schenectady, New
York, and are intended to assist Seller to more efficiently manage its
obligations under this Contract.
The OSM consists of the following components to be installed at the Site:
1. One Windows NT based computer system (CPU, Monitor, Keyboard,
Trackball, etc.).
2. One internal modem per computer system to provide remote access.
3. The required interconnection devices such as short haul modem pairs,
etc.
4. The software package and configuration to collect and monitor data from
the turbine control system and other specified devices.
5. An external DAT tape backup device.
The following conditions shall apply to the OSM:
1. Seller assumes no greater or lesser liability than it has under the terms of
the Contract as a result of the application of the OSMs to the Covered Units.
Further, Seller shall not be responsible, whether in contract, tort (including
strict liability or fault), warranty or otherwise for failing to monitor the OSM
or failing to notify Buyer of abnormalities.
2. The OSM equipment that will be placed on the Covered Units is passive and
will not interfere in any way with the operation of that equipment.
3. Title to the OSM hardware and software is and shall remain with Seller or its
affiliates. Seller does not sell or license the OSM, and does not grant any
ownership or license interest in the OSM to Buyer by virtue of this program.
Buyer acknowledges that, in addition to Seller-owned software, the OSM contains
certain third party software, which may include, but is not limited to, software
obtained by Seller from OSI Software, Inc., which Seller either owns or is
licensed to use and that Seller does not extend any license to any such software
to Buyer. Buyer agrees not to alter the hardware, software, connections or
configuration of the OSM or its connection to the data stream, and will not add
tags, links to other devices or systems or otherwise change the OSM setup,
functioning and configuration, or connectivity.
4. The OSM will include standard data displays for data visualization which
Buyer may view, and Seller will furnish to Buyer the password(s) necessary to do
so. However, Seller assumes no liability whatsoever for any action, or inaction,
which Buyer elects as a result of viewing this data.
5. Buyer agrees not to attempt to access any data, displays, information,
software or other parts or functions of the OSM that have not been specifically
made available to it by Seller, whether or not protected or restricted.
6. Buyer agrees not to disassemble, reverse engineer, reverse assemble,
decompile or otherwise attempt to derive the source code of any OSM software,
including third party software.
7. In the event that Buyer uses, accesses or alters any data, displays,
information, software or hardware, or otherwise acts in violation of this
agreement, including unauthorized use of any third party software such as, but
not limited to, software of OSI Software, Inc., Seller and the third party
software provider(s) shall have the right to recover damages from Buyer and
Buyer shall indemnify and hold harmless GE from all claims, losses, damages,
judgments, expenses, including attorneys' fees and litigation expenses, arising
out of or related to any such violation of this agreement by Buyer. Buyer
further understands and
<PAGE>
acknowledges that third party software providers may be able to assert certain
other property rights, such as copyright rights, on their own behalf.
8. Buyer shall make a phone line available for Seller connection to the OSM
assigned specifically for use of the OSM. This phone line shall not be used by
Buyer or others for any other communications or purpose. The said phone line
shall be and remain continuously connected to the OSM. The phone line must be
direct and not through a switchboard. Buyer shall not connect, or allow to be
connected, to the OSM any other phone line. Buyer shall not initiate or allow
any remote access to the OSM, whether through the assigned phone line or
otherwise, or allow others to do so.
9. Buyer does not have any right or responsibility to maintain or repair the
OSM.
10. Seller will provide instruction to Buyer's personnel on-site concerning the
OSM features to which Buyer will have access.
11. Buyer shall supply and maintain an electric power source for the OSM. Seller
shall have a right to access the OSM and its connections at all reasonable
times.
12. Buyer will ensure that each of their employees who may come in contact with
the OSM is made aware of the Buyer commitments described herein, and abides by
them.
13. Although the OSM program is to support Seller's obligations under the
Contract, and will be removed at the conclusion of that program, the date of
removal shall have no bearing on determining the term specified in the Contract.
<PAGE>
APPENDIX I
SERVICE RATES
The following is a description of information which cannot be submitted
electronically:
Appendix I-1 - Engineering Services Rates
Global Power Generation Services Department - effective January 1, 1999 - 2
pages
Appendix I-2 - G.E. Power Systems Craft Labor - 1 page
Appendix I-3 - Inspection & Repair Services Domestic External Commercial Rates -
effective January 1, 1999 - 1 page
Recommended Operational & Maintenance Spare Parts 6 - 7FA IPS 80905 Tenaska -
Spare Parts Recommendation - 6-17-99, 28 pages
<PAGE>
APPENDIX J
The following is a description of information which cannot be
submitted electronically:
INITIAL OPERATIONAL SPARE PARTS
1. GT TURBINE OPERATIONAL SPARES - 3 PAGES
2. GT ACCESSORY GEAR SPARES -
4. PAGES
3. GENERATOR CONSUMABLE SPARES - 1 PAGE
4. GENERATOR EXCITATION SPARES - 3 PAGES
5. GT CONTROLS SPARES - 1 PAGE
6. GT LOAD COMMUTATED INVERTER SPARES - 2 PAGES
<PAGE>
APPENDIX K
INITIAL SPARE PARTS
Seller shall provide the following initial spares, on site prior to the
Performance Start Date, to support the Sellers obligations in this Contract for
the Price specified in Appendix A, Section 6.6.
- - Fuel Nozzle Assembly without Tips (1 set)
- - Combustion Liners & Cap Assembly (1 set)
- - Transition Pieces (1 set)
- - Fuel Nozzle (1 set)
TOTAL $2,433,202.00
<PAGE>
APPENDIX L
TECHNICAL ADVISOR RESPONSIBILITIES
<PAGE>
APPENDIX L
TECHNICAL ADVISOR RESPONSIBILITIES
The LTSA Service Director serves as the single point GE contract for the
Customer for all turbine generator services for the duration of the contract.
The Service Director will coordinate outage activities, conduct periodic
meetings, provide responses to technical inquiries, and work with the Customer
to meet the Critical to Quality (CTs) initiatives set forth in the contract. The
Service Director's responsibilities include, but are not limited to, the
following:
- - Coordinate the Power Generation Services (PGS), Apparatus Service
Department (ASD), and Parts Center activities for the LTSA contract
responsibilities and additional Customer extra work activities related
to the turbine generator.
- - Conduct Maintenance Planning Meetings, Pre-Outage Meetings, and
Post-Outage Meetings.
- - Conduct contract Quarterly Review Meetings which outline LSTA
activities and unit performance.
- - Order and track parts for the LTSA outages and inventory. A parts
management system will include all spare parts within GE scope and
identify their storage location or source of availability.
- - Forward Technical Information Letters (TILs) and Engineering change
Notices (ECNs) to the customer and plan the implementation of any
recommendations from these documents.
- - Track the repair of turbine generator parts in the ASK facilities and
maintain a status chart of the parts in repairs.
- - Respond to Customer technical inquiries utilizing the Power Answer
Center to access the appropriate Engineering and commercial personnel.
- - Provide information regarding the latest advancements in Conversion,
Modification, and Upgrade (CM&U) opportunities to the customer and
assist with implementation of any such CM&Us.
- - Work with the plant O&M staff to develop maintenance schedules which
optimize plant reliability and availability.
- - Maintain a unit operating history for the turbine generator sets.
- - Identify Critical to Quality (CTQs) which need improvement and
structure projects and action items to address the needs.
- - Conduct periodic site visits to assess the operating condition of the
units and address any concerns of the plant Operations and Maintenance
personnel.
- - Respond to forced outages to insure the best response time and provide
the necessary resources to restore the unit to operating conditions in
a timely manner.
<PAGE>
APPENDIX M
REDACTED POWER PURCHASE AGREEMENT
[SEE EPC AGREEMENT - EXHIBIT B, ATTACHMENT IV]
<PAGE>
Exhibit 10.8
An asterisk ([*]) indicates that confidential information has been
omitted and filed separately with the Securities and Exchange Commission as
part of a Confidential Treatment Request.
FIXED PRICE ENGINEERING, PROCUREMENT AND CONSTRUCTION
CONTRACT
THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT (this
"Contract") is entered into effective this 23rd day of September, 1999, by and
between TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership
("Tenaska"), and WILLBROS ENGINEERS, INC., a Delaware corporation (the
"Contractor").
WITNESSETH:
WHEREAS, Tenaska intends to construct, own and operate a dispatchable
electric generating facility together with related equipment and other
improvements (the "Plant") at a location in Heard County, Georgia (the "Plant
Site"); and
WHEREAS, Tenaska desires to engage Contractor, and Contractor desires
to be engaged, to provide turnkey services (engineering, material procurement,
and construction) for a 20-inch natural gas transmission pipeline for
approximately 6,500 feet from the Transcontinental Gas Pipeline Corporation
("Transco") meter station to the Plant Site (the "Pipeline").
NOW, THEREFORE, for and in consideration of the premises and the mutual
promises and covenants contained herein, the parties, intending to be legally
bound, agree as follows:
DEFINITIONS
The following terms shall have the meanings specified when used in this
Contract:
APPLICABLE LAWS means all laws, ordinances, rules, regulations, orders,
interpretations, requirements, standards, codes, resolutions, licenses,
permits, judgments, decrees, injunctions, writs and orders of any
court, arbitrator, or governmental (federal, national, state,
municipal, local or other), agency, body, instrumentality or authority
that are applicable to either or both of the Parties, the Pipeline, the
Work or the terms of this Contract, including all environmental and
Hazardous Materials laws which are at any time applicable to performing
the Work.
DRAWINGS include, without limitation: all renderings, technical and
design drawings, specifications, plans, layouts, diagrams,
illustrations, descriptions, calculations, schedules, graphs,
performance charts; graphic or pictorial material needed to show
locations, dimensions, elevations, sections, and details; all documents
necessary to fix and describe the size, quality and composition of the
Pipeline; supplier operating and maintenance manuals, recommended spare
parts lists, documents required to support permitting and licensing
and, all other operations data pertinent to the Pipeline. The Drawings
shall set forth and detail all requirements for the construction of the
Pipeline, provide all instructions customarily necessary in the trade
and shall include documents required for regulatory agency approval. At
the time the Drawings are delivered to Tenaska, they become the
property of Tenaska and Contractor shall only maintain drawings in
support of this Contract.
<PAGE>
EQUIPMENT means all engineered, manufactured and produced items,
materials, supplies and goods required to be incorporated into the
Pipeline for the construction and operation of the Pipeline in
accordance with this Contract.
HAZARDOUS MATERIALS means (i) "hazardous materials", "hazardous
substances", or "toxic substances" or "contaminants" as those terms are
defined under any environmental law of the United States or of the
State of Georgia, as the same may be amended from time to time, and in
the rules and regulations adopted or promulgated in respect thereof,
(ii) petroleum and petroleum products, including crude oil and
fractions thereof, (iii) any other hazardous, radioactive, toxic or
noxious substance, material, pollutant or solid, liquid or gaseous
waste, and (iv) any substance that, whether by its nature or its use,
is subject to regulation under any environmental law.
SUBSTANTIAL COMPLETION means that the Pipeline has satisfied the tests
described in Appendix A and is available for use in accordance with its
intended purpose.
WORK means all of the obligations of Contractor under this Contract.
WORKSITE means the right-of-way or other property on, over or under
which the Pipeline is to be constructed, including any property over
which construction easements are obtained.
ARTICLE I - OBLIGATIONS OF CONTRACTOR
1.1 SELECTION OF CONTRACTOR. Tenaska hereby engages Contractor, and
Contractor accepts such engagement, to provide engineering, material
procurement, and construction of the Pipeline, on a turnkey basis, for and on
behalf of Tenaska pursuant to the provisions of this Contract.
1.2 STANDARDS OF PERFORMANCE. Contractor shall, in the performance of
the Work, use the full measure of care, diligence and good faith commensurate
with generally accepted professional standards and, to the extent that any of
the duties directly or indirectly related to the Work are discretionary, act
fairly and in good faith as between Tenaska and any third parties.
1.3 SCOPE OF THE WORK. Contractor shall provide the Work described in
Appendix A, which is attached to, incorporated in and forms part of this
Contract. The Scope of Work includes (a) furnishing the design and engineering
for the Pipeline, including the preparation of all Drawings, which design and
engineering shall meet the requirements of this Contract and shall be prepared
and implemented in accordance with all Applicable Laws; provide and implement
purchasing, construction, expediting, inspection, and testing in accordance with
all performance and other requirements of this Contract and all Applicable Laws
(together with all services related thereto) as required by this Contract or as
may be necessary to provide Tenaska with the Pipeline meeting all terms,
conditions, specifications and standards set forth in this Contract; provide all
labor, Equipment, procurement of Equipment, (together with all services provided
or to be provided by Contractor) to fulfill the Contractor's obligations to
provide the Pipeline; perform all change orders; and, perform in accordance with
all of Contractor's representations, covenants and warranties as set forth in
this Contract.
2
<PAGE>
1.4 RESPONSIBILITIES OF TENASKA. Tenaska shall furnish Contractor with
all right-of-way easements and Contractor shall be required to obtain all other
construction permits. Tenaska shall furnish Contractor with basic design
criteria and process descriptions as a basis for Contractor's performance of the
Work. If Tenaska has not furnished Contractor with all right-of-way easements
necessary for the Pipeline by January 1, 2000, then Contractor shall be entitled
to an extension of the Scheduled Completion Date by up to one day for each day
until all such right-of-way easements are obtained by Tenaska, provided that the
period of extension to the Scheduled Completion Date shall not exceed the period
of actual delay determined in accordance with the following:
(A) Contractor demonstrates that such delay will delay any item on the
critical path so as to delay Contractor's achievement of Substantial
Completion;
(B) Contractor provides reasonable detailed support for the number of
days of change requested in the Scheduled Completion Date as a result
of such delay;
(C) Contractor demonstrates that it will use all reasonable efforts to
maintain the Scheduled Completion Date as if the delay had not
occurred; and
(D) Contractor demonstrates specific actions which will be taken to
work around or mitigate the impact of the delay on the Scheduled
Completion Date.
1.5 COMMENCEMENT AND COMPLETION OF THE WORK. Upon execution of this
Contract, Contractor shall commence performance of the Work under this Contract
and shall achieve Substantial Completion by September 1, 2000, subject to any
extensions permitted in accordance with Section 3.5 ("Scheduled Completion
Date"). If at anytime it becomes apparent in the reasonable opinion of Tenaska
that the Scheduled Completion Date cannot be achieved, Contractor shall take all
necessary action, including increasing the number of personnel and labor on the
project and implementing overtime and double shifts to accelerate the progress
of the Work so as to achieve the Scheduled Completion Date.
1.6 LIQUIDATED DAMAGES. There shall be no liquidated damages applicable
to Contractor until the "Liquidated Damages Date" which shall be the later of
(a) the Scheduled Completion Date, as extended in accordance with Section 3.5
and (b) November 20, 2000. For each full day or part thereof that Substantial
Completion is not achieved after the Liquidated Damages Date, Contractor shall
pay to Tenaska liquidated damages in the amount of Five Thousand Dollars
($5,000), with a maximum cap of forty (40) days. It is understood and agreed
between the parties that the terms, conditions and amounts fixed for liquidated
damages are reasonable, considering the damages that Tenaska will sustain in the
event of Contractor's failure to meet the requirements for completion of the
Work as set forth in Section 1.5 and that these amounts are agreed upon and
fixed as liquidated damages because of the difficulty of ascertaining the exact
amount of damages that may be sustained by Tenaska and shall be applicable
regardless of the actual amount of damages sustained. Subject to the right of
Tenaska to terminate this Contract pursuant to Section 1.18, liquidated damages
shall be the sole and exclusive liability of Contractor for any delay in
achieving the Scheduled Completion Date. The amount of liquidated damages
Contractor is liable for pursuant to the terms of this Contract shall become due
to Tenaska fifteen (15) days after the Scheduled Completion Date and liquidated
damages shall continue to be payable monthly thereafter until Substantial
Completion is achieved.
3
<PAGE>
1.7 NO REPRESENTATIONS TO CONTRACTOR. Contractor acknowledges and
agrees that this Contract is made for the consideration set forth herein, and
that Contractor has, by examination, satisfied itself as to the nature and
location of the Worksite on which the Work is to be performed, the character,
quantity and kind of materials and conditions to be encountered, the character,
quantity and kind of equipment, tools, machinery, supplies, manpower and other
items needed in connection with the performance of the Work, and the Worksite
location and conditions and all other matters which may in any way affect the
performance of the Work. Contractor shall be responsible for all Worksite
preparation, including proper clearing, grubbing and disposal of brush, trees
and other vegetation; providing temporary and permanent drainage and drainage
structures; removal of debris; all necessary investigation, analysis, testing
and determination concerning the condition, contents or integrity of the
subsurface, underground and/or soils conditions of the Worksite. In performing
Worksite preparation, Contractor shall be responsible for and assumes the cost
of any construction, engineering or structural conditions, including those
caused by the presence of organic materials (except Hazardous Materials which
were present prior to the execution of this Contract ("Pre-existing Hazardous
Materials"), archaeological remains and artifacts), inadequate soil bearing
qualities or underground water and other unknown or unforeseen subsurface
conditions. Contractor's failure to acquaint itself with any general or local
condition listed above or otherwise or circumstances affecting the Work existing
as of the date of this Contract will neither relieve it from the responsibility
for successfully performing this Contract, nor entitle Contractor to an
adjustment to the fixed price or the Scheduled Completion Date. Tenaska will not
entertain, nor have any liability for, claims relating to, or arising out of,
unknown or unforeseen subsurface conditions, (other than with respect to
Pre-existing Hazardous Materials, archaeological remains or artifacts).
1.8 OWNERSHIP OF DRAWINGS AND OTHER ITEMS. All Drawings and other
tangible evidence of Contractor's Work product prepared under this Contract
shall become and remain the sole property of Tenaska, and Contractor agrees not
to use or reproduce such items for any other purpose other than in connection
with the Pipeline without the prior written consent of Tenaska. Tenaska agrees
to indemnify, defend and hold Contractor and the other Indemnitees (as
hereinafter defined) harmless from any liability arising out of the use (other
than Contractor's use) of such Drawings and other tangible evidence of
Contractor's work product on any other projects unless Contractor is retained
and compensated for providing engineering services for such other projects.
Contractor may retain copies of work product for its records.
1.9 BOOKS, RECORDS AND INVOICES. Contractor shall keep and maintain
accurate books, records and invoices relating to the performance of the Work in
such form, substance and detail as Tenaska may reasonably prescribe from time to
time for any portion of the Work that may be performed on a time and material
basis. Tenaska shall have the right to inspect, examine, copy and audit such
records, books and invoices at any reasonable time during the term of this
Contract, or within three (3) years after the termination hereof. Contractor
shall make such books, records and invoices available for inspection,
examination, copying and auditing as upon request by Tenaska. This right of
audit will not apply to any of the Work that is performed on a fixed price
basis.
1.10 LIENS. Assuming that Tenaska is current on payments required to be
made under Article II, Contractor agrees promptly to pay or discharge all liens,
or attachments which may be filed or levied in connection with the performance
of the Work, and all taxes levied upon
4
<PAGE>
Contractor, its equipment, employees, property and operations, and to indemnify,
defend and hold Tenaska harmless therefrom. The final payment to Contractor
under this Contract shall not become due until Contractor delivers to Tenaska a
complete release and waiver of all claims for taxes, liens, or attachments
arising out of the performance of the Work, and/or, at Tenaska's sole option,
receipts showing the discharge thereof and, in either case, an affidavit stating
that to the best knowledge of Contractor, such releases and/or receipts include
all labor, equipment and material costs or taxes for which a lien, or attachment
could be filed. In the event that any claimant shall refuse to furnish such
release and/or receipt, Tenaska may, at its option, require Contractor to
furnish a bond in an amount and on such terms as are satisfactory to Tenaska to
indemnify Tenaska against any such tax, lien, or attachment. In the event that
any tax, lien, or attachment remains unsatisfied after all payments are made to
Contractor hereunder, Contractor shall pay to Tenaska all of the moneys that
they or either of them may be required to pay to effect the discharge thereof,
including without limitation all costs and attorneys' fees.
1.11 INDEMNIFICATION. Contractor shall indemnify and hold Tenaska, its
partners, and affiliates, Construction Lender and Independent Engineer, and the
directors, officers, shareholders, partners, employees and agents of any of the
above-mentioned parties ("Indemnitees") harmless from any and all liability,
loss and expense (including costs and attorneys' fees) arising from injury or
death to persons or damage to property, to the extent that such loss, injury,
death or damage is directly attributable to the negligence or willful misconduct
of Contractor or any subcontractor, or breach of this Agreement by Contractor,
in the performance of the Work. Contractor is not indemnifying the Indemnitees
from their own acts of negligence or willful misconduct. If such liability, loss
and expense was caused by or results from the concurrent negligence or willful
misconduct of Contractor and/or Contractor's subcontractors and any Indemnitee,
Contractor shall not be required to indemnify such Indemnitee for that
percentage of the damage, loss or expense which was caused by the negligence or
willful misconduct of such Indemnitee. Tenaska shall promptly advise Contractor
in writing of any claim, liability, loss or expense which would give rise to a
right of indemnification under this Section 1.11. Tenaska shall have the right,
at its option and its own expense, to participate in the defense of such claim,
without relieving the indemnifying party of its obligations hereunder. In no
event shall Contractor or an Indemnitee, be responsible for any special,
indirect or consequential damages suffered by the other, as the case may be,
arising out of the Work or this Contract, including without limitation any
increased operating expense, loss of anticipated revenues or profits, loss of
the beneficial use and the loss of any oil, gas or other property.
1.12 ENVIRONMENTAL MATTERS. Contractor shall, during construction: (i)
limit fugitive dust; (ii) avoid run off of contaminated surface water and silt;
and (iii) not contaminate ground water, in any manner including by spilling
Hazardous Materials. All Hazardous Materials introduced to the Worksite by
Contractor or any subcontractor shall be properly used and stored. All spills or
releases of Hazardous Materials caused by Contractor or any subcontractor shall
be properly disposed of and/or remedied by Contractor, at Contractor's expense,
provided that Contractor shall not be responsible for disposal or remediation of
Hazardous Materials which were present at any particular Worksite prior to
commencement of Work by Contractor at such particular Worksite. Notwithstanding
the foregoing, Contractor shall be responsible for disposal and remediation of
any spills or releases of Hazardous Materials which result from damage or injury
to underground tanks or pipelines located on the Worksite caused by Contractor,
but only to the extent that Contractor
5
<PAGE>
was aware or should have been aware, using standard industry practices, of the
existence of such pipeline or tank.
1.13 INSURANCE. Contractor shall maintain, and shall cause each
authorized subcontractor to maintain, the insurance set forth below during the
performance of the Work and shall furnish certificates evidencing such insurance
to Tenaska and shall provide forty-five (45) days' advance written notice to
Tenaska in the event of any material modification or cancellation with respect
to such insurance.
(a) Comprehensive General Liability Insurance covering all operations
for Property Damage and Bodily Injury, endorsed to include the liability assumed
in this Contract, with minimum limits of:
$2,000,000 combined single limit of liability for Bodily
Injury and Property Damage, and Personal Injury resulting from any one
occurrence, including the following coverages:
(i) Premises and Operations.
(ii) Completed Operations for three (3) years
after completion of the Work.
(iii) Broad Form Comprehensive General Liability
Endorsement to include Blanket Contractual
Liability, Personal Injury and Broad Form
Property Damage coverage.
(iv) Independent Contractors.
(v) Delete Exclusions relative to Collapse,
Explosion and Underground Property Hazards.
(b) Comprehensive Automobile Liability Insurance including owned,
non-owned and hired automotive equipment used in the performance of the Work
under this Contract, with minimum limits of:
$2,000,000 combined single limit of liability for Bodily
Injury and Property Damage resulting from any one occurrence.
(c) Worker's Compensation and Occupational Disease Insurance in
compliance with the laws of all jurisdictions covering all persons at all times
while employed by Contractor in the performance of the Work. Such insurance
shall include coverage for Employer's Liability with a limit of not less than
$1,000,000 and, where applicable, endorsed to include coverage for General
Maritime remedies; transportation wages, maintenance and cure; United States
Longshoremen's and Harbor Worker's Act; Defense Base Act; Death on the High Seas
Act; and Jones Act with claims "in rem" insured as a claim against the employer,
if applicable.
6
<PAGE>
(d) If aircraft (owned, charted or leased) are used by Contractor in
the performance of the Work, the applicable party shall provide:
(i) Aircraft Liability Insurance with a limit of not less
than $10,000,000 per occurrence.
(ii) Passenger Liability Insurance, including crew, of not
less than $100,000 per seat on a voluntary seat
accident form.
(e) If watercraft (owned, chartered or leased) are used by Contractor
in the performance of the Work, the applicable party shall provide:
(i) Protection and Indemnity ("P & I") Insurance,
including full Collision Liability with a limit not
less than $1,000,000 or the market value of the
vessel, whichever is greater. In lieu of this P & I
Insurance, the Comprehensive General Liability policy
may be endorsed to extend coverage for watercraft.
(ii) Hull and Machinery Insurance in an amount equal to
the value of the vessel. Where said vessels engage in
towing operations, said insurance shall include full
tower's liability insurance.
(f) Excess Liability Insurance over primary General, Automobile,
Employer's, Protection and Indemnity and Collision as specified above with a
combined Bodily Injury and Property Damage minimum limit of $10,000,000 each
occurrence.
(g) Cargo Insurance covering all job materials while in transit from
points of manufacture or supply to the job site, including while said materials
are in storage in transit, for the full replacement cost thereof.
(h) All insurance shall name Tenaska and its lenders, Transco and Great
Northern Nekoosa Corporation as additional insureds and shall include a waiver
of subrogation in favor of Tenaska and its lenders, Transco and Great Northern
Nekoosa Corporation.
1.14 ALL RISK INSURANCE. Tenaska shall maintain All Risk Builder's
Insurance covering the Pipeline for the total installed value thereof during the
performance of the Work and shall furnish a certificate evidencing such
insurance to Contractor. Such insurance shall commence immediately upon start of
Work or when materials come at risk whichever first occurs and shall continue
through the completion of construction and testing until Substantial Completion.
The All Risk Builder's insurance shall provide for a per occurrence deductible
amount not to exceed $100,000, shall name Contractor as an additional insured
and shall include a waiver of subrogation in favor of Contractor.
1.15 CONFIDENTIAL INFORMATION. All data and information acquired by
Contractor from Tenaska, pursuant to the Work, shall be for the sole and
exclusive benefit of Tenaska, and no part of the same shall be disclosed by
Contractor to third parties who are not subcontractors or suppliers of
Contractor without the written consent of Tenaska. Disclosure by Contractor to
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subcontractors or suppliers shall be made on a need to know basis. The
provisions of this Section 1.15 shall not apply to data and information within
any one of the following categories or any combination thereof: (i) information
which was in the public domain prior to receipt thereof from Tenaska or which
subsequently becomes part of the public domain by publication or otherwise
except by Contractor's wrongful act; (ii) information which Contractor can show
was in its possession prior to its receipt thereof from Tenaska; (iii)
information received by Contractor from a third party which did not have a
confidentiality obligation with respect thereto; or (iv) information that is
required to be disclosed by law or court order.
1.16 PATENT RIGHTS AND COPYRIGHTS. All royalties or other charges for
the use of patents or copyrights to be used in the performance of the Work shall
be deemed to be included in the compensation to be paid to Contractor under this
Contract. Contractor agrees to indemnify, defend and hold Tenaska harmless from
any and all damages, costs and expenses, including without limitation attorneys'
fees, which may be awarded or assessed against Tenaska for any alleged
infringement of any patent or copyright arising out of the Work and/or Tenaska's
use of the Pipeline.
1.17 SECURITY FOR PERFORMANCE. Contractor shall provide a duly executed
corporate indemnification and guarantee from an entity or entities whose
financial responsibility is acceptable to Tenaska (the "Guarantee"), as a
condition precedent to and at the time of execution of this Contract. The duly
executed Guarantee must be delivered to Tenaska at the time of the execution of
this Contract. The Guarantee shall be provided to Tenaska and Construction
Lender in the form of Appendix E, attached hereto and by this reference made a
part hereof. If Construction Lender later requires reasonable modifications to
the Guarantee, Contractor, as a condition precedent to continuing performance of
this Contract, shall furnish Tenaska and Construction Lender with such modified
document. If a lien is filed by a subcontractor or supplier, Contractor shall
within twenty (20) days of a written request of Tenaska provide a lien bond or
other arrangement containing such terms and conditions as are satisfactory and
acceptable to Tenaska to remove such lien, or upon Contractor's failure to do
so, Tenaska may obtain such bond or other arrangement and remove such lien and
pay the cost, including reasonable attorney fees and the amount of or cost for
providing for security, from the monthly progress payments otherwise due
Contractor, if necessary. In lieu of retainage, Contractor shall, not less than
five (5) days prior to the date on which payment is due to Contractor under the
first invoice for Work, deliver to Tenaska an irrevocable Letters of Credit in
the total aggregate amount of Two Hundred Thirty Two Thousand Six Hundred Twenty
Dollars ($232,620) issued by a bank or other financial institution acceptable to
Tenaska in the form set forth in Appendix D. Tenaska shall have the right to
draw upon the Letter of Credit under the same circumstances and in the same
amounts as Tenaska would otherwise have the ability make deductions from
payments to Contractor pursuant to Section 2.1 and as allowed by law. Tenaska
shall have full discretion to make one or more draws of all or any portion of
such Letter of Credit.
1.18 TERMINATION OF CONTRACT. In addition to the remedy set forth in
Sections 1.5 and 1.6 above, in the event that Contractor (i) shall fail to
diligently perform the Work, (ii) shall fail to make such progress in the
performance of the Work as may be required to coordinate with, or to prevent
delay in the performance of, other operations of Tenaska that are necessary in
the performance of this Contract, (iii) shall abandon the performance of the
Work or any significant portion thereof, (iv) shall fail in any material way to
perform the Work in accordance with this Contract or otherwise be in material
breach of this Contract, or (v) shall become insolvent,
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commit any act of bankruptcy or make an assignment for the benefit of creditors,
Tenaska shall have the right, without prejudice to any other right or remedy,
upon fifteen (15) days' written notice to Contractor, unless such breach is
cured prior to the expiration of such notice period, or if such breach cannot
reasonably be cured within such period, cure is commenced within such period and
diligently pursued to completion, to terminate the Work of Contractor and enter
upon and take over the Worksite and all machinery, equipment, tools, supplies
and other items found thereon or enroute thereto, and may perform or cause to be
performed the Work in such a manner as to complete the performance contemplated
by this Contract in whatever reasonable manner Tenaska may deem expedient. In
such an event, Contractor shall not be entitled to any further payments
thereunder until the Work has been completely performed, and to the extent and
at the time that the costs of completing the Work exceed those costs which would
have been payable to Contractor to complete the Work, except for Contractor's
default, Contractor will pay the difference (less any amounts previously due and
unpaid to Contractor for Work satisfactorily performed by Contractor under this
Contract) to Tenaska., provided that, Tenaska shall use reasonable efforts to
mitigate the additional costs to Contractor for completion of the Work.
Contractor agrees to execute any assignments necessary to make available to
Tenaska the rights of Contractor under purchase orders and subcontracts. In the
event of a termination of this Contract by Tenaska pursuant to this Section
1.18, there shall be no termination of any obligation of Contractor for the
payment liquidated damages which may have accrued through the date of
termination pursuant to Section 1.6 of this Contract.
1.19 WARRANTIES.
1.19.1 WORKMANSHIP AND MATERIAL WARRANTIES.
(a) Contractor's engineering responsibility, including the
specification and selection of material and equipment suitable for the
facilities which are the subject of the Work under this Contract, shall be
carried out in accordance with generally accepted engineering practice, and
Contractor's construction responsibility shall be carried out in accordance with
sound construction practice. Contractor shall require from its subcontractors
the same standards of engineering practice and construction practice. All of
Contractor's Work under this Contract shall be carried out in accordance with
the Drawings to be prepared by Contractor under this Contract.
(b) Notwithstanding Subsections 1.19(c) and 1.19(d), Contractor shall
remedy any defects in the Work in accordance with Section 1.19.2 below, which
appear within two (2) years from the date of Substantial Completion. A "defect"
means any and all design, engineering, construction, manufacturing,
installation, materials, equipment, Work, tools, or supplies which (i) does not
conform to the terms of this Contract, (ii) fails to comply with the standards
set forth in Section 1.19.1(a), (iii) is not of specified quality, (or of equal
quality for all intended purposes), (iv) is of improper or inferior workmanship,
or (v) is not suitable for use under the applicable climatic and range of
operating conditions.
(c) Contractor shall secure or cause its subcontractors to secure, for
the benefit of Tenaska, warranties of third party vendors and suppliers with
respect to workmanship, materials and equipment manufactured or furnished by
them. Contractor shall use its best efforts, excluding litigation, to enforce
such warranties, as if such third party workmanship, materials
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and equipment were warranted by Contractor. If Contractor or any of its
subcontractors is unable to obtain such a warranty from any vendor or supplier
with respect to any individual items, Contractor shall notify Tenaska of such
inability and the parties shall mutually agree upon the vendor to be selected
for such item.
(d) Unless otherwise approved, in writing, by Tenaska, Contractor shall
use its best efforts to include in all subcontracts entered into under this
Contract a warranty of materials, equipment and workmanship extending to Tenaska
and Contractor which shall provide that defects in materials, equipment and
workmanship which may appear within two (2) years from the date of acceptance of
the subcontractor's Work shall be repaired at subcontractor's expense. In no
event shall warranties of materials, equipment and workmanship obtained from
subcontractor's be for a period of less than one (1) year from the date of
acceptance of the subcontractor's Work.
1.19.2 REMEDIES. Tenaska shall notify Contractor in writing within
fifteen (15) days of discovery by Tenaska of any defects in the Work, provided
that any delay by Tenaska beyond such fifteen (15) days in notifying Contractor
shall relieve Contractor from liability only to the extent of any additional
expense which may arise as the direct result of such delay. At no additional
cost, Contractor shall proceed promptly to take such action relating to its Work
as is necessary to cause its Work to comply with the warranties specified in
this Contract, and take such steps in accordance with the provisions of the
foregoing subsections under Section 1.19.1 to enforce subcontractor or vendor
warranties. Contractor shall be available for the performance of warranty
repairs on a seven (7) day a week, twenty-four (24) hours per day basis.
Contractor shall not be obligated to repair or replace any materials, operating
equipment or Work which becomes defective as a result of improper operation or
maintenance. Not later than six (6) months prior to the expiration of the
warranty period, Contractor shall offer to Tenaska an optional seven (7) day a
week, twenty-four (24) hours per day repair service to be performed following
expiration of the warranty period for a mutually agreeable annual fee.
1.20 TITLE. The title to all materials and consumables to be used in
connection with the performance of the Work shall transfer to Tenaska upon
delivery of the same to the Worksite and title to all Work, completed or in the
course of construction, shall be in Tenaska but the ownership thereof shall not
absolve Contractor from liability for loss or damage to same, nor from any other
duty or responsibility for same as provided in this Contract. Upon transfer of
title to Tenaska, Tenaska shall have title free and clear of claims and liens of
all persons (subject to the statutory lien rights of Contractor until payment
for the Work has been received by Contractor).
1.21 CHANGES, EXTRA WORK AND OPTION. Tenaska reserves the right to
order Changes or Extra Work by written request. Contractor shall make no Changes
or do Extra Work, except on prior written instructions of Tenaska. Tenaska shall
have the right, at any time prior to January 1, 2000, to exercise any of the
options listed in Appendix B, Page 1 of 2, at the price set forth in such
Appendix.
1.21.1. CHANGES. As used in this Contract, the term "Change"
contemplates a substitution for, or omission of, any Work, materials or other
requirement within the Scope of the Work as described in Section 1.3 above, the
performance of or compliance with which is contemplated by
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this Contract, and which are estimated by Tenaska and Contractor to affect the
time required for performance of this Contract or increase or decrease the cost
of the Work.
1.21.2 EXTRA WORK. As used herein, the term "Extra Work" is defined to
mean an item of Work or a manner of performance other than a Change, which is
outside the Scope of Work as described in Section 1.3 above, but which is
estimated by Tenaska and Contractor to affect the time required for performance
of the Contract or increase or decrease the cost of the Work.
1.21.3 AUTHORIZATION FOR CHANGES OR EXTRA WORK. If Tenaska requests a
Change or Extra Work, Contractor shall furnish Tenaska with a written fixed
price proposal for approval. Adjustments will be made to the total compensation
set forth in Article II below upon written approval by Tenaska. If it is not
possible for Contractor to prepare a fixed price proposal for this Change or
Extra Work, or if Tenaska and Contractor do not promptly agree upon a fixed
price, Contractor will perform the Change or Extra Work on a time and material
basis. A schedule of unit pricing and rates for Changes or Extra Work for
materials, installation services and engineering activities is provided in
Appendix C. Rates for Changes or Extra Work for activities not covered under
Appendix C will be negotiated.
1.22 RISK OF LOSS. Prior to Substantial Completion, Tenaska will not,
except for loss or damage caused by willful misconduct or negligent acts of
Tenaska, be accountable or responsible for any loss or damage to any part of the
Pipeline or Work and then only to the extent such loss or damage is not covered
by the Builders' Risk policy, including but not limited to uninsured losses and
deductibles. Except for Tenaska's liability as provided in the immediately
preceding sentence, to the extent any loss or damage to any part of the Pipeline
or Work is not covered by the All Risk Builders' Risk insurance, the risk of
loss or damage to any part of the Pipeline or Work prior to Substantial
Completion is and shall be the sole obligation of Contractor, including risk of
loss to materials or consumables owned by Tenaska. On the date of Substantial
Completion, Tenaska shall assume the care, custody and control of the Pipeline,
including risk of loss or damage to the Pipeline and the Work.
ARTICLE II - COMPENSATION
2.1 INVOICING AND PAYMENT. Contractor shall submit to Tenaska monthly
written invoices based on percentage of completion of individual bid items
listed in Appendix B along with any appropriate supporting documentation. Such
invoices and supporting documentation shall be transmitted to the address of
Tenaska set forth herein unless otherwise agreed to in writing by the parties
hereto. Tenaska shall pay Contractor the amounts due under the invoices, within
twenty-five (25) days of the receipt of the invoice. Such payment shall be made
to the authorized and appropriately designated representative of Contractor via
wire transfer. Extra Work and Change items performed on a fixed price basis
shall be invoiced separately and will be paid in the same manner as described
herein. If the Extra Work or Change is being performed on a time and material
basis, Contractor will provide with its monthly invoice an itemized accounting
of all labor charges, equipment rental charges and material costs to support the
invoice amount. In the event of a dispute or question as to a portion of an
invoice, Tenaska will make timely payment of the undisputed portion and will
withhold the disputed portion until the same is resolved. All progress payments
provided for in Section 2.1 are subject to deductions by Tenaska for (i) any
overpayments (as a result of later determined inadequacy of some Work, Work
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not performed or miscalculations) made by Tenaska for any previous progress
payment or period, (ii) any liquidated damages due Tenaska under this Contract,
(iii) such amount as Tenaska reasonably determines to be the cost to remedy any
Work not done or which is defective or does not conform to this Contract
(including breach of warranty) and the amount of any unsettled claims against
Contractor or Tenaska (iv) the cost of any loss or damage to the Tenaska caused
by Contractor and (v) any amounts due to Tenaska or other indemnified parties
pursuant to the indemnification provisions of this Contract.
2.2 COMPENSATION FOR THE WORK. Compensation shall be paid to Contractor
for the performance of the Work according to the Fixed Price Schedule set forth
in Appendix B. The payments made to Contractor by Tenaska pursuant to this
Article II shall constitute the sole and full compensation to Contractor as
consideration for the performance of the Work. Neither Contractor nor the
employees, agents or representatives of Contractor shall accept or receive any
trade commission, discount, allowance or any other indirect payment or other
consideration in connection with or in any way related to the performance of the
Work. Neither Contractor nor any of the employees, agents or representatives of
Contractor shall have or be entitled to any direct or indirect benefits of any
royalty on or any gratuity or commission with respect to any patented,
copyrighted or otherwise protected article or process used in connection with
the performance of the Work unless otherwise expressly agreed to in writing by
Tenaska. With the exception of all sales taxes, all other taxes levied in
connection with the performance of the Work, including occupational, excise,
unemployment, FICA, income taxes, state and federal gasoline and fuel taxes,
property taxes on Contractor's equipment, tools and supplies necessary for
performance of the Work, and customs duties on materials and supplies and all
other taxes on any item or service that is a part of the Work, whether such tax
is normally included in the price of such item or service or is normally
separately stated, shall be the responsibility of Contractor and are included in
the Fixed Price. Tenaska shall provide a Georgia sales tax exemption certificate
to Contractor or will indemnify Contractor from all Georgia sales taxes levied
against Contractor arising out of the performance of this Contract.
ARTICLE III - POSTPONEMENT, TERMINATION AND DEFAULT
3.1 TERMINATION FOR CONVENIENCE BY TENASKA. Tenaska may, at any time,
in its sole and exclusive discretion, by written notice to Contractor, instruct
Contractor to postpone or abandon the Work, in whole or in part, or terminate
this Contract. Such postponement, abandonment or termination shall become
effective five (5) days after the receipt of such notice by Contractor, unless a
different period is agreed upon with Tenaska. Upon the receipt of such notice,
Contractor shall strictly comply with the instructions set forth therein, and
shall exert due diligence and best efforts to keep any further Work-related
expenditures to a minimum. In the case of a partial postponement or abandonment,
Tenaska will authorize a Change making any required adjustment to the Scheduled
Completion Date or to Contractor's compensation.
3.2 TERMINATION BY CONTRACTOR. Tenaska shall be in default to
Contractor if Tenaska fails to timely pay Contractor any undisputed amounts due
pursuant to the terms of this Contract following receipt by Tenaska from
Contractor of a written notice of such default. An amount disputed by Tenaska
must be disputed in good faith. Tenaska shall be allowed thirty (30) days from
receipt of a notice of default to remedy such default after which Contractor may
immediately terminate this Contract by written notice to Tenaska.
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3.3 PRESERVATION OF RIGHTS AND LIABILITIES. The termination of this
Contract, for whatever reason, shall not prejudice any of the accrued rights,
claims or liabilities of either Tenaska or Contractor under this Contract.
3.4 ENTITLEMENT OF CONTRACTOR UPON POSTPONEMENT, ABANDONMENT OR
TERMINATION. Upon the postponement, abandonment or termination of this Contract
as provided in this Article III, and subject to the obligation of Contractor to
keep expenditures to a minimum upon notice or such postponement, abandonment or
termination, Contractor shall be entitled to receive those items of compensation
that have been earned by the performance of the Work as of the date such notice
is received by Contractor, as well as the reimbursement of any reasonable
expenses incurred by Contractor in connection with the orderly termination of
the Work.
3.5 FORCE MAJEURE. Tenaska and Contractor shall give prompt written
notice to the other, as the case may be, of any event or situation arising from
circumstances beyond their reasonable control or which could not have been
reasonably foreseen, and which by the exercise of due diligence such party is
unable to prevent or overcome, that render the performance of the Work
impossible ("force majeure"), provided that abnormally severe weather conditions
sufficient to constitute force majeure are defined as only conditions which are
at the Worksite and are shown to be conditions which have not occurred using a
ten (10) year historical profile of U.S. Meteorological Society weather data
from the nearest reporting station to the Worksite. In the event of a force
majeure, the Scheduled Completion Date shall be extended to the extent of the
delay actually caused by the force majeure. A party claiming force majeure shall
make reasonable attempts to remedy the cause or causes constituting the force
majeure, keeping the other party reasonably informed. Tenaska and Contractor
shall in the event of any force majeure cooperate in good faith with one another
to minimize and mitigate the impact of any such occurrence and do all things
commercially reasonable under the circumstances to achieve this goal. It is the
duty of the party claiming force majeure to prove all the elements of force
majeure including (i) specific action taken to work around or mitigate the
impact, (ii) specific event dates, durations and logic to support the claim and
(iii) specific cause for the claim of force majeure and to provide written
documentation of such proof to the other party as soon as reasonably possible.
Contractor shall not be entitled to increase the fixed price on account of an
event of force majeure until Contractor has established the existence of more
than twenty five (25) days (on a cumulative basis) of delays actually caused by
force majeure. In the event that Contractor establishes the existence of more
than twenty five (25) days (on a cumulative basis) of delays actually caused by
force majeure, Contractor shall be entitled to increase the Fixed Price by an
amount equal to the increase, if any, in the costs actually incurred by
Contractor and demonstrated to the reasonable satisfaction of Tenaska by
Contractor to be over and above those in the Fixed Price, but only to the extent
such costs are reasonable and necessary and result directly from such force
majeure delays arising from those delays actually caused by force majeure in
excess of twenty five (25) days.
ARTICLE IV - SETTLEMENT OF DISPUTES
4.1 DISPUTES. In the event of a dispute between Tenaska and Contractor
with respect to the interpretation of this Contract or the performance required
by this Contract, including any dispute which may result in a claim, (a
"Dispute"), the aggrieved party shall notify the other in writing of the Dispute
then existing (the "Dispute Notice"). In order for a party to proceed under this
Section, the Dispute Notice must specifically state that the aggrieved party is
invoking the
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Dispute procedure of this Section 4.1. The parties shall then make a good faith
attempt to resolve the Dispute, provided that the provisions of this Section 4.1
shall not override, delay or in any way prevent termination of this Contract by
Tenaska or Contractor pursuant applicable Sections of this Contract governing
termination of this Contract. During such attempted Dispute resolution, except
as otherwise provided herein, the parties shall continue to proceed diligently
and in good faith pursuant to the provisions of this Contract. In the event a
Dispute is not resolved within sixty (60) Days following the date of the Dispute
Notice, thereafter either party in its sole discretion may invoke litigation,
provided that failure to invoke litigation shall not be a waiver of any such
Dispute. During any litigation which arises out of a Dispute, all parties will
continue to proceed pursuant to the provisions of this Contract without
prejudice to the rights of Tenaska or Contractor to terminate as provided
herein. In addition to the specific rights of termination and suspension as set
forth in this Contract and except as limited in this Contract, Tenaska or
Contractor shall have also available the remedies, among others, of an action
for damages, restraining order, temporary injunction, permanent injunction, or
specific performance of all or any provision hereof together with any other
rights accruing to it at law or in equity. Tenaska shall not be required to
invoke the Dispute procedure of Section 4.1 in order to withhold amounts
permitted by this Contract to be withheld by Tenaska from a progress payment
invoice or to draw upon the Letter of Credit provided pursuant to Section 1.17.
ARTICLE V - GENERAL PROVISIONS
5.1 ASSIGNMENT; SUBCONTRACTING. Contractor shall not in any way assign,
transfer, subcontract or otherwise transfer the obligations or the benefits of
this Contract without the prior written consent of Tenaska. If Contractor does,
with approval, subcontract the Work or any part thereof, or assign this
Contract, in part of whole, it shall require its subcontractor or assignee to be
bound to it and to assume toward it all of the obligations and responsibilities
that it has assumed toward Tenaska and such shall not operate to release
Contractor from any of its obligations and liabilities under this Contract
unless specifically provided in Tenaska's written consent.
5.2 GOVERNING LAW. This Contract shall be governed by and construed
according to the laws of the State of Texas excluding their conflict of laws
provisions to the maximum extent permitted by Section 35.51 of the Texas
Business and Commerce Code and Owner and Contractor agree Dallas County, Texas
shall be the most convenient forum for jurisdiction and resolution of any legal
dispute hereunder and irrevocably submit to the jurisdiction of the federal and
state courts located in Dallas County, Texas in any action or proceeding arising
out of or relating to this Agreement and hereby irrevocably agree that the venue
for such claims in respect of such action or proceeding shall be in such courts.
For any claim arising out of or relating to this Agreement which must by statute
be determined in the courts of the State of Georgia, Owner and Contractor hereby
irrevocably submit to the jurisdiction of the Superior Court of Fulton County,
Georgia and hereby irrevocably agree that the venue for such claims in respect
of such action or proceeding shall be in such court.
5.3 AMENDMENTS AND INTEGRATION. This Contract shall constitute the
complete and entire agreement between the parties hereto with respect to the
subject matter hereof. No prior statement or agreement, oral or written, shall
vary or modify the written terms hereof. This
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Contract may be amended only be a written document signed by both parties,
stating that it is intended to amend this Contract.
5.4 NOTICES. All notices, requests, demands and other communications
required or permitted to be given by either Tenaska or Contractor hereunder
shall be in writing and shall be deemed to have been given if delivered in
person or by facsimile or by first class certified mail, postage and fees
prepaid, to the address of the intended recipient as set forth below. Notice
delivered in person shall be acknowledged in writing at the time of receipt.
Notice delivered by facsimile shall be acknowledged by return facsimile within
twenty-four (24) hours, excluding Saturdays, Sundays and public holidays. All
such notices, requests, demands and other communications shall be deemed to have
been received by the addressee, if by mail, three (3) days following mailing; if
by facsimile, immediately following transmission; or if by personal delivery,
upon such delivery. All such notices, requests, demands and other communications
shall be sent to the following addresses:
To Tenaska: Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154
Facsimile No: (402) 691-9719
Attn: Larry V. Pearson, V.P., Fuel Supply
To Contractor: Willbros Engineers, Inc.
2087 East 71st Street (74136)
P.O. Box 701650
Tulsa, Oklahoma 74136-1650
Facsimile: (918) 493-3430
Attn: Steve W. Shores, Senior Vice-President
The foregoing addresses may be changed by either party by giving notice to the
other as provided above.
5.5 EXERCISE OF RIGHTS AND WAIVER. The failure of either party to
exercise any right under this Contract shall not, unless otherwise provided or
agreed to in writing, be deemed a waiver thereof; nor shall a waiver by either
party of any provisions hereof be deemed a waiver of any future compliance
therewith, and such provisions shall remain in full force and effect.
5.6 RELATION OF THE PARTIES. In connection with the provision of the
Work, the Contractor shall operate as and shall have the status of an
independent contractor. Nothing in this Contract shall be construed as
establishing or creating a relationship of master and servant or principal and
agent between Tenaska and Contractor, or the employees, agents and
representatives of Contractor.
5.7 SEVERABILITY. In the event that any clause or provision in this
Contract shall, for any reason, be deemed invalid or unenforceable, the
remaining provisions and clauses shall not be affected, impaired or invalidated
and shall remain in full force and effect, provided that the rights and
obligations of the parties hereto remain substantially unchanged.
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5.8 LICENSED AND AUTHORIZED. Contractor represents and warrants that it
is properly licensed and authorized by all necessary governmental and public and
quasi-public authorities having jurisdiction over its Work required hereunder.
5.9 HEADINGS AND CONSTRUCTION. The section headings are inserted for
convenience of reference only and shall in no way effect, modify, define, or be
used in construing the text of this Contract. Where the context requires, all
singular words in this Contract shall be construed to include their plural and
all words of neuter gender shall be construed to include the masculine and
feminine forms of such words. The terms "include," "including" and similar terms
shall be construed as if followed by the phrase "without limitation."
Notwithstanding the fact that this Contract has been prepared by one of the
parties, all of the parties confirm that they and their respective counsel have
reviewed, negotiated and adopted this Contract as the joint agreement and
understanding of the parties. This Contract is to be construed as a whole and
any presumption that ambiguities are to be resolved against the primary drafting
party shall not apply.
5.10 CONSENT. Contractor acknowledges that, as a condition of Tenaska
obtaining financing for construction of the Project, Tenaska's Lender(s) will
require a collateral assignment of this Contract. In connection therewith, such
Lenders will require Tenaska to execute a collateral assignment of this Contract
and an estoppel certificate together with a Consent and Agreement, all in a form
and substance satisfactory to the Lenders, as well as deliver an opinion from
legal counsel as to the validity and proper execution of this Contract, and like
matters. Contractor agrees to execute and deliver such Consent and Agreement and
to deliver such opinion of legal counsel as such Lenders may reasonably require
and in form and substance as the Lenders and Contractor may reasonably agree.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their duly authorized representatives as of the date first written
above.
TENASKA GEORGIA PARTNERS, L.P.
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /s/_____________________________
Title: Vice President
WILLBROS ENGINEERS, INC.,
a Delaware corporation
By: /s/ ____________________________
Title: Senior Vice President
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TENASKA GEORGIA PARTNERS, L.P. Appendix A
Scope
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Page 1 of 10
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NATURAL GAS PIPELINE Date: 9/15/99
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1.0 PROJECT DESCRIPTION
1.1 INTRODUCTION
Tenaska is proposing to construct, own and operate a simple cycle
independent power production facility in Heard County, Georgia. A
description of the pipeline requirements is included in Attachment
I.
Commercial operation of the plant is scheduled for May 1, 2001.
This will require the pipeline to be completely installed, tested
and ready to begin deliveries to the Power Plant by January 1,
2001.
1.2 SITE DESCRIPTION
The site for the proposed facility is located in Heard County,
Georgia approximately nine miles northeast of Franklin and
approximately 40 miles southwest of Atlanta. A 500 kV transmission
line owned by Georgia Transmission Corporation runs through the
site and will be used to interconnect the Project into the
transmission system. Transco's natural gas pipelines run
approximately one mile south of the site. Plant elevation is
approximately 800 feet above mean sea level. A portion of the
power plant site is within the 100-year flood plain. A site
topographic map with wetland delineation is attached as Attachment
III.
1.3 PROJECT DESCRIPTION
The following briefly describe key pipeline components. Scope of
work and detailed technical requirements are specified in
Attachments I, II, III, and IV.
The pipeline will deliver natural gas from the Transco metering
station to the Contractor provided pressure-regulating station on
the Power Plant site. The pipeline and associated facilities will
be sized for a peak day delivery of 270,000 Mcf/day at a delivery
pressure of 485 psig to the Power Plant. The design pressure at
the Transco metering station will be 850 psig. Transco expects the
gas pressure to range from 530-psig minimum to 800psig maximum.
The pipeline shall include, but not necessarily be limited to, the
following piping, regulating station and filter/separator, valves,
hookups for temporary pig launchers and receivers, cathodic
protection, supports, and pipe coatings.
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Scope
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2.0 SCOPE OF WORK
2.1 INTRODUCTION
The Contractor shall be responsible for the design, engineering,
equipment and materials procurement, construction, commissioning,
start-up, and testing of the work. The scope of work shall include
all tasks necessary to provide Tenaska a complete and functional
pipeline in conformance with the performance parameters indicated
in this RFP and acceptable to Tenaska.
The engineering, procurement and construction services to be
performed by the Contractor shall include, but not be limited to,
the following:
o Review of and compliance with local, state and federal
codes, regulations and standards
o Coordinate with the appropriate regulatory officials for
design submittals and interpretation of codes, regulations,
and standards
o Obtain all construction permits
o Prepare and issue pipeline routing drawings
o Provide schedule for use by Tenaska's Power Plant EPC
Contractor
o Provide written facility description, system descriptions
and system operating criteria
o Prepare and issue equipment list
o Conduct final soils investigations (if required)
o Develop civil and structural design criteria
o Prepare construction drawings
o Procure and install all equipment and material between the
tie-in points necessary for a complete pipeline facility
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o Prepare requisitions and specifications for equipment and
material, review bids and issue purchase orders for
equipment and materials
o Provide technical personnel for interface during field
construction, checkout and start-up
o Process and review vendor drawings and maintain a vendor
document control system
o Provide start-up and checkout services and supervision as
required, supplemented as necessary by vendor personnel
o Provide operator training for up to 10 operators
o Provide 10 sets of Operating and Maintenance manuals in
English and U.S. units for all equipment
o Publish weekly progress report for Tenaska's review
o Expedite vendors as required to maintain project schedule
o Participate in monthly project meeting conducted by Tenaska
and Power Plant EPC Contractor
o Provide quality control and quality assurance programs
2.2 ENGINEERING AND DESIGN
2.2.1 GENERAL REQUIREMENTS
The Contractor shall be responsible for providing all
engineering and design services required for the
construction of the pipeline. Detail engineering shall
include the preparation of equipment and material
specifications, construction drawings based on
calculations, studies and vendor information, and final
as-built drawings.
The Contractor shall review and comply with all applicable
local, state and federal codes, regulations and standards.
Coordination with the
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appropriate regulatory officials, Transco and Power Plant
EPC Contractor shall be the Contractor's responsibility.
The engineering and design shall assure that all equipment
and systems fit and work together as integrated systems
and that the design and installation are compatible with
systems provided by others such that their function,
operation, safety and performance are not impaired.
The Contractor shall keep one (1) copy of all drawings,
specifications, amendments, O&M manuals, and other
pertinent data at the job site and engineer's office, and
shall be kept in good order and available for use by
Tenaska.
All Contractor specifications and design and construction
drawings shall be stamped and signed by a professional
engineer registered in the State of Georgia.
The Contractor shall prepare and maintain, on a current
basis, drawing and specification lists, engineering and
design schedule, and purchasing and delivery schedules to
help monitor and expedite the progress of the work. The
engineering/design and purchase/delivery schedules shall
be prepared using the critical path method (CPM)
scheduling technique and shall be coordinated with the
Contractor's construction schedule.
The Contractor shall prepare and maintain complete plans
showing the exact location and elevation of the equipment,
apparatus, roadways, and access/maintenance aisles. These
drawings will be updated to agree with the final equipment
drawings, as they become available from the vendors.
2.2.2 Civil Work
The Contractor shall be responsible for the full
development of the civil engineering and design for the
pipeline. The Power Plant EPC Contractor will provide
clearing, grubbing and rough grading at the power plant
site. The Contractor shall be responsible for all civil
work along the pipeline route from the tie-in point at the
Transco metering
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station to the termination point on the power plant site.
This shall include but not be limited to the following:
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o Pipeline layout
o Pipeline route preparation, clearing and grubbing
o Grading, excavation and backfill
o Directional boring (where required)
o Erosion and sedimentation control
o Construction access roads and parking
The Contractor shall prepare specifications for final
soils exploration (if required) and pipeline survey as
required for the engineering and design.
2.2.3 STRUCTURAL WORK
The Contractor shall be responsible for structural
engineering and design including preparation of
calculations, drawings and specifications for all required
pipeline supports, support foundations, substructures and
steel structures.
2.2.4 MECHANICAL WORK
The Contractor shall be responsible for the full
development of the mechanical engineering and design
within the regulator station and/or pipeline right-of-way
including, but not limited to, the following:
o Design of pipeline included in the scope of the
system. Preparation of necessary drawings to
establish clearances and locate pipeline connections
to components as well as location of any supports.
Preparation of stress and flexibility analysis as
required. Piping drawings shall locate required
valves, fittings, specialties and connections.
Drawings shall be suitable for general pipe
fabrication and construction. Pipe support drawings
shall be provided as necessary.
o Specifications and lists of necessary valves, piping
materials, specialties and miscellaneous items.
o Preparation of cathodic protection drawings and
location of equipment and materials.
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2.3 DRAWINGS
The Contractor shall prepare all drawings required for procurement
of equipment and materials, for construction of the facility, and
for obtaining the required construction and Contractor building
permits. The drawings shall show complete details of all
components and types and location of all materials and equipment.
The Contractor shall prepare, and maintain up-to-date, a master
drawing list of all drawings, both design and vendor, for the
project.
The Contractor shall review and approve all vendor documents
including outline drawings, diagrams, shop drawings, inspection
and test procedures, samples and other vendor submissions for
conformance with the design concepts and quality levels of the
plant and for compliance and consistency with the Contractor's
engineering calculations, drawings, and specifications.
Contractor shall furnish to Tenaska for review two (2) copies of
each drawing, including vendor drawings.
Upon completion of the work, Contractor shall update all approved
Contractor's working drawings, so that they show the final
installation (as built) complete in all respects, and shall
provide Tenaska with one (1) set of full size reproducibles on
3-mil Mylar base or similar material, with matte finish on both
sides, three (3) blue-line copy sets, two (2) sets of final
specifications, and one (1) set of final CAD drawings files on
computer disks. All drawings, drawing notes, design data, and
calculations shall be in English.
2.4 SPECIFICATIONS AND PROCUREMENT
The Contractor shall prepare specifications for the procurement of
all equipment and materials required for the pipeline. The
Contractor shall obtain equipment and materials from suppliers
acceptable to Tenaska. Where vendor engineering is used, the
Contractor is responsible for all aspects of the vendor design.
The Contractor shall furnish copies of all Purchase Orders for
equipment and materials.
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The Contractor shall monitor and expedite the submittal of vendor
documents and delivery of equipment and material to maintain the
Project Schedule.
The Contractor shall conduct shop inspections and witness shop
tests on selected equipment. Tenaska shall have the right to
inspect or witness the inspection of any equipment, materials,
test, etc. The witnessing or inspection by Tenaska does not in any
way relieve the Contractor of his obligations.
2.5 CONSTRUCTION, ERECTION AND COMMISSIONING
The construction, erection and commissioning services shall
consist of necessary management, materials, technical advisory
services, supervision, labor and construction aids to install and
make ready for turnover all the equipment and materials being
provided for the pipeline.
The contractor shall maintain a quality control program which
provides that the engineering, manufacture, fabrication and
construction are controlled at all points.
2.5.1 GENERAL FIELD SERVICES
o Contractor shall provide construction management for
the overall pipeline construction and scheduling.
o Contractor shall provide surveying as necessary to
construct the pipeline.
o Contractor shall be responsible for the pipeline
construction and scheduling and shall coordinate his
construction efforts with Tenaska's Power Plant EPC
Contractor and Transco.
o Contractor shall prepare and maintain, on a current
basis, a detailed construction schedule using the
critical path method (CPM) scheduling technique.
o Contractor shall be responsible for loading all
equipment and materials included in its scope, onto
suitable conveyances and transporting the equipment
to the work site as well as unloading,
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sorting, inspecting, storing and cataloging of all
received items. Any damage to the factory applied
coating after leaving the mill is the responsibility
of the contractor and must be corrected.
o Contractor shall store all materials and equipment
normally requiring protection on arrival at the site
under weatherproof coverings and will protect the
materials from injury during construction until
final completion and acceptance.
o Contractor shall provide temporary office space,
warehouse, sanitation, heating, telephone site
security, staff accommodations and housing and tool
room facilities and supplies as required for the
performance of the field services included in its
scope of supply.
o Contractor shall provide the necessary temporary
distribution system for utilities such as water,
electric lighting, electric power, fire protection,
and sanitary facilities.
o Contractor shall provide all necessary construction
and/or erection aids including cranes, scaffolding,
tools, consumable supplies and expendable devices as
required for the scope of work.
o Contractor shall be responsible for the clean-up,
removal and disposal of trash, litter, and garbage
and for the restoration of all above areas used
during the course of this Contract.
o Contractor shall be responsible for compliance with
all federal, state and local ordinances including
noise and storm water runoff regulations.
Construction delays associated with non-compliance
with regulations, including the foregoing, shall not
be considered as excusable delays.
o Contractor shall obtain and pay for all permits,
fees, and inspections required by federal, state and
city or local authorities.
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o Contractor shall unpack, uncrate, and install all of
the equipment furnished as part of this project.
o Contractor shall assemble and align, at the job
site, all the equipment and materials included in
this offering.
o Contractor shall provide touch-up painting of
equipment shipped already finished painted, where
required, in accordance with its painting system and
shall prime and finish painting all other exposed
pipeline equipment and materials.
o Contractor shall provide technical advisory
personnel for the construction and/or erection of
the pipeline, its appurtenances, and other equipment
as required.
2.5.2 Commissioning Services
Upon completion of the construction and hydrostatic testing
of the pipeline and facilities:
o Contractor shall perform a cleaning and checkout of
the complete installation, including caliper and
foam pigging of the pipeline.
o Contractor shall inject nitrogen blanket to protect
pipeline until final startup occurs.
o Contractor will provide supervision of the nitrogen
blowdown and preparation for startup with natural
gas.
o Contractor shall provide for start-up and testing of
equipment and systems included.
o Contractor shall complete the as-built drawings.
o Contractor shall provide thorough classroom training
of Tenaska's operating personnel.
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o Contractor shall dispose of flushing, testing, and
cleaning media in an environmentally acceptable
manner and in a manner acceptable to Tenaska and
local authorities.
o Contractor shall install pipeline warning signs as
required by code and at critical crossings.
2.6 PROJECT MANAGEMENT
The management of the pipeline project will be under the
direction of the Contractor's project manager who will be
in charge of all aspects of the project. He will be in
direct contact with Tenaska's designated representative,
Power Plant EPC Contractor's project manager, Transco
representative, and will report to the Contractor's
corporate management. His responsibility and authority for
the project will be limited only by terms of the Contract,
by company policies, and by directives from management. The
principal functions of the project manager throughout the
course of the project can be summarized as follows:
o Organize the project work; select and assign
qualified staff; delegate responsibility and
authority to key staff; establish effective working
relationships within the project group, the vendors,
construction Contractor(s), and with Tenaska's
designated project manager.
o Plan the work so it can be effectively accomplished
by the project staff in accordance with a
clearly-defined scope of work and overall schedule.
o Supervise project activities and ensure close
contact is maintained with Transco and Tenaska, that
departments providing support services have all
necessary relevant information and that effective
project wide communications are established.
o Provide the overall project management to direct the
engineering, procurement and other services through
project completion and start-up of the facilities.
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o Publish a weekly progress report for Tenaska's
review.
o Coordinate project administrative activities.
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TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
System Description &
Design Basis
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ATTACHMENT I
SYSTEM DESCRIPTION / DESIGN BASIS
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HEARD COUNTY, GEORGIA POWER PLANT
GAS SUPPLY PIPELINE SYSTEM
1. SYSTEM DESCRIPTION
The Gas Supply Pipeline System is comprised of four parts: a meter
station, the pipeline from the gas supplier to the power plant, a
filter/separator, and a pressure regulating station at the power plant.
The meter station will be designed and constructed by others. The
pipeline, filter/separator and the pressure regulating station are the
responsibility of the EPC Contractor.
1.1 PIPELINE
The proposed pipeline route is approximately 6,500 feet long. It
begins at the outlet of the meter station near the gas supplier's
("Transco's") pipeline and ends on the power plant site at the
pressure regulating station. Two principal properties are
traversed: the Goodson property and the Temple Inland property.
Both properties are used for forestation and the harvesting of
timber. Great Northern Nekoosa Corp. is the leaseholder of the
Goodson property. The route is depicted on the attached drawing.
The available temporary workspace (25 feet wide) and the
orientation of the proposed pipeline in the permanent ROW (50 feet
wide) are shown on the attached drawing.
The pipeline shall be designed to accommodate the future use of
in-line inspection tools or smart pigs. A launcher at the
beginning and the receiver at the end are not parts of this
project. However, the design shall incorporate the use of
full-bore mainline valves and bypasses to enable use of temporary,
portable pig traps. Mainline valves intermediate of the
end-of-line facilities are not required.
The only known special design features for this pipeline are the
three (3) wetland/creek crossings. The first two are unnamed
tributaries of Hilly Mill Creek. The third crossing is Hilly Mill
Creek. These crossings are more fully described on drawings
50671-PL-1010, 50671-PL-1011 and 50671-PL-1012. The crossing of
Hilly Mill Creek shall be accomplished by horizontal directional
drilling while the other two crossings can be conventional
open-cut crossings. The drawings for the conventional crossings
depict the additional temporary workspace available outside the
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wetland areas, the pipeline route plan and the existing ground
profile. The approximate lengths of these crossings are 84 feet
and 161 feet, respectively. The drawing for the directionally
drilled crossing includes the profile of the proposed pipeline in
relation to the existing ground profile as well as the route plan
and additional temporary workspace. The directional drill will
enter from the power plant side of the wetland (Hilly Mill Creek)
and pipe staging will be on the opposite or south side. The
approximate length of the drill from entry to exit is 1,210 feet.
The temporary workspace for pipe laying is located to the east of
the pipeline from the meter station through the second wetland
crossing. From the end of the second wetland crossing to the
Temple Inland property, the temporary workspace shifts to the west
side of the pipeline. Once on Temple Inland property, the
temporary workspace reverts to the east side.
The 20" diameter of the pipeline will enable delivery of the
nominated gas quantities as set forth below in Table 2.2-2 in
accordance with the conditions specified therein.
Population density defines a class location category that in turn
requires a particular design factor used in determining pipe wall
thickness for a particular strength or grade of pipe. While the
current population density defines the proposed pipeline route as
Class 1, designs shall be conducted for future population
encroachment. Therefore, the design shall be for a Class 2
location. The line pipe tentatively selected for this project is
20-inch OD X 0.281-inch wall thickness API Specification 5L Grade
X52. Pressure tests will be run at a pressure that will qualify
the pipeline for Class 3, if required in the future. The line pipe
shall have a factory-applied, corrosion-resistant coating of
fusion bonded epoxy (FBE) with a nominal thickness of 14 to 18
mils.
1.2 PRESSURE REGULATING STATION
A pressure regulating station is required at the power plant to maintain
a constant delivery pressure to the gas turbine generators regardless of
the gas demand; i.e., the number of units running. Pressure control
valves and equipment shall be redundant.
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System Description &
Design Basis
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2. DESIGN BASIS
The design criteria applied to the Gas Supply Pipeline are based upon
conventional technical considerations for cross-country gas pipelines.
2.1 GAS CHARACTERISTICS
<TABLE>
<CAPTION>
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TABLE 2.1-1
GAS CHARACTERISTICS
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<S> <C>
1. Pipeline Inlet Pressure at Transco, Minimum, psig 530
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2. Pipeline Inlet Pressure at Transco, Maximum, psig 850
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3. Pipeline Inlet Temperature at Transco, Maximum, OF. 120
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4. Pipeline Inlet Temperature at Transco, Normal, OF. 80
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5. Gas Gravity (Air = 1.0) 0.59
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6. Molar Composition, %
N2 0.32
CO2 0.99
C1 95.07
C 2 2.47
C3 0.64
iC4 0.17
nC4 0.15
nC5 0.06
C6+ 0.04
0.09
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7. Water Content, lbs./MMScf { 7
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8. Sulfur Content (as hydrogen sulfide), grain/100 Scf { 0.3
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Gross Heating Value, Btu/Scf 1,040 +/- 60
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</TABLE>
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2.2 PIPELINE DESIGN
Pipeline design will conform to Federal and State governmental
regulations and industry codes and standards. The governing
regulation is 49 CFR Part 192, Transportation of Natural and Other
Gas by Pipeline: Minimum Safety Standards. ASME B31.8, Code for
Pressure Piping: Gas Transmission and Distribution Piping Systems
will also be used as referenced by 49 CFR Part 192. Other industry
codes, standards and specifications that are assumed applicable
are listed in Table 2.2-1.
<TABLE>
<CAPTION>
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TABLE 2.2-1
APPLICABLE INDUSTRY CODES, STANDARDS AND SPECIFICATIONS
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ACTIVITY OR COMPONENT INDUSTRY CODE, STANDARD OR SPECIFICATION
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<S> <C>
1. Pipeline 49 CFR Part 192, Transportation of Natural and Other Gas by Pipeline:
Minimum Safety Standards
ASME B31.8, Code for Pressure Piping: Gas Transmission and Distribution
Piping Systems (as applicable)
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2. Pipeline Construction International Pipe Line & Offshore Contractors Association: Construction
of Welded Steel Cross Country Pipelines
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3. Welding API 1104, Standard for Welding Pipelines and Related Facilities
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4. Line Pipe API 5L, Specification for Line Pipe
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5. Line Pipe Transportation API RP5L1, Recommended Practice for Railroad Transportation of Line Pipe
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6. Valves API 6D, Specification for Pipeline Valves
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7. Flanges ANSI B16.5, Steel Pipe Flanges and Flanged Fittings
MSS SP-44, Steel Pipe Line Flanges
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8. Fittings ANSI B16.9, Factory-made Wrought Steel Buttwelding Fittings
MSS SP-75, specification for High Test Wrought Welding Fittings
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9. End Closures API 6H, Specification for End Closures, Connectors and Swivels
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</TABLE>
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<TABLE>
<CAPTION>
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TABLE 2.2-2
PIPELINE TECHNICAL DATA
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<S> <C>
1. Daily Gas Volume From Transco, Maximum, MMScf 270
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2. Standard Pressure, psia 14.73
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3. Standard Temperature, OF. 60
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4. Delivery Temperature from Pressure Regulating Station, Range, OF. 50-120
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5. Design Pressure, psig 850
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6. Corrosion Allowance, inches nil
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</TABLE>
The following is a description of information which cannot be submitted
electronically:
DRAWINGS OF :
TOPSOIL SEGREGATION - 1 PAGE
CREEK CROSSING #1 GROUND PROFILE AND TEMPORARY WORKSPACE - 1 PAGE
CREEK CROSSING #2 GROUND PROFILE AND TEMPORARY WORKSPACE - 1 PAGE
HILLY MILL CREEK DIRECTIONAL DRILL CROSSING - 1 PAGE
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Technical Requirements
& Specifications
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ATTACHMENT II
1.0 TECHNICAL REQUIREMENTS AND SPECIFICATIONS
1.1 GENERAL
The Contractor shall furnish all engineering, procurement and
construction work, and all equipment, materials, tools and other
requirements necessary to provide a complete pipeline in accordance
with the requirements and scope of work of this Appendix A. The
technical requirements and specifications in this section describe the
design basis and minimum level of quality for equipment, systems,
materials and work. The pipeline and associated equipment and
facilities shall be designed and constructed in accordance with these
requirements and the requirements of Transco.
The Contractor is encouraged to define to Tenaska any deviations from
these specifications which, in the opinion of the Contractor, would
improve the quality, appearance or performance of the facility. The
deviations from these documents require written approval by Tenaska.
It is the Contractor's responsibility that equipment and materials
furnished and the design and construction work is in conformance with
all applicable codes, regulations and standards.
1.2 CIVIL
1.2.1 CLEARING
Contractor shall furnish all labor, materials, tools,
equipment and services for all clearing and tree protection.
The Contractor shall clear from within the limits of
construction all trees designated for removal, shrubs, brush,
downed timber, rotten wood, heavy growth of grass and weeds,
rubbish, structures and debris. Stumps, roots, root mats, logs
and debris below the surface encountered within the limits of
construction shall be grubbed (removed) if they are within the
area of the pipeline trench and permanent right-of-way.
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The Contractor shall protect existing trees, structures,
fencing and other vegetation to remain against damage. Do not
smother trees by stockpiling construction materials or
excavated materials within the drip line. Foot or vehicular
traffic or parking of vehicles within the tree drip line shall
be avoided. Temporary protection shall be provided. All trees,
structures, fencing or vegetation damaged by contractors
operation shall be repaired or replaced at Contractor's cost
and consistent with easements from landowners and tenants.
All wastes shall be removed from the pipeline route including
rubble, discarded junk or other debris encountered within the
limits of construction. Combustible materials shall not be
burned or organic matter buried on the pipeline route.
1.2.2 Earthwork
Furnish all labor, materials, tools, equipment, and perform
all work and services in connection with boring, excavation,
trenching, filling and compacting for pipeline and final site
grading:
1.2.3 Boring, Trenching, Backfilling and Compacting
Contractor shall furnish all labor, materials, tools,
equipment and services for the boring, excavation, trenching,
stringing, backfilling and compacting for the pipeline and
associated facilities.
Boring shall be by directional drilling methods.
Trenches shall be excavated by open cut method to the depth
required to accommodate the work and DOT code. The Contractor
shall verify the location of all utilities prior to excavation
and shall comply with local rules and regulations governing
the respective utilities.
Trenches shall be kept free of water.
Backfill shall begin as soon as practical after lowering in
the pipe. No large clods of dirt or other material that will
cause voids in the trench backfill shall be allowed in the
trench.
<PAGE>
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TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Technical Requirements
& Specifications
----------------------
Attachment II
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Page 3 of 8
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- --------------------------------------------------------------------------------
Backfill shall be free of rock cobbles, roots, sod or other
organic matter and frozen material to prevent damage to the
coated pipe.
The Contractor shall be responsible for any damage to the pipe
or pipe coating caused during or by the backfilling operation.
The backfill shall be mounded 8" - 12" above the ditch ground
level. All excess soil shall be spread over the right-of-way
and smooth graded as necessary.
1.2.4 FINISH GRADING AND SEEDING
The Contractor shall furnish all labor, materials, tools,
equipment and perform all work and services for finish grading
and seeding. The Contractor shall finish grade and seed all
areas disturbed by the Contractors work. The finished surface
shall be free of stones, sticks or other material 1-inch or
more in any dimension and shall be smooth and true to required
and existing grades. Seeding shall be with native grasses.
1.2.5 Soil Erosion and Sedimentation Control
The Contractor shall provide a soil erosion and sedimentation
control plan design that complies with local requirements. The
approved system shall be furnished, installed and maintained
by the Contractor.
In addition to local requirements, the system shall comply
with the "Standards and Specifications for Soil Erosion and
Sedimentation Control in Developing Areas" by the U.S.
Department of Agriculture, Soil Conservation Service.
1.3 STRUCTURAL
1.3.1 FOUNDATIONS
The Contractor shall furnish labor, materials, tools,
equipment, and services for any foundations required. The
Contractor shall determine detailed design criteria and types
of foundation support methods.
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Technical Requirements
& Specifications
----------------------
Attachment II
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Page 4 of 8
----------------------
Date: 9/3/99
- --------------------------------------------------------------------------------
1.3.2 Concrete
The Contractor shall furnish all materials, labor,
supervision, services, tools and equipment required for all
concrete work required for all foundations, pipe supports and
other structures.
The system of concrete and reinforcing steel strength (at 28
days) combination shall be 4,000 psi.
1.3.3 STRUCTURAL AND MISCELLANEOUS STEEL
The Contractor shall furnish all materials; labor, services,
tools and equipment required for the design, fabrication and
erection of all structural and miscellaneous steel required
for the project.
1.4 MECHANICAL
1.4.1 GENERAL REQUIREMENTS
The Contractor shall furnish all engineering, design, labor,
materials, equipment and construction services required to
provide a totally functional pipeline system. The work shall
comply with applicable codes and standards, including, but not
necessarily limited to, the following:
o State and local codes, laws, ordinances, rules and
o regulations American National Standards Institute
o (ANSI) American Society of Mechanical Engineers
o (ASME) American Society for Testing and Materials
o (ASTM) Occupational Safety and Health Administration
o (OSHA) U. S. DOT Title 49 Part 192
(Transportation of Natural and Other Gas by Pipeline:
Minimum Federal Safety Standards)
o American Gas Association (AGA)
o API Standard 1104
In case of conflict or disagreement between codes and
standards, the more stringent conditions shall govern.
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Technical Requirements
& Specifications
----------------------
Attachment II
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Page 5 of 8
----------------------
Date: 9/3/99
- --------------------------------------------------------------------------------
All underground piping will be installed with a minimum of
four (4) feet of cover. Pipeline markers shall be installed
along the pipeline route.
The Contractor shall test and place in successful service the
pipeline and associated equipment. The Contractor to the
satisfaction of Tenaska shall correct all defects in the
construction and/or erection or in the associated equipment
and materials.
The Contractor shall furnish equipment and materials required
and perform tests necessary to demonstrate proper installation
of the pipeline. Tenaska shall be notified at a reasonable
time prior to any testing. These tests shall include, but not
be limited to, the following:
o Hydrostatic Testing
o Radiographic examination of welds (100%)
The highest degree of cleanliness practically achievable shall
be maintained throughout the project, keeping in mind that the
piping are to be handled, assembled and welded under project
conditions. Foreign matter, construction debris, welding rods
and other consumables shall be removed.
Touch up paint shall be applied to all painted items as
required.
1.4.2 PIPING MATERIAL
Piping material selection shall be based on the design
pressure, temperature and service conditions. Piping materials
shall be in accordance with applicable ASTM and ANSI
standards. Carbon steel piping shall be ASTM A53 or A106,
coated and wrapped for all underground piping.
All above ground piping and equipment shall be painted.
Fittings shall be constructed of materials equivalent to the
pipe on which they are used. Butt weld fittings shall be in
accordance with ANSI B16.9, ANSI 16.28, and ASTM A234. The
thickness of butt weld fittings shall be equal to the pipe
wall thickness.
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Technical Requirements
& Specifications
----------------------
Attachment II
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Page 6 of 8
----------------------
Date: 9/3/99
- --------------------------------------------------------------------------------
Flanges mating with flanges on piping, valves and fittings
shall be of sizes, drillings and facings that match the
connecting flanges. Flange class ratings shall be adequate to
meet the pressure and temperature values specified for the
piping with which they are used. Flanges shall be constructed
of materials equivalent to the pipe with which they are used.
Steel flanges shall conform to ANSI B16.5. Bolting shall
conform to the requirements of ANSI B16.1 and ANSI B16.24.
1.4.3 GAS REGULATING STATION AND FILTER/SEPARATOR
The Contractor shall furnish and install a gas regulating
station and filter/separator on the power plant site to
control the gas pressure at 485 psig, if the filter/separator
is downstream of the regulators or 475 psig, if the
filter/separator is upstream of the regulators at all flows
from a minimum of 27,000 Mcf/day to maximum flow. The
regulating station shall be capable of maintaining this
pressure within a 1% range of the set pressure with a rate of
change in gas flow of 6.5%/minute.
The gas regulating station shall be furnished with all
regulating valves, isolation valves, relief valves and
instrumentation. Isolation valves shall be installed upstream
and down stream of the regulating valves to permit removal and
maintenance. Inlet and outlet pressure gauges and transmitters
shall be installed to permit the monitoring of gas pressures.
Signals from the pressure transmitters will be sent to the
Power Plant Distributed Control System. The wiring from the
transmitters to the control room will be by others.
1.4.4 INSTALLATION
All piping shall be installed in accordance with the
Contractors design drawings. All above ground piping shall be
installed in a neat, rectangular form.
Valves shall be installed is such a manner that they can be
operated and maintained from grade.
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Technical Requirements
& Specifications
----------------------
Attachment II
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Page 7 of 8
----------------------
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- --------------------------------------------------------------------------------
All equipment, piping and valves of a temporary nature
(including pig launcher and receiver facilities) shall be
installed in a safe and workmanlike manner. This shall include
such lines as temporary vents for hydrostatic testing. When
the temporary piping is no longer required it shall be
dismantled and removed.
All necessary flange isolation materials and insulated
bushings and couplings shall be installed as required to
properly isolate below grade piping from above grade piping
and equipment. Bolting at insulated flanges shall consist of
studs and nuts with sufficient stud length to allow at least
one full stud thread to protrude through each nut. Sleeves
shall extend into the insulating washers. After insulation,
insulating flanges shall be tested to determine that the
piping is properly electrically isolated to the satisfaction
of Tenaska.
Welding procedures, welders and welding operators shall be
qualified in accordance with Title 49 Code of Federal
Regulations and API Standard 1104 (latest edition) "Welding of
Pipelines and Related Facilities." Records of the names of the
welding operators who make each weld shall be maintained.
Documentation relative to the welder, welding operator and
procedure qualification shall be made available where the work
is being performed and also copies made available for Tenaska.
Site facilities shall be provided where all welding operators
shall perform qualification tests. The Contractor shall
provide for on-site weld qualifications.
Preparation of weld ends and fit-up shall be in accordance
with the requirements of PFI standards or other applicable
requirements. Backing rings shall not be used without the
approval of Tenaska.
Pipe bending shall be used when specifically required or where
the use of elbows is impractical. All bends shall be smooth,
without buckles and truly circular. The allowable flattening,
as determined by the difference between minor and major axes,
shall not be greater than five percent of the nominal
diameter. Allowances shall be made for thinning of the pipe.
<PAGE>
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TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Technical Requirements
& Specifications
----------------------
Attachment II
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Page 8 of 8
----------------------
Date: 9/3/99
- --------------------------------------------------------------------------------
1.4.5 CATHODIC PROTECTION
All buried piping shall be mill coated and joints coated, and
wrapped and provided with a cathodic protection system.
Cathodic protection systems shall be designed and installed to
meet the criteria of the National Association of Corrosion
Engineers (NACE). Based on soil resistivity the Contractor
shall determine whether cathodic protection systems shall be
of the sacrificial or impressed current types. Test stations
shall be installed to monitor the effectiveness of the
cathodic protection systems and the integrity of the
electrical isolation means.
The pipe coating system shall be tested for holidays and
repaired where necessary.
1.4.6 INSPECTION AND TESTING
Inspection and testing shall be performed in accordance with
the requirements of the applicable code and in accordance with
the following criteria.
Hydrostatic testing of the pipeline shall be performed on the
pipeline after completion. The length of pipe to be inserted
during the directional drill should be tested before running
through the underground bore hole. Hydrostatic testing shall
be performed with cold water at a pressure to qualify the
pipeline as stated in this Appendix A, Attachment I. The water
shall be filtered between test sections.
After hydrostatic testing the pipeline shall be dewatered,
dried and cleaned using pipeline pigs (including foam pig and
caliper pig). All water used for hydrostatic testing shall be
disposed of in an environmentally acceptable manner.
1.4.7 NITROGEN BLANKET AND COMMISSIONING
Nitrogen will be injected into the pipeline after drying and
cleaning to protect the pipeline until natural gas is
introduced into the pipeline.
Commissioning of pipeline will be performed when nitrogen is
removed and natural gas is injected into the pipeline to place
it into service.
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Wetlands Locations
----------------------
Attachment III
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Date: 9/3/99
- --------------------------------------------------------------------------------
ATTACHMENT III
The following is a description of information which cannot be submitted
electronically:
MAP SHOWING WETLANDS LOCATIONS -
1 PAGE
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Survey
----------------------
Attachment IV
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Date: 9/3/99
- --------------------------------------------------------------------------------
ATTACHMENT IV
The following is a description of information which cannot be submitted
electronically:
SURVEY OF PIPELINE ROUTE - 1 MAP
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix A - Scope
Schedule
----------------------
Attachment V
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Date: 9/3/99
- --------------------------------------------------------------------------------
ATTACHMENT V
The following is a description of information which cannot be submitted
electronically:
PROJECT SCHEDULE - 1 PAGE
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix B
Fixed Price Schedule
----------------------
- --------------------------------------------------------- Page 1 of 2
NATURAL GAS PIPELINE
----------------------
Date: 9/3/99
- --------------------------------------------------------------------------------
APPENDIX B
FIXED PRICE SCHEDULE
Base Scope - 20" Steel Natural Gas Pipeline Including:
o 6,559 Linear Feet of Coated Pipe
o Valves
o Cathodic Protection
o Regulator Station
o Filter / Separator (270 MMScfd) with Bypass
o Pipeline Cleaned and Dried to -38O F. and a Nitrogen Blanket
o One Run of T.D. Williamson Electronic Caliper Pig
o Assumption of Risk for 2,000 LF of Rock Ditch
o Four (4) Feet of Cover / ROW Grading and Reseeding with Native
Grass
o Four (4) - 8'x20'x 4" Thick Pre-cast Concrete Slabs Installed
Over Pipeline for Protection During Logging Operations at
Locations to be Specified by Tenaska.
Total EPC Price [*]
Options Available to Tenaska:
o Radio Link - [*]
o Heater - [*]
o Pipe Size Increase from 20" to 24" - [*]
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix B
Fixed Price Schedule
----------------------
- --------------------------------------------------------- Page 2 of 2
NATURAL GAS PIPELINE
----------------------
Date: 9/3/99
- --------------------------------------------------------------------------------
The following clarifications and exceptions apply:
- --------------------------------------------------------------------------------
TECHNICAL CLARIFICATION AND EXCEPTIONS
- --------------------------------------------------------------------------------
NO. CLARIFICATION / EXCEPTION
- --------------------------------------------------------------------------------
1. The origin of the pipeline (the tie-in point at Transco's meter
station) shall be assumed to be within 100 feet of the point of
intersection shown 16.82 feet from the southern edge of Easement Area
7. Any origin greater than 100 feet from said point of intersection
will be considered extra work.
- --------------------------------------------------------------------------------
2. The termination point of the pipeline as shown on Attachment IV is
defined as follows: The termination point for the pipeline shall be
within 50 feet of the pressure regulating station. The pressure
regulating station shall be located within 100 feet of a point that is
offset 300 feet from a point 300 feet north of the southernmost
existing electrical line transmission tower as measured along the
centerline of the existing electric power lines. Any revised location
for the regulating station greater than 100 feet from the location for
the regulating station as defined in Attachment IV will be considered
extra work.
- --------------------------------------------------------------------------------
3. The location of the mainline valve for the connection of temporary
launcher or receiver shall be assumed to be within 30 feet of the
origin or termination points, respectively. Any location greater than
30 feet will require additional compensation in accordance with the
schedule of rates for extra work.
- --------------------------------------------------------------------------------
4. Scraper launcher and receiver, temporary or otherwise, are excluded
from this proposal.
- --------------------------------------------------------------------------------
5. Unpriced copies of purchase orders will be provided.
- --------------------------------------------------------------------------------
6. Copies of drawings furnished to Tenaska shall be blue line or black
line at Willbros' option.
- --------------------------------------------------------------------------------
7. An area 150 feet by 100 feet shall be available on the proposed power
plant site for site office and material storage. This area shall be
located at an elevation above the 100-year flood plan.
- --------------------------------------------------------------------------------
8. Valves 8" NPS and larger shall have manual gear operators; valves 6"
NPS and smaller shall have manual level operators.
- --------------------------------------------------------------------------------
9. Any lighting at scraper trap areas or pressure regulating station area
will be provided by others.
- --------------------------------------------------------------------------------
10. Tenaska shall provide geotechnical data from soil borings for Hilly
Mill Creek.
- --------------------------------------------------------------------------------
11. Sales tax at 6% is included on materials. No allowance is made for
sales or use tax on labor.
- --------------------------------------------------------------------------------
12. 100% of right-of-way and all access points are available prior to
construction mobilization.
- --------------------------------------------------------------------------------
13. Cuttings from directional drill will be disposed evenly along the
right-of-way.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix C
Rates For Changes or
Extra Work
----------------------
- --------------------------------------------------------- Page 1 of 1
NATURAL GAS PIPELINE
----------------------
Date: 9/3/99
- --------------------------------------------------------------------------------
APPENDIX C
RATES FOR CHANGES OR EXTRA WORK
6.4 CHANGES AND EXTRA WORK
Changes and extra work will be handled in accordance with the contract
and the following paragraphs:
6.4.1 Additional Material - Additional material will be provided at
cost plus 15%.
6.4.2 Construction - Extra work will be performed on the schedules
of rates for labor and equipment provided in Exhibit 6-3, plus
10%.
6.4.3 Engineering and Field Services - Extra work will be performed
on the Schedule of Rates provided in Exhibit 6-4.
6.4.4 Rock Excavation - Rock ditch in excess of that included in the
base price will be compensated at $16.00 per lineal foot.
The following is a description of information which cannot be submitted
electronically:
Construction Extra Work Rates - 6 Pages
Schedule of Rates for Extra Work- Technical and Support Staff (Offices Services)
- - 8 Pages
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix D
Letter of Credit
----------------------
Page 1 of 3
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Date: 9/15/99
- --------------------------------------------------------------------------------
[BANK LETTERHEAD]
DATE: [ISSUANCE DATE]
IRREVOCABLE STANDY LETTER OF CREDIT NUMBER: ________________
BENEFICIARY: APPLICANT:
TENASKA GEORGIA PARTNERS, L.P. WILLBROS ENGINEERS, INC.
1044 North 115th Street, Suite 400 2087 East 71st Street
Omaha, Nebraska 68154-4446 Tulsa, Oklahoma 74136
Attention: Michael F. Lawler Attention: ___________________
AMOUNT:
USD __________________________
______________________________
______________________________
EXPIRATION:
______________________________
GENTLEMEN:
WE HEREBY OPEN OUR IRREVOCABLE STANDY LETTER OF CREDIT NO. ________ IN YOUR
FAVOR, FOR ACCOUNT OF WILLBROS ENGINEERS, INC. ENGINEERS, INC. IN AN AMOUNT UP
TO BUT NOT EXCEEDING USD ______________ (_______________________________ NO/100
UNITED STATES DOLLARS), TO BE INCREASED AS STATED BELOW, AVAILABLE BY YOUR
DRAFT(S) AT SIGHT DRAWN ON _____________________ AND ACCOMPANIED BY:
YOUR SIGNED STATEMENT READING AS FOLLOWS: "WE CERTIFY THAT (A) WILLBROS
ENGINEERS, INC. HAS FAILED TO COMPLY WITH AN OBLIGATION UNDER THE AGREEMENT FOR
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES, DATED __________________,
1999, BETWEEN TENASKA GEORGIA PARTNERS, L.P. AND WILLBROS ENGINEERS, INC., AS
AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME OR (B) IF WITHIN
FIFTEEN (15) DAYS OF THE EXPIRATION DATE OF THE LETTER OF CREDIT, WILLBROS
ENGINEERS, INC. HAS NOT COMPLETED ALL PERFORMANCE DUE FROM WILLBROS ENGINEERS,
INC. UNDER THE ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT OR A
SATISFACTORY SUBSTITUTE LETTER OF
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix D
Letter of Credit
----------------------
Page 2 of 3
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Date: 9/15/99
- --------------------------------------------------------------------------------
CREDIT HAS NOT BEEN DELIVERED ON BEHALF OF WILLBROS ENGINEERS, INC., TO TENASKA
GEORGIA PARTNERS, L.P. WE FURTHER CERTIFY THAT WE HAVE ON OR BEFORE THIS DATE
PROVIDED WILLBROS ENGINEERS, INC. WITH A WRITTEN NOTICE OF OUR INTENT TO DRAW
UNDER __________________________. LETTER OF CREDIT NO. _____________."
THE TERM "BENEFICIARY" INCLUDES ANY SUCCESSOR BY OPERATION OF LAW OF THE NAMED
BENEFICIARY, INCLUDING WITHOUT LIMITATION, ANY LIQUIDATOR, REHABILITATOR,
RECEIVER OR CONSERVATOR.
ALL DRAFTS DRAWN UNDER THIS LETTER OF CREDIT MUST BE MARKED "DRAWN UNDER
__________________________. LETTER OF CREDIT NO. __________."
PARTIAL DRAWINGS ARE PERMITTED.
WE ENGAGE WITH YOU THAT EACH DRAFT DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS
OF THIS CREDIT WILL BE DULY HONORED ON DELIVERY OF THE DOCUMENTS AS SPECIFIED IF
PRESENTED AT THIS OFFICE ON OR BEFORE _________________________.
THIS IS AN INTEGRAL PART OF LETTER OF CREDIT NUMBER: _______________.
THIS LETTER OF CREDIT IS AVAILABLE ACCORDING TO THE FOLLOWING SCHEDULE:
(A) __________________________________________________________________
(B) __________________________________________________________________
(C) __________________________________________________________________
(D) __________________________________________________________________
THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS OF THE INTERNATIONAL CHAMBER OF COMMERCE, 1993
REVISION, PUBLICATION NO. 500.
THIS ORIGINAL LETTER OF CREDIT AND ALL AMENDMENTS THERETO MUST BE SUBMITTED TO
US TOGETHER WITH ANY DRAWINGS HEREUNDER FOR OUR ENDORSEMENT OF ANY PAYMENTS
EFFECTED BY US AND/OR FOR CANCELLATION. THE ORIGINAL UNCANCELLED LETTER OF
CREDIT AND ALL AMENDMENTS THERETO WILL BE RETURNED TO YOU AFTER OUR ENDORSEMENT
UNLESS THE DRAFT IS A) FOR THE FULL AMOUNT AVAILABLE IN
<PAGE>
- --------------------------------------------------------------------------------
TENASKA GEORGIA PARTNERS, L.P. Appendix D
Letter of Credit
----------------------
Page 3 of 3
- --------------------------------------------------------------------------------
NATURAL GAS PIPELINE Date: 9/15/99
- --------------------------------------------------------------------------------
ACCORDANCE WITH THE TERMS HEREIN, B) THE LETTER OF CREDIT IS BEING CANCELLED AT
YOUR REQUEST, OR C) THE LETTER OF CREDIT HAS EXPIRED.
IF YOU REQUIRE ANY ASISTANCE OR HAVE ANY QUESTIONS REGARDING THIS TRANSACTION,
PLEASE CALL _________________________________.
BANK OF ___________________________________.
____________________________________ _________________________________
FOR CASHIER FOR CASHIER
THIS DOCUMENT CONSISTS OF ____ PAGE(S).
<PAGE>
GUARANTY OF OBLIGATION
This Guaranty is made by Willbros Group, Inc., a Panama corporation,
("Guarantor"), in favor of TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership ("Tenaska"), with respect to that certain Engineering, Procurement
and Construction Agreement dated the 23rd day of September, 1999, between
Tenaska and WILLBROS ENGINEERS, INC., a Delaware corporation ("Contractor"), for
the construction of a natural gas transmission pipeline from the
Transcontinental Gas Pipeline Corporation meter station to the Tenaska Georgia
Generation Station, as amended, supplemented or otherwise modified from time to
time (hereinafter called the "EPC Agreement"), in consideration of the execution
of the EPC Agreement by Tenaska with Contractor.
Guarantor states and represents that Guarantor will derive direct and indirect
benefit from the making of the Guaranty.
NOW, THEREFORE, for good and valuable consideration, Guarantor hereby covenants
and agrees as follows:
1. Guarantor hereby unconditionally guarantees the full and timely
performance by Contractor of all of its obligations under the EPC
Agreement, as it from time to time may be amended, and hereby
undertakes that if Contractor shall in any respect fail to perform and
observe all of the terms, provisions, conditions, and stipulations of
the EPC Agreement, Guarantor warrants the faithful performance of all
of such terms and conditions and will fully indemnify and keep
indemnified Tenaska against all claims, losses, damages, costs and
expenses whatsoever which Tenaska may incur by reason of Contractor's
failure to perform and observe any of the terms, provisions,
conditions, and stipulations of the EPC Agreement (collectively, the
"Guaranteed Obligations"). THE OBLIGATIONS OF GUARANTOR HEREUNDER SHALL
NOT BE REDUCED, LIMITED OR TERMINATED, NOR SHALL GUARANTOR BE
DISCHARGED FROM ANY THEREOF, FOR ANY REASON WHATSOEVER (other than the
payment, observance and performance of the Guaranteed Obligations and
other than as provided in Section 9 of this Guaranty), including (and
whether or not the same shall have occurred or failed to occur once or
more than once and whether or not Guarantor shall have received notice
thereof):
(a) (i) any increase in, (ii) any extension of the time of
payment, observance or performance of, (iii) any other
amendment or modification of any of the other terms and
provisions of, (iv) any release, composition or settlement
(whether by way of acceptance of a plan of reorganization or
otherwise) of, (v) any subordination (whether present or
future or contractual or otherwise) of, or (vi) any discharge,
disallowance, invalidity, illegality, voidness or other
unenforceability of, the Guaranteed Obligations;
<PAGE>
(b) (i) any failure to obtain, (ii) any release, composition or
settlement of, (iii) any amendment or modification of any of
the terms and provisions of, (iv) any subordination of, or (v)
any discharge, disallowance, invalidity, illegality, voidness
or other enforceability of, any other guaranties of the
Guaranteed Obligations;
(c) any termination of or change in any relationship between
Guarantor and Contractor, including any such termination or
change resulting from a change in the ownership of Guarantor
or from the cessation of any commercial relationship between
Guarantor and Contractor;
(d) any exercise of, or any election not or failure to exercise,
delay in the exercise of, waiver of, or forbearance or other
indulgence with respect to, any right, remedy or power
available to Tenaska, including (i) any election not or
failure to exercise any right of set-off, recoupment or
counterclaim, and (ii) any election of remedies effected by
Tenaska, and
(e) ANY OTHER ACT OR FAILURE TO ACT OR ANY OTHER EVENT OR
CIRCUMSTANCE THAT (i) VARIES THE RISK OF GUARANTOR HEREUNDER
OR (ii) BUT FOR THE PROVISIONS HEREOF, WOULD, AS A MATTER OF
STATUTE OR RULE OF LAW OR EQUITY, OPERATE TO REDUCE, LIMIT OR
TERMINATE THE OBLIGATIONS OF THE GUARANTOR HEREUNDER OR
DISCHARGE GUARANTOR FROM ANY THEREOF.
2. Guarantor represents and warrants to Tenaska and Tenaska's successors
and assigns that:
(a) Guarantor is duly organized and validly existing as a Panama
corporation;
(b) Guarantor is authorized and has all necessary power and
authority, corporate and other, to execute and deliver this
Guaranty and to perform the obligations of Guarantor,
including all obligations of Contractor pursuant to the EPC
Agreement;
(c) This Guaranty reasonably may be expected to benefit directly
or indirectly, Guarantor;
(d) This Guaranty has been duly executed and delivered by
Guarantor and is the valid, binding, and enforceable contract
of Guarantor;
(e) The execution and delivery of this Guaranty by Guarantor and
its performance of its obligations under the Guaranty, do not
(and, to the best of Guarantor's knowledge, will not) conflict
with any law, rule or regulation, or any agreement,
instrument, indenture, deed or any other restriction, to which
such Guarantor is subject or a party, or accelerate or affect
any of its obligations under any thereof.
<PAGE>
3. Guarantor shall cause Contractor to duly and timely perform all of the
Guaranteed Obligations including the obligations of Contractor under
the EPC Agreement, as it may from time to time be amended.
4. The obligations of Guarantor hereunder include, without limitation, all
liabilities for liquidated or similar damages and warranty obligations
of Contractor.
5. Tenaska may enforce against Guarantor any and all of the rights of
Tenaska under this Guaranty without having instituted or completed any
legal, arbitration or other proceedings against Contractor or any
partner or joint venturer in Contractor.
6. This Guaranty shall be governed by and construed according to the laws
of the State of Texas. Guarantor submits to personal jurisdiction in
the State of Texas and further agrees that the non-exclusive venue for
any such action may be in the state and federal courts located in
Dallas County, Texas.
7. Guarantor waives: (a) any requirement, and any right to require, that
any right or power be exercised or any action be taken against the
Contractor, any partner or joint venturer in Contractor, or any other
guarantor or any collateral for the Guaranteed Obligations; (b) (i)
notice of acceptance of and intention to rely on this Agreement, and
(ii) all other notices that may be required by applicable law or
otherwise to preserve any rights against Guarantor under this
Agreement, including any notice of default, demand, dishonor,
presentment and protest; and, (c) diligence.
8. Guarantor shall not assert any right to set off against claims by
Tenaska hereunder other than claims which Contractor has a right to set
off under the EPC Agreement.
9. Notwithstanding any other provision to the contrary set forth herein,
Guarantor retains the right to assert any and all claims, defenses and
limitations of liability possessed by Contractor under the terms of the
EPC Agreement, (but excluding any defense based upon absence of binding
effect of the EPC Agreement).
10. Guarantor's obligations hereunder (a) are absolute and unconditional,
(b) subject to Section 9 above, are unlimited in amount, except as
provided in the EPC Agreement, (c) constitute a guaranty of payment and
performance and not a guaranty of collection, (d) are as primary
obligor and not as a surety only, (e) shall be a continuing guaranty of
all present and future Guaranteed Obligations, and (f) shall be
irrevocable.
<PAGE>
11. This Guaranty may be assigned by Tenaska to Tenaska's lenders for the
project and shall inure to the benefit of such assignee(s).
12. Notice to Guarantor shall be to:
Willbros Group, Inc.
%Willbros USA, Inc.
600 Willbros Place
2431 East 61st Street
Tulsa, Oklahoma 74136
Attn: John Hove
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered to Tenaska in the name and on behalf of Guarantor by one
of its officers who is duly authorized to do so, for the benefit of Tenaska, as
of this 23rd day of Septmber, 1999.
Guarantor
WILLBROS GROUP, INC.
ATTEST:
By: /s/ By: /s/
----------------------- ------------------------
(Name)
Title: Assistant Secretary Executive Vice President
-------------------- ------------------------
(Title)
<PAGE>
CERTIFICATE OF SECRETARY
WILLBROS GROUP, INC.
I, John N. Hove, being the duly elected and acting Corporate Secretary
of WILLBROS GROUP. INC., a corporation organized and existing under and by
virtue of the laws of the Republic of Panama (hereinafter referred to as the
"Corporation"), do hereby
C E R T I F Y :
1. THAT the following preambles and resolutions are a true, correct and
complete copy of the same duly adopted by Memorandum of Action signed by all of
the members of the Executive Committee of the Board of Directors of the
Corporation on September 23, 1999, and that such resolutions have not been
rescinded since their adoption and are in full force and effect on the date
hereof:
EXECUTION OF GUARANTEE
WHEREAS, Willbros Engineers, Inc., a Delaware corporation ("WEI"),
is an indirect wholly-owned subsidiary of the Corporation; and
WHEREAS, WEI has entered into an Engineering, Procurement and
Construction Agreement dated September 23, 1999, with Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("Tenaska"), with
respect to the construction of a natural gas transmission pipeline from
the Transcontinental Gas Pipeline Corporation meter station to the
Tenaska Georgia Generation Station (the "EPC Agreement"); and
WHEREAS, WEI has certain obligations to Tenaska under the EPC
Agreement; and
WHEREAS, Tenaska has requested the provision of a parent company
guarantee by the Corporation with respect of the obligations of WEI
under the EPC Agreement, such guarantee to be substantially in the same
form attached hereto (the "Guarantee"); and
WHEREAS, the provision of the Guarantee is deemed to be in the
best interests of the Corporation;
<PAGE>
NOW, THEREFORE, BE IT
RESOLVED, that the form of, and the terms and conditions contained
in, the Guarantee be, and the same hereby are, authorized and approved
in all respects; and further
RESOLVED, that the execution, delivery and performance by the
Corporation of the Guarantee be, and the same hereby are, authorized
and approved in all respects; and further
RESOLVED, that the Chairman, the President and each of the Vice
Presidents of the Corporation be, and each of them individually hereby
is, authorized and empowered to negotiate and make such changes,
modifications, additions and deletions to the Guarantee as they, or any
of them, in their sole discretion, may deem appropriate, and to execute
and deliver, for and on behalf of the Corporation, the Guarantee, in
such form as the officer or officers executing the same shall deem
necessary, advisable or appropriate, as shall be conclusively evidenced
by his signature affixed thereon; and further
RESOLVED, that the officers of the Corporation be, and each of
them individually hereby is, authorized and empowered, for and on
behalf of the Corporation, to execute and deliver any and all
additional documents, instruments and papers, and to take or cause to
be taken such additional actions, as they or any of them, in their sole
discretion, may deem necessary, convenient or appropriate in connection
with the negotiation, execution and deliver of the Guarantee and to
carry out the purposes of the foregoing resolutions, and in this
connection to take such action and to execute, deliver, acknowledge,
record, file and certify all such further instruments, certificates,
letters, agreements, documents, papers and undertakings as the officer
or officers so acting may consider and determine necessary, advisable
or convenient, as shall be conclusively evidenced by his signature
affixed thereon.
2. THAT the persons identified below are duly elected, qualified and
acting Officers of the Corporation; and that they hold the office or offices set
forth opposite their names on the date hereof:
<TABLE>
<CAPTION>
NAME TITLE
<S> <C>
Larry J. Bump Chairman of the Board and Chief
Executive Officer
Paul A. Huber President and Chief Operating Officer
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE
<S> <C>
Melvin F. Spreitzer Executive Vice President, Treasurer
And Chief Financial Officer
Lawrence R. Fisher, Jr. Senior Vice President
John N. Hove Corporate Secretary
J.T. Dalton Assistant Secretary
Kathy E. Alexander Assistant Secretary
Thomas B. Reilly Assistant Treasurer
David W. Arneson Assistant Treasurer
</TABLE>
3. AND I FURTHER CERTIFY THAT I am authorized to execute this Certificate
on behalf of the Corporation.
IN WITNESS WHEREOF, I have hereunto executed this Certificate and
affixed the seal of the Corporation, this 27th day of September, 1999
By: /s/ John N. Hove
------------------------------------
John N. Hove
Corporate Secretary
I Paul A. Huber, President of the Corporation, do hereby certify that
John N. Hove is the duly elected, qualified and acting Corporate Secretary of
the Corporation, and that the signature set forth above his name is his true and
genuine signature.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 27th
day of September, 1999.
/s/ Paul A. Huber
-----------------------------------
Paul A. Huber
President
3
<PAGE>
County of Tulsa )
State of Oklahoma ) Section
United States of America )
Before me, the undersigned, a Notary Public in and for the aforementioned
County, State and Country, on this 27th day of September, 1999, personally
appeared Paul A. Huber and John N. Hove, President and Corporate Secretary,
respectively, of WILLBROS GROUP, INC., to me known to be the identical persons
who executed the foregoing instrument, and acknowledged that they executed the
same as their free and voluntary act and deed, and as the free and voluntary act
and deed of said Corporation.
In Witness Whereof, I have hereunto set my official signature and affixed
my notarial seal the day and year last above written.
/s/ Kathy E. Alexander
-------------------------------------
Kathy E. Alexander
Notary Public
My Commission Expires:
February 27, 2001
- ----------------------
4
<PAGE>
Exhibit 10.9
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
INTERCONNECT, REIMBURSEMENT
AND OPERATING AGREEMENT
TENASKA GEORGIA PARTNERS, L.P.
THIS AGREEMENT ("AGREEMENT") is made and entered into as of the 18th
day of August, 1999, by and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION
("Transco") and TENASKA GEORGIA PARTNERS, L.P. ("Customer").
WITNESSETH:
WHEREAS, Customer has requested that Transco construct a new delivery
point to Customer near milepost 1001.73 on Transco's mainline in Heard County,
Georgia, referred to as the "Tenaska Meter Station"; and
WHEREAS, Transco and Customer desire to enter into this Agreement to
set forth the terms and conditions under which Transco's costs to construct and
operate the Tenaska Meter Station will be recovered from Customer and under
which the Tenaska Meter Station will be constructed and operated.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound,
Transco and Customer hereby agree as follows:
1
<PAGE>
ARTICLE I
GENERAL PROVISIONS FOR CONSTRUCTION
A. Based on Customer's representation that the natural gas to be
delivered to the Tenaska Meter Station will not be delivered to, or for the
account of, an end-user that is currently being served by a local distribution
company, Transco, subject to the terms and conditions hereof, will construct the
Tenaska Meter Station pursuant to the automatic authorizations provisions of
Section 157.211(a) of the Federal Energy Regulatory Commission ("FERC")
regulations.
B. As soon as reasonably practicable after execution of this Agreement
by both parties and prepayment by Customer, Transco will begin engineering
design and material procurement for the Tenaska Meter Station. After receipt and
acceptance of all requisite governmental approvals, Transco shall schedule the
construction of the Tenaska Meter Station; provided that such construction shall
be scheduled consistent with the operating needs of Transco's system but without
unreasonable delay. If practical, such construction schedule shall provide for a
target in-service date for Transco's Facilities nine months from the date that
Customer has made the prepayment to Transco. Transco makes no warranties as to
completion of Transco's Facilities by the target in-service date; nevertheless,
if Transco, despite its reasonable diligence, is unable to complete construction
and place Transco's Facilities into operation by such date, Transco will proceed
with reasonable diligence to complete construction and place Transco's
Facilities into operation at the earliest practical date thereafter.
2
<PAGE>
C. In order to establish the interconnection between the natural gas
facilities of Transco and Customer, Transco shall design, construct, own,
operate and maintain certain facilities as may be required in Transco's sole
opinion, which shall hereinafter be collectively referred to as "Transco's
Facilities." In addition, Customer shall design, construct, own, operate and
maintain the necessary facilities to receive gas from the Tenaska Meter Station,
which shall hereinafter be collectively referred to as "Customer's Facilities."
Exhibit A, attached hereto and hereby made part of this Agreement, shall provide
a detailed description and location of Transco's Facilities and Customer's
Facilities. Transco's Facilities and Customer's Facilities shall herein be
collectively referred to as the "Interconnection."
D. The Tenaska Meter Station shall be built in compliance with the
specifications set forth in the American Gas Association Gas Measurement Report
No. 3, "Orifice Metering of Natural Gas," Transco Specification Number
1.0101.02, "Design Guidelines for Onshore Measuring and Regulating Stations,"
and Transco Specification Number 3.3400.01, "Specification for Meter Tube
Fabrication and Testing," each as in effect at the time of installation.
E. Transco's data acquisition and communications equipment shall be
integrated with the meter station and associated facilities and shall provide
for electronic flow measurement and an electric signal that is proportional to
the flow rate. Customer shall not make repairs, adjustments or modifications to
that equipment without the prior written consent of Transco.
F. Customer's Facilities shall be designed to have a Maximum Allowable
Operating Pressure ("MAOP") equal to or greater than the MAOP of the Tenaska
Meter Station.
3
<PAGE>
G. The designated point of tie-in and ownership change between the
Tenaska Meter Station and Customer's Facilities at the Interconnection shall be
located at the isolating flange immediately downstream of Transco's meter tube
outlet header. Transco shall own such flange and all facilities upstream
thereof, and Customer shall own all facilities downstream of such flange.
H. Transco shall cathodically isolate Transco's Facilities from those
of Customer at the point of ownership change.
I. Customer shall be responsible for the cathodic protection of
Customer's Facilities.
J. Transco shall acquire the necessary land rights for the Tenaska
Meter Station subject to review by Customer, which review shall not be
unreasonably withheld.
K. Upon request by Transco, Customer shall procure and install, at its
sole cost and expense, the electric utility service required to operate the
Tenaska Meter Station, including the station lighting, communication equipment
and associated facilities. The installation of such equipment shall be scheduled
at a time agreeable to Transco and Customer.
L. Transco's pressure and transportation service obligations for
deliveries to Customer at the Tenaska Meter Station shall be governed by the
transportation service agreement(s) between Transco and Customer and Transco's
FERC Gas Tariff.
M. Customer shall provide notice to Transco's Director of Field
Operations for the Atlanta Division (currently Mr. D. J. Williams) by telephone
at 770-981-2511 or Transco's Gas Control at (800) 248-0404, no less than
seventy-two (72) hours prior to commencement of any work which may be located in
the vicinity of any Transco facility at or near the Tenaska Meter Station. The
installation of all facilities shall be carried out
4
<PAGE>
in a manner which does not interfere with Transco's operations and while the
Transco system remains in service under normal operating pressure. Any work
being performed pursuant to this Agreement or otherwise in the vicinity of any
Transco facility at the Tenaska Meter Station which, in the sole determination
of Transco, endangers any facilities or personnel shall be terminated
immediately.
N. Any work being performed pursuant to this Agreement or otherwise in
the vicinity of the Tenaska Meter Station by Transco which, in the sole
determination of Tenaska, endangers any facilities or personnel shall be
terminated immediately.
ARTICLE II
REIMBURSEMENT
A. Customer shall reimburse Transco for all costs, expenses, overheads
and, if applicable, AFUDC incurred by Transco pursuant to this Agreement.
B. Transco has estimated the total reimbursable cost hereunder to be
$1,208,000. After execution of this Agreement and prior to commencement of
engineering design and material procurement by Transco, Customer shall pay
Transco this estimated amount by wire transfer, and Transco shall credit this
amount as a prepayment toward the actual reimbursable costs.
C. The parties recognize that Transco may incur unforeseen legal,
regulatory or other costs pursuant to this Agreement, such that the prior
estimated costs (described in Article II, Paragraph B above) may not be
representative of Transco's actual costs, and Customer's obligations are for
reimbursement of Transco's actual costs. To the extent that circumstances
dictate revision(s) of the cost estimate above, Customer agrees to make
additional payment(s) to Transco consistent with such
5
<PAGE>
revision(s) to fund the difference. As soon as practical, after the earlier of
(i) the completion of the Interconnection or (ii) termination of this Agreement
pursuant to Article VI below, but not later than 60 days after completion of the
as-built drawings, Transco shall render to Customer a detailed listing of the
actual costs incurred by Transco.
D. As a result of certain Internal Revenue Service rulings
reimbursement for this project constitutes a contribution in aid of
construction, which is a taxable event, the total amount due Transco shall be
increased to the extent necessary to reimburse Transco for the income tax effect
of all payments to Transco hereunder for Transco's Facilities. This tax
reimbursement will be in addition to any other payments by Customer and shall be
paid by Customer concurrently with the prepayment. Transco estimates the tax
reimbursement to be $362,400.
E. If Transco's actual costs exceed Customer's prepayment(s), then
Transco will include with the listing referred to in Article II, Paragraph C
above, an invoice for the excess amount and Customer shall pay or cause to be
paid by wire transfer to Transco the full amount of such invoice within thirty
(30) days of the date of the invoice. Should Customer fail to make timely
payment of the amount of the invoice, then Transco shall be entitled to collect
the amount of such invoice together with interest at a rate equal to the prime
rate from time to time charged by Citibank, N.A., or its successor. Interest
shall accrue on unpaid amounts, including unpaid interest compounded daily,
beginning on the payment due date of Transco's invoice to Customer and shall
terminate when such invoice is paid.
F. If Transco's actual costs are less than the Customer's
prepayment(s), then Transco shall refund to Customer the difference. The refund
shall be made by bank check and shall be included with Transco's detailed
listing of costs. If the refund is not
6
<PAGE>
included with Transco's detailed listing of costs, interest will be calculated
on the refund amount in accordance with that provided for in Article II. E.
above.
G. If Transco's actual costs are disputed in good faith by Customer,
the parties shall work together to seek a mutually agreeable resolution of the
dispute; provided, however, that no such dispute shall delay or otherwise
interfere with either party's obligation to render payments to the other party
as set forth in this Article II. Payment of costs by Customer or acceptance of
payments by Transco shall not prejudice any claim by the parties relating to the
disputed portion of Transco's actual costs.
H. All costs will be accumulated and recorded in accordance with the
FERC's Uniform System of Accounts. Customer, after fifteen (15) days notice in
writing to Transco, shall have the right during normal business hours to audit,
at Customer's own expense, all books and records of Transco relating to
Transco's construction of the facilities described herein. Customer shall have
one (1) year after the date of receipt of the detailed cost listing described
above in which to make such an audit. After such one (1) year period, Customer's
right to audit shall expire and Transco's records shall be presumed to be
correct.
ARTICLE III
OPERATION AND MAINTENANCE
A. Transco and Customer shall operate and maintain their respective
facilities in accordance with sound and prudent practices existing in the
pipeline industry and in compliance with all valid and applicable laws, orders,
directives, rules and regulations of governmental authorities having
jurisdiction.
7
<PAGE>
B. Transco shall be responsible for the custody transfer of gas at the
Interconnection and shall provide two (2) electric signals at the
Interconnection from Transco's data acquisition equipment that is proportional
to the flow rate. Such signals will include temperature, pressure, Btu content,
gas quality and flow data.
C. The quality and measurement of gas delivered to Customer at the
Interconnection shall be in accordance with Transco's currently effective FERC
Gas Tariff, as amended from time to time.
D. Customer's Facilities shall be operated by Customer at pressures
which are lower than Transco's daily operating pressure(s) at the Tenaska Meter
Station.
E. If Customer, in Transco's sole opinion reasonably exercised, fails
to comply with any provision of this Agreement, Transco shall have the right,
upon reasonable notification to Customer and subject to any necessary regulatory
authorizations, to suspend the flow of gas through the Interconnection. Customer
shall reimburse Transco for any costs incurred as a result of such suspension of
gas flow. Transco shall not be required to resume gas flow through the
Interconnection until Customer has corrected, in Transco's sole opinion, the
area(s) of noncompliance with this Agreement.
ARTICLE IV
INDEMNITY/DAMAGES
A. Transco shall hold harmless, defend and indemnify Customer, its
agents, partners, officers, directors, stockholders, lenders, representatives
and employees (collectively, "Customer Indemnified Parties") from and against
any and all claims, actions, settlements, liabilities, losses, costs, damages,
fines, judgments, demands and expenses (including, without limitation, fees and
disbursements of counsel incurred by
8
<PAGE>
the indemnified parties in any action or proceeding between the indemnifying
party and the indemnified parties or between the indemnified parties and any
third party or otherwise) (collectively "Claims") for injury to or death of
persons or damage to or loss of property incurred by or asserted against any of
the Customer Indemnified Parties which are (1) caused by the activities of, or
due to the placement of materials by, Transco, its agents, affiliates, officers,
directors, representatives, employees, contractors or subcontractors, and/or (2)
otherwise resulting from the actions or omissions of Transco, its parent and
affiliated companies, and its and their respective agents, officers, directors,
representatives, employees, contractors or subcontractors arising out of,
relating to or incident to the performance of this Agreement. Customer shall
immediately notify Transco in writing of any such Claim for which Transco shall
be requested to indemnify the Customer Indemnified Parties hereunder.
Notwithstanding the foregoing, Transco shall not be required to hold harmless,
defend or indemnify the Customer Indemnified Parties for any environmental
Claims which are attributable to the condition of the land upon which the
Interconnection is constructed or from activities by any party other than
Transco, its parent and affiliated companies, and their respective agents,
officers, directors, representatives, employees, contractors or subcontractors
on or with respect to such land.
B. Customer shall hold harmless, defend and indemnify Transco, its
parent and affiliated companies, and its and their respective agents, officers,
directors, stockholders, lenders, representatives and employees (collectively
"Transco Indemnified Parties") from and against all Claims for injury to or
death of persons or damage to or loss of property incurred by or asserted
against any of the Transco Indemnified Parties which are (1) caused by
activities of, or due to the placement of
9
<PAGE>
materials by, Customer, its agents, affiliates, officers, directors,
representatives, employees, contractors or subcontractors, and/or (2) otherwise
resulting from the actions or omissions of Customer, its agents, affiliates,
officers, directors, representatives, employees, contractors or subcontractors
arising out of, relating to or incident to the performance of this Agreement.
Transco shall immediately notify Customer in writing of any such Claim for which
Customer shall be requested to indemnify the Transco Indemnified Parties
hereunder.
C. Without limitation of the foregoing, if damage occurs to Transco's
pipeline for which Customer shall be obligated to indemnify Transco hereunder,
Customer shall (1) reimburse Transco for all reasonable costs and expenses
Transco incurs to repair the damage and replace any lost natural gas, and (2)
hold harmless, defend and indemnify the Transco Indemnified Parties from and
against all Claims resulting from any inability by Transco to render service
obligations to its customers. The method of repair, replacement, remediation and
other remedies shall be at the sole discretion of Transco.
D. Without limitation of the foregoing, if damage occurs to Customer's
pipeline for which Transco shall be obligated to indemnify Customer hereunder,
Transco shall (1) reimburse Customer for all reasonable costs and expenses
Customer incurs to repair the damage and replace any lost natural gas, and (2)
hold harmless, defend and indemnify the Customer Indemnified Parties from and
against all Claims resulting from any inability by Customer to render service
obligations to its customers. The method of repair, replacement, remediation and
other remedies shall be at the sole discretion of Customer.
10
<PAGE>
ARTICLE V
INSURANCE
A. Customer and Transco shall, at all times while the Interconnection
and all other appurtenant facilities hereunder are being constructed, operated
and maintained, carry and maintain in full force, with reliable insurance
companies, the following types of insurance, with not less than the minimum
limits set out below.
1. Workers' Compensation insurance with statutory limits in
compliance with all applicable state and federal laws, and
Employers' Liability insurance with limits not less than
$1,000,000 each accident, $1,000,000 disease-policy limit,
$1,000,000 disease-each employee. If work is to be performed
in North Dakota, Ohio, Washington, Wyoming or West Virginia,
the appropriate state fund(s) will be participated in to cover
all eligible employees and provide a stop gap endorsement. If
work is to be performed offshore or on navigable waterways,
this insurance shall be endorsed to provide full Maritime
Liability coverage, including Longshore and Harbor Workers'
Compensation Act, including Outer Continental Shelf Land Act,
Jones Act, death on High Seas Act and In Rem.
2. Commercial or Comprehensive General Liability insurance,
including coverage for contractual liability, independent
contractors, products/complete operations, with limits not
less than $2,000,000 per occurrence for bodily injury and
property damage combined.
3. If motorized vehicles are used in the construction, operations
or maintenance hereunder, Automobile Liability insurance
covering all owned, non-owned and hired vehicles with a limit
of not less than $2,000,000 per occurrence for bodily injury
and property damage combined.
B. All of the above policies of Customer shall be endorsed to provide
waivers of subrogation in favor of Transco.
C. All of the above policies of Transco shall be endorsed to provide
waivers of subrogation in favor of Customer.
D. Under Customer's General Liability and Automobile Liability
policies, Transco, its parent, subsidiary and affiliated companies will be named
as additional insureds.
11
<PAGE>
E. Customer and Transco shall require their contractors and
subcontractors involved in the construction, operation or maintenance of the
Interconnection and appurtenant facilities hereunder, to carry and maintain
Workers' Compensation and Employer's Liability, Commercial or Comprehensive
General Liability and Automobile Liability insurance coverages with limits as
stated in Paragraph A above, and such requirements shall be enforced.
F. Transco, at its option, may self insure all or any of the above
coverages.
ARTICLE VI
TERM
A. This Agreement shall become effective on the date first written
above and shall continue in force and effect unless and until terminated as
follows:
1. Upon default by either party in the performance of any
provision, condition or requirement herein, the other party may give notice in
writing to the party in default, specifying the default. Unless such default is
cured within sixty (60) days, this Agreement may be terminated by written notice
at the option of the party serving such notice of default.
2. Either party may terminate this Agreement forthwith by
written notice to the other party (hereinafter the "Notice Party") if any of the
following shall occur:
a. Notice Party dissolves, liquidates or terminates
its separate corporate existence;
b. Proceedings are commenced by or against Notice
Party for any relief under any bankruptcy or insolvency law, or any law relating
to the relief of debtors, readjustment of indebtedness, reorganization,
arrangement, composition or
12
<PAGE>
extension, and, if such proceedings have commenced against Notice Party, such
proceedings shall not have been dismissed, nullified, stayed or otherwise
rendered ineffective (but then only so long as such stay shall continue in force
or such ineffectiveness shall continue) within ninety (90) days after such
proceeding shall have commenced;
c. A decree or order of a court having jurisdiction
for the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of Notice Party or of a substantial part of its
affairs, shall have been entered, and such decree or order shall have remained
in force undischarged and unstayed for a period of ninety (90) days, or any
substantial part of the property of Notice Party shall be sequestered or
attached and shall not be returned to the possession of Notice Party or released
from such attachment within ninety (90) days thereafter; or
d. Notice Party shall make a general assignment for
the benefit of creditors or shall admit in writing its inability to pay its
debts generally as they become due.
3. By mutual agreement of the parties in writing.
B. Termination of this Agreement shall not relieve either party from
any obligation accruing or accrued prior to the date of such termination, nor
shall such termination deprive a party not in default of any remedy otherwise
available to it.
C. Upon termination of this Agreement, Transco shall have the right to
abandon all or a portion of the Tenaska Meter Station in place. Transco shall
use all reasonable efforts to salvage any equipment reimbursed by Customer and
refund the recovered amount to Customer.
13
<PAGE>
ARTICLE VII
TARIFF/REGULATIONS
This Agreement and all of the terms and conditions contained herein,
and the respective obligations of the parties hereunder, are subject to the
provisions of Transco's FERC Gas Tariff and all valid and applicable laws,
orders, rules and regulations of duly constituted authorities having
jurisdiction.
ARTICLE VIII
MISCELLANEOUS
A. NOTICES. Unless otherwise indicated in this Agreement, any notice or
other communication shall be in writing and may be sent by (1) personal delivery
(including delivery by a courier service), (2) telecopy to the following
telecopy numbers, or (3) registered or certified mail, postage prepaid,
addressed as set forth below:
IF TO TRANSCO:
Transcontinental Gas Pipe Line Corporation
P. O. Box 1396
Houston, Texas 77251-1396
Telecopy: (713) 215-4269
For operating design and construction matters:
Attention: Vice President - Operations
For all other matters:
Attention: Vice President - Customer Service and Rates
IF TO CUSTOMER:
Tenaska Georgia Partners, L.P.
1044 North 115th Street, Suite 400
Omaha, NE 68154-4446
Telecopy: 402-691-9719
Attention: Vice President Fuel Supply
B. CUSTOMER'S REPRESENTATIVE. Ms. Rhonda Masker, telephone (402)
691-9518, shall be the official representative to whom Transco may contact on
all matters
14
<PAGE>
relating to the administration of this Agreement. Decisions of Ms. Masker shall
bind Customer, and such representative shall be changed only upon written notice
to Transco. Mr. Jerry P. Guinane, telephone (402) 691-9508 shall be Customer's
designated field contact whom Transco may contact in regard to the day to day
construction activities of the project.
C. ASSIGNMENT. Any assignment of rights or delegation of obligations
hereunder by either party shall be void and of no force or effect without the
prior written consent of the other party, which consent shall not be
unreasonably withheld. Any such assignment shall not relieve the assigning party
of its obligations under this Agreement unless otherwise agreed by the
non-assigning party.
D. WAIVER. No waiver by either party of any one or more defaults by the
other party in the performance of any provision of this Agreement shall operate
or be construed as a waiver of any other existing and/or future defaults under
this Agreement, whether of a like or different character.
E. CAPTIONS, EXHIBITS. The captions to each of the various articles are
included only for convenience or reference and shall have no effect on, or be
deemed a part of, the text of this Agreement. Exhibit A hereto is hereby
incorporated herein by reference and made a part of this Agreement.
F. AMENDMENTS. Except for changes to the rates, terms and/or conditions
of Transco's FERC Gas Tariff filed by Transco, this Agreement may be amended
only by written instrument signed by both parties.
G. APPLICABLE LAW. THIS AGREEMENT AND ANY CLAIMS HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
EXCLUDING ANY CONFLICTS OF LAWS
15
<PAGE>
RULES OR PRINCIPLES THAT MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
H. SAVINGS CLAUSE. If any provision of this Agreement is adjudicated or
otherwise found to be against public policy, void or unenforceable, then the
provision shall be deleted or modified, in keeping with the express intent of
the parties hereto, as necessary to render the remainder of this Agreement valid
and enforceable. All deletions or modifications shall be the minimum required to
effectuate the foregoing.
I. JOINT PREPARATION. Every provision of this Agreement shall be
considered as prepared through the joint efforts of the parties hereto and shall
not be construed against either party as a result of the preparation or drafting
thereof.
16
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IN WITNESS OF THE FOREGOING, duly authorized representatives of Transco and
Customer hereby execute duplicate originals of this Agreement as of the date
first above written.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
By /s/
--------------------------------------
Frank J. Ferazzi
Vice President
Customer Service and Rates
TENASKA GEORGIA PARTNERS, L.P.
By: Tenaska Georgia I, L.P.
Managing General Partner
By: Tenaska Georgia, Inc.
Managing General Partner
By /s/
--------------------------------------
Name: Larry V. Pearson
Title: Vice President
17
<PAGE>
EXHIBIT A
I. FACILITIES:
A. Transco's Facilities:
1. Two 20" tap valve assemblies
2. 16" inlet piping including a ball valve
3. Meter station consisting of three 12" orifice meter
tubes, two 30" headers, a 12" bypass, three 6" drip
bottles, automatic tube switching controls and
actuators
4. 16" outlet piping, including a ball valve, a check
valve and an isolating flange assembly
5. Electronic flow computer, transmitter, battery and
charger
6. Communications equipment consisting of radio, radio
tower, modem, charger and solar panel
7. Self framing metal meter building with crane, all
mounted on a concrete foundation
8. 24" seam-to-seam atmospheric condensate tank with
secondary containment
B. Customer's Facilities:
1. Provide electric power, if requested by Transco, for
its instruments and communications
2. Tie-in to the 16" outlet piping of Transco's
interconnect at the isolating flange
3. Install all gas processing and controls as Tenaska
deems necessary for its combustion turbine, such as
pressure regulation, overpressure protection, check
meters, gas heating, filter separation, valving and
controls. All such equipment will be downstream of
its tie-in with Transco. All equipment and piping
which may be exposed to Transco's pipeline pressure
must be designed to equal or exceed Transco's MOP.
C. Transco's maximum operating pressure at M.P. 1001.73 is 800
psig.
II. PROJECT COST ESTIMATE:
Transco has estimated the reimbursable project cost to be $1,208,000.
Transco has estimated the tax gross-up on the reimbursable cost to be
$362,400. The total amount to be reimbursed by Customer is estimated to
be $1,570,400
<PAGE>
Exhibit 10.10
WATER PURCHASE AGREEMENT
This Water Purchase Agreement ("Agreement") dated the 25th day of
February, 1999 is entered into between the HEARD COUNTY WATER AUTHORITY, a
public corporation created and existing under the laws of the State of Georgia
(hereinafter referred to as "Authority") and TENASKA GEORGIA PARTNERS, L.P., a
Delaware limited partnership ("Tenaska"). Authority and Tenaska are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."
WITNESSETH:
Tenaska intends to build and cause to be operated an approximately 950
Megawatt electric power generation facility (the "Plant") in Heard County,
Georgia on the real property described on Exhibit "A" attached hereto and by
reference incorporated herein (the "Land"). Authority operates facilities for
the delivery of water ("Water Facilities"). Tenaska anticipates that some
portion of the Plant will achieve commercial operation on or about June 1, 2001,
but in no event sooner than June 1, 2000 ("Commercial Operation"). The Plant
operations will require a substantial quantity of water for its power generation
process. Authority agrees to deliver to the Plant and to sell to Tenaska and
Tenaska agrees to buy water from the Authority for use in its generation
process, hereinafter such water is referred to as "Water".
NOW, THEREFORE, in consideration of the mutual terms and conditions of
this Agreement, the receipt and legal sufficiency of which is hereby
acknowledged by the Parties, the Parties agree as follows:
1. PURPOSE. The purpose of this Agreement is to define the Parties'
contractual rights and obligations with respect to the supply and use
of Water at the Plant.
2. TERM OF AGREEMENT. This Agreement shall be effective on the date
recited in the first paragraph hereof, and the term of this Agreement
shall extend for a term of thirty (30) years after the date Tenaska
first purchases Water under this Agreement in accordance with Paragraph
5 hereof (the "Term"), unless earlier terminated in accordance with the
provisions of Paragraphs 15 or 16 hereof.
3. AUTHORITY OBLIGATIONS. Subject to the conditions set forth herein,
including but not limited to Tenaska's obligations contained in
Paragraph 6 below, the Authority shall provide the following:
(a) As soon as practical, but no later than nine (9) months after
the payment by Tenaska of the sums specified in Paragraph 6
below, the Authority shall place into operation all facilities
necessary to provide, transport and deliver Water to the
Delivery Point in the amounts required by Tenaska, not to
exceed 350 gallons per minute (504,000 gallons per day) (the
"Authority Commitment").
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(b) Authority shall continually maintain and operate Water
Facilities adequate to accomplish the requirements hereunder,
during the term of this Agreement. Authority understands and
acknowledges that the Water is essential to Tenaska's
operation of the Plant.
(c) Except as excused in accordance with the conditions identified
in Paragraph 7 herein, at all times during the term of this
Agreement Authority shall deliver to the Delivery Point and
sell to Tenaska the quantity of Water at any time and from
time to time required for use at the Plant, not to exceed the
Authority Commitment. Authority is not obligated to deliver a
quantity of Water more than the Authority Commitment, but at
its election it may do so. In the event that Tenaska desires
to use Water in excess of the Authority Commitment and the
Authority is willing to provide such Water, Tenaska shall pay
the rate for such Water as described in Paragraph 5 (a)(ii).
There is no minimum or maximum purchase requirement for Water
under this Agreement, except that if in any Commercial
Operation Year (as hereinafter defined) Tenaska uses less than
$20,000.00 of Water, then the Authority shall invoice Tenaska
for, and Tenaska shall pay within fifteen (15) days after
receipt of such invoice, the difference between said
$20,000.00 annual minimum and the total dollar amount of
charges to Tenaska for Water used by Tenaska during the same
Commercial Operation Year. For Purposes of this Section 3(c),
the term "Commercial Operation Year" shall mean the twelve
(12) consecutive month period beginning on the date the Plant
commences Commercial Operation for the sale of power (the
"Commercial Operation Commencement Date"), and each twelve
consecutive month period which thereafter begins on the
anniversary of the "Commercial Operation Commencement Date.
Tenaska shall have no obligation to pay the $20,000.00 annual
minimum payment specified above if the Plant does not commence
Commercial Operation.
(d) The Authority represents and warrants that based on the Water
Facilities of the Authority existing as of the date of this
Agreement, and the existing demands for the supply of Water,
the Authority has ample capacity to serve the Plant with the
quantity of Water represented by the Authority Commitment, so
long as no Excusable Interruption (as hereinafter defined)
occurs and remains outstanding. In consideration for Tenaska's
obligation to pay the Tenaska Payment under Paragraph 6 below,
the Authority shall reserve for Tenaska water production
supplies of the Authority which are necessary to provide to
Tenaska potable Water at the Delivery Point in an amount not
to exceed 504,000 gallons per day and/or at a rate not to
exceed 350 gallons per minute. The Authority shall not
otherwise add customers or sell unused capacity which would
deny or tend to deny Tenaska the supply capacity committed
hereunder. Tenaska represents and warrants that Tenaska has
inspected the Water Facilities of the Authority as they
existed as of the date of such inspection, and that if said
Water Facilities were properly operated and maintained as
required in subpart 3(g) below and there
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<PAGE>
were no other existing demands for the supply of Water from
the Water Facilities to other customers of the Authority, the
Water Facilities as inspected by Tenaska have the capacity to
process the Water needed to supply the Authority Commitment,
so long as no Excusable Interruption (as hereinafter defined)
occurs and remains outstanding. However, Tenaska makes no
representation or warranty as to the existing or future
demands by other customers of the Authority for the supply of
Water, or that the Water Facilities have the capacity needed
to serve the Plant with the quantity of Water represented by
the Authority Commitment and also serve the other existing or
future demands of customers of the Authority.
(e) In order that the Authority may provide the necessary rate of
flow and capacity committed hereunder, Tenaska shall make
reasonable efforts to give the Authority notice (which notice
may be given verbally, and need not be given in accordance
with Section 13(a) below), to the extent Tenaska is able to,
of Tenaska's need for Water at a rate in excess of 100 gallons
per minute.
(f) In consideration for Tenaska's obligation to pay the Tenaska
Payment under Paragraph 6 below, the Authority agrees that if
after the date of this Agreement the Authority enters into any
agreement with any person or entity for the provision of
potable water or reservation of capacity to provide potable
water to any user involved in the generation of electrical
power or other energy, at a rate or capacity exceeding either
230 gallons per minute at any time or exceeding 331,200
gallons per day at any time, (i) at any lower rates than those
charged to Tenaska hereunder, (ii) for a lower up front cost
than the $500,000.00 Tenaska Payment (which $500,000.00 amount
shall be reduced prorata on a straight line basis for any
capacity of less than 350 gallons per minute), and/or (iii) on
any other terms more favorable than those provided to Tenaska
hereunder, then the Authority shall for the remainder of the
Term provide the Water to Tenaska at such lower rates, the
Authority shall refund to Tenaska the difference between said
lower up front cost and the applicable prorata share of the
Tenaska Payment, and Tenaska shall have the benefit of any
such other more favorable terms. For example if the Authority
entered into an agreement to supply water to a commercial user
at a rate of 175 gallons per minute/252,000 gallons per day at
the same rate per gallon and other terms as provided in this
Agreement, except that the up front cost charged to the new
commercial user was $252,000, then the Authority shall refund
$50,000.00 to Tenaska. The most favored nations provision
contained in this Section 3(f) shall not apply to any
agreement by the Authority to provided water to a
municipality, county government or other governmental agency
provided that the municipality, county government or other
governmental agency which is a party to such agreement is not
reselling the water to users involved in the generation of
electrical power or other energy.
(g) Authority shall construct and continually operate and maintain
the Water Facilities in a manner consistent with (i) the terms
and provisions of this
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<PAGE>
Agreement;(ii) good industry practice; and (iii) all
applicable laws, statutes, rules, regulations, ordinances and
codes.
4. DELIVERY POINT, METERING, AUDITING AND TESTING.
(a) The Delivery Point shall be at a point on the property line of
the Land as the Authority may designate. Tenaska will bear the
responsibility of maintaining the Water quality following
receipt by Tenaska of Water at the Delivery Point.
(b) A metering station shall be owned, installed and continually
operated and maintained, tested, calibrated and adjusted by
Authority, located between the Water Facilities and the
Delivery Point as the Parties may agree, providing accurate
and continuous measurement and recording of the quantity of
Water. The meter and its installation shall meet current
American Water Works Associations standards. Metering
equipment may be tested, as agreed, by Authority and Tenaska.
If such metering equipment is found to be in error, then the
Parties shall use reasonable effort to determine the quantity
of Water actually delivered to the Delivery Point during the
period affected by such error, and the equipment shall be
adjusted to accurately record the delivery of Water. Authority
and Tenaska shall have the right to have a representative
present at the time of any test. All water meters, metering
equipment, vaults, valves, bypasses, telemetryremote read
equipment, and testable backflow preventors shall be provided
and installed by the Authority at the Authority's sole cost
and expense (the cost of said facilities and equipment having
been included in the Tenaska Payment amount); provided,
however, that, in addition to the Tenaska Payment, Tenaska
shall pay the Authority (i) $15,000.00 towards the cost of
such equipment and installation, and (ii) (A) should the cost
of the items specified above in this sentence cost the
Authority $15,000.00 or more, and (B) should Tenaska specify
that the Authority install a water meter costing more than the
water meter selected by the Authority, then the Authority
shall install the water meter specified by Tenaska and Tenaska
shall pay the Authority the difference in the cost of the
meter specified by the Authority and the cost of the more
expensive water meter specified by Tenaska.
(c) Authority and Tenaska each shall have the ongoing right to
examine and audit the other Party's records concerning
quantities and quality of Water supplied to Tenaska at the
Delivery Point. The Parties shall give reasonable notice of
the exercise of their right to examine and audit such records,
but not less than ten (10) days, and any audit or examinations
shall take place during normal business hours and be done in
such a manner so as not to unduly interrupt the operations of
the party being audited.
(d) Authority shall supply Tenaska, upon request by Tenaska, a
copy of regulatory and chemical analysis reports on the Water
as submitted to any governmental
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authority, including, without limitation, the Environmental
Protection Division of the Georgia Department of Natural
Resources or its successor. In the event Tenaska desires
another or a more comprehensive chemical analysis of the Water
supplied or to be supplied, the cost of such shall be borne by
Tenaska.
(e) Each of the Parties shall immediately notify the other Party's
Designated Representative (as identified in Paragraph 13
hereof) of any emergency or condition of which the notifying
Party is aware which may affect the quality and/or quantity of
Water.
5. RATES, INVOICING AND PAYMENT. Authority shall invoice Tenaska for Water
supplied during the previous month in accordance with the provisions of
this paragraph.
(a) For each month of the term of this Agreement, the Authority
shall charge Tenaska for Water based on a Variable Charge. The
Variable Charge will be equal to the quantity of Water
delivered to the Delivery Point during each month as
determined by the metering equipment, multiplied by the
Variable Rate.
(i) For quantities of Water up to and including the
Authority Commitment, the Variable Rate shall be
$1.57 per 1,000 gallons, subject to adjustment as
provided herein. The Variable Rate shall be $1.57 per
1,000 gallons for Water purchased through December
31, 1999 ("initial Rate"). With respect to each
calendar year after December 31, 1999, the Initial
Rate shall be subject to adjustment annually to take
into account changes in the cost of living as
reflected in the Consumer Price Index for U.S. City
Average, all items (1967 = 100) published by the
Bureau of Labor Statistics of the United States
Department of Labor ("CPI") between the indexes
published for December, 1999 and December of the year
immediately prior to the year for which such rate is
being determined. By way of example, the Variable
Rate for the twelve (12) month period of January 1,
2005 through December 31, 2005, shall be equal to the
product of $1.57 (per 1,000 gallons), multiplied by a
fraction, the numerator of which is the index as
reported for December, 2004 and the denominator of
which is the index as reported for December, 1999.
Assuming that the index for December, 1999 is 500 and
the index for December, 2004 is 505, then the
Variable Rate for Water purchased during 2005 shall
be $1.586 per 1,000 gallons [$1.57 per 1,000 gallons
x (505 / 500)]. In the event the Bureau of Labor
Statistics ceases to publish the index or changes the
manner in which the index is computed, an equitable
substitute index shall apply.
In addition to the CPI increase as specified above,
If Authority is legally required to make capital
improvements as a result of environmental
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statutes, rules or regulations enacted or promulgated
after the date of the Agreement by the State of
Georgia or the Federal Government, Tenaska will, in
addition to the CPI increase, pay the increase in
water rates charged to all Heard County water users,
attributable to the cost of legally required capital
improvements made by the Authority to comply with
such legal requirements.
(ii) For quantities of Water used by Tenaska in excess of
the Authority Commitment, the Variable Rate shall be
$2.00 per 1,000 gallons, subject to the same cost of
living adjustment as described above with respect to
the Variable Rate for quantities of Water up to and
including the Authority Commitment.
(b) On or about the fifth (5th) day of each calendar month,
beginning with the month after the Authority first delivers
Water to Tenaska at the Delivery Point, Authority shall mail
or personally deliver to Tenaska an invoice ("Authority's
Invoice") for amounts due Authority for Water supplied during
the previous month. Authority's Invoice shall state the
quantity of Water supplied during the month covered by
Authority's Invoice, the date of any CPI or successor indices
used to calculate the price of Water, the total amount due to
Authority and any additional information reasonably requested
by Tenaska to determine the accuracy of Authority's Invoice.
The remittance address shall be such address as may be
reflected on Authority's Invoice from time to time.
(c) Tenaska shall pay the amount indicated on Authority's Invoice
by the fifteenth (15th) of each month. Subject to the
obligations of Tenaska to promptly pay, Tenaska may dispute
the amount indicated on Authority's Invoice and make payment
"under protest" by notifying Authority in writing accompanying
the payment. Any refund of an amount paid "under protest"
shall bear interest at the rate of ten percent (10%) per annum
from the date of payment until the date of the refund.
Tenaska's failure to pay any invoiced amount within ten (10)
days after the date Tenaska receives notice of default
specifying the failure to pay charges for Water when due will
subject Tenaska to a penalty equal to ten percent (10%) of the
amount invoiced and not timely paid.
(d) In the event an error is discovered with respect to any
Authority's Invoice, or with respect to any payment made
pursuant to any Authority's Invoice, such error shall be
adjusted within thirty (30) days following the discovery of
the error.
(e) Each Party shall permit the other or its Designated
Representative to examine, audit and copy all records and
information necessary to confirm the accuracy of any
Authority's Invoice submitted pursuant to paragraph 5(b).
(f) Should Tenaska fail to pay an amount invoiced by the Authority
on the date due, Tenaska shall be considered to be in default
pursuant to its obligations hereunder,
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and the Authority shall give written notices of such payment
default to Tenaska and Tenaska's Lenders (as hereinafter
defined). If such payment default is not cured within sixty
(60) days after the effective date of the notices of default
in payment given to Tenaska and its Lenders, the Authority
shall have the right to suspend any water service until such
default is cured, and if not cured within sixty (60) days
after the effective date of the notices of default are given
to both Tenaska and its Lenders, the Authority shall have the
right to thereafter terminate this Agreement by giving written
notice of termination given while such default remain
outstanding and uncured. The sixty (60) day cure period
provided to Tenaska and its Lenders following the giving of
any notice of a payment default to Tenaska and its Lenders
pursuant to this Agreement shall be coextensive (and not
consecutive) with the sixty (60) day cure period set forth in
Section 1.3 of the Consent and Agreement (as hereinafter
described) so long as the notice of the payment default given
to the Lenders was given in accordance with the notice
provisions of such Consent and Agreement.
6. TENASKA PAYMENT FOR WATER FACILITIES.
Tenaska agrees to pay Authority $500,000.00 (the "Tenaska Payment") in
consideration of the services, commitments and reservation of the
Authority recited in Paragraph 3 of this Agreement. The Tenaska Payment
includes all tap fees, miscellaneous fees and the legal fees, costs and
expenses of providing the consents to assignments, estoppel
certificates, legal opinions and other documentation from the Authority
and its counsel required by Tenaska's Lenders (as hereinafter defined).
Tenaska shall pay Authority the Tenaska Payment within ten (10) days of
financial closing for the Plant.
7. INTERRUPTION OF SERVICE.
(a) Interruptions for Necessary Scheduled Maintenance. Authority
may not interrupt its provision of Water to the Plant for
necessary scheduled maintenance unless it has given prior
notice to Tenaska. For purposes of this subparagraph, prior
notice means receipt by Tenaska from Authority of notice of at
least five (5) days prior to any scheduled suspension,
interruption, delay, reduction or other interference of supply
("Interruption"). If Authority has given the required prior
notice, Authority may temporarily suspend the supply for a
period not to exceed 48 hours in order to correct the reason
for the Interruption. Whenever possible, a proposed
Interruption shall be scheduled during a shut-down of the
Plant. The required prior notice from the Authority shall
specify the duration and extent of the proposed Interruption
in the Water supply and the reason therefor.
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(b) Interruptions due to Uncontrollable Force.
(i) If the Water supply is interrupted as a result of an
Excusable Interruption (as hereinafter defined), then
during the Excusable Interruption, Authority shall
not be obligated to deliver Water to Tenaska.
(ii) The term "Excusable Interruption" shall mean acts of
God, floods, earthquakes, storm, drought, or other
natural calamities, war, insurrection, riot,
curtailment, order, regulation, or restriction
imposed by state or federal governmental authority,
cutting of water supply lines at the hands of third
parties, failure of equipment or facilities that have
been properly operated and maintained in accordance
with both good industry practice and all applicable
laws, statutes, rules, regulations, ordinances and
codes; or other similar cause beyond the reasonable
control of the Party affected.
(iii) In the event that either Party is rendered unable,
wholly or in part, by Excusable Interruption, to
carry out its obligations of this Agreement, except
for those obligations requiring the payment of money,
and if such Party gives notice stating the reasons
therefor to the other Party as soon as practicable
after the occurrence being claimed as an Excusable
Interruption, then insofar as and to the extent and
for the reasonable time that such obligations are so
affected (not including those obligations requiring
the payment of money) by the Excusable Interruption,
the performance obligation of such Party shall be
suspended. The suspension of the Party's performance
obligation shall be for no longer than that necessary
to cause such inability to be remedied with
reasonable dispatch.
8. TAXES.
Each Party shall pay all sales, real and personal property taxes and
assessments imposed on such Party, pursuant to applicable law or local
custom with respect to the activities of generation, transportation,
delivery, sale, emission, disposal, or use of Water.
9. ASSIGNMENT AND DELEGATION.
(a) Except as otherwise provided herein, no right or interest in
this Agreement shall be assigned by either Tenaska or
Authority without the written permission of the other Party
and no delegation of any obligation or of the performance of
any obligation by either Tenaska or Authority shall be made
without the written permission of the other Party, which
permission shall not be unreasonably withheld; provided,
however, nothing contained in this Paragraph 9 shall be
construed to restrict Tenaska in any manner from freely
granting a security interest, transferring in trust,
mortgaging, hypothecating, assigning or otherwise transferring
Tenaska's right, title and interest or delegating its duties
under this Agreement to any institutional or commercial
lender, or other person, its
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<PAGE>
successors or assigns, providing credit or loans to Tenaska in
connection with the financing, refinancing or operation of the
Plant (a "Lender" or "Lenders") or construed to restrict any
Lender from exercising its rights or pursuing its remedies
available under any loan agreements, security agreements or
other instruments or documents between itself and Tenaska or
otherwise available to such Lender at law or in equity; and
that Tenaska may assign this Agreement without the prior
written permission of Authority to Tenaska's Lender(s), and
Authority will execute a consent to such assignment as may be
reasonably requested by such Lender(s). Any attempt of
assignment or delegation shall be void and ineffective for all
purposes unless made in conformity with this Paragraph 9.
(b) Either Party may assign its rights and delegate its
obligations to any subsidiary or affiliate of any such Party,
provided that no such assignment or delegation releases such
party from any of its obligations.
10. INDEMNITY.
(a) Tenaska agrees to release, defend, indemnify and hold harmless
Authority, its members, officers, employees, and agents
(collectively, "Authority Representatives") from that portion
of any claims, actions, suits, losses, harm, liability,
damages, cost and expenses, including but not limited to
reasonable attorneys' fees (collectively, "Claim") arising out
of the negligent acts or omissions of Tenaska in connection
with this Agreement and the construction or operation of the
water system owned by Tenaska on its Plant site ("Water
System"); provided, however, Tenaska does not release, defend,
indemnify or hold harmless Authority Representatives from any
Claim or portion thereof caused by or resulting from the
negligence or wrongful act or omission of Authority
Representatives. In the event of a Claim against the Authority
by a third party, where negligence by Tenaska is concurrent
and contributes to the cause of the Claim, then the Authority
and Tenaska shall be responsible and liable in proportion to
the degree of their own negligence. Nothing in this Agreement
shall be construed to preclude either Party from pursuing any
remedy against a third party.
(b) Authority hereby agrees to release, defend, indemnify and hold
harmless Tenaska, its directors, officers, partners,
shareholders, employees, agents and representatives
(collectively, "Tenaska Representatives") from that portion of
any Claim arising out of the negligent acts or omissions of
Authority in connection with this Agreement and the
construction or operation of the Water Facilities; provided,
however, Authority does not release, defend, indemnify or hold
harmless Tenaska Representatives from any Claim or portion
thereof caused by or resulting from the negligence or wrongful
act or omission of Tenaska Representatives. In the event of a
Claim against Tenaska by a third party, where negligence by
Authority is concurrent and contributes to the cause of the
Claim, then the Authority and Tenaska shall be responsible and
liable in proportion to the
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degree of their own negligence. Nothing in this Agreement
shall be construed to preclude either Party from pursuing any
remedy against a third party. For purposes of this paragraph
10(b) "Tenaska" shall mean, Tenaska, its partners (both
general and limited), the general and limited partners of such
partners, their related and affiliated entities, and the
respective directors, officers, partners, shareholders,
employees, agents and representatives of each of the
foregoing.
11. REPRESENTATIONS AND WARRANTIES. The representations and warranties made
respectively by the Parties shall remain in existence during the term
of this Agreement.
Tenaska represents and warrants that:
(a) Tenaska is a Delaware limited partnership, organized and
existing in good standing under and by virtue of the laws of
the State of Delaware;
(b) has the power and authority to own its properties and carry on
the business as presently conducted and as represented in this
Agreement;
(c) has obtained or will obtain all necessary federal, state and
local government authorizations or permits to operate the
Plant on the Land; and
(d) that this Agreement represents a valid and binding obligation
of Tenaska, enforceable against it by its terms, and that
entering into this Agreement will not violate any rule,
regulation, charter, by laws, or other agreements binding upon
Tenaska.
Authority agrees, represents and warrants that:
(a) Authority is a legally created political subdivision and
public corporation of the State of Georgia, duly organized,
validly existing and in good standing under and by virtue of
the laws of the State of Georgia and has the corporate power
and authority to own its properties and to carry on its
business as presently conducted and as represented in this
Agreement; and
(b) Authority has the lawful authority to supply Water as
contracted for hereunder and pursuant to the terms of this
Agreement; and
(c) Authority has obtained or will obtain in a timely manner all
easements and rights-of-way, and all federal, state and local
governmental permits and other approvals needed to provide the
Water necessary to comply with the terms and provisions of
this Agreement; and
(d) Authority has had its governing body approve this Agreement so
that Authority has the authority to execute this Agreement and
comply with the terms and provisions hereof, and final
resolutions authorizing the execution and delivery of
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this Agreement by the Authority, and the performance of the
Authority's obligations hereunder, have been entered on the
minutes of the Authority.
(e) that this Agreement represents a valid and binding obligation
of the Authority, enforceable against it by its terms, and
that entering into this Agreement will not violate any rule,
regulation, charter, by laws, or other agreements binding upon
the Authority.
12. WAIVER OF SUBROGATION. Notwithstanding that any loss or damage may be
due to or result from the negligence of either of the parties hereto,
Authority and Tenaska, for themselves and their respective insureds,
each hereby waives and releases any and all rights to recover against
(i) the other party, (ii) any entity related or affiliated to such
other party, and (iii) the respective directors, officers, partners,
shareholders, employees, agents, representatives, successors and
assigns of each of the foregoing, for any loss or damage that would be
covered by any of the following insurance policies, which each Party is
hereby required to carry under this Agreement: (a) primary commercial
general liability; (b) excess commercial general liability; and (c)
automobile liability, regardless of whether the loss or damage is
within the limits of liability of such policy. Each party shall ensure
that any policy of insurance which it carries as insurance against
property damage that may occur in connection with the construction,
maintenance or operation of the Water Facilities or the Water System or
any electrical system used in conjunction therewith shall name the
other Party as additional insured as its interests may appear.
13. MISCELLANEOUS PROVISIONS.
(a) Notices. Except as otherwise provided in this paragraph, any
notice, request, authorization, invoice, payment, direction or
other communication as allowed or required under this
Agreement shall be given in writing and be delivered in person
or by first class United States certified mail, properly
addressed, return receipt requested with the required postage
prepaid, to the intended recipient as follows:
Tenaska: Tenaska Georgia Partners, L.P.
Plant Manager (Designated Representative)
Tenaska Georgia Partners, L.P.
Franklin, Georgia 30217
and
cc: Ronald Quinn
Suite 400
1044 N. 115 Street
Omaha, Nebraska 68154-4446
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Authority: Heard County Water Authority
Attn: Executive Director (Designated Representative)
11520 Highway 34 West
Post Office Box 610
Franklin, Georgia 30217
Invoices and related payments may be sent by regular first
class United States mail and are not subject to the
requirement of being sent by certified mail. Invoices and
payments may be sent to an address, different from the above,
as may be specified upon thirty (30) days advance written
notice from time to time by the receiving Party. Such Party
shall provide notice of its desired mailing address for
invoices or payments as appropriate if different from the
above address. Either Party may change its address or
Designated Representative specified above by giving the other
Party reasonable notice of such change in accordance with this
paragraph. All notices, requests and authorization of
directions or other communications by a Party shall be deemed
delivered when mailed as provided in this paragraph or
personally delivered to the other Party. All invoices for
Water shall be deemed paid by Tenaska on the date such payment
is received by the Authority.
(b) GOVERNMENTAL AUTHORITY. This Agreement is subject to the
rules, regulations, orders and other requirements, now or
hereafter in effect, of all governmental authorities having
jurisdiction over this Agreement, the Parties or either of
them, provided, however, that the provisions of this Agreement
shall not be amended, modified or abrogated by any rules,
regulations, orders or other requirements promulgated, enacted
or issued by the Authority after the date this Agreement
becomes effective. To the extent that the Authority is
protected by sovereign immunity, the Authority hereby
acknowledges that, pursuant to the Georgia Constitution (1983
Ga. Const. Article I, Section II, Paragraph IX(c)) and
O.C.G.A. Section 50-21-1(a), the Authority waives, and that it
intends to waive, the defense of sovereign immunity in
connection with any matters related to this Agreement or the
performance of the Authority hereunder. To the extent that the
Authority is protected by sovereign immunity and it is
determined for any reason that the Authority has not
effectively waived its sovereign immunity, then the Authority
further agrees not to raise the defense of sovereign immunity
in connection with any matters related to this Agreement or
the performance of the Authority hereunder. Notwithstanding
the foregoing waiver of sovereign immunity, the Authority
reserves and is not waiving the right to raise sovereign
immunity as a defense to any civil action or actions brought
by persons or entities other than Tenaska, its Lenders, and
their successors and assigns.
(c) NO PARTNERSHIP. This Agreement shall not be interpreted or
construed to create an association, joint venture or
partnership between the Parties, nor to impose any partnership
obligations or liability on either Party. Furthermore, neither
Party
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shall have any right, power or authority to enter into any
agreement or undertaking for or on behalf of, to act as, or be
an agent or representative of, or to otherwise bind the other
Party.
(d) NONWAIVER. The failure of either Party to insist upon or
enforce strict performance by the other Party of any provision
of this Agreement or to exercise any right under this
Agreement shall not be construed as a waiver or relinquishment
to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather,
the same shall be and remain in full force and effect.
(e) ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement, and supersedes any and all prior agreements of the
Parties with respect to the subject matter hereof.
(f) NO SPECIFIED THIRD-PARTY BENEFICIARIES. Except as otherwise
specifically provided in this Agreement, there are no
third-party beneficiaries of this Agreement. Nothing contained
in this Agreement is intended to confer any right or interest
on anyone other than the Parties, their respective successors,
assigns and legal representatives, and the third-party
beneficiaries, of any, specifically identified in this
Agreement.
(g) AMENDMENT. No change, amendment or modification of any
provision of this Agreement shall be valid unless set forth in
a written amendment to this Agreement signed by both parties.
Authority agrees to make any modification of the terms and
provisions of this Agreement required or requested by any
Lender, provided that no such modifications will materially
and adversely affect Authority's rights or obligations under
this Agreement unless the Authority is otherwise equitably
compensated.
(h) IMPLEMENTATION. Each Party shall take such action (including,
but not limited to, the execution, acknowledgment and delivery
of documents) as may reasonably be requested by the other
Party for the implementation or continuing performance of this
Agreement.
(i) INVALID PROVISION. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in
all respects as if such invalid and unenforceable provisions
were omitted; and to this end the terms and provisions of this
Agreement are agreed to be severable.
(j) APPLICABLE LAW. This Agreement shall be interpreted, construed
and enforced in accordance with the laws of the State of
Georgia, except to the extent such laws may be preempted by
the laws of the United States of America.
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(k) JURISDICTION AND VENUE. The Parties agree that original
jurisdiction of any action arising out of this Agreement shall
lie solely in the Superior Court of Heard County, Georgia, and
that venue of any litigation arising out of this Agreement
shall be in Heard County, State of Georgia, or such other
place as the Parties may agree in writing.
(l) DISPUTES/DEFAULT.
(i) Prior to either Party's rights to claim that the
other has defaulted or otherwise breached any
obligation or other provision of this Agreement, the
Parties shall first attempt to resolve the potential
claim of default or breach in accordance with this
paragraph 13(1). Should Tenaska contest the amount of
any invoice from the Authority, Tenaska shall pay the
full amount of the disputed invoice under protest and
with a reservation of rights as specified above in
this Agreement, and by making such payment the
Authority agrees that Tenaska shall not be or be
deemed to have waived any of its rights, remedies or
defenses under this Agreement or otherwise.
(ii) In the event either Party claims the other is in
material default or either Party disputes the
validity of any agreement or warranty or
representation under this Agreement or the other's
interpretation or performance of any provision under
this Agreement, including the other's failure to
perform (any one or all considered to be a "Dispute"
), the disputing Party shall notify the other that a
Dispute exists, specifying the nature and extent of
the Dispute (the "Dispute Notice"). The Dispute
Notice shall be delivered to the other Party within
ten (10) days after the incident giving rise to the
Dispute. The Parties shall then make a good faith
attempt to resolve the Dispute. During such attempted
Dispute resolution, the Parties shall continue to
proceed in good faith and diligently perform their
respective obligations under this Agreement.
(iii) In the event the Dispute is not resolved within
twenty (20) days after the delivery of the Dispute
Notice, the disputing Party may then take legal
action in law or equity subject to the restrictions
and limitations imposed by this Agreement. The
Parties agree that the nature and subject matter of
this Agreement are so unique that Authority and
Tenaska shall also have available the remedies of
specific performance, temporary restraining orders,
injunction and other equitable remedies.
(iv) This Agreement has been reviewed and approved by each
of the Parties. In the event it should be determined
that any provision of this Agreement is uncertain or
ambiguous, the language in all parts of this
Agreement shall be in all cases construed as a whole
according to its fair meaning and not strictly
construed for or against either Party.
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<PAGE>
(m) DEFINITIONS. Capitalized terms shall have the meaning assigned
them in this Agreement. All other words shall have their
ordinary meaning and significance.
14. CONSENT AND AGREEMENT, ESTOPPEL AGREEMENTS AND LEGAL OPINION. Authority
acknowledges that, as a condition of obtaining financing for
construction of the Plant, Tenaska's Lenders will require a collateral
assignment of this Agreement. In connection therewith, such Lenders
will require Authority to execute a Consent and Agreement in the form
of Exhibit "B" attached hereto and by reference incorporated herein, as
is, or in a form satisfactory to the Lenders, provided that no
modifications to the Exhibit "B" form will materially and adversely
affect Authority's rights or obligations under this Agreement unless
the Authority is otherwise equitably compensated. Additionally, the
Authority shall deliver an opinion from legal counsel as to the
organization and standing of Authority, the validity and execution of
this Agreement, enforceability of this Agreement against Authority and
like matters. Authority agrees to execute and deliver such Consent and
Agreement and to deliver without delay such opinion of legal counsel in
the form of Exhibit "C" attached to and made a part of Exhibit "B" to
this Agreement, or as such Lenders may reasonably require and in form
and substance as the Lenders and Authority may reasonably agree. Both
the Consent and Agreement and the opinion of the Authority's legal
counsel shall be executed and delivered to Tenaska at least five (5)
days prior to the financial closing for the Plant. Tenaska shall
deliver to the Authority such resolutions as are necessary to indicate
Tenaska's authority to enter into this Agreement and such opinions of
counsel as may be reasonably necessary to indicate the validity and
enforceability of this Agreement.
15. TERMINATION BY TENASKA. The obligations of Tenaska under this Agreement
are hereby made subject to the condition precedent (which may be waived
by Tenaska by giving notice in writing of such waiver to Authority)
that:
(a) Tenaska or the Development Authority of Heard County, Georgia
("Development Authority") has closed the purchase of the Land
as evidenced by the recordation of a deed to such effect in
the real estate records of Heard County, Georgia; and
(b) Tenaska and the Development Authority have entered into a
lease with respect to the Land, among other matters, as
evidenced by the recordation of such lease in the real estate
records of Heard County, Georgia.
Upon completion of both such items, Tenaska shall be deemed to have
Elected to Proceed. If such events shall fail to occur on or before
April 1, 2001, or if Tenaska shall earlier abandon the plan to build a
power plant on the Land, then Tenaska may elect to terminate this
Agreement by written notice from Purchaser to Authority. In the event
that Tenaska terminates this Agreement, this Agreement shall terminate,
be null and void and of no further force or effect, including without
limitation extinguishing Tenaska's obligation to make a payment under
Paragraphs 4(b) and 6 hereof.
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16. TERMINATION BY AUTHORITY.
(a) For purposes of this Section 16(a), the term "Milestone Date"
shall mean December 31, 1999; provided, however, that Tenaska
shall have the unilateral right and option to extend the
Milestone Date to June 30, 2000, by giving the Authority
written notice of such extension on or before December 31,
1999 and paying a non-refundable extension fee in the amount
of $100,000.00 (the "Extension Fee") to the Authority by check
on or before December 31, 1999. Should Tenaska exercise
Tenaska's extension option, then the Extension Fee paid by
Tenaska shall be credited against the Tenaska Payment.
Upon the occurrence of either of the following:
(i) the failure of Tenaska and the Heard County
Development Authority to execute a lease agreement
for the Land by the Milestone Date, as said date may
be extended in accordance herewith; or
(ii) the failure of Tenaska to obtain financing for the
construction of the Plant by the Milestone Date, as
said date may be extended in accordance herewith;
(each of the foregoing items in 16(a)(i)and (ii) being
hereinafter referred to as a "Failure to Meet a Milestone"),
the Authority may, at the Authority's election, terminate the
Agreement by written notice of termination given to Tenaska
while any Failure to Meet a Milestone remains outstanding.
Neither Tenaska nor its Lenders shall have any assured cure
period in which to cure a failure to meet a Milestone Date. In
the event that the Authority terminates this Agreement
pursuant to this Section 16(a), this Agreement shall
terminate, be null and void and of no further force or effect,
including without limitation extinguishing Tenaska's
obligation to make any payments under Paragraphs 4(b) and 6
hereof.
(b) Upon the occurrence of one or more of the following:
(i) the failure of Tenaska to begin commercial operation
by April 1, 2002;
(ii) the filing by Tenaska of any voluntary petition for
protection pursuant to the Bankruptcy laws of the
United State or of any state; or
(iii) the appointment of a receiver for Tenaska, and such
receiver is not dismissed within 180 days after
appointment;
(each of the foregoing items in 16(b)(i),(ii) and (iii) being
hereinafter referred to as a "Triggering Event"), the
Authority may, at the Authority's election, send Tenaska a
notice (the "Trigger Notice") specifying the Triggering
Event(s) that have occurred and remain outstanding, and shall
also state that the Authority
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intends to terminate the Agreement if the named Triggering
Events remain outstanding for more than forty-five (45) days
after the effective date of the Trigger Notice. Should any
Triggering Event that exists and that have been specified in a
Trigger Notice remain outstanding for more than the
above-described forty-five (45) day cure period, then the
Authority shall thereafter have the right to terminate this
Agreement by written notice of termination given to Tenaska
while the Triggering Events remain outstanding. In the event
that the Authority terminates this Agreement under this
Section 16(b), this Agreement shall terminate, be null and
void and of no further force or effect, including without
limitation extinguishing Tenaska's obligation to make any
payments under Paragraphs 4(b) and 6 hereof.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by their duly authorized representatives,
under seal, all as of the day and year first above written.
HEARD COUNTY WATER AUTHORITY, a public
corporation created and existing under the
laws of the State of Georgia
By: /s/ (SEAL)
-----------------------------
Its: Chairman
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON NEXT PAGE]
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TENASKA GEORGIA PARTNERS, L.P.
A Delaware Limited Partnership
By: Tenaska Georgia I, L.P.
a Delaware Limited Partnership,
its General Partner
By: Tenaska Georgia, Inc., a
Delaware Corporation, its
General Partner
By: /s/
-------------------------------
Its: Vice President
[CORPORATE SEAL]
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EXHIBIT A
LEGAL DESCRIPTION FOR TENASKA PLANT SITE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY, GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY, 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY RIGHT OF WAY LINE
OF GEORGE BROWN ROAD SOUTH 72 DEGREES 57 MINUTES 18 SECONDS WEST FOR A DISTANCE
OF 916.24 FEET TO A STEEL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE
POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND. THENCE SOUTH 00
DEGREES 16 MINUTES 00 SECONDS WEST FOR A DISTANCE OF 902.40 FEET TO A STEEL
FENCE POST; THENCE SOUTH 02 DEGREES 39 MINUTES 49 SECONDS EAST FOR A DISTANCE OF
321.00 FEET TO A ONE INCH PIPE; THENCE SOUTH 00 DEGREES 34 MINUTES 44 SECONDS
EAST FOR A DISTANCE OF 802.62 FEET TO A ONE INCH PIPE; THENCE SOUTH 00 DEGREES
34 MINUTES 44 SECONDS EAST FOR A DISTANCE OF 291.17 FEET TO A POINT IN THE
CENTERLINE OF HILLY MILL CREEK; THENCE FOLLOWING THE COURSE OF THE CENTERLINE OF
HILLY MILL CREEK IN A WESTERLY DIRECTION, TRAVERSED AS FOLLOWS; NORTH 62 DEGREES
07 MINUTES 20 SECONDS WEST FOR A DISTANCE OF 98.34 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK; THENCE SOUTH 20 DEGREES 00 MINUTES 44 SECONDS WEST FOR
A DISTANCE OF 136.80 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE
NORTH 74 DEGREES 21 MINUTES 03 SECONDS WEST FOR A DISTANCE OF 223.86 FEET TO A
POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION LINE RIGHT OF
WAY (150 FOOT WIDTH); THENCE NORTH 74 DEGREES 21 MINUTES 03 SECONDS WEST FOR A
DISTANCE OF 36.90 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH
47 DEGREES 24 MINUTES 20 SECONDS WEST FOR A DISTANCE OF 127.90 FEET TO A POINT
IN THE CENTERLINE OF THE CREEK; THENCE NORTH 79 DEGREES 16 MINUTES 25 SECONDS
WEST FOR A DISTANCE OF 274.76 FEET TO A POINT IN THE CENTERLINE OF THE CREEK;
THENCE NORTH 54 DEGREES 59 MINUTES 10 SECONDS WEST FOR A DISTANCE OF 188.31 FEET
TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE LEAVING THE CENTERLINE OF THE
CREEK NORTH 27 DEGREES 08 MINUTES 04 SECONDS WEST FOR A DISTANCE OF 142.40 FEET
TO A POINT; THENCE NORTH 76 DEGREES 02 MINUTES 42 SECONDS WEST FOR A DISTANCE OF
170.99 FEET TO A POINT;
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THENCE NORTH 54 DEGREES 14 MINUTES 27 SECONDS WEST FOR A DISTANCE OF 280.96 FEET
TO A POINT; THENCE NORTH 66 DEGREES 49 MINUTES 01 SECONDS WEST FOR A DISTANCE OF
101.90 FEET TO A POINT; THENCE SOUTH 55 DEGREES 21 MINUTES 00 SECONDS WEST FOR A
DISTANCE OF 162.95 FEET TO A POINT; THENCE NORTH 81 DEGREES 39 MINUTES 29
SECONDS WEST FOR A DISTANCE OF 406.05 FEET TO A POINT; THENCE NORTH 30 DEGREES
16 MINUTES 39 SECONDS WEST FOR A DISTANCE OF 496.12 FEET TO AN INTERSECTION OF
SAID LINE WITH THE CENTERLINE OF AN UNNAMED CREEK FROM THE NORTHEAST; THENCE
FOLLOWING THE CENTERLINE OF SAID UNNAMED CREEK TO THE NORTHEAST, TRAVERSED AS
FOLLOWS; NORTH 67 DEGREES 00 MINUTES 13 SECONDS EAST FOR A DISTANCE OF 336.28
FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 64 DEGREES 26
MINUTES 52 SECONDS EAST FOR A DISTANCE OF 296.07 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK; THENCE NORTH 53 DEGREES 40 MINUTES 03 SECONDS EAST FOR
A DISTANCE OF 67.68 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH
16 DEGREES 14 MINUTES 29 SECONDS EAST FOR A DISTANCE OF 228.26 FEET TO A POINT
IN THE CENTERLINE OF THE CREEK; THENCE NORTH 22 DEGREES 18 MINUTES 47 SECONDS
EAST FOR A DISTANCE OF 241.49 FEET TO A POINT IN THE CENTERLINE OF THE CREEK;
THENCE NORTH 06 DEGREES 14 MINUTES 09 SECONDS EAST FOR A DISTANCE OF 71.42 FEET
TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 78 DEGREES 23 MINUTES 44
SECONDS EAST FOR A DISTANCE OF 307.88 FEET TO A POINT IN THE CENTERLINE OF THE
CREEK; THENCE NORTH 47 DEGREES 11 MINUTES 56 SECONDS EAST FOR A DISTANCE OF
157.63 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 26 DEGREES
01 MINUTES 20 SECONDS EAST FOR A DISTANCE OF 111.97 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK; THENCE NORTH 54 DEGREES 06 MINUTES 33 SECONDS EAST FOR
A DISTANCE OF 128.35 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE
NORTH 07 DEGREES 03 MINUTES 45 SECONDS EAST FOR A DISTANCE OF 34.61 FEET TO A
POINT IN THE CENTERLINE OF THE CREEK; THENCE LEAVING THE CREEK SOUTH 89 DEGREES
40 MINUTES 10 SECONDS EAST FOR A DISTANCE OF 290.53 FEET TO POINT AT THE
CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION LINE EASEMENT (150 FOOT
WIDTH); THENCE SOUTH 89 DEGREES 40 MINUTES 10 SECONDS EAST FOR A DISTANCE OF
177.44 FEET TO A 12 INCH DIAMETER WOOD POST; THENCE NORTH 71 DEGREES 45 MINUTES
00 SECONDS EAST FOR A DISTANCE OF 405.46 FEET TO A STEEL FENCE POST FLUSH WITH
THE GROUND; SAID POINT BEING THE POINT OF BEGINNING.
SAID PARCEL CONTAINS 73.53 ACRES OF LAND, AND IS MORE PARTICULARLY SHOWN AS
TRACT "A" ON SHEET 1 0F 2 OF THAT CERTAIN ALTA/ACSM LAND TITLE SURVEY FOR
TENASKA, INC., FIRST AMERICAN
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TITLE INSURANCE COMPANY AND OTHER PARTIES TO BE NAMED, PREPARED BY DONALDSON,
GARRET & ASSOCIATES, INC., MACON, GEORGIA, DATED APRIL 3, 1998.
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EXHIBIT "B"
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this Consent ), dated as of [ , 199_] among
Heard County Water Authority, a public corporation created and existing under
the laws of the State of Georgia (the Consenting Party ), Tenaska Georgia
Partners, L.P., a Delaware limited partnership (the Borrower ), and
[____________], as agent (together with its successors in such capacity, the
Agent ) for the financial institutions (the Banks**) which are or from time to
time may become a party to the Loan Agreement (as defined below). [**NOTE: IF
THE PLANT PROJECT IS FINANCED IN THE CAPITAL MARKETS, INSTEAD OF A BANK GROUP,
THE TERMINOLOGY IN THIS DOCUMENT WILL BE ADJUSTED ACCORDINGLY TO REFER TO A
BONDHOLDER AND A TRUSTEE, RATHER THAN TO BANKS AND AGENT].
RECITALS
WHEREAS, the Borrower proposes to develop, construct, own and operate a
950 MW peaking electric power generation process facility in Heard County,
Georgia (the "Project" );
WHEREAS, the Consenting Party and the Borrower have entered into a
Water Purchase Agreement, dated as of ______, 199_ (as amended, restated,
modified or otherwise supplemented from time to time in accordance with the
terms thereof, the "Assigned Agreement" );
WHEREAS, the Borrower, the Agent and the Banks have entered into a
[Construction and Term Loan and Reimbursement Agreement], dated as of the date
hereof (as amended, restated, modified or otherwise supplemented from time to
time, the "Loan Agreement" ), pursuant to which the Banks will make loans and
extend other credit to the Borrower for the purpose of financing the cost of,
and providing certain other credit support for, the construction and operation
of the Project and certain related expenses (the "Loans" );
WHEREAS, as security for the Loans and all other obligations under the
Loan Agreement, the Borrower has assigned all of its rights, title and interest
in, to and under, and granted a security interest in, the Assigned Agreement to
the Agent pursuant to the [Assignment and Security Agreement], dated as of the
date hereof, between the Borrower and the Agent (as amended, restated, modified
or otherwise supplemented from time to time, the "Security Agreement" ); and
WHEREAS, it is a condition precedent to the Banks obligations to make
the Loans under the Loan Agreement that the Consenting Party execute and deliver
this Consent.
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NOW, THEREFORE, as an inducement to the Banks to make the Loans, and in
consideration of good and valuable consideration, the receipt of which is hereby
acknowledged, and intending to be legally bound, the Consenting Party hereby
agrees as follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 CONSENT TO ASSIGNMENT. The Consenting Party (a) acknowledges that
the Agent and the Banks are entering into the Loan Agreement and making the
Loans in reliance upon the execution and delivery by the Consenting Party of the
Assigned Agreement and this Consent, (b) consents in all respects to the pledge
and assignment to the Agent of all of the Borrower's rights, title and interest
in, to and under the Assigned Agreement pursuant to the Security Agreement, and
(c) acknowledges the right, but not the obligation, of the Agent or the Agent's
designee, in the exercise of the Agent's rights and remedies under the Security
Agreement, to make all demands, give all notices, take all actions and exercise
all rights of the Borrower in accordance with the Assigned Agreement, and agrees
that in such event the Consenting Party shall continue to perform its
obligations under the Assigned Agreement.
1.2 SUBSTITUTE OWNER. The Consenting Party agrees that, if the Agent
shall notify the Consenting Party that an event of default under the Loan
Agreement has occurred and is continuing and that the Agent has exercised its
rights (a) to have itself or its designee substituted for the Borrower under the
Assigned Agreement or (b) to sell, assign, transfer or otherwise dispose of the
Assigned Agreement to a Person, then the Agent, the Agent's designee or such
Person (each, a "Substitute Owner" ) shall be substituted for the Borrower under
the Assigned Agreement and that, in such event, the Consenting Party will
continue to perform its obligations under the Assigned Agreement in favor of the
Substitute Owner.
1.3 RIGHT TO CURE. The Consenting Party agrees that in the event of a
default by the Borrower in the performance of any of its obligations under the
Assigned Agreement, or upon the occurrence or non-occurrence of any event or
condition under the Assigned Agreement which would immediately or with the
passage of any applicable grace period or the giving of notice, or both, enable
the Consenting Party to terminate or suspend its obligations or exercise any
other right or remedy under the Assigned Agreement or under applicable law
(hereinafter a "default" ), the Consenting Party will continue to perform its
obligations under the Assigned Agreement and will not exercise any such right or
remedy until it first gives prompt written notice of such default to the Agent
and affords the Agent, the Agent's designee and the Banks a period of at least
sixty (60) days (or if such default is a non-monetary default, such longer
period not to exceed one hundred eighty (180) days as is required so long as any
such party has commenced and is diligently pursuing appropriate action to cure
such default) from receipt of such notice to cure such default; provided,
however, that if any such party is prohibited from curing any such
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<PAGE>
default by any process, stay or injunction issued by any governmental authority
or pursuant to any bankruptcy or insolvency proceeding involving the Borrower,
then the time periods specified in this Section 1.3 for curing a default shall
be extended for the period of such prohibition. Agent and Banks shall have no
right to require Consenting Party to enter into a new agreement under Section
1.4 below or cure a default under the Assigned Agreement pursuant to this
Section 1.3 if the Assigned Agreement was terminated by the Consenting Party
pursuant to the termination option contained in Section 16 (a) of the Assigned
Agreement, but Agent and Banks shall have the right to require Consenting Party
to enter into a new agreement under Section 1.4 below and to cure any default
and/or Triggering Event under the Assigned Agreement pursuant to this Section
1.3 if the Assigned Agreement was terminated by the Consenting Party pursuant to
the termination option contained in Section 16(b) of the Assigned Agreement.
1.4 NO TERMINATION, ASSIGNMENTS OR MATERIAL AMENDMENTS. The Consenting
Party will not, without the prior written consent of the Agent, enter into any
consensual cancellation or termination of the Assigned Agreement, or assign or
otherwise transfer any of its right, title and interest thereunder or consent to
any such assignment or transfer by the Borrower. The Consenting Party will not
enter into any material amendment, supplement or other modification of the
Assigned Agreement (an "Amendment" ) until after the Agent has been given ten
(10) days (excluding Saturdays, Sundays and any days which are a legal holiday
in New York or any days on which banking institutions are authorized or required
by law or government action to close) prior written notice of the proposed
Amendment by the Borrower (a copy of which notice will be provided to the
Consenting Party by the Borrower), and will not then enter into such Amendment
if the Consenting Party has, within such ten (10) day period, received a copy of
(i) the Agent's objection to such Amendment or (ii) the Agent's request to the
Borrower for additional information with respect to such Amendment.
In the event that the Assigned Agreement is terminated as a result of
any bankruptcy or insolvency proceeding affecting the Borrower, the Consenting
Party will, at the option of the Agent enter into a new agreement with the Agent
(or its transferee or other nominee that owns or leases the Project) having
terms substantially the same as the terms of the Assigned Agreement, provided
that Agent exercises such option by written notice given to Consenting Party
within sixty (60) days after the date Consenting Party give Agent notice of such
termination.
1.5 NO LIABILITY. In the event that the Assigned Agreement is
terminated as a result of any bankruptcy or insolvency proceeding affecting the
Borrower, the Consenting Party will, at the option of the Agent enter into a new
agreement with the Agent (or its transferee or other nominee that owns or leases
the Project) having terms substantially the same as the terms of the Assigned
Agreement, provided that (i) such option to enter into a new agreement is
exercised by the Agent within sixty (60) days after Consenting Party gives the
Banks and Agent written notice of such termination, and (ii) the Banks or Agent
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pay any amounts due under the Assigned Agreement for Water delivered to Tenaska
that remains outstanding and unpaid as of the date of the new agreement.
The Consenting Party acknowledges and agrees that neither the Agent,
the Agent s designee or the Banks shall have any liability or obligation under
the Assigned Agreement as a result of this Consent, the Security Agreement or
otherwise, nor shall the Agent, the Agent's designee or the Banks be obligated
or required to (a) perform any of the Borrower's obligations under the Assigned
Agreement, except, in the case of the Agent or the Agent's designee, during any
period in which the Agent or the Agent's designee is a Substitute Owner pursuant
to Section 1.2, in which case (i) the obligations of such Substitute Owner shall
be no more than that of the Borrower under such Assigned Agreement, (ii) such
Substitute Owner shall have no personal liability to the Consenting Party for
the performance of such obligations and (iii) the sole recourse of the
Consenting Party shall be to such Substituted Owner s interest in the Project,
or (b) take any action to collect or enforce any claim for payment assigned
under the Security Agreement.
1.6 PERFORMANCE UNDER ASSIGNED AGREEMENT. The Consenting Party shall
perform and comply with all material terms and provisions of the Assigned
Agreement to be performed or complied with by it and shall maintain the Assigned
Agreement in full force and effect in accordance with its terms.
1.7 DELIVERY OF NOTICES. The Consenting Party shall deliver to the
Agent, concurrently with the delivery thereof to the Borrower, a copy of each
notice, request or demand given by the Consenting Party pursuant to the Assigned
Agreement.
1.8 ACKNOWLEDGMENTS. The Consenting Party agrees to execute such
acknowledgments or other similar instruments as the Agent shall reasonably
request in connection with the transactions provided for in this Consent.
SECTION 2. PAYMENTS UNDER THE ASSIGNED AGREEMENT
The Consenting Party will pay all amounts payable by it under the
Assigned Agreement, if any, in the manner required by the Assigned Agreement
directly into the account as shall be specified from time to time by the Agent
to the Consenting Party in writing.
All payments required to be made by the Consenting Party under the
Assigned Agreement shall be made without any offset, recoupment, abatement,
withholding, reduction or defense whatsoever, except as specifically permitted
under the Assigned Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE CONSENTING PARTY
In order to induce the Agent and the Banks to enter into the Loan
Agreement and to make the Loans, the Consenting Party makes the following
representations and
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<PAGE>
warranties, which shall survive the execution and delivery of this Consent and
the Assigned Agreement and the consummation of the transactions contemplated
hereby and thereby.
3.1 ORGANIZATION. The Consenting Party is a legally created political
subdivision and public corporation of the State of Georgia, duly organized,
validly existing, qualified, authorized to do business and in good standing
under and by virtue of the laws of the State of Georgia, and has all requisite
power and authority, corporate and otherwise, to enter into and to perform its
obligations hereunder and under the Assigned Agreement, and to carry out the
terms hereof and thereof and the transactions contemplated hereby and thereby.
3.2 AUTHORIZATION. The execution, delivery and performance by the
Consenting Party of this Consent and the Assigned Agreement have been duly
authorized by all necessary corporate and member action on the part of the
Consenting Party and do not require any approval or consent of any holder (or
any trustee for any holder) of any indebtedness or other obligation of (a) the
Consenting Party or (b) any other person or entity, except approvals or consents
which have previously been obtained.
3.3 EXECUTION AND DELIVERY: BINDING AGREEMENTS Each of this Consent and
the Assigned Agreement is in full force and effect, has been duly executed and
delivered on behalf of the Consenting Party by the appropriate officers of the
Consenting Party, and constitutes the legal, valid and binding obligation of the
Consenting Party, enforceable against the Consenting Party in accordance with
its terms, except as the enforceability thereof may be limited by (a)
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).
3.4 LITIGATION. There is no legislation, litigation, action, suit,
proceeding or investigation pending or (to the best of the Consenting Party's
knowledge after due inquiry) threatened against the Consenting Party before or
by any court, administrative agency, arbitrator or governmental authority, body
or agency which, if adversely determined, individually or in the aggregate, (a)
could adversely affect the performance by the Consenting Party of its
obligations hereunder or under the Assigned Agreement, or which could modify or
otherwise adversely affect the Approvals (as defined in Section 3.6), (b)
questions the validity, binding effect or enforceability hereof or of the
Assigned Agreement, any action taken or to be taken pursuant hereto or thereto
or any of the transactions contemplated hereby or thereby or (c) could have a
material adverse effect upon (i) the business, operations, properties, assets,
or condition (financial or otherwise) of the Consenting Party, (ii) the ability
of the Consenting Party to perform under the Assigned Agreement or this Consent,
(iii) the business, operations, properties, assets, prospects or condition
(financial or otherwise) of the Project, (iv) the value, validity, perfection
and enforceability of the liens granted to the Agent under the Security
Agreement and other security documents or (v) the ability of the Agent or the
Banks to
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<PAGE>
enforce any of their material rights and remedies under the Assigned Agreement
or this Consent (collectively, a " Material Adverse Effect" ).
3.5 COMPLIANCE WITH OTHER INSTRUMENTS. The Consenting Party is not in
violation of its charter or by-laws, and the execution, delivery and performance
by the Consenting Party of this Consent and the Assigned Agreement and the
consummation of the transactions contemplated hereby and thereby will not result
in any violation of, breach of or default under any term of its charter or
by-laws, or of any contract or agreement to which it is a party or by which it
or its property is bound, or of any license, permit, franchise, judgment, writ,
injunction, decree, order, charter, law, ordinance, rule or regulation
applicable to it, except for any such violations which, individually or in the
aggregate, would not have a Material Adverse Effect on the Consenting Party.
3.6 GOVERNMENT CONSENT. No consent, order, authorization, waiver,
approval or any other action, or registration, declaration or filing with, any
person, board or body, public or private (collectively, the "Approvals" ), is
required to be obtained by the Consenting Party in connection with the
execution, delivery or performance of the Assigned Agreement or the consummation
of the transactions contemplated thereunder, except as listed in Exhibit B
hereto. All such Approvals listed on Exhibit B, except for those set forth in
Part II thereof (the "Deferred Approvals" ), are Final (as defined below). An
Approval shall be "Final" if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with the terms
thereof), does not impose restrictions or requirements inconsistent with the
terms of the Assigned Agreement, and is final and not subject to any appeal. The
Consenting Party reasonably believes that each Deferred Approval will be
obtained in the ordinary course of business prior to the time when such Deferred
Approval is required to be Final.
3.7 NO DEFAULT OR AMENDMENT. Neither the Consenting Party nor, to the
best of the Consenting Party's knowledge after due inquiry, any other party to
the Assigned Agreement is in default of any of its obligations thereunder. The
Consenting Party has no existing counterclaims, offsets or defenses against the
Borrower. The Consenting Party and, to the best of the Consenting Party's
knowledge after due inquiry, each other party to the Assigned Agreement have
complied with all conditions precedent to the respective obligations of such
party to perform under the Assigned Agreement. To the best of the Consenting
Party's knowledge after due inquiry, no event or condition exists which would
either immediately or with the passage of any applicable grace period or giving
of notice, or both, enable either the Consenting Party or the Borrower to
terminate or suspend its obligations under the Assigned Agreement. The Assigned
Agreement has not been amended, modified or supplemented in any manner.
3.8 NO PREVIOUS ASSIGNMENTS. The Consenting Party has no notice of, and
has not consented to, any previous assignment of all or any part of its rights
under the Assigned Agreement.
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<PAGE>
3.9 REPRESENTATIONS AND WARRANTIES. All representations, warranties and
other statements made by the Consenting Party in the Assigned Agreement were
true and correct as of the date when made and are true and correct as of the
date of this Consent.
SECTION 4. OPINION OF COUNSEL The Consenting Party shall deliver an
opinion of counsel relating to the Assigned Agreement and this Consent
substantially in the form of Exhibit C hereto, and addressing such other matters
as may be requested by the Borrower and the Agent.
SECTION 5. MISCELLANEOUS
5.1 NOTICES. All notices and other communications hereunder shall be in
writing, shall be deemed given upon receipt thereof by the party or parties to
whom such notice is addressed, shall refer on their face to the Assigned
Agreement (although failure to so refer shall not render any such notice or
communication ineffective), shall be sent by first class mail, by personal
delivery or by a nationally recognized guaranteed overnight delivery service
(e.g. UPS Next Day Air), and shall be directed as follows:
If to the Consenting Party: Heard County Water Authority
11520 Highway
34 West Franklin, Georgia
Attention: Executive Director
Telephone: ( )
Fax: ( )
If to the Borrower: Tenaska Georgia Partners, L.P.
2000 E. Lamar Blvd., Suite 430
Arlington, Texas 76006
Attention: Bill Braudt
Telephone: ( )
Fax: (817) 462-1500
with a copy to:
(i) Plant Manager (Designated
Representative)
Tenaska Georgia Partners, L.P.
Franklin, Georgia 30217
(ii) Ronald Quinn
1044 North 115th Street, Suite 400
Omaha, Nebraska 68154-4446
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<PAGE>
If to the Agent: [______________________]
Attention: [___________]
Telephone: ( )
Fax: ( )
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices or other communications shall be
sent.
5.2 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS CONSENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).
(b) Any legal action or proceeding with respect to this Consent and
any action for enforcement of any judgment in respect thereof may be brought in
the courts of the State of Georgia or of the United States of America for the
Northern District of Georgia, and, by execution and delivery of this Consent,
each of the Consenting Party, the Borrower, and the Agent hereby accepts for
itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from any
appeal thereof. Each of the Consenting Party, the Borrower and the Agent hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Consent brought in the courts referred to above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of the
Agent or its designees to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against the Consenting Party
in any other jurisdiction.
5.3 COUNTERPARTS. This Consent may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
5.4 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.
5.5 SEVERABILITY. In case any provision in or obligation under this
Consent shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
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<PAGE>
5.6 AMENDMENT; WAIVER. Neither this Consent nor any of the terms
hereof may be terminated, amended, supplemented, waived or modified except by an
instrument in writing signed by the Consenting Party, the Borrower, and the
Agent.
(a) The Consenting Party's obligations hereunder are absolute
and unconditional, and the Consenting Party has no right, and shall have no
right, to terminate this Consent or to be released, relieved or discharged from
any obligation or liability hereunder until the occurrence of one of the
following: (1) all Loans and all other obligations under the Loan Agreement have
been indefeasibly satisfied in full, notice of which shall be provided by the
Agent when all such obligations have been satisfied, (2) the expiration of the
thirty (30) year Term of the Assigned Agreement, or (3) provided that the Banks
and Agent have not elected to enter into a new agreement pursuant to the terms
of Section 1.4 above, the termination of the Assigned Agreement in accordance
with its terms and in accordance with the terms of this Consent.
(b) In the event that the Agent delivers a termination notice
to the Consenting Party pursuant to this Section 5.7, this Consent shall
terminate for all purposes as to the Agent and the Loan Agreement and the Agent
and the Banks shall have no further rights or obligations under this Consent;
provided, however, that the Consenting Party agrees that this Consent shall
continue to apply for the benefit of the Borrower and the providers of new
credit facilities to replace the Loan Agreement (the New Lender ) provided that
(i) within five (5) days following delivery by the Agent to the Consenting Party
of the Termination Notice pursuant to this Section 5.7, the New Lender or an
agent, trustee or other representative of the New Lender, shall have notified
the Consenting Party that it undertakes the prospective obligations of the
"Agent" under this Consent, and shall have supplied substitute notice address
information for Section 5.1 and new payment instructions (countersigned on
behalf of the Borrower) for Exhibit A, (ii) the amount of the new credit
facilities do not exceed the original amount of the commitment by the Banks to
make loans and extend other credit facilities under the Loan Agreement, and
(iii) thereafter, (w) the term "Loans" under this Consent will be deemed to
refer to the new credit facilities, (x) the term "Agent" or "Banks" shall be
deemed to refer to the New Lender or any agent or trustee for the New Lender,
(y) the term "Loan Agreement" shall be deemed to refer to the credit agreement,
indenture or other instrument providing for the new credit facilities and (z)
the term Security Agreement shall be deemed to refer to the security agreement
under which the Assigned Agreement is assigned as collateral to secure
performance of the obligations of the Borrower under the new credit facilities.
5.8 SUCCESSORS AND ASSIGNS. This Consent shall be binding upon the
parties hereto and their permitted successors and assigns and shall inure to the
benefit of the parties, their designees and their respective permitted
successors and assigns.
5.9 FURTHER ASSURANCES. The parties hereto hereby agree to execute and
deliver all such instruments and take all such action as may be necessary to
effectuate fully the purposes of this Consent.
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<PAGE>
TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE CONSENTING PARTY, THE
BORROWER AND THE AGENT HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
CONSENT.
5.10. SURVIVAL. All agreements, statements, representations and
warranties made by the Consenting Party herein shall be considered to have been
relied upon by the Agent and the Banks and shall survive the execution and
delivery of this Consent.
5.11 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of the Agent in exercising any right, power or privilege hereunder and no course
of dealing between the Consenting Party and the Agent shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other exercise, or the further exercise, of any
other right, power or privilege hereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Agent would otherwise have.
5.12 WAIVER OF SOVEREIGN IMMUNITY. To the extent that the Authority
is protected by sovereign immunity, the Authority hereby acknowledges that,
pursuant to the Georgia Constitution (1983 Ga. Const. Article I, Section II,
Paragraph IX(c)) and O.C.G.A. Section 50-21-1(a), the Authority waives, and that
it intends to waive, the defense of sovereign immunity in connection with any
matters related to this Agreement or the performance of the Authority hereunder.
To the extent that the Authority is protected by sovereign immunity and it is
determined for any reason that the Authority has not effectively waived its
sovereign immunity, then the Authority further agrees not to raise the defense
of sovereign immunity in connection with any matters related to this Agreement
or the performance of the Authority hereunder. Notwithstanding the foregoing
waiver of sovereign immunity, the Authority reserves and is not waiving the
right to raise sovereign immunity as a defense to any civil action or actions
brought by persons or entities other than Agent, the Banks, Tenaska, and their
respective successors and assigns.
IN WITNESS WHEREOF, the Consenting Party, the Borrower and the Agent
have caused this Consent to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
HEARD COUNTY WATER AUTHORITY
By:
----------------------------------
Name:
Title:
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<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
By: TENASKA GEORGIA I, L.P.,
as General Partner
By: TENASKA GEORGIA, INC.,
as General Partner
By:
-------------------------
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
[_________________], as Agent
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
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<PAGE>
Exhibit A to
CONSENT AND AGREEMENT
[Reserved]
-1-
<PAGE>
Exhibit B to
CONSENT AND AGREEMENT
APPROVALS
-1-
<PAGE>
Exhibit C to
CONSENT AND AGREEMENT
FORM OF OPINION OF COUNSEL
[Agent]
[______________]
Tenaska Georgia Partners, L.P.
2000 E. Lamar Blvd., Suite 430
Arlington, Texas 76006
Re: The 950 MW peaking electric power generation process facility
Located in Heard County, Georgia (the "Project" ).
-------------------------------------------------------------
Dear Ladies and Gentlemen:
I have acted as counsel to Heard County Water Authority, a public
corporation and political subdivision of the State of Georgia created and
existing under the laws of the State of Georgia (the "Authority"), in connection
with the Project to be constructed by Tenaska Georgia Partners, L.P., a Delaware
limited partnership (the "Borrower"), for which the Authority will provide the
supply and use of water pursuant to the Water Purchase Agreement, dated as of
[______, 199_] between the Borrower and the Authority (the "Agreement"). This
opinion is being provided in connection with the transactions contemplated by
the terms of the [Construction and Term and Reimbursement Loan Agreement], dated
as of the date hereof by and among the Borrower, the financial institutions
which are or from time to time may become a party thereto (the "Banks") and
[____________], as agent for the Banks (together with its successors in such
capacity, the "Agent").
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of the following:
(i) the Agreement;
(ii) the Consent and Agreement of the Authority, dated as
of the date hereof (the "Consent");
(iii) the Charter, By-laws, and any rules and regulations
governing of the Authority; and
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<PAGE>
(iv) the resolutions authorizing the execution and
delivery of the Agreement and the Consent, duly
adopted by the Board of Directors of the Authority.
The documents referred to in items (iii) and (iv) above are hereinafter
collectively referred to as the Governing Documents and the Agreement and the
Consent are hereinafter collectively referred to as the "Documents". In
addition, I have examined and am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of such other documents as I have
deemed necessary or appropriate as a basis for the opinions set forth below.
In my examination I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such copies. In rendering the
opinions expressed below, I have further assumed, without any independent
investigation or verification of any kind, that each Document I have examined is
the valid and binding obligation of each party thereto other than the Authority.
This opinion assumes that each of the Documents has been duly executed and
delivered by, constitute legal, valid and binding obligations of, and are
enforceable in accordance with their respective terms against, each party to
such Documents other than the Authority.
I am admitted to the bar of the State of Georgia. I express no opinion
as to the law of any jurisdiction other than (i) the laws of the State of
Georgia and (ii) the federal laws of the United States of America.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. The Authority is a a public corporation and political
subdivision of the State of Georgia created and existing under the laws
of the State of Georgia duly organized, validly existing and in good
standing under the laws of the State of Georgia. The Authority is duly
qualified to transact business in each jurisdiction in which it owns or
leases real property or in which the nature of its business requires it
to be so qualified.
2. The Authority has full corporate power and authority to
enter into, deliver and perform its obligations under each of the
Documents.
3. The Authority has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each
Document.
4. The Authority has duly executed and delivered each
Document.
5. Each Document constitutes the valid and binding obligation
of the Authority enforceable against the Authority in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors rights generally and by general principles
-2-
<PAGE>
of equity (regardless of whether enforcement is sought in a proceeding
in equity or at law).
6. The execution, delivery and performance by the Authority of
the Documents will not: (i) contravene any applicable provision of any
law, regulation, ruling, order or decree of any governmental authority
to which or by which the Authority or any of its property or assets is
subject or bound or (ii) violate any provision of the Governing
Documents of the Authority. The execution, delivery and performance by
the Authority of the Documents do not and will not, to the best of my
knowledge after due inquiry, conflict with, result in any breach of, or
constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any lien or encumbrance upon
any of the property or assets of the Authority pursuant to any
provision of any securities issued by the Authority, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or
other agreement to which the Authority is a party or by which it or any
of its property or assets is bound.
7. No consent, order, authorization, waiver, approval or any
other action, or registration, declaration or filing with, any person,
board or body, public or private (collectively, the "Approvals"), is
required to be obtained by the Authority in connection with the
execution, delivery or performance of the Documents or the consummation
of the transactions contemplated thereby, except as listed on Schedule
A hereto. All such Approvals listed on Schedule A, except for those set
forth in Part II thereof, are Final (as defined below). An Approval
shall be Final if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with
terms thereof), does not impose restrictions or requirements
inconsistent with the terms of the Documents, and is final and not
subject to any appeal.
8. To the best of my knowledge after due inquiry, there are no
pending or threatened actions or proceedings affecting the Authority or
any of its properties or assets that individually or in the aggregate
could prohibit or limit in any way the execution, delivery and
performance by the Authority of any of the Documents.
This opinion is being furnished only to the Agent, the Borrower, the
parties identified on Schedule B hereto and their respective successors and
assigns and is solely for the benefit of such parties; provided that assignees
of, or participants in, the interests of the Banks may rely on this opinion as
if it were addressed to them.
Very truly yours,
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<PAGE>
Schedule A
APPROVALS
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<PAGE>
Schedule B
THE BANKS
WATERPURCHASE
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<PAGE>
EXHIBIT 10.11
CONFIDENTIAL
CONTRACT FOR PURCHASE
between
TENASKA GEORGIA I, L.P.
and
GENERAL ELECTRIC COMPANY
An asterisk [*] indicates that confidential information has been omitted and
filed separately with the Securities and Exchange Commission as part of a
Confidential Treatment Request.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. DEFINITIONS...................................................................................................1
Acceptance Testing.............................................................................................1
Applicable Laws................................................................................................1
Availability Test..............................................................................................1
Business Days..................................................................................................1
Buyer's Inspector(s)...........................................................................................1
Cancellation Charge............................................................................................1
Commercial Operation...........................................................................................1
Computer Programs..............................................................................................1
Contract.......................................................................................................2
Delay Notice...................................................................................................2
Delivery.......................................................................................................2
Delivery Point.................................................................................................2
Demonstration Tests............................................................................................2
Design Finalization Meeting....................................................................................2
Directed Order.................................................................................................2
Dispute Notice.................................................................................................2
Documentation..................................................................................................2
Emissions Test.................................................................................................2
EPC Agreement..................................................................................................2
EPC Contractor.................................................................................................2
Equipment......................................................................................................2
Excusable Delay................................................................................................2
Facility.......................................................................................................2
Guarantee Fuel.................................................................................................2
Initial Synchronization........................................................................................3
Liquidated Damage Performance Guarantees.......................................................................3
Month..........................................................................................................3
Normal Carriage................................................................................................3
Options........................................................................................................3
Performance Guarantees.........................................................................................3
Performance Minimums...........................................................................................3
Performance Tests..............................................................................................3
Power Purchase Agreement.......................................................................................4
Project........................................................................................................4
Project Coordinators...........................................................................................4
Projected Date of Commercial Operation.........................................................................4
Proposed Delivery Date.........................................................................................4
Punch List.....................................................................................................4
Requested Delivery Date........................................................................................4
Scheduled Delivery Date........................................................................................4
Section(s).....................................................................................................4
Services.......................................................................................................4
Site...........................................................................................................4
Spare Part.....................................................................................................4
Specifications.................................................................................................4
Subcontractor(s) or Supplier(s)................................................................................4
Substantial Completion.........................................................................................5
Total Contract Price...........................................................................................5
<PAGE>
CONFIDENTIAL
Unit(s)........................................................................................................5
Unit Contract Price............................................................................................5
Utility Tests..................................................................................................5
Witness Tests..................................................................................................5
ARTICLE 2. SCOPE OF SUPPLY...............................................................................................6
2.1 Scope.....................................................................................................6
2.2 Directed Order............................................................................................6
2.3 Multiple Projects.........................................................................................6
2.4 Options...................................................................................................6
2.5 Pre-Assembly..............................................................................................6
ARTICLE 3. PRICE AND TERMS OF PAYMENT....................................................................................8
3.1 Total Contract Price......................................................................................8
3.2 Sales Tax.................................................................................................8
3.3 Progress Payment Schedule.................................................................................8
3.4 Changes in Total Contract Price...........................................................................8
3.5 Progress Payment Invoices.................................................................................9
ARTICLE 4. SHIPMENT AND DELIVERY........................................................................................11
4.1 Shipment of Equipment....................................................................................11
(a) Combustion Turbine Scheduled Delivery Date...................................................11
(b) Revised Total Contract Price and Payment Schedule............................................11
(c) Scheduled Delivery Date......................................................................12
(d) Delivery.....................................................................................12
4.2 Method of Shipment.......................................................................................13
4.3 Early Shipment...........................................................................................13
4.4 Inspection of Equipment..................................................................................13
ARTICLE 5. INSPECTION AND FACTORY TESTS.................................................................................14
5.1 Inspection Rights........................................................................................14
5.2 Witness Tests............................................................................................14
5.3 Notification of Testing..................................................................................14
5.4 Consequences of Inspection...............................................................................14
ARTICLE 6. DELIVERY, TITLE, AND RICK OF LOSS............................................................................15
6.1 Risk of Loss.............................................................................................15
6.2 Passage of Title.........................................................................................15
6.3 Computer Programs........................................................................................15
6.4 License of Computer Programs.............................................................................15
ARTICLE 7. EXCUSABLE DELAYS.............................................................................................17
7.1 Excusable Delay..........................................................................................17
ARTICLE 8. COMPLIANCE WITH LAWS, CODES AND STANDARDS....................................................................18
ii
<PAGE>
CONFIDENTIAL
8.1 Compliance with Applicable Laws..........................................................................18
8.2 Change in Applicable Laws................................................................................18
ARTICLE 9. CHANGES; ADDITIONAL EQUIPMENT................................................................................20
9.1 Changes..................................................................................................20
9.2 Options..................................................................................................20
ARTICLE 10. WARRANTY....................................................................................................21
10.1 Warranties and Representations..........................................................................21
10.2 Warranty Period.........................................................................................21
10.3 General Conditions of Warranty..........................................................................22
10.4 Warranty Obligations....................................................................................22
(i) Net Equipment Electric Output.......................................................24
(ii) Net Equipment Heat Rate............................................................24
(iii) Net Equipment Peak Electrical Output..............................................24
10.5 Extension of Warranty Period............................................................................24
10.6 Exclusive Warranties....................................................................................25
10.7 Warranty Exclusion......................................................................................25
ARTICLE 11. PROPRIETARY INFORMATION.....................................................................................26
11.1 Proprietary Information.................................................................................26
11.2 Exclusions from Confidentiality.........................................................................26
11.3 Buyer's Confidential Information........................................................................26
11.4 No Adequate Remedy......................................................................................27
11.5 Confidentiality of Contract.............................................................................27
ARTICLE 12. INTELLECTUAL PROPERTY.......................................................................................28
12.1 Intellectual Property Indemnification....................................................................28
12.2 Remedy for Infringement.................................................................................28
12.3 Exception to Indemnification............................................................................28
ARTICLE 13. LIMITATION OF LIABILITY.....................................................................................29
13.1 Limitation of Liability.................................................................................29
13.2 Consequential Damages Exclusion.........................................................................29
13.3 Retention of Remedies...................................................................................29
13.4 Further Limitations.....................................................................................30
ARTICLE 14. TERMINATION.................................................................................................31
14.1 Termination.............................................................................................31
14.2 Termination by Seller...................................................................................31
14.3 Termination by Buyer....................................................................................31
ARTICLE 15. INDEMNIFICATION.............................................................................................32
15.1 Indemnification.........................................................................................32
15.2 Indemnification.........................................................................................32
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ARTICLE 16. PERFORMANCE GUARANTEES......................................................................................33
16.1 Performance Guarantees..................................................................................33
(a) Liquidated Damage Performance Guarantees.....................................................33
(b) Performance Guarantees.......................................................................33
16.2 Satisfaction of Liquidated Damage Performance Guarantees and Performance Guarantees.....................34
(a) Satisfaction of Liquidated Damage Performance Guarantees.....................................34
(b) Satisfaction of Performance Guarantees.......................................................34
16.3 Demonstration Test Guarantees...........................................................................35
16.4 Availability Test Guarantee.............................................................................35
ARTICLE 17. LIQUIDATED DAMAGES AND ACCEPTANCE TESTING...................................................................37
17.1 Schedule Liquidated Damages.............................................................................37
(a) Delivery.....................................................................................37
(b) Commercial Operation.........................................................................37
(c) Accrual of Liquidated Damages under Section 17.1.............................................40
(d) Aggregation of Liquidated Damages............................................................40
(e) Limitation...................................................................................41
17.2 Performance.............................................................................................41
(a) Performance Guarantees.......................................................................41
(b) Performance Liquidated Damages...............................................................41
(i) Net Equipment Electric Output.......................................................41
(ii) Net Equipment Heat Rate............................................................41
(iii) Net Equipment Peak Electrical Output..............................................41
(c) Acceptance Testing...........................................................................41
(i) Testing Procedures..................................................................41
(ii) Diagnostic Testing and Remedy......................................................42
(iii) Retesting.........................................................................43
(d) Seller's Election to Reduce Liquidated Damages for Commercial Operation......................43
(e) Modified Liquidated Damages..................................................................45
(f) Failure of Performance Tests.................................................................45
(g) Limitation...................................................................................47
17.3 Documentation Liquidated Damages........................................................................47
17.4 Limitation of Liquidated Damages........................................................................47
17.5 Exclusive Remedy........................................................................................47
17.6 Application of Total Contract Price Reductions..........................................................48
ARTICLE 18. PROJECT MANAGEMENT..........................................................................................49
18.1 Project Coordinators....................................................................................49
18.2 Continuity of Seller's Employees........................................................................49
18.3 Status Reports..........................................................................................49
ARTICLE 19. TECHNICAL SERVICES..........................................................................................50
19.1 Technical Services......................................................................................50
ARTICLE 20. TRAINING AND DOCUMENTATION..................................................................................51
20.1 Documentation...........................................................................................51
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20.2 Reproduction of Documentation...........................................................................51
20.3 Training................................................................................................51
ARTICLE 21. INSURANCE...................................................................................................52
21.1 Insurance Requirements..................................................................................52
21.2 Additional Requirements.................................................................................52
ARTICLE 22. GENERAL CLAUSES.............................................................................................53
22.1 Assignment..............................................................................................53
22.2 Third Party Beneficiaries...............................................................................54
22.3 Entire Agreement........................................................................................54
22.4 Severability............................................................................................54
22.5 Independent Contractor..................................................................................54
22.6 Governing Law...........................................................................................54
22.7 Notice..................................................................................................54
22.8 Construction............................................................................................55
22.9 Nuclear Waiver..........................................................................................55
22.10 Dispute Resolution.....................................................................................56
22.11 Disclosure of Information..............................................................................56
INDEX TO APPENDICES......................................................................................................58
</TABLE>
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CONTRACT FOR PURCHASE
This Contract, effective this 27th day of August, 1999, is between
Tenaska Georgia I, L.P., a Delaware limited partnership ("Buyer") and General
Electric Company, a New York corporation ("Seller"). Buyer and Seller may be
referred to individually as a "Party" and collectively as "Parties".
ARTICLE 1. DEFINITIONS
The following defined terms used in this Contract have the meanings specified in
this Section.
ACCEPTANCE TESTING for a Unit means the performance of one or more of the
Performance Tests, Demonstrations Tests, the Emission Test, the Availability
Test or the Utility Tests for such Unit in accordance with the general
requirements of Section 3.0 of Appendix C and the particular requirements of the
individual tests.
APPLICABLE LAWS means all laws, ordinances, rules, regulations, orders,
interpretations, requirements, standards, codes, resolutions, licenses, permits,
judgments, decrees, injunctions, writs and orders of any court, arbitrator, or
governmental (federal, national, state, municipal, local or other, having
jurisdiction over a Party and the location where a particular element of the
Services is performed or where any part of the Equipment is situated) agency,
body, instrumentality or authority that are applicable to either or both of the
Parties, the Facility, the Site, the Services or the terms of this Agreement,
including the Codes and Standards described in Section 8 of Appendix A and all
environmental and hazardous materials laws which are applicable to a Site or the
Equipment and which are at any time applicable to performing the Services.
AVAILABILITY TEST means the test conducted by Buyer or on Buyer's behalf to
demonstrate that each Unit satisfies the requirements of Section 7.0 of Appendix
C.
BUSINESS DAYS mean all calendar days except Saturdays, Sundays and all legal
holidays of the United States or the State of New York.
BUYER'S INSPECTOR(S) has the meaning set forth in Section 5.1.
CANCELLATION CHARGE has the meaning set forth in Section 14.1.
COMMERCIAL OPERATION has the meaning set forth in Section 17.1(b).
COMPUTER PROGRAMS means the software programs provided by Seller to Buyer under
this Contract.
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CONTRACT means this contract, including Appendices A through M.
DEFERRED TESTS has the meaning set forth in Section 10.2.
DELIVERY has the meaning set forth in Section 4.1(d)(ii).
DELIVERY POINT means (i) the location selected by Buyer for Delivery of a Unit
in accordance with Section 4.1 when shipped by highway transport, or (ii) the
accessible rail siding nearest the location selected by Buyer in accordance with
Section 4.1 when shipped by rail transport.
DEMONSTRATION TESTS means tests conducted by Buyer or on Buyer's behalf to
demonstrate that a Unit satisfies the requirements of Section 6.0 of Appendix C.
DESIGN FINALIZATION MEETING has the meaning set forth in Section 18.3.
DIRECTED ORDER has the meaning set forth in Section 2.2.
DISPUTE NOTICE has the meaning set forth in Section 22.10.
DOCUMENTATION has the meaning set forth in Section 20.1.
EMISSIONS TEST means a test conducted by Buyer or on Buyer's behalf to
demonstrate that a Unit satisfies the Performance Guarantee set forth in Section
4.1 of Appendix C.
EPC AGREEMENT means the Engineering, Procurement and Construction Agreement of
Buyer for the Project, when executed.
EPC CONTRACTOR means the entity or entities which execute an EPC Agreement with
Buyer for the Project.
EQUIPMENT means: all items as described in Appendix A; all items included in any
Appendix D option exercised in accordance with such Appendix; and, all other
items, parts, components and materials necessary for the manufacture and supply
of the Units.
EXCUSABLE DELAY has the meaning set forth in Section 7.1.
FACILITY means the power generation facility at the Project Site together with
all Equipment located at such Site.
GUARANTEED DATE has the meaning set forth in Section 4.1(a).
GUARANTEE FUEL means the operating fuel, in accordance with fuel specifications,
which are specifically identified in Section 2.1 of Appendix C.
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INITIAL SYNCHRONIZATION means, for each Unit, the date on which the generator
breaker for such Unit is first closed and the Unit is connected to the electric
grid.
INTERIM PERFORMANCE REQUIREMENTS means the Interim Performance Requirement for
Net Equipment Electrical Output set forth in Section 1.1 of Appendix C and the
Interim Performance Requirement for Net Equipment Heat Rate set forth in Section
1.2 of Appendix C
LIQUIDATED DAMAGE PERFORMANCE GUARANTEES has the meaning set forth in Section
16.1(a).
MECHANICALLY COMPLETE means that installation of a Unit is complete and such
Unit and all necessary auxiliary systems (including any balance of plant issues
such as gas supply) are ready for first fire.
MONTH means a period of time beginning on a certain day of the month and ending
on the day before the same date in the following calendar month, provided that
when determining periods of one or more Months if the calendar month which
should contain the end date does not have a date corresponding to the end date
then the end of the period shall be the last day of such calendar month.
NORMAL CARRIAGE means carriage by either highway transport or by rail transport,
as selected by Seller, on normal routing from the factory to the Delivery Point.
OPTIONS has the meaning set forth in Section 9.2.
PERFORMANCE GUARANTEES has the meaning set forth in Section 16.1(b).
PERFORMANCE MINIMUMS means the Performance Minimum for Net Equipment Electrical
Output set forth in Section 1.1 of Appendix C and the Performance Minimum for
Net Equipment Heat Rate set forth in Section 1.2 of Appendix C.
PERFORMANCE TESTS means tests conducted by Buyer or on Buyer's behalf in
accordance with Section 5.0 of Appendix C to determine if a Unit or Units have
satisfied certain of the Liquidated Damage Performance Guarantees, Performance
Minimums and Performance Guarantees.
PHASE means either Phase I or Phase II of the Project.
PHASE I means the installation of Units #1, #2 and #3 and shall be completed
upon the achievement of Substantial Completion of all of Units #1, #2 and #3 and
the satisfactory completion of the tests set forth in Section 8.0 of Appendix C
with respect to such Units.
PHASE II means the installation of Units #4, #5 and #6 and shall be completed
upon achievement of Substantial Completion for all of the Units #1 through #6
and the satisfactory completion of the tests set forth in Section 8.0 of
Appendix C with respect to Units #1 through #6.
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POTENTIAL LIQUIDATED DAMAGES has the meaning set forth in Section 17.2(d).
POWER PURCHASE AGREEMENT means an agreement for the sale of power from the
Project.
PROJECT means the construction of a power generation facility for Buyer in Heard
County, Georgia, or such other location as designated by Buyer in accordance
with Section 4.1, at which the Units are to be installed, including related and
associated Equipment.
PROJECT COORDINATORS has the meaning set forth in Section 18.1.
PUNCH LIST means unfinished items which in the reasonable opinion of Buyer do
not affect the operation, safety or integrity of a Unit at a certain Facility
and do not impact the performance or life of the Unit, but are included in the
scope of Seller's obligations under the Contract.
SCHEDULED DATE OF COMMERCIAL OPERATION means, for each Unit, the "Scheduled Date
of Commercial Operation" for such Unit as such term is defined in the EPC
Agreement and, for each Phase, means the latest Scheduled Date of Commercial
Operation for any Unit in such Phase.
SCHEDULED DELIVERY DATE has the meaning set forth in Section 4.1(c).
SCHEDULED SHIPMENT DATE has the meaning set forth in Section 4.1(c).
SECTION(S) means sections of this Contract, not including Appendices, unless
otherwise stated.
SERVICES means all work or services to be performed by Seller in accordance with
this Contract.
SHIPMENT has the meaning set forth in Section 4.1(d)(i).
SITE means the location of the Project as set forth in the legal description
attached as Appendix K, or such other legal description as Buyer may substitute
upon designation of a Delivery Point other than a location at or near Heard
County, Georgia.
SPARE PART means any component of a Unit purchased by Buyer under this Contract
which is intended to be placed into Buyer's inventory and not used or installed
into the Unit at the time of Initial Synchronization.
SPECIFICATIONS means: Appendices A, C, D and G and, all other obligations of
Seller as described in Articles 1 through 22 of this Contract.
SUBCONTRACTOR(S) OR SUPPLIER(S) shall mean any licensor, subcontractor or
supplier of any tier supplying material, equipment, documentation, labor, goods
or services to Seller in connection with the obligations of Seller under the
Contract.
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SUBSTANTIAL COMPLETION has the meaning set forth in Section 10.2.
TOTAL CONTRACT PRICE has the meaning set forth in Section 3.1.
UNIT means each of the six (6) General Electric Frame PG7241 (FA) heavy-duty,
single shaft combustion turbine-generator units to be supplied to Buyer pursuant
to this Contract.
UNIT CONTRACT PRICE means that portion of the Total Contract Price allocable to
a specific individual Unit.
UNIT PERFORMANCE LIQUIDATED DAMAGES means liquidated damages which become due to
Buyer under this Contract at the rates set forth in Section 17.2(b) based upon
the performance testing of an individual Unit, the aggregate amount of which
shall be subject to adjustment based upon aggregate test results in accordance
with the provisions of Section 17.2(f).
UTILITY TESTS means tests conducted on all of the Units in Phase I and at a
later date, on all of the Units in Phase I and Phase II, by Buyer or on Buyer's
behalf in accordance with Section 8.0 of Appendix C.
WITNESS TESTS has the meaning set forth in Section 5.2.
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ARTICLE 2. SCOPE OF SUPPLY
2.1 SCOPE. Seller shall supply the Documentation, Equipment and Services
in accordance with the Specifications and shall meet the performance
requirements and guarantees set forth in this Contract in accordance
with the Specifications.
2.2 DIRECTED ORDER. If Buyer determines that Documentation, Equipment or
Services to be provided by Seller under this Contract do not comply
with Applicable Laws and Seller disagrees as to the Documentation,
Equipment or Services to be provided by Seller under this Contract,
Buyer may issue a Directed Order to Seller covering such Documentation,
Equipment or Services so long as such Directed Order is reasonably
capable of being performed by Seller and is intended solely to cause
such Documentation, Equipment or Services to comply with Applicable
Laws. If Owner issues a Directed Order, Seller shall proceed without
undue delay to provide the Documentation, Equipment or Service which
Buyer has directed, as set out in such order. Within ten (10) days
after Buyer's issuance of a Directed Order, if Seller disagrees with
such order, Seller shall submit a Dispute Notice to Buyer setting out
the reasons for Seller's disagreement with Buyer's position and the
Parties shall resolve such disagreement in accordance with the
procedures of Section 22.10.
2.3 RESERVED.
2.4 OPTIONS. If Buyer elects to exercise any of the Options described in
Section 9.2 and Appendix D, prior to or on August 31, 1999, then Seller
shall provide such Options to Buyer at the prices listed on and in
accordance with Section 9.2 and Appendix D, as applicable, and subject
to all terms and conditions of this Contract. If Buyer elects to
exercise any of the Options described in Section 9.2 and Appendix D
after August 31, 1999, Seller shall be entitled to a Change Order for
an applicable change in price or schedule, provided that Seller shall,
in good faith, attempt to mitigate any effects upon price and schedule.
2.5 PRE-ASSEMBLY. All Units, including the auxiliary equipment and the
following Major Components (to the extent included in the scope of
supply), shall be shipped pre-fabricated and pre-assembled as
described in Appendix A, according to Seller's standard practice.
<TABLE>
<S> <C>
Major Components
Combustion Turbine Unit(s): - combustion turbine
- generator
- gas valve module
- packaged electrical and electronic control cabinet
- fuel forwarding skid
- cooling water module
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- turbine enclosure
- accessory module
- water injection skid
- turbine inlet air & exhaust systems
- compressor water wash skid
- generator auxiliary compartment
- special installation tools
- interconnecting pipe and cables (to the extent included
in Seller's scope in Appendix A)
</TABLE>
Any and all changes shall be updated by Seller in a conformed
technical specification based on review and agreement by Buyer and
Seller prior to August 31, 1999.
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ARTICLE 3. PRICE AND TERMS OF PAYMENT
3.1 TOTAL CONTRACT PRICE. The total price for the Equipment, Documentation
and Services is [*] (the "Total Contract Price").
3.2 SALES TAX. The Total Contract Price does not include any federal, state
or local sales, use, excise, value added, or similar taxes, provided
that Buyer shall not be responsible for any foreign taxes of any kind
including excise taxes, value added taxes, sales or use taxes, customs
fees or duties which may arise as a result of the foreign manufacture
or import of any of the Equipment. Consequently, in addition to the
Total Contract Price, the amount of any present or future sales, use,
excise, value added, or other similar tax applicable to the sale or use
of the Equipment, Documentation or Services hereunder (exclusive of
taxes based on the income of Seller) shall be paid by Buyer, or in lieu
thereof Buyer shall provide Seller with a tax-exemption certificate (or
similar documentation) acceptable to the taxing authorities. Seller
agrees to cooperate within reason with Buyer in connection with any
proceeding or other action undertaken by Buyer for the purpose of
eliminating, reducing or deferring the payment of any such taxes.
Seller will cooperate with Buyer to provide such information to Buyer
or applicable taxing authorities so as to appropriately mitigate
Buyer's taxes, however, Seller will not be obligated to provide
proprietary cost information to taxing authorities, or to provide audit
information to taxing authorities beyond that which Seller determines
to be reasonable.
3.3 PROGRESS PAYMENT SCHEDULE. Seller acknowledges timely receipt from
Buyer of the payments shown on Appendix B as due to Seller through
August, 1999. Buyer shall make all additional progress payments to
Seller in accordance with the payment schedule attached as Appendix B.
Prior to Shipment of the first Major Component of a Unit, Buyer shall
provide to Seller written evidence, in a form reasonably acceptable to
Seller, that Buyer has the financial ability to satisfy Buyer's
remaining obligations under this Contract for such Units. Seller shall
be entitled to invoice Buyer on or before the fifteenth (15th) calendar
day of each calendar month for the progress payment due for the
following calendar month. All progress payments shall be made to Seller
upon submission of invoices by Seller in accordance with Section 3.5,
provided that each invoice submitted by Seller pursuant to the
applicable Appendix shall include charges only for those applicable
events or durations as described in Appendix B. All payments to be made
under this Section 3.3 shall be in accordance with Sections 3.1 and 3.4
of this Contract.
3.4 CHANGES IN TOTAL CONTRACT PRICE. In the event that a change in the
Contract scope pursuant to Section 9.1 results in a change in the Unit
Contract Price for one or more Units and in the Total Contract Price,
all payments shall be adjusted accordingly. However, if the change
results in a decrease in the Total Contract Price, then the payments
previously made shall be retained by Seller and the credit shall be
applied fully
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to the extent of the next payment and each subsequent payment as it
becomes due.
3.5 PROGRESS PAYMENT INVOICES. Invoices shall be received by Buyer not
later than the fifteenth (15th) calendar day of the month preceding the
month in which payment is due, and such invoices shall be due and
payable on the twenty-fifth (25th) calendar day of the month following
the month in which such invoice is received by Buyer, except that the
Shipment Payments (as described in Appendix B) and the Final Payments
(as described in Appendix B), shall each be due within three (3)
Business Days respectively after receipt of proper invoices documenting
the events or dates shown in Appendix B. In the event payment is not
received by the due date, interest shall accrue on such amount at an
annual rate of interest equal to the prime rate of The Chase Manhattan
Bank, N.A. in effect on the due date plus one percent (1%). Buyer may
withhold payment of the disputed portion of any invoice until such
dispute is resolved to the reasonable satisfaction of Buyer. If it is
determined that Buyer was justified in withholding payment or if the
dispute is settled in favor of Buyer, Buyer shall not pay interest on
the amounts withheld. If it is determined that Buyer was not justified
in withholding such amounts or if the dispute is settled in favor of
Seller, Buyer shall pay interest at the rate provided above, from the
time the withheld amount was due. Buyer may retain the Final Payment
for each Unit in Phase I in the amount of five percent (5%) per Unit
("Retainage") as security for any liquidated damages which may become
due under this Contract until Substantial Completion is achieved for
all Units in Phase I or until payment is made of Unit Performance
Liquidated Damages with respect to all of the Units in Phase I;
provided that if an election is made by Seller pursuant to Section
17.2(d) with respect to one or more Units in Phase I, then the
Potential Liquidated Damages calculated as set forth in Section 17.2(d)
shall be aggregated for all Units in Phase I and to the extent that the
aggregate Potential Liquidated Damages for such Units is less than the
Retainage for all of the Units in Phase I, Buyer shall pay to Seller
the amount by which the Retainage exceeds such aggregate Potential
Liquidated Damages; provided that as a condition to such payment each
Unit in Phase I which is not subject to an election under Section
17.2(d) shall have achieved Substantial Completion. Buyer may retain
the Final Payment for each Unit in Phase II in the amount of five
percent (5%) per Unit ("Retainage") as security for any liquidated
damages which may become due under this Contract until (i) the Deferred
Tests are completed for Units #2 and #3 and (ii) Substantial Completion
is achieved for all Units or until payment is made of final liquidated
damages with respect to all of the Units; provided that if an election
is made by Seller pursuant to Section 17.2(d) with respect to one or
more Units in Phase II, then the Potential Liquidated Damages
calculated as set forth in Section 17.2(d) shall be aggregated for all
Units in Phase II and to the extent that the aggregate Potential
Liquidated Damages for such Units is less than the Retainage for all of
the Units in Phase II, Buyer shall pay to Seller the amount by which
the Retainage exceeds such aggregate Potential Liquidated Damages;
provided that as a condition to such payment each Unit in Phase II
which is not subject to an election under Section 17.2(d) shall have
achieved Substantial Completion. Notwithstanding the achievement of
Substantial Completion for a Unit, Buyer may continue to hold a portion
of the Retainage for such Unit equal to Twenty Five Thousand Dollars
($25,000) until the satisfactory completion of tests with respect to
the
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Combustion Turbine Evaporative Cooler for such Unit plus an amount
equal to twice the value of any Punch List items for such Unit. Buyer
and Seller shall mutually agree upon an estimated cost for each item
included by Buyer on the Punch List, and Buyer shall, on a monthly
basis, release such amounts from such Retainage as correspond to twice
the value of those items on the Punch List which Seller has completed
and when all remaining Punch List items are complete and approved by
Buyer, Buyer shall release the entire Retainage. In the event that,
following timely Delivery of all of the Units in a Phase in accordance
with the provisions of this Contract, all of the Units in a Phase have
not achieved Substantial Completion by the date ("Delayed Final Payment
Date") which is the earlier of (i) six (6) months after the Scheduled
Date of Commercial Operation for such Phase, as such date is determined
at the time of execution of the EPC Agreement or (ii) June 1, 2002 for
Phase I and June 1, 2003 for Phase II, as applicable, through no cause
of Seller (including any claim of Excusable Delay by Seller under this
Contract), then Buyer shall pay to Seller all of the Retainage for the
Units in such Phase (if, with respect to Phase II only, less than [*]
of Technical Services have been used at such time with respect to all
of the Units, Buyer shall receive a credit against any Retainage to be
paid equal to the difference between [*] and the number of man-weeks
actually used multiplied by [*]) within three (3) Business Days after
the Delayed Final Payment Date for such Phase, provided that payment of
such Retainage shall not release Seller from any liability or
obligation due or which may become due under this Contract, except
that Seller will no longer be obligated to provide additional Technical
Services as set forth in Section 19.1. Payment of Retainage to Seller
pursuant to the immediately preceding sentence shall be accompanied by
interest on the amount of such payment at the annual rate of interest
equal to the prime rate of The Chase Manhattan Bank, in effect on the
Scheduled Date of Commercial Operation for the applicable Phase, as
such date is determined at the time of execution of the EPC Agreement,
plus onepercent (1%), until the date of payment to Seller.
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ARTICLE 4. SHIPMENT AND DELIVERY
4.1 SHIPMENT OF EQUIPMENT. Approximately ninety (90) days prior to the
first anticipated shipment of any Major Components for a Unit, Seller
shall notify Buyer of the anticipated date for Shipment of such Unit.
Upon receipt of notification from Seller of the anticipated date for
Shipment for a Unit, Buyer shall immediately designate a Delivery Point
for such Unit, provided that if Buyer fails to designate a Delivery
Point for a Unit within sixty (60) days of such notification, the Unit
shall be stored by Seller until Buyer designates a Delivery Point. In
the event of such storage, Buyer shall reimburse Seller's additional
expenses thereby incurred, including but not limited to preparation
for, placement into, and removal from storage. Each Unit shall be
shipped by Seller so that the Unit will be delivered by Normal
Carriage, in accordance with Section 4.2, to the Delivery Point. If
Buyer directs Seller to deliver the Unit to a Delivery Point other than
a location at or near Heard County, Georgia then (i) Buyer shall pay to
Seller any additional delivery costs incurred by Seller for such
delivery of the Unit to such other location, or (ii) Buyer shall be
entitled to a credit from Seller against the Total Contract Price for
any delivery costs saved by Seller for such delivery of the Unit to
such other location. In the event that Seller places a Unit in storage
in accordance with the provisions of this Section 4.1, Seller shall be
deemed to have accomplished Shipment or Delivery, as applicable, for
the purposes of Section 17.1 upon placing such Unit in storage,
provided that upon designation of a Delivery Point by Buyer such Unit
shall be delivered to the Delivery Point within four (4) weeks of such
designation.
(A) COMBUSTION TURBINE SCHEDULED DELIVERY DATE. Subject to the
provisions of Section 4.1(d), Scheduled Shipment Dates and
Scheduled Delivery Dates of the Units shall be as follows:
<TABLE>
<CAPTION>
SCHEDULED SHIPMENT DATE SCHEDULED DELIVERY DATE
----------------------- -----------------------
<S> <C> <C>
Gas Turbine-Generator Unit #1 [*] [*]
Gas Turbine-Generator Unit #2 [*] [*]
Gas Turbine-Generator Unit #3 [*] [*]
Gas Turbine-Generator Unit #4 [*] [*]
Gas Turbine-Generator Unit #5 [*] [*]
Gas Turbine-Generator Unit #6 [*] [*]
</TABLE>
"Guaranteed Date" means for each of Units #1 and #4 the Scheduled
Delivery Date for such Unit and for each of Units #2, #3, #5 and
#6 the Scheduled Shipment Date for such Unit, which dates, if not
met by Seller will, in accordance with Section 17.1, subject
Seller to the payment of liquidated damages.
(B) RESERVED.
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(C) SCHEDULED SHIPMENT DATE AND SCHEDULED DELIVERY DATE. Unless the
context requires otherwise, the term "Scheduled Shipment Date" as
used in this Contract shall mean, for each Unit, the date, as set
forth in Section 4.1(a), that Shipment of such Unit is to be
accomplished pursuant to the terms of this Contract. Unless the
context requires otherwise, the term "Scheduled Delivery Date" as
used in this Contract shall mean, for each Unit, the date, as set
forth in Section 4.1(a), that Delivery of such Unit is to be made
to the Delivery Point pursuant to the terms of this Contract.
(D) SHIPMENT AND DELIVERY.
(I) SHIPMENT. For the purposes of this Contract, "Shipment" of a
Unit shall be deemed to have occurred when the last of the
Major Components of such Unit as set forth in Section 2.5
(provided such Major Components substantially conform to the
Specifications and requirements of this Contract) has been
placed in the carrier's custody for shipment to the Delivery
Point in accordance with this Contract, as evidenced by a
bill of lading signed by the carrier; provided that for
purposes of any Unit or Major Component of a Unit
manufactured or procured from outside the United States,
"Shipment" of such Unit or Major Component shall be deemed
to have occurred when such Unit or Major Component clears
United States Customs at its port of entry into the United
States; and further provided that solely for the purposes of
determining liquidated damages pursuant to Section 17.1(a),
Shipment of a Unit shall be deemed not to have occurred if
any Equipment related to such Unit remains undelivered more
than ninety (90) days after the Scheduled Shipment Date for
such Unit and such undelivered Equipment delays the
installation and safe operation of such Unit.
Notwithstanding the provision of the immediately preceding
sentence, liquidated damages shall not begin to accrue for
late Shipment of a Unit under Section 17.1(a) because of any
undelivered Equipment related to such Unit until ten (10)
days after delivery to Seller of written notice that such
Equipment is undelivered and may delay the installation and
safe operation of such Unit.
(II) DELIVERY. For the purposes of this Contract, "Delivery" of a
Unit shall be deemed to have occurred when the last of the
Major Components of such Unit as set forth in Section 2.5
(provided such Major Components substantially conform to the
Specifications and requirements of this Contract) has been
delivered to the Delivery Point as evidenced by a bill of
lading signed by the carrier; provided that solely for the
purposes of determining liquidated damages pursuant to
Section 17.1(a), Delivery of a Unit shall be deemed not to
have occurred if any Equipment related to such Unit (other
than such Major Components) remains undelivered more than
sixty (60) days after the Scheduled Delivery Date for such
Unit and such undelivered Equipment delays the installation
and safe operation of such
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Unit. Notwithstanding the provision of the immediately
preceding sentence, liquidated damages shall not begin to
accrue for late Delivery of a Unit under Section 17.1(a)
because of any undelivered Equipment related to such Unit
(other than such Major Components) until ten (10) days after
delivery to Seller of written notice that such Equipment is
undelivered and may delay the installation and safe
operation of such Unit.
4.2 METHOD OF SHIPMENT. Shipment will be made F.O.B. carrier, at the point
of delivery to the carrier. Seller shall, at Seller's expense, arrange
for Shipment of the Equipment by Normal Carriage to the Delivery
Point.
4.3 EARLY SHIPMENT. Seller plans to deliver the generators and the
following additional Equipment (PEECC, Isophase Bus, Sole Plates,
Generator Terminal Enclosure, Bus Accessory Compartment, Isolation
Transformer, DC Link Reactor, LCI Module, Inlet Duct and Inlet Filter)
associated with Combustion Turbine-Generator Units #2 and #3 by
[*], respectively. Seller makes no guarantee of any early Shipment or
early Delivery of Combustion Turbine- Generator Units #2 and #3. The
only Guaranteed Dates for such Units are as designated in Section
4.1(a). Except with respect to the generators and additional Equipment
for Combustion Turbine-Generator Units #2 and #3 itemized above, or as
otherwise specifically agreed upon by Buyer in writing, Buyer shall
not be required to accept early Shipment of any Unit if such Shipment
would result in delivery of any portion of such Unit earlier than one
(1) Month prior to the Scheduled Delivery Date for such Unit.
4.3 INSPECTION OF EQUIPMENT. Payment for Equipment provided hereunder, or
inspection or testing thereof by Buyer, shall not constitute acceptance
or relieve Seller of its obligations under this Contract. Buyer may
inspect the Equipment delivered and reject upon prompt notification to
Seller any and all such Equipment which does not conform to the
Specifications or the requirements of this Contract. Equipment which is
rejected shall be corrected, repaired, or replaced by Seller in
accordance with Seller's warranty obligations under Article 10, such
that the Equipment conforms to the Specifications and requirements of
this Contract. If Buyer receives Equipment with a defect or
nonconformity not reasonably apparent on inspection, then Buyer
reserves the right to require prompt correction, repair, or replacement
by Seller in accordance with Seller's warranty obligations under
Article 10 following the discovery of such defect or nonconformity.
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ARTICLE 5. INSPECTION AND FACTORY TESTS
5.1 INSPECTION RIGHTS. Buyer, its agents (including but not limited to
Buyer's engineering and construction contractors and employees and
consultants of Tenaska, Inc.), as well as the employees and agents for
the purchasers of the electrical output of the Project and Buyer's
lenders (collectively, "Buyer's Inspector(s)") will be provided access
to Seller's facilities and production records for purposes of obtaining
information on production progress, quality control, determining
status, and observing tests and inspections. Seller shall have the
right of approval, which approval shall not be unreasonably withheld,
with respect to all Buyer's Inspectors who are not employees of
Tenaska, Inc. Such access may be conditioned upon the execution by such
inspectors of confidentiality agreements acceptable to Seller, in its
reasonable discretion, and limited to areas concerned with the
Equipment where work of a non-proprietary nature is performed.
5.2 WITNESS TESTS. All "non-optional" factory testing described in Appendix
L shall be successfully completed by Seller prior to Shipment of a
Unit. Seller and Buyer shall mutually agree upon a specific list of
factory tests ("Witness Tests") which Buyer's Inspectors shall witness,
provided that such list may be supplemented at Buyer's request to
permit Buyer to witness additional factory tests which Seller intends
to conduct, upon reasonable advance notice to Seller. Such Witness
Tests shall be initially identified as such in Appendix A.
5.3 NOTIFICATION OF TESTING. Seller shall advise Buyer as to the schedule
for testing and Buyer's Inspectors will be given an opportunity to
observe work during regular working hours. Neither completion of
production work nor shipment of any part of the Equipment will be
delayed to accommodate Buyer's Inspectors. The conditions of any tests
shall be as set forth in the Specifications and Buyer shall be notified
at least ten (10) Business Days prior to the commencement of all
Witness Tests. Buyer will be informed of Seller's methods of reporting
production progress. Appropriate office facilities will be provided
where Buyer's Inspectors may conduct their work in connection with the
above. Subject to the conditions set forth in this Article 5, Seller
will make reasonable efforts to obtain for Buyer access to Seller's
Suppliers' facilities for the purposes described in this Article.
5.4 CONSEQUENCES OF INSPECTION. Buyer's inspection of the work or Buyer's
failure to inspect any work in no way relieves Seller of its
obligation to fulfill the requirements of this Contract nor is it to
be construed as acceptance by Buyer.
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ARTICLE 6. DELIVERY, TITLE, AND RISK OF LOSS
6.1 RISK OF LOSS. Seller shall retain all risk of loss for damage to the
Equipment until the Equipment is delivered to the Delivery Point. Risk
of loss or damage to the Equipment, except for Computer Programs,
shall pass to and vest in Buyer upon arrival of the Equipment at the
Delivery Point.
6.2 PASSAGE OF TITLE. Title to the Equipment shipped from within the United
States shall vest in Buyer when the Equipment is placed in the
carrier's custody for shipment, and title to Equipment shipped from a
country other than the United States shall vest in Buyer at the port of
export immediately after the Equipment has been cleared for export.
Upon transfer of title to Equipment to Buyer, Seller shall promptly
execute and deliver to Buyer written documentation which shall be
effective to confirm in Buyer good and marketable title to the
Equipment being purchased, free and clear of all obligations,
mortgages, liens, pledges, custodianship, security interests, or any
other encumbrances, claims, or charges of any kind whatsoever, except
those relating to any payments remaining due Seller under this
Contract. Upon written request of Buyer, Seller shall execute and
deliver such documents as are reasonably required by Buyer to
subordinate the lien, security interest, or claim of Seller relating to
any payments remaining due under this Contract, to the interests
(including any lien and/or security interests) of the lenders for the
Project. It is expressly understood that Seller has the right to
utilize all resources within its global manufacturing and supplier
network to supply the requirements of this Contract. In the event that
Major Components are manufactured in a country other than the United
States, such Major Components will be scheduled by Seller to arrive in
the United States for delivery to the Delivery Point no later than the
applicable date(s) set forth in Section 4.1(a), or any other date(s)
mutually agreed upon by Buyer and Seller, in writing. Seller shall
indemnify Buyer and hold Buyer harmless with respect to any foreign
taxes of any kind including excise taxes, value added taxes, sales or
use taxes, customs, fees or duties which may arise as a result of the
foreign manufacture or import of any of the Equipment.
6.3 COMPUTER PROGRAMS. Title to and right of possession of any Computer
Programs licensed hereunder shall remain with Seller, or its licensor,
except that Buyer shall have the right of possession and use of the
Computer Programs provided hereunder at no cost for the term of the
license set forth in Section 6.4. Nothing in this Contract shall be
construed as limiting Seller, or its licensors, from using and
licensing the Computer Programs to any third party.
6.4 LICENSE OF COMPUTER PROGRAMS. Seller grants to Buyer, and any party
under contract with Buyer to operate the Units of Equipment, a
nontransferable, nonexclusive license (the "License"), without
sublicensing rights, to use the computer programs provided to Buyer
under this Contract (the "Computer Programs") solely in connection with
the Unit for which such Computer Programs are supplied, subject to the
conditions and restrictions contained in this Contract. The term of the
License shall extend until the
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decommissioning of the Unit for which such Computer Programs are
licensed. The License does not grant any right to the background
technology from which the Computer Programs were generated or to the
source code underlying the Computer Programs, except to the extent
specifically identified in this Contract. Except as specifically set
forth in this Contract, Buyer is granted no right to modify the
Computer Programs or merge the computer programs with other computer
programs, provided that the use of the Computer Programs with other
programs or the sharing of data between the Computer Programs and
other programs is not prohibited. Notwithstanding the foregoing
provisions of this Section 6.4, in the event of the sale or transfer
of any Unit of the Equipment or the sale or transfer of the Project,
such License will automatically transfer to the transferee, subject to
the terms of this Section 6.4. In the event that Seller updates,
revises or enhances the Computer Programs governed by the License,
Seller shall make all such updates, revisions or enhancements to the
Computer Programs available to Buyer on reasonable terms.
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ARTICLE 7. EXCUSABLE DELAYS
7.1 [*] The following one (1) page has been omitted and filed separately
with the Securities and Exchange Commission as part of a
Confidential Treatment Request.
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ARTICLE 8. COMPLIANCE WITH LAWS, CODES AND STANDARDS
8.1 COMPLIANCE WITH APPLICABLE LAWS. Seller warrants and represents that
the Equipment, Documentation and Services under this Contract shall
comply, at the time of Delivery and in the case of Services at the time
of performance, with all Applicable Laws, except to the extent that
such Applicable Laws (i) pertain to conditions within the control of
Buyer or (ii) pertain to sound level emissions and gas emissions of the
Units, in which case Seller's obligations shall be as set forth in this
Contract. Buyer shall advise Seller of any local laws, codes, standards
and regulations ("local laws") materially affecting the Equipment.
Seller's representation and warranty as to compliance with local laws
is subject to and limited by the preceding sentence.
In the event that Seller fails to conform to the above warranty, Buyer
shall, promptly after discovery, advise Seller thereof in writing and
Seller, at its option and expense, shall repair, replace or modify the
nonconforming Equipment or Documentation or reperform the nonconforming
portion of Services in accordance with Seller's warranty obligations
under Article 10. In the event of any unreasonable delay by Buyer in
advising Seller of a breach of the warranty set forth in Section 8.1,
Seller shall be relieved of its warranty obligations hereunder only to
the extent of any additional loss or expense directly resulting from
such delay.
8.2 CHANGE IN APPLICABLE LAWS. In the event that compliance under Section
8.1 with respect to any applicable local laws requires any
modifications to the scope set forth in Appendix A or any changes in
Seller's design, manufacturing processes and procedures, or quality
assurance program, then the Total Contract Price will be adjusted by
change order to equitably reflect the added costs and expense to Seller
of such change and, if necessary, the schedule for Seller's performance
under the Contract will be revised for the reasonable period necessary
to comply with such modification, change or revision. Any other
provisions of this Contract will be modified as is required by such
change or revision in Applicable Laws. In the event Buyer elects to
have one or more of the Units delivered to any location other than a
location at or near Heard County, Georgia, and any modifications to the
scope set forth in Appendix A or any changes in Sellers design,
manufacturing processes and procedures, or quality assurance program
are required as a result of such change of location, including changes
required for compliance under Section 8.1, then the Unit Contract Price
for such Unit(s) and the Total Contract Price will be adjusted by
change order to equitably reflect the added or reduced costs and
expenses to Seller of such change and, if necessary, the schedule for
Seller's performance under the Contract will be revised for the
reasonable period necessary to comply with such modification, change or
revision, and any other provisions of this Contract will be modified as
is required by any changes in the Applicable Laws. Notwithstanding the
foregoing, no modification in the Total Contract Price, schedule or
other provisions of this Contract shall be made as a result of any
general change in the manufacturing facilities of Seller or a change in
Seller's work force not specifically limited to the
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Equipment, Documentation or Services for this Project, resulting from
any change of Applicable Laws.
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ARTICLE 9. CHANGES; ADDITIONAL EQUIPMENT
9.1 CHANGES. Buyer may, by written change order, make mutually agreed to
changes to the Equipment, Documentation and/or Services. If any such
change results in an increase or decrease in the cost or time required
for the performance of the Services or changes to any other pertinent
provisions under this Contract, then there shall be an equitable
adjustment to the Total Contract Price and any applicable Unit Contract
Prices and time of delivery and any other pertinent provisions of the
Contract. Any such change in the Equipment, Documentation and/or
Services and in the Total Contract Price and any Unit Contract Price or
the Scheduled Delivery Date or any other pertinent provisions of the
Contract, shall be indicated on the change order. If Buyer and Seller
do not agree upon the price of such change or its effect on the
Scheduled Delivery Date or its effect on any other pertinent provisions
of the Contract, Buyer may issue a Directed Change Order, so long as
such Directed Change Order is reasonably capable of being performed by
Seller and is intended solely to cause the Documentation, Equipment or
Services to comply with Applicable Laws, and Seller shall proceed
without undue delay to perform the change described in the Directed
Change Order, as set out in such order and consistent with this Section
9.1. Within ten (10) days after Buyer's submission of a Directed Change
Order, Seller shall submit a Dispute Notice to Buyer setting out the
reasons for Seller's disagreement with the price of such change or its
effect on the Scheduled Delivery Date or its effect on any other
pertinent provisions of Seller, and the Parties shall resolve such
disagreement in accordance with the procedures of Section 22.10.
9.2 OPTIONS. Attached to this Contract as Appendix D is a listing of
certain options (the "Options") that are available in connection with
the Equipment. The Parties agree that the prices listed on Appendix D
with respect to the Options are firm prices in accordance with Article
3. In the event Buyer elects to purchase any such Option(s), the
Contract Price and any other pertinent provisions of the Contract shall
be adjusted accordingly. Seller agrees that the Scheduled Delivery Date
shall not be impacted in the event Buyer selects such Options set forth
in Appendix D on or prior August 31, 1999.
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ARTICLE 10. WARRANTY
10.1 WARRANTIES AND REPRESENTATIONS.
(a) Seller warrants and represents to Buyer that the Equipment to
be delivered hereunder shall be as described in the
Specifications; shall be designed and fit for the purpose of
generating electric power in accordance with the
Specifications; shall be new; and shall be free from defects
in material, workmanship, and title; and that the Services
shall be performed in a competent, diligent, workmanlike
manner in accordance with generally accepted industry
standards. Seller further warrants and represents to Buyer
that the Documentation, Specifications, and other materials
which are to be provided to Buyer under this Contract, will
faithfully and accurately reflect the Equipment provided under
this Contract.
(b) Seller warrants and represents to Buyer that Seller will have
good and indefeasible title, and will at the time of transfer
of title under this Contract, convey to Buyer good and
indefeasible title to the Equipment, free and clear of any and
all liens and security interests which may arise by or through
Seller or any subcontractor of Seller.
10.2 WARRANTY PERIOD. The warranties set forth in Section 10.1(a) for each
Unit shall apply to defects which appear prior to Substantial
Completion and during a period of either (i) twelve (12) Months
following the earlier of (1) the date on which Seller makes a valid
election with respect to such Unit under Section 17.2(d) or (2) the
date such Unit achieves Substantial Completion; or (ii) thirty (30)
Months from the actual date of Delivery of such Unit to Buyer,
whichever period expires first ("Warranty Period"). Where any item of
Equipment is used with more than one Unit, the warranty on such item
shall be for the same period as the warranty on the Unit with which it
is first used. The Warranty Period for a Unit shall be extended on a
day-for-day basis for any period of time in excess of ten (10) days
that the Unit is not capable of operating due solely to a warranty
claim attributable to Seller. For the purposes of this paragraph, the
number of days of Warranty Period extension shall be counted as those
days in excess of ten (10) between:
(i) the date the Unit is removed from service, or unable to return
to service, solely due to a warranty nonconformity for which Seller is
responsible; and
(ii) the date the corrective work is complete and Seller advises that
the Unit is available for return to service.
"Substantial Completion" of a Unit shall mean the satisfaction by such
Unit of each of the Liquidated Damage Performance Guarantees,
Performance Guarantees, Demonstration Test Requirements and the
Availability Test Requirements under Article 16; provided that with
respect to Units #2 and #3, certain tests as indicated in Section 3.15
of Exhibit C
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("Deferred Tests") shall be deferred and the performance requirements
of such Deferred Tests shall not be a condition of Substantial
Completion of such Units. The Warranty Period for the warranties set
forth in Section 10.1(b) shall extend for a period of five (5) years
from the date of this Contract.
10.3 GENERAL CONDITIONS OF WARRANTY. The warranties and remedies set forth
herein are conditioned upon the following:
(a) The proper receipt, handling, storage, installation, use,
inspection, operation and maintenance of the Equipment by
Buyer in accordance with the Specifications and written
service manuals and written advisories (to the extent such
service manuals and advisories are not inconsistent with the
terms of this Contract including the Specifications) provided
by Seller pursuant to the Contract, and, in the absence
thereof, Buyer following generally accepted industry practices
in regard to the above activities.
(b) The Equipment not being subjected to accident, alteration,
abuse or misuse by Buyer, which directly causes a defect in
the Equipment.
(c) Buyer shall allow Seller the reasonable opportunity to review
operating and maintenance records relating to the Facility at
which the warranted Equipment is located and shall provide
Seller's representatives reasonable access to the Site for the
purpose of observing the Equipment and the operation and
maintenance thereof.
10.4 WARRANTY OBLIGATIONS.
(a) Except with respect to the warranties set forth in Section
10.1(b), if during the applicable Warranty Period, the
Equipment or Documentation delivered and/or Services
performed under this Contract do not meet the above
warranties, then Buyer shall promptly notify Seller, not later
than thirty (30) days after the expiration of the Warranty
Period, and make the Equipment or Documentation available
promptly for correction; provided that Buyer may elect to
defer the correction for a reasonable period of time to permit
Buyer's continued use of the Equipment, but Buyer assumes the
risk of any additional damage which may arise from the
deferral of such correction. Seller, at its expense, shall
thereupon correct any defect, at its option, by (i)
re-performing the defective Service, (ii) modifying or
repairing any Equipment or Documentation not in compliance
with Section 8.1, and/or (iii) repairing, replacing, or
modifying any defective Equipment, or any defects in the
Documentation (including repairing, replacing, or modifying
any parts of the Equipment damaged ("Collateral Damage") as a
result of the defective Service, defective parts, or defective
Documentation, except that Seller shall be entitled to be
reimbursed by Buyer for the costs incurred by Seller with
respect to repairing the Collateral Damage, but only to the
extent of any insurance proceeds
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received by Buyer to cover the expense of repairing such
Collateral Damage); provided that in repairing, replacing,
or modifying any Equipment, Buyer shall not materially
change the functionality or performance of the Equipment to
the detriment of Buyer. Seller shall provide technical
advisory services reasonably necessary for any such repair
or replacement. If required to avoid or mitigate a forced
outage, warranty work and services by Seller shall be
performed on a twenty-four (24) hours a day, seven (7) days
a week basis. Such warranty work and services are limited to
the Equipment supplied and do not include removal and
replacement of structures or other parts of the facility
reasonably necessary to conduct the warranty work. In the
event Seller shall fail to undertake and perform its
warranty obligations within a reasonable time, Buyer may,
with prior written notice to Seller, perform or retain a
third party contractor to perform such warranty work and
Seller shall be liable for the reasonable costs thereof. In
such event, Seller's ongoing warranty obligations on the
portion of work on which Buyer or a third party contractor
are performing such warranty work shall only continue if
Seller gives written approval, which shall not be
unreasonably withheld, to the remedial work performed by
Buyer or third party contractor.
(b) [*] This paragraph has been omitted and filed separately
with the Securities and Exchange Commission as part of a
Confidential Treatment Request.
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(i) NET EQUIPMENT ELECTRICAL OUTPUT - [*] for each
kilowatt that the Net Equipment Electrical Output
(using an aggregated number for all reworked Units
based upon the testing of all reworked Unit(s) at
the Project) measured after such warranty work is
less than the Final Test Value for Net Equipment
Electrical Output of such Unit(s) measured during
Acceptance Testing, adjusted in accordance with
the degradation curve attached in Appendix C.
(ii) NET EQUIPMENT HEAT RATE - [*] for each BTU per
kilowatt hour per Unit that the Net Equipment Heat
Rate (determined as an average for all reworked
Unit(s) based upon the testing of all reworked
Unit(s) at the Project) measured after such
warranty work and when operated on natural gas is
greater than the Final Test Value for Net
Equipment Heat Rate (determined as an average for
all Unit(s)) measured during Acceptance Testing
when operated on natural gas, adjusted in
accordance with the degradation curve attached in
Appendix C, plus [*] for each BTU per kilowatt
hour per Unit that the Net Equipment Heat Rate
(determined as an average for all reworked
Unit(s) based upon the testing of all reworked
Unit (s) at the Project) measured after such
warranty work and when operated on fuel oil is
greater than the Final Test Value for Net
Equipment Heat Rate (determined as an average for
all Unit(s)) measured during Acceptance Testing
when operated on fuel oil, adjusted in accordance
with the degradation curve attached in Appendix C.
Seller's total aggregate liability for liquidated damages
under this Section 10.4 shall not exceed [*] of the
Contract Price. Payment of liquidated damages under
this Section 10.4 shall relieve Seller from all further
liability with respect to the change in Net Equipment
Electrical Output or Net Equipment Heat Rate of the Equipment
but shall not relieve Seller in any way from any warranty
obligations under this Contract.
10.5 EXTENSION OF WARRANTY PERIOD. Any modified, repaired or replaced part
of the Equipment, revised Documentation and/or service furnished in
connection therewith and any Service re-performed under the aforesaid
warranty shall carry warranties on the same terms as set forth above
except that the warranty period shall be for a period of one (1) year
from the date of such modification, repair or replacement, revision, or
reperformance. Seller's warranty obligations with respect to any Unit,
if not terminated earlier pursuant to this Article 10, shall terminate
on and shall be subject to the overall warranty limit of, the lesser of
four (4) years after Substantial Completion of the Unit, or five (5)
years after Delivery of the Unit.
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10.6 EXCLUSIVE WARRANTIES. The warranties set forth in this Article 10 and
the warranty contained in Section 8.1, are exclusive and in lieu of all
other warranties, whether written, oral, implied or statutory. NO
IMPLIED OR STATUTORY WARRANTY OF EITHER MERCHANTABILITY OR FITNESS FOR
PARTICULAR PURPOSE, OR ANY WARRANTIES ARISING FROM COURSE OF DEALING OR
USAGE OF TRADE SHALL APPLY. The remedies set forth in this Article 10,
Article 17, Section 8.1 and Section 13.3 are the only remedies of Buyer
for claims based on defect in or failure of Equipment or Services,
whether said claims are designated as arising in contract, warranty
(other than with respect to infringement which shall be governed by
Article 12), tort (including negligence), strict liability, indemnity
(other than with respect to those situations governed by Article 15),
or otherwise, whether arising before or after Delivery, and however
instituted.
10.7 WARRANTY EXCLUSION. Seller does not warrant the Equipment or any
repaired or replaced part against normal wear and tear due to operation
or environment.
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ARTICLE 11. PROPRIETARY INFORMATION
11.1 PROPRIETARY INFORMATION. Performance of the Contract by Seller may
involve the use or furnishing of drawings, procedures, equipment, or
the like, which Seller considers to be proprietary. At the time of
furnishing such information to Buyer, Seller will expressly designate
by label, stamp, or other written communication that the information or
documentation furnished is proprietary and confidential. Buyer, its
employees, and agents (including any architect/engineer or contractor)
agree (a) to treat such information as confidential and to use all
reasonable care not to divulge such information to any third party
other than (i) employees and consultants of Tenaska, Inc., (ii) the
purchasers of the electrical output generated by the Project, (iii)
Buyer's lenders, investors, contractors, partners, insurers,
consultants and affiliates, (iv) Buyer's Project operator, (v)
governmental regulators, (vi) affiliates of partners in Buyer and (vii)
permitted assignees under Section 22.1, (b) to restrict the use of such
information to matters relating to (i) Seller's performance of the
Contract and (ii) Buyer's performance of its obligations to regulators,
investors, lenders, contractors, Project operator, and purchasers of
the electrical output generated by such Facility, and (c) in all cases
to restrict such access to those individuals or entities whose access
is necessary in the implementation of the Contract, the development,
construction and operation of such Project, and the purchasers of the
electrical output generated by the Project, subject to the
confidentiality provisions of this Article 11. Except for such
purposes, confidential information will not be reproduced without
Seller's prior written consent.
11.2 EXCLUSIONS FROM CONFIDENTIALITY. The foregoing restrictions do not
apply to information which: (i) is contained in a printed publication
which was released to the public by Seller prior to the date of this
Contract or is disclosed by Seller without restriction either prior to
or subsequent to the receipt by Buyer of such information; (ii) is, or
becomes, publicly known otherwise than through a wrongful act of Buyer,
its employees, or agents; (iii) is in the possession of Buyer, its
employees, or agents prior to receipt from Seller, provided that the
person or persons providing the same have not had access to the
information from Seller; (iv) is developed independently by Buyer, its
agents or employees without use of Seller's confidential information;
(v) is required to be disclosed by a court, governmental or regulatory
body; or (vi) is approved in writing by Seller for disclosure by Buyer,
its agents or employees to a third party not bound by the
confidentiality obligations afforded to Seller under Section 11.1
above.
11.3 BUYER'S CONFIDENTIAL INFORMATION. Confidential information shall also
include any Project information obtained by Seller from, or disclosed
to Seller by, Buyer, its agents or employees, which is considered by
Buyer to be proprietary, and is designated by label, stamp, or other
written communication by Buyer to Seller that the information or
documentation furnished is proprietary and confidential, except such
information as was (i) previously known by Seller, free from any
obligation to keep it confidential, (ii) publicly disclosed or
disclosed without restriction by Buyer to parties other than Buyer's
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partners, affiliates of partners or lenders or potential lenders for
the Project, either prior to or subsequent to the receipt by Seller of
such information, or (iii) is developed independently by Seller, its
agents or employees without use of Buyer's confidential information.
Except as may be authorized by Buyer in writing, Seller shall not
disclose to any person, firm, or enterprise, or use for its own benefit
other than in the performance of its obligations under this Contract or
if required to do so by a court, governmental or regulatory body, any
such confidential information of Buyer.
11.4 NO ADEQUATE REMEDY. Each Party acknowledges and agrees that, in the
event of a breach or threatened breach by it of the provisions of
Sections 11.1 or 11.3, the aggrieved Party will have no adequate remedy
in money or damages and, accordingly, shall be entitled to an
injunction against such breach. However, no specification in this
Section 11.4 of any specific legal or equitable remedy shall be
construed as a waiver or prohibition against any other legal or
equitable remedies in the event of a breach of a provision of this
Article 11.
11.5 CONFIDENTIALITY OF CONTRACT. Seller and Buyer deem this Contract, and
information concerning price, warranty, performance guarantees, and
delivery cycles exchanged by the Parties during the negotiations of
this Contract, to be confidential information and subject to the
provisions of this Article 11. Notwithstanding the foregoing, the terms
and provisions of Article 3 shall not be disclosed to any third party,
including any potential prime contractor, (but excepting any investors,
partners in Buyer and their affiliates, any financial lender, insuror
or consultant of Buyer and the employees and consultants of Tenaska,
Inc.) without the prior written consent of Seller, which consent shall
not be unreasonably withheld. The Parties' respective obligations with
respect to confidential information hereunder shall terminate on the
tenth (10th) anniversary date of this Contract.
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ARTICLE 12. INTELLECTUAL PROPERTY
12.1 INTELLECTUAL PROPERTY INDEMNIFICATION. Seller agrees to defend and to
handle at its own cost and expense any claim or action against Buyer
for actual or alleged infringement of any patent or copyright, or
similar proprietary right, including but not limited to
misappropriation of trade secrets, based upon the Equipment,
Documentation, or other materials and/or Services furnished to Buyer by
Seller, or the use thereof by Buyer. Seller shall, at Seller's sole
expense, conduct the defense of any such claim or action and all
negotiations for the settlement or compromise, unless otherwise
mutually agreed to, in writing, by Buyer and Seller; provided that if
such claim or action seeks an injunction or other equitable relief
against Buyer, counsel retained by Buyer at the expense of Buyer shall
be permitted to participate in such defense. Seller agrees to further
indemnify and hold Buyer harmless from and against any and all
liabilities, losses, settlements, judgments, reasonable costs and
expenses (including but not limited to reasonable legal fees and
expenses and costs of settlement) incurred by Buyer associated with any
such claim or action. Seller will not be responsible for any settlement
of such suit or proceeding made without its prior written consent,
subject to Seller's compliance with the foregoing provisions of this
Section 12.1.
12.2 REMEDY FOR INFRINGEMENT. If any Equipment, Documentation, materials
and/or Services furnished hereunder are held to constitute
infringement, and the use thereof is temporarily or permanently
enjoined, then Seller shall, at its own expense, in such manner as to
minimize the disturbance to Buyer's business activities, either: (i)
obtain for Buyer the right to continue using such Equipment,
Documentation, materials and/or Services or (ii) modify such Equipment,
Documentation, materials and/or Services to become non-infringing
(provided that such modification does not affect Buyer's intended use
of the same as contemplated hereunder); or (iii) replace such
Equipment, Documentation, materials and/or Services with equally
suitable, non-infringing Equipment, Documentation, materials and/or
Services, provided such replacement Equipment does not degrade the
operation of the Equipment or affect Seller's warranty. Sections 12.1
and 12.2 state the entire liability of Seller for infringement of any
patent, copyright or similar proprietary right with respect to any
Equipment, Documentation, materials and/or Services.
12.3 EXCEPTION TO INDEMNIFICATION. Sections 12.1 and 12.2 shall not apply to
the extent that a claim is caused by any Equipment (i) which is
manufactured to Buyer's unique design requirements for Buyer's sole and
exclusive use, (ii) modified by Buyer or its contractors after Delivery
and by reason of said design, use or modification a suit is brought
against Buyer or (iii) furnished under this Contract and used by Buyer
in conjunction with any other apparatus or material not reasonably
anticipated or specified by Seller. To the extent of a claim described
in the preceding sentence, Seller assumes no liability whatsoever for
infringement.
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ARTICLE 13. LIMITATION OF LIABILITY
13.1 LIMITATION OF LIABILITY. Except for liabilities arising under Article
11, or Sections 12.1 and 15.1, the total liability of Seller on all
claims, whether in contract, warranty, tort (including negligence),
strict liability, indemnity, or otherwise, arising out of the
performance of this Contract or from the manufacture, sale, delivery,
resale, repair, installation, technical direction of installation,
replacement, or use of any Equipment shall not exceed the Total
Contract Price. All liability of Seller with respect to any Unit shall
terminate upon the first to occur of: (a) the Unit completing [*],
(b) [*] after Substantial Completion of the Unit, or (c) [*] after
Delivery of the Unit.
13.2 CONSEQUENTIAL DAMAGES EXCLUSION. Except for the payment of liquidated
damages as specified in Articles 10 and 17, in no event, whether as a
result of breach of contract, warranty, tort (including negligence),
strict liability, indemnity, or otherwise, shall Seller or its
subcontractors or suppliers be liable for any special, consequential,
incidental, indirect, or exemplary damages; provided that the
immediately foregoing exclusion of liability for any special,
consequential, incidental, indirect, or exemplary damages shall not
limit the obligations of Seller to provide indemnification for (a)
injury (including death) to persons in accordance with Section 15.1 or
(b) damage to tangible property of a third party in accordance with
Section 15.1 but only if Seller is held to be directly liable to the
third party for all or a portion of such tangible property damage by a
court of competent jurisdiction. In no event, (c) shall Buyer be liable
to Seller for any special, consequential, incidental, indirect or
exemplary damages and (d) the total liability of Buyer on all claims,
whether in contract, tort (including negligence), strict liability,
indemnity or otherwise arising out of this Contract shall not exceed
the Total Contract Price, provided that the limitations set forth in
clause (d) shall not apply to Buyer's obligations (including any breach
thereof) under Article 3, Article 11 or Section 15.2. Nothing in clause
(c) of the preceding sentence of this Section 13.2 shall limit the
obligations of Buyer to provide indemnification for (e) injury
(including death) to persons in accordance with Section 15.2 or (f)
damage to tangible property of a third party in accordance with Section
15.2 but only if Buyer is held to be directly liable to the third party
for all or a portion of such tangible property damage by a court of
competent jurisdiction. This section shall not limit Seller's
obligation to provide the express remedies for breach of warranty set
forth in Article 10 of this Contract.
13.3 RETENTION OF REMEDIES. Subject to the limitations in Section 8.1,
Article 10, Sections 13.1 and 13.2, and the limitations of Buyer's
remedies in Articles 16 and 17, Buyer retains all of its rights and
remedies at law or in equity, for Seller's failure to comply with any
provision of this Contract, including failure of Seller to satisfy any
of the Performance Guarantees, Demonstration Test Requirements and
Availability Test Requirements.
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13.4 FURTHER LIMITATIONS. For the purpose of this Article 13, the term
"Seller" shall mean Seller, its affiliates, subcontractors and
suppliers of any tier, and their respective agents and employees,
whether individually or collectively. Buyer will obtain from any third
party to which this Contract may be assigned and from the initial owner
of any Project and from the owner of the Project Site, a specific
acknowledgement that the protections afforded Seller by this Article 13
will be binding on such parties.
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ARTICLE 14. TERMINATION
14.1 TERMINATION. Buyer may terminate this Contract at any time upon written
notice to Seller and payment of the Cancellation Charge in accordance
with Appendix B, provided that Buyer shall have the option of
terminating this Contract as to specific Units and retaining the right
to purchase less than all of the Units (to be delivered to Buyer in
accordance with the terms of this Contract) by making the payments to
Seller as shown in Appendix B.
14.2 TERMINATION BY SELLER. In the event that Buyer fails to timely pay to
Seller any undisputed amounts due pursuant to the terms of this
Contract, Buyer shall be in default under this Contract and Buyer shall
be allowed thirty (30) days from receipt of a written notice of such
default from Seller in which to cure such default, after which Seller
may immediately terminate this Contract by written notice to Buyer. Any
amount disputed by Buyer to be due under this Contract must be disputed
in good faith.
14.3 TERMINATION BY BUYER. In the event that Seller breaches a material
provision of this Contract, Seller shall be in default under this
Contract and Seller shall be allowed thirty (30) days from receipt of a
written notice of such default from Buyer in which to cure such
default, or initiate and diligently pursue to completion a cure, after
which Buyer shall immediately have the right to terminate this Contract
by written notice to Seller. In the event the Contract sets forth a
specific remedy for any breach, Buyer shall not have the right to
terminate the Contract.
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ARTICLE 15. INDEMNIFICATION
15.1 INDEMNIFICATION. Seller shall indemnify and hold harmless Buyer,
partners in Buyer, their respective affiliates, a Section 22.1 third
party assignee and the officers and directors of such partners,
affiliates and assignee ("Buyer Indemnified Parties"), from any losses,
liabilities, judgments or damages arising from third party claims
(excluding claims of third parties due to electric service interruption
or frequency fluctuation) for damage to tangible property, or for
injury (including death) to persons (including employees of Seller and
the Buyer Indemnified Parties) to the extent that such claim is based
upon or attributable to (i) the negligence or willful misconduct of
Seller or its servants, agents, or employees, or (ii) the breach of
Seller's obligations under this Contract. In the event any damage or
injury is caused jointly or concurrently by the negligence of Buyer and
Seller, such loss shall be borne proportionately by the Parties to
their degree of negligence. Seller shall not be liable in any event for
loss or injury to persons or property (including the Equipment supplied
hereunder) to the extent caused (a) solely by Buyer, its agents,
employees, contractors, or their employees, agents, or subcontractors,
or (b) solely by the failure or malfunctioning of any tools, equipment,
facilities, or devices furnished by Buyer. For purposes of this Section
15.1, "third party" shall not include Buyer, or its partners,
subsidiaries, affiliates, parents, successors or assigns, or any party
with (x) an equity or partnership interest in the foregoing, or (y) a
security interest of any nature in the foregoing's assets or property,
if such party also claims or seeks to claim any of the rights, powers,
or privileges of Buyer under this Contract.
15.2 INDEMNIFICATION. Buyer shall indemnify and hold harmless Seller and
affiliates of Seller, and the officers and directors of such affiliates
("Seller Indemnified Parties"), from any losses, liabilities, judgments
or damages arising from third party claims for damage to tangible
property, or for injury (including death) to persons (including
employees of Buyer and the Seller Indemnified Parties) to the extent
that such claim is based upon or attributable to (i) the negligence or
willful misconduct of Buyer or its servants, agents, or employees, or
(ii) the breach of Buyer's obligations under this Contract. In the
event any damage or injury is caused jointly or concurrently by the
negligence of Buyer and Seller, such loss shall be borne
proportionately by the Parties to their degree of negligence. Buyer
shall not be liable in any event for loss or injury to persons or
property (including the Equipment supplied hereunder) to the extent
caused (a) solely by Seller, its agents, employees, contractors, or
their employees, agents, or subcontractors, or (b) solely by the
failure or malfunctioning of any tools, equipment, facilities, or
devices furnished by Seller. For purposes of this Section 15.2, "third
party" shall not include Seller, or its subsidiaries, affiliates,
parents, successors or assigns, or any party with (x) an equity or
partnership interest in the foregoing, or (y) a security interest of
any nature in the foregoing's assets or property, if such party also
claims or seeks to claim any of the rights, powers, or privileges of
Seller under this Contract.
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ARTICLE 16. PERFORMANCE GUARANTEES
16.1 Performance Guarantees.
(a) LIQUIDATED DAMAGE PERFORMANCE GUARANTEES Each individual
guaranteed performance specified in subsections (i) and (ii)
of this Section 16.1(a) is herein referred to as a "Liquidated
Damage Performance Guarantee". The respective guaranteed
values referenced below, and the contract conditions which
apply to such guaranteed values, are identified in Section 1.0
of Appendix C.
Seller guarantees that:
(i) the "Final Test Value" for the Net Equipment
Electrical Output as defined in Sections 1.0, 2.0
and 3.0 of Appendix C shall not be less than the
guaranteed output set forth in Section 1.1 of
Appendix C; and
(ii) the "Final Test Value" for the Net Equipment Heat
Rate as defined in Sections 1.0, 2.0 and 3.0 of
Appendix C shall not be greater than the guaranteed
heat rate set forth in Section 1.2 of Appendix C;
when, in each case (i) and (ii) above, such actual values are
measured and corrected to the contract conditions as specified
in Appendix C all in accordance with the test procedures
(hereinafter "Final Test Value(s)").
(b) PERFORMANCE GUARANTEES. (Exhaust and Noise Emissions) Each
individual guaranteed performance specified in subsections (i)
and (ii) of this Section 16.1(b) is herein referred to as a
"Performance Guarantee". The respective guaranteed values
referenced below, and the contract conditions which apply to
such guaranteed values, are identified in Section 4.0 of
Appendix C.
Seller guarantees that:
(i) the "Final Test Values" for the exhaust emissions
from the combustion turbine Units shall not exceed
the guaranteed limits set forth in Section 4.1 of
Appendix C when the actual values for such emissions
are measured as specified in Section 4.1 of Appendix
C all in accordance with the test procedures; and
(ii) the "Final Test Values" for the noise emissions from
the combustion turbine Unit(s) shall not exceed the
guaranteed limits set forth in Section 4.2 of
Appendix C when the actual value for such emissions
is measured as specified in Section 4.2 of Appendix C
in accordance with the test procedures.
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16.2 SATISFACTION OF LIQUIDATED DAMAGE PERFORMANCE GUARANTEES AND
PERFORMANCE GUARANTEES.
(a) SATISFACTION OF LIQUIDATED DAMAGE PERFORMANCE GUARANTEES. The
Liquidated Damage Performance Guarantees set forth in
subsections (i) and (ii) of Section 16.1(a) shall be
conclusively deemed satisfied and Seller shall be relieved of
any and all obligations with respect to such Liquidated Damage
Performance Guarantees after the condition(s) of the
applicable subsection of each of (i) and (ii) below has
occurred:
(i) (A) the Final Test Value of the Net Equipment Electrical
Output is equal to or greater than the guaranteed
electrical output set forth in Section 1.1 of
Appendix C, or
(B) Seller has exercised all reasonable efforts and
diligently taken appropriate corrective actions to
achieve the guaranteed electrical output set forth in
Section 1.1 of Appendix C during any testing and
retesting conducted by Buyer or on Buyer's behalf and
having achieved the Performance Minimum for
electrical output set forth in Section 1.1 of
Appendix C but having failed to achieve the
guaranteed electrical output, Seller has paid
liquidated damages to Buyer pursuant to Section
17.2(b), or
(C) Buyer provides written notice to Seller that it has
satisfied this portion of the Liquidated Damage
Performance Guarantee; and
(ii) (A) the Final Test Value of the Net Equipment Heat Rate
is equal to or less than the guaranteed heat rate set
forth in Section 1.2 of Appendix C, or
(B) Seller has exercised all reasonable efforts and
diligently taken appropriate corrective actions to
achieve the guaranteed heat rate set forth in Section
1.2 of Appendix C during any testing and retesting
conducted by Buyer or on Buyer's behalf and having
achieved the Performance Minimum for heat rate set
forth in Section 1.2 of Appendix C but having failed
to achieve the guaranteed heat rate, Seller has paid
liquidated damages to Buyer pursuant to Section
17.2(b), or
(C Buyer provides written notice to Seller that it has
satisfied this portion of the Liquidated Damage
Performance Guarantee.
(b) SATISFACTION OF PERFORMANCE GUARANTEES. The Performance
Guarantees set forth in subsections (i) and (ii) of Section
16.1(b) shall be conclusively deemed satisfied and Seller
shall be relieved of any and all obligations with respect to
such Performance Guarantees after the condition(s) of the
applicable subsection of each of (i) and (ii) below has
occurred:
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(i) (A) the Final Test Values for the exhaust emissions
from the combustion turbine Unit are each equal to
or less than the guaranteed limits set forth in
Section 4.1 of Appendix C, or
(B) Buyer provides written notice to Seller that it has
satisfied such Performance Guarantee; and
(ii) (A) the Final Test Values for the noise emissions from
the combustion turbine Unit(s) is equal to or less
than the guaranteed limits set forth in Section 4.2
of Appendix C, or
(B) Buyer provides written notice to Seller that it has
satisfied such Performance Guarantee;
provided that the Emissions Test for such Project may be delayed by
Buyer for a period not to exceed six (6) months after Commercial
Operation.
16.3 DEMONSTRATION TEST GUARANTEES. Seller guarantees that the Equipment
shall satisfy the Demonstration Test requirements set forth in Section
6.0 of Appendix C (the "Demonstration Test Requirements") when such
tests are performed in accordance with the test procedures.
Each Demonstration Test Requirement set forth in Section 6.0 of
Appendix C shall be conclusively deemed satisfied and Seller shall be
relieved of any and all obligations with respect to such Demonstration
Test Requirement upon the occurrence of the following:
(i) the performance of the Equipment in such
Demonstration Test equals or exceeds the requirement
guaranteed for such test in Section 6.0 of Appendix
C, or
(ii) Buyer provides written notice to Seller that it has
satisfied such Demonstration Test Requirement;
provided that the test of the Combustion Turbine Evaporative Cooler may
be delayed by Buyer for a period not to exceed six (6) months after
Commercial Operation.
16.4 AVAILABILITY TEST GUARANTEE. Seller guarantees that the Equipment
shall satisfy the Availability Test requirements set forth in Section
7.0 of Appendix C (the "Availability Test Requirements") when such
test is performed in accordance with the test procedures.
Each Availability Test Requirement set forth in Section 7.0 of Appendix
C shall be conclusively deemed satisfied and Seller shall be relieved
of any and all obligations with respect to such Availability Test
Requirement upon the occurrence of the following:
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(i) the performance of the Equipment in such Availability Test
equals or exceeds the requirement guaranteed for such test in
Section 7.0 of Appendix C, or
(ii) Buyer provides written notice to Seller that it has satisfied
such Availability Test Requirement.
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ARTICLE 17. LIQUIDATED DAMAGES AND ACCEPTANCE TESTING
17.1 SCHEDULE LIQUIDATED DAMAGES. In the event of a delay in Shipment or
Delivery (as applicable, depending upon which of such events has an
applicable Guaranteed Date in Section 4.1(a)) of a Unit or if Seller's
failure to comply with the requirements of this Contract with respect
to Equipment and Services causes a delay in the achievement of
Commercial Operation of one or more Units, the Parties agree that
Buyer's loss would be difficult to determine. Each Party acknowledges
and agrees, after taking into account the terms of this Contract and
all relevant circumstances at the date hereof, that the liquidated
damages payable under this Section 17.1 represent a reasonable and
genuine pre-estimate of the damages which would be suffered by Buyer in
the event of a delay in the Delivery or Shipment (as applicable) of one
or more Units or a delay in the achievement of Commercial Operation of
one or more Units and does not constitute a penalty. Accordingly,
Seller and Buyer agree, as a predetermined reasonable and exclusive
remedy for any such loss to the following liquidated damages:
(a) SHIPMENT OR DELIVERY.
Except for Spare Parts, in the event that Shipment or Delivery
(as applicable depending upon the Guaranteed Date) of a Unit
(as defined in Section 4.1(d)) is not made on or before the
applicable Guaranteed Date for such Unit as set forth in
Section 4.1(a) due to causes not excused by the provisions of
this Contract, daily liquidated damages shall accrue (subject
to the notice requirements of Section 4.1(d)(i) and (ii) in
the event that certain Equipment is missing) at the following
rates for each full day that Shipment or Delivery (as
applicable) of such Unit occurs after the Guaranteed Date:
for days one (1) through fourteen (14), the sum of
Twenty Thousand Dollars ($20,000) per day, per
Unit; and for days beyond the fourteenth (14th) day,
the sum of Forty Thousand Dollars ($40,000) per day,
per Unit.
(b) COMMERCIAL OPERATION. To the extent that Seller's failure to
comply with the requirements of this Contract with respect to
a Unit is the primary cause of one or more days that the Unit
does not achieve Commercial Operation by the Scheduled Date of
Commercial Operation for such Unit and such cause of delay is
not excused by the provisions of this Contract, Seller agrees
to pay liquidated damages in accordance with the following
schedule: for days one (1) through fourteen (14), the sum of
Thirty Thousand Dollars ($30,000) per day, per Unit; and for
days beyond the fourteenth (14th) day, the sum of Fifty
Thousand Dollars ($50,000) per day, per Unit.
(i) If, despite the efforts of the EPC Contractor to
mitigate the effects of late Shipment or Delivery
under Section 17.1(a), such late Shipment or
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Delivery of a Unit is the primary cause of a delay of
any day the Unit does not achieve Commercial Operation
by the Scheduled Date of Commercial Operation for such
Unit (excluding the first thirty (30) days of late
Shipment or Delivery under Section 17.1(a) which shall
be deemed to have no effect on the achievement of
Commercial Operation), Seller shall pay liquidated
damages to Buyer in accordance with the schedule set
forth in Section 17.1(b) above, provided that in
determining the amount of any liquidated damages under
this Section 17.1(b)(i) for delay after the first
thirty (30) days, the liquidated damages paid by
Seller under Section 17.1(a) with respect to each day
of delay shall reduce the amount of liquidated damages
due under this Section 17.1(b)(1) for such
corresponding day of delay. FOR EXAMPLE, if Commercial
Operation of a Unit is fifty (50) days late, all of
which was caused by late delivery of such Unit, the
first thirty (30) days of late Commercial
Operation are disregarded. Liquidated damages under
this Section 17.1(b)(1) will be $10,000 per day for
each day thereafter through the fiftieth day,
calculated by using $50,000 for the thirty first day
of delay in achieving Commercial Operation as shown in
the schedule at the beginning of this Section 17.1(b)
minus $40,000 of liquidated damages paid for such gas
turbine Unit which was delivered thirty-one days late,
and continuing similarly with such calculation for
each of the days through the fiftieth day.
(ii) If, excluding any and all effects of any late
Shipment or Delivery under Section 17.1(a), the
actions or inactions of Seller are the primary cause
of a delay of any day a Unit does not achieve
Commercial Operation by the Scheduled Date of
Commercial Operation for such Unit and such cause of
delay is not excused by the provisions of this
Contract, Seller shall pay liquidated damages to Buyer
in accordance with the schedule set forth in Section
17.1(b) above, provided that (i) Seller shall have a
minimum time period (the "Minimum Period") of
thirty-one (31) days after each of Units #1, #4, #5
and #6 is Mechanically Complete and twenty-seven (27)
days after each of Units #2 and #3 is Mechanically
Complete, as shown in the EPC Project Schedule
attached to this Contract as Appendix H (commissioning
of Units #2 and #3 on fuel oil to be delayed until
after Commercial Operation) for inspecting the Unit
and its installation, the performance of pre-testing,
startup, commissioning, correction of discovered
problems, tuning, verification that the Unit is in
proper adjustment and condition to begin Acceptance
Testing and the performance of Acceptance Testing by
Buyer's EPC Contractor (extended for any time periods
during such Minimum Period when Seller reasonably
needs to perform services or tests on such Unit and
does not have such access and availability to such
Unit, consistent with the EPC Project Schedule),
prior to the expiration of which no liquidated damages
shall accrue under this Section 17.1(b). Seller shall
notify Buyer's EPC Contractor, in writing, in the
event that, as provided in the immediately
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preceding sentence, Seller believes that it has not
had the access to such Unit which it reasonably needs
and Buyer's EPC Contractor shall have 24 hours in
which to cure such problem by providing such access to
Seller. Buyer shall cause the EPC Contractor to
provide Seller with written notice when each Unit is
Mechanically Complete, and the Minimum Period shall
not commence until Seller has received such notice.
Any modifications to the EPC Project Schedule made by
the EPC Contractor shall provide Seller with durations
for the performance of Seller's activities during the
Minimum Period, which are comparable to or greater
than the durations available under the original EPC
Project Schedule attached as Appendix H. If, prior to
Commercial Operation of a Unit, Seller recommends
repair activities for a Unit which Buyer's EPC
Contractor has the responsibility to perform, Seller
shall not be charged for liquidated damages for delay
in achieving Commercial Operation of such Unit for any
period of time which is longer than the normal period
of time which would be required to accomplish such
repairs or for any period of time after such repairs
are completed which is longer than reasonably
necessary to prepare such Unit for testing or
retesting. In connection with Seller's performance of
Services under this Contract, including work performed
by Seller during the Minimum Period, Seller shall work
in conjunction with Buyer's EPC Contractor to
coordinate all activities in order to minimize the
total time required for the achievement of Commercial
Operation. Any liquidated damages which accrue under
this Section 17.1(b)(ii) shall be in addition to any
liquidated damages which may accrue under Section
17.1(a) or Section 17.1(b)(i).
In the event that liquidated damages are to be paid to Buyer
pursuant to this Section 17.1(b), such liquidated damages
shall continue to accrue for a Unit for each day until the
earlier of (1) Commercial Operation for such Unit is achieved
or (2) Seller, having (i) achieved the Interim Performance
Requirements for such Unit, (ii) satisfied the exhaust
emission requirements as measured by CEMS in accordance with
the requirements of Appendix C (compliance testing not
required prior to this date), (iii) satisfied the
Demonstration Test Requirements (excluding an Evaporation
Cooler Test), and (iv) successfully completed a ten (10) hour
availability test requirement for such Unit, as described in
Section 7.0 of Appendix C, elects to stop the accrual of
liquidated damages under this Section 17.1(b) by making an
election under Section 17.2(d). "Commercial Operation" means
the satisfaction of all requirements of applicable tests
required under the EPC Agreement for Commercial Operation of a
Unit, as determined under the EPC Agreement. Buyer shall cause
the contractor under the EPC Agreement to cooperate with
Seller to provide timely information, including an Acceptance
Testing schedule during the Minimum Period, to Seller
concerning the Scheduled Commercial Operation Date for each
Unit under the EPC Agreement, including any changes to such
dates within a reasonable time after such changes. In the
event that the aggregate amount of liquidated damages charged
to Seller under
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Section 17.1(b) exceeds the aggregate amount of liquidated
damages paid by the EPC Contractor under the EPC Agreement
for failing to timely achieve Commercial Operation, as
defined in the EPC Agreement, the amount of liquidated
damages charged to Seller under Section 17.1(b) shall be
reduced to such amount paid by the EPC Contractor, and Buyer
shall, if necessary, refund any excess payments to Seller.
In the event that Seller is the primary cause of delay in
the achievement of Commercial Operation of a Unit and the
maximum liquidated damages for delay in achieving Commercial
Operation under this Section 17.1 have accrued, or the delay
in the achievement of Commercial Operation of a Unit caused
by Seller exceeds one (1) year, for whatever reasons,
including delay in Shipment or Delivery of the Unit, Seller
shall be in material breach for substantial nonperformance
of this Contract. Upon a material breach for substantial
nonperformance pursuant to this Section 17.1, Buyer may
pursue any and all remedies available to Buyer, at law or in
equity, including termination of this Contract with respect
to such Unit at any time thereafter without payment of any
Cancellation Charge, and the filing of an action for damages
in addition to any previously accrued liquidated damages
relating to such Unit, caused by such material breach,
subject only to the limitation of liability set forth in
Section 13.1 and the exclusion of damages set forth in
Section 13.2, provided that Section 13.2 shall not restrict
Buyer from the recovery of damages for any additional direct
costs arising from the completion of the performance
required under this Contract, whether by another party or by
Buyer.
(c) ACCRUAL OF LIQUIDATED DAMAGES UNDER SECTIONS 17.1. Liquidated
damages shall accrue pursuant to Section 17.1(a) beginning on
the Scheduled Shipment Date or the Scheduled Delivery Date for
each Unit, as applicable. Liquidated damages, if any,
applicable pursuant to Section 17.1(b) shall be determined by
Buyer within thirty (30) days after Commercial Operation of a
Unit and shall be deemed to have accrued upon the notification
to Seller, in accordance with Section 22.7, of the amount of
such liquidated damages and the basis for such determination;
provided that in the event that Commercial Operation of a Unit
is delayed beyond ninety (90) days after the Scheduled Date of
Commercial Operation for such Unit as a result of delays
caused by Seller or Commercial Operation of a Unit fails to
occur within twelve (12) months of the date of the Delivery of
a Unit, Buyer may, at any time thereafter, notify Seller of
the amount of liquidated damages, if any, applicable to Seller
under Section 17.1(b) and such liquidated damages shall be
deemed to have accrued on such date of notification.
(d) AGGREGATION OF LIQUIDATED DAMAGES. The amounts specified in
the schedule set forth in Section 17.1(a), when aggregated for
all days of late Shipment or Delivery, as applicable, plus the
amounts specified in the schedule set forth in Section 17.1(b)
when aggregated for all Units and all days of delay in
Commercial Operation for all Units represent the aggregate
maximum liability of Seller for late Shipment or Delivery, as
applicable, under Section 17.1(a) and for delay in Commercial
Operation under Section 17.1(b).
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(e) LIMITATION. Seller's total aggregate liability for
liquidated damages under this Section 17.1 for all Units,
together with any payments made pursuant to Section 17.2(e),
shall not exceed [*] of the Total Contract Price.
17.2 PERFORMANCE.
(a) PERFORMANCE GUARANTEES. If Buyer elects to conduct Acceptance
Testing, then each of the Units shall satisfy the Liquidated
Damage Performance Guarantees set forth in Section 1.0 of
Appendix C, the Performance Guarantees set forth in Section
4.0 of Appendix C, the Demonstration Test Requirements set
forth in Section 6.0 of Appendix C, and the Availability Test
Requirements set forth in Section 7.0 of Appendix C. Seller
may observe any preliminary tests including standard start-up
tests made by Buyer, for the purpose of verifying that the
Unit is in proper adjustment and condition to undergo
Acceptance Testing.
(b) PERFORMANCE LIQUIDATED DAMAGES. With respect to the Liquidated
Damage Performance Guarantees, it is agreed that Buyer's loss
would be difficult to determine in the event that one or more
of the Units fails to satisfy the Liquidated Damage
Performance Guarantees. Accordingly, Seller and Buyer agree as
a predetermined reasonable and exclusive remedy (provided that
with respect to Net Equipment Electrical Output and Net
Equipment Heat Rate, the Units must achieve the Performance
Minimums before liquidated damages become the exclusive
remedy) for any such loss, Seller shall pay to Buyer for
liquidated damages and not as a penalty, sums based upon the
following items:
(i) NET EQUIPMENT ELECTRICAL OUTPUT - [*] for each
kilowatt that the actual Net Equipment Electrical
Output (using an aggregated number for all Units
based upon testing of all Units located at the
Project) is less than the guaranteed Net Equipment
Electrical Output set forth in Section 1.1 of
Appendix C.
(ii) NET EQUIPMENT HEAT RATE - [*] for each BTU per
kilowatt hour per Unit that the actual Net Equipment
Heat Rate (using an average number based upon testing
of all Units located at the Project Site), when
tested on natural gas, is greater than the guaranteed
Net Equipment Heat Rate set forth in Section 1.2 of
Appendix C, plus [*] for each BTU per kilowatt hour
per Unit that the actual Net Equipment Heat Rate
(using an average number based upon testing of all
Units located at the Project Site), when tested on
fuel oil, is greater than the guaranteed Net
Equipment Heat Rate set forth in Section 1.2 of
Appendix C.
(c) ACCEPTANCE TESTING.
(i) TESTING PROCEDURES. Buyer may conduct Acceptance
Testing in order to
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determine whether the Liquidated Damage Performance
Guarantees, the Performance Guarantees, the
Demonstration Test Requirements, and the Availability
Test Requirements have been satisfied. Such testing
shall be conducted by Buyer or on Buyer's behalf and
may be witnessed by Seller. Seller shall develop the
detailed test procedures for initial testing and
potential retesting and obtain Buyer's review,
comment, and approval not later than October 31,
2000; provided that test procedures for the Utility
Tests shall be developed on Buyer's behalf by the EPC
Contractor as set forth in Section 8.0 of Appendix C.
For all Acceptance Testing performed under this
Contract, Buyer (or, as applicable, the EPC
Contractor on Buyer's behalf) shall at no cost to
Seller: (i) make the Units available at the times,
loads and conditions necessary for proper testing,
(ii) provide all instrumentation, labor, operators,
technicians, fuel and consumables required to perform
Acceptance Testing and to read and record the test
data, (iii) provide fuel and consumables in
accordance with the Specifications and (iv) conduct
the Performance Tests, Demonstration Tests, Emissions
Test, Availability Test and Utility Tests in
accordance with test procedures approved by Buyer and
calculate the test results. Seller, based upon
project information provided by Buyer, estimates that
[*] of fuel will be consumed during operation of the
Units in connection with the installation, start up,
commissioning, Acceptance Testing, diagnostic
testing, and retesting of the Units and Seller will
perform the Services under this Contract so as to
minimize the potential use of fuel in excess of such
estimated amounts. Seller shall have no liability for
fuel costs associated with the Project. Seller shall
(i) have the right of representation at all
Acceptance Testing, (ii) have access to all data
resulting from the Acceptance Testing, and (iii) be
promptly furnished with a copy of the test data and
have the right to review and comment on the
calculations used to determine the test results.
(ii) DIAGNOSTIC TESTING AND REMEDY If results of any
Acceptance Testing indicate that any of the
Liquidated Damage Performance Guarantees, the
Performance Guarantees, the Demonstration Test
Requirements, or the Availability Test Requirements
have not been satisfied, Buyer (or the EPC Contractor
on Buyer's behalf) will, at Seller's request, conduct
diagnostic tests (which may include tests to
determine the efficiency of the groups of blading in
each turbine element) to determine the cause(s) of
the failure and the expedient remedial action. With
respect to such diagnostic tests, Seller will at its
expense (i) provide test instrumentation for the
period of the tests, (ii) provide engineering
direction and labor for installation of the test
instrumentation and for conducting the tests, and
(iii) analyze the test data from such tests. With
respect to such diagnostic tests, Buyer (or the EPC
Contractor on Buyer's behalf) will at its expense (i)
provide fuel for the tests, (ii) provide sufficient
load during the tests, (iii) operate the Units during
the tests, and (iv) read and record the test data.
Seller shall, at its
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expense, using all reasonable efforts, attempt to
remedy the failure by repair, adjustment or
replacement of the Equipment as Seller deems
necessary to correct such failure.
(iii) RETESTING. If Seller has completed its attempt to
remedy the failure of the Equipment to satisfy the
Liquidated Damage Performance Guarantees, the
Performance Guarantees, the Demonstration Test
Requirements, or the Availability Test Requirements,
the Parties shall as soon as practicable after the
date of re-synchronization following completion of
Seller's remedy, reperform Acceptance Testing.
Reperformance of Acceptance Testing shall occur as
soon as reasonably possible following notice from
Seller during the Retest Period that a Unit is again
ready for Acceptance Testing. With respect to such
Acceptance Testing, Seller will (i) provide test
instrumentation for the period of the tests, (ii)
provide technical guidance and assistance during the
tests, and (iii) calculate the tests results.
Following any failure of the Equipment to satisfy any
of the Liquidated Damage Performance Guarantees, the
Performance Guarantees, the Demonstration Test
Requirements, or the Availability Test Requirements,
Seller shall continue to use all reasonable efforts
to satisfy the Liquidated Damage Performance
Guarantees, the Performance Guarantees, the
Demonstration Test Requirements, and the Availability
Test Requirements in accordance with the preceding
procedures of this Section 17.2(c), provided that
upon satisfying all of the Performance Guarantees
(other than the Emissions Test, if delayed),
the Demonstration Test Requirements (other than the
Combustion Turbine Evaporative Cooler portion, if
delayed), and the Availability Test Requirements and
achieving all of the Interim Performance
Requirements, Seller may elect to proceed in
accordance with Section 17.2(d). Notwithstanding any
provision in this Contract to the contrary, Buyer
reserves the right to require Seller to reconduct any
Acceptance Testing which Buyer reasonably
deems necessary after any changes, adjustments or
modifications are made to the Equipment by Seller, in
order to confirm or establish the final test results.
Subject to the right of Seller to elect pursuant to
Section 17.2(d), and Buyer's right to terminate this
Contract pursuant to Section 17.2(f), Seller shall be
required to continue diagnostic testing, remedy and
retesting of the Units until all of the Performance
Guarantees, the Demonstration Test Requirements, the
Availability Test Requirements, and the Performance
Minimums have been satisfied.
(d) SELLER'S ELECTION TO REDUCE LIQUIDATED DAMAGES FOR COMMERCIAL
OPERATION. In the event that after completion of Acceptance
Testing, a Unit has (i) achieved the Interim Performance
Requirements, (ii) satisfied the exhaust emission requirements
as measured by CEMS in accordance with the requirements of
Appendix C (compliance testing not required prior to this
date), (iii) satisfied the Demonstration Test Requirements
(excluding an Evaporation Cooler Test), and
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(iv) successfully completed an ten (10) hour availability test
requirement, as described in Section 7.0 of Appendix C, but
has failed to satisfy all of the Liquidated Damage Performance
Guarantees, Seller may elect to stop the accrual of liquidated
damages under Section 17.1(b) by delivering written notice to
Buyer under this Section 17.2(d) of such election, which
notice shall include a statement that the Unit has achieved
the Interim Performance Requirements based upon the results
of the most recent Performance Tests and setting forth the
values for Net Equipment Heat Rate and Net Equipment
Electrical Output achieved by such Unit. For purposes of a
Unit satisfying the Interim Performance Requirements for Net
Equipment Heat Rate and Net Equipment Electrical Output in
order to stop the accrual of liquidated damages under Section
17.1(b), such Unit will be tested individually and must
satisfy each of the Net Equipment Heat Rate Interim
Performance Requirement and the Net Equipment Electrical
Output Interim Performance Requirement individually, and Buyer
shall calculate the performance liquidated damages which would
otherwise be due with respect to such Unit based upon such
values for Net Equipment Heat Rate and Net Equipment
Electrical Output ("Potential Liquidated Damages"), but such
liquidated damages shall not be deemed to have accrued as a
result of such election. Notwithstanding the immediately
preceding sentence, for purposes of finally calculating
liquidated damages under this Contract, Net Equipment Heat
Rate will be determined as an average of all Units and Net
Equipment Electrical Output will be determined as an aggregate
of all Units. After making an election under this Section
17.2(d), Seller shall use all reasonable efforts to cause such
Unit to satisfy all of the Liquidated Damage Performance
Guarantees making such changes and adjustments to the Unit as
Seller deems necessary and diligently retesting until all of
the Liquidated Damage Performance Guarantees for such Unit
have been satisfied or until one hundred eighty (180) days
have expired from the date of the notification, whichever
occurs first ("Retest Period"). As a condition to proceeding
under this Section 17.2(d), Seller agrees that Seller's remedy
and testing will not unreasonably interfere with the normal
and continuous operation of the Unit during the Retest Period
and that the cost of all changes, adjustments and retesting,
excluding fuel and operating expenses, shall be at Seller's
expense. If the Retest Period has elapsed and the Unit has
failed to satisfy all of the Liquidated Damage Performance
Guarantees, Buyer may terminate Seller's remedy and retesting
activities or require Seller to continue remedy and testing
activities for an additional period of up to one hundred
twenty (120) days under the same provisions and procedures
which governed the Retest Period. If Buyer terminates Seller's
remedy and retesting activities, liquidated damages relating
to the Liquidated Damage Performance Guarantees shall be
finally determined in accordance with Section 17.2(f). If
Buyer extends the time for remedy and retesting, Seller shall
make changes and adjustments to the Unit as Seller deems
necessary to satisfy the Liquidated Damage Performance
Guarantees and shall use all reasonable efforts and shall
diligently remedy and retest until all of the Liquidated
Damage Performance Guarantees are satisfied or until such
extension has expired, whichever comes first ("Extended Retest
Period"). The cost of any
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such changes, adjustments and retesting, excluding fuel and
operating expenses, shall be at Seller's expense. If at the
end of such Extended Retest Period, the Equipment has failed
to satisfy all of the Liquidated Damage Performance
Guarantees, Buyer shall terminate retesting and liquidated
damages relating to the Liquidated Damage Performance
Guarantees shall be finally determined in accordance with
Section 17.2(f). If during the Retest Period or the Extended
Retest Period, Buyer operates a Unit more than a total of two
hundred fifty (250) hours to satisfy the requirements of the
Power Purchase Agreement, the Liquidated Damage Performance
Guarantee values will be adjusted in accordance with a
degradation schedule provided in the Acceptance Test
procedures pursuant to Appendix C of this Contract.
(e) [*] This section has been omitted and filed separately with
the Securities and Exchange Commission as part of a
Confidential Treatment Request.
(f) FAILURE OF PERFORMANCE TESTS. If Seller has achieved the
Performance Minimums but failed to satisfy all of the
Liquidated Damage Performance Guarantees with respect to a
Unit, Unit Performance Liquidated Damages shall be
calculated by Buyer in accordance with Section 17.2(b) based
upon the test results from the most recent Performance
Tests, provided that if Seller has not elected to proceed in
accordance with Section 17.2(d), Seller shall use reasonable
commercial efforts to satisfy the Liquidated Damage
Performance Guarantees for a period of at least thirty (30)
days. Unit Performance Liquidated Damages for each Unit
(based upon the most recent performance tests) for failure
to satisfy any Liquidated Damage Performance Guarantees, if
not previously satisfied, shall
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accrue under this Contract on the earlier of (i) such time
as Seller, having satisfied the Performance Minimums and
having used reasonable commercial efforts to satisfy the
Liquidated Damage Performance Guarantees for a period of at
least thirty (30) days, has notified Buyer that it accepts
the results of the most recent Performance Test for such
Unit as the Final Test Values, (ii) if written notice is
delivered to Buyer pursuant to Section 17.2(d), at the end
of any period for remedy and testing of a Unit allowed
pursuant to Section 17.2(d), or (iii) ninety (90) days
having passed since the beginning of initial Acceptance
Testing for a Unit and Seller, having satisfied the Interim
Performance Requirements but failed to achieve the
Liquidated Damage Performance Guarantees for such Unit, has
not elected to proceed pursuant to Section 17.2(d). In the
event that Seller, having been permitted the opportunity to
exercise all reasonable efforts to achieve the Performance
Minimums and satisfy the Performance Guarantees, the
Demonstration Test Requirements, and the Availability Test
Requirements for a Unit for a period not to exceed one
hundred sixty (160) days after the beginning of initial
Acceptance Testing, is unable to achieve all of the
Performance Minimums and to satisfy each Performance
Guarantee, each Demonstration Test Requirement, and each
Availability Test Requirement for a Unit, Buyer may declare
that there has been a material breach and substantial
nonperformance of this Contract with respect to such Unit
and Buyer may thereafter pursue any and all remedies
available to Buyer, at law or in equity (including
termination of this Contract with respect to such Unit
without payment of any Cancellation Charge and the filing of
an action for damages, in addition to any previously accrued
Unit Performance Liquidated Damages, caused by such material
breach and substantial nonperformance), subject only to the
limitation of liability set forth in Section 13.1 and the
exclusion of damages set forth in Section 13.2, provided
that Section 13.2 shall not restrict Buyer from the recovery
of damages for any additional direct costs arising from the
completion of the performance required under this Contract,
whether by another party or by Buyer. In any event, Seller
shall be deemed to have satisfied its obligations under this
Section 17.2 with respect to any Unit upon such Unit
satisfying or achieving the Liquidated Damage Performance
Guarantees, the Performance Guarantees, the Demonstration
Test Requirements, and the Availability Test Requirements
for such Unit. At such time as all of the Units have
accomplished one of the following:
(i) achieved Substantial Completion, or
(ii) completed testing and retesting under a Section
17.2(d) election, or
(iii) satisfied the Performance Minimums and all other
requirements of Acceptance Testing but Seller, in the
absence of a 17.2(d) election, having tried for at
least thirty (30) days after completion of initial
Acceptance Testing to achieve the Liquidated Damage
Performance Guarantees and having not achieved the
Liquidated Damage Performance Guarantees has elected
to accept Unit Performance Liquidated Damages at the
current
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performance level,
final liquidated damages shall be finally determined for all
of the Units based upon Net Equipment Heat Rate determined as
an average of all Units and Net Equipment Electrical Output
determined as an aggregate of all Units and final liquidated
damages shall be adjusted on an equitable basis and paid in
accordance with Section 17.6. Unit Performance Liquidated
Damages for each Unit shall be calculated based upon
performance tests performed on each Unit as a condition to
achieving Substantial Completion of such Unit and the results
of such tests shall be used for all aggregate calculations of
final liquidated damages (without any requirement to repeat
such performance tests), except that Unit Performance
Liquidated Damages for Units #2 and #3 shall be initially
calculated without the Deferred Tests for such Units and Unit
Liquidated Damages for Units #2 and #3 shall be recalculated
as such time as the Deferred Tests are completed for such
Units.
(g) LIMITATION. Seller's total aggregate liability for liquidated
damages under this Section 17.2, excluding any payments made
pursuant to Section 17.2(e), shall not exceed [*] of the Total
Contract Price.
17.3 DOCUMENTATION LIQUIDATED DAMAGES. In the event that the Project
specific documentation, in reasonable form and substance for the power
industry, identified by the initials L.D. in the left margin next to
the documents listed in Appendix G is not provided by the applicable
dates set forth in Appendix G due to causes not excused by the
provisions of this Contract, Seller shall pay to Buyer daily liquidated
damages in the amount of [*] per day for each late document until such
documentation is provided; not to exceed in the aggregate an amount of
[*] per day, regardless of the number of late documents. Seller's
liability for liquidated damages pursuant to this Section 17.3 shall
not exceed [*]. Daily liquidated damages shall accrue under this
Section 17.3 beginning upon the applicable dates set forth in Appendix
G.
17.4 LIMITATION OF LIQUIDATED DAMAGES. Seller's total aggregate
liability for liquidated damages under this Contract shall not exceed
[*] of the Total Contract Price.
17.5 EXCLUSIVE REMEDY. If the Units achieve all of the Performance Minimums,
Seller's liability for liquidated damages with respect to such Units
shall be the exclusive remedy of Buyer and the sole liability of Seller
for an unexcused failure of the Seller to comply with the Liquidated
Damage Performance Guarantees and the requirements of this Contract in
Section 17.3 with respect to such Units which result in liquidated
damages, whether based in contract, in tort (including negligence and
strict liability), or otherwise. In the event liquidated damages for
failure to meet all of the Liquidated Damage Performance Guarantees or
the requirements of Section 17.3 with respect to the Units are paid by
Seller or by refund in accordance with Section 17.6, Seller's
Liquidated Damage
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Performance Guarantees or the requirements of Section 17.3, as
applicable, shall be deemed met at the level of performance actually
achieved by such Units and Seller's obligations with respect to such
Liquidated Damage Performance Guarantees and Section 17.3 shall
terminate with respect to such Units. Payment of liquidated damages
shall not relieve Seller of its obligations to repair or replace as
provided in Section 10.4 and Seller's obligations arising under
Section 13.3 except, after testing by Seller is completed, with
respect to those specific defects or deficiencies in a Unit for which
such liquidated damages have been paid.
17.6 APPLICATION OF TOTAL CONTRACT PRICE REDUCTIONS As any liquidated
damages accrue pursuant to Article 17, Buyer may invoice Seller for the
amount of such liquidated damages and Seller shall pay to Buyer the
amount invoiced within thirty (30) days of the date invoiced by Buyer,
provided that Buyer, upon written notice to Seller of the amount of
liquidated damages which have accrued, may withhold or cause to be
withheld, such amount of liquidated damages from any payments remaining
due to Seller under this Contract. If the aggregate Unit Performance
Liquidated Damages paid by Seller exceeds the final liquidated damages
determined as set forth in Section 17.2(f), Buyer shall pay to Seller
such excess amount within thirty (30) days of the final determination.
Any amount of liquidated damages which is not paid when due shall
accrue interest at an annual rate of interest equal to the prime rate
of The Chase Manhattan Bank, in effect on the due date plus one percent
(1%). The term Total Contract Price, for the purposes of determining
all limitations on liquidated damages or liability as provided in this
Contract, shall mean the sum of [*] unless the Total Contract Price is
modified pursuant to Section 3.5 or Article 9. The amount set forth in
the preceding sentence shall not be changed by reason of any liquidated
damages which may be withheld from payments due to Seller pursuant to
this Article 17.
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ARTICLE 18. PROJECT MANAGEMENT
18.1 PROJECT COORDINATORS. Seller and Buyer each agree to appoint a
qualified staff member or members, at no additional charge, to function
as overall Project Coordinator(s). The Seller and Buyer Project
Coordinators will act as the principal points of interface between the
Parties.
18.2 CONTINUITY OF SELLER'S EMPLOYEES. Seller agrees to use its reasonable
efforts to insure the continuity of all Seller employees assigned to
perform services hereunder. All persons furnished by Seller to perform
services at Buyer's premises shall be deemed solely Seller's employees
or agents and Seller shall have sole responsibility for them. Seller
shall use its best efforts to notify Buyer at least fourteen (14) days
prior to the reassignment of any such personnel. In the event Seller
reassigns any such personnel, Seller will use its best efforts to
provide a qualified replacement as soon as reasonably possible. In the
event that any Seller employee performing services contemplated by this
Contract is found to be unacceptable to Buyer, based upon Buyer's
reasonable judgment, Buyer shall notify Seller and Seller shall
immediately take appropriate corrective action to remove the
objectionable employee and to provide a qualified replacement.
18.3 STATUS REPORTS. Seller shall submit to Buyer's Project Coordinator(s),
commencing four (4) weeks after the date of the Design Finalization
Meeting with respect to the combustion turbine Units, and thereafter
every four (4) weeks during the term of the work effort contemplated by
this Contract, written status reports fully describing the activities
and accomplishments of Seller during the preceding four (4) week
period, in order to timely report Seller's continuous progress so that
timely corrective action can be taken as necessary. The status reports
will include, but not be limited to, the following: (a) current status
of Seller's activities, together with an explanatory narrative where
appropriate; (b) indication of the progress on the work being performed
by Seller; and (c) identification of actual and anticipated problem
areas, their impact on the work effort of Seller and on the delivery
schedule, and present action being taken (or suggested alternative
action to be taken) in order to reduce the impact of such problems. If
Buyer requests, Seller shall hold status meetings with Buyer management
in order to review the status of Seller's activities. Such meetings
will be conducted at such locations as are mutually agreed to by Buyer
and Seller. Any participation by Buyer or it's permitted assignee for a
certain Project, or an affiliate of Buyer, in the Vendor Coordination
Meeting is for the purpose of being advised of scheduling dates and
such entities shall have no responsibility with respect to the
coordination of Seller's work and any participation by Buyer or it's
permitted assignee, or an affiliate of Buyer in the Design Finalization
Meeting is for the purpose of generally advising Buyer concerning
design matters and such entities shall have no responsibility for the
adequacy of Seller's design and/or engineering.
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ARTICLE 19. TECHNICAL SERVICES
19.1 TECHNICAL SERVICES. Seller shall provide technical services to
Buyer, at no additional cost, in accordance with Appendix I for up to
six hundred (600) man-weeks for the combustion turbine Units (based on
a total purchase of six (6) Units). Any technical services provided by
Seller as a result of any defects in the Equipment or Services provided
by Seller shall not be charged against such allowance. A man-week shall
mean forty (40) hours of technical services, provided that there shall
be no use of equivalent hours for overtime or coverage during double
shifts, it being the obligation of Seller to provide a sufficient
number of technicians to satisfy the construction schedule and avoid
overtime charges. In the event that Buyer uses more than the total
number of six hundred (600) man-weeks of technical services, the Total
Contract Price shall be increased to reflect such actual usage based
upon a rate of $8,000 per man-week. In the event that Buyer uses less
than six hundred (600) man-weeks of technical services, the Total
Contract Price shall be decreased by an amount equal to $8,000 for each
man-week less than five hundred five man-weeks. The provision of such
services shall be scheduled to correspond to the construction schedule
for the Project.
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ARTICLE 20. TRAINING AND DOCUMENTATION
20.1 DOCUMENTATION. Seller agrees to provide, at no charge to Buyer, copies
of all documentation for the Equipment (the "Documentation") described
in Appendix G by no later than the applicable dates set forth in
Appendix G and such other written materials, including manuals, which
are to be provided to Buyer by Seller in accordance with any other
Sections of this Contract and the Appendices. Such Documentation shall
be in accordance with Seller's standard format and include, but not be
limited to, the following: user, operator/attendant and supervisory
reference manuals and guides, operational and technical bulletins,
Equipment schematics, parts listings, and other documentation and
operating instructions sufficient to enable Buyer to use, operate, and
maintain the Equipment.
20.2 REPRODUCTION OF DOCUMENTATION. Buyer may copy the Documentation
provided hereunder in order to satisfy its own internal requirements
subject to the confidentiality requirements of Article 11. If Buyer
requests Seller to furnish additional copies of any such Documentation,
Seller shall furnish the same at its standard published prices.
20.3 TRAINING. Seller shall provide a familiarization training program in
the use, operation, technical, and maintenance aspects of the Equipment
sufficient for personnel of Buyer or it's permitted assignee, or an
affiliate of Buyer, to use, operate, and maintain the Equipment. The
extent and timing of such familiarization training is described in
Appendix E.
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ARTICLE 21. INSURANCE
21.1 INSURANCE REQUIREMENTS. Seller shall procure and at all times prior to
completion of the obligations of Seller under this Contract shall
maintain with insurers reasonably acceptable to Buyer, the following
insurance protecting Seller against liability from damages because of
injuries, including death, suffered by persons, including employees of
Seller, and from damages to property arising from or resulting out of
Seller's negligence in performance, including its subcontractors and
suppliers, of Services. Buyer, Buyer's lender and their consultants
shall be included as an additional insured under the policies listed in
subsections (b) and (c) below, and the insurer shall waive all rights
of subrogation against Buyer, Buyer's lender and their consultants.
(a) Workers' Compensation Insurance in accordance with statutory
requirements and Employer's Liability Insurance with limits of
not less than $1,000,000 each accident.
(b) Commercial General Liability Insurance with bodily injury and
property damage limits of not less than $1,000,000 combined
single limit each occurrence/aggregate.
(c) Automobile Liability Insurance with bodily injury and property
damage limits of not less than $1,000,000 combined single limit
each accident.
21.2 ADDITIONAL REQUIREMENTS. All insurance required to be maintained by
Seller shall be primary to any insurance carried by Buyer that might
apply on the same basis. Prior to the performance of any Services,
Seller shall furnish Buyer with a certificate of insurance evidencing
the coverages set forth in Section 21.1. The certificate shall indicate
that such insurance shall not be canceled or materially changed without
at least thirty (30) days written notice to Buyer. Nothing contained in
this Article 21 shall be construed as a limitation of the liability of
Seller for damage or injury, including death, which arises out of
Seller's obligations under this Contract.
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ARTICLE 22. GENERAL CLAUSES
22.1 ASSIGNMENT.
(A) ASSIGNMENT TO PROJECT DEVELOPER OR OWNER. Buyer may assign any or
all of its rights or obligations under this Contract to an
affiliate of Buyer, provided such assignee has adequate resources
(as determined by Seller in the exercise of its reasonable
judgment) to fulfill those obligations of Buyer which are
assigned, and further provided such assignee agrees to be bound
by all of the protections and limitations afforded Seller under
this Contract and any defaults of Buyer existing at such time are
cured. Upon completion of such assignment and the delivery of an
assumption agreement (in a form reasonably satisfactory to
Seller) executed by such assignee to Seller, Buyer shall be
released from any and all obligations and liabilities therefor
under this Contract which are assumed by the assignee, provided,
however, Buyer shall not be released from those obligations, if
any, which Buyer elects to reserve from such assignment.
Notwithstanding any provision of this Contract to the contrary,
Buyer and Buyer's assignee, if applicable, shall have the
absolute right, without the consent of Seller, to assign this
Contract, or any rights reserved by Buyer after assignment,
including any licenses granted hereunder pursuant to Section 6.4,
to the Project lenders for collateral security purposes. Seller
will have the right to assign any part of its obligations under
this Contract to any of its subsidiaries or affiliates, in which
case Seller will guarantee the performance of such assignee.
(b) ASSIGNMENT TO CONTRACTOR. In addition to the rights of assignment
under Section 22.1(a), Buyer or Buyer's assignee under Section
22.1(a) may assign this Contract to a third party contractor that
has entered into an agreement with Buyer or such assignee for the
construction of the Project ("Contractor Assignee"), provided
such Contractor Assignee has adequate resources (as determined by
Seller in the exercise of its reasonable judgment) to fulfill
those duties or rights of Buyer or Buyer's assignee under Section
22.1(a) which are assigned and provided such Contractor Assignee
agrees to be bound by all of the protections and limitations
afforded Seller under this Contract and any defaults of Buyer or
Buyer's assignee under Section 22.1(a) existing at such time are
cured. Those rights which are reserved to Buyer or Buyer's
assignee under Section 22.1(a) pursuant to the terms of this
Contract and Appendix M are not assigned to such Contractor
Assignee. Upon the delivery of an assumption agreement (in a form
reasonably satisfactory to Seller) executed by such Contractor
Assignee to Seller, Buyer or Buyer's Assignee under Section
22.1(a), as the case may be, shall be released from any and all
obligations and liabilities therefor under this Contract which
are assumed by the Contractor Assignee, provided, however, Buyer
or Buyer's assignee under Section 22.1(a) is not released from
those obligations which are identified in this
53
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CONFIDENTIAL
Contract and in Appendix M as obligations retained by Buyer. In
the event of the delay or cancellation of the Project after this
Contract is assigned to a Contractor Assignee, Seller consents to
the reassignment of this Contract to Buyer, or an affiliate of
Buyer to which this Contract was previously assigned in
accordance with Section 22.1(a), by such Contractor Assignee.
22.2 THIRD PARTY BENEFICIARIES. The provisions of this Contract are for the
benefit of the Parties hereto and are not for any other third party,
except as provided in Article 15 and Section 22.1.
22.3 ENTIRE AGREEMENT. This Contract represents the entire agreement between
the Parties and no modification, amendment, rescission, waiver or other
change shall be binding on either Party unless assented to in writing
by such Party's authorized representative. Any oral or written
representation or warranty not contained or referenced herein shall not
be binding on either Party. Each Party agrees that it has not relied
on, or been induced by, any representations of the other Party not
contained in this Contract or the attachments hereto. A failure or
delay of either Party to this Contract to enforce any of the provisions
hereof, or to exercise any option which is herein provided, or to
require at any time performance of any of the provisions hereof shall
in no way be construed to be a waiver of such provision. This Contract
supercedes all provisions of the Memorandum of Global Agreement, dated
July 2, 1999, entered into between Buyer and Seller, which relate to
the six (6) PG7241FA gas turbine-generator units for the Georgia
Project.
22.4 SEVERABILITY. In the event any one or more provisions of this Contract
shall for any reason be held to be invalid, illegal or unenforceable,
the remaining provisions of this Contract shall be unimpaired, and the
invalid, illegal or unenforceable provision shall be replaced by a
mutually acceptable provision, which, being valid, legal and
enforceable, reflects the intention of the Parties regarding the
invalid, illegal or unenforceable provision.
22.5 INDEPENDENT CONTRACTOR. In performing services pursuant to this
Contract, Seller is acting as an independent contractor and except as
specified in this Contract, neither Party has any authority to bind or
otherwise obligate the other Party in any manner whatsoever. Buyer
shall not be responsible for payment of workers' compensation,
disability or other similar benefits, unemployment or other similar
insurance, or for the withholding of income taxes or other taxes and
social security for any Seller employees, and such responsibility shall
be that of Seller.
22.6 GOVERNING LAW. The validity, performance and all matters relating to
the interpretation and effect of this Contract and any amendment
thereto shall be governed by the laws of the State of New York,
excluding their conflict of laws provisions.
22.7 NOTICE. All notices or other communications shall be in writing and
shall be sufficient if delivered personally, dispatched by overnight
courier service, mailed by registered or
54
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CONFIDENTIAL
certified mail, return receipt requested, proper postage prepaid, or
sent by facsimile machine to the following addresses:
<TABLE>
<S> <C>
If to Buyer: Tenaska Georgia I, L.P.
1044 North 115th Street
Omaha, Nebraska 68154
Attention: Michael C. Lebens
Facsimile Number: (402) 691-9530
If to Seller: Dave Stender
Project Manager
Global Power Plant Systems Department
General Electric International, Inc.
1 River Road, Bldg. 2-309, Schenectady, NY 12345
Facsimile Number: (518) 385-7326
</TABLE>
or such other address or addresses as either Party may from time to
time designate to the other by written notice. Any such notice or other
official communication shall be deemed to have been delivered as of the
date it is personally delivered, when received if placed in the mails
in the manner specified or sent by overnight courier or when sent if by
facsimile.
22.8 CONSTRUCTION. The headings and captions in this Contract are inserted
for convenient reference only and shall not limit or construe the
articles, paragraphs or sections to which they apply. Where the context
requires, all singular words in this Contract shall be construed to
include their plural and all words of neuter gender shall be construed
to include the masculine and feminine forms of such words. The terms
"include," "including" and similar terms shall be construed as if
followed by the phrase "without limitation." Notwithstanding the fact
that this Contract has been prepared by one of the Parties, all of the
Parties confirm that they and their respective counsel have reviewed,
negotiated and adopted this Contract as the joint agreement and
understanding of the Parties. Accordingly, this Contract is to be
construed as a whole and any presumption that ambiguities are to be
resolved against the primary drafting Party shall not apply. In the
event any conflict exists between provisions of this Contract and the
provisions of any Appendix or attachment to this Contract, the
provisions of the Contract, excluding the Appendices and any
attachments hereto, shall control.
22.9 NUCLEAR WAIVER. The Equipment sold hereunder is not intended for
application (and shall not be used) in connection with the use or
handling of nuclear material or the construction or operation of a
nuclear installation. Buyer warrants that it shall not use such
Equipment for such purposes, or permit others to use such Equipment for
such purposes unless such use is agreed to in writing by Seller. If, in
breach of the foregoing, any such use occurs, Seller disclaims all
liability for any nuclear or other damage, injury, or contamination,
and Buyer shall indemnify Seller against any such liability, whether
55
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CONFIDENTIAL
arising as a result of breach of contract, warranty, tort (including
negligence), strict liability, indemnity, or otherwise.
22.10 DISPUTE RESOLUTION. The Parties agree to use good faith attempts to
resolve any disputes which may arise between the Parties regarding the
application or interpretation of any provision of this Contract. In
case of a dispute, the aggrieved Party shall promptly notify the other
Party of the existence of a dispute subject to resolution pursuant to
Section 22.10 of the Contract and shall describe the nature of the
dispute in reasonable detail ("Dispute Notice"). If the Parties shall
have failed to resolve the dispute within ten (10) days after delivery
of the Dispute Notice, each Party shall nominate a senior member of its
management to attempt to resolve the dispute. Should the Parties still
be unable to resolve the dispute to their mutual satisfaction within
thirty (30) days after delivery of the Dispute Notice, each Party shall
have the right to pursue any and all remedies available at law or in
equity. Pending final resolution of any dispute, the Parties shall
continue to fulfill their respective obligations hereunder.
22.11 DISCLOSURE OF INFORMATION. Seller covenants to Buyer that as of the
date of this Contract, all technical information letters issued by
Seller relative to maintenance or reliability issues with the Equipment
have been provided to Buyer and Seller has disclosed to Buyer all
material maintenance and reliability issues with the Equipment which
Seller has learned through user groups or directly from users and which
have not yet been addressed by Seller by the release of technical
information letters. From the date of this Contract until Substantial
Completion, Seller shall promptly disclose to Buyer (a) technical
information letters issued by Seller relative to maintenance or
reliability issues with the Equipment and (b) shall use it best efforts
to promptly disclose all material maintenance and reliability issues
with the Equipment which Seller learns through user groups or directly
from users and which have not yet been addressed by Seller by the
release of technical information letters. In the event that Buyer
notifies Seller that Seller has failed to provide Buyer with the
information required by this Section, Seller shall within ten (10) days
of receipt of such notice provide Buyer with copies of the relevant
technical information letters previously issued by Seller or summaries
of maintenance and reliability issues identified and shall schedule a
conference call and/or meeting between representatives of Buyer and
Seller to review the technical findings and recommendations cited in
such technical information, letters and summaries.
56
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CONFIDENTIAL
IN WITNESS WHEREOF, the Parties have executed this Contract by their
duly authorized representatives as of the date first above written.
GENERAL ELECTRIC COMPANY
By: /S/
-------------------------------
Title: GM-Commercial Operations
TENASKA GEORGIA I, L.P.,
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /S/
-------------------------------
Title: Vice President
57
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CONFIDENTIAL
INDEX TO APPENDICES
<TABLE>
<S> <C>
Appendix A Description of Equipment
Appendix B Payment\Cancellation Charge Schedule with Engineering Release Notice
Appendix C Guaranteed Performance Criteria and Test Provisions
Appendix D Options
Appendix E Training
Appendix F Not Used
Appendix G Documentation
Appendix H EPC Project Schedule
Appendix I Technical Direction of Installation and
Commissioning Assistance
Appendix J Not Used
Appendix K Site Legal Description
Appendix L Customer Witness Plan
Appendix M Rights and Obligations retained by Buyer
</TABLE>
58
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CONFIDENTIAL
TurbineContract
59
<PAGE>
GE POWER SYSTEMS
1. GENERAL EQUIPMENT DESCRIPTION
- --------------------------------------------------------------------------------
1.1 EQUIPMENT PROPOSAL OVERVIEW
1.1.1 DESIGN CONDITIONS
<TABLE>
<S> <C>
Nominal Net Equipment Rating (Refer to the Performance
Specifications for Equipment Performance
Requirements
Site Conditions
Site Ambient Temp./Relative Humidity 94oF/39.4%RH
(Guarantee Conditions)
Site Pressure 14.289psia
Elevation 785 feet
Location Inland
Seismic Criteria 1997 UBC, Zone 2A
Wind Design 1997 UBC; Exposure C,
Importance Factor = 1.00
Basic Wind Speed = 100 mph
Fuel
Primary Natural Gas
Backup Distillate Fuel Oil
Gas Fuel Preheating Not Included.
Liquid Fuel Preheating Not Included
Treatment Not Included
Gas Fuel Booster Compressor Not Included. Minimum required gas
pressure is 415 psig at customer
connection to gas feed module. Maximum
operating pressure is 475 psig.
<PAGE>
1.1.2 EQUIPMENT/SYSTEM DEFINITION
Gas Turbine Six (6) PG7241FA Units
Exhaust System No stack included
Starting Means Shared static (1 for 2 units)
Air Filtration Two-Stage High Efficiency
Inlet Air Cooling Evap Coolers (Effectiveness 85%)
Compressor/Turbine Cleaning Off-Line / On-Line
Compressor Water Wash Only
Combustion System DLN 2.6
Emissions Control
Natural Gas Dry Low NOx: 15 ppm
Distillate Oil Water Injection:42 ppm
Generators Six (6) Gas Turbine Units
Gas Turbine Generators
Model Six (6) 7FH2 Packaged Generators
Cooling Hydrogen
Terminal Voltage 7F H2 = 18.0 kV
Frequency 60 Hz
Power Factor (pf)
Gas Turbine 0.85 Lagging/0.95 Leading
Generator Excitation EX2000 - Static Bus Fed
Generator Seal Oil System Scavenging Design
<PAGE>
Enclosures/Location
Gas Turbine-Generator Outdoor
Cooling Systems
Gas Turbine/Generator/Auxiliaries Closed H2O to Air
Control Systems
Gas Turbine-Generators SPEEDTRONIC-TM- Mark V / Local Control
Packages
Continuous Emissions Monitoring (CEMs) Not Included
Black Start Capability Not Included
High Voltage Switchyard Not Included
Transmission System Not Included
Generator Breaker Not Included
Auxiliary Boiler Not Included
Freeze Protection Not Included
</TABLE>
TURBINECONTRACTAPPENDIXA-1
- --------
- -TM- A TRADEMARK OF GENERAL ELECTRIC COMPANY
<PAGE>
GE POWER SYSTEMS
2. GAS TURBINE-GENERATOR
- --------------------------------------------------------------------------------
2.1 GAS TURBINE MAJOR EQUIPMENT AND SERVICES LIST
Six (6) General Electric Frame PG7241 (FA) heavy-duty,
single-shaft combustion turbine-generator units, each
comprising an air compressor, dual fuel combustion system,
power turbine, and a 60 Hz, 18.0 kV generator, all enclosed
in environmentally acceptable enclosures will be provided.
The Combustion Turbines will meet the performance emissions
and noise requirements as described in Appendix C.
This presents a listing of the gas turbine major equipment
and services which GE proposes to provide. The list is only
a quick reference to the scope of supply. Please refer to
the Table of Contents to locate more detailed descriptions
of the items listed here.
2.1.1 MAJOR EQUIPMENT
Six (6) base-mounted PG7241(FA) 60 Hz gas turbines
including:
2.1.1.1 COMBUSTION SYSTEMS
- Dry low NOx combustion system
-- With inlet heating
- Water injection for NOx control to 42 ppmvd @ 15% O2
when burning oil fuel
-- On base equipment
- Supply manifold and piping
- Spray nozzles
- Controls
-- Off base skid with water forwarding pump,
enclosure, space heater
- Compressor inlet humidity sensor
- Compressor inlet temperature thermocouple
<PAGE>
2.1.1.2 SPECIAL SYSTEMS
- Modulating IGV with position feedback control
- Exhaust frame blowers on turbine compartment roof
2.1.2 INLET SYSTEM
- Inlet system arrangement
-- Up and forward inlet system arrangement
- Inlet filtration
-- Two-stage standard pad-type media filter
-- Moisture resistant filter media (high humidity
environments)
-- Weather protection on inlet filter compartment
-- Inlet system differential pressure indicator
-- Inlet system differential pressure alarm
-- Inlet filter compartment support steel (Seismic
Zone 2A, -GREATER THAN OR EQUAL TO- 100 mph wind
speed)
- Inlet heating
-- Inlet heating control valves
-- Combined 8 ft silencer and in-duct inlet heating
module
- Inlet ducting
-- Inlet silencing to meet a guaranteed individual
turbine near field sound level guarantee of 90 dB
A. at 3 feet
-- Inlet expansion joint
-- Inlet 90 degree elbow
-- Inlet transition piece
-- Inlet ducting support steel (Seismic Zone 2A, =
100 mph wind speed)
- Inlet cooling
-- Evaporative cooler
-- 90% design effectiveness evaporative cooler
(Standard GE procurement practice)
-- 85% guaranteed effectiveness evaporative cooler
(Per Appendix C)
<PAGE>
- Inlet system hardware
-- Walkway for inlet filter compartment
-- Stairway access to inlet filter compartment house
-- Right hand access to inlet filter compartment
-- Electric hoist with 500 lb lift capacity
-- Inlet filter compartment interior lighting
- Inlet system atmospheric protection
-- Zinc rich paint inside and outside of inlet filter
compartment
-- Zinc rich painted inlet support steel
-- Zinc rich paint inside and outside of inlet
ducting with epoxy top coat inside ducting
-- Stainless steel inlet silencing perforated sheet
2.1.3 EXHAUST SYSTEM
2.1.3.1 ARRANGEMENT
- Exhaust diffuser with an axial exit
- Exhaust expansion joint
2.1.4 GAS TURBINE ACCESSORY COMPARTMENT
2.1.4.1 STARTING SYSTEMS
- LCI static start ( 1 per 2 units )
-- 6 Disconnect switches
-- Generator start with inverter/regulator
-- Static start isolation transformer
-- 12-pulse water cooled LCI
- Rotor turning systems
-- Turning gear and motor for rotor cooldown
-- Rotor indexing (borescope inspection)
<PAGE>
2.1.4.2 LUBRICATING AND HYDRAULIC SYSTEMS
- Oil reservoir
- Pumps
-- AC motor driven main lube oil pump
-- Motor driven main hydraulic pump
-- AC motor driven, auxiliary lube oil and hydraulic
pumps
-- DC motor driven, emergency lube oil pump
-- Pressure lift journal bearings
- Turbine
- Load
- Dual Combined Hydralic/Lift Oil Pump
-- Generator seal oil pump
- AC/DC auxiliary pump
- Industrial, off-base cooling water system
-- Aluminum fin material
-- Modular 100% capacity coolant-to-air heat
exchanger mounted off-base, with motor driven fans
to force air over finned tube heat exchangers. The
fan motor power is supplied from the unit motor
control center.
-- Automatic temperature controller which regulates
coolant flow to control lube oil temperature
during operation
-- Dual full-flow AC motor-driven coolant circulating
pumps (one running, one standby)
-- Make-up and expansion tank
-- Instruments for the system as follows:
- Tank low level alarm and indicator
- Panel mounted water header pressure gage,
pressure switch and temperature switch.
- Coolant header temperature gage
- Inlet and outlet thermometers
-
-- Dual lube oil system filters
<PAGE>
-- Dual hydraulic oil filters
-- Dual lube oil coolers
- Plate/frame type with stainless steel plates
-- ASME code stamp
- Lube oil coolers
- Lube oil filters
- Lube oil piping
-- 304L stainless steel lube oil feed pipe
-- Carbon steel lube oil drain pipe
-- Lube system valve stainless steel trim
-- Lube vent demister
- Compartment vent fan
2.1.4.3 FIRE PROTECTION SYSTEM
- Fire detection system
-- Turbine and accessory compartments
-- Liquid fuel and atomizing air skid
- Compartment warning signs
- FM-200 Fire Protection for the PEECC
- CO(2) supply system
-- One low pressure CO(2) tank per unit
- Hazardous atmosphere detectors in turbine and fuel gas
compartments
- Hazardous atmosphere detector readout in Mark V panels
2.1.5 FUEL SYSTEMS
- Gas fuel
-- Stainless steel gas piping
-- Orifice type gas flow measurement system
-- Gas fuel valves on accessory base
<PAGE>
-- Gas fuel temperature -LESS THAN- 400DEG.F
-- Gas fuel scrubber
- Liquid fuel
-- Stainless steel fuel oil piping
-- Single, motor driven, atomizing air compressor
-- Motor driven, 1x100% capacity, main liquid fuel
pump
-- Fuel oil flow divider
- Fuel treatment/processing
-- Duplex, low pressure fuel filters
2.1.6 WATER WASH SYSTEM
- On-base piping and nozzles for offline and online
compressor water wash system
- Off base water wash skid, 2 skids for 6 units
2.1.7 GAS TURBINE PACKAGING
2.1.7.1 ENCLOSURES AND BASES
- Lagging and enclosures
-- Turbine and accessory compartment lagging
-- Load coupling compartment lagging
-- On-base accessory compartment lagging
-- Off-base acoustic enclosure for turbine only
- Compartment ac ventilation system
-- Dual accessory compartment vent fans
-- Dual turbine compartment vent fans
-- Single vent fan for liquid fuel and atomizing air
skid
- Heated turbine and accessory compartments for humidity
control
- Plant arrangement
-- Right hand accessory module
<PAGE>
-- Unit walkways by GE
- Turbine and accessory base painting
-- Standard primer
- Seismic Zone
-- UBC zone #4 (inlet and exhaust are 2A,
-LESS THAN OR EQUAL TO- 100 mph)
- Hazardous area classification
-- NEC Class I, Group D, Division 2 (turbine and gas
compartments only)
- Special features
-- Dual (metric-English) indicators and gauges
2.1.7.2 COUPLINGS
- Rigid load coupling
- Load coupling guard
2.1.8 GENERATOR
2.1.8.1 GENERAL INFORMATION
- Hydrogen cooled generator with conventionally cooled
armature
- Short circuit ratio = .58
- Outdoor installation
- Class F armature and rotor insulation
- Class B temperature rise, armature and rotor winding
- Capability to 0.85 power factor (leading)
- 60 Hz generator frequency
- Generator voltage 18.0 kV
- Generator bearings
-- End shield bearing support
-- Elliptical journal bearings
<PAGE>
-- Roll out bearing capability without removing rotor
-- Insulated collector end bearing
-- Online bearing insulation check
-- Offline bearing insulation check with isolated
rotor
- Monitoring Devices and sensors
-- Bently Nevada Series 3300
- Generator Field
-- Direct cooled field
-- Two-pole field
-- Finger type amortissuers
-- Full amortissuers
2.1.8.2 GENERATOR GAS COOLERS
- Coolers shipped installed
- Generator gas cooler configuration
-- Five (5) horizontally mounted simplex coolers
-- Coolers located in generator base
-- Cooler piping connections on left side as viewed
from collector end
-- ASME code stamp
-- Single wall cooler tubes
-- Victaulic cooler couplings
-- Plate fins
-- Cooling water manifold and isolation valves
- Generator gas cooling system characteristics
-- Coolant temperature 117DEG.F at 100DEG.F ambient
day
-- Generator capacity with one section out of service
80% with class "F" rise
-- Maximum cooler pressure capability - 125 psi
-- Coolant 66% water, 33% glycol
-- Fouling factor 0.0005
- Generator gas cooler construction materials
<PAGE>
-- 90-10 copper-nickel tubes
-- Carbon steel tube sheets
-- Carbon steel waterbox and coupling flanges with
epoxy coating
-- Aluminum cooler tube fins
2.1.8.3 GENERATOR LUBE OIL SYSTEMS AND EQUIPMENT
- Bearing lube oil system
-- Generator lube oil system integral with turbine
- Bearing lift oil system
-- Stainless steel lift oil piping and tubing
-- Lift oil supplied from turbine oil system
- Lube oil system piping materials
-- Stainless steel lube oil feed pipe
-- Carbon steel lube oil drain pipe
-- Welded oil piping
-- Flexible pipe as permitted by ANSI B31.3
2.1.8.4 GENERATOR GROUNDING EQUIPMENT
- Neutral grounding equipment
-- Neutral ground transformer and secondary resistor
-- Mounted in terminal enclosure
2.1.8.5 GENERATOR TEMPERATURE DEVICES
- Stator winding temperature devices
-- 100 ohm platinum RTDs (Resistance temperature
detector)
-- Single element RTDs
-- Grounded RTDs
-- Nine (9) stator slot RTDs
- Gas path temperature devices
-- 100 ohm platinum gas path RTDs
-- Single element RTDs
<PAGE>
- Bearing temperature devices
-- Chromel alumel (type K) thermocouples
-- Dual element temperature sensors
-- Two (2) bearing metal temperature sensors per
bearing
- Collector temperature devices
-- 100 ohm platinum RTDs
-- Single element temperature sensors
-- Collector air inlet temperature sensor
-- Collector air outlet temperature sensor
- Lube oil system temperature devices
-- Chromel alumel (type K) thermocouples
-- Dual element bearing temperature sensors per
bearing
-- One (1) bearing drain temperature sensor per drain
2.1.8.6 PACKAGING, ENCLOSURES, AND COMPARTMENTS
- Paint and preservation
-- Standard primer
- Line-side terminal enclosure
-- Terminal enclosure shipped separate
-- High voltage bushings shipped installed
-- Top mounted
-- Non-segregated phase internal bus
-- Phase sequence R-C-L when looking at enclosure
terminals
-- Outgoing power connection on left side when viewed
from collector end
-- Isolated phase bus duct connection
-- Lightning arrestors
-- Pull out PTs
- Neutral terminal enclosure
-- Top mounted
-- Integral with line side terminal enclosure
<PAGE>
-- Neutral tie
- Collector compartment
-- Collector compartment shipped separate
-- Outdoor
- Load coupling compartment
-- Dual load compartment vent fans
- Foundation hardware
-- Generator shims
-- Generator alignment key(s) - collector end
-- Generator alignment key(s) - turbine end
-- Generator alignment key(s) - axial
-- Jacking provisions
- Generator enclosure suitable for outdoor installation
2.1.8.7 HYDROGEN SYSTEMS AND ACCESSORIES
- Hydrogen control assembly
-- NEMA 1 assembly in collector compartment
- Hydrogen cooled generator gas manifolds
-- Hydrogen bottle manifold
-- CO2 bottle manifold
-- Auto purge gas purge control manifold
-- Hydrogen control manifold
- Seal oil system
-- Control unit mounted in collector compartment
-- Stainless steel seal oil feed pipe
-- Carbon steel seal oil drain pipe
2.1.8.8 ELECTRICAL EQUIPMENT
- Motors
-- TEFC motors
<PAGE>
-- Coated with antifungal material for protection in
tropical areas
- Six (6) ambient air cooled, high voltage bushings
- Heaters
-- Generator stator heaters
-- Generator collector heaters
- Compartment lighting and outlets
-- AC lighting
- Collector compartment
- Current transformers
-- Relaying class C400
-- Neutral CTs
- CT1, CT2, CT3 (metering CT's)
- CT4, CT5, CT6 (separate relaying CT's)
- CT7, CT8, CT9 (relaying)
- CT10, CT11, CT12 (generator differential) -
C800
-- Line CTs
- CT16, CT17, CT18 (relaying)
- CT19A, CT19C (Excitation CTs)
- CT21, CT22, CT23 (generator protection)
2.1.8.9 GENERATOR EXCITATION SYSTEMS, STATIC COMPONENTS
- Busfed static, with hot backup
2.1.8.9.1 EXCITATION MODULE FEATURES
- Control/monitor/display through TCP
-- Voltage matching
-- VAR/PF Controller
-- Selection of automatic or manual regulator
-- Raise-lower of the active regulator setpoint
<PAGE>
-- Enter setpoint command
-- Display field amps
-- Display field volts
-- Display transfer volts
-- Display field temperature
- Built-in diagnostic display panel
-- Automatic voltage regulator (AVR)
-- Manual voltage regulator (FVR)
-- Automatic and manual bi-directional tracking
-- Reactive current compensation (RCC)
-- Volts per hertz limiter (V/Hz LIM)
-- Over excitation limiter (OEL)
-- Under excitation limiter (UEL)
-- Generator field ground detector (64F)
-- VT failure detector (PTFD) (60EX)
- Dual source internal bulk power supply
- Millivolt shunt for field
- Surge protection
-- VT disconnect and CT shorting switches
-- Two phase current sensing (CT,s A,C)
-- Three phase voltage sensing
-- Single pole dc field contactor
- Thyristor bridge circuit filtering
- Shaft voltage suppresser circuit (mounted in panel)
-- Field de-excitation circuit (with field discharge
inductor)
-- 125 Vdc field flashing circuit (when required)
-- Bridge disconnect; ac no load
- Protection Module
-- Volts/hertz protection (24EX)
<PAGE>
-- Generator overvoltage protection (59EX)
-- Off/on-line overexcitation protection (76EX)
-- Loss of excitation (40EX)
-- Bridge ac phase unbalance (47EX)
- Power system stabilizer
2.1.8.9.2 PERFORMANCE
- 2.0 response ratio and 160% VFFL (100DEG.C) ceiling @
Vt = 1.0pu
2.1.8.9.3 ENCLOSURE LOCATION
- Installed in LCI compartment or GEC
2.1.8.9.4 ENCLOSURE CONSTRUCTION
- NEMA-I enclosure
- Standard paint ANSI-70 light gray, interior and
exterior
2.1.9 CONTROLS AND ELECTRICAL AUXILIARIES
2.1.9.1 CONTROL CAB/PACKAGED ELECTRIC AND ELECTRONIC CONTROL
COMPARTMENT (PEECC)
- Access doors
- Air conditioning and heating
- Control panels mounted on a common skid
- Lighting and power outlets
- FM200 fire protection system (including supply of
FM200)
2.1.9.2 MARK V SPEEDTRONIC-TM- TURBINE CONTROL PANEL FEATURES
- Triple modular redundant (TMR)
- Auto/manual synchronizing module with synchronizing
check function
- -----------------
- -TM- A Trademark of General Electric Company
<PAGE>
- Generator stator over-temperature alarm (49)
- Droop control
- Load limiter
- Customer alarm/trip contact for CRT display
- Additional customer input contacts
- Additional customer output contacts
- Provision for 8 selectable analog inputs from customer
- Provision for 8 selectable analog output to customer
- Wet low NOx data for EPA compliance
- Vibration alarm readout and trip
- Electrical overspeed protection
- Constant settable droop
- Power factor calculation and display
- Manual set point preselected load
2.1.9.3 GENERATOR CONTROL PANEL
2.1.9.3.1 GENERATOR CONTROL PANEL LOCATION
- PEECC
2.1.9.3.2 GENERATOR CONTROL PANEL FEATURES
2.1.9.3.2.1 GENERATOR BREAKER TRIP SWITCH (52G/CS) WITH RED AND GREEN
INDICATOR LIGHTS
2.1.9.3.2.2 DIGITAL GENERATOR PROTECTION SYSTEM (DGP) MODEL NO. DGP54
AACA
- Generator differential (87G)
- Current unbalance (46)
- Loss of excitation (40)
<PAGE>
- Reverse power (32)
- Stator ground detection (64G)/(59GN)
- Overexcitation (24)
- Overvoltage (59)
- Over frequency (81O)
- Under frequency (81U)
- System phase fault relay (51V)
- Generator differential lockout relay (86G-1)
-- One circuit coil monitor (74) in each 86 lockout
- Voltage transformer fuse failure (VTFF)
2.1.9.3.3 GENERATOR CONTROL PANEL DISCRETE RELAYS
- Synchronizing Undervoltage relay (27BS-1,2)
- DC tripping bus, blown fuse protection (74)
- Voltage balance relay (60)
- Distance relay (21)
- Breaker or lockout trip coil monitor (74)
- Reverse/Inadvertent energization protection (50RE/86RE)
- Bus Ground detection relay (59BN)-3 PT's & resist
2.1.9.3.4 GENERATOR CONTROL PANEL INSTRUMENTATION
- Generator digital multimeter
-- VM - Generator Volts:
-- AM - Generator Amps: Phase 1,2,3 and Neutral
-- MWATTS - Generator MegaWatts
-- MVAR - Generator MegaVArs
-- FM - Generator frequency
<PAGE>
-- MVA - Generator MVA
-- PF - Generator Power Factor
-- MWH - Generator MegaWatt-Hours
-- MWVAH - Generator MVA Hours
-- Generator transducers (watts, watt/var)
2.1.9.3.5 INTEGRATED INTO MARK V
- Mark V with speed matching, synch & check
- Manual sync displayed on Mark V [I]
- Load control in Mark V
- Temp indication-for generator RTD's
- Auto/manual synchronizing module displayed on
Mark V [I]
2.1.9.4 GENERATOR PROTECTION
- Generator electrical protection equipment
-- Ground brush rigging
2.1.9.5 LOCAL OPERATOR MULTIUNIT INTERFACE [I]
- Table top 15 in. color monitor
- Trackball cursor control
- Table top AT 101 spillproof keyboard
- 24 pin dot matrix printer
- 50 ft of Arcnet cable between Mark V panel and local
operator interface [I] for indoor use
- Display in English language
2.1.9.6 REMOTE CONTROL AND MONITORING SYSTEMS
- GSM-TCP/IP Ethernet via [I/G]
<PAGE>
2.1.9.7 BATTERIES AND ACCESSORIES
- Lead acid battery
- Single phase battery charger
- Battery and charger mounted in the PEECC
2.1.9.8 MOTOR CONTROL CENTER
- MCC mounted in control cab/PEECC
- Tin-plated copper bus-work
- 42 kA bracing
- 480V 60 Hz auxiliary power
2.1.9.9 MOTOR FEATURES
- Service factor on all motors 1.15
- Coated with antifungal material for protection in
tropical areas
- TEFC motors -LESS THAN- 200 hp
- Extra severe duty motors
- Cast iron motor housings o All redundant motors to be
lead/lag
- Motor heaters
- WP motors -GREATER THAN- 200 hp
2.1.9.10 ROTOR, BEARING AND PERFORMANCE MONITORING SYSTEMS
- Performance monitoring systems (RTD for compressor
inlet temperature)
-- Sensors wired to Mark V
- Vibration sensors
-- Seismic Velocity vibration sensors, Two per each
bearing for protection
<PAGE>
-- Bently Nevada proximity probes and proximeters.
Two probes on each bearing for readout
- Boroscope access holes
- Thermocouples for measuring critical turbine
temperatures including bearing metal and drains
- Redundant sensors for critical functions with
applicable third party certification on devices
2.1.10 POWER SYSTEM STUDIES
- Provided by owner
2.1.11 SERVICES
- Coordinate drafting, manufacturing and shipping
schedules to meet contractual requirements
- Containerize shipments of miscellaneous parts
- Technical advisory services
- Transportation to nearest rail siding
-- Heard County, Georgia
- Truck shipments to site (MSD)
- Provide design drawings and final drawings
- Documentation
-- Up to 10 sets of English language service manuals
per station, including Operation, Maintenance and
Parts volumes
- Turbine maintenance tools
-- Guide pins (for removal or replacement of bearing
caps, compressor casing and exhaust frame)
-- Fuel nozzle wrenches
-- Fuel nozzle test fixture
-- Spark plug electrode tool
<PAGE>
-- Clearance tools
-- Fuel nozzle staking tool
-- Combustion liner tool
-- Bearing and coupling disassembly fixture
- Generator maintenance tools
-- Rotor lifting slings
-- Rotor removal equipment including shoes, pans,
pulling devices
-- Rotor jacking bolts
- Installation Equipment
-- Trunions for generator
- On loan basis only
-- Jacking bolts for generator
- --------------------------------------------------------------------------------
2.2 GAS TURBINE MECHANICAL DESCRIPTION
The gas turbine output flange is located at the compressor
end of the rotor assembly to provide "cold end" drive. This
feature substantially improves alignment control and
provides an axial exhaust to optimize the plant arrangement
for combined cycle or waste heat recovery applications. The
generator is connected to the gas turbine through a solid
coupling. The direction of rotation is counter-clockwise
when facing the direction of airflow through the gas
turbine.
<PAGE>
[GRAPHIC OMITTED]
The gas turbine has an eighteen stage axial flow compressor
with modulated inlet guide vanes. Interstage extraction is
used for turbine nozzle and wheelspace cooling.
A reverse flow, fourteen chamber combustion system is
utilized with multiple fuel nozzles per chamber. Redundant
spark plugs and flame detectors are a standard part of the
combustion system with crossfire tubes connecting each
combustion chamber to adjacent chambers. If required, water
injection can be introduced for NOx emissions control.
Transition pieces are effectively cooled by air impingement.
Thermal barrier coatings are applied to the inner walls of
the combustion liners for smoother temperature gradients.
The gas turbine has three turbine stages with the first and
second stage nozzles and buckets being air cooled. The
buckets are designed with long shanks to isolate the turbine
wheel rim from the hot gas path. Precision cast buckets are
used for each turbine stage with the second and third stages
incorporating an integral tip shroud for better gas path
leakage control. All turbine buckets are
<PAGE>
coated to provide corrosion resistance. The turbine section
is coupled to an axial diffuser with optimum pressure
recovery for higher thermal efficiency.
The rotor is a two bearing single shaft design with high
torque capability. It incorporates internal cooling and
thermal response control in the turbine section. Both the
compressor and turbine sections are constructed of
individually rabbeted discs held with through bolts. For
field changeout, the unit rotor is handled as one piece.
The turbine and compressor casings are horizontally split
for ease of inspection and maintenance. For each combustion
chamber, the liners and transition pieces can be
individually changed out. Borescope holes are located in the
compressor, combustion and turbine sections to facilitate
visual inspection.
2.2.1 COMPRESSOR CLEANING
2.2.1.1 ON-LINE/OFF-LINE COMPRESSOR WATER WASH
Compressor water washing is used to remove fouling deposits
and to restore performance. Fouled compressors result in
reduced air flow, lower compressor efficiency, and lower
compressor pressure ratio. Compressor cleaning may also slow
the progress of corrosion, thereby increasing blade life and
reducing the contribution of corrosion products to the
formation of fouling deposits. On-line cleaning is the
process of injecting cleaning solution into the compressor
while running at full speed and some percentage of load.
Off-line cleaning is the process of injecting cleaning
solution into the compressor while it is being turned at
cranking speed. The advantage of on-line cleaning is that
washing can be done without having to shut down the machine.
On-line washing, however is not as effective as off-line
washing: therefore on-line washing is used to supplement
off-line washing, not replace it.
The on-base compressor washing feature consists of piping,
nozzles, solenoid valves and software in the turbine control
panel. A compressor water wash can be initiated while the
turbine is either on-line or off-line.
The off-base detergent pumping skid consists of detergent
storage tank, mixing venturi, forwarding pump, enclosure and
freeze protection. One skid is provided for the site
(approximate plan dimensions of 9' x 8').
<PAGE>
2.2.1.1.1 ON-LINE MANIFOLD AND NOZZLES
The on-line washing components consist of two piping
manifolds, and spray nozzles (one in the forward bellmouth
and one in the aft bellmouth) and a motor-operated valve
which is also controlled by the turbine control panel. The
turbine control system is equipped with software to perform
an automatic on-line wash by simply initiating the wash from
the turbine control panel.
2.2.1.1.2 OFF-LINE MANIFOLD AND NOZZLES
The off-line washing components consist of a piping
manifold, and spray nozzles in the forward bellmouth, and a
motor-operated valve controlled by the turbine control
panel. Off-line washing is a manual operation because of the
large number of manual valves on the turbine which need to
be manipulated in order to perform an off-line wash.
[GRAPHIC OMITTED]
2.2.1.2 COMBUSTION
A reverse flow, multi chamber (can annular) combustion
system is utilized. Combustion chambers are arranged around
the periphery of the compressor discharge casing. This
system also includes the fuel nozzles, spark plug ignition
system, flame detectors, and crossfire tubes.
Crossfire tubes connect each combustion chamber to adjacent
chambers on both sides. Transition pieces connect the
combustion liners to the turbine nozzles Each liner, fuel
nozzle, and transition piece can be individually replaced.
<PAGE>
[GRAPHIC OMITTED]
2.2.1.2.1 COMBUSTION CHAMBERS
The combustion liners are cylindrical. Discharge air from
the axial-flow compressor flows forward along the outside of
the combustion liner, as guided by the flow sleeve. Liner
cooling is achieved via film cooling with annular slots
distributed along the length of the combustion liner.
Backside only cooling is utilized on some DLN combustors.
Thermal barrier coatings are applied to the inner walls of
the combustion liners for longer inspection intervals.
Air enters the combustor through a variety of holes in the
liner. The air, depending on its injection location is
utilized in the actual combustion process, for cooling, or
as dilution to tailor the exhaust gas profile.
2.2.1.2.2 TRANSITION PIECES
Transition pieces direct the hot gases from the liners to
the turbine nozzles. The transition pieces have a circular
inlet for the combustion liners transitioning to an annular
segment at the exit for the turbine nozzle. Seals are
utilized at both connection locations to control leakage
flows.
2.2.1.2.3 SPARK PLUGS
Combustion is initiated by discharge from two electrode
spark plugs each in a different combustion chamber. At the
time of firing, a spark at one or both of these plugs
ignites a chamber.
<PAGE>
No LP gas torch ignitor system is required with this design.
2.2.1.2.4 CROSSFIRE TUBES
The combustion chambers are interconnected by means of
crossfire tubes. These tubes enable flame from the fired
chambers containing spark plugs to propagate to the unfired
chambers.
2.2.1.2.5 ULTRAVIOLET FLAME DETECTORS
The control system continuously monitors for presence or
absence of flame. Cooled flame detectors are installed in
several combustors. The detector consists of a small gas
filled tube with two closely spread electrodes. An
electronic package containing a power supply applies a high
DC voltage across the electrodes. When ultraviolet (UV)
radiation is present, it causes a discharge within the tube,
which results in a current pulse and discharge of the power
supply.
The power supply recharges and the discharge process
continues to repeat as long as the UV radiation is present.
The presence of flame is determined by the electronic
package which measures the pulse frequency, and relays the
flame condition to the gas turbine control system. The
"FAILURE TO FIRE" or "LOSS OF FLAME" is indicated on the
control panel.
2.2.1.2.6 DRY LOW NOx COMBUSTION SYSTEM
The Dry Low NOx (DLN) combustor is a single stage multi-mode
combustor capable of operation with either gaseous or liquid
fuel. The burning zone is formed by the combustion liner and
the face of the cap. The majority of the combustion air is
introduced through annular passages (premix chambers)
surrounding each of the six fuel nozzles.
<PAGE>
[GRAPHIC OMITTED]
The DLN 2.6 fuel system operation is fully automated,
sequencing the combustion system through a number of staging
modes prior to reaching full load. The primary controlling
parameter for fuel staging is the calculated combustion
reference temperature. Other DLN 2.6 operation influencing
parameters available to the operator are inlet guide vane
(IGV) temperature control "ON" or "OFF" and inlet bleed heat
"ON" or "OFF". To achieve maximum exhaust temperature, as
well as an expanded load range for optimal emissions, both
IGV temperature control and inlet bleed heat should be
selected "ON".
<PAGE>
[GRAPHIC OMITTED]
Liquid fuel injection is injected at the tip of the fuel
nozzle only. Operation is thus in diffusion mode, with
emissions comparable to a standard GE multi-nozzle
combustor. A water injection passage is integral to the fuel
nozzle and is used for NOx abatement while operating on
liquid fuel.
2.2.1.2.7 CONTINUOUS DYNAMICS MONITORING SYSTEM
A continuous dynamics monitoring system will be provided for
tuning the combustion system on a rental basis, and will be
returned after unit commissioning. The system shall consist
of the following (optional):
o Probes
o Multiplex junction box
o NT computer
<PAGE>
2.2.2 ACCESSORY MODULE
2.2.2.1 LUBRICATION AND HYDRAULIC CONTROL OIL SYSTEM
The lubricating provisions for the turbine and
generator are incorporated in a common system
located on the accessory module.
[GRAPHIC OMITTED]
The module is vented to atmosphere and includes the
following equipment:
o Lubricating oil reservoir with the following devices:
-- Redundant full flow AC motor-driven lubricating oil
pumps
-- AC/DC auxiliary generator seal oil pump
-- Partial flow DC motor-driven emergency lubricating oil
pump
-- Redundant full flow AC motor-driven hydraulic oil pumps
-- (Stainless steel) dual plate frame oil-to-coolant heat
exchanger with transfer valve
<PAGE>
-- Dual lube oil system filters
-- Pressure lift bearings for the
- Turbine
- Load
-- Dual filters and transfer valve for hydraulic oil
systems
The mist eliminator is an air-exhaust filtration unit used
to remove lube oil-mist particles which are entrained in the
lubricating system vent lines by the sealing air returns of
the gas turbine lubricating system. The mist eliminator
assembly consists of a holding tank with filter elements,
motor-driven blower, and check-relief valve. One assembly is
provided for the vent line from the lube oil reservoir and
one is provided in the exciter end of the generator for the
generator bearings. Collected oil drains back to the lube
oil reservoir.
-- Temperature indicating gauge for bearing header
temperature
-- Thermocouples in turbine and generator bearing drains
-- Bearing metal thermocouples
-- Permissive-start temperature switch
-- Bearing header high temperature alarm and shutdown
switches
-- Bearing header low pressure alarm and trip switches
-- Oil filter delta pressure alarm switches
-- Lubricating oil pump stop and start switches
-- Tank mounted level indicator, with low and high level
alarm switch
-- Lube oil heater for -20F
-- Panel mounted bearing header pressure gauge
-- Panel mounted main, auxiliary, emergency and seal oil
pump discharge pressure gauges
-- Panel mounted lubrication and hydraulic oil filter
differential pressure gauges
2.2.3 DUAL FUEL SYSTEM
2.2.3.1 FUEL TRANSFER
Fuel is to be in accordance with GE fuel specifications as
indicated in the Reference Specification section of the
proposal.
<PAGE>
The gas turbine may be started on either fuel, and transfers
from one fuel to the other may be initiated by the operator
prior to start up or at any time after completion of the
starting sequence. Since gas is usually the primary fuel,
with distillate as a backup, transfers from gas to
distillate can be automatically initiated on low gas supply
pressure, provided that liquid fuel is available, and that
there is adequate time to start the fuel forwarding pump.
Transfer back to the primary fuel is by operator initiation
only, in order to ensure the integrity of the supply and
prevent oscillatory operation if the gas supply pressure is
marginal at the transfer initiation pressure. If liquid fuel
is the primary fuel, this automatic sequence can be switched
to accommodate this.
A typical gas/distillate transfer is illustrated below. The
energy equivalent of the fuel flow as the function of fuel
command is matched between the two fuels, so that equal gas
and liquid commands will result in equal energy release in
the gas turbine combustors. The fuel signal divider then
splits the signal to each fuel system in a manner that
maintains the sum of the two signals equal to the total
required fuel demand.
[GRAPHIC OMITTED]
The transfer sequence is divided into two parts, a line
filling period and the actual transfer. During the first
period, the incoming fuel command is raised to
<PAGE>
a level that will allow filling of the system in about
thirty seconds, and the outgoing fuel command is lowered by
an equivalent amount. After fuel has reached the fuel
nozzles, the incoming fuel is ramped up to equal the total
fuel demand, and the outgoing fuel is ramped down to zero.
Since total energy to the gas turbine is held reasonably
constant, load variations for a properly matched and tuned
system are minimal, and generally are less than five percent
of nameplate rating.
The next step in the process involves initiation of the
inactive fuel system purge, if purging is required, and
automatic verification of proper operation. Since purging
results in additional, although limited, fuel being injected
into the turbine to clear the inactive fuel system, there is
potential for a load disturbance at this time if the purge
is initiated too abruptly. Once the system is cleared, the
potential for a load spike disappears. Purge system
sequencing is designed to minimize this effect, and in the
case of liquid fuel nozzle purging, is initiated during the
transfer. This results in random opening of purge check
valves, which has been shown to substantially reduce the
load spikes. The final step in the transfer process is
resetting the NOx control system to meet the needs of the
new fuel.
2.2.3.2 NATURAL GAS FUEL SYSTEM
[GRAPHIC OMITTED]
<PAGE>
2.2.3.2.1 RESERVED
2.2.3.3 LIQUID FUEL SYSTEM
[GRAPHIC OMITTED]
The liquid fuel equipment located on the liquid
fuel/atomizing air module consists of:
o Single 5 micron low pressure fuel oil filter, ahead of
fuel pump
o Fuel oil filter differential pressure gages
o One 100% capacity AC motor driven fuel pump
o Electro-hydraulically controlled bypass valve
o Fuel oil stop valve
o Fuel flow divider
o Fuel oil pressure gauges-- after low pressure filter and
before flow divider
<PAGE>
o On-base piping and manifold
o Off base skid - forwarding pump, enclosure and space
heater
o Water quality per GEK101944
2.2.3.4 ATOMIZING AIR SYSTEM
The motor-driven atomizing air equipment located on the
liquid fuel/atomizing air module provides high-pressure air
to atomize the liquid fuel for combustion, to purge the
liquid fuel combustor nozzle passages, and to provide the
purge control valve operating air. The equipment consists
of:
o Single air to water U-tube heat exchanger for cooling
cycle air for entry to the atomizing air compressor and
purge compressor
o Full flow one micron filter
o Throttling valve to reduce atomizing air compressor outlet
pressure for purging
o Motor driven atomizing air compressor
o Gauge/switch panel
o Module enclosure
o Piping; flexible fuel nozzle pigtails
2.2.3.5 WATER INJECTION SYSTEM FOR NOX REDUCTION (DISTILLATE FUEL)
o On-base manifold and supply piping
o Off-base water injection skid
Water forwarding pumps, AC motor driven
2.2.4 PACKAGE ENCLOSURES
Gas turbine enclosures consist of several connected sections
forming an all weather protective housing. Enclosures
provide thermal insulation, acoustical attenuation and fire
extinguishing media containment. The enclosures allow access
to equipment for routine inspections and maintenance.
Enclosures are also heated, cooled and lighted, as described
below, for convenience and optimum performance of installed
equipment.
<PAGE>
2.2.4.1 HEATING AND VENTILATION SYSTEM
The following heaters are provided to maintain start-up
temperatures and humidity protection during shutdown and
standby periods at ambient temperatures down to
-20DEG.F(-28.9DEG.C):
o Electric (ac) heaters in the generator, generator
termination, and generator auxiliary compartments for
humidity control
o Electric (ac) heaters in the control compartment to
50 DEG. F minimum
o Electric (ac) heaters in the turbine, accessory, and
liquid fuel/atomizing air compartments for humidity control
Ventilation of compartments during operation is provided for
as follows:
o Control compartment (by wall-mounted air conditioner)
90 DEG. F maximum
o Dual AC accessory compartment vent fans 150 DEG. F
maximum
o Dual AC turbine compartment vent fans 350 DEG. F maximum
o Single vent fan liquid fuel/atomizing air skid
150 DEG. F maximum
2.2.4.2 FIRE PROTECTION SYSTEM
Fixed temperature sensing fire detectors are provided in the
gas turbine and liquid fuel/atomizing air compartments and
#2 bearing tunnel. The detectors provide signals to actuate
the low pressure carbon dioxide (CO(SUB2)) automatic
multi-zone fire protection system. Nozzles in the protected
zones direct the CO(SUB2) to the compartments at a
concentration sufficient for extinguishing flame. This
concentration is maintained by gradual addition of CO(SUB2)
for an extended period. Wiring to the detectors will be
single conductor with high temperature insulation.
The fire protection system is capable of achieving a
non-combustible atmosphere in less than one minute, which
meets the requirements of the United States National Fire
Protection Association (NFPA) #12.
The supply system is composed of a low pressure CO2 tank,
mounted off-base, a manifold and a release mechanism.
Initiation of the system will trip the unit, provide an
alarm on the annunciator, turn-off ventilation fans and
close ventilation openings.
<PAGE>
2.2.4.3 LIGHTING
AC lighting on an automatic circuit is provided in the
turbine compartment, accessory compartment and control
compartment. When ac power is not available, a dc
battery-operated circuit supplies a lower level of light
automatically.
2.2.4.4 WALKWAYS
Unit walkways, platforms and stairway access by GE.
2.2.5 INLET SYSTEM
2.2.5.1 GENERAL
Gas turbine performance and reliability are a function of
the quality and cleanliness of the inlet air entering the
turbine. Therefore, for most efficient operation, it is
necessary to treat the ambient air entering the turbine and
filter out contaminants. It is the function of the air inlet
system with its specially designed equipment and ducting to
modify the quality of the air under various temperature,
humidity, and contamination situations and make it more
suitable for use. The inlet system consists of the equipment
and materials defined in the Scope of Supply chapter of this
proposal. The following paragraphs provide a brief
description of the major components of the inlet system.
2.2.5.2 INLET FILTRATION
2.2.5.2.1 INLET FILTER COMPARTMENT
The inlet filter compartment sits on a steel support
structure upstream of the gas turbine. The elevated
arrangement provides a compact system and minimizes pickup
of dust concentration near the ground.
The two stage inlet filter is comprised of a prefilter and a
high-efficiency filter. The media-type prefilters provide an
inexpensive, disposable stage of filtration. The prefilters
usually extend the life of high-efficiency filters by a
factor of about three.
The high-efficiency filters use filter medium appropriate
for the site environmental conditions to achieve good
collection efficiency for all particles, including those as
small as 1 micron. Because the collection
<PAGE>
efficiency is very high, the air quality downstream is also
high, even when the ambient air is badly contaminated.
The filter elements are contained within a fabricated steel
enclosure which has been specially designed for proper air
flow management and weather protection.
As the outside of the filter elements become laden with
dust, increasing differential pressure is sensed by a
pressure switch in the plenum.
2.2.5.2.2 EVAPORATIVE COOLER
The evaporative cooler is used in applications where
significant operation occurs in the hot months and where low
relative humidities are common. With evaporative cooling,
water is added to the inlet air and, as the water
evaporates, the air is cooled. The amount of water required
for evaporative cooling depends upon the airflow through the
turbine, the temperature and humidity of the ambient air and
the amount of hardness in the water. The exact increase in
power available from the gas turbine is dependent upon the
same site conditions.
The cooler consists of a water distribution system and media
packed blocks made of corrugated layers of fibrous material.
Water is distributed over the blocks through one set of
channels and the air passes over alternate channels. The air
side is wetted by the wicking action of the media. This
system minimizes water carryover.
Water is to be provided per GEK 101944, "Requirements for
Water/Steam Purity in Gas Turbines."
2.2.5.3 INLET SYSTEM INSTRUMENTATION
2.2.5.3.1 INLET SYSTEM DIFFERENTIAL PRESSURE INDICATOR
Standard pressure drop indicator (gauge) displays the
pressure differential across the inlet filters in inches of
water.
2.2.5.3.2 INLET SYSTEM DIFFERENTIAL PRESSURE ALARM
When the pressure differential across the inlet filters
reaches a preset value , an alarm is initiated. This alarm
may signify a need to change the filter elements.
<PAGE>
2.2.5.4 INLET DUCTING AND SILENCING
2.2.5.4.1 INLET DUCTING
The inlet ductwork system connects the inlet filter
compartment with the gas turbine compressor inlet plenum.
The ducting is designed to deliver the required air flow to
the compressor while minimizing the pressure drop of the
incoming air stream. There is a stationary trash screen
within the ducting system to prevent the remote possibility
of ingestion of foreign objects. The trash screen can be
accessed for cleaning and inspection through a removable
access panel. The inlet ducting makes use of materials and
coatings in their construction which are designed to
minimize maintenance requirements.
2.2.5.4.2 INLET SILENCING
The noise generated during gas turbine operation is
attenuated by means of absorptive silencing material and
devices built into the inlet system which dissipate or
reduce the acoustical energy to an expected level of 58 dBA
at normal operation and 65 dBA during filter cleaning at 400
feet. The silencer is specifically designed to eliminate the
fundamental compressor tone, and to attenuate the noise at
other frequencies also. The inlet silencer consists of an
acoustically lined duct containing 8 feet of silencing
baffles constructed of a low-density insulating material
which is encapsulated by perforated sheet steel. The
acoustic lining in the walls of the silencer duct and the
walls of the ducting downstream of the silencer have a
similar construction.
2.2.5.4.3 INLET SYSTEM ANTI-ICING PROTECTION
This system features an inlet bleed heat injection manifold
integrated with the inlet silencer.
2.2.6 EXHAUST SYSTEM
The exhaust system arrangement includes the exhaust
diffuser. After exiting the last turbine stage, the exhaust
gases enter the exhaust diffuser section in which a portion
of the dynamic pressure is recovered as the gas expands. The
gas then flows axially into the exhaust system which is not
in GE's scope of supply.
GE is providing an inconel flex-joint expansion joint at the
outlet flange of the exhaust frame which is designed to
interface with internally insulated exhaust diffuser.
<PAGE>
2.2.7 ACOUSTICS
Measuring procedures will be in accordance with ASME PTC 36
(near field) and/or ANSI B133.8 (far field).
2.2.8 PAINTING
The exteriors of the turbine compartment, accessory and
liquid fuel/atomizing air modules, generator compartment,
control cab (if supplied), BAC/LCI and accessory base and
other equipment are painted with two coats of alkyd primer
prior to shipment.
The turbine compartment interior is painted with
high-temperature paint. Interiors of all other compartments
are painted.
2.2.9 WIRING
The gas turbine electrical interconnection system includes
on-base wiring, terminal boards, junction boxes, etc. as
well as compartment interconnecting cables. Junction boxes
are selected to meet the environmental requirement of the
Purchaser but are, in general, of steel or cast aluminum
construction. Special environments such as corrosive or
hazardous can be accommodated. Terminal boards within
junction boxes are of the heavy duty industrial type
selected for the particular environment in which the
junction box is located. On-base gas turbine wire
termination uses spring tongue crimped type terminals.
Generator wire terminations are ring type. Control panel
wiring is General Electric type SIS Vulkene insulated
switchboard wire, AWG #14-41 Strand SI-57275. Ribbon cables
are used as appropriate.
With the exception of cables pre-connected with specific
equipment, the Purchaser or his Installer is responsible for
interconnecting cable purchase, installation, and
connection. GE will supply appropriate connection diagrams
and recommended cable installation procedures for the
turbine and GE furnished off-base equipment. On-base gas
turbine wire installation and termination is performed in
the factory.
2.2.10 MISCELLANEOUS PARTS
As a service to the customer and to facilitate an efficient
installation of the gas turbine, GE provides for shipment of
miscellaneous parts needed during field installation.
<PAGE>
Shipment is in a single 96" x 96" x 192" (2438 mm x 2438 mm
x 4877 mm) weather-tight cargo container. The plywood
container, which can be opened from one end, is outfitted
with shelves and bins for parts storage. The container
comprises what amounts to a "mobile stockroom" and is
designed for transport by truck or rail.
Within the container, each part is packed, identified with
its own label or tag, and stowed in an assigned bin or
shelf. A master inventory list furnished with the container
provides the location of each part for ease in locating the
item.
An additional box approximately 60" x 60" x 216" (1524 mm x
1524 mm x 5486 mm) is furnished for the interconnecting
piping.
2.2.10.1 OFF-BASE COOLANT-TO-AIR INDUSTRIAL TYPE COOLING SYSTEM
A self contained, off-base industrial type, closed-loop
pressurized coolant system is supplied to dissipate the heat
from the lubrication oil and turbine support legs. It also
cools the flame detectors, atomizing air system and
generator. The following major components are included:
o Modular 100% capacity coolant-to-air heat exchanger
mounted off-base, with motor driven fans to force air over
finned tube heat exchangers. The fan motor power is
supplied from the unit motor control center.
o Automatic temperature controller which regulates coolant
flow to control lube oil temperature during operation.
o Dual full-flow AC motor-driven coolant circulating pumps
(one running, one standby).
o Make-up and expansion tank.
o Instruments for the system as follows:
-- Tank low level alarm and indicator
-- Panel mounted water header pressure gauge, pressure
switch and temperature switch.
-- Coolant header temperature gauge
-- Inlet and outlet thermometers.
<PAGE>
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2.3 GAS TURBINE ELECTRICAL DESCRIPTION
2.3.1 GENERATOR SYSTEM
2.3.1.1 ELECTRICAL RATING
The generator is designed to operate within Class "B"
temperature rise limits, per ANSI standards, throughout the
allowable operating range. The insulation systems utilized
throughout the machine are proven class "F" materials.
The generator is designed to exceed the gas turbine
capability at all ambient conditions between 0 and
120DEG.F.
2.3.1.2 PACKAGING
The 7FH2 generator is designed for compactness and ease of
service and maintenance. Location permitting, the unit will
ship with the rotor, gas shields and end shields factory
assembled. The high voltage bushings, bearings, oil
deflectors hydrogen seals and coolers will also be factory
assembled. The clearances of the bearings, rub rings, fans,
hydrogen seals and deflectors will be factory fitted and
will only require a minimum amount of field inspection of
these components.
All generator wiring, including winding and gas RTD's,
bearing metal and drain TC's, and vibration detection
systems will all be terminated on the main unit with level
separation provided. The standard arrangement will be hard
wired.
Prior to full assembly, the generator stator will receive a
150% pressure test. Following full assembly, a 45 psig seal
oil test will be performed to ensure the seals are seated
properly.
Feed piping between the bearings will be stainless steel and
mounted on the units in the factory to a common header. All
connections to the end shields will be assembled. All
assembled piping will be welded without backing rings and a
first pass TIG weld. A full oil flush will be performed
prior to shipping.
Some amount of field assembly will be required but should be
limited to the following:
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o Factory fitted bearing drain piping and bearing drain
enlargement (BDE)
-- Matched, marked, and shipped separate
-- Loop seal between BDE and drain tank will be stainless
steel and will ship loose
o Water manifolds will be factory fitted and shipped
separate
o Collector compartment
-- Interconnecting wiring and piping
-- Alignment of collector housing and brush rigging to
collector ring
2.3.1.3 FRAME FABRICATION
The frame is a stiff structure, constructed to be a hydrogen
vessel and to be able to withstand in excess of 200PSI. It
is a hard frame design with its four-nodal frequency
significantly above l20Hz. The ventilation system is
completely self contained, including the gas coolers within
the structure. The gastight structure is constructed of
welded steel plate, reinforced internally by radial web
plates and axially by heavy wall pipes, bars and axial
braces.
A series of floating support rings and core rings are welded
to keybars which in turn will support the core. This allows
the entire core to be spring mounted at twenty locations.
This arrangement isolates the core vibration, resulting from
the radial and tangential magnetic forces of the rotor, by
damping the amplitude and reducing the transmissibility by
20:1 Excessive movement of the core, as may result from out
of phase synchronization, is limited by the use of stop
collars at certain locations circumferential around the
frame. The clearance is designed to allow the spring action
of the bar to be unrestricted during normal operation but to
transmit the load of excessive movement through the
structure prior to yielding of any of the components. This
entire arrangement is in keeping with long standard
practices and experience with similar frame designs which
have proven to be very effective and reliable.
The stator frame is supported on four welded-on feet
attached at the lower portion of the fabrication. All the
weight of the unit and the operating loads are carried
through the structure by the web plates and the wrapper to
the feet. The machined portion of the feet are located 85"
below the centerline of the unit.
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2.3.1.4 CORE
The core is laminated from grain oriented silicon steel to
provide maximum flux density with minimum losses, thereby
providing a compact electrical design. The laminations are
coated on both sides to ensure electrical insulation and
reduce the possibility of localized heating resulting from
circulation currents.
The overall core is designed to have a natural frequency in
excess of 170 hertz, well above the critical two-per-rev
electromagnetic stimulus from the rotor. The axial length of
the core is made up of many individual segments separated by
radial ventilation ducts. The ducts at the core ends are
made of stainless steel to reduce heating from end fringing
flux. The flanges are made of cast iron to minimize losses.
The unit will receive periodic pressing during stacking to
ensure compactness, and after stacking the core will receive
a final press in excess of 700 tons.
2.3.1.5 ROTOR
The rotor is machined from a single high alloy steel
forging. The two pole design has 24 axial slots machined
radially in the main body of the shaft. The axial vent slots
machined directly into the main coil slot are narrower then
the main slots and provide the direct radial cooling of the
field copper.
The two retaining rings are of the body mounted design. The
rings will be made of 18 Mn - 18 Cr forged material which
offers excellent protection against stress corrosion
cracking.
The coil wedges are segmented stainless steel. Radial holes
are drilled in the wedges for ventilation passages.
The shaft at the collector is designed to transmit the
torque of an optional starting motor. A shrunk-on coupling
is assembled after the collector rings are on, and it
provides the interface point to the flex-coupling connection
to the motor. The same arrangement and coupling are used
with a static start system when the turning gear is replaced
by a torque converter and starting motor.
2.3.1.6 FIELD ASSEMBLY
The field consists of coils made from high conductivity
copper. Each turn will have slots punched in the slot
portion of the winding to provide direct cooling of the
field. The end turns are of the same cross section as the
slot portion and the entire coil will be pre-assembled with
overlapping brazed joints.
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The slot armor used in the slots is a Class "F" rigid epoxy
glass design. An insulated cover is positioned on the bottom
of each slot armor and on top of the subslot vent. The cover
will provide the required creepage between the lower turn
and the shaft. Epoxy glass insulation strips are used
between each coil turn. A pre-molded polyester glass
retaining ring insulation is utilized over the end windings
and a partial amortisseur is assembled under the rings to
form a low resistance circuit for eddy currents to flow. The
rotor is designed to accommodate static start hardware
utilizing full length slot amortisseurs.
The collector assembly incorporates all the features of GE
proven generator packages with slip on insulation over the
shaft and under the rings. The collector rings use a radial
stud design to provide electrical contact between the rings
and the field leads. The rings are designed to handle the
excitation requirements of the design (approximately 2200
amps on cold day operation and 1900 amps at rated
conditions).
The entire rotor assembly, weighing 76,000 pounds is
balanced up to 10% over operating speed.
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2.3.1.7 END SHIELD/BEARING
The unit is equipped with end shields on each end designed
to support the rotor bearings, prevent gas from escaping and
to be able to withstand a hydrogen explosion in the unlikely
event of such a mishap. The end shield is constructed from
steel plate and it is reinforced to provide the required
strength and stiffness. The split at the horizontal joint
allows for ease of assembly and removal. The horizontal
joints, as well as the vertical face which bolts to the end
structure, are machined to provide a gas tight joint.
Sealing grooves are machined into these joints. These steps
are taken to prevent gas leakage between all the structural
components for pressures up to 45 psig.
The center section of the end shields contain the bearings,
oil deflectors and hydrogen seals.. The lower halves of the
bearings are equipped with dual element thermocouples. The
leads are connected through a quick disconnect through the
end shield to allow ease of bearing removal.
A three section inner and a two section outer oil deflector
are bolted into the end shield and provide sealing of the
oil along the shaft. The deflectors are either fabricated or
cast aluminum. All faces of the deflectors have "O" ring
grooves to provide additional protection from oil leaks. All
annular areas formed between the set of teeth are designed
to provide minimum pressure drops and have oil gutters
machined in to prevent oil from backdripping on the shaft.
The hydrogen seal casing and seals, which prevent hydrogen
gas from escaping along the shaft utilize steel babbitted
rings. Pressurized oil for the seals is supplied from the
main oil system header to the seal oil control unit, where
it is regulated. The seal oil control unit is factory
assembled packaged system and is located in the collector
end compartment and includes the following components:
o Differential pressure regulator valve with bypass
o Differential pressure gage (seal oil pressure vs casing
gas pressure) and two differential pressure switches: one
for alarm and one for actuating the DC emergency seal oil
pump
o Shut-off and isolation valves for operation and
maintenance
The connection end bearing and hydrogen seals are insulated
from the rotor to prevent direct electrical contact between
the rotor and the end shield. Both end shields will have
proximity type vibration probes. These are located axially
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outboard of the bearing. Mounting for velocity type
vibration sensors is also provided on the surface of the
bearing caps.
All exiting wiring from the temperature indication devices
and the insulating test leads are brought out of the unit
through gas tight conex type seals to prevent any chance of
a hydrogen leak.
2.3.1.8 WINDING
The armature winding consists of "Class F" insulated bars.
The winding is a three phase, two circuit design. The bar
ground insulation is protected with a semi-conducting armor
in the slot and our well proven grading system on the end
arms.
The ends of the bars are pre-cut and solidified prior to
insulation to allow strap brazing connections on each end
after the bars are assembled. A resin impregnated insulation
cap is used to insulate the end turn connections.
The bars are secured in the slot with side ripple springs
(SRS) to provide circumferential force and with a top ripple
spring (TRS) for additional mechanical restraint in the
radial direction. The SRS's, TRS's and the wedging system
are well-proven reliable designs. The end winding support
structure consists of glass binding bands, radial rings and
the conformable resin-impregnated felt pads and glass roving
to provide the rigid structure required for system
electrical transients.
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2.3.1.9 LEAD CONNECTIONS
All the lead connection rings terminate at the top of the
structure at the excitation end of the unit. Each of the
circuits are connected to the high voltage bushings. The
bushings, which provide a compact design for factory
assembly and shipment, are positioned in the top of the
frame and are offset to allow proper clearances to be
maintained. This configuration also allows connections to
the leads to be staggered and provides ease of bolting and
insulation.
The six high voltage bushings exit the frame at the top.
These bushings are made up of a porcelain insulators
containing silver plated, copper conductors which form a
hydrogen tight seal. The bushings are assembled to
non-magnetic terminal plates to minimize losses. Copper bus
is assemble to the bushings within an enclosure. Customer
connections are made beyond the terminal enclosure and the
specific mating arrangements will be provided within the
enclosure, not inside the generator.
2.3.1.10 LUBRICATION
Lubrication for the generator is supplied from a system in
common with the turbine lubrication system which is
contained in the lubrication module. Lubricant feed and
drain lines are provided as an integral part of the
generator
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package. Flanged connections are provided for connection to
piping from the lubrication module.
2.3.1.11 DETRAINING SYSTEM
The air-side seal oil and the generator bearing oil drain to
a bearing drain enlargement mounted under the generator
casing. This bearing drain enlargement is a detraining
chamber and provides a large surface area for detraining the
oil before it is returned to the main oil tank.
Two seal drain enlargements are provided for removing
entrained hydrogen from the oil which drains from the
hydrogen-side seal rings. They are drained through a common
line to a float trap which then drains to the bearing drain
enlargement for further detraining. A high liquid level
alarm switch is provided to detect abnormal oil level in the
seal drain enlargement.
Piping is all factory fitted and the system is well-proven
to assure that no hydrogen can enter into the oil system.
2.3.1.12 HYDROGEN CONTROL CABINET
To maintain hydrogen purity in the generator casing at
approximately 98 percent, a small quantity of hydrogen is
continuously scavenged from the seal drain enlargements and
discharged to atmosphere. The function of the hydrogen
control cabinet is to control the rate of scavenging and to
analyze the purity of the hydrogen gas. The cabinet is
divided into two compartments, the gas compartment and the
electrical compartment, which are separated by a gas-tight
partition.
2.3.1.13 GAS COMPARTMENT
The following instrumentation is included:
o Hydrogen pressure gage with electronic transmitter for
remote receiver
o Differential fan pressure gage
o Flowmeters for gas analyzer and for total scavenging rate
o A gas purifier with filter for removing oil, water and
particles as small as 12 microns
o Moisture indicator to indicate the presence of moisture in
the gas line
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o Gas tight wiring seal into hydrogen electrical compartment
2.3.1.14 ELECTRICAL COMPARTMENT
The following instrumentation is included:
o One gas purity analyzer with 0-105 mv output for panel and
remote indicators, with high and low purity alarm contacts
o Generator gas temperature indicator with high temperature
alarm contact
2.3.1.15 HYDROGEN MANIFOLD
Hydrogen, is admitted to the generator casing through the
use of the hydrogen gas manifold. The following
instrumentation is provided and is located in the collector
compartment:
o Generator gas pressure gage
o High and low generator gas pressure switches
2.3.1.16 CARBON DIOXIDE MANIFOLD
A carbon dioxide system is used for purging the generator
casing of air before admitting hydrogen, and also to purge
hydrogen before admitting air. The following instrumentation
is provided and is located in the collector compartment.
o Purging control valve assembly
o Relief valve
2.3.1.17 MOTOR CONTROL CENTER
The MCC is manufactured and tested in accordance with NEMA
ICS-2 & UL Standard No. 845. It is designed for 480V, 3 PH,
60 HZ, with a short circuit capacity of 42,000 amps RMS
symmetrical at the incoming 480VAC line terminals. The main
protective device will be a Tri break 600 amp, type TB4,
200,000 amp interrupting, 125-400 amp trip, bolt -in
connection.
2.3.1.18 COOLING SYSTEM
The generator is cooled by a recirculating gas stream cooled
by gas-to-water heat exchangers. Cold gas is forced by the
generator fans into the gas gap, and
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also around the stator core. The stator is divided axially
into sections by the web plates and outer wrapper so that in
the center section cold gas is forced from the outside of
the core toward the gap through the radial gas ducts, and in
the end section it passes from the gas gap toward the
outside of the core through the radial ducts. This
arrangement results in substantially uniform cooling of the
windings and core.
The rotor is cooled externally by the gas flowing along the
gap over the rotor surface, and internally by the gas which
passes over the rotor and windings, through the rotor
ventilating slots, and radially outward to the gap through
holes in the ventilating slot wedges.
After the gas has passed through the generator, it is
directed to five horizontally mounted gas-to-water heat
exchangers. After the heat is removed, cold gas is returned
to the rotor fans and recirculated.
2.3.2 GENERATOR COLLECTOR COMPARTMENT
An exciter-end, enclosure will be provided shipped separate
from the generator. It will contain the following
assemblies:
o Hydrogen control cabinet
o Seal oil control unit, regulator & flowmeter
o Seal oil drain system, float trap & liquid level detector
o H2 & CO2 feed & purge system, valves & gauges
o Switch & gauge, block & porting system
o Collector housing & brush rigging assembly
o Collector filters & silencers
o Level-separated electrical junction boxes
o Turning gear
The above items will be packaged in the enclosure and
shipped separate from the generator. All internal piping and
wiring will be completed and terminated at convenient
locations in the housing. A minimum fit of field wiring and
piping will be required to assemble the collector cabinet to
the generator. The end wall of the enclosure will have
provisions for the flex coupling between the generator and
the starting motor or torque converter to pass through. The
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generator end of the enclosure will interface with the
generator and be sealed against the elements.
The enclosure is designed with a removable end wall section
& roof to allow ease of rotor removal without moving the
housing. Position of all the above hardware will be spaced
to allow easy access for maintenance and to prevent any
unnecessary disassembly during rotor removal. Two doors are
provided on the end wall to allow access from either side.
Safety latches are provided on the inside of the doors to
provide easy exit from the enclosure. AC lighting is
standard. One DC light fixture is optional. Fire detectors
in the enclosure are optional.
2.3.3 GENERATOR TERMINAL COMPARTMENT
The generator terminal compartment is a roof mounted
enclosure located above the generator having estimated
weight of 15000 lbs. Design of the enclosure will
accommodate ISO phase bus on centers up to 40 inches with
bus exit either from the left or right side. Devices
included in the enclosure are as follows:
o Outgoing power connections to station transformer
contained in individual isolated phase ducts
o Neutral grounding transformer rated 25 KVA, 12 KV-240 V,
95 kV BIL
o Neutral grounding resistor rated 1.45 ohms, 160A for one
(1) minute
o Three (3) 18 KV lightning arrestors for generator
protection
o Current transformers:
-- 3 sets of 3 8,000/5 with C/400 accuracy in the neutral
connection
-- 1 set of 3 8,000/5 with C/800 in the neutral connection
-- 2 sets of 3 8,000/5 and 1 set of 2 for the excitation
with C400 accuracy on the line side
2.3.4 PACKAGED ELECTRONIC AND ELECTRICAL CONTROL COMPARTMENT (PEECC)
The PEECC is a completely enclosed compartment suitable for
outdoor installation. Heating, air conditioning, compartment
lighting and power outlets are provided for convenience and
protection of the equipment in the PEECC. Electrical
monitoring and control of the unit are accomplished by the
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turbine Mark V SPEEDTRONIC-TM- control panel and the
generator control panel, which are mounted on a common skid
and located in the PEECC. In addition to the control
systems, the PEECC also houses the gas turbine motor control
centers and 125Vdc battery and charger. The arrangement of
the equipment is shown in the typical compartment layout
below.
Description of the FM-200 system in the PEECC is as follows:
o Smoke detectors for fire detection only
o Heat detectors for fire detection and signal discharge
FM-200
o Strobe/horn local alarm system
o On-base discharge piping and nozzles
PACKAGED ELECTRONIC AND ELECTRICAL CONTROL COMPARTMENT (PEECC)
(Typical)
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2.4 GAS TURBINE CONTROL DESCRIPTION
2.4.1 MARK V SPEEDTRONIC CONTROL SYSTEM
2.4.1.1 CONTROL SYSTEM
The gas turbine control system, SPEEDTRONIC Mark V, is a
state-of-the-art Triple Modular Redundant (TMR)
microprocessor control system with a heritage of over 40
years of successful turbine automation. The core of this
system is the three separate but identical controllers
called [R], [S], and [T]. All critical control algorithms,
protective functions, and sequencing are performed by these
processors. In so doing, they also acquire the data needed
to generate outputs to the turbine. Protective outputs are
routed through the [P] module consisting of triple redundant
processors [X], [Y], and [Z], which also provide independent
protection for certain critical functions such as overspeed.
The three control processors, [R], [S], and [T], acquire
data from triple-redundant sensors as well as from dual or
single sensors. The actual number of sensors will depend on
the turbine type. All critical sensors for continuous
controls, as well as protection, are triple-redundant. Other
sensors are dual or single devices fanned out to all three
control processors. The extremely high reliability achieved
by TMR control systems is due in considerable measure to the
use of triple sensors for all critical parameters.
2.4.1.1.1 MARK V ELECTRONICS
All of the microprocessor-based controls have a modular
design for ease of maintenance. Each module or controller
contains up to five cards, including a power supply.
Multiple microprocessors reside in each controller which
distribute the processing for maximum performance.
Individual microprocessors are dedicated to specific I/O
assignments, application software communications, etc., and
the processing is performed in a real-time, multi-tasking
operating system. Communications between the controller's
five cards is accomplished with ribbon cables and gas-tight
connectors. Communication between individual controllers is
performed on high-speed Arcnet links.
2.4.1.1.2 SHARED VOTING
Software Implemented Fault Tolerance (SIFT) and hardware
voting are utilized by the Mark V TMR control system. At the
beginning of each computing time frame, each controller
independently reads its sensors and
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exchanges this data with the data from the other two
controllers. The median value of each analog input is
calculated in each controller and then used as the resultant
control parameter for that controller. Diagnostic algorithms
monitor a predefined deadband for each analog input to each
controller, and if one of the analog inputs deviates from
this deadband, a diagnostic alarm is initiated to advise
maintenance personnel.
Contact inputs are voted in a similar manner. Each contact
input connects to a single terminal point and is parallel
wired to three contact input cards. Each card optically
isolates the 125 or 24 V dc input, and then a dedicated
80196 processor in each card time stamps the input to within
1 ms resolution. These signals are then transmitted to the
[R], [S], and [T] controllers for voting and execution of
the application software. This technique eliminates any
single point failure in the software voting system.
Redundant contact inputs for certain functions such as low
lube oil pressure are connected to three separate terminal
points and then individually voted. With this SIFT
technique, multiple failures of contact or analog inputs can
be accepted by the control system without causing an
erroneous trip command from any of the three controllers as
long as the failures are not from the same circuit.
Another form of voting is accomplished through hardware
voting of analog outputs. Three coil servos on the valve
actuators are separately driven from each controller, and
the position feedback is provided by three LVDTs. The normal
position of each valve is the average of the three commands
from [R], [S], and [T]. The resultant averaging circuit has
sufficient gain to override a gross failure of any
controller, such as a controller output being driven to
saturation. Diagnostics monitor the servo coil currents and
the D/A converters in addition to the LVDTs.
2.4.1.1.3 PC BASED OPERATOR INTERFACE
The operator interface, [I], consists of a PC, color
monitor, cursor positioning device, keyboard, and printer.
It can be used as the sole operator interface or as a local
maintenance work station with all operator control and
monitoring coming from communication links with a plant
distributed control system (DCS). Operators use the monitor,
cursor positioning device, and keyboard. The keyboard is not
necessary. However, the keyboard is convenient for accessing
displays with dedicated function keys and adjusting
setpoints by entering a numeric value such as 100 mw rather
than issuing a manual raise/lower command. The keyboard is
primarily used for maintenance such as editing application
software or alarm messages. Setpoint and logic commands
require an initial selection, such as the command to engage
the
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turning gear, which is followed by a confirming execute
command. The monitor is available in various sizes and
types, and it can be used for desktop mounting, packaged as
a drop-in insert for a control room console, or mounted in a
separate free-standing cabinet.
2.4.1.1.4 DIRECT SENSOR INTERFACE
Mark V input/output (I/O) is designed for direct interface
to turbine and generator devices such as thermocouples,
RTD's , vibration sensors and flame sensors. Direct
monitoring of these sensors eliminates the cost and
potential reliability factors associated with interposing
transducers and instrumentation. In addition, all of the
resultant data visible to the operator from the Mark V
operator interface and Distributed Control System (DCS)
system via a communication link if desired.
2.4.1.1.5 BUILT-IN DIAGNOSTICS
The Mark V control system has extensive built-in diagnostics
and includes "power-up", background and manually initiated
diagnostic routines capable of identifying both control
panel, sensor, and output device faults. These faults are
identified down to the board level for the panel, and to the
circuit level for the sensor or actuator component. On-line
replacement of boards is made possible by the Mark V's
triply redundant design and is also available for those
sensors where physical access and system isolation are
feasible.
2.4.1.1.6 GENERATOR INTERFACE AND CONTROL
The primary point of control for the generator is though the
Mark V operator interface. However, the Mark V is integrated
with the EX2000 excitation system over an Arcnet local area
network (LAN). Therefore the Mark V is used to control
megawatt output and the EX2000 is used to control megavar
output. The generator protection panel (GPP) is used to
provide primary protection for the generator. This
protection is further augmented by protection features
located in the EX2000 and the Mark V.
2.4.1.1.7 SYNCHRONIZING CONTROL AND MONITORING
Automatic synchronization is performed by the [X], [Y], and
[Z] cards in conjunction with the [R], [S], and [T]
controllers. The controllers match speed and voltage and
issue a command to close the breaker based on a predefined
breaker closure time. Diagnostics monitor the actual breaker
closure time and self-correct each command. Another feature
is the ability to
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synchronize manually via the Mark V operator interface
instead of using the traditional synchroscope on the
generator protective panel. Operators can choose one
additional mode of operation by selecting the monitor mode,
which automatically matches speed and voltage, but waits for
the operator to review all pertinent data on the CRT display
before issuing a breaker close command.
2.4.1.1.8 ARCHITECTURE
The Mark V control configuration diagram depicts several
advantages for increased reliability and ease of interface.
For example:
o Multiple unit control from a single [I] which allows any
turbine to be controlled from any [I]
o Back-up display wired directly to [R], [S], and [T]
controllers
o PC interface to plant DCS system
o Hard wire protective signal from [R] [S] [T] controllers
o Additional protective processors [X], [Y], [Z]
The protective block diagram shows the built in
redundancy/reliability of the Mark V control system. For
example, if there is an overspeed condition requiring a trip
of the unit, the first line of defense would be the primary
overspeed protection via the [R], [S], and [T] controllers.
All three trip signals then pass to the [P] trip card where
two out of three voting occurs prior to sending the
automatic fuel supply trip signal. The secondary overspeed
protection is via the [X], [Y], and [Z] cards which
similarly send their independent trip signals to the [P]
trip card for voting.
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2.4.1.2 SCOPE OF CONTROL
The Mark V control system provides complete monitoring
control and protection for Gas Turbine-Generator and
Auxiliary systems. The scope of control is broken down into
three (3) sections: Control, Sequencing and Protection.
-- Control
-- Start-up control
-- Speed/load setpoint and governor
-- Temperature Control
-- Guide vane control
-- Fuel control
-- Generator excitation setpoints
-- Synchronizing control (speed/voltage matching)
-- Emissions control by one of the following:
- Diluent injection (water)
- Combustion staging for Dry Low NOx (DLN)
-- Droop control
-- Preselected load control
-- Base control
The Mark V will be capable of accepting raise and lower
pulses from the plant DCS system for load control.
-- Sequencing
-- GT auxiliary systems (MCC starters)
-- Start-up, running and shutdown
-- Purge and ignition
-- Fuel changeover
-- Alarm management
-- Synchronizing
-- H(2) sequencing (if applicable)
-- Maintain starts, trips and hours counters
-- Event counters
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- Manually initiated starts
- Fired starts
- Fast load starts
- Emergency trips
-- Time meters
-- Fired time
-- DCS interface (if applicable)
-- Protection
-- Overspeed, redundant electronic
-- Overtemperature (including generator)
-- Vibration
-- Loss of flame
-- Combustion monitor
-- Redundant sensor CO(2) fire protection
-- Low lube oil pressure, high lube oil temperature,
etc.
2.4.1.3 GAS TURBINE PLANT OPERATING MODES
2.4.1.3.1 STARTING/LOADING
All starting is done automatically, with the operator given
the opportunity to hold the start-up sequence at either the
crank (pre-ignition) or fire (post-ignition, pre-accelerate)
points of the start-up. An "Auto" mode selection results in
a start without any holds.
Either before issuing a start command, or during the start,
the operator may make the following selections:
1. Select or disable the automatic synchronization
capability of the Mark V control. Auto synch utilizes
the proven microsynchronizer first introduced in the
Mark II generation of SPEEDTRONIC. The
microsynchronizer provides extremely accurate and
repeatable breaker closures based on phase angle, slip,
the rate of change of slip and the response time of the
breaker which is in the system memory.
2. Select Preselected Load or Base Load. If a selection is
made the unit will automatically load to the selected
point and control there. If no selection is made the
unit will load to a low load referred to as "Spinning
Reserve"
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automatically upon synchronization; be it automatic or
manual. The turbine governor is automatically regulated
to maintain the megawatt setting assigned to "Spinning
Reserve".
2.4.1.3.2 OPERATING
Once the unit is on line, it may be controlled either
manually or automatically from the Mark V control Operator
Interface.
Manual control is provided by the governor raise/lower
control displayed on the operator interface screen.
Automatic operation is switched on when the operator selects
one of three load points (preselect or base) from the
turbine control interface.
For a fully automatic start with automatic loading to base
load, the operator selects the "Auto" operating mode,
enables auto synchronization and selects "Base" load. Given
a "Start" signal, the unit will then start, synchronize and
load to Base load with no further input on the part of the
operator.
2.4.1.3.3 SHUTDOWN
On shutdown, the system will automatically unload and return
to turning gear motor operation. The unit will stay on
turning gear until an operator turns it off. Note: the
operator must insure the unit is sufficiently cool before
shutting off turning gear to avoid temporary rotor bow due
to heat.
2.4.1.4 COMMUNICATIONS
The open architecture of the [I] processor facilitates a
wide range of external communication links. The Mark V's
internal Arcnet communication link is isolated from external
communication links at the [I] processor.
The External communication link utilizes Ethernet with
TCP-IP protocol to facilitate transmitting of data with
local time tags for alarms and events to the plant level.
Ethernet provides high speed 10 mega baud transmission rates
combined with TCP-IP which is widely used throughout the
world. GE supplies an application layer protocol call GSM
(i.e. GEDS Standard Messages) which supports four classes of
application level messages.
Time synchronization between Mark Vs, and/or between Mark Vs
and a DCS enable all time tags to be referenced to a common
source. The [I] operator interface is the common reference
point within the Mark V control system, and it sends the
time synchronization commands to the Mark V controllers
<PAGE>
where the individual time tags are assigned. Sites with
multiple Mark Vs can have a master [I] for time
synchronization with the other [I]s acting as slaves. A
failure of the master [I] will initiate an automatic default
to one of the slaves as the new master.
The [I] operator interface is supplied with 50 ft (15 m) of
cable to facilitate convenient location near the Mark V
panel. However, the communications link provided allows for
remote location of a single interface using up to 1500 ft
(457 m) of cable without repeaters or 9600 ft (2926 m) using
a fiber optic link without repeaters. Multiple operator
interfaces may be used to communicate to a Mark V. This
capability changes the maximum allowable distance of a
remote operator interface. Cable routing between buildings
of this stage link cable requires adequate lightning
protection (i.e., fiber optics).
2.4.1.5 OPERATOR DISPLAYS
Two (2) out of the typical forty (40) available displays are
shown on the following pages. The first screen is the main
menu display. From the main menu all operation/maintenance
and user defined screens can be reached. The main menu
screen is made up of three (3) major areas:
-- List of available displays
-- Alarm field shows the three (3) latest unacknowledged
alarms (Black band near bottom of screen in the
example. Blue is the actual color.)
-- Function control keys (bottom of screen)
<PAGE>
[GRAPHIC OMITTED]
The second screen shown is a typical operating screen. Note
that the alarm list and function control key fields are also
shown below the primary display field on this screen.
Control target values are shown in the primary display
field. Selecting and executing commands is very simple. For
example, to go to baseload, you would move the cursor to the
"Baseload" target and click on it. Then before the control
times out, you would move the cursor to the "Execute
Command" target and click on it. The "Execute Command" step
protects against accidental activation of the wrong command
that might occur with a one step (point/click) command.
Signals that require an Execute command in order to be
activated are:
-- Start -- Stop
-- Operation Selection
-- Off
-- Crank
-- Fire
-- Auto
-- Remote
<PAGE>
-- Fuel Selection
-- Gas
-- Distillate (Dist)
-- Load Selection
-- Preselected Load
-- Base
-- Guide Vane Control
-- Temp Control Off
-- Temp Control On
-- Governor Type Selection
-- Droop (nominal 4%)
<PAGE>
[GRAPHIC OMITTED]
Interface displays can be in either English or Metric units.
Standard operator display language is English.
2.4.1.6 BACKUP INTERFACE
In the unusual event that the operator interface becomes
unavailable, a small backup interface is provided on the
Mark V cabinet door. It uses a liquid crystal display with
two (2) lines of forty (40) characters per line to display
key control parameters and alarms. The Mark V accepts
operator commands from this backup interface.
2.4.1.7 PRINTER
The standard Mark V operator interface printer is a 240 cps,
dot matrix type with these convenient features:
<PAGE>
-- Alarm logging
-- Event logging
-- Historical trip display printing capability
-- User defined display printing capability
-- Periodic log display printing capability
-- CRT screen copy
Each alarm and event is logged with a high resolution time
tag. Contact inputs are logged to 1 millisecond. Separate
alarm queues are maintained for turbine/generator system
alarms and for Mark V internal self-diagnostic alarms.
System alarms can be silenced, acknowledged and reset
locally or from a DCS via a two-way communication link, if
desired. Any intermittent alarms can be locked out with a
permanent lockout message residing in the alarm queue.
If a trip occurs, the historical trip display automatically
captures in memory all key control parameters and alarm
messages at the time of the trip and at several time
intervals preceding the trip. The operator can print the
historical trip display when required. A start signal
triggers the display to start collecting new data and all
previous data is deleted from the current log. Display logs
can be saved at any time to a memory buffer.
A user-defined display allows selection of any desired data
for viewing or printing. The periodic log allows a user to
define points to be collected and printed periodically to a
printer. The period of each list is defined in minutes, from
1 to 10,080 (one week).
2.4.1.8 DOCUMENTATION
Documentation for the Mark V turbine control system consists
of two types: unit-specific drawings and instruction books.
A unique set of requisition-specific documentation is
supplied with each control system and three instruction
books are available for the specific needs of each user.
2.4.1.8.1 REQUISITION SPECIFIC DRAWINGS
-- I/O REPORT contains the unit-specific assignment of I/O
terminations in the Mark V control panel. This report
also has I/O related information such as the signal
names.
<PAGE>
-- CONTROL SEQUENCE PROGRAM PRINTOUT is a unit-specific
printout that shows a functional representation the Big
Blocks and sequencing of a particular requisition.
Software on the operator interface allows editing and
printing of this document from any location.
-- OUTLINE DRAWINGS provide an external view of the
control panel and primary operator interface. The
drawings furnish information needed for handling and
installing the equipment.
-- CASE LAYOUT DRAWING supplies an internal view of the
control panel. The primary purpose of this drawing is
to furnish information needed to route interconnect
cables.
-- CASE WIRING DRAWING defines the factory cabling
internal to the control panel case. The drawing's
primary purpose is to document the internal wiring for
maintenance use.
-- CORE DRAWINGS provide an isometric drawing of the core
depicting the cards and their respective locations
within the core. For each card, the physical location
and identification of removable parts, such as
connectors and hardware jumpers, are highlighted. The
core drawing is placed in a pocket on the inside of the
core door.
Instruction Books:
Three (3) instruction books are provided for the Mark V
turbine control system that are designed to meet the special
needs of the operators, maintenance personnel, and
application engineer.
-- For the operator, Mark V User's Manual
-- For the maintenance technician, Mark V Maintenance
Manual
-- For the application engineer, Mark V Application Manual
<PAGE>
2.4.1.9 SPEEDTRONIC MARK V REDUNDANCY LIST AND I/O
2.4.1.9.1 REDUNDANT OR MULTIPLE SENSORS
<TABLE>
<CAPTION>
DEVICE PARAMETER FUNCTION DEVICE TYPE QTY REDUNDANCY
------ --------- -------- ----------- --- ----------
<S> <C> <C> <C> <C> <C>
26QA/T Lube oil temp high A/P temp switch 3 S
28FD Flame detector A/P UV scanner 4 S
33FL Liquid fuel stop valve M limit switch 2 S
39VX Vibration sensor A/P velocity pick-up 2 S
45FX Fire detector A/P temp switch 2 # S
63HG Gas fuel trip oil press A/P press switch 3 D
63HL Liquid fuel trip oil press A/P press switch 3 D
63QA/T Lube oil hyd press A/P press switch 3 S
63TF Inlet filter press C/P press switch 3 D
65FP Liquid fuel pump servo C 3 coil servo 1 D
65GC Gas cont valve servo C 3 coil servo 1 D
77FD Liquid fuel flow C/P mag. pick-up 3 D
77NH Speed magnetic pick-up C mag. pick-up 3 D
77NT Speed magnetic pick-up A/P mag. pick-up 3 D
77WN Water flow mag pick-up C mag pick-up 4 S
90SR Gas ratio valve servo C 3 coil servo 1 D
90TV Inlet guide vane servo C 3 coil servo 1 D
96FG-2 Gas fuel cont press C transducer 3 D
96GC Gas control valve C LVDT 2 S
96SR Gas ratio valve C LVDT 2 S
96TV Inlet Guide Vane C LVDT 2 S
CTDA Compressor discharge temp M TC 2 S
CTIF Compressor inlet temp M TC 2 S
FTGI-x Fuel gas supply temp C TC 3 D
TTWS-x GT Wheelspace temp A/P TC 2/W S
TTXD-x GT Exhaust temp C/P TC 18 ## D/S
-------------------------------
Notes: # All channels/locations except 1 are redundant by means of two sensors per
location. The non-redundant location has one sensor.
## The number of exhaust TC's varies with the GT model from 13 to 27. Each
control processor reads 1/3 of the TC's directly and then all TC data is
shared by all processors.
Legend: S = Shared D = Dedicated A = Alarm
</TABLE>
<PAGE>
2.4.1.9.2 NONREDUNDANT (PARTIAL LISTING)
<TABLE>
<CAPTION>
DEVICE PARAMETER FUNCTION SENSOR QTY
------ --------- -------- ------ ---
<S> <C> <C> <C> <C>
20FG Gas fuel trip oil C solenoid valve 1
20FL Liquid fuel trip oil C solenoid valve 1
26FD Liquid fuel temp C temp switch 1
26QL/M Lube oil temp low/moderate C temp switch 1 ea
26QN Lube oil temp normal P temp switch 1
63AD Atomizing air differential press A press switch 1
63FD Liquid fuel press A * press switch 1
63FG Gas fuel press A * press switch 1
63LF1 Liquid fuel filter press A press switch 1
63QA Lube oil press P press switch 1
63QL Lube oil press P press switch 1
63TK Exh frame cooling press A/P press switch 1/fan
63WC Cooling water press low A press switch 1
71QH Lube tank high level A level switch 1
71QL Lube tank low level A level switch 1
71WL Water tank low level A level switch 1
96FF-1 Gas fuel low flow press C transducer 1
96FG-1 Gas fuel supply press C transducer 1
* Can be used to initiate a transfer from primary to backup fuel.
</TABLE>
<PAGE>
2.4.1.9.3 I/O CAPACITY
<TABLE>
<CAPTION>
I/O TYPE STD COMMENTS
-------- --- --------
<S> <C> <C>
Contact inputs 192 96 paralleled to [R][S][T] & 96 [C]
Paralleled to [R][S][T] (TMR only)
125 / 24V dc, optical isolation
Contact outputs 120 60 from [R][S][T] & 60 from [C]
From [R][S][T] (TMR only)
Pulse rate inputs 19 Mag pu: 6 to each of [R][S][T], 1 parallel
4 TTL
6 Mag pu: 2 to each of [X][Y][Z] in P
LVDT/R position inputs 16 7vrms, 3kHz, 70mA excitation
Servo valve outputs 8 3 coil, +/-10,20,40mA (4 channels)
3 coil, +/-10,20,40,80,120,240mA (4ch)
Vibration seismic 12 Paralleled to [R][S][T]
acceler. Paralleled to [R][S][T]
Proximitor vibration Requires special packaging on Simplex
position Requires special packaging on Simplex
key phas. Requires special packaging on Simplex
Thermocouple input 87 15 to each of [R][S][T] & 42 to [C]
RTD inputs 30 to [C]
4-20 mA inputs 29 15 paralleled to [R][S][T] & others [C]
4-20 / 0-1 mA inputs 1 1 paralleled to [R][S][T] & 8 to [C]
4-20 mA outputs 16 For monitoring from [C]
4-20 / 0-200 mA outputs 2 Valve positioners from [R][S][T]
+/- 10V dc inputs 8 2 to each of [R][S][T] & 2 parallel
0 to 5V dc inputs 6 2 to each of [R][S][T]
Flame scanners 8 335V dc excitation
Shaft voltage & currency 1 1 to [C]
PT inputs 120vac open delta
CT inputs 5 amps ac
</TABLE>
<PAGE>
2.4.1.10 HARDWARE AND SPECIFICATIONS
2.4.1.10.1 MARK V TURBINE CONTROL PANEL
<TABLE>
<S> <C>
Dimensions 54" (1.37 m) wide x 90" (2.29 m) high x 20" (0.51 m) deep
Weight 1200 lbs (544 kg)
Type NEMA 1, convection cooled
Power 1100W maximum for the Mark V enclosure
Provisions for one (1) dc and one (1) ac source or two (2) ac sources
Voltage ranges 100 to 140 V dc
105 to 132 V ac, 47 to 63 Hz
210 to 264 V ac, 47 to 63 Hz
[I] Operator Interface -- nominal load is 7.5 A for the 120 V source.
Type NEMA 1, convection cooled
Access Front only
Cable entrance Top or bottom
Temperature Operating: 32 DEG.F to +113 DEG.F (0 DEG.C to +45 DEG.C
Storage: -40 DEG.F to + 158 DEG.F (-40DEG.C to +70DEG.C)
Humidity: 5 to 95%, noncondensing
Reactive sulfur 10 ppb max
Reactive chlorine 10 ppb max
Equivalent Static Vertical 0.67G; Horizontal 1.0G
Levels:
Seismic Ground Levels Vertical 0.5G; Horizontal 0.5G
Cabinet meets Uniform Building Code (UBC) Zone 4 requirements
Clarification: The ground seismic accelerations will be amplified by
the intervening structure; thus, the difference above between seismic levels and
static equivalent levels provide for this amplification. These are relatively
conservative; however could be exceeded in a "flexible" installation. All seismic
installations should be reviewed by someone familiar with the dynamics
involved with the final installation.
Surge per ANSI C37.90A
</TABLE>
<PAGE>
<TABLE>
<S> <C>
EMI Mobile radio, 5 watt using 27, 150 and 480MHz at 3 ft (1 m), with
doors closed
Terminations Pressure pad type Phoenix terminal boards.
Accepts one (1) #12 AWG or two (2) #14 AWG per point for control I/O. 300 volt,
10 amp rating.
Designed to meet UL, CSA and VDE. Captive screws, dead front for safety, 85%
copper alloy with nickel plating.
Grounding Cabinet ground bar, must be connected to the plant ground grid with a minimum
of #4 AWG.
Cabinet steel 0.105" thick (12 gauge), B8A3A sheet, hot roll, low carbon, ATSI 1010.
Codes Cabinet carries CSA, CE/EMCD and UL labels.
Paint Exterior and Interior, electrocoat (E-Coat) plating process, color ANSI-70
light gray. E-coat contains no zinc, lead or chrome. Thickness is
approximately 1.5 to 2.0 mils.
</TABLE>
2.4.2 MOTOR CONTROL CENTERS
The motor control center contains circuit protective devices
and power distribution equipment to supply electrical power
to all packaged power plant devices as defined on the
electrical one line diagram. The motor control center is
manufactured and tested in accordance with NEMA ICS-2 and UL
Standard No. 845. Vertical sections and individual units
will be UL (CSA) Labeled where possible. The motor control
center is located in the PEECC.
2.4.3 GENERATOR PROTECTION
2.4.3.1 GENERATOR PROTECTION PANEL
The current generator protection panel is the result of
years of research to best meet our customers needs and to
upgrade the generator protection panel to incorporate the
latest in digital technology. The heart of the generator
protection panel is the digital multifunction relay
integration with the Mark V turbine control panel.
The standard generator protection panel incorporates this
features along with generator metering, Watt and Var
transducers for turbine control, and bus ground detection.
Pre-engineered protective modules such as generator step-up
transformer protection and auxiliary transformer protection
are not
<PAGE>
included in the generator protection panels design. The
generator protective panel can also be customized to
incorporate protective and monitoring features as required.
A simple one-line diagram of the standard generator
protection panel is presented on the following page. This
one-line is for illustration purposes only. For job specific
details see the one-line diagram in the Equipment Drawings
chapter of this proposal.
<PAGE>
[GRAPHIC OMITTED]
<PAGE>
2.4.3.2 GENERATOR PROTECTION
The Digital Generator Protection is a compact, digital,
multiprocessor, space saving, multifunction protection
system. It's modular construction allows for easy
maintenance. The Digital Generator Protection module
provides a wide range of protection, monitoring, control and
recording functions for ac generators. It can be used on
generators driven by steam, gas and hydraulic turbines. Any
size of generator can be protected with the Digital
Generator Protection. A high degree of dependability and
security is achieved by extensive self diagnostic routines
and redundant power supplies.
The Digital Generator Protection provides the commonly used
protective functions in one package, including 100% stator
ground fault detection using 3rd harmonic voltage
monitoring. It has adaptive sampling frequency for better
protection during startup. The Digital Generator Protection
has eight configurable output relays, four trip and four
alarm relays.
The Digital Generator Protection can record the last 100
sequence of events, 120 cycles of oscillography fault
recording and the last 3 fault reports. These records and
fault reports require connection to a local (customer
supplied) PC for displaying of reports.
IRIG-B time synchronization capability is available within
the Digital Generator Protection Module. To take advantage
of this feature, the customer must supply all external
equipment.
A Man Machine Interface (MMI) with integral keypad, 16
character displays, and target LEDs allow easy local user
interface for entering settings, display present values,
view fault target information and access stored data. Some
of the present values that can be displayed are amps, volts,
Watts, Vars, power factor, negative sequence, third harmonic
level.
A front 9 pin RS232 serial ports allow both local and remote
computer access. Available options include, serial printer
port supplied on the rear, and Sequential trip such as the
33ST function for steam turbines. It can be specified to
operate with wye-wye or open-delta connected VTs and any
phase rotation.
2.4.3.2.1 GENERATOR LOCKOUT RELAY (86G-1)
Trips the generator breaker, the turbine, and the excitation
system. This lockout is normally tripped by either one of
the three functions 40, 87G or
<PAGE>
59GN ( 64G1 ). The reasoning behind this is that if a loss
of excitation, or differential, or stator ground fault
occurs the structural integrity of the generator may have
been compromised and continued operation will potentially
lead to more devastating results. The turbine Mark V logic
monitors this lockout.
2.4.3.2.2 BREAKER OR LOCKOUT TRIP COIL MONITOR (74)
Monitoring of trip coil circuit integrity is of sufficient
concern to warrant the installation of an auxiliary relay
and indicating lights for the lockout relays and generator
breaker. A high impedance relay 74 is placed in series with
the trip coil to be monitored. This relay drops out if
either the power source fails (i.e. a fuse blows) or circuit
integrity to the trip coil is interrupted. A visual
indication is also supplied via a white indication light
mounted on the front of the generator protection panel. The
contacts from the monitoring relay can go to either the
Turbine control panel or customer DCS for alarm
2.4.3.2.3 GENERATOR BREAKER CONTROL SWITCH WITH STATUS LIGHTS (52G/CS)
The generator breaker control is through the Mark V [I]. The
52G/CS function provides a way to manually open the
generator breaker from the generator protection panel. This
breaker control switch is for TRIPPING ONLY, the breaker
can't be closed with it.
2.4.3.2.4 BREAKER DUAL COIL CROSS TRIPPING (94BG)
The standard panel has the capability to take full advantage
of redundant breaker trip coils when supplied on the
breaker. To take full advantage of the redundant breaker
coils (if supplied with the breaker) two separate dc sources
feed the trip coil circuits. The separation of sources is
normally via separate fusing. A high speed, low pickup
voltage auxiliary relay 94GB is placed in parallel with each
trip coil. Contacts from the relay in trip coil "A" circuit
are used to cross trip coil "B" and vice versa.
2.4.3.2.5 SYNCHRONIZING UNDERVOLTAGE RELAYS (27BS-1,2)
Undervoltage conditions can be present in a system due to
faults to ground, sudden energization of a considerable load
onto a loaded system, primary and backup regulator failure,
and when running up or coasting to a stop. The 27BS-1, and 2
are used with the Mark V synchronizing scheme to provide
additional inputs to help determine whether the generator
can be synchronized
<PAGE>
to a live or dead station bus. The Mark V logic alarms when
undervoltage conditions are present after the breaker has
closed.
2.4.3.2.6 GENERATOR DIGITAL METER (DMM)
This single meter provides the following functions:
1. VM - Generator Volts: 1-2, 2-3, 3-1
2. AM - Generator Amps: Phases 1,2,3 and Neutral
3. MWATTS - Generator MegaWatts
4. MVAR - Generator MegaVARs
5. FM - Generator frequency
6. MVA - Generator MVA
7. PF - Generator Power Factor
8. MWH - Generator MegaWatt-Hours
9. MVAH - Generator MVA Hours
2.4.3.2.7 BUS GROUND FAULT (59BN)
This protection scheme is designed to protect the system
(station bus) from faults to ground. The synchronous
generator is connected through a breaker to a step-up
transformer. The low voltage side of this transformer is
usually connected in a delta configuration. If one phase of
the system should go to ground, virtually no fault current
would flow. However, voltage reference in the delta
connection will be fixed at the ground fault location
causing the voltage vectors to be shifted. One set of PT's
connected in a Wye - Broken Delta configuration, in
conjunction with an overvoltage 59BN relay, are used to
detect such a fault.
2.4.3.2.8 DC BLOWN FUSE PROTECTION (74)
Each lockout tripping circuit is fused independently in the
generator protection panel. If the fuse of a particular
tripping bus is blown, the associated protective relays
cannot trip the lockout relay. The intent of this function
is to alert the operator when the dc voltage to the tripping
bus is lost. This loss of dc can be a result of either a
blown fuse or incoming dc source failure/low level.
<PAGE>
2.4.3.2.9 TRANSDUCERS (96GW1, GG1)
The main purpose of these transducers is to provide power
feedback to speed governing control in place of the
conventional fuel command feedback. The cases when this
function is required are:.
-- Constant Settable Droop (Gas Turbine of "Load
reference")
2.4.3.3 MARK V INTEGRATION
In addition to the relaying mounted in the generator
protection panel, the Mark V handles protection such as
generator temperature protection (49), synchronizing check
(25A), backup frequency and reverse power. Generator control
and monitoring is primarily accomplished via the Mark V
operator interface. The Mark V handles manual and
auto-synchronizing, speed raise/lower, voltage raise/lower,
and generator breaker control. The Mark V operator interface
also displays frequency and voltage for the generator and
bus, breaker status, field current and voltage, along with
the status of permissive. For the gas turbines connected to
a generator breaker, the Mark V auto/manual synchronizing
module will be capable of synchronizing across the generator
breaker and line breaker.
2.4.3.4 OPTIONAL PROTECTIVE FEATURES
The following additional protective features are
incorporated into a customized Generator Protective Panel.
This panel will be larger than the standard standard
generator panel.
2.4.3.4.1 SYSTEM BACKUP DISTANCE PROTECTION (21)
The distance relays are typically used instead of
overcurrent with voltage restraint when the lines leaving
the station bus have distance or pilot relay protection
schemes and the generator ties the station bus through a
step-up transformer.
This protection scheme is designed to protect the generator
from faults in the adjacent system which are not cleared by
the first line relays. It is used in lieu of 51V (system
phase fault over current relays with voltage restraint).
2.4.3.4.2 REVERSE/INADVERTENT ENERGIZATION PROTECTION (50RE/86RE)
This is also sometimes called: Accidental Energization, Back
Energization. Prior to the generator achieving rated speed,
the Mark V arms/enables the trip
<PAGE>
circuit ( using 14HS, i.e. 95% speed ) of the overcurrent
relay. A normally closed TMR contact is utilized in the Mark
V for maximum reliability both during normal operation and
during shutdowns ( i.e. Mark V powered down ). When the
turbine is above 95% speed the Mark V disarms the
overcurrent relay trip circuit, allowing the unit to be
synchronized.
An additional independent lockout 86RE is included to allow
the 86G fuses to be removed while the unit is shut down. The
trip contacts from the 86RE should trip customer upstream
breakers since the generator breaker trip coil may be
disabled (i.e. fuses removed during maintenance).
This protection scheme protects against inadvertent breaker
closure while the unit is at standstill, running up or down
in speed. One (1) three phase instantaneous overcurrent
relay 50RE is supervised by frequency/turbine speed
controlled outputs from the Mark V.
2.4.3.4.3 VOLTAGE BALANCE PROTECTION (60)
The 60 relay is used in this protection scheme is designed
to prevent the misoperation of protective relays and/or
regulator in the event of PT signal loss. In the event a
potential transformer fuse is blown or the PT voltage is
lost for any reason, the excitation ac regulator and certain
relays may operate incorrectly. (See Note below.) The relay
is operational only when the generator breaker is closed.
Both set of contacts ("a" and "b") are monitored by the
turbine control panel. If the 60 relay indicates a blown
fuse, the turbine panel will alarm and appropriate relay's
trips are blocked.
NOTE: The EX2000 has its own internal logic to transfer from
auto regulator to manual regulator in the event of a loss of
its PT feedback signal. So the "b" contact from the 60 relay
would not be required in that application. Also the DGP
relay has a VTFF ( voltage transformer fuse failure )
function that may be used for transfer or blocking functions
if it is connected to the appropriate PT's. Finally, several
of the functions that the 60 relay is normally used for
(e.g. blocking the 40, 51V and 32 ) are functions that are
in the DGP. The DGP software automatically disables these
functions if it detects a loss of its PT input signal.
2.4.3.5 ELECTRICAL SYSTEM INTEGRATION STUDY
All necessary studies and calculations required to integrate
the generator panel into the electrical system, including
short circuit, load flow, installation and protective device
coordination studies are by Owner.
<PAGE>
2.4.4 EX2000 DIGITAL EXCITATION SYSTEM
2.4.4.1 EX2000P DIGITAL, STATIC VOLTAGE REGULATOR FOR BUS FED
EXCITATION
The EX2000P is a digital, static, potential source
excitation system, utilizing the latest hardware and
software technology. To meet customer and operational
requirements, a full range of control and protection
functions are available for the product. A simplified
one-line diagram of the EX2000P with Hot Backup is shown
below.
[GRAPHIC OMITTED]
The EX2000P system comes equipped with a full-wave,
inverting, thyristor bridge which supplies excitation power
to the rotating field winding of the main AC generator. In
addition, all control and protective functions are
<PAGE>
implemented in the system software. Digital technology
coupled allows the EX2000P to maintain 99.98% availability.
The EX2000P is comprised of four basic components: 1) Power
Conversion Module; 2) Digital Controller; 3) Excitation
Transformer; and 4) Communication (ARCNET) Interface. The
following briefly describe these basic components.
2.4.4.1.1 POWER CONVERSION MODULE
A three phase, full-wave, inverting thyristor bridge is the
standard power conversion module for EX2000P digital
exciters. The inverting bridge provides both positive and
negative field forcing voltage for optimum performance.
Negative forcing provides fast response for load rejection
and de-excitation. Software changes of the firing circuits
can be made to suppress negative forcing if it is not
required for the system application. The standard current
capability of the bridge is 6% above the calculated rated
full load field current of the generator.
The thyristor bridge assembly is forced air cooled. These
blower assemblies are all energized during normal operation.
Thermostats are used to monitor the power conversion module
temperature. An alarm is provided for a high temperature
level and a trip at an even higher temperature level.
2.4.4.1.2 EXCITATION TRANSFORMER
The excitation transformer is more commonly referred to as
the input Power Potential Transformer (PPT). It is in a
separate enclosure from the exciter. The power to the
transformer can be obtained a station auxiliary bus. The
purpose of this transformer is to step the voltage down to
the required level for the excitation system.
With the use of a regulator in the static exciter, it is not
necessary to specify transformer full capacity taps, above
and below normal, on the primary winding. The transformer
rating is chosen so that the transformer can deliver the
excitation required for the application at 105% rated
generator terminal voltage on a continuous basis
2.4.4.1.3 DIGITAL CONTROLLER
The Digital Controller consists of five printed wire boards
mounted on the front door of the Power Conversion Module.
The cards included are the Main
<PAGE>
Processor Card, Microprocessor Application Card, Power
Supply and Instrumentation Card, Power Connect Card and LAN
Communications Card
2.4.4.1.4 COMMUNICATION (ARCNET) INTERFACE
For communications to the EX2000P, GE uses an ARCNET (local
area network) controller with modified ARCNET drivers. The
ARCNET controller adheres to standard ARCNET protocol
2.4.4.1.5 FEATURES AND FUNCTIONS
The exciter is enclosed in a NEMA-I stand alone enclosure
and contains the SCR power conversion module and regulator
with all standard control and protection functions, and
auxiliary functions such as de-excitation module, DC field
flashing module, and shaft voltage suppression circuit.
Standard features and functions and features included with
the EX2000P are listed below.
2.4.4.1.5.1 INTERFACE WITH THE GE SPEEDTRONIC MARK V TURBINE CONTROL
SYSTEM
The connection between the EX2000 and Mark V is accomplished
through a coaxial cable on the ARCNET LAN. Therefore, the
Mark V provides a digital window into the EX2000 through
which all pertinent variables can be monitored and
controlled (See Typical Mark V display - EX2000 variables).
Any or all of the following functions can be provided:
-- Voltage matching
-- VAR/PF controller
-- Selection of automatic or manual regulator
-- Raise/lower of the active regulator set-point
-- Enter set-point command
-- Start/stop
-- Field volts, amps and transfer volts
-- Status and alarms
-- Field temperature
<PAGE>
[GRAPHIC OMITTED]
2.4.4.1.5.2 DE-EXCITATION MODULE
Consisting of a thyristor and inductor for discharge of
stored field energy during unit shutdown or overvoltage
conditions
2.4.4.1.5.3 AC DISCONNECT
No load break disconnect switch to disconnect the EX2000
rectifier from the PPT.
2.4.4.1.5.4 SURGE PROTECTION
Including AC line-to-line RC filters sized to limit
commutation overshoot voltage on the thyristors.
<PAGE>
2.4.4.1.5.5 THYRISTOR BRIDGE CONDUCTION MONITOR
Detects loss of thyristor current conduction due to a blown
fuse, open or shorted thyristor, or faulty firing circuits.
2.4.4.1.5.6 BUILT-IN DIAGNOSTIC DISPLAY PANELS
If a problem occurs, a fault code appears in the programmer
displays. A 10 character alphanumeric diagnostic display
with keypad is provided in each exciter bridge/control core
of the exciter.
2.4.4.1.5.7 AUTOMATIC VOLTAGE REGULATOR (AVR)
Provides automatic control of generator terminal from no
load to full rated load.
2.4.4.1.5.8 MANUAL VOLTAGE REGULATOR (FVR)
Provides manual control of generator field excitation.
2.4.4.1.5.9 SOLID STATE AUTOMATIC AND MANUAL REGULATOR REFERENCE
ADJUSTERS
Allow each regulator reference set-point to increase or
decrease in response to "Raise" and Lower" signals from the
operator. The settings of the upper and lower limits and
up/down ramp times are adjustable.
2.4.4.1.5.10 AUTOMATIC AND MANUAL REFERENCE FOLLOWERS
Adjust the non-active regulator output to automatically
track the active regulator.
2.4.4.1.5.11 VOLTS/HERTZ PROTECTION (24EX)
This function serves as backup to the Volts/Hertz Limiter.
2.4.4.1.5.12 GENERATOR TIME OVERVOLTAGE (59EX)
This function monitors the generator armature voltage and
will initiate an alarm and or a trip signal upon detecting
an acceptably high voltage.
<PAGE>
2.4.4.1.5.13 BRIDGE AC VOLTAGE INPUT PHASE VOLTAGE UNBALANCE ALARM
This function will initiate an alarm if the bridge AC input
phase has excessive line dip or imbalance which persists to
long.
2.4.4.1.5.14 BRIDGE AC INPUT PHASE UNBALANCE (47EX)
This function will initiate a trip if the bridge AC input
phase has excessive line dip or imbalance persists to long.
2.4.4.1.5.15 REACTIVE CURRENT COMPENSATION (RCC)
Voltage droop for sharing reactive current between
paralleled machines or "line drop" compensation for
regulating voltage at some point remote from the generator
terminals.
2.4.4.1.5.16 SHAFT VOLTAGE SUPPRESSOR
Limits shaft voltage caused by thyristor commutation to aid
in protecting generator journals and bearings against shaft
currents caused by the excitation system..
2.4.4.1.5.17 DUAL SOURCE INTERNAL POWER SUPPLY
The 125 VDC battery supply and an internal ac supply fed
from the PPT are applied to this power supply. Should loss
occur in either of these sources, the power supply will
utilize the available source without interrupting exciter
operation.
2.4.4.1.5.18 GENERATOR FIELD FLASHING
Application circuit - utilizing station battery supply to
flash the field.
2.4.4.1.5.19 GENERATOR FIELD GROUND DETECTOR (64F)
Utilizing square wave modulation, this detector sweeps over
the entire field windings so that there are no dead bands,
detecting field leakage current between any point in the
field windings and ground.
2.4.4.1.5.20 SOFT STARTUP
Automatic startup sequencing provides a soft start when
flashing under AVR control with negligible terminal voltage
overshoot during startup.
<PAGE>
2.4.4.1.5.21 GLOBAL ALARM (30EX)
Contact output indicating exciter trouble.
2.4.4.1.5.22 EXCITER TRIP (94EX)
Contact output simultaneous trip request indicating exciter
failure. Typically used to trip 86G.
2.4.4.1.5.23 VT DISCONNECT AND CT SHORTING BLOCKS
Used to isolate the VT and CT feedback signals from the
voltage regulator.
2.4.4.1.5.24 GENERATOR VOLTAGE SENSING
All three phases of the generator VT are monitored and used
in regulating generator volts.
2.4.4.1.5.25 GENERATOR CURRENT SENSING
Phase A and C of the generator CT's are used for regulating
and monitoring generator current.
2.4.4.1.5.26 GENERATOR SIMULATOR FOR EXCITER OPERATOR TRAINING AND
PROTECTION SETUP
For use when the generator is not operating.
2.4.4.1.5.27 POWER SYSTEM STABILIZER (PSS)
This function is incorporated into the exciter system
software. A signal representing the integral of accelerating
power is introduced into the automatic voltage regulator
algorithm to increase the generators ability to produce and
transmit large power levels in a stable manner by reducing
low frequency rotor oscillations
2.4.4.1.5.28 PROTECTION MODULE
This module is separate from the main controller and serves
as a backup to the limiters located within the controller.
The protection module allows the separation of control and
protection into two separate systems. The output of the
protection package drives contacts that are used for
transfer to backup (hot backup) and alarm (30EX), or trip
purposes (94EX). The protection features provided are as
follows:
<PAGE>
-- Volts/Hertz, Dual Level (24EX)
-- Generator Overvoltage (59EX)
-- Off/On-Line Overexcitation (76EX)
-- Bridge AC Phase Unbalance (47EX)
-- Loss of Excitation (40EX)
2.4.4.1.5.29 LOSS OF EXCITATION (40EX)
Loss of excitation (or loss of field) results in loss of
synchronism and operation of the generator as an inductive
machine
2.4.4.1.5.30 SPARE POWER CONVERSION MODULE TO SERVE AS HOT BACKUP
For those applications where the customer requires
redundancy, the "Hot Backup" option is provided. This
feature utilizes a complete digital controller and rectifier
bridge as a backup to the primary controller and bridge.
During normal operation, the Hot Backup module receives the
same input as the primary module, but its output feeds a
small dummy load as opposed to the generator field.
If the protection module senses a condition that would
normally initiate a trip signal, it will force a transfer to
the Hot Backup module before the trip contact is necessary.
The transfer to Hot Backup is "on-the-fly" in the sense that
the transfer occurs with the generator on-line and does not
affect generator output
2.4.4.1.5.31 SECOND DC FIELD CONTACTOR
Field interrupting dc contactor in the hot backup rectifier
bridge output dc-positive line.
2.4.4.1.6 PERFORMANCE
The EX2000P bus fed excitation system is a High Initial
Response (HIR) potential source exciter based on IEEE std
421.5 (will reach 95% ceiling generator field voltage in
less than 100ms.)
2.4.4.1.7 ELECTRICAL SYSTEM INTEGRATION
All necessary studies and calculations required to integrate
the EX2000 into the Owners electrical system, including
short circuit, load flow, insulation,
<PAGE>
protective device coordination studies, and power system
stabilizer studies are by Owner.
- --------------------------------------------------------------------------------
2.5 OTHER GAS TURBINE FEATURES
2.5.1 GAS TURBINE PERFORMANCE MONITORING INSTRUMENTATION
-- Compressor bellmouth static and differential pressure
transmitters
-- Compressor inlet RTDs
2.5.2 GENERATOR LINE-SIDE COMPARTMENT DRAWOUT PTS
-- Excitation (1 set)
-- Relaying (1 set)
2.5.3 STATIC START SYSTEM
2.5.3.1 OPERATION
Using existing ac drive technology, GE will furnish a
Load-Commutating Inverter(LCI) adjustable frequency drive as
the starting means for the gas turbine.
The static starting system can accelerate the gas
turbine-generator without imposing high inrush currents with
resulting voltage disturbance on the A.C. station service
line. This system will provide variable frequency power
directly to the generator terminals, using the generator as
a synchronous motor to start the gas turbine. The generator
will be turning at approximately 4 RPM, via a low speed
turning gear, prior to starting. With signals from the
turbine control, the LCI will accelerate or decelerate the
generator to a self sustaining speed required for purge,
light-off , waterwash etc. Deceleration is a coast-down
function.
Starting excitation is provided by GE's EX2000 excitation
system
Conventional, 3-phase , 12-pulse bridge circuits are used
for the rectifier and inverter and are connected through a
dc link inductor. A transformer provides 3-phase power,
impedance for fault protection, and electrical isolation
from system disturbances to ground.
<PAGE>
The drive system protective strategy is to provide a high
level of fault protection for the major equipment. The
protective relaying includes phase overcurrent, ground fault
and motor protection. The rectifier inverter will include
voltage surge protection and full fault suppression
capability for internal faults or malfunctions. A drive
system monitor and diagnostic fault indications continuously
monitor the condition and operation of the LCI.
The following equipment is provided as part of the static
start system:
2.5.3.2 LOW SPEED TURNING GEAR
The gear assembly is located on the collector end of the
generator and is used for slow speed operation (approx. 4
RPM), cooldown and standby turning and rotor breakaway
during startup.
2.5.3.3 POWER CONVERSION EQUIPMENT
The LCI power conversion equipment is mounted in a NEMA 4
ventilated enclosure and consists of the following:
-- One (1) 12-pulse converter with series redundant
thyristor cells to rectify ac line power to controlled
voltage dc power.
-- One (1) inverter with series redundant cells to convert
dc link power to controlled frequency ac power.
-- Cooling Fan and Electrical Filter Compartment: Two (2)
ventilation fans are provided to cool the inverter
section. The dc filters provide protection from voltage
spikes as well as providing sufficient latching current
to turn on the SCR's.
-- Control Panel
The control panel is located in a NEMA 1 enclosure. It
contains the microprocessor system control logic for firing,
drive sequencing, diagnostics and protective functions,
acceleration (ramping function), excitation system interface
and input/output signal interfacing. Door mounted panel
meters and operator devices are also provided.
2.5.3.4 DC LINK REACTOR
The dc link is a dry-type air-core reactor, convection
cooled, located in an outdoor protective enclosure.
<PAGE>
It is electrically connected between the converter and the
inverter. The inductor helps smooth the dc current to
eliminate coupling between the frequencies of the converter
and inverter. The dc link also provides protection during
system faults by limiting the current.
Reactor rating is as follows:
-- 890 amps dc continuous,
-- Inductance - 20 millineries
-- 5000v to ground
-- Momentary fault capacity of 13,000 amperes and braced
to withstand 30,000 amperes peak asymmetrical fault
for 1/2 Hz
-- Class H insulation
2.5.3.5 FUSED CONTACTOR (4160 VOLT)
Contains 4160 volt fused contactor for circuit isolation
under normal conditions. The fuse is rated to interrupt the
current if a fault occurred in the inverter section during
startup.
2.5.3.6 ISOLATION TRANSFORMER
The isolation transformer is an oil-filled type and is
located in an outdoor weather-protected enclosure. It
provides electrical isolation and impedance for system
protection against notching and harmonic distortion. The
transformer is designed for service with a three phase,
twelve pulse power converter connected to the secondary
winding.
One transformer is provided for each two gas turbine-
generators.
Transformer rating as follows:
-- 5500 KVA, 4160V pri-4160 / dual 480VAC sec
-- 1250 KVA exciter winding- 515v, 3 phase, 60 hz
-- Impedance 6%
-- Ambient 30DEG.C average, 50DEG.C maximum
-- Altitude 3300 ft above sea level
<PAGE>
-- Delta connected primary, BIL 95 KV
-- Wye connected secondary
-- Delta connected exciter winding
-- BIL 60 KV
-- Continuous voltage to ground
-- 5.2 KV
2.5.3.7 MOTORIZED DISCONNECT SWITCH
Each static start motor-operated generator three pole
disconnect switch is rated at 18 KV, 1250 A continuous, 80
KA momentary, no load break. They are separately mounted and
is electrically connected between the inverter and the feed
for the generator stator.
TURBINE CONTRACT APPENDIX A-2
<PAGE>
4. COMPONENT PERFORMANCE
- ------------------------------------------------------------------------------
4.1 ESTIMATED GAS TURBINE PERFORMANCE
<PAGE>
TURBINECONTRACT APPENDIX A-4 COVER
<PAGE>
TURBINE CONTRACT APPENDIX A-4
[*] The following four (4) pages have been omitted and filed separately with
the Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
6. PERFORMANCE CURVES
- -------------------------------------------------------------------------------
6.1 TURBINE AND GENERATOR PERFORMANCE CURVES
6.1.1 GAS TURBINE CURVES
<TABLE>
<CAPTION>
CURVE NUMBER DATE
<S> <C> <C>
Estimated Single Unit Performance, Base (gas fuel) 522HA851 4/17/98
Compressor Inlet Temperature Corrections, Base (gas fuel) 522HA852 4/17/98
Modulated Inlet Guide Vane Effect (gas fuel) 522HA853 4/17/98
Estimated Single Unit Performance, Base (oil fuel) 544HA223 5/26/99
Compressor Inlet Temperature Corrections, Base (oil fuel) 544HA225 5/26/99
Modulated Inlet Guide Vane Effect (oil fuel) 544HA224 5/26/99
Altitude Correction Factor for Turbine 4l6HA662A 4/24/90
Humidity Effects Curve 498HA697B 10/10/89
</TABLE>
6.1.2 GAS TURBINE HYDROGEN COOLED GENERATOR PERFORMANCE CURVES
<TABLE>
<CAPTION>
CURVE NUMBER
<S> <C>
Estimated Saturation and Synchronous Impedance Curve 80203G1-1
Estimated Generator Reactive Capability Curve 80203G1-2
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Estimated Excitation V Curve 80203G1-3
Generator Output as a Function of Cold Gas Temperature 80203G1-7A
Generator Output as a Function of Cold Liquid Temperature 80203G1-7B
Voltage - Frequency Capability Curve 80203G1-VF
</TABLE>
6.1.3 GAS TURBINE STARTUP CURVES AND DURATION CURVE
<TABLE>
<CAPTION>
CURVE NUMBER
<S> <C>
Typical 7FA Gas Turbine Startup Curve
LCI Start
DLN 2.6
</TABLE>
6.1.4 GAS TURBINE ALLOWABLE LOAD CHANGE RATES
During normal load, the unit can be loaded from FSNL to base load
in 12 minutes. During fast load, the unit can be loaded from FSNL
to base load in 4 minutes.
<PAGE>
The following is a description of information which cannot be submitted
electronically:
APPENDIX 6 - PERFORMANCE CURVES
GENERAL ELECTRIC MODEL PG7241(FA) GAS TURBINE
Page 4.2 Estimated Performance - Configuration: DLN Combustor
Compressor 59 F (15 C), 60% Relative Humidity Atmospheric Pressure
14.7 psia (1.013 bar)
Page 4.3 Effect of Compressor Inlet Temperature on Output, Heat Rate, Heat
Consumption, Exhaust Flow and Exhaust Temperature at Baseload
Page 4.4 Effect of Inlet Guide Vane on Exhaust Flow and Temperature As a
Function of Output and Compressor Inlet Temperature
GENERAL ELECTRIC GAS TURBINE ALTITUDE CORRECTION FACTOR
Page 4.5 Altitude Vs Atmospheric Pressure And Altitude Vs Correction Factor
For Gas Turbine Output and Fuel Consumption
GENERAL ELECTRIC MS6001, MS7001 AND MS9001 GAS TURBINES
Page 4.6 Corrections to Output and Heat Rate For Non-Iso Specific Humidity
Conditions For Operation At Base Load On Exhaust Temperature
Control Curve
ESTIMATED SATURATION AND SYNCHRONOUS IMPEDANCE CURVES
Page 4.7 198900 KVA - 3600 RPM - 18000 VOLTS - 0.90 PF
335 FLD VOLTS - 45 C COLD GAS - 30 PSIG H2
ESTIMATED REACTIVE CAPABILITY CURVES
Page 4.8 198900 KVA - 3600 RPM - 18000 VOLTS - 0.90 PF
335 FLD VOLTS - 45 C COLD GAS - 30 PSIG H2
ESTIMATED EXCITATION V CURVES
Page 4.9 198900 KVA - 3600 RPM - 18000 VOLTS - 0.90 PF
335 FLD VOLTS - 45 C COLD GAS - 30 PSIG H2
GENERATOR OUTPUT AS A FUNCTION OF COLD GAS TEMPERATURE
Page 4.10 198900 KVA - 3600 RPM - 18000 VOLTS - 0.90 PF
335 FLD VOLTS - 45 C COLD GAS - 30 PSIG H2
GENERATOR OUTPUT AS A FUNCTION OF COLD LIQUID TEMPERATURE
Page 4.11 198900 KVA - 3600 RPM - 18000 VOLTS - 0.90 PF
335 FLD VOLTS - 45 C COLD GAS - 30 PSIG H2
PG7241FA GAS TURBINE TYPICAL STARTUP CHARACTERISTICS (@ISO CONDITIONS; NG FUEL)
TURBINECONTRACTAPPENDIXA-6
<PAGE>
7. DIVISION OF RESPONSIBILITY/SUPPLY BY OTHERS
To provide a complete operational installation, additional equipment and
services not included in this proposal must be provided by the customer
or the installer. These include, but are not limited to, the following:
7.1 CIVIL
- Foundation design and construction with all embedments including
sub-sole plates, anchor bolts, and conduit
- Grounding grid and connections
- Necessary drainage, including sumps and piping
7.2 MECHANICAL
- Gas fuel in accordance with GEI-41040, Process Specification Fuel
Gases for Combustion in Heavy-Duty Gas Turbines (see Reference
Documents chapter)
- Gas fuel heated to 50 o F above its dew point.
- Gas supply shutoff valve located remotely from the unit
7.2.1 CUSTOMER GAS FUEL SYSTEM SUPPLY REQUIREMENTS
1. The gas fuel pressures specified in this document are
referenced to FG1. This point identifies the purchaser
connection as shown on the Purchaser Connection Drawing.
2. The fuel gas delivered to the turbine is to meet the most
recent revision of the Process Specification Fuel Gases For
Combustion in Heavy-Duty Gas Turbines - GEI-41040.
3. Maximum supply pressure excursions are limited to either 1%
per second ramp or 5% step. The 1% per second ramp is
applicable over the range of minimum pressure requirement
to maximum operating pressure. The 5% step is applicable
over the range of minimum
<PAGE>
pressure requirement to 95% of maximum operating pressure
and with a maximum of one 5% step change in 5 seconds.
4. Provide over-pressure protection, (including safety valve
accumulation), such that the maximum mechanical design
pressure is not exceeded at FG1.
- FUEL SUPPLY PRESSURE REQUIREMENTS
<TABLE>
<CAPTION>
MEASUREMENT VALUE
<S> <C>
Model Series PG7241
Combustor DLN 2.6
Maximum Mechanical Design Pressure psig (kPa) 575
Maximum Operating Pressure psig (kPa) 475
Minimum required pressure psig (kPa) 415
Maximum temperature at minimum pressureDEG.F(DEG.C) 120
Customer fuel modified Wobbe Index LATER
</TABLE>
NOTES:
1. The minimum pressure is specified at FG1 with respect to the model
series, fuel temp, ambient conditions, combustor, and customer design
fuel.
2. Maximum mechanical design pressure is specified to provide over-pressure
protection, (including safety valve accumulation), such that the maximum
mechanical design pressure value is not exceeded at FG1.
3. Maximum operating pressure refers to the maximum turndown capability of
the speed ratio valve.
4. Minimum pressure required is referenced to the coldest ambient
temperature and the maximum fuel temperature. This value is applicable
across the range of operation.
5. Minimum fuel temp required superheat above the hydrocarbon dewpoint at
FG1 is quoted in GEI41040.
6. The Modified Wobbe Index allowable variation from that quoted in the
table is +/- 5%.
<PAGE>
[GRAPHIC]
- Liquid fuel in accordance with GEI-41047, Gas Turbine Liquid Fuel
Specifications (see Reference Documents chapter)
- Storage tank(s), fuel forwarding and piping to the liquid
fuel atomizing air skid inlet
- Piping from the skid outlet to the turbine inlet connection
Note: Customer shall provide fuel analyses of actual operating
fuel(s) 30 days prior to the first fire of the gas turbine
- Distillate fuel forwarding skid
- Mineral lube oil in accordance with GE Lube Oil Recommendations
(see Reference Documents chapter)
- Inlet System
- Inlet heating interconnecting piping
- Exhaust System
- Exhaust duct/stack
<PAGE>
- External exhaust system finish paint including any tie
coats
- Demineralized water for the water injection system in accordance
with the following:
<TABLE>
<S> <C>
Total solids 5 ppm max
Total trace metals: sodium + potassium + 0.5 ppm max
lithium + vanadium + lead)
pH 6.5 - 7.5
</TABLE>
- Where contaminants are present in the water, the total limits in
the fuel, water and air should be controlled such that the total
concentration equivalent in the fuel (from all sources) conforms
to the following limits:
<TABLE>
<CAPTION>
CONTAMINANT MAX. EQUIVALENT
CONCENTRATION (PPM-WEIGHT)
<S> <C>
Sodium plus Potassium plus lithium 1.0
Lead 1.0
Vanadium 0.5
Calcium 2.0
</TABLE>
- The water quality requirement can generally be satisfied by
demineralized water.
- - Coolant in accordance with GE cooling system specifications for gas
turbine lubrication, turbine supports, atomizing air and generator
cooling systems (see Reference Documents chapter)
- - Vent and drain piping or ducting, as needed
- - Unit walkways by GE
- - Water for compressor cleaning system in accordance with GEK-103623, Gas
Turbine Compressor Washing--Liquid Washing Recommendations (see Reference
Documents chapter)
- - Starting System
- LCI heat exchanger piping
- LCI system cables
<PAGE>
- LCI isolation transformer breaker and protection
- Start-up PPT overcurrent relays
- - Miscellaneous Systems
- Station instrument air
- Station instrument air for start-up
- Interconnecting piping between the accessory compartment and
liquid fuel/atomizing air skid
-
7.3 ELECTRICAL
- AC electric power for gas turbine auxiliaries
- Electric power for station auxiliaries
- Line side current and potential transformers
- Generator circuit breaker
- ISO phase bus duct
- Interconnecting cables
7.4 INSTALLATION/ERECTION
- Transportation from the nearest rail siding, unloading, placement
on foundation and installation of the equipment offered in this
Proposal
- Construction services including electric power, lighting,
temporary heaters, test equipment, compressed air, crane(s) and
all required standard tools
- Storage and security for equipment received
- Finish paint including any special external finish paints required
for corrosion protection with any required tie coats
<PAGE>
- Interconnecting piping between the turbine-generator equipment and
/ or auxiliary skids, such as cooling water, water wash, exhaust
frame blowers, and fire protection systems, as applicable
- Perform necessary preoperational work
- Cables and bus duct as follows:
-- Control cables between controls equipment (or control cab
if supplied), fuel forwarding system, remote control
panels, customer devices, other off-base devices and
auxiliary skids
-- Power cables between the generating units, controls
equipment (or control cab), fuel forwarding system, remote
panels, customer devices, other off-base devices and
auxiliary skids
- Access, necessary authorizations, and office facilities for GE
personnel required during installation and start-up
7.5 START-UP/TEST
- Operating personnel for starting, preliminary runs and tests
- Lubricating fluid, greases, CO2, and supplies for starting,
preliminary runs, tests and normal operation thereafter
- Fuel and load for tests
- All field performance tests will be as described in Appendix C.
TURBINECONTRACTAPPENDIXA-7
<PAGE>
8. CODES AND STANDARDS
8.1 GAS TURBINE-GENERATOR
GE considers the applicable sections of the
following US and ISO codes and standards to be
the most relevant for the gas turbine equipment.
Our designs and procedures are generally
compliant with the applicable section for the
following:
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
ANSI/ASCE 7-1993 Minimum Design Loads for Buildings and Other Structures
(Used for snow loads)
---------------------------------------------------------------------------------------------
ANSI/ASME B1.1-1989 Unified Inch Screw Threads (GE complies at the
customer's connection)
---------------------------------------------------------------------------------------------
ANSI/ASME B1.20.1-1983 (R1992) General Purpose (Inch) Pipe Threads
---------------------------------------------------------------------------------------------
ANSI/ASME B16.5-1996 Pipe Flanges and Flanged Fittings
---------------------------------------------------------------------------------------------
ANSI/ASME B16.9-1993 Factory-Made Wrought Steel Butt Welding Fittings
---------------------------------------------------------------------------------------------
ANSI/ASME B16.21-1992 Nonmetallic Flat Gaskets for Pipe
Flanges (Spiral-wound gaskets per API 601 may be
used, particularly in turbine compartment piping.)
---------------------------------------------------------------------------------------------
ANSI/ASME B31.3-1996 Chemical Plant and Petroleum Refinery Piping Gas
turbine piping systems comply, with the exceptions
to the following paragraphs:
6.6.1 The standard factory performance
test serves as the leak test for
all gas turbine piping systems on
units and peripheral skids/hardware
except as noted on 6.6.2.
6.6.2 Fuel gas steam injection systems
are tested as individual
fabrications at 1.5 times their
design operating pressures.
---------------------------------------------------------------------------------------------
ANSI/ASME PTC-36-1985 Measurement of Industrial Sound (Used for Near-field
Measurements Only)
---------------------------------------------------------------------------------------------
ANSI B133.2-1997 Basic Gas Turbine. GE complies, with the following
exception to paragraph 8.5:
Loose items such as jackscrews and eyebolts are not
furnished. Provisions for use of such items are not
included in the design.
---------------------------------------------------------------------------------------------
ANSI B133.3-1981 (R1994) Gas Turbine-Procurement Standard-Auxiliary Equipment
(GE complies fully with design portions only.
GE uses its own lube oil flushing procedure.
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
Atomizing air receiver is not applicable.)
---------------------------------------------------------------------------------------------
ANSI B133.4-1978 (R1997) Gas Turbine Control and Protection Systems
---------------------------------------------------------------------------------------------
ANSI B133.5-1978 (R1990) Gas Turbine Electrical Equipment
---------------------------------------------------------------------------------------------
ANSI B133.8-1977 (R1989) Gas Turbine Installation Sound Emission (Used for
Far-field Measurements Only)
---------------------------------------------------------------------------------------------
ANSI/NFPA 12-1998 Carbon Dioxide Extinguishing Systems
---------------------------------------------------------------------------------------------
ANSI/NFPA 70-1999 National Electrical Code (Electrical components are
designed to meet the intent of this Code for Class
1, Group D, Div. 2, Hazardous area classification,
where appropriate.)
---------------------------------------------------------------------------------------------
ANSI/IEEE C37-1995 Guides and Standards for Circuit Breakers, Switchgear,
Substations and Fuses
---------------------------------------------------------------------------------------------
ANSI/IEEE C37.1-1994 Definition, Specification and Analysis of Systems Used
for Supervisory Control, Data Acquisition and Automatic
Control
---------------------------------------------------------------------------------------------
ANSI/IEEE C37.2-1996 Electrical Power System Device Function Numbers (GE
complies with respect to device designations except
that, in a few cases, device numbers were modified
or added to fit GE's needs.)
---------------------------------------------------------------------------------------------
ANSI/IEEE C37.90.1-1989 (R 1994) Surge Withstand Capability (SWC) Tests for Protective
Relays and Relay Systems (Salem Controls)
---------------------------------------------------------------------------------------------
ANSI/IEEE C57-1995 Compilation of all C57 Standards
---------------------------------------------------------------------------------------------
ANSI C50.10-1990 Rotating Electrical Machinery - Synchronous Machines
---------------------------------------------------------------------------------------------
ANSI C50.13-1989 Rotating Electrical Machinery - Cylindrical Rotor
Synchronous Generators
---------------------------------------------------------------------------------------------
ANSI C50.14-1977 (R1989) Requirements for Combustion Gas Turbine-Driven
Cylindrical Rotor Synchronous Generators (GE does
not provide a peak reserverating. Not all of the
prototype tests indicated in Table 2 have
necessarily been conducted.)
---------------------------------------------------------------------------------------------
ANSI/IEEE 100-1996 Dictionary of Electrical and Electronics Terms
---------------------------------------------------------------------------------------------
NEMA MG1-1993 Motors and Generators
---------------------------------------------------------------------------------------------
NEMA MG2-1989 Safety Standard for Construction and Guide for
Selection, Installation and Use of Electric Motors and
Generators
---------------------------------------------------------------------------------------------
NEMA TR1-1993 Transformers, Regulators and Reactors
---------------------------------------------------------------------------------------------
ANSI S1.4-1983 Specification for Sound Level Meters
---------------------------------------------------------------------------------------------
ANSI S1.13-1971 (R1986) Methods for the Measurement of Sound Pressure Levels
---------------------------------------------------------------------------------------------
ANSI/SAE/J184-Feb. 87 Qualifying a Sound Data Acquisition System
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
AGMA 6011-G92 Specification for High-Speed Helical Gear Units
(Used for accessory gear and load gear except for
service factor.)
---------------------------------------------------------------------------------------------
UBC-1994 Uniform Building Code (Used for wind loads and seismic
design)
---------------------------------------------------------------------------------------------
ANSI/IEEE 421.1-1986 Definitions for Excitation Systems for Synchronous
Machines
---------------------------------------------------------------------------------------------
EIA/TIA RS-232E-1991 Interface between Data Terminal Equipment and Data
Circuit Terminating Equipment Employing Serial Binary
Interchange
---------------------------------------------------------------------------------------------
</TABLE>
The GE Gas Turbine Drafting Standards are
based on the following as appropriate to the
gas turbine. Please note that in several
instances (symbols, etc.) have been devised
for GE's special needs (such as flow divider
and manifolds):
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
ANSI/ASME B46.1-1985 Surface Texture
---------------------------------------------------------------------------------------------
ANSI Y14.5M-1982 (R1988) Dimensioning and Tolerancing
---------------------------------------------------------------------------------------------
ANSI Y14.15-1966 (R1988) Electrical and Electronics Diagrams (On-base gas
turbine and accessory base equipment)
---------------------------------------------------------------------------------------------
ANSI Y14.17-1966 Fluid Power Diagrams
---------------------------------------------------------------------------------------------
ANSI Y14.36-1978 Surface Texture Symbols
---------------------------------------------------------------------------------------------
ANSI/IEEE 315-1975 (R1994) Graphic Symbols for Electrical and Electronics Diagrams
---------------------------------------------------------------------------------------------
ANSI Y32.10-1967 (R1987) Graphical Symbols for Fluid Power Diagrams
---------------------------------------------------------------------------------------------
ANSI Y32.11-1961 (R1993) Graphic Symbols for Process Flow Diagrams in the
Petroleum and Chemical Industries
---------------------------------------------------------------------------------------------
ANSI/ASME Y32.2.3-1949 (R1988) Graphical Symbols for Pipe Fittings, Valves and Piping
---------------------------------------------------------------------------------------------
ANSI/AWS A2.4-1993 Symbols for Welding, Brazing and Nondestructive
Examination
---------------------------------------------------------------------------------------------
ASME Section VIII, Division 1 - Boiler and Pressure Vessel Code--Pressure Vessels (for
1990 Stator Frame Welds)
---------------------------------------------------------------------------------------------
ISO 7919-1-1986 Mechanical Vibrations - Measurements on Rotating Shafts
and Evaluation
---------------------------------------------------------------------------------------------
ISO 10816 (Draft) Mechanical Vibrations - Evaluation of Machine Vibration
by Measurements of Non-rotating Parts
---------------------------------------------------------------------------------------------
TEMA C, 7th Edition Mechanical Standards for Class C Heat Exchangers (for
Commercial Coolers)
---------------------------------------------------------------------------------------------
OSHA Regulation No. 1910-179-1995 Crane Lifts; Factor of Safety
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
8.2 RESERVED
8.3 OTHER CODES AND STANDARDS OF PRACTICE
In the event conflicts arise between the codes and standards of
practice described herein and codes, laws, rules, decrees,
regulation, standards, etc., of the Owner and/or country where
the equipment is to be installed, the codes and standards of
practice described herein will govern. If the Owner desires
other codes and standards of practice to be utilized by GE or
its Suppliers, they will be subject to negotiation and mutual
agreement between the Owner and GE.
---------------------------------------------------------------
WARNING
MANUFACTURED WITH 1.1.1-TRICHLOROCTHANE, CFC-113 AND TCA, AND
CONTAINS HALON-1301, HCFC-22 AND FREON-113, SUBSTANCES WHICH
HARM PUBLIC HEALTH AND ENVIRONMENT BY DESTROYING OZONE IN THE
UPPER ATMOSPHERE.
---------------------------------------------------------------
8.4 CODES AND STANDARDS ORGANIZATION LISTING
Below is a list of the organizations with the
addresses and phone numbers where codes and
standards or related information can be
purchased:
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
AGMA American Gear Manufacturer's Association
1500 King Street, Suite 201
Alexandria, Virginia 22314 703-684-0211
---------------------------------------------------------------------------------------------
ANSI American National Standards Institute (Sales)
11 West 42nd Street, 13th Floor
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
New York, New York 10036 212-642-4900 Phone 212-302-1286 Fax
---------------------------------------------------------------------------------------------
ASCE American Society of Civil Engineers
345 East 47th Street
New York, New York 10017-2398 800-548-2723
---------------------------------------------------------------------------------------------
ASME The American Society of Mechanical Engineers
22 Law Drive, Box 2900
Fairfield, NJ 07007-2900 201-882-1167
---------------------------------------------------------------------------------------------
AWS American Welding Society
550 N. Lejeune Road
Miami, Florida 33126 305-443-9353
---------------------------------------------------------------------------------------------
EIA Electronic Industries Association
Global Engineering Documents (Distributor)
1990 M Street, Suite 400
Washington, D.C. 20036 800-854-7179
---------------------------------------------------------------------------------------------
IEEE Institute of Electrical and Electronic Engineers, Inc.
345 East 47th Street
New York, New York 10017 212-705-7900
---------------------------------------------------------------------------------------------
ISO International Organization for Standardization
Case Postal 56
CH-1211
Geneva 20, Switzerland
Contact ANSI - (212-642-4900)
---------------------------------------------------------------------------------------------
NEMA National Electrical Manufacturer's Association (Publications)
2101 L Street, N.W.
Washington, D.C. 20037 202-457-8400 Phone 202-457-8473 Fax
---------------------------------------------------------------------------------------------
NFPA National Fire Protection Association
1 Batterymarch Park
P.O. Box 9146
Quincy, MA 02269-9146 1-800-344-3555
---------------------------------------------------------------------------------------------
OSHA Office of Safety & Health Standards
U.S. Department Of Labor
200 Constitution Avenue, NW - Room N3101
Washington, D.C. 20210 202-219-4667
---------------------------------------------------------------------------------------------
TEMA Tubular Exchanger Manufacturers Association
25 North Broadway
Tarrytown, NY 10591
914-332-0040
---------------------------------------------------------------------------------------------
UBC Uniform Building Code
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
International Conference of Building Officials
5360 South Workman Mill Road
Whittier, CA 90601
310-699-0541
---------------------------------------------------------------------------------------------
</TABLE>
TURBINECONTRACTAPPENDIXA-9
<PAGE>
9. DATA SHEETS
9.1 TECHNICAL DATA
The following technical data is typical for the size and type
of unit proposed and except for that information specifically
identified as being guaranteed, this data is preliminary in
nature and subject to change based on final equipment design
and component selection.
9.1.1 GAS TURBINE
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Type Heavy duty
---------------------------------------------------------------------------------------------
Stages 3
---------------------------------------------------------------------------------------------
Configuration Single shaft, 2 bearing
---------------------------------------------------------------------------------------------
Operating speed 3600 rpm
---------------------------------------------------------------------------------------------
Critical speeds
---------------------------------------------------------------------------------------------
First rpm
---------------------------------------------------------------------------------------------
Laterial 1154
---------------------------------------------------------------------------------------------
Torsional 1309
---------------------------------------------------------------------------------------------
Second rpm
---------------------------------------------------------------------------------------------
Laterial 1212
---------------------------------------------------------------------------------------------
Torsional 7403
---------------------------------------------------------------------------------------------
Third rpm
---------------------------------------------------------------------------------------------
Laterial 2066
---------------------------------------------------------------------------------------------
Torsional 10305
---------------------------------------------------------------------------------------------
Fourth rpm (laterial) 3044
---------------------------------------------------------------------------------------------
Fifth rpm (laterial) 3162
---------------------------------------------------------------------------------------------
Maximum tip speed 1615 fps
---------------------------------------------------------------------------------------------
Trip speed
---------------------------------------------------------------------------------------------
Electrical 3960 rpm
---------------------------------------------------------------------------------------------
Maximum temperature 2420DEG.F
---------------------------------------------------------------------------------------------
First stage rotor bucket material
---------------------------------------------------------------------------------------------
Metal *DS-GTD-111
---------------------------------------------------------------------------------------------
Coating GE proprietary coating
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
Second stage rotor bucket material
---------------------------------------------------------------------------------------------
Metal DS-GTD-111
---------------------------------------------------------------------------------------------
Coating GE proprietary coating
---------------------------------------------------------------------------------------------
Third stage rotor bucket material
---------------------------------------------------------------------------------------------
Metal GTD-111
---------------------------------------------------------------------------------------------
Coating GE proprietary coating
---------------------------------------------------------------------------------------------
Stator nozzle material
---------------------------------------------------------------------------------------------
First FSX-414
---------------------------------------------------------------------------------------------
Second and third GTD-222
---------------------------------------------------------------------------------------------
Rotor wheel material In-706
---------------------------------------------------------------------------------------------
</TABLE>
* Directionally solidified casting with
serpentine cooling passages
9.1.2 COMPRESSOR
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Type Axial flow
---------------------------------------------------------------------------------------------
Stages 18
---------------------------------------------------------------------------------------------
Rati- 15.3 (ISO)
---------------------------------------------------------------------------------------------
Maximum tip speed 1269 fps
---------------------------------------------------------------------------------------------
Inlet guide vanes Variable-modulating
---------------------------------------------------------------------------------------------
Rotor blade material
---------------------------------------------------------------------------------------------
Stages 0 through 8 C-450
---------------------------------------------------------------------------------------------
Stages 9 through 17 AISI-403
---------------------------------------------------------------------------------------------
Stator blade material
---------------------------------------------------------------------------------------------
Stages 0 through 8 C-450
---------------------------------------------------------------------------------------------
Stages 9 through 17 AISI-403
---------------------------------------------------------------------------------------------
Rotor material
---------------------------------------------------------------------------------------------
Stages 0 through 14 Ni Cr MoV
---------------------------------------------------------------------------------------------
Stages 15 through 17 Cr Mo V
---------------------------------------------------------------------------------------------
Inlet guide vane material C-450
---------------------------------------------------------------------------------------------
</TABLE>
9.1.3 BEARINGS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Radial type (2) Tilt Pad
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
---------------------------------------------------------------------------------------------
Thrust type (1) Tilt pad
---------------------------------------------------------------------------------------------
</TABLE>
9.1.4 COMBUSTION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Type Can annular reverse flow
---------------------------------------------------------------------------------------------
Number of chambers 14
---------------------------------------------------------------------------------------------
Materials
---------------------------------------------------------------------------------------------
Liners Nimonic 263
---------------------------------------------------------------------------------------------
Transition pieces Nimonic 263
---------------------------------------------------------------------------------------------
Igniters (quantity) 2
---------------------------------------------------------------------------------------------
Flame detectors
---------------------------------------------------------------------------------------------
Quantity 4
---------------------------------------------------------------------------------------------
</TABLE>
9.1.5 WATER INJECTION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Required inlet pressure 0-20 psig
---------------------------------------------------------------------------------------------
Maximum inlet temperature 110DEG.F
---------------------------------------------------------------------------------------------
Minimum inlet temperature 35DEG.F
---------------------------------------------------------------------------------------------
</TABLE>
9.1.6 NATURAL GAS FUEL
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Pressure required
---------------------------------------------------------------------------------------------
* Maximum 475 psig
---------------------------------------------------------------------------------------------
* Minimum 415 psig
---------------------------------------------------------------------------------------------
Fuel gas temperature (minimum) 50DEG.F of superheat
---------------------------------------------------------------------------------------------
</TABLE>
* Fuel gas supply pressure is measured at the
inlet connection to the gas fuel valve module,
and the pressure value at this point is
referenced to site conditions. For typical gas
fuel quality information, refer to GEI-41040,
Process Specification Fuel Gases for
Combustion in Heavy-Duty Gas Turbines in the
Reference Document Chapter.
9.1.7 LIQUID FUEL
For typical liquid fuel quality information, refer to GEI
41047, Gas Turbine Liquid Fuel Specifications in the Reference
Document Chapter.
<PAGE>
9.1.8 LUBRICATION AND HYDRAULIC CONTROL OIL
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Configuration (turbine and generator) Common supply
---------------------------------------------------------------------------------------------
Oil type Mineral oil
Reference GEK-32568
---------------------------------------------------------------------------------------------
Retention time 5 minutes
---------------------------------------------------------------------------------------------
Bearing supply pressure nominal 25 psig
---------------------------------------------------------------------------------------------
Bearing supply temperature (nominal) 130DEG.F
---------------------------------------------------------------------------------------------
Main oil pump
---------------------------------------------------------------------------------------------
Type Centrifugal
---------------------------------------------------------------------------------------------
Driver AC motor
---------------------------------------------------------------------------------------------
Auxiliary oil pump
---------------------------------------------------------------------------------------------
Type Centrifugal
---------------------------------------------------------------------------------------------
Driver AC motor
---------------------------------------------------------------------------------------------
Emergency oil pump
---------------------------------------------------------------------------------------------
Type Centrifugal
---------------------------------------------------------------------------------------------
Driver DC motor
---------------------------------------------------------------------------------------------
Lube filters Duplex, 17 u nominal
---------------------------------------------------------------------------------------------
Lube cooler Plate and frame (stainless) water
cooled
---------------------------------------------------------------------------------------------
</TABLE>
9.1.9 INLET AIR
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Air filter
---------------------------------------------------------------------------------------------
Normal pressure loss 2.0 in. H2O
---------------------------------------------------------------------------------------------
Maximum pressure loss (dirty) 4.0 in. H2O
---------------------------------------------------------------------------------------------
</TABLE>
9.1.10 EXHAUST SYSTEM
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
External duct shell and stiffeners A36 carbon steel
---------------------------------------------------------------------------------------------
Internal flow liner Duct walls: 409 stainless steel
Silencer panels (if provided): ASTM/A176 TY 409
stainless steel perforated sheet
---------------------------------------------------------------------------------------------
External duct primer Inorganic zinc
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
9.1.11 ACOUSTICS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
OCTIVE BAND 31.5 63 125 250 500 1000 2000 4000 8000
(HZ)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DB 131 142 146 145 137 139 132 115 98
---------------------------------------------------------------------------------------------
</TABLE>
The sound level defined above is exclusive of any
noise radiated by the customer's exhaust system.
The sound power level is measured in dB relative
to 10-12 watts, at the exhaust plenum exit, under
base load conditions. Measuring procedures are in
accordance with ASME PTC 36 (near field) and/or
ANSI B133.8 (far field).
9.1.12 FIRE PROTECTION
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Type Low presssure CO2
---------------------------------------------------------------------------------------------
System Multi-zone
---------------------------------------------------------------------------------------------
Detector Fixed type temperature sensors
---------------------------------------------------------------------------------------------
Detector manufacturer Fenwal or equal
---------------------------------------------------------------------------------------------
Number of detectors 22
---------------------------------------------------------------------------------------------
</TABLE>
9.1.13 COOLING WATER MODULE
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Nominal heat duty* 200,000 to 317,000 Btu/min
(211 to 334 MJ/min)
---------------------------------------------------------------------------------------------
Supply temperature (maximum) 120DEG.F (49DEG.C)
---------------------------------------------------------------------------------------------
Supply pressure (maximum) 125 psig (862 KPag)
---------------------------------------------------------------------------------------------
Expected system pressure drop 45 psid (310 KPad)
---------------------------------------------------------------------------------------------
</TABLE>
* Actual value depends on site configuration and
conditions.
9.1.14 STARTING SYSTEM
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Configuration Generator static start
---------------------------------------------------------------------------------------------
Manufacturer GE
---------------------------------------------------------------------------------------------
Type Load commutating inverter (LCI)
frequency drive
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
9.1.15 CONTROLS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
Manufacturer GE
---------------------------------------------------------------------------------------------
Model SPEEDTRONIC( Mark V
---------------------------------------------------------------------------------------------
Type Triple Modular Redundant (TMR)
Microprocessor based
---------------------------------------------------------------------------------------------
Display Color graphics (CRT)
---------------------------------------------------------------------------------------------
Operator input Keyboard and cursor positioning
device (mouse or trackball)
---------------------------------------------------------------------------------------------
Control panel supply 125 Vdc
---------------------------------------------------------------------------------------------
Auxiliary power supply 120 Vac
---------------------------------------------------------------------------------------------
Enclosure NEMA Class I
---------------------------------------------------------------------------------------------
Generator control panel manufacturer GE
(includes protective relays and synchronizing
equipment)
---------------------------------------------------------------------------------------------
Auxiliary panel manufacturer GE
---------------------------------------------------------------------------------------------
MCC
---------------------------------------------------------------------------------------------
AC 480Vac, 3 phase, 60 Hz
---------------------------------------------------------------------------------------------
DC 125 Vdc
---------------------------------------------------------------------------------------------
Air conditioning and heating 240 Vac, 1 phase, 60 Hz
---------------------------------------------------------------------------------------------
Convenience outlets and lighting 120 Vac
---------------------------------------------------------------------------------------------
</TABLE>
9.1.16 BATTERY AND ACCESSORIES
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
BATTERY SYSTEM FEATURES DESCRIPTION
<S> <C>
---------------------------------------------------------------------------------------------
Battery Type 56 Cell 125Vdc nominal calcium-alloyed Flooded
lead/acid type Floated at 129Vdc (2.30 volts/cell)
Equalized at 135Vdc (2.41 volts/cell)
---------------------------------------------------------------------------------------------
Shipping Batteries shipped in special shipping contains to
the site for installation.
---------------------------------------------------------------------------------------------
Installation Mounted in the control compartment
---------------------------------------------------------------------------------------------
Charger Type Single phase 35 amp charger
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
9.1.17 EX2000P DIGITAL, STATIC, VOLTAGE REGULATOR FOR BUS FED
(STATIC) EXCITERS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
MEASUREMENT VALUE
<S> <C>
---------------------------------------------------------------------------------------------
General
---------------------------------------------------------------------------------------------
Excitation System Type Digital Static Potential Source
---------------------------------------------------------------------------------------------
Performance (per IEEE std 421.2)
---------------------------------------------------------------------------------------------
Response High Initial Response
---------------------------------------------------------------------------------------------
Standard Response 2.0 Response Ratio and 160% VFFL ceiling @ generator
terminal voltage = 1.0 per unit based on a field
winding temperature of 100DEG.C (Per IEEE 421)
---------------------------------------------------------------------------------------------
Compliant Standards
---------------------------------------------------------------------------------------------
ANSI/IEEE ANSI C37.2, C37.18, C37.20, C57.9x series,
IEEE 383, 421, 421A, 421B, 421.1
---------------------------------------------------------------------------------------------
NEMA/ICS AB1, ICS1-111, ICS6-110, SG3, WC7
---------------------------------------------------------------------------------------------
CSA All applicable standards
---------------------------------------------------------------------------------------------
NEC All applicable guidelines
---------------------------------------------------------------------------------------------
UBC Meets Zone 4 Requirements
---------------------------------------------------------------------------------------------
Rectifier Bridge
---------------------------------------------------------------------------------------------
Type 6 SCR, Full-wave, Full-inverting
---------------------------------------------------------------------------------------------
Fuses Fast-acting, Current-Limiting, one per leg
---------------------------------------------------------------------------------------------
Input Control Power Requirements
---------------------------------------------------------------------------------------------
From Preferred Station Service 120 Vac Single Phase
---------------------------------------------------------------------------------------------
Field Ground Detector 0.3 amperes continuous
---------------------------------------------------------------------------------------------
125 Vdc/250 Vdc Station Battery
---------------------------------------------------------------------------------------------
Field Flashing 15% of generator no-load field current for 15
secs
---------------------------------------------------------------------------------------------
Control Power without Hot Backup 2.50 amperes continuous
---------------------------------------------------------------------------------------------
Control Power with Hot Backup 5.00 amperes continuous
---------------------------------------------------------------------------------------------
Environmental (Enclosure)
---------------------------------------------------------------------------------------------
Operating Temperature Range 0C to +30C (32F to 86F)
---------------------------------------------------------------------------------------------
Storage Temperature Range -40C to +70C (-40F to +158F)
---------------------------------------------------------------------------------------------
Humidity 5% to 95% non-condensing
---------------------------------------------------------------------------------------------
Heat Dissipation 18,000 W @ 1900 ADC. Linear relationship for other
currents.
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Line filter module (Not required for PPT
secondary Voltages LESS THAN 250 Vac)
---------------------------------------------------------------------------------------------
Dimensions 13 in. H x 19 in. D x 22 in. W
---------------------------------------------------------------------------------------------
Weight Approximately 50 lbs
---------------------------------------------------------------------------------------------
Mounting Requirements When height restrictions prevent this module from
being mounted on top of the main EX2000 enclosure,
it must be mounted within a 15 foot wire run of the
main EX2000 enclosure.
---------------------------------------------------------------------------------------------
</TABLE>
9.1.18 ESTIMATED POWER CONSUMPTION OF ELECTRICAL AUXILIARIES AT ISO CONDITIONS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
AUXILIARY START START OPS OPS STANDBY
(KW) (KW) (KW) (KW) (KW)
GAS DIST GAS DIST
FUEL FUEL FUEL FUEL
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
Static start 7140 7140
---------------------------------------------------------------------------------------------
Lube oil pump 83 83 83 83 83
---------------------------------------------------------------------------------------------
Hydraulic oil pump 50 50 50 50 50
---------------------------------------------------------------------------------------------
Exhaust frame blowers 68 68 68 68
---------------------------------------------------------------------------------------------
Turning gear motor 6
---------------------------------------------------------------------------------------------
Atomizing air compressor 414 414
---------------------------------------------------------------------------------------------
Turbine compt vent fans 32 32 32 32
---------------------------------------------------------------------------------------------
Liquid fuel skid vent fan 4 4 4 4
---------------------------------------------------------------------------------------------
GTE vent fan 2 2 2 2
---------------------------------------------------------------------------------------------
Load coupling compt vent fan 4 4 4 4
---------------------------------------------------------------------------------------------
Accessory compt vent fan 4 4 4 4
---------------------------------------------------------------------------------------------
Lube mist eliminator 12 12 12 12 12
---------------------------------------------------------------------------------------------
Lube oil heater 45 45 45
---------------------------------------------------------------------------------------------
Control system 50 50 50 50 50
---------------------------------------------------------------------------------------------
Generator/GTE/collector anti-condensation 9
space heaters
---------------------------------------------------------------------------------------------
Turbine/accessory/liquid fuel/gas valve 19
compt anti-condensation space heaters
---------------------------------------------------------------------------------------------
Liquid fuel pump 207 207
---------------------------------------------------------------------------------------------
H2 auxilliary seal oil pump 8
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Water injection pump 207
---------------------------------------------------------------------------------------------
Water injection skid space heater 10 10 10 10 10
---------------------------------------------------------------------------------------------
Water wash skid space heater 10 10 10 10 10
---------------------------------------------------------------------------------------------
Air conditioning - PEECC 36 36 36 36 36
---------------------------------------------------------------------------------------------
Air conditioning - LCI 30 30 30 30 30
---------------------------------------------------------------------------------------------
BAC vent fan 2 2 2 2
---------------------------------------------------------------------------------------------
</TABLE>
9.2 COMPONENT WEIGHTS AND DIMENSIONS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
ITEM LENGTH WIDTH HEIGHT WEIGHT
(FT) (FT) (FT) (LBS)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
Accessory compartment 31.00 11.50 13.83 80000
---------------------------------------------------------------------------------------------
Turbine compartment 29.33 13.25 14.00 377000
---------------------------------------------------------------------------------------------
Generator 37.20 12.08 13.80 540000
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 9
NATURAL GAS COMPOSITION & HEATING VALUE
BASIS: DRY GAS, 14.696 PSIA, 60+
REFERENCE: ASTM D3588 - 91
TEST DATF - Nine month average
DESCRIPTION - Transco Gas Analysis
PROJECT - Tenaska Georgia Generation
<TABLE>
<CAPTION>
GAS IHV HHV COMP. GAS MOL W1
LHV MHV COMPOSITION PROD/100 PROD/100 MOL WT PROD/100
COMPONENT BTU/SCF BTU/SCF MOL % BTU/SCF BTU/SCF LB/MOL LB/MOL
- --------- ------- ------- ----------- -------- -------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CO2 0.0 0.0 0.957 0.00 0.00 44.010 0.421
N2 0.0 0.0 0.347 0.00 0.00 28.013 0.097
H2 273.9 324.2 0.000 0.00 0.00 2.016 0.000
C1 909.4 1010.0 95.512 868.58 954.67 16.043 15.323
C2 1618.7 1769.7 2.305 37.31 40.79 30.070 0.693
C3 2314.9 2516,1 0.496 11.48 12.48 44.097 0.219
IC4 3000.4 3251.9 0.129 3.87 4.19 58.123 0.075
NC4 3010.8 3262.3 0.111 3.34 3.62 50.123 0.065
IC5 3699.0 4000.9 0.046 1.70 1.84 72.160 0.033
NC5 3703.9 4008.9 0.028 1.04 1.12 72.150 0.020
C6'S 4403.9 4755.9 0.010 0.44 0.48 86.177 0.009 **
C7+ 5100.3 9502.5 0.059 3.01 3.25 100.204 0.059 **
TOTAL 100.000 930.78 1032.44 17.014
</TABLE>
CALCULATION SUMMARY
LOWER HEATING VALUE = 930.78 BTU/SCF
20,761 BTU/LB *
HIGHER HEATING VALUE = 1032.44 BTU/SCF
23,029 BTU/LB *
MOLECULAR WEIGHT = 17.014 LB/MOL
For permitting purposes assume the gas contains no more than 0.25 gr/100 SCF
112S and 2.0gr/100 SCF total Sulfur.
* At 379.5 SCF/LB MOL
** C6's and C7+ are treated as n-Hexane and n-Heptane respectively.
<PAGE>
10. FUEL ANALYSES
- --------------------------------------------------------------------------------
TURBINECONTRACTAPPENDIXA-10COVER
<PAGE>
11. FACTORY SERVICES
- --------------------------------------------------------------------------------
[OBJECT OMITTED]
<TABLE>
<S> <C> <C>
11.1 GE Power Generation Quality........................................11.1
11.2 Quality Services Overview..........................................11.6
11.3 Gas Turbine Quality Services.......................................11.9
11.4 Generator Quality Services........................................11.10
11.5 Purchased Equipment Quality Services..............................11.10
11.6 Standards and Procedures..........................................11.11
11.7 Customer Review of GE Documentation...............................11.13
11.8 Customer Observation Points.......................................11.13
</TABLE>
- --------------------------------------------------------------------------------
11.1 GE POWER GENERATION QUALITY
GE Power Generation (GEPG) is committed to setting the
industry standard of excellence for customer satisfaction.
Inherent in this objective is our continuing determination
to perform every function, every process, to the highest
quality standards--from the way we develop and apply
technologies to the way we manufacture products and provide
services.
11.1.1 COMPANY POLICY STATEMENTS
The quality standards for the GE corporation are set in GE
Policy 20.1, Company-Wide Quality and GE Policy 20.11,
Customer Satisfaction. The highlights of Policy 20.1 are:
- Company-Wide Quality, as a corporate objective, means
attaining a level of overall performance and attitude
that makes General Electric the natural choice of
customers and earns the respect of all those affected
by the company's activities.
- Company-Wide Quality, as an individual objective, is
achieved by employees who aspire to be better than the
best. General Electric is committed to assisting
employees in their pursuit of excellence by providing
them with the leadership, cooperative climate,
training, facilities and materials consistent with the
overall company quest for quality.
<PAGE>
Policy 20.11 highlights are:
- It is the policy of GE to understand its customers'
needs for products and services, as well as all
related requirements, and to put its best effort into
responding to those customer needs before, during and
after every sales transaction.
- GE shall make commitments to its customers which
reflect GE's true ability to serve and to make every
effort to meet those commitments.
11.1.2 POWER GENERATION PHILOSOPHY
"To provide our valued customers with the highest quality
products, parts and services with unparalleled customer
service, while effectively utilizing every employee and
partner working together in an environment of mutual
respect, dignity and unyielding integrity."
11.1.2.1 OBJECTIVE
The objectives of the Quality Policy are based on the
premise that, in striving for excellence in every facet of
our operations, we will assure the highest level of customer
satisfaction and the fulfillment of their objectives through
the products and services Power Generation has provided.
Integral to this are the following key elements:
- Customers are both internal and external.
- Quality measurements must be customer oriented.
- Complete understanding of customer requirements and
expectations is essential.
- Quality is to be achieved by designing and building
quality and reliability into our products and
services, optimizing our processes and minimizing or
eliminating inspections, waste and rework.
- Business processes and procedures instrumental in the
achievement of the Quality Policy are to be defined,
documented and controlled.
- Continuous process improvement efforts will focus
around process simplification, variation reduction and
cycle time compression, utilizing when able, "Best
Practices" as models and examples.
<PAGE>
- Timely and effective corrective and preventive action
will be the key to the continuous improvement process.
- Management involvement plays a critical role in the
achievement of the quality objectives.
- The Power Generation Quality System will be based on the
International Standard ISO 9001.
11.1.2.2 IMPLEMENTATION
It is the responsibility of the President and CEO, GE Power
Systems, and his management teams at all levels, to ensure
the understanding and implementation of this policy
throughout the business and to provide the necessary
processes, practices, procedures and resources necessary to
achieve that end.
11.1.2.3 MEASUREMENT
To ensure the success of the Quality Policy, appropriate and
meaningful measurements will be identified, developed and
reviewed at all levels and functions to ensure that
appropriate corrective and preventive action needs are
identified and addressed in a timely and effective manner.
The type and degree of such measurements will be of a nature
to evaluate the performance to the objectives implied in the
quality policy and consistent with the continuous
improvement philosophy of the business.
Such measurements may include, but not be limited to:
- Customer satisfaction measurements
- Internal and external failures
- Audit results
- Process and product quality trends
- Organizational performance data
- Product performance data
- Statistical analysis techniques
- Related cost data
<PAGE>
11.1.2.4 REFERENCES
This policy is intended to support the objectives
established in Company Policy 20.1 "Company Wide Quality"
and Company Policy 20.11 "Customer Satisfaction".
11.1.2.5 REVIEW
The Quality Policy will be reviewed annually by Executive
Management in order to assure its continued applicability
and objectives.
11.1.3 ISO 9000 CERTIFICATION
The desire for customer satisfaction drives world class
quality. Customers throughout the world are not only
demanding a high level of quality, they are requiring this
quality be assured through the application of a
comprehensive quality program. The ISO 9000 program and
certification provide customers with a globally recognized
Quality Management system.
In order to be more responsive to our customer's needs GE
took this customer requirement and made it a top priority.
Our Sales, Engineering, Sourcing and Manufacturing functions
worked diligently to accomplish ISO certification. GE takes
great pride and pleasure in the fact that we were the first
power generation supplier to obtain broad scope ISO
certification. Lloyd's Register Quality Assurance has
assessed and approved GE's quality management system
standards of ISO 9001:1994, EN ISO 9001:1994 and ANSI/ASQC
Q9001-1994.
GE has focused on this quality issue, with customer
satisfaction being the top priority. The driving force
behind our total quality system is to achieve total customer
satisfaction by minimizing variances and completing the
product or services correct the first time. We established
our quality measurements and targets based on the most
demanding of our customers' perspective. To satisfy this
high level of demand, we focused on our "process" quality,
not just the end-products and services. To achieve this we
have directly involved our employees, our customers and
suppliers in these process improvements.
What really counts is our customers' perception of how well
we meet their quality requirements and goals. Therefore, our
quality measurements and procedures are being constantly
monitored and evaluated against both our own high standards
and our customers' needs.
<PAGE>
11.1.4 TOTAL QUALITY PLAN
GEPG has an integrated total quality plan which addresses
all processes, involves all employees and is driven by top
management leadership. The principles of total quality are
based on achieving total customer satisfaction by minimizing
variances and doing the right thing the first time. These
principles are:
- Total commitment to quality at every salaried and hourly
level
- Assure understanding of customer requirements and
expectations
- Directly involve our customers and suppliers in process
improvements
- Assign ownership for process design and control to
empowered Workout/Continuous Improvement teams
- Focus on "process" quality - not just end-products and
services
- Set our quality measurements/targets from the most
demanding customer's perspective
- Define the key measures needed to assess variances in
process performance
- Apply Continuous Improvement methods to reduce variances
and cycle times to progressively improve overall
performance
- Train employees and maintain a cadre of leaders
- Implement tracking and reporting systems to monitor
progress and results
- Monitor all elements of Cost Of Quality (COQ), including
prevention, appraisal, and internal and external failure,
plus the impact of "lost opportunities" on net operating
income
- Identify and progressively eliminate the source of all
avoidable COQ
- Identify, recognize, and reward exceptional individual
and team performance
GEPG recognizes that ISO 9001 certification covers the basic
fundamentals of a quality system. To attain total quality,
GEPG has created a comprehensive Quality Manual which meets
the requirements of the most demanding customer and sets the
total quality guidelines.
<PAGE>
- --------------------------------------------------------------------------------
11.2 QUALITY SERVICES OVERVIEW
11.2.1 TERMS AND DEFINITIONS FOR QUALITY SERVICES
11.2.1.1 ACCEPTANCE CRITERIA
The specific set of measurements and criteria including
judgment by which a part, a component, or the whole product
is accepted or rejected. The acceptance criteria established
by GE (as designer of the equipment) will prevail in all
cases.
11.2.1.2 AUDIT TYPICAL
A customer examination of typical parts or factory
inspection practices (such as NDT, dimensional checks) in a
specific area such as turbine wheel UT examination. The
"audit typical" is frequently conducted in lieu of a witness
point when the parts or components of interest are at a
stage of production where the part does not have customer
assignment.
11.2.1.3 MATERIALS SHIPPED DIRECT (MSD)
Materials or equipment within the GE scope of supply but
manufactured by a sub-supplier and shipped directly from the
subsupplier to the installation site.
11.2.1.4 OBSERVE
Advance notice of an observation point is provided to the
customer and updated as the event nears. Production
sequences are followed and the event is not delayed or
rescheduled to accommodate customer schedules.
11.2.1.5 OBSERVATION POINT
A specific test or event in the production cycle observed by
the customer or his representative without interrupting the
normal production flow. Advance notification will be
provided to the customer for contractually specified
observation points and updated as the event nears.
Production sequences will be followed and the event will not
be delayed or rescheduled to accommodate customer schedules.
<PAGE>
11.2.1.6 QUALITY CONTROL REPORTS (QCR)
The reporting form used to identify and track manufacturing
nonconformances. The customer representative may review any
QCR pertaining to his equipment.
11.2.1.7 RECORDS REVIEW
A joint Customer-Quality representative review of
Manufacturing and Quality documentation applicable to or
typical of the customer's unit.
11.2.1.8 RIGHTS OF ACCEPTANCE
The contractually agreed and stated ultimate power to accept
a product or portion of product. Contract documents define
the limits of customer rights of acceptance; otherwise, the
manufacturer retains the rights.
11.2.2 ARRANGEMENTS AND ACCESS GUIDELINES
Customer representatives will be provided reasonable access
to manufacturing facilities for purposes of obtaining
information on production progress, determining status, and
observing inspections and tests with respect to the customer
ordered power generation equipment. All customer contacts
with GE during the manufacturing phase are scheduled in
advance through designated personnel in Project Management,
Project Engineering and/or Manufacturing.
Access will be available at the manufacturing facilities
during normal working hours and on an off-hours basis where
appropriate or necessary for observation of contractually
agreed upon production points. The main manufacturing
locations are Greenville, SC and Schenectady, NY.
11.2.3 SUPPLIERS
GE Power Generation maintains a high quality global supplier
base. These suppliers are subject to rigorous approval,
qualification and surveillance processes to maintain this
high level of quality. GE will make additions and deletions
from time to time to the current supplier list in an effort
to improve quality and delivery while maintaining the
ability to provide our customer's equipment at competitive
prices.
<PAGE>
11.2.4 QUALITY SYSTEMS MANUAL
GE Power Generation has and maintains controlled Quality
Manuals in accordance with good quality practices and
established standards.
The Quality Manuals are primarily a tool to be used by
personnel and components in their pursuit of quality. The
manuals provide information to integrate the quality system.
All quality related instructions are referenced to permit
ready access to pertinent information on any portion of the
quality system.
The Quality Manuals address the following elements:
1. Management Responsibility
2. Quality System
3. Contract Review
4. Design Control
5. Document Control
6. Purchasing
7. Purchaser Supplied Product
8. Product Identification and Traceability
9. Process Control
10. Inspection and Testing
11. Control of inspection, measuring and test equipment
12. Inspection and Test Status
13. Control of Non-Conforming Material
14. Corrective and Preventive Action
15. Handling, Storage, Packaging, Preservation and Delivery
16. Quality Records
17. Internal Quality Audits
18. Training
19. Servicing
20. Statistical Techniques
11.2.5 MONITORING AND DIAGNOSTICS
At GE's discretion, a Monitoring and Diagnostics (M&D)
system may be utilized by GE to perform quality management
during the warranty period of a
<PAGE>
new unit. The system enables GE's turbomachinery experts
located at the M&D Center in Schenectady, NY to remotely
monitor trends and detect anomalies that may lead to more
serious problems if left uncorrected.
The system requires installation of a non-intrusive,
proactive GE proprietary computer called the On Site Monitor
(OSM) at the customer site to receive and store data from
sensors in the unit. The M&D Center, which operates 24 hours
per day, seven days a week, periodically accesses the OSM
via a phone modem. At the end of the warranty, the OSM may
be removed from the customer site.
- --------------------------------------------------------------------------------
11.3 GAS TURBINE QUALITY SERVICES
The following quality assurance services are available for
the Gas Turbine:
11.3.1 QUALITY SYSTEMS MANUAL (REVIEW)
The GE Gas Turbine Quality Manual and related quality system
documentation may be reviewed in detail by the customer with
a quality organization representative at the gas turbine
manufacturing facilities.
11.3.2 QUALITY PROGRAM REVIEW (PRE-INSPECTION MEETING)
A one day project-oriented review can be conducted by
manufacturing quality professionals at the manufacturing
facility. The customer's representatives are exposed to the
quality system, manufacturing facilities, quality control
methods and records system. A shop tour is conducted,
specific customer required quality services are reviewed and
any contract-level quality issues are identified.
11.3.3 PROGRESS AND QUALITY TOPICS (REVIEW)
An informal one day review guided by customer interests and
hosted by manufacturing Quality personnel can be held at the
manufacturing facility. Specific manufacturing progress is
observed, Quality documentation checked, and other customer
special interest quality topics discussed.
Typical events or activities include:
- Audit rotor or stator materials certifications
<PAGE>
- Audit rotor balance procedures and records
- General Factory Tour
- Audit typical forging NDT practices
- Review typical unit records file
11.3.4 COMPREHENSIVE PRODUCT QUALITY REPORT
Gas Turbine personnel will supply on CD ROM the
Comprehensive Product Quality Report (CPQR) containing
images of the unit certification sheet, rotor assembly and
balance data, unit assembly data, and final gas turbine
factory test data (when required). The CD ROM will contain
all files, programs, and instructions to allow its use on
any IBM Compatible personal computer with a CD ROM drive in
a Windows environment. The software provides easy
identification and retrieval of any item or image.
Three (3) copies of the CD ROM will normally be available
four weeks after unit shipment. Quality Records personnel
will prepare the CD ROM with data from quality records
files.
- --------------------------------------------------------------------------------
11.4 GENERATOR QUALITY SERVICES
The following quality assurance services are available for
generator.
11.4.1 QUALITY SYSTEMS MANUAL (REVIEW)
The Generator Quality Systems Manual and related quality
systems documentation may be reviewed in detail by the
customer with a quality representative at the manufacturing
facilities.
- --------------------------------------------------------------------------------
11.5 PURCHASED EQUIPMENT QUALITY SERVICES
These services are provided for the major vendor purchased
material and equipment required for the turbine-generators.
11.5.1 SUPPLIER QUALITY SYSTEM
GE Power Systems utilizes the following three step process
for selecting and controlling the quality of the products
received from our suppliers:
<PAGE>
- Supplier Approval--An approved supplier is one that
has been authorized by functional representatives to
receive a GE Power Generation Purchase Order.
Additional suppliers are selected for potential
approval on an on-going basis to maintain high
quality, cost effective suppliers.
- Supplier Qualification--Product specific reviews,
inspections and qualifications are performed once a
purchase order has been placed to assure the supplier
complies with the customer requirements. A qualified
supplier is one that has proven its ability to
manufacture a component to satisfactorily meet all GE
requirements.
- Supplier Surveillance--Inspections and quality audits
are performed where required to assure conformance to
customer requirements.
11.5.2 SUPPLIER QUALITY SYSTEM REVIEW
GE Sourcing (purchasing) personnel or a GE representative
will arrange for and accompany where necessary the
customer's representative on quality-oriented visits to
subsuppliers. Emphasis is placed on equipment to be shipped
direct to the customer site (MSD equipment). The customer's
representative may review the subsupplier's quality program,
the GE quality plan for the subject equipment and the status
and condition of the equipment designated for their unit.
This visit should be coordinated with specific supplier
production cycle events or tests as applicable.
- --------------------------------------------------------------------------------
11.6 STANDARDS AND PROCEDURES
11.6.1 GENERAL
GE has traditionally designed and manufactured its products
in accordance with GE standards, specifications and
procedures which are based on U.S. National Codes and
Standards applicable to the product. Depending on product
needs, the GE standards may fully meet or exceed the
corresponding National Code (ASME, NEC, QWS), or deal with
state-of-the-art materials, or govern a new proprietary
process, or address a special foreign code requirement or
meet GE design requirements.
The customer or his representative may review and discuss
the standards at the manufacturing facilities but copies
will not be provided and contents will not be altered.
<PAGE>
GE specifications, standards, and procedures are also
applied to all purchased materials for the GE supplied
equipment.
11.6.2 NON-DESTRUCTIVE TESTING (NDT)
The non-destructive testing practices are based on ASTM
standards and ASNT recommended practices as deemed
appropriate for the manufacture of the equipment. NDT
personnel training is guided by SNT-TC-1A and the necessary
process specifications are in place to direct NDT activities
including:
- Radiographic (X-Ray)
- Liquid Penetrant (Red Dye)
- Fluorescent Penetrant (i.e. Zyglo)
- Ultrasonic
- Eddy Current
- Magnetic Particle
- Bore Etch and Spin
- Hydrostatic Testing
- Kerosene and Whiting
- Red and Blue Surface Contact
11.6.3 RIGHTS OF APPROVAL AND ACCEPTANCE
GE reserves all rights of acceptance/rejection for
components or characteristics except where specifically
defined in the GE/Customer contract documentation.
Customer reviews or observations of factory tests and
inspections do not constitute a waiver of requirements to
meet the specified operating conditions, nor does customer
inspection relieve GE of its responsibilities.
<PAGE>
11.6.4 DRAWINGS AND RECORDS
Drawings and records are available for review and discussion
on a specific case basis at the manufacturing facility.
Copies will not be provided except for normal purchaser
drawings and where specifically required in the contract.
- --------------------------------------------------------------------------------
11.7 CUSTOMER REVIEW OF GE DOCUMENTATION
A customer may review whatever quality control plans,
procedures, drawings or records are necessary for
operations/tests/inspections performed on his parts. (Under
certain conditions when his parts may not be available,
`typical' documentation, may be reviewed to demonstrate
examples.) Due to the fact that such documentation usually
contains information considered proprietary, copies are not
provided.
All documentation reviews will be conducted with an
authorized representative, such as the area Quality and
Process Engineer. This is necessary as such documentation is
usually of a "working" nature and will need interpretation
by a knowledgeable individual.
Since the review of documentation and data will usually
involve in-process product and activities, certain types of
documentation may not be made available for customer review
until after full resolution and/or implementation of related
issues.
Advance submittals of specifications, procedures and
manufacturing quality plans are not provided.
- --------------------------------------------------------------------------------
11.8 CUSTOMER OBSERVATION POINTS
The customer, by previous arrangements, can be notified in
advance of significant events in the manufacturing cycle for
his major hardware. The normal practice is to provide the
customer with a monthly "milestone" schedule of key
activities for each of the customer's units.
If specific observation points have been contracted, advance
notification (usually 5 days) of observation points will be
provided with confirmation of 24 - 48 hours. Production
work, testing and equipment delivery will not be delayed to
accommodate the inspector.
<PAGE>
Supplied equipment and parts are manufactured under a
production and inventory control system. Many parts are
produced for "inventory" and are not assigned to a specific
customer until time of shipment. Thus, except for certain
large components and major serialized parts, it may not be
possible to provide an observation point on the actual parts
a customer will receive. In such cases, GE recommends that a
customer observe the test or inspection on similar parts to
assure that the procedures and processes are being followed
that will assure a quality part.
The following tests and inspections are performed in the
manufacturing facilities and, are optional observation
points. This list should not be taken to mean that any one
such test will be performed on a particular part. These
points have been developed by GE based upon considerable
past experience of what some of our customers have wanted to
observe.
11.8.1 GAS TURBINE TESTS AND INSPECTIONS
11.8.1.1 ROTOR FINAL BALANCE (OBSERVE) - OPTIONAL
THE CUSTOMER REPRESENTATIVE IS INVITED TO OBSERVE THE NORMAL
PRODUCTION OPERATION OF FINAL ROTOR BALANCE AT THE
APPROPRIATE POINT DURING THE MANUFACTURING CYCLE OF THE
CUSTOMER'S UNIT. WHILE GE CAN NOT GUARANTEE THE ROTOR WILL
ACTUALLY BE USED IN THE CUSTOMER'S UNIT DUE TO SHIPMENT
PRIORITIES, GE WILL MAKE EVERY ATTEMPT TO HAVE THE
DESIGNATED ROTOR BE BALANCED. THE COMPLETED ROTOR IS SET UP
IN THE BALANCE MACHINE AND STABILIZED. UNBALANCE READINGS
ARE TAKEN IN TWO PLANES AT LOW SPEED (300 TO 500 RPM) AND
BALANCE CORRECTION IS APPLIED TO ONE OR MORE PLANES BY
WEIGHT ADDITION OR REMOVAL. FINAL BALANCE READINGS AND
MATHEMATICAL CHECKS ARE PERFORMED TO ASSURE AN ACCEPTABLE
ROTOR.
Final rotor balance is a single operation on the entire unit
for MS6001B, MS6001F, MS7001F, MS9001F gas turbine models
(two bearing designs). The MS7001E and MS9001E models,
(three bearing designs), have separate balance operations
for the compressor section rotor and the turbine section
rotor. Manufacturing methods and priorities are such that
the customer should plan on separate visits where multiple
balancing operations are to be observed.
Since GT rotors are considered rigid and are made up of
individually balanced, geometrically-controlled components,
the low speed balancing operation adequately ensures low
vibration levels in the operation unit.
<PAGE>
11.8.1.2 TURBINE FACTORY FINAL TEST (OBSERVE) - OPTIONAL
Factory no-load testing is the principal method of assuring
that the gas turbine unit is operable and that the
aero-thermal performance is acceptable as compared to
factory testing on similar models. Factory testing of gas
turbines will be performed on an audit basis as determined
by GE. When a customer's specific machine is scheduled for
testing, the customer or his representative(s) may be
invited to directly observe operation of his gas turbine
during its normal final fire testing.
11.8.1.3 UNIT READY FOR SHIPMENT (OBSERVE) - OPTIONAL
Consisting of up to two (2) distinct inspection points
depending on the machine and the customer objectives, this
option starts with a walk around inspection of the unit in
the final stages of preparation for shipment. This
inspection is after final painting but before the bolting of
batten strips which secure the side panels and prevent
internal access for machines with on-base lagging. During
this inspection the customer may review overall workmanship,
completeness of assembly, adequacy of prime painting,
application of flange blanking plates, preservation
techniques and general shipping practices.
Next the customer may desire to see his unit on
the rail car ready for shipment. The unit is
fully enclosed, if an on-base lagging design, is
secured to the car and appropriately marked. It
is then shipped by rail, either to location or to
port.
11.8.2 GENERATOR TEST AND INSPECTIONS
11.8.2.1 GENERATOR STATOR
11.8.2.1.1 FINAL ELECTRICAL TEST (OBSERVE)
The typically two (2) to four (4) hour inspection includes
the following:
- GENERAL VISUAL INSPECTION OF THE FULLY ASSEMBLED STATOR
- WINDING RESISTANCE MEASUREMENT--The dc resistance of each
phase is measured with a low resistance ohm meter along
with the winding temperature.
<PAGE>
- INSULATION RESISTANCE MEASUREMENT--Prior to the final
winding high potential test, the insulation resistance
over a ten minute period is measured with a 500 volt dc
insulation tester.
- HIGH-POTENTIAL TEST--The windings of the armature are
tested by grounding two phases and applying a 60 Hz
voltage whose RMS value is twice the machine's rated
voltage plus 1000 volts. This test is repeated for each
phase. This test is done per GE standard which meets or
exceeds IEEE 115 and ANSI C50.10.
11.8.2.2 GENERATOR FIELD
11.8.2.2.1 OVERSPEED AND BALANCE (OBSERVE)
OVERSPEED TEST--The overspeed test is intended to expose
the components of the field assembly to forces higher than
normal and demonstrate the ability of the field assembly to
withstand such forces. The field is set up in the high speed
balance facility, it is held for three minutes at a speed
20% above the rated speed of the unit.
HIGH SPEED BALANCE--The generator field will undergo a
high speed balance. The primary objective of precision
balancing is to reduce the residual unbalance of the
field to the lowest possible level. The approach used in
balancing fields is called modal balancing. Each mode of
vibration, or critical speed, is balanced in turn,
starting with the lowest speed, on first mode. The
process proceeds to each critical in turn from the first
to the highest critical within the operating speed range.
After all criticals are balanced to a small residual
vibration level, balance at rated speed is evaluated.
11.8.2.2.2 FINAL ELECTRICAL TEST (OBSERVE)
- WINDING RESISTANCE MEASUREMENT--The dc resistance of each
phase is measured with a low resistance bridge. The
winding temperature is also measured.
- INSULATION RESISTANCE MEASUREMENT--Prior to the final
winding high potential test, the insulation resistance
over a ten minute period is measured with a 500 volt dc
insulation tester.
- High-Potential Test--The windings of the field are tested
by applying 10 times the rated field voltage but not less
than 1500 volts ac between the field winding and ground
for field voltages of 500 volts or less. For fields
<PAGE>
rated greater than 500 volts, the test voltage is twice
the rated voltage plus 4000 volts ac. This test is done
per GE standard which meets or exceeds IEEE 115 and
ANSI C50.10.
11.8.3 CONTROL PANEL FACTORY TEST (OBSERVE)
The gas turbine control panels are manufactured at GE's
Salem, Virginia plant. Components and modules such as
electronic cards and page assemblies undergo extensive
inspection and automated computer testing before they arrive
at final assembly. All modules with back plane wiring are
automatically machine wired and computer checked.
After the components and modules are assembled in their
parent panel, the equipment is made ready for final test and
inspection. The major portions of this procedure include
testing and checking of the following:
- All final assembly wiring
- Power distribution and supply systems
- Input/output systems
- Automated (PC based) hardware loop back-checks
- System operation using test software
- Customized requisition software checked in a "Software
Test Bed" facility using permanent electronic modules for
test
- For a control panel installed in a control compartment,
interfaces between generator control panel and other
compartment systems.
TURBINECONTRACTAPPENDIXA-11
<PAGE>
12. FACTORY TESTING
- --------------------------------------------------------------------------------
Please refer to Tab 11 for the GE Factory Testing Programs.
TURBINECONTRACTAPPENDIXA-12
<PAGE>
13. MECHANICAL
- --------------------------------------------------------------------------------
TURBINECONTRACTAPPENDIXA-13
<PAGE>
14. ELECTRICAL
- --------------------------------------------------------------------------------
TURBINECONTRACTAPPENDIXA-14
<PAGE>
15. REFERENCE DOCUMENTS
- --------------------------------------------------------------------------------
The following is a description of information which cannot be submitted
electronically:
<TABLE>
<S> <C>
Process Specification Fuel Gases for Combustion in Heavy-Duty Gas Turbines - 14 Pages GEI-41040F
Gas Turbine Liquid Fuel Specifications - 24 Pages GEI-41047H
Recommendations for Storage of Liquid Fuels - 5 Pages GEK-28163
Cooling Water Recommendations for Closed Cooling System - 8 Pages GEI-41004G
Compressor Cleaning - 16 Pages GEK-103623B
Standard Field Performance Testing Procedure - 11 Pages GEK-28106A
Standard Field Testing Procedure for NOx Emission Compliance - 8 Pages GEK-28172F
Gas Turbine and Accessory Equipment Preservation - 11 Pages GEK-28156C
Lubricating Oil Recommendations for Gas Turbines with Bearing Ambients above
500DEG.F (260DEG.C) - 13 Pages GEK-32568E
Heavy Duty Gas Turbine Operating and Maintenance Considerations - 34 Pages GER-3620F
Lubricating Oil Piping Specification - 58 Pages 351A7897
Secondary Steam and Water Piping Specification - 48 Pages 351A7892
</TABLE>
TURBINECONTRACTAPPENDIXA-15
<PAGE>
EQUIPMENT AND SERVICES SPECIFICATION
APPENDIX A - M
FOR
SIX (6) PG7241FA 60 HZ
COMBUSTION GAS TURBINE
PACKAGED POWER PLANTS
TO
TENASKA INC.
FOR THE
TENASKA GEORGIA GENERATING PROJECT
HEARD COUNTY,GEORGIA
SPECIFICATION NO: 80905
-----
DATED:AUGUST, 1999
------
GE PROPRIETARY INFORMATION appears on all pages in the Data Sheet,
Performance Specification, Equipment Scope of Supply, and Commercial
Sections of this proposal.
<PAGE>
Table Of Contents
<TABLE>
<CAPTION>
TAB
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
APPENDIX A
DESCRIPTION OF EQUIPMENT
General Equipment Description........................................................1
Gas Turbine-Generator................................................................2
Gas Turbine Major Equipment and Services List
Gas Turbine Mechanical Description
Gas Turbine Electrical Description
Gas Turbine Control Description
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE AND OPERATION
<TABLE>
<S> <C>
Component Performance Specifications.................................................4
Estimated Gas Turbine Performance....................................................5
Performance Curves...................................................................6
Turbine and Generator Performance Curves
Gas Turbine Performance Curves
Gas Turbine Hydrogen Cooled Generator
Performance Curves
Gas Turbine Startup Curves and Duration
</TABLE>
- --------------------------------------------------------------------------------
DESIGN BASIS
<TABLE>
<S> <C>
Division of Responsibility/Supply by Others..........................................7
Codes and Standards..................................................................8
Data Sheets..........................................................................9
Fuel Analyses.......................................................................10
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SERVICES
<TABLE>
<S> <C>
Factory Services....................................................................11
Factory Testing.....................................................................12
</TABLE>
- --------------------------------------------------------------------------------
DRAWINGS AND DIAGRAMS
<TABLE>
<S> <C>
Mechanical..........................................................................13
Electrical..........................................................................14
</TABLE>
- --------------------------------------------------------------------------------
REFERENCE DOCUMENTS
<TABLE>
<S> <C>
Reference Documents.................................................................15
TURBINECONTRACTAPPENDIXA-MCOVER & TOC
</TABLE>
<PAGE>
Appendix B - Payment and Cancellation Schedule
- --------------------------------------------------------------------------------
TURBINECONTRACTAPPENDIXBCOVER
<PAGE>
APPENDIX B-1 - PAYMENT SCHEDULE HEARD COUNTY GEORGIA
[*] The following two (2) pages have been omitted and filed separately with
the Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
Appendix C
APPENDIX C - GUARANTEED
PERFORMANCE CRITERIA AND TEST
PROVISIONS
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX C
GUARANTEED PERFORMANCE CRITERIA AND TEST PROVISIONS
All references to sections in this Appendix C shall be to sections of this
Appendix C unless otherwise specifically stated.
1.0 LIQUIDATED DAMAGE PERFORMANCE GUARANTEES
1.1 NET EQUIPMENT ELECTRICAL OUTPUT: Seller guarantees that the
Net Equipment Electrical Output, defined as the difference of
i.) the sum of the electrical output at the generator
terminals of all gas turbine Units at a Site less ii.) the sum
of all gas turbine Unit auxiliary loads at a Site (with the
gas turbine field performance test data corrected in
accordance with Section 3 to the Basis of Liquidated Damage
Performance Guarantees conditions set forth in Section 2
below) when using the specified fuel shall not be less than
the product of i.) number of Units being tested at the Site
times ii.) the corresponding values in the column labeled
"Guaranteed Net Equipment Electrical Output" in Table 1-1.
The Performance Minimum for Net Equipment Electrical Output
will be equal to the product of i) the number of Units being
tested at the Site times ii) the corresponding value in the
column labeled "Performance Minimum Net Equipment Electrical
Output" in Table 1-1.
The Interim Performance Requirement for Net Equipment
Electrical Output will be equal to the product of i) the
number of Units being tested at the Site times ii) the
corresponding value in the column labeled "Interim Performance
Requirement Net Equipment Electrical Output" in Table 1-1.
1.2 NET EQUIPMENT HEAT RATE: Seller guarantees that the Net
Equipment Heat Rate, defined as the quotient of i.) the total
fuel consumption of all gas turbine Units being tested at the
Site divided by ii.) the total Net Equipment Electric Output
of all gas turbine Units being tested at the Site (with the
gas turbine field performance test data corrected in
accordance with Section 3 to the Basis of Liquidated Damage
Performance Guarantees conditions set forth in Section 2),
shall have a value not greater than the corresponding value
shown in the columns labeled "Guaranteed Net Equipment Heat
Rate" in Tables 1-1 attached using the specified fuel.
<PAGE>
The Performance Minimum for Net Equipment Heat Rate will be
equal to the corresponding value in the column labeled
"Performance Minimum Net Equipment Heat Rate" in Table 1-1
attached.
The Interim Performance Requirement for Net Equipment Heat
Rate for each Unit shall be equal to the corresponding value
in the column labeled "Interim Performance Requirement Net
Equipment Heat Rate" in Table 1-1 attached.
2.0 BASIS OF LIQUIDATED DAMAGE PERFORMANCE GUARANTEES
Upon completion of any Performance Tests for determining Net Equipment
Electrical Output and Net Equipment Heat Rate, gas turbine performance test data
shall be corrected in accordance with Section 3 to the Operating Conditions set
forth below. The corrected data shall be used to calculate the test results for
comparison to the guaranteed values to determine whether the guarantees for Net
Equipment Electrical Output in Section 1.1 and Net Equipment Heat Rate set forth
in Section 1.2 have been satisfied.
2.1 Compressor Inlet Temperature 77.0deg F
2.2 Compressor Inlet Relative Humidity 88 %
2.3 Barometric Pressure for 785 foot above sea level elevation 14.29 psia
2.4 Inlet and Exhaust Pressure Loss, inches H2O 4.0 inlet/5.5 exhaust
above atmospheric pressure
2.5 Generator power factor 0.95 lagging
2.6 Generator terminal frequency (no correction allowed) 60 Hertz
2.7 Customer Gas composition per page A2-1of this Appendix.
2.8 The fuel will be considered to be a Light Distillate or Diesel Fuel as
defined in Appendix A in GEI-41047H.
2.9 Net gas turbine electrical output is defined as the measured gross
output at the generator terminals less the applicable measured
auxiliary loads. The applicable auxiliary loads are those loads for
which values are given on Table 2-1 of this Appendix.
2.10 Evaporative coolers are in service.
3. TEST CRITERIA AND CORRECTION OF SITE TEST DATA
<PAGE>
The following criteria shall apply to all Performance Tests performed
to determine satisfaction of the Performance Guarantees.
3.1 Correction factors shall be developed by the Seller with the
participation of the Buyer as part of the procedure of performing the
test, described herein. These corrections shall be limited to:
3.1.1 Compressor inlet temperature
3.1.2 Compressor inlet relative humidity
3.1.3 Barometric pressure for site elevation
3.1.4 Fuel analyses and corresponding fuel temperatures
3.1.5 Generator power factor. Every effort will be made to
conduct the Performance Tests at a 0.95 lagging power
factor.
3.2 Seller shall provide during the engineering of the Equipment
and upon agreement on test procedures all correction curves
required to correct the test data to the Basis of the
Liquidated Damage Performance Guarantee conditions.
3.3 Performance Tests shall be run in two operating modes: 1)
base load on gas, and 2) base load on oil.
3.4 If more than [*] have elapsed for each gas turbine Unit
before the time Performance Tests are conducted, Seller shall
have the right to inspect the Equipment to assure that the
Equipment is in a new and clean condition and request an
offline water wash. Upon such request the Contractor shall
perform the offline water wash. If the Buyer, at its sole
discretion, operates a gas turbine Unit in excess of [*],
then the attached performance degradation schedule shall be
used.
3.5 The overall Performance Test measurement uncertainty shall not
exceed [*] on Net Equipment Electrical Output or [*] on Net
Equipment Heat Rate.
3.6 Data for each Performance Test will consist of instrument
readings taken at no greater than ten-minute intervals over a
two hour continuous time span after steady state conditions
and one hour stabilization period have been established. Four
consecutive thirty minute tests will be conducted, and the
average of the four tests' results will be used to determine
the achievement of the Liquidated Damages Performance
Guarantees.
<PAGE>
3.7 The gas turbine will be considered to be in a steady state
condition when the turbine wheel space temperatures do not
change more than 5 degrees F in 15 minutes prior to the test
point.
3.8 Barometric pressure at the project location will be measured
with a calibrated digital barometer.
3.9 The Transco natural gas custody transfer meter will be used
for all heat rate calculations applicable when burning gas.
Gas fuel flow to the plant will be measured with a flat plate
orifice installed in accordance with the requirements of ASME
MFC-3M-1989 and ISO-5157-1.[Editors Note: Tenaska/Transco may
consider AGA-3 as the preferred standard. The upstream
pressure will be measured with a precision test instrument,
calibrated differential pressure transducer or gauge, and the
gas temperature with a thermometer or thermocouple.
3.10 Gas samples will be taken from the fuel gas system during the
gas fired tests for laboratory measurement of higher heating
value and specific gravity. The higher and lower heating value
will be determined from the laboratory gas analysis per ASTM
D3588. At least one gas sample will be taken every 30 minutes
during the tests.
3.11 Fuel oil samples will be taken from the fuel oil system during
the oil fired tests for laboratory measurement of higher
heating value and specific gravity. The hydrogen content will
be determined by ASTM D1018, or equivalent. The heating value
will be determined from the laboratory gas analysis per ASTM
D2382, or equivalent. The specific gravity will be determined
by ASTM D1480, or equivalent. At least one oil sample will be
taken every 30 minutes during the tests.
3.12 Calculation of gas flow will be done in accordance with the
latest AGA standards using compressibility factors calculated
from Detail Method of AGA Report No. 8 - 1994.
3.13 Gas turbine performance corrections will be based on
compressor inlet temperature measurements. Compressor inlet
air temperature will be measured with at least four (4) RTD's
or thermocouples supplied by Seller and installed in the inlet
air duct near the gas turbine compressor inlet.
3.14 Ambient conditions will be measured near the gas turbine inlet
air filter. Dry bulb temperature will be measured with a
thermometer or thermocouple. Relative humidity or wet bulb
temperatures will be determined using a psychrometer.
<PAGE>
3.15 Units # 2 and # 3 will not require commissioning or testing on
fuel oil as a condition of Substantial Completion.
Commissioning on fuel oil and completion of the Deferred Tests
shall be performed after Commercial Operation. The Deferred
Tests are those tests which require fuel oil firing as
follows:
a. Net Equipment Heatrate Test (Section 1.2) on
fuel oil.
b. Air Emissions Test (Section 4.1) on fuel oil.
c. Gas Turbine Fuel Switching Test (Section 6.2).
d. Minimum Load Operation at 50% Base Load on
fuel oil (Section 6.3).
e. Gas Turbine Startup on fuel oil (Section 6.4).
f. Gas Turbine Load Rate Change on fuel oil
(Section 6.5).
g. Gas Turbine Fuel Oil Firing (Section 6.7).
3.16 In any case where this Appendix C, and the "Standard Field
Performance Testing Procedure", GEK-28106A, are in conflict,
this Appendix C shall prevail.
4.0 PERFORMANCE GUARANTEES (Air Emissions and Noise)
4.1 Seller guarantees that the hourly average exhaust emissions
at base load shall not exceed the concentrations on the
attached pages A4-1 through A4-4 for each Unit in steady-state
operation.
These emissions are based on the following conditions:
1. Natural gas fuel shall be in compliance with GE, Gas Fuel
Specification GEI-41040F, Sections 10 and 15 of Appendix
A.
2. Distillate No. 2 fuel oil shall be in compliance with GE
Gas Turbine Liquid Fuel Specifications GEI-41047H, Section
15 of Appendix A.
3. Testing and system adjustments are conducted in accordance
with GE document GEK-28172F, Standard Field Testing
Procedure For Emissions Compliance, Section 15 of Appendix
A; provided that in the event of a conflict between the
foregoing document and the applicable state Emission Test
requirements, the state requirements shall prevail.
4. Emissions are on a one hour average basis (except for
Opacity).
5. PM10. Seller reserves the right to determine the emission
rates on a net basis wherein emissions at the gas turbine
inlet are subtracted from the measured exhaust emission
rate if required to demonstrate emission rate.
<PAGE>
Satisfaction of the above emission limits will be determined
in the Emission Test. The Emission Test will be conducted on
behalf of Buyer by the EPC Contractor for the gas turbine in
accordance with the Prevention of Significant Deterioration
(PSD) permit to construct. The Emission Test will be
conducted at the Plant stacks for the following pollutants:
a. NOx - EPA Method 20 (or equivalent)
b. CO - EPA Method 10 or 10B
c. Particulates and PM-10 - EPA Method 201A and 202
or Method 5 modified to include back-half
condensables
d. VOC - EPA Method 25A modified to exclude methane
and ethane
e. Opacity - EPA Method 9
f. O - EPA Method 20 (or equivalent)
2
g. Moisture - EPA Method 4
h. Flue gas flow - EPA Method 2
4.2 Noise. Seller guarantees that the actual near field A-weighted
sound pressure level in a free field environment resulting
from the operation of the gas turbine generators at steady
state conditions at any load above 50% of base load shall not
exceed 90 dB (A) average, when measured in a free field 3 feet
in the horizontal plane from the outermost surfaces of
equipment, including piping, conduit, framework, barriers and
personnel protection devices if provided, and at an elevation
of 5 feet from the machine baseline. Start up, shut down,
transients, and off normal conditions are excluded from the
warranty.
Noise testing methodology will be based on ASME PTC-36-1985
for near field readings and ANSI B133.8 for far field
readings. Testing will be done in accordance to a test plan
agreed to by Buyer and Seller.
Intermittent noises such as safety valve blow off and filter
pulse noise are not included in the above guarantees.
5.0 GENERAL REQUIREMENTS FOR ACCEPTANCE TESTING
<PAGE>
5.1 The Acceptance Testing described in this Appendix C consists
of the Performance Test, the Emissions Test, and Noise Tests
described in Sections 1, 2, 3 and 4, Demonstration Tests
described in Section 6, Availability Tests described in
Section 7 and Utility Tests described in Section 8.
5.2 During all Acceptance Testing the Equipment will be operated
within normal design limits of the Equipment and in a manner
consistent with good utility practices for continuous
long-term operation, and the gas turbine control temperatures
shall not exceed Seller's recommendation for continuous
long-term operation. During Acceptance Testing, the Equipment
will be operated from the control room with systems normally
operated in automatic operating in the automatic mode.
5.3 During Acceptance Testing the gas turbine emissions shall be
equal to or less than the emission limits specified in Section
4.1.
Emissions Test compliance will be determined using the results
measured by the CEMS. Prior to the Emissions Test, CEMS
equipment will be tested in accordance with the applicable
requirements of 40 CFR Pt. 60, App F and 40 CFR Pt. 75,
Appendix A, as appropriate prior to the start of testing and
CEMS will be in service throughout the tests.
The EPC Contractor will be responsible for the field
functional testing and calibration testing of the CEMS prior
to all Acceptance Testing. The EPC Contractor will be
responsible for developing CEMS certification protocol and
calibration.
5.4 Prior to and during all Acceptance Testing, all Systems must
be ready for normal and continuous operation. The use of
temporary equipment will not be allowed unless approved by
Buyer and EPC Contractor. Temporary instrumentation will be
used where required. During Acceptance Testing the Equipment
will operate with normal Plant staffing (all operating
functions will be conducted by the permanent operating staff
and the EPC Contractor's personnel, including the Seller's
technical service representatives, will provide supervision
only and will not perform any hands-on operating functions).
The Equipment will run in a normal manner with no required
Equipment shutdown to reduce auxiliary load. Only Equipment
required for normal operation will be in operation.
5.5 During all Acceptance Testing the Equipment shall be operated
in compliance with all permit limits and requirements as
measured by Plant instrumentation.
5.6 Net Equipment Electrical Output will be determined for all
Units at a Site in accordance with Section 1.1 and for each
combustion turbine Unit individually, as it is available for
testing.
<PAGE>
5.7 Net Equipment Heat Rate will be determined for all Units at a
Site in accordance with Section 1.2 and for each combustion
turbine Unit individually, as it is available for testing.
6.0 DEMONSTRATION TEST REQUIREMENTS
The following is a list of requirements which shall be demonstrated by the
Equipment:
6.1 GENERATORS LEADING / LAGGING OPERATION. The gas turbine
Unit generator shall operate at each power factor constant
limit of 0.95 leading to 0.85 lagging for a period of one (1)
hour.
6.2 GAS TURBINE FUEL SWITCHING. The gas turbine Unit shall
change from primary fuel to alternate fuel and then return to
primary fuel at gas turbine baseload conditions. The duration
of each fuel change shall not exceed twenty (20) minutes.
6.3 MINIMUM LOAD OPERATION AT 50% OF BASE LOAD. The gas
turbine Unit shall operate stable at a power output of 50% of
base load for a duration of two (2) hours. The gas turbine
Units shall operate within permitted emissions limits as
specified in Section 4.1.
6.4 GAS TURBINE STARTUP ON NATURAL GAS AND FUEL OIL. Each gas
turbine Unit will be started up in the two ways described
below. The gas turbine Unit on turning gear prior to the
start. Each start will be comprised of start initiation,
acceleration to full speed no load, synchonization, and
loading to base load output.
Startup tests and test criteria:
a) A normal Start firing natural gas will not exceed 30
minutes.
b) A normal Start firing fuel oil will not exceed 30 minutes.
6.5 GAS TURBINE LOAD CHANGE RATE. Each gas turbine generator Unit
shall have a loading/unloading rate of no less than 8.3 % of
base load output per minute between 0-100% of base load on
either fuel.
6.6 GAS TURBINE EVAPORATIVE COOLER TEST. The gas turbine Units'
evaporative coolers shall maintain at least 85% effectiveness
for a duration of one hour. This Performance Test Requirement
for the Evaporative Coolers may be satisfied only when: (1)
the dry bulb temperature exceeds 60 DEG.F,
<PAGE>
and (2) there is a minimum 10DEG.F difference between wet
bulb and dry bulb temperatures.
Evaporative cooler effectiveness shall be determined by test
data as follows:
X = (Dbt - CITt) / (Dbt - Wbt)
Where:
X - tested evaporative cooler effectiveness
(expressed as a fraction)
Dbt - dry bulb temperature, deg F
CITt - compressor inlet temperature, deg F
Wbt - wet bulb temperature, deg F
t - at test conditions
6.7 GAS TURBINE FUEL OIL FIRING. Each gas turbine Unit shall
operate for one hour at base load, in a stable manner, while
fired 100% with the specified #2 fuel oil and without any
combustion system or combustion turbine temperature alarms.
7.0 AVAILABILITY TEST
The Availability Test will demonstrate the ability of each gas turbine Unit to
operate reliably with a [*] availability or greater. The Availability Test will
be deemed satisfied when each Unit operates reliably and with a [*] availability
for 12 consecutive hours per day over a period of 2 consecutive days or Buyer
provides Seller written notification that the Availability Test is satisfied
During each hour of the Availability Test, the Unit will be expected to operate
above the applicable gas-fired, base load Guaranteed Net Equipment Electrical
Output value shown in Table 1-1 of this Appendix. Credit for Unit output above
the applicable value in the tables will not be allowed. No corrections to Unit
output will be made unless ambient conditions exceed the test rating conditions
in Section 3.1. The Availability Test will be deemed successful if the corrected
net energy (kWh) value divided by the number of hours operated during the
Availability Test is greater than [*] multiplied by the the applicable
Guaranteed Net Equipment Electrical Output value from Tables 1-1 of this
Appendix.
If the gas turbine Units are available to run but cannot due to reasons beyond
Seller's control, the Availability Test will be deemed satisfied when :
1) each Unit operates reliably and with a [*] availability for 40 hours, or
<PAGE>
2) 30 calendar days have passed since Seller has made the Units available for
the Availability Test.
The "10 Hour Availability Test" referred to in Sections 17.1(b) and 17.2(d) of
the Agreement will be deemed passed when the Unit successfully completes ten
hours of continuous operation when burning natural gas and at base load.
8.0 UTILITY TESTS
8.1 The Utility Tests shall consist of a Capacity Test and a Gas
turbine Evaporative Cooler Test. Seller has no requirements
arising out of the Utility Test; provided that Buyer or the
EPC Contractor on Buyer's behalf will use the Utility Tests to
determine satisfaction of certain guarantees and requirements
made by Seller.
8.1.1 The Capacity Tests will be used by Buyer or the EPC
Contractor to establish the Plant capacity under the
Utilities Power Purchase Agreement(s). These tests
require simultaneous operation of the gas turbines.
As part of the Capacity Test, a Gas turbine
Evaporative Cooler Utility Test will be conducted as
specified in Section 8.2.2 herein. The test may
coincide with the test described in Section 6.6.
8.1.2 Test corrections will be used to adjust the tested
output of the Plant to the conditions defined in
Section 8.3.
8.1.3 Seller's data and performance curves will be used for
developing corrections to test data to Standard
Conditions listed in Section 8.3.
8.2 Procedures and Test Requirements
8.2.1 General
8.2.1.1 The Capacity Test will be 2 hours in duration.
8.2.1.2 The Capacity Test will be conducted with all normally
operated auxiliaries in service and with the Plant
operated at a power factor between 0.95 leading to
0.95 lagging.
8.2.1.3 The Plant will be operated on natural gas.
8.2.1.4 Buyer or EPC Contractor on Buyer's behalf will
provide notice to Seller at least 50 hours before the
Capacity Tests. Utility personnel will be allowed to
witness the Capacity Tests.
<PAGE>
8.2.1.5 Reactive power data will be collected from the
Utility (kWh) meter used for measuring net reactive
power output to the transmission system. The change
in meter readings over a set time period will be used
to calculate a net capacity value.
8.2.1.6 The output of the gas turbine generators shall be
corrected in accordance with the conditions specified
herein. The corrections will then be applied to the
Utility kWh meter readings.
8.2.1.7 Calculated contract capacity shall be rounded off to
the nearest 100 kW.
8.2.1.8 No adjustments shall be made to the capacity
calculations for tolerances due to measurement
uncertainties.
8.2.1.9 A minimum of six (6) complete sets of data shall be
collected at ten-minute intervals for each one hour
test run.
8.2.1.10 Computations for correcting capacity shall be
performed immediately following each test run.
8.2.1.11 The preliminary corrected capacity results shall be
available upon completion second test run
calculations.
8.2.1.12 The Plant Net Capacity shall be the average of the net
plant output corrected to Standard Conditions (Section
2) calculated for each test run.
8.2.1.13 A preliminary report summarizing the test results will
be prepared and issued by the EPC Contractor or the
Buyer within 24 hours upon which the test is
completed. EPC Contractor shall issue final report
within two (2) weeks of test completion.
8.2.2 Gas Turbine Evaporative Cooler Utility Test
8.2.2.1 Gas Turbine Evaporative Cooler Effectiveness shall be
determined by test data as follows:
X = (Db - CIT ) / (Db - WB )
t t t t
Test evaporative cooler effectiveness will be used to
determine the compressor inlet temperatures at Standard Conditions (Section 8.3)
as follows:
CIT = Db - X (Db - Wb ) = 94 - X (20)
sc sc sc sc
Where:
<PAGE>
X = tested evaporative cooler effectiveness
DB = dry bulb temperature, DEG.F
t
CIT = compressor inlet temperature, DEG.F
t
WB = wet bulb temperature, DEG.F
t
t = at test conditions
sc = standard conditions
DB = 94 DEG.F
sc
Wb = 74 DEG.F
sc
8.2.2.2 The Evaporative Cooler Utility Test shall be performed only
if : (1) the dry bulb temperature exceeds 60 DEG.F, and (2)
there is a minimum 10 DEG.F difference between wet bulb and
dry bulb temperatures.
8.2.2.3 If the Evaporative Cooler Utility Test cannot be performed
due to restrictions in Section 8.2.2.2 above, then the
Sellers design evaporative cooler effectiveness (85%) will
be used during the interim to determine Plant Net Capacity.
The evaporative cooler will be tested independently at
earliest time acceptable to all parties (Utility, Owner, EPC
Contractor and Seller).
8.2.3 Gas Turbine
8.2.3.1 Utility Test shall be performed at the gas turbine
manufacturer rating for continuous service which is normally
designated as "base firing mode" for a dry low NO(SUB.x)
combustion system without gas turbine diluent injection for
NO(SUB.x) control.
8.2.3.2 Capacity corrections curves shall be provided to adjust for
the effects of compressor inlet temperature and barametric
pressure
8.2.3.3 The tests will be performed after the gas turbine Unit
reaches steady state condition. The Unit will be considered
in a steady state condition when turbine exhaust temperature
does not change by more than 5 DEG.F in fifteen minutes prior
to test.
8.2.3.4 The effect of relative humidity on turbine performance will be
neglected, except for the effect on compressor inlet
temperature.
8.2.3.5 No adjustment shall be made for inlet or exhaust pressure drop.
<PAGE>
8.2.3.6 The measured value of barometric pressure shall be corrected
for temperature if required by measuring device. The
recorded pressure shall then be compared to the standard
conditions for determining the capacity correction factor.
Only the gas turbine output will be corrected for barometric
pressure.
8.2.3.7 Compressor inlet temperature shall be measured with the
permanently installed compressor inlet thermocouple or RTD's.
Four (4) measuring devices shall be in service.
8.3 Standard Conditions Test data from the Utility Test described in this
Section 8.0, shall be corrected to the Standard Conditions set forth in
this Section 8.3. Correction factors shall be developed by the Seller
with the participation of the Buyer as part of the procedure for
performing the test, and at the EPC Contractor's option, in accordance
with the guidelines set forth in ASME PTC-22 for the gas turbines.
8.3.1 Standard Conditions for correcting Utility Test results
are given in Section 2.
<PAGE>
TURBINE CONTRACT APPENDIX C
<PAGE>
APPENDIX C
GUARANTEED PERFORMANCE AND INTERIM PERFORMANCE REQUIREMENTS
Table 1-1
[*] This one (1) page has been omitted and filed separately with the
Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
APPENDIX C TABLE 2-1
[*] This one (1) page has been omitted and filed separately with the
Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
[Graph]
<PAGE>
[*] The following four (4) pages have been omitted and filed separately with the
Securities and Exchange Commission as part of a Confidential Treatment
Request.
<PAGE>
[Graph]
<PAGE>
CUSTOMER GAS COMPOSITION
See Section 10.0 "Fuel Analyses", of Appendix A to this Contract for the
Customer Gas Composition.
<PAGE>
APPENDIX D - OPTION LIST
- --------------------------------------------------------------------------------
<PAGE>
CONFIDENTIAL
APPENDIX D - OPTIONS
In accordance with the provisions of Section 9.2 of the Contract for Purchase,
the following is a summary of the options available to the Buyer in connection
with the Equipment. The scheduled Delivery Date shall not be impacted provided
that Buyer exercises such options on or prior to the submission of the
Manufacture Release Notice.
<TABLE>
<CAPTION>
A. Gas Turbines Unit Price Unit Price Georgia Contract
Change (CT 1-3) Change (CT 4-6) Pricechange
<S> <C> <C> <C>
1 Two static start systems for three gas turbines (cross connected) [*] [*] [*]
2 Two years extended warranty with "in and out" for three (3) units [*] [*] [*]
3 Inlet chilling system to 45 o F CIT (per unit) [*] [*] [*]
4 Gas turbine generator performance monitoring instrumentation (per unit). [*] [*] [*]
Compressor bellmouth static and differential pressure transmitters and
compressor inlet RTDs.
5 AACA generator protection panel in lieu of BABA panel (per unit) [*] [*] [*]
6 Current transformers (per unit). Additional C800 class CTs for [*] [*] [*]
transformer differential scheme.
7 Delete Power System Stabilizer (PSS) but have capability to add later [*] [*] [*]
(per unit)
8 Generator line-side compartment drawout PTs (price per unit) [*] [*] [*]
Excitation (1 set per unit). Relaying (1 set per unit)
9 Second single-phase standard battery charger (per unit) [*] [*] [*]
10 Gas turbine generator breaker (per unit) [*] [*] [*]
11 Second generator breaker synchronization (per unit) [*] [*] [*]
12 Silencers for all vent fans (per unit) [*] [*] [*]
13 Delete fire protection system CO2 tanks (per unit) [*] [*] [*]
14 VAR/Power Factor control via Mark V (per unit) [*] [*] [*]
15 Combustion Monitoring System [*] [*] [*]
16 FM200 Tanks and Supply (per unit) [*] [*] [*]
17 Local Operator Multi-Unit Interface [I] up to eight units [*] [*] [*]
18 Two-stage standard pad-type media filters versus self-cleaning [*] [*] [*]
inlet filters (per unit)
19 Corrosion-resistant versus standard media filters (per unit) [*] [*] [*]
20 Delete unit walkways (per unit) [*] [*] [*]
21 Delete natural gas fuel heater (per unit) [*] [*] [*]
22 Delete air processing unit (per unit) [*] [*] [*]
23 Freight differential to Georgia versus shipment to Texas (per unit) [*] [*] [*]
24 Additional remote [I] (per unit) [*] [*] [*]
25 Additional GEC equipment (Heard County vs. Frontier) (per unit) [*] [*] [*]
26 Cooling water module (i.e., for simple cycle operation) (per unit) [*] [*] [*]
27 Acoustic barrier wall (per unit) [*] [*] [*]
28 Epoxy paint for inlet ducting (per unit) [*] [*] [*]
29 Additional air conditioner (per unit) [*] [*] [*]
30 Mark V configuration changes (Heard County vs. Frontier) (per unit) [*] [*] [*]
31 Static Start Differential (3 for 6 vs. 2 for 3) (per unit) [*] [*] [*]
32 TDI Differential (75 mnwks/unit vs. 100 mnwks/unit) (per unit) [*] [*] [*]
33 Exhaust Stack (per unit) [*] [*] [*]
34 DLN 2.6 at 9 ppmv NOx in lieu of 15 ppmv NOx (per unit) [*] [*] [*]
35 Stainless steel generator cooler tubes in lieu of 90/10 copper [*] [*] [*]
nickel (per unit)
36 Freight differential to Alabama versus shipment to Texas (per unit) [*] [*] [*]
37 Mark V remote control and monitoring to include: two (2) [*] [*] [*]
ETHERNET links (one for each of two remote [I]/[G];
two (2) remote multi-unit [I]/[G] processors; and one
(1) []]/[G] for the Mark V [C] communications processor
and one (1) for the redundant [D] processor (per unit)
38 Provide time synchronizing card to the time synchronize the [*] [*] [*]
Mark V's to the plant controls
39 GE gas meter runs. Furnish to AGA-3 requirements. (per unit) [*] [*] [*]
</TABLE>
<PAGE>
APPENDIX E - TRAINING
- -------------------------------------------------------------------------------
SUMMARY
A comprehensive training program is conducted for
a selected number of Owner's engineers,
operations and maintenance personnel. The
training will be conducted at the Owner's job
site. Optional training at facilities in the
United States can be provided at extra cost.
The Owner's personnel assigned for training must
have prior general knowledge of power plant
systems operation.
A GE training coordinator is designated for the
project who is familiar with overall plant design
and system operations. This person schedules and
coordinates job site training, as well as
integrates individual systems training into the
overall plant operation from Schenectady, NY. An
on site training coordinator may be provided at
extra cost.
The training programs will cover the areas
specified below and detailed on the following
pages:
OPERATORS TRAINING
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Gas Turbine-Generator Operation (On-Site) 2 weeks
<S> <C>
---------------------------------------------------------------------------------------------
TOTAL OPERATORS TRAINING 2 WEEKS
---------------------------------------------------------------------------------------------
MAINTENANCE TRAINING
---------------------------------------------------------------------------------------------
Gas Turbine (On-Site) 1 week
---------------------------------------------------------------------------------------------
TOTAL MAINTENANCE TRAINING 1 WEEK
---------------------------------------------------------------------------------------------
I&C AND ELECTRICAL TRAINING
---------------------------------------------------------------------------------------------
Excitation for AC Generators (On-Site) 1 day
---------------------------------------------------------------------------------------------
Excitation for AC Generators (Schenectady) 1 week
---------------------------------------------------------------------------------------------
SPEEDTRONIC Mark V for Operators (On-Site) 1 week
---------------------------------------------------------------------------------------------
SPEEDTRONIC Mark V Technician's Level (Schenectady) 2 weeks
---------------------------------------------------------------------------------------------
LCI Static Start (Off-Site - Salem) 1 week
---------------------------------------------------------------------------------------------
TOTAL I&C AND ELECTRICAL TRAINING 6.2 WEEKS
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
TOTAL TRAINING 9.2 WEEKS
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
TRAINING MATERIAL AND RELATED CONDITIONS (ON-SITE TRAINING)
- Classes run daily (five days/week) and are limited to six
(6) hours. The actual class time, a.m. and p.m. hours, is
dictated by the availability of the equipment and the
students per the normal work schedule. Each class time
period should be agreed to by the Owner's management and
GE's instructor(s) at the beginning of the program. The
six (6) hour class limitation will allow ample time for
the instructor(s) to prepare the next session's work plan.
- A maximum of fifteen (15) students per class can be
accommodated On-Site.
- This training is scheduled to be conducted during 2001. If
performance of training is delayed beyond 2001, a six
percent (6%) per year escalation charge shall be added to
quoted rates and fees. o English-speaking instructor(s)
will be furnished for the course duration.
- Each student will be furnished a suitable bound course
instruction and reference handbook in English; shipment
costs have been included in the firm price quoted herein.
Any materials furnished are exclusively for the use of the
Owner's personnel. This material is not for resale or to
be distributed to third parties, nor is it to be copied or
reproduced without GE's prior written permission.
- A climate controlled class room suitable to accommodate
and seat comfortably all students and provide a 35mm slide
projector, an overhead projector for transparencies,
projector for personal computers, chalk, erasers, pencils
and flip chart paper as required.
- Equipment walk around and panel familiarization will be
dependent upon equipment availability.
- For SPEEDTRONIC Mark V training, Buyer needs to provide
PCs capable of running the Mark V [I] processor software
for "hands on" experience in class. One (1) PC for a
maximum of every three (3) students is recommended and
they will have to meet the following requirements:
-- Free hard disk space: 40 megabytes
-- Minimum RAM: 16 megabytes
-- No disk memory manager programs running (e.g. stacker
or double space)
<PAGE>
-- 80386 or higher INTEL processor
-- MSDOS 5.0 or higher (No Windows 95 or NT)
-- VGA monitor
-- Mouse or trackball and driver software
-- 3 1/2" floppy disk drive
-- PCs must be desktop computers with expansion slots that
will accept an ARCNET card (e.g. No. IBM PS2 computers
or laptop computers)
-- Maximum number of computers: 6
(ARCNET Lan will not support more than 6)
-- Maximum number of students per computer: 3
- Any audio or video recording of GE's lecture material is
prohibited unless GE grants permission in writing in
advance of the training program.
- The instructor(s) will retain all visual aids such as 35mm
slides and transparencies used to conduct the course.
- The power plant equipment should preferably be operable
and available to support this course of study.
- GE shall be responsible for the instructors travel and
living expenses during the training period.
- Buyer agrees to pay GE for any additional time spent by
the instructor at the request of Buyer beyond those quoted
herein. This shall include all overtime hours. For such
additional training, GE shall invoice Buyer at GE's
current Commercial Rate Schedule, IDR, copy to be provided
at Buyer's request.
- --------------------------------------------------------------------------------
TRAINING MATERIAL AND RELATED CONDITIONS - GE SITE BASED TRAINING
- This training is scheduled to be conducted during 2001. If
performance of training is delayed beyond 2001, a six
percent (6%) per year escalation charge shall be added to
quoted rates and fees.
- One (1) daily class (five days/week) will be limited to
six (6) hours. The actual class time, a.m. and p.m. hours,
is dictated by the availability of the equipment and the
students per the normal work schedule. Each class time
<PAGE>
period is agreed to by the Owner's management and GE's
instructor(s) at the beginning of the program.
- A maximum of fifteen (15) students per class can be
accommodated on-site, the number of students that can be
accommodated in Schenectady is three (3).
- Each student will be furnished a suitable bound course
instruction and reference handbook in English. Any
materials furnished are exclusively for the use of the
Owner's personnel. This material is not for resale or to
be distributed to third parties, nor is it to be copied or
reproduced without GE's prior written permission.
- Any audio or video recording of GE's lecture material is
prohibited unless GE grants permission in writing in
advance of the training program.
- The instructor(s) will retain all visual aids such as 35
mm slides and transparencies used to conduct the course.
- --------------------------------------------------------------------------------
TRAINING SCHEDULE
After engineering design has been finalized, training is
conducted during a mutually-agreeable time.
- --------------------------------------------------------------------------------
COURSE CONTENTS FOR THE MAJOR PLANT COMPONENTS
GAS TURBINE-GENERATOR OPERATION COURSE
COURSE DESCRIPTION:
This site-specific course is designed to enable engineers,
supervisors, operations and maintenance personnel to safely
operate GE designed heavy duty turbine generator units. This
course develops a background in turbine generator operation
which will enable participants to properly analyze operating
problems and take the necessary corrective action.
Emphasis is placed on the operator's responsibilities with
regard to auxiliary systems, operational data taking, and
data evaluation. Operators are instructed in how to
interpret fault annunciation. The
<PAGE>
course focuses on the starting, loading, and specific
operator checks of the various turbine support and auxiliary
systems to ensure safe and reliable operation of the turbine
unit. Also covered is the effect that operation has on major
mechanical maintenance.
Content:
The typical Operation course covers the following areas:
Gas Turbine Operations
----------------------
- Gas Turbine-Generator Fundamentals
- Basic theory of operation
- Base and machine arrangement
- Support Systems Operation, and System Checks
- Inlet Filter
- Lube Oil
- Hydraulic and Control Oil
- Cooling Water
- Cooling and Sealing Air
- Fuel system(s)
- Starting Means
- Heating and Ventilation
- Fire Protection
- Control System
- Arrangements
- Control Functions and Operating Sequences
- Protection Functions
- Operator Responsibilities
- Data Taking and Evaluation
- Operating Limits
- Required Operator Action on Various
- Annunciation Indications
- Unit Operation
- Startup
- Normal Operation
- Shutdown
- Emergency Procedures
- Generator
- Machine Theory
<PAGE>
- Components Stator/Field
- Power System Load Characteristics And Power Factor
- Excitation
- Equipment Operation
- Alarms, Trips
- Generator
-- Fundamentals
-- Generator Construction
- Generator Auxiliary Systems
-- Lubrication
-- Generator Cooling System
-- Seal Oil/Seal Air
- Generator Controls and Protection
-- Excitation System
-- Digital Generator Protection
- Turbine Generator Operation
-- Operating parameters
-- Start up
-- Loading
-- Shutdown
-- Generator Operation
- Operator Responsibilities
-- Data Taking and Evaluation
Operating Limits and Required Operator Actions
COURSE DURATION: 2 WEEKS
Course duration is dependent upon the size and complexity of
the gas turbine generator unit and the student's background
and experience level with power generation equipment.
<PAGE>
GAS TURBINE-GENERATOR SYSTEMS MAINTENANCE COURSE
COURSE DESCRIPTION:
This site-specific course is designed to introduce
operations and maintenance personnel to the routine
preventative maintenance procedures of the turbine-generator
support systems required to attain high levels of
availability and reliability from the turbine-generator.
This course does NOT cover the turbine-generator disassembly
inspections required for major mechanical maintenance.
Operating and maintenance personnel should attend this
course together to develop a working relationship regarding
the routine maintenance requirements of the unit.
The training will include detailed descriptions of the
turbine-generator support systems. This will include a
functional description of the system as well as the routine
maintenance requirements of the system. If the course is
held at the customer's location it will include site visits
to familiarize personnel with the location of the various
system components and to allow personnel to correlate the
system piping schematics to the system hardware. The
training will not incorporate any "hands-on" training or
component disassembly.
CONTENT:
The typical Systems Maintenance course covers the following
topics:
GAS TURBINE MAINTENANCE
- Gas Turbine Introduction
- Explanation of how a gas turbine works
- Introduction to the customer-specific unit
- Gas Turbine-Generator Arrangements
- Site turbine and accessory base arrangements and
enclosures
- Site generator and load gear (if applicable)
arrangements and enclosures
- Support Systems Operation and Routine Maintenance
- Inlet and Exhaust Systems including Generator Cooling
Air and Inlet Bleed Heat (if applicable)
<PAGE>
- Lube Oil System
- Hydraulic Oil System
- Trip Oil System
- Seal Oil System (if applicable)
- Inlet Guide Vanes
- Cooling Water System
- Cooling and Sealing Air System
- Fuel System(s)
- Atomizing Air System (if applicable)
- Water/Steam Injection (if applicable)
- Purge Air System(s) (if applicable)
- Starting System, including slow-roll/cooldown function
- Heating and Ventilation Systems
- Fire Protection System
- Generator Hydrogen System (if applicable)
- Generator Auxiliary Systems (Brush Rigging, Coolers)
- Water Wash System as a maintenance tool
- Bearings
- Inspection and Repair
- Bearing Alignment
- Turbine Fluid Systems
- Lubrication oil and high pressure hydraulic systems
- Fluid specifications
- Inspection, evaluation, repair and flushing procedures
- Turbine Auxiliary Systems
- Turning gear, shaft grounding, T.S.I.
- Recommended calibration
- Inspection, evaluation and repair of the systems
- Generator Maintenance
- Bearing and coupling inspection and repair, including
alignment
- Cleaning and inspection of components / systems
- Disassembly and assembly of components
<PAGE>
- Generator Auxiliary Systems
- Brush rigging, coolers, high voltage bushings
- Preventative maintenance
- Inspection, evaluation and possible repairs
- Hydrogen and Stator Water Cooling Systems (if applicable)
- Preventative maintenance
- Inspection and repair of components
- Flushing procedures
COURSE DURATION: 1 WEEK
Course duration is dependent upon the size and complexity of
the gas turbine generator unit and the student's background
and experience level with power generation equipment.
GENERATOR CONTROL-EXCITATION (EX2000) (TECHNICIANS LEVELS)
COURSE DESCRIPTION:
This site specific course covers generator parameters,
EX2000 control and protective circuits and excitation system
settings. A simulator is used to enhance the classroom
training.
This course is designed to provide a solid background in
Digital Excitation System maintenance and troubleshooting
skills.
CONTENT:
The generator Control for Technicians course covers the
following areas:
- Excitation Fundamentals
- Generator Parameters
- Excitation System One Line and Excitation Drawings
<PAGE>
- Manual/Auto Regulation
- Control and Protective Circuits
- Digital Excitation System Overview
- EX2000 Programmer
- Analog and Digital Signal Training
- On Line and Off Troubleshooting Maintenance
- Digital Generator Protection
COURSE DURATION: 1 WEEK
The course duration will vary, depending upon the student's
background and their familiarity with generator controls and
computer based control systems.
GENERATOR CONTROL FOR OPERATORS
COURSE DESCRIPTION:
The course focuses on the operation of the Generator Control
System. Operational safety precautions are emphasized for
personnel and equipment during operation.
To improve the ability of personnel to safely operate the
generator and EX2000 excitation system.
CONTENT:
The Generator Control for Operators course covers the
following areas:
- Generator Curves
- Excitation System Parameters i.e. UEL, V/Hz
- Auto and Manual Voltage Regulators
- Start/Stop and Synchronizing
- On line Operation
- Alarms and Fault Codes
<PAGE>
COURSE DURATION: 1 DAY FOR A TOTAL OF 8 HOURS
The course duration will vary, depending upon the student's
background and their familiarity with generator controls and
computer based control systems.
SPEEDTRONIC-TM- MARK V GAS TURBINE OPERATOR
COURSE DESCRIPTION:
This site specific course is designed to instruct a
qualified gas turbine operator to the modifications made to
upgrade the unit to a SPEEDTRONIC-TM- Mark V Control System.
This course covers major topics in the fundamentals of the
Gas Turbine Mark V control system and related systems,
documentation, backup operators interface [BOI] and the
operator's control interface [I].
Emphasis is placed on enabling operators and supervisors to
confidently operate and monitor the gas turbine using the
SPEEDTRONIC-TM- Mark V control system.
CONTENT:
The typical SPEEDTRONIC-TM- Mark V Turbine Operator Course
covers the following areas:
GAS TURBINE MARK V
------------------
- Gas Turbine
- Hardware Modification and Interface
- Introduction to SPEEDTRONIC-TM- FundamentaLS
- Introduction to control function
- Redundancy, Hardware, Security
- Startup, Speed, Temperature, Controls
- Fuel systems
- Protection systems
<PAGE>
- SPEEDTRONIC-TM- Control Documentation
- Function
- Interpretation and use
- Operator Interface [I]
- Operation
- Data retrieval
- Display modification
- Backup Operator Interface [BOI]
- Operation
- Data recovery
- Startup and shutdown sequence
COURSE DURATION: 1 WEEK
The course duration will vary, depending upon the student's
background and their familiarity with generator controls and
computer based control systems.
GAS TURBINE SPEEDTRONIC-TM- MARK V TECHNICIANS TRAINING
COURSE DESCRIPTION:
This site specific course is designed to enable engineers
and competent instrument and control technicians to
confidently calibrate the controls and diagnose problems in
General Electric Gas Turbine SPEEDTRONIC-TM- Mark V Control
Systems. The course is designed to provide a solid
background in turbine governing systems. Participants
increase their skills in relating machine operating
requirements to the SPEEDTRONIC-TM- control.
<PAGE>
CONTENT:
The Gas Turbine SPEEDTRONIC-TM- Mark V Controls course
covers the following areas:
- Gas Turbine Control Fundamentals
- Gas turbine principles of operation
- Governing system requirements
- Gas Turbine Systems
- Piping schematics
- Electrical wiring diagrams
- Gas Turbine Control
- Startup/speed/temperature/other controls
- Protection
- Control Displays
- User's manual
- Control System Software
- IDOS
- File descriptions
- Micro Processor Initialization
- Troubleshooting
- Valve Calibration (LVDT)
- Input/output configuration screens
- Software Tools
- Modifying and downloading control configuration
- Data acquisition on Mark V interface
- Software backup
- Troubleshooting
- Gas turbine process alarms
<PAGE>
- Mark V panel diagnostic alarms
- Governing system requirements
- Protection requirements
- Documentation Conventions/Terminology
- Mechanical
- Electrical
- Controls
- Mark V Hardware - Mark V panel
- Operator interfaces [I] [BOI]
- Printers
COURSE DURATION: 2 WEEKS
The course duration will vary, depending upon the student's
background and their familiarity with turbine generator
controls and computer based control systems.
TURBINECONTRACTAPPENDIXE
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX F - NOT USED
- --------------------------------------------------------------------------------
TURBINECONTRACTAPPENDIXF
<PAGE>
APPENDIX G
DOCUMENTATION AND SPECIAL REQUIREMENTS
TENASKA GEORGIA GENERATION PROJECT
1.0 RESERVED
2.0 GAS TURBINE DOCUMENTATION
This section describes the documentation to support the Buyer's efforts
to design, install, operate and maintain the Gas Turbine-Generator
Packaged Power Plant. The documentation requirements are summarized
below in two categories that are generally aligned with the major
phases of the Project. These categories are as follows:
- Buyer Design Drawings
- Startup and Operation Documents
SELLER SHALL FURNISH THE NUMBER OF COPIES OF DOCUMENTS IN THE NUMBER OF
WEEKS SHOWN AFTER THE ORDER DEFINITION MEETING AS SHOWN BELOW:
Approvals
Only the Electrical One-Line Diagram and the Mechanical Outline are
submitted for Buyer's approval. Errors detected by the Buyer in any
drawings submitted will be corrected. Approval of these documents by
the Buyer will not be construed as a complete check of the documents
and will not lessen the responsibility of Seller.
The Seller will make available at the time of the Design Finalization Meeting
(DFM) "typical" gas turbine Buyer Design drawings as defined in the list below
to facilitate Buyer's preliminary work. A "marked-up" one-line diagram
reflecting the scope of supply under Appendix A shall also be provided.
Significant document revisions by the Seller after the initial issue "For
Approval" or "Approved for Installation" shall constitute the Seller's failure
to meet the Seller's contract obligations for documentation.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Issued--Approved
Issued--For Approval for Installation
-------- ---------------------------------------- --------- ------------------------------- --------------------------------
GE Repro- Repro-
Code Category Code ducible Prints Wks ducible Prints Wks
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LD 0 One-Line Diagram MLI 1 6 11
Information: 0444
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
1 General Arrangement Information:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 1.1 GTG Mechanical Outline MLI 1 6 12
1.2 Inlet air Filter Outline 0306
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Issued--Approved
Issued--For Approval for Installation
-------- ---------------------------------------- --------- ------------------------------- --------------------------------
GE Repro- Repro-
Code Category Code ducible Prints Wks ducible Prints Wks
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2 Cross-Sectional Drawings: *
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
3 Outline Drawings:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 3.1 Buyer's Electrical Connection MLI 1 6 14
Outline 0301
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 3.2 Buyer's Piping Connection MLI 1 6 14
Outline 0313
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 3.2 Notes for Buyer's Piping MLI 1 6 14
Connection Outline 0314
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
4&5 Foundation Drawings, Loading &
Bolt Setting Arrangement:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD .1 Foundation Interface Outline MLI 1 6 14
including inlet air filter 0323
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD .2 Foundation Bolting MLI 1 6 14
Arrangement including inlet air 1603
filter
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD .3 Off-Base Equipment MLI 1 6 14
Foundation Interface Outline 0326
including isolation transformer, DC link
reactor, BACC Electrical Outline, PEECC
Electrical Outline, Generator Terminal
Enclosure & Access platforms
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
6 Calculations: N/A
-------- ---------------------------------------- --------- ----------------------------------------------------------------
LD 7 Erection Drawings: Information and Procedures for Installation with shipment of
equipment and Temporary Storage. 90 Days Before Shipment.
-------- ---------------------------------------- --------- ----------------------------------------------------------------
8 Welding Procedures:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
8.1 Document List MLI 1 6 6
0438
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
9 Bills of Material:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
9.1 Device Summary MLI 1 6 11
0414
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
10 Piping Schematics:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 10.1 Schematic Piping Diagrams MLI 1 6 10
0040
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Issued--Approved
Issued--For Approval for Installation
-------- ---------------------------------------- --------- ------------------------------- --------------------------------
GE Repro- Repro-
Code Category Code ducible Prints Wks ducible Prints Wks
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
11 Electrical Wiring Diagrams:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 11.1 Cable Summary MLI 1 6 12
0463
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
Interconnection Diagram MIL-0301/ 1 6 14
0330
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
12 Control and/or Annunciator *
Schematics:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 12.1 Turbine Control One month prior to SHIP
Specification
-------- ---------------------------------------- --------- ----------------------------------------------------------------
LD 12.2 Generator Protection & Turbine @ SHIP
Auxiliary Elementary Diagrams
-------- ---------------------------------------- --------- ----------------------------------------------------------------
13 Utility Requirements and Diagram See Code 10 Drawing
-------- ---------------------------------------- --------- ----------------------------------------------------------------
14 Control Panel Drawings *
(and/or Operator Station):
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
15 Allowable Pipe Forces and Moments: See Code 3 Drawing
-------- ---------------------------------------- --------- ----------------------------------------------------------------
16 Parts Lists: *
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
17
-------- ---------------------------------------- --------- ----------------------------------------------------------------
18 Performance Curves: See Appendix A
-------- ---------------------------------------- --------- ----------------------------------------------------------------
LD Control System Configuration A108 1 6 12
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
Excitation System Elementary Diagrams 1 6 12
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
19 Material Test and Mill Certificates: N/A
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD 20 Operating & Maintenance Manuals: 12 Copies @ Delivery
-------- ---------------------------------------- --------- ----------------------------------------------------------------
21 Motor Data Sheets (See Section 6.0) 2
including Atomizing air Compressor monthss
and Water Injection Skid: prior
to ship
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
22 Hydrostatic/Running/Performance
Tests:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
23 Max. Piece Weight and Dimension
Data:
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
23.1 Gas Turbine Package Weight MLI 1 6 14
& Center of Gravity & Lifting 0408
Relative Data
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
<PAGE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Issued--Approved
Issued--For Approval for Installation
-------- ---------------------------------------- --------- ------------------------------- --------------------------------
GE Repro- Repro-
Code Category Code ducible Prints Wks ducible Prints Wks
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
24 Manufacturer's Data: *
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
25 Vessel, Tank, Exchanger Drawings: *
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
26 Instrument Installation Drawings: @ SHIP
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
27 Control System Configuration: @ SHIP
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
LD Platform/walkway Details 1 6 9
-------- ---------------------------------------- --------- ----------- ---------- -------- ----------- ---------- ---------
</TABLE>
- ------------------
* Provided in O&M Service Manuals
(1) Weeks are from the Order Definition Meeting
3.0 NOTES
3.1 Prior to receipt of Buyer approval on drawings issued "For
Approval", Seller may proceed at its risk, subject to the
terms of the P.O., with fabrication.
3.2 Documents submitted to Buyer "For Approval" will be marked,
signed and returned. Those marked "Approved as Noted" or
"Disapproved" must be corrected by Seller and returned to
Buyer within 30 working days after receipt of comments. A
response and/or disposition to returned drawings shall be made
within no more than 30 working days.
4.0 TESTS
4.1 Seller shall conduct shop tests as specified in Appendix A.
4.2 Seller shall notify the Buyer at least 10 working days in
advance of starting any test where possible. Neither
completion of the work nor shipment of any part of the
equipment, however, will be delayed to accommodate Buyer's
inspector.
5.0 INSTRUCTIONS
5.1 Equipment must be tagged with Seller's device tag numbers as
designated in the purchase order, or on the first issue of
approval drawings, for proper identification at jobsite.
5.2 Each Seller document requested above must be identified by a
specific project number and by both the Seller's equipment tag
numbers of the individual components, if any, and the package
as a whole.
5.3 All Seller documents plus one (1) copy of Transmittal Letter
shall be forwarded to:
Buyer: (_________________) Seller: (__________________)
<PAGE>
5.4 When submitting drawings and/or data, Seller shall incorporate
as many similar items as possible on each document.
5.5 Any Seller documents required as a result of issuing of
supplements to the Purchase Order shall be handled in the
manner outlined above.
6.0 MOTOR DATA
SELLER SHALL FURNISH THE FOLLOWING ELECTRICAL DATA IN ACCORDANCE WITH
CODE 21 ON PAGE 7:
6.1 Motor manufacturer's certified outline drawing.
6.2 Manufacturer's certified standard nameplate report data sheet.
The following is a minimum requirement:
1) Manufacturer's Type and Frame Size
2) Horsepower Output
3) Time Rating
4) Max Ambient Design Temperature
5) Insulation System Design
6) RPM at rated load.
7) Frequency
8) Number of phases
9) Rated load ampere
10) Rated voltage
11) Code letter for lock rotor kVA
12) Design letter
13) NEMA nominal efficiency
14) Service factor
Nameplate shall be of stainless steel and stamped per NEMA
Standard MG 1 Part 10. Nameplate information shall include as
a minimum, in addition to MG 1, the nominal efficiency value
per NEMA Standard MG 1 Part 12, the manufacturers stock,
design, and/or serial number, the UL, CSA, or other approved
Listing Mark, a connection or phase sequence diagram with
rotational arrows, and bearing replacement information. The
bearing identification shall conform with accepted industry
standards, not vendors proprietary nomenclature. Motor shall
also be properly marked for the hazardous atmosphere rating of
the internal anti-condensation heater, and of the motor, if
applicable.
7.0 SPECIAL DATA REQUIREMENTS
7.1 For pressure vessels, fabrication shall be in accordance with
the ASME Boiler and Pressure Vessel Code if required by
Appendix A. Section VIII, Division 1, or Section 1, where
applicable, and where not applicable, fabrication shall be
equivalent to ASME Code.
7.2 Manufacturer of pressure vessels (lube oil coolers) shall make
available at its facility data regarding pressure vessel
design and manufacture for Buyer's review. Unit specific data
pertinent to the operation and maintenance of the equipment
shall be provided in Seller's Service Manuals, submitted at
the time of shipment.
7.2.1 The following information, where available, shall be
included:
<PAGE>
(A) ASME Manufacturer's Data Sheet (Form U-1)
(B) ASME Dimensional Sketch ("As Built") where
spot x-rays shall be shown on the "As Built"
Drawing.
(C) Certified Record Showing Location of Heat
Numbers
(D) Radiograph Record
(E) Certified Report of Chemical Analysis and
Physical Properties of all materials used.
(F) Photostatic Copy of Stress Relief Recording
Charts (Affidavit Attesting Acceptance)
(G) Code Stamp Facsimile (Rubbings) of Nameplate.
8.0 STAMPING AND NAMEPLATE
8.1 A GE nameplate suitable for outdoor installation shall be
supplied and mounted on a readily visible part of the
Equipment. Information contained on the nameplate shall be
reviewed at the Design Finalization Meeting.
8.2 The Buyer's order number, item identification number (tag
no.), official code symbol and other data as required by the
specified code or local authorities having jurisdiction over
the installation shall be stamped by Buyer's EPC Contractor
on-site. Seller shall provide a ship loose tag kit to
facilitate this requirement.
9.0 EPC CONTRACTOR DOCUMENTATION REQUESTS
Other documentation required by the Buyer's EPC Contractor will be
specified prior to equipment release for engineering and mutually
agreed to at the Design Finalization Meeting.
10.0 PREPARATION FOR SHIPMENT
All equipment parts shall be dry, thoroughly cleaned inside and outside
and free of all dirt and loose foreign materials. All flange faces and
other machined surfaces shall be coated with a readily removable rust
preventative coating and protected against damage during shipment all
in accordance with Seller's standard practices. Threaded openings shall
be protected with solid steel plugs.
11.0 GENERAL NOTES
11.1 Reserved
11.2 Gas Turbine Documentation
The information contained on each drawing and the purpose of
each is described below:
ONE-LINE DIAGRAM - MLI 0444
This drawing contains a simplified electrical schematic of the
power system from generator ground to the Buyer's high voltage
bus including protective relaying, excitation system and
synchronizing system. Also shown on this drawing are auxiliary
power systems with schematic display of distribution panels. A
location key is used to indicate component locations. Device
nomenclature follows the IEEE standard for electrical
switchgear.
The purpose of this drawing is to define for system
coordination protective functions, operational functions
(synchronization, breaker closure, load control), short
circuit limitations and auxiliary power requirements.
<PAGE>
CABLE SUMMARY - MLI 0463
This drawing contains information for interconnecting cables
and wires connecting to Seller supplied equipment. It
indicates "from/to" information, cable size for Seller
supplied cables and voltage level requirements, information
for the Buyer to supply interconnecting cable/wire not
furnished by Seller, and prepare bid specifications for
quotation on installation of all required cable/wire.
The purpose is to define requirements for Seller and
Buyer-supplied cables/wires and necessary information for
installation bids.
BUYER'S ELECTRICAL CONNECTION OUTLINE - MLI 0301
This drawing contains dimensional data concerning location of
gas turbine power plant equipment junction boxes, receptacles,
cutouts, electrical devices requiring field interconnections
and ground stud locations.
Cable routing through conduit embedments shown on the
Foundation Interface Drawing is shown on this drawing.
The purpose is to provide necessary information to allow the
Buyer to determine cable trenches and conduit needs for Seller
and Buyer-supplied cables/wiring. This drawing identifies the
routing of Seller supplied cables through the foundation
conduit embedments.
GAS TURBINE GENERATOR MECHANICAL OUTLINE - MLI 0306
The mechanical outline provides dimensional data (length,
width, and height) of the gas turbine package, inlet air
filter and all other major pieces of Seller supplied
equipment.
The purpose of this drawing is to define space requirements
for station layout, show generator rotor removal dimensions,
cooler tube bundle and lubrication oil filter removal
dimension, vertical centerlines for major pieces and outline
dimensions of the pieces of equipment that extend beyond the
perimeter of the gas turbine package.
BUYER'S PIPING CONNECTION OUTLINE - MLI 0313
This drawing shows the outline of the gas turbine package with
detailed dimensions for Buyer supplied field piping
connections with interface dimensions for points that must be
connected to a station sump or drain.
The purpose is to define the location of field piping
connections for Seller supplied loose piping and components,
as well as Buyer supplied piping. This includes LCI pre-cooler
and cooler.
NOTES FOR BUYER'S PIPING CONNECTION OUTLINE - MLI 0314
The Buyer's piping connection notes give piping interface data
including thread and flange sizes and ratings. Descriptive
information is given for connections that are normally plugged
and/or are to be connected to the station sump.
The purpose is to define piping connections shown on The
Buyer's Piping Connection Outline. This includes LCI
pre-cooler and cooler.
<PAGE>
FOUNDATION INTERFACE OUTLINE - MLI 0323
This drawing contains foundation interface information for the
main gas turbine and inlet air filter foundation including pad
locations and loadings for embedded sole plates. Embedded
conduit locations and sizes within the gas turbine foundations
are defined.
The purpose is to provide information for the design of the
foundation for the gas turbine supplied components located on
the unit centerline.
FOUNDATION BOLTING ARRANGEMENT - MLI 1603
This drawing depicts the arrangement of the bolting of the gas
turbine, generator, Seller supplied components located on the
gas turbine centerline, inlet and exhaust ducts and inlet air
filter to the main foundation. The material required for
leveling and bolting the components to the foundation and the
shims, keyways and keys required for alignment of the gas
turbine are defined and the materials that are supplied by
Seller are identified.
The purpose of this drawing is to supplement the information
presented on the Foundation Interface drawing and to define
the material supplied by Seller.
OFF-BASE EQUIPMENT FOUNDATION INTERFACE OUTLINE - MLI 0326
This drawing contains the same information as the preceding
drawing except it is for the off-base mechanical and
electrical components supplied by Seller. It also includes
equipment envelope dimensions and piping and electrical
connection points. It also includes platform foundation
interface information.
GAS TURBINE PACKAGE WEIGHT AND CENTER OF GRAVITY -
MLI 0407 & 0408
This drawing contains the location of package unit weights and
center of gravity for the control compartment, accessory and
turbine compartment, generator, GAC, inlet compartment, inlet
and exhaust systems, static start equipment, and on-base
coolant water module, if provided.
The purpose is to provide suggested slinging arrangements and
to assist the Buyer in determining lifting requirements for
heavier pieces of equipment.
SCHEMATIC PIPING DIAGRAMS - MLI 0040
These diagrams are functional representations of all packaged
power plant fluid systems, such as lubrication oil, coolant
system, fuel and fuel forwarding. They contain information
regarding flow rates, pressures and temperature requirements
at Buyer connection points and identify system capacity to
determine initial fill requirements.
The purpose is to provide information to allow the Buyer to
determine station interconnecting piping design requirements,
location of off-base skids, and the amount of lubrication oil
and coolant required for operation of the power plant. The
schematics also act as source documents for generation of the
device summary.
DEVICE SUMMARY - MLI 0414
The device summary defines the functional characteristics for
all mechanical and electrical devices on the gas
turbine-generator and their associate components. It is
developed from all the schematic drawings and forms the basis
for the cable block diagram and connection outlines.
<PAGE>
DOCUMENTATION LIST - MLI 0438
This drawing is intended to provide a list of commonly
required specifications and recommendations for equipment or
commodities supplied by the Buyer.
The following is provided as applicable:
- Buyer documentation index
- Coolant recommendations for closed cooling system
(not included)
- Fuel oil specification
- Fuel gas specification
- Lubrication oil recommendations
- Welding symbol interpretation
- Cable installation data
- Drafting symbols
- Insulation recommendations
The purpose is to provide information to allow the Buyer to
determine requirements for the aforementioned items.
STARTUP AND OPERATION DOCUMENTS
Documentation associated with the checkout, initial startup
and routine operation of the Gas Turbine Generator Packaged
Power Plant include the following:
- Consolidated Service Manuals; available at time of unit
shipment
- Turbine Control Specification; available at time of unit
shipment
- Elementary Diagrams; available at time of unit shipment
- Startup Report; available after initial operation of
the unit
In addition, previously supplied functional drawings such as
the one line, schematic piping device summary and elementary
diagrams are heavily utilized during the functional checkout
and initial startup operations.
CONSOLIDATED SERVICE MANUALS
The Consolidated Service Manuals are comprised of: Instruction
Book, Inspection & Maintenance Manual and Spare and Renewal
Parts Book. Twelve (12) copies are provided.
The Instruction Book portion of the Consolidated Service
Manuals contains site specific information on turbine
generator operation. Normal operating sequences are described,
together with normal running inspections for all supplied
equipment and systems. Trouble-shooting and diagnostic
recommendations are also included. Special notes, and
cautionary and warning statements are included and highlighted
throughout the instruction book to enable easy recognition of
special procedures and techniques which must be followed to
ensure correctness and safety for equipment and personnel.
Operating information is also included for all components and
systems that are standardized in their design.
The Inspection and Maintenance Manual provides information for
inspection and maintenance of the gas turbine, its accessories
and auxiliary systems over the life of the equipment.
Recommended procedures for scheduling inspections and planning
maintenance outages, including recommended spares, tools and
equipment are provided. Standard practices for
<PAGE>
disassembly, component inspection and reassembly are described
in detail. Copies of the necessary reporting forms are also
provided.
The Spare and Renewal Parts Book includes all necessary gas
turbine accessory and auxiliary system drawings to allow the
ordering of replacement and expendable materials, parts,
components, and assemblies for all routine inspection and
maintenance activities. It is organized along the same lines
as the model list, or master drawing index, used to
manufacture the gas turbine in the factory, and is specific to
the site.
TURBINE CONTROL SPECIFICATION
The turbine control specification provides all recommended
turbine control panel settings, control system calibration
procedures and turbine operating sequences. It is a site
specific document, and together with the device summary and
gas turbine and generator elementary, provides information on
all field settable control and protective equipment.
ELEMENTARY DIAGRAMS
Elementary diagrams are provided for the gas turbine and
generator controls, including the excitation system. The
turbine control elementary diagram is primarily functional,
and although some hardware representation is included where
appropriate, it concentrates on a pictorial representation of
the turbine and auxiliary system sequencing and control and
protection algorithms implemented in the panel software. The
turbine control panel is also supported for checkout purposes
by a hardware connection diagram that depicts all internal
hardware connections.
The generator and power system elementary diagram is also
functional, however, since control, protection and sequencing
are accomplished with hardware elements, it is more
representative of the actual system hardware configuration.
The same is also true of the motor control centers for all
electrically powered auxiliaries.
STARTUP REPORT
The startup report is prepared by Seller's field startup
engineer after completion of the initial operation of the
unit. It provides an indication of the initial settings and
startup control characteristics for the gas turbine, generator
and all auxiliary systems. It is useful for anticipating
trouble and performing diagnostic work at least through the
first inspection period, and in many cases, over the life of
the installation.
<PAGE>
GE POWER SYSTEMS
- ---------------------------------------------
APPENDIX H - EPC SCHEDULE
- --------------------------------------------------------------------------------
The following is a description of information which cannot be submitted
electronically:
EXHIBIT VII - EPC PROJECT SCHEDULE - GEORGIA
Nine Pages of Project Schedule
<PAGE>
APPENDIX I - TECHNICAL ADVISORY SERVICES
AND COMMISSIONING ASSISTANCE
Qualified electrical, mechanical and controls Technical Advisors to
support the installation, startup and commissioning and performance
testing of the supplied equipment are provided.
DEFINITION
Technical Advisory Service is defined as technical advice and
counsel based on good engineering, manufacturing, installation
and operation practices as applicable to the equipment. Such
services may also include testing, adjustment, programming and
other similar services.
DESCRIPTION OF TYPICAL TECHNICAL ADVISORY SERVICES
GE TURBINE-GENERATOR INSTALLATION
LEAD TECHNICAL ADVISOR
The Turbine-Generator Installation Team is headed by the Lead
Technical Advisor; an experienced GE turbine-generator
installation engineer whose functions and responsibilities
include the following:
- The effective guidance and counseling of the other
GE Technical Advisors to provide for broader
utilization of their skills.
- The integration of the assigned service work with
the Owner representatives to assist in meeting
scheduled startup, completion and operation dates.
- The reporting of pertinent facts on failure of
equipment warranted by GE and its Suppliers to the
proper personnel to permit prompt and equitable
settlement of warranty claims.
- The submittal of timely reports on job progress
and resolution of problems.
- The planning, organization and direction of the
other GE personnel for the installation, startup,
testing and warranty implementation of the
supplied equipment.
- The maintenance of installation records and job
log book.
<PAGE>
TURBINE-GENERATOR INSTALLATION TEAM
The Turbine-Generator Installation Team is comprised of Technical
Advisors skilled in one or more of the following areas: mechanical
erection of gas and steam turbines and related equipment, electrical
equipment installation and testing, SPEEDTRONIC Control System
checkout, calibration and unit startup. Their principal functions and
responsibilities, with respect to Technical Advisory Services, include:
- The inspection and unloading of the major components at the
installation site and their placement on the foundations.
- The setting of necessary shims between sole plates and the
turbines.
- The removal of shipping supports on the turbine and generator
packages.
- The installation of the turbine units to the proper center
line and elevation.
- The alignment of the accessory equipment and generators to the
turbines.
- The installation and checkout of conduit, piping, control
wiring and instrumentation between the turbines and GE
supplied auxiliary equipment and generators.
- Checkout and initial operation of the turbine starting
equipment.
- The sequencing and checkout of the turbine SPEEDTRONIC Control
Panels.
- The installation and checkout of the generator
excitation/electric systems.
- The startup of the turbine units with the Owner's operating
personnel.
- Mark up two (2) sets of drawings to reflect the "as-built"
condition of the equipment. One (l) set for site records and
one (1) set to be returned to GE Customer Service.
2
<PAGE>
GE POWER SYSTEMS
- ---------------------------------------------
APPENDIX J - NOT USED
- --------------------------------------------------------------------------------
TURBINE CONTRACT APPENDIX J
<PAGE>
GE POWER SYSTEMS
- ---------------------------------------------
APPENDIX K - SITE LEGAL DESCRIPTION
- --------------------------------------------------------------------------------
TURBINE CONTRACT APPENDIX K COVER
<PAGE>
LEGAL DESCRIPTION FOR TENASKA PLANT SITE
----------------------------------------
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY, GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY, 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY RIGHT OF WAY LINE
OF GEORGE BROWN ROAD SOUTH 72 DEGREES 57 MINUTES 18 SECONDS WEST FOR A DISTANCE
OF 916.24 FEET TO A STEEL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE
POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND. THENCE SOUTH 00
DEGREES 16 MINUTES 00 SECONDS WEST FOR A DISTANCE OF 902.40 FEET TO A STEEL
FENCE POST; THENCE SOUTH 02 DEGREES 39 MINUTES 49 SECONDS EAST FOR A DISTANCE OF
321.00 FEET TO A ONE INCH PIPE; THENCE SOUTH 00 DEGREES 34 MINUTES 44 SECONDS
EAST FOR A DISTANCE OF 802.62 FEET TO A ONE INCH PIPE; THENCE SOUTH 00 DEGREES
34 MINUTES 44 SECONDS EAST FOR A DISTANCE OF 291.17 FEET TO A POINT IN THE
CENTERLINE OF HILLY MILL CREEK; THENCE FOLLOWING THE COURSE OF THE CENTERLINE OF
HILLY MILL CREEK IN A WESTERLY DIRECTION, TRAVERSED AS FOLLOWS; NORTH 62 DEGREES
07 MINUTES 20 SECONDS WEST FOR A DISTANCE OF 98.34 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK; THENCE SOUTH 20 DEGREES 00 MINUTES 44 SECONDS WEST FOR
A DISTANCE OF 136.80 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE
NORTH 74 DEGREES 21 MINUTES 03 SECONDS WEST FOR A DISTANCE OF 223.86 FEET TO A
POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION LINE RIGHT OF
WAY (150 FOOT WIDTH); THENCE NORTH 74 DEGREES 21 MINUTES 03 SECONDS WEST FOR A
DISTANCE OF 36.90 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH
47 DEGREES 24 MINUTES 20 SECONDS WEST FOR A DISTANCE OF 127.90 FEET TO A POINT
IN THE CENTERLINE OF THE CREEK; THENCE NORTH 79 DEGREES 16 MINUTES 25 SECONDS
WEST FOR A DISTANCE OF 274.76 FEET TO A POINT IN THE CENTERLINE OF THE CREEK;
THENCE NORTH 54 DEGREES 59 MINUTES 10 SECONDS WEST FOR A DISTANCE OF 188.31 FEET
TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE LEAVING THE CENTERLINE OF THE
CREEK NORTH 27 DEGREES 08 MINUTES 04 SECONDS WEST FOR A DISTANCE OF 142.40 FEET
TO A POINT; THENCE NORTH 76 DEGREES 02 MINUTES 42 SECONDS WEST FOR A DISTANCE OF
170.99 FEET TO A POINT; THENCE NORTH 54 DEGREES 14 MINUTES 27 SECONDS WEST FOR A
DISTANCE OF 280.96 FEET TO A POINT; THENCE NORTH 66 DEGREES 49 MINUTES 01
SECONDS WEST FOR A DISTANCE OF 101.90 FEET TO A POINT; THENCE SOUTH 55 DEGREES
21 MINUTES 00 SECONDS WEST FOR A DISTANCE OF 162.95 FEET TO A POINT; THENCE
NORTH 81 DEGREES 39 MINUTES 29 SECONDS WEST FOR A DISTANCE OF 406.05 FEET TO A
POINT; THENCE NORTH 30 DEGREES 16 MINUTES 39 SECONDS WEST FOR A DISTANCE OF
<PAGE>
496.12 FEET TO AN INTERSECTION OF SAID LINE WITH THE CENTERLINE OF AN UNNAMED
CREEK FROM THE NORTHEAST; THENCE FOLLOWING THE CENTERLINE OF SAID UNNAMED CREEK
TO THE NORTHEAST, TRAVERSED AS FOLLOWS; NORTH 67 DEGREES 00 MINUTES 13 SECONDS
EAST FOR A DISTANCE OF 336.28 FEET TO A POINT IN THE CENTERLINE OF THE CREEK;
THENCE NORTH 64 DEGREES 26 MINUTES 52 SECONDS EAST FOR A DISTANCE OF 296.07 FEET
TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 53 DEGREES 40 MINUTES 03
SECONDS EAST FOR A DISTANCE OF 67.68 FEET TO A POINT IN THE CENTERLINE OF THE
CREEK; THENCE NORTH 16 DEGREES 14 MINUTES 29 SECONDS EAST FOR A DISTANCE OF
228.26 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 22 DEGREES
18 MINUTES 47 SECONDS EAST FOR A DISTANCE OF 241.49 FEET TO A POINT IN THE
CENTERLINE OF THE CREEK; THENCE NORTH 06 DEGREES 14 MINUTES 09 SECONDS EAST FOR
A DISTANCE OF 71.42 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH
78 DEGREES 23 MINUTES 44 SECONDS EAST FOR A DISTANCE OF 307.88 FEET TO A POINT
IN THE CENTERLINE OF THE CREEK; THENCE NORTH 47 DEGREES 11 MINUTES 56 SECONDS
EAST FOR A DISTANCE OF 157.63 FEET TO A POINT IN THE CENTERLINE OF THE CREEK;
THENCE NORTH 26 DEGREES 01 MINUTES 20 SECONDS EAST FOR A DISTANCE OF 111.97 FEET
TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE NORTH 54 DEGREES 06 MINUTES 33
SECONDS EAST FOR A DISTANCE OF 128.35 FEET TO A POINT IN THE CENTERLINE OF THE
CREEK; THENCE NORTH 07 DEGREES 03 MINUTES 45 SECONDS EAST FOR A DISTANCE OF
34.61 FEET TO A POINT IN THE CENTERLINE OF THE CREEK; THENCE LEAVING THE CREEK
SOUTH 89 DEGREES 40 MINUTES 10 SECONDS EAST FOR A DISTANCE OF 290.53 FEET TO
POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION LINE EASEMENT
(150 FOOT WIDTH); THENCE SOUTH 89 DEGREES 40 MINUTES 10 SECONDS EAST FOR A
DISTANCE OF 177.44 FEET TO A 12 INCH DIAMETER WOOD POST; THENCE NORTH 71 DEGREES
45 MINUTES 00 SECONDS EAST FOR A DISTANCE OF 405.46 FEET TO A STEEL FENCE POST
FLUSH WITH THE GROUND; SAID POINT BEING THE POINT OF BEGINNING.
SAID PARCEL CONTAINS 73.53 ACRES OF LAND, AND IS MORE PARTICULARLY SHOWN AS
TRACT "A" ON SHEET 1 0F 2 OF THAT CERTAIN ALTA/ACSM LAND TITLE SURVEY FOR
TENASKA, INC., FIRST AMERICAN TITLE INSURANCE COMPANY AND OTHER PARTIES TO BE
NAMED, PREPARED BY DONALDSON, GARRET & ASSOCIATES, INC., MACON, GEORGIA, DATED
APRIL 3, 1998.
<PAGE>
GE POWER SYSTEMS
- ---------------------------------------------
APPENDIX L - WITNESS PLAN
- --------------------------------------------------------------------------------
(See Appendix A, Section 11)
TURBINE CONTRACT APPENDIX L
<PAGE>
GE POWER SYSTEMS
- ---------------------------------------------
APPENDIX M - RIGHTS AND OBLIGATIONS RETAINED BY BUYER
- --------------------------------------------------------------------------------
TURBINE CONTRACT APPENDIX M COVER
<PAGE>
APPENDIX M - Section 22.1
RIGHTS AND OBLIGATIONS RETAINED BY BUYER
In the event of the assignment of this Contract pursuant to Section 22.1(b), the
term Buyer as used in this Contract shall mean such Section 22.1(b) Contractor
Assignee, except that Buyer or Buyer's assignee under Section 22.1(a) ("Owner"),
may, at its option, retain some or all of the following rights:
Section 2.4 rights to exercise all Options under Sections
2.4. and 9.2.
Section 4.1 the right under Section 4.1 to (i) direct Seller
to deliver the Equipment to a Delivery Point
other than a location at or near the Site, (ii)
the right to notify Seller to delay shipment of
any Unit(s) and to request a specific alternate
Delivery Date, and (iii) the right to make any
elections under Section 4.1(a).
Section 4.4 the right, jointly with assignee, to exercise
all of the inspection rights under Section 4.4.
Section 5.1 together with assignee, the rights of access set
forth in Section 5.1.
Section 5.2 the right to agree upon a specific list of
Witness Tests.
Section 7.1 the right, along with assignee, to receive all
notices to be delivered by Seller under Section
7.1.
Section 8.1 rights, along with assignee, to the benefits of
all warranties in Section 8.1 and to notify
Seller of a breach under Section 8.1.
Article 9.1 the right to consent to all change orders,
including Directed Change Orders, under Section
9.1 and to receive copies of all dispute notices
delivered by Seller pursuant to Section 9.1.
Article 10 rights, along with assignee, to all warranties
in Article 10, including rights to receive all
payments of liquidated damages due under Article
10.
Article 11 rights to enforce Seller's covenants regarding
confidentiality with respect to the confidential
information of Tenaska, Inc., Owner, and
assignee.
Section 12.1 rights, along with assignee, to be indemnified
by Seller.
<PAGE>
Section 12.2 rights, along with assignee, to require Seller
to provide remedies for infringement.
Section 14.1 the right to consent to the termination of the
Contract under Section 14.1 and in all other
circumstances.
Section 15.1 the right to be included as an Indemnified party
under Section 15.1.
Section 17.2 the right, along with assignee, to receive
delivery of all notices to be delivered by
Seller under Section 17.2.
Section 17.2(d) the right to require Seller to continue remedy
and testing activities.
Section 18.1 the right to appoint a qualified staff member to
function as a Project Coordinator.
<PAGE>
Exhibit 10.11.1
AGREEMENT FOR ASSIGNMENT AND ASSUMPTION
OF
TURBINE CONTRACT TO TENASKA GEORGIA
This Agreement for Assignment and Assumption of Turbine Contract to
Tenaska Georgia (this "Agreement") entered into by and between Tenaska Georgia
I, L.P., a Delaware limited partnership ("Tenaska") and Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("Tenaska Georgia"), effective as
of November 10, 1999.
WHEREAS, Tenaska entered into a Contract for Purchase with General
Electric Company, a New York corporation ("General Electric"), dated August 27,
1999, (the "Turbine Contract"); and
WHEREAS, Section 22.1(a) of the Turbine Contract provides that such
contract may be assigned to an Affiliate of Tenaska or an entity in which an
Affiliate of Tenaska has an ownership interest; and
WHEREAS, pursuant to Section 22.1(a) of the Turbine Contract, Tenaska
desires to assign the Turbine Contract to Tenaska Georgia.
NOW, THEREFORE, the parties agree as follows:
1. Tenaska assigns to Tenaska Georgia all of its rights and benefits under
the Turbine Contract, and Tenaska further assigns and delegates all of
its duties and obligations under the Turbine Contract to Tenaska
Georgia.
2. Tenaska Georgia accepts the assignment from Tenaska of all rights and
benefits under the Turbine Contract and assumes all of the duties and
obligations of Tenaska as contained in the Turbine Contract. Tenaska
Georgia agrees to be bound by all the protections and limitations
afforded to General Electric under the Turbine Contract.
3. Tenaska Georgia hereby releases Tenaska from any and all duties,
obligations and liabilities under the Turbine Contract.
4. This Agreement shall not become effective until a fully executed copy
of this Agreement, including the Agreement and Consent of General
Electric, attached hereto, is executed and delivered to Tenaska and
Tenaska Georgia.
5. This Agreement shall inure to and be binding upon the successors and
assigns of the parties.
6. This Agreement shall be governed by and construed according to the laws
of the State of Texas.
<PAGE>
TENASKA GEORGIA I, L.P.,
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
Managing General Partner
/S/_______________________ By: /S/_____________________________
Witness Michael F. Lawler
Title: Vice President of Finance & Treasurer
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
Managing General Partner
/S/_______________________ By: /S/__________________________
Witness Michael F. Lawler
Title: Vice President of Finance & Treasurer
<PAGE>
AGREEMENT AND CONSENT
General Electric Company, a New York corporation ("General Electric")
consents to the assignment of the Contract for Purchase between General Electric
and Tenaska Georgia I, L.P., a Delaware limited partnership ("Tenaska"), dated
the 27th day of August, 1999, (the "Turbine Contract") to Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("Tenaska Georgia") and the
assumption by Tenaska Georgia of the Turbine Contract as set forth in the
Agreement for Assignment and Assumption of Turbine Contract to Tenaska Georgia
attached hereto.
General Electric hereby releases Tenaska from any and all duties,
obligations and liabilities under the Turbine Contract.
Dated this 10th day of November, 1999.
GENERAL ELECTRIC COMPANY,
a New York corporation
By: /S/
Title: Vice President
TURBINECONTRACTASSIGNMENTOTGPARTNERS
<PAGE>
Exhibit 10.11.2
AGREEMENT FOR ASSIGNMENT AND ASSUMPTION
OF
TURBINE CONTRACT TO EPC CONTRACTOR
This Agreement for Assignment and Assumption of Turbine Contract to EPC
Contractor (this "Agreement") entered into by and between Tenaska Georgia
Partners, L.P., a Delaware limited partnership ("Tenaska Georgia"), and Zachry
Construction Corporation, a Delaware corporation ("Zachry"), this 10th day of
November, 1999.
WHEREAS, Tenaska Georgia I, L.P., a Delaware limited partnership
("Tenaska"), and Zachry entered into an Engineering, Procurement and
Construction Agreement dated September 15, 1999, which provides for the design
and construction of a dispatchable electric generating facility on a Plant
Premises located in Heard County in the State of Georgia, as amended by a First
Amendment to Engineering, Procurement and Assignment Agreement, dated October 8,
1999, ("EPC Agreement"); and
WHEREAS, by an Agreement for Assignment and Assumption of EPC Agreement
of even date herewith, the EPC Agreement has been assigned to Tenaska Georgia;
and
WHEREAS, Tenaska entered into a Contract for Purchase with General
Electric Company, a New York corporation ("General Electric"), dated August 27,
1999, (the "Turbine Contract"); and
WHEREAS, Section 22.1(a) of the Turbine Contract provides that Tenaska
may assign the Turbine Contract to an Affiliate of Tenaska or an entity in which
an Affiliate of Tenaska has an ownership interest; and
WHEREAS, pursuant to Section 22.1(a) of the Turbine Contract, Tenaska
has, by an Agreement for Assignment and Assumption of Turbine Contract to
Tenaska Georgia, assigned the Turbine Contract to Tenaska Georgia, and Tenaska
Georgia has accepted such assignment of the Turbine Contract by execution of
such agreement; and
WHEREAS, Section 22.1(b) of the Turbine Contract provides that an
assignee under Section 22.1(a), may assign the Turbine Contract, including
rights and obligations with respect to one or more Units, to a third party
contractor that has entered into an agreement with such assignee for the
construction of the Project (as defined in the Turbine Contract); and
WHEREAS, Tenaska Georgia desires to assign, and Zachry is willing to
accept an assignment of the Turbine Contract.
NOW, THEREFORE, the parties agree as follows:
1. Tenaska Georgia assigns to Zachry all of its rights and benefits under
the Turbine Contract, except as otherwise provided in Section 22.1(b)
and Appendix M of the Turbine Contract (and no other rights and
benefits which Tenaska Georgia may have pursuant to any other option or
contract with General Electric) and Tenaska Georgia further assigns and
delegates all of its duties and obligations under the Turbine Contract
to Zachry, except for the obligation to process and make payments with
respect to the Turbine Contract.
<PAGE>
2. Zachry accepts the assignment from Tenaska Georgia of all rights and
benefits under the Turbine Contract, except as otherwise provided in
Section 22.1(b) and Appendix M of the Turbine Contract, assumes all of
the duties and obligations of Tenaska Georgia as contained in the
Turbine Contract, except for the obligation to process and make
payments with respect to the Turbine Contract. Zachry agrees to be
bound by all the protections and limitations afforded to General
Electric under the Turbine Contract.
3. Zachry shall promptly submit invoices furnished by General Electric
under the Turbine Contract directly to Tenaska Georgia. Such payments
shall be due and payable via wire transfer to an account designated by
General Electric and otherwise in accordance with the terms of the
Turbine Contract and shall be made directly by Tenaska Georgia to
General Electric. In the event Tenaska Georgia fails to make any
payment to General Electric (i) as a result of the failure by Zachry
to promptly submit invoices or any other act or omission of Zachry or
(ii) for additional work requested of General Electric or caused
directly to General Electric by Zachry, then Zachry shall be directly
liable for such payment together with interest thereon computed in
accordance with the Turbine Contract. Except as provided in this
Section 3, Zachry shall have no independent liability for the payment
obligations under the Turbine Contract. Nothing in this Section 3
shall alter the obligation of Tenaska Georgia to pay Zachry under the
EPC Agreement.
4. This Agreement shall not become effective until a fully executed copy
of this Agreement, including the Agreement and Consent of General
Electric, attached hereto, is delivered to Zachry and Tenaska Georgia.
5. Pursuant to Section 22.1(b) of the Turbine Contract, Zachry agrees that
Tenaska Georgia shall retain the right to have the Turbine Contract
assigned to Tenaska Georgia's lenders for security purposes. Zachry
further agrees that upon written request, Zachry will execute such
documents as are reasonably required by Tenaska Georgia's lenders and
in such form as is reasonably required by Tenaska Georgia's lenders, to
assign the Turbine Contract to Tenaska Georgia's lenders, without the
consent of General Electric.
6. Tenaska Georgia and Zachry further agree that continuing obligations
between Tenaska Georgia and Zachry with respect to the subject matter
of the Turbine Contract shall be governed by the terms and conditions
of the EPC Agreement and this Agreement.
7. This Agreement shall inure to and be binding upon the successors and
assigns of the parties.
8. This Agreement shall be governed by and construed according to the laws
of the State of Texas.
Dated this 10th day of November, 1999.
<PAGE>
ZACHRY CONSTRUCTION CORPORATION,
a Delaware corporation
/s/__________________ By: /s/_____________________________
Witness Robert J. Kalt
Title: Vice President
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
By: TENASKA GEORGIA, INC.
Managing General Partner
By: /s/_____________________________
Michael F. Lawler
Title: Vice President of Finance & Treasurer
/s/_________________________
Witness
<PAGE>
AGREEMENT AND CONSENT
General Electric Company, a New York corporation ("General Electric")
consents to the assignment of the Contract for Purchase (the "Turbine Contract")
between General Electric and Tenaska Georgia I, L.P., a Delaware limited
partnership ("Tenaska"), dated the 27th day of August, 1999, as assigned by
Tenaska to Tenaska Georgia Partners, L.P., a Delaware limited partnership
("Tenaska Georgia"), to Zachry Construction Corporation, a Delaware corporation
("Zachry"), and the assumption by Zachry of the Turbine Contract as set forth in
the Agreement for Assignment and Assumption of Turbine Contract to EPC
Contractor attached hereto, and further agrees as follows:
1. Tenaska Georgia is released from any and all rights, obligations and
liability under the Turbine Contract, except as otherwise provided in
Section 22.1(b) and Appendix M of the Turbine Contract and except for
the obligation to process and make payments with respect to the Turbine
Contract in accordance with and as limited by the foregoing the
Agreement for Assignment and Assumption of Turbine Contract to EPC
Contractor.
2. As a condition to the receipt of any payment under the Turbine
Contract, General Electric will execute a lien waiver (in a form
supplied by Tenaska Georgia or Zachry reasonably satisfactory to
General Electric) which lien waiver will waive General Electric's
rights to place a lien on the Plant Premises with respect to that
portion of the Equipment and Services which is the subject of that
payment and any prior payments received by General Electric.
3. Tenaska Georgia retains certain rights and obligations pursuant to
Section 22.1(b) and Exhibit M of the Turbine Contract and there shall
be no amendment of the Turbine Contract without the written consent of
Tenaska Georgia. General Electric shall provide to Tenaska Georgia a
duplicate copy of any notice given to Zachry under the Turbine
Contract.
Dated this 10th day of November, 1999.
GENERAL ELECTRIC COMPANY,
a New York corporation
By: /s/__________________
Title: Vice President
TURBINECONTRACTASSIGNMENTTOZACHARY
<PAGE>
Exhibit 10.12
GROUND LEASE
BY AND BETWEEN
TENASKA, INC.
"LESSOR"
AND
TENASKA GEORGIA PARTNERS, L.P.
"LESSEE"
NOVEMBER 10, 1999
<PAGE>
GROUND LEASE
THIS GROUND LEASE (the "Lease") is made and entered into as of November
10, 1999, (the "Effective Date") by and between TENASKA, INC., a Delaware
corporation ("Lessor"), and TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership ("Lessee").
RECITALS
A. Lessor owns that certain real property located in Heard County,
State of Georgia, which consists of approximately 13.13 acres of unimproved land
which is more particularly described in EXHIBIT "A" attached hereto (the
"Property").
B. Lessee desires to lease the Property for the purpose of constructing
a laydown area in connection with the construction of a power generation
facility on and/or adjacent to the Property;
NOW, THEREFORE, in consideration of the rents to be paid hereunder,
covenants and conditions contained herein, the parties hereby agree as follows:
ARTICLE 1. BASIC LEASE INFORMATION
The following is a summary of basic lease information. Each term or
item in this Article I shall be deemed to incorporate all of the provisions set
forth below pertaining to such term or item and to the extent there is any
conflict between the provisions of this Article I and any more specific
provision of this Lease, the more specific provision shall control.
<TABLE>
<S> <C>
Lessor: Tenaska, Inc.
Address of Lessor: 1044 North 115th Street, Suite 400
Omaha, Nebraska 68154
Attn: Law and Contract Administration Departments
Lessee: Tenaska Georgia Partners, L.P.
Address of Lessee: 1044 North 115th Street, Suite 400
Omaha, Nebraska 68154
Attn: Law and Contract Administration Departments
Commencement Date: Effective Date
Expiration Date: December 31, 2002
Term: Effective Date - December 31, 2002
</TABLE>
<PAGE>
Base Rent: $13,130.00 per year, payable in equal monthly
installments of $1,094.17 per month.
ARTICLE 2. LEASE OF PROPERTY
2.1 PROPERTY. Lessor hereby leases the Property to Lessee, Lessee
hereby hires the Property from Lessor, on the term and conditions set forth in
this Lease.
ARTICLE 3. ACCEPTANCE OF PROPERTY
Except as otherwise specifically provided in this Lease, Lessee hereby
agrees to take the Property in its existing condition and acknowledges that in
entering into this Lease, Lessee does not rely on, and Lessor does not make, any
express or implied representations or warranties as to any matters including,
without limitation, the suitability of the soil or subsoil, any characteristics
of the Property or improvements thereon, the suitability of the Property for
Lessee's intended use, the economic feasibility of the business Lessee intends
to conduct on the Property, title to the Property, or any other matter. Lessee
hereby leases the Property subject to all matters of record, including, without
limitation the Permitted Title Encumbrances identified on EXHIBIT "B" attached
hereto and made a part hereof.
ARTICLE 4. TERM
4.1 INITIAL TERM. The term of this Lease (the "Term") shall be for the
period stated in the Basic Lease Information, commencing on the Commencement
Date and expiring on the Expiration Date (as identified pursuant to Section
5.1), unless terminated earlier or extended as hereinafter provided. Regardless
of the length of the term of this Lease, both Lessor and Lessee agree that an
estate in land, and not a usufruct, is hereby created by this Lease.
ARTICLE 5. BASE RENT
5.1 RENT COMMENCEMENT. Rent shall commence on the Effective Date (the
"Rent Commencement Date").
5.2 BASE RENT. Commencing upon the Rent Commencement Date and
continuing throughout the Term, Lessee shall pay Base Rent to Lessor, at
Lessor's address stated in the Basic Lease Information, in equal monthly
payments of $1,094.17, without prior notice, demand, abatement or set off. Base
Rent shall be paid on the first day of each calendar month, in advance, without
deduction or offset. If the Rent Commencement Date or the Expiration Date occur
on other than the first day of a month, the installment of Base Rent due for
such partial month shall be prorated based on a 30-day month.
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<PAGE>
5.3 LATE PAYMENT. If Lessee fails to pay any installment of Base Rent
or any Additional Rental (as defined in Article 6) within ten (10) days after
notice of non-receipt from Lessor, such unpaid amounts shall be subject to a
late payment charge equal to five percent (5%) of the unpaid amounts in each
instance. The late payment charge has been agreed upon by Lessor and Lessee
after negotiation, as a reasonable estimate of the additional administrative
costs and detriment that will be incurred by Lessor as a result of any such
failure by Lessee, the actual costs thereof being extremely difficult if not
impossible to determine.
ARTICLE 6. ADDITIONAL RENTAL
Each and every sum payable to Lessor pursuant to this Lease (other than
Base Rent), each and every sum Lessee pays to any third party pursuant to this
Lease, and each and every sum which Lessor pays to any third party to cure a
default of Lessee shall be additional rent ("Additional Rental"). Lessor shall
be entitled to the same rights and remedies with respect to recovery of
Additional Rental as it shall be with respect to Base Rent. Base Rent and
Additional Rental are collectively referred to herein as "Rent".
ARTICLE 7. NET LEASE; NO COUNTERCLAIM OR ABATEMENT
7.1 NET LEASE. The Base Rent and Additional Rental due to Lessor
hereunder shall be absolutely net to Lessor and shall be paid without assertion
of any counterclaim, setoff, deduction or defense and without abatement,
suspension, deferment or reduction. Except as expressly provided to the contrary
in this Lease, Lessor will not be required to make any expenditure, incur any
obligation, or incur any liability of any kind in connection with this Lease or
the ownership, construction, maintenance, operation or repair of the Property.
7.2 INDEPENDENT COVENANTS. The obligations of Lessee hereunder shall be
separate and independent covenants and agreements. Each agreement of Lessee
shall be both a covenant and a condition. Lessee hereby waives, to the full
extent permitted by applicable law, all rights now or hereafter conferred by
statute to quit, terminate or surrender this Lease or the Property or any part
thereof, or to any abatement, suspension, deferment, diminution or reduction of
any Rent hereunder.
ARTICLE 8. USE AND OPERATION OF PROPERTY
The Property shall be used as a laydown area in connection with the
construction of a power generation facility on a separate tract of land in the
vicinity of the Property, or any other lawful use permitted by applicable zoning
and land use restrictions.
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ARTICLE 9. IMPROVEMENTS AND ACTIVITIES UPON THE PROPERTY
9.1 IMPROVEMENTS AND ACTIVITIES. Lessee is permitted to construct the
following improvements and engage in the following activities on the Property:
(i) to grade and lay down aggregate on the Property;
(ii) to construct roads and access ways on the Property;
(ii) to construct security fencing and gates around the boundary of
the Property;
(iii) to construct temporary parking and temporary storage areas;
(iv) to construct temporary warehouses and construction equipment
maintenance areas, both of which may have concrete slab
floors;
(v) to construct and/or install temporary office facilities;
(vi) to receive and unload permanent materials and consumable
supplies;
(vii) to store permanent materials and consumable supplies in the
temporary warehouse structures and on aggregate surfaced
storage areas;
(viii) to fabricate and assemble permanent materials;
(ix) to receive, assemble, disassemble, maintain and store
construction equipment;
(x) to construct temporary structures for brass-in and brass-out
of workers;
(xi) to construct or install temporary restroom facilities for
workers;
(xii) installation of holding tanks to hold waste water discharged
from temporary office facilities, and for the installation of
temporary sanitary sewer lines needed to discharge waste water
into any available sanitary sewer system; and
(xiii) installation of temporary utility pipes and lines (both
underground and overhead).
9.2 All costs of design, engineering, permitting and construction of
any Improvements to the Property shall be at Lessee's sole cost and expense.
9.3 PERMITS AND APPROVAL. Lessee shall be solely responsible at its
sole cost and expense for obtaining the approval of any necessary governmental
agency with jurisdiction over the Property for any general plan approval or
amendment, rezoning, variance, conditional use permit, building, electrical and
plumbing permits, environmental impact analysis and mitigations imposed thereby,
or other governmental action necessary to permit the construction and
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<PAGE>
operation of the laydown area in accordance with this Lease. Any fees or other
assessments imposed as part of the approval process shall be paid by Lessee.
9.4 INSURANCE REQUIREMENTS. Before commencing to perform any of the
activities permitted by Section 9.1 hereof and before any building materials
have been delivered to the Property by Lessee or under Lessee's authority,
Lessee shall procure or cause to be procured the insurance coverage described
below in the limits hereinafter provided, and shall provide Lessor with
certificates of such insurance:
(i) Comprehensive liability insurance covering Lessee, Lessor and each
contractor and subcontractor engaged in any work on the Property, which
insurance may be effected by endorsement if obtainable, on the policy required
to be carried pursuant to Article 18, covering Lessor and Lessee, and in a
liability amount not less than Twenty Million Dollars ($20,000,000) under
Lessee's Comprehensive Liability Insurance Policy and Umbrella Liability
Insurance Policy. Such coverage may be provided on a "claims made" basis.
All insurance required pursuant to this Section 9.5 shall meet the
requirements of Section 18.6.
9.5 GENERAL CONSTRUCTION REQUIREMENTS. All construction and other work
shall be done in a good and workmanlike manner and consistent with all existing
and future applicable local, state and federal statutes, rules, regulations,
codes (including, without limitation, zoning and building codes), ordinances,
permits, orders and other applicable law, and all amendments and modifications
thereto (collectively "Applicable Laws").
ARTICLE 10. ARBITRATION OF DISPUTES.
In any instance where this Lease provides for the arbitration of
disputes, such disputes shall be resolved through arbitration to be conducted in
accordance with the commercial arbitration rules of the American Arbitration
Association then in effect as supplemented by the terms of this Agreement.
Discovery shall be available to the parties in such arbitration proceedings as
prescribed by law for civil actions in the state courts having jurisdiction over
disputes, including without limitation subpoenas requiring attendance of
witnesses, subpoenas duces tecum for the production of books, records, documents
and other evidence, interrogatories and depositions. All arbitration proceedings
shall be held in Omaha, Nebraska before one neutral arbitrator having at least
five years' real estate experience. The arbitrator shall be selected by mutual
agreement of Lessor and Lessee, or, if the parties are unable to agree on an
arbitrator within thirty (30) days after arbitration is first requested either
party shall have the right to petition any court with jurisdiction to appoint an
arbitrator. The non-prevailing party shall bear all costs and expenses of the
arbitration, including without limitation the prevailing party's reasonable
attorneys' fees and costs as provided in Section 34.6. The arbitrator shall have
no power to alter or modify any of the terms of this Lease and the arbitrators
jurisdiction shall be limited accordingly. Judgment upon the award may be
entered in any court having jurisdiction.
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<PAGE>
ARTICLE 11. MECHANICS' AND OTHER LIENS
11.1 NO LIENS. Lessee covenants and agrees to keep all of the Property
and every part thereof and all improvements thereon free and clear of and from
any and all mechanics', material supplier's and other liens for work or labor
done, services performed, materials, appliances, or power contributed, used or
furnished to be used in or about the Property for or in connection with any
operations of Lessee, any improvements that Lessee may make or permit or cause
to be made, or any work or construction by, for or permitted by Lessee on or
about the Property, and at all times promptly and fully to pay and discharge any
and all claims upon which any such lien may or could be based, and to save and
hold Lessor and all of the Property and the improvements thereon free and
harmless of and from any and all such liens and claims of liens and suits or
other proceedings pertaining thereto.
11.2 RIGHT TO CONTEST LIENS. Lessee shall have the right to contest, in
good faith, the amount or validity of any lien of the nature described in
Section 11.1 above, provided that Lessee shall give Lessor written notice of
Lessee's intention to do so within ten (10) days after the recording of such
lien, and provided further, that Lessee shall, at its expense, defend itself and
Lessor against the same and shall pay and satisfy any adverse judgment that may
be rendered thereon before the enforcement thereof against the Property. In
addition, at the request of Lessor, Lessee shall procure and record the bond as
required by Applicable Law for purposes of freeing the Property from the effect
of such lien or claim or action thereof. Lessee shall pay all reasonable
attorneys' fees, consultants fees, travel expenses, and other costs incurred by
Lessor in connection with any such contest.
11.3 NO EFFECT ON LESSOR'S INTERESTS. No mechanics' or material
suppliers' liens or other liens of any character whatsoever created or suffered
by Lessee shall in any way, or to any extent, affect the interests, right or
title of Lessor in and to the Property.
11.4 LESSOR'S RIGHT TO CAUSE RELEASE OF LIENS. If Lessee shall not
within ten (10) days following the imposition of any such lien which is not
being contested by Lessee in accordance with Section 11.2 cause the lien to be
released of record by payment or posting of a proper bond, Lessor shall have the
right but not the obligation to cause the same to be released by such means as
Lessor shall deem appropriate and the amount paid by Lessor together with all
expenses incurred by Lessor in connection therewith (including without
limitation reasonable attorneys' fees and expenses), plus interest at eighteen
percent (18%) per annum or the maximum rate allowed by law, whichever is less,
from the date of payment by Lessor, shall be Additional Rental, immediately due
and payable by Lessee to Lessor upon demand.
ARTICLE 12. OWNERSHIP OF IMPROVEMENTS
All improvements constructed, installed or placed by Lessee on the
Property shall be the property of Lessee during the Term. Prior to expiration of
the Term, and within sixty (60) days after any earlier termination of this Lease
if terminated pursuant to any provision hereof, Lessee shall have the right to
remove, at Lessee's sole cost and expense, any improvements originally installed
on the Property at Lessee's expense, provided that all work to remove such
6
<PAGE>
improvements is performed in compliance with Applicable Laws, and the Property
left in compliance with Applicable Laws, free of any liens. Upon expiration of
this Lease, or on the date sixty (60) days after any earlier termination of this
Lease, all of Lessee's right, title and interest in the improvements shall cease
and terminate and title to the improvements shall immediately vest in Lessor.
Lessee shall surrender the Property to Lessor as provided in Article 25. No
further deed or other instrument shall be necessary to confirm the vesting in
Lessor of title to the improvements.
ARTICLE 13. MAINTENANCE AND REPAIRS; NO WASTE
13.1 MAINTENANCE AND REPAIRS. During the Term, Lessee shall, at its own
cost and expense and without any cost or expense to Lessor, keep and maintain
the Property in good condition and repair and shall allow no nuisances to exist
or be maintained thereon. Lessee shall promptly make all repairs, replacements
and alterations (whether structural or nonstructural, foreseen or unforeseen or
ordinary or extraordinary) necessary to maintain the Property in good condition
and in compliance with all Applicable Laws.
13.2 NO WASTE. Lessee shall not commit or permit waste upon the
Property, other than the removal of trees and clearing and grading of the
Property as Lessee determines is needed in order for Lessee to conduct its
business operations on the Property.
13.3 NO LESSOR OBLIGATIONS. Lessor shall not be obligated to make to
the Property any repairs, replacements or renewals of any kind, nature or
description whatsoever and Lessee hereby expressly waives any right to terminate
this Lease and any right to make repairs at Lessor's expense under Applicable
Laws, if any, or any amendments thereof or any similar law, statute or ordinance
now or hereafter in effect.
ARTICLE 14. UTILITIES AND SERVICES
Lessee shall be solely responsible for, shall make all arrangements
for, and shall pay for all utilities and services furnished to or used at the
Property including without limitation, gas, electricity, other power, water,
telephone, cable and other communication services, security services, sewage,
sewage service fees, trash collection, and any taxes or impositions thereon.
Lessee shall maintain, repair and replace all such utility services located on
or connected to the Property at no cost or expense to Lessor.
ARTICLE 15. [Intentionally Deleted]
ARTICLE 16. COMPLIANCE WITH LAWS; INSURANCE REQUIREMENTS
16.1 COMPLIANCE WITH APPLICABLE LAWS. Lessee, at Lessee's sole cost and
expense, shall comply with all Applicable Laws related to the use or occupancy
of the Property by Lessee.
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16.2 COMPLIANCE WITH INSURANCE REQUIREMENTS. Lessee shall not do
anything, or permit anything to be done, in or about the Property that would,
(i) invalidate or be in conflict with the provisions of any fire or other
insurance policies covering the Property or any property located therein.
ARTICLE 17. HAZARDOUS SUBSTANCES
17.1 LESSEE'S ENVIRONMENTAL COVENANT AND INDEMNIFICATION. Lessee shall
not handle, store, manufacture, treat, release, dispose of, or cause or permit
to be brought upon the Property any Hazardous Substances on or in the Property,
except in the ordinary course of Lessee's business, and shall not discharge any
Hazardous Substances onto the land or any surface water or ground water at or
near the Property, except in compliance with Applicable Laws. Lessee shall
indemnify, defend and hold harmless Lessor from and against any and all claims,
demands, actions, suits, orders, proceedings, judgments, injunctions,
liabilities, losses, liens, costs, expenses, (including reasonable attorneys'
fees and fees of other experts and consultants), and damages, of any kind or
nature, threatened, made, brought or entered against Lessor or any of its
officers, directors, agents or employees, to the extent arising out of Hazardous
Substances in, on or under the Property that directly resulted from the
activities of Lessee or any of its agents or employees on the Property.
17.2 ENVIRONMENTAL NOTICES. Lessor and Lessee shall each immediately
advise the other in writing of (a) any and all governmental agency regulatory
proceedings or enforcement actions instituted or threatened which presently
require or could require investigation, mitigation, clean-up, alteration or
abatement of conditions at the Property, and (b) all claims made or threatened
by any party against either party or the Property relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Substance.
17.3 DEFINITIONS. For purposes of this Article 17, "Hazardous
Substances" shall mean any substance which is (i) designated, defined,
classified or regulated as a hazardous substance, hazardous material, hazardous
waste, pollutant or contaminant under any Environmental Law, as currently in
effect or as hereafter amended or enacted, (ii) a petroleum hydrocarbon
including crude oil or any fraction thereof and all petroleum products, (iii)
PCBs, (iv) asbestos, (v) flammable, explosive, toxic, or otherwise regulated
pursuant to Environmental Laws, or (vi) infectious, (vii) radioactive, (viii)
carcinogenic, or (ix) a reproductive toxic. "Environmental Law(s)" shall mean
the comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. 9601, ET. SEQ., the Resource Conservation and Recovery Act of
1979, 42 U.S.C. sections 6901 ET. SEQ., the Hazardous Materials Transportation
Act, 49 U.S.C. Sections 1801 ET. SEQ., the Clean Water Act, 33 U.S.C. Sections
1251 ET. SEQ., as said laws have been supplemented or amended to date, the
regulations promulgated pursuant to said laws and any other federal, state or
local law, statute, rule, regulation, ordinance, decree, order, permit, license,
approval or authorization which regulates or proscribes the use, storage,
disposal, presence, cleanup, transportation or release or threatened release
into the environment of Hazardous Substances or pertaining to the protection of
human health and safety of the environment.
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ARTICLE 18. IMPOSITIONS; INSURANCE
18.1 IMPOSITIONS. As Additional Rental hereunder, Lessee covenants and
agrees to bear, discharge and pay to the relevant authority or entity, in lawful
money of the United States, without offset or deduction, as the same become due,
before delinquency, all real estate taxes, assessments, rates, charges, license
fees, municipal liens, levies, excises or imposts, whether general or special,
or ordinary or extraordinary, including all governmental charges that may be
levied, assessed, charged or imposed or may be or become a lien or charge upon
the Property or any part thereof; or upon the use or occupancy of the Property;
upon any buildings or improvements that are or are hereafter placed, built or
newly constructed upon the Property; or upon the leasehold of Lessee or upon the
estate hereby created; commencing as of the Rent Commencement Date and
continuing throughout the Term. If at any time during the Term, under any
Applicable Laws, any tax is levied or assessed against Lessor directly, in
substitution in whole or in part for the above-described real property taxes,
Lessee covenants and agrees to pay and discharge such tax. All of the foregoing
taxes, assessments and other charges are herein referred to as "Impositions".
Impositions shall not include franchise, transfer, inheritance or estate taxes
imposed upon or assessed against the Property, or taxes computed based on the
net income of Lessor.
18.2 RIGHT TO CONTEST. Lessee shall have the right to contest, by
appropriate proceedings, the amount or validity, in whole or in part, of any
Imposition. Lessor shall have no obligation to join in any such proceedings.
Lessee shall indemnify and defend Lessor against and save Lessor harmless, in
accordance with Article 19, from and against any and all claims, demands,
liabilities, losses, liens, damages, penalties, costs and expenses, including,
without limitation, reasonable attorneys' fees and expenses, of any kind or
nature, arising from or in connection with any such proceedings.
18.3 PRORATION. Any Imposition relating to a fiscal period of any
taxing authority, only a part of which period is included within the Term, shall
be prorated as between Lessor and Lessee so that Lessor shall pay the portion
thereof attributable to any period prior to the commencement of and subsequent
to the lapse of the Term, and Lessee shall pay the portion thereof attributable
to any period during the Term.
18.4 ASSESSMENT PROCEEDINGS. If at any time during the Term any
governmental authority shall undertake to create an improvement or special
assessment district the proposed boundaries of which shall include the Property,
Lessee shall be entitled to appear in any proceeding relating thereto and to
exercise all rights of a landowner to have the Property excluded from the
proposed improvement or special assessment district or to determine the degree
of benefit to the Property resulting therefrom. The party receiving any notice
or other information relating to the proposed creation of any improvement or
special assessment district, the proposed boundaries of which include the
Property, shall promptly advise the other party in writing of such receipt.
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18.5 REQUIRED INSURANCE. At all times during the Term and at its sole
cost and expense, Lessee shall obtain and keep in force for the benefit of
Lessee and Lessor the following insurance:
(a) PROPERTY INSURANCE. Upon the construction of any insurable
improvements to the Property, property insurance covering all risks, fire and
other perils, in an amount equal to the Full Insurable Replacement Value, as
defined below. Such policy shall specify that proceeds shall be payable whether
or not any improvements are actually rebuilt. Each such policy shall include an
endorsement protecting the named and additional insureds against becoming a
co-insured under the policy. "Full Insurable Replacement Value" means 100% of
the actual costs to replace the improvements (without deduction for depreciation
but with standard exclusions such as foundations, excavations, paving and
landscaping, as applicable to specific perils), including the costs of
demolition and debris removal and including materials and equipment not in place
but in transit to or delivered to the Property.
(b) COMPREHENSIVE GENERAL LIABILITY. Comprehensive general liability
through one or more primary and umbrella liability policies against claims
including but not limited to, bodily injury and property damage occurring on the
Property or the streets, curbs or sidewalks adjoining the Property, with such
limits as may be commercially reasonable from time to time, but in any event not
less than Ten Million Dollars ($10,000,000), combined single limit and annual
aggregate for the Property, which Lessee shall increase as necessary during the
Term to maintain adequate coverage over time which is comparable to the
requirements in effect as of the execution of this Lease. Such insurance shall
insure the performance by Lessee of the indemnity agreements contained in this
Lease.
(c) OTHER. All other insurance that Lessee is required to maintain
under Applicable Laws.
18.6 POLICY FORM AND GENERAL.
(a) All of the insurance policies required under this Lease, including
without limitation, under the provisions of Article 9 and this Article 18, and
all renewals thereof shall be issued by one or more companies of recognized
responsibility, authorized to do business in Georgia with an A. M. Best rating
of A XII or higher and which are otherwise reasonably acceptable to Lessor. All
property and liability insurance hereunder shall name Lessor and its officers as
additional insureds. All insurance of Lessee shall be primary coverage.
(b) Each policy of property insurance and all other policies of
insurance on the improvements or Property which shall be obtained by Lessee,
whether required by the provisions of this Lease or not, shall be made expressly
subject to the provisions of this Article 18 and shall provide that Lessee's
insurers shall waive any right of subordination against Lessor. All policies
provided for herein expressly shall provide that such policies shall not be
cancelled, terminated or altered without thirty (30) days' prior written notice
to Lessor. A certificate of the policy executed by the insurance company
evidencing that the required insurance coverage is in full force and effect,
shall be deposited with Lessor, shall be maintained throughout the Term, and
shall be renewed not less than thirty (30) days before the expiration of the
term of the policy.
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ARTICLE 19. INDEMNITY
19.1 LESSEE'S INDEMNITY. Lessee shall indemnify, protect, defend and
save and hold harmless Lessor and the Property from and against any and all
claims, demands, liabilities, losses, liens, costs, actions, causes of action,
suits, costs, expenses (including, without limitation, reasonable attorneys'
fees and fees of other experts and consultants) and damages, of any kind or
nature, to the extent arising out of or in connection with (i) any default by
Lessee in the observance or performance of any of the terms, covenants or
conditions of this Lease on Lessee's part to be performed by Lessee or by any
other person or entity claiming under Lessee, (ii) the conduct or management of
any work or thing done in or on the Property, (iii) any actual or alleged acts,
omissions, negligence or willful misconduct, in, on or about the Property, of
Lessee or its subtenants, licensees, contractors or subcontractors, or any other
their respective agents, employees, servants, invitees, visitors, contractors or
subcontractors, or (iv) the use or occupancy of the Property by Lessee or its
subtenants, licensees, contractors or subcontractors, or any other their
respective agents, employees, servants, invitees, visitors, contractors or
subcontractors, and (v) any accident or other occurrence on or about the
Property; except to the extent that any of the foregoing are caused by or result
solely from the gross negligence or willful misconduct of Lessor or any of
Lessor's agents or employees. In case any claim, action or proceeding be
brought, made or initiated against Lessor relating to any of the above described
events, omissions, occurrences, or conditions, Lessee, upon notice from Lessor,
shall at its sole cost and expense resist, or defend such claim, action or
proceeding by attorneys reasonably approved by Lessor.
ARTICLE 20. APPROPRIATION, DAMAGE OR DESTRUCTION
20.1 NO TERMINATION. No Appropriation (as defined below), nor any loss
or damage by fire or other cause resulting in either partial or total
destruction of the Property, the improvements or any other property on the
Property shall operate to terminate this Lease, except as expressly set forth in
Section 20.6 below with respect to an Appropriation of the Property. Lessee
shall have no rights to terminate this Lease in the case of any total or partial
fire, loss, casualty, damage or destruction of the Property. Unless this Lease
is terminated pursuant to and in accordance with this Article 20, and except as
expressly provided in Section 20.3 below with respect to reduction of Rent in
the event of a partial Appropriation, no such Appropriation, loss or damage
shall relieve or discharge Lessee from the payment of Rent or from the
performance and observance of any of the agreements, covenants and conditions
herein contained, on the part of Lessee to be performed and observed. For the
purpose of this Lease, "Appropriation" shall mean any taking by exercise of
right of condemnation (direct or inverse) or eminent domain, or requisitioning
by military or other public authority for any purpose arising out of a temporary
emergency or other temporary circumstance, or sale under threat of condemnation.
20.2 EVALUATION OF EFFECT OF APPROPRIATION. Upon any Appropriation of
less than the entire Property, Lessee shall promptly undertake to determine the
effect of such Appropriation on the remaining portion of the Property and the
function of the Property and, if this Lease is not
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terminated pursuant to and in accordance with this Article 20, the cost and time
to make any repairs and Alterations to the remaining portion of the Property
necessary in order for the Property to be restored to an economically viable
whole capable of operation in accordance with this Lease no later than ninety
(90) days after the occurrence of the Appropriation.
20.3 PARTIAL APPROPRIATION; AMENDMENT; DUTY TO RESTORE. If less than
the entire Property is subject to an Appropriation and this Lease is not
terminated pursuant to and in accordance with this Article 20, this Lease shall
be deemed terminated as to the part so Appropriated as of the date of
Appropriation and shall be deemed amended, effective as of the effective date of
such Appropriation, such that the definition of the "Property" shall include
only that portion of the land that is not subject to such Appropriation. Lessee,
as promptly as practicable and with all due diligence, shall cause the repair or
reconstruction of or the making of Alterations as necessary to restore the
Property to a fully functioning whole with all facilities necessary to operate
the Property in accordance with this Lease.
20.4 DAMAGE OR DESTRUCTION; DUTY TO RESTORE. If the Property or any
portion thereof are damaged or destroyed at any time during the Term, Lessee, as
promptly as practicable and with all due diligence, shall cause the repair and
reconstruction of the Property and all improvements thereon to a condition
substantially equal to or better than their condition immediately prior to such
damage or destruction.
20.5 PERFORMANCE OR REPAIRS, RESTORATION AND ALTERATIONS. All repairs,
restoration and alterations shall be performed in accordance with the provisions
of Article 9 of this Lease. Subject to Section 20.6, all insurance proceeds and
all awards received by or payable to any party with respect to such damage or
Appropriation, less actual costs and expenses incurred in connection with the
collection thereof, shall be applied to the costs of repair, restoration and
alterations of the Property in accordance with the provisions of this Article 20
and Article 9 hereof. Lessee shall pay any amount by which the award or
insurance proceeds received as a result of such damage or Appropriation, less
the costs and expenses incurred in connection with the collection thereof, are
insufficient to pay the entire cost of such repair, restoration or Alterations.
20.6 OPTION TO TERMINATE UPON APPROPRIATION. If during the Term the
entire Property or such substantial portion thereof shall be Appropriated such
that such Appropriation makes the continued operation of the remaining portion
of the Property for the purposes permitted hereunder economically unfeasible,
then Lessee shall have the option to terminate this Lease.
20.7 TERMINATION; LESSEE'S OBLIGATION TO RESTORE; ARBITRATION. Lessee
may exercise any option to terminate pursuant to Section 20.6 above by giving
written notice to Lessor, within thirty (30) days after the Appropriation, as
the case may be. If Lessee elects to terminate this Lease pursuant to this
Article 20, Lessee shall surrender the Property to Lessor in accordance with the
provisions of Article 25. All awards with respect to Lessee's interests and all
awards for severance damages and all proceeds of insurance payable with respect
to such Appropriation, after payment of costs and expenses of collection
thereof, shall first be applied to the costs of such demolition, and then, to
the extent of any remaining insurance proceeds, to the
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cost of the repair and restoration of any improvements Lessor elects to retain
on the Property. The balance, if any, of such awards or insurance proceeds,
shall be distributed as provided in Section 20.10. Should Lessor and Lessee for
any reason disagree as to whether the conditions provided in Section 20.6 to
Lessee's rights to elect to terminate this Lease have occurred, the matter shall
be determined by arbitration pursuant to Article 10 hereof.
20.8 DETERMINATION OF AWARD. The amount of the award due to Lessor and
Lessee as a result of Appropriation shall be separately determined by the court
having jurisdiction of such proceedings based on the following: Lessor shall be
entitled to that portion of the award attributable to the residual value of the
fee interest in the Property (or portion thereof subject to Appropriation, in
case of a partial Appropriation) subject to this Lease; Lessee shall be entitled
to that portion of the award attributable to the value of Lessee's leasehold
interest in the Property (or portion thereof subject to Appropriation, in case
of a partial Appropriation) and to the value of Lessee's interest in any
improvements and any alterations made to the Property (or portion thereof
subject to Appropriation, in case of a partial Appropriation), as determined by
the court.
20.9 EXCESS PROCEEDS AND AWARDS FOR LESSEE'S INTERESTS. If the total
award made in connection with any Appropriation for Lessee's interests, and for
severance damages to both Lessee and Lessee's interests, exceeds the amount
necessary to repair, restore or construct Alterations as required under this
Article 20, or if there are proceeds of insurance in excess of that required to
repair or restore the Property as required under this Article 20, upon receipt
by Lessor of satisfactory evidence that the work of repair, restoration and
construction required under this Article 20 has been fully completed and paid
for in accordance with the provisions of Article 9 and the last day for filing
any mechanic's or materialmen's liens has passed without the filing of any, or
if any such lien has been released, any remaining proceeds of insurance shall be
paid to Lessee.
20.10 RIGHT TO PARTICIPATE IN SETTLEMENT. Lessor and Lessee shall both
have the right to participate in the settlement or compromise of any insurance
proceeds and awards. If in any Appropriation the court does not make the
allocation of awards referred to in Section 20.9 and the parties cannot agree
upon such allocations, such allocations shall be determined by arbitration
pursuant to Article 10 hereof.
ARTICLE 21. ASSIGNMENT
21.1 LESSOR'S CONSENT REQUIRED. Except with respect to a Permitted
Transfer (as defined below), Lessee shall not, either voluntarily or
involuntarily, or by operation of law, assign this Lease or any interest
therein, and shall not sublet the Property or any part thereof, without the
written consent of Lessor first had and obtained, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, Lessee shall have the
right to assign this Lease without Lessor's prior written consent but upon prior
notice to Lessor to (a) any entity resulting from a merger or consolidation with
Lessee, (b) any entity purchasing or succeeding to substantially all of the
assets of Lessee, or (c) any corporation which controls, is controlled by, or is
under common control with Lessee (collectively, "Permitted Transfers") provided
(i) such assignee assumes in writing all of Lessee's obligations under this
Lease prior to or concurrently
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with such assignment, and (ii) no such assignment shall release or relieve
Lessee of any duties, obligations or liabilities under the Lease.
21.2 NOTICE OF INTENT TO ASSIGN. If Lessee desires at any time to
assign this Lease to a nonaffiliated entity or person or to sublet the Property
or any portion thereof (other than pursuant to a Permitted Transfer), it shall
notify Lessor of its desire to do so and shall submit in writing to Lessor: (a)
the name of the proposed sublessee or assignee; (b) the nature of the proposed
sublessee or assignee's business to be carried on in the Property; (c) a
complete copy of the proposed sublease or assignment and (d) such operational
and financial information as is reasonably necessary for Lessor to adequately
evaluate the acceptability of the proposed sublease or assignment within
fourteen (14) days after Lessor's receipt of the information specified above,
Lessor shall by written notice to Lessee elect to (i) consent to the sublease or
assignment upon the proposed terms and conditions, or (ii) refuse to give its
consent. If Lessor disapproves of any proposed assignment or sublease, Lessor's
response must explain the reasons for such disapproval. If Lessor does not
respond within said 14 day period, Lessor shall be deemed to have consented to
the proposed assignment or sublease.
21.3 UNAUTHORIZED ASSIGNMENTS VOID; NO WAIVER. Any assignment or
sublease without the prior written consent of Lessor (if required) shall be
void, and shall, at the option of Lessor constitute a default under this Lease.
Lessor's waiver or consent to any assignment or sublease shall not relieve
Lessee from any obligation under the Lease, or constitute a waiver or consent
with respect to subsequent or different subleases or assignments, unless the
consent shall expressly so provide. The acceptance of Rent by Lessor from any
other person shall not be deemed to be a waiver of any provision of this Article
21. Lessor's consent to any assignment or sublease shall in no way relieve
Lessee of its duties, obligations or liabilities under this Lease.
ARTICLE 22. LESSOR'S RIGHT OF INSPECTION
Lessor shall be entitled, at all reasonable times and upon reasonable
notice during regular business hours to go upon and into the Property for the
purposes of inspecting the performance by Lessee of the terms, covenants,
agreements and conditions of this Lease.
ARTICLE 23. EVENT OF DEFAULT AND LESSOR'S REMEDIES
23.1 EVENTS OF DEFAULT. The occurrence of any of the following shall be
an "Event of Default" on the part of Lessee hereunder:
(a) Failure to pay Rent at the times or in the manner herein provided,
when such failure shall continue for a period of ten (10) days after written
notice thereof from Lessor to Lessee. No such notice shall be deemed a
forfeiture or a termination of this Lease unless Lessor expressly so elects in
such notice; or
(b) Failure to perform any non-monetary provision of this Lease when
such failure shall continue for a period of thirty (30) days, or such other
period as is expressly set forth
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herein, after written notice thereof from Lessor to Lessee; provided that if the
nature of the default is such that it will reasonably take more than thirty (30)
days to cure, Lessee shall not be in default so long as it promptly commences
and diligently prosecutes such cure to completion. No notice of default shall be
deemed a forfeiture or a termination of this Lease unless Lessor expressly so
elects in such notice.
23.2 LESSOR'S REMEDIES. Upon the occurrence of an Event of Default,
Lessor shall have the following rights and remedies:
(a) The right to terminate this Lease, in which event Lessee shall
immediately surrender possession of the Property in accordance with Article 25,
and pay to Lessor all Rent and other charges and amounts due from Lessee
hereunder to the date of termination;
(b) Lessor may continue this Lease in effect and enforce all of its
rights and remedies under this Lease, including the right to recover Rent as it
becomes due, for so long as Lessor does not terminate Lessee's right to
possession. Acts of maintenance or preservation, efforts to relet the Property
or the appointment of a receiver upon Lessor's initiative to protect its
interest under this Lease shall not constitute a termination of Lessee's right
to possession.
23.3 RIGHTS CUMULATIVE. The various rights and remedies reserved to
Lessor herein shall be cumulative and shall be in addition to every other right
or remedy provided for in this Lease or now or hereafter existing at law or in
equity and the exercise of the rights or remedies provided for in this Lease or
now or hereafter existing at law or in equity shall not preclude the
simultaneous or later exercise by Lessor of any or all other rights and
remedies.
ARTICLE 24. LESSOR'S RIGHT TO CURE DEFAULTS
If Lessee shall fail or neglect to do or perform any act or thing
herein provided by it to be done or performed and such failure shall not be
cured within any applicable grace period provided in Article 23, then Lessor
shall have the right, but shall have no obligation, to pay any Imposition
payable by Lessee hereunder, discharge any lien, take out, pay for and maintain
any insurance required under Article 18, or do or perform or cause to be done or
performed any such other act or thing (entering upon the Property for such
purposes, if Lessor shall so elect), and Lessor shall not be or be held liable
or in any way responsible for any loss, disturbance, inconvenience, annoyance or
damage resulting to Lessee on account thereof, and Lessee shall repay to Lessor
upon demand the entire reasonable cost and expense thereof . All amounts payable
by Lessee to Lessor under any of the provisions of this Lease, if not paid when
the same become due as in this Lease provided, shall bear interest at eighteen
percent (18%) per annum or the maximum rate allowed by law, whichever is less.
ARTICLE 25. SURRENDER OF THE PROPERTY
Upon the termination of this Lease, whether at the expiration of the
Term as stated in Article 4 hereof or prior thereto pursuant to any provision
hereof, Lessee shall surrender to
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Lessor the Property in good order and repair, reasonable wear and tear excepted,
and free and clear of all liens and encumbrances. Upon any termination of this
Lease, all improvements shall automatically and without further act by Lessor or
Lessee become the property of Lessor, free and clear of any claim or interest
therein on the part of Lessee or anyone claiming under Lessee, and without
payment therefor by Lessor, provided that Lessee may remove any equipment,
fixtures or other personal property of Lessee. Upon or at any time after the
Expiration Date, if requested by Lessor, Lessee shall, without charge to Lessor,
promptly execute, acknowledge and deliver to Lessor a good and sufficient
quitclaim deed and bill of sale of all of Lessee's right, title, and interest in
and to the Property and the improvements thereon. Lessee hereby irrevocably
appoints Lessor as its lawful attorney in fact to execute and deliver for, on
behalf of and in the name of Lessee, any such deed, bill of sale, or other
instrument referred to in this Article 25 or otherwise, required to document the
transfer or reversion to Lessor of such interests of Lessee, and Lessee and
Lessor agree that such power of attorney shall be a power coupled with an
interest. Any personal property of Lessee that remains on the Property after the
Expiration Date may, at the option of Lessor, be deemed to have been abandoned
by Lessee and may either be retained by Lessor as its property or disposed of,
without accountability, in such manner as Lessor may determine in its sole
discretion,
ARTICLE 26. SIGNS
During the term Lessee shall be allowed to install and maintain any and
all signs on Property Lessee desires to install, provided that (i) all signs
shall comply with Applicable Law, (ii) Lessee shall be obligated to remove all
such signage at the expiration or earlier termination of the Term, and (iii) all
such signage shall be subject to Lessor's prior written approval, such approval
not to be unreasonably withheld, conditioned or delayed.
ARTICLE 27. NO WAIVER BY LESSOR
No failure by Lessor to insist upon the strict performance of any term,
covenant, agreement, provision, condition or limitation of this Lease or to
exercise any right or remedy upon a breach thereof, and no acceptance by Lessor
of full or partial Rent during the continuance of any such breach shall
constitute a waiver of any such breach or of such term, covenant, agreement,
provision, condition or limitation. No term, covenant, agreement, provision,
condition or limitation of this Lease and no breach thereof may be waived,
altered or modified except by a written instrument executed by Lessor. No waiver
of any breach shall affect or alter this Lease but each and every term,
covenant, agreement, provision, condition and limitation of this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent breach.
ARTICLE 28. NO PARTNERSHIP
It is expressly understood that neither Lessee nor Lessor is or
becomes, in any way or for any purpose, a partner of the other in the conduct of
its business, or otherwise, or joint venturer
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or a member of a joint enterprise with the other, or agent of the other by
reason of this Lease or otherwise.
ARTICLE 29. SUBORDINATION AND ATTORNMENT
29.1 ATTORNMENT. In the event of a foreclosure proceeding or the
exercise of the power of sale under any mortgage or deed of trust, Lessee will,
if requested, attorn to the purchaser and recognize the purchaser as Lessor
under this Lease. However, Lessee's obligation to attorn to the purchaser will
be conditioned on Lessee's receipt of a nondisturbance agreement.
29.2 SUBORDINATION. This Lease is subject and subordinate to all the
liens of all mortgages and deeds of trust that now or later affect the Property
or Lessor's interest therein, and to all subdivision maps of the Property that
are now or may become of record, and all other matters of record as of the
Effective Date, all without the necessity of Lessee's executing further
instruments to effect the subordination. Notwithstanding such subordination,
Lessee's right to quiet possession of the Property shall not be disturbed if
Lessee is not in default of its obligation under this Lease beyond any
applicable cure period. If requested, Lessee will execute whatever documentation
may be required to further effect the provision of this Section 29.2, provided
that any subordination shall be conditioned on Lessee's receipt of a
nondisturbance agreement.
ARTICLE 30. NOTICES
Any notice, consent or other communication required or permitted under
this Lease shall be in writing and shall be delivered by hand, sent by air
courier, sent by prepaid registered or certified mail with return receipt
requested, and shall be deemed to have been given on the earliest of (i)
receipt, (ii) one business day after delivery to an air courier for overnight
expedited delivery service, or (iii) five (5) business days after the date
deposited in the United States mail, registered or certified, with postage
prepaid and return receipt requested (provided that such return receipt must
indicate receipt at the address specified). All notices shall be addressed as
appropriate to the addresses set forth in Article I (or to such other or further
addresses as the parties may desire by notice given in accordance with this
section).
ARTICLE 31. HOLDING OVER
This Lease shall terminate upon the Expiration Date and any holding
over by Lessee after the Expiration Date shall not constitute a renewal of this
Lease or give Lessee any rights hereunder or in or to the Property.
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ARTICLE 32. MEMORANDUM OR SHORT FORM OF LEASE
This Lease shall not be recorded. However, at the request of either
party, the parties hereto shall execute and acknowledge a memorandum or short
form hereof in recordable form that Lessor shall file for recording in the
Official Records of Heard County, Georgia.
ARTICLE 33. ESTOPPEL CERTIFICATE
Within ten (10) days after request by either party, the other party to
this Lease shall deliver an estoppel certificate duly executed (and
acknowledged, if required by any lender) in substantially the form of the
attached EXHIBIT "C" (or as otherwise reasonably requested by a lender or
purchaser) to any proposed lender, purchaser, or to the requesting party.
ARTICLE 34. GENERAL PROVISIONS
34.1 SEVERABILITY. In case any one or more of the provisions of this
Lease shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Lease, and this Lease shall be construed as if such
invalid, illegal or unenforceable provisions had not been contained herein.
34.2 TIME OF THE ESSENCE. Time is hereby expressly declared to be of
the essence of this Lease and of each and every term, covenant, agreement,
condition and provision hereof.
34.3 HEADINGS. Article, Section and subsection headings in this Lease
are for convenience only and are not to be construed as a part of this Lease or
in any way limiting or amplifying the provisions hereof.
34.4 LEASE CONSTRUED AS A WHOLE. The language in all parts of this
Lease shall in all cases be construed as a whole according to its fair meaning
and not strictly for or against either Lessor or Lessee. The parties acknowledge
that each party and its counsel have reviewed this Lease and participated in its
drafting and therefore that the rule of construction that any ambiguities are to
be resolved against the drafting party shall not be employed nor applied in the
interpretation of this Lease. No prior draft of this Lease shall be admissible
as evidence of the parties' intent.
34.5 MEANING OF TERMS. Whenever the context so requires, the neuter
gender shall include the masculine and the feminine, and the singular shall
include the plural, and vice versa. Any reference to a specific sum of money,
shall mean that amount of lawful money of the United States of America.
34.6 ATTORNEYS' FEES. In the event of any action or proceeding at law
or in equity between Lessor and Lessee to enforce or interpret any provision of
this Lease or to protect or establish any right or remedy of either party
hereunder, the party not prevailing in such action or proceeding shall pay to
the prevailing party all costs and expenses, including without limitation,
reasonable attorneys' fees and expenses, incurred therein by such prevailing
party and if such
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prevailing party shall recover judgment in any such action or proceeding, such
costs, expenses and attorneys' fees shall be included in and as a part of such
judgment.
34.7 GEORGIA LAW; FORUM. The laws of the State of Georgia other than
those laws denominated choice of law rules which would require the application
of the laws of another forum, shall govern the validity, construction and effect
of this Lease.
34.8 BINDING AGREEMENT. Subject to the provisions of Article 21 of this
Lease, the terms, covenants and agreements contained in this Lease shall bind
and inure to the benefit of the parties hereto and their respective successors
and assigns.
34.9 ENTIRE AGREEMENT. This instrument, together with the exhibits
hereto, all of which are incorporated herein by reference, constitutes the
entire agreement between Lessor and Lessee with respect to the subject matter
hereof and supersedes all prior offers and negotiations, oral and written. This
Lease may not be amended or modified in any respect whatsoever except by an
instrument in writing signed by Lessor and Lessee.
34.10 QUIET ENJOYMENT. Lessor agrees that Lessee, upon paying Rent and
all other sums due hereunder and upon keeping and observing all of the
covenants, agreements and provisions of this Lease on its part to be observed
and kept, shall lawfully and quietly hold, occupy and enjoy the Property during
the Term without hindrance or molestation by anyone claiming by, through, or
under Lessor.
34.11 BROKER'S COMMISSION. Each party warrants that they have no
agreement with any broker, and each party shall indemnify the other for any fees
or commissions claimed by any broker or agent alleging an agreement or
commitment with such party.
34.12 ESTATE FOR YEARS. It is the intent of Lessor and Lessee that this
Lease shall grant and convey to Lessee and Estate for Years expiring on December
31, 2002, and not a usafruct. Lessee shall be permitted to grant its lenders and
any holder of security interest in power generation facility being constructed
by Lessee on Lessee's land in Land Lots 236 and 237 of the 3rd Land District of
Heard County, Georgia (all of the foregoing being hereinafter collectively
referred to as "Lenders"), a leasehold deed to secure debt encumbering the
Estate for Years conveyed to Lessee hereunder.
34.13 RESTRICTIONS ON ASSIGNMENTS AND TRANSFERS BY LESSOR. Lessor
agrees that Lessor will not voluntarily encumber, convey, assign or grant any
rights in the Property without the prior written consent of Lessee and any
Lenders, such consent by Lessee and any Lenders not to be unreasonably withheld,
conditioned or delayed.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease under
seal by proper persons thereunto duly authorized as of the date first above
written.
[SIGNATURES BEGIN ON NEXT PAGE]
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LESSOR:
TENASKA, INC., a Delaware
corporation
By: /S/ (SEAL)
----------------------------
Print Name: Jerry K. Crouse
Title: Vice President
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON NEXT PAGE]
20
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LESSEE:
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
By: Tenaska Georgia, Inc., a Delaware
corporation, its General Partner
By: /S/ (SEAL)
-------------------------------------------
Print Name: Michael F. Lawler
Title: Vice President of Finance & Treasurer
[CORPORATE SEAL]
21
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
TRACT H
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
206 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A 1/2 INCH REBAR SET AT THE POINT WHERE THE WEST LINE OF
LAND LOT 206 INTERSECTS THE SOUTH RIGHT OF WAY LINE OF GEORGE BROWN ROAD
(PRESCRIPTIVE RIGHT OF WAY, 40 FEET, MORE OF LESS, IN WIDTH), SAID POINT BEING
THE POINT OF REFERENCE; THENCE NORTH 01 DEGREE 30 MINUTES 06 SECONDS EAST FOR A
DISTANCE OF 40.01 FEET TO A POINT WHERE SAID WEST LINE OF LAND LOT 206
INTERSECTS THE NORTH RIGHT OF WAY LINE OF GEORGE BROWN ROAD, SAID POINT BEING
THE POINT BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
Thence along said west line of Land Lot 206 North 01 degree 27 minutes
40 seconds East for a distance of 800.22 feet to a Painted Rock at the Northwest
corner of said Land Lot 206;
Thence along the North line of Land Lot 206 South 89 degrees 14 minutes
11 seconds East for a distance of 821.44 feet to a 2 inch rebar set on the West
Right of Way line of Joe Stephens Road (80 foot width);
Thence along said right of way line of Joe Stephens Road, along a curve
to the left having a radius of 2021.86 feet, a central angle of 16 degrees 46
minutes 53 seconds, an Arc length of 592.18 feet, and subtended by a chord
bearing South 00 degrees 33 minutes 16 seconds East for a distance of 590.07
feet to a 1/2 inch rebar set at the point where said right of way line of Joe
Stephens Road intersects the North right of way line of George Brown Road;
Thence along said northern right of way line of George Brown Road South
78 degrees 31 minutes 36 seconds West for a distance of 146.61 feet to a point;
Thence along a curve to the left having a radius of 4280.10 feet, a
central angle of 05 degrees 04 minutes 37 seconds, an Arc length of 379.26 feet,
and subtended by a chord bearing South 75 degrees 59 minutes 18 seconds West for
a distance of 379.13 feet to a point;
Thence South 73 degrees 26 minutes 59 seconds West for a distance of
265.34 feet to a point;
Thence along a curve to the right having a radius of 159.33 feet, a
central angle of 29 degrees 41 minutes 14 seconds, an Arc length of 82.56 feet,
and subtended by a chord bearing
<PAGE>
South 88 degrees 17 minutes 36 seconds West for a distance of 81.64 feet to a
point, said point being the POINT OF BEGINNING.
Said property contains 13.13 acres, more or less, and is that same
tract or parcel of land shown as Tract A2 on that certain ALTA/ACSM Title
Survey, entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity
National Title Insurance Company of New York, Stewart Title Guaranty Company,
Heard County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised , 1999.
LESS AND EXCEPT:
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
206 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, DEEDED FROM TENASKA
GEORGIA PARTNERS, L.P., AS GRANTOR, TO HEARD COUNTY, AS GRANTEE, PURSUANT TO
THAT CERTAIN RURAL POST ROADS RIGHT OF WAY DEED DATED JULY 1, 1999, RECORDED IN
DEED BOOK 197, PAGE 618, HEARD COUNTY, GEORGIA RECORDS.
2
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EXHIBIT "B"
PERMITTED TITLE ENCUMBRANCES
1. All real property ad valorem taxes for the year 1999 and subsequent years.
2. Right of Way Deeds, in favor of Heard County, a political subdivision of
the State of Georgia, as follows:
(a) from Jimmy Adams, et al., dated June 12, 1963, recorded in Deed Book
55, Page 494, Records of Heard County, Georgia;
(b) from Jimmy Adams, et al., dated June 12, 1963, filed for record
October 29, 1963, recorded in Deed Book 55, Page 495, aforesaid
Records; and
(c) from Ann Henry, et al., dated June 15, 1963, filed for record October
29, 1963, recorded in Deed Book 55, Page 496, aforesaid Records.
3. Any applicable zoning ordinances and governmental rules and regulations
4. All matters not of record which would be disclosed by an accurate survey or
inspection of the Substation Site.
5. All matter shown or disclosed on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP,
Fidelity National Title Insurance Company of New York, Stewart Title
Guaranty Company, Heard County Development Authority & The Chase Manhattan
Bank as Trustee and Collateral Agent, prepared by Donaldson, Garrett &
Associate, Inc., bearing the seal and certification of James W. Newberry,
Jr. Registered Land Surveyor No. 2558, dated March 19, 1999, last revised
November , 1999.
<PAGE>
EXHIBIT "C"
ESTOPPEL CERTIFICATE
TO: (Lender/Addressee)
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
RE: Ground Lease dated as of ________________________________ (the "Lease")
by and between Tenaska, Inc. ("Lessor") and Tenaska Georgia Partners, L.P.
("Lessee")
The undersigned is the Lessor/Lessee of certain real property more
particularly identified in the Lease. In consideration of the payment by
Lender/Addressee of $10.00 and other good and valuable consideration to
Lessor/Lessee, the receipt and legal sufficiency of which is hereby
acknowledged, the undersigned hereby certifies the following information with
respect to the Lease (including any amendments to or modifications of the same),
and agrees that you may rely upon the same:
1. The Lease is in full force and effect and has not been modified or
amended except as specifically set forth below.
2. The undersigned asserts no claim of default against the other party
to the Lease, or (in the case of Lessor) offset or defense against the payment
of rent or other charges payable by the Lessee, and asserts no other claim under
the Lease. To the best of the undersigned's knowledge and belief, there is no
default by the other party under the Lease.
3. All fixed minimum rental has been paid to the end of the current
calendar month, which is __________________________________ by and between
Tenaska, Inc. ("Lessor") and Tenaska Georgia Partners, L.P. ("Lessee") paid more
than one month in advance of its due date.
4. The Property is 13.13 acres of improved real property on which is
located
------------------------------------------------------------------------.
5. Dates of any amendments or modifications:
---------------------------
- -------------------------------------------------------------------------------.
6. Current annual fixed minimum rental:
-------------------------------
- -------------------------------------------------------------------------------.
7. Lease termination date:
---------------------------------------------
- -------------------------------------------------------------------------------.
<PAGE>
8. The Lease contains no first right of refusal, option to expand, or
option to terminate, except as follows:
----------------------------------------
- -------------------------------------------------------------------------------.
9. The undersigned is not in default under the Lease and has no claim
of default against the other party to the Lease.
10. The Lessee is in occupancy of the Property and has not assigned the
Lease, in whole or in part, nor sublet any portion of the Property, except as
follows:
------------------------------------------------------------------------
- ------------------------------------------------------------------------------ .
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------.
11. The Lessee is required to pay real property taxes, insurance, and
all utilities used in and upon the leased Property and is responsible for all
repairs and maintenance to the leased Property and all improvements.
Dated: , 19 .
---------------------- ------ -----------
Very truly yours,
------------------------------------------,
a
------------------------------------------
By
------------------------------------------
Its
------------------------------------------
2
<PAGE>
Exhibit 10.13
AFTER RECORDING, RETURN TO:
Steven K. Bender, Esq.
Long Aldridge & Norman,LLP
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
SHORT FORM GROUND LEASE AGREEMENT
SHORT FORM GROUND LEASE AGREEMENT (hereinafter referred to as the
"Short Form") is made and entered into on this 10th day of November, 1999 (the
"Effective Date") by and between TENASKA, INC., a Delaware corporation
("Lessor"), and TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership
("Lessee").
WITNESSETH:
WHEREAS, Lessor and Lessee entered into that certain Ground Lease dated
November 10, 1999 (the "Lease").
NOW, THEREFORE, FOR AND IN CONSIDERATION of Ten and 00/100 ($10.00)
Dollars and other good and valuable consideration in hand paid at or before the
sealing and delivery of these presents, from Lessee to Lessor, Lessor does
hereby rent and lease to Lessee, and Lessee does hereby rent and lease from
Lessor, upon the terms and conditions hereinafter set forth, the use and
possession of that certain tract or parcel of real property situated in the
County of Heard, State of Georgia, as more particularly described in EXHIBIT "A"
attached hereto and by this reference incorporated herein, and together with all
and singular rights, members and appurtenances thereto, (hereinafter
collectively the "Property"), for a term beginning on the Effective Date set
forth above and expiring on December 31, 2002 (the "Term"), and on such other
terms and conditions as contained in the Lease. There are no options in the
Lease for the renewal or extension of the Term.
This Short Form is subject to all the terms and conditions of the Lease
which are hereby incorporated herein and by this reference made a part hereof.
In the event of any conflict between the terms of this Short Form and the Lease,
the terms of the Lease shall control. The Lease sets forth the entire agreement
of the parties hereto and this Short Form does not alter, amend or change the
Lease in any way.
1
<PAGE>
IN WITNESS WHEREOF, Lessor and Lessee have caused their duly
authorized officers and managers to execute and deliver this Short Form Ground
Lease Agreement under seal as of the day and year first above written.
LESSOR
Signed, sealed and delivered in the
the presence of: TENASKA, INC., a Delaware corporation
Unofficial Witness
/S/ By: /S/ (SEAL)
------------------------- ---------------------------------
Print Name: Jerry K.CROUSE
/S/
-------------------------
Notary Public Title: Vice President
My Commission Expires:
[CORPORATE SEAL]
[NOTARY SEAL]
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
LESSEE:
Signed, sealed and delivered
in the the presence of: TENASKA GEORGIA PARTNERS, L.P.,
a Delaware limited partnership
/S/ By: Tenaska Georgia, Inc., a Delaware
-------------------------
corporation, its General Partner
Unofficial Witness
/S/
-------------------------
Notary Public By:/S/ (SEAL)
-------------------------
My Commission Expires: Print Name: Michael F. LAWLER
------
[NOTARY SEAL] Title: Vice President of Finance & TREASURER
[CORPORATE SEAL]
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
TRACT H
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
206 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A 1/2 INCH REBAR SET AT THE POINT WHERE THE WEST LINE OF
LAND LOT 206 INTERSECTS THE SOUTH RIGHT OF WAY LINE OF GEORGE BROWN ROAD
(PRESCRIPTIVE RIGHT OF WAY, 40 FEET, MORE OF LESS, IN WIDTH), SAID POINT BEING
THE POINT OF REFERENCE; THENCE NORTH 01 DEGREE 30 MINUTES 06 SECONDS EAST FOR A
DISTANCE OF 40.01 FEET TO A POINT WHERE SAID WEST LINE OF LAND LOT 206
INTERSECTS THE NORTH RIGHT OF WAY LINE OF GEORGE BROWN ROAD, SAID POINT BEING
THE POINT BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
Thence along said west line of Land Lot 206 North 01 degree 27 minutes
40 seconds East for a distance of 800.22 feet to a Painted Rock at the Northwest
corner of said Land Lot 206;
Thence along the North line of Land Lot 206 South 89 degrees 14 minutes
11 seconds East for a distance of 821.44 feet to a 1/2 inch rebar set on the
West Right of Way line of Joe Stephens Road (80 foot width);
Thence along said right of way line of Joe Stephens Road, along a curve
to the left having a radius of 2021.86 feet, a central angle of 16 degrees 46
minutes 53 seconds, an Arc length of 592.18 feet, and subtended by a chord
bearing South 00 degrees 33 minutes 16 seconds East for a distance of 590.07
feet to a 1/2 inch rebar set at the point where said right of way line of Joe
Stephens Road intersects the North right of way line of George Brown Road;
Thence along said northern right of way line of George Brown Road South
78 degrees 31 minutes 36 seconds West for a distance of 146.61 feet to a point;
Thence along a curve to the left having a radius of 4280.10 feet, a
central angle of 05 degrees 04 minutes 37 seconds, an Arc length of 379.26 feet,
and subtended by a chord bearing South 75 degrees 59 minutes 18 seconds West for
a distance of 379.13 feet to a point;
Thence South 73 degrees 26 minutes 59 seconds West for a distance of
265.34 feet to a point;
Thence along a curve to the right having a radius of 159.33 feet, a
central angle of 29 degrees 41 minutes 14 seconds, an Arc length of 82.56 feet,
and subtended by a chord bearing
<PAGE>
South 88 degrees 17 minutes 36 seconds West for a distance of 81.64 feet to a
point, said point being the POINT OF BEGINNING.
Said property contains 13.13 acres, more or less, and is that same tract or
parcel of land shown as Tract H on that certain ALTA/ACSM Title Survey, entitled
Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc.,
Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title
Insurance Company of New York, Stewart Title Guaranty Company, Heard County
Development Authority & The Chase Manhattan Bank as Trustee and Collateral
Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the seal and
certification of James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated
March 19, 1999, last revised , 1999.
LESS AND EXCEPT:
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
206 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, DEEDED FROM TENASKA
GEORGIA PARTNERS, L.P., AS GRANTOR, TO HEARD COUNTY, AS GRANTEE, PURSUANT TO
THAT CERTAIN RURAL POST ROADS RIGHT OF WAY DEED DATED JULY 1, 1999, RECORDED IN
DEED BOOK 197, PAGE 618, HEARD COUNTY, GEORGIA RECORDS.
RESHORTFORMGROUNDLEASE
<PAGE>
Exhibit 10.14
AFTER RECORDING RETURN TO:
Steven K. Bender, Esquire
Long Aldridge & Norman, LLP
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
(404) 527-4640
ACCESS AND UTILITY EASEMENT AGREEMENT
This ACCESS AND UTILITY EASEMENT AGREEMENT ("Agreement") is made and
entered into this 10th day of November, 1999, by TENASKA, INC., a Delaware
corporation ("Grantor") and TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership ("Grantee") (the words "Grantor" and "Grantee" to include their
respective successors, successors-in-title and assigns where the context
requires or permits).
FOR AND IN CONSIDERATION of the payment of $10.00 in hand paid by
Grantee to Grantor at or before the sealing and delivery of these presents, in
consideration of the mutual agreements set forth below, and other good and
valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, Grantor and Grantee hereby agree as follows:
1. ACCESS EASEMENT. Grantor does hereby grant, bargain, sell, alien,
convey and confirm unto Grantee, its successors, successors-in-title and
assigns, a perpetual non-exclusive access easement to use an eighty foot (80')
wide strip of land (said eighty foot [80'] strip of land being hereinafter
referred to as the "Easement Area") across those certain tracts or parcels of
land identified and described in EXHIBIT "A" attached hereto and made a part
hereof (hereinafter referred to as the "Grantor Property") for all forms of
pedestrian and vehicular traffic, including, without limitation, truck traffic
and construction traffic, on, over, through and across the Easement Area.
Grantor agrees that Grantee shall have the sole and absolute discretion to
select and determine the location of the Easement Area across the Grantor
Property, subject to the terms expressly set forth in Paragraph 2 below. The
foregoing easement includes the right of Grantee, its successors,
successors-in-title and assigns, from time to time, to construct, improve,
maintain, repair and replace, a roadway, gutters, culverts, drainage pipe,
curb-cuts, and other roadway improvements (collectively the "Roadway
Facilities") in the Easement Area to facilitate use of the Easement Area for
access to and from George Brown Road and the western boundary line of the
Grantor Property.
<PAGE>
2. DETERMINATION AND SURVEY OF EASEMENT AREA. The Easement Area shall
be eighty feet (80') wide along its entire length and shall run from the
southern boundary of the George Brown Road right-of-way, on the northern
boundary line of the Grantor Property, to the western boundary line of the
Grantor Property. On or before December 31, 2001, Grantee shall determine the
location of the Easement Area and at Grantee's sole cost, have an ALTA/ACSM
survey of the eighty foot (80') wide Easement Area prepared by a Georgia
Registered Land Surveyor, meeting the requirements of this Agreement. A copy of
such survey shall be delivered by Grantee to Grantor. Grantor and Grantee agree
to execute and deliver on or before December 31, 2001, an amendment to this
Easement Agreement, in recordable form, for purposes of (i) identifying and
describing the location of the Easement Area by a metes and bounds legal
description based upon such survey of the eighty foot (80') wide Easement Area
obtained by Grantee, and (b) limiting the easement rights granted to Grantee
hereunder to the eighty foot (80') wide Easement Area designated by Grantee in
such new survey, which Easement Area shall be subject to Grantor's and its
successor's rights to relocate the Easement Area pursuant to the terms of
Paragraph 5 below.
3. UTILITY EASEMENT. Grantor does hereby grant, bargain, sell, alien,
convey and confirm unto Grantee, its successors, successors-in-title and
assigns, a perpetual non-exclusive utility easement on, over, through, across,
and under the same eighty foot (80') wide Easement Area designated by Grantee
pursuant to Paragraphs 1 and 2 above for purposes of installing, operating,
using, repairing, maintaining, replacing and removing any utility lines, wires,
cables, pipes, and any and all equipment and utility facilities related to such
lines, wires, cables or pipes, (collectively the "Utility Facilities"),
including, without limitation, electric, gas, sewer, telephone, communications,
cable and water utility lines and pipes.
4. INDEMNIFICATION. Grantee for itself, and its successors,
successors-in-title, grantees and assigns, hereby agrees to indemnify, defend
and hold harmless Grantor, and its successors, successors-in-title, grantees and
assigns, from any and all claims, demands, liabilities, losses, liens, suits,
civil actions, judgements, costs, expenses (including reasonable attorneys'
fees) and damages, of any kind or nature, (hereinafter collectively referred to
as a "Claim") suffered or incurred by Grantor in connection with Grantee, its
successors, successors-in-title, grantees or assigns, or any of their respective
agents, employees, servants, contractors, subcontractors, tenants, subtenants,
licensees, invitees, lenders or other parties holding a collateral interest in
the Power Plant Property (as hereinafter defined), using the Easement Area, or
making use of any of the easements, rights, privileges granted hereunder, except
to the extent any Claim was caused by the negligence or willful misconduct of
Grantor, its successors, successors-in-title, grantees or assigns, or any of
their respective agents, employees, servants, contractors, subcontractors,
tenants, subtenants, licensees, invitees, lenders or parties holding a
collateral interest in the Easement Area.
2
<PAGE>
Grantor for itself, and its successors, successors-in-title, grantees
and assigns, hereby agrees to indemnify, defend and hold harmless Grantee, and
its successors, successors-in-title, grantees and assigns, from any and all
Claims suffered or incurred by Grantee in connection with Grantor, its
successors, successors-in-title, grantees or assigns, or any of their respective
agents, employees, servants, contractors, subcontractors, tenants, subtenants,
licensees, invitees, lenders or other parties holding a collateral interest in
the Grantor Property, using the Easement Area in violation of this Agreement,
except to the extent any Claim was caused by the negligence or willful
misconduct of Grantee, its successors, successors-in-title, grantees or assigns,
or any of their respective agents, employees, servants, contractors,
subcontractors, tenants, subtenants, licensees, invitees, lenders or parties
holding a collateral interest in the Power Plant Property.
5. GRANTOR'S RIGHT TO RELOCATE EASEMENT AREA. Notwithstanding any other
provisions of this Agreement, Grantor or any successor-in-title to any real
property burdened by the easement granted herein may from time to time remove
such easement and the Easement Area from such parcel (or any subsequently
burdened parcel) and relocate such easement, the Easement Area and any Roadway
Facilities and Utility Facilities installed therein to another location capable
of handling the turning radius needed for semi-tractor trailer traffic and
construction traffic (a) by providing, at the sole expense of Grantor or any
successor-in-title, an alternative easement and Easement Area extending from the
southern boundary of the George Brown Road right-of-way, on the northern
boundary line of the Grantor Property, to the location on the western boundary
line of the Grantor Property originally selected by Grantee for the Easement
Area, the width of said parcel and the easement rights thereto to be the same as
those specified in Paragraphs 1 and 2 above, and (b) by relocating, at the sole
expense of Grantee or its successor-in-title the Roadway Facilities and Utility
Facilities, if then installed, so as to be located within the new easement
parcel, so long as such relocation does not materially interrupt roadway and
utility access to and from the Power Plant Property, the relocation will not
cause Grantee any increased maintenance expenses for the Roadway Facilities or
Utility Facilities, the capacity of the Roadway Facilities and Utility
Facilities will not be reduced, and the newly installed Roadway Facilities and
Utility Facilities will be in compliance with all applicable local, state and
federal statutes, rules, regulations, ordinances, codes, orders, permits and
other applicable law. The relocation of the easement granted herein shall be
documented by an amendment to this Agreement executed by Grantor or its
successor-in-title to the Easement Area or any parcel subsequently burdened by
the easement granted herein and by Grantee or its successor-in-title to the
Power Plant Property, provided that the requirements for the relocation of the
easement, Easement Area, Roadway Facilities and Utility Facilities set forth
herein are satisfied. Grantor shall, at Grantor's sole cost, have an ALTA/ACSM
survey of the new relocated eighty foot (80') wide Easement Area prepared by a
Georgia Registered Land Surveyor, meeting the requirements of this Agreement. A
copy of such survey shall be delivered by Grantor to Grantee. The amendment to
this Agreement shall be in recordable form and shall identify and describe the
location of the new relocated Easement Area by a metes and bounds legal
description based upon such new survey obtained by Grantor. The execution of any
such amendment will not be unreasonably withheld, conditioned or delayed by the
parties hereto.
6. ADDITIONAL PROVISIONS. The easements granted under this Agreement
include the right of Grantee to cut away and keep clear, remove and dispose of
all trees, shrubs or other vegetation that interfere with the construction,
improvement, maintenance, repair, replacement, operation or use of the Roadway
Facilities or Utility Facilities, without any further compensation
3
<PAGE>
to Grantor. All Roadway Facilities and Utility Facilities installed by Grantee
in the Easement Area shall be constructed in a good and workmanlike manner, in
compliance with all applicable local, state and federal statutes, rules,
regulations, ordinances, codes, orders, permits and other applicable law, and
Grantee shall leave the Easement Area clean and free of debris. This Agreement
shall be governed, construed and enforced in accordance with the laws of the
State of Georgia. The easements set forth in this Agreement shall be for the
use, benefit and enjoyment of Grantee, its designated successors,
successors-in-title (including, without limitation The Development Authority of
Heard County ["DAHC"] as successor-in-title to the property of Grantee
identified and described in Exhibit "B" attached hereto and made a part hereof
[hereinafter referred to as the "Power Plant Property"]), grantees and assigns,
and their respective agents, employees, servants, tenants (including, without
limitation, Tenaska Georgia Partners, L.P. as a tenant leasing the Power Plant
Property from DAHC), subtenants, licensees, permitees, invitees, contractors,
subcontractors, lenders and any other party holding a collateral interest in the
Power Plant Property. This Agreement and the easements, rights, and privileges
created hereby shall be binding upon and inure to the benefit of Grantee and
Grantor and their respective designated (to the extent necessary under the last
two sentences of this paragraph) successors, successors-in-title (including,
without limitation the DAHC as successor-in-title to the Power Plant Property),
grantees, assignees, and their respective tenants (including, without
limitation, Tenaska Georgia Partners, L.P. as a tenant leasing the Power Plant
Property from DAHC), subtenants, licensees, permitees, lenders and any other
party holding a collateral interest in the Power Plant Property. All of the
easements, rights and privileges, set forth herein shall touch, concern, burden
and run with the title to the Grantor Property until the date Grantor and
Grantee publicly record an amendment to this Agreement designating the location
of the Easement Area pursuant to Paragraphs 1 and 2 above; and thereafter shall
only touch, concern, burden and run with the title to the eighty foot (80') wide
Easement Area, as the servient tenement, and shall be appurtenant to, touch,
concern and run with the title to any lands now or hereafter owned by Grantee,
its designated successors, successors-in-title (including, without limitation
the DAHC as successor-in-title to the Power Plant Property), grantees and
assigns, in Land Lots 206, 207, 236 and/or 237 of the 3rd Land District, Heard
County, Georgia, including, without limitation, the Power Plant Property,
collectively the dominant tenement. Any conveyance of said dominant tenement, or
any part thereof, to any lender or any other party holding a collateral interest
in the Power Plant Property (whether by foreclosure, deed in lieu of foreclosure
or otherwise) shall also convey the rights, privileges, duties and obligations
contained in this Agreement, regardless of whether or not specific mention is
made of this Agreement and regardless of whether or not a specific conveyance is
made of, or subject to, the easements, rights, privileges, duties and
obligations contained herein. Any conveyance of said dominant tenement, or any
part thereof, to any person or entity, other than a lender or a party holding a
collateral interest in the Power Plant Property, shall only convey the rights,
privileges, duties and obligations contained in this Agreement if specific
mention is made of this Agreement or if a specific conveyance is made of, or
subject to, the easements, rights, privileges, duties and obligations contained
herein.
The rights, privileges, and easements of Grantor to use the Easement
Area are subject to the rights, privileges, and easements of Grantee hereunder.
Any use by Grantor of the Easement Area shall not conflict, interfere, hamper or
deny in any fashion Grantee's exercise of the rights, privileges, and easements
granted to Grantee hereunder. Grantor expressly reserves unto itself, its
successors, successors-in-title and assigns, any and all rights, privileges and
uses which are
4
<PAGE>
not inconsistent with or would not conflict, interfere, hamper or deny in any
fashion Grantee's exercise of the rights, privileges, and easements granted to
Grantee hereunder
TO HAVE AND TO HOLD the rights, privileges and easements described
above unto Grantee, its successors, successors-in-title and assigns, subject to
all matters of record in the Heard County, Georgia records.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the day and year first above written.
GRANTOR:
Signed, sealed and delivered in the
the presence of: TENASKA, INC., a Delaware corporation
/S/
- --------------------------
Unofficial Witness
BY: /S/ (SEAL)
-----------------------------
Print Name: Paul G. Smith
/S/ Title: Vice President
- --------------------------
Notary Public
My Commission Expires:
[CORPORATE SEAL]
[NOTARY SEAL]
[SIGNATURES CONTINUED ON NEXT PAGE]
5
<PAGE>
GRANTEE
Signed, sealed and delivered in the
the presence of: TENASKA GEORGIA PARTNERS, L.P., a
Delaware limited partnership
/S/ By: Tenaska Georgia, Inc., a Delaware
- --------------------------- corporation, its General Partner
Unofficial Witness
/S/
- ---------------------------
Notary Public By:/S/ (SEAL)
My Commission Expires: ---------------------------------
------ Print Name: Michael F. Lawler
[NOTARY SEAL] Title:Vice President of Finance &
Treasuer
[CORPORATE SEAL]
6
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTIONS
TRACT A-2
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS 236
& 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE POINT OF
BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
7
<PAGE>
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
61.64 feet to a POINT ON THE WESTERLY LIMIT OF A GEORGIA POWER COMPANY
TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 210.06 feet to
a 2 INCH REBAR SET AT THE NORTHERLY LIMITS OF THE WETLANDS OF HILLY MILL CREEK;
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 1963.86 feet
to a 2 INCH REBAR SET;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
252.91 feet to a 12 INCH WOOD POST;
THENCE North 72 degrees 48 minutes 00 seconds East for a distance of
405.46 feet to the POINT OF BEGINNING.
Said property contains 27.41 acres, more or less, and is that same tract or
parcel of land shown as Tract A2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
TRACT E-2
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE POINT OF
BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE South 72 degrees 48 minutes 00 seconds East for a distance of
405.46 feet to a point;
8
<PAGE>
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a1/2 inch rebar set on the westerly line of a Georgia Power
Company Easement (150 foot width);
THENCE North 05 degrees 00 minutes 38 seconds West for a distance of
456.22 feet to a point on said westerly line of a Georgia Power Company Easement
and on the southerly right of way line of George Brown Road;
THENCE along said right of way line in an easterly direction, along a
curve to the right having a radius of 668.28 feet and an arc length of 237.56
feet and being subtended by a chord bearing South 71 degrees 01 minutes 39
seconds East for a distance of 236.31 feet to a point;
THENCE South 60 degrees 47 minutes 40 seconds East for a distance of
454.84 feet to a point;
THENCE along a curve to the left having a radius of 199.33 feet and an
arc length of 64.11 feet and being subtended by a chord bearing South 70 degrees
00 minutes 28 seconds East for a distance of 63.83 feet to a 1/2 inch rebar set;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
20.09 feet to the POINT OF BEGINNING.
Said property contains 4.13 acres, more or less, and is that same tract
or parcel of land shown as Tract E2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999. more or less.
LESS AND EXCEPT:
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 237
OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, DEEDED FROM TENASKA, INC., A
DELAWARE CORPORATION, AND TENASKA GEORGIA, INC., A DELAWARE CORPORATION, AS
GRANTORS, TO HEARD COUNTY, AS GRANTEE, PURSUANT TO THAT CERTAIN RURAL POST ROADS
RIGHT OF WAY DEED DATED NOVEMBER 10, 1999, FILED FOR RECORD NOVEMBER 10, 1999
AT 4:06 P.M., RECORDED IN DEED BOOK 201, PAGE 628, HEARD COUNTY,
GEORGIA RECORDS.
9
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EXHIBIT "B"
LEGAL DESCRIPTION
TRACT A-1
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 72 degrees 48 minutes 00 seconds West for a distance of
405.46 feet to a 12 INCH WOOD POST;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a INCH REBAR SET ON THE WESTERLY LINE OF A GEORGIA POWER COMPANY
RIGHT OF WAY (150 FOOT WIDTH), SAID POINT BEING THE POINT OF BEGINNING FOR THE
HEREIN DESCRIBED PARCEL OF LAND.
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 2173.92 feet to
the CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 46 degrees 21 minutes 20 seconds West for a distance of 66.26
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
10
<PAGE>
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK;
THENCE along the centerline of the unnamed creek to the Northeast,
more or less, North 68 degrees 03 minutes 13 seconds East for a distance of
336.28 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 29 minutes 52 seconds East for a distance of
296.07 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 54 degrees 43 minutes 02 seconds East for a distance of
67.68 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 17 degrees 17 minutes 28 seconds East for a distance of
228.26 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 23 degrees 21 minutes 46 seconds East for a distance of
241.49 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 07 degrees 17 minutes 08 seconds East for a distance of
71.42 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 79 degrees 26 minutes 44 seconds East for a distance of
307.88 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 48 degrees 14 minutes 55 seconds East for a distance of
157.63 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 27 degrees 04 minutes 19 seconds East for a distance of
111.97 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 55 degrees 09 minutes 32 seconds East for a distance of
128.35 feet to a POINT IN THE CENTERLINE OF THE CREEK;
11
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THENCE North 08 degrees 06 minutes 45 seconds East for a distance of
34.61 feet to an IRON PIN SET IN THE CENTERLINE OF THE CREEK;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
212.86 feet to on the Westerly line of a GEORGIA POWER COMPANY TRANSMISSION LINE
RIGHT OF WAY (150 FOOT WIDTH); Said point being the POINT OF BEGINNING.
Said property contains 46.13, more or less, and is that same tract or
parcel of land shown as Tract A2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised _____________, 1999.
REACCESS & UTILITY EASEMENT
12
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Exhibit 10.15
ELECTRIC SUBSTATION SITE OPTION AGREEMENT
This Electric Substation Site Option Agreement ("Agreement") is made
and entered into this 10th day of November, 1999, by and between TENASKA GEORGIA
PARTNERS, L.P. a Delaware limited partnership, hereinafter referred to as
"Buyer", and TENASKA, INC., a Delaware corporation, hereinafter referred to as
"Seller".
In consideration of the sum of Ten and No/100 ($10.00) Dollars paid by
Buyer to Seller as a non-refundable option fee (the "Option Fee"), the receipt
of which is hereby acknowledged by Seller, Seller hereby grants to Buyer the
exclusive option (the "Option") to purchase one contiguous block of land up to
eight (8) acres in size (the land, of up to eight [8] acres, Buyer elects to
purchase pursuant to this Agreement being hereinafter referred to as the
"Substation Site"), from that certain tract or parcel of land identified and
described in EXHIBIT "A" attached hereto and made a part hereof (hereinafter
referred to as "Tract A-2"), for use as an electric substation and switch yard
related to the electric generating facility to be constructed by Buyer on that
certain tract or parcel of land identified and described in EXHIBIT "B" attached
hereto and made a part hereof (the "Power Plant Site"). The Buyer shall have the
sole and absolute discretion to select the location and configuration of the
Substation Site to be purchased by Buyer, provided, however, that the Substation
Site selected by Buyer shall be contiguous to the Power Plant Site and shall not
exceed eight (8) acres in size.
Should Buyer exercise the Option, Buyer shall pay Seller a purchase
price of Six Thousand Five Hundred and No/100 ($6,500.00) Dollars per acre (the
"Purchase Price"), with the acreage determined by an ALTA/ACSM survey prepared
for Buyer by a Georgia registered land surveyor, at Buyer's cost, and the survey
and acreage approved by Seller as being in accordance with the terms of this
Agreement, Seller's approval not to be unreasonably withheld, conditioned or
delayed (said survey, after being so approved by Seller, being hereinafter
referred to as the "Survey"). The closing of such purchase shall take place at
any time on or before the expiration of the Option Period (as hereinafter
defined). The Purchase Price shall be paid in cash at the closing of the
purchase.
The Option Fee shall secure the Option on the above Substation Site for
a period commencing on the date first above written and expiring on December 31,
2001 (the "Option Period"). The above non-refundable Option Fee shall not be
credited towards the Purchase Price.
Buyer shall at all times during the Option Period, and prior to the
closing of the purchase of the Substation Site, have full rights of access to
Tract A-2 for purposes of Buyer, its agents, engineers and contractors entering
upon Tract A-2 to conduct any inspections, studies, environmental audits,
surveys, soils tests, borings, percolation tests or other tests, studies or
examinations Buyer determines are needed in order for Buyer to evaluate Tract
A-2 and the Substation Site, with all such work to be performed at Buyer's sole
risk and expense. Buyer agrees to indemnify, defend and hold harmless Seller
with respect to any and all claims, demands, liabilities, losses, liens, suits,
actions, causes of action, costs, expenses (including reasonable attorneys' fees
and fees of other experts) and damages, of any kind or nature, resulting in
whole or in part from any activities of Buyer on Tract A-2, including, without
limitation the acts or omissions of Buyer and Buyer's agents, employees,
servants, contractors
<PAGE>
and subcontractors, except to the extent caused solely by the gross negligence
of Seller (collectively the "Buyer's Inspection Indemnity Obligations"). Buyer
shall restore the surface of any portion of Tract A-2 disturbed by any such
activities and pay for any damage to timber and equipment caused by Buyer's
activities on Tract A-2 during the Option Period. Buyer shall be responsible for
the acts and omissions of all agents, employees, servants, contractors and
subcontractors engaged by Buyer to conduct such inspection work. Buyer further
agrees that during such inspections it will have in effect liability and
property damage insurance coverage in form and amounts reasonably acceptable to
Seller taking into account the scope of the work. Upon notice and request by
Seller, Buyer shall deliver to Seller a certificate of insurance evidencing the
coverages maintained by Buyer covering such inspection work.
This Option may only be exercised by Buyer giving Seller written notice
of exercise any time during the Option Period, which notice shall include the
above-described Survey designating the location and configuration of the
Substation Site in compliance with the terms of this Agreement. Following
exercise of the Option, the exact date and time for closing shall be specified
by Buyer to Seller by written notice given not less than thirty (30) days prior
to the date specified for closing.
If this Option is exercised (in accordance with its terms) the Seller
shall sell and the Buyer shall purchase the Substation Site of up to eight (8)
acres as identified and described in the Survey. Upon payment of the Purchase
Price by Buyer, Seller will deliver to Buyer, or any person or entity said Buyer
may designate, a limited warranty deed for the Substation Site and such
documentation as shall be required so as to (i) enable Buyer or its designee to
obtain an owners title insurance policy issued by a Georgia title insurance
company, with the standard title exceptions (other than the survey exception)
deleted, in an amount not less than the full Purchase Price of the Substation
Site, showing title to said Substation Site to be vested in Buyer or its
designee, at the standard premium rates, and (ii) close the purchase of the
Substation Site in accordance with the terms hereof. Said conveyance shall be
free and clear of all liens and encumbrances, with the exception of the
permitted title exceptions identified and described on EXHIBIT "C" attached
hereto and made a part hereof (collectively the "Permitted Title Exceptions").
Upon purchase of the Substation Site, Seller shall pay the Georgia real
estate transfer tax assessments in connection with the sale of the Substation
Site, the costs to clear title and to convey good and marketable fee simple
title, subject to the Permitted Title Exceptions, and the legal fees of Seller
associated with the sale. Buyer shall pay all associated legal fees of its own,
the full cost of the site survey, the cost of the title exam and title insurance
premium for any title policy obtained by Buyer, the cost to record the limited
warranty deed by which the Substation Site shall be transferred and any costs
incurred by Buyer in connection with any inspections performed by or for the
benefit of Buyer. Any and all real estate taxes and/or assessments shall be
prorated as of the date of closing. The limited warranty deed executed and
delivered at closing shall provide that Buyer, as Grantee, shall assume
liability for subsequent ad valorem tax assessments for prior years due to any
change in the land usage of the Substation Site made by Buyer, its successors or
assigns. Seller and Buyer represent and warrant, each to the other, that they
have not engaged or dealt with any real estate agent, broker or sales person in
connection with this Agreement or the sale of the Substation Site.
2
<PAGE>
If the Buyer does not exercise this Option, neither party shall have
any further rights or claims against the other, except that Buyer's Inspection
Indemnity Obligations shall survive the expiration or any earlier termination of
this Agreement.
Seller agrees that during the option period Seller will not voluntarily
encumber, lien, convey, assign or grant any rights in or on Tract A-2 without
the prior written consent of Buyer and any holder of security interest in power
generation facility being constructed by Buyer on the Power Plant Site (all of
the foregoing being hereinafter collectively referred to as "Lenders"), such
consent by Buyer and any Lenders not to be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing terms of this grammatical paragraph or
any other term or provision of this Agreement to the contrary, Seller shall be
permitted during the option period to encumber Tract A-2 with a Restricted
Covenant in compliance with the terms of that certain permit number 980013970
issued to Buyer pursuant to Section 404 of the Clean Water Act ( 33 U.S.C.
1344), and/or Section 10 of the Rivers and Harbors Act of 1899 (33 U.S.C.403 ))
by the Department of the Army, Corps of Engineers, Savannah District, without
Seller having to obtain the prior written consent of Buyer or any Lenders, and
upon the public recording of such Restricted Covenant it shall be deemed
included in the Exhibit "C" Permitted Title Exceptions as if originally set
forth on EXHIBIT "C".
This Option constitutes the entire agreement between the parties. No
representations, warranties or promises pertaining to this Option or any
property affected by this Option have been made by, or shall be binding on, any
of the parties hereto, except as expressly stated in this Option. This Option
may not be changed orally, but only by an agreement in writing signed by the
party against whom enforcement of any such change is sought. The interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Georgia. This Option shall inure to the benefit of, and shall bind,
the successors and assigns of the respective parties. All agreements, terms,
conditions, representation and warranties, if any, in this Agreement not
performed at or before the closing of the sale of the Substation Site shall not
survive the closing and shall be merged into the limited warranty deed delivered
at closing, except that Buyer's Inspection Indemnity Obligations shall survive
the closing.
No right or interest in this Agreement shall be assigned by Buyer
without the written permission of Seller; provided, however, nothing contained
in this Paragraph shall be construed to restrict Buyer in any manner from freely
granting a security interest, transferring in trust, mortgaging, hypothecating,
assigning or otherwise transferring Buyer's right, title and interest under this
Agreement to any institutional or commercial lender, or other person, its
successors or assigns, providing credit or loans to Buyer in connection with the
financing, refinancing or operation of an electric generating plant (hereinafter
referred to as a "Lender" or "Lenders") or construed to restrict any Lender from
exercising its rights or pursuing its remedies available under any loan
agreements, security agreements or other instruments or documents between itself
and Buyer or otherwise available to such Lender at law or in equity; and that
Buyer may assign this Agreement without the prior written permission of Seller
to Buyer's Lender(s), and Seller will execute a consent to such assignment as
may be reasonably requested by such Lender(s). Any attempt of assignment shall
be void and ineffective for all purposes unless made
3
<PAGE>
in conformity with this Paragraph. No such assignment of this Agreement or any
rights hereunder shall release the Buyer or other assignor from any of its
obligations hereunder.
Any notice or demand required or permitted under this Option shall be
sent by hand delivery, guaranteed overnight delivery (e.g. UPS Next Day Air) or
by registered or certified mail return receipt requested, sent as follows:
To Seller: Tenaska, Inc.
1044 North 115th Street
Suite 400
Omaha, Nebraska 68154
Attn: Ronald R. Tanner
Plus copies to: Tenaska, Inc.
1044 North 115th Street
Suite 400
Omaha, Nebraska 68154
Attn: Law and Contract Administration Departments
and
Steven K. Bender, Esquire
Long Aldridge & Norman LLP
Suite 3500
303 Peachtree Street
Atlanta, Georgia 30308
To Buyer: Tenaska Georgia Partners, L.P..
1044 North 115th Street
Suite 400
Omaha, Nebraska 68154
Attn: Ronald R. Tanner
Plus copies to: Tenaska Georgia, Inc.
1044 North 115th Street
Suite 400
Omaha, Nebraska 68154
Attn: Law and Contract Administration Departments
and
Steven K. Bender, Esquire
Long Aldridge & Norman LLP
Suite 3500
303 Peachtree Street
Atlanta, Georgia 30308
4
<PAGE>
All notice shall be effective upon hand delivery, deposit with an overnight
courier or deposit in the U.S. Mail, in accordance herewith. Either party may
change their address(es) for receipt of notices by giving at least ten (10) days
prior written notice of said change to the other party in accordance herewith.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
BUYER:
TENASKA GEORGIA PARTNERS, L.P., a
Delaware limited partnership
By: Tenaska Georgia, Inc., a Delaware
corporation, its General Partner
By:/S/
---------------------------------------
Print Name: Michael F. Lawler
Title: Vice President of Finance & Treasurer
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON NEXT PAGE]
5
<PAGE>
SELLER:
TENASKA, INC, a Delaware corporation
By: /S/
---------------------------------
Print Name: Jerry K. Crouse
Title: Vice President
[CORPORATE SEAL]
6
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
TRACT A-2
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS 236
& 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE POINT OF
BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
7
<PAGE>
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
61.64 feet to a POINT ON THE WESTERLY LIMIT OF A GEORGIA POWER COMPANY
TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 210.06 feet to
a 2 INCH REBAR SET AT THE NORTHERLY LIMITS OF THE WETLANDS OF HILLY MILL CREEK;
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 1963.86 feet
to a 2 INCH REBAR SET;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
252.91 feet to a 12 INCH WOOD POST;
THENCE North 72 degrees 48 minutes 00 seconds East for a distance of
405.46 feet to the POINT OF BEGINNING.
Said property contains 27.41 acres, more or less, and is that same tract or
parcel of land shown as Tract A2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised _________________, 1999.
8
<PAGE>
EXHIBIT "B"
LEGAL DESCRIPTION
TRACT A-1
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 72 degrees 48 minutes 00 seconds West for a distance of
405.46 feet to a 12 INCH WOOD POST;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a INCH REBAR SET ON THE WESTERLY LINE OF A GEORGIA POWER COMPANY
RIGHT OF WAY (150 FOOT WIDTH), SAID POINT BEING THE POINT OF BEGINNING FOR THE
HEREIN DESCRIBED PARCEL OF LAND.
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 2173.92 feet to
the CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 46 degrees 21 minutes 20 seconds West for a distance of 66.26
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
9
<PAGE>
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK;
THENCE along the centerline of the unnamed creek to the Northeast, more
or less, North 68 degrees 03 minutes 13 seconds East for a distance of 336.28
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 29 minutes 52 seconds East for a distance of
296.07 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 54 degrees 43 minutes 02 seconds East for a distance of
67.68 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 17 degrees 17 minutes 28 seconds East for a distance of
228.26 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 23 degrees 21 minutes 46 seconds East for a distance of
241.49 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 07 degrees 17 minutes 08 seconds East for a distance of
71.42 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 79 degrees 26 minutes 44 seconds East for a distance of
307.88 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 48 degrees 14 minutes 55 seconds East for a distance of
157.63 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 27 degrees 04 minutes 19 seconds East for a distance of
111.97 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 55 degrees 09 minutes 32 seconds East for a distance of
128.35 feet to a POINT IN THE CENTERLINE OF THE CREEK;
10
<PAGE>
THENCE North 08 degrees 06 minutes 45 seconds East for a distance of
34.61 feet to an IRON PIN SET IN THE CENTERLINE OF THE CREEK;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
212.86 feet to on the Westerly line of a GEORGIA POWER COMPANY TRANSMISSION LINE
RIGHT OF WAY (150 FOOT WIDTH); Said point being the POINT OF BEGINNING.
Said property contains 46.13, more or less, and is that same tract or
parcel of land shown as Tract A2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised ________________, 1999.
11
<PAGE>
EXHIBIT "C"
PERMITTED TITLE EXCEPTIONS
1. Liens for real estate ad valorem taxes, real estate assessments and
other governmental charges against real estate which are not yet due
and payable.
2. Any applicable zoning ordinances and governmental rules and regulations
3. All rights of the federal or state government with respect to any
waterway which is adjacent to or which crosses the Substation Site or
any portion or portions thereof.
4. Right of Way Deed Plant Wansley-Fortson Transmission Line from Georgia
Kraft Company dated August 7, 1974, filed for record September 14,
1974, recorded in Deed Book 75, Page 438, Heard County, Georgia records
(as shown on survey by Donaldson, Garrett & Associates, referenced
below).
5. All matters not of record which would be disclosed by an accurate
survey or inspection of the Substation Site.
6. All matter shown or disclosed on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska
Georgia, Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP,
Fidelity National Title Insurance Company of New York, Stewart Title
Guaranty Company, Heard County Development Authority & The Chase
Manhattan Bank as Trustee and Collateral Agent, prepared by Donaldson,
Garrett & Associate, Inc., bearing the seal and certification of James
W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19,
1999, last revised ______________, 1999.
7. Right of First Refusal Agreement by and between Tenaska, Inc., a
Delaware corporation, and Inland Paperboard and Packaging, Inc., a
Delaware corporation, dated October 8, 1999, and that certain
Memorandum of Right of First Refusal Agreement by and between Tenaska,
Inc., a Delaware corporation, and Inland Paperboard and Packaging,
Inc., a Delaware corporation, dated October 8, 1999, filed for record
October 11, 1999 at 3:15 p.m., recorded in Deed Book 201, Page 131,
Heard County, Georgia records.
8. Terms and provision contained in that certain Easement Agreement by and
between Violet E. Davis and Tenaska, Inc., a Delaware corporation,
dated May 7, 1998, filed for record May 7, 1998 at 1:54 p.m., recorded
in Deed Book 184, Page 578, aforesaid Records.
9. Restricted Covenant from Tenaska Inc., a Delaware corporation, dated
November ___, 1999, filed for record November ___, 1999 at ___:___
__.m., recorded in Deed Book _______, Page _______, aforesaid Records.
12
<PAGE>
10. That certain Access and Utility Easement Agreement from Tenaska, Inc.,
a Delaware corporation to Tenaska Georgia Partners, L.P., a Delaware
limited partnership, dated November ___, 1999, filed for record
November ___, 1999 at ___:___ __.m., recorded in Deed Book _______,
Page _______, aforesaid Records.
REElectricSubstationSiteOptionAgreement
13
<PAGE>
Exhibit 10.16
AFTER RECORDING RETURN TO:
Steven K. Bender, Esquire
Long Aldridge & Norman, LLP
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
(404) 527-4640
NATURAL GAS PIPELINE RIGHT-OF-WAY
THIS AGREEMENT, made the 2nd day of November, 1999, between GREAT
NORTHERN NEKOOSA CORPORATION, a Maine corporation, of 100 Peachtree Street,
N.W., Suite 2650, Atlanta, Georgia 30303 ("GRANTOR"), and TENASKA GEORGIA
PARTNERS, L.P. a Delaware limited partnership, of 1044 North 115th Street,
Omaha, Nebraska 68154-4446, ("GRANTEE"). The terms GRANTOR and GRANTEE include,
without limitation, the neuter, masculine and feminine genders, the singular and
the plural, and their respective successors and assigns where the context
requires or permits.
WITNESSETH:
That for and in consideration of the sum of TEN AND NO/100 DOLLARS
($10.00) and other good and valuable consideration paid by GRANTEE to GRANTOR,
the receipt of which is hereby acknowledged, GRANTOR does hereby grant, bargain,
sell and convey, to the extent of GRANTOR'S interest in the property under the
Timber Agreement between T. W. Goodson and Southern Land, Timber and Pulp
Corporation (predecessor to Great Northern Nekoosa Corporation), dated May 27,
1959 and recorded in Deed Book 47, page 555, Heard County Records (the "Timber
Agreement"), unto GRANTEE, its successors and assigns, the right and easement,
during the term of the Timber Agreement, as extended from time to time, and the
term of any other agreement between GRANTOR and the successors-in-title to T.W
Goodson, to survey, lay, maintain, operate, repair, replace and remove a
pipeline or pipelines with fittings, appliances, appurtenances, machinery,
apparatus, equipment, fixtures, improvements and facilities related thereto
(hereinafter collectively referred to as the "pipeline") for the transportation
of oil and/or gas under, over, and through the real property located in Heard
County, Georgia (the "Premises"), and being more particularly described in
Exhibit A attached hereto and made a part hereof by reference.
Further, GRANTOR does hereby grant and convey unto GRANTEE a temporary
right, right-of-way and easement to use the real property located in Heard
County, Georgia, and being more particularly described in Exhibit B attached
hereto and made a part hereof by reference (the "Temporary Easement Area"; the
Premises and Temporary Easement Area being hereinafter sometimes collectively
referred to as the
<PAGE>
"right-of-way"), for the purpose and a term so long as necessary to clear,
excavate, lay and construct the aforementioned pipeline and do all things
reasonably necessary and incident to the initial construction of the pipeline,
and as needed in connection with any later maintenance, repair, replacement,
alteration or removal of the pipeline. GRANTEE shall be permitted to clear the
Temporary Easement Area of trees, shrubs and other vegetation so as to permit
use of the Temporary Easement Area for the foregoing purposes.
1. GRANTEE shall have the right of ingress to and egress from said
right-of-way and across adjacent lands of GRANTOR by means of roads and lanes
thereon, if such there be; otherwise by such route or routes as shall occasion
the least practicable damage and inconvenience to GRANTOR.
2. GRANTOR expressly reserves the right of use of the Premises for
purposes which are not inconsistent with the easement privileges granted herein,
including but not limited to, the right to cross the right-of-way at will in the
management of its properties; provided, however, that GRANTOR, its agents,
employees, servants, tenants, under tenants, permitees, licensees, invitees,
contractors and subcontractors (i) shall only drag and/or skid logs across the
four (4) Crossing Areas (as hereinafter defined) installed as provided in
Paragraph 10 below, (ii) shall only cross the pipeline with trucks and/or other
equipment at said four (4) Crossing Areas, and (iii) shall not change the grade
of the Premises. GRANTEE understands that "management" in this sense involves
the re-establishment of forest growth and logging operations necessitating the
building and repair of roads, the felling of trees and the movement and use of
heavy and cumbersome equipment and trucks loaded with forest products.
3. It is understood and agreed by and between the parties hereto that
as a further consideration for the right-of-way granted hereunder, GRANTEE does
hereby release and discharge GRANTOR, from any and all liability, claim or
demand which GRANTEE may have or claim to have, now or hereafter, against
GRANTOR by reason of any property damage to its pipeline, including all
appurtenances thereon, resulting from, arising out of, or in any manner
associated with, any forestry operation of the GRANTOR in the management of its
properties. All property of whatever kind or nature which may be now or
hereinafter placed in, on, or about the Premises shall be at the sole risk of
GRANTEE, and GRANTOR shall not be liable to GRANTEE for any damage or loss to
said property taking place on the Premises.
4. GRANTEE agrees to indemnify GRANTOR and hold GRANTOR harmless from
and against any and all loss, liability, damage, injury, cost, expense,
including attorneys' fees and claims of any kind whatsoever paid, incurred or
suffered by, or asserted against, GRANTOR for, with respect to, or as a direct
or indirect result of the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission or release from the pipeline on the Premises of
any hazardous material arising out of, in connection with, or in any manner
caused by the use of the Premises by GRANTEE, including, without limiting the
generality of the foregoing, any loss, liability, damage, injury, cost, expense,
including attorneys' fees, or claim asserted or arising under any environmental
law, unless caused by the sole or gross negligence, or willful misconduct,
2
<PAGE>
of GRANTOR, its agents, employees, servants, tenants, under tenants, permitees,
licensees, invitees, contractors or subcontractors. Notwithstanding any
provision to the contrary contained in this instrument, this obligation of
indemnity shall survive the expiration or earlier termination of this
right-of-way. As used herein, the term "Environmental Law" shall mean any
federal, state, local or foreign law, statute, decree, ordinance, code, rule, or
regulation, including, without limiting the generality of the foregoing, the
Comprehensive Environmental Response Compensation and Liability act of 1980, as
amended, the Hazardous Materials Transportation Act, the Resource Conservation
and Recovery act, the Toxic Substance Control Act of 1976, and any federal,
state or local so-called "Superfund" or "Superlien" law or ordinance relating to
the emission, discharge, release, threatened release into the environment of any
oil, petroleum containing substance, pollutant, contaminant, chemical,
hazardous, toxic or dangerous waste, substance or material (including, without
limitation, ambient air, surface water, groundwater or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of such substances and any and all regulations,
codes, plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder. As used herein, the term
"Hazardous Material" shall mean any pollutants, contaminants, chemicals,
hazardous, toxic or dangerous waste, substance or material, or any other
substance or material regulated or controlled pursuant to any Environmental Law
now or at any time hereafter in effect, including any other substances defined
as "hazardous substances" or "toxic substances" in any Environmental Law.
GRANTEE further agrees to indemnify and hold GRANTOR harmless from and against
any and all loss, costs, damages, claims, actions or liability, including
attorneys' fees, on account of the injury to or death of any person or persons,
or the damage to or destruction of any property arising from or growing out of
the exercise of the rights herein granted, or of its exercise of rights assumed
in connection therewith, by GRANTEE, its employees, agents, or contractors,
unless caused by the sole or gross negligence, or willful misconduct, of
GRANTOR, its agents, employees, servants, tenants, under tenants, permitees,
licensees, invitees, contractors or subcontractors.
5. GRANTEE covenants and agrees to obtain and maintain, so long as this
agreement remains in effect, insurance coverage for the indemnity and save
harmless provisions of this right-of-way and to furnish GRANTEE a certificate
prior to any operations on the Premises, which insurance coverage shall be as
follows: public liability insurance with coverage not less than $1,000,000 for
any one person and $2,000,000 for any one occurrence and $500,000 property
damage, with GRANTOR named as an additional insured up to the limits of
liability required herein and to the extent of GRANTEE'S liability hereunder.
Failure to provide a certificate will constitute a default hereunder, and if
such default is not cured within thirty (30) days after GRANTOR has given
written notice of such default to GRANTEE, then GRANTEE shall pay GRANTOR upon
demand damages in the amount of $1,000.00 per day for each day such default
continues beyond said thirty (30) day cure period.
3
<PAGE>
6. The parties hereto acknowledge and agree that the obligations to
release, discharge and indemnify assumed by GRANTEE in Paragraphs 3 and 4
constitute additional consideration to GRANTOR without which GRANTOR would not
have agreed to this grant. The parties further agree that, as used in Paragraphs
3 and 4 the term GRANTOR shall include the GRANTOR, its officers, agents,
affiliated corporations, contractors and their respective employees.
7. GRANTEE shall comply with all laws and ordinances and with the rules
and regulations of any codes of Federal, State or local authority applicable to
the use of the Premises, including, but not limited to, the Endangered Species
Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response Compensation and Liability Act, Clean Water Act, and Clean Air Act.
GRANTEE shall have the full responsibility of obtaining any and all federal.
state and local permits or licenses and shall fully comply with all of the laws,
rules, regulations and requirements of any and all federal, state or local
government, authority, agency, commission or regulatory body insofar as the same
may apply to GRANTEE's operations hereunder, and particularly as such laws,
rules, regulations and requirements may relate to protection of the environment,
water and air.
8. GRANTEE shall repair, to the satisfaction of GRANTOR or its
representative, any damage it shall cause to GRANTOR's private roads, lanes or
ditches, whether such damage is caused by the installation or the maintenance of
the pipeline.
9. GRANTEE agrees and covenants to pay GRANTOR, at the then market
value, for any of GRANTOR's timber lying outside of the Premises and Temporary
Easement Area destroyed or damaged from acts or omissions of GRANTEE, its
employees, agents, or contractors at any time during the period this grant is in
force. All stumps, brush, limbs or other debris of any kind which GRANTEE
desires to clear from the Premises and Temporary Easement Area shall be placed,
piled, and burned or otherwise disposed of in such manner that there will be no
increased fire or bug hazard to the timber of GRANTOR on or near said property
lying outside of the Premises and Temporary Easement Area, and no defacement of
the timber or other property of GRANTOR lying outside of the Premises and
Temporary Easement Area. No stumps, brush, limbs or other debris shall be
burned, piled or placed on property of GRANTOR lying outside the Premises and
Temporary Easement Area.
10. GRANTEE agrees to bury the pipeline to a depth of at least
forty-eight (48") inches below the surface of the earth. GRANTEE agrees that in
connection with the construction of the pipeline, GRANTEE will install, at
GRANTEE'S cost, four (4) crossing locations along the pipeline that will be
reinforced so as to prevent any damage to the pipeline as a result of trucks
crossing the pipeline and logs being dragged or skidded across the pipeline at
those crossing locations (collectively referred to as the "Crossing Areas," and
individually as a "Crossing Area"). The four (4) Crossing Areas shall be
installed approximately at the locations identified and described in Exhibit "C"
attached hereto and made a part hereof by reference, each Crossing Area shall be
a minimum of twenty feet (20') wide measured along the length of the pipeline,
and the
4
<PAGE>
Crossing Areas shall be posted with signs specifying such crossing points.
Additionally, GRANTEE agrees that should GRANTEE'S installation of the pipeline
require that any portion of the existing roadway located at Crossing Area "A,"
as shown on Exhibit "C," be relocated, then GRANTEE shall, at GRANTEE'S cost,
relocate such portion of the road, construct a comparable roadway as close as
possible to the existing location of such road, and GRANTEE shall pay GRANTOR
the then market value for any timber lying outside of the Premises and Temporary
Easement Area that are cut down, destroyed or damaged in connection with
relocating such portion of the roadway.
11. The easements granted hereunder include the right of GRANTEE to
cut, clear, remove and dispose of, from time to time, all trees, shrubs, and
other vegetation in and on the Premises, and to remove and dispose of all
obstructions thereon, as GRANTEE may deem necessary for the safe operation and
maintenance of the pipeline. GRANTEE agrees to maintain the area in the Premises
so that it is clear of trees and heavy vegetation and to clearly mark the
location thereof so that it is clearly visible at all times. GRANTOR shall not
construct or permit any buildings, structures, fences, trees, hedges, wind rows
or other obstructions to be erected or placed upon the Premises, or to change
the grade of the Premises, or create or permit any condition whereby standing
water would accumulate on the Premises, nor to otherwise interfere in or to
knowingly permit any other person to interfere with GRANTEE'S use and enjoyment
of rights granted under this Agreement.
12. The right-of-way and easements herein granted, and all rights and
privileges in connection herewith, shall automatically revert to GRANTOR, its
successors and assigns, if the construction of a gas pipeline within the
Premises is not commenced within three (3) years after the date of this
right-of-way. It is the intent of the GRANTOR and GRANTEE that the commencement
of the construction of any gas pipeline, whether by GRANTEE, Tenaska, Inc., or
any of their respective successors or assigns, shall prevent the reversion of
the right-or-way and easements herein granted, and all rights and privileges in
connection herewith, from reverting to GRANTOR, its successors and assigns. Said
three (3) year period shall be extended for the period of any force majeure as
described in Paragraph 13 below.
13. GRANTEE shall be excused for the period of any delay, and shall not
be deemed in default, with respect to the performance of any of the terms,
covenants, or conditions of this Agreement when prevented from doing so by union
labor disputes, fire or other casualty, earthquake, war, insurrection, shortages
of labor, shortages of materials, unexpected repairs, acts of God (including
weather conditions interfering with performance of obligations) or other causes
outside the control of GRANTEE.
14. Should GRANTEE ever terminate its rights under this Agreement as
evidenced by GRANTEE giving a Quit Claim Deed to GRANTOR which deed expressly
states that it is given for purposes of terminating the easements granted
hereunder, GRANTEE shall have one hundred and eighty (180) days from the date of
said deed to close the pipeline in accordance with all applicable Federal, State
and local statutes, ordinances, rules, regulations and codes. Unless the time
period is extended by written consent of GRANTOR, any property or fixtures of
GRANTEE left on the Premises after
5
<PAGE>
the expiration of said one hundred and eighty (180) days shall be deemed
abandoned by GRANTEE. The closure of the pipeline by GRANTEE, as aforesaid,
shall be done in a good and workmanlike manner and with reasonable care and
caution in protecting timber and other property on lands adjacent to the
right-of-way. GRANTEE shall pay GRANTOR for all damages to timber and other
property of GRANTOR located off of the right-of-way, which are caused by
GRANTEE's removal of its properties, and in addition, if removal of the pipeline
is required by applicable law in order to close the pipeline, then GRANTEE shall
refill the trench from which its pipeline is removed and restore the surface of
GRANTOR's lands within the right-of-way to as near the same condition as existed
prior to such removal as is reasonably possible.
15. This grant of easement is made without warranty of title, subject
to any and all easements, rights of way, oil and gas leases and/or servitudes,
of whatever kind or nature, which are presently of record in the chain of title
for the Premises and Temporary Easement Area, including, without limitation, the
easements, rights and privileges granted under this right-of-way being subject
to that certain Natural Gas Pipeline Right-of-Way dated September 8, 1999,
granted by GRANTOR to Tenaska, Inc., a Delaware corporation, and recorded in
Deed Book 200, Page 136 of the Heard County, Georgia Records (hereinafter the
"Tenaska, Inc. Natural Gas Pipeline Right-of-Way"). GRANTOR hereby consents to
the granting of that certain Perpetual Right-Of-Way And Easement Agreement
granted by Charles L. Goodson, as Executor of the Last Will and Testament of Ora
Lee Goodson, as grantor, to Tenaska Georgia Partners, Inc., a Delaware
corporation, as grantee, dated ______________, 1999, and filed for record on
_______________, 1999, at _______________.M., in the Heard County, Georgia
records, recorded at Deed Book _______, Page _______, and any amendments thereto
which are made for purposes of changing the size and/or location of the easement
areas described therein. All property of whatever kind or nature which may be
now or hereinafter placed in, on, or about the above-described property, shall
be at the sole risk of the GRANTEE, and GRANTOR shall not be liable to the
GRANTEE for any damage or loss to said property. GRANTOR DOES NOT MAKE ANY
WARRANTIES, EXPRESS OR IMPLIED, THAT THE PROPERTY SUBJECT TO THIS RIGHT-OF-WAY
GRANT CAN BE USED FOR ANY PURPOSE WHATSOEVER.
16. The rights and obligations of GRANTEE hereunder shall be assignable
by GRANTEE without the prior written consent of GRANTOR. If any assignee of this
Agreement assumes in writing all obligations of the GRANTEE hereunder accruing
or arising from and after the effective date of such assignment and the GRANTOR
gives its written consent to the release of the assigning GRANTEE from the
obligations and liabilities hereunder, such consent of GRANTOR not to be
unreasonably withheld, conditioned or delayed, the assigning GRANTEE shall be
released from all obligations and liabilities for matters accruing or arising
from and after the effective date of such assignment. GRANTOR agrees that
without any consent from GRANTOR, (i) TENASKA GEORGIA PARTNERS, L.P.
(hereinafter sometimes referred to as "TGP"), as GRANTEE, shall have the right
to transfer and assign the rights and obligations of GRANTEE hereunder to THE
DEVELOPMENT AUTHORITY OF HEARD COUNTY ("DAHC"), (ii) DAHC, as GRANTEE shall have
the right to lease the easements, rights and privileges granted hereunder to TGP
as the tenant of DAHC, and (iii) DAHC and
6
<PAGE>
TPG shall each have right to grant to their lenders and any other party holding
a collateral interest in the Power Plant Property (as hereinafter defined) the
right to use the easements, rights and privileges granted hereunder; and TGP
shall remain liable to GRANTOR for all obligations and liabilities of the
GRANTEE accruing or arising from and after the effective date of such transfers,
assignments and lease until released in accordance with the terms of this
Section 16.
17. All notices and/or payments, necessary, required or permitted to be
given under the terms of this right-of-way shall be in writing and shall be sent
by hand delivery, registered or certified U.S. Mail, return receipt requested,
or guaranteed overnight delivery (e.g. UPS Next Day Air or Federal Express), as
follows:
IF TO GRANTOR: Great Northern Nekoosa Corporation
100 Peachtree Street, N.W.
Suite 2650
Atlanta, Georgia 30303
Attention: Erwin Barger
IF TO GRANTEE: Tenaska Georgia Partners, L.P.
1044 North 115th Street
Omaha, Nebraska 68154-4446
Attention: Vice President of Fuel Supply
Plus copies to: Tenaska Georgia Partners, L.P.
1044 North 115th Street
Omaha, Nebraska 68154-4446
Attention: Vice President of Operations
or to such other addresses as each party hereto may designate by written notice
to the other party given in accordance herewith, and notice so given shall be
effective on the date of delivery in the case of notice sent by hand delivery,
five (5) days after mailing in the case of notice sent by U.S. Mail, and on the
next business day after consignment to a guaranteed overnight delivery service
where sent by overnight delivery.
18. This Agreement and the easements, rights, and privileges created
hereby shall be binding upon and inure to the benefit of GRANTEE and GRANTOR and
their respective successors, successors-in-title, grantees, assignees, tenants,
subtenants, licensees, permitees, employees, invitees, agents, contractors,
subcontractors and lenders. All of the easements, rights and privileges, set
forth herein shall touch, concern, burden and run with the title to the Premises
and Temporary Easement Area, as the servient tenement, and shall be appurtenant
to, touch, concern, benefit and run with the title to the property of GRANTEE
identified in Exhibit D attached hereto and made a part hereof (herein referred
to as the "Power Plant Property"), the dominant tenement. Any conveyance of the
Timber Agreement, or any right, title or interest thereunder, shall be subject
to the terms of this Agreement and the easements, rights and privileges granted
hereunder, regardless of whether or not a specific mention is
7
<PAGE>
made of this Agreement and regardless of whether or not made subject to the
easements, rights, and privileges granted hereunder.
19. The interpretation, construction and performance of this agreement
shall be governed by the laws of the State of Georgia. GRANTOR represents and
warrants to GRANTEE that no contracts, agreements, leases, subleases, easements,
liens, or other encumbrances, that conflict with the easements, rights and
privileges granted to GRANTEE hereunder, have been executed or granted by
GRANTOR, other than (a) those shown of record in the chain of title to the
Premises and Temporary Easement Area in the Heard County, Georgia records as of
the date hereof, and (b) the Tenaska, Inc. Natural Gas Pipeline Right-Of-Way (as
defined above).
TO HAVE AND TO HOLD the aforesaid rights, privileges, and easements
unto GRANTEE, its successors and assigns, forever, subject to the conditions,
limitations and restrictions contained herein.
[SIGNATURES BEGIN ON NEXT PAGE]
8
<PAGE>
IN WITNESS WHEREOF, the parties have caused their corporate names and
seals to be affixed by their duly authorized representatives, on the date first
written above.
Signed, sealed and delivered GREAT NORTHERN NEKOOSA
in the presence of: CORPORATION
/S/ By: /S/
- --------------------- --------------------------------
Witness
Print Name: Donald L. Glass
Title: Executive Vice President - Timber
ATTEST:
/S/ /S/
- --------------------- --------------------------------
Notary Public for Assistant Secretary
----
County, Georgia
(CORPORATE SEAL)
Signed, sealed and delivered TENASKA GEORGIA PARTNERS, L.P.
in the presence of:
/S/ By: Tenaska Georgia, Inc., a Delaware
- ---------------------- corporation, its General Partner
Witness
By: /S/
-----------------------------
Print Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
ATTEST:
/S/ /S/
- --------------------- --------------------------------
Notary Public for Secretary
----
County,
(CORPORATE SEAL)
9
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
EASEMENT AREA 2 - PERMANENT GAS PIPELINE EASEMENT
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 & 236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
102.52 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
309.02 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
<PAGE>
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
389.03 feet to a point;
THENCE South 13 degrees 57 minutes 28 seconds West for a distance of
235.43 feet to a point;
THENCE South 01 degrees 34 minutes 09 seconds East for a distance of
636.83 feet to a point;
THENCE South 20 degrees 37 minutes 20 seconds East for a distance of
13.96 feet to a point;
THENCE South 75 degrees 41 minutes 17 seconds West for a distance of
50.30 feet to a point;
THENCE North 20 degrees 37 minutes 20 seconds West for a distance of
16.82 feet to a point;
THENCE North 01 degrees 34 minutes 09 seconds West for a distance of
652.03 feet to a point;
THENCE North 13 degrees 57 minutes 28 seconds East for a distance of
257.78 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
381.45 feet to a point;
THENCE North 01 degrees 08 minutes 53 seconds West for a distance of
237.86 feet to a point;
THENCE North 13 degrees 19 minutes 59 seconds West for a distance of
1046.41 feet to a point;
THENCE North 30 degrees 02 minutes 25 seconds East for a distance of
439.69 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
288.60 feet to a point;
THENCE North 12 degrees 00 minutes 21 seconds West for a distance of
143.97 feet to a point;
THENCE North 02 degrees 23 minutes 46 seconds West for a distance of
463.86 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
263.22 feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of
50.16 feet to the POINT OF BEGINNING.
Said property contains 4.81 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 11 - PERMANENT ACCESS
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1502.56 feet to a point;
THENCE South 03 degrees 25 minutes 19 seconds West for a distance of
556.81 feet to a 3/4 inch pipe;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of
434.31 feet to a 3/4 inch pipe, said point being the POINT OF BEGINNING for the
herein described parcel of land.
THENCE South 00 degrees 29 minutes 20 seconds East for a distance of
30.01 feet to a point;
THENCE North 89 degrees 13 minutes 51 seconds West for a distance of
16.78 feet to a point;
THENCE North 32 degrees 43 minutes 50 seconds West for a distance of
70.24 feet to a point;
THENCE North 08 degrees 02 minutes 18 seconds West for a distance of
31.43 feet to a point;
<PAGE>
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
69.56 feet to a point;
THENCE South 89 degrees 04 minutes 41 seconds East for a distance of
12.67 feet to a point;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of
110.58 feet to the POINT OF BEGINNING.
Said property contains 0.13 acre more or less.
REGREATNCKOOSANATURALGASPIPELINERIGHTOFWAYEXHA
<PAGE>
EXHIBIT B
LEGAL DESCRIPTION
EASEMENT AREA 3 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236 OF
THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of 291.17
feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of 32.38
feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of 978.06
feet to a point on the Southerly limits of the Wetlands of Hilly Mill Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a
distance of 84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 12.03
feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 140.19
feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE along a curve to the right having a radius of 3600.00 feet and an
arc length of 149.43 feet, being subtended by a chord of South 39 degrees 39
minutes 09 seconds West for a distance of 149.42 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of 117.12
feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of 102.52
feet to the POINT OF BEGINNING.
Said property contains 0.14 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 4 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
50.16 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
25.08 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
92.32 feet to a point;
THENCE along a curve to the right having a radius of 3525.00 feet and
an arc length of 369.76 feet, being subtended by a chord of South 44 degrees 20
minutes 28 seconds West for a distance of 369.59 feet to a point;
THENCE South 42 degrees 39 minutes 13 seconds East for a distance of
75.00 feet to a point;
<PAGE>
THENCE along a curve to the left having a radius of 3600.00 feet and an
arc length of 302.97 feet, being subtended by a chord of North 44 degrees 56
minutes 07 seconds East for a distance of 302.89 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
67.37 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
431.14 feet to a point;
THENCE North 46 degrees 21 minutes 35 seconds West for a distance of
115.41 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
100.00 feet to a point;
THENCE South 46 degrees 21 minutes 35 seconds East for a distance of
275.00 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
14.21 feet to a point;
THENCE North 12 degrees 00 minutes 21 seconds West for a distance of
143.97 feet to a point;
THENCE North 02 degrees 23 minutes 46 seconds West for a distance of
463.86 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
263.22 feet to the POINT OF BEGINNING.
Said property contains 1.38 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 5 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
50.16 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
263.22 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
463.86 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
143.97 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
175.27 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 46 degrees 21 minutes 35 seconds West for a distance of
225.00 feet to a point;
<PAGE>
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
100.00 feet to a point;
THENCE South 46 degrees 21 minutes 35 seconds East for a distance of
221.78 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
13.71 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
113.33 feet to the POINT OF BEGINNING.
Said property contains 0.52 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 6 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 & 236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
202.70 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
106.32 feet to a point;
<PAGE>
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
213.81 feet to a point;
THENCE South 41 degrees 31 minutes 33 seconds East for a distance of
225.00 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
100.00 feet to a point;
THENCE North 41 degrees 31 minutes 33 seconds West for a distance of
200.00 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
125.37 feet to a point;
THENCE North 01 degrees 08 minutes 53 seconds West for a distance of
280.53 feet to a point;
THENCE North 13 degrees 19 minutes 59 seconds West for a distance of
1024.59 feet to a point;
THENCE North 30 degrees 02 minutes 25 seconds East for a distance of
507.24 feet to the POINT OF BEGINNING.
Said property contains 1.60 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 7 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
309.02 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
<PAGE>
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
297.81 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
91.22 feet to a point;
THENCE South 13 degrees 57 minutes 28 seconds West for a distance of
235.43 feet to a point;
THENCE South 01 degrees 34 minutes 09 seconds East for a distance of
636.83 feet to a point;
THENCE South 20 degrees 37 minutes 20 seconds East for a distance of
13.96 feet to a point;
THENCE North 75 degrees 41 minutes 17 seconds East for a distance of
25.15 feet to a point;
THENCE North 20 degrees 37 minutes 20 seconds West for a distance of
12.53 feet to a point;
THENCE North 01 degrees 34 minutes 09 seconds West for a distance of
629.22 feet to a point;
THENCE North 13 degrees 57 minutes 28 seconds East for a distance of
204.18 feet to a point;
THENCE South 41 degrees 31 minutes 33 seconds East for a distance of
188.62 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
100.00 feet to a point;
THENCE North 41 degrees 31 minutes 33 seconds West for a distance of
225.00 feet to the POINT OF BEGINNING.
Said property contains 1.01 acres more or less.
REGREATNEKOOSANATURALGASPIPELINERIGHTOFWAYEXHB
<PAGE>
EXHIBIT "C"
GOODSON LTL TRACT
The following is a description of information which cannot be submitted
electronically:
A,B,C,D - Permanent Gas Line Crossing Locations (Proposed) - 1 page
REGREATNEKOOSANATURALGASPIPELINERIGHTOFWAYEXHC
<PAGE>
EXHIBIT "D"
LEGAL DESCRIPTION
TRACT A-1
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 72 degrees 48 minutes 00 seconds West for a distance of
405.46 feet to a 12 INCH WOOD POST;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a 2 INCH REBAR SET ON THE WESTERLY LINE OF A GEORGIA POWER
COMPANY RIGHT OF WAY (150 FOOT WIDTH), SAID POINT BEING THE POINT OF BEGINNING
FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 2143.92 feet to
the CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 46 degrees 21 minutes 20 seconds West for a distance of 66.26
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
<PAGE>
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK;
THENCE along the centerline of the unnamed creek to the Northeast,
more or less, North 68 degrees 03 minutes 13 seconds East for a distance of
336.28 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 29 minutes 52 seconds East for a distance of
296.07 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 54 degrees 43 minutes 02 seconds East for a distance of
67.68 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 17 degrees 17 minutes 28 seconds East for a distance of
228.26 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 23 degrees 21 minutes 46 seconds East for a distance of
241.49 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 07 degrees 17 minutes 08 seconds East for a distance of
71.42 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 79 degrees 26 minutes 44 seconds East for a distance of
307.88 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 48 degrees 14 minutes 55 seconds East for a distance of
157.63 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 27 degrees 04 minutes 19 seconds East for a distance of
111.97 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 55 degrees 09 minutes 32 seconds East for a distance of
128.35 feet to a POINT IN THE CENTERLINE OF THE CREEK;
Page 2 of 21
<PAGE>
THENCE North 08 degrees 06 minutes 45 seconds East for a distance of
34.61 feet to an IRON PIN SET IN THE CENTERLINE OF THE CREEK;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
212.86 feet to a 2 inch rebar set on the Westerly line of a GEORGIA POWER
COMPANY TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH); Said point being the
POINT OF BEGINNING.
Said property contains 46.13 acres, and is that same tract or parcel of
land shown as Tract A1 on that certain ALTA/ACSM Title Survey, entitled Heard
County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc., Tenaska
Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title Insurance
Company of New York, Stewart Title Guaranty Company, Heard County Development
Authority & The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and certification of
James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19, 1999,
last revised November 4, 1999.
TRACT B
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
Page 3 of 21
<PAGE>
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
Page 4 of 21
<PAGE>
THENCE South 78 degrees 47 minutes 46 seconds West for a distance OF
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek, Said point being the POINT OF BEGINNING for the herein described parcel
of land;
THENCE along said wetlands limits to the Southeast, more or less, South
53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
Page 5 of 21
<PAGE>
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
Page 6 of 21
<PAGE>
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE leaving said wetlands limits, North 65 degrees 01minutes 43
seconds West for a distance of 98.87 feet to a point;
THENCE North 11 degrees 02 minutes 41 seconds East for a distance of
230.45 feet to a point;
THENCE North 11 degrees 13 minutes 13 seconds West for a distance of
121.54 feet to a point;
THENCE North 38 degrees 58 minutes 52 seconds West for a distance of
121.90 feet to a point;
THENCE North 23 degrees 10 minutes 22 seconds West for a distance of
116.83 feet to a point;
THENCE North 27 degrees 01 minutes 41 seconds West for a distance of
102.77 feet to a point;
THENCE North 44 degrees 31 minutes 22 seconds West for a distance of
55.85 feet to a point;
THENCE South 70 degrees 40 minutes 56 seconds West for a distance of
73.31 feet to a point;
THENCE South 71 degrees 22 minutes 08 seconds West for a distance of
120.59 feet to a point;
THENCE North 27 degrees 11 minutes 02 seconds West for a distance of
173.06 feet to a point;
THENCE North 06 degrees 27 minutes 30 seconds East for a distance of
58.98 feet to a point;
THENCE North 40 degrees 46 minutes 01 seconds East for a distance of
132.31 feet to a point;
THENCE North 01 degrees 41 minutes 21 seconds West for a distance of
32.15 feet to a point;
Page 7 of 21
<PAGE>
THENCE North 42 degrees 40 minutes 25 seconds West for a distance of
132.37 feet to a point;
THENCE North 47 degrees 57 minutes 38 seconds East for a distance of
97.57 feet to the POINT OF BEGINNING.
Said property contains 3.84 acres more or less and is that same tract
or parcel of land shown as Tract B on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
TRACT C
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF
JOE STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
Page 8 of 21
<PAGE>
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek, said point being the POINT OF BEGINNING for the herein described parcel
of land.
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a THREE-QUARTER INCH PIPE;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE North 72 degrees 59 minutes 23 seconds West for a distance of
97.41 feet to a point;
THENCE North 28 degrees 40 minutes 02 seconds West for a distance of
114.55 feet to a point;
THENCE North 62 degrees 08 minutes 04 seconds West for a distance of
184.99 feet to a point;
THENCE North 63 degrees 50 minutes 09 seconds West for a distance of
166.92 feet to a point;
THENCE North 64 degrees 00 minutes 12 seconds West for a distance of
173.39 feet to a point;
THENCE North 87 degrees 49 minutes 10 seconds West for a distance of
111.55 feet to a point;
THENCE North 66 degrees 04 minutes 51 seconds West for a distance of
158.94 feet to a point;
THENCE North 66 degrees 19 minutes 50 seconds West for a distance of
121.59 feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of
186.45 feet to a point;
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of
163.48 feet to a point;
THENCE North 56 degrees 31 minutes 54 seconds West for a distance of
127.08 feet to a point;
Page 9 of 21
<PAGE>
THENCE North 49 degrees 42 minutes 26 seconds West for a distance of
110.80 feet to a point;
THENCE South 63 degrees 26 minutes 27 seconds West for a distance of
73.93 feet to a point;
THENCE South 34 degrees 43 minutes 18 seconds West for a distance of
155.58 feet to a point;
THENCE North 65 degrees 01 minutes 43 seconds West for a distance of
125.76 feet to a point on the Southerly Wetland limits of Hilly Mill Creek;
THENCE along said Wetland Limits to the Southeast, more or Less, North
19 degrees 07 minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
Page 10 of 21
<PAGE>
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
Page 11 of 21
<PAGE>
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to the POINT OF BEGINNING.
Said property contains 5.13 acres more or less and is that same tract
or parcel of land shown as Tract C on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
TRACT D
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
Page 12 of 21
<PAGE>
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK; SAID POINT BEING
THE POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
Page 13 of 21
<PAGE>
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a Distance of
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek;
THENCE along said wetlands limits to the Southeast, more or less, South
53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
Page 14 of 21
<PAGE>
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
Page 15 of 21
<PAGE>
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE across an unnamed creek and wetlands area which intersects from
the Southwest, South 65 degrees 01 minutes 43 seconds East for a distance of
394.79 feet to a point;
THENCE continuing along said wetlands limit, North 19 degrees 07
minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
Page 16 of 21
<PAGE>
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
Page 17 of 21
<PAGE>
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to a point;
THENCE North 02 degrees 18 minutes 34 seconds East for a distance of
978.06 feet to a point;
THENCE North 01 degrees 18 minutes 40 seconds East for a distance of
32.38 feet to the POINT OF BEGINNING.
Said property contains 43.03 acres more or less and is that same tract
or parcel of land shown as Tract D on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
TRACT G
Page 18 of 21
<PAGE>
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236
OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
177.76 feet to point;
Page 19 of 21
<PAGE>
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
82.45 feet to point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
639.20 feet to point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
52.57 feet to point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
175.00 feet to point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
150.00 feet to point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
175.00 feet to point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
25.93 feet to point;
THENCE South 44 degrees 18 minutes 22 seconds East for a distance of
63.80 feet to a point;
THENCE South 53 degrees 03 minutes 38 seconds East for a distance of
18.78 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
211.55 feet to point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
11.80 feet to point;
THENCE along a curve to the right having a radius of 3600.00 Feet, a
central angle of 09 degrees 21 minutes 08 seconds, an Arc length of 587.61 feet,
and subtended by a chord bearing South 33 degrees 47 minutes 14 seconds West for
a distance of 586.96 feet to the POINT OF BEGINNING.
Page 20 of 21
<PAGE>
Said property contains 3.16 acres more or less and is that same tract
or parcel of land shown as Tract G on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
REGREATNEKOOSANATURALGASPIPELINERIGHTOFWAYEXHD
<PAGE>
Exhibit 10.17
AFTER RECORDING, RETURN TO:
Steven K. Bender, Esquire
Long Aldridge & Norman LLP
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
PERPETUAL RIGHT-OF-WAY AND EASEMENT AGREEMENT
FOR AND IN CONSIDERATION OF THE SUM OF TEN DOLLARS in hand paid and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged CHARLES L. GOODSON, AS EXECUTOR OF THE LAST WILL AND
TESTAMENT OF ORA LEE GOODSON ("Grantor"), whose address is 4 BROOKSIDE DRIVE,
NEWNAN, GA 30263, has irrevocably granted, bargained, sold, and conveyed, and by
these presents does hereby grant, bargain, sell, and convey unto TENASKA GEORGIA
PARTNERS, L.P., a Delaware limited partnership, its successors and assigns
("Grantee") whose address is 1044 North 115th Street, Omaha, Nebraska
68154-4446, the perpetual and nonexclusive right and easement on, under, over
and through the real property more specifically described in EXHIBIT "A"
attached hereto and incorporated herein by reference (the "Property") for
purposes of (i) surveying, clearing, excavating, laying, constructing, testing,
operating, inspecting, maintaining, protecting, repairing, replacing, removing
and altering a pipeline or pipelines together with all necessary and appropriate
appurtenances, machinery, apparatus, equipment, fixtures, improvements and
facilities related thereto (hereinafter collectively referred to as the
"pipeline") which are capable of transporting natural gas along and through a
route through the portion of the Property described as the "Perpetual Easement
Area" in EXHIBIT "B" attached hereto and incorporated herein by reference (the
"Perpetual Easement Area"); (ii) transporting natural gas through such pipeline;
(iii) installing and maintaining signs along the Perpetual Easement Area
identifying the area as the location of an underground pipeline; (iv) cutting,
clearing, removing and disposing of, from time to time, all trees, shrubs, and
other vegetation in the Perpetual Easement Area, and to remove and dispose of
all obstructions, as Grantee may deem necessary for the safe operation and
maintenance of the pipeline; (v) for as long as such pipeline and related
structures are being used for such purposes, the right of ingress and egress
through the Property at convenient points for the carrying out of all such
purposes; and (vi) such other rights as may be necessary or convenient for the
enjoyment of the privileges provided by this Perpetual Right-of-Way and Easement
Agreement ("Easement Agreement").
<PAGE>
Further, Grantor does hereby irrevocably grant and convey unto Grantee
a temporary nonexclusive right and easement consisting of the easement area
identified and described on EXHIBIT "C" (the "Temporary Easement Area"), said
Temporary Easement Area shall be for the purpose and a term so long as necessary
to clear, excavate, lay and construct the aforementioned pipeline and do all
things reasonably necessary and incident to the initial construction of the
pipeline, and as needed in connection with any later maintenance, repair,
replacement, removal or alteration of the pipeline. Grantee shall be permitted
to clear the Temporary Easement Area of trees, shrubs and other vegetation so as
to permit use of the Temporary Easement Area for the foregoing purposes.
Grantor covenants to use the Property for purposes compatible with such
rights as granted to Grantee in or permitted by this Easement Agreement and
shall not construct or permit any buildings, structures, fences, trees, hedges
or other obstructions to be erected or placed upon the Property, or to change
the grade of the Property, or create or permit any condition whereby standing
water would accumulate on the Perpetual Easement Area, nor to otherwise
interfere in or to knowingly permit any other person to interfere with Grantee's
use and enjoyment of rights granted under this Easement Agreement.
Grantee shall repair or replace in a good and workmanlike manner all
fences and drain systems disturbed or cut during the construction, maintenance
or operation of the pipeline laid hereunder; and, if not replaced, Grantee
agrees to pay or cause to be paid to the Grantor and the Grantor's tenants, if
any, of the Property at the time of the completion of the construction
heretofore, according to the respective interests, the reasonable value of any
damages to crops, livestock, timber and improvements that are sustained by
reason of Grantee exercising the right herein granted. Grantee shall not
materially interfere with the use of said premises for normal farming operations
as employed at the time of construction of such pipeline, except in the exercise
of the rights permitted hereunder. Grantee shall bury the pipeline at depths
consistent with industry standards.
Grantee shall upon completion of the laying of the pipeline, as soon as
reasonably possible, fully restore and level the surface of the Property to
substantially the same condition existing prior to construction of the pipeline.
The rights and obligations hereunder shall be assignable by Grantee,
and subsequent assigns of Grantee, without the prior written consent of Grantor.
Any assignment by Grantee or subsequent assignment of Grantee, of its rights and
obligations hereunder shall completely relieve assignor of any such obligation
for further liability. The easements set forth in this Easement Agreement shall
be for the use, benefit and enjoyment of Grantee, its designated successors,
successors-in-title (including, without limitation The Development Authority of
Heard County ["DAHC"] as successor-in-title to the property of Grantee
identified and described in Exhibit "D" attached hereto and made a part hereof
[hereinafter referred to as the "Power Plant Property"]), grantees and assigns,
and their respective agents, employees, servants, tenants (including, without
limitation, Tenaska Georgia Partners, L.P. as a tenant leasing the Power Plant
Property from DAHC), subtenants, licensees, permitees, invitees, contractors,
subcontractors, lenders and any other party holding a collateral interest in the
Power Plant Property. This Agreement and the easements, rights, and privileges
created hereby shall be binding upon and inure to the benefit of Grantee and
Grantor and their respective designated (to the extent necessary under the last
two sentences of this paragraph) successors, successors-in-title (including,
without limitation the DAHC as successor-in-title to the Power Plant Property),
grantees, assignees, and their respective tenants (including, without
limitation, Tenaska Georgia Partners, L.P. as a tenant leasing the Power Plant
Property from DAHC), subtenants, licensees, permitees, lenders and any other
party holding a collateral interest in the Power Plant Property. All of the
easements, rights and privileges, set forth herein shall touch, concern, burden
and run with the title to the Perpetual Easement Area, Temporary Easement Area
and Property, as the servient tenement, and shall be appurtenant to, touch,
concern and run with the title to any lands now or
2
<PAGE>
hereafter owned by Grantee, its designated successors, successors-in-title
(including, without limitation the DAHC as successor-in-title to the Power Plant
Property), grantees and assigns, in Land Lots 206, 207, 236 and/or 237 of the
3rd Land District, Heard County, Georgia, including, without limitation, the
Power Plant Property, collectively the dominant tenement. Any conveyance of said
dominant tenement, or any part thereof, to any lender or any other party holding
a collateral interest in the Power Plant Property (whether by foreclosure, deed
in lieu of foreclosure or otherwise) shall also convey the rights, privileges,
duties and obligations contained in this Easement Agreement, regardless of
whether or not specific mention is made of this Easement Agreement and
regardless of whether or not a specific conveyance is made of, or subject to,
the easements, rights, privileges, duties and obligations contained herein. Any
conveyance of said dominant tenement, or any part thereof, to any person or
entity, other than a lender or a party holding a collateral interest in the
Power Plant Property, shall only convey the rights, privileges, duties and
obligations contained in this Easement Agreement if specific mention is made of
this Easement Agreement or if a specific conveyance is made of, or subject to,
the easements, rights, privileges, duties and obligations contained herein.
The interpretation, construction and performance of this agreement shall be
governed by the laws of the State of Georgia. Time is of the essence of this
Easement Agreement. Grantor covenants with Grantee that Grantor is the fee
simple owner of record of the Property, is lawfully seized and possessed of the
Property, and has a good and lawful right to convey the Property, any part
thereof and easements and other rights granted herein, and the Property is free
from all encumbrances, other than (a) those shown of record in the Heard County,
Georgia records as of the date hereof, and (b) that certain Perpetual
Right-of-Way and Easement Agreement dated April 28, 1999, granted by Grantor to
Tenaska, Inc., a Delaware corporation, recorded at Deed Book 195, Pages 599-612
of said records, as amended by that certain Amendment to Perpetual Right-of-Way
and Easement Agreement dated September 12, 1999, recorded at Deed Book 200,
Pages 199-212 of said records, and that certain Second Amendment to Perpetual
Right-of-Way and Easement Agreement and Consent Agreement dated ______________,
1999, both such amendments granted by Grantor to Tenaska, Inc., and that Grantor
will forever warrant and defend title thereto against the lawful claims of all
persons whomsoever claiming by, through or under Grantor.
Grantee hereby authorizes Grantor the right to access the described Property for
ingress and egress purposes in compliance with the standards described in this
Easement Agreement.
[SIGNATURES BEGIN ON NEXT PAGE]
3
<PAGE>
IN WITNESS WHEREOF, this instrument is executed under seal on this 1st
day of November, 1999.
GRANTOR:
Signed, sealed and delivered CHARLES L. GOODSON,
in the presence of: AS EXECUTOR OF THE LAST WILL AND
TESTAMENT OF ORA LEE GOODSON
/S/________________________________
Witness By: /S/________________________(SEAL)
Charles L. Goodson, Executor for
Ora Lee Goodson Estate
/S/_________________________________
Notary Public
My Commission Expires:______________
(NOTARY SEAL)
RE GOODSON PERPETUAL RIGHT OF WAY & EASEMENT AGREEMENT
4
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 235 AND
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
That tract of land containing 170 acres, more or less, in the Third
Land District of originally Coweta, now Heard County, Georgia and being 100
acres, more or less, of Land Lot 235; 50 acres, more or less, of Land Lot 236
and 20 acres, more or less, of Land Lot 234; and being bounded now or formerly
on the North by C.P. Stephens; on the East by Powers lands; on the South by
Goodson lands; on the West by Ashley, Shackleford and Hendrick lands. Said Tract
known as the Watt Orr place, described in deed from Mrs. Dovie L. Orr, et. al.
to Goodson Bros., recorded in Deed Book 34, Page 483, Heard County records.
RE GOODSON PERPETUAL RIGHT OF WAY & EASEMENT AGREEMENT EXHA
<PAGE>
EXHIBIT B
LEGAL DESCRIPTION
EASEMENT AREA 2 - PERMANENT GAS PIPELINE EASEMENT
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 & 236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
102.52 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
309.02 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
<PAGE>
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
389.03 feet to a point;
THENCE South 13 degrees 57 minutes 28 seconds West for a distance of
235.43 feet to a point;
THENCE South 01 degrees 34 minutes 09 seconds East for a distance of
636.83 feet to a point;
THENCE South 20 degrees 37 minutes 20 seconds East for a distance of
13.96 feet to a point;
THENCE South 75 degrees 41 minutes 17 seconds West for a distance of
50.30 feet to a point;
THENCE North 20 degrees 37 minutes 20 seconds West for a distance of
16.82 feet to a point;
THENCE North 01 degrees 34 minutes 09 seconds West for a distance of
652.03 feet to a point;
THENCE North 13 degrees 57 minutes 28 seconds East for a distance of
257.78 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
381.45 feet to a point;
THENCE North 01 degrees 08 minutes 53 seconds West for a distance of
237.86 feet to a point;
THENCE North 13 degrees 19 minutes 59 seconds West for a distance of
1046.41 feet to a point;
THENCE North 30 degrees 02 minutes 25 seconds East for a distance of
439.69 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
288.60 feet to a point;
THENCE North 12 degrees 00 minutes 21 seconds West for a distance of
143.97 feet to a point;
THENCE North 02 degrees 23 minutes 46 seconds West for a distance of
463.86 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
263.22 feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of
50.16 feet to the POINT OF BEGINNING.
Said property contains 4.81 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 11 -- PERMANENT ACCESS
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1502.56 feet to a point;
THENCE South 03 degrees 25 minutes 19 seconds West for a distance of
556.81 feet to a : inch pipe;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of
434.31 feet to a : inch pipe, said point being the POINT OF BEGINNING for the
herein described parcel of land.
THENCE South 00 degrees 29 minutes 20 seconds East for a distance of
30.01 feet to a point;
THENCE North 89 degrees 13 minutes 51 seconds West for a distance of
16.78 feet to a point;
THENCE North 32 degrees 43 minutes 50 seconds West for a distance of
70.24 feet to a point;
THENCE North 08 degrees 02 minutes 18 seconds West for a distance of
31.43 feet to a point;
<PAGE>
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
69.56 feet to a point;
THENCE South 89 degrees 04 minutes 41 seconds East for a distance of
12.67 feet to a point;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of
110.58 feet to the POINT OF BEGINNING.
Said property contains 0.13 acre more or less.
RE GOODSON PERPETUAL RIGHT OF WAY & EASEMENT AGREEMENT EXHB
<PAGE>
EXHIBIT C
LEGAL DESCRIPTION
EASEMENT AREA 3 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236 OF
THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of 291.17
feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of 32.38
feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of 978.06
feet to a point on the Southerly limits of the Wetlands of Hilly Mill Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a
distance of 84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 12.03
feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 140.19
feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE along a curve to the right having a radius of 3600.00 feet and an
arc length of 149.43 feet, being subtended by a chord of South 39 degrees 39
minutes 09 seconds West for a distance of 149.42 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of 117.12
feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of 102.52
feet to the POINT OF BEGINNING.
Said property contains 0.14 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 4 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
50.16 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
25.08 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
92.32 feet to a point;
THENCE along a curve to the right having a radius of 3525.00 feet and
an arc length of 369.76 feet, being subtended by a chord of South 44 degrees 20
minutes 28 seconds West for a distance of 369.59 feet to a point;
THENCE South 42 degrees 39 minutes 13 seconds East for a distance of
75.00 feet to a point;
<PAGE>
THENCE along a curve to the left having a radius of 3600.00 feet and an
arc length of 302.97 feet, being subtended by a chord of North 44 degrees 56
minutes 07 seconds East for a distance of 302.89 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
67.37 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
431.14 feet to a point;
THENCE North 46 degrees 21 minutes 35 seconds West for a distance of
115.41 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
100.00 feet to a point;
THENCE South 46 degrees 21 minutes 35 seconds East for a distance of
275.00 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
14.21 feet to a point;
THENCE North 12 degrees 00 minutes 21 seconds West for a distance of
143.97 feet to a point;
THENCE North 02 degrees 23 minutes 46 seconds West for a distance of
463.86 feet to a point;
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
263.22 feet to the POINT OF BEGINNING.
Said property contains 1.38 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 5 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
50.16 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
263.22 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
463.86 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
143.97 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
175.27 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 46 degrees 21 minutes 35 seconds West for a distance of
225.00 feet to a point;
<PAGE>
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
100.00 feet to a point;
THENCE South 46 degrees 21 minutes 35 seconds East for a distance of
221.78 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
13.71 feet to a point;
THENCE North 43 degrees 38 minutes 25 seconds East for a distance of
113.33 feet to the POINT OF BEGINNING.
Said property contains 0.52 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 6 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 & 236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
202.70 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
106.32 feet to a point;
<PAGE>
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
213.81 feet to a point;
THENCE South 41 degrees 31 minutes 33 seconds East for a distance of
225.00 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
100.00 feet to a point;
THENCE North 41 degrees 31 minutes 33 seconds West for a distance of
200.00 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
125.37 feet to a point;
THENCE North 01 degrees 08 minutes 53 seconds West for a distance of
280.53 feet to a point;
THENCE North 13 degrees 19 minutes 59 seconds West for a distance of
1024.59 feet to a point;
THENCE North 30 degrees 02 minutes 25 seconds East for a distance of
507.24 feet to the POINT OF BEGINNING.
Said property contains 1.60 acres more or less.
<PAGE>
LEGAL DESCRIPTION
EASEMENT AREA 7 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
235 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A ONE INCH PIPE MARKING THE NORTHEAST CORNER
OF LAND LOT 236, SAID POINT BEING THE POINT OF REFERENCE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a : inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
102.52 feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of
259.73 feet to a point;
THENCE South 02 degrees 23 minutes 46 seconds East for a distance of
460.14 feet to a point;
THENCE South 12 degrees 00 minutes 21 seconds East for a distance of
166.15 feet to a point;
THENCE South 43 degrees 38 minutes 25 seconds West for a distance of
309.02 feet to a point;
THENCE South 30 degrees 02 minutes 25 seconds West for a distance of
413.84 feet to a point;
<PAGE>
THENCE South 13 degrees 19 minutes 59 seconds East for a distance of
1031.86 feet to a point;
THENCE South 01 degrees 08 minutes 53 seconds East for a distance of
266.31 feet to a point;
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
297.81 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 48 degrees 28 minutes 27 seconds West for a distance of
91.22 feet to a point;
THENCE South 13 degrees 57 minutes 28 seconds West for a distance of
235.43 feet to a point;
THENCE South 01 degrees 34 minutes 09 seconds East for a distance of
636.83 feet to a point;
THENCE South 20 degrees 37 minutes 20 seconds East for a distance of
13.96 feet to a point;
THENCE North 75 degrees 41 minutes 17 seconds East for a distance of
25.15 feet to a point;
THENCE North 20 degrees 37 minutes 20 seconds West for a distance of
12.53 feet to a point;
THENCE North 01 degrees 34 minutes 09 seconds West for a distance of
629.22 feet to a point;
THENCE North 13 degrees 57 minutes 28 seconds East for a distance of
204.18 feet to a point;
THENCE South 41 degrees 31 minutes 33 seconds East for a distance of
188.62 feet to a point;
THENCE North 48 degrees 28 minutes 27 seconds East for a distance of
100.00 feet to a point;
THENCE North 41 degrees 31 minutes 33 seconds West for a distance of
225.00 feet to the POINT OF BEGINNING.
Said property contains 1.01 acres more or less.
RE GOODSON PERPETUAL RIGHT OF WAY & EASEMENT AGREEMENT EXHC
<PAGE>
EXHIBIT C
GOODSON LTL TRACT
The following is a description of information which cannot be submitted
electronically:
A,B,C,D - Permanent Gas Line Crossing Locations (Proposed) - 1 page
<PAGE>
EXHIBIT "D"
LEGAL DESCRIPTION
TRACT A-1
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN
LAND LOTS 236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND
BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 72 degrees 48 minutes 00 seconds West for a distance of
405.46 feet to a 12 INCH WOOD POST;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a 2 INCH REBAR SET ON THE WESTERLY LINE OF A GEORGIA POWER
COMPANY RIGHT OF WAY (150 FOOT WIDTH), SAID POINT BEING THE POINT OF BEGINNING
FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along said westerly line of a Georgia Power Company Right of Way
South 05 degrees 00 minutes 38 seconds East for a distance of 2143.92 feet to
the CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 46 degrees 21 minutes 20 seconds West for a distance of 66.26
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
<PAGE>
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED
CREEK;
THENCE along the centerline of the unnamed creek to the Northeast,
more or less, North 68 degrees 03 minutes 13 seconds East for a distance of
336.28 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 29 minutes 52 seconds East for a distance of
296.07 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 54 degrees 43 minutes 02 seconds East for a distance of
67.68 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 17 degrees 17 minutes 28 seconds East for a distance of
228.26 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 23 degrees 21 minutes 46 seconds East for a distance of
241.49 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 07 degrees 17 minutes 08 seconds East for a distance of
71.42 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 79 degrees 26 minutes 44 seconds East for a distance of
307.88 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 48 degrees 14 minutes 55 seconds East for a distance of
157.63 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 27 degrees 04 minutes 19 seconds East for a distance of
111.97 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 55 degrees 09 minutes 32 seconds East for a distance of
128.35 feet to a POINT IN THE CENTERLINE OF THE CREEK;
Page 2 of 21
<PAGE>
THENCE North 08 degrees 06 minutes 45 seconds East for a distance of
34.61 feet to an IRON PIN SET IN THE CENTERLINE OF THE CREEK;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
212.86 feet to a 1/2 inch rebar set on the Westerly line of a GEORGIA POWER
COMPANY TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH); Said point being the
POINT OF BEGINNING.
Said property contains 46.13 acres, and is that same tract or parcel
of land shown as Tract A1 on that certain ALTA/ACSM Title Survey, entitled Heard
County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc., Tenaska
Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title Insurance
Company of New York, Stewart Title Guaranty Company, Heard County Development
Authority & The Chase Manhattan Bank as Trustee and Collateral Agent, prepared
by Donaldson, Garrett & Associate, Inc., bearing the seal and certification of
James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated March 19, 1999,
last revised November 4, 1999.
TRACT B
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
Page 3 of 21
<PAGE>
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
Page 4 of 21
<PAGE>
THENCE South 78 degrees 47 minutes 46 seconds West for a distance OF
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek, Said point being the POINT OF BEGINNING for the herein described parcel
of land;
THENCE along said wetlands limits to the Southeast, more or less,
South 53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a
point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
Page 5 of 21
<PAGE>
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
Page 6 of 21
<PAGE>
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE leaving said wetlands limits, North 65 degrees 01minutes 43
seconds West for a distance of 98.87 feet to a point;
THENCE North 11 degrees 02 minutes 41 seconds East for a distance of
230.45 feet to a point;
THENCE North 11 degrees 13 minutes 13 seconds West for a distance of
121.54 feet to a point;
THENCE North 38 degrees 58 minutes 52 seconds West for a distance of
121.90 feet to a point;
THENCE North 23 degrees 10 minutes 22 seconds West for a distance of
116.83 feet to a point;
THENCE North 27 degrees 01 minutes 41 seconds West for a distance of
102.77 feet to a point;
THENCE North 44 degrees 31 minutes 22 seconds West for a distance of
55.85 feet to a point;
THENCE South 70 degrees 40 minutes 56 seconds West for a distance of
73.31 feet to a point;
THENCE South 71 degrees 22 minutes 08 seconds West for a distance of
120.59 feet to a point;
THENCE North 27 degrees 11 minutes 02 seconds West for a distance of
173.06 feet to a point;
THENCE North 06 degrees 27 minutes 30 seconds East for a distance of
58.98 feet to a point;
THENCE North 40 degrees 46 minutes 01 seconds East for a distance of
132.31 feet to a point;
THENCE North 01 degrees 41 minutes 21 seconds West for a distance of
32.15 feet to a point;
Page 7 of 21
<PAGE>
THENCE North 42 degrees 40 minutes 25 seconds West for a distance of
132.37 feet to a point;
THENCE North 47 degrees 57 minutes 38 seconds East for a distance of
97.57 feet to the POINT OF BEGINNING.
Said property contains 3.84 acres more or less and is that same tract or
parcel of land shown as Tract B on that certain ALTA/ACSM Title Survey, entitled
Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc.,
Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title
Insurance Company of New York, Stewart Title Guaranty Company, Heard County
Development Authority & The Chase Manhattan Bank as Trustee and Collateral
Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the seal and
certification of James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated
March 19, 1999, last revised November 4, 1999.
TRACT C
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND
LOTS 236 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF
JOE STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
Page 8 of 21
<PAGE>
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek, said point being the POINT OF BEGINNING for the herein described parcel
of land.
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a THREE-QUARTER INCH PIPE;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet to a point;
THENCE North 72 degrees 59 minutes 23 seconds West for a distance of
97.41 feet to a point;
THENCE North 28 degrees 40 minutes 02 seconds West for a distance of
114.55 feet to a point;
THENCE North 62 degrees 08 minutes 04 seconds West for a distance of
184.99 feet to a point;
THENCE North 63 degrees 50 minutes 09 seconds West for a distance of
166.92 feet to a point;
THENCE North 64 degrees 00 minutes 12 seconds West for a distance of
173.39 feet to a point;
THENCE North 87 degrees 49 minutes 10 seconds West for a distance of
111.55 feet to a point;
THENCE North 66 degrees 04 minutes 51 seconds West for a distance of
158.94 feet to a point;
THENCE North 66 degrees 19 minutes 50 seconds West for a distance of
121.59 feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of
186.45 feet to a point;
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of
163.48 feet to a point;
THENCE North 56 degrees 31 minutes 54 seconds West for a distance of
127.08 feet to a point;
Page 9 of 21
<PAGE>
THENCE North 49 degrees 42 minutes 26 seconds West for a distance of
110.80 feet to a point;
THENCE South 63 degrees 26 minutes 27 seconds West for a distance of
73.93 feet to a point;
THENCE South 34 degrees 43 minutes 18 seconds West for a distance of
155.58 feet to a point;
THENCE North 65 degrees 01 minutes 43 seconds West for a distance of
125.76 feet to a point on the Southerly Wetland limits of Hilly Mill Creek;
THENCE along said Wetland Limits to the Southeast, more or Less, North
19 degrees 07 minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
Page 10 of 21
<PAGE>
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
Page 11 of 21
<PAGE>
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to the POINT OF BEGINNING.
Said property contains 5.13 acres more or less and is that same tract
or parcel of land shown as Tract C on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
TRACT D
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
Page 12 of 21
<PAGE>
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK; SAID POINT BEING
THE POINT OF BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
127.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 78 degrees 13 minutes 26 seconds West for a distance of
274.76 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 56 minutes 11 seconds West for a distance of
188.31 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 26 degrees 05 minutes 05 seconds West for a distance of
142.40 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 74 degrees 59 minutes 42 seconds West for a distance of
170.99 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 53 degrees 11 minutes 27 seconds West for a distance of
280.96 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 65 degrees 46 minutes 02 seconds West for a distance of
101.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
Page 13 of 21
<PAGE>
THENCE South 56 degrees 23 minutes 59 seconds West for a distance of
162.95 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 80 degrees 36 minutes 29 seconds West for a distance of
406.05 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 29 degrees 13 minutes 39 seconds West for a distance of
496.12 feet to a POINT OF INTERSECTION OF HILLY MILL CREEK AND AN UNNAMED CREEK
FROM THE NORTHEAST;
THENCE South 78 degrees 47 minutes 46 seconds West for a Distance of
360.23 feet to a point on the Southern limits of the wetlands of Hilly Mill
Creek;
THENCE along said wetlands limits to the Southeast, more or less,
South 53 degrees 54 minutes 27 seconds East for a distance of 76.08 feet to a
point;
THENCE South 45 degrees 43 minutes 13 seconds East for a distance of
63.42 feet to a point;
THENCE South 37 degrees 54 minutes 40 seconds East for a distance of
63.14 feet to a point;
THENCE South 12 degrees 38 minutes 55 seconds West for a distance of
96.50 feet to a point;
THENCE South 31 degrees 53 minutes 23 seconds West for a distance of
54.60 feet to a point;
THENCE South 41 degrees 48 minutes 24 seconds West for a distance of
62.60 feet to a point;
THENCE South 08 degrees 50 minutes 54 seconds West for a distance of
30.89 feet to a point;
THENCE South 73 degrees 19 minutes 07 seconds East for a distance of
59.72 feet to a point;
THENCE North 74 degrees 25 minutes 30 seconds East for a distance of
60.24 feet to a point;
THENCE North 47 degrees 07 minutes 32 seconds East for a distance of
33.85 feet to a point;
Page 14 of 21
<PAGE>
THENCE North 03 degrees 16 minutes 22 seconds East for a distance of
30.45 feet to a point;
THENCE South 61 degrees 11 minutes 13 seconds East for a distance of
29.26 feet to a point;
THENCE South 43 degrees 42 minutes 16 seconds East for a distance of
44.52 feet to a point;
THENCE South 49 degrees 16 minutes 16 seconds East for a distance of
57.00 feet to a point;
THENCE South 30 degrees 34 minutes 48 seconds East for a distance of
65.93 feet to a point;
THENCE South 24 degrees 24 minutes 28 seconds East for a distance of
47.19 feet to a point;
THENCE South 21 degrees 50 minutes 49 seconds East for a distance of
58.28 feet to a point;
THENCE South 24 degrees 09 minutes 26 seconds East for a distance of
79.36 feet to a point;
THENCE South 27 degrees 37 minutes 37 seconds East for a distance of
52.90 feet to a point;
THENCE South 45 degrees 45 minutes 34 seconds East for a distance of
37.07 feet to a point;
THENCE North 35 degrees 31 minutes 29 seconds East for a distance of
32.07 feet to a point;
THENCE South 37 degrees 21 minutes 56 seconds East for a distance of
38.13 feet to a point;
THENCE South 15 degrees 07 minutes 14 seconds East for a distance of
55.08 feet to a point;
THENCE South 49 degrees 21 minutes 23 seconds East for a distance of
41.61 feet to a point;
THENCE South 10 degrees 21 minutes 54 seconds East for a distance of
66.83 feet to a point;
Page 15 of 21
<PAGE>
THENCE South 28 degrees 17 minutes 29 seconds West for a distance of
51.89 feet to a point;
THENCE South 04 degrees 18 minutes 43 seconds West for a distance of
78.67 feet to a point;
THENCE South 06 degrees 56 minutes 49 seconds West for a distance of
56.79 feet to a point;
THENCE South 07 degrees 48 minutes 12 seconds West for a distance of
48.18 feet to a point;
THENCE South 35 degrees 36 minutes 30 seconds West for a distance of
63.01 feet to a point;
THENCE South 03 degrees 06 minutes 41 seconds West for a distance of
49.25 feet to a point;
THENCE across an unnamed creek and wetlands area which intersects from
the Southwest, South 65 degrees 01 minutes 43 seconds East for a distance of
394.79 feet to a point;
THENCE continuing along said wetlands limit, North 19 degrees 07
minutes 29 seconds East for a distance of 19.11 feet to a point;
THENCE North 11 degrees 12 minutes 10 seconds East for a distance of
55.36 feet to a point;
THENCE North 59 degrees 47 minutes 00 seconds East for a distance of
61.82 feet to a point;
THENCE North 46 degrees 30 minutes 17 seconds East for a distance of
108.43 feet to a point;
THENCE North 51 degrees 07 minutes 59 seconds East for a distance of
99.18 feet to a point;
THENCE North 78 degrees 57 minutes 49 seconds East for a distance of
32.52 feet to a point;
THENCE South 66 degrees 51 minutes 15 seconds East for a distance of
88.50 feet to a point;
THENCE South 51 degrees 09 minutes 25 seconds East for a distance of
75.29 feet to a point;
Page 16 of 21
<PAGE>
THENCE South 42 degrees 38 minutes 23 seconds East for a distance of
82.73 feet to a point;
THENCE South 66 degrees 04 minutes 46 seconds East for a distance of
88.97 feet to a point;
THENCE South 32 degrees 53 minutes 29 seconds East for a distance of
60.69 feet to a point;
THENCE South 62 degrees 19 minutes 25 seconds East for a distance of
64.45 feet to a point;
THENCE South 34 degrees 53 minutes 35 seconds East for a distance of
38.63 feet to a point;
THENCE South 36 degrees 35 minutes 41 seconds East for a distance of
74.06 feet to a point;
THENCE South 55 degrees 19 minutes 31 seconds East for a distance of
73.40 feet to a point;
THENCE South 57 degrees 46 minutes 00 seconds East for a distance of
45.12 feet to a point;
THENCE North 39 degrees 42 minutes 35 seconds East for a distance of
48.51 feet to a point;
THENCE South 26 degrees 49 minutes 36 seconds East for a distance of
66.09 feet to a point;
THENCE South 63 degrees 22 minutes 19 seconds East for a distance of
81.30 feet to a point;
THENCE South 60 degrees 12 minutes 05 seconds East for a distance of
47.15 feet to a point;
THENCE North 76 degrees 42 minutes 50 seconds East for a distance of
37.29 feet to a point;
THENCE South 67 degrees 38 minutes 47 seconds East for a distance of
104.31 feet to a point;
THENCE South 58 degrees 01 minutes 02 seconds East for a distance of
94.01 feet to a point;
Page 17 of 21
<PAGE>
THENCE South 73 degrees 39 minutes 40 seconds East for a distance of
90.45 feet to a point;
THENCE South 46 degrees 08 minutes 36 seconds East for a distance of
73.29 feet to a point;
THENCE South 68 degrees 34 minutes 52 seconds East for a distance of
80.11 feet to a point;
THENCE South 72 degrees 11 minutes 52 seconds East for a distance of
174.98 feet to a point;
THENCE South 74 degrees 05 minutes 22 seconds East for a distance of
25.78 feet to a point;
THENCE South 51 degrees 26 minutes 02 seconds East for a distance of
43.79 feet to a point;
THENCE South 09 degrees 58 minutes 33 seconds East for a distance of
54.59 feet to a point;
THENCE South 45 degrees 04 minutes 30 seconds East for a distance of
50.75 feet to a point;
THENCE South 55 degrees 48 minutes 09 seconds East for a distance of
59.24 feet to a point;
THENCE North 02 degrees 18 minutes 34 seconds East for a distance of
978.06 feet to a point;
THENCE North 01 degrees 18 minutes 40 seconds East for a distance of
32.38 feet to the POINT OF BEGINNING.
Said property contains 43.03 acres more or less and is that same tract or
parcel of land shown as Tract D on that certain ALTA/ACSM Title Survey, entitled
Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc.,
Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title
Insurance Company of New York, Stewart Title Guaranty Company, Heard County
Development Authority & The Chase Manhattan Bank as Trustee and Collateral
Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the seal and
certification of James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated
March 19, 1999, last revised November 4, 1999.
TRACT G
Page 18 of 21
<PAGE>
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236
OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
177.76 feet to point;
Page 19 of 21
<PAGE>
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
82.45 feet to point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
639.20 feet to point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
52.57 feet to point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
175.00 feet to point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
150.00 feet to point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
175.00 feet to point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
25.93 feet to point;
THENCE South 44 degrees 18 minutes 22 seconds East for a distance of
63.80 feet to a point;
THENCE South 53 degrees 03 minutes 38 seconds East for a distance of
18.78 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
211.55 feet to point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
11.80 feet to point;
THENCE along a curve to the right having a radius of 3600.00 Feet, a
central angle of 09 degrees 21 minutes 08 seconds, an Arc length of 587.61 feet,
and subtended by a chord bearing South 33 degrees 47 minutes 14 seconds West for
a distance of 586.96 feet to the POINT OF BEGINNING.
Page 20 of 21
<PAGE>
Said property contains 3.16 acres more or less and is that same tract or
parcel of land shown as Tract G on that certain ALTA/ACSM Title Survey, entitled
Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc.,
Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title
Insurance Company of New York, Stewart Title Guaranty Company, Heard County
Development Authority & The Chase Manhattan Bank as Trustee and Collateral
Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the seal and
certification of James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated
March 19, 1999, last revised November 4, 1999.
RE GOODSON PERPETUAL RIGHT OF WAY & EASEMENT AGREEMENT EXHD
<PAGE>
Exhibit 10.18
AFTER RECORDING, RETURN TO:
Steven K. Bender, Esquire
Long Aldridge & Norman LLP
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
PERPETUAL RIGHT-OF-WAY AND EASEMENT AGREEMENT
FOR AND IN CONSIDERATION OF THE SUM OF TEN DOLLARS in hand paid and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, TENASKA GEORGIA PARTNERS, L.P., a Delaware limited
partnership ("Grantor"), whose address is 1044 North 115th Street, Omaha,
Nebraska 68154-4446, has irrevocably granted, bargained, sold, and conveyed, and
by these presents does hereby grant, bargain, sell, and convey unto TENASKA,
INC., a Delaware Corporation, its successors, successors-in-title and assigns
("Grantee") whose address is 1044 North 115th Street, Omaha, Nebraska
68154-4446, the perpetual and nonexclusive right and easement on, under, over
and through the real property more specifically described in EXHIBIT "A"
attached hereto and incorporated herein by reference (the "Property") for
purposes of (i) surveying, clearing, excavating, laying, constructing, testing,
operating, inspecting, maintaining, protecting, repairing, replacing, removing
and altering one or more pipelines together with all necessary and appropriate
appurtenances, machinery, apparatus, equipment, fixtures, improvements and
facilities related thereto (hereinafter collectively referred to as the
"pipeline") which are capable of transporting natural gas on, under, over and
through the Property; (ii) transporting natural gas through such pipeline; (iii)
installing and maintaining signs on the Property identifying the area where the
pipeline is installed as the location of an underground pipeline; (iv) cutting,
clearing, removing and disposing of, from time to time, all trees, shrubs, and
other vegetation on the Property, and to remove and dispose of all obstructions,
as Grantee may deem necessary for the safe operation and maintenance of the
pipeline; (v) for as long as such pipeline and related structures are being used
for such purposes, the right of ingress and egress through the Property at
convenient points for the carrying out of all such purposes; and (vi) such other
rights as may
<PAGE>
be necessary or convenient for the enjoyment of the privileges provided by this
Perpetual Right-of-Way and Easement Agreement (the "Easement Agreement").
Grantor covenants to use the Property for purposes compatible with such
rights as granted to Grantee in or permitted by this Easement Agreement and
shall not construct or permit any buildings, structures, fences, trees, hedges
or other obstructions to be erected or placed upon the Property, or to change
the grade of the Property, or create or permit any condition whereby standing
water would accumulate on the Property, nor to otherwise interfere in or to
knowingly permit any other person to interfere with Grantee's use and enjoyment
of rights granted under this Easement Agreement; provided, however, that Grantee
understands, acknowledges and agrees that Grantor will install one or more of
Grantor's own pipelines on, under, over and through the Property, together with
all necessary and appropriate appurtenances, machinery, apparatus, equipment,
fixtures, improvements and facilities related thereto, and nothing contained in
this Easement Agreement shall prevent, restrict, interfere, hinder or delay
Grantor from laying, constructing, testing, operating, inspecting, maintaining,
protecting, repairing, replacing, removing and/or altering Grantor's own
pipeline or pipelines.
Grantee shall repair or replace in a good and workmanlike manner all
fences and drain systems disturbed or cut during the construction, maintenance
or operation of the pipeline laid hereunder; and, if not replaced, Grantee
agrees to pay or cause to be paid to the Grantor and the Grantor's tenants, if
any, of the Property at the time of the completion of the construction
heretofore, according to the respective interests, the reasonable value of any
damages to crops, livestock, timber and improvements that are sustained by
reason of Grantee exercising the right herein granted. Grantee shall not
materially interfere with the use of said premises for normal farming operations
as employed at the time of construction of such pipeline, except in the exercise
of the rights permitted hereunder. Grantee hereby authorizes Grantor the right
to access the described Property for ingress and egress purposes in compliance
with the standards described in this Easement Agreement. Grantee shall upon
completion of the laying of Grantee's pipeline, as soon as reasonably possible,
fully restore and level the surface of the Property to substantially the same
condition existing prior to construction of the pipeline.
Grantee for itself, and its successors, successors-in-title, grantees
and assigns, hereby agrees to indemnify, defend and hold harmless Grantor, and
its successors, successors-in-title, grantees and assigns, from any and all
claims, demands, liabilities, losses, liens, suits, civil actions, judgements,
costs, expenses (including reasonable attorneys' fees) and damages, of any kind
or nature, (hereinafter collectively referred to as a "Claim") suffered or
incurred by Grantor in connection with Grantee, its successors,
successors-in-title, grantees or assigns, or any of their respective agents,
employees, servants, contractors, subcontractors, tenants, subtenants,
licensees, invitees, lenders or other parties holding a collateral interest in
the Power Plant Property (as hereinafter defined), using the Property or A-1
Temporary Easement Area, or making use of any of the easements, rights,
privileges granted hereunder, except to the extent any Claim was caused by the
negligence or willful misconduct of Grantor, its successors,
successors-in-title, grantees or assigns, or any of their respective agents,
employees, servants, contractors, subcontractors, tenants, subtenants,
licensees, invitees, lenders or parties holding a collateral interest in the
Property.
2
<PAGE>
Grantor for itself, and its successors, successors-in-title, grantees
and assigns, hereby agrees to indemnify, defend and hold harmless Grantee, and
its successors, successors-in-title, grantees and assigns, from any and all
Claims suffered or incurred by Grantee in connection with Grantor, its
successors, successors-in-title, grantees or assigns, or any of their respective
agents, employees, servants, contractors, subcontractors, tenants, subtenants,
licensees, invitees, lenders or other parties holding a collateral interest in
the Grantor Property, using the Property in violation of this Agreement, except
to the extent any Claim was caused by the negligence or willful misconduct of
Grantee, its successors, successors-in-title, grantees or assigns, or any of
their respective agents, employees, servants, contractors, subcontractors,
tenants, subtenants, licensees, invitees, lenders or parties holding a
collateral interest in the Power Plant Property.
The rights and obligations hereunder shall be assignable by Grantee,
and subsequent assigns of Grantee, without the prior written consent of Grantor.
If any assignee of this Easement Agreement or any rights hereunder assumes in
writing all obligations of the Grantee hereunder accruing or arising from and
after the effective date of such assignment and the Grantor gives its written
consent to the release of the assigning Grantee from the obligations and
liabilities hereunder, such consent of Grantor not to be unreasonably withheld,
conditioned or delayed, the assigning Grantee shall be released from all
obligations and liabilities for matters accruing or arising from and after the
effective date of such assignment. The easements set forth in this Easement
Agreement shall be for the use, benefit and enjoyment of Grantee, its designated
successors, successors-in-title (including, without limitation The Development
Authority of Heard County ["DAHC"] as successor-in-title to the property of
Grantee identified and described in EXHIBIT "B" attached hereto and made a part
hereof [hereinafter referred to as the "Power Plant Property"]), grantees and
assigns, and their respective agents, employees, servants, tenants (including,
without limitation, Tenaska, Inc. as a tenant leasing the Power Plant Property
from DAHC), subtenants, licensees, permitees, invitees, contractors,
subcontractors, lenders and any other party holding a collateral interest in the
Power Plant Property. This Agreement and the easements, rights, and privileges
created hereby shall be binding upon and inure to the benefit of Grantee and
Grantor and their respective designated (to the extent necessary under the last
two sentences of this paragraph) successors, successors-in-title (including,
without limitation the DAHC as successor-in-title to the Power Plant Property),
grantees, assignees, and their respective tenants (including, without
limitation, Tenaska, Inc. as a tenant leasing the Power Plant Property from
DAHC), subtenants, licensees, permitees, lenders and any other party holding a
collateral interest in the Power Plant Property. All of the easements, rights
and privileges, set forth herein shall touch, concern, burden and run with the
title to the Property, as the servient tenement, and shall be appurtenant to,
touch, concern and run with the title to any lands now or hereafter owned by
Grantee, its designated successors, successors-in-title (including, without
limitation the DAHC as successor-in-title to the Power Plant Property), grantees
and assigns, in Land Lots 206, 207, 236 and/or 237 of the 3rd Land District,
Heard County, Georgia, including, without limitation, the Power Plant Property,
collectively the dominant tenement. Any conveyance of said dominant tenement, or
any part thereof, to any lender or any other party holding a collateral interest
in the Power Plant Property (whether by foreclosure, deed in lieu of foreclosure
or otherwise) shall also convey the rights, privileges, duties and obligations
contained in this Easement Agreement, regardless of whether or not specific
mention is made of this Agreement and regardless of whether or not a specific
3
<PAGE>
conveyance is made of, or subject to, the easements, rights, privileges, duties
and obligations contained herein. Any conveyance of said dominant tenement, or
any part thereof, to any person or entity, other than a lender or a party
holding a collateral interest in the Power Plant Property, shall only convey the
rights, privileges, duties and obligations contained in this Easement Agreement
if specific mention is made of this Easement Agreement or if a specific
conveyance is made of, or subject to, the easements, rights, privileges, duties
and obligations contained herein.
TO HAVE AND TO HOLD the rights, privileges and easements described
above unto Grantee, its successors, successors-in-title and assigns, subject to
all matters of record in the Heard County, Georgia records.
The interpretation, construction and performance of this agreement
shall be governed by the laws of the State of Georgia. Grantor will forever
warrant and defend title thereto against the lawful claims of all persons
whomsoever claiming by, through or under Grantor.
IN WITNESS WHEREOF, this instrument is executed under seal on this
____ day of November, 1999.
GRANTOR:
Signed, sealed and delivered in the
the presence of: TENASKA GEORGIA PARTNERS, L.P., a
Delaware limited partnership
/S/
- --------------------- By: Tenaska Georgia, Inc., a Delaware
Unofficial Witness corporation, its General Partner
/S/
-----------------
Notary Public By:/S/ (SEAL)
My Commission Expires: ------------------------
------------ Print Name: Michael F.Lawler
[NOTARY SEAL] Title: Vice President of Finance &
Treasurer
[CORPORATE SEAL]
[SIGNATURES CONTINUED ON NEXT PAGE]
4
<PAGE>
GRANTEE:
Signed, sealed and delivered in the
the presence of: TENASKA, INC., a Delaware corporation
/S/ _______________
Unofficial Witness
By:/S/ (SEAL)
----------------------------
Print Name: Paul G.Smith
/S/________________
Notary Public Title: Vice President
My Commission Expires:
[CORPORATE SEAL]
[NOTARY SEAL]
5
<PAGE>
EXHIBIT "A"
L E G A L D E S C R I P T I O N
EASEMENT AREA 15
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
236 & 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE North 62 degrees 10 minutes 44 seconds West for a Distance of
297.46 feet to a point;
THENCE South 85 degrees 02 minutes 54 seconds West for a Distance of
52.56 feet to a point;
THENCE South 86 degrees 08 minutes 41 seconds West for a Distance of
150.03 feet to a point, said point being the POINT OF BEGINNING FOR THE HEREIN
DESCRIBED PARCEL OF LAND.
THENCE North 68 degrees 34 minutes 04 seconds West for a distance of
190.84 feet to a point;
THENCE North 72 degrees 01 minutes 44 seconds West for a distance of
163.03 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
99.70 feet to a point on the northerly limits of the wetlands of Hilly Mill
Creek;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
204.82 feet to a point in the centerline of Hilly Mill Creek;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
673.51 feet to a point on the southerly limits of the wetlands of Hilly Mill
Creek;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
142.77 feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of
18.78 feet to a point;
6
<PAGE>
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of
63.80 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
127.77 feet to a point on the southerly limits of the wetlands of Hilly Mill
Creek;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
726.13 feet to a point in the centerline of Hilly Mill Creek;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
142.74 feet to a point on the northerly limits of the wetlands of Hilly Mill
Creek;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
88.38 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
75.02 feet to a point;
THENCE South 72 degrees 01 minutes 44 seconds East for a distance of
238.66 feet to a point;
THENCE South 68 degrees 34 minutes 04 seconds East for a distance of
155.80 feet to a point;
THENCE South 05 degrees 00 minutes 38 seconds East for a distance of
83.76 feet to a point, said point being the POINT OF BEGINNING.
Said property contains 2.62 acres, and is that same tract or parcel of
land shown as Easement Area 15 on that certain ALTA/ACSM Title Survey, entitled
Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia, Inc.,
Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National Title
Insurance Company of New York, Stewart Title Guaranty Company, Heard County
Development Authority & The Chase Manhattan Bank as Trustee and Collateral
Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the seal and
certification of James W. Newberry, Jr. Registered Land Surveyor No. 2558, dated
March 19, 1999, last revised November 4, 1999.
[LEGAL DESCRIPTION CONTINUED ON NEXT PAGE]
7
<PAGE>
TRACT G
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236
OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to a 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to a POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of
32.38 feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
978.06 feet to a point on the Southerly limits of the Wetlands of Hilly Mill
Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of
84.64 feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
140.19 feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 88 degrees 57 minutes 38 seconds West for a distance of
177.75 feet to point;
8
<PAGE>
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of
82.45 feet to a point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of
639.20 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
52.57 feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
150.00 feet to a point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of
175.00 feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of
25.93 feet to a point;
THENCE South 44 degrees 18 minutes 22 seconds East for a distance of
63.80 feet to a point;
THENCE South 53 degrees 03 minutes 38 seconds East for a distance of
18.78 feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of
211.55 feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of
11.80 feet to a point;
THENCE along a curve to the right having a radius of 3600.00 feet, a
central angle of 09 degrees 21 minutes 08 seconds, an Arc length of 587.61 feet,
and subtended by a chord bearing South 33 degrees 47 minutes 14 seconds West for
a distance of 586.96 feet to the POINT OF BEGINNING.
Said property contains 3.16 acres more or less and is that same tract
or parcel of land shown as Tract G on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
9
<PAGE>
EXHIBIT "B"
L E G A L D E S C R I P T I O N
TRACT A-2
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOTS 236
& 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE POINT OF
BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
902.40 feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of
321.00 feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of
802.62 feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of
291.17 feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE along the centerline of Hilly Mill Creek to the Northwest, more
or less, North 60 degrees 42 minutes 09 seconds West for a distance of 97.17
feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE South 21 degrees 03 minutes 44 seconds West for a distance of
136.80 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
223.86 feet to a POINT AT THE CENTERLINE OF A GEORGIA POWER COMPANY TRANSMISSION
LINE RIGHT OF WAY (150 FOOT WIDTH);
THENCE North 73 degrees 18 minutes 03 seconds West for a distance of
36.90 feet to a POINT IN THE CENTERLINE OF THE CREEK;
THENCE North 46 degrees 21 minutes 20 seconds West for a distance of
61.64 feet to a POINT ON THE WESTERLY LIMIT OF A GEORGIA POWER COMPANY
TRANSMISSION LINE RIGHT OF WAY (150 FOOT WIDTH);
10
<PAGE>
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 210.06 feet to
a 2 INCH REBAR SET AT THE NORTHERLY LIMITS OF THE WETLANDS OF HILLY MILL CREEK;
THENCE along said westerly limit of a Georgia Power Company Right of
Way North 05 degrees 00 minutes 38 seconds West for a distance of 1963.86 feet
to a 2 INCH REBAR SET;
THENCE South 88 degrees 37 minutes 10 seconds East for a distance of
252.91 feet to a 12 INCH WOOD POST;
THENCE North 72 degrees 48 minutes 00 seconds East for a distance of
405.46 feet to the POINT OF BEGINNING.
Said property contains 27.41 acres, more or less, and is that same tract or
parcel of land shown as Tract A2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
TRACT E-2
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT
237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND, SAID POINT BEING THE POINT OF
BEGINNING FOR THE HEREIN DESCRIBED PARCEL OF LAND.
THENCE South 72 degrees 48 minutes 00 seconds East for a distance of
405.46 feet to a point;
THENCE North 88 degrees 37 minutes 10 seconds West for a distance of
252.91 feet to a 1/2 inch rebar set on the westerly line of a Georgia Power
Company Easement (150 foot width);
THENCE North 05 degrees 00 minutes 38 seconds West for a distance of
456.22 feet to a point on said westerly line of a Georgia Power Company Easement
and on the southerly right of way line of George Brown Road;
THENCE along said right of way line in an easterly direction, along a
curve to the right having a radius of 668.28 feet and an arc length of 237.56
feet and being subtended by a chord bearing South 71 degrees 01 minutes 39
seconds East for a distance of 236.31 feet to a point;
THENCE South 60 degrees 47 minutes 40 seconds East for a distance of
454.84 feet to a point;
11
<PAGE>
THENCE along a curve to the left having a radius of 199.33 feet and an
arc length of 64.11 feet and being subtended by a chord bearing South 70 degrees
00 minutes 28 seconds East for a distance of 63.83 feet to a 1/2 inch rebar set;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of
20.09 feet to the POINT OF BEGINNING.
Said property contains 4.13 acres, more or less, and is that same tract
or parcel of land shown as Tract E2 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999, more or less.
LESS AND EXCEPT:
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN
LAND LOT 237 OF THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA,
DEEDED FROM TENASKA, INC., A DELAWARE CORPORATION, AND TENASKA GEORGIA, INC., A
DELAWARE CORPORATION, AS GRANTORS, TO HEARD COUNTY, AS GRANTEE, PURSUANT TO THAT
CERTAIN RURAL POST ROADS RIGHT OF WAY DEED DATED NOVEMBER 10, 1999, FILED FOR
RECORD NOVEMBER 10, 1999 AT 4:08 P.M., RECORDED IN DEED BOOK 201, PAGE
628, HEARD COUNTY, GEORGIA RECORDS.
12
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Exhibit 10.19
AFTER RECORDING RETURN TO:
Steven K. Bender, Esquire
Long Aldridge & Norman, LLP
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
(404) 527-4640
CONSTRUCTION EASEMENT AGREEMENT
This Construction Easement Agreement ("Agreement") is made and entered
into this day of 8th day of October, 1999, by INLAND PAPERBOARD AND PACKAGING,
INC., a Delaware corporation ("Grantor") and TENASKA, INC., a Delaware
corporation, and TENASKA GEORGIA PARTNERS, L.P., a Delaware limited partnership
(collectively the "Grantee") (the words "Grantor" and "Grantee" to include their
respective successors, successors-in-title, grantees and assigns where the
context requires or permits).
FOR AND IN CONSIDERATION of the payment of $10.00 in hand paid by
Grantee to Grantor at or before the sealing and delivery of these presents, in
consideration of the mutual agreements set forth below, and other good and
valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, Grantor and Grantee hereby agrees as follows:
1. CONSTRUCTION EASEMENT. Grantor does hereby grant, bargain, sell,
alien, convey and confirm unto Grantee, their successors, successors-in-title,
grantees and assigns, a non-exclusive perpetual easement on, over, through and
across the real property more specifically described in EXHIBIT "A" attached
hereto and incorporated herein by reference (the "Temporary Construction
Easement Area") for the purpose and a term so long as necessary to clear,
excavate, lay and construct gas pipelines and related pipeline facilities and
equipment through the real property lying between the two (2) tracts comprising
the Temporary Construction Easement Area and adjoining pipeline easement areas
(said area between the two (2) tracts comprising the Temporary Construction
Easement Area and adjoining pipeline easement areas being hereinafter
collectively referred to as "Tract G"), and to do all things reasonably
necessary and incident to the initial construction of such pipelines, and as
needed in connection with any later maintenance, repair, replacement, alteration
or removal of such pipelines (all of the foregoing purposes being hereinafter
collectively referred to as the "Construction Purposes"). Notwithstanding the
foregoing terms of this Agreement, the easement granted hereunder shall be, and
convey, an exclusive right to use the Temporary Construction Easement Area from
the date hereof and until December 31, 2002, and shall be non-exclusive
thereafter. Grantee shall not remove or damage any standing timber from or on
the Temporary Construction Easement Area except to the minimum extent needed to
carry out the Construction Purposes. If Grantee removes or damages any standing
timber from or on the Temporary Construction Easement Area Grantee shall pay
Grantor the net present value of the expected yield of the mature trees removed
or damaged by Grantee. Should Grantee remove any timber or other vegetation on
the Temporary
<PAGE>
Construction Easement Area, Grantee shall leave the Temporary Construction
Easement Area clean and free of debris.
2. INDEMNIFICATION. Grantee for itself, and its successors,
successors-in-title, grantees and assigns, hereby agrees to indemnify, defend
and hold harmless Grantor, and its successors, successors-in-title, grantees and
assigns, from any and all claims, demands, liabilities, losses, suits, civil
actions, judgements, costs, expenses (including reasonable attorneys' fees) and
damages, of any kind or nature (hereinafter collectively referred to as a
"Claim"), suffered or incurred by Grantor in connection with Grantee, its
successors, successors-in-title, grantees or assigns, or any of their respective
agents, employees, servants, contractors, subcontractors, tenants, subtenants,
licensees, invitees or lenders, using the Temporary Construction Easement Area,
or making use of any of the easement rights, granted hereunder, except to the
extent any Claim was caused by the negligence or wilful misconduct of Grantor,
its successors, successors-in-title, grantees or assigns, or any of their
respective agents, employees, servants, contractors, subcontractors, tenants,
subtenants, licensees, invitees or lenders.
3. ADDITIONAL PROVISIONS. This Agreement shall be governed, construed
and enforced in accordance with the laws of the State of Georgia. Grantor agrees
that the easements granted in this Agreement shall be a burden upon, touch,
concern and run with the title to the Temporary Construction Easement Area.
Grantee shall have the right to assign Grantee's rights and privileges under
this Agreement to any successor-in-title of Grantee who acquires the Grantee's
land adjoining the Temporary Construction Easement Area, without the need for
Grantor's consent. Upon any such successor-in-title to Grantee assuming in
writing all obligations hereunder accruing or arising from and after the
effective date of such transfer and publicly recording such assumption agreement
in the real estate records of the Clerk of the Superior Court of Heard County,
Georgia, the original Grantee shall be released from the obligations,
liabilities and matters accruing or arising from and after the effective date of
such assumption that have been assumed by such successor-in-title. The easements
set forth in this Agreement shall be for the use, benefit and enjoyment of
Grantee, its successors, successors-in-title, grantees and assigns (including,
without limitation the Development Authority of Heard County ["DAHC"] as
successor-in-title to Grantee's adjoining land), and their respective agents,
employees, servants, tenants (including, without limitation, any tenant leasing
the adjoining land from DAHC), subtenants, licensees, invitees, and lenders. The
easements and other obligations set forth in this Agreement are binding upon and
shall inure to the benefit of the parties hereto, and their respective
successors, successors-in-title, grantees and assigns (including, without
limitation DAHC as successor-in-title to Grantee's adjoining land), and their
respective agents, employees, servants, tenants (including, without limitation,
any tenant leasing the adjoining land from DAHC), subtenants, licensees,
invitees, and lenders.
<PAGE>
TO HAVE AND TO HOLD the rights, privileges and easements described
above unto Grantee, their successors, successors-in-title, grantees and assigns.
AND GRANTOR, their heirs, executors, administrators, personal
representatives, successors, successors-in-title, grantees and assigns will
forever warrant and defend the right and title to, and privileges under, the
easements conveyed by Grantor to Grantee hereunder, against the claims of all
persons claiming by, through or under Grantor.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the day and year first above written.
GRANTOR:
Signed, sealed and delivered in the
the presence of: INLAND PAPERBOARD AND PACKAGING,
INC., a Delaware corporation
/S/
- --------------------------------
Unofficial Witness
By: /S/ (SEAL)
---------------------------------
Print Name: Jack C. Sweeny
/S/
- -------------------------------- Title: Vice President
Notary Public
My Commission Expires:
---------
[CORPORATE SEAL]
[NOTARY SEAL]
[Signatures Continued on Next Page]
<PAGE>
GRANTEE:
Signed, sealed and delivered in the
the presence of: TENASKA, INC., a Delaware corporation
/S/
- --------------------------------
Unofficial Witness
By:/S/ (SEAL)
----------------------------------
Print Name: Paul G. Smith
/S/ Title: Vice President
- --------------------------------
Notary Public
[CORPORATE SEAL]
My Commission Expires:
----------
[NOTARY SEAL]
Signed, sealed and delivered in the
the presence of: TENASKA GEORGIA PARTNERS, L.P., a
Delaware limited partnership
/S/ By: Tenaska Georgia I, L.P., a
- -------------------------------- Delaware limited partnership, Its
Unofficial Witness General Partner
/S/ By: Tenaska Georgia, Inc., a Delaware
- -------------------------------- corporation, its General Partner
Notary Public
My Commission Expires: By: /S/ (SEAL)
---------- ---------------------------------
[NOTARY SEAL] Print Name: Michael F. Lawler
Title: VP of Finance & Treasurer
[CORPORATE SEAL]
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
EASEMENT AREA 9 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236 OF
THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of 902.40
feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of 321.00
feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of 802.62
feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of 291.17
feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of 32.38
feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of 978.06
feet to a point on the Southerly limits of the Wetlands of Hilly Mill Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of 84.64
feet to a ? inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 12.03
feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 140.19
feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of 124.94
feet to a point;
THENCE along a curve to the left having a radius of 3700.00 feet and an arc
length of 513.91 feet, being subtended by a chord
<PAGE>
of North 33 degrees 18 minutes 31 seconds East for a distance of 513.50 feet to
a point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of 20.82
feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of 202.54
feet to a point;
THENCE North 53 degrees 03 minutes 38 seconds West for a distance of 104.97
feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of 211.55
feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of 11.80
feet to a point;
THENCE along a curve to the right having a radius of 3600.00 feet and an
arc length of 587.61 feet, being subtended by a chord of South 33 degrees 47
minutes 14 seconds West for a distance of 586.96 feet to a point, said point
being the POINT OF BEGINNING.
Said property contains 1.78 acres more or less.
EASEMENT AREA 10 - TEMPORARY WORKSPACE
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236 OF
THE THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of 902.40
feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of 321.00
feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of 802.62
feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of 291.17
feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of 32.38
feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a
<PAGE>
distance of 978.06 feet to a point on the Southerly limits of the Wetlands of
Hilly Mill Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of 84.64
feet to a 1 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 12.03
feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 140.19
feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1520.84 feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of 102.52
feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of 50.16
feet to a point;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of 25.08
feet to a point, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE North 03 degrees 30 minutes 04 seconds West for a distance of 82.45
feet to a point;
THENCE North 45 degrees 03 minutes 01 seconds East for a distance of 639.20
feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of 52.57
feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of 175.00
feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of 150.00
feet to a point;
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of 175.00
feet to a point;
THENCE North 19 degrees 13 minutes 55 seconds East for a distance of 25.93
feet to a point;
THENCE North 44 degrees 18 minutes 22 seconds West for a distance of 99.68
feet to a point;
THENCE North 56 degrees 31 minutes 54 seconds West for a distance of 120.58
feet to a point;
THENCE North 70 degrees 46 minutes 05 seconds West for a distance of 68.89
feet to a point;
THENCE South 19 degrees 13 minutes 55 seconds West for a distance of 350.00
feet to a point;
<PAGE>
THENCE South 70 degrees 46 minutes 05 seconds East for a distance of 140.96
feet to a point;
THENCE South 45 degrees 03 minutes 01 seconds West for a distance of 583.23
feet to a point;
THENCE South 03 degrees 30 minutes 04 seconds East for a distance of 119.61
feet to a point;
THENCE South 88 degrees 57 minutes 38 seconds East for a distance of 100.31
feet to a point, said point being the POINT OF BEGINNING.
Said property contains 3.02 acres more or less.
RECONSTRUCTIONEASEMENT
<PAGE>
Exhibit 10.20
AFTER RECORDING RETURN TO:
Steven K. Bender, Esquire
Long Aldridge & Norman, LLP
Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
(404) 527-4640
EASEMENT AGREEMENT
This Easement Agreement ("Agreement") is made and entered into this 2nd
day of November, 1999, by ROBERT CHARLES PAYNE AND SUSAN LYNN PAYNE, both
residents of the State of Georgia (collectively "Grantor") and TENASKA GEORGIA
PARTNERS, L.P., a Delaware limited partnership ("Grantee") (the words "Grantor"
and "Grantee" to include their respective heirs, executors, administrators,
personal representatives, successors, successors-in-title and assigns where the
context requires or permits).
FOR AND IN CONSIDERATION of the payment of $10.00 in hand paid by
Grantee to Grantor at or before the sealing and delivery of these presents, in
consideration of the mutual agreements set forth below, and other good and
valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, Grantor and Grantee hereby agrees as follows:
1. ACCESS EASEMENT. Grantor does hereby grant, bargain, sell, alien,
convey and confirm unto Grantee, its successors, successors-in-title and
assigns, a non-exclusive perpetual easement to use a thirty foot (30') wide
strip of land identified and described on EXHIBIT "A" attached hereto and made a
part hereof (the "Easement Area") for all forms of pedestrian and vehicular
traffic, including, without limitation, truck traffic and construction traffic,
on, over, through and across the Easement Area. The Easement Area shall be
thirty feet (30') wide along its entire length, and shall run from Dogwood Road,
on the eastern boundary line of the Grantor Property to the western boundary
line of the Grantor Property. The foregoing easement includes the right of
Grantee, its successors, successors-in-title and assigns, from time to time, to
construct, improve, maintain, repair and replace, a gravel roadway, gutters,
culverts, drainage pipe, curb-cuts, and other roadway improvements (collectively
the "Roadway Facilities") in the Easement Area to facilitate use of the Easement
Area for access to and from Dogwood Road and the western boundary line of the
Grantor Property.
2. UTILITY EASEMENT. Grantor does hereby grant, bargain, sell, alien,
convey and confirm unto Grantee, its successors, successors-in-title and
assigns, a non-exclusive perpetual utility easement on, over, through, across,
and under the Easement Area for purposes of installing, operating, using,
repairing, maintaining, and replacing any utility lines, wires, cables, pipes,
equipment and related utility facilities (collectively the "Utility
Facilities"), including,
<PAGE>
without limitation, electric, gas, sewer, telephone, communications, cable and
water utility facilities.
3. ADDITIONAL PROVISIONS. The easements granted under this Agreement
include the right of Grantee to cut away and keep clear, remove and dispose of
all trees, shrubs or other vegetation that interfere with the construction,
improvement, maintenance, repair, replacement, operation or use of the Roadway
Facilities or Utility Facilities, without any further compensation to Grantor.
All Roadway Facilities and Utility Facilities installed in the Easement Area
shall be constructed in a good and workmanlike manner, and Grantee shall leave
the Easement Area clean and free of debris. This Agreement shall be governed,
construed and enforced in accordance with the laws of the State of Georgia.
Grantee shall have the right to assign Grantee's rights and privileges under
this Agreement to any person or entity, without the need for Grantor's consent,
provided the assignee assumes in writing all of the obligations of Grantee under
this Agreement acruing or arising from and after the date of such assignment.
Upon any assignee assuming all obligations hereunder accruing or arising from
and after the effective date of such assignment, the assigning Grantee shall be
released from all obligations and liabilities for matters accruing or arising
from and after the effective date of such assignment.
The easements set forth in this Agreement shall be for the use, benefit
and enjoyment of Grantee, its designated successors, successors-in-title
(including, without limitation The Development Authority of Heard County
["DAHC"] as successor-in-title to the dominant tenement [as hereinafter
defined]), grantees and assigns, and their respective agents, employees,
servants, tenants (including, without limitation, Tenaska Georgia Partners, L.P.
as a tenant leasing the dominant tenement from DAHC), subtenants, licensees,
permitees, invitees, contractors, subcontractors, lenders and any other party
holding a collateral interest in the dominant tenement. This Agreement and the
easements, rights, and privileges created hereby shall be binding upon and inure
to the benefit of Grantee and Grantor and their respective designated (to the
extent necessary under the last two sentences of this paragraph) heirs,
executors, administrators, personal representatives, successors,
successors-in-title (including, without limitation the DAHC as
successor-in-title to the dominant tenement), grantees, assignees, and their
respective tenants (including, without limitation, Tenaska Georgia Partners,
L.P. as a tenant leasing the dominant tenement from DAHC), subtenants,
licensees, permitees, lenders and any other party holding a collateral interest
in the dominant tenement. All of the easements, rights and privileges, set forth
herein shall touch, concern, burden and run with the title to the Easement Area,
as the servient tenement, and shall be appurtenant to, touch, concern and run
with the title to any lands now or hereafter owned by Grantee, its designated
successors, successors-in-title (including, without limitation the DAHC as
successor-in-title to the dominant tenement), grantees and assigns, in Land Lots
206, 207, 236 and/or 237 of the 3rd Land District, Heard County, Georgia,
collectively the dominant tenement. Any conveyance of said dominant tenement, or
any part thereof, to any lender or any other party holding a collateral interest
in the dominant tenement (whether by foreclosure, deed in lieu of foreclosure or
otherwise) shall also convey the rights, privileges, duties and obligations
contained in this Agreement, regardless of whether or not specific mention is
made of this Agreement and regardless of whether or not a specific conveyance is
made of, or subject to, the easements, rights, privileges, duties and
obligations contained herein. Any conveyance of said dominant tenement, or any
part thereof, to any person or entity, other than a lender or a party holding a
collateral interest in the dominant
<PAGE>
tenement, shall only convey the rights, privileges, duties and obligations
contained in this Agreement if specific mention is made of this Agreement or if
a specific conveyance is made of, or subject to, the easements, rights,
privileges, duties and obligations contained herein.
TO HAVE AND TO HOLD the rights, privileges and easements described
above unto Grantee, its successors, successors-in-title and assigns.
AND GRANTOR, its heirs, executors, administrators, personal
representatives, successors, successors-in-title and assigns will forever
warrant and defend the right and title to, and privileges under, the easements
conveyed by Grantor to Grantee hereunder, against the claims of all persons
whomsoever.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the day and year first above written.
GRANTOR:
Signed, sealed and delivered in the
presence of:
/S/
-----------------------------
Unofficial Witness
/S/ (SEAL)
------------------------- ------
Robert Charles Payne
/S/
-----------------------------
Notary Public
My Commission Expires:
----------
[NOTARY SEAL]
Signed, sealed and delivered in
the presence of:
/S/
-----------------------------
Unofficial Witness
/S/ (SEAL)
------------------------- ------
Susan Lynn Payne
/S/
-----------------------------
Notary Public
Address of Grantor:
My Commission Expires: Mr. and Mrs. Robert Charles Payne
---------- 10 Lisa Court
[NOTARY SEAL] Stockbridge, Georgia 30281
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
GRANTEE:
Signed, sealed and delivered in the TENASKA GEORGIA PARTNERS, L.P.,
the presence of: a Delaware limited partnership
/S/ By: Tenaska Georgia, Inc., a Delaware
- -------------------------------- corporation, its General Partner
Unofficial Witness
/S/
- --------------------------------
Notary Public By:/S/ (SEAL)
--------------------- ------
My Commission Expires: Print Name: Michael F. Lawler
----------
[NOTARY SEAL] Title: Vice President of Finance &
Treasurer
[CORPORATE SEAL]
<PAGE>
EXHIBIT "A"
EASEMENT AREA 12 - PERMANENT ACCESS - LOT 175, POWERS CREEK ESTATES
ALL THAT TRACT OR PARCEL OF LAND SITUATE, LYING AND BEING IN LAND LOT 236 OF THE
THIRD LAND DISTRICT OF HEARD COUNTY GEORGIA, AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE WESTERLY RIGHT OF WAY LINE OF JOE
STEPHENS ROAD (80 FOOT WIDTH) WITH THE SOUTHERLY RIGHT OF WAY LINE OF GEORGE
BROWN ROAD (PRESCRIPTIVE RIGHT OF WAY 40 FEET, MORE OR LESS, IN WIDTH), SAID
POINT BEING THE POINT OF REFERENCE; THENCE ALONG THE SOUTHERLY MARGIN OF GEORGE
BROWN ROAD SOUTH 74 DEGREES 00 MINUTES 18 SECONDS WEST FOR A DISTANCE OF 877.40
FEET TO A METAL FENCE POST FLUSH WITH THE GROUND;
THENCE South 01 degrees 19 minutes 00 seconds West for a distance of 902.40
feet to a STEEL FENCE POST;
THENCE South 01 degrees 36 minutes 50 seconds East for a distance of 321.00
feet to a 1" PIPE;
THENCE South 00 degrees 28 minutes 16 seconds West for a distance of 802.62
feet to an 1" PIPE;
THENCE South 00 degrees 43 minutes 57 seconds West for a distance of 291.17
feet to an POINT IN THE CENTERLINE OF HILLY MILL CREEK;
THENCE South 01 degrees 18 minutes 40 seconds West for a distance of 32.38
feet to a point;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of 978.06
feet to a point on the Southerly limits of the Wetlands of Hilly Mill Creek;
THENCE South 02 degrees 18 minutes 34 seconds West for a distance of 84.64
feet to a 3/4 inch pipe;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of
12.03 feet;
THENCE South 01 degrees 21 minutes 15 seconds West for a distance of 140.19
feet to a Painted Rock;
THENCE North 88 degrees 57 minutes 38 Seconds West for a distance of
1502.56 feet to a point;
THENCE South 03 degrees 25 minutes 19 seconds West for a distance of 556.81
feet to a 3/4 inch pipe;
THENCE South 00 degrees 55 minutes 19 seconds West for a distance of 434.31
feet to a 3/4 inch pipe, said point being the POINT OF BEGINNING for the herein
described parcel of land.
THENCE South 89 degrees 13 minutes 51 seconds East for a distance of 615.65
feet to a 3/4 inch pipe on the westerly right of way line of Dogwood Road;
THENCE along said right of way line South 28 degrees 15minutes 41 seconds
East for a distance of 34.31 feet to a point;
<PAGE>
THENCE North 89 degrees 13 minutes 51 seconds West for a distance of 631.64
feet to a point;
THENCE North 00 degrees 29 minutes 20 seconds West for a distance of 30.01
feet to the POINT OF BEGINNING.
Said property contains 0.43 acre, more or less, and is that same tract or
parcel of land shown as Easement Area 12 on that certain ALTA/ACSM Title Survey,
entitled Heard County Power Generation Site for Tenaska, Inc., Tenaska Georgia,
Inc., Tenaska Georgia I, LP, Tenaska Georgia Partners, LP, Fidelity National
Title Insurance Company of New York, Stewart Title Guaranty Company, Heard
County Development Authority & The Chase Manhattan Bank as Trustee and
Collateral Agent, prepared by Donaldson, Garrett & Associate, Inc., bearing the
seal and certification of James W. Newberry, Jr. Registered Land Surveyor No.
2558, dated March 19, 1999, last revised November 4, 1999.
REPAYNEEASEMENTAGREEMENT
<PAGE>
Exhibit 10.21
-----------------------------------------------------------------
AFTER RECORDING, PLEASE RETURN TO:
STEVEN K. BENDER, ESQ.
LONG ALDRIDGE & NORMAN LLP
SUITE 5300
303 PEACHTREE STREET
ATLANTA, GEORGIA 30308
PLEASE CROSS REFERENCE TO:
(I) PERPETUAL RIGHT-OF-WAY AND
EASEMENT AGREEMENT RECORDED AT DEED
BOOK 195, PAGE 599, HEARD COUNTY,
GEORGIA RECORDS, AS AMENDED BY
AMENDMENT TO PERPETUAL RIGHT-OF-WAY
AND EASEMENT AGREEMENT RECORDED AT
DEED BOOK 200, PAGE 199, AFORESAID
RECORDS, AS FURTHER AMENDED BY
SECOND AMENDMENT TO PERPETUAL
RIGHT-OF-WAY AND EASEMENT AGREEMENT
TO BE RECORDED CONTEMPORANEOUSLY
HEREWITH IN AFORESAID RECORDS;
(II) NATURAL GAS PIPELINE RIGHT-OF-
WAY RECORDED AT DEED BOOK 200, PAGE
136,AFORESAID RECORDS, AS AMENDED
BY AMENDMENT TO NATURAL GAS PIPELINE
RIGHT-OF-WAY AND CONSENT AGREEMENT
TO BE RECORDED CONTEMPORANEOUSLY
HEREWITH IN AFORESAID RECORDS;
(III) PERPETUAL RIGHT-OF-WAY AND
EASEMENT AGREEMENT BY CHARLES L.
GOODSON, AS EXECUTOR OF THE LAST
WILL AND TESTAMENT OF ORA LEE
GOODSON AND TO BE RECORDED
CONTEMPORANEOUSLY HEREWITH IN
AFORESAID RECORDS; AND
(IV) NATURAL GAS PIPELINE
RIGHT-OF-WAY BY GREAT NORTHERN
NEKOOSA CORPORATION AND TENASKA
GEORGIA PARTNERS, L.P. AND TO BE
RECORDED CONTEMPORANEOUSLY HEREWITH
IN AFORESAID RECORDS.
NON-INTERFERENCE AND CROSS-INDEMNITY AGREEMENT
(TENASKA, INC./TENASKA GEORGIA PARTNERS, L.P.)
THIS NON-INTERFERENCE AGREEMENT AND CROSS-INDEMNITY (herein called this
"Agreement") executed as of this 10th day of November, 1999 by TENASKA, INC., a
Delaware corporation (herein called "Tenaska, Inc.") and TENASKA GEORGIA
PARTNERS, L.P., a Delaware limited partnership (herein called "TGP");
W I T N E S S E T H; That:
WHEREAS, Tenaska, Inc. entered into (i) with Charles L. Goodson, as
Executor of Last Will and Testament of Ora Lee Goodson (herein called "Goodson")
that certain Perpetual Right-of-Way and Easement Agreement recorded at Deed Book
195, Page 599, Heard County, Georgia records, as amended by Amendment to
Perpetual Right-of-Way and Easement Agreement recorded at Deed Book 200, Page
199, aforesaid records, as further amended by Second Amendment to Perpetual
Right-of-Way and Easement Agreement and recorded contemporaneously herewith in
aforesaid records (herein, as amended, called the "Tenaska, Inc. Goodson
Easement"), and (ii) with Great Northern Nakoosa Corporation, a Maine
corporation (herein called "GNNC") that certain Natural Gas Pipeline
Right-of-Way recorded at Deed Book 200, Page 136, aforesaid records, as amended
by Amendment to Natural Gas Pipeline Right-of-Way and Consent Agreement recorded
contemporaneously herewith in aforesaid records (herein, as amended, called the
"Tenaska, Inc. GNNC Easement"; the Tenaska, Inc. Goodson Easement and the
Tenaska, Inc. GNNC Easement are sometimes herein collectively called the
"Tenaska, Inc. Easements");
<PAGE>
WHEREAS, TGP entered into (i) with Goodson that certain Perpetual
Right-of-Way and Easement Agreement and recorded contemporaneously herewith in
aforesaid records (herein called the "TGP Goodson Easement"), and (ii) with GNNC
that certain Natural Gas Pipeline Right-of-Way to be recorded contemporaneously
herewith in aforesaid records (herein called the "TGP GNNC Easement"; the TGP
Goodson Easement and the TGP GNNC Easement are sometimes herein collectively
called the "TGP Easements"; the Tenaska, Inc. GNNC Easement and the TGP GNNC
Easement are sometimes herein collectively called the "GNNC Easements");
WHEREAS, the Tenaska, Inc. Easements and the TGP Easements provide for
certain rights, privileges, duties, obligations and easements for each of
Tenaska, Inc. and TGP, respectively;
WHEREAS, Tenaska, Inc. and TGP desire for TGP's exercise of TGP's
rights, privileges, duties, obligations and easements under the TGP Easements
not to be interfered with by Tenaska, Inc.'s exercise of said rights,
privileges, duties, obligations and easements;
WHEREAS, Tenaska, Inc. and TGP desire to clarify certain arrangements
under the indemnities contained in the GNNC Easements;
NOW, THEREFORE, for and in consideration of $10.00, in hand paid by TGP
to Tenaska, Inc., the mutual premises contained herein, and other valuable
consideration, the receipt and sufficiency of each of which is hereby
acknowledged, the parties hereby agree as follows:
1. NO INTERFERENCE. Notwithstanding anything to the contrary in the
Tenaska, Inc. Easements, the rights, privileges, and easements of Tenaska, Inc.
under the Tenaska, Inc. Easements are subject to the prior and superior rights,
privileges, and easements of TGP under the TGP Easements. Tenaska, Inc. shall
exercise Tenaska, Inc.'s rights, privileges and easements under the Tenaska,
Inc. Easements so as not to conflict, interfere, hamper or deny in any fashion
TGP's rights, privileges, and easements under the TGP Easements. Tenaska, Inc.
shall cooperate in good faith with TGP in exercising Tenaska, Inc.'s rights,
privileges, and easements under the Tenaska, Inc. Easements in order to affect
the same.
2. CROSS-INDEMNITY. Tenaska, Inc. and TGP acknowledge that the GNNC
Easements provide for certain indemnities by Tenaska, Inc. and TGP,
respectively. Subject to the last sentence of this Section 2, (i) Tenaska, Inc.
shall indemnify and hold harmless TGP from and against any and all claims,
costs, damages, expenses and losses arising out of or relating to the exercise
by Tenaska, Inc. of Tenaska, Inc.'s rights, privileges, duties, obligations and
easements under the Tenaska, Inc. GNNC Easement, and (ii) TGP shall indemnify
and hold harmless Tenaska, Inc. from and against any and all claims, costs,
damages, expenses and losses arising out of or relating to the exercise by TGP
of TGP's rights, privileges, duties, obligations and easements under the TGP
GNNC Easement. Notwithstanding the foregoing of this Section 2, should a claim
be made against either party under an indemnity under one or both of the GNNC
Easements, as the case may be, then the other party shall indemnify and hold
harmless the party
<PAGE>
against whom the claim was made only to the proportionate extent that such claim
is the result of the acts or omissions of said other party.
3. NO AMENDMENT. No party shall amend this Agreement without the prior
written consent of all holders of a security interest or security title in the
Power Plant Property (as defined in the TGP Easements). For purposes of this
Section 3, the consent of The Development Authority of Heard County (herein
called "DAHC") is required for so long as DAHC owns any portion of the Power
Plant Property.
4. NO PARTNERSHIP OR JOINT VENTURE. This Agreement does not create an
association, partnership, joint venture or a principal and agency relationship
between Tenaska, Inc. and TGP.
5. NO OBLIGATION TO ENFORCE. Neither Tenaska, Inc. nor TGP is obligated
to take any action to enforce the terms of this Agreement or to exercise any of
the rights, or privileges of Tenaska, Inc. or TGP hereunder.
6. NO THIRD PARTY BENEFICIARIES. Except as set forth in Section 3 of
this Agreement, no provision of this Agreement may be construed to create any
rights or benefits in any person or entity other than Tenaska, Inc. and TGP.
7. CUMULATIVE RIGHTS; NO WAIVER. Except as otherwise expressly set
forth in this Agreement, all rights, powers and privileges conferred hereunder
upon the parties are cumulative but not restricted to those given by law. No
failure of any party to exercise any power given such party hereunder or to
insist upon strict compliance by any other party to its obligations hereunder,
and no custom or practice of the parties in variance with the terms hereof,
constitutes a waiver of any party's right to demand exact compliance with the
terms hereof.
8. CONSTRUCTION. This Agreement must be construed and interpreted under
the laws of the State of Georgia. The captions of each Article, Section and
paragraph of this Agreement and the particular pronouns used herein, whether
masculine, feminine, or neuter, singular or plural, are intended only to be used
as a convenience in reference and must not be construed to limit or change the
meaning of the language of this Agreement taken by paragraph or as a whole. If
any term, covenant, or condition of this Agreement or the application thereof to
any person or circumstance is, to any extent, invalid or unenforceable, the
remainder of this Agreement or the application of such terms, covenants, and
conditions to persons or circumstances other than those as to which it is held
invalid or unenforceable, will not be affected thereby and each term, covenant,
or condition of this Agreement will be valid and be enforced to the fullest
extent permitted by law.
9. DURATION. The provisions of this Agreement are perpetual, binding
upon Tenaska, Inc. and TGP, and run with and bind title to the property of
Tenaska, Inc. and TGP, each to the same extent as provided in the Tenaska, Inc.
Easements and the TGP Easements.
10. NO REVERTER. No covenant or restriction herein is intended to be or
will be construed as a condition subsequent, a conditional limitation, or as
creating the possibility of reverter.
<PAGE>
11. NO MERGER. There is no merger of the rights and privileges created
hereby with the fee estate of Tenaska, Inc. or TGP, respectively, by reason of
the fact that any single owner may hereafter own or hold all or a portion of the
property subject to or benefited by the Tenaska, Inc. Easements or the TGP
Easements, as the case may be, and no such merger will occur until Tenaska,
Inc., TGP, and all persons or entities required for execution of an amendment
under Section 4 execute a written statement or instrument affecting such merger
and duly record the same.
[SIGNATURES BEGIN ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
under seal as of the day and year first above written.
TENASKA, INC.:
Signed, sealed and delivered TENASKA, INC., a Delaware corporation
in the presence of: Georgia corporation
/S/ By: /S/
--------------------------- ---------------------------------
Official Witness Name: Jerry K. Crouse
Title: Vice President
/S/
---------------------------
Notary Public
Attest:/S/
-----------------------
My commission expires: Name: Paul G. Smith
Title: Vice President
- ---------------------------
(NOTARIAL SEAL) [CORPORATE SEAL]
TGP:
Signed, sealed and delivered TENASKA GEORGIA PARTNERS, L.P., a
in the presence of: Delaware limited partnership
/S/ By: Tenaska Georgia, Inc., a Delaware
--------------------------- corporation
Official Witness
/S/ By: /S/
------------------------- ------------------------------
Notary Public Name: Michael F. Lawler
Title: Vice President of Finance &
Treasurer
Attest:/S/
--------------------------
My commission expires: Name: Douglas A. Troupe
Title: Assistant Secretary/Assistant
Treasurer
- ---------------------------
(NOTARIAL SEAL) [CORPORATE SEAL]
RENONINTERFERENCE&CROSSINDEMNITYAGREEMENT
<PAGE>
Exhibit 10.22
EXECUTION COPY
- --------------------------------------------------------------------------------
PPA LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated
November 10, 1999
among
Tenaska Georgia Partners, L.P.,
as Partnership
and
The Toronto-Dominion Bank,
as the Issuing Bank
as a Bank and as Agent
and
THE BANKS PARTY HERETO
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
DEFINITIONS
Section 1.1 Definitions...................................................................1
Section 1.2 Construction..................................................................6
ARTICLE II
PPA LETTER OF CREDIT
Section 2.1 Commitments...................................................................7
Section 2.2 Amount and Term of PPA Letter of Credit.......................................7
Section 2.3 Participation in PPA Letter of Credit.........................................8
Section 2.4 Drawing and Reimbursement.....................................................8
Section 2.5 Fees..........................................................................8
Section 2.6 Interest......................................................................9
(a) Rate.....................................................................9
(b) Method of Electing Interest Rates........................................9
(c) Funding Losses..........................................................11
(d) Basis for Determining Interest Rate Inadequate or Unfair................11
(e) Maximum Rate............................................................12
Section 2.7 Repayment....................................................................12
Section 2.8 Prepayments..................................................................12
Section 2.9 Security.....................................................................13
Section 2.10 Payments.....................................................................13
Section 2.11 Computation of Interest and Fees.............................................13
Section 2.12 Payments on Non-Business Days................................................14
Section 2.13 Sharing of Payments, Etc.....................................................14
Section 2.14 Evidence of Debt.............................................................15
Section 2.15 Increased Costs and Reduced Returns..........................................15
Section 2.16 Capital Adequacy.............................................................17
Section 2.17 Taxes........................................................................17
Section 2.18 Illegality...................................................................19
Section 2.19 Reduction in Commitments/Reimbursements......................................19
Section 2.20 Right of Set-off.............................................................19
i
<PAGE>
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Closing Date.........................................20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of Partnership................................21
ARTICLE V
COVENANTS
Section 5.1 Covenants....................................................................21
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default............................................................21
Section 6.2 Remedies.....................................................................22
Section 6.3 Collateralization upon Acceleration of the Bonds.............................22
ARTICLE VII
CHARACTER OF OBLIGATIONS
Section 7.1 Obligations Absolute.........................................................23
Section 7.2 Limited Liability of Agent and Banks.........................................23
ARTICLE VIII
THE AGENT
Section 8.1 Authorization and Action.....................................................24
Section 8.2 Agent's Reliance, Etc........................................................25
Section 8.3 The Agent, the Issuing Bank and Affiliates...................................25
Section 8.4 Bank Credit Decision.........................................................25
Section 8.5 Indemnification..............................................................26
Section 8.6 Successor Agent..............................................................26
Section 8.7 Collateral...................................................................26
ii
<PAGE>
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments, Etc..............................................................27
Section 9.2 Notices, Etc.................................................................27
Section 9.3 No Waiver, Remedies..........................................................28
Section 9.4 Costs and Expenses...........................................................28
Section 9.5 Application of Money.........................................................28
Section 9.6 Severability.................................................................28
Section 9.7 Non-Recourse Liability.......................................................29
Section 9.8 Binding Effect...............................................................29
Section 9.9 Assignments and Participations...............................................29
Section 9.10 Indemnification..............................................................30
Section 9.11 Governing Law; Submission of Jurisdiction; Venue; Waiver of Jury Trial.......32
Section 9.12 Headings.....................................................................33
Section 9.13 Execution in Counterparts....................................................33
Exhibit A Form of PPA Letter of Credit
Exhibit B Form of Assignment and Acceptance
Exhibit C Amortization Schedule
Exhibit D Applicable Margin Table
</TABLE>
iii
<PAGE>
PPA LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
This PPA LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT, dated November
10, 1999 (this "AGREEMENT"), is entered into by and among (1) TENASKA GEORGIA
PARTNERS, L.P., a Delaware limited partnership (the "PARTNERSHIP"); (2) THE
TORONTO-DOMINION BANK, as the Issuing Bank (the "ISSUING BANK"); (3) THE
TORONTO-DOMINION BANK, in its individual capacity, together with each other bank
that becomes a party hereto pursuant to Section 9.9 (each, including the Issuing
Bank, a "BANK" and collectively, the "BANKS"); and (4) THE TORONTO-DOMINION
BANK, as agent for the Banks (in such capacity, together with its successors in
such capacity, the "AGENT").
WHEREAS, the Partnership is constructing and will lease a 936MW (nominal
summer rating) natural gas-fired, simple-cycle electric generating facility in
Heard County, Georgia and related property and facilities (the "Facility");
WHEREAS, the Partnership intends to finance the construction and
equipping of the Facility through an offering of Bonds (the "Bonds") under Rule
144A, the proceeds of which Bonds will be used to purchase Taxable Industrial
Development Revenue Bonds issued by the Development Authority of Heard County,
Georgia, a public corporation created and existing under the laws of the State
of Georgia (the "DAHC Bonds"), the net proceeds of which will be used to pay
Project Costs related to the Facility;
WHEREAS, PECO Energy Company ("PECO") and the Partnership have entered
into a Power Purchase Agreement, dated as of August 24, 1999 (the "PPA")
pursuant to which the Partnership will sell and PECO will purchase the capacity
and associated energy from the Project; and
WHEREAS, in order to provide assurances in respect of the Partnership's
satisfaction of its obligations to PECO, the Partnership has requested that the
Issuing Bank agree to issue and the Banks participate in, and the Issuing Bank
is willing to agree to issue and the Banks are willing to participate in, the
PPA Letter of Credit upon the terms and conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. (a) Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed to them in the Common
Agreement.
(b) The following terms are used in this Agreement with the following
respective meanings:
"ADDITIONAL COMMITMENT" means (i) the amount set forth opposite such
Bank's name on the signature pages hereof and described as being the Additional
Commitment or, if such Bank
<PAGE>
has entered into one or more Assignments and Acceptances, set forth for such
Bank in the register maintained by the Agent for such purpose as the same may be
reduced from time to time in accordance with the provisions of this Agreement,
or (ii) as the context may require, the obligation of such Bank to make loans in
an aggregate amount of principal amount not exceeding such amount.
"ADJUSTED BASE RATE" means the higher of (i) the Federal Funds Rate plus
.50% and (ii) the Base Rate.
"AGENT" has the meaning set forth in the preamble to this Agreement.
"APPLICABLE MARGIN" means, at any time, the margin applicable at such
time to Base Rate Loans or Eurodollar Rate Loans or the letter of credit fee
payable under Section 2.5(a), in each case as set forth on Exhibit D hereto.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance entered
into by a Bank and another Person, substantially in the form of Exhibit B.
"BANK" has the meaning set forth in the preamble of this Agreement.
"BASE RATE" means the variable rate of interest PER ANNUM officially
announced or published by the Agent from time to time as its "base rate," such
rate being set by the Agent as a general reference rate of interest, taking into
account such factors as the Agent may deem appropriate, it being understood that
many of the Agent's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Agent may make various commercial or other loans at rates
of interest having no relationship to such rate. For purposes of this Agreement,
each change in the Base Rate shall be effective as of the opening of business on
the date announced as the effective date of the change in such "base rate."
"BASE RATE LOAN" means a PPA Loan, or portion thereof, bearing interest
at a rate determined with reference to the Adjusted Base Rate.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for business in New York, New York, and with respect to all
notices and determinations in connection with, advances of, continuations of,
conversions from and to, and payments of principal and interest on, Eurodollar
Rate Loans, any day that is also a day for trading by and between banks in U.S.
dollar deposits in the London interbank Eurodollar market.
"CLOSING DATE" means the date on which the conditions precedent set
forth in Section 3.1 have been fulfilled.
"COMMITMENT" of a Bank means (i) prior to April 1, 2001 the Initial
Commitment and (ii) upon and after April 1, 2001, the sum of the Initial
Commitment and the Additional Commitment.
"COMMITMENTS" means all of the Commitments.
2
<PAGE>
"COMMON AGREEMENT" means the Agreement as to Certain Undertakings,
Common Representations, Warranties, Covenants and other items dated as of
November 1, 1999 made by and among the Partnership, the Trustee, the DSR LOC
Agent, the PPA LOC Agent, and the Collateral Agent.
"CREDIT DOCUMENTS" means this Agreement, the Security Documents, the
Collateral Agency Agreement and the PPA Letter of Credit.
"DEFAULT" means an event that with the giving of any required notice
and/or the lapse of any required time would constitute an Event of Default.
"DOLLARS" and "$" means freely transferable United States dollars.
"DRAWING" means a drawing under the PPA Letter of Credit.
"EUROCURRENCY LIABILITIES" has the meaning set forth in Regulation D.
"EUROCURRENCY RESERVE PERIOD" has the meaning set forth in Section
2.15(b).
"EURODOLLAR RATE" means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate PER ANNUM equal to the average (rounded upwards,
if necessary, to the nearest 1/100 of 1%) of the offered rates which appear on
the Dow Jones Telerate page 3750, British Bankers Association Interest
Settlement Rates for deposits in Dollars (or such other system for the purpose
of displaying rates of leading reference banks in the London interbank market,
as designated by the Agent) as of 11:00 a.m. (London time) on the day two
Business Days prior to the first day of such Interest Period in an amount
approximately equal to the principal amount of the Eurodollar Rate Loan to which
such Interest Period is to apply and for a period of time comparable to such
Interest Period.
"EURODOLLAR RATE LOAN" means a PPA Loan, or portion thereof, bearing
interest at a rate determined with reference to the Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
"EXCLUDED TAXES" has the meaning set forth in Section 2.17(a).
"EXPIRATION DATE" means seven years from the date hereof.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
PER ANNUM equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"INDEMNIFIED PARTY" has the meaning set forth in Section 9.10.
3
<PAGE>
"INITIAL COMMITMENT" means (i) the amount set forth opposite such Bank's
name on the signature pages hereof and described as being the Initial Commitment
or, if such Bank has entered into one or more Assignments and Acceptances, set
forth for such Bank in the register maintained by the Agent for such purpose as
the same may be reduced from time to time in accordance with the provisions of
this Agreement, or (ii) as the context may require, the obligation of such Bank
to make loans in an aggregate amount of principal amount not exceeding such
amount.
"INTEREST PERIOD" means with respect to each Eurodollar Rate Loan, a
period commencing on the date specified in the applicable Notice of Interest
Rate Election and ending one, two, three, six or, with the consent of the Banks,
nine or twelve calendar months thereafter, as the Partnership may elect in the
applicable Notice of Interest Rate Election; PROVIDED, that:
(a) any Interest Period which would otherwise end on a day which is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(c) no Interest Period shall be selected to be applicable to a PPA Loan
or portion thereof if such Interest Period ends after the next scheduled
principal payment date therefor pursuant to this Agreement unless, at the time
of such selection, there are outstanding Base Rate Loans and/or Eurodollar Rate
Loans the Interest Period(s) applicable to which, end on or before such
scheduled payment date which the Partnership reasonably determines are in an
aggregate principal amount at least equal to the amount of such next scheduled
principal payment; and
(d) no Interest Period shall end after the latest Required Payment Date.
"ISSUING BANK" has the meaning set forth in the preamble of this
Agreement.
"LOAN OBLIGATIONS" means the Drawings and the principal of all PPA Loans
(including but not limited to the Partnership's obligations in respect of
amounts not yet disbursed).
"MAXIMUM STATED AMOUNT" means (i) $15,000,000 from the Closing Date
until March 31, 2001 and (ii) on and after April 1, 2001, the Stated Amount as
of such date plus $10,000,000 (in each case as such terms are defined in the
PPA), reduced by, in each case, the amount of any PPA Term Loan made as the
result of a Term Conversion Event.
"MORTGAGE BASIS" means in respect of each PPA Term Loan, an amortization
schedule which, taking into account the interest rate applicable to such PPA
Term Loan determined in accordance with Section 2.7(d) and assuming payments are
made on Interest Payment Dates, results in levelized payment of the principal of
and interest on such PPA Term Loan to and including the PPA Term Loan Required
Payment Date applicable thereto.
"NON-RECOURSE PARTY" has the meaning specified in Section 9.7.
4
<PAGE>
"NON-RENEWAL EVENT" means the failure of the PPA Letter of Credit to
have been extended or replaced at least 10 days prior to the stated expiration
date of such PPA Letter of Credit.
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.6(b).
"OBLIGATIONS" means all of the Loan Obligations and any and all other
obligations of the Partnership to the Issuing Bank, the Banks or the Agent under
or in connection with the Credit Documents, whether for interest, fees,
expenses, indemnification or otherwise.
"PARTICIPANT" has the meaning set forth in Section 9.9(b).
"PARTNERSHIP" has the meaning set forth in the preamble of this
Agreement.
"PERCENTAGE INTEREST" means, for each Bank, the fraction, expressed as a
percentage, where the numerator is the Commitment of such Bank and the
denominator is the aggregate of all the Commitments held by all the Banks, as
set forth on the signature page opposite the name and signature of each
respective Bank or if applicable, in Schedule 1 to any Assignment and
Acceptance.
"PPA LETTER OF CREDIT" means a letter of credit in favor of PECO
substantially in the form of Exhibit A, issued or to be issued by the Issuing
Bank.
"PPA LOAN" means any PPA LOC Loan or PPA Term Loan, as applicable.
"PPA LOC LOAN" means a loan made as a result of Drawing on the PPA
Letter of Credit which, is not made upon the occurrence of a Non-Renewal Event.
"PPA LOC LOAN REQUIRED PAYMENT DATE" means, in respect of each PPA LOC
Loan, the earlier of (a) the date five years from the date such PPA LOC Loan is
made by the Banks pursuant to the terms of this Agreement and (b) the Final
Maturity Date.
"PPA TERM LOAN" means a PPA Term Loan made as a result of (i) the
occurrence of a Non-Renewal Event to fund a Drawing made upon such occurrence or
(ii) a Term Conversion Event.
"PPA TERM LOAN REQUIRED PAYMENT DATE" means, in respect of each PPA Term
Loan, the earlier of (a) the date five years from the date such PPA Term Loan is
made by the Banks pursuant to the terms of this Agreement and (b) the Final
Maturity Date.
"PURCHASING BANK" has the meaning set forth in Section 9.9(a).
"QUARTERLY DATE" has the meaning set forth in Section 2.5(a)
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
5
<PAGE>
"REGULATORY CHANGE" means, subsequent to the date of this Agreement, any
adoption or change in United States Federal, state or municipal or foreign law
or regulations (including Regulation D) or the adoption or change or making of
any application, interpretation, directive, request or guideline of or under any
United States Federal, state or municipal or foreign law or regulations by any
court, central bank or Governmental Authority.
"REQUIRED BANKS" means, at any time, Banks (one of which shall be the
Agent) owed at least 66-2/3% of the sum of Loan Obligations then outstanding
and/or the Commitments; PROVIDED, HOWEVER, that, if and so long as there are
only two Banks, then "Required Banks" shall mean both of such Banks.
"REQUIRED PAYMENT DATE" means in the case of any PPA LOC Loan, the PPA
LOC Loan Required Payment Date or in the case of a PPA Term Loan, the applicable
PPA Term Loan Required Payment Date.
"STATED AMOUNT" means the amount (not to exceed the Maximum Stated
Amount) available to be drawn under the PPA Letter of Credit as of any date, as
reduced and reinstated from time to time in accordance with the terms hereof.
"TAXES" means any and all present or future income, stamp, transfer,
turnover and other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, and any and all interest, penalties, claims or
other liabilities arising under or relating thereto, including those imposed on
any of the Banks or on payments to be made to or received by any of them from
the Partnership hereunder.
"TERM CONVERSION EVENT" means, in respect of a PPA LOC Loan, the failure
by the Partnership to have repaid (i) at least 50% of the original amount of
such PPA LOC Loan on the date 30 months after the making of such PPA LOC Loan or
(ii) the full amount of such PPA LOC Loan by the PPA LOC Loan Required Payment
Date.
"TERMINATION NOTICE" has the meaning set forth in Section 2.2(d).
Section 1.2 CONSTRUCTION. In this Agreement, unless expressly specified
to the contrary: the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to statutes or
regulations are to be construed as including all statutory or regulatory
provisions consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing, lithography and
other means of reproducing words in a tangible, visible form, but shall not
include electronic mail; the words "including," "includes" and "include" shall
be deemed to be followed by the words "without limitation;" references to
articles, sections (or subdivisions of sections), recitals, appendices,
exhibits, annexes or schedules are to those of this Agreement; references to
agreements and other instruments shall be deemed to include all amendments and
other modifications to such agreements and instruments, but only to the extent
such amendments and other modifications are not prohibited by the terms of this
Agreement; references to Persons include their respective permitted successors
and assigns and, in the case of Governmental Authorities, Persons succeeding to
their respective functions and capacities; and all accounting terms used in this
Agreement shall be interpreted, all accounting determinations under this
6
<PAGE>
Agreement shall be made and all financial statements required to be delivered
under this Agreement shall be prepared in accordance with GAAP as in effect from
time to time, on a basis consistent with the most recent audited financial
statements, if any, of the relevant Person delivered to the Agent, or otherwise
reasonably acceptable to the Agent.
ARTICLE II
PPA LETTER OF CREDIT
Section 2.1 COMMITMENTS. Each Bank irrevocably agrees severally, on the
terms and conditions contained in this Agreement, to participate in the PPA
Letter of Credit and each Drawing thereunder in the Percentage Interest of such
Bank and in an aggregate amount not to exceed at any time such Bank's
Commitment.
Section 2.2 AMOUNT AND TERM OF PPA LETTER OF CREDIT. (a) Subject to the
terms and conditions contained in this Agreement, the Issuing Bank irrevocably
agrees to issue the PPA Letter of Credit on the Closing Date for the account of
the Partnership and in the Maximum Stated Amount.
(b) If a Non-Renewal Event shall have occurred and PECO shall have made
a Drawing in accordance with Section 2.4, the PPA Letter of Credit shall
thereupon terminate.
(c) If a Term Conversion Event shall have occurred, and the Agent,
subject to the approval of the Required Banks, elects to convert any PPA LOC
Loan into a PPA Term Loan in accordance with Section 2.7(e), the Stated Amount
shall be reduced by an amount equal to the amount of the PPA LOC Loan so
converted and the Maximum Stated Amount correspondingly reduced.
(d) The Issuing Bank shall have the right, upon the occurrence and
during the continuance of an Event of Default, to deliver to the Collateral
Agent and PECO a notice in the form of Annex E to the PPA Letter of Credit (a
"TERMINATION NOTICE"), which notice shall be given at least sixty (60) days
prior to the date of termination referred to in such notice. After the delivery
by the Issuing Bank of a Termination Notice, the Stated Amount shall be neither
increased, nor reinstated upon payment of any PPA LOC Loans notwithstanding any
other provision of this Agreement to the contrary.
(e) The Agent shall, solely for informational purposes, deliver to the
Partnership a copy of any Termination Notice given to the beneficiary under the
PPA Letter of Credit; PROVIDED, HOWEVER, that the Banks' ability to terminate
the PPA Letter of Credit shall not be contingent upon the Agent's delivery to
the Partnership of such notice and that neither the Agent nor the Banks shall
incur any liability whatsoever as a result of the Agent's failure to deliver
such notice to the Partnership.
Section 2.3 PARTICIPATION IN PPA LETTER OF CREDIT. Simultaneously with
the issuance of the PPA Letter of Credit, the Issuing Bank shall be deemed to
have sold and transferred to each Bank, and each Bank shall be deemed to have
purchased and received from the Issuing
7
<PAGE>
Bank, in each case irrevocably and without any further action by any party, an
undivided interest and participation in the PPA Letter of Credit, each Drawing
and the other Loan Obligations in respect thereof in an amount equal to such
Bank's Percentage Interest therein. The Agent shall promptly advise each Bank of
any reduction in the Maximum Stated Amount, change in the Stated Amount or
Expiration Date in respect of the PPA Letter of Credit or the cancellation or
other termination of the PPA Letter of Credit and any Drawing; PROVIDED,
HOWEVER, that failure to provide such notice shall not limit or impair the
rights of the Agent hereunder or under the Financing Documents.
Section 2.4 DRAWING AND REIMBURSEMENT. (a) The payment by the Issuing
Bank of a Drawing shall constitute the making by the Issuing Bank of a loan to
the Partnership in the amount of such payment. In the event that a Drawing is
not repaid by the Partnership by 10:00 a.m. (New York City time), on the day of
such Drawing, the Agent shall promptly notify each other Bank. Each such Bank
(including the Issuing Bank in its capacity as a Bank) shall, on the day of such
notification, make a loan to the Partnership, which shall be used to repay the
applicable portion of the Issuing Bank's loan with respect to such Drawing, in
an amount equal to the amount of such Bank's Percentage Interest in such
Drawing, for application to repay the Issuing Bank (each such loan by a Bank,
which shall be either a PPA LOC Loan or a PPA Term Loan, to be referred to as a
"PPA LOAN"), and shall deliver to the Agent for the Issuing Bank's account, on
the day of such notification and in immediately available funds, the amount of
such PPA Loan. In the event that any Bank fails to make available to the Agent
for the account of the Issuing Bank the amount of such PPA LOC Loan, the Issuing
Bank shall be entitled to recover such amount on demand from such Bank together
with interest thereon at the Federal Funds Rate and until such reimbursement is
made, the unreimbursed amount of the Issuing Bank's loan shall be deemed to be a
PPA Loan (either a PPA LOC Loan or a PPA Term Loan, as applicable) for all
purposes of this Agreement.
(b) If a Non-Renewal Event shall have occurred, PECO shall be entitled
to make a Drawing on the PPA Letter of Credit in an amount equal to the Stated
Amount of the PPA Letter of Credit as in effect immediately prior to such
Drawing and the PPA Letter of Credit shall thereupon terminate.
Section 2.5 FEES. The Partnership shall pay the following fees to the
Agent for the respective accounts of the persons specified below:
(a) for the respective accounts of the Banks, a letter of credit fee
equal to the product of (i) the average daily Stated Amount and (ii) a per annum
rate equal to the average daily Applicable Margin for Eurodollar Rate Loans, as
in effect during the applicable period, payable quarterly in arrears on the
first Business Day of each February, May, August and November (each such
Business Day, a "QUARTERLY DATE") occurring after the Closing Date calculated on
the basis of a 360-day year for the actual number of days elapsed;
(b) from and including the Closing Date, for the account of the Issuing
Bank, a fronting fee equal to the product of (x) the average daily Stated Amount
and (y) 0.125% per annum payable quarterly in arrears on each Quarterly Date
occurring after the Closing Date calculated on the basis of a 360-day year for
the actual number of days elapsed;
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(c) from and after the Closing Date to and including April 1,
2001, for the account of each Bank an annual commitment fee, payable quarterly
in arrears on each Quarterly Date occurring after the Closing Date and
calculated on the basis of a 360 day year for the number of days elapsed in an
amount equal to 0.375% of the Additional Commitment; and
(d) such other fees specified in the fee letter among the
Partnership, the Agent.
Section 2.6 INTEREST. (a) RATE. The Partnership shall pay interest on
the unpaid principal amount of each PPA Loan for each day from the date such PPA
Loan is made until such principal amount has been paid in full as follows:
(i) BASE RATE LOANS. As to Base Rate Loans for each day until due at a
rate PER ANNUM equal to (x) the sum of the Adjusted Base Rate plus (y) the
Applicable Margin as in effect on such day payable monthly in arrears on the
first Business Day of each month; and
(ii) EURODOLLAR RATE LOANS. As to Eurodollar Rate Loans, for each day
until due at a rate PER ANNUM equal to the sum of (x) the Eurodollar Rate plus
(y) as in effect on such day the Applicable Margin, payable on the last day of
the applicable Interest Period or, if such Interest Period exceeds three months,
at intervals of three months from the first day of such Interest Period.
(iii) DEFAULT INTEREST. Interest payments for each day on any principal
amounts that have not been paid when due shall be payable at the Adjusted Base
Rate plus the Applicable Margin as in effect on such day plus 2%
(b) METHOD OF ELECTING INTEREST RATES. (i) Each PPA Loan shall
constitute a Base Rate Loan unless the Partnership elects otherwise pursuant to
the following provisions of this Section 2.6(b).
(ii) Each PPA Loan shall constitute a Base Rate Loan or a Eurodollar
Rate Loan as the Partnership may elect in accordance with this Section 2.6(b).
If no such election is timely made with respect to a PPA Loan, such PPA Loan
shall constitute a Base Rate Loan in accordance with Section 2.6(b)(i), provided
that, in the case of PPA Term Loans that arise on the occasion of a conversion
from PPA LOC Loans in accordance with Section 2.7(d) or 2.7(e), such PPA Term
Loans shall be continued as the same type of PPA Loan (i.e., Base Rate Loan or
Eurodollar Loan), and if any such PPA LOC Loan was a Eurodollar Loan, the then
current Interest Period shall continue after such conversion, until the end of
such Interest Period, at which time the provisions for election of Interest
Periods contained in this Section 2.6(b) shall apply. The Partnership may from
time to time elect to change or continue the interest rate borne by each PPA
Loan, subject to the conditions set forth below, as follows:
(A) with respect to PPA Loans that are Base Rate Loans, the
Partnership may elect to convert all or any portion of such PPA Loans to
Eurodollar Rate Loans as of any Business Day; and
(B) with respect to PPA Loans that are Eurodollar Rate Loans,
the Partnership may elect to convert all or any portion of such PPA
Loans to Base Rate Loans or elect to continue all or any portion of such
PPA Loans as
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Eurodollar Rate Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period applicable
to such PPA Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF INTEREST
RATE Election") to the Agent (1) in the case of a conversion to or continuation
of a Eurodollar Rate Loan, not later than 10:00 a.m. (New York City time) on the
third Business Day prior to the day on which such conversion or continuation is
to be effective or (2) in the case of a conversion to a Base Rate Loan, at any
time prior to the day on which such conversion is to be effective. Each Notice
of Interest Rate Election shall be in writing (including facsimile transmission)
or by voice, promptly confirmed in writing. A Notice of Interest Rate Election
may, if it so specifies, apply to only a portion of the aggregate principal
amount of the relevant PPA Loan.
(iii) Each Notice of Interest Rate Election shall specify:
(A) the PPA Loans (or portion thereof) together with amount of
each thereof to which such notice applies;
(B) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of subsection (ii) above;
(C) if PPA Loans are to be converted, each new type of PPA Loan
together with amount thereof, and if such new PPA Loans are Eurodollar
Rate Loans, the duration of the initial Interest Period applicable
thereto; and
(D) if such PPA Loans are to be continued as Eurodollar Rate
Loans for additional Interest Periods, the duration of such Interest
Periods.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period. No
conversion into or continuation of a Eurodollar Rate Loans shall be permitted
when a Default or an Event of Default has occurred and is continuing, and if a
Default or an Event of Default has occurred and is continuing, each Eurodollar
Rate Loan shall automatically be converted into a Base Rate Loan on the last day
of the then current Interest Period applicable thereto.
(iv) A Notice of Interest Rate Election shall not be revocable by the
Partnership. If the Partnership fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Eurodollar Rate Loan, such PPA Loans shall be
converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto.
(c) FUNDING LOSSES. If the Partnership makes any payment of principal
with respect to any Eurodollar Rate Loan or any Eurodollar Rate Loan is
converted to a Base Rate Loan on any day other than the last day of an Interest
Period applicable thereto, or if the Partnership fails to borrow, repay or
prepay any Eurodollar Rate Loan after notice has been given to the Agent in
accordance with the terms hereof, the Partnership shall reimburse the Agent, for
the ratable account of the Banks, within 30 days after demand for any resulting
loss or expense incurred by them, including any loss incurred in obtaining,
liquidating or employing deposits from third parties. Without prejudice to the
foregoing, the Partnership shall indemnify
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the Agent and the Banks against any direct (as opposed to consequential) loss or
expense that the Agent or the Banks may sustain or incur as a consequence of a
failure by the Partnership in payment of principal of, or interest on, any
Eurodollar Rate Loan, or any part thereof, including any interest, premium or
penalty paid by the Agent or any Bank to lenders of funds borrowed by it or
deposited with it for the purpose of making or maintaining such Eurodollar Rate
Loan. A certificate as to the amount of any such loss or expense in reasonable
detail (specifying the basis of such loss or expense) shall be promptly
submitted by the Agent, or by any Bank through the Agent, to the Partnership and
shall be conclusive and binding as to the amount thereof, absent manifest error.
(d) BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. If on or
prior to the first day of any Interest Period for any Eurodollar Rate Loan:
(i) the Agent or any Bank determines, in its reasonable
judgment, that deposits in Dollars (in the applicable amounts) are not
being offered to the Agent or such Bank in the relevant market for such
Interest Period, or
(ii) the Agent or such Bank, in its reasonable judgment, shall
determine that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Agent or such Bank of funding its Eurodollar
Rate Loans for such Interest Period,
the Agent, or such Bank through the Agent, shall forthwith give notice thereof
(which notice shall describe in reasonable detail the basis for such
determination) to the Partnership, whereupon until the Agent, or such Bank
through the Agent, notifies the Partnership that the circumstances giving rise
to such suspension no longer exist, (A) the obligations of the Agent or such
Bank to make or continue Eurodollar Rate Loans or to convert outstanding PPA
Loans into Eurodollar Rate Loans shall be suspended and (B) each outstanding
Eurodollar Rate Loan, or if a Bank only shall be affected, each Eurodollar Rate
Loan held by such Bank shall be converted into a Base Rate Loan on the last day
of the then current Interest Period applicable thereto.
(e) MAXIMUM RATE. This Agreement is hereby expressly limited so that in
no contingency or event, whether by reason of acceleration of the maturity of
any indebtedness hereunder or otherwise, shall the interest contracted for or
charged or received by the Banks exceed the maximum amount permissible under
Applicable Law. If, from any circumstance whatsoever, interest would otherwise
be payable to the Banks in excess of the maximum lawful amount, the interest
payable to the Banks shall be reduced to the maximum amount permitted under
Applicable Law, and the amount of interest for any subsequent period, to the
extent less than that permitted by Applicable Law, shall to that extent be
increased by the amount of such reduction.
Section 2.7 REPAYMENT. (a) The Partnership shall repay the principal
amount of each PPA LOC Loan in accordance to the provisions of Exhibit C
applicable to PPA LOC Loans. Each PPA LOC Loan shall mature and be paid in full
on the applicable PPA LOC Loan Required Payment Date.
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(b) The Issuing Bank shall reduce the Stated Amount by the principal
amount of each PPA LOC Loan.
(c) Subject to Sections 2.2 and 6.2, the Issuing Bank shall, upon
receipt of written notice from the Partnership, reinstate the Stated Amount to
the extent of any repayment or prepayment of the principal amount of any PPA LOC
Loan; provided, that such reinstatement shall not cause the Stated Amount to
exceed the Maximum Stated Amount as then in effect. The Issuing Bank shall
provide notice to PECO in the form of Annex D if the Letter of Credit is
reinstated.
(d) Each PPA Term Loan (including the PPA Term Loans made after a
Non-Renewal Event and any PPA Term Loan made upon a conversion of a PPA LOC Loan
after the occurrence of a Term Conversion Event) shall, in accordance with
Exhibit C, (i) amortize and be payable on successive Scheduled Payment Dates in
amounts of principal and interest computed on a Mortgage Basis, and (ii) finally
mature and be due and payable on the applicable PPA Term Loan Required Payment
Date in the amount of remaining principal thereof and accrued interest thereon.
(e) If a Term Conversion Event shall have occurred as to any PPA LOC
Loan, then from and after the date such Term Conversion Event occurs, the Agent
may, subject to the approval of the Required Banks and upon 15 Business Days'
prior written notice to the Partnership and the other Senior Parties, convert
such PPA LOC Loan into a PPA Term Loan.
Section 2.8 PREPAYMENTS. The Partnership may, at any time and from time
to time on any Business Day, upon prior written notice to the Agent not later
than 11:00 a.m. (New York City time), at least one Business Day before the day
of any prepayment of the PPA LOC Loans, such notice stating the proposed date
and aggregate principal amount of the prepayment, and if such notice is given
the Partnership shall, prepay without premium or penalty, except as provided in
Section 2.6(c), the outstanding principal amounts of the PPA LOC Loans in whole
or in part, together with accrued interest to the date of such prepayment on the
principal amount prepaid. PPA Term Loans shall be prepaid ratably with the Bonds
in the event the Bonds are prepaid, provided that in the event that an LOC Sweep
Notice shall have been given, the PPA Term Loans may be prepaid in accordance
with Section 3.3(c) of the Collateral Agency Agreement.
All prepayments made hereunder shall be applied by the Agent and the
Banks against the installments of principal amount of outstanding PPA Loans of a
particular class (i.e., PPA LOC Loans or PPA Term Loans), in inverse order of
maturity; such prepayments shall first be applied to the prepayment of
outstanding Base Rate Loans of a particular class (i.e., PPA LOC Loans or PPA
Term Loans) to the extent thereof and then to the prepayment of outstanding
Eurodollar Rate Loans of such class.
Section 2.9 SECURITY. The Obligations shall be secured by the Security
Documents, the rights and remedies in respect of which shall be exercised
pursuant to the Collateral Agency Agreement.
Section 2.10 PAYMENTS. (a) The Partnership shall make each payment
hereunder not later than 10:00 a.m. (New York City time), on the day when due to
the Agent at its address set
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forth in Section 9.2, in Dollars in immediately available funds. The Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal (including reimbursement of Drawings), interest or fees ratably
(other than amounts payable for the account of the Issuing Bank pursuant to
Section 2.5(a) and (b), which shall be payable solely to the Issuing Bank, or
payable pursuant to Section 9.4) to the Banks and like funds relating to the
payment of any other amount payable to any Bank, to such Bank, in each case to
be applied in accordance with the terms of this Agreement. The Agent may
withhold from any interest payment to any Bank an amount equal to any applicable
withholding tax (including upon the failure of any Bank to provide the forms or
other documentation required under Section 2.17(f)).
(b) Unless the Agent receives notice from the Partnership before the
date on which any payment is due to the Banks hereunder that the Partnership
will not make such payment in full, the Agent may assume that the Partnership
has made such payment in full to the Agent on such date, and the Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due to such Bank. If and to the extent
that the Partnership has not so made such payment in full to the Agent on the
date on which such payment is due, each Bank agrees, irrevocably and without
qualification or exception, to repay to the Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each day
from the date such amount is distributed to such Bank until the date on which
such Bank repays such amount to the Agent, at the Federal Funds Rate.
(c) All payments made by the Partnership to each of the Banks and the
Agent under this Agreement will be made without set-off, counterclaim or other
defense.
Section 2.11 COMPUTATION OF INTEREST AND FEES. All computations of
interest hereunder for Eurodollar Rate Loans shall be made on the basis of a
year of 360 days and for Base Rate Loans shall be made on the basis of a year of
365/366 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable. Each calculation and each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
Section 2.12 PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment
hereunder is stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest or
fees, as the case may be. If no due date is specified for the payment of any
amount payable by the Partnership hereunder, such amount shall be due and
payable not later than 10 Business Days after receipt by the Partnership of
written demand from the Agent for payment thereof.
Section 2.13 SHARING OF PAYMENTS, ETC. (a) Each Bank agrees that if, as
a result of the exercise of a right of set-off, banker's lien or counterclaim or
other similar right or the receipt of a secured claim it receives any payment in
respect of the PPA Loans or other Obligations hereunder it shall promptly notify
the Agent thereof (and the Agent shall promptly notify the other Banks). If, as
a result of such payment, such Bank receives a greater percentage of the
Obligations owed to it under this Agreement than the percentage received by any
other Bank, such Bank shall purchase a participation (which it shall be deemed
to have purchased
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simultaneously upon the receipt of such payment) in the Obligations then held by
such other Banks so that all such recoveries of principal and interest with
respect to all Obligations owed to each Bank shall be pro rata on the basis of
its respective amount of such Obligations owed to all Banks; PROVIDED, that if
all or part of such proportionately greater payment received by such purchasing
Bank is thereafter recovered by or on behalf of the Partnership from such Bank,
such purchase shall be rescinded and the purchase price paid for such
participation shall be returned to such Bank to the extent of such recovery, but
without interest.
(b) Each Bank which receives a secured claim as described in
subsection (a) above shall, to the extent practicable, exercise its rights in
respect of such secured claim in accordance with such subsection (a) and
otherwise in a manner consistent with the rights of the Banks entitled under
this Section 2.13 to share in the benefits of any recovery on such secured
claim.
(c) The Partnership expressly consents to the foregoing
arrangements and agrees that any holder of a participation in any Obligation so
purchased or otherwise acquired of which the Partnership has received notice may
exercise any and all rights of set-off, banker's lien or counterclaim with
respect to any and all monies owing by the Partnership to such holder as fully
as if such holder were a holder of such Obligation in the amount of the
participation held by such holder.
Section 2.14 EVIDENCE OF DEBT. (a) The indebtedness of the Partnership
resulting from all PPA Loans shall be evidenced by this Agreement.
(b) The books and accounts of the Agent shall be conclusive evidence,
absent manifest error, of the amounts of all Drawings, PPA Loans, fees, interest
and other amounts advanced, due, outstanding, payable or paid pursuant to this
Agreement.
Section 2.15 INCREASED COSTS AND REDUCED RETURNS. (a) If, on or after
the date hereof, the adoption of any Applicable Law, or any change therein, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Agent or any Bank with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject the Agent or such Bank to any tax, duty or
other charge (other than routine examination fees or Taxes) with respect
to the Eurodollar Rate Loans or its obligation to make or continue
Eurodollar Rate Loans, or shall change the basis of taxation of payments
to the Agent or any Bank of the principal of or interest on its
Eurodollar Rate Loans or any other amounts due under this Agreement in
respect of its Eurodollar Rate Loans or its obligation to make or
continue PPA Loans or Eurodollar Rate Loans (except for changes in the
rate of tax on the net income of the Agent or such Bank imposed by the
federal, state or local jurisdiction in which the Agent's or such Bank's
principal executive office is located); or
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(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including any such requirement
imposed by the Board of Governors of the Federal Reserve System, but
excluding with respect to any Eurodollar Rate Loan any such requirement
provided in Section 2.17(b), against assets of, deposits with or for the
account of, or credit extended by, the Agent or any Bank or shall impose
on the Agent or any Bank or on the London interbank market any other
condition affecting the Eurodollar Rate Loans or its obligation to
advance Eurodollar Rate Loans;
and the result of any of the foregoing is to increase the cost to the Agent or
such Bank of making or continuing any Eurodollar Rate Loan or to reduce the
amount of any sum received or receivable by the Agent or such Bank under this
Agreement with respect thereto by an amount deemed by the Agent or such Bank to
be material, then, the Agent, or such Bank through the Agent, shall deliver to
the Partnership as promptly as practicable a certificate setting forth in
reasonable detail the additional amounts that the Agent or such Bank, as the
case may be, determines will fully compensate it for such reduction, increased
cost or payment and the basis for the determination of such amount; PROVIDED,
that the Partnership shall not be obligated to compensate the Agent or any Bank
for the amount of such increased cost incurred with respect to a period of time
prior to the date which is 90 days before the date on which the Agent first
notifies the Partnership of a claim for such compensation or that an event had
occurred which will entitle the Agent or a Bank to such compensation. Any such
amount claimed by the Agent or any Bank shall, in the case of clause (i) above,
be net of applicable tax savings, if any, directly attributable thereto. Within
15 Business Days after demand by the Agent, the Partnership shall pay to the
Agent, for its account or for the account of the applicable Bank, as the case
may be, such additional amount shown as due on any such certificate, absent
manifest error.
(b) In the event that the Agent or any Bank shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
on all the parties hereto) at any time that the Agent or such Bank is required
to maintain reserves in respect of Eurocurrency Liabilities during any period
during which any PPA Loan owing to it bears interest based on the Eurodollar
Rate (each such period, for the Agent or such Bank, a "EUROCURRENCY RESERVE
PERIOD"), but only in respect of any period during which any reserve shall
actually be maintained by the Agent or such Bank for any Eurodollar Rate Loan as
a result of a reserve requirement applicable to it under Regulation D in
connection with Eurocurrency Liabilities, then the Agent, or such Bank through
the Agent, shall promptly give notice to the Partnership of such determination,
and the Partnership shall directly pay to the Agent, for its account or for the
account of the applicable Bank, as the case may be, additional interest on the
unpaid principal amount of such PPA Loan during such Eurocurrency Reserve Period
at a rate PER ANNUM which shall, during each monthly period applicable to such
PPA Loan, be the amount by which (x) the Eurodollar Rate for such monthly period
divided (and rounded upward to the next whole multiple of 1/100 of 1%) by a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable to the Agent or such Bank in respect of Eurocurrency
Liabilities exceeds (y) the Eurodollar Rate for such monthly period. The Agent,
or such Bank through the Agent, shall furnish along with such notice a
certificate setting forth in reasonable detail the cost actually incurred to
maintain such reserves and the basis for the determination of such amount;
PROVIDED, that the Partnership shall not be obligated to compensate the Agent or
any Bank for the amount of such increased cost incurred with respect to a period
of time prior to the date which is 90 days
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before the date on which the Agent first notifies the Partnership of a claim for
such compensation or that an event has occurred which will entitle the Agent or
a Bank to such compensation. Additional interest payable pursuant to the
immediately preceding sentence shall be paid by the Partnership at the time that
it is otherwise required to pay interest in respect of such PPA Loan, or, if
later demanded by the Agent or any Bank, promptly on demand. Each of the Agent
and the Banks agrees that, if notice is given to the Partnership of the
existence of a Eurocurrency Reserve Period, the Agent, or the applicable Bank
through the Agent, shall promptly notify the Partnership of any termination
thereof, at which time the Partnership shall cease to be obligated to pay
additional interest to the Agent or such Bank pursuant to the first sentence of
this paragraph until such time, if any, as a subsequent Eurocurrency Reserve
Period shall occur.
(c) The Agent, and each Bank through the Agent, will promptly notify the
Partnership of any event of which it has knowledge, occurring after the date
hereof, which will entitle the Agent or such Bank to compensation pursuant to
this Section and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the sole judgment of the Agent or such Bank, be otherwise
disadvantageous to the Agent or such Bank.
Section 2.16 CAPITAL ADEQUACY. If the Agent or any Bank shall determine
that, after the date hereof, the adoption of any Applicable Law regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of the Agent or such Bank or
its holding company as a consequence of the Agent's or such Bank's obligations
hereunder to a level below that which the Agent or such Bank could have achieved
but for such adoption, change, request or directive (taking into consideration
its policies with respect to capital adequacy) by an amount deemed by the Agent
or such Bank to be material, then the Agent, or such Bank through the Agent,
shall deliver to the Partnership as promptly as practicable (but in no event
later than 120 days after the Agent or such Bank has actual knowledge of such
claim for capital adequacy) a certificate setting forth in reasonable detail the
amount being charged by the Agent or such Bank and the basis for the
determination of such amount. Within 15 Business Days after the delivery of such
certificates by the Agent, the Partnership shall pay to the Agent, for its
account or for the account of the applicable Bank, as the case may be, the
amount shown as due on any such certificate.
Section 2.17 TAXES. (a) Payments by the Partnership to the Agent and the
Banks under this Agreement will be made free and clear of and without deduction
for Taxes, other than Taxes based on the net income of the Agent or any Bank
(including franchise taxes imposed in lieu of net income taxes) imposed by (i)
the United States federal government, (ii) the jurisdiction where the Agent or
such Bank is organized or has its principal office or (iii) the jurisdiction of
the branch of such Bank maintaining any PPA Loan or the branch of the Agent
through which it renders its services as the Agent ("EXCLUDED TAXES"). If the
Partnership is required by law to deduct Taxes (other than Excluded Taxes) from
such a payment, then the sum payable under the instrument to which the payment
relates will be increased so that such deduction does not result in a diminution
in the amount the Agent or any Bank actually receives.
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(b) To the extent permitted by law, without duplication of amounts paid
by the Partnership under Section 2.17(a), the Partnership hereby indemnifies and
holds harmless the Agent and each Bank from and against, and agrees to reimburse
the Agent and each Bank on an after-tax basis (computed taking into account any
deductions or other benefits available for federal income tax purposes for the
Agent or such Bank if it is a United States taxpayer and any deductions and
benefits available for income tax purposes in any jurisdiction in which the
Agent or such Bank is a taxpayer) on demand for, any and all Taxes paid or
incurred by the Agent or such Bank in connection with the transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that the foregoing indemnity
does not cover Excluded Taxes. Reimbursement on an "after-tax basis" means on a
basis such that the Agent or such Bank is made whole after taking into account
income taxes that the Agent or such Bank will owe on the indemnity or
reimbursement payment in any jurisdiction and any related tax benefits, assuming
the Agent or such Bank is subject to income taxes at the highest marginal rates.
Nothing in this paragraph shall interfere with the right of the Agent or any
Bank to arrange its tax affairs in whatever manner it thinks fit and, in
particular, the Agent and the Banks are under no obligation to claim a deduction
or other benefit relating to these transactions ahead of any other claim,
relief, credit, deduction or other benefit to which it is entitled. The Agent,
or applicable Bank through the Agent, shall promptly give written notice to the
Partnership office (but in no event later than 60 days) the Agent or such Bank
has actual knowledge of the imposition of any Taxes subject to indemnification
hereunder; PROVIDED, HOWEVER, that failure to give such notice within such 60
day period will not relieve the Partnership of the obligation to indemnify the
Agent or such Bank in accordance with the terms hereof, except to the extent of
interest that would have been avoided had the notice been given prior to the end
of such 60-day period.
(c) The Partnership will provide evidence that all Taxes imposed on
payments under this Agreement, any PPA Loan have been fully paid to the
appropriate authorities by delivering official receipts or notarized copies to
the Agent within 15 Business Days after payment. The Partnership will compensate
the Agent or any Bank that has to pay any Taxes because the Partnership failed
to timely furnish such evidence; PROVIDED, that prior to paying such Taxes, the
Agent, or such Bank through the Agent, shall have notified the Partnership of
its intent to make such payment.
(d) If the Partnership so requests promptly in writing after receipt of
any notice under Section 2.17 hereof, the Agent or applicable Bank will contest
in good faith the Taxes at the Partnership's expense, keep the Partnership fully
informed about the progress of the contest, consult in good faith with the
Partnership's counsel regarding conduct of the contest, and not compromise or
otherwise settle the contest without the Partnership's consent (which shall not
be unreasonably withheld or delayed); PROVIDED, that the Agent or such Bank may
in its sole discretion select the forum for the contest and determine whether
the contest will be by resisting payment of the Taxes or by paying the Taxes and
seeking a refund; PROVIDED, FURTHER that the Agent or such Bank will be under no
obligation to contest unless (A) if the Agent or such Bank requests, the
Partnership has provided the Agent or such Bank an opinion of independent tax
counsel selected by the Partnership and reasonably acceptable to the Agent or
such Bank to the effect that there is a reasonable basis for the contest, (B)
the amount in controversy is at least $75,000, (C) the Agent or such Bank has
received satisfactory indemnification and security for any liability, loss, cost
or expense arising out of the contest (including, but not limited to, all
reasonable legal and accounting fees and expenses, penalties, interest and
additions to tax), (D) if
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requested by the Agent or such Bank, the Partnership has admitted in writing its
duty to indemnify the Agent or such Bank for the Taxes if the contest is lost
(but such admission shall not preclude the Partnership from raising a defense to
liability if a court of competent jurisdiction has rendered a decision
articulating the cause of such Taxes, and the cause is not one for which the
Partnership is responsible under this Section 2.17), and (E) if the contest is
conducted in a manner that requires paying all or part of the Taxes, the
Partnership has paid the amount required.
(e) If the Partnership so requests within 10 days of notice to the
Partnership of the imposition of any Taxes on payments to any of the Banks of a
type not generally imposed on United States or foreign lenders making advances
of the types contemplated hereunder, such Banks shall (consistent with legal and
regulatory restrictions) comply with Section 2.19 hereof.
(f) At such times as may be required by Applicable Law or as the Agent
or the Partnership may reasonably request, each Bank agrees that it will deliver
to the Agent and the Partnership duly completed forms of any applicable
jurisdiction or other documentation reasonably satisfactory to the Agent and the
Partnership that such Bank is entitled to receive payments under this Agreement
without deduction or withholding of income tax under the Applicable Law of such
jurisdiction. Each Bank further agrees to notify the Agent and the Partnership
of the occurrence of any event (including any change in treaty, law or
regulation) that would render such Bank unable to receive payments hereunder
without such deduction or withholding.
Section 2.18 ILLEGALITY. If, on or after the date of this Agreement, the
adoption of any Applicable Law, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or any Bank with any request or directive
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency shall make it unlawful or impossible for the
Agent or such Bank to make, continue or convert its Eurodollar Rate Loans, the
Agent, or such Bank through the Agent, shall so notify the Partnership,
whereupon until the Agent, or such Bank through the Agent, notifies the
Partnership that the circumstances giving rise to such suspension no longer
exist, the obligation of the Agent or such Bank to make or continue Eurodollar
Rate or convert outstanding PPA Loans into Eurodollar Rate Loans, shall be
suspended. Before giving any notice to the Partnership pursuant to this Section,
the Agent or applicable Bank shall designate a different lending office for the
Eurodollar Rate Loans if such designation will avoid the need for giving such
notice and will not, in the sole judgment of the Agent or such Bank, be
otherwise disadvantageous to the Agent or such Bank. If such notice is given,
each Eurodollar Rate Loan of the Agent or such Bank then outstanding shall
either (i) be converted to a Base Rate Loan on the last day of the then current
Interest Period applicable to such Eurodollar Rate Loan if the Agent or such
Bank may lawfully make or continue such PPA Loan to such day, or (ii) be
immediately converted to a Base Rate Loan if the Agent or such Bank shall
determine that it may not lawfully continue to make or continue such PPA Loan to
such day; PROVIDED, that the Partnership shall not be obligated to make any
payment pursuant to Section 2.6(c) as a result of such conversion. If the
Partnership so requests within 10 days of receipt of the notice referred to
above, the applicable Bank shall (consistent with legal and regulatory
restrictions) comply with Section 2.19 hereof.
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Section 2.19 REDUCTION IN COMMITMENTS/REIMBURSEMENTS. The Partnership
shall have the right to refinance the Commitment and any outstanding PPA Loans,
if any, without premium or penalty, except as provided in Section 2.6(c), upon
at least 10 Business Days' prior written notice to the Agent.
Section 2.20 RIGHT OF SET-OFF. Subject to the terms and conditions of
the Collateral Agency Agreement, the Partnership hereby authorizes each Bank (in
addition to, and without limitation of, any right of set-off, banker's lien or
counterclaim a Bank may otherwise have), upon the occurrence and during the
continuance of any Event of Default, at any time and from time to time, without
notice to the Partnership or any Person other than the Collateral Agent (any
such notice being hereby expressly waived by the Partnership to the extent it
may legally do so) to set off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held, and
other indebtedness at any time owing, by such Bank in any of its offices,
wherever located (whether such deposits or indebtedness be in dollars or in any
other currency), to or for the credit or the account of the Partnership against
any and all of the Obligations and liabilities of the Partnership now or
hereafter existing under this Agreement, irrespective of whether or not such
Bank shall have made any demand hereunder or thereunder and although such
Obligations may be contingent or unmatured.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO CLOSING DATE. The occurrence of the
Closing Date is subject to satisfaction or waiver of the following conditions
precedent:
(a) issuance of the Bonds;
(b) the Agent shall have received the following, each dated on or before
the Closing Date, in form and substance satisfactory to the Agent:
(i) the Common Agreement and the Collateral Agency Agreement
each duly executed by the parties thereto;
(ii) this Agreement duly executed by the Partnership;
(iii) an original of each of the Security Documents, duly
executed by the parties thereto;
(iv) written opinions of counsel covering such matters as the
Agent may reasonably request; and
(v) evidence reasonably satisfactory to the Agent that all
actions necessary or appropriate in order to effectively establish,
create or perfect the Security Interest have been duly taken.
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(c) receipt by the Issuing Bank of a copy of the report of the
Independent Engineer in form and substance reasonably satisfactory to the Agent;
(d) receipt by the Issuing Bank of a copy of the Market Study in form
and substance reasonably satisfactory to the Agent; and
(e) payment by the Partnership of all accrued fees and expenses (as
provided in Sections 2.5 and 9.4) of the Agent and the Banks (including the
reasonable accrued fees and disbursements of counsel to the Agent and the
Banks), to the extent that one or more statements for such fees and expenses
have been presented for payment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF PARTNERSHIP. The
Partnership hereby makes for the benefit of the Agent and the Banks all of the
representations and warranties of the Partnership contained in Article IV of the
Common Agreement (which representations and warranties are incorporated by
reference herein as if fully set forth herein together with all related
definitions and which representations and warranties shall be true and correct
as of the date hereof and the Closing Date).
ARTICLE V
COVENANTS
Section 5.1 COVENANTS. So long as any Commitment is in effect, the PPA
Letter of Credit is outstanding or the Obligations remain unpaid, the
Partnership shall observe and perform all of the covenants of the Partnership
contained in Article V of the Common Agreement (which covenants together with
all related definitions are incorporated herein by reference as if fully set
forth herein.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default" under this Agreement so long as the same shall be continuing:
(a) any principal of any PPA Loans is not paid in full within 5 days
after the due date thereof;
(b) the Partnership shall fail to pay any amount due (other than amounts
due pursuant to Section 6.1(a)) under this Agreement within 15 days after the
due date thereof; or
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(c) an "Event of Default" under the Common Agreement shall have occurred
and be continuing.
Section 6.2 REMEDIES. Upon the occurrence and during the continuation of
an Event of Default, the Agent shall, at the request of the Required Banks, take
one or more of the following actions: (i) after giving any required notice to
the beneficiary of the PPA Letter of Credit and the lapse of the time period
required prior to termination of the PPA Letter of Credit, terminate the PPA
Letter of Credit in accordance with Section 2.2(d), (ii) declare the
Obligations, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, including but not limited to the
amount of any and all PPA Loans which may be made upon a Drawing under the PPA
Letter of Credit which occurs after the date on which the Agent declares such
amounts to be due and payable, but prior to the effective date of a termination
of the PPA Letter of Credit in accordance with Section 2.2(d), whereupon the
Obligations, all such interest and all such amounts shall become and be
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Partnership,
(iii) terminate the ability of the Partnership to cause reinstatement of the
Stated Amount through the reimbursement of Drawings, as contemplated by the
terms hereof or (iv) terminate the ability of the Partnership to continue PPA
Loans as, or convert PPA Loans to, Eurodollar Rate Loans; PROVIDED, that the
Agent and the Banks shall not have the right to exercise any other remedy
otherwise available to the Agent or any Bank except in accordance with the
provisions of the Collateral Agency Agreement.
Section 6.3 COLLATERALIZATION UPON ACCELERATION OF THE BONDS. In the
event that an Event of Default hereunder results from an "EVENT OF DEFAULT"
under the Common Agreement and the Trustee accelerates amounts due under the
Common Agreement, the Maximum Stated Amount shall be entitled to
collateralization pursuant to the terms of the Collateral Agency Agreement by
having the Collateral Agent deposit (in a separate account to be held by the
Collateral Agent), at the time that any amounts are paid to the Trustee in
respect of accelerated amounts due under the Common Agreement, an amount equal
to the amount that would have been disbursed to the Agent at such time (based on
pro rata payment requirements) if Drawings had been made to the full extent of
the Stated Amount ("DEEMED PPA LOC LOANS") and the Deemed PPA LOC Loans had been
accelerated at the same time as an acceleration under the Indenture. Upon a
Drawing on the PPA Letter of Credit, a portion of the amount in the separate
account equal to such Drawing's proportionate share of the Maximum Stated Amount
shall be transferred by the Collateral Agent to the Agent. The Agent, the
Issuing Bank and each Bank agree that upon termination or expiration of the PPA
Letter of Credit, all amounts in such separate collateral account that have not
been transferred pursuant to the previous sentence (to the extent of such
expiration or termination) shall be transferred to the Collateral Agent.
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ARTICLE VII
CHARACTER OF OBLIGATIONS
Section 7.1 OBLIGATIONS ABSOLUTE. The Obligations shall be absolute,
unconditional and irrevocable and shall not be affected or impaired under any
circumstances whatsoever, including the following circumstances:
(a) any lack of validity or enforceability of any provision of any
Project Document or Financing Document;
(b) any amendment or waiver of, or any consent to departure from, any
provision of any Project Document or Financing Document;
(c) the existence of any claim, set-off, defense or other right that the
Partnership may have at any time against the beneficiary of the PPA Letter of
Credit (or any Person for whom such beneficiary may be acting), any Bank, the
Agent or any other Person, whether in connection with any Project Document or
Financing Document, the transactions contemplated thereby or any unrelated
transaction;
(d) any statement or signature in any certificate or other document
presented under the PPA Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect, or any such statement being untrue or
inaccurate in any respect whatsoever;
(e) any exchange, release or nonperfection of any Collateral or other
collateral, or any release, amendment or waiver of or consent to departure from
any Project Document, Financing Document or any guaranty, for any of the
Obligations;
(f) payment by the Issuing Bank under the PPA Letter of Credit against
presentation of a draft or certificate that does not comply with the terms of
the PPA Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
Section 7.2 LIMITED LIABILITY OF AGENT AND BANKS. As among the
Partnership, the Agent and the Banks (including the Issuing Bank), the
Partnership assumes all risks of the acts or omissions of the beneficiaries of
the PPA Letter of Credit with respect to the use of the PPA Letter of Credit.
Neither the Agent nor any Bank nor any of their respective officers, directors,
employees or agents shall be liable or responsible for (i) the use that may be
made of the PPA Letter of Credit or any acts or omissions of any beneficiaries
of the PPA Letter of Credit in connection with the PPA Letter of Credit; (ii)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted in connection with the PPA Letter of Credit or of any
endorsement thereon, even if such document or endorsement should prove to be
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in any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(iii) payment by the Issuing Bank against presentation of any document that does
not comply with the terms of the PPA Letter of Credit, including failure of any
document to bear any reference or adequate reference to the PPA Letter of
Credit; or (iv) any other circumstance whatsoever in making, delaying to make or
failing to make payment under the PPA Letter of Credit; PROVIDED, however, that
the Partnership shall have a claim against the Issuing Bank, and the Issuing
Bank shall be liable to the Partnership, to the extent of any direct, as opposed
to consequential, damages suffered by the Partnership that the Partnership
proves were the result of the Issuing Bank's willful misconduct or gross
negligence in paying under the PPA Letter of Credit or the Issuing Bank's
willful or grossly negligent failure to pay under the PPA Letter of Credit after
the presentation to it by the beneficiary of a draft and certificate strictly
complying with the terms and conditions of the PPA Letter of Credit (unless the
Issuing Bank in good faith believed itself (based upon an opinion of counsel) to
be prohibited by law or legal authority from making such payment). In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
any document that appears on its face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
ARTICLE VIII
THE AGENT
Section 8.1 AUTHORIZATION AND ACTION. (a) Each Bank hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by the Credit Documents (including
enforcement of and collection under any Credit Document or other Project
Document), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Banks, and such instructions shall be binding upon all Banks;
PROVIDED, HOWEVER, that the Agent shall not be required to take any action that,
in the Agent's sole judgment, exposes the Agent to personal liability or that is
contrary to any Credit Document or other Project Document or Applicable Law. In
performing its function and duties hereunder as Agent, the Agent shall act
solely as the agent of the Banks and in its capacity as Issuing Bank, the
Issuing Bank shall act solely as issuer of the PPA Letter of Credit, and does
not assume and shall not be deemed to have assumed in either such capacity any
obligation towards or relationship of agency or trust or other fiduciary
relationship with or for the Partnership or any other party to any Project
Document.
(b) Each Bank hereby authorizes the Agent in the name of and on behalf
of such Bank to sign such documents, take all such actions and perform such
obligations that the Agent deems necessary or appropriate to bind each of the
Banks under the Credit Documents and to create, perfect or maintain the
existence or perfected status of any security interest created pursuant to any
such Credit Documents.
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Section 8.2 AGENT'S RELIANCE, ETC. Neither the Agent nor the Issuing
Bank nor any of its or their directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with any Credit Document or other Project Document, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Agent and the Issuing Bank (i) may treat any
Bank that has signed an Assignment and Acceptance as the holder of the
applicable portion of the Obligations; (ii) may consult with legal counsel
(including counsel for the Partnership or any Affiliate), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with any
Credit Document or other Project Document; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of any Credit Document or other Project Document on the
part of the Partnership or any Affiliate or to inspect the property (including
the books and records) of the Partnership or any Affiliate thereof; (v) shall
not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Credit Document or
other Project Document or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall incur no liability under or in respect of any
Credit Document or other Project Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier or
otherwise) believed by it to be genuine and signed or sent by the proper party
or parties.
Section 8.3 THE AGENT, THE ISSUING BANK AND AFFILIATES. With respect to
its Commitment and participation in the PPA Letter of Credit, the Issuing Bank
shall have the same rights and powers under this Agreement as any other Bank and
may exercise the same as though it were not the Agent or the Issuing Bank, as
the case may be; and the term "BANK" or "BANKS" shall, unless otherwise
expressly indicated, include the Agent and the Issuing Bank in their capacity as
a Bank (including the Issuing Bank in its capacity as such). The Agent and the
Issuing Bank and their Affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind of business
with, the Partnership, any Affiliate thereof and any Person that may do business
with or own securities of the Partnership or any Affiliate thereof, all as if
the Agent and the Issuing Bank, respectively, were not the Agent and the Issuing
Bank and without any duty to account therefor to the Banks.
Section 8.4 BANK CREDIT DECISION. Each Bank agrees that it has,
independently and without reliance on the Agent, the Issuing Bank or any other
Bank and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Bank also agrees that it will, independently and without reliance on the Agent,
the Issuing Bank or any other Bank and based on such documents and information
as it deems appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
Section 8.5 INDEMNIFICATION. The Banks agree to indemnify the Agent and
the Issuing Bank (to the extent not promptly reimbursed by the Partnership and
without limiting the obligation of the Partnership to do so), on demand, ratably
according to such Bank's Percentage Interest, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
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judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever that may at any time (including at any time following the payment of
any Obligations or termination of this Agreement) be imposed on, incurred by or
asserted against the Agent or the Issuing Bank in any way relating to or arising
out of any Credit Document or other Project Document or any action taken or
omitted by the Agent under any Credit Document or other Project Document;
PROVIDED, HOWEVER, that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting solely from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank agrees to reimburse the Agent promptly upon demand for its ratable
share of any costs and expenses payable by the Partnership under Section 9.4, to
the extent that the Agent is not reimbursed for such costs and expenses by the
Partnership.
Section 8.6 SUCCESSOR AGENT. The Agent may resign at any time by giving
30 days prior written notice thereof to the Banks and the Partnership and may be
removed at any time with or without cause with the written approval of the
Required Banks. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent with the consent of the Partnership,
which shall not be unreasonably withheld. If no successor Agent has been so
appointed by the Required Banks, and has accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the Required
Banks' removal of the retiring Agent, then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent with the consent of the Partnership (which
shall not be unreasonably withheld), which successor Agent shall be a commercial
bank organized under the laws of the United States of America or of any state
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under the Credit
Documents and the other Project Documents. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was agent under this Agreement.
Section 8.7 COLLATERAL. (a) Except as expressly provided herein, the
Agent shall have no duty to take any affirmative steps with respect to the
collection of amounts payable in respect of the Collateral. The Agent shall
incur no liability as a result of any private sale of the Collateral.
(b) The Banks hereby consent, and agree upon written request by the
Agent to execute and deliver such instruments and other documents as the Agent
may deem desirable to confirm such consent, to the release of the Liens on the
Collateral, including any release in connection with any sale, transfer or other
disposition of the Collateral or any part thereof, in accordance with the
Project Documents.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or consent to any departure by the Partnership therefrom, shall
be effective unless in writing and signed or consented to (in writing) by the
Required Banks (and, in the case of amendments, the Partnership), and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that (A) no amendment,
waiver or consent shall, unless in writing and signed or consented to (in
writing) by all of the Banks do any of the following: (i) waive any of the
conditions specified in Article 3; (ii) increase the Commitments of the Banks,
extend the term of any Commitments or subject the Banks to any additional
obligations; (iii) reduce the principal of, or interest on, the PPA Loans or any
fees or other amounts payable hereunder; (iv) postpone any date fixed for (a)
payment of principal of, or interest on, any PPA Loans (b) reimbursement of
drawings under the PPA Letter of Credit or (c) payment of fees or other amounts
payable hereunder; (v) change the percentage of the Commitments or the number of
Banks, required for the Banks or any of them to take any action hereunder; or
(vi) amend this Section 9.1; (B) no amendment, waiver or consent shall, unless
in writing or consented to (in writing) by the Issuing Bank, affect the rights
and obligations of the Issuing Bank hereunder; (C) no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Persons required above to take such action, affect the rights or duties of the
Agent under this Agreement or any other Credit Document; and (D) any provision
that is a part of this Agreement as a result of an incorporation by reference to
the Indenture shall be amended or waived as provided in Section 8.3 of the
Collateral Agency Agreement.
Section 9.2 NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing (including by telecopier and shall be mailed,
telecopied or delivered, if to the Partnership, to it at Tenaska Georgia
Partners, L.P., 1044 N. 115th Street, Suite 400, Omaha, NE 68154-4446,
Attention: Michael F. Lawler, telephone 402-691-9500, telecopier 402-691-9550;
if to any Bank other than the Issuing Bank, to it at the address or telecopier
number set forth below its name in the Assignment and Acceptance by which it
became a party hereto; if to the Agent or the Issuing Bank, to it at The
Toronto-Dominion Bank, 909 Fannin, Suite 1700, Houston, Texas, Attention: Jeff
Lents; telephone 713-653-8229, telecopier 713-951-9921, or, as to each party, to
it at such other address or telecopier number as designated by such party in a
written notice to the other parties. All such notices and communications shall
be deemed received, (i) if personally delivered, upon delivery, (ii) if sent by
first-class mail, on the third Business Day following deposit into the mails and
(iii) if sent by telecopier, upon acknowledgment of receipt thereof by the
intended recipient, except that notices and communications to the Agent pursuant
to Article 2 or 8 shall not be effective until received by the Agent.
Section 9.3 NO WAIVER, REMEDIES. No failure on the part of any Bank
(including the Issuing Bank) or the Agent to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, and no single
or partial exercise of any such right shall preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
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Section 9.4 COSTS AND EXPENSES. The Partnership agrees to pay on demand
(i) all reasonable costs and expenses of the Agent and the Banks (including the
Issuing Bank) in connection with the preparation, execution, delivery,
syndication, administration, modification and amendment of this Agreement, the
other Credit Documents, and the other documents to be delivered hereunder,
including (a) the reasonable fees and out-of-pocket expenses of counsel for the
Agent and the Banks with respect thereto and with respect to advising the Agent
and the Banks as to their rights and responsibilities, or the perfection,
protection or reservation of rights or interests, under this Agreement, the
other Credit Documents, the other Project Documents and the other documents to
be delivered hereunder, (b) the reasonable fees and expenses of any consultants,
auditors or accountants engaged by the Agent with the written consent (which
shall not be unreasonably withheld) of the Partnership pursuant hereto, and (ii)
all reasonable costs and expenses of the Agent and the Banks (including the
Issuing Bank) (including reasonable counsel fees and expenses of the Agent and
the Banks) in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the other Credit Documents,
the other Project Documents and the other documents to be delivered hereunder,
whether in any action, suit or litigation, bankruptcy, insolvency or similar
proceeding. In addition, the Partnership shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of the aforementioned documents, and
the Partnership agrees to indemnify and hold the Agent and the Banks (including
the Issuing Bank) harmless from and against any and all liabilities with respect
to or resulting from any delay in paying or omission to pay any of the
foregoing.
Section 9.5 APPLICATION OF MONEY. If any sum paid or recovered in
respect of the Obligations is less than the amount then due, the Agent may apply
that sum to principal, interest, fees or any other amount due under this
Agreement in such proportions and order and generally in such manner as the
Agent shall reasonably determine.
Section 9.6 SEVERABILITY. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions of this Agreement or affecting the validity, enforceability or
authorization of such provision in any other jurisdiction.
Section 9.7 NON-RECOURSE LIABILITY. Satisfaction of the Obligations
shall be had solely from the Collateral. Notwithstanding any provision to the
contrary in the Transaction Documents, there shall be no recourse against any
Affiliates, partners, stockholders, officers, directors, representatives or
employees of the Partnership, other than the Partnership (each a "NON-RECOURSE
PARTY"), for any payment due hereunder or under any other Financing Document or
Security Document from the Partnership or for the performance of any obligation
of such Non-Recourse Party, or breach of any representation or warranty made by
such Non-Recourse Party hereunder or thereunder. The sole recourse of the Agent
and the Banks hereunder or under any other Transaction Document or for the
performance of any obligation of the Partnership, or breach of any
representation or warranty made hereunder or thereunder by the Partnership,
shall be against the Partnership and its assets, it being expressly understood
by the Senior Parties that such obligations of the Partnership are obligations
solely of the Partnership and that no such
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personal liability shall attach to, or be incurred by any Non-Recourse Party;
PROVIDED, that nothing contained in this Section 9.7 shall (i) impair in respect
of the Partnership the validity of any Credit Document, as applicable, prevent
the taking of any action permitted by law against the Partnership or any of its
Affiliates, or in any way affect or impair the rights of the Agent and the Banks
to take any action permitted by law, in either case to realize upon the
Collateral, (ii) be deemed to release the Partnership or any of its Affiliates,
or any past, present or future shareholder, partner, officer, employee, director
or agent of any thereof, from liability for its fraudulent actions, fraudulent
misrepresentations, gross negligence or willful misconduct or (iii) limit or
affect the obligations and liabilities of any Non-Recourse Party in accordance
with the terms of any other Transaction Document creating such obligations and
liabilities to which such Non-Recourse Party is a party.
Section 9.8 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Partnership, the Agent and the Banks and their
respective successors and assigns, except that the Partnership shall not have
the right to assign any of its rights and obligations hereunder without the
prior written consent of the Required Banks, and, except as provided in Section
9.9, no Bank other than the Issuing Bank shall have the right to assign any of
its rights and obligations hereunder.
Section 9.9 ASSIGNMENTS AND PARTICIPATIONS. (a) Any Bank may at any time
(with the consent of the Partnership, such consent not to be unreasonably
withheld or delayed, the consent of the Agent, such consent not to be
unreasonably withheld or delayed, and the consent of the Issuing Bank) sell to
one or more banks or other entities whose long-term unsecured debt is rated at
least "A-" or the equivalent by S&P and Moody's (a "PURCHASING BANK") all or any
part of its rights and obligations under this Agreement (which, except in the
case of an assignment to a Person that, immediately before such assignment, was
a Bank), shall be in an amount equal to not less 33 1/3% of the Maximum Stated
Amount pursuant to an Assignment and Acceptance, executed by such Purchasing
Bank, such transferor Bank, the Agent and the Issuing Bank (and, in the case of
a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the
Partnership). Upon (i) such execution of such Assignment and Acceptance and (ii)
delivery of a copy thereof to the Partnership and payment of the amount of its
participation to the Agent or such transferor Bank, such Purchasing Bank shall
for all purposes be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank under this Agreement, to the same extent as if it were
an original party hereto with the Percentage Interest as set forth in such
Assignment and Acceptance, which shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Percentage Interests arising
from the purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Agreement.
(b) Any Bank may, from time to time, sell or offer to sell participating
interests in any PPA Loans owing to such Bank, such Bank's interest in any
Commitment of such Bank or any other interests and obligations of such Bank
hereunder, to one or more banks or other entities (each, a "PARTICIPANT"), on
such terms and conditions as may be determined by the selling Bank, without the
consent of or notice to the Partnership, and the grant of such participation
shall not relieve any Bank of its obligations, or impair the rights of any Bank,
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank shall remain solely responsible for the performance
of such Bank's obligations under this Agreement, the
28
<PAGE>
Partnership, the Agent and the Issuing Bank will continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement and such Bank shall retain the sole right and
responsibility to exercise the rights of such Bank, and enforce the obligations
of the Partnership, including the right, subject to Section 9.1, to approve any
amendment, modification, supplement or waiver of any provision of any Credit
Document and the right to take action under Article 6 hereof, subject to Section
9.1, and such Bank shall not grant any such Participant any voting rights or
veto power over any such action by such Bank under this Agreement. No
Participant shall have any rights under this Agreement to receive payment of
principal, interest or any other amount payable hereunder except through a Bank
and as provided in this Section 9.9. The Partnership agrees that, upon the
occurrence and during the continuance of any Event of Default, each Participant
shall have the right of set-off in respect of its participating interest in
amounts owing under this Agreement as set forth in Section 2.20 hereof to the
same extent as if the amount of its participating interest was owing directly to
it as a Bank under this Agreement. The Partnership also agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16, 2.17 and
2.18 hereof with respect to its participation granted hereunder; PROVIDED, that
no Participant shall be entitled to receive any greater amount pursuant to such
Sections than the Bank transferring such participation would have been entitled
to receive in respect of the amount of the participation transferred to such
Participant had no such transfer occurred.
(c) Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.9, disclose to
the Purchasing Bank or Participant or proposed Purchasing Bank or Participant
any information relating to the Partnership furnished to such Bank by or on
behalf of the Partnership; provided, however, that prior to any such disclosure,
the Person receiving such disclosure shall sign such confidentiality agreements
as the Partnership may reasonably request.
Section 9.10 INDEMNIFICATION. The Partnership agrees to indemnify, on
demand, and hold harmless the Agent and each Bank (including the Issuing Bank)
and each of their respective officers, directors, employees, agents and
affiliates from and against any and all claims, damages, losses, liabilities,
costs and expenses whatsoever that such indemnified party may incur (or that may
be claimed against such indemnified party by any Person) by reason of (i) any
untrue statement or alleged untrue statement of any material fact concerning the
Partnership or the Collateral, or the omission or alleged omission to state any
fact concerning the Partnership or the Collateral necessary to make any such
statement, in light of the circumstances under which it was made, not
misleading; (ii) the issuance, sale or delivery of the Senior Debt; (iii) the
use of the proceeds of the Senior Debt or any Drawing; (iv) any reasonable
action taken by such indemnified party in protecting and enforcing the rights
and remedies of the Agent and the Banks under the Project Documents; (v) subject
to Section 7.2, the execution, delivery or transfer of, or payment or failure to
pay under, the PPA Letter of Credit; (vi) any claim of any Person with respect
to any finder's fee, brokerage commission or other similar sum due in connection
with any Project Document; or (vii) any failure by the Partnership to comply
with any Environmental Laws; PROVIDED, HOWEVER, that the Partnership shall not
be required to indemnify the Issuing Bank for any claims, damages, losses,
liabilities, costs or expenses to the extent caused by the Issuing Bank's
willful misconduct or gross negligence in paying under the PPA Letter of Credit
or the Issuing Bank's willful or grossly negligent failure to pay under the PPA
Letter of Credit after the presentation to it by the beneficiary of a draft and
certificate strictly complying with the
29
<PAGE>
terms and conditions of the PPA Letter of Credit (unless the Issuing Bank in
good faith believed itself (based upon an opinion of counsel) to be prohibited
by law or legal authority from making such payment). The Partnership, upon
demand by any party indemnified or intended to be indemnified pursuant to this
Section 9.10 at any time, shall also reimburse such party for any reasonable
legal or other expenses incurred in connection with investigating or defending
against any of the foregoing. If any action, suit or proceeding arising from any
of the foregoing is brought against any party indemnified or intended to be
indemnified pursuant to this Section 9.10 (an "INDEMNIFIED PARTY"), such
Indemnified Party shall promptly notify the Partnership in writing, enclosing a
copy of all papers served, but the omission so to notify the Partnership of any
such action shall not relieve it of any liability that it may have to any
Indemnified Party otherwise than under this Section 9.10; PROVIDED, HOWEVER,
that the Partnership shall not be liable for any settlement of any such action
effected without the Partnership's prior written consent. In case any such
action shall be brought against any Indemnified Party and it shall notify the
Partnership of the commencement thereof, the Partnership shall be entitled to
participate in and, to the extent that it shall wish, to assume the defense
thereof with counsel reasonably satisfactory to such Indemnified Party, and
after notice from the Partnership to such Indemnified Party of the Partnership's
election so to assume the defense thereof, the Partnership shall not be liable
to such Indemnified Party for any subsequent legal or other expenses
attributable to such defense, except as provided below, other than reasonable
costs of investigation subsequently incurred by such Indemnified Party in
connection with the defense thereof. The Indemnified Party shall have the right
to employ its own counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (i) the
employment of counsel by such Indemnified Party has been authorized by the
Partnership, (ii) the Indemnified Party shall have reasonably concluded that
there may be a conflict of interest between the Partnership and the Indemnified
Party in the conduct of the defense of such action (in which case the
Partnership shall not have the right to direct the defense of such action on
behalf of the Indemnified Party) or counsel for the Partnership shall have
declined to represent the Indemnified Party in light of a potential conflict of
interest or (iii) the Partnership shall not in fact have employed counsel
reasonably satisfactory to the Indemnified Party to assume the defense of such
action.
Section 9.11 GOVERNING LAW; SUBMISSION OF JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS
AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ANY LEGAL ACTION OR PROCEEDING AGAINST THE PARTNERSHIP WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTNERSHIP HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. THE PARTNERSHIP HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 111 EIGHTH
AVENUE, 13TH FLOOR, NEW YORK, NY 10011, AS ITS DESIGNEE, APPOINTEE AND AGENT
WITH RESPECT TO ANY ACTION OR PROCEEDING IN NEW YORK TO RECEIVE FOR AND ON ITS
BEHALF, AND IN
30
<PAGE>
RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES
AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING AND AGREES
THAT THE FAILURE OF SUCH AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF PROCESS
TO THE PARTNERSHIP SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE OR OF
ANY CLAIM BASED THEREON. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT
SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE PARTNERSHIP AGREES TO DESIGNATE
A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE
PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT. THE PARTNERSHIP FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PARTNERSHIP AT ITS ADDRESS
SET FORTH IN SECTION 9.2, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING.
(b) THE PARTNERSHIP HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN SECTION 9.11(a) ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO ANY OF THIS AGREEMENT OR THE CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
Section 9.12 HEADINGS. The section and subsection headings used herein
have been inserted for convenience of reference only and do not constitute
matters to be considered in interpreting this Agreement.
Section 9.13 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
31
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
TENASKA GEORGIA PARTNERS, L.P.,
by Tenaska Georgia, Inc.,
its Managing General Partner
By: /s/ Michael F. Lawler
--------------------------------------------
Name: Michael F. Lawler
Title: Vice President of Finance & Treasurer
PERCENTAGE
COMMITMENT INTEREST
Initial Commitment $15,000,000 100% The Toronto-Dominion Bank
Additional Commitment $10,000,000 100% as Agent, the Issuing Bank
and as a Bank
By: /s/ Warren Finley
------------------------------
Name: Warren Finley
Title: Manager Credit
<PAGE>
EXHIBIT A
FORM OF LETTER OF CREDIT
IRREVOCABLE STAND-BY LETTER OF CREDIT NO.________
THE TORONTO-DOMINION BANK
PECO ENERGY COMPANY
[ADDRESS]
[Date]
Dear Sirs:
For the account of Tenaska Georgia Partners, L.P. ("Tenaska"), we hereby
authorize you to draw on us at sight $15,000,000 plus upon and after April 1,
2001, $10,000,000 (giving a total of $25,000,000 less any non-reimbursed draws)
(such amount, or after such date the sum of such amounts, as the same shall be
reduced and reinstated from time to time in accordance with the terms hereof,
being referred to herein as the "Stated Amount").
Funds under this Letter of Credit are available to you against your
sight draft(s) drawn on us and accompanied by a certificate purportedly signed
by your authorized representative in the form of ANNEX A attached hereto.
Presentation of such draft(s) and certificate(s) shall be made at our
office located at ________________, ________________, Attention: ______________
or at any other location _______________ which may be designated by us by
written notice delivered to you. Drafts must be marked "Drawn under [BANK]
Irrevocable Letter of Credit No. ________________". We hereby agree that all
drafts drawn under and in compliance with the terms of this Letter of Credit
will be duly honored by us upon due delivery of the draft(s) and certificate(s)
if presented at such office on or before the termination date hereof.
Payment under this Letter of Credit shall be made in accordance with the
payment instructions set forth in your certificate in the form of ANNEX A.
All drafts, certificates and notices shall be personally delivered to
us.
Upon our receipt of a certificate in the form of ANNEX B attached hereto
from your authorized representative, the Stated Amount will be reduced in
accordance with such certificate.
This Letter of Credit shall automatically terminate and be delivered to
us for cancellation upon the earliest of (i) our receipt of a certificate signed
by your authorized representative in the form of ANNEX C attached hereto, (ii)
the close of business on [DATE], and (iii) 60 days after our delivery to you of
a termination certificate stating that this Letter of Credit will terminate on
such 60th day by reason of an event of default having occurred under the
reimbursement agreement
Ex. B-1
<PAGE>
between Tenaska and us. The earlier of the termination dates arising under
clause (ii) and (iii) above is the "Expiry Date."
Partial drawings under this Letter of Credit are permitted. Each drawing
hereunder shall reduce the Stated Amount by the amount paid on such drawing;
provided that a reduction in the Stated Amount may be reinstated by our delivery
to you of a certificate in the form of ANNEX D indicating that the Stated Amount
has been so increased.
This Letter of Credit is subject to the International Standby Practices
(ISP98). This Letter of Credit shall be deemed to be made under the laws of the
State of New York, including Article 5 of the Uniform Commercial Code, and
shall, as to matters not governed by the International Standby Practices
(ISP98), be governed by and construed in accordance with the laws of the State
of New York, excluding any choice of law provisions or conflict of law
principles which would require reference to the laws of any other jurisdiction.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein; and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for the certificate(s) and such sight
draft(s) referred to herein.
Very truly yours,
[BANK]
By:
--------------------------------------
Ex. B-2
<PAGE>
Annex A
DRAWING CERTIFICATE
The undersigned, a duly authorized representative of PECO Energy Company
("PECO"), as the beneficiary of the Irrevocable Letter of Credit No. ___ (the
"Letter of Credit") issued by [BANK] (the "Bank") for the account of Tenaska
Georgia Partners, L.P. ("Tenaska"), certifies as follows to the Bank:
1. Tenaska and PECO are parties to a Power Purchase Agreement dated
August 24, 1999 (the "PPA"). [TENASKA HAS FAILED TO PAY PECO CERTAIN LIQUIDATED
DAMAGES PAYABLE UNDER SECTION 4.02, 8.08, 8.09, 8.10 OR 8.11 OF THE PPA] OR
[TENASKA HAS FAILED TO PAY AN AVAILABILITY ADJUSTMENT DUE UNDER THE PPA.] OR
[THE [EXPIRY DATE BEING THE DATE 7 YEARS AFTER THE ISSUE DATE OF THE LETTER OF
CREDIT] IS TO OCCUR WITHIN 10 DAYS OF THE DATE OF THIS DRAWING CERTIFICATE AND
THE LETTER OF CREDIT HAS NOT BEEN RENEWED OR REPLACED BY AN ACCEPTABLE CREDIT
SUPPORT (AS DEFINED IN THE PPA)] OR [THE [EXPIRY DATE BEING THE DATE 60 DAYS
AFTER DELIVERY OF A TERMINATION CERTIFICATE STATING THAT THIS LETTER OF CREDIT
WILL TERMINATE ON SUCH 60TH DAY BY REASON OF AN EVENT OF DEFAULT HAVING OCCURRED
UNDER TENASKA'S FINANCING DOCUMENTS] IS TO OCCUR WITHIN 30 DAYS OF THE DATE OF
THIS DRAWING CERTIFICATE AND THE LETTER OF CREDIT HAS NOT BEEN RENEWED OR
REPLACED BY AN ACCEPTABLE CREDIT SUPPORT (AS DEFINED IN THE PPA).
2. PECO is entitled to make a drawing under the Letter of Credit in the
amount of $_____. The amount of drawing to be made hereunder does not exceed (a)
(1) the amount of the obligations due and payable by Tenaska to PECO or (2) the
amount required to be posted as cash collateral upon the expiration of an
Acceptable Credit Support to PECO, pursuant to the PPA and (b) the Stated Amount
of the Letter of Credit.
3. All payments to PECO under the Letter of Credit shall be made by wire
transfer of immediately available funds to PECO at [PECO'S BANK], for credit to
account no. _____.
Any capitalized term used herein and not defined shall have its
respective meaning as set forth in the Letter of Credit.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
--------------------------------------
Name:
Title:
Ex. B-3
<PAGE>
Annex B
CONSENT TO REDUCTION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by [BANK] for the account of Tenaska Georgia
Partners, L.P. The undersigned beneficiary of such Letter of Credit hereby
consents to a permanent reduction in the amount available to be drawn under the
Letter of Credit, effective immediately, to
$-------------.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
------------------------------------
Ex. B-4
<PAGE>
Annex C
CONSENT TO TERMINATION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by [BANK] for the account of Tenaska Georgia
Partners, L.P. The undersigned beneficiary of such Letter of Credit hereby
consents to the termination of the Letter of Credit, effective immediately, and
is surrendering the Letter of Credit for cancellation.
IN WITNESS WHEREOF, PECO Energy Company has executed and delivered this
certificate as of the ____ day of __________, 20__.
PECO ENERGY COMPANY,
a Pennsylvania corporation
By:
------------------------------------
Ex. B-5
<PAGE>
Annex D
CERTIFICATE OF REINSTATEMENT OF STATED AMOUNT
[Date]
PECO
[Address]
Attn:
Ladies and Gentlemen:
Reference is made to [BANK], Letter of Credit No. [ ] Irrevocable
Standby Letter of Credit (the "LETTER OF CREDIT"), dated __________ __, 1999,
issued by us in your favor. Any capitalized term used herein and not defined
shall have its respective meaning as set forth in the Letter of Credit. This
constitutes our notice to you pursuant to the Letter of Credit that $______has
been added to the amount available to be drawn. The Stated Amount is therefore
increased by such amount to $___________.
Very truly yours,
[BANK]
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
Ex. B-6
<PAGE>
Annex E
NOTICE OF TERMINATION OF LETTER OF CREDIT
Reference is made to the Irrevocable Stand-by Letter of Credit No. ____
(the "Letter of Credit") issued by [BANK] for the account of Tenaska Georgia
Partners, L.P. The undersigned [BANK] hereby provides notice that this Letter of
Credit will terminate on the 60th day after the date hereof by reason of an
event of default having occurred under the reimbursement agreement between
Tenaska and us.
IN WITNESS WHEREOF, the [BANK] has executed and delivered this
certificate as of the ____ day of __________, 20__.
[BANK]
By:
------------------------------------
Ex. B-7
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 200__
Reference is made to the PPA Letter of Credit and Reimbursement
Agreement, dated November 10, 1999 (the "REIMBURSEMENT AGREEMENT"), among
Tenaska Georgia Partners, L.P., a Delaware limited partnership (the
"PARTNERSHIP"), the Issuing Bank (as defined in the Reimbursement Agreement),
the Banks (as defined in the Reimbursement Agreement) and the Issuing Bank, as
Agent for the Banks (the "AGENT"). Terms defined in the Reimbursement Agreement
are used herein with the same meaning.
_________________ (the "ASSIGNOR") and ___________________ (the
"ASSIGNEE") agree as follows:
(1) The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, the percentage interest
specified on Schedule 1 hereto in and to all of the Assignor's rights and
obligations under the Reimbursement Agreement as of the date hereof (after
giving effect to any other assignments thereof made before the date hereof,
whether or not such assignments have become effective, but without giving effect
to any other assignments thereof also made on the date hereof), including,
without limitation, such Percentage Interest in the Assignor's Commitment, each
of the PPA Loans owing to the Assignor and the PPA Letter of Credit. The
Assignee shall pay to the Assignor, at or before 12:00 noon, local time of the
Assignor, on the Effective Date (as defined below), the purchase price therefor
in an amount equal to the Percentage Interest of each of the PPA Loans owing to
the Assignor, as reflected on Schedule 1 hereto, in immediately available funds.
(2) The Assignor (a) represents and warrants that as of the date hereof
its Commitment, each of the PPA Loans owing to it and its participation in the
PPA Letter of Credit (after giving effect to any other assignments of the
foregoing made before the date hereof, whether or not such assignments have
become effective, but without giving effect to any other such assignments also
made on the date hereof) are in the respective dollar amounts specified therefor
on Schedule 1 hereto; (b) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (c) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any of the Credit
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any of the Credit Documents or any other instrument or
document furnished pursuant thereto; and (d) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Partnership or the performance or observance by the Partnership or any other
Person of any of its obligations under any of the Credit Documents or any other
instrument or document furnished pursuant thereto.
Ex. B-1
<PAGE>
(3) The Assignee (a) confirms that it has received copies of the Credit
Documents and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance, including such documents evidencing satisfaction of the conditions
precedent set forth in the Reimbursement Agreement; (b) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank (including the Issuing Bank) and based on such documents and information as
it may deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Reimbursement Agreement; (c) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; (d) agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Reimbursement Agreement are required to
be performed by it as a Bank; and (e) specifies as its address for notices the
address set forth beneath its name on Schedule 1 hereto.
(4) Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance and
recording by the Agent in the Register maintained by the Agent for such purpose.
The effective date of this Assignment and Acceptance shall be the date of
acceptance thereof by the Agent, unless otherwise specified on Schedule 1 hereto
(the "EFFECTIVE DATE").
(5) Upon such acceptance and recording by the Agent, as of the Effective
Date (a) the Assignee shall be a party to the Reimbursement Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Reimbursement Agreement.
(6) Upon such acceptance and recording by the Agent, from and after the
Effective Date the Agent shall make all payments under the Reimbursement
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto)
to the Assignee. The Assignor and the Assignee shall make all appropriate
adjustments directly between themselves in respect of payments of principal,
interest and/or fees under the Reimbursement Agreement for periods before the
Effective Date.
(7) Each of the Assignor and the Assignee agrees that at any time and
from time to time upon the written request of the other party, it will execute
and deliver such further documents and do such further acts and things as the
other party may reasonably request in order to effect the purposes of this
Assignment and Acceptance.
(8) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS
ASSIGNMENT AND ACCEPTANCE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
(9) This Assignment and Acceptance is executed by the parties on
Schedule 1 hereto and may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document. Execution of this Assignment
Ex. B-2
<PAGE>
and Acceptance by the Agent and the Partnership on Schedule 1 hereto shall
constitute any consent of such Person required pursuant to Section 9.9 of the
Reimbursement Agreement.
Ex. B-3
<PAGE>
Schedule 1 to
Assignment and Acceptance
Section 1.
Percentage of Assignor interest
in Drawings, Commitments, and
PPA Loans to be assigned: _______%
Section 2.
Immediately prior to Effective Date:
Assignor's Initial Commitment: $_______
Assignor's Additional Commitment: $_______
Assignor's Total Commitment: $_______
PPA Loans owing to Assignor: $_______
Assignor's participation in remaining
amount of Stated Amount of PPA Letter
of Credit:
Initial Commitment Portion $_______
Additional Commitment Portion $_______
Assignor's Percentage Interest (as
defined in the Reimbursement Agreement) _______%
Section 3.
Upon Effective Date:
Assignor's Initial Commitment: $_______
Assignor's Additional Commitment: $_______
Assignor's Percentage Interest: _______%
Assignee's Initial Commitment: $_______
Assignee's Additional Commitment: $_______
Assignee's Percentage Interest: _______%
Ex. B-4
<PAGE>
Section 4.
Effective Date:
----------------------------------
[ASSIGNOR]
By:
------------------------------------
Name:
Title:
[ADDRESS FOR NOTICES]
Consented to on this _____ day of __________, 200__:
[ ],
as Agent and the Issuing Bank
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Consented to on this _____ day of __________, 200__:
TENASKA GEORGIA PARTNERS, L.P.,
by Tenaska Georgia, Inc.,
its Managing General Partner
By:
----------------------------------
Name:
Title:
Ex. B-5
<PAGE>
EXHIBIT C
AMORTIZATION SCHEDULE
The principal amount of each PPA LOC Loan shall be due and payable in
semi-annual installments on consecutive Scheduled Payment Dates, commencing on
the first such Scheduled Payment Date to occur after such PPA LOC Loan is made,
and shall in any event be due and payable, to the extent not previously paid on
the applicable PPA LOC Loan Required Payment Date. The Partnership shall pay
interest on any PPA LOC Loan on such Scheduled Payment Date and on the PPA LOC
Loan Required Payment Date out of cash available in the Revenue Account at the
same level in the flow of funds as interest on other Senior Debt and shall repay
the principal amount, if any, of PPA LOC Loans on such Scheduled Payment Dates
and on the PPA LOC Loan Required Payment Date out of 100% of the cash available
in the Revenue Account after payment of Debt Service on all Senior Debt
(including but not limited to DSR LOC Loans) other than principal of PPA LOC
Loans.
The principal amount of each PPA Term Loan shall be due and payable in
semi annual installments on consecutive Scheduled Payment Dates, commencing on
the first such Scheduled Payment Date to occur after such PPA Term Loan is made,
and maturing in full on the applicable PPA Term Loan Required Payment Date. The
amount of principal payable on each such Scheduled Payment Date shall be equal
to the amount of the principal component only of an amortization schedule based
on the foregoing payment schedule and a final maturity date the earlier of (x)
five years from the date on which such PPA Term Loan is made and (y) the Final
Maturity Date and assuming (i) a fixed PER ANNUM interest rate equal to the
interest rate (whether determined with reference to the Adjusted Base Rate or
the Eurodollar Rate) applicable to such PPA Term Loan on such date and (ii)
mortgage-style payments of principal and interest.
Ex. C-1
<PAGE>
EXHIBIT D
<TABLE>
<CAPTION>
- ---------------------- -------------------- -------------------- --------------------
BBB-/Baa3 or BB+/Ba1* BB/Ba2 or
above* below*
- ---------------------- -------------------- -------------------- --------------------
EurodollarBase Eurodollar Base Eurodollar Base
Rate Rate Rate Rate Rate Rate
Loans Loans Loans Loans Loans Loans
and LOC and LOC and LOC
fees fees fees
- ---------------------- --------- ---------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Year 1-4 137.5 137.5 bps 150.0 bps 150.0 200.0 bps 200.0
bps bps bps
- ---------------------- --------- ---------- ---------- --------- ---------- ---------
Year 5-7 150.0 150.0 bps 162.5 bps 162.5 212.5 bps 212.5
bps bps bps
- ---------------------- --------- ---------- ---------- --------- ---------- ---------
</TABLE>
- ---------------
* In the event of a split rating, the lower rating will be used.
Ex. D-1
<PAGE>
Exhibit 10.23
AGREEMENT REGARDING AD VALOREM TAXATION
This Agreement Regarding Ad Valorem Taxation by and among the Board of
Commissioners of Heard County ("Commissioners"), the Board of Tax Assessors of
Heard County (the "Board") and Tenaska Georgia Partners L.P., a Delaware Limited
Partnership ("Tenaska").
Tenaska is presently evaluating the construction of an electric power
generation facility in Heard County, Georgia. The economic burden of ad valorem
taxes on the plant is a significant factor in determining the economic
feasibility of its construction. To induce and facilitate the construction of
the plant, the Development Authority of Heard County ("Authority") has made
available to Tenaska taxable revenue bond financing ("Bond Financing") of up to
$400,000,000.00. Under that financing, the Authority will own the land,
building, equipment and other property purchased with the bond proceeds and will
lease the property to Tenaska under a lease with a term in excess of twenty-five
(25) years (the "Lease"). At the end of the lease period, Tenaska will have the
obligation to purchase the land, building and equipment from the Authority for a
nominal sum. The Authority will use Tenaska's lease payments to retire the bond
issue indebtedness, and the Authority will retain for its use and the use of
Heard County any lease payments in excess of those needed to retire the bond
issue indebtedness.
This bond financing and the ad valorem tax consequences resulting
therefrom is a major consideration for Tenaska in its determination of the
feasibility of construction of the plant. The Commissioners, the Board and
Tenaska recognize and agree that the Authority's ownership interest in the real
and personal property leased to Tenaska is not subject to ad valorem taxation.
Likewise, Commissioners, the Board and Tenaska recognize and agree that
Tenaska's leasehold interest in the property it leases from the Authority
pursuant to the Lease will be subject to ad valorem taxation.
In order to provide Tenaska with sufficient information and certainty
upon which it can base its construction decision, the Commissioners, the Board
and Tenaska agree that it is important to set forth at this time the methodology
by which it is agreed that Tenaska's leasehold interest under the Lease will be
valued.
That methodology is as follows:
1. There will be no value to the Lease and therefore no real property
or personal property taxes on the property which is subject to the Lease until
January 1 of the year after the year in which the construction of the plant is
completed and revenue generation operations commence thereon.
<PAGE>
2. Ad valorem taxes will commence in the year after the year in which
the plant is completed and revenue generation operations commence thereon.
Thereafter, for a period of twenty (20) years, the taxes will be derived by
reference to the hypothetical amount of the cumulative principal reduction of
the outstanding bond indebtedness ("Cumulative Principal Reduction") determined
as if the principal amount of the outstanding bond indebtedness were amortized
by equal quarterly payments of principal and interest at a rate equal to six
percent (6%) per annum over such period of twenty (20) years, as more
specifically set forth below:
First, determine the dollar amount of the outstanding bond financing
proceeds that were invested in engineering, procurement and construction costs
("EPC") in (a) Leased Land and Buildings and (b) Leased Equipment, as each are
defined in the Lease.
Second, for the Leased Land and Buildings (collectively) and for the
Leased Equipment, and as of the first day of each of the twenty years of the
hypothetical amortization, compute the Cumulative Principal Reduction which will
have been deemed to have been paid under such amortization through such date
[computed separately for the Leased Land and Buildings (collectively) and for
the Leased Equipment].
Third, to take into account depreciation, the Cumulative Principal
Reduction in each year of the twenty year period shall be multiplied by a factor
set forth below:
<TABLE>
<CAPTION>
Column 1 Column 2 Column 3
YEAR FACTOR FACTOR
(begins with year Leased Equipment Leased Land and Buildings
after construction (no depreciation)
of plant is completed
and operating)
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
1 .93 1.00
2 .86 1.00
3 .79 1.00
4 .72 1.00
5 .65 1.00
6 .58 1.00
7 .51 1.00
8 .44 1.00
9 .37 1.00
10 .30 1.00
11 .30 1.00
12 .30 1.00
-2-
<PAGE>
13 .30 1.00
14 .30 1.00
15 .30 1.00
16 .30 1.00
17 .30 1.00
18 .30 1.00
19 .30 1.00
20 .30 1.00
</TABLE>
Fourth, to determine the property value for ad valorem tax purposes in
any year of such twenty (20) year period, compute the product of (a) the
Cumulative Principal Reduction of the Leased Land and Buildings (collectively)
and the Leased Equipment through such year and (b) the factor in Third above.
Such product shall be deemed to be the fair market value of the Leased Land and
Buildings and of the Leased Equipment in such year. Such product shall
thereafter be multiplied by forty percent (40%) to determine the assessed value
of each such category for such year and thereafter multiplied by the millage
rate, established by Heard County with respect to such year, to determine the
tax in each such year of such twenty (20) year period.
An example of the application of this methodology, assuming a millage
rate of 25.00 and assuming EPC of Leased Land and Buildings of $1,757,000.00 and
Leased Equipment of $228,243,000.00 is attached hereto as Exhibit "A" and
Exhibit "B".
After the expiration of the twenty (20) year period described in this
paragraph 2, the valuation of the Leased Land, Buildings and Leased Equipment,
to the extent not governed by paragraph 4, will be determined under the
methodology then employed by the Board.
3. Repairs or Replacement. Repairs or replacement of items of Leased
Equipment whenever occurring shall be treated as part of the Leased Equipment
and shall have the same value as the items of Leased Equipment so repaired or
replaced and shall not affect the value of the Leased Equipment for tax purposes
or the ultimate tax liability of Tenaska.
4. Plant Expansion. The Bond Financing has been sized to accommodate a
plant expansion within ten (10) years from the sale of the first bonds. If,
after the construction of the initial plant is completed and revenue generation
operations begin, any Buildings or Leased Equipment are thereafter purchased
through the Bond Financing as part of a plant expansion, such Buildings and
Leased Equipment shall be entitled to a twenty year tax abatement (with the
Lease accordingly extended as necessary) on the same methodology described in
paragraphs 1, 2 and 3 above. The plant expansion will not be taxed during its
construction, as set forth in paragraph 1, and a separate twenty (20) year
hypothetical amortization of the bonds issued in connection with such plant
expansion will be established based upon the EPC for such plant
-3-
<PAGE>
expansion effective the year after the plant expansion is completed and revenue
generation operations commence thereon, using the methodology in paragraph 2
above, adjusted as needed so as to afford the plant expansion a full 20-year tax
abatement under the formula described herein.
By their signatures appearing at the bottom of this agreement, the
Commissioners, the Board and Tenaska concur and agree to be bound by the above
valuation of Tenaska's leasehold interest for Heard County ad valorem tax
purposes under such Authority Bond financing and Lease. This Agreement shall
inure to the benefit of Tenaska, its successors and assignees, including without
limitation, its lenders.
This the 30th day of July, 1999.
BOARD OF COMMISSIONERS OF HEARD COUNTY
By: /s/
------------------------------------------
Chairman
BOARD OF TAX ASSESSORS OF HEARD COUNTY
By: /s/
------------------------------------------
Chairman
Witness: /s/
---------------------------------
TENASKA GEORGIA PARTNERS, L.P.,
a Delaware Limited Partnership
By: Tenaska Georgia I, L.P.
a Delaware Limited Partnership,
its General Partner
By: Tenaska Georgia, Inc., a
Delaware Corporation, its General Partner
By: Michael F. Lawler
Vice President of Finance & Treasurer
<PAGE>
TENASKA GEORGIA PARTNERS L.P.
HEARD COUNTY DEVELOPMENT AUTHORITY BOND AMORTIZATION
Total Amount Invested $230,000
Land and Building $1,757
Equipment $228,243
Rate 6.00%
<TABLE>
<CAPTION>
Cumulative Assessed Ad Valorem
$4,918.25 Total Principal Depreciation Value Millage Tax
Year Balance Prin Payment Interest Payment Payment Factor 40.00% Rate Expense
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2002 $228,243.00 $1,494.61 $3,423.65 $4,918.25 1,495 0.93 556 2.50 14
$226,748.39 $1,517.03 $3,401.23 $4,918.25 3,012
$225,231.36 $1,539.78 $3,378.47 $4,918.25 4,551
$223,691.58 $1,562.88 $3,355.37 $4,918.25 6,114
2003 $222,128.70 $1,586.32 $3,331.93 $4,918.25 7,701 0.86 2,649 2.50 66
$220,542.38 $1,610.12 $3,308.14 $4,918.25 9,311
$218,932.26 $1,634.27 $3,283.98 $4,918.25 10,945
$217,297.99 $1,658.78 $3,259.47 $4,918.25 12,604
2004 $215,639.20 $1,683.67 $3,234.59 $4,918.25 14,287 0.79 4,515 2.50 113
$213,955.54 $1,708.92 $3,209.33 $4,918.25 15,996
$212,246.62 $1,734.55 $3,183.70 $4,918.25 17,731
$210,512.06 $1,760.57 $3,157.68 $4,918.25 19,492
2005 $208,751.49 $1,786.98 $3,131.27 $4,918.25 21,278 0.72 6,128 2.50 153
$206,964.51 $1,813.79 $3,104.47 $4,918.25 23,092
$205,150.72 $1,840.99 $3,077.26 $4,918.25 24,933
$203,309.73 $1,868.61 $3,049.65 $4,918.25 26,802
2006 $201,441.12 $1,896.64 $3,021.62 $4,918.25 28,699 0.65 7,462 2.50 187
$199,544.48 $1,925.09 $2,993.17 $4,918.25 30,624
$197,619.40 $1,953.96 $2,964.29 $4,918.25 32,578
$195,665.43 $1,983.27 $2,934.98 $4,918.25 34,561
2007 $193,682.16 $2,013.02 $2,905.23 $4,918.25 36,574 0.58 8,485 2.50 212
$191,669.14 $2,043.22 $2,875.04 $4,918.25 38,617
$189,625.92 $2,073.87 $2,844.39 $4,918.25 40,691
$187,552.06 $2,104.97 $2,813.28 $4,918.25 42,796
2008 $185,447.08 $2,136.55 $2,781.71 $4,918.25 44,932 0.51 9,166 2.50 229
$183,310.54 $2,168.60 $2,749.66 $4,918.25 47,101
$181,141.94 $2,201.12 $2,717.13 $4,918.25 49,302
$178,940.82 $2,234.14 $2,684.11 $4,918.25 51,536
2009 $176,706.67 $2,267.65 $2,650.60 $4,918.25 53,804 0.44 9,470 2.50 237
$174,439.02 $2,301.67 $2,616.59 $4,918.25 56,106
$172,137.35 $2,336.19 $2,582.06 $4,918.25 58,442
$169,801.16 $2,371.24 $2,547.02 $4,918.25 60,813
2010 $167,429.92 $2,406.81 $2,511.45 $4,918.25 63,220 0.37 9,357 2.50 234
$165,023.12 $2,442.91 $2,475.35 $4,918.25 65,663
$162,580.21 $2,479.55 $2,438.70 $4,918.25 68,142
$160,100.66 $2,516.74 $2,401.51 $4,918.25 70,659
2011 $157,583.92 $2,554.50 $2,363.76 $4,918.25 73,214 0.3 8,786 2.50 220
$155,029.42 $2,592.81 $2,325.44 $4,918.25 75,806
$152,436.61 $2,631.70 $2,286.55 $4,918.25 78,438
$149,804.90 $2,671.18 $2,247.07 $4,918.25 81,109
2012 $147,133.72 $2,711.25 $2,207.01 $4,918.25 83,821 0.3 10,058 2.50 251
$144,422.47 $2,751.92 $2,166.34 $4,918.25 86,572
$141,670.56 $2,793.20 $2,125.06 $4,918.25 89,366
$138,877.36 $2,835.09 $2,083.16 $4,918.25 92,201
2013 $136,042.27 $2,877.62 $2,040.63 $4,918.25 95,078 0.3 11,409 2.50 285
$133,164.65 $2,920.78 $1,997.47 $4,918.25 97,999
$130,243.86 $2,964.60 $1,953.66 $4,918.25 100,964
$127,279.27 $3,009.06 $1,909.19 $4,918.25 103,973
2014 $124,270.20 $3,054.20 $1,864.05 $4,918.25 107,027 0.3 12,843 2.50 321
$121,216.00 $3,100.01 $1,818.24 $4,918.25 110,127
$118,115.99 $3,146.51 $1,771.74 $4,918.25 113,274
$114,969.47 $3,193.71 $1,724.54 $4,918.25 116,467
2015 $111,775.76 $3,241.62 $1,676.64 $4,918.25 119,709 0.3 14,365 2.50 359
$108,534.15 $3,290.24 $1,628.01 $4,918.25 122,999
$105,243.90 $3,339.60 $1,578.66 $4,918.25 126,339
$101,904.31 $3,389.69 $1,528.56 $4,918.25 129,728
2016 $98,514.62 $3,440.53 $1,477.72 $4,918.25 133,169 0.3 15,980 2.50 400
$95,074.08 $3,492.14 $1,426.11 $4,918.25 136,661
$91,581.94 $3,544.52 $1,373.73 $4,918.25 140,206
$88,037.42 $3,597.69 $1,320.56 $4,918.25 143,803
2017 $84,439.72 $3,651.66 $1,266.60 $4,918.25 147,455 0.3 17,695 2.50 442
$80,788.07 $3,706.43 $1,211.82 $4,918.25 151,161
$77,081.63 $3,762.03 $1,156.22 $4,918.25 154,923
$73,319.60 $3,818.46 $1,099.79 $4,918.25 158,742
2018 $69,501.14 $3,875.74 $1,042.52 $4,918.25 162,618 0.3 19,514 2.50 488
$65,625.41 $3,933.87 $984.38 $4,918.25 166,551
$61,691.54 $3,992.88 $925.37 $4,918.25 170,544
$57,698.65 $4,052.77 $865.48 $4,918.25 174,597
2019 $53,645.88 $4,113.57 $804.69 $4,918.25 178,711 0.3 21,445 2.50 536
$49,532.31 $4,175.27 $742.98 $4,918.25 182,886
$45,357.05 $4,237.90 $680.36 $4,918.25 187,124
$41,119.15 $4,301.47 $616.79 $4,918.25 191,425
2020 $36,817.68 $4,365.99 $552.27 $4,918.25 195,791 0.3 23,495 2.50 587
$32,451.69 $4,431.48 $486.78 $4,918.25 200,223
$28,020.21 $4,497.95 $420.30 $4,918.25 204,721
$23,522.26 $4,565.42 $352.83 $4,918.25 209,286
2021 $18,956.84 $4,633.90 $284.35 $4,918.25 213,920 0.3 25,670 2.50 642
$14,322.94 $4,703.41 $214.84 $4,918.25 218,623
$9,619.53 $4,773.96 $144.29 $4,918.25 223,397
$4,845.57 $4,845.57 $72.68 $4,918.25 228,243
=========== =========== =========== =========
$228,243.00 $165,217.31 $393,460.31 $5,976.00
</TABLE>
<PAGE>
TENASKA GEORGIA PARTNERS L.P.
HEARD COUNTY DEVELOPMENT AUTHORITY BOND AMORTIZATION
Total Amount Invested $230,000
Land and Building $1,757
Equipment $228,243
Rate 6.00%
<TABLE>
<CAPTION>
Cumulative Assessed Ad Valorem
$37.86 Total Principal Depreciation Value Millage Tax
Year Balance Prin Payment Interest Payment Payment Factor 40.00% Rate Expense
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2002 $1,757.00 $11.51 $26.36 $37.86 12 1 5 2.50 0
$1,745.49 $11.68 $26.18 $37.86 23
$1,733.82 $11.85 $26.01 $37.86 35
$1,721.96 $12.03 $25.83 $37.86 47
2003 $1,709.93 $12.21 $25.65 $37.86 59 1 24 2.50 1
$1,697.72 $12.39 $25.47 $37.86 72
$1,685.33 $12.58 $25.28 $37.86 84
$1,672.75 $12.77 $25.09 $37.86 97
2004 $1,659.98 $12.96 $24.90 $37.86 110 1 44 2.50 1
$1,647.02 $13.16 $24.71 $37.86 123
$1,633.86 $13.35 $24.51 $37.86 136
$1,620.51 $13.55 $24.31 $37.86 150
2005 $1,606.96 $13.76 $24.10 $37.86 164 1 66 2.50 2
$1,593.20 $13.96 $23.90 $37.86 178
$1,579.24 $14.17 $23.69 $37.86 192
$1,565.07 $14.38 $23.48 $37.86 206
2006 $1,550.68 $14.60 $23.26 $37.86 221 1 88 2.50 2
$1,536.08 $14.82 $23.04 $37.86 236
$1,521.26 $15.04 $22.82 $37.86 251
$1,506.22 $15.27 $22.59 $37.86 266
2007 $1,490.95 $15.50 $22.36 $37.86 282 1 113 2.50 3
$1,475.46 $15.73 $22.13 $37.86 297
$1,459.73 $15.96 $21.90 $37.86 313
$1,443.76 $16.20 $21.66 $37.86 329
2008 $1,427.56 $16.45 $21.41 $37.86 346 1 138 2.50 3
$1,411.11 $16.69 $21.17 $37.86 363
$1,394.42 $16.94 $20.92 $37.86 380
$1,377.47 $17.20 $20.66 $37.86 397
2009 $1,360.28 $17.46 $20.40 $37.86 414 1 166 2.50 4
$1,342.82 $17.72 $20.14 $37.86 432
$1,325.10 $17.98 $19.88 $37.86 450
$1,307.12 $18.25 $19.61 $37.86 468
2010 $1,288.86 $18.53 $19.33 $37.86 487 1 195 2.50 5
$1,270.34 $18.81 $19.06 $37.86 505
$1,251.53 $19.09 $18.77 $37.86 525
$1,232.44 $19.37 $18.49 $37.86 544
2011 $1,213.07 $19.66 $18.20 $37.86 564 1 225 2.50 6
$1,193.41 $19.96 $17.90 $37.86 584
$1,173.45 $20.26 $17.60 $37.86 604
$1,153.19 $20.56 $17.30 $37.86 624
2012 $1,132.63 $20.87 $16.99 $37.86 645 1 258 2.50 6
$1,111.75 $21.18 $16.68 $37.86 666
$1,090.57 $21.50 $16.36 $37.86 688
$1,069.07 $21.82 $16.04 $37.86 710
2013 $1,047.24 $22.15 $15.71 $37.86 732 1 293 2.50 7
$1,025.09 $22.48 $15.38 $37.86 754
$1,002.61 $22.82 $15.04 $37.86 777
$979.79 $23.16 $14.70 $37.86 800
2014 $956.62 $23.51 $14.35 $37.86 824 1 330 2.50 8
$933.11 $23.86 $14.00 $37.86 848
$909.25 $24.22 $13.64 $37.86 872
$885.03 $24.58 $13.28 $37.86 897
2015 $860.44 $24.95 $12.91 $37.86 922 1 369 2.50 9
$835.49 $25.33 $12.53 $37.86 947
$810.16 $25.71 $12.15 $37.86 973
$784.45 $26.09 $11.77 $37.86 999
2016 $758.36 $26.49 $11.38 $37.86 1,025 1 410 2.50 10
$731.87 $26.88 $10.98 $37.86 1,052
$704.99 $27.29 $10.57 $37.86 1,079
$677.71 $27.69 $10.17 $37.86 1,107
2017 $650.01 $28.11 $9.75 $37.86 1,135 1 454 2.50 11
$621.90 $28.53 $9.33 $37.86 1,164
$593.37 $28.96 $8.90 $37.86 1,193
$564.41 $29.39 $8.47 $37.86 1,222
2018 $535.02 $29.84 $8.03 $37.86 1,252 1 501 2.50 13
$505.18 $30.28 $7.58 $37.86 1,282
$474.90 $30.74 $7.12 $37.86 1,313
$444.16 $31.20 $6.66 $37.86 1,344
2019 $412.96 $31.67 $6.19 $37.86 1,376 1 550 2.50 14
$381.30 $32.14 $5.72 $37.86 1,408
$349.16 $32.62 $5.24 $37.86 1,440
$316.53 $33.11 $4.75 $37.86 1,474
2020 $283.42 $33.61 $4.25 $37.86 1,507 1 603 2.50 15
$249.81 $34.11 $3.75 $37.86 1,541
$215.70 $34.62 $3.24 $37.86 1,576
$181.07 $35.14 $2.72 $37.86 1,611
2021 $145.93 $35.67 $2.19 $37.86 1,647 1 659 2.50 16
$110.26 $36.21 $1.65 $37.86 1,683
$74.05 $36.75 $1.11 $37.86 1,720
$37.30 $37.30 $0.56 $37.86 1,757
========= ========= ========= =======
$1,757.00 $1,271.83 $3,028.83 $136.00
</TABLE>
<PAGE>
Exhibit 12.1
NOT APPLICABLE(1)
- --------------------
(1) Because we have not begun operations, we cannot calculate a ratio of
earnings to fixed charges.
<PAGE>
EXHIBIT 23-2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report,
dated October 7, 1999 (except with respect to the matters discussed in Note 4,
as to which the date is November 4, 1999), relating to the Tenaska Georgia
Partners, L.P. balance sheet as of August 31, 1999, and the related statements
of operations, partners' deficit and cash flows for the eight-month period ended
August 31, 1999, and to all references to our Firm included in or made a part of
this Registration Statement on Form S-4.
Omaha, Nebraska,
January 27, 2000
<PAGE>
Exhibit 23.3
[LETTERHEAD OF R. W. BECK]
January 21, 2000
Tenaska Georgia Partners, L.P.
1044 N. 115 Street
Suite 400
Omaha, Nebraska 68154-4446
Ladies and Gentlemen:
SUBJECT: TENASKA GEORGIA PARTNERS, L.P.
$275,000,000 9.50% SENIOR SECURED BONDS DUE 2030
This letter is furnished relating to the exchange by Tenaska Georgia Partners,
L.P. (the "Registrant") of $275,000,000 principal amount of unregistered 9.50%
Senior Secured Bonds Due 2030 (the "Old Bonds") for $275,000,000 of registered
9.50% Senior Secured Bonds Due 2030 (the "New Bonds"), as more fully described
in the Registration Statement on Form S-4, filed with the Securities and
Exchange Commission by the Registrant (the "Prospectus"), and prepared in
connection with the issuance of the New Bonds.
R. W. Beck, Inc. ("Beck") was retained by the Registrant to act as the
Independent Engineer in connection with the issuance of the Old Bonds and it
prepared an Independent Engineer's Report dated November 3, 1999 (the "Report")
which is included as Appendix B to the Prospectus. We hereby consent to the
inclusion of the Report in the Prospectus and to references to Beck in the
Prospectus under the heading "Prospectus Summary Independent Consultant's
Reports - Independent Engineer's Report" and under the heading "Experts."
Very truly yours,
R. W. BECK, INC.
/s/ Kenneth V. Marino
Principal
KVM:pd
File: Tenaska Bonds-ltr-e
011616\04-00617-01000 0001\011763
<PAGE>
Exhibit 23.4
Ladies and Gentlemen:
We consent to the use of our Southeast U.S. Electricity Market Study (the
"Report") in the Prospectus (including any amendments or supplements thereto)
relating to the offering of 9.50% Senior Secured Bonds due 2030 of Tenaska
Georgia Partners, L.P. ("TGP") constituting part of the registration statement
on Form S-4 of TGP (the "Prospectus"). In addition, we consent to the inclusion
of the summary of the Report under the heading "Prospectus Summary--Independent
Consultants' Reports--Independent Market Consultant's Report" in the Prospectus
and to the reference to us as experts under the heading "Experts" in the
Prospectus.
Resource Data International
By:
Name: Douglas M. Logan
Principal
January 4, 2000
<PAGE>
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
---------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
TENASKA GEORGIA PARTNERS, L.P.
(Exact name of obligor as specified in its charter)
DELAWARE 47-0812088
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1044 N. 115TH STREET MICHAEL F. LAWLER
OMAHA, NEBRASKA 68154-4446 VICE PRESIDENT OF FINANCE AND TREASURER
(402) 691-9500 TENASKA GEORGIA PARTNERS, L.P.
1044 N. 115 STREET, SUITE 400
OMAHA, NEBRASKA 68154-4446
(402) 691-9500
(Address of principal executive offices) (Name, address and telephone
number of agent for service)
--------------------------------------------
<PAGE>
9.50% SENIOR SECURED BONDS DUE 2030
(Title of the securities)
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, New York
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
-2-
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 28th day of June, 1999.
THE CHASE MANHATTAN BANK
By /s/ ANNETTE M. MARSULA
-----------------------
/s/ Annette M. Marsula, Assistant Vice President
-3-
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business September 30, 1999, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ........................................ $ 13,497
Interest-bearing balances ................................ 6,388
Securities: ..................................................
Held to maturity securities.................................... 798
Available for sale securities.................................. 48,655
Federal funds sold and securities purchased under
agreements to resell ..................................... 30,373
Loans and lease financing receivables:
Loans and leases, net of unearned income....... $132,392
Less: Allowance for loan and lease losses...... 2,463
Less: Allocated transfer risk reserve .......... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ................................... 129,929
Trading Assets ................................................ 47,413
Premises and fixed assets (including capitalized
leases)................................................... 3,287
Other real estate owned ....................................... 26
Investments in unconsolidated subsidiaries and
associated companies...................................... 185
Customers' liability to this bank on acceptances
outstanding .............................................. 716
Intangible assets ............................................. 2,693
Other assets .................................................. 15,430
--------
TOTAL ASSETS .................................................. $299,390
========
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ...................................... $100,324
Noninterest-bearing ............................. $41,601
Interest-bearing ................................ 58,723
-------
In foreign offices, Edge and Agreement
subsidiaries and IBF's ................................... 88,064
Noninterest-bearing .................................. $ 6,363
Interest-bearing ................................ 81,701
Federal funds purchased and securities sold under agreements
to repurchase ............................................ 35,773
Demand notes issued to the U.S. Treasury ...................... 892
Trading liabilities ........................................... 33,565
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ............ 4,434
With a remaining maturity of more than one year
through three years................................ 14
With a remaining maturity of more than three years...... 97
Bank's liability on acceptances executed and outstanding 716
Subordinated notes and debentures ............................. 5,429
Other liabilities ............................................. 11,457
TOTAL LIABILITIES ............................................. 280,765
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock .................................................. 1,211
Surplus (exclude all surplus related to preferred stock)...... 11,016
Undivided profits and capital reserves ........................ 7,333
Net unrealized holding gains (losses)
on available-for-sale securities .............................. (951)
Accumulated net gains (losses) on cash flow hedges............. 0
Cumulative foreign currency translation adjustments ........... 16
TOTAL EQUITY CAPITAL .......................................... 18,625
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .......................... $299,390
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
WILLIAM B. HARRISON, JR. ) DIRECTORS
SUSAN V. BERRESFORD )
-5-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR TENASKA GEORGIA PARTNERS, L.P. INCLUDED AS EXHIBIT 23-2
TO THE FORM S-4 REGISTRATION STATEMENT DATED________ AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> AUG-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 89,334
<DEPRECIATION> 0
<TOTAL-ASSETS> 89,334
<CURRENT-LIABILITIES> 6,119,584
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (6,030,250)
<TOTAL-LIABILITY-AND-EQUITY> 89,334
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,030,250
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,030,250)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,030,250)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE>
LETTER OF TRANSMITTAL
TENASKA GEORGIA PARTNERS, L.P.
OFFER TO EXCHANGE
ITS
9.50% SENIOR SECURED BONDS DUE 2030 THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OUTSTANDING
9.50% SENIOR SECURED BONDS DUE 2030
PURSUANT TO THE PROSPECTUS DATED , 2000
TENASKA GEORGIA PARTNERS, L.P. WILL ACCEPT ALL OLD BONDS (AS HEREINAFTER
DEFINED) TENDERED AND NOT WITHDRAWN ON OR PRIOR TO 5:00 P.M., NEW YORK CITY
TIME, ON , 2000, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY
BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
<TABLE>
<CAPTION>
THE EXCHANGE AGENT IS:
THE CHASE MANHATTAN BANK
<S> <C> <C>
BY FACSIMILE: BY REGISTERED OR CERTIFIED MAIL, CONFIRM BY TELEPHONE:
(212) 270-4288 OVERNIGHT COURIER OR HAND: (212) 270-2611
Attention: The Chase Manhattan Bank
William H. McDavid 270 Park Avenue
New York, New York 10017
Attention: William H. McDavid
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned acknowledges receipt of the Prospectus dated ,
2000 (the "Prospectus") of TENASKA GEORGIA PARTNERS, L.P. (the "Partnership")
and this Letter of Transmittal (the "Letter of Transmittal"), which together
constitute the Partnership's offer (the "Exchange Offer") to exchange up to
$275,000,000 principal amount of its 9.50% Senior Secured Bonds due 2030 (the
"New Bonds"), pursuant to an offering registered under the Securities Act of
1933, for a like principal amount of its outstanding 9.50% Senior Secured Bonds
due 2030 (the "Old Bonds"). Recipients of the Prospectus should read the
requirements described in the Prospectus with respect to eligibility to
participate in the Exchange Offer. Capitalized terms used but not defined herein
have the meanings given to them in the Prospectus.
Either this Letter of Transmittal or an Agent's Message (as hereinafter
defined) is to be completed by a holder of Old Bonds (which term, for purposes
of the Exchange Offer, includes any participant in The Depository Trust Company
("DTC") whose name appears on a security position listing as the holder of such
Old Bonds) in order to tender Old Bonds. Certificates for Old Bonds should be
forwarded with this Letter of Transmittal or, if tender of Old Bonds is to be
made by book-entry transfer pursuant to the procedures set forth in the
Prospectus under "The Exchange Offer--Procedures for Tendering Old Bonds,"
tender of Old Bonds should be made by book-entry transfer to the account
maintained by The Chase Manhattan Bank (the "Exchange Agent") at DTC.
Any beneficial owner whose Old Bonds are held through a broker, dealer,
commercial bank, trust company or other nominee and who wishes to tender should
contact such holder of Old Bonds promptly and instruct such holder of Old Bonds
to tender on behalf of the beneficial owner. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing this
<PAGE>
Letter of Transmittal and delivering his Old Bonds, either make appropriate
arrangements to transfer record ownership of the Old Bonds in such beneficial
owner's name or obtain a properly completed bond power from the registered
holder of Old Bonds. The transfer of registered ownership may take considerable
time.
In order to properly complete this Letter of Transmittal, a holder of Old
Bonds must (i) complete the box entitled "Description of Old Bonds," (ii) if
appropriate, check and complete the boxes relating to book-entry transfer,
guaranteed delivery, Special Issuance Instructions and Special Delivery
Instructions, (iii) sign the Letter of Transmittal by completing the box
entitled "Sign Here" and (iv) complete the Substitute Form W-9. Each holder of
Old Bonds should carefully read the detailed instructions below prior to
completing the Letter of Transmittal.
Holders of Old Bonds who desire to tender the Old Bonds for exchange and
(i) whose Old Bonds are not immediately available, (ii) who cannot deliver their
Old Bonds and all other documents required hereby to the Exchange Agent on or
prior to the Expiration Date or (iii) who are unable to complete the procedure
for book-entry transfer on a timely basis, must tender the Old Bonds pursuant to
the guaranteed delivery procedures set forth below. See Instruction 2.
2
<PAGE>
Holders of Old Bonds who wish to tender their Old Bonds for exchange must,
at a minimum, complete columns (1) through (3) in the box below entitled
"Description of Old Bonds" and sign the box below entitled "Sign Here." If only
these columns are completed, such holder of Old Bonds will have tendered for
exchange all Old Bonds listed in column (3) below. If the holder of Old Bonds
wishes to tender for exchange less than all of such Old Bonds, column (4) must
be completed in full. In such case, such holder of Old Bonds should refer to
Instruction 5.
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF OLD BONDS
(1) (2) (3) (4)
PRINCIPAL AMOUNT
BOND NUMBER(S)(1) TENDERED FOR
(ATTACH SIGNED EXCHANGE (ONLY IF
NAME(S) AND ADDRESS(ES) OF HOLDER OF OLD BOND(S) LIST AGGREGATE DIFFERENT AMOUNT
(PLEASE FILL IN, IF BLANK) IF NECESSARY) PRINCIPAL AMOUNT FROM COLUMN(3))(2)
<S> <C> <C> <C>
</TABLE>
(1) Column (2) need not be completed by holders of Old Bonds tendering Old Bonds
for exchange by book-entry transfer. Please check the appropriate box below
and provide the requested information.
(2) Column (4) need not be completed by holders of Old Bonds who wish to tender
for exchange the principal amount of Old Bonds listed in Column (3).
Completion of Column (4) will indicate that the holder of Old Bonds wishes
to tender for exchange only the principal amount of Old Bonds indicated in
column (4). Any such tender must be in denominations of $100,000 and
integral multiples of $1,000 in excess thereof.
3
<PAGE>
/ / CHECK HERE IF TENDERED OLD BONDS ARE ENCLOSED HEREWITH .
/ / CHECK HERE IF TENDERED OLD BONDS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING (FOR USE BY ELIGIBLE INSTITUTIONS (AS HEREINAFTER DEFINED)
ONLY):
Name of Tendering Institution ______________________________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
By crediting the Old Bonds to the Exchange Agent's account at DTC in
accordance with DTC's Automated Tender Offer Program ("ATOP") and by
complying with applicable ATOP procedures with respect to the Exchange
Offer, including transmitting a computer-generated message (an "Agent's
Message") to the Exchange Agent in which the holder of the Old Bonds
acknowledges and agrees to be bound by the terms of this Letter of
Transmittal, the participant in DTC confirms on behalf of itself and the
beneficial owners of such Old Bonds all provisions of this Letter of
Transmittal applicable to it and such beneficial owners as fully as if it
had completed the information required herein and executed and transmitted
this Letter of Transmittal to the Exchange Agent.
/ / CHECK HERE IF TENDERED OLD BONDS ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING (FOR USE
BY ELIGIBLE INSTITUTIONS ONLY):
Name of Registered Holder of Old Bond(s) ___________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Window Ticket Number (if available) ________________________________________
Name of Institution which Guaranteed Delivery ______________________________
Account Number (if delivered by book-entry transfer) _______________________
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name _______________________________________________________________________
Address ____________________________________________________________________
4
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY (i) if (a) New Bonds issued in exchange for Old
Bonds or (b) certificates for Old Bonds in a principal amount not exchanged
for New Bonds, are to be issued in the name of someone other than the
undersigned, or (ii) if Old Bonds tendered by book-entry transfer which are
not exchanged are to be returned by credit to an account maintained at DTC.
Issue to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP/POSTAL CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
Credit Old Bonds not exchanged and delivered by book-entry transfer to
the account set forth below:
____________________________________________________________________________
(DTC ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)
To be completed ONLY if certificates for Old Bonds in a principal amount
not exchanged for New Bonds are to be mailed or delivered to someone other
than the undersigned, or to the undersigned at an address other than the
address shown below the undersigned's signature.
Mail or deliver to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP/POSTAL CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
5
<PAGE>
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Pursuant to the offer by TENASKA GEORGIA PARTNERS, L.P. (the "Partnership"),
upon the terms and subject to the conditions set forth in the Partnership's
Prospectus dated , 2000 (the "Prospectus") and this Letter of Transmittal
(the "Letter of Transmittal"), which together constitute the Partnership's offer
(the "Exchange Offer") to exchange up to $275,000,000 principal amount of its
9.50% Senior Secured Bonds due 2030 that have been registered under the
Securities Act of 1933 (the "New Bonds"), pursuant to an offering registered
under the Securities Act of 1933, for a like principal amount of its outstanding
9.50% Senior Secured Bonds due 2030 (the "Old Bonds"), the undersigned hereby
tenders to the Partnership for exchange the Old Bonds indicated above.
By executing this Letter of Transmittal and subject to and effective upon
acceptance for exchange of the Old Bonds tendered for exchange herewith, the
undersigned will have irrevocably sold, assigned, transferred and exchanged, to
the Partnership, all right, title and interest in, to and under all of the Old
Bonds tendered for exchange hereby, and hereby appoints the Exchange Agent as
the true and lawful agent and attorney-in-fact (with full knowledge that the
Exchange Agent also acts as agent of the Partnership) of such holder of Old
Bonds with respect to such Old Bonds, with full power of substitution to
(i) deliver certificates representing such Old Bonds, or transfer ownership of
such Old Bonds on the account books maintained by DTC (together, in any such
case, with all accompanying evidences of transfer and authenticity), to the
Partnership, (ii) present and deliver such Old Bonds for transfer on the books
of the Partnership and (iii) receive all benefits and otherwise exercise all
rights and incidents of beneficial ownership with respect to such Old Bonds, all
in accordance with the terms of the Exchange Offer. The power of attorney
granted in this paragraph shall be deemed to be irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that the undersigned is the
owner, and has full power and authority to transfer the Old Bonds in exchange
for the New Bonds, and that when such Old Bonds are accepted for exchange by the
Partnership, the Partnership will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claims. The undersigned will, upon receipt, execute and
deliver any additional documents deemed by the Exchange Agent or the Partnership
to be necessary or desirable to complete the sale, exchange, assignment and
transfer of the Old Bonds tendered for exchange hereby.
The undersigned hereby further represents to the Partnership that (i) the
New Bonds acquired pursuant to the Exchange Offer are being obtained in the
ordinary course of business of the person receiving such New Bonds, whether or
not such person is the holder, (ii) neither the holder nor any such other person
has an arrangement or understanding with any person, nor an intention, to
participate in the distribution (within the meaning of the Securities Act of
1933) of such New Bonds, (iii) neither the holder nor any such other person is
an "affiliate," as defined under Rule 405 of the Securities Act of 1933, of the
Partnership and (iv) the holder and such other person acknowledge that (a) any
person participating in the Exchange Offer for the purpose of distributing the
New Bonds must, in the absence of an exemption therefrom, comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with any secondary resale transaction of the New Bonds and cannot
rely on the position of the staff of the Securities and Exchange Commission set
forth in the no-action letters that are discussed in the Prospectus under "The
Exchange Offer--Purpose and Effect of the Exchange Offer" and (b) failure to
comply with such requirements in such instance could result in such holder
incurring liability under the Securities Act of 1933 for which such holder is
not indemnified by the Partnership. If the undersigned is a broker-dealer that
will receive New Bonds for its own account in exchange for Old Bonds that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Bonds; however, by so acknowledging and
6
<PAGE>
by delivering a prospectus, the undersigned will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act of 1933.
For purposes of the Exchange Offer, the Partnership will be deemed to have
accepted for exchange, and to have exchanged, validly tendered Old Bonds, if, as
and when the Partnership gives oral or written notice of the acceptance to the
Exchange Agent. Tenders of Old Bonds that have not been accepted for exchange
may be withdrawn at any time on or prior to 5:00 p.m., New York City time, on
the Expiration Date. See "The Exchange Offer--Withdrawal of Tenders" in the
Prospectus. Any Old Bonds tendered by the undersigned and not accepted for
exchange will be returned to the undersigned at the address set forth above
unless otherwise indicated in the box above entitled "Special Delivery
Instructions." The undersigned acknowledges that the Partnership's acceptance of
Old Bonds validly tendered for exchange pursuant to any one of the procedures
described in the section of the Prospectus entitled "The Exchange Offer" and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Partnership upon the terms and subject to the conditions of
the Exchange Offer.
Unless otherwise indicated in the box entitled "Special Issuance
Instructions," please return any Old Bonds not tendered for exchange in the
name(s) of the undersigned. Similarly, unless otherwise indicated in the box
entitled "Special Delivery Instructions," please mail any certificates for Old
Bonds not tendered or exchanged (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Issuance Instructions" and "Special Delivery
Instructions" are completed, please issue the certificate representing the New
Bonds issued in exchange for the Old Bonds accepted for exchange in the name(s)
of, and return any Old Bonds not tendered for exchange or not exchanged to, the
person(s) so indicated. The undersigned recognizes that the Partnership has no
obligation pursuant to the "Special Issuance Instructions" and "Special Delivery
Instructions" to transfer any Old Bonds from the name of the holder of Old
Bond(s) thereof if the Partnership does not accept for exchange any of the Old
Bonds so tendered for exchange.
A tender for exchange of Old Bonds pursuant to any one of the procedures set
forth in the section of the Prospectus entitled "The Exchange Offer" will
constitute the tendering holder of Old Bond's acceptance of the terms and
conditions of the Exchange Offer.
IN ORDER TO VALIDLY TENDER OLD BONDS FOR EXCHANGE, HOLDERS OF OLD BONDS MUST
COMPLETE, EXECUTE, AND DELIVER THIS LETTER OF TRANSMITTAL.
Except as stated in the Prospectus, all authority herein conferred or agreed
to be conferred shall survive the death or incapacity of the undersigned, and
any obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
otherwise stated in the Prospectus, this tender for exchange of Old Bonds is
irrevocable.
7
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
____________________________________________________________________________
____________________________________________________________________________
Date:
--------------------------------
Must be signed by the registered holder of Old Bond(s) exactly as
name(s) appear(s) on certificate(s) representing the Old Bonds or on a
security position listing or by person(s) authorized to become registered
Old Bond holder(s) by certificates and documents transmitted herewith. If
signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, please provide the following information. (See
Instruction 6)
Name(s)_____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Please Print)
Capacity (full title)_______________________________________________________
Address_____________________________________________________________________
____________________________________________________________________________
(Include Zip/Postal Code)
Area Code and Telephone No. ( )___________________________________________
Tax Identification or Social Security Nos.__________________________________
Please complete Substitute Form W-9
GUARANTEE OF SIGNATURE(S)
(SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 1)
Authorized Signature________________________________________________________
Dated_______________________________________________________________________
Name and Title______________________________________________________________
(Please Print)
Name of Firm________________________________________________________________
- --------------------------------------------------------------------------------
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. GUARANTEE OF SIGNATURE. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a member firm of
a registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or another "eligible institution," within the
meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, that is a
member of one of the following recognized signature Guarantee Programs: (a) the
Securities Transfer Agents Medallion Program (STAW); (b) the New York Stock
Exchange Medallion Signature Program (MSP); or (c) the Stock Exchange Medallion
Program (SEMP) (each an "Eligible Guarantor Institution").
Signatures on this Letter of Transmittal need not be guaranteed (i) if this
Letter of Transmittal is signed by the registered holder(s) of the Old Bonds
tendered herewith and such registered holder(s) have not completed the box
entitled "Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (ii) if such Old Bonds are
tendered for the account of an eligible institution. IN ALL OTHER CASES, ALL
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION.
2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD BONDS; GUARANTEED DELIVERY
PROCEDURE. This Letter of Transmittal is to be completed by holders of Old Bonds
(i) if certificates are to be forwarded herewith or (ii) if tenders are to be
made pursuant to the procedures for tender by book-entry transfer or guaranteed
delivery set forth in the section of the Prospectus entitled "The Exchange
Offer." Certificates for all physically tendered Old Bonds or any confirmation
of a book-entry transfer under DTC's ATOP (a "Book-Entry Confirmation"), as well
as a properly completed and duly executed copy of this Letter of Transmittal or
facsimile hereof, and any other documents required by this Letter of Transmittal
must be received by the Exchange Agent at its address set forth on the cover of
this Letter of Transmittal on or prior to 5:00 p.m., New York City time, on the
Expiration Date. Holders of Old Bonds who elect to tender Old Bonds and
(i) whose Old Bonds are not immediately available, (ii) who cannot deliver the
Old Bonds or other required documents to the Exchange Agent on or prior to
5:00 p.m., New York City time on the Expiration Date or (iii) who are unable to
complete the procedure for book-entry transfer on a timely basis, may have such
tender effected if: (a) such tender is made by or through an Eligible Guarantor
Institution; (b) on or prior to 5:00 p.m., New York City time, on the Expiration
Date, the Exchange Agent has received from such holder or Eligible Guarantor
Institution a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) and Notice of Guaranteed Delivery (by telegram, telex,
facsimile transmission, mail or hand delivery) setting forth the name and
address of the holder of such Old Bonds, the certificate number(s) of such Old
Bonds and the principal amount of Old Bonds tendered for exchange, stating that
tender is being made thereby and guaranteeing that, within three Nasdaq National
Market ("NASDAQ") trading days after the date of delivery of the Notice of
Guaranteed Delivery, the certificates representing such Old Bonds (or a
Book-Entry Confirmation), in proper form for transfer, and any other documents
required by this Letter of Transmittal, will be deposited by such Eligible
Guarantor Institution with the Exchange Agent; and (c) certificates for all
tendered Old Bonds, or a Book-Entry Confirmation, together with a copy of the
previously executed Letter of Transmittal (or facsimile thereof) and any other
documents required by this Letter of Transmittal, are received by the Exchange
Agent within three NASDAQ trading days after the Expiration Date.
THE METHOD OF DELIVERY OF OLD BONDS, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER OF
OLD BONDS. EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN
9
<PAGE>
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. NEITHER THE LETTER OF
TRANSMITTAL NOR ANY OLD BONDS SHOULD BE SENT TO THE PARTNERSHIP.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders of Old Bonds, by execution of this Letter of Transmittal (or
facsimile hereof, if applicable), waive any right to receive notice of the
acceptance of their Old Bonds for exchange.
3. INADEQUATE SPACE. If the space provided in the box entitled "Description
of Old Bonds" above is inadequate, the certificate numbers and principal amounts
of the Old Bonds being tendered should be listed on a separate signed schedule
affixed hereto.
4. WITHDRAWALS. A tender of Old Bonds may be withdrawn at any time on or
prior to 5:00 p.m., New York City time, on the Expiration Date by delivery of
written notice of withdrawal to the Exchange Agent at the address set forth on
the cover of this Letter of Transmittal or holders must comply with the
appropriate procedures of DTC's ATOP. To be effective, a notice of withdrawal of
Old Bonds must (i) specify the name of the person who tendered the Old Bonds to
be withdrawn (the "Depositor"), (ii) identify the Old Bonds to be withdrawn
(including the certificate number or numbers and aggregate principal amount of
those Old Bonds), (iii) be signed by the holder of Old Bonds in the same manner
as the original signature on the Letter of Transmittal by which such Old Bonds
were tendered (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the applicable transfer agent register
the transfer of such Old Bonds into the name of the person withdrawing the
tender and (iv) where certificates for Old Bonds have been transmitted, specify
the name in which those Old Bonds were registered, if different from that of the
withdrawing holder. If certificates for Old Bonds have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of those
certificates, the withdrawing holder must also submit (a) the serial numbers of
the particular certificates to be withdrawn and (b) a signed notice of
withdrawal with signatures guaranteed by an eligible institution unless the
holder is an eligible institution. If Old Bonds have been tendered pursuant to
the procedure for book-entry transfer, any notice of withdrawal must specify the
name and number of the account at DTC to be credited with the withdrawn Old
Bonds and otherwise comply with DTC's procedures. Withdrawals of tenders of Old
Bonds may not be rescinded, and any Old Bonds withdrawn will thereafter be
deemed not validly tendered for purposes of the Exchange Offer and no New Bonds
will be issued with respect thereto unless the Old Bonds so withdrawn are
validly retendered. Properly withdrawn Old Bonds may be retendered by following
one of the procedures described in the section of the Prospectus entitled "The
Exchange Offer--Procedures for Tendering" at any time on or prior to 5:00 p.m.,
New York City time, on the Expiration Date.
5. PARTIAL TENDERS. (Not applicable to holders of Old Bonds who tender Old
Bonds by book-entry transfer). Tenders of Old Bonds will be accepted only in
denominations of $100,000 and integral multiples of $1,000 in excess thereof. If
a tender for exchange is to be made with respect to less than the entire
principal amount of any Old Bonds, fill in the principal amount of Old Bonds
that are tendered for exchange in column (4) of the box entitled "Description of
Old Bonds," as more fully described in the footnotes thereto. In case of a
partial tender for exchange, a new certificate, in fully registered form, for
the remainder of the principal amount of the Old Bonds, will be sent to the
holders of Old Bonds unless otherwise indicated in the appropriate box on this
Letter of Transmittal as promptly as practicable after the expiration or
termination of the Exchange Offer.
6. Signatures on this Letter of Transmittal, Powers of Attorney and
Endorsements.
(a) The signature(s) of the holder of Old Bond(s) on this Letter of
Transmittal must correspond with the name(s) as written on the face of the Old
Bonds without alteration, enlargement or any change whatsoever.
(b) If tendered Old Bonds are owned of record by two or more joint owners,
all such owners must sign this Letter of Transmittal.
10
<PAGE>
(c) If any tendered Old Bonds are registered in different names, on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal and any necessary or required documents as
there are different registrations or certificates.
(d) When this Letter of Transmittal is signed by the holder of the Old Bonds
listed and transmitted hereby, no endorsements of Old Bonds or separate powers
of attorney are required. If, however, Old Bonds not tendered or not accepted,
are to be issued or returned in the name of a person other than the holder of
such Old Bond(s), then the Old Bonds transmitted hereby must be endorsed or
accompanied by appropriate powers of attorney in a form satisfactory to the
Partnership, in either case signed exactly as the name(s) of the holder of Old
Bond(s) appear(s) on the Old Bonds. Signatures on such Old Bonds or powers of
attorney must be guaranteed by an Eligible Guarantor Institution (unless signed
by an Eligible Guarantor Institution).
(e) If this Letter of Transmittal or Old Bonds or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Partnership of their authority so to act must be submitted.
(f) If this Letter of Transmittal is signed by a person other than the
registered holder of Old Bond(s) listed, the Old Bonds must be endorsed or
accompanied by appropriate powers of attorney, in either case signed exactly as
the name(s) of the registered holder of Old Bond(s) appear(s) on the
certificates. Signatures on such Old Bonds or powers of attorney must be
guaranteed by an Eligible Institution (unless signed by an Eligible
Institution).
7. TRANSFER TAXES. Except as set forth in this Instruction 7, the
Partnership will pay all transfer taxes, if any, applicable to the transfer and
exchange of Old Bonds pursuant to the Exchange Offer. If, however, issuance of
New Bonds is to be made to, or Old Bonds not tendered for exchange are to be
issued or returned in the name of, any person other than the holder of Old
Bonds, the amount of any transfer taxes payable on account of the transfer to
such person will be imposed on and payable by the holder of Old Bond(s)
tendering Old Bonds for exchange prior to the issuance of the New Bonds. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
8. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If the New Bonds are to be
issued, or if any Old Bonds not tendered for exchange are to be issued or sent,
to someone other than the holder of Old Bonds or to an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Holders of Old Bonds tendering Old Bonds by book-entry transfer may
request that Old Bonds not accepted be credited to such account maintained at
DTC as such holder of Old Bonds may designate.
9. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time or receipt), acceptance and withdrawal of
Old Bonds will be determined by the Partnership, in its sole discretion, whose
determination shall be final and binding. The Partnership reserves the absolute
right to reject any or all tenders for exchange of any particular Old Bonds that
are not in proper form, or the acceptance of which would, in the opinion of the
Partnership or its counsel, be unlawful. The Partnership reserves the absolute
right to waive any defect, irregularity or condition of tender for exchange with
regard to any particular Old Bonds. The Partnership's interpretation of the
terms of, and conditions to, the Exchange Offer (including the instructions
herein) will be final and binding. Unless waived, any defect or irregularities
in connection with the Exchange Offer must be cured within such time as the
Partnership shall determine. Neither the Partnership, the Exchange Agent nor any
other person shall be under any duty to give notice of any defects or
irregularities in Old Bonds tendered for exchange, nor shall any of them incur
any liability for failure to give such notice. A tender of Old Bonds will not be
deemed to have been made until all defects and irregularities with respect to
such tender have been cured or waived. Any Old Bonds received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering
11
<PAGE>
holders, unless otherwise provided in this Letter of Transmittal as soon as
practicable following the Expiration Date.
10. WAIVER OF CONDITIONS. The Partnership reserves the absolute right to
waive certain of the specified conditions as described under "The Exchange
Offer--Conditions to the Exchange Offer" in the Prospectus in the case of any
Old Bonds tendered (except as otherwise provided in the Prospectus).
11. MUTILATED, LOST, STOLEN OR DESTROYED BONDS. If a holder of Old Bonds
desires to tender an Old Bond pursuant to the Exchange Offer, but the Old Bond
has been mutilated, lost, stolen or destroyed, such holder of Old Bonds should
write to or telephone the Trustee, at the address listed below, concerning the
procedures for obtaining replacement certificates for such Old Bonds, arranging
for indemnification or any other matter that requires handling by the Trustee:
The Chase Manhattan Bank
Attention: William H. McDavid
270 Park Avenue
New York, New York 10017
Telephone: (212) 270-2611
Facsimile: (212) 270-4288
12. REQUESTS FOR INFORMATION OR ADDITIONAL COPIES. Requests for information
or for additional copies of the Prospectus and this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover of this Letter of Transmittal.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF, IF
APPLICABLE), TOGETHER WITH OLD BOND CERTIFICATES, OR CONFIRMATION OF BOOK-ENTRY
TRANSFER OR THE NOTICE OF GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS,
MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO 5:00 P.M., NEW YORK CITY
TIME, ON THE EXPIRATION DATE.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under current United States federal income tax law, a holder of Old Bonds
whose tendered Old Bonds are accepted for exchange is required to provide the
Partnership (as payor), through the Exchange Agent, with such holder's correct
taxpayer identification number ("TIN") on Substitute Form W-9 or otherwise
establish a basis for exemption from backup withholding. If such holder of Old
Bonds is an individual, the TIN is such holder's social security number. If the
Exchange Agent is not provided with the correct taxpayer identification number,
the holder of Old Bonds may be subject to a penalty imposed by the Internal
Revenue Service. In addition, delivery of such holder's New Bonds may be subject
to backup withholding.
Certain holders of Old Bonds (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. Exempt holders of Old Bonds should indicate their exempt
status on Substitute Form W-9. A Canadian resident or other non-U.S. holder may
qualify as an exempt recipient by submitting to the Exchange Agent a properly
completed Internal Revenue Service Form W-8 (which the Exchange Agent will
provide upon request) signed under penalty of perjury, attesting to the holder's
exempt status. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Partnership is required to withhold 31%
of any payment made to the holder of Old Bonds or other payee. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
SUBSTITUTE FORM W-9; TAXPAYER IDENTIFICATION NUMBER
To prevent backup withholding on payments that are made with respect to Old
Bonds exchanged in the Exchange Offer, each holder of Old Bonds is required to
provide the Exchange Agent with either (i) the holder's correct TIN by
completing the form below, certifying that the TIN provided on Substitute
Form W-9 is correct (or that such holder of Old Bonds is awaiting a TIN) and
that (A) the holder of Old Bonds has not been notified by the Internal Revenue
Service that he or she is subject to backup withholding as a result of a failure
to report all interest or dividends or (B) the Internal Revenue Service has
notified the holder of Old Bonds that he or she is no longer subject to backup
withholding; or (ii) an adequate basis for exemption (by, in the case of a
Canadian resident holder, submitting a completed Form W-8).
The holder of Old Bonds is required to give the Exchange Agent the TIN
(E.G., social security number or employer identification number) of the record
owner of the Old Bonds. If the Old Bonds are held in more than one name or are
not held in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance regarding which number to report.
13
<PAGE>
<TABLE>
<S> <C> <C>
PAYER'S NAME:
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR ---------------------------------
FORM W-9 TIN IN THE BOX AT RIGHT AND Social Security Number
CERTIFY BY SIGNING AND OR ----------------------------
DATING BELOW Employer Identification Number
DEPARTMENT OF THE PART 2--CERTIFICATION--Under Penalties of Perjury, I certify that:
TREASURY (1) The number shown on this form is my correct taxpayer identification
INTERNAL REVENUE SERVICE number (or I am waiting for a number to be issued to me) and
PAYER'S REQUEST FOR (2) I am not subject to backup withholding either because I have not been
TAXPAYER IDENTIFICATION notified by the Internal Revenue Service (the "IRS") that I am subject
NUMBER (TIN) to backup withholding as a result of a failure to report all interest
or dividends, or the IRS has notified me that I am no longer subject
to backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) in Part 2 above if
you have been notified by the IRS that you are subject to backup
withholding because of under-reporting interest or dividends on your tax
return. However, if after being notified by the IRS that you were subject
to backup withholding you receive another notification from the IRS
stating that you are no longer subject to backup withholding, do not cross
out item (2)
SIGNATURE -------------------------------- DATE-------------
PART 3--Awaiting TIN / /
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENT MADE TO
YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and
either (a) I have mailed or delivered an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail
or deliver such an application in the near future. I understand that if I do not provide a taxpayer
identification number within sixty (60) days, 31% of all reportable payments made to me thereafter will be
withheld until I provide such a number.
- --------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Signature Date
</TABLE>
14
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
OFFER TO EXCHANGE
ITS
9.50% SENIOR SECURED BONDS DUE 2030 THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OUTSTANDING
9.50% SENIOR SECURED BONDS DUE 2030
To Our Clients:
We are enclosing herewith a Prospectus dated , 2000 (the
"Prospectus") of Tenaska Georgia Partners, L.P. (the "Partnership") and a
related Letter of Transmittal (the "Letter of Transmittal," which, together with
the Prospectus, constitutes the "Exchange Offer") relating to the offer by the
Partnership to exchange up to $275,000,000 principal amount of its 9.50% Senior
Secured Bonds due 2030 ("New Bonds"), pursuant to an offering registered under
the Securities Act of 1933, for a like principal amount of its issued and
outstanding 9.50% Senior Secured Bonds due 2030 ("Old Bonds") upon the terms and
subject to the conditions set forth in the Exchange Offer.
PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 2000, UNLESS EXTENDED.
The Exchange Offer is not conditioned upon any minimum number of Old Bonds
being tendered.
We are the holder of record and/or participant in the book-entry transfer
facility of Old Bonds held by us for your account. A tender of such Old Bonds
can be made only by us as the record holder and/or participant in the book-entry
transfer facility and pursuant to your instructions. The Letter of Transmittal
is furnished to you for your information only and cannot be used by you to
tender Old Bonds held by us for your account.
We request instructions as to whether you wish to tender any or all of the
Old Bonds held by us for your account pursuant to the terms and conditions of
the Exchange Offer. We also request that you confirm that we may on your behalf
make the representations contained in the Letter of Transmittal.
Pursuant to the Letter of Transmittal, each holder of Old Bonds will
represent to the Partnership that (i) the New Bonds acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of the
person receiving such New Bonds, whether or not such person is the holder,
(ii) neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such New
Bonds, (iii) neither the holder nor any such other person is an "affiliate" as
defined under Rule 405 of the Securities Act of 1933, of the Partnership and
(iv) the holder and such other person acknowledge that (a) any person
participating in the Exchange Offer for the purpose of distributing the New
Bonds must, in the absence of an exemption therefrom, comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with any resale of the New Bonds and cannot rely on the position
of the staff of the Securities and Exchange Commission set forth in the
no-action letters that are discussed in the Prospectus under "The Exchange
Offer--Purpose and Effect of the Exchange Offer" and (b) failure to comply with
such requirements in such instance could result in such holder incurring
liability under the Securities Act of 1933 for which such holder is not
indemnified by the Partnership. If the undersigned is a broker-dealer that will
receive New Bonds for its own account in exchange for Old Bonds that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Bonds; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act of 1933.
Very truly yours,
<PAGE>
TENASKA GEORGIA PARTNERS, L.P.
OFFER TO EXCHANGE
ITS
9.50% SENIOR SECURED BONDS DUE 2030 THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OUTSTANDING
9.50% SENIOR SECURED BONDS DUE 2030
To Registered Holders and Participants in The Depository Trust Company ("DTC
Participants"):
We are enclosing herewith the material listed below relating to the offer by
Tenaska Georgia Partners, L.P. (the "Partnership") to exchange up to
$275,000,000 principal amount of its 9.50% Senior Secured Bonds due 2030 ("New
Bonds"), pursuant to an offering registered under the Securities Act of 1933,
for a like principal amount of its issued and outstanding 9.50% Senior Secured
Bonds due 2030 ("Old Bonds") upon the terms and subject to the conditions set
forth in the Partnership's Prospectus dated , 2000 and the related
Letter of Transmittal (which together constitute the "Exchange Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated , 2000;
2. Letter of Transmittal;
3. Notice of Guaranteed Delivery;
4. Instruction to Registered Holder and/or Book-Entry Transfer
Participant from Owner; and
5. Letter that may be sent to your clients for whose account you hold
Old Bonds in your name or in the name of your nominee, to accompany
the instruction form referred to above, for obtaining such client's
instruction with regard to the Exchange Offer.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE EXCHANGE
OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000,
UNLESS EXTENDED.
The Exchange Offer is not conditioned upon any minimum number of Old Bonds
being tendered.
To participate in the Exchange Offer by tendering notes by book-entry
transfer, a beneficial holder must cause a DTC Participant to tender such
holder's Old Bonds to The Chase Manhattan Bank (the "Exchange Agent") account
maintained at The Depository Trust Company ("DTC") for the benefit of the
Exchange Agent through DTC's Automated Tender Offer Program ("ATOP"), including
transmission of a computer-generated message that acknowledges and agrees to be
bound by the terms of the Letter of Transmittal. By complying with DTC's ATOP
procedures with respect to the Exchange Offer, the DTC Participant confirms on
behalf of itself and the beneficial owners of tendered Old Bonds all provisions
of the Letter of Transmittal applicable to it and such beneficial owners as
fully as if it completed, executed and returned the Letter of Transmittal to the
Exchange Agent.
Pursuant to the Letter of Transmittal, each holder of Old Bonds will
represent to the Partnership that (i) the New Bonds acquired pursuant to the
Exchange Offer are being obtained in the ordinary course of business of the
person receiving such New Bonds, whether or not such person is the holder,
(ii) neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such New
Bonds, (iii) neither the holder nor any such other person is an "affiliate," as
defined under Rule 405 of the Securities Act of 1933, of the Partnership and
(iv) the holder and such other person acknowledge that (a) any person
participating in the Exchange Offer for the purpose of distributing the New
Bonds must, in the absence of an exemption therefrom, comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with any resale of the New Bonds and cannot rely on the position
of the staff of the SEC set forth in the no-action letters that are discussed in
the Prospectus under "The Exchange Offer--Purpose and Effect of the Exchange
Offer" and (b) failure to comply with such requirements in such instance could
result in such holder incurring liability under the Securities Act of 1933 for
which such holder is not indemnified by the Partnership. If the
<PAGE>
undersigned is a broker-dealer that will receive New Bonds for its own account
in exchange for Old Bonds that were acquired as a result of market-making
activities or other trading activities, it acknowledges that it will deliver a
prospectus in connection with any resale of such New Bonds; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act of
1933.
The enclosed Instruction to Registered Holder and/or Book-Entry Transfer
Participant from Owner contains an authorization by the beneficial owners of the
Old Bonds for you to make the foregoing representations.
The Partnership will not pay any fee or commission to any broker or dealer
or to any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Old Bonds pursuant to the Exchange Offer. The
Partnership will pay or cause to be paid any transfer taxes payable on the
transfer of Old Bonds to it, except as otherwise provided in Instruction 7 of
the enclosed Letter of Transmittal.
Additional copies of the enclosed material may be obtained from the Exchange
Agent.
Very truly yours,
TENASKA GEORGIA PARTNERS, L.P.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE
AGENT OF TENASKA GEORGIA PARTNERS, L.P. OR THE CHASE MANHATTAN BANK OR AUTHORIZE
YOU TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN CONNECTION WITH
THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
2
<PAGE>
NOTICE OF GUARANTEED DELIVERY
TO BE USED IN CONNECTION WITH
TENASKA GEORGIA PARTNERS, L.P.
OFFER TO EXCHANGE
ITS
9.50% SENIOR SECURED BONDS DUE 2030 THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OUTSTANDING
9.50% SENIOR SECURED BONDS DUE 2030
As set forth in the Prospectus dated , 2000 (the "Prospectus")
of TENASKA GEORGIA PARTNERS, L.P. (the "Partnership"), in the section entitled
"The Exchange Offer," and in the accompanying Letter of Transmittal, which
together with the Prospectus constitute the Partnership's offer (the "Exchange
Offer") to exchange up to $275,000,000 principal amount of its 9.50% Senior
Secured Bonds due 2030, pursuant to an offering registered under the Securities
Act of 1933, for a like principal amount of its outstanding 9.50% Senior Secured
Bonds due 2030 (the "Old Bonds"), this form, or one substantially equivalent
hereto, must be used by any holder of Old Bonds who wishes to tender Old Bonds
pursuant to the Exchange Offer and (i) whose Old Bonds are not immediately
available, (ii) who cannot deliver the Old Bonds or other required documents to
the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration
Date or (iii) who is unable to complete the book-entry transfer on a timely
basis. Such form may be delivered by facsimile transmission, if applicable, mail
or hand delivery to the Exchange Agent.
THE PARTNERSHIP WILL ACCEPT ALL OLD BONDS TENDERED PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON , 2000, UNLESS EXTENDED ("THE EXPIRATION DATE"). TENDERS
MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON
THE EXPIRATION DATE.
<TABLE>
<S> <C> <C>
THE EXCHANGE AGENT IS:
THE CHASE MANHATTAN BANK
BY FACSIMILE: BY REGISTERED OR CERTIFIED CONFIRM BY
MAIL, OVERNIGHT COURIER OR TELEPHONE:
HAND
(212) 270-4288 The Chase Manhattan Bank (212) 270-2611
Attention: 270 Park Avenue
William H. McDavid New York, New York 10017
Attention: William H. McDavid
</TABLE>
DELIVERY OF TIES NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN TO THE ONE
LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders the Old Bonds listed below, upon the terms
and conditions of the Exchange Offer contained in each of the Prospectus,
receipt of one of which is hereby acknowledged, pursuant to the guaranteed
delivery procedures set forth under the section of the Prospectus entitled "The
Exchange Offer."
<TABLE>
<CAPTION>
<S> <C>
PRINCIPAL
OLD BOND CERTIFICATE NUMBERS AMOUNT
(IF AVAILABLE) TENDERED
</TABLE>
If Old Bonds will be tendered by book-entry transfer to The Depository Trust
Company:
Name of Tendering Institution:
________________________________________________________________________________
Account No. ____________________________________________________________________
SIGN HERE
________________________________________________________________________________
Signature(s)
________________________________________________________________________________
Name(s) (Please Print)
________________________________________________________________________________
Address
__________________________ _________________________ _________________________
City State/Province Zip/Postal Code
________________________________________________________________________________
Area Code and Telephone No.
Date: __________________________________________________________________________
<PAGE>
- --------------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTY)
If the holder of Old Bonds is resident in the United States a bank,
broker, dealer, credit union, savings association or other entity which is
an "eligible guarantor institution," as such term is defined in Rule 17Ad-15
under the Securities Exchange Act of 1934 (an "Eligible Guarantor
Institution'), guarantees to deliver to the Exchange Agent (i) certificates
for the Old Bonds tendered hereby, in proper form for transfer, together
with a properly completed and duly executed Letters of Transmittal, with any
required signature guarantees and any other required documents or (ii) a
confirmation of the book-entry transfer of such Old Bonds into the Exchange
Agent's account at The Depository Trust Company, pursuant to the procedure
for book-entry transfer set forth in the Prospectus, and any other documents
required by the Letter of Transmittal all by 5:00 p.m., New York City time,
on the third NASDAQ trading day following the Expiration Date.
SIGN HERE
____________________________________________________________________________
Eligible Guarantor Institution (Please Print)
____________________________________________________________________________
____________________________________________________________________________
Signature(s)
____________________________________________________________________________
____________________________________________________________________________
Name(s) (Please Print)
____________________________________________________________________________
____________________________________________________________________________
Address
____________________________________________________________________________
City State/Province Zip/Postal Code
____________________________________________________________________________
Area Code and Telephone No.
Date:
--------------------------------
- --------------------------------------------------------------------------------
DO NOT SEND OLD BONDS WITH THIS FORM. ACTUAL TENDER OF OLD BONDS MUST BE
MADE PURSUANT TO, AND BE ACCOMPANIED BY, A COPY OF THE PREVIOUSLY EXECUTED
LETTER OF TRANSMITTAL.
2
<PAGE>
INSTRUCTIONS
1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY. A properly completed and
duly executed copy of this Notice of Guaranteed Delivery and any other documents
required by this Notice of Guaranteed Delivery must be received by the Exchange
Agent at its address set forth on the cover hereof prior to 5:00 p.m., New York
City time, on the Expiration Date. The method of delivery of this Notice of
Guaranteed Delivery and all other required documents to the Exchange Agent is at
the election and risk of the holder but, except as otherwise provided below, the
delivery will be deemed made only when actually received by the Exchange Agent.
If such delivery is by mail, it is recommended that the holder use properly
insured, registered mail with return receipt requested. For a full description
of the guaranteed delivery procedures, see the section of the Prospectus
entitled "The Exchange Offer". In all cases, sufficient time should be allowed
to assure timely delivery. No Notice of Guaranteed Delivery should be sent to
the Partnership.
2. SIGNATURE ON THIS NOTICE OF GUARANTEED DELIVERY; GUARANTEE OF SIGNATURES.
If this Notice of Guaranteed Delivery is signed by the registered holder(s) of
the Old Bonds referred to herein, the signature must correspond with the name(s)
as written on the face of the Old Bonds without alteration, enlargement or any
change whatsoever.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Old Bonds listed, this Notice of Guaranteed Delivery
must be accompanied by appropriate bond powers signed as the name(s) of the
registered holder(s) appear(s) on the face of the Old Bonds without alteration,
enlargement or any change whatsoever.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing, and, unless waived by the Partnership, evidence
satisfactory to the Partnership of the authority so to act must be submitted
with this Notice of Guaranteed Delivery.
3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance or for additional copies of the Prospectus and the Letter of
Transmittal may be directed to the Exchange Agent at its address or telephone
number set forth on the cover hereof
3
<PAGE>
INSTRUCTION TO HOLDER AND/OR
BOOK-ENTRY TRANSFER PARTICIPANT FROM OWNER OF
9.50% SENIOR SECURED BONDS DUE 2030 OF TENASKA GEORGIA PARTNERS, L.P.
To Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus dated
, 2000 (the "Prospectus") of Tenaska Georgia Partners, L.P. (the
"Partnership") and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), which together constitute the Partnership's offer (the "Exchange
Offer") to exchange up to $275,000,000 principal amount of its 9.50% Senior
Secured Bonds due 2030 ("New Bonds"), pursuant to an offering registered under
the Securities Act of 1933, for a like principal amount of its issued and
outstanding 9.50% Senior Secured Bonds due 2030 ("Old Bonds")
This will instruct you, the holder and/or book-entry transfer facility
participant, as to the action to be taken by you relating to the Exchange Offer
with respect to the Old Bonds held by you for the account of the undersigned.
The aggregate face amount of the Old Bonds held by you for the account of
the undersigned is (fill in amount):
$ of 9.50% Senior Secured Bonds due 2030.
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
Tender the following Old Bonds held by you for the account of the
undersigned (insert principal amount of Old Bonds to be tendered (if any)):
$ of 9.50% Senior Secured Bonds due 2030.
Not to tender any Old Bonds held by you for the account of the undersigned.
If the undersigned instructs you to tender the Old Bonds held by you for the
account of the undersigned, it is understood that you are authorized to make, on
behalf of the undersigned (and the undersigned, by its signature below, hereby
makes to you), the representations and warranties contained in the Letter of
Transmittal that are to be made with respect to the undersigned as a beneficial
owner, including but not limited to the representations that (i) the New Bonds
acquired pursuant to the Exchange Offer are being obtained in the ordinary
course of business of the person receiving such New Bonds, whether or not such
person is the holder, (ii) neither the holder nor any such other person has an
arrangement or understanding with any person to participate in the distribution
of such New Bonds, (iii) neither the holder nor any such other person is an
"affiliate," as defined under Rule 405 of the Securities Act of 1933, of the
Partnership and (iv) the holder and such other person acknowledge that (a) any
person participating in the Exchange Offer for the purpose of distributing the
New Bonds must, in the absence of an exemption therefrom comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with any resale of the New Bonds and cannot rely on the position
of the staff of the Securities and Exchange Commission set forth in the
no-action letters that are discussed in the Prospectus under "The Exchange
Offer--Purpose and Effect of the Exchange Offer" and (b) failure to comply with
such requirements in such instance could result in such holder incurring
liability under the Securities Act of 1933 for which such holder is not
indemnified by the Partnership. If the undersigned is a broker-dealer that will
receive New Bonds for its own account in exchange for Old Bonds that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Bonds; however, by so acknowledging and by delivering a prospectus, the
undersigned, will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act of 1933.
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
Name of beneficial owner(s):________________________________________________
Signature(s)________________________________________________________________
Name(s) (please print):_____________________________________________________
Address:____________________________________________________________________
Telephone Number:___________________________________________________________
Taxpayer identification or Social Security Number:
____________________________________________________________________________
Date:_______________________________________________________________________
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2
