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File No. 70-8317
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form U-1
APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
THE COLUMBIA GAS SYSTEM, INC.
COLUMBIA LNG CORPORATION
20 Montchanin Road
Wilmington, DE 19807
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(Names of company or companies filing this statement
and addresses of principal executive offices)
L. J. Bainter, Treasurer
THE COLUMBIA GAS SYSTEM, INC.
J. W. Grossman, Treasurer
COLUMBIA LNG CORPORATION
20 Montchanin Road
Wilmington, DE 19807
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(Name and address of agents for service)
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2
The Application-Declaration as previously filed is hereby amended
to include the following exhibit.
Item 6. Exhibits and Financial Statements.
(a) Exhibits
B-2 Amended and Restated Agreement of Limited Partnership
of Cove Point LNG Limited Partnership, dated as of January
27, 1994, among CLNG Corporation and Cove Point Energy
Company, Inc. as the General Partners, and Columbia LNG
Corporation and the PEPCO Energy Company, Inc. as the
Limited Partners.
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3
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused this
Application-Declaration to be signed on their behalf by the undersigned
thereunto duly authorized.
The signatures of the Applicants and of the persons signing on
their behalf are restricted to the information contained in this
Declaration which is pertinent to the application of the respective
companies.
THE COLUMBIA GAS SYSTEM, INC.
Date: February 8, 1994 By: L. J. Bainter
----------------------------
L. J. Bainter
Treasurer
COLUMBIA LNG CORPORATION
Date: February 8, 1994 By: J. W. Grossman
----------------------------
J. W. Grossman
Treasurer
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EXHIBIT INDEX
(a) Exhibits
B-2 Amended and Restated Agreement of Limited Partnership
of Cove Point LNG Limited Partnership dated as of
January 27, 1994, among CLNG Corporation and Cove Point
Energy Company, Inc. as the General Partners, and
Columbia LNG Corporation and PEPCO Energy Company, Inc. as
the Limited Partners.
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EXHIBIT B-2
CONFORMED COPY
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
COVE POINT LNG LIMITED PARTNERSHIP
DATED AS OF
JANUARY 27, 1994
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<PAGE> 6
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF COVE POINT LNG LIMITED PARTNERSHIP
TABLE OF CONTENTS
=======================================================================
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ARTICLE I. DEFINED TERMS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . 3
1.02 References . . . . . . . . . . . . . . . . . . . 3
ARTICLE II. CONTINUATION AND PURPOSES
SECTION 2.01 Continuation . . . . . . . . . . . . . . . . . . 4
2.02 Name . . . . . . . . . . . . . . . . . . . . . . 4
2.03 Principal Place of Business . . . . . . . . . . . 5
2.04 Registered Office . . . . . . . . . . . . . . . . 5
2.05 Registered Agent . . . . . . . . . . . . . . . . 5
2.06 Purposes . . . . . . . . . . . . . . . . . . . . 5
2.07 Powers . . . . . . . . . . . . . . . . . . . . . 6
2.08 Term . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III. NAMES AND ADDRESSES OF PARTNERS
SECTION 3.01 Withdrawal of Original Partners;
Admission of New Partners . . . . . . . . . . . . 10
3.02 General Partners . . . . . . . . . . . . . . . . 10
3.03 Limited Partners . . . . . . . . . . . . . . . . 10
3.04 Time of Admission of Partners . . . . . . . . . . 10
ARTICLE IV. PARTNERSHIP FINANCING AND CAPITAL ACCOUNTS
SECTION 4.01 Partners' Initial Capital Contributions . . . . . 11
4.02 Partnership Interests . . . . . . . . . . . . . . 11
4.03 Initial Project Finance . . . . . . . . . . . . . 11
4.04 Additional Capital Contributions . . . . . . . . 15
4.05 Capital Accounts . . . . . . . . . . . . . . . . 16
4.06 Status of Capital Contributions . . . . . . . . . 19
4.07 Advances . . . . . . . . . . . . . . . . . . . . 22
4.08 Advances Related to the Loan . . . . . . . . . . 23
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ARTICLE V. ALLOCATIONS
SECTION 5.01 Annual Allocable Shares . . . . . . . . . . . . . 26
5.02 Profits . . . . . . . . . . . . . . . . . . . . . 26
5.03 Losses . . . . . . . . . . . . . . . . . . . . . 27
5.04 Special Allocations . . . . . . . . . . . . . . . 27
5.05 Curative Allocations . . . . . . . . . . . . . . 31
5.06 Other Allocation Rules . . . . . . . . . . . . . 32
5.07 Tax Allocations: Code Section 704(c) . . . . . . 33
5.08 Equalization Allocations in Connection
with Liquidation Distributions . . . . . . . . . 34
ARTICLE VI. DISTRIBUTIONS
SECTION 6.01 Net Cash Flow . . . . . . . . . . . . . . . . . . 34
6.02 Distribution Rules . . . . . . . . . . . . . . . 36
6.03 Restricted Distributions . . . . . . . . . . . . 36
ARTICLE VII. FEES AND EXPENSES OF GENERAL PARTNERS
SECTION 7.01 Fees . . . . . . . . . . . . . . . . . . . . . . 37
7.02 Reimbursement of Expenses . . . . . . . . . . . . 37
ARTICLE VIII. MANAGEMENT
SECTION 8.01 Management and Control of the Partnership . . . . 37
8.02 Powers of the General Partners . . . . . . . . . 38
8.03 Outside Businesses . . . . . . . . . . . . . . . 43
8.04 Relationships with Affiliates . . . . . . . . . . 44
8.05 Title to Assets of the Partnership . . . . . . . 45
8.06 Non-Recourse . . . . . . . . . . . . . . . . . . 45
8.07 Resolution of Conflicts of Interest . . . . . . . 46
8.08 Merger . . . . . . . . . . . . . . . . . . . . . 48
8.09 Partnership Governance . . . . . . . . . . . . . 49
8.10 The Operator . . . . . . . . . . . . . . . . . . 53
8.11 Request for Instructions . . . . . . . . . . . . 53
ARTICLE IX. LIMITED PARTNERS
9.01 Liability of Limited Partners . . . . . . . . . . 54
9.02 No Management by Limited Partners . . . . . . . . 55
9.03 Employees, Agents or Officers of the
Partnership or a General Partner . . . . . . . . 55
</TABLE>
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ARTICLE X. BOOKS, RECORDS, FINANCIAL STATEMENTS
AND TAX MATTERS
SECTION 10.01 Records and Access to Records . . . . . . . . . . 56
10.02 [RESERVED] . . . . . . . . . . . . . . . . . . . 56
10.03 Financial Statements . . . . . . . . . . . . . . 56
10.04 Bank or Brokerage Accounts . . . . . . . . . . . 58
10.05 Right to Make Section 754 Election . . . . . . . 59
10.06 Tax Matters Partner . . . . . . . . . . . . . . . 59
10.07 Partnership Status . . . . . . . . . . . . . . . 61
10.08 Income Tax Compliance and Capital Accounts . . . 61
10.09 Tax Elections . . . . . . . . . . . . . . . . . . 61
10.10 Allocation of Tax Attributes . . . . . . . . . . 63
10.11 Specific Tax Allocation Rules . . . . . . . . . 63
10.12 Notice of Change . . . . . . . . . . . . . . . . 64
10.13 [RESERVED] . . . . . . . . . . . . . . . . . . . 64
10.14 Profits and Losses . . . . . . . . . . . . . . . 64
10.15 Gross Asset Value . . . . . . . . . . . . . . . 66
10.16 New Partners . . . . . . . . . . . . . . . . . . 68
10.17 Sales; Transfers . . . . . . . . . . . . . . . . 69
10.18 Deficit Capital Account on Liquidation . . . . . 69
ARTICLE XI. ASSIGNABILITY; ADMISSION AND
WITHDRAWAL OF PARTNERS
SECTION 11.01 Assignability of a General Partner's
Interest in the Partnership . . . . . . . . . . . 71
11.02 Assignability of a Limited Partner's
Interest in the Partnership . . . . . . . . . . . 72
11.03 Recognition of Assignment by Partnership . . . . 73
11.04 Effective Date of Assignment . . . . . . . . . . 74
11.05 Death, Incompetency, Bankruptcy, or
Dissolution of a Limited Partner . . . . . . . . 74
11.06 Withdrawal from the Partnership . . . . . . . . . 75
11.07 Removal of General Partner . . . . . . . . . . . 75
ARTICLE XII. EXCULPATION AND INDEMNIFICATION OF
THE GENERAL PARTNERS AND OTHER
INDEMNIFIED PERSONS
SECTION 12.01 Exculpatory Provisions . . . . . . . . . . . . . 76
12.02 Indemnification of General Partner and
Other Indemnified Persons . . . . . . . . . . . . 77
ARTICLE XIII. DISSOLUTION AND TERMINATION
SECTION 13.01 No Dissolution . . . . . . . . . . . . . . . . . 82
13.02 Events Causing Dissolution . . . . . . . . . . . 82
13.03 Notice of Dissolution . . . . . . . . . . . . . . 83
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13.04 Liquidation . . . . . . . . . . . . . . . . . . . 83
13.05 Methods of Liquidation . . . . . . . . . . . . . 84
13.06 Termination of Partnership . . . . . . . . . . . 85
13.07 Deemed Distribution and Recontribution . . . . . 85
ARTICLE XIV. DISPUTE RESOLUTION
SECTION 14.01 Arbitration . . . . . . . . . . . . . . . . . . . 86
ARTICLE XV. POWER OF ATTORNEY
SECTION 15.01 Appointment of General Partner . . . . . . . . . 87
15.02 Power Coupled with Interest . . . . . . . . . . . 89
ARTICLE XVI: MISCELLANEOUS
SECTION 16.01 Notices . . . . . . . . . . . . . . . . . . . . . 89
16.02 Amendments . . . . . . . . . . . . . . . . . . . 90
16.03 Fiscal Year . . . . . . . . . . . . . . . . . . . 92
16.04 Securities Act Investment Covenant . . . . . . . 92
16.05 Failure to Pursue Remedies . . . . . . . . . . . 93
16.06 Headings . . . . . . . . . . . . . . . . . . . . 93
16.07 Cumulative Remedies . . . . . . . . . . . . . . . 93
16.08 Binding Effect . . . . . . . . . . . . . . . . . 93
16.09 Interpretation . . . . . . . . . . . . . . . . . 93
16.10 Severability . . . . . . . . . . . . . . . . . . 94
16.11 Counterparts . . . . . . . . . . . . . . . . . . 94
16.12 Whole Agreement . . . . . . . . . . . . . . . . . 94
16.13 Governing Law . . . . . . . . . . . . . . . . . . 94
16.14 Mutual Representations and Warranties . . . . . . 95
16.15 No Rights of Third Parties . . . . . . . . . . . 96
ARTICLE XVII. PROJECTS; FERC APPLICATIONS
SECTION 17.01 Scope of the Initial Project . . . . . . . . . . 96
17.02 The Initial FERC Application . . . . . . . . . . 96
17.03 Additional Projects . . . . . . . . . . . . . . . 98
17.04 Project Construction Plan . . . . . . . . . . . . 99
ARTICLE XVIII. THE CONSTRUCTION CAPITAL CLOSING;
CERTAIN REGULATORY MATTERS
SECTION 18.01 Partners' Regulatory Approvals . . . . . . . . . 100
18.02 Conditions Precedent to Construction
Capital Closing . . . . . . . . . . . . . . . . . 102
18.03 Construction Capital Closing . . . . . . . . . . 106
18.04 Expenses . . . . . . . . . . . . . . . . . . . . 108
</TABLE>
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APPENDICES
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APPENDIX A: Definitions . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B: Partnership Interests . . . . . . . . . . . . . . . B-1
APPENDIX C: Representatives and Alternative
Representative . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
tconagr1.19
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AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
COVE POINT LNG LIMITED PARTNERSHIP
==================================================================
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of COVE
POINT LNG LIMITED PARTNERSHIP (this "LP Agreement") is made as of the 27th
day of January, 1994, by and among CLNG CORPORATION, a Delaware corporation
("CLNG Corp."), and COVE POINT ENERGY COMPANY, INC., a Delaware corporation
("COPE"), as the General Partners, and COLUMBIA LNG CORPORATION, a Delaware
corporation ("CLG"), and PEPCO ENERGY COMPANY, INC., a Delaware corporation
("PENCO"), as the Limited Partners, together with any other Persons who
become general or limited partners of the Partnership in accordance with
the provisions hereof and whose names are set forth as General Partners or
Limited Partners on Appendix B to this LP Agreement (collectively, the
"Partners").
W I T N E S S E T H:
WHEREAS, CLG and COPE have heretofore formed the Partnership, under
the name "Cove Point LNG Company, L.P.," by filing a Certificate of Limited
Partnership with the office of the Secretary of State of the State of
Delaware on October 28, 1993, and entered into an Agreement of Limited
Partnership of the Partnership, dated
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as of October 28, 1993 (the "Original Partnership Agreement"), with CLG as
the general partner, and COPE as the Initial Limited Partner; and
WHEREAS, upon the terms and conditions set forth in this LP Agreement,
CLG will withdraw as general partner of the Partnership, and will be
admitted to the Partnership as a Limited Partner, and CLNG Corp. will be
admitted to the Partnership as a General Partner; and
WHEREAS, upon the terms and conditions set forth in this LP Agreement,
COPE will withdraw as the Initial Limited Partner, and will be admitted to
the Partnership as a General Partner, and PENCO will be admitted to the
Partnership as a Limited Partner; and
WHEREAS, the Partners desire to change the registered agent of the
Partnership and change the name of the Partnership to "Cove Point LNG
Limited Partnership" and continue the Partnership under such new name as a
limited partnership under the Act and this LP Agreement; and
WHEREAS, the Partners desire to provide for the governance of the
Partnership and to set forth in detail their respective rights and duties
relating to the Partnership and to amend and restate the Original
Partnership Agreement in its entirety.
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NOW, THEREFORE, in consideration of the mutual promises and
obligations contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Partners, intending to be legally bound, hereby amend and
restate the Original Partnership Agreement in its entirety and hereby agree
as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.01. Definitions. For purposes of this LP Agreement,
capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in Appendix A to this LP Agreement, which is
incorporated herein by reference and made a part hereof (such definitions
to be equally applicable to both the singular and the plural forms of the
terms defined). Any term defined by reference to an agreement, instrument
or other document shall have the meaning so assigned to it whether or not
such agreement, instrument or other document is in effect.
Section 1.02. References. Unless otherwise indicated, references in
this LP Agreement to articles, sections, sub-sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in or attached
to this LP Agreement. The use of the words "hereof," "herein,"
"hereunder," "herewith" and words of similar import shall refer to this LP
Agreement as a whole (as the same may be amended or restated from time to
time) and not
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to any particular subdivision thereof. Any reference to the date hereof
shall be to the date as of which this LP Agreement was made, as first above
written.
ARTICLE II
CONTINUATION AND PURPOSES
Section 2.01. Continuation. The Partners hereby continue the
Partnership as a limited partnership under and pursuant to the provisions
of the Act and agree that the rights, duties and liabilities of the
Partners shall be as provided in the Act, except as otherwise provided
herein. The General Partners shall execute and file a certificate of
amendment in accordance with Section 17-202 of the Act to reflect the
change in registered agent, the change in name of the Partnership, the
withdrawal of CLG as a general partner of the Partnership, and the
admission of CLNG Corp. and COPE to the Partnership as General Partners.
Section 2.02. Name. The name of the Partnership heretofore formed and
continued hereby is "Cove Point LNG Limited Partnership," unless and until
the name of the Partnership is further changed by the General Partners, in
their sole discretion, and an appropriate amendment to the Certificate of
Limited Partnership is filed as required by the Act. The Partnership's
business may be conducted under the name of the Partnership or any other
name or names deemed advisable by the General Partners, including the name
of any General Partner or any Affiliate thereof.
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The words "Limited Partnership," "L.P." or similar words or letters shall
be included in the Partnership's name where necessary for the purposes of
complying with the laws of any jurisdiction that so requires.
Section 2.03. Principal Place of Business. The principal place of
business of the Partnership shall be located at 2100 Cove Point Road,
Lusby, Calvert County, Maryland 20657. The General Partners may hereafter
change the principal place of business of the Partnership to such other
place or places as the General Partners may determine from time to time in
their sole discretion. The General Partners shall give Notice of any such
change to the Limited Partners. The Partnership may maintain such other
offices at such other places as the General Partners deem advisable from
time to time.
Section 2.04. Registered Office. The address of the registered office
of the Partnership in the State of Delaware is 20 Montchanin Road,
Wilmington, New Castle County, Delaware 19807.
Section 2.05. Registered Agent. The Partnership's registered agent for
service of process on the Partnership in the State of Delaware is CLNG
Corporation, 20 Montchanin Road, Wilmington, New Castle County, Delaware
19807.
Section 2.06. Purposes. The purpose and business of the Partnership
shall be any business which lawfully may be conducted by a limited
partnership formed pursuant to the Act, including primarily, but without
limitation, to own, maintain, operate, improve and dispose of the Facility,
to pursue, finance, develop,
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construct, own, operate, and dispose of the Initial Project and to do the
same with respect to any additional Project undertaken by the Partnership
in accordance with the provisions of Section 17.03 of this LP Agreement,
and to conduct any other lawful business (together with such incidental and
other activities related to or arising from the foregoing) as the General
Partners, from time to time, deem necessary or appropriate to promote and
maintain the assets and businesses of the Partnership, subject to
Applicable Law.
Section 2.07. Powers.
(a) General Powers. The Partnership shall have the power to do any and
all acts necessary, appropriate, proper, advisable, incidental or
convenient to or for the furtherance of the purposes and business described
herein and for the protection and benefit of the Partnership, and shall
have, without limitation, any and all of the powers that may be exercised
on behalf of the Partnership by the General Partners pursuant to Article
VIII. The Partnership, and the General Partners on behalf of the
Partnership, may file and prosecute applications with the FERC and other
Governmental Authorities for the furtherance and accomplishment of the
purposes and businesses of the Partnership, and may enter into and perform
the Operating Agreement, the Loan Documents, the Asset Contribution
Agreement, and any documents expressly required therein to be executed by
or on behalf of the Partnership (collectively, the "Transaction
Documents"), without any further act, vote or approval of any Partner
notwithstanding any other provision of this LP
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Agreement, the Act or other Applicable Law, rule or regulation, in form and
substance acceptable to the General Partners. The General Partners are
hereby authorized to enter into and cause the Partnership to perform the
Transaction Documents on behalf of the Partnership, but such authorization
shall not be deemed a restriction on the power of the General Partners to
enter into and cause the Partnership to perform other agreements on behalf
of the Partnership.
(b) Specific Powers. Without limiting the generality of Sections 2.06
and 2.07(a), the Partnership shall have the power, subject to the terms and
conditions of this LP Agreement:
(i) to conduct its business, carry on its operations and have and
exercise its powers in any state, territory, district or possession of
the United States, or in any foreign country, that may be necessary,
convenient or incidental to the accomplishment of the purposes and
businesses of the Partnership, and in connection therewith, to be
qualified, formed or registered under foreign qualification,
registration or assumed or fictitious name statutes or similar laws in
any jurisdiction in which the Partnership transacts, or proposes to
transact, any business;
(ii) to acquire by purchase, lease, contribution of property or
otherwise, own, hold, operate, maintain, finance, improve, lease,
sell, convey, mortgage, transfer, demolish or dispose of any real or
personal property that may be necessary,
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convenient or incidental to the accomplishment of the purposes of the
Partnership;
(iii) to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with any Partner, any
Affiliate thereof, or any agent of the Partnership necessary to, in
connection with, convenient to, or incidental to the accomplishment of
the purposes and businesses of the Partnership;
(iv) to purchase, take, receive, subscribe for or otherwise acquire,
own, hold, vote, use, employ, sell, mortgage, lend, pledge, or
otherwise dispose of, and otherwise use and deal in and with, shares
or other interests in or obligations of domestic or foreign
corporations, associations, general or limited partnerships, trusts,
limited liability companies, individuals, or direct or indirect
obligations of the United States of America or of any government,
state, territory, governmental district or municipality or of any
instrumentality of any of them;
(v) to lend money for its proper purpose, to invest and reinvest its
funds, to take and hold real and personal property for the payment of
funds so loaned or invested;
(vi) to sue and be sued, complain and defend, and participate in
administrative or other proceedings, in the name of the Partnership;
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(vii) to elect, designate or otherwise appoint employees, officers and
agents of the Partnership, and define their duties and fix their
compensation;
(viii) to indemnify any Person in accordance with the Act;
(ix) to cease its activities and cancel its Certificate of Limited
Partnership;
(x) to negotiate, enter into, renegotiate, extend, renew, terminate,
modify, amend, waive, execute, acknowledge or take any other action
with respect to any lease, contract or security agreement in respect
of any assets of the Partnership;
(xi) to borrow money and issue evidences of indebtedness, and to
secure the same by a mortgage, pledge or other lien on the assets of
the Partnership;
(xii) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the
Partnership or to hold such proceeds against the payment of contingent
liabilities; and
(xiii) to make, execute, acknowledge and file any and all documents or
instruments necessary, convenient or incidental to the accomplishment
of the purposes and businesses of the Partnership.
Section 2.08. Term. The term of the Partnership (the "Term") commenced
on October 28, 1993, which was the date the Certificate of Limited
Partnership was filed in the office of the Secretary of State (the
"Formation Date") and shall continue until the 1st day
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of January, 2043, unless dissolved before such date in accordance with the
provisions of this LP Agreement or extended beyond January 1, 2043,
pursuant to a Majority Vote and the Consent of all General Partners.
ARTICLE III
NAMES AND ADDRESSES OF PARTNERS
Section 3.01. Withdrawal of Original Partners; Admission of New
Partners. Upon the execution and delivery of this LP Agreement, (i) CLNG
Corp. and COPE, as general partners of the Partnership, and CLG and PENCO,
as limited partners of the Partnership, shall be admitted to the
Partnership, and (ii) CLG, as general partner of the Partnership under the
Original Partnership Agreement, and COPE, as the Initial Limited Partner,
shall withdraw from the Partnership.
Section 3.02. General Partners. The names and mailing addresses of the
General Partners are set forth on Appendix B to this LP Agreement, which is
incorporated herein by reference and made a part hereof.
Section 3.03. Limited Partners. The names and addresses of the Limited
Partners are set forth on Appendix B to this LP Agreement, which is
incorporated herein by reference and made a part hereof.
Section 3.04. Time of Admission of Partners. After the date hereof, a
Person shall be deemed admitted as a Limited Partner or General Partner, as
the case may be, at the time such Person (i)
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executes this LP Agreement or a counterpart of this LP Agreement and (ii)
is named as a Limited Partner or General Partner, as the case may be, on
Appendix B hereto. Any reference in this LP Agreement to Appendix B shall
be deemed to be a reference to Appendix B as amended and in effect from
time to time to reflect admissions and withdrawals of Partners duly
undertaken in accordance herewith.
ARTICLE IV
PARTNERSHIP FINANCING AND CAPITAL ACCOUNTS
Section 4.01. Partners' Initial Capital Contributions. As of the date
hereof, CLG and COPE have contributed in cash to the capital of the
Partnership the amount set forth opposite their name on Appendix B hereto.
Such amount constitutes the agreed value of such contribution made by such
Partners.
Section 4.02. Partnership Interests. In consideration of the Partners'
respective commitments to make Capital Contributions pursuant to this
Article IV, each Partner shall, as of the date hereof, have the Partnership
Interest set forth opposite such Partner's name on Appendix B hereto.
Section 4.03. Initial Project Finance. Subject to satisfaction or
waiver of the applicable conditions precedent set forth in Article XVIII of
this LP Agreement:
(a) Development Costs. On and as of the Construction Capital Closing
Date, the Columbia Partners' shall be deemed to have
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contributed to the Partnership, and their Capital Accounts shall be ratably
adjusted to reflect, all expenditures made or incurred by them, or on
behalf of them by any of their Affiliates, prior to the Formation Date, up
to $1 million in connection with the planning, engineering, designing,
financing, marketing of services, and obtaining of FERC and other
regulatory approvals for the Initial Project, including without limitation,
expenditures related to planning and development of a proposed business
plan for the Initial Project, as verified by COPE (the "Qualified
Development Expenditures"). The Columbia Partners shall neither have any
right of reimbursement with respect to such Qualified Development
Expenditures, nor shall such Qualified Development Expenditures be either
(i) included in the Columbia Partners' Cash Investment or (ii) considered
for purposes of Section 6.01(b).
(b) CLG's Pre-Closing Initial Project Costs. After the Formation Date,
costs incurred by the Columbia Partners related to the development of the
Initial Project in accordance with the Approved Budget shall be treated as
advances to the Partnership. On the Construction Capital Closing Date, the
Columbia Partners shall be reimbursed by the Partnership without interest,
in cash, or cash equivalents acceptable to the Columbia Partners, for all
such costs incurred by them between the Formation Date and the Construction
Capital Closing as verified by COPE, subject to a maximum of $1 million.
To the extent that the Columbia Partners incur additional costs related to
the Initial Project above such $1 million amount between the Formation Date
and the Construction
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Capital Closing, then such additional expenditures incurred in accordance
with the Approved Budget for the Initial Project and verified by COPE shall
continue to be advances to the Partnership by the Columbia Partners which
shall be repaid without interest at the Construction Capital Closing by
crediting the amount of such additional expenditures as a portion of the
Columbia Partners' Cash Investment pursuant to Section 4.03(e).
(c) PEPCO Partners' Equity Capital. On the Construction Capital
Closing Date, the PEPCO Partners will contribute as a Capital Contribution
to the Partnership, in cash or cash equivalents acceptable to the General
Partners, $10 million, which amount shall be contributed by the PEPCO
Partners in proportion to their respective Partnership Interests and the
PEPCO Partners' respective Capital Accounts will be adjusted to reflect
such Capital Contribution. The Partnership shall use such funds for the
recommissioning of the Facility and the implementation of the Initial
Project, including, without limitation, for construction of the
Liquefaction Unit and related equipment, for reimbursing CLG for its costs
in accordance with the first sentence of Section 4.03(b), for the
Partnership's Property Taxes and O&M Expenses, and to provide reasonable
reserves for working capital requirements through the first three (3)
months after the In-Service Date, all in accordance with the Approved
Budgets and the Project Construction Plan for the Initial Project. After
the proceeds of the PEPCO Partners' $10 million Capital Contribution (plus
any investment or reinvestment income earned thereon) have been
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depleted, the Partnership shall make use of the Loan as needed to continue
financing the Initial Project.
(d) The Loan. On and after the Construction Capital Closing Date,
PENCO will provide construction and term loans to the Partnership up to an
aggregate principal amount of $15 million (the "Loan") on a secured basis
pursuant to, and subject to the conditions precedent set forth in, the Loan
Documents which shall be satisfactory in form and substance to PENCO and
the General Partners.
(e) Columbia Partners' Equity Capital. If, and only after, the Loan
proceeds have been fully utilized as provided in the Loan Documents, any
additional amounts are necessary to fund the recommissioning, construction,
Property Taxes, O&M Expenses and working capital requirements through the
In-Service Date of the Initial Project, such additional amounts will be
contributed in cash, or cash equivalents acceptable to the General
Partners, by the Columbia Partners in proportion to their respective
Partnership Interests, and the Columbia's Partners' respective Capital
Accounts will be adjusted to reflect such Capital Contribution; provided,
however, that such contributions shall be required to be made only as and
when required by the Partnership to fund such recommissioning,
construction, working capital, Property Taxes and O&M Expenses in
accordance with Approved Budgets; and provided, further, that the maximum
obligation of the Columbia Partners to make such Capital Contributions
under this Section 4.03(e) shall be $7 million, less: any amounts credited
to the Columbia Partners'
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Cash Investment in accordance with the last sentence of Section 4.03(b).
The Columbia Partners shall, on or prior to the Construction Capital
Closing, provide the Columbia Keepwell Letter to the Partnership.
(f) Cash Investment. For each Partner, the total of all Capital
Contributions made in the form of cash (or cash equivalents acceptable to
the General Partners) pursuant to Sections 4.03(c) or 4.03(e), as
applicable, will constitute such Partners' "Cash Investment" for purposes
of making distributions of Net Cash Flows pursuant to Article VI of this LP
Agreement.
(g) CLG's Contribution of the Facility. On the Construction Capital
Closing Date, CLG shall contribute the Facility and related assets to the
Partnership, and the Partnership shall assume certain obligations related
to such assets, all in accordance with the Asset Contribution Agreement.
The Columbia Partners' Capital Accounts shall be adjusted to reflect the
contribution of the Facility at its Gross Asset Value as of the
Construction Capital Closing Date, as determined in accordance with Section
10.15(i) of this LP Agreement.
Section 4.04. Additional Capital Contributions. After the In-Service
Date of the Initial Project, if the General Partners determine that the
Partnership requires additional Capital Contributions from the Partners for
any purpose, including the funding of any Additional Project in accordance
with Section 17.03 of this LP Agreement, then the General Partners may
cause Cash Calls for such amounts to be given promptly to all Partners
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specifying the aggregate Capital Contributions required and the amount of
each Partner's ratable share thereof. Upon the date specified in any such
Cash Call, which date shall not be less than fifteen (15) days after the
date such Cash Call is given, each Partner shall contribute to the
Partnership, in cash, its pro rata share, based on its Partnership Interest
set forth on Appendix B hereto, of the total amount of additional capital
required by the Partnership, provided, however, that no Partner shall be
required to make any additional Capital Contribution to the Partnership
other than such Capital Contributions as shall have been Consented to by
such Partner in advance of any such Cash Call, and provided, further, that
no Capital Contributions may be made by any Partner without the prior
approval of the General Partners.
Section 4.05. Capital Accounts.
(a) Maintenance of Capital Accounts. For each Partner, a separate
capital account (a "Capital Account") shall be established on the books and
records of the Partnership and maintained in accordance with Section
4.05(b) of this LP Agreement. In addition, to the extent necessary or
appropriate under GAAP and/or the accounting rules and regulations, if any,
at the time prescribed by the FERC or any other regulatory body or bodies
with jurisdiction over the Partnership or its assets, the Partnership shall
maintain separate books and records reflecting the Partners' capital in
accordance with such other accounting principles, provided, that, all
references in this LP Agreement to a Partner's Capital Account shall be to
such Partner's "Capital Account" as defined in the
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immediately preceding sentence. The initial Capital Account established
for any Transferee shall be in the same amount as, and shall replace, the
Capital Account of the Partner whom such Transferee succeeds, and, for
purposes of this LP Agreement, such Transferee shall be deemed to have
acquired the Partnership Interest of the Partner whom such Transferee
succeeds. To the extent a Transferee acquires less than the entire
Partnership Interest of the Partner it succeeds, the original Capital
Account of such Transferee and its Partnership Interest shall be in
proportion to the interest it acquires, and the Capital Account of any
Transferor Partner who retains a partial interest in the Partnership, and
the amount of its Partnership Interest, shall be reduced in proportion to
the interest it retains.
(b) Adjustments to Capital Accounts. The Capital Account of each
Partner shall be maintained and adjusted in accordance with the following
provisions:
(i) to such Partner's Capital Account there shall be credited such
Partner's cash Capital Contributions and the Gross Asset Value of any
non-cash Capital Contributions, such Partner's allocable share of
Profits and any items in the nature of income or gain which are
specially allocated pursuant to Section 5.04 or Section 5.05 hereof,
and the amount of any Partnership liabilities that are assumed by such
Partner or that are secured by any Partnership assets distributed to
such Partners;
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(ii) to such Partner's Capital Account there shall be debited the
amount of cash and the Gross Asset Value of any Partnership assets
distributed to such Partner pursuant to any provision of this LP
Agreement, such allocable distributive share of Losses and any items
in the nature of expenses or losses which are specially allocated
pursuant to Section 5.04 or Section 5.05 hereof, and the amount of any
liabilities of such Partner that are assumed by the Partnership or
that are secured by any property contributed by such Partner to the
Partnership; and
(iii) in determining the amount of any liability for purposes of this
Section 4.05(b), and for purposes of determining the amount of any
Capital Contribution there shall be taken into account Section 752(c)
of the Code and any other applicable provisions of the Code and
Treasury Regulations.
(c) The foregoing provisions and the other provisions of this LP
Agreement relating to the maintenance of Capital Accounts are intended to
comply with Treasury Regulations Section 1.704-1(b), and shall be
interpreted and applied in a manner consistent with such Treasury
Regulations. In the event the General Partners shall determine that it is
necessary or appropriate to modify the manner in which the Capital
Accounts, or any debits or credits thereto (including, without limitation,
debits or credits relating to liabilities which are secured by contributed
or distributed property or which are assumed by the Partnership or any
Partner), are computed in order to comply with such Regulations, the
General
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Partners may make such modification, provided that it is not likely to have
a material effect on the amounts distributable to any Partner pursuant to
Section 10.18 hereof upon the dissolution of the Partnership. The General
Partners also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the
Partners and the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance
with Treasury Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any
modifications that are necessary or appropriate in the event unanticipated
events might otherwise cause this LP Agreement not to comply with Treasury
Regulations Section 1.704- 1(b).
Section 4.06. Status of Capital Contributions.
(a) Return of Capital Contributions. No Partner shall be entitled to
demand or receive the return of any Capital Contribution, or to receive any
funds or property of the Partnership, except as otherwise expressly
provided in this LP Agreement, and no Partner shall be entitled to interest
on any Capital Contribution or the balance of its Capital Account.
(b) No Partner Compensation. No Partner shall receive any interest,
salary, or drawing with respect to its Capital Contributions or its Capital
Account or for services rendered on behalf of the Partnership or otherwise
in its capacity as a Partner. The foregoing shall not prohibit
compensation to any Partner or Affiliate of a Partner for services rendered
to the
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Partnership (i) as contemplated by the Operating Agreement, or (ii) to the
extent approved in writing by the General Partners.
(c) Limited Liability. Except as otherwise specifically provided in
the Act or in this LP Agreement, no Limited Partner shall be liable for the
debts, liabilities, contracts or any other obligations of the Partnership.
Except as otherwise specifically provided in the Act or in this LP
Agreement, a Limited Partner shall be liable only to make Capital
Contributions as provided in Article IV of this LP Agreement and, except as
contemplated by Section 4.03(d), shall not be required to lend any funds to
the Partnership and, after such Capital Contributions have been paid in
accordance with this LP Agreement, shall not be required to make any
additional Capital Contributions to the Partnership. No General Partner
shall have any personal liability for the repayment of any loan, advance or
Capital Contribution of any Limited Partner.
(d) Defaulting Partners. Upon the failure of any Partner (a
"Defaulting Partner") to pay in full, or make provisions for payment
reasonably acceptable to the other Partners (the "Non-Defaulting
Partners"), within ten (10) days after Notice of default is received by
such Partner (such tenth (10th) day after delivery of such notice being the
"Default Date"), any Capital Contribution specified in any Cash Call or
otherwise required to be made pursuant to this LP Agreement (a "Defaulted
Capital Contribution"):
(i) such Defaulting Partner shall not be entitled to exercise any
voting or other consensual rights with respect to its
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Partnership Interest until such Defaulted Capital Contribution is
cured, except as otherwise required by the Act or Section
13.02(b)(ii);
(ii) the Non-Defaulting Partners shall have the right, but not the
obligation, to make advances to the Partnership pursuant to Section
4.07 in an aggregate amount equal to the amount of such Defaulted
Capital Contribution (a "Defaulted Contribution Advance") which shall
be repaid (together with interest thereon at a rate per annum equal to
the lesser of the then applicable Prime Rate or the maximum rate
permitted by Applicable Law) prior to any distributions to Partners;
(iii) the Defaulting Partner's distributions of Net Cash Flow and
allocations to its Capital Account shall be suspended from the Default
Date until such Defaulted Capital Contribution is cured in accordance
with this Section 4.06(d) whereupon, subject to Section 13.04(a), any
suspended distributions shall be restored to the curing Partner;
(iv) if such Defaulted Capital Contribution is not cured on or before
the first anniversary of the Default Date, and the Defaulting Partner
fails to cure (or provide for a cure reasonably acceptable to the Non-
Defaulting Partners) within ten (10) days after a Notice of forfeiture
is received by such Defaulting Partner (such tenth (10th) day after
delivery of such Notice being the "Forfeiture Date"), the Defaulting
Partner shall thereupon forfeit its Partnership Interest, and
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such Defaulting Partner shall have no rights or interest in the
Partnership and shall cease to be a Partner;
(v) if such Defaulted Capital Contribution is not cured in accordance
with this Section 4.06(d), all amounts which would have been
distributed to such Defaulting Partner from the Default Date to the
Forfeiture Date shall be treated for all purposes of this LP Agreement
as if distributed to such Defaulting Partner during such period and,
subject to Section 13.04(a), such amounts shall be distributed to the
remaining Partners in accordance with Section 6.01 and such Defaulting
Partner's Capital Account shall be reallocated under Section 4.05(c)
in accordance with the Partnership Interests of the remaining
partners; and
(vi) after the Forfeiture Date, the remaining General Partner(s) shall
be entitled to cause the Partnership to commence any judicial or other
proceeding with respect to damages resulting from a Defaulted Capital
Contribution.
The provisions of this Section 4.06(d) shall constitute the Non-Defaulting
Partners' exclusive remedy with respect to such Defaulted Capital
Contribution.
Section 4.07. Advances. If any Partner shall advance any funds to the
Partnership in excess of its Capital Contribution, the amount of such
advance shall neither increase its Partnership Interest nor entitle it to
any increase in its share of the distributions of the Partnership. The
amount of any such advance shall be a debt obligation of the Partnership to
such Partner and,
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except as otherwise provided in (x) Section 4.06(d)(ii) with respect to
advances relating to Defaulted Capital Contributions or (y) Section 4.08
with respect to advances relating to the Loan, shall be repaid to it by the
Partnership with such interest and upon such other terms and conditions as
shall be agreed to in writing by such Partner and the Partnership. All
Partner advances provided for in this LP Agreement shall be payable and
collectible only out of the Partnership assets, and no Partner shall be
personally obligated to repay any part thereof. No Person who makes any
nonrecourse loan to the Partnership shall have or acquire, as a result of
making such loan, any direct or indirect interest in the profits, capital,
business or property of the Partnership, other than as a secured creditor.
Except as provided in Section 4.06(d)(ii) and Section 4.08, no Partner
shall make any advances or loans to the Partnership without the prior
approval of the General Partners.
Section 4.08. Advances Related to the Loan. (a) Unless prohibited by
Section 6.02(a) of the Construction and Term Loan Agreement, before or
after the occurrence of any actual or threatened "Event of Default" as such
term is used in the Loan Documents, any Partner shall have the right, but
not the obligation, to advance funds to the Partnership as may be necessary
under the circumstances to avert or cure such Event of Default, as the case
may be, or to satisfy all or part of the Partnership's obligations under
the Loan Documents then due and owing (including, if such Event of Default
gives rise to the acceleration of the
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Loan, for payment of the outstanding principal amount of the Loan, together
with all accrued interest thereon and other costs then due and owing in
connection therewith). The right of each Partner to make advances pursuant
to this Section 4.08 shall be ratable in accordance with its Partnership
Interest, provided, however, that in the event any Partner elects not to
advance its ratable share of such funds, the remaining Partners shall have
the right, but not the obligation, to advance additional funds to cover any
shortfall, which additional fund advances shall be made pro rata among the
advancing Partners determined on the basis of their Partnership Interests,
without giving effect to the Partnership Interest(s) of the non-advancing
Partner(s).
(b) Upon the receipt by the Partnership of any Notice from the Lender
as to any Event of Default (or any notice of acceleration of the Loan), or
in the event that any Partner with knowledge of the occurrence or potential
occurrence of any Event of Default with respect to the Partnership's
payment obligations, gives Notice to one or more of the other Partners
thereof, the Partners shall have ten (10) days (or such shorter period as
may be required under the circumstances) to elect whether or not to make an
advance contemplated by this Section 4.08. Any Partner's failure to make
an election to advance during such ten (10) day period shall be deemed such
Partner's election not to exercise its right to make an advance pursuant to
this Section 4.08. Any Partner may condition its election on the receipt
of necessary regulatory approvals by it and its Affiliates. Any Partner
electing to make an advance
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pursuant to this Section 4.08 shall promptly notify the Lender of its
intent to do so.
(c) Advances made pursuant to this Section 4.08 shall accrue interest
at the lesser of Two Hundred (200) basis points over the Prime Rate or the
maximum rate permitted by Applicable Law. To the extent any advances made
in accordance with this Section 4.08 are made in partial payment of the
Loan, the Partnership's obligation to repay such advances shall be
subordinate to the Partnership's obligation to repay the Loan and, if
requested by the Lender, the advancing Partners shall execute subordination
agreements reasonably satisfactory to the Lender upon the making of any
such advance. The Partnership shall repay any advances in accordance with
this Section 4.08 in such manner as shall be agreed to in writing by the
General Partners, provided, however, that in the event the General Partners
are unable to agree on the repayment terms of such advances:
(i) The interest thereon shall be due and payable in arrears on the
first day of each calendar quarter after the date of the advance (the
"Advance Payment Date"); and
(ii) the principal amount thereof shall be repaid in equal quarterly
installments with the first installment due on the initial Advance
Payment Date and the last installment due on the Advance Payment Date
nearest in time to the stated maturity of the Loan;
provided, further, that all interest and principal due on such advance
shall automatically become due and payable in full upon the
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happening of any event causing the dissolution of the Partnership pursuant
to Section 13.02 hereof.
ARTICLE V
ALLOCATIONS
Section 5.01. Annual Allocable Shares.
(a) For any Fiscal Year with respect to which cash is distributed to
the Partners pursuant to Section 6.01 of this LP Agreement, each Partner's
"Annual Allocable Share" shall be a fraction equal to (x) the amount of
cash distributed to such Partner, divided by (y) the total amount of cash
distributed to all of the Partners for such Fiscal Year.
(b) In all other Fiscal Years, each Partner's Annual Allocable Share
shall be determined in the same manner as provided in Section 5.01(a) using
the fiction that $1.00 of cash had been distributed to all of the Partners
with respect to such Fiscal Year in the proportions specified in Section
6.01(a) hereof.
Section 5.02. Profits. (a) After giving effect to the special
allocations set forth in Sections 5.04 and 5.05 hereof, Profits for any
Fiscal Year shall be allocated among the Partners in proportion to their
Annual Allocable Shares.
(b) Notwithstanding Sections 5.02(a) and 5.03 hereof, Profits or
Losses, if any, attributable to a distribution (or to an event which
produces a distribution) under Section 6.02(c) hereof shall
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be allocated among the Partners in accordance with each Partner's
Partnership Interest.
Section 5.03. Losses.
(a) After giving effect to the special allocations set forth in
Sections 5.04 and 5.05 hereof, Losses for any Fiscal Year shall be
allocated among the Partners in proportion to their Annual Allocable
Shares.
(b) The Losses allocated pursuant to Section 5.03(a) hereof shall not
exceed the maximum amount of Losses that can be so allocated without
causing any Partner to have an Adjusted Capital Account Deficit at the end
of any Fiscal Year. In the event some but not all of the Partners would
have Adjusted Capital Account Deficits as a consequence of an allocation of
Losses pursuant to Section 5.03(a) hereof, the limitation set forth in this
Section 5.03(b) shall be applied on a Partner by Partner basis so as to
allocate the maximum permissible Losses to each Partner under Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations. All Losses, if any, in
excess of the limitations set forth in this Section 5.03(b) shall be
allocated to the General Partners in proportion to their Partnership
Interests.
Section 5.04. Special Allocations. The following special allocations
shall be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in Section
1.704-2(f) of the Treasury Regulations, notwithstanding any other provision
of this Article V, if there is a net decrease in Partnership Minimum Gain
during any Fiscal Year, each Partner shall
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be specially allocated items of Partnership income and gain for such Fiscal
Year (and, if necessary, subsequent Fiscal Years) in an amount equal to
such Partner's share of the net decrease in Partnership Minimum Gain,
determined in accordance with Treasury Regulations Section 1.704-2(g).
Allocations pursuant to the immediately preceding sentence shall be made in
proportion to the respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated shall be determined
in accordance with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Treasury
Regulations. This Section 5.04(a) is intended to comply with the minimum
gain chargeback requirement in Section 1.704-2(f) of the Treasury
Regulations and shall be interpreted consistently therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided in
Section 1.704-2(i)(4) of the Treasury Regulations, notwithstanding any
other provision of this Article V, if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt
during any Fiscal Year, each Partner who has a share of the Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Section 1.704-2(i)(5) of the Treasury
Regulations, shall be specially allocated items of Partnership income and
gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in
an amount equal to such Partner's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with
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Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to the
immediately preceding sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant
thereto. The items to be so allocated shall be determined in accordance
with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Treasury Regulations.
This Section 5.04(b) is intended to comply with the minimum gain chargeback
requirement in Section 1.704-2(i)(4) of the Treasury Regulations and shall
be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Limited Partner
unexpectedly receives any adjustments, allocations, or distributions
described in Section 1.704-1(b)(2)(ii)(d)(4), Section 1.704-
1(b)(2)(ii)(d)(5), or Section 1.704-1(b)(2)(ii)(d)(6) of the Treasury
Regulations, items of Partnership income and gain shall be specially
allocated to each such Limited Partner in an amount and manner sufficient
to eliminate, to the extent required by the Treasury Regulations, the
Adjusted Capital Account Deficit of such Limited Partner as quickly as
possible, provided that an allocation pursuant to this Section 5.04(c)
shall be made only if and to the extent that such Limited Partner would
have an Adjusted Capital Account Deficit after all other allocations
provided for in this Section 5.04(c) have been tentatively made as if this
Section 5.04(c) were not in this LP Agreement.
(d) Gross Income Allocation. In the event any Partner has a deficit in
its Capital Account balance at the end of any Fiscal Year which is in
excess of the sum of (i) the amount such Partner
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is obligated to restore pursuant to any provision of this LP Agreement, and
(ii) the amount such Partner is deemed to be obligated to restore pursuant
to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of
the Treasury Regulations, each such Partner shall be specially allocated
items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section
5.04(d) shall be made only if and to the extent that such Partner would
have a deficit in its Capital Account balance in excess of such sum after
all other allocations provided for in this Article V have been made as if
Section 5.04(c) hereof and this Section 5.04(d) were not part of this LP
Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year
shall be specially allocated among the Partners in proportion to their
Partnership Interests.
(f) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions
for any Fiscal Year shall be specially allocated to the Partner who bears
the economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable in accordance
with Treasury Regulations Section 1.704-2(i)(1).
(g) Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(2) or Treasury Regulations Section 1.704-
1(b)(2)(iv)(m)(4) to be taken into
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account in determining Capital Account balances as the result of a
distribution to a Partner in complete liquidation of its Partnership
Interest, the amount of such adjustment to Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis) and such gain or
loss shall be specially allocated to the Partners in accordance with their
interests in the Partnership in the event Treasury Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom such
distribution was made in the event Treasury Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.
Section 5.05. Curative Allocations. The allocations set forth in
Section 5.04 hereof (the "Regulatory Allocations") are intended to comply
with certain requirements of the Treasury Regulations. It is the intent of
the Partners that, to the extent possible, all Regulatory Allocations shall
be offset either with other Regulatory Allocations or with special
allocations of other items of Partnership income, gain, loss, or deduction
pursuant to this Section 5.05. Therefore, notwithstanding any other
provision of this Article V (other than provisions relating to Regulatory
Allocations), the General Partners shall make such offsetting special
allocations of Partnership income, gain, loss, or deduction in whatever
manner they determine appropriate so that, after such offsetting
allocations are made, each Partner's Capital Account balance is, to the
extent possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations
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were not part of this LP Agreement and all Partnership items were allocated
pursuant to Sections 5.02, 5.03, and 5.08 of this LP Agreement. In
exercising its discretion under this Section 5.05, the General Partners
shall take into account future Regulatory Allocations under Sections
5.04(a) and (b) that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Sections 5.04(e) and (f).
Section 5.06. Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items
shall be determined on a daily, monthly, or other basis, as determined by
the General Partners using any permissible method under Code Section 706
and the Treasury Regulations promulgated thereunder.
(b) The Partners are aware of the income tax consequences of the
allocations made by this Article V and hereby agree to be bound by the
provisions of this Article V in reporting their shares of Partnership
income and loss for income tax purposes.
(c) Solely for purposes of determining a Partner's proportionate share
of the "excess nonrecourse liabilities" of the Partnership within the
meaning of Section 1.752-3(a)(3) of the Treasury Regulations, the Partners'
interests in Partnership profits are in proportion to their Partnership
Interests.
(d) To the extent permitted by Section 1.704-2(h)(3) of the Treasury
Regulations, the General Partners shall endeavor to treat distributions of
Net Cash Flow as having been made from the
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proceeds of a nonrecourse liability or a Partner Nonrecourse Debt only to
the extent that such distributions would cause or increase an Adjusted
Capital Account Deficit for any Limited Partner.
Section 5.07. Tax Allocations: Code Section 704(c). In accordance with
Code Section 704(c) and the Treasury Regulations thereunder, income, gain,
loss, and deduction with respect to any property contributed to the capital
of the Partnership shall, solely for tax purposes, be allocated among the
Partners so as to take account of any variation between the adjusted basis
of such property to the Partnership for federal income tax purposes and its
initial Gross Asset Value (computed in accordance with Section 10.15(i)
hereof). In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to Section 10.15(ii) hereof, subsequent allocations of
income, gain, loss, and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Treasury Regulations thereunder. Any
elections or other decisions relating to such allocations shall be made by
the General Partners in any manner that reasonably reflects the purpose and
intention of this LP Agreement. Allocations pursuant to this Section 5.07
are solely for purposes of federal, state, and local taxes and shall not
affect, or in any way be taken into account in computing, any Partner's
Capital Account or share of Profits, Losses, other items, or distributions
pursuant to any provision of this LP Agreement.
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Section 5.08. Equalization Allocations in Connection with Liquidation
Distributions. Notwithstanding Sections 5.02 and 5.03 hereof, if and to the
extent that gain or loss is recognized, or deemed recognized pursuant to
Section 10.14(iii) hereof, in connection with the distribution to one or
more Partners of any assets of the Partnership or the sale of any assets of
the Partnership other than in the ordinary course of business, pursuant to
Section 13.04 of this LP Agreement or otherwise, such gain or loss shall be
allocated among the Partners so that, to the maximum extent practicable the
ratio of each partner's Capital Account to the total of all Partners'
Capital Accounts shall be equal to each such Partner's Partnership
Interest.
ARTICLE VI
DISTRIBUTIONS
Section 6.01. Net Cash Flow. Except as otherwise specifically provided
in Article XIII (relating to the dissolution of the Partnership), any
distributions of the Net Cash Flow of the Partnership with respect to any
Fiscal Year shall be made to the Partners as follows:
(a) Net Cash Flow Less Than Distribution Threshold. At the end of each
Fiscal Year, the Partnership's Net Cash Flow for such Fiscal Year shall be
computed (without regard to any Operator's Bonuses payable for such Fiscal
Year) and, if greater than zero, divided by the number which represents the
cumulative total of all
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the Partners' Cash Investments at that time. If the resulting quotient is
less than .26 (the "Distribution Threshold"), then the Partnership's Net
Cash Flow, if any, for such Fiscal Year shall be distributed to the
Partners, pro rata, in the same proportion that each Partner's respective
Cash Investment bears to the combined total Cash Investments of all
Partners.
(b) Net Cash Flow Greater Than Distribution Threshold. At the end of
each Fiscal Year in which the quotient referred to in Section 6.01(a)
equals or exceeds the Distribution Threshold, the Net Cash Flow for such
Fiscal Year shall be distributed to the Partners in the following order:
(i) first, each Partner will receive a cash distribution equal to 26% of
its Cash Investment; (ii) second, the Columbia Partners will receive a cash
distribution equal to 26% of the difference between $25 million and the
Columbia Partners' aggregate Cash Investments, which shall be divided
between them in shares proportionate to their respective Partnership
Interests; and (iii) third, any and all remaining Net Cash Flow shall
thereafter be distributed equally between the Columbia Partners and the
PEPCO Partners in shares proportionate to their respective Partnership
Interests.
(c) Equalization. Beginning with the Fiscal Year following the first
Fiscal Year in which either (i) the Loan is fully repaid or (ii) the
Partnership commences the operation of a Terminalling Business, and
continuing thereafter, all Net Cash Flow, if any, shall be distributed
equally between the Columbia Partners and the PEPCO Partners in shares
proportionate to their respective
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Partnership Interests, without regard to the distribution mechanisms set
forth in Sections 6.01(a) and 6.01(b) (the "Equalization"), provided,
however, that in the event that the Loan is prepaid in full at any time
during the five (5) Fiscal Years following the Fiscal Year in which the In-
Service Date of the Initial Project occurs (the "In-Service Year"),
Equalization shall take effect commencing on the first day of the sixth
(6th) Fiscal Year following the In-Service Year.
Section 6.02. Distribution Rules.
(a) Net Cash Flow shall be distributed annually within sixty (60) days
after the close of each Fiscal Year unless otherwise approved by the
General Partners.
(b) Any distributions of Net Cash Flow made by the Partnership
pursuant to Section 6.01 shall be made only in cash.
(c) All other distributions of cash to the Partners shall be
distributed pro rata in accordance with each Partner's Partnership Interest
at such times and in such amounts as shall be determined by the General
Partners in accordance with this LP Agreement.
Section 6.03. Restricted Distributions. Notwithstanding any provision
to contrary contained in this LP Agreement, the Partnership, and the
General Partners on behalf of the Partnership, shall not make a
distribution to any Partner on account of its Partnership Interest if such
distribution would violate Section 17-607 of the Act or other Applicable
Law.
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ARTICLE VII
FEES AND EXPENSES OF GENERAL PARTNERS
Section 7.01. Fees.
(a) No Management Fees. Subject to Section 7.02 hereunder, the General
Partners shall not be entitled to any fees or other compensation in
connection with their acting in their capacities as General Partners
hereunder.
Section 7.02. Reimbursement of Expenses. The Partnership shall
reimburse any General Partner for its ordinary and reasonably necessary
out-of-pocket expenses, incurred by it with the approval of the General
Partners, when acting in such capacity on behalf of the Partnership, upon
submission of receipts therefor.
ARTICLE VIII
MANAGEMENT
Section 8.01. Management and Control of the Partnership. The General
Partners shall have full, exclusive and complete discretion to manage and
control the business and affairs of the Partnership, to make all decisions
affecting the business and affairs of the Partnership and to take all such
actions as they deem necessary or appropriate to accomplish the purpose of
the Partnership as set forth herein. No Limited Partner, as such, shall
have any authority, right or power to bind the Partnership or to manage or
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control, or to participate in the management or control of, the business
and affairs of the Partnership in any manner whatsoever.
Section 8.02. Powers of the General Partners.
(a) Powers. Subject to the limitations set forth in Section 8.02(b) of
this LP Agreement and except as otherwise specifically provided herein, the
General Partners (acting on behalf of the Partnership), shall have the
right, power and authority, in the management of the business and affairs
of the Partnership, to do or cause to be done any and all acts, at the
expense of the Partnership, as the General Partners deem to be necessary or
appropriate to effectuate the business, purposes and objectives of the
Partnership. The power and authority of the General Partners shall
include, without limitation, the power and authority, on behalf of, and in
furtherance of the purpose and businesses of the Partnership:
(i) to acquire, own, lease, sublease, manage, finance, hold, deal in,
encumber, control or dispose of any interest or rights in personal
property or real property;
(ii) to negotiate, enter into, renegotiate, extend, renew, terminate,
modify, amend, waive, execute, acknowledge or take any other action
with respect to any lease, contract or security agreement in respect
of any assets of the Partnership;
(iii) to pay, collect, compromise, litigate, arbitrate, or otherwise
adjust or settle any and all other claims or demands
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of or against the Partnership or to hold such proceeds against the
payment of contingent liabilities;
(iv) to borrow money or to obtain credit in such amounts, at such rate
of interest and upon such other terms and conditions as the General
Partners deem appropriate, provided that such indebtedness is
nonrecourse to the Partners (unless otherwise agreed to in writing by
all of the Partners), from banks, other lending institutions or any
other Person, including the Partners, and pursuant to indentures, loan
agreements or any other type of instrument, for any purpose or
business of the Partnership and to secure payment of the principal of
any such indebtedness and the interest thereon by mortgage, pledge,
conveyance or assignment in trust of or grant any other liens or
security interests in the whole or any part of any or all of the
property and assets of the Partnership;
(v) to make, execute, assign, acknowledge and file on behalf of the
Partnership any and all documents or instruments of any kind which the
General Partners may deem necessary or appropriate in carrying out the
purposes and business of the Partnership; and any Person dealing with
any General Partner shall not be required to determine or inquire into
its authority or power to bind the Partnership or to execute,
acknowledge or deliver any and all documents in connection therewith;
(vi) to assume obligations, enter into contracts, including contracts
of guaranty or suretyship, incur liabilities, lend
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money and otherwise use the credit of the Partnership, and to secure
any and all obligations, contracts or liabilities of the Partnership
by mortgage, pledge or other encumbrance of all or any part of the
property and income of the Partnership;
(vii) to invest funds of the Partnership;
(viii) to employ and engage suitable agents, employees, advisors,
consultants and counsel (including any custodian, investment advisor,
accountant, attorney, corporate fiduciary, bank or other reputable
financial institution, or any other agents, employees or Persons who
may serve in such capacity for the General Partners or any Affiliate
of the General Partners) to carry out any activities that the General
Partners are authorized or required to carry out under this LP
Agreement (subject to the supervision and control of the General
Partners), including, without limitation, the Operator or similar
Person who may be engaged to undertake some or all of the general
management, property management, financial accounting and
recordkeeping or other duties of the General Partners and to indemnify
such Persons against liabilities incurred by them in acting in such
capacity as on behalf of the Partnership;
(ix) to employ, retain or appoint Persons as may be necessary or
appropriate for the conduct of the Partnership's business (subject to
the supervision and control of the General Partners), including
Persons who may be designated as officers with titles including but
not limited to "chairman," "vice
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chairman," "controller," "secretary," and assistants thereto
(collectively, the "Partnership Officials") as determined, and to the
extent authorized, by the General Partners;
(x) to register, qualify, list or report, or cause to be registered,
qualified, listed or reported, this LP Agreement, the Limited Partner
Interests issued in connection herewith or the Partnership pursuant to
the Securities Act of 1933, as amended (the "Exchange Act"), any other
securities laws of the United States, the securities rules and
regulations of any State of the United States, the laws of any other
jurisdiction, the rules and regulations of any securities exchange or
pursuant to an automated quotation system of a registered securities
association as the General Partners deem appropriate;
(xi) to qualify the Partnership to do business in any state,
territory, dependency or foreign country;
(xii) to sell or dispose of all or a portion of the Partnership's
assets for the benefit of the Partners at the times and on terms
determined by the General Partners, in their sole discretion;
(xiii) to form or cause to be formed, and to own the stock of, one or
more corporations, and to form or cause to be formed and to
participate in partnerships, joint ventures, limited liability
companies, trusts and other entities; and
(xiv) to possess and exercise any additional rights and powers of
General Partners under the partnership laws of the State of
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Delaware, including, without limitation, the Act and the Delaware
Uniform Partnership Law (and any other Applicable Law, to the extent
not expressly prohibited by this LP Agreement);
provided, however, that the expression of any power or authority of the
General Partners in this LP Agreement shall not in any way limit or exclude
any other power or authority which is not specifically or expressly set
forth in this LP Agreement, and provided, further, that the Partnership
shall at all times be managed in such a manner as the General Partners deem
reasonable and necessary or appropriate to comply with Applicable Law and
preserve the limited liability of the Limited Partners.
(b) Limitations. Notwithstanding the foregoing provisions of Sections
8.01 and 8.02, the General Partners shall have no authority, without the
written approval of all Partners, to:
(i) take any action or cause the Partnership to act in contravention
of this LP Agreement;
(ii) borrow from the Partnership;
(iii) confess a judgment against the Partnership;
(iv) fail to qualify or maintain the qualification of the Partnership
to do business in any jurisdiction in which the failure to do so would
subject any Limited Partner to liability as a general partner therein,
or perform any act that would subject any Limited Partner to liability
as a general partner in any jurisdiction; and
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(v) except in accordance with the express terms hereof, admit a Person
as an additional, successor or substituted Partner of the Partnership.
(c) Manner of Taking Action. All powers vested in the General Partners
pursuant to this LP Agreement shall be exercised only with the unanimous
Consent of all General Partners and all agreements or other documents
executed on behalf of the Partnership shall be executed by each and every
General Partner, provided, however, that the General Partners may, and it
is the intent of the Parties hereto that the General Partners shall
whenever practicable, act through their designated Representatives in the
manner provided for in Section 8.09 of this LP Agreement.
Section 8.03. Outside Businesses. The General Partners shall engage in
no business activities other than in connection with their acting as
General Partners hereunder. The Limited Partners and their respective
officers, directors, stockholders, employees, agents and Affiliates (other
than the General Partners) may engage in or possess an interest in other
business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Partnership, and
neither the Partnership nor any other Person shall have any rights by
virtue of this LP Agreement in and to such independent ventures or the
income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Partnership, shall not be
deemed wrongful or improper. None of the Partners or their respective
officers, directors, stockholders, employees, agents and
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Affiliates shall be obligated to present any particular investment
opportunity to the Partnership even if such opportunity is of a character
which, if presented to the Partnership, could be taken by the Partnership,
and any such Person shall have the right to recommend to others any such
particular investment opportunity or, in the case of any such Person other
than a General Partner, to take for its own account (individually or as a
partner or fiduciary) any such particular investment opportunity.
Section 8.04. Relationships with Affiliates. The Partnership may enter
into any agreement or contract with any Partner, any Person who is an
Affiliate of a Partner, or any of their respective officers, directors,
stockholders, employees and agents, to the extent approved by the General
Partners, provided that any such agreement or contract shall contain
substantially such terms and conditions as would be contained in a similar
agreement or contract entered into by the Partnership as the result of
arm's-length negotiations from a comparable unaffiliated disinterested
third party. The Transaction Documents shall be deemed to be in compliance
with this Section 8.04. The Partners agree that (i) CLNG Corp. shall have
sole authority, as General Partner, to act on behalf of the Partnership
with respect to any purported breach under the Loan Documents, and (ii)
COPE shall have sole authority, as General Partner, to act on behalf of the
Partnership with respect to any purported breach under the Operating
Agreement. In the event of any conflict between the Partnership and any
such affiliated Person, the General Partners shall resolve such conflict
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in accordance with Section 8.07 of this LP Agreement, provided, that any
General Partner may, in its sole discretion, recuse itself from taking any
action contrary to its or its Affiliates' interests with respect to such
conflict, by written Notice to the other General Partner(s), upon which
such other General Partner(s) shall have sole power and authority to
resolve such conflict in the manner provided in Section 8.07.
Section 8.05. Title to Assets of the Partnership. Title to assets of
the Partnership, whether real, personal or mixed, tangible or intangible,
shall be deemed to be owned by the Partnership as an entity, and no
Partner, individually or collectively, shall have any ownership interest in
such assets of the Partnership or any portion thereof. Title to any or all
of the assets of the Partnership may be held in the name of the
Partnership, any General Partner or in the name of one or more nominees, as
the General Partners may determine. Each General Partner hereby declares
and warrants that any assets of the Partnership for which legal title is
held in the name of such General Partner shall be held in trust by the
General Partner for the use and benefit of the Partnership in accordance
with the terms and provisions of this LP Agreement. All assets of the
Partnership shall be recorded as the property of the Partnership on its
books and records, irrespective of the name in which legal title to such
assets of the Partnership is held.
Section 8.06. Non-Recourse. Unless otherwise approved by the General
Partners, the Partnership shall not enter into any
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contract, lease, sublease, note, deed of trust, or other agreement or
contractual obligation, unless there is contained therein an appropriate
provision limiting the claims of all Parties to such instrument and other
beneficiaries thereunder to the assets of the Partnership and expressly
waiving any rights of such Parties and other beneficiaries to proceed
against any of the Partners individually; provided, however, the
Partnership may enter into contracts not containing such a provision
provided that such contract is in the ordinary course of its business and
the Partnership's obligations thereunder (including any potential or
contingent obligations for any purported breach of any such contract) are
in the aggregate less than $25,000.
Section 8.07. Resolution of Conflicts of Interest.
(a) Manner of Resolution. Except as expressly provided in the third
sentence of Section 8.04, and subject to the right of recusal set forth in
the proviso in Section 8.04, (i) whenever a conflict of interest exists or
arises between any General Partner or any of its Affiliates, on the one
hand, and the Partnership, or any other Partner on the other hand, or (ii)
whenever this LP Agreement or any other agreement contemplated herein or
therein provides that the General Partners shall act in a manner which is,
or provides terms which are, fair and reasonable to the Partnership, or any
Limited Partner, the General Partners shall resolve such conflict of
interest in, or otherwise act in a manner consistent with, the best
interests of the Partnership, provided, that in taking such action or
providing such terms, the General Partners may consider
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in each case the relative interests of each Party to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith, the resolution, action or terms so made, taken or
provided by any General Partner in accordance with this Section 8.07(a)
shall not constitute a breach of this LP Agreement or any other agreement
contemplated herein or of any duty or obligation of the General Partner at
law or in equity or otherwise.
(b) Meaning of Discretion. Whenever in this LP Agreement the General
Partners are permitted or required to make a decision (i) in their "sole
discretion" or "discretion" or under a grant of similar authority or
latitude, the General Partners shall be entitled to consider only such
interests and factors as they desire, provided, however, that in all cases
the General Partners shall consider, and act in accordance with, the best
interests of the Partnership or (ii) in "good faith" or under another
expressed standard, the General Partners shall act under such express
standard and shall not be subject to any other or different standards
imposed by this LP Agreement or any other agreement contemplated herein or
by Applicable Law or in equity or otherwise.
(c) Arbitration. In the event the General Partners are unable to agree
as to the resolution of any conflict, and no General Partner has sole
authority to act on behalf of the Partnership with respect to such issue
pursuant to Section 8.04, the issue shall be
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resolved by arbitration in accordance with Article XIV of this LP
Agreement.
(d) No Liability. No General Partner shall be liable to the
Partnership or to any other Partner for acting in accordance with the good
faith belief and judgment of its officers, Representatives, Alternate
Representatives or other agents that such actions are in the best interests
of the Partnership.
Section 8.08. Merger. The Partnership may merge with, or consolidate
into, another business entity (as defined in Section 17-211(a) of the Act)
upon the approval by the General Partners and a Majority Vote. In
accordance with Section 17-211 of the Act (including Section 17-211(g)),
notwithstanding anything to the contrary contained in this LP Agreement, an
agreement of merger or consolidation approved by the General Partners and a
Majority Vote, may (A) effect any amendment to this LP Agreement, or (B)
effect the adoption of a new partnership agreement for the Partnership if
it is the surviving or resulting limited partnership of the merger or
consolidation. Any amendment to this LP Agreement or adoption of a new
partnership agreement made pursuant to the foregoing sentence shall be
effective at the effective time or date of the merger or consolidation.
For purposes of any vote required by the Limited Partners in connection
with any merger or consolidation, the Limited Partners shall be treated for
purposes of voting as a single class of limited partners. The provisions
of this Section 8.08 shall not be construed to limit the accomplishment of
a merger
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or of any of the matters referred to herein by any other means otherwise
permitted by law.
Section 8.09. Partnership Governance.
(a) Appointment of Representatives/Partnership Officials. Upon the
execution of this LP Agreement, each of the General Partners shall appoint
one (1) individual to represent and vote for such General Partner with
respect to any matter within the powers of the General Partners hereunder
(the "Representatives"). Each General Partner shall also appoint one or
more individuals to be such General Partner's "Alternate Representatives"
with full power of substitution and authority to act in place of
individuals to be such General Partner's Representative in the event of the
unavailability of such Representative. Each Representative and Alternate
Representative shall be deemed to be acting solely in a representative
capacity on behalf of the General Partner that he or she represents, and in
so doing, to the maximum extent permitted by Applicable Law, shall have no
fiduciary duty (including, without limitation, any duty of loyalty, candor
or care) to any Person other than to such General Partner, provided, that
the foregoing shall not diminish or affect any such duty owed by the
General Partner to the Partnership. Each General Partner shall have only
one vote at any meeting of the General Partners exercisable through its
Representative or Alternate Representative, as the case may be. As of the
date hereof, each General Partner's Representative and Alternate
Representatives are those listed on Appendix C hereto. Each General
Partner reserves the right to change any one or more
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of its Representatives or Alternate Representatives, as the case may be,
and to appoint successors and substitutes therefor, from time to time, in
such General Partner's sole discretion, and any such change shall be
effective upon such General Partner delivering a Notice of such change to
the other General Partner. Except as may be specifically provided
otherwise herein, or in any written directives that are executed by all of
the General Partners, all approvals, decisions and actions with respect to
the management and control of the Partnership that have been made or taken
by the Representatives or Alternate Representatives, as the case may be, in
accordance with this Section 8.09, shall be approvals, decisions and
actions duly made or taken by the General Partners hereunder, and as such
shall be binding on the Partnership and the Partners. Each General Partner
shall have the right to call meetings on three (3) business days' Notice to
the other General Partner. Meetings of the General Partners shall be held
at the offices of the Partnership at Cove Point, Maryland, unless otherwise
agreed to by the General Partners.
(b) Rules and Regulations. From time to time, the General Partners may
adopt rules and regulations consistent with this LP Agreement with respect
to the operation and governance of the Partnership (the "Rules and
Regulations"). The Rules and Regulations may, among other things, govern
the conduct of meetings of the General Partners, and describe the duties of
Partnership Officials. Neither the adoption of any Rules and Regulations
in accordance with this Section 8.09(b) nor the adoption of any
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amendment or supplement to such Rules and Regulations, shall be deemed an
amendment to this LP Agreement. Any reference in this LP Agreement to the
Rules and Regulations shall be deemed to be a reference to the same as
amended or supplemented and in effect from time to time.
(c) Partnership Officials. Unless otherwise approved by the General
Partners, there shall at all times be appointed a Chairman and Vice
Chairman of the Partnership. The General Partners shall elect the first
Chairman and the first Vice Chairman of the Partnership at an
organizational meeting of the General Partners which shall be held no later
than five (5) business days after the date of this LP Agreement, or such
later date as fixed by the General Partners. The first Chairman of the
Partnership shall be a Person nominated by CLNG Corp., and the first Vice
Chairman shall be a Person nominated by COPE. Starting with the earlier to
occur of (i) commencement of the first Fiscal Year occurring after the In-
Service Date for the Initial Project or (ii) January 1, 1996, and
continuing annually thereafter, nomination of the Chairmanship and Vice
Chairmanship shall rotate among the General Partners, and elections will
take place no later than ten (10) business days after the close of the
Partnership's Fiscal Year, or such later date as fixed by approval of the
General Partners.
(d) The Chairman and Vice Chairman. Unless otherwise approved by the
General Partners, the Chairman shall at all times be a duly appointed
Representative, and shall preside at all meetings of the General Partners.
The Vice Chairman shall also be a Representative
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and shall perform the duties of the Chairman at the request, or in the
absence, of the Chairman, or upon the refusal or inability of the Chairman
to perform his or her responsibilities. The Chairman and Vice Chairman
shall have the power and authority to execute on behalf of the Partnership,
and obligate the Partnership to perform, any contracts, agreements and
other documents or instruments specifically approved by the General
Partners for execution by the Chairman, Vice Chairman or both, as the case
may be, provided, however, that such approval shall not limit the power of
the General Partners to execute on behalf of the Partnership, and cause the
Partnership to perform, any contracts, agreements and other documents of
the Partnership, to the extent execution by the General Partners is
necessary or appropriate under the circumstances.
(e) Other Officers. The General Partners may, from time to time,
appoint such other Partnership Officials as the General Partners deem
necessary or appropriate, including, without limitation, a Secretary and a
Controller for the Partnership and any assistants thereto. Such
Partnership Officials shall serve at all times under the supervision of,
and at the pleasure of the General Partners, and their functions and duties
shall be only as prescribed by the General Partners by written directive.
(f) Performance by Operator. With the exception of the Chairman and
Vice Chairman, subject to approval by the General Partners, the function of
any Partnership Official may be performed
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by the Operator to the extent provided in the Operating Agreement, or by
any director, officer, or employee of the Operator.
(g) Indemnification by General Partner. To the fullest extent
permitted by Applicable Law, each General Partner shall indemnify and hold
harmless those Representatives, Alternate Representatives, Partnership
Officials (or other individuals acting in connection with the Partnership's
business or affairs at the request of such General Partner) who are its
employees or employees of its Affiliates, against all actions, claims,
demands, costs (including fees and expenses of counsel) and liabilities
arising out of the acts (or failure to act) of any such Persons based upon
any actual or alleged breach of fiduciary duty (including any duty of care,
candor or loyalty) owed or claimed to be owed, to the Partnership.
Section 8.10. The Operator. The Partnership shall retain the Operator
to provide certain services as an independent contractor under the
Operating Agreement. The Operator shall have no duties or obligations to
the Partnership or the Partners other than the duties and obligations of
the Operator expressly set forth in the Operating Agreement.
Section 8.11. Request for Instructions. In the event that any
Partnership Official is unsure of the application of any provision of this
LP Agreement, any related Transaction Document or any other agreement
relating to the transactions contemplated hereby or thereby, such
Partnership Official may request and rely upon written instructions of the
General Partners (which instructions shall be signed by an authorized
officer of each General Partner);
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provided, however, that if such instructions have not been received within
twenty (20) days after the date of such request (or such earlier date as
reasonably requested or as necessary under the circumstances) until
instructed otherwise, the requesting Person may, but shall be under no duty
to, take or refrain from taking such action as the requesting Person may
deem advisable in the best interests of the Partnership.
ARTICLE IX
LIMITED PARTNERS
Section 9.01. Liability of Limited Partners. Except as otherwise
expressly required by law, a Limited Partner, in its capacity as such,
shall have no liability in excess of (i) the amount of its Capital
Contributions, (ii) its share of any undistributed profits and assets of
the Partnership, (iii) its obligation to make other payments expressly
provided for in this LP Agreement, and (iv) the amount of any distributions
wrongfully distributed to it. It is the intent of the Parties hereto that
no distribution to any Limited Partner shall be deemed a return of any
money or other property in violation of the Act. The payment of any such
money or distribution of any such property to a Limited Partner shall be
deemed to be a compromise within the meaning of Section 17-502(b) of the
Act, and the Limited Partner receiving any such money or property shall not
be required to return any such money or property to any Person, the
Partnership or any creditor of
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the Partnership. However, if any court of competent jurisdiction finally
determines that, notwithstanding the provisions of this LP Agreement, any
Limited Partner is obligated to return such money or property, such
obligation shall be the obligation of such Limited Partner and not of the
General Partners.
Section 9.02. No Management by Limited Partners. No Limited Partner,
in its capacity as such, shall have any right to be represented at any
meeting of the General Partners or otherwise to take part in the
management, operation or control of the business and affairs at the
Partnership. The Limited Partners shall not have any right, power, or
authority to transact any business in the name of the Partnership or to act
for or on behalf of or to bind the Partnership. A Limited Partner shall
have no rights other than those specifically provided herein or granted by
Applicable Law.
Section 9.03. Employees, Agents or Officers of the Partnership or a
General Partner. An employee, agent, director or officer of a Limited
Partner may also serve as a Partnership Official or be an employee, agent,
director or officer of the Operator or any General Partner. The existence
of these relationships and acting in such capacities will not result in a
Limited Partner being deemed to be participating in the control of the
business of the Partnership or otherwise affect the liability of the
Limited Partner or the Person so acting.
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ARTICLE X
BOOKS, RECORDS, FINANCIAL STATEMENTS AND TAX MATTERS
Section 10.01. Records and Access to Records. At all times during the
continuation of the Partnership, the General Partners shall keep or cause
to be kept full and true books of account maintained in accordance with
GAAP in which shall be entered fully and accurately each transaction of the
Partnership. Such books of account, together with a copy of this LP
Agreement and of the Certificate of Limited Partnership, shall at all times
be maintained at the principal place of business of the Partnership (or
such other location(s) approved by the General Partners from time to time)
and shall be open to inspection and examination at reasonable times by all
Limited Partners and their duly authorized representatives for any purpose
reasonably related to such Limited Partner's interest as a Limited Partner
in the Partnership. Unless otherwise approved by the General Partners, the
books of account and the records of the Partnership shall be examined by
and reported upon as of the end of each Fiscal Year of the Partnership by a
firm of independent certified public accountants of national reputation
selected by the General Partners.
Section 10.02. [RESERVED]
Section 10.03. Financial Statements. The General Partners shall
prepare and maintain, or cause to be prepared and maintained, the books of
account of the Partnership and the following documents
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that shall be transmitted, unless otherwise approved by the General
Partners, to each Partner at the times hereinafter set forth:
(1) Within thirty (30) days after the close of each Fiscal Year of the
Partnership, the following financial statements, examined by and
reported upon by the independent certified public accountants referred
to in Section 10.01:
(i) balance sheet of the Partnership as of the beginning and
close of such year;
(ii) statement of Partnership Profits and Losses for such year;
(iii) statement of cash flow for the Partnership; and
(iv) statement of such Partner's Capital Account as of the close
of such year, and changes therein during such year.
(2) Within thirty (30) days after the close of each Fiscal Year of the
Partnership, a statement showing an estimate of such Partner's share
of each item of Partnership income, gain, loss, deduction, or credit
for such year for income-tax purposes.
(3) On a monthly basis, the General Partners shall use best efforts to
transmit to the Partners a statement setting forth an estimate of the
Partnership's net income for such month within five (5) business days
after the last business day of the applicable calendar month. In
addition, on a monthly and
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quarterly basis, the General Partners shall use best efforts to have
prepared and transmitted to the Partners within fifteen (15) business
days after the last business day of the applicable calendar month or
fiscal quarter, as the case may be, such financial statements referred
to in clauses (i), (ii) and (iii) of Section 10.03(a)(1) on an
unaudited basis. Such financial statements shall be prepared in
accordance with GAAP, consistently applied (except when the
Partnership is required to adopt a new standard), subject to normal
year-end adjustments and the absence of notes, and shall be
accompanied by a certification by the General Partners that such
financial statements present fairly in all material respects the
financial condition and results of operations of the Partnership for
the periods indicated.
Section 10.04. Bank or Brokerage Accounts. All funds of the
Partnership shall be deposited in the Partnership's name in such bank or
brokerage account or accounts as shall be designated by the General
Partners. Withdrawals from any such bank or brokerage account or accounts
shall be made upon such signature or signatures as the General Partners may
designate. Such funds shall not be commingled with the funds of any other
Person. Subject to prior approval by the General Partners, the Partnership
may make such short-term investments of funds which may include, but shall
not be limited to, checking and savings accounts, certificates of deposit
and time or demand deposits in commercial banks, United States of America
government securities, securities guaranteed by government
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agencies, bankers' acceptances, Eurodollar deposits and notes, both fixed
and floating rate, securities issued by money market mutual funds, savings
and loan association deposits, or commercial paper, rated investment grade
or better by Standard & Poors' Corporation or Moody's Investor Services,
Inc., or the successor to either of them ("Permitted Short-Term
Investments"); provided that, the Partnership shall not make any such
deposits or investments that would require registration of the Partnership
under the Investment Company Act of 1940 or would otherwise be prohibited
by Applicable Law.
Section 10.05. Right to Make Section 754 Election. The General
Partners may, in their sole discretion, make or revoke, on behalf of the
Partnership, an election in accordance with Section 754 of the Code, so as
to adjust the basis of Partnership property in the case of a distribution
of property within the meaning of Section 734 of the Code, and in the case
of a Transfer of a Partnership interest within the meaning of Section 743
of the Code. Each of the Partners shall, upon request of the General
Partners, supply the information necessary to give effect to such an
election.
Section 10.06. Tax Matters Partner.
(a) Designation. CLNG Corp. is hereby designated as the initial "Tax
Matters Partner" (the "TMP"), of the Partnership as defined in Section
6231(a)(7) of the Code and, in such capacity, shall have the power (subject
to the limitation on the TMP's discretion set forth in Section 10.06(d)) to
manage and control, on behalf of the Partnership, any administrative
proceeding at the Partnership
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level with the IRS relating to the determination of any item of Partnership
income, gain, loss, deduction or credit for federal income tax purposes.
The TMP and other Partners shall use their best efforts to comply with the
responsibilities (including, without limitation, the making of elections
and preparing of returns) outlined in this Article X and in Sections 6622
through 6231 and 6050K of the Code and in doing so shall incur no liability
to any other Partner, provided, that such efforts are undertaken in good
faith and in a manner that the TMP or Partner, as the case may be, believes
to be in the best interests of the Partners generally.
(b) IRS Notices. The TMP shall, within ten (10) days after the TMP's
receipt of any notice from the IRS in any administrative proceeding at the
Partnership level relating to the determination of any Partnership item of
income, gain, loss, deduction or credit, mail a copy of such notice to each
Partner.
(c) New Tax Matters Partners. The Partners may at any time hereafter
designate a new TMP; provided, however, that only a General Partner may be
designated as the TMP of the Partnership and the Partner serving as TMP for
a given taxable year shall continue as TMP with respect to all matters
concerning such year.
(d) No Discretion. Unless otherwise expressly provided in this LP
Agreement, or required by the Code or Treasury Regulations, the TMP shall
act (or refrain from acting) on behalf of the Partnership in accordance
with the directions of the General Partners, and shall make no election,
declaration or statement, settle or compromise any audit matter or dispute,
or execute or file any tax
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return, tax filing or other document on behalf of the Partnership without
the prior approval of the General Partners.
Section 10.07. Partnership Status. It is the intention of the Partners
that the Partnership be treated as a partnership for purposes of federal
and state income tax, and each Partner hereby covenants that it will make
no election, declaration or statement on or in any tax return, tax filing,
or any book or record maintained by it which is inconsistent with or
detrimental to the Partnership's ongoing maintenance of partnership tax
status.
Section 10.08. Income Tax Compliance and Capital Accounts. The TMP
shall prepare or cause to be prepared and filed on behalf of the
Partnership, when and as required by Applicable Law, all federal, state and
local income tax information returns or requests for extensions thereof.
Not less than two weeks prior to the due date (including extensions) for
any return, the TMP shall submit to each Partner a copy of the return as
proposed for review and a schedule showing the Partner's allocable share of
partnership tax attributes ("Tax Attributes") sufficient to allow such
Partner to include such Tax Attributes in its federal income tax return.
Each Partner shall provide to the TMP, when and as requested, all
information concerning the affairs of such Partner as may be reasonably
required to permit the filing of such returns.
Section 10.09. Tax Elections. The TMP shall make the following tax
elections on behalf of the Partnership:
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(a) Unless required to adopt a different taxable year pursuant to
Section 706(b) of the Code, adopt the calendar year as the annual
accounting period;
(b) Adopt the accrual method of accounting;
(c) Deduct interest expense and taxes attributable to the construction
or installation of real and personal property improvements to the fullest
extent permitted by the Code;
(d) Compute the allowance for depreciation under the most accelerated
tax depreciation method and using the shortest life and lowest salvage
value authorized by Applicable Law, consistent with the election provided
for in Section 10.09(e), with respect to all depreciable assets;
(e) If allowed by the Code, and to the maximum extent allowable, elect
to take available investment tax credit on the full basis of each asset.
(f) Make the election provided for in Section 754 of the Code if, and
only if, each Partner who has acquired a Partnership Interest with respect
to which the election is made or is in effect shall have provided to the
TMP concurrently, or within thirty (30) days after the end of the tax year
in which such Partnership Interest is acquired, its irrevocable and
unconditional written undertaking to the effect that it, and its successors
in interest hereunder, will reimburse the Partnership annually for
additional administrative costs reasonably incurred by the Partnership as a
result of such election as determined by the Partnership's Certified Public
Accountants; and
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(g) Make such other elections as the TMP shall have been directed in
writing by the General Partners to make. The requirement to make any of
the elections set forth in Sections 10.09(a) through 10.09(f) is predicated
upon the assumption that current federal income tax law will continue in
force. If any legislative change is made in the Code or any other tax
statutes or by the IRS in regulations and other pronouncements or by the
courts in case law affecting any of such elections so as to materially
alter the economic result of the required election, the TMP shall make such
election in respect of the item so affected as directed by the General
Partners; provided, however, that such election shall be made in a manner
consistent with the best interests of the Partners as a group.
Section 10.10. Allocation of Tax Attributes. Subject to the provisions
of Sections 10.11 and 10.14, and Article XIII, the Profits and Losses, as
the case may be, of the Partnership for each Fiscal Year and, in each case,
all related tax characteristics or attributes of the Partnership, or tax
credits of the Partnership, shall be allocated among the Partners in
accordance with the provisions of Article V.
Section 10.11. Specific Tax Allocation Rules. It is the intention of
the Partners that the allocation of Tax Attributes arising from the
Partnership comply with applicable provisions of the Code and Treasury
Regulations Section 1.704-1(b) as they exist and any amendments thereto.
Notwithstanding anything to the contrary in this Section 10.11, each
General Partner shall at all
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times be allocated at least 1% of each item of Partnership Tax Attributes.
Section 10.12. Notice of Change. Prior to making any change in the tax
elections required by Sections 10.09(a) through 10.09(f), pursuant to
Section 10.09(g), the TMP shall give each Partner at least thirty (3O)
calendar days' written notice specifying such change.
SECTION 10.13 [RESERVED]
Section 10.14. Profits and Losses. "Profits" and "Losses" shall mean,
for each Fiscal Year, an amount equal to the Partnership's taxable income
or loss, as the case may be, for such Fiscal Year, determined in accordance
with Section 703(a) of the Code (but including in taxable income or loss,
for this purpose, all items of income, gain, loss or deduction required to
be stated separately pursuant to Section 703(a)(1) of the Code), with the
following adjustments:
(i) any income of the Partnership exempt from federal income tax and
not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be added to such taxable income or
loss;
(ii) any expenditures of the Partnership described in Section 705
(a)(2)(B) of the Code (or treated as expenditures described in Section
705(a)(2)(B) of the Code pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in
computing Profits or Losses pursuant to this definition shall be
subtracted from such taxable income or loss;
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(iii) in the event the Gross Asset Value of any Partnership asset is
adjusted in accordance with Paragraph (ii) or Paragraph (iii) of the
definition of "Gross Asset Value" in Section 10.15, the amount of such
adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profits or Losses;
(iv) gain or loss resulting from any disposition of any asset of the
Partnership with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the
Gross Asset Value of the asset disposed of, notwithstanding that the
adjusted tax basis of such asset differs from its Gross Asset Value;
(v) in lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Fiscal
Year or other period, computed in accordance with the definition of
"Depreciation" in Appendix A hereto;
(vi) to the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section
743(b) is required pursuant to Treasury Regulations Section 1.704-
1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation of a
Partner's Interest, the amount of such adjustment shall be treated as
an item of gain (if the adjustment increases the basis of the asset)
or loss (if the
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adjustment decreases the basis of the asset) from the disposition of
the asset and shall be taken into account for purposes of computing
Profits or Losses; and
(vii) notwithstanding any other provision of this Section 10.14, any
items which are specially allocated pursuant to Section 5.04 or
Section 5.05 hereof shall not be taken into account in computing
Profits or Losses. The amounts of the items of Partnership income,
gain, loss, or deduction available to be specially allocated pursuant
to Sections 5.04 and 5.05 hereof shall be determined by applying the
rules set forth in Sections 10.14(i) through 10.14(vi) above, as
applicable.
Section 10.15. Gross Asset Value. "Gross Asset Value" means, with
respect to any asset, such asset's adjusted basis for federal income tax
purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of
such asset as agreed to by the contributing Partner and the other
Partners; provided that, the initial Gross Asset Value of the Facility
and related assets contributed to the Partnership pursuant to Section
4.03(g) hereof shall be equal to CLG's tax basis thereof as of the
Construction Capital Closing Date (it being acknowledged and agreed by
the Partners that, as of July 1, 1994, CLG's tax basis in such assets
is estimated to be $5.2 million);
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(ii) the Gross Asset Value of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as
determined by the General Partners, as of the following times: (a) the
acquisition of an additional interest in the Partnership by any new or
existing Partner in exchange for more than a de minimis Capital
Contribution; (b) the distribution by the Partnership to a Partner of
more than a de minimis amount of Partnership assets as consideration
for an interest in the Partnership; and (c) the liquidation of the
Partnership within the meaning of Treasury Regulation Section 1.704-
1(b)(2)(ii)(g); provided, however, that adjustments pursuant to Clause
(a) and Clause (b) of this sentence shall be made only if the General
Partners reasonably determine that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners
in the Partnership;
(iii) the Gross Asset Value of any Partnership asset distributed to
any Partner shall be the gross fair market value of such asset on the
date of distribution, as determined by the distributee Partner and the
General Partners;
(iv) the Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b),
but only to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Treasury Regulation Section
1.704-
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1(b)(2)(iv)(m) and Sections 10.14(vi) and 5.04(g) hereof; provided,
however, that Gross Asset Values shall not be adjusted pursuant to
this paragraph (iv) to the extent the General Partners determine that
an adjustment pursuant to paragraph (ii) above is necessary or
appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this paragraph (iv); and
(v) if the Gross Asset Value of an asset has been determined or
adjusted pursuant to Paragraphs (i), (ii) or (iv) above, such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing
Profits and Losses.
Section 10.16. New Partners. The Partnership Interests of additional
Partners shall not be entitled to any retroactive allocation of the
Partnership's income, gains, losses, deductions, credits or other items;
provided that, subject to the restrictions of Section 706(d) of the Code,
the Partnership Interests of additional Partners shall be entitled to their
respective share of the Partnership's income, gains, losses, deductions,
credits and other items arising under contracts entered into before the
effective date of the issuance of any such interests to the extent that
such income, gains, losses, deductions, credits and other items arise after
such effective date. To the extent consistent with Section 706(d) of the
Code and Treasury Regulations promulgated thereunder, the Partnership's
books may be closed at the time the Partnership Interests of additional
Partners are issued (as though the
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Partnership's tax year had ended) or the Partnership may credit to the
additional Partners pro rata allocations of the Partnership's income,
gains, losses, deductions, credits and items for that portion of the
Partnership's Fiscal Year after the effective date of the issuance of the
Partnership Interests of additional Partners.
Section 10.17. Sales; Transfers. The provisions of this LP Agreement
shall inure to the benefit and be binding upon the Parties hereto and their
successors and assigns. The Partners agree that if any one of them makes a
Transfer of its Partnership Interest under this LP Agreement, such Transfer
will be structured, if possible, so as not to cause a termination under
Code Section 708(b)(1)(B). If a Code Section 708(b)(1)(B) termination is
caused, the terminating Partner will indemnify the non-terminating Partners
and save them harmless for any increase in taxes, interest, and penalties
or decreases in credits caused by such termination. As between any Partner
and its Transferee, Profits and Losses for the Fiscal Year of the
Partnership in which such assignment occurs shall be apportioned for
federal income tax purposes in accordance with any convention permitted
under Section 706(d) of the Code and determined by the TMP.
Section 10.18. Deficit Capital Account on Liquidation. In the event
the Partnership is "liquidated" within the meaning of Treasury Regulation,
Section 1.704-1(b)(2)(ii)(g):
(a) (i) subject to Section 13.04(a) hereof, distributions shall be
made pursuant to this Section 10.18 to the Partners who
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have positive Capital Accounts in compliance with Treasury Regulations
Section 1.704-1(b)(2)(ii)(b)(2) and, (ii) if any General Partner's Capital
Account has a deficit balance (after giving effect to all contributions,
distributions, and allocations for all Fiscal years, including the Fiscal
Year during which such liquidation occurs), such Partner shall contribute
to the capital of the Partnership the amount necessary to restore such
deficit balance to zero in compliance with Treasury Regulations Section
1.704-1(b)(2)(ii)(b)(3), provided, that no General Partner shall be
obligated to contribute to the capital of the Partnership any amount in
excess of such General Partners' pro rata share of the aggregate amount of
recourse Partnership liabilities approved or provided for under Section
8.06 hereof.
(b) If any Limited Partner has a deficit balance in its Capital
Account (after giving effect to all contributions, distributions, and
allocations for all Fiscal Years, including the Fiscal Year during which
such liquidation occurs), such Limited Partner shall have no obligation to
make any contribution to the capital of the Partnership with respect to
such deficit, and such deficit shall not be considered a debt owed to the
Partnership or to any other Person for any purpose whatsoever.
(c) In the discretion of the General Partners, a pro rata portion of
the distributions that would otherwise be made to the Partners pursuant to
paragraph (a) of this Section 10.18 may be:
(i) distributed to a trust established for the benefit of the Partners
for the purposes of liquidating Partnership assets,
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collecting amounts owed to the Partnership, and paying any liabilities
or obligations of the Partnership or of the General Partners arising
out of or in connection with the Partnership. The assets of any such
trust shall be distributed to the Partners from time to time, in the
reasonable discretion of the General Partners in the same proportions
as the amount distributed to such trust by the Partnership would
otherwise have been distributed to the Partners pursuant to Section
13.04(b) hereof; or
(ii) withheld to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized
portion of any installment obligations owed to the Partnership,
provided that such withheld amounts shall be distributed to the
Partners as soon as practicable.
ARTICLE XI
ASSIGNABILITY; ADMISSION AND WITHDRAWAL OF PARTNERS
Section 11.01. Assignability of a General Partner's Interest in the
Partnership. A General Partner shall neither Transfer nor pledge,
encumber, mortgage, or otherwise hypothecate (hereinafter in this Article
XI collectively referred to as "assign" or "assignment") the whole or any
part of its interest as a General Partner in the Partnership without the
prior Consent of the other Partners. An assignee of all or part of the
interest of a General Partner in the Partnership shall be admitted to the
Partnership as
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a general partner of the Partnership only if (i) the other Partners Consent
to the admission of such assignee as an additional or successor General
Partner, and (ii) such assignee agrees in writing to accept and adopt the
terms and provisions of this LP Agreement. If such conditions are
satisfied, the admission shall be effective upon the filing of an amendment
to the Certificate of Limited Partnership with the Secretary of State which
indicates that such Person has been admitted to the Partnership as a
general partner of the Partnership. If a General Partner Transfers all of
its Partnership Interest and a successor General Partner is admitted, in
accordance with this Section 11.01, the admission of the successor General
Partner shall occur, and for all purposes shall be deemed to have occurred,
immediately prior to the time the Transferor ceases to be a general partner
of the Partnership. Such Transferor shall cease to be a general partner of
the Partnership upon the filing of an amendment to the Certificate of
Limited Partnership with the Secretary of State which indicates that such
Transferor is no longer a general partner of the Partnership. Such
Transferee and the other General Partners are hereby authorized to and
shall continue the Partnership without dissolution.
Section 11.02. Assignability of a Limited Partner's Interest in the
Partnership. No Limited Partner may assign the whole or any part of its
interest in the Partnership without the prior unanimous Consent of the
General Partners, which Consent shall not be unreasonably withheld (taking
into account the best interests of the Partnership). If the prior Consent
of all General Partners is
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obtained for any such assignment, such assignment shall, nevertheless, not
entitle the assignee to become a Substituted Limited Partner or to be
entitled to exercise or receive any of the rights, powers or benefits of a
Limited Partner unless the assigning Limited Partner designates, in a
written instrument delivered to the General Partners, its assignee to
become a Substituted Limited Partner and the General Partners, in their
sole discretion, Consent to the admission of such assignee as a Limited
Partner; and provided further, that such assignee shall not become a
Substituted Limited Partner without (i) having first executed an instrument
in form and substance satisfactory to the General Partners accepting and
adopting the terms and provisions of this LP Agreement, including, if
requested by the General Partners, a counterpart signature page to this LP
Agreement, and (ii) having paid to the Partnership, in cash, a fee
sufficient to cover all reasonable expenses of the Partnership in
connection with its admission as a Substituted Limited Partner.
Section 11.03. Recognition of Assignment by Partnership. No
assignment, or any part thereof, that is in violation of this Article XI
shall be valid or effective, and neither the Partnership nor the General
Partners shall recognize the same for the purpose of making distributions
of Net Cash Flow pursuant to Section 6.01 with respect to such Partnership
Interest, or part thereof. Neither the Partnership nor the General
Partners shall incur any liability as a result of refusing to make any such
distributions to the recipient of any such invalid assignment.
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Section 11.04. Effective Date of Assignment. Any valid assignment of a
Limited Partner's interest in the Partnership, or part thereof, pursuant to
Section 11.02 shall be effective as of the close of business on the last
day of the calendar month in which the General Partners give their written
consent to such assignment (or the last day of the calendar month in which
such assignment occurs, if later). The Partnership shall, from the
effective date of such assignment, thereafter pay all further distributions
of Net Cash Flow, on account of the Partnership Interest (or part thereof)
so assigned, to the assignee of such interest, or part thereof. As between
any Partner and its assignee, Profits and Losses for the fiscal year of the
Partnership in which such assignment occurs shall be apportioned for
federal income-tax purposes in accordance with any manner permitted under
Section 706(d) of the Code as such Partner and its assignee may agree to.
Section 11.05. Death, Incompetency, Bankruptcy, or Dissolution of a
Limited Partner. The death, incompetency, Bankruptcy, dissolution or other
cessation to exist as a legal entity of a Limited Partner shall not, in and
of itself, dissolve the Partnership. In any such event, the legal
representative or successor of such Limited Partner may exercise all of the
rights of such Limited Partner for the purpose of settling its estate or
administering its property, subject to the terms and conditions of this LP
Agreement, including any power of an assignee to become a Limited Partner.
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Section 11.06. Withdrawal from the Partnership. Except as specifically
provided in this LP Agreement, a General Partner or a Limited Partner may
not withdraw as a general partner of the Partnership or as a limited
partner of the Partnership, as the case may be.
Section 11.07. Removal of General Partner. A General Partner may be
removed as a general partner of the Partnership with or without cause upon
(i) the unanimous Consent of the Limited Partners and (ii) the election by
such Limited Partners of a successor General Partner. Upon any such
election, all Partners shall be bound thereby and shall be deemed to have
approved thereof. Such successor General Partner shall be deemed admitted
to the Partnership immediately prior to the removal of the predecessor
General Partner and shall continue the Partnership without dissolution. A
successor General Partner shall be admitted as a general partner of the
Partnership upon the filing of an amendment to the Certificate of Limited
Partnership with the Secretary of State which indicates that the successor
General Partner has been admitted as a general partner of the Partnership
and that the removed General Partner is no longer a general partner of the
Partnership.
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ARTICLE XII
EXCULPATION AND INDEMNIFICATION OF
THE GENERAL PARTNERS AND OTHER INDEMNIFIED PERSONS
Section 12.01. Exculpatory Provisions.
(a) Covered Persons. Notwithstanding any other terms of this LP
Agreement, whether express or implied, or obligation or duty at law or in
equity, neither the General Partners, their Affiliates, nor any of their
respective Representatives, Alternate Representatives, officers, directors,
shareholders, partners, employees, or agents nor any Partnership Official
or any other officer, employee, representative or agent of the Partnership
and its Affiliates (individually, a "Covered Person" and collectively, the
"Covered Persons") shall be liable to the Partnership or any Partner for
any act or omission (in relation to the Partnership, this LP Agreement, any
related document or any transaction or investment contemplated hereby or
thereby) taken or omitted in good faith by a Covered Person and in the
reasonable belief that such act or omission is in or is not contrary to the
best interests of the Partnership and is within the scope of authority
granted to such Covered Person by this LP Agreement, provided that such act
or omission does not constitute Disabling Conduct.
(b) Reliance. A Covered Person may rely and shall incur no liability
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
bond, debenture, paper, document,
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signature or writing reasonably believed by it to be genuine, and may rely
on a certificate signed by an officer of any Person in order to ascertain
any fact with respect to such Person or within such Person's knowledge and
may rely on an opinion of counsel reasonably selected by such Covered
Person with respect to legal matters unless such Covered Person acts in bad
faith.
(c) Fiduciary Duty. To the extent that, at law or in equity, a Covered
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Partnership or to any other Covered Person, a Covered Person
acting under this LP Agreement shall not be liable to the Partnership or to
any other Covered Person for its good faith reliance on the provisions of
this LP Agreement. The provisions of this LP Agreement, to the extent that
they restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the parties hereto to replace
such other duties and liabilities of such Covered Person.
Section 12.02. Indemnification of General Partner and Other
Indemnified Persons.
(a) Scope of Indemnity. To the fullest extent permitted by Applicable
Law, the Partnership shall indemnify and hold harmless each General
Partner, its Affiliates and all directors, officers, shareholders,
partners, employees, Representatives, Alternate Representatives and agents
of each General Partner and its Affiliates and all Partnership Officials
and all other officers, employees, representatives and agents of the
Partnership and its
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Affiliates (individually, an "Indemnified Person" and collectively, the
"Indemnified Persons") from and against any and all losses, claims,
demands, liabilities, expenses (including all fees and expenses),
judgments, fines, settlements, and other amounts arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in which the Indemnified Person may be
involved, or threatened to be involved, as a party or otherwise, by reason
of its involvement with the management of the affairs of the Partnership,
or a General Partner or its status as a General Partner, an Affiliate
thereof, or partner, director, officer, stockholder, employee,
representative or agent thereof or of the Partnership or a Person serving
at the request of the Partnership, a General Partner or any Affiliate
thereof in another entity in a similar capacity, which relates to or arises
out of the Partnership, its property, its business or affairs, and
regardless of whether the liability or expense accrued at or relates to, in
whole or in part, any time before, on or after the date hereof. The
adverse disposition of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that the Indemnified
Person acted in a manner contrary to the standard set forth in Section
12.02(b) below. Any indemnification pursuant to this Section 12.02 shall
be made only out of the assets of the Partnership.
(b) Limitation. An Indemnified Person shall not be entitled to
indemnification under this Section 12.02 with respect to any claim,
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issue or matter in which it (i) has a right of indemnity under Section
8.09(g), or (ii) has engaged in Disabling Conduct; provided, however, that
a court of competent jurisdiction, may determine upon application that,
despite such Disabling Conduct, in view of all the circumstances of the
case, the Indemnified Person is fairly and reasonably entitled to
indemnification for such liabilities and expenses as the court may deem
proper.
(c) Expenses. To the fullest extent permitted by law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Partnership prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 12.02.
(d) Other Rights. The indemnification provided by Section 12.02 shall
be in addition to any other rights to which an Indemnified Person may be
entitled under any agreement, by law or vote of the Partners as a matter of
law or otherwise, both as to action in the Indemnified Person's capacity as
a General Partner, an Affiliate thereof or a partner, director, officer,
stockholder, partner, representative, employee or agent thereof, or an
officer, employee, representative or agent of the Partnership or an
Affiliate thereof and, as to action in any other capacity, shall continue
as to an Indemnified Person who has ceased to serve in
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such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of an Indemnified Person. The General Partners
and the Partnership may enter into indemnity contracts with Indemnified
Persons and adopt written procedures pursuant to which arrangements are
made for the advancement of expenses and the funding of obligations under
this Section 12.02 and containing such other procedures regarding
indemnification as are appropriate.
(e) Insurance.
(i) Liability. Each General Partner shall at all times maintain
commercial or comprehensive general liability insurance coverage to
include blanket contractual and broad-form liability endorsements, or
their equivalents, completed operations coverage and, when applicable,
products coverage, with minimum limits of $100 million. The
Partnership shall, in addition, purchase primary liability coverage in
the form of a "joint venture" or similar policy approved by the
General Partners with limits of at least $5 million.
(ii) All-Risk/Property. All of the Partnership's assets, including,
without limitation, the Facility and the Pipeline, shall be insured
under an all-risks property insurance policy approved by the General
Partners, with limits of coverage sufficient to provide coverage for
all of the Partnership's equipment and other fixed assets, and also
including business interruption and pollution coverage if available on
reasonable terms, as the General Partners may approved from time to
time.
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(iii) Directors and Officers. Unless otherwise approved by the General
Partners, the Partnership shall not procure or provide "Directors and
Officers" or similar liability coverage for any Person, and each
General Partner may provide such coverage for any individual acting in
connection with the Partnership's business at such General Partner's
behest.
(iv) Other Insurance. The Partnership may maintain in existence any
and all other forms of insurance coverage necessary, appropriate or
customary to the Partnership's business, as approved from time to time
by the General Partners, including, without limitation, automobile,
workmen's compensation, crime, and other standard coverages.
(f) No Liability to Limited Partners. In no event may any Indemnified
Person subject the Limited Partners to personal liability by reason of any
indemnification of an Indemnified Person under this LP Agreement or
otherwise.
(g) Interest in Transaction. An Indemnified Person shall not be denied
indemnification in whole or in part under this Section 12.02 because the
Indemnified Person had an interest in the transaction with respect to which
the indemnification applies if the transaction is otherwise permitted by
the terms of this LP Agreement.
(h) Benefit of Indemnity. The provisions of Section 12.02 are for the
benefit of the Indemnified Persons and shall not be deemed to be for the
benefit of any other Persons.
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ARTICLE XIII
DISSOLUTION AND TERMINATION
Section 13.01. No Dissolution. The Partnership shall not be dissolved
by the admission of additional Limited Partners or Substituted Limited
Partners or by the admission of additional General Partners or successor
General Partners in accordance with the terms of this LP Agreement.
Section 13.02. Events Causing Dissolution. The Partnership shall be
dissolved and its affairs shall be wound up upon the occurrence of any of
the following events:
(a) The expiration of the term of the Partnership, as provided in
Section 2.08;
(b) The withdrawal, removal or Bankruptcy of any General Partner, or
the assignment by any General Partner of its entire interest in the
Partnership when the assignee has not been admitted to the Partnership as a
successor General Partner in accordance with Section 11.01, or the
occurrence of any other event that results in any General Partner ceasing
to be a general partner of the Partnership under the Act, provided that,
the Partnership shall not be dissolved and required to be wound up in
connection with any of the events specified in this clause (b) if (i) at
the time of the occurrence of such event there is at least one remaining
general partner of the Partnership who is hereby authorized to and does
carry on the business of the Partnership, or (ii) within ninety (90) days
after the occurrence of such event, all remaining
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Partners agree in writing to continue the business of the Partnership and
to the appointment, effective as of the date of such event, if required, of
one or more successor general partners of the Partnership;
(c) A written determination by the General Partners to dissolve the
Partnership;
(d) The affirmative vote of holders of seventy-five percent (75%) or
more of the Limited Partner Interests to dissolve the Partnership;
(e) The sale by the Partnership of all or substantially all of the
Partnership's assets; or
(f) The entry of a decree of judicial dissolution under Section 17-802
of the Act.
Section 13.03. Notice of Dissolution. Upon the dissolution of the
Partnership, the General Partners or the Liquidating Trustee, as the case
may be, shall promptly Notify the Partners of such dissolution.
Section 13.04. Liquidation. Upon dissolution of the Partnership, the
General Partners, or, in the event that the dissolution is caused by an
event described in Section 13.02(b) and there is no General Partner, a
Person or Persons who may be approved by a Majority Vote (the "Liquidating
Trustee"), shall immediately commence to wind up the Partnership's affairs;
provided, however, that a reasonable time shall be allowed for the orderly
liquidation of the assets of the Partnership and the discharge of
liabilities to creditors so as to enable the Partners
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to minimize the normal losses attendant upon a liquidation. The Partners
shall continue to receive allocations of Profits and Losses during
liquidation in the same proportions as specified in Article V as before
liquidation. Each Partner shall be furnished with a statement prepared by
the Partnership's certified public accountant that shall set forth the
assets and liabilities of the Partnership as of the date of dissolution.
The proceeds of liquidation shall be distributed, as realized, in the
following order and priority:
(a) To creditors of the Partnership, including any Partners or their
Affiliates who are creditors, to the extent otherwise permitted by law, in
satisfaction of the liabilities of the Partnership (whether by payment or
the making of reasonable provision for payment thereof); and
(b) To distribute to the Partners the remaining proceeds of
liquidation in accordance with the provisions of Section 10.18 of this LP
Agreement, after giving effect to all contributions, distributions, and
allocations for all periods, including any allocations under Section 5.08
hereof.
Section 13.05. Methods Of Liquidation. The Partnership may be
liquidated by either:
(a) Selling the Partnership assets and distributing the net proceeds
therefrom in the manner provided in Section 13.04. Any net gain or loss
realized by the Partnership on the sale or other disposition of Partnership
assets in the process of liquidation of the Partnership shall be allocated
to the Partners' Capital
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Accounts in proportion to their respective Partnership Interests; or
(b) If unanimously Consented to by all Partners at such time, and
subject to the order of priority set forth in Section 13.04, distributing
the Partnership assets proportionately to the Partners in kind with each
Partner accepting an undivided interest in the Partnership assets, subject
to Partnership liabilities, in satisfaction of its proportionate interests
in the Partnership. For the purpose of determining the amount distributed
to each Partner, any property distributed in kind in the liquidation shall
be valued at Appraised Fair Market Value.
Section 13.06. Termination of Partnership. The Partnership shall
terminate when all of the assets of the Partnership, after payment of or
due provision for all debts, liabilities and obligations of the
Partnership, shall have been distributed to the Partners in the manner
provided for in this Article XIII, and the Certificate of Limited
Partnership shall have been canceled in the manner required by the Act.
Section 13.07. Deemed Distribution and Recontribution. Notwithstanding
any other provision of this Article XIII, in the event the Partnership is
liquidated within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Treasury Regulations but no event of dissolution has occurred under Section
13.02 hereof, the Partnership's assets shall not be liquidated, the
Partnership's liabilities shall not be paid or discharged, and the
Partnership's affairs shall not be wound up. Instead, solely for federal
income
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tax purposes, the Partnership shall be deemed to have distributed the
Partnership's assets in kind to the Partners, who shall be deemed to have
assumed and taken subject to all Partnership liabilities, all in accordance
with their respective Capital Accounts and, if any General Partner's
Capital Account has a deficit balance (after giving effect to all
contributions, distributions, and allocations for all Fiscal Years,
including the Fiscal Year during which such liquidation occurs), such
General Partner shall, subject to the limitation in Section 10.18(b)
hereof, contribute to the capital of the Partnership the amount necessary
to restore such deficit balance to zero in compliance with Treasury
Regulations Section 1.704-1(b)(2)(ii)(b)(3). Immediately thereafter, the
Partners shall be deemed to have recontributed the Partnership's assets in
kind to the Partnership, which shall be deemed to have assumed and taken
subject to all such liabilities.
ARTICLE XIV
DISPUTE RESOLUTION
Section 14.01. Arbitration. To the fullest extent permitted by the Act
and other Applicable Law, any controversy or claim arising out of or
relating to this LP Agreement, or any breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"), as amended and in effect on the
date that demand for arbitration is
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filed with the AAA. Each Party hereto agrees that any such controversy
shall be submitted to a single arbitrator if agreed to by the parties to
the arbitration. Otherwise, each party to the arbitration shall select one
arbitrator, and the two arbitrators selected shall then choose a third
arbitrator. The ruling of the arbitrator(s) shall be binding and
conclusive upon the Parties hereto to the fullest extent permitted by law.
Any arbitration shall occur in Baltimore, Maryland, or any other location
agreed to in writing by the parties to the arbitration, and judgment upon
the award rendered may be entered in any court having jurisdiction thereof.
The arbitrator(s) shall be governed by and shall apply the substantive law
of the State of Delaware in making their award. The expenses of the
arbitration shall be borne equally by the parties to the arbitration, and
each such party shall pay for and bear the cost of its or its own experts,
evidence and legal counsel, unless the arbitrator(s) determine(s) that any
party to the arbitration proceeded in bad faith, or asserted meritless
claims or positions, in which event the arbitrator(s) shall be empowered to
award the other party all or part of the reasonable costs of such
arbitration.
ARTICLE XV
POWER OF ATTORNEY
Section 15.01. Appointment of General Partners. Each Limited Partner
hereby irrevocably constitutes and appoints each General
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Partner and each Liquidating Trustee as its true and lawful
attorney-in-fact, in its name, place, and stead, to make, execute,
acknowledge, and file the following documents, to the extent consistent
with the other provisions of this LP Agreement:
(a) This LP Agreement, and, to the extent required by law, the
Certificate of Limited Partnership;
(b) Any fictitious or assumed-name certificates required to be filed
on behalf of the Partnership;
(c) Any application or registration to do business in any State other
than, or in addition to, the State of Delaware;
(d) Deeds, notes, mortgages, pledges, security instruments of any kind
and nature, leases, and such other instruments as may be necessary to carry
on the business of the Partnership; provided that no such instrument shall
increase the personal liability of the Limited Partners;
(e) All certificates and other instruments that the General Partners
deem appropriate or necessary to form and qualify, or continue the
qualification of, the Partnership as a limited partnership in the State of
Delaware and all jurisdictions in which the Partnership may intend to
conduct business or own property;
(f) Any duly adopted amendment to or restatement of this LP Agreement
or the Certificate of Limited Partnership;
(g) All conveyances and other instruments or documents that the
General Partners deem appropriate or necessary to effect or reflect the
dissolution, liquidation and termination of the
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Partnership pursuant to the terms of this LP Agreement (including a
certificate of cancellation);
(h) Any and all financing statements, continuation statements,
mortgages or other documents necessary to grant to or perfect for secured
creditors of the Partnership, including any General Partner and its
Affiliates, a security interest, mortgage, pledge or lien on all or any of
the assets of the Partnership; and
(i) All other instruments as the attorneys-in-fact or any of them may
deem necessary or advisable to carry out fully the provisions of this LP
Agreement in accordance with its terms.
Section 15.02. Power Coupled with Interest. It is expressly intended
by each Limited Partner that the power of attorney granted by Section 15.01
is coupled with an interest, shall be irrevocable, and shall survive and
not be affected by the subsequent disability or incapacity of such Limited
Partner (or if such Limited Partner is a corporation, partnership, trust,
association, limited liability company or other legal entity, by the
dissolution or termination thereof).
ARTICLE XVI
MISCELLANEOUS
Section 16.01. Notices.
(a) Address for Notices. All Notices provided for in this LP Agreement
shall be in writing, duly signed by the party giving such notice, and shall
be delivered as follows:
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(i) if given to the Partnership, in care of each General Partner at
its mailing address set forth on Appendix B attached hereto;
(ii) if given to any General Partner, at its mailing address set forth
on Appendix B attached hereto;
(iii) if given to any Limited Partner, at the address set forth
opposite its name on Appendix B attached hereto; or
(iv) at such other address as any Partner may hereafter designate by
written notice to the Partnership.
(b) Sufficiency of Notice. Each Notice, demand, request or
communication hereunder shall be deemed sufficiently given, served, sent or
received for all purposes if and when delivered in person or when sent to a
Person at the address set forth above by certified mail, postage prepaid
and return receipt requested, by facsimile transmission, listed telex or
other confirmed transmission, or by any nationally recognized express mail
service which provides a means for tracking deliveries and guarantees next-
day delivery, including, without limitation, Airborne Express and Federal
Express.
Section 16.02. Amendments.
(a) Amendments with the Consent of Limited Partners. Except as
provided in Section 16.02(b), no amendment to this LP Agreement shall be
effective or binding upon the Parties hereto without the written Consent of
all General Partners and a Majority Vote; provided, however, that any
modification or amendment that would: (i) increase the amount of the
capital contributions to be made by
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any Partner, (ii) increase the liability of the Limited Partners, or (iii)
materially adversely affect the rights of the Limited Partners under this
LP Agreement shall require the Consent of all General Partners and all
Limited Partners. Upon receipt of a written proposal executed by all
Limited Partners for the adoption of an amendment of this LP Agreement, or
should the General Partners desire to propose such an amendment, the
General Partners shall adopt and implement a plan whereby the Limited
Partners may vote for or against the adoption of such an amendment.
(b) Amendments Without Limited Partner Consent. Notwith-standing
anything herein to the contrary, the General Partners may amend this LP
Agreement without the consent of any Limited Partner:
(i) to reflect the addition or substitution of Limited Partners (made
in accordance with the terms hereof) or the reduction of the Capital
Accounts upon the return of capital to Limited Partners;
(ii) to add to the representations, duties or obligations of the
General Partners or surrender any right or power granted to the
General Partners herein, for the benefit of the Limited Partners;
(iii) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or
to add any other provisions with respect to matters or questions
arising under this LP Agreement which will not be inconsistent with
the provisions of this LP Agreement;
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(iv) to delete or add any provision from or to this LP Agreement
requested to be so deleted or added by the staff of the SEC or by a
state regulatory agency, the deletion or addition of which provision
is deemed by such staff or such regulatory agency to be for the
benefit or protection of the Limited Partners; and
(v) to modify any provision of this LP Agreement, if, in the opinion
of counsel to the Partnership and the General Partners, such
modification is necessary to prevent the Partnership or the Partners
from in any manner being regulated as a registered holding company or
non-exempt subsidiary thereof under PUHCA, as amended, to prevent the
Partnership from being treated for tax purposes as an association
taxable as a corporation, rather than being taxable as a partnership,
or to prevent the Partnership from being treated as a "publicly traded
partnership" as defined in the Code.
Section 16.03. Fiscal Year. The "Fiscal Year" of the Partnership shall
be the calendar year commencing at 12:01 a.m. on January 1 of each year and
ending at 12:00 midnight on December 31 of each year.
Section 16.04. Securities Act Investment Covenant. Each Partner
represents and warrants that it is acquiring its interest in the
Partnership for its own account, and not with a view to resale or
distribution thereof within the meaning of the Securities Act of 1933, as
amended, and that no such interest will be sold, transferred, hypothecated,
or assigned by it in contravention of
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the Securities Act of 1933, as amended, or any state Blue Sky or securities
statute.
Section 16.05. Failure to Pursue Remedies. The failure of any Party to
seek redress for violation of, or to insist upon the strict performance of,
any provision of this LP Agreement shall not prevent a subsequent act,
which would have originally constituted a violation, from having the effect
of an original violation.
Section 16.06. Headings. The headings in this LP Agreement are
included for convenience and identification only and are in no way intended
to describe, interpret, define or limit the scope, extent or intent of this
LP Agreement or any provision hereof.
Section 16.07. Cumulative Remedies. The rights and remedies provided
by this LP Agreement are cumulative and the use of any one right or remedy
by any Party shall not preclude or waive its right to use any or all other
remedies. Said rights and remedies are given in addition to any other
rights the Parties may have by law, statute, ordinance or otherwise.
Section 16.08. Binding Effect. This LP Agreement shall be binding upon
and inure to the benefit of all the Parties and, to the extent permitted by
this LP Agreement, their successors, legal representatives, and assigns.
Section 16.09. Interpretation. Throughout this LP Agreement and any
amendment hereto, nouns, pronouns, and verbs shall be construed as
masculine, feminine, neuter, singular or plural, whichever shall be
applicable.
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Section 16.10. Severability. The invalidity or unenforceability of any
particular provision of this LP Agreement shall not affect the other
provisions hereof, and this LP Agreement shall be construed in all respects
as if such invalid or unenforceable provision were omitted.
Section 16.11. Counterparts. This LP Agreement may be executed in any
number of counterparts with the same effect as if all Partners had signed
the same document. All counterparts shall be construed together and shall
constitute one instrument.
Section 16.12. Whole Agreement. This LP Agreement and Appendices A, B
and C annexed hereto, each of which is made a part hereof by this
reference, contain the entire "partnership agreement" of the Partnership
for purposes of the Act and, except as otherwise provided herein, may be
changed only by written amendment. There are no oral understandings or
agreements between the Parties upon the subject matter of this LP
Agreement, and any prior written agreements as to the governance of the
affairs of the Partnership, including, without limitation, the Original
Partnership Agreement, are hereby superseded and merged herein, except only
as herein otherwise expressly stated.
Section 16.13. Governing Law. This LP Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the
State of Delaware, and all rights and remedies shall be governed by such
laws without regard to principles of conflicts of laws.
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Section 16.14. Mutual Representations and Warranties. Each Party
hereto (the "Warranting Party") represents and warrants to each other Party
hereto, and each such other Party in agreeing to enter into this LP
Agreement has relied upon such representations and warranties, that:
(a) The Warranting Party has the requisite power and authority,
corporate and otherwise, to execute and deliver this LP Agreement and to
perform its duties and obligations hereunder, and any Person signing this
LP Agreement on behalf of a Warranting Party is duly authorized, empowered
and directed to sign this LP Agreement on such Warranting Party's behalf;
(b) This LP Agreement has been duly and validly executed by the
Warranting Party and, assuming the due execution and delivery of this LP
Agreement by all other Parties hereto, constitutes the Warranting Party's
valid and binding obligation, enforceable against the Warranting Party in
accordance with the terms hereof, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws relating to creditors' rights generally or general
principles of equity; and
(c) Except for the Initial FERC Certificate, and the approvals
contemplated by Section 18.01, no consent, approval, or other authorization
by any judicial, governmental or regulatory authority, domestic or foreign,
or any third party, is required to be obtained by the Warranting Party in
connection with the valid execution, delivery, and performance by the
Warranting Party of
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this LP Agreement, or the consummation by the Warranting Party of the
transactions contemplated hereby.
Section 16.15. No Rights of Third Parties. None of the provisions of
this LP Agreement shall be construed as existing for the benefit of any
Person not a Party hereto, including, without limitation, any creditor of
the Partnership or of any of the Partners, or shall be enforceable by any
Person not a signatory to this LP Agreement.
ARTICLE XVII
PROJECTS; FERC APPLICATIONS
Section 17.01. Scope of the Initial Project. The first Project
undertaken by the Partnership shall consist of the construction of the
Liquefaction Unit at the Cove Point Site, alterations and improvements to
the Facility to integrate the Liquefaction Unit as part of the Facility,
and such other refurbishments to the Facility as are necessary to enable
the Partnership to engage in the Peaking Business and the Transportation
Business (the "Initial Project"). Prior to the Construction Capital
Closing, the Partners shall use best efforts to cooperate in maximizing the
peaking revenues and volumes represented by the Service Agreements.
Section 17.02. The Initial FERC Application.
(a) Diligent Prosecution. After execution of this LP Agreement, the
Partnership shall continue to diligently prosecute the Initial FERC
Application seeking certificate authority to
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permit the Partnership to acquire and own the Facility, to construct and
operate the Initial Project, and to carry on the Peaking Business and the
Transportation Business. All Partners hereby agree to cooperate in the
prosecution thereof, including any amendments, modifications, appeals or
similar actions deemed necessary from time to time by the General Partners.
(b) Acceptance by Partnership. If and when the Initial FERC
Certificate is granted to the Partnership either (i) in the form and
substance requested in the Initial FERC Application, as the same may have
been amended or modified to the satisfaction of the General Partners from
time to time, with no material alterations or modifications on the part of
the FERC, or (ii) if not granted as specifically requested, if the Initial
FERC Certificate would otherwise permit the Partnership to proceed with the
Initial Project in all material respects without detriment to any Partner,
such Initial FERC Certificate shall be automatically accepted by the
Partnership with no approval or other action being necessary by any
Partner. In the event that the Initial FERC Certificate is not subject to
such automatic acceptance, the General Partners may, upon their sole
discretion, nonetheless cause the Partnership to accept any Initial FERC
Certificate issued by the FERC. In either event, upon acceptance by the
Partnership of the Initial FERC Certificate, the Partnership shall
forthwith proceed to construct and operate the Initial Project after the
Construction Capital Closing Date subject to satisfaction or waiver of the
other conditions precedent set forth in Section 18.02.
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(c) Right to Withdraw. If the Initial FERC Certificate is not accepted
in accordance with Section 17.02(b), any Partner shall have the right to
withdraw from the Partnership prior to the Construction Capital Closing
Date by giving written Notice to the other Partners. Subject to the Act,
upon such withdrawal of any Partner, the remaining Partners may elect, on
such terms as they deem advisable in their sole discretion, to continue the
existence of the Partnership and cause it to continue with the Initial
Project to the extent of the Partnership's rights, if any, to use the
Facility for such purpose.
Section 17.03. Additional Projects. (a) In the event that the
Partnership is presented with an opportunity to expand the Peaking
Business, initiate a baseload LNG import trade or to pursue other
opportunities with respect to expansion of the Facility, including power
generation, and the Partnership's pursuit of such activities is approved by
unanimous Consent of all Partners, Capital Contributions required to fund
such Additional Projects will be made by, and the economic benefits of such
Additional Projects will be shared by each Partner in proportion to such
Partner's Partnership Interest. The Partners hereby agree that an express
purpose of the Partnership shall be to pursue the implementation of an
ongoing baseload LNG import trade.
(b) The General Partners shall cause the Partnership to develop,
market, construct and operate any such Additional Project following
approval by the General Partners of a Project Construction Plan, provided,
that the implementation thereof shall
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be subject to the Partnership first obtaining any and all necessary
consents and approvals of the FERC and any other applicable Governmental
Authorities, and further subject to any applicable and enforceable
restrictive covenants contained in the Sierra Club Agreement. Any such
Additional Project for which a Project Construction Plan has been approved
by the General Partners shall, in the absence of a written agreement of all
Partners to the contrary, be funded jointly by all Partners upon Cash Calls
made in accordance with Section 4.04 of this LP Agreement, and/or through
external financing, including, without limitation, Project debt financing,
to the extent approved by the General Partners.
Section 17.04. Project Construction Plan. For each Project proposed to
be constructed by the Partnership, the General Partners shall agree upon a
"Project Construction Plan" setting forth the scope of the Project and a
plan for administering, coordinating and supervising the design,
construction and permitting of the Project, including without limitation
the proposed design criteria, construction cost estimate and schedule,
project milestone schedule (including projected dates for the filing for
and issuance of all necessary regulatory permits through the projected In-
Service Date for such Project), a completion and testing protocol
establishing the criteria to be satisfied to establish the In-Service Date
for such Project (the "Completion and Testing Protocol"), an estimate of
the operating and maintenance budget, marketing plan, business plan and a
cost-benefit analysis with respect to the Project, and such other
information as either of the General Partners may
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reasonably request. Each Project Construction Plan shall be in addition to
the Partnership's Annual Plan; however, all such plans and each annual
Approved Budget of the Partnership shall be coordinated with and consistent
with each other. With respect to the Project Construction Plan for the
Initial Project, the General Partners shall use their best efforts to reach
agreement upon such Plan on or before the Construction Capital Closing
Date, which Plan, in the case of the Initial Project, shall not include the
cost-benefit analysis referred to above in this Section 17.04.
ARTICLE XVIII. THE CONSTRUCTION CAPITAL CLOSING;
CERTAIN REGULATORY MATTERS
Section 18.01. Partners' Regulatory Approvals.
(a) Columbia Approvals. Notwithstanding anything to the contrary
contained herein, the Columbia Partners' obligations hereunder are
expressly conditioned upon the receipt by the Columbia Partners of the
order requested on December 8, 1993, from the SEC under PUHCA with respect
to the transactions contemplated hereby in substantially the form requested
(or with such modifications thereto as may be requested (x) by Columbia or
the Columbia Partners consistent with the Transaction Documents, or (y) by
the SEC which do not materially adversely affect the Columbia Partners)
(the "SEC Order"). In connection therewith, each of the Columbia Partners
shall have the unconditional right to withdraw from the Partnership at any
time that the SEC Order is denied by
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the SEC; or any of Columbia or the Columbia Partners reasonably determines
in good faith that further prosecution of the application for the SEC Order
is futile.
(b) PEPCO Approvals. The PEPCO Partners shall take such actions and
make such filings as are necessary or appropriate to obtain any requisite
approvals of any public utility commissions or other regulatory agencies
having jurisdiction over their or their Affiliates' properties or the
conduct of their or their Affiliates' businesses. Until such time as the
Columbia Partners have obtained the SEC Order, the PEPCO Partners shall
have the unconditional right to withdraw from the Partnership in the event
that the PEPCO Partners are denied any required regulatory approval
reasonably satisfactory in form and substance to the PEPCO Partners.
(c) Cooperation. All Partners agree to diligently pursue and use their
best efforts to obtain their respective required regulatory approvals, and
to cooperate with the efforts of all other Partners and their respective
Affiliates in obtaining such regulatory approvals, and no Partner will take
any action contrary to or in opposition of any such Partner and/or such
Partner's Affiliates obtaining such approvals. In connection therewith,
each of the Partners agrees to join in and execute any such filings, in a
timely manner, as the other Partner and/or such Partner's Affiliates
reasonably request and take all such other actions as may be necessary and
appropriate in order to obtain the necessary approvals from all regulatory
authorities having jurisdiction over the transactions contemplated hereby
(collectively, the "Regulatory
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Approvals"). If at any time either Partner receives information from any
regulatory agency or other Governmental Authority, which by Applicable Law
is required to approve, or which has the authority to challenge the
validity of, the transactions contemplated hereby, in judicial proceedings
or otherwise, that provides a high probability for such Partner to conclude
in good faith that the required Regulatory Approval will not be granted or
that the transactions contemplated hereby or in the Transaction Documents
will be so challenged, such Partner shall immediately Notify the other
Partners, and the Partners shall confer as to the appropriate action to be
taken in response thereto.
Section 18.02. Conditions Precedent to Construction Capital Closing.
(a) General Conditions. The obligation of each of the Partners to
perform its obligations hereunder at the Construction Capital Closing shall
be subject to the satisfaction, or waiver in writing by such Partner, on or
prior to the Construction Capital Closing, of each of the following
conditions:
(i) FERC Approval. The Partnership shall have accepted the Initial
FERC Certificate in the manner provided in Section 17.02, and the
Initial FERC Certificate shall be in full force and effect and not
subject to any further review or reconsideration by any Governmental
Authority;
(ii) Regulatory Approvals. Each Partner's necessary Regulatory
Approvals shall have been received and shall be final (not subject to
any further administrative or judicial review or
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reconsideration) and in full force and effect, with all required
waiting periods (if any) having expired ("Final Regulatory Approval");
(iii) Service Agreements. The Partnership shall have obtained executed
Service Agreements for a Peaking Business substantially equivalent to
the "Nominated Revenues Business Plan" projections dated October 22,
1993, or such other level of executed Service Agreements as may be
agreed upon by the General Partners;
(iv) Sierra Club Agreement. The Sierra Club Agreement shall have been
duly executed and delivered by each of the parties thereto, and shall
be in full force and effect and fully assignable to the Partnership as
provided herein and therein;
(v) Transaction Documents. Each of the Transaction Documents shall
have been duly executed and delivered by each of the Parties thereto,
and shall be in full force and effect and the conditions precedent to
the transactions contemplated thereby shall have been satisfied or
waived;
(vi) Absence of Injunction. No Governmental Authority shall have
issued any injunction, cease and desist order or similar restraint
upon the performance by any of the Partners or their Affiliates of
their respective obligations contemplated hereby, which injunction,
order or other restraint would remain in effect at what would have
otherwise been the effective time of the Construction Capital Closing;
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(vii) Partnership Opinion. The Partners shall have received an
opinion, dated the Construction Capital Closing Date, of Richards,
Layton and Finger as special Delaware counsel to the Columbia Partners
to the effect that the Partnership was duly formed and validly exists
as a limited partnership under the Act; and
(viii) Budget and Plan. The General Partners shall have agreed on an
Approved Budget and Project Construction Plan for the Initial Project.
(b) Conditions to the PEPCO Partners' Obligations. The obligation of
each PEPCO Partner to perform its obligations hereunder at the Construction
Capital Closing shall be subject to the satisfaction, or waiver in writing
by the PEPCO Partners, on or prior to the Construction Capital Closing, of
each of the following conditions:
(i) Representations and Warranties/Officer's Certificate. The
representations and warranties of the Columbia Partners set forth in
Section 16.14 hereof shall be true and correct in all material
respects as of the effective time of the Construction Capital Closing
as though made on and at the Construction Capital Closing, except to
the extent that such representations and warranties may relate solely
to an earlier time, in which case such representations and warranties
shall have been true and correct on and as of such earlier time, and
the PEPCO Partners shall have received a certificate signed by the
Presidents of the Columbia Partners to that effect;
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(ii) Performance of Obligations of the Columbia Partners. The Columbia
Partners shall have performed all obligations required to be performed
by the Columbia Partners under this LP Agreement prior to the
Construction Capital Closing Date;
(iii) Corporate Authorization. The Columbia Partners shall have
certified in writing that all corporate action necessary to authorize
the execution, delivery and performance of this LP Agreement and the
consummation of the transactions contemplated hereby and thereby,
shall have been duly and validly taken by the Boards of Directors and
stockholders of the Columbia Partners;
(iv) Acceptance of the PEPCO Partners' Counsel. The form and substance
of all legal matters contemplated hereby and all papers delivered
hereunder shall be acceptable to the PEPCO Partners' respective
counsel.
(c) Conditions to the Columbia Partners' Obligations. The obligation
of each Columbia Partner to perform its obligations under this LP Agreement
at the Construction Capital Closing shall be subject to the satisfaction,
or waiver in writing by the Columbia Partners, at or prior to the
Construction Capital Closing, of each of the following conditions:
(i) Representations and Warranties Officer's Certificate. The
representations and warranties of the PEPCO Partners set forth in
Section 16.14 hereof shall be true and correct in all material
respects as of the effective time of the Construction Capital Closing
as though made on and at the Construction
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Capital Closing, except to the extent that such representations and
warranties may relate solely to an earlier time, in which case such
representations and warranties shall have been true and correct on and
as of such earlier time, and the Columbia Partners shall have received
a certificate signed by the Presidents of the PEPCO Partners to that
effect;
(ii) Performance of Obligations of the PEPCO Partners. The PEPCO
Partners shall have performed all obligations required to be performed
by the PEPCO Partners under this LP Agreement prior to the
Construction Capital Closing Date;
(iii) Corporate Authorization. The PEPCO Partners shall have certified
in writing that all corporate action necessary to authorize the
execution, delivery and performance of this LP Agreement, and the
consummation of the transactions contemplated hereby, shall have been
duly and validly taken by the Boards of Directors and stockholders of
the PEPCO Partners;
(iv) Acceptance of the Columbia Partners' Counsel. The form and
substance of all legal matters contemplated hereby and all papers
delivered hereunder shall be acceptable to the Columbia Partners'
respective counsel.
Section 18.03. Construction Capital Closing.
(a) Time and Place. The closing for the purpose of consummating the
transactions contemplated by this LP Agreement (the "Construction Capital
Closing") shall, unless another date or place is agreed to in writing by
the Parties hereto, take place at
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20 Montchanin Road, Wilmington, Delaware 19807, on such date (the
"Construction Capital Closing Date") which shall be the thirtieth (30th)
day after the date which is the latest to occur of (i) the Partnership's
acceptance of the Initial FERC Certificate, or (ii) the PEPCO Partners' and
the Columbia Partners' respective receipt of Final Regulatory Approvals, or
at such other time as the PEPCO Partners and the Columbia Partners shall
mutually agree to in writing.
(b) Events of Termination. The Partners' obligations to proceed to the
Construction Capital Closing may be terminated at any time prior to the
effective time of the Construction Capital Closing upon the happening of
any one or more of the following events ("Events of Termination"):
(i) by mutual written agreement executed by all of the Partners;
(ii) by the PEPCO Partners, upon written Notice to the Columbia
Partners, if as of the scheduled or otherwise agreed to Construction
Capital Closing Date the conditions to the PEPCO Partners' obligations
specified in Sections 18.02(a) or 18.02(b) hereof have not been
satisfied and shall not have been waived in writing by the PEPCO
Partners, unless and to the extent that the failure to satisfy such
condition is the result of a material breach by the PEPCO Partners of
any agreement, representation, warranty or covenant made or contained
in this LP Agreement;
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(iii) by the Columbia Partners, upon written Notice to the PEPCO
Partners, if as of the scheduled or otherwise agreed to Construction
Capital Closing Date the conditions specified in Sections 18.02(a) and
18.02(c) hereof have not been satisfied and shall not have been waived
in writing by the Columbia Partners, unless and to the extent that the
failure to satisfy such condition is the result of a material breach
by the Columbia Partners of any agreement, representation, warranty or
covenant made or contained in this LP Agreement;
(iv) by the Columbia Partners or the PEPCO Partners, upon written
Notice to the other Partners of their withdrawal from the Partnership
in accordance with Section 18.01(a) or (b);
(v) by any Partner hereto, upon written Notice to the other Partners
of such Partner's election to withdraw from the Partnership pursuant
to Section 17.02(c); or
(vi) by any Partner hereto, upon written Notice to the other Partners
if the Construction Capital Closing does not occur on or prior to
October 28, 1998.
(c) Effect of Termination. Upon the happening of an Event of
Termination, any Partner may withdraw from the Partnership and, unless the
remaining Partners take appropriate action hereunder and under the Act to
continue the Partnership, the Partnership shall be dissolved and its
affairs would up on accordance herewith and with the Act.
Section 18.04 Expenses. Whether or not there occurs an Event of
Termination prior to the Construction Capital Closing, each
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Partner shall bear its own expenses in connection with its (i) obtaining
any consents or approvals in connection herewith, (ii) drafting, review,
negotiation and performance of the Transaction Documents and (iii) due
diligence, provided, however, that upon the Construction Capital Closing,
the Partnership shall bear all out-of-pocket costs in connection with the
conveyance of the Facility and perfection of the security interests
securing repayment of Loan, including, without limitation, all transfer
taxes, recording fees, title insurance premiums, and the fees and
disbursements of any counsel retained by or on behalf of the Partnership in
connection therewith, provided that the retention of such counsel was
approved in advance by the General Partners.
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IN WITNESS WHEREOF, the Parties hereto have executed this LP Agreement
as of the date first above stated.
GENERAL PARTNERS:
CLNG CORPORATION
By: /s/ L. MICHAEL BRIDGES
-----------------------
Name: L. Michael Bridges
Title: President
COVE POINT ENERGY COMPANY, INC.
By: /s/ JOHN M. DERRICK, JR.
-----------------------
Name: John M. Derrick, Jr.
Title: Chairman
LIMITED PARTNERS:
COLUMBIA LNG CORPORATION
By: /s/ L. MICHAEL BRIDGES
-----------------------
Name: L. Michael Bridges
Title: President
PEPCO ENERGY COMPANY, INC.
By: /s/ JOHN M. DERRICK, JR.
-----------------------
Name: John M. Derrick, Jr.
Title: Chairman
pepparag.9
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APPENDIX A
TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
COVE POINT LNG LIMITED PARTNERSHIP
------------------------------------------------------------------
DEFINITIONS
"Act": The Delaware Revised Uniform Limited Partnership Act, 6 Del. C.
Section 17-101, et seq., as the same may be amended, supplemented or
otherwise modified from time to time.
"Additional Project": Any Project engaged in by the Partnership in
addition to the Initial Project in accordance with Section 17.03 of this LP
Agreement.
"Adjusted Capital Account Deficit": Means, with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as
of the end of the relevant Fiscal Year, after giving effect to the
following adjustments:
(i) credit to such Capital Account any amounts which such Partner is
obligated to restore pursuant to any provision of this LP Agreement or
is deemed to be obligated to restore pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-
2(i)(5); and
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LP Agreement A-1
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(ii) debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-
1(b)(2)(ii)(d)(6) of the Treasury Regulations.
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Section 1.704-1(b)(2) (ii)(d) of
the Treasury Regulations and shall be interpreted consistently therewith.
"Advance Payment Date": As defined in Section 4.08(c) of this LP
Agreement.
"Affiliate": With respect to a specified Person, any other Person that
directly or indirectly controls, is controlled by, or is under common
control with, the specified Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Alternate Representative": As defined in the Section 8.09(a) of this
LP Agreement.
"Annual Allocable Share": As defined in Section 5.01(a) of this LP
Agreement.
Appendix A to
LP Agreement A-2
<PAGE> 123
"Annual Plan" and "Annual Budget": As defined in Section 2.01(a) of
the Operating Agreement.
"Applicable Law": All applicable laws, statutes, treaties, rules,
codes, ordinances, regulations, permits, certificates, orders,
interpretations, licenses and permits of any Governmental Authority and
judgments, decrees, injunctions, writs, or orders of like action of any
court, arbitrator, or other administrative, judicial, or quasi-judicial
tribunal or agency of competent jurisdiction (including those pertaining to
health, safety or the environment).
"Appraised Fair Market Value": Fair market value as determined by
mutual written agreement of the applicable Persons or, in the absence
thereof, by an investment banking or public accounting firm of nationally
recognized standing acceptable to the applicable Persons.
"Approved Budget": A written report with respect to any Project or the
operation and maintenance of the Facility, covering a time period specified
therein, of anticipated expenditures for capital and expense items showing,
in reasonable detail, the nature and purpose of any capital expenditures
and a functional description of all expense items, as adopted, modified or
supplemented from time to time with the approval of the General Partners.
"Asset Contribution Agreement": The Asset Contribution Agreement, by
and among CLG, COPE and the Partnership, to be entered into on the
Appendix A to
LP Agreement A-3
<PAGE> 124
Construction Capital Closing Date, as the same may be amended or restated
from time to time in accordance with its terms.
"Bankruptcy": With respect to any Partner, (i) the filing by a Partner
of a voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States
Code (or corresponding provisions of future laws) or any other federal or
state insolvency law, or the filing by a Partner of an answer consenting to
or acquiescing in any such petition, (ii) the making by a Partner of any
assignment for the benefit of its creditors or the admission by a Partner
in writing of its inability to pay its debts as they mature, (iii) the
filing of an involuntary petition under Title 11 of the United States Code
(or corresponding provisions of future laws), an application for the
appointment of a receiver for the assets of a Partner, or an involuntary
petition seeking liquidation, reorganization, arrangement or readjustment
of its debts under any other federal or state insolvency law, provided that
the same shall not have been vacated, set aside or stayed within a 60-day
period after the occurrence of such event, or (iv) the entry against it of
a final and nonappealable order for relief under any bankruptcy, insolvency
or similar law now or hereafter in effect. The term "Bankruptcy" as
defined in this LP Agreement and as used herein, is intended and shall be
deemed to supersede and replace the events of withdrawal described in
Section 17-402(a)(4) and (5) of the Act.
Appendix A to
LP Agreement A-4
<PAGE> 125
"Bankruptcy Court": The United States Bankruptcy Court for the
District of Delaware.
"Capital Accounts": With respect to each Partner, the account
established and maintained for such Partner pursuant to Section 4.05(a) of
this LP Agreement.
"Capital Contribution": With respect to any Partner, the aggregate
amount of money and the initial Gross Asset Value of any property other
than money contributed by such Partner to the Partnership pursuant to
Article IV of this LP Agreement, provided, that neither the Loan nor any
other amounts loaned or advanced by a Person to the Partnership shall
constitute a Capital Contribution.
"Cash Calls": Written requests to the Partners in the form of invoices
or other appropriate billing mechanism, requesting Capital Contributions in
cash to cover Partnership expenditures consistent with Approved Budgets.
"Cash Investment": As defined in Section 4.03(f) of this LP Agreement.
"Certificate of Limited Partnership": The Partnership's Certificate of
Limited Partnership which was filed with the Secretary of State on October
28, 1993, and amended in accordance with Section 2.01
Appendix A to
LP Agreement A-5
<PAGE> 126
of this LP Agreement, as the same may be further amended or restated from
time to time, all in accordance with the Act.
"Certified Public Accountant(s)": Such nationally recognized firm or
firms of independent public accountants suitable to the General Partners as
may be retained on behalf of the Partnership from time to time.
"Chairman": The Partnership Official selected by the General Partners
to perform the duties and have the powers specified in Sections 8.09(c) and
8.09(d) of this LP Agreement.
"Charitable Trust Payments": The amounts required to be contributed by
the "Owner," to the "Charitable Trust" (as such quoted terms are defined in
the Sierra Club Agreement) pursuant to Section 5.02 of the Sierra Club
Agreement.
"CLG": Columbia LNG Corporation, a Delaware corporation.
"CLNG Corp.": CLNG Corporation, a Delaware corporation.
"Code": The Internal Revenue Code of 1986, as amended from time to
time, or any corresponding federal tax statute enacted after the date of
this LP Agreement. A reference to a specific section of the Code refers
not only to such specific section but also to any corresponding provision
of any federal tax statute enacted after the
Appendix A to
LP Agreement A-6
<PAGE> 127
date of this LP Agreement, as such specific section or corresponding
provision is in effect on the date of application of such provisions.
"Columbia": The Columbia Gas System, Inc., a Delaware corporation.
"Columbia Keepwell Letter": A letter executed by an authorized officer
of Columbia in form and substance satisfactory to Columbia and the PEPCO
Partners.
"Columbia Partners": Collectively, CLG (including any Transferee of
its Partnership Interest admitted as a Substituted Limited Partner in
accordance with this LP Agreement), and CLNG Corp. (including any
Transferee of its Partnership Interest admitted as a successor general
partner in accordance with this LP Agreement).
"Completion and Testing Protocol": As defined in Section 17.04 of this
LP Agreement.
"Controller": The Partnership Official appointed to perform or cause
to be performed, the duties of the Controller referred to in Section
8.09(e) of this LP Agreement.
"Consent" or "Consented": With respect to any Person or Persons, the
consent, approval or agreement of such Person or Persons to a particular
matter as set forth in a written document executed by such
Appendix A to
LP Agreement A-7
<PAGE> 128
Person, or a duly authorized officer or representative of such Person or
Persons.
"Construction and Term Loan Agreement": The Construction and Term Loan
Agreement to be entered into on the Construction Capital Closing Date
between the Partnership, as borrower, and PENCO, as lender, as the same may
be amended or restated from time to time in accordance with its terms.
"Construction Capital Closing": As defined in Section 18.03(a) of this
LP Agreement.
"Construction Capital Closing Date": The date on which the
Construction Capital Closing occurs.
"COPE": Cove Point Energy Company, Inc., a Delaware corporation.
"Court of Chancery": The Court of Chancery of the State of Delaware.
"Cove Point Site": That certain parcel of land containing
approximately 1,017 acres, more or less, situate at Cove Point in Calvert
County, Maryland, and more fully described in the Asset Contribution
Agreement.
Appendix A to
LP Agreement A-8
<PAGE> 129
"Covered Person": As defined in Section 12.01(a) of this LP Agreement.
"Customers": Persons purchasing services from the Partnership pursuant
to Service Agreements.
"day(s)": Unless expressly otherwise provided, calendar day(s).
"Debt Service": Payments of interest and principal due under the Loan,
any Partner advances and any other debt obligations issued, assumed or
otherwise incurred by the Partnership as provided in this LP Agreement or
otherwise with the prior approval of the General Partners.
"Default Date": As defined in Section 4.06(d) of this LP Agreement.
"Defaulted Capital Contribution": As defined in Section 4.06(d) of
this LP Agreement.
"Defaulted Contribution Advance": As defined in Section 4.06(d) of
this LP Agreement.
"Defaulting Partner": As defined in Section 4.06(d) of this LP
Agreement.
Appendix A to
LP Agreement A-9
<PAGE> 130
"Depreciation": Means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year, except that if the Gross Asset
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Fiscal Year, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as
the federal income tax depreciation, amortization, or other cost recovery
deduction for such Fiscal Year bears to such beginning adjusted tax basis;
provided, however, that if the adjusted basis for federal income tax
purposes of an asset at the beginning of such Fiscal Year is zero,
Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partners.
"Disabling Conduct": Conduct that constitutes fraud, willful
misconduct, bad faith or gross negligence.
"Distribution Threshold": As defined in Section 6.01(a) of this LP
Agreement.
"EST": Eastern Standard Time.
"Event of Termination": As defined in Section 18.03(b) of this LP
Agreement.
"Facility": Collectively, the Pipeline and the Terminal.
Appendix A to
LP Agreement A-10
<PAGE> 131
"FERC": The Federal Energy Regulatory Commission of the United States
of America, or any federal commission, agency or other governmental body of
the United States of America, succeeding to the powers of such Commission.
"FERC Application": An Application for a Certificate of Public
Convenience and Necessity filed with FERC by or on behalf of the
Partnership with the approval of the General Partners, together with any
amendments or supplements thereto.
"FERC Certificate": The Certificate of Public Convenience and
Necessity issued by FERC in response to a FERC Application, as the same may
be amended or supplemented by FERC from time to time.
"Final Regulatory Approvals": As defined in Section 18.02(a) (ii) of
this LP Agreement.
"Fiscal Year": As defined in Section 16.03 of this LP Agree-ment.
"Forfeiture Date": As defined in Section 4.06(d) of this LP Agreement.
"Formation Date": October 28, 1993, the date of the filing of the
Certificate of Limited Partnership with the Secretary of State.
Appendix A to
LP Agreement A-11
<PAGE> 132
"GAAP": Generally Accepted Accounting Principles, consistently
applied, at the time prevailing and applicable to the Partnership, in
particular, or otherwise generally applicable to companies engaged in
businesses similar to that of the Partnership.
"Gas": Natural gas, as defined under the Natural Gas Act, having the
physical and chemical qualities required for acceptance by the Partnership
under the Partnership's tariffs at the time either (i) in effect under an
appropriate order of FERC or (ii) on file with FERC pursuant to an
application of the Partnership for such tariffs to become effective.
"General Partners": Collectively, CLNG Corporation and Cove Point
Energy Company, Inc., and includes any Person or Persons admitted as an
additional general partner or successor general partner of the Partnership
in accordance with this LP Agreement, in such Person's capacity as a
general partner of the Partnership.
"Governmental Authority": Any federal, state, county, municipal,
foreign, international, regional, or other governmental authority, agency,
board, body, instrumentality or court.
"Gross Asset Value": As defined in Section 10.15 of this LP Agreement.
Appendix A to
LP Agreement A-12
<PAGE> 133
"Indemnified Person(s)": As defined in Section 12.02(a) of this LP
Agreement.
"Initial FERC Application": The FERC Application seeking authority for
the Partnership to construct, own and operate the Initial Project.
"Initial FERC Certificate": The FERC Certificate authorizing the
construction, ownership and operation of the Initial Project pursuant to
the Initial FERC Application.
"Initial Limited Partner": COPE, in its capacity as such pursuant to
the Original Partnership Agreement.
"Initial Project": As defined in Section 17.01 of this LP Agreement.
"In-Service Date": With respect to any Project, the date on which such
Project is accepted by the Partnership with the approval of its General
Partners as being substantially completed and operational in accordance
with the applicable Completion and Testing Protocol.
"IRS" or "Internal Revenue Service": The Internal Revenue Service of
the United States of America, or any Federal Commission,
Appendix A to
LP Agreement A-13
<PAGE> 134
agency or other governmental body of the United States of America
succeeding to the power of such service.
"Lender": PENCO, in its capacity as lender under the Loan Documents.
"Limited Partner": Any Person named as a limited partner of the
Partnership on Appendix B to this LP Agreement and includes any Person
admitted as an additional limited partner of the Partnership or a
Substituted Limited Partner of the Partnership pursuant to this LP
Agreement, in such Person's capacity as a limited partner of the
Partnership, and "Limited Partners" means, collectively, two or more of
such Persons when acting in their capacities as limited partners of the
Partnership in accordance with this LP Agreement.
"Limited Partner Interest": Means an interest of a Limited Partner in
the Partnership representing such fractional part of the interests of all
Limited Partners pursuant to this LP Agreement as is equal to the quotient
of one divided by the number of Limited Partner Interests. The term
"Limited Partner Interests" shall refer collectively to the total of the
interests of all of the Limited Partners in the Partnership.
"Liquefaction Unit": The Gas liquefaction unit to be constructed at
the Facility, as part of the Initial Project, with such design capacity as
shall be approved by the General Partners.
Appendix A to
LP Agreement A-14
<PAGE> 135
"Liquidating Trustee": The General Partners or, if there is no General
Partner, a Person or Persons who may be approved by a Majority Vote.
"LNG" or "Liquefied Natural Gas": Gas in a liquid state maintained at
cryogenic temperatures.
"Loan": As defined in Section 4.03(d) of this LP Agreement.
"Loan Default": As defined in Section 4.08(a) of this LP Agreement.
"Loan Documents": The Construction and Term Loan Agreement, together
with the Security Documents, Notes and related documents and instruments as
defined and referred to therein evidencing the Loan to be entered into by
the Partnership as the borrower thereunder and PENCO, as the lender
thereunder, on the Construction Capital Closing Date, as the same may be
amended or restated from time to time in accordance with the terms thereof.
"Losses": As defined in Section 10.14 of this LP Agreement.
"LP Agreement": This Amended and Restated Agreement of Limited
Partnership of Cove Point LNG Limited Partnership dated as of January 27,
1994, by and among CLNG Corp. and COPE as the General Partners, and CLG and
PENCO, as the Limited Partners, as the same
Appendix A to
LP Agreement A-15
<PAGE> 136
may be amended, restated, supplemented or otherwise modified from time to
time in accordance with its terms.
"Majority Vote": The written approval of, or the affirmative vote by,
the holders of a majority of the Limited Partner Interests.
"Marshall Hall Property": The parcel or parcels of land of
approximately 96.26 acres located on the Pipeline's right-of-way in Charles
County, Maryland, as more fully described in the Loan Documents.
"Net Cash Flow": For each Fiscal Year or other period of the
Partnership, the cash received by the Partnership from (x) gross operating
revenues of the Partnership from all sources and (y) earnings on the
Partnership's investments, less all expense amounts paid by or for the
account of the Partnership during the same Fiscal Year or other period from
such cash received including, without limitation: (i) all O&M Expenses,
Debt Service, Operator's Fee, Operator's Bonuses, Reimbursable Costs,
Charitable Trust Payments, taxes, including all Property Taxes, expenses
reimbursed to the Partners under Section 7.02 of this LP Agreement; (ii)
any amounts determined by the General Partners to be necessary to provide a
reasonable reserve for working-capital needs or any other contingencies of
the Partnership; and (iii) any amounts expended or reserved for funding
capital improvements to the Facility includ-
Appendix A to
LP Agreement A-16
<PAGE> 137
ing, without limitation, for the replacement of equipment, fixtures and
personal property, as determined to be necessary by the General Partners or
otherwise as provided for in Approved Budgets. Net Cash Flow shall not be
reduced by depreciation, amortization, cost recovery deductions, depletion,
similar allowances or other non-cash items, but shall be increased by any
reduction of, or decreased for any addition to, reserves previously
established.
"Non-Defaulting Partner": As defined in Section 4.06(d) of this LP
Agreement.
"Notice": The written notice of a Person given pursuant to the
requirements of the agreement or document requiring such notice, or if not
therein specified, in accordance with the provisions of Section 16.01 of
this LP Agreement; and "Notify" shall mean the giving of such a Notice.
"O&M Expenses": The costs associated with the operation of the
Partnership and the maintenance of the Facility as determined by the
Operator in accordance with GAAP and applicable regulatory guidelines, but
excluding Property Taxes.
"Operating Agreement": The Operating Agreement to be entered into
between Cove Point Service Corporation, as the Operator, and the
Partnership as the Owner, on the Construction Capital Closing
Appendix A to
LP Agreement A-17
<PAGE> 138
Date, as the same may be amended or restated from time to time in
accordance with its terms.
"Operator": Cove Point Service Corporation as Operator under the
Operating Agreement or, upon its resignation or removal in accordance with
the Operating Agreement, such successor Operator as may be appointed in
accordance with the Operating Agreement.
"Operator's Bonuses": The "Performance Bonus" and "Terminalling Bonus"
paid or payable by the Partnership to the Operator pursuant to Section
3.02(b)(ii) and (iii) of the Operating Agreement.
"Operator's Fee": As defined in Section 3.02(b)(i) of the Operating
Agreement.
"Original Partnership Agreement": The Agreement of Limited
Partnership of the Partnership (formerly known as Cove Point LNG Company,
L.P.), dated as of October 28, 1993, by and between CLG, as the general
partner, and COPE, as the Initial Limited Partner.
"Partner": Any Limited Partner or General Partner admitted to the
Partnership in accordance with this LP Agreement, and "Partners" means,
collectively, two or more of such Persons constituting all of the Limited
Partners and General Partners of the Partnership.
Appendix A to
LP Agreement A-18
<PAGE> 139
"Partner Nonrecourse Debt": Has the meaning set forth in Section
1.704-2(b)(4) of the Treasury Regulations.
"Partner Nonrecourse Debt Minimum Gain": Means an amount, with respect
to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain
that would result if such Partner Nonrecourse Debt were treated as a
nonrecourse liability, determined in accordance with Section 1.704-2(i)(3)
of the Treasury Regulations.
"Partner Nonrecourse Deductions": Has the meaning set forth in
Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Treasury Regulations.
"Partnership": Cove Point LNG Limited Partnership, the Delaware
limited partnership formed pursuant to the Original Partnership Agreement
and continued under and pursuant to the Act and this LP Agreement.
"Partnership Interest(s)" or "Interest(s)": The interest of a Partner
in the Partnership, expressed as a percentage of one hundred percent, as
shown on Appendix B to this LP Agreement. The term "Partnership Interests"
shall refer collectively to the total of the interests of all of the
Partners in the Partnership.
"Partnership Minimum Gain": Has the meaning set forth in Sections
1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations.
Appendix A to
LP Agreement A-19
<PAGE> 140
"Partnership Official": As defined in Section 8.02(a)(ix) of this LP
Agreement.
"Party": With respect to any agreement, document or instrument, any
Person who has duly authorized, executed and delivered such agreement,
document or instrument.
"Peaking Business": The business of providing peak shaving and related
storage and transportation services to Customers pursuant to approved FERC
tariffs.
"PENCO": PEPCO Energy Company, Inc., a Delaware corporation.
"PEPCO Partners": Collectively, COPE (including any Transferee of its
Partnership Interest admitted as a successor general partner in accordance
with this LP Agreement), and PENCO (including any Transferee of its
Partnership Interest admitted as a Substituted Limited Partner in
accordance with this LP Agreement).
"Performance Bonus": A cash bonus of up to $500,000 to be paid in
accordance with Section 2.08(b)(ii) of the Operating Agreement, by the
Partnership to the Operator.
"Permitted Short-Term Investments": As defined in Section 10.04 of
this LP Agreement.
Appendix A to
LP Agreement A-20
<PAGE> 141
"Person": Any individual or any legal entity or organization
including, without limitation, any corporation, partnership (general or
limited), limited liability company, business trust, voluntary association,
unincorporated organization or government body (or any agency,
instrumentality or political subdivision thereof).
"Pipeline": The eighty-seven (87) mile, thirty-six (36) inch outside
diameter Gas pipeline which extends from the Terminal to a point of
intersection with Columbia Gas Transmission Corporation and CNG
Transmission Corporation in Loudoun County, Virginia, together with all
land interests, easements, rights-of-way, permits and licenses relating
thereto, all as more fully described in the Loan Documents together with
all modifications, additions or improvements thereto from time to time.
"Prime Rate": The Prime Rate reported from time to time in the "Money
Rates" section of The Wall Street Journal, or if not therein reported, as
reported in similar financial journals of national circulation from time to
time.
"Profits": As defined in Section 10.14 of this LP Agreement.
"Project": The construction and recommissioning of equipment,
facilities, buildings and/or other improvements to be owned and operated by
or on behalf of the Partnership, including all
Appendix A to
LP Agreement A-21
<PAGE> 142
modifications, additions, replacements and improvements to, or the
recommissioning of, all or any portion of the Facility, all as approved by
the General Partners, and the development, promotion and marketing of
services or business opportunities arising therefrom.
"Project Construction Plan": As defined in Section 17.04 of this LP
Agreement.
"Property Taxes": All taxes, fees and other charges owed to
Governmental Authorities and all similar obligations relating to or arising
out of the ownership, possession or use by the Partnership of the Facility
and all rights-of-way, leases, licenses, easements and other interests in
property (real or personal) associated therewith.
"PUHCA": The Public Utility Holding Company Act of 1935, as amended.
"Qualified Development Expenditures": As defined in Section 4.03(a) of
this LP Agreement.
"Record Date": The date established by the General Partners as the
record date for purposes of any entitlement hereunder.
Appendix A to
LP Agreement A-22
<PAGE> 143
"Record Holder": The Limited Partner in which name a Limited Partner
Interest is registered on the books and records of the Partnership and, as
applied to the General Partners' interest in the Partnership, the owner
therefore, in each case as of the close of business on any Record Date.
"Regulatory Allocations": As defined in Section 5.05 of this LP
Agreement.
"Regulatory Approvals": As defined in Section 18.01(c) of this LP
Agreement.
"Reimbursable Costs": Costs which are reimbursable to the Operator in
accordance with Section 3.02 of the Operating Agreement.
"Representative": As defined in Section 8.09(a) of this LP Agreement.
"Rules and Regulations": As defined in Section 8.09(b) of this LP
Agreement.
"SEC": The Securities and Exchange Commission, or any federal
commission, agency or other federal governmental body succeeding to the
powers of such Commission.
Appendix A to
LP Agreement A-23
<PAGE> 144
"SEC Order": As defined in Section 18.01(a) of this LP Agreement.
"Secretary of State": The office of the Secretary of State of the
State of Delaware, or any Delaware state commission, agency or other
governmental body succeeding to the powers thereof.
"Section [ ] of": With respect to the Act, Code, Treasury Regulations
or other law or regulation, the Section so specified, or such appropriate
amendments thereto or successor provisions as may be enacted subsequent to
the date of this LP Agreement.
"Service Agreements": The service agreements entered into from time to
time, between the Partnership and its Customers as the same may be amended,
supplemented, or otherwise modified from time to time, with the approval of
the General Partners.
"Sierra Club Agreement": The agreement to be entered into on or before
the Construction Capital Closing Date among Columbia LNG Corporation, the
Sierra Club and the Maryland Conservation Council, Inc., together with all
Exhibits and Attachments thereto, including, without limitation, the
MET/Conservancy Easement, the 1993 County Easement, the 1993 Association
Easement, the State Release, and the Declaration of Trust Agreement (all as
defined in the Sierra Club Agreement).
Appendix A to
LP Agreement A-24
<PAGE> 145
"Sierra Parties": CLG, the Sierra Club, the Maryland Conservation
Counsel, the Maryland Environmental Trust, the Nature Conservancy, the
State of Maryland, the County Commissioners of Calvert County, Maryland,
the Cove Point Beach Association, Inc. and any other party that the "Owner"
(as defined in the Sierra Club Agreement) is required or permitted to enter
into a contract with pursuant to the Sierra Club Agreement.
"Substituted Limited Partner": Means a Person who is admitted to the
Partnership as a Limited Partner pursuant to this LP Agreement in place of
a Limited Partner, and who is named as a Limited Partner on Appendix B to
this LP Agreement.
"Tax Attributes": As defined in Section 10.08 of this LP Agreement.
"Tax Matters Partner or "TMP": As defined in Section 10.06 of this LP
Agreement.
"Term": As defined in Section 2.08 of this LP Agreement.
"Terminal": The LNG terminal facility located at the Cove Point Site,
as more fully described in the Loan Documents, together with all
modifications, additions and improvements thereto from time to time.
Appendix A to
LP Agreement A-25
<PAGE> 146
"Terminalling Bonus": As defined in Section 2.08(b)(iii) of the
Operating Agreement.
"Terminalling Business": The business of receiving, on an ongoing
basis, baseload quantities of LNG by tanker at the Terminal for storage,
vaporization and transportation through the Facility to prospective
Customers, as evidenced by Service Agreements, precedent agreements or
similar Customer commitments as approved from time to time by the General
Partners.
"Termination Date": January 1, 2043, or such other date as may be
specified in the Certificate or any amendment thereto, as the latest date
on which the Partnership is to dissolve.
"Transaction Documents": As defined in Section 2.07 of this LP
Agreement.
"Transfer": A sale, transfer, assignment, or other disposition. In
connection with any Transfer, the "Transferor" and "Transferee" are,
respectively, the Person disposing of, or receiving, as the case may be,
the subject of such Transfer. With respect to any Transfer of all or part
of a Partnership Interest, "Transferee" shall mean a Person who has
obtained such Partnership Interest and who has been admitted to the
Partnership as a Partner in accordance with this LP Agreement.
Appendix A to
LP Agreement A-26
<PAGE> 147
"Transportation Business": The business of transporting Gas through
the Pipeline.
"Treasury Regulations": The federal income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may
be amended and in effect from time to time (including corresponding
provisions of succeeding regulations).
"Vice Chairman": The Partnership Official selected by the General
Partners to perform the duties and have the powers specified in Sections
8.09(c) and 8.09(d) of this LP Agreement.
apenadef.9
Appendix A to
LP Agreement A-27
<PAGE> 148
APPENDIX B
TO
AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
COVE POINT LNG LIMITED PARTNERSHIP
The name and mailing address of each General Partner and the amount of
the cash contribution to the capital of the Partnership paid by such
General Partner for its general partner interest in the Partnership and
such General Partner's Partnership Interest are as follows:
<TABLE>
<CAPTION>
Name and Mailing Initial
Address of Cash Partnership
General Partners Contribution Interest
---------------- ------------ -----------
<S> <C> <C>
CLNG Corporation -0- 1%
20 Montchanin Road
Wilmington, DE 19807
Cove Point Energy
Company, Inc. $10 1%
1900 Pennsylvania
Avenue, N.W.
Washington, D.C. 20068
</TABLE>
The name and mailing address of each Limited Partner, as well as the
amount of the cash contribution to the capital of the Partnership paid by
such Limited Partner for its Limited Partner Interest in the Partnership,
and such Limited Partner's Partnership Interest, are as follows:
<TABLE>
<CAPTION>
Name and Mailing Initial
Address of Cash Partnership
Limited Partner Contribution Interest
---------------- ------------ -----------
<S> <C> <C>
Columbia LNG Corporation $10 49%
20 Montchanin Road
Wilmington, DE 19807
PEPCO Energy Company, Inc. -0- 49%
1900 Pennsylvania
Avenue, N.W.
Washington, D.C. 20068
</TABLE>
appenblp.3
Appendix B to
LP Agreement B-1
<PAGE> 149
APPENDIX C
TO AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
COVE POINT LNG LIMITED PARTNERSHIP
===================================================================
REPRESENTATIVES AND ALTERNATE REPRESENTATIVES
CLNG CORPORATION
Representative: L. Michael Bridges
Alternate Representative: Jeffrey W. Grossman
COVE POINT ENERGY COMPANY, INC.
Representative: John D. McCallum
Alternate Representative: Steven M. Scherer
apenclp
Appendix C to
LP Agreement C-1
