SEC FILE NO. 70-8369
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
GENERAL PUBLIC UTILITIES CORPORATION
ENERGY INITIATIVES, INC.<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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In the Matter of )
)
GENERAL PUBLIC UTILITIES CORPORATION ) Certificate Pursuant
ENERGY INITIATIVES, INC. ) to Rule 24 of Partial
) Completion of
SEC File No. 70-8369 ) Transactions
)
(Public Utility Holding Company )
Act of 1935) )
)
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TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, General Public Utilities Corporation
("GPU") and Energy Initiatives, Inc. ("EI"), hereby certify
pursuant to Rule 24 of the Rules and Regulations under the Public
Utility Holding Company Act of 1935 (the "Act"), that certain of
the transactions proposed in the Application, as amended, filed
in SEC File No. 70-8369, have been carried out in accordance with
the Commission's order, dated May 18, 1994 with respect thereto,
as follows:
1. As previously reported in the Certificate Pursuant
to Rule 24 dated June 21, 1994, filed in this docket ("June 1994
Rule 24 Certificate"), on June 13, 1994 EI acquired from North
Canadian Resources, Inc. ("NCRI") pursuant to a Stock Purchase
and Sale Agreement dated March 31, 1994, as amended by the First
Amendment to Stock Purchase and Sale Agreement dated as of June
13, 1994 ("Stock Purchase Agreement"), the common stock of North
Canadian Power Incorporated (since renamed NCP Energy, Inc.)
("NCP"), together with NCP's indirect ownership interests in the
1<PAGE>
Lake, Pasco, Ada and Federal Paperboard Cogeneration Projects.
At such time, requisite consents from third parties ("Requisite
Consents") with respect to NCP's indirect ownership interests in
the Syracuse Cogeneration Project ("Syracuse Project") had not
yet been obtained, and consequently, NCP's ownership interests in
that project were transferred to NCRI as "excluded subsidiaries"
("Excluded Subsidiaries") under the Stock Purchase Agreement
pending receipt of the Requisite Consents.
2. Due to the inability to obtain the Requisite
Consents to purchase the Excluded Subsidiaries, pursuant to a
Second Amendment to Stock Purchase Agreement dated as of January
1, 1995 ("Amended Stock Purchase Agreement"), EI agreed to
purchase instead certain of NCRI's interests in the Syracuse
Project in lieu of purchasing the Excluded Subsidiaries as
originally contemplated by the Stock Purchase Agreement.
Accordingly, on January 1, 1995, following the receipt of the
requisite consents to effect such transaction, NCP acquired from
Syracuse Investment, Inc. ("SII"), a Delaware corporation owned
by NCRI, (i) a 4.9% limited partner interest ("4.9% Interest") in
Syracuse Orange Partners, L.P., a Delaware limited partnership
which currently holds an 89% limited partner interest in Project
Orange Associates, L.P. ("POA"), a Delaware limited partnership
which owns the Syracuse Project and (ii) pursuant to the
Assignment Agreement dated as of January 1, 1995 and related
Security Agreement, the right to receive distributions with
respect to the balance of the SII limited partner interest in
SOP. Such right is evidenced by a promissory note ("Distribution
2<PAGE>
Note") which is being held in escrow pending the receipt of an
appropriate Commission order authorizing its acquisition by NCP.
3. On January 1, 1995, NCP and NCP Syracuse, Inc., a
Delaware corporation owned by NCRI and the Managing General
Partner of POA ("NCP Syracuse"), entered into certain Management
Agreements pursuant to which NCP agreed to manage the Syracuse
Project on behalf of NCP Syracuse (such rights and interest of
NCP in and to the Management Agreements are referred to as the
"Management Rights") (the 4.9% Interest, Distribution Note and
Management Rights are collectively referred to as the "Syracuse
Interests").
4. Pursuant to a Purchase Options Agreement dated as
of January 1, 1995, the parties agreed, among other things, that
under certain circumstances, (i) NCP Syracuse, will have the
right to acquire from NCP the Management Rights, the 4.9%
Interest and the Distribution Note and (ii) NCP or its designee
will have the right to acquire NCP Syracuse's 10% general partner
interest in SOP and 1% general partner interest in POA and SII's
1% general partner interest in SOP and remaining limited partner
interest in SOP, or at NCP's option, the outstanding shares of
capital stock of NCP Syracuse and SII. In addition, pursuant to
the Purchase Options Agreement, the parties agreed under certain
circumstances to restrict the transfer of the interests held by
them in the Syracuse Project.
5. As reported in the June 1994 Rule 24 Certificate,
immediately prior to EI's acquisition of the NCP common stock, a
1% general partner and an aggregate 56.95% of limited partner
interests ("Lake Interests") in the Lake Project were transferred
3<PAGE>
to Lake Interest Holdings Inc. ("LIHI"), a wholly-owned special
purpose Delaware subsidiary of NCRI, and an aggregate 3.15% of
limited partner interests ("Pasco Interests") in the Pasco
Project was transferred to Pasco Interest Holdings Inc., another
wholly-owned special purpose Delaware subsidiary of NCRI.
Pursuant to the Amended and Restated Lake Interest Option
Agreement, dated as of June 13, 1994, and the Pasco Interest
Option Agreement, dated as of June 13, 1994, EI was granted the
exclusive option until March 31, 1995, to acquire all or
specified portions of the Lake and Pasco Interests, subject to
the satisfaction of certain conditions precedent set forth in
these Option Agreements. Pursuant to First Amendments dated as
of January 1, 1995 to each of the Lake Interest Option Agreement
and Pasco Interest Option Agreement, the dates by which such
options may be exercised were extended to December 31, 1995.
6. EI, NCRI and Harris Trust and Savings Bank
("Escrow Agent") have entered into a First Amendment to Amended
and Restated Escrow Agreement, dated December 30, 1994. Pursuant
thereto, on December 30, 1994, the Escrow Agent disbursed a total
of $5,695,000 to NCRI in respect of the allocated purchase price
for the Syracuse Interests, a partial working capital closing
adjustment ($290,408) and an agreed upon portion of escrow
interest earned with respect to the escrow deposit in payment for
the Lake Interests and Pasco Interests ($35,161). In addition,
the Escrow Agent dispersed a total of $4,586,771.51 to EI (which
in turn paid such funds to GPU) representing the balance of EI's
cash deposit remaining in escrow for the Syracuse Project
Excluded Subsidiaries including approximately $205,726, the
4<PAGE>
agreed upon portion of escrow interest earned with respect to the
escrow deposit in payment for the Lake Interests and Pasco
Interests.
7. To summarize, GPU has made cash capital
contributions to EI aggregating $59,212,590 which EI has in turn
used to pay the purchase price for NCP and the Syracuse
Interests.
8. The following exhibits are filed in Item 6:
B-1(i) - First Amendment to Amended and
Restated Lake Interest Option
Agreement
B-1(b) - Second Amendment to Stock Purchase
and Sale Agreement
B-1(b)(i) - Revised Schedule 2.1 of Stock
Purchase Agreement - filed under
request for confidential treatment
pursuant to Rule 104.
B-2(b) - First Amendment to Amended and
Restated Escrow Agreement
B-3(a)(i) - Second Amendment to First Amended and
Restated Limited Partnership
Agreement of Lake Cogen Ltd.
B-5(a)(i) - First Amended and Restated Limited
Partnership Agreement of Syracuse
Orange Partners, L.P.
B-5(a)(ii) - First Amendment to First Amended and
Restated Limited Partnership
Agreement of Syracuse Orange
Partners, L.P.
B-5(a)(iii)- Assignment of Partnership Interest
B-5(a)(iv) - Distribution Note
B-5(a)(v) - Assignment and Security Agreement
B-5(a)(vi) - Purchase Options Agreement
B-5(g) - Management Agreements
5<PAGE>
B-16(a) - First Amendment to Pasco Interest
Option Agreement
6<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS CERTIFICATE TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:
T. G. Howson,
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:
B. L. Levy, President
Date: January 11, 1995 <PAGE>
EXHIBIT TO BE FILED BY EDGAR
Exhibits:
B-1(i) - First Amendment to Amended and
Restated Lake Interest Option
Agreement
B-1(b) - Second Amendment to Stock Purchase
and Sale Agreement
B-2(b) - First Amendment to Amended and
Restated Escrow Agreement
B-3(a)(i) - Second Amendment to First Amended and
Restated Limited Partnership
Agreement of Lake Cogen Ltd.
B-5(a)(i) - First Amended and Restated Limited
Partnership Agreement of Syracuse
Orange Partners, L.P.
B-5(a)(ii) - First Amendment to First Amended and
Restated Limited Partnership
Agreement of Syracuse Orange
Partners, L.P.
B-5(a)(iii)- Assignment of Partnership Interest
B-5(a)(iv) - Distribution Note
B-5(a)(v) - Assignment and Security Agreement
B-5(a)(vi) - Purchase Options Agreement
B-5(g) - Management Agreements
B-16(a) - First Amendment to Pasco Interest
Option Agreement<PAGE>
Exhibit B-1(i)
AMENDMENT NO. 1 TO AMENDED AND
RESTATED LAKE INTEREST OPTION AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED LAKE
INTEREST OPTION AGREEMENT, dated as of January 1, 1995 (this
"Amendment No. 1"), is entered into by and among North Canadian
Resources, Inc., a Delaware corporation ("NCRI"), Lake Interest
Holdings Inc., a Delaware corporation ("LIHI"), and Energy
Initiatives, Inc., a Delaware corporation ("Buyer") (NCRI, LIHI
and Buyer are collectively referred to herein as the "Parties").
WHEREAS, the Parties have entered into an Amended and
Restated Lake Interest Option Agreement, dated as of June 13,
1994 ("Original Agreement"), whereby, among other things, (A)
LIHI granted to Buyer, for a period ending as of the close of
business on the Lake Option Expiration Date (capitalized terms
used herein and not otherwise defined herein shall have the
meanings set forth in the Original Agreement) the exclusive right
and option to purchase all right, title and interest of LIHI in
and to (i) the Lake Interest and (ii) the Lake Federal QF
Interest and/or the Lake Florida QF Interest; and (B) NCRI
irrevocably granted to Buyer the exclusive right and option to
purchase all right, title and interest of NCRI in and to the LIHI
Stock.
WHEREAS, as a result of circumstances arising from the
Florida Power Proceeding, as defined below, the Parties desire to
extend the Lake Option Expiration Date with respect to the Lake
Interest and the Lake Federal QF Interest.
NOW, THEREFORE, in consideration of the above premises
and the agreements contained herein and in the Purchase
Agreement, the Parties, intending to be legally bound, mutually
agree as follows:
1. Section 2.3 of the Original Agreement is hereby
amended to read in its entirety as follows:
2.3 As used herein, "Lake Option Expiration Date" means, as
to the Lake Florida QF Interest Option, the date of exercise
of such Option (or, if earlier, termination of the Lake
Partnership); and as to each other Option, the earlier of
(i) December 31, 1995 and (ii) 90 days following the date of
(x) the issuance of a final non-appealable order by the
Florida Public Service Commission ("Florida PSC") with
respect to the proceeding entitled In re: Petition for
Declaratory Statement Regarding Application of Rule 25-
17.0832,F.A.C., to Certain Negotiated Contracts for Purchase
of Firm Capacity and Energy by Florida Power Corporation
(Docket No. 940771-EQ) ("Florida Power Proceeding"), or any
successor proceeding or (y) a binding settlement agreement
entered into between the parties in the Florida Power
Proceeding and in the case entitled NCP Lake Power Inc. v.
1<PAGE>
Florida Power Corporation, Case No. 94-2354-CAOI (Fifth
Judicial Circuit, Lake County, Florida).
2. This Amendment No. 1 shall not be effective unless
and until TIFD III-C, Inc., a Delaware corporation ("TIFD"),
shall have consented hereto as required by Section 6 of the
Original Agreement.
3. Except as amended hereby, the Original Agreement
shall remain in full force and effect in accordance with its
terms.
IN WITNESS WHEREOF, each of the Parties has caused this
Amendment No. 1 to be duly executed on the date first written
above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
2<PAGE>
Exhibit B-1(b)
EXECUTION COPY
SECOND AMENDMENT TO
STOCK PURCHASE AND SALE AGREEMENT
SECOND AMENDMENT, dated as of January 1, 1995 (the "Second
Amendment"), to STOCK PURCHASE AND SALE AGREEMENT, dated as of
March 31, 1994 (the "Original Agreement") as amended by the First
Amendment to Stock Purchase and Sale Agreement dated as of June
13, 1994 (the "First Amendment") by and among NORTH CANADIAN OILS
LIMITED, a Canadian corporation ("NCO"), NORTH CANADIAN
RESOURCES, INC., a Delaware corporation ("NCRI"), NCP ENERGY
INC., a California corporation formerly known as North Canadian
Power Incorporated ("NCP"), and ENERGY INITIATIVES, INC., a
Delaware corporation ("Buyer"). Capitalized terms used in this
Second Amendment shall unless otherwise defined herein or in
Schedule I to this Second Amendment have the meanings ascribed to
them in the Original Agreement and the Glossary attached as Annex
A thereto, as amended by the First Amendment.
WHEREAS, simultaneously herewith Buyer and NCRI are entering into
an amendment to the Escrow Agreement (the "First Escrow Agreement
Amendment") as heretofore amended and restated;
WHEREAS, at the time of the NCP Closing the Syracuse Subsidiaries
(as defined in Section 3.3.2(c)(i) of the Original Agreement)
were classified as Excluded Subsidiaries and were transferred to
NCRI prior to the NCP Closing in accordance with the provisions
of Subsection 1.4.1 of the Original Agreement; and
WHEREAS, the parties now desire to amend the Original Agreement,
as heretofore amended, in certain respects with respect to the
provisions relating to the Project described on Annex B as the
Syracuse Project and to proceed with closing the transfer of the
Syracuse Interests (as hereinafter defined) in lieu of an
Excluded Subsidiaries Closing;
NOW, THEREFORE, for good and valuable consideration, the parties
hereto, intending to be legally bound, mutually agree that the
Original Agreement, as amended by the First Amendment, is further
amended as follows:
ARTICLE I
A. Article I is hereby further amended by adding a new
Subsection 1.1.4 to read as follows:
1.1.4 At the Syracuse Interest Closing, NCRI shall
cause Syracuse Investment, Inc. ("SII") to sell,
transfer, assign and deliver to NCP, and NCP shall
purchase and accept all right, title and interest in
1<PAGE>
and to the following (which are collectively referred
to herein as the "Syracuse Interests" and the closing
at which the Syracuse Interests are transferred to
Buyer is referred to herein as the "Syracuse Interest
Closing"):
(a) a 4.9% limited partnership interest (the "4.9%
Interest") in Syracuse Orange Partners, L.P. ("SOP");
and
(b) the right to receive Distributions with respect to the
balance of the limited partnership interest to be owned
by SII following the transfer of the 4.9% Interest
provided for in paragraph (a) above, which will be
evidenced by the NCRI Note.
The parties agree that the transactions provided for herein
are in lieu of and substitution for the Excluded Subsidiary
Closing relating to the Syracuse Subsidiaries. Upon
completion of the Syracuse Interest Closing, the parties
shall have no further obligations, rights or liabilities
whatsoever with respect to the Syracuse Subsidiaries, the
Syracuse Partnerships, or the Syracuse Project, and the NCO
Obligations with respect thereto, pursuant to the provisions
of Subsection 1.1.2, 1.2.2, 1.2.3, 1.2.4 and Section 1.3,
provided that the foregoing shall not be deemed to limit any
of the representations or indemnities of the parties in
Articles V through VIII, XV and XVI. For purposes of this
agreement, Distributions and Note shall have the respective
meanings assigned to such terms in the Distributions
Assignment Agreement.
B. Article I is hereby further amended by deleting Section 1.6.7
and replacing it with a new Section 1.6.7 as follows:
1.6.7 As used herein, "Option Expiration Date":
(i) as to each of the Lake Florida QF Interest
Option and the Pasco Florida QF Interest
Option, means the exercise date of such
option (or, if earlier, termination of the
Lake Project Partnership or Pasco Project
Partnership, as applicable),
(ii) as to the Lake Interest Option, Lake
Federal QF Interest Option, and LIHI Stock
Option, has the meaning set forth in the
Lake Option Agreement, and
(iii) as to the Pasco Federal QF Interest Option
and PIHI Stock Option, has the meaning set
forth in the Pasco Option Amendment.
2<PAGE>
C. Article I is hereby further amended by renumbering the
existing provisions of Section 1.7 as Subsection 1.7.1 and adding
a new Subsection 1.7.2 to read as follows:
1.7.2 At the Syracuse Interest Closing:
(i) the Management Agreement, dated as of June
13, 1994, between NCRI and NCP shall be
terminated, and
(ii) NCP and NCP Syracuse, Inc. shall enter into
the Syracuse Project Management Agreements
in the form of Exhibit A to the Second
Amendment pursuant to which NCP will,
following the Syracuse Interest Closing,
manage on behalf of NCP Syracuse the
Syracuse Project.
D. Article I is hereby further amended to add a new Section 1.10
which shall read as follows:
1.10 Syracuse Interest Buy-Sell Agreement
At the Syracuse Interest Closing, NCP and NCP Syracuse
and its affiliates shall enter into a Purchase Options
Agreement relating to, among other things, the Syracuse
Interest in the form of Exhibit B to the Second
Amendment.
Article II
A. Article II is hereby further amended by deleting all of
Subsection 2.1.1 and Schedule 2.1 referred to therein and
substituting in lieu thereof a new Subsection 2.1.1 and Schedule
2.1 to read as follows:
2.1.1. The aggregate Purchase Price payable to NCRI in
connection with the Purchase and Sale Transaction is
Sixty-Two Million, Two Hundred Sixty Three Thousand,
Five Hundred Dollars ($62,263,500) which shall be
allocated and paid to NCRI in accordance with the
following Schedule 2.1. Additional consideration of
$2,600,000 shall be payable for the Management
Agreement and $2,722,500 for the Note and the
Distributions Assignment Agreement.
3<PAGE>
[Schedule 2.1 - filed under request for confidential treatment
pursuant to Rule 104.]
B. Article II is hereby further amended to add a new Subsection
2.2.5 to read as follows:
2.2.5. At the Syracuse Interest Closing, the Escrow
Agent shall deliver to NCRI on behalf of Buyer and NCRI
shall accept in immediately available funds
$6,020,569.00, comprised of the aggregate of the
following:
(a) $372,500 for the 4.9% Interest;
(b) $2,722,500 for the Note and the Distributions
Assignment Agreement;
(c) $2,600,000 for the Management Agreement;
(d) $290,408 in partial settlement of the Working Capital
Closing Adjustment
(e) $35,161 representing NCRI's share of interest in the
Escrow Deposit from June 13, 1994 through the date of
the Syracuse Interest Closing and attributable to the
Pasco Federal QF Interest Option, Pasco Florida QF
Interest Option, Lake Federal QF Interest Option and
Lake Florida QF Interest Option.
ARTICLE III
A. Article III is hereby amended by deleting all of Section 3.8
without substitution.
B. Article III is hereby further amended by deleting all of
Subsection 3.9.2 (as amended) and substituting in lieu thereof a
new Subsection 3.9.2 to read in its entirety as follows:
3.9.2 In the event following the NCP Closing the Lake
Interest and the Pasco Interest have not been purchased by
the Lake Interest Optionee and the Pasco Interest Optionee,
respectively, on or prior to December 31, 1995, then unless
the parties shall otherwise agree in writing, on January 1,
1996 the Escrow shall be terminated and the Escrow Agent
shall disburse the escrow deposits in accordance with the
provisions of the Amended and Restated Escrow Agreement as
further amended.
C. Article III is hereby further amended to add a new Section
3.10 which shall read as follows:
4<PAGE>
3.10 Syracuse Interest Closing.
3.10.1. The closing with respect to the Syracuse Interest
shall occur, subject to satisfaction of the conditions
precedent set forth in Article XII of the Purchase Agreement
as amended hereby, at the offices of Berlack, Israels &
Liberman on the date hereof.
3.10.2. At the Syracuse Interest Closing, the Escrow Agent
shall release and deliver:
(A) to Buyer:
(i) Buyer's Syracuse Deposit described in
Section 3.2.3(c);
(ii) Seller's Syracuse Deposit described in
Sections 3.3.2.(ii), (iii), (iv) and (v);
and
(iii) $4,561,473.14, respecting Buyer's share of
the interest in the Escrow Deposit through
the date of the Syracuse Interest Closing
and the balance of the deposit which is not
required to be held in escrow pursuant to
Section 4.4.1; and
(B) to NCRI:
(i) that portion of Seller's Syracuse Deposit
described in Sections 3.3.2(i), (vi), (vii)
and (viii); and
(ii) the aggregate cash payment described in
Section 2.2.5.
3.10.3. At the Syracuse Interest Closing, the parties shall
execute and deliver (and cause their affiliates to execute
and deliver, as the case may be) the documents specified in
Schedule A to the Second Amendment (collectively, the
"Syracuse Closing Agreements").
3.10.4. At the Syracuse Interest Closing, each party shall
execute and deliver to the other such other instruments and
documents as may be necessary or appropriate to carry out
the Purchase Sale Transactions and the Escrow Agreement, as
amended by the First Escrow Agreement Amendment, and to
comply with the terms and conditions hereof and thereof.
ARTICLE IV
Article IV is hereby amended by adding a new Section 4.4. to read
as follows:
5<PAGE>
4.4. Partial Settlement of Working Capital Closing
Adjustment.
4.4.1. The parties agree that $290,408 shall be paid
to NCRI from the funds held by the Escrow Agent,
representing a partial settlement of the Working
Capital Closing Adjustment. The amount of the Working
Capital Closing Adjustment in dispute ($300,000) shall
continue to be held in escrow, pending a final, mutual
agreement by the parties. In addition to such
$300,000, Escrow Agent shall continue to hold in escrow
$9,886,020 in respect of the Lake Interest and Pasco
Interest.
4.4.2. The parties further agree that from and after the
Syracuse Interest Closing all interest earned on the Escrow
Deposit shall be allocated and paid in accordance with the
provisions of the Escrow Agreement as amended by the First
Escrow Agreement Amendment.
ARTICLES V
The Second Amendment makes no changes to Articles V which shall
continue in full form and effect as set forth in the Original
Purchase Agreement as amended by the First Amendment.
ARTICLE VI
A. Article VI is hereby amended by deleting the proviso in
Article VI added by Section 4(a) of First Amendment and
substituting in lieu thereof with the following proviso to be
inserted at the end of the first paragraph of Article VI to read
as follows:
provided, however, that representations regarding PIHI,
Pasco Option Agreement, PIHI Stock and Pasco Option
Interest are made as of the date of the First
Amendment, and the representations set forth in Section
6.10 are made as of the date of the Second Amendment.
B. Article VI is hereby further amended to add the following new
Section 6.10:
6.10.1. Syracuse Interest Closing Date Representations.
NCRI hereby represents and warrants to the Buyer, as of
the date of this Second Amendment, as follows:
6.10.1 Each NCO Party (as defined below) has duly
authorized, executed and delivered each Syracuse Closing
Agreement to which it is a party and such agreement
constitutes such NCO Party's valid and legally binding
obligation, enforceable in accordance with its terms.
6<PAGE>
6.10.2 The execution, delivery and performance by each NCO
Party of each Syracuse Closing Agreement to which it is a
party are not prohibited by, do not violate or conflict with
any provision of, or result in a default (or constitute an
event which with notice or lapse of time or both, would
become a default) under:
(a) Such NCO Party's Certificate of Incorporation or
by-laws;
(b) Any order, decree or judgment of any court,
Governmental Authority or arbitrative body to
which such NCO Party or any of the Syracuse
Partnerships or its assets are bound or subject;
(c) Any law or regulation applicable to such NCO Party
or any of the Syracuse Partnerships; or
(d) Any Commitment to which such NCO Party or any of
the Syracuse Partnerships is a party or by which
its assets are bound or subject (subject to
receipt of the Consents contemplated by the
Purchase Options Agreement).
6.10.3 No consent, approval or authorization of or filing
of any certificate, notice, application, report or other
document with, any Governmental Authority is required on the
part of any NCO Party in connection with the valid execution
and delivery of each Syracuse Closing Agreement to which it
is a party or the performance by it of its obligations
thereunder.
6.10.4 Each representation and warranty of each NCO Party
contained in the Syracuse Closing Agreements is true and
correct on and as of the date of the Second Amendment.
6.10.5 As used herein, the term "NCO Party" means each of
NCO, NCRI, NCP Syracuse, SII, LIHI and PIHI.
Article VII
The Second Amendment makes no change in Article VII which shall
continue in full force and effect as set forth in the Original
Purchase Agreement as amended by the First Amendment.
Article VIII
A. The first paragraph of Article VIII is hereby amended to
delete such first paragraph in its entirety and substituting in
lieu thereof a new first paragraph to read as follows:
As an inducement to NCO, NCRI and NCP to enter into
this Agreement, Buyer hereby makes the following
7<PAGE>
representations to NCO, NCRI and NCP as of the date
hereof, provided, however, that the representations set
forth in Section 8.11 are made to NCO and NCRI only,
and such representations are made as of the date of the
Second Amendment.
B. Article VIII is hereby amended to add the following new
Section 8.11:
8.11 Syracuse Interest Closing Date Representations.
Buyer hereby represents and warrants to Sellers, as of the
date of this Second Amendment, as follows:
8.11.1. Each EI Party (as defined below) has duly
authorized, executed and delivered each Syracuse Closing
Agreement to which it is a party and such agreement
constitutes such EI Party's valid and legally binding
obligation, enforceable in accordance with its terms.
8.11.2. The execution, delivery and performance by each EI
Party of each Syracuse Closing Agreement to which it is a
party are not prohibited by, do not violate or conflict with
any provision of, or result in a default (or constitute an
event which with notice or lapse of time or both, would
become a default) under:
(a) Such EI Party's Certificate of Incorporation or
by-laws;
(b) Any order, decree or judgment of any court,
Governmental Authority or arbitrative body (in the
case of NCP, entered into after June 13, 1994), to
which such EI Party or its assets are bound or
subject;
(c) Subject to receipt of the Authorizations (as
defined below), any law or regulation applicable
to such EI Party; or
(d) Any Commitment to which such EI Party is a party
or by which its assets are bound or subject (in
the case of NCP, entered into after June 13,
1994), subject to receipt of the Consents
contemplated by the Purchase Options Agreement.
8.11.4. No consent, approval or authorization of or filing
of any certificate, notice, application, report or other
document with, any Governmental Authority is required on the
part of any EI Party in connection with the valid execution
and delivery of each Syracuse Closing Agreement to which it
is a party or the performance by it of its obligations
thereunder (other than those that have been obtained or made
and such Governmental authorizations as are contemplated by
8<PAGE>
the Purchase Options Agreement and Distributions Assignment
Agreement ("Authorizations").
8.11.5. Each representation and warranty of each EI Party
contained in the Syracuse Closing Agreements is true and
correct on and as of the date of the Second Amendment.
8.11.6. As used herein, the term "EI Party" means each of
Buyer and NCP.
Articles IX - XI
This Second Amendment makes no change in Articles IX through XI
which shall continue in full force and effect as set forth in the
Original Purchase Agreement as amended by the First Amendment.
Article XII
Article XII is hereby amended to add a new Section 12.4 which
shall read as follows:
12.4. Conditions Precedent to Syracuse Interest Closing.
The obligations of the parties hereto to consummate the
transactions to be performed by them in connection with the
Syracuse Interest Closing are subject to satisfaction of
each of the following conditions:
(a) each of the conditions precedent to the obligations of
the respective parties in Section 12.1 and 12.2 hereof
shall have been satisfied;
(b) all of the Requisite Consents necessary to consummate
the Syracuse Interest Closing shall have been received,
and such Requisite Consents shall be in full force and
effect.
Articles XIII and XIV
This Second Amendment makes no change in Articles XIII and XIV.
9<PAGE>
Article XV
A. Article XV is hereby amended to delete all of paragraph (a)
of Subsection 15.1.1 and to substitute in lieu thereof a new
paragraph (a) which shall read as follows:
(a) the representations of:
(i) NCO set forth in Article V,
(ii) NCRI set forth in Article VI, and
(iii) NCP set forth in Article VII
are true and correct on the date of the Original
Agreement (or on the date of the First Amendment or
Second Amendment, as applicable, in respect of the
representations described in the proviso to the first
paragraph of Article VI), except that no representation
or warranty is being made as to the title to any real
estate or any Encumbrances thereon; and
B. Article XV is hereby further amended by adding a new
paragraph (d) to Subsection 15.1.2 which shall read as follows:
(d) all Claims now or hereafter asserted by or on behalf of
Adam Victor, G.A.S. Orange Development, Inc., G.A.S.
Orange Partners, L.P., Gas Alternative Systems, Inc. or
any of their Affiliates, successors or assigns
(including, without limitation, in the proceeding
entitled G.A.S. Orange Partners, L.P., G.A.S. Orange
Development, Inc., Gas Alternative Systems, Inc. and
Adam H. Victor v. NCP Syracuse, Inc., North Canadian
Power Incorporated and Syracuse Orange Partners, L.P.,
94 CV 752 (N.D.N.Y.)), insofar as such Claims arise out
of or relate to the ownership, operation or management
of either or both of the Syracuse Partnerships or the
Syracuse Cogeneration Project at any time prior to the
date of the Syracuse Interest Closing provided,
however, that (i) NCO does not indemnify Buyer and its
Affiliates against loss of any amounts which would have
been payable or distributable by the Syracuse
Partnerships to Buyer or its Affiliates but for
expenses or losses (including indemnification by the
Syracuse Partnerships of their partners in accordance
with the terms of their partnership agreements)
incurred or suffered by the Syracuse Partnerships in
connection with such Claims and (ii) the indemnity
provided by this paragraph (d) shall not be subject to
the limitations set forth in Sections 15.1.3 and 15.1.4
below.
C. Article XV is hereby further amended to delete all of
paragraph (a) of Subsection 15.2.1 and to substitute in lieu
10<PAGE>
thereof the following paragraph (a) which shall read in its
entirety as follows:
(a) the representations of Buyer set forth in Article VIII
are true and correct as of the date of the Original
Agreement (or on the date of the Second Amendment in
respect of the representation described in the proviso
to the first paragraph of Article VIII); and
D. Article XV is further hereby amended by replacing the words
"or Pasco Option Closing" with ", Pasco Option Closing or
Syracuse Interest Closing" in the second line of Section
15.1.2(c) and 15.2.2(c).
ARTICLES XVI
Article XVI is hereby amended by adding a new paragraph (d) to
Subsection 16.2.2 which shall read as follows:
(d) all Taxes imposed:
(i) on Buyer or NCP (including but not limited to
under Sections 186, 186-a, or 189 of the New York
Tax Law) and attributable to the ownership of the
4.9% Interest, and
(ii) on either or both of the Syracuse Partnerships
pursuant to Sections 186, 186-a or 189 of the New
York Tax Law, to the extent of NCP's direct or
indirect share thereof;
in each case, with respect to periods (or portions
thereof) ending on or prior to the Syracuse Interest
Closing.
ARTICLE XVII
The Second Amendment makes no changes to Article XVII of the
Original Agreement.
Glossary
The definition of "Closing Documents" is hereby amended to read
in its entirety as follows:
The documents to be delivered by Sellers and/or Buyer at the
NCP Closing, an Excluded Subsidiary Closing, a Lake Interest
Closing, a Pasco Option Closing and at the Syracuse Interest
Closing, as the case may be, as set forth in Articles III
and XII of the Agreement.
Except as expressly amended by this Second Amendment, the
Original Agreement, as amended by the First Amendment, shall
11<PAGE>
continue in full force and effect in accordance with its terms.
This Second Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same document.
[SIGNATURE PAGE FOLLOWS]
12<PAGE>
[SIGNATURE PAGE TO SECOND AMENDMENT
TO STOCK PURCHASE AND SALE AGREEMENT]
IN WITNESS WHEREOF, each of the parties has caused this Second
Amendment to be duly executed on this date first written above.
NORTH CANADIAN OILS LIMITED ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
By:
Name:
Title:
NORTH CANADIAN RESOURCES, INC. NCP ENERGY INC.
on behalf of itself and NCP Syracuse,
Inc. and Syracuse Investment, Inc.
By:
Name:
By: Title:
Name:
Title:
13<PAGE>
SCHEDULE I
[To Second Amendment to Stock Purchase and Sale Agreement]
1. Assignment of Partnership Interest, dated as of the date
hereof, between SII and NCP ("Partnership Interest
Assignment Agreement"), and related Consent to Assignment by
the General Partners, Confirmation of Transfer by the
General Partners and Consent of NCP.
2. Management Agreements, each dated as of the date hereof,
between NCP Syracuse and NCP.
3. Promissory Note of NCRI delivered pursuant to the
Distributions Assignment Agreement.
4. Assignment Agreement, dated as of the date hereof, between
Investment and Buyer ("Distributions Assignment Agreement")
and related Security Agreement, dated as of the date hereof,
between SII and NCP ("Security Agreement").
5. Purchase Options Agreement, dated as of the date hereof,
among NCRI, NCP Syracuse, SII and NCP ("Purchase Options
Agreement").
6. First Amendment to the Escrow Agreement, dated December 30,
1994, among Escrow Agent, NCO, NCRI, NCP and Buyer ("Escrow
Agreement Amendment").
7. First Amendment to Lake Interest Option Agreement, dated as
of the date hereof, among NCRI, LIHI and Buyer ("Lake Option
Amendment").
8. First Amendment to Pasco Interest Option Agreement, dated as
of the date hereof, among NCRI, PIHI and Buyer ("Pasco
Option Amendment").
9. The Second Amendment to the Stock Purchase and Sale
Agreement.
10. First Amendment, dated the date hereof, to the First Amended
and Restated Limited Partnership Agreement of SOP.
11. Termination of Management Agreement, dated as of the date
hereof, among NCRI and NCP.
12. Consent, Waiver and Release Agreement, dated as of the date
hereof, among Metlife Capital Corporation, NCO, NCRI, NCP,
NCP Syracuse and Buyer.
13. Second Amendment, dated as of the date hereof, to First
Amended and Restated Limited Partnership Agreement of Lake
Cogen Ltd., among LIHI, NCP Lake Power Incorporated and Lake
Investment, L.P.
14<PAGE>
Exhibit B-2(b)
EXECUTION COPY
FIRST AMENDMENT
dated December 30, 1994 to
AMENDED AND RESTATED
ESCROW AGREEMENT
by and among
NORTH CANADIAN RESOURCES, INC.,
ENERGY INITIATIVES, INC.,
and
HARRIS TRUST AND SAVINGS BANK
dated
June 13, 1994<PAGE>
FIRST AMENDMENT TO
AMENDED AND RESTATED ESCROW AGREEMENT
THIS FIRST AMENDMENT dated December 30, 1994 (the "First Escrow
Agreement Amendment") to the AMENDED AND RESTATED ESCROW
AGREEMENT dated June 13, 1994 (the "Escrow Agreement") is made
and entered into by and among NORTH CANADIAN RESOURCES, INC., a
Delaware corporation ("NCRI"), ENERGY INITIATIVES, INC., a
Delaware corporation ("Buyer") and HARRIS TRUST AND SAVINGS BANK
(the "Escrow Agent"). Capitalized terms used in this First
Escrow Agreement Amendment shall unless otherwise defined herein
have the meanings ascribed to them in the Glossary referenced as
Annex A to the Escrow Agreement.
WHEREAS, NCRI, Buyer and the Escrow Agent initially entered into
the Escrow Agreement dated March 31, 1994 (the "Original Escrow
Agreement");
WHEREAS, the Original Escrow Agreement was amended and restated
on June 13, 1994 by the First Amended and Restated Escrow
Agreement and;
WHEREAS, the parties now desire to further amend the Escrow
Agreement;
NOW, THEREFORE, in consideration of the premises and promises
contained herein, the parties intending to be legally bound
mutually agree that the Amended and Restated Escrow Agreement, is
hereby further amended as follows:
ARTICLE I
ESCROW
This First Escrow Agreement Amendment makes no change in Article
I of the Escrow Agreement. As of the date hereof, after giving
effect to the disbursements made on the date hereof, Buyer's Cash
Deposit consists of $10,186,020.00. In addition, Escrow Agent
holds the Lake Interest Deposits and Pasco Option Deposits.
ARTICLE II
DISBURSEMENTS
Section 2.4 of the Escrow Agreement is hereby deleted in its
entirety. This First Escrow Agreement Amendment makes no other
change in Article II of the Escrow Agreement.
1<PAGE>
ARTICLE III
INTEREST ON BUYER'S CASH DEPOSIT
A. Article III of the Escrow Agreement is hereby amended to
delete all of Section 3.2 and to substitute a new Section 3.2
which shall read as follows:
3.2. Interest in Buyer's Cash Deposit
3.2.1. Any interest earned after the date hereof with
respect to Buyer's Cash Deposit attributable to
the Pasco Option Deposits (which amount is agreed
to be $1,324,010.00) shall be allocated as
follows:
(a) 50% of such interest accruing on or prior to
March 31, 1995 shall be allocated to each of
NCRI and Buyer; and
(b) 100% of such interest accruing after March
31, 1995 shall be allocated to NCRI.
All such interest accrued shall be paid out at the time
any of Buyer's Cash Deposit is paid out in connection
with every payout of Buyer's Cash Deposit with respect
to such Pasco Option Deposits in proportion to the
amount paid out.
3.2.2. Any interest earned after the date hereof with respect
to Buyer's Cash Deposit attributable to the Lake
Interest Deposits (which amount is agreed to be an
aggregate of $8,562,010.00 of which $1,562,010.00 is
allocable to the Lake Federal QF Interest Option and
Lake Florida QF Interest Deposit shall be allocated as
follows:
(a) 50% of such interest accruing on or prior to
March 31, 1995 shall be allocated to each of
NCRI and Buyer;
(b) 100% of such interest accruing after March
31, 1995 with respect to the Lake Federal QF
Interest Deposit and the Lake Florida QF
Interest Deposit shall be allocated to NCRI;
and
(c) 50% of the balance of such interest accruing
after March 31, 1995 shall be allocated to
each of NCRI and Buyer.
All such interest accrued shall be paid out at the time
any of Buyer's Cash Deposit is paid out in connection
with every payout of Buyer's Cash Deposit with respect
2<PAGE>
to Lake Interest Deposits in proportion to the amount
paid out.
3.2.3. Any interest earned after the date hereof with respect
to the balance of Buyer's Cash Deposit ($300,000) shall
be allocated to Buyer and paid out to Buyer when said
$300,000 is disbursed.
ARTICLE IV
TERMINATION OF ESCROW
Article IV is hereby amended by deleting the reference in
paragraph (d) of Section 4.1 to "March 31, 1995" and substituting
in lieu thereof "December 31, 1995". Section 4.1 is further
amended by deleting the proviso at the end of such Section 4.1
beginning with the words "provided, however" and ending with the
words "as provided herein."
Article IV is further amended by deleting Sections 4.1(b) and (c)
in their entirety.
Article IV is hereby further amended to delete all of Subsection
4.2 and to substitute in lieu thereof a new Section 4.2 to read
as follows:
4.2. In the event following the NCP Closing the entire Lake
Option Interest and Pasco Option Interest has not been purchased
by the Lake Optionee(s) and Pasco Optionee(s) on or prior to
December 31, 1995, then unless the parties shall otherwise agree
in writing, on January 1, 1996 the Escrow shall be terminated and
the Escrow Agent shall:
(a) deliver to NCRI the entire balance of the Sellers'
Escrow Deposit;
(b) deliver to Buyer the entire balance of the Buyer's
Escrow Deposit;
(c) disburse to Buyer and NCRI all accrued but
undistributed interest earned on the Cash Deposit in
accordance with Article III; and
(d) disburse to Buyer the balance of the Cash deposit.
ARTICLES V - X
This First Escrow Agreement Amendment makes no changes in Article
V through Article X.
ARTICLE XI
3<PAGE>
Section 11.1 is hereby amended to insert in the third line after
the word "Agreement" and before the word "constitute" the
following phrase:
, together with this First Escrow Agreement Amendment
and the Second Amendment and the documents and
instruments referred to therein,"
[SIGNATURE PAGE TO FIRST AMENDMENT DATED DECEMBER 30, 1994 TO
AMENDED AND RESTATED ESCROW AGREEMENT DATED JUNE 13, 1994]
IN WITNESS WHEREOF, the undersigned, have caused this First
Amendment to the Amended and Restated Escrow Agreement to be
executed as of the day and year first above written.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
HARRIS TRUST AND SAVINGS BANK
Escrow Agent
By:
Name:
Title:
4<PAGE>
Exhibit B-3(a)(i)
EXECUTION COPY
SECOND AMENDMENT
TO
FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
LAKE COGEN, LTD.
This SECOND AMENDMENT TO FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF LAKE COGEN, LTD. (the "Second
Amendment"), dated as of January 1, 1995, by and among NCP Lake
Power Incorporated, a Delaware corporation ("NCP Lake"), Lake
Investment, L.P., a Delaware limited partnership ("LIL"), and
Lake Interest Holdings Inc., a Delaware corporation ("LIHI").
W I T N E S S E T H:
WHEREAS, Lake Cogen Ltd. (the "Partnership") is a
Florida limited partnership existing on the date hereof under and
pursuant to that certain First Amended and Restated Limited
Partnership Agreement of Lake Cogen, Ltd., a Florida limited
partnership, dated as of July 24, 1992, as amended by that
certain First Amendment to First Amended and Restated Limited
Partnership Agreement of Lake Cogen, Ltd., dated as of June 13,
1994 (said limited partnership agreement, as so amended, the
"Partnership Agreement");
WHEREAS, NCP Lake and LIHI are all of the general partners
of the Partnership and LIL and LIHI are all of the limited
partners of the Partnership;
WHEREAS, the parties hereto desire to further amend the
Partnership Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual
covenants herein contained and intending to be legally bound, the
parties hereto agree as follows:
1. The date contained in the first sentence of
subparagraph (C) of clause (ii) of the definition
of Partnership Interest contained in the
Partnership Agreement is hereby changed from
"March 30, 1995" to "December 31, 1995."<PAGE>
2. This Second Amendment shall not be effective
unless and until TIFD III-C, Inc., a Delaware
corporation ("TIFD"), shall have consented hereto
as required under that certain Assignment of
Partnership Interests, dated as of July 29, 1992,
among NCP Lake, Lake Investment and TIFD, as
agent, and that certain Assignment of Partnership
Interests, dated as of June 13, 1994, by and
between LIHI and TIFD, as agent.
2<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Second Amendment to be executed by the undersigned thereunto duly
authorized on the date first above written.
NCP LAKE POWER INCORPORATED
By:
Name:
Title:
LAKE INVESTMENT, L.P.
By: NCP Lake Power Incorporated,
General Partner
By:
Name:
Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
3<PAGE>
EXHIBIT B-5(a)(i)
EXECUTION COPY
FIRST
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SYRACUSE ORANGE PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP
NCP Syracuse, Inc.,
as General Partner
and
Syracuse Investment, Inc.,
as General Partner
and
MetLife Capital Corporation,
as Limited Partner
and
Stewart & Stevenson Services, Inc.,
as Limited Partner
and
Syracuse Investment, Inc.,
as Limited Partner<PAGE>
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . .
ARTICLE II CONTINUATION OF PARTNERSHIP . . . . . . . . . . . . .
2.1 Continuation . . . . . . . . . . . . . . . . . . . . . .
2.2 Name . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3 Principal Place of Business . . . . . . . . . . . . . .
ARTICLE III FILING OF CERTIFICATES AND OTHER DOCUMENTS . . . . .
3.1 Additional Filings of Certificates . . . . . . . . . . .
3.2 Filing of Other Documents . . . . . . . . . . . . . . .
ARTICLE IV PURPOSE . . . . . . . . . . . . . . . . . . . . . . .
4.1 Purpose and Character of Business . . . . . . . . . . .
ARTICLE V TERM, FISCAL YEAR AND ACCOUNTING METHOD . . . . . . . .
5.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2 Fiscal Year; Accounting Method . . . . . . . . . . . . .
ARTICLE VI CONTRIBUTIONS, CAPITAL AND LOANS . . . . . . . . . . .
6.1 Capital Contributions . . . . . . . . . . . . . . . . .
6.2 Additional Capital Contributions . . . . . . . . . . . .
6.3 Withdrawal of Capital . . . . . . . . . . . . . . . . .
6.4 Interest . . . . . . . . . . . . . . . . . . . . . . . .
6.5 No Liability for Return of Capital . . . . . . . . . . .
6.6 No Third Party Rights . . . . . . . . . . . . . . . . .
6.7 Loans . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VII DISTRIBUTIONS AND ALLOCATIONS . . . . . . . . . . . .
7.1 Distributions . . . . . . . . . . . . . . . . . . . . .
7.2 Form of Distribution . . . . . . . . . . . . . . . . . .
7.3 Allocations . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VIII TAX MATTERS . . . . . . . . . . . . . . . . . . . .
8.1 Considered a Partnership . . . . . . . . . . . . . . . .
8.2 Tax Matters Partner . . . . . . . . . . . . . . . . . .
8.3 Preparation of Tax Returns . . . . . . . . . . . . . . .
8.4 Elections by Tax Matters Partner . . . . . . . . . . . .
8.5 Special Basis Adjustment . . . . . . . . . . . . . . . .
8.6 Survival of Tax Provisions . . . . . . . . . . . . . . .
ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS . . . . . . . .
9.1 Books and Records . . . . . . . . . . . . . . . . . . .
9.2 Delivery of Documents . . . . . . . . . . . . . . . . .
9.3 Reports; Fiscal Year . . . . . . . . . . . . . . . . . .
9.4 Tax Returns . . . . . . . . . . . . . . . . . . . . . .
9.5 Bank Accounts . . . . . . . . . . . . . . . . . . . . .
9.6 Annual Audit . . . . . . . . . . . . . . . . . . . . . .
ARTICLE X COMPENSATION AND REIMBURSEMENT OF GENERAL PARTNERS . .
10.1 Compensation . . . . . . . . . . . . . . . . . . . . .
10.2 Reimbursement of Expenses . . . . . . . . . . . . . . .
-i-<PAGE>
ARTICLE XI RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNERS . . . .
11.1 Management of the Partnership . . . . . . . . . . . . .
11.2 Devotion of Time and other Business . . . . . . . . . .
11.3 Liability for Certain Obligations of General Partners .
11.4 Exculpation . . . . . . . . . . . . . . . . . . . . . .
11.5 Indemnification . . . . . . . . . . . . . . . . . . . .
11.6 Miscellaneous Management Matters . . . . . . . . . . .
11.7 Execution of Partnership Investments . . . . . . . . .
ARTICLE XII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS . . .
12.1 No Right to Participate in Management . . . . . . . .
12.2 Limited Liability . . . . . . . . . . . . . . . . . . .
12.3 Matters Subject to Vote . . . . . . . . . . . . . . . .
12.4 Call of Meetings and Written Consents . . . . . . . . .
12.5 Manner of Voting . . . . . . . . . . . . . . . . . . .
12.6 Limitations . . . . . . . . . . . . . . . . . . . . .
12.7 Compensation and Reimbursement . . . . . . . . . . . .
12.8 Investment Opportunities . . . . . . . . . . . . . . .
ARTICLE XIII ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS . . . .
13.1 Restrictions of Transfers . . . . . . . . . . . . . . .
13.2 Rights of Assignee . . . . . . . . . . . . . . . . . .
13.3 Substitution of Assignee . . . . . . . . . . . . . . .
13.4 Confirmation of Transfer of Limited Partnership
Interest . . . . . . . . . . . . . . . . . . . . . . .
13.5 Indemnification . . . . . . . . . . . . . . . . . . .
13.6 Bankruptcy of a Limited Partner . . . . . . . . . . . .
13.7 Further Assignments . . . . . . . . . . . . . . . . . .
13.8 Additional Limited Partner . . . . . . . . . . . . . .
ARTICLE XIV REMOVAL AND REPLACEMENT OF THE GENERAL PARTNERS . . .
14.1 Removal for Good Cause Only . . . . . . . . . . . . . .
14.2 Vote . . . . . . . . . . . . . . . . . . . . . . . . .
14.3 Dispute Regarding Removal . . . . . . . . . . . . . . .
14.4 Voluntary Withdrawal . . . . . . . . . . . . . . . . .
14.5 Selection of a Substitute General Partner . . . . . . .
14.6 Substitution . . . . . . . . . . . . . . . . . . . . .
14.7 Indemnification . . . . . . . . . . . . . . . . . . . .
14.8 Conversion of a General Partner's Interest . . . . . .
ARTICLE XV DISSOLUTION, LIQUIDATION AND TERMINATION OF
THE PARTNERSHIP . . . . . . . . . . . . . . . . . . . . . .
15.1 Events of Dissolution . . . . . . . . . . . . . . . . .
15.2 Right to Continue the Partnership's Business . . . . .
15.3 Liquidation . . . . . . . . . . . . . . . . . . . . . .
15.4 Termination . . . . . . . . . . . . . . . . . . . . . .
15.5 Compliance with Timing Requirements of Regulations . .
-ii-<PAGE>
ARTICLE XVI MISCELLANEOUS PROVISIONS
16.1 Amendments . . . . . . . . . . . . . . . . . . . . . .
16.2 Notices . . . . . . . . . . . . . . . . . . . . . . . .
16.3 Power of Attorney . . . . . . . . . . . . . . . . . . .
16.4 Severability . . . . . . . . . . . . . . . . . . . . .
16.5 Application of Delaware Law . . . . . . . . . . . . . .
16.6 Arbitration . . . . . . . . . . . . . . . . . . . . . .
16.7 Confidential Information . . . . . . . . . . . . . . .
16.8 Headings . . . . . . . . . . . . . . . . . . . . . . .
16.9 Entire Agreement . . . . . . . . . . . . . . . . . . .
16.10 Gender and Number . . . . . . . . . . . . . . . . . .
16.11 Successors . . . . . . . . . . . . . . . . . . . . . .
16.12 Consents and Agreements . . . . . . . . . . . . . . .
16.13 Attorneys' Fees . . . . . . . . . . . . . . . . . . .
16.14 No Injunction . . . . . . . . . . . . . . . . . . . .
16.15 Counterparts . . . . . . . . . . . . . . . . . . . . .
16.16 Covenant to Sign Documents . . . . . . . . . . . . . .
16.17 Time of Essence . . . . . . . . . . . . . . . . . . .
16.18 Force Majeure . . . . . . . . . . . . . . . . . . . .
16.19 No Partition . . . . . . . . . . . . . . . . . . . . .
16.20 No for Benefit of Creditors . . . . . . . . . . . . .
16.21 Withholding . . . . . . . . . . . . . . . . . . . . .
16.22 Representations of Limited Partners . . . . . . . . .
16.23 Waiver . . . . . . . . . . . . . . . . . . . . . . . .
16.24 Construction . . . . . . . . . . . . . . . . . . . . .
16.25 Incorporation by Reference . . . . . . . . . . . . . .
16.26 Further Action . . . . . . . . . . . . . . . . . . . .
16.27 Variation of Pronouns . . . . . . . . . . . . . . . .
EXHIBIT A Contributions by Partners . . . . . . . . . . . . . .
EXHIBIT B Definitions . . . . . . . . . . . . . . . . . . . . .
EXHIBIT C Allocations . . . . . . . . . . . . . . . . . . . . .
-iii-<PAGE>
THE LIMITED PARTNERSHIP INTERESTS
REFERRED TO HEREIN ("INTERESTS") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR UNDER THE SECURITIES LAWS OF DELAWARE OR
ANY OTHER STATE. SUCH INTERESTS ARE BEING
OFFERED AND SOLD UNDER THE EXEMPTION PROVIDED
BY SECTION 4(2) OF THE SECURITIES ACT AND
SIMILAR EXEMPTIONS UNDER APPLICABLE STATE
LAW.
A PURCHASER OF ANY INTEREST MUST BE
PREPARED TO BEAR THE ECONOMIC RISK OF THE
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME
BECAUSE THE INTERESTS HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OR UNDER
APPLICABLE STATE SECURITIES LAWS AND,
THEREFORE, CANNOT BE SOLD UNLESS THEY ARE
SUBSEQUENTLY SO REGISTERED OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. THERE
IS NO OBLIGATION OF THE ISSUER TO REGISTER
THE INTERESTS UNDER THE SECURITIES ACT OR
APPLICABLE STATE LAW.
ARTICLE XIII OF THE PARTNERSHIP
AGREEMENT PROVIDES FOR FURTHER RESTRICTIONS
ON TRANSFER OF THE INTERESTS.
FIRST
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SYRACUSE ORANGE PARTNERS, L. P.,
A Delaware Limited Partnership
THIS FIRST AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT (the "Agreement") of Syracuse Orange Partners, L.P., a
Delaware limited partnership (the "Partnership"), is dated as of
December 16, 1992 by and among NCP Syracuse, Inc., a Delaware
corporation, as a general partner ( "NCP Syracuse" ), Syracuse
Investment, Inc., a Delaware corporation, as a general partner
("Syracuse Investment") (NCP Syracuse and Syracuse Investment are
collectively referred to as the "General Partners" ), MetLife
Capital Corporation, a Delaware corporation, as a limited partner
( "MetLife" ), Stewart & Stevenson Services, Inc., a Texas
corporation, as a limited partner ("Stewart & Stevenson"), and
Syracuse Investment as a limited partner, and any other Person
admitted to the Partnership as a General Partner or a Limited
Partner in accordance with the terms of this Agreement.
1<PAGE>
RECITALS
A. Project Orange Associates, L.P., a Delaware limited
partnership (the "Project partnership"), was formed on May 23,
1988 for the purpose of developing, owning, constructing and
maintaining a gas-fired cogeneration facility to be located near
Syracuse University in Syracuse, New York, consisting of (i) an
approximately 80 megawatt (net) natural gas fired cogeneration
plant constructed on property leased from Syracuse University in
Syracuse, New York, (ii) accompanying steam delivery and
condensate return facilities, (iii) an existing steam generating
plant to be operated by the Project partnership under contract
with Syracuse University, (iv) a 120 million MMBtu prepaid
natural gas fuel supply, (v) a 9.5 mile natural gas transmission
pipeline, and (vi) all contracts, agreements, licenses and the
business conducted by the Project Partnership in connection with
the foregoing items (i)-(v) (collectively, the "Project").
B. Pursuant to that certain First Amended and Restated
Agreement of Limited Partnership of the Project Partnership,
dated as of April 5, 1991 (the "FARALP"), NCP Syracuse is the
managing general partner of the Project Partnership and the
Partnership is a limited partner of the Project Partnership.
C. The Certificate of Limited Partnership of the
Partnership was filed in the Office of the Secretary of State of
the State of Delaware on April 3, 1991.
D. NCP Syracuse, Stewart & Stevenson and Syracuse
Investment formed the Partnership on the terms and conditions set
forth in that certain Limited Partnership Agreement of Syracuse
Orange Partners, L.P. entered into as of April 30, 1991 (the
"Prior Agreement").
E. MetLife has acquired an interest in the Partnership as
a Limited Partner pursuant to that certain Investment Agreement
among NCP Syracuse, MetLife and Syracuse Investment entered into
immediately prior to the Effective Time.
F. NCP Syracuse, Stewart & Stevenson and Syracuse
Investment desire to admit MetLife as a Limited Partner, and
MetLife desires to be admitted as a Limited Partner, and NCP
Syracuse, Stewart & Stevenson, Syracuse Investment and MetLife
desire to continue the Partnership and to amend and restate the
Prior Agreement, effective as of the Effective Time, on the terms
and conditions set forth in this Agreement, which Agreement shall
govern the relationships of the parties hereto. The provisions
of the Prior Agreement are hereby completely superseded for all
periods beginning on or after the Effective Time except as
specifically provided herein.
G. Concurrent with the execution of this Agreement, the
partners of the Project Partnership have entered into that
certain Second Amended and Restated Agreement of Limited
Partnership of Project Orange Associates, L.P., which amends and
2<PAGE>
restates the FARALP (as so amended and restated, the "Project
Partnership Agreement").
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants set forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
The capitalized terms used in this Agreement shall have the
meanings set forth herein or in Exhibit B attached hereto.
ARTICLE II
CONTINUATION OF PARTNERSHIP
2.1 Continuation. NCP Syracuse caused a Certificate to be
prepared and filed in the office of the Delaware Secretary of
State on April 3, 1991. The parties hereto acknowledge that the
Partnership has been formed under the Act, and that the Act shall
govern the rights and liabilities of the parties hereto, except
as otherwise herein expressly stated.
2.2 Name. The name of the Partnership is "SYRACUSE ORANGE
PARTNERS, L.P." The business of the Partnership may be conducted
under any name reasonably chosen by NCP Syracuse, in accordance
with the Act, and NCP Syracuse may, in its reasonable discretion,
change the name of the Partnership from time to time. NCP
Syracuse shall promptly notify the Partners of any such name
change.
2.3 Principal Place of Business. The principal office of
the partnership shall be located at 1100 Town & Country Road,
Suite 800, Orange, California 92668. From time to time, NCP
Syracuse may change the location of such principal office in the
United States and may establish such additional offices as NCP
Syracuse may deem advisable, in NCP Syracuse's sole discretion.
Notification of any such change or additional offices shall be
given to the Partners as soon as practicable.
ARTICLE III
FILING OF CERTIFICATES AND OTHER DOCUMENTS
3.1 Additional Filings of Certificates. In addition to the
filing of the Certificate with the Delaware Secretary of State,
the General Partners shall cause the Certificate to be filed in
such other places as are or shall be required by the Financing
Agreement or by applicable law. The General Partners shall also
cause the Certificate to be amended as and when required by
applicable law (including, without limitation, an amendment to
the Certificate to reflect the admission of Syracuse Investment
as an additional General Partner), and shall cause to be prepared
and filed in the office of the Delaware Secretary of State and in
such other places as are or shall be required by applicable law
any Certificate of Cancellation required to be filed by
applicable law.
3<PAGE>
3.2 Filing of Other Documents. From time to time, the
General Partners shall sign, acknowledge, swear, file and publish
any additional certificates, notices, statements or other
instruments, including any appropriate fictitious business name
statements, as, when and where required by any provisions of law
governing the formation of the Partnership or the conduct of its
business or to enable the Partnership to hold Partnership
Property in the Partnership's name.
ARTICLE IV
PURPOSE
4.1 Purpose and Character of Business. The sole purpose and
character of the business of the Partnership is to act as a
limited partner of, and to hold an equity interest in, the
Project Partnership. The Partnership may do any or all things
that may be necessary, convenient, incidental, or appropriate to
the conduct of the business and the achievement of the purposes
specified above. Without limiting the generality of the
foregoing, except as expressly provided herein: (a) the
Partnership may borrow money from a General Partner in such
General Partner's individual capacity, any Affiliate of such
General Partner, any Limited Partner in such Limited Partner's
individual capacity, any Affiliate of any such Limited Partner
or any other third person, and may give security therefor and
repay such loans, and otherwise enter into, perform and discharge
contracts, agreements, instruments and other arrangements with
such General Partner in such General Partner's individual
capacity, any Affiliate of such General Partner, any Limited
Partner in such Limited Partner's individual capacity, any
Affiliate of any such Limited Partner or any other Person, all
such transactions and arrangements to be on arm's-length terms;
(b) the Partnership may act as guarantor of the obligations of,
or otherwise for the benefit of, the Project Partnership, and
grant one or more security interests in its interest in the
Project Partnership; (c) the Partnership may loan money to the
Project Partnership; and (d) the Partnership may
(i) develop, own, sell, transfer, convey, license, mortgage,
pledge, exchange, exploit or otherwise dispose of or deal with
all of the property of every nature whatsoever of the
Partnership, (ii) incur indebtedness, secured or unsecured, for
any of the purposes of the Partnership, and (iii) engage in any
activities that are in furtherance of said purpose and are not
prohibited by law.
ARTICLE V
FISCAL YEAR AND ACCOUNTING METHOD
5.1 Term. The term of the Partnership commenced on April 3,
1991, the date the Certificate was filed in the office of the
Delaware Secretary of State. Unless earlier dissolved pursuant
to Section 15.1 hereof or the provisions of the Act, the
Partnership shall be dissolved on December 31, 2040.
4<PAGE>
5.2 Fiscal Year; Accounting Method. The Partnership's
fiscal year shall be the calendar year, unless otherwise required
by law. The Partnership's books and records shall be maintained
on an accrual basis in accordance with GAAP and tax accounting
methods, unless otherwise required by law.
ARTICLE VI
CONTRIBUTIONS, CAPITAL AND LOANS
6.1 Capital Contributions.
(a) Limited Partners. Subject to Section 6.1(C) hereof,
immediately after the Effective Time each Limited Partner shall
make a Capital Contribution to the Partnership in the dollar
amount, in cash, set forth opposite such Limited Partner's name
in Exhibit A attached hereto.
(b) General Partners. Subject to Section 6.1(c) hereof,
immediately after the Effective Time each General Partner shall
make a Capital Contribution to the Partnership in the dollar
amount, in cash, set forth opposite such General Partner's name
in Exhibit A attached hereto.
(c) Financing Agreement. Notwithstanding the provisions of
Sections 6.1(a) and (b) hereof, any part or all of the Capital
Contribution of any or all Partners may be made by payment of
cash, in an amount equal to such part or all of such Capital
Contribution, directly to the Agent or into the "Construction
Account" (as defined in the Financing Agreement) in accordance
with the provisions of Section 5.19 of the Financing Agreement,
whether such payment to the Agent or the Construction Account is
made by such Partner or is made on behalf of such Partner by
North Canadian Oils Limited, a Canadian corporation ("NCO"). To
the extent that any amount is so paid to the Agent or the
Construction Account by a Partner, or by NCO on behalf of such
Partner, such Partner shall be deemed to have made a Capital
Contribution in cash to the Partnership in such amount for all
purposes under this Agreement. To the extent that any such
payment is made by NCO on behalf of a Partner, such Partner shall
immediately reimburse NCO in full for such payment.
6.2 Additional Capital Contributions. No Partner shall be
required to make any contributions to the capital of the
Partnership in excess of the Capital Contribution of such Partner
referred to in Section 6.1(a) or 6.1(b) hereof.
6.3 Withdrawal of Capital. Except as expressly provided
in Article XV hereof, no Partner shall have the right to withdraw
its Capital Contribution or to receive any return of a portion of
its Capital Contribution.
6.4 Interest. Interest earned on funds of the Partnership
shall constitute Partnership Property and no Partner shall be
entitled to interest on any Capital Contribution, on any Capital
5<PAGE>
Account balance or on any undistributed or reinvested Partnership
Property.
6.5 No Liability for Return of Capital. No General Partner
shall be personally liable for the return of any portion of the
Capital Contribution of any Partner; the return of such Capital
Contribution shall be made solely from Partnership assets. Under
the circumstances requiring a return of any Capital Contribution,
no Partner shall have the right to demand or receive property
other than cash except as may be specifically provided for in
this Agreement.
6.6 No Third Party Rights. Except as each Partner may
otherwise consent with respect to such Partner's obligations or
rights, the obligations or rights of the Partnership or of
Partners to make or require any Capital Contribution under this
Agreement shall not grant any rights to or confer any benefits
upon any Person who is not a Partner.
6.7 Loans.
(a) General Rule. No Partner shall be required to lend or
advance any money to or for the benefit of the Partnership.
(b) Permitted Loans. If (i) the Partnership's funds are
insufficient to meet its operating costs, expenses, obligations
or liabilities, or to fund amounts the Partnership has determined
to contribute or lend to the Project Partnership, and (ii) the
Partnership has been unsuccessful in obtaining necessary
financing from third parties on terms which are reasonably
satisfactory to NCP Syracuse, or if NCP Syracuse has otherwise
reasonably determined that it is both desirable and appropriate
to obtain such financing from the Partners without offering such
opportunity to any third parties, any Partner or Affiliate
thereof may (but shall not be required to) lend all or a portion
of the amount of needed funds to the Partnership. In the event
more than one Partner or Affiliate thereof desires to loan or
advance funds to the Partnership pursuant to this Section 6.7(b),
each such Partner or Affiliate thereof shall be entitled to
provide to the Partnership such proportion of the necessary funds
as such Partner's Sharing Ratio bears to the Sharing Ratios of
the other Partners (or their Affiliates) who desire to
participate. Any such loans shall be unsecured, shall provide
for repayment solely out of funds available for distribution
pursuant to the terms of this Agreement and prior to any
distributions to the Partners (except to the extent such loan is
made to fund expenditures which create or fund an asset (tangible
or intangible) which would make it appropriate to amortize such
loan) and shall otherwise have terms which are no less favorable
to the Partnership than could be obtained on an arms'-length
basis from an independent third party. All such loans made at
substantially the same time shall be on the same terms and
conditions.
6<PAGE>
ARTICLE VII
DISTRIBUTIONS AND ALLOCATIONS
7.1 Distributions. The Partnership shall make
distributions of Cash Available for Distribution from time to
time (each such distribution a "Distribution"), within five (5)
business days of receipt of distributions from the Project
Partnership, provided that a Distribution shall be made within
fifteen (15) business days of receipt of such Distribution from
the Project Partnership if such Distribution will result (or NCP
Syracuse reasonably believes that such Distribution may result)
in portions of such Distribution being distributable pursuant to
more than one distribution tier of this Section 7.1. No
Distributions shall be made under this Section 7.1 that would
render the Partnership insolvent or jeopardize the business
activities of the Partnership. Subject to the foregoing and to
Article XV whereof, Cash Available for Distribution, if any,
shall be distributed to the Partners in the following order and
priority:
(a) First, 56.00% to the MetLife Parties (in proportion to
their Sharing Ratios), 8.09% to Stewart & Stevenson, 24.91% to
Syracuse Investment (in its Limited Partner capacity), 1.00% to
Syracuse Investment (in its General Partner capacity), and 10.00%
to NCP Syracuse, in each case until the MetLife Parties have
achieved an IRR equal to 10.00%;
(b) Second, 19.00% to the MetLife Parties (in proportion to
their Sharing Ratios), 8.09% to Stewart & Stevenson, 61.91% to
Syracuse Investment (in its Limited Partner capacity), 1.00% to
Syracuse Investment (in its General Partner capacity), and 10.00%
to NCP Syracuse, in each case until the MetLife Parties have
achieved an IRR equal to 15.00%; and
(c) Third, the balance of all Distributions, 13.00% to the
MetLife Parties (in proportion to their Sharing Ratios), 8.09% to
Stewart and Stevenson, 67.91% to Syracuse Investment (in its
Limited Partner capacity), 1.00% to Syracuse Investment (in its
General Partner capacity), and 10.00% to NCP Syracuse.
7.2 Form of Distribution. No Partner shall have any right
to receive any Partnership Property other than cash upon a
Distribution, except as specifically provided in this Agreement.
A Partner shall not be compelled to accept a distribution of
Partnership Property other than cash in lieu of a proportionate
Distribution being made to other Partners.
7.3 Allocations. The Profits, Losses and other items of
the Partnership shall be allocated among the Partners as set
forth in Exhibit C attached hereto.
ARTICLE VIII
TAX MATTERS
7<PAGE>
8.1 Considered a Partnership. The Partners intend that, as
defined in Section 7701(a)(2) of the Code, the Partnership will
be treated as a partnership for United States, state, and local
income tax purposes. Specifically, each Partner agrees not to
make the election described in Section 761(a) of the Code to be
excluded from the application of the provisions of Subchapter K.
Moreover, each Partner further agrees not to make an election to
be excluded from the application of the partnership provisions of
any applicable state taxation code or statute.
8.2 Tax Matters Partner. NCP Syracuse is designated the tax
matters partner ("Tax Matters Partner") as provided in Section
6231(a)(7)(A) of the Code and any comparable provision of state
or local law. Except as otherwise provided herein, this
designation is effective only for the purpose of activities
performed under the Agreement pursuant to the provisions of the
Code and any comparable provision of state or local law and shall
be subject to the following terms and conditions:
(a) The Tax Matters Partner, as an authorized
representative of the Partnership, shall direct the defense of
any claims made by federal, state or local tax authorities ("Tax
Authorities") to the extent that such claims relate to the
adjustment of Partnership items at the Partnership level. The Tax
Matters Partner shall promptly (and in any event within ten (10)
days after receipt) deliver to each Partner a copy of all
notices, communications, reports or writings of any kind
(including, without limitation, any notice of beginning of
administrative proceedings or any report explaining the reasons
for a proposed adjustment) received from the Tax Authorities
relating to or potentially resulting in an adjustment of
Partnership items. The Tax Matters Partner shall consider in
good faith any suggestions made by any Partner or its counsel
regarding the conduct of any related administrative or judicial
proceedings.
The Tax Matters Partner shall keep each Partner advised of
all material developments with respect to any proposed adjustment
which come to its attention, including, without limitation, the
scheduling of all conferences with the Tax Authorities. Each
Partner shall be entitled, at its own expense, to attend all
meetings with the Tax Authorities and to review in advance
(subject to giving comments in response thereto to the Tax
Matters Partner within such period as the Tax Matters Partner may
reasonably designate (but in no event less than five (5) business
days)), any material written information (including, without
limitation, any pleadings, memoranda or similar items) to be
submitted to the Tax Authorities. In addition to the right of a
Partner to attend any such meetings, a partner may participate in
such meeting subject to such control and direction of the Tax
Matters Partner as may be reasonable under the circumstances
taking into account, without limitation, the tax implications to
each Partner.
8<PAGE>
Without first obtaining the written consent of a Majority in
Interest of the Limited Partners, the Tax Matters Partner shall
not, with respect to any proposed adjustment of a Partnership
item which materially and adversely affects the Partners, (A)
enter into a settlement agreement which purports to bind Partners
other than the Tax Matters Partner (including, without
limitation, any stipulation consenting to an entry of decision by
the Tax Court), or (B) enter into an agreement or stipulation
extending the statute of limitations.
(b) The Tax Matters Partner shall deliver to each Partner
promptly (and in any event within ten (10) days after receipt) a
copy of all reports, notices or other items relating to tax
audits at the Project Partnership level which are delivered to
the Partnership. In addition, the Tax Matters Partner shall, and
shall cause its Affiliates to, use good faith and diligent
efforts to make available to each Partner similar rights with
respect to tax audits and contests involving the Project
Partnership as are set forth above with respect to audits
involving the Partnership, to the extent the exercise of such
rights does not unduly interfere with the conduct of such
proceedings and to the extent the furnishing of such rights to
such Partner does not conflict with the Tax Matters Partner's
duties and obligations to the Project Partnership, taking into
account that such Partner has an indirect beneficial interest in
the Project Partnership by reason of its interest in the
Partnership.
(c) If notice of an administrative proceeding under Section
6223 of the Code (or any comparable provision of state or local
law) is received by a Partner, such Partner shall notify the Tax
Matters Partner of the treatment of any Partnership item on the
Partner's income tax return which is or may be inconsistent with
the treatment of that item on the Partnership return.
(d) No Partner shall enter into any settlement agreement
with any taxing authority with respect to any Partnership item
unless and until such Partner shall have first notified the Tax
Matters Partner in writing of the proposed agreement and its
terms at least thirty (30) days prior to entering into such
settlement.
(e) The Tax Matters Partner or any Partner shall notify all
Partners of any intention to file a petition with the Tax Court
for a redetermination of any Partnership item within ten (10)
days from the date of the Notice of Final Partnership
Administrative Adjustments.
8.3 Preparation of Tax Returns. The Tax Matters Partner
shall cause the preparation and timely filing of United States,
state and local income tax returns on behalf of the Partnership.
A copy of all such returns shall be delivered to each Partner as
set forth in Section 9.4 hereof. Each Partner agrees to furnish
the Tax Matters Partner such information as each Partner may have
which is required for the proper and timely preparation of such
9<PAGE>
returns. The Tax Matters Partner shall provide drafts of the
United States, state and local income tax returns of the
Partnership and the Project Partnership to all Partners for their
review at least twenty (20) days before filing.
8.4 Elections by Tax Matters Partner. The Tax Matters
Partner shall make the following elections under the Code and
regulations and any similar state and local statutes and
regulations:
(a) To adopt the calendar year as the annual accounting
period, unless otherwise required by law;
(b) To adopt the accrual method of accounting;
(c) To amortize organizational expenditures, if any, over a
sixty (60) month period in accordance with Section 709(b) of the
Code and any similar state statutes; and
(d) To make such other elections as the Tax Matters Partner
may deem advisable to reduce Partnership taxable income to the
maximum extent possible and to take deductions in the earliest
taxable year possible in accordance with the Code and the
Regulations.
8.5 Special Basis Adjustment. In connection with
Distributions or any assignment or transfer of a Partnership
interest permitted by the terms of this Agreement, the General
Partners shall cause the Partnership, at the written request of
the transferor or the transferee with respect to a transfer of a
Partnership interest, on behalf of the Partnership and at the
time and in the manner provided in the Regulations, to make an
election to adjust the basis of Partnership Property in the
manner provided in Sections 734(b), 743(b) and 754 of the Code.
If such election is made with respect to a transfer of a
Partnership interest, (a) the transferee shall pay all reasonable
costs incurred by the partnership in connection therewith,
including, without limitation, reasonable attorneys' and
accountants' fees, and (b) the Partnership shall timely notify
the Managing General Partner of the Project Partnership to make
such election with respect to the Project Partnership as provided
in Section 6.1(d) of the Project Partnership Agreement.
8.6 Survival of Tax provisions. The provisions of this
Agreement relating to tax matters shall survive the termination
of the partnership and this Agreement and the termination of any
Partner's interest in the Partnership and shall remain binding on
that Partner for the period of time necessary to resolve with any
Federal, state or local tax authority any tax matters regarding
the partnership.
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
10<PAGE>
9.1 Books and Records. The Partnership's books and records,
together with copies of all of the documents and papers
pertaining to the business of the Partnership, shall be kept at
the principal place of business of the Partnership and at all
reasonable times upon reasonable notice shall be open to the
inspection of and may be copied and excerpts taken therefrom by
any Partner, or such Partner's duly authorized representative,
provided that such inspection is made in good faith and without
any intent to damage the Partnership or any of the Partners. The
books and records of the Partnership shall be kept in accordance
with GAAP, and shall reflect the Partnership transactions and be
appropriate and adequate for the Partnership's business.
9.2 Delivery of Documents. The Partnership shall provide to
each Limited Partner not affiliated with a General Partner each
of the following Partnership documents:
(a) Within thirty (30) days after the end of each fiscal
year during which such list has changed, a current list of the
full name and last known business or residence address of each
Partner, specifying separately the General Partners and Limited
Partners; and
(b) As soon as practicable, a copy of the Certificate, and
all certificates of amendment thereto and other certificates
filed pursuant to the Act, promptly after the filing thereof,
together with executed copies of any powers of attorney pursuant
to which any such certificate has been executed.
9.3 Reports; Fiscal Year.
(a) Information From the Project Partnership. The General
Partners shall promptly (and in any event within five (5) days
after receipt) furnish to each Partner a copy of each report,
record, financial statement, notice or other document provided to
the Partnership, or a General Partner (in its capacity as such),
by the Project Partnership or any other participant (including
lenders) pursuant to the Project Partnership Agreement. In
addition, upon the request of any Partner, the General Partners
shall promptly obtain from the Project Partnership and provide to
such Partner any information or a copy of any document the
partnership is entitled to obtain from the Project Partnership
pursuant to the Project Partnership Agreement or applicable law.
(b) Quarterly Reports. The General Partners shall deliver
or cause to be delivered to each Partner for each fiscal quarter,
within fifteen (15) days (thirty (30) days if Distributions
during such fiscal quarters were made pursuant to more than one
Distribution tier under Section 7.1 hereof) after the Partnership
receives the relevant information from the Project Partnership
for such fiscal quarter, the following:
(i) a management-prepared balance sheet, income statement
and statement of Partners' capital for the Partnership with
11<PAGE>
respect to such calendar quarter just ending and the year to
date; and
(ii) a management-prepared statement of income for the
Partnership comparing the actual results for the quarter and the
year to date with budgeted amounts as well as a narrative
explanation of the material variances.
(c) Annual Report. The General Partners shall deliver or
cause to be delivered to each Partner for each year, within
thirty (30) days after the Partnership receives the relevant
information from the Project Partnership for such year, the
following:
(i) A balance sheet as of the end of such year, and
statements of income, Partners' capital and statement of cash
flows for such year;
(ii) A general description of the activities of the
Partnership during the period covered by the report; and
(iii) A report of any transactions between the Partnership
and any General Partner or any Affiliate thereof, including fees
or compensation paid by the Partnership and the services
performed by any General Partner or any Affiliate thereof for
such fees or compensation.
The annual financial statements of the partnership shall be
audited and certified by the Partnership Accountants.
(d) Other Information. Upon obtaining knowledge thereof,
the General Partners shall furnish to each Partner prompt written
notice of any events or occurrences not otherwise provided for in
this Section 9.3 which the General Partners believe may
reasonably be expected to materially and adversely affect the
Partnership, provided that no General Partner shall be required
to disclose information which such General Partner has a legal
duty not to disclose and which becomes known by the General
Partner after the legal duty not to disclose arises.
9.4 Tax Returns. The General Partners shall deliver or
cause to be delivered to each partner for each tax year, as soon
as practicable (but in no event later than thirty (30) days)
after the Partnership receives the information necessary from the
Project Partnership for the Partnership to complete its Federal,
state and local income tax or information returns), (i) the
information necessary for such Partner to complete its Federal,
state and local income tax or information returns with respect to
its investment in the Partnership, and (ii) complete copies of
the Partnership's Federal, state, and local income tax or
information returns for the year.
9.5 Bank Accounts. All funds of the Partnership shall be
deposited in the name of the Partnership in such bank accounts or
other accounts, including, in the sole discretion of NCP
12<PAGE>
Syracuse, money market funds or other short term investments, as
shall be determined by NCP Syracuse. All withdrawals therefrom
shall be made upon checks signed on behalf of the Partnership by
any officer of a General Partner or by any Person or Persons
authorized by a General Partner to sign checks on behalf of the
Partnership.
9.6 Annual Audit. The partnership accountants
("Partnership Accountants") shall be Deloitte & Touche or another
firm of independent certified public accountants of recognized
national standing selected by NCP Syracuse. The Partnership
Accountantsshall auditthe Partnership'sbooks andrecords eachyear.
ARTICLE X
COMPENSATION AND REIMBURSEMENT OF GENERAL PARTNERS
10.1 Compensation. No General Partner shall be paid any
management fee or other compensation for the discharge of its
duties as a General Partner; provided, however, that a General
Partner may be compensated, in its individual capacity, pursuant
to any contract, agreement or other arrangement entered into
pursuant Section 4.1 hereof.
10.2 Reimbursement of Expenses. Subject to Section 12.3(o)
hereof, all reasonable business expenses, costs (including
appropriate corporate overhead), fees, and other outlays
advanced, paid or otherwise incurred by a General Partner in
connection with the formation of the Partnership, the conduct of
the Partnership's business and operations (including the
Partnership's investment in the Project Partnership) or its
dissolution and liquidation shall be reimbursed by the
Partnership. Any requested reimbursement shall be paid to such
General Partner at all times upon demand before any Distributions
to the Partners shall be made pursuant to Section 7.1 hereof.
ARTICLE XI
RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNERS
11.1 Management of the Partnership.
(a) Control in General Partners. The General Partners shall
have full and exclusive control of the management and operation
of the business of the Partnership and shall make all business
judgments, determinations and decisions affecting the affairs of
the Partnership except as otherwise specifically provided herein.
The General Partners shall have, subject to any limitations
imposed elsewhere in this Agreement, the power and authority on
behalf of the Partnership to do or cause to be done any and all
acts deemed by the General Partners to be necessary or
appropriate in connection with the management and operation of
the business of the Partnership, including, without limitation,
the power and authority on behalf of the Partnership to: (i)
cause the Partnership to take the actions set forth in Section
12.3 hereof; (ii) cause the Partnership to act as guarantor of
the obligations of, or otherwise for the benefit of, the Project
13<PAGE>
Partnership; (iii) cause the Partnership to carry such insurance
as the General Partners deem to be appropriate and adequate to
protect the General Partners as provided in Section 11.5 hereof;
(iv) submit any Partnership claim or liability to arbitration or
reference; (v) change the Partnership Accountants; (vi) execute,
acknowledge (if appropriate) and deliver any and all instruments
to effect any and all of the foregoing; and (vii) execute,
acknowledge (if appropriate) and file or record such
applications, notices, certifications and other documents with
such Federal, state or local governmental agencies as may be
necessary or appropriate in connection with the Partnership's
investment in the Project Partnership. In connection with the
foregoing, it is agreed that any instrument, agreement or other
document executed by any General Partner while acting in the name
and on behalf of the Partnership shall be deemed to be an action
of the Partnership as to any third parties (including each
Limited Partner as a third party for such purposes).
(b) Actions of General Partners. The General Partners
shall take or cause to be taken (subject to the limitations
expressly set forth in this Agreement) all actions that the
General Partners reasonably and in good faith deem to be
necessary or appropriate for carrying out the purposes of the
Partnership in accordance with the terms and provisions of this
Agreement and the requirements of applicable laws and regulations
and for continuing the Partnership's valid existence as a limited
partnership under the laws of the State of Delaware. Except as
expressly set forth herein, nothing in this Agreement shall
preclude the engagement, at the expense of the Partnership, of
any agent or Person, to manage or provide other services in
respect of the Partnership, subject to the control of the General
Partners.
(c) Managing General Partner. The rights and powers of the
General Partners pursuant to this Agreement shall be exercised
solely by NCP Syracuse as the Managing General Partner except as
may otherwise be expressly set forth herein.
11.2 Devotion of Time and Other Business. The General
Partners shall devote to the Partnership's affairs such time, on
a nonexclusive basis, as is necessary to perform their duties as
General Partners hereunder. The General Partners shall cause
their officers and employees diligently to pursue and to apply
their general skills, time and effort to the General Partners'
duties to the extent reasonably necessary to manage the
Partnership in the best interests of all of the Partners.
Nevertheless, the officers and employees of the General Partners
shall not be required to devote their full time to Partnership
affairs, except to the extent necessary from time to time for the
proper performance of their duties hereunder, and may engage in
other businesses, including businesses identical or similar to
the Partnership's business. Without limiting the foregoing, NCP
Syracuse shall be permitted to serve as the managing general
partner of the Project Partnership. Neither the General Partners
nor any of their shareholders, officers or directors shall be
14<PAGE>
obligated to present any particular investment opportunity to the
Partnership, even if the opportunity is of a character which, if
presented to the Partnership, could be taken by the Partnership.
The General Partners and their shareholders, officers or
directors shall have the right to take for their own account, or
to recommend to others, any investment opportunity.
11.3 Liability for Certain Obligations of General Partners.
The Partnership shall be jointly and severally liable with the
General Partners for any liability of the General Partners to any
other partner of the Project Partnership pursuant to section 4.4
of the Project Partnership Agreement; provided, however, that the
liability of the Partnership for actions of the General Partner
under section 4.4 of the Project Partnership Agreement shall be
limited to such portion, if any, of the Partnership's interest in
the Project Partnership (including but not limited to its
interest in distributions by the Project Partnership) as is equal
to the excess, if any, of (a) the greater of (i) the aggregate
percentage of distributions in the Project Partnership
beneficially held, NCP Syracuse and its Affiliates (other than
the Partnership) or (ii) the amount of the "Keep Requirement" (as
such term is defined in the Project Partnership Agreement) over
(b) the portion of the amount of such "Keep Requirement" inuring
to NCP Syracuse either directly as the managing general partner
of the Project Partnership or through its direct interest in the
Partnership.
Notwithstanding any other provision of this Agreement, but
without in any manner limiting any liability the Partnership may
otherwise have to a Person under the Project Partnership
Agreement, the Partners shall enter into such amendment to this
Agreement as shall be necessary so that the effect on the
Partnership and the Partners of the liability referred to in the
foregoing provisions of this Section 11.3 shall be borne entirely
by NCP Syracuse and its Affiliates (other than the Partnership),
and NCP Syracuse hereby indemnifies the Limited Partners against
such liability, with the result that the effective after-tax
economic interest of the other Partners in the Project
Partnership's capital, distributions, profits and losses shall
remain unchanged. If the interests in the Partnership of NCP
Syracuse and Syracuse Investment are anticipated to fall below
the guidelines (as may be modified from time to time) established
by the IRS for ruling purposes that the Partnership lacks the
corporate characteristic of "centralization of management"
pursuant to Regulations Section 301.7701-2(c), then each General
Partner shall take such action on or before such reduction in
interest as may be necessary in the opinion of counsel to the
Partnership reasonably satisfactory to a Majority in Interest of
the Limited Partners to allow such counsel to render an opinion
(including reasonable assumptions made therein) that the tax
classification of the Partnership shall not be adversely affected
thereby. Counsel to the Partnership shall render such opinion
before the effective date of any such reduction.
15<PAGE>
11.4 Exculpation. Neither the General Partners nor any of
their shareholders, officers, directors, representatives or
agents shall be liable, responsible or accountable in damages or
otherwise to the Partnership or any Limited Partner, individually
or collectively, for any loss, liability, damage or expense
incurred by reason of any act or omission performed or omitted by
any General Partner either on behalf of the Partnership or in
furtherance of the interests of the Partnership, and in a manner
believed in good faith by such Person to be within the scope of
the authority granted to the General Partners by this Agreement
or by law, so long as such Person is not determined by a final
adjudication of a court of competent jurisdiction or by final
binding arbitration to be guilty of gross negligence, gross
misconduct, fraud, breach of fiduciary duty or a willful breach
of this Agreement with respect to such act or omission.
11.5 Indemnification. Each General Partner and its direct
and indirect shareholders, officers, directors, representatives
and agents shall be held harmless and be indemnified by the
Partnership for any liability, loss (including amounts paid in
settlement), damages or expenses (including reasonable attorneys
fees) suffered by virtue of such General Partners status as a
General Partner of the Partnership or any acts or omissions or
alleged acts or omissions arising out of such Person's activities
either on behalf of the Partnership or in furtherance of the
interests of the Partnership, and in a manner believed in good
faith by such Person to be within the scope of authority
conferred on such General Partner by this Agreement or law, so
long as such Person is not determined by a final adjudication of
a court of competent jurisdiction or by final binding arbitration
to be guilty of gross negligence, gross misconduct, fraud, breach
of fiduciary duty or a willful breach of this Agreement with
respect to such acts or omissions. Such indemnification or
agreement to hold harmless shall only be recoverable out of the
assets of the partnership, including insurance proceeds, if any,
and not of any Partner. Each General Partner and each director of
such General Partner shall have the right (and no other Person
shall have the right) to select its own attorney, if it makes a
reasonable showing that the Partnership attorney cannot
adequately represent its interest. The Partnership shall pay the
expenses incurred by an indemnified Person before the final
disposition of any suit or proceeding only after (a) the
indemnified Person delivers to the Partnership an undertaking
promising to repay amounts so expended by the Partnership if it
is later adjudicated or determined that the Person is not
entitled to indemnification under this Agreement, and (b) a
Majority in Interest of the Limited Partners reasonably
determines that the indemnified Person has the resources to repay
such amount.
11.6 Miscellaneous Management Matters. A General Partner
may rely on any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond,
debenture, or other document it believes to be genuine and to
have been signed or presented by the proper party or parties. A
16<PAGE>
General Partner may consult with any attorneys, accountants,
appraisers, management consultants, investment bankers, and other
consultants it selects (who may also serve as consultants for the
Partnership). An opinion by any consultant on a matter which a
General Partner believes to be within the consultant's
professional competence shall be complete protection as to any
action or omission by the General Partner reasonably based in
good faith on the opinion. No General Partner shall be
responsible for the misconduct, negligence, acts, or omissions
of any consultant, agent, or employee of the Partnership and no
General Partner assumes any obligations as to these consultants,
agents, or employees except to use due care in selecting them.
11.7 Execution of partnership Investments. NCP Syracuse
shall execute all deeds, leases, notes, mortgages, joint venture
or partnership agreements, contracts, certificates,
correspondence and any and all other instruments executed on the
Partnership's behalf, and for which the General Partners have
authority, in substantially the following form:
Syracuse Orange Partners, L.P.
By: NCP Syracuse, Inc., General Partner
By:_________________________________
(Name of authorized representative)
Its:________________________________
(Title)
ARTICLE XII
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
12.1 No Right to Participate in Management. The Limited
Partners shall not, and shall have no right to, participate in
the control, conduct, or operation of the Partnership or the
Partnership's business, and shall have no right or authority to
act for or bind the Partnership; provided, however, that the
Limited Partners may select a Person to act for and bind the
Partnership during the winding up period following dissolution of
the Partnership pursuant to Section 15.3(a) hereof in the event
that there is no General Partner of the Partnership. A Limited
Partner shall not be deemed to participate in the management or
control of the Partnership solely by virtue of consulting with
and advising a General Partner with respect to the business of
the Partnership or exercising any rights or powers which the
Limited Partners are permitted to exercise pursuant to this
Agreement and Section 17-803 of the Act.
Notwithstanding any other provision of this Agreement, the
Limited Partners shall have the sole right to the exclusion of
the General Partners, acting in a manner directed by a Majority
in Interest of the Limited Partners, to cause the Partnership to
17<PAGE>
take all actions which the Partnership is entitled to take
pursuant to Article IV of the Project Partnership Agreement and
Sections 3.1 (b), 3.2 (b), 7.1 (c), 7.3 (a), 7.4 (a), 7.4 (b),
8.1(a) (i), 10.3 or 10.5 of the Project Partnership Agreement.
The General Partners will take all actions within their control
(including, without limitation, providing copies of all notices
and other written information to the Limited Partners) necessary
or desirable in order to allow the full and timely exercise by
the Limited Partners of the rights set forth in the preceding
sentence. The provisions of this paragraph shall expire and
shall have no further effect on and after the Final Flip Point.
12.2 Limited Liability.
(a) Limited Liability. No Limited Partner shall have any
liability whatsoever for any debts, liabilities or other
obligations of the Partnership, beyond the amount of such Limited
Partner's Capital Contribution pursuant to Section 6.1 (a)
hereof; provided, however, that each Limited Partner may be
required to return any Distributions made to such Limited Partner
(with interest thereon) in violation of Section 17-607 of the
Act. A Limited Partner, as such, shall not be personally liable
for any obligations of the Partnership, and shall not be
obligated to make loans to the Partnership. As specified in
Section 11.5 hereof, the Limited Partners shall not be required
to indemnify the General Partners except out of Partnership
assets.
(b) Indemnification. Each Limited Partner and its direct
and indirect shareholders, officers, directors, representatives
and agents shall be held harmless and be indemnified by the
Partnership for any liability, loss (including amounts paid in
settlement), damages or expenses (including reasonable attorneys'
fees) suffered by virtue of such Limited Partner's status as a
Limited Partner of the Partnership or any acts or omissions or
alleged acts or omissions arising out of such Person's activities
either on behalf of the Partnership or in furtherance of the
interests of the Partnership, and in a manner believed in good
faith by such Person to be within the scope of authority
conferred on such Limited Partner by this Agreement or law, so
long as such Person is not determined by a final adjudication of
a court of competent jurisdiction to be guilty of gross
negligence, gross misconduct, fraud, breach of fiduciary duty or
a willful breach of this Agreement with respect to such acts or
omissions. Such indemnification or agreement to hold harmless
shall only be recoverable out of the assets of the Partnership,
including insurance proceeds, if any, and not of any Partner.
Each Limited Partner and each director of such Limited Partner
shall have the right (and no other Person shall have the right)
to select its own attorney, if it makes a reasonable showing that
the Partnership attorney cannot adequately represent its
interest. The Partnership shall pay the expenses incurred by an
indemnified Person before the final disposition of any suit or
proceeding only after the indemnified Person delivers to the
Partnership an undertaking promising to repay amounts so expended
18<PAGE>
by the Partnership if it is later adjudicated or determined that
the Person is not entitled to indemnification under this
Agreement.
12.3 Matters Subject to Vote. The General Partners shall
not take any action set forth in subsections (a)-(t) of this
Section 12.3 unless such action has been approved by the written
consent or affirmative vote of a Majority in Interest of the
Limited Partners or otherwise has received the approval set forth
below. The Limited Partners shall have the right to vote upon
the following matters and no others:
(a) The dissolution and winding up of the Partnership as
provided in Section 15.1 hereof, or an election to continue the
Partnership and the business of the Partnership as set forth in
Section 15.2 hereof;
(b) The sale, exchange, lease, mortgage, assignment, pledge
or other transfer of, or granting of a security interest in, all
or any material portion of the assets of the Partnership except
in accordance with the Financing Agreement;
(c) The incurrence, renewal, refinancing or payment of
indebtedness by the Partnership except pursuant to or in
connection with the financing of the Partnership's business and
operations or of the project, and except in the ordinary course
of its business;
(d) A change in the nature of the business of the
Partnership;
(e) Removal or withdrawal of a General Partner as provided
in Section 14.2 or Section 14.4 hereof;
(f) Admission of a Substitute General Partner;
(g) Admission of an additional general partner;
(h) Amendment of this Agreement, as provided in Section
16.1 hereof;
(i) The merger or consolidation of the Partnership;
(j) The execution or performance of any contract, agreement
or other arrangement by the Partnership with a General Partner in
its individual capacity or with any Affiliate of a General
Partner, except as provided in Section 6.7(b) hereof;
(k) Any matter required by this Agreement to be submitted
by the Tax Matters Partner to the Limited Partners for the
consent or approval of the Limited Partners;
(1) The making of loans, guarantees or other extensions of
credit, or making capital contributions to the Project
19<PAGE>
Partnership, in each case except as set forth in Section 6.1 or
6.7 hereof;
(m) The material modification of (A) any material financial
reporting method used by the Partnership, unless such change is
in accordance with GAAP and noted in the financial statements of
the Partnership prepared in accordance with Article 6 hereof or
is otherwise required by a change in applicable financial
reporting rules, or (B) any material tax reporting method or
position, unless such change is required by a change in
applicable tax law;
(n) The borrowing of money, or entering into any loan
agreement, deferred purchase agreement, lease or other financing
arrangement, except for trade payables incurred and loans made
pursuant to Section 6.7 hereof;
(o) The incurrence of expenses on behalf of the Partnership
in excess of $10,000 per year, except under extraordinary
circumstances, provided that amounts payable to the Partnership
Accountants for services as contemplated in this Agreement and
amounts payable to counsel to the Partnership with respect to tax
audits or proceedings involving the Partnership shall not be
included in, or subject to, such limitation;
(p) The exercise by the Partnership of any right or option
under the Project Partnership Agreement to transfer the
Partnership's interest in the Project Partnership or to withdraw
from the Project Partnership;
(q) The exercise by the Partnership of any voting or
consent rights pursuant to the Project Partnership Agreement;
(r) The election of the Partnership to be subject to any
modifications of, or revisions to, the Act to the extent any such
successor provisions of the Act would be applicable to the
Partnership only if the Partnership so elects;
(s) Any matter for which a vote or consent required by
another provision of this Agreement; and
(t) Such other matters as the General Partners may submit
in their sole and absolute discretion to the Limited Partners for
a vote or for their consent.
12.4 Call of Meetings and Written Consents. The General
Partners may call a meeting of the Limited Partners for a vote,
or may call for a vote or consent without a meeting. The General
Partners shall call a meeting of the Limited Partners for a vote,
or shall call for a vote or consent without a meeting, within
twenty (20) days after receiving a written request from Limited
Partners holding twenty percent (20%) or more of the Sharing
Ratios for a vote or consent with respect to any matter as to
which any or all of the Limited partners may vote or consent
pursuant to Section 12.3 hereof; provided, however, that the
20<PAGE>
foregoing right of the Limited Partners to request that the
General Partners call a meeting or call for a vote or consent
shall not give the Limited Partners the right or power to compel
the General Partners or the Partnership to take any action with
respect to any matter set forth in Section 12.3 hereof, except
for any action by the Limited Partners pursuant to Section 12.1,
12.3(e) or 14.2 hereof. The General Partners notice of a meeting
shall state the time and place of the meeting, and the general
nature of the business to be transacted; if no meeting is called,
the General Partners' notice shall state the matter or matters as
to which a vote or consent is being sought and the date on which
such votes or consents shall be counted. The date of the meeting,
or the date on which votes or consents shall be counted, shall be
no less than ten (10) nor more than sixty (60) days after the
mailing of the General Partners' notice. The meeting, if any,
shall be held at the Partnership's principal place of business or
at such other location as the General Partners shall state in the
notice. The Partnership shall bear all expenses of the
notification and meeting or vote or consent.
12.5 Manner of Voting. Each Limited Partner shall be
entitled to cast votes (a) at a meeting, in person, by written
proxy, or by a signed writing directing the manner in which the
vote is to be cast, which writing must be received by the General
Partners before the meeting, or (b) without a meeting, by a
signed writing indicating the matter as to which the vote or
consent is effective and, if a vote, whether it is in support of
or opposition to such matter, which writing must be received by
the General Partners at or before the time and date on which the
votes or consents are to be counted. Only the votes or consents
of Limited Partners of record on the date on which the General
Partners send their notice, whether at a meeting or otherwise,
shall be counted. The General Partners shall be entitled to vote
their Limited Partnership Interests, if any, for all matters in
the same fashion as other Limited Partners. If a proposal is
approved by an action of the Limited Partners taken without a
meeting, the written vote or consent shall set forth the action
to be taken and shall be signed by Limited Partners owning, in
the aggregate, not less than the minimum percentage of the
aggregate Sharing Ratios that would be necessary to authorize or
take such action at a meeting at which all the Limited Partners
were present and voted.
12.6 Limitations. Except as otherwise required by law or
provided in this Agreement, no Limited Partner shall have the
power to: (a) withdraw or reduce such Limited Partner's
contribution to the capital of the Partnership except as a result
of the dissolution of the Partnership; (b) cause the dissolution
and termination of the Partnership by court decree or otherwise;
or (c) demand or receive property other than cash in return for
such Limited Partner's Capital Contribution. No specific time
has been agreed upon for the repayment of the Limited Partners'
Capital Contributions.
21<PAGE>
12.7 Compensation and Reimbursement. No salary or other
compensation shall be paid to any Limited Partner.
12.8 Investment Opportunities. No Partner shall be
obligated to present any investment opportunity to the
Partnership, even if the opportunity is of a character that could
be taken by the Partnership if presented to it. Each Partner
shall have the right to take for its own account, or to recommend
to others, any investment opportunity presented to it.
ARTICLE XIII
ASSIGNMENT OF LIMITED PARTNERSHIP INTERESTS
13.1 Restrictions on Transfers. No Limited Partner shall
directly or indirectly, voluntarily, involuntarily or by
operation of law, convey, exchange, assign, mortgage, encumber,
hypothecate, pledge, sell or otherwise transfer (each a
"Transfer") all or any portion of its Limited Partnership
Interest, or enter into any agreement to do so, except in
accordance with the provisions of this Article XIII. Any such
attempted Transfer in violation of the terms of this Article XIII
or of the Financing Agreement shall be void and of no force or
effect.
No Limited Partner may Transfer any portion of its Limited
Partnership Interest (a) if the General Partners shall not have
received the Required Opinion from counsel selected by, or
reasonably acceptable to, the General Partners, or (b) if such
Transfer would result in the Partnership being treated as an
association taxable as a corporation under the Code, or (c) if
such Transfer would cause the Project to cease to be a
"qualifying cogeneration facility" as defined in the Public
Utility Regulatory Policies Act of 1978, or (d) if such Transfer
would cause the Partnership to be considered to be terminated
under the Code unless such Transfer has received the unanimous
consent of the Partners, or (e) if such Transfer would constitute
a violation of or default under the Financing Agreement, or (f)
if, as a result of such Transfer, there would be more than ten
(10) holders of beneficial interests in the Partnership other
than NCP Syracuse, or (g) if such Transfer is to a "Prohibited
Transferee" (as that term is defined in the project Partnership
Agreement), unless such transfer is consented to in accordance
with the provisions of the Project Partnership Agreement. For
purposes of clause (f) above, no Partner or Affiliate shall make
any Transfer which would have the effect of causing a violation
of clause (f) above if there were three (3) MetLife Parties
holding interests in the Partnership.
13.2 Rights of Assignee. An assignee of a Limited
Partner's Limited Partnership Interest or a portion thereof (an
"Assignee") who does not become a Substitute Limited Partner in
accordance with the provisions of Section 13.3 hereof shall be
subject to all of the restrictions upon a Limited Partner
provided in this Agreement, but such Assignee shall not have the
right to vote on any of the matters on which a Limited Partner
22<PAGE>
would be entitled to vote and shall not have any other rights of
a Partner other than the right to the Assignee's share of
Profits, Losses and Distributions. If the General Partners
receive a notice of Transfer pursuant to Section 13.3 hereof, and
if such Transfer is effected in compliance with this Article
XIII, the Assignee shall become entitled to receive the
transferring Limited Partner's share of Distributions and
allocations with respect to the Limited Partnership Interest so
transferred and shall succeed to the transferring Limited
Partner's Capital Account with respect to the Limited Partnership
Interest so transferred as of the end of the day on which the
General Partners receive such notice; provided, however, that an
Assignee shall become a Substitute Limited Partner only upon the
satisfaction of the conditions for substitution set forth in
Section 13.3 hereof.
13.3 Substitution of Assignee. An Assignee of all or any
part of a Limited Partner's Limited Partnership Interest shall
become a Substitute Limited Partner only if each of the following
conditions are met:
(a) Each General Partner consents thereto, which consent
shall be in the sole and absolute discretion of each General
Partner; provided that the provisions of this Section 13.3(a)
shall not apply with respect to any portion of a Limited
Partnership Interest of a MetLife Party;
(b) If Syracuse Investment is the assigning Limited Partner
and such Transfer is with respect to all or a portion of the
remaining five (5) percentage points or less of Syracuse
Investment's Sharing Ratio at any time (in its capacity as a
Limited Partner), MetLife (if it is a Limited Partner at the time
of Transfer or, if it is not such a Limited Partner, the
successor in interest to MetLife with the largest Sharing Ratio)
shall consent thereto, which consent shall be in the sole and
absolute discretion of such Person;
(c) The Assignee shall consent in writing, in a form
reasonably satisfactory to the General Partners, to be bound by
the terms and conditions of this Agreement with respect to the
Limited Partnership Interest transferred;
(d) The assigning Limited Partner or Assignee shall pay any
expenses of the Partnership in connection with the substitution
of such Assignee as a Limited Partner;
(e) The assigning Limited Partner or Assignee shall submit
an instrument of assignment, duly executed by the assigning
Limited Partner, in a form reasonably satisfactory to the General
Partners, which instrument of assignment shall specify the
portion of the Limited Partnership Interest assigned to such
Assignee and shall set forth the transferring Limited Partner's
intention that the Assignee become a Substitute Limited Partner;
and
23<PAGE>
(f) All requirements of the Act, including any amendment of
the Certificate required by the Act, shall have been completed by
the Assignee, the transferring Limited Partner and the
Partnership, as the case may be.
The admission of a Substitute Limited Partner shall be
effective as of the close of the day on which all of the
conditions specified in this Section 13.3 have been satisfied.
13.4 Confirmation of Transfer of Limited Partnership
Interest. If a Limited Partner Transfers all or any part of its
Limited Partnership Interest as permitted by this Article XIII,
such Limited Partner shall provide written confirmation of such
Transfer to the General Partners, signed by both the transferring
Limited Partner and its transferee, within thirty (30) days after
the Transfer or, if earlier, by the fifteenth (15) day of the
month following the fiscal year of the Partnership in which the
Transfer occurred. This written confirmation shall include (a)
the names and addresses of the transferring Limited Partner and
the transferee, (b) the taxpayer identification numbers of the
transferring Limited Partner and of the transferee, (c) the date
of the Transfer, and (d) the terms and conditions of the Transfer
to the extent such information is necessary to (if applicable)
make the special basis adjustments pursuant to Section 8.5
hereof.
13.5 Indemnification. Each Limited Partner hereby agrees
that it shall indemnify and hold harmless the General Partners
and the Partnership from and against any and all losses, costs,
liabilities or economic disadvantages which result, directly or
indirectly, from any attempt by such Limited Partner to make a
Transfer which does not comply with the requirements of this
Article XIII.
13.6 Bankruptcy of a Limited Partner. In the event of the
bankruptcy of a Limited Partner, the trustee, conservator,
administrator, receiver or other successor in interest of such
Limited Partner shall have all the rights of such Limited Partner
for the purpose of settling or managing its affairs and such
power as such Limited Partner possessed to assign all or a part
of its Limited Partnership Interest and to join with the Assignee
in satisfying the conditions precedent to such Assignee becoming
a Substitute Limited Partner. The bankruptcy of a Limited Partner
shall not dissolve the Partnership. A Limited Partner's
successor in interest shall be liable for all obligations of the
Limited Partner. In no event, however, shall such successor in
interest become a Substitute Limited Partner, except in
accordance with Section 13.3 hereof.
13.7 Further Assignments. An Assignee of all or any
portion of a Limited Partner's Limited Partnership Interest
pursuant to the terms hereof, who desires to make a further
assignment of such interest, shall be subject to all of the
provisions of this Article XIII to the same extent and in the
24<PAGE>
same manner as the Limited Partner making the initial Transfer of
its Limited Partnership Interest.
13.8 Additional Limited Partner. Except as provided in
this Agreement, no additional limited partner shall be admitted
to the Partnership without the approval of the General Partners
and a Majority in Interest of the Limited Partners.
ARTICLE XIV
REMOVAL AND REPLACEMENT OF A GENERAL PARTNER
14.1 Removal for Good Cause Only. A General Partner may be
removed as general partner of the Partnership only for "Good
Cause" upon the affirmative vote or consent of a Majority in
Interest of the Limited Partners required under Section 14.2
hereof or for "Insolvency" as defined in Section 15.1 hereof. For
purposes of this Section, the term "Good Cause" shall mean either
(a) willful and continued neglect by such General Partner of its
duties under this Agreement, which neglect has a material adverse
effect on the Partnership, or (b) a willful breach by such
General Partner of its fiduciary duties to the Partnership or the
Limited Partners including without limitation
misappropriation of Partnership assets, fraud, dishonesty or bad
faith exercise of management authority; provided, however, that
with respect to any neglect or breach under clause (a) or (b)
above, the effects of such neglect or breach has not been cured
by such General Partner within forty-five (45) days after receipt
of written notice from a Majority in Interest of the Limited
Partners specifying such neglect or breach (the "Removal Notice")
or, if the effects of such neglect or breach cannot be cured
within such forty-five (45) day period, the failure by such
General Partner to take good faith reasonable efforts within such
period to commence a cure of the effects of such neglect or
breach and to diligently continue such efforts until such effects
are fully cured. In the event such General Partner disputes any
attempted removal pursuant to the provisions of this Section
14.1, such dispute shall be submitted to binding arbitration in
accordance with the provisions of Section 16.5 hereof.
For purposes of this Section 14.1 and Sections 14.2 and 14.3
hereof, NCP Syracuse and Syracuse Investment shall be treated as
a single General Partner, such that the removal of either of them
for Good Cause automatically, without further action, shall
result in the removal of both of them for Good Cause.
14.2 Vote. Subject to the provisions of Section 14.1
hereof, the vote of a Majority in Interest of the Limited
Partners, without the necessity for concurrence by any General
Partner, may remove a General Partner for "Good Cause" as a
General Partner of the Partnership. The Removal Notice delivered
to the General Partner shall specify, in addition to the actions
deemed to constitute "Good Cause" for removal, the effective date
for removal (the "Removal Date"), which effective date may not be
prior to the date upon which a Person has agreed to become a
Substitute General Partner.
25<PAGE>
14.3 Dispute Regarding Removal.
(a) In the event that a Majority in Interest of the Limited
Partners cause delivery of a Removal Notice to remove a General
Partner for "Good Cause" pursuant to Section 14.1 hereof, the
General Partner to be removed shall have a period of thirty (30)
days to provide notice to all of the Limited Partners of its
intention to dispute the removal and to submit such removal to
arbitration. If such General Partner disputes the removal and
submits such removal to arbitration, the Removal Date shall be
tolled pending the outcome of arbitration. If, upon arbitration,
the removal is overturned, such General Partner shall remain as a
General Partner of the Partnership.
(b) If the General Partner to be removed does not dispute
removal or, upon submitting the removal to arbitration, such
removal is upheld, such General Partner shall cease to be a
General Partner effective on the Removal Date (as may be extended
by arbitration), provided, however, that a Majority in Interest
of the Limited Partners may comply with the provisions of Section
14.5 and 14.6 hereof to select a Substitute General Partner, and
the Removal Date shall be tolled pending the selection of a
Substitute General Partner and acceptance by such Substitute
General Partner. The Partnership shall cause an accounting to be
prepared at the expense of the Partnership from the end of the
preceding fiscal year to the Removal Date. After receiving the
Removal Notice, and prior to the Removal Date, such General
Partner shall not transact any business on behalf of the
Partnership other than in the ordinary course of business unless
pursuant to a contract entered into and binding upon the
Partnership prior to the date of receipt of the Removal Notice by
such General Partner.
14.4 Voluntary Withdrawal. A General Partner may
voluntarily withdraw from the Partnership as a General Partner
without the prior written consent of all of the Partners. Any
such withdrawal with such Consent shall be effective ninety (90)
days after written notice (the "Withdrawal Notice") to the
Partners (the "Withdrawal Date"), provided that such effective
date may not be prior to the date upon which a Person has agreed
to become a Substitute General Partner. Notwithstanding the
foregoing, Syracuse Investment may voluntarily withdraw as a
General Partner and convert its interest as a General Partner
into a Limited Partnership Interest effective ninety (90) days
after giving a Withdrawal Notice to the Partners, provided that
counsel to the Partnership renders an opinion (including
reasonable assumptions made therein) reasonably satisfactory to a
Majority in Interest of the Limited Partners that such withdrawal
will not affect the tax classification of the Partnership.
14.5 Selection of a Substitute General Partner. Subject to
Section 15.2 hereof, after either voting to remove a General
Partner, as provided in Section 14.2 hereof, or receipt of the
Withdrawal Notice from NCP Syracuse as provided for in the first
26<PAGE>
sentence of Section 14.4 hereof, a Majority in Interest of the
Limited Partners may select a Substitute General Partner.
14.6 Substitution.
(a) An assignee of all or a portion of a General Partner's
interest in the Partnership shall not become a Substitute General
Partner without the approval of a Majority in Interest of the
Limited Partners, which consent may be withheld in their sole
discretion, and compliance with the provisions of Section 14.6(b)
hereof.
(b) A Person proposed to become a Substitute General
Partner shall assume the rights, powers and responsibilities of a
General Partner as provided in this Agreement upon the effective
date of removal or withdrawal of a General Partner pursuant to
Section 14.5 hereof, or upon the approval of such Person as a
Substitute General Partner by a Majority in Interest of Limited
Partners pursuant to Section 14.6(a) hereof, provided that such
Person delivers to the Partners a written agreement (the
"Substitute General Partner Agreement") executed by such Person
within ten (10) days after such Person's selection as a proposed
Substitute General Partner, which Substitute General Partner
Agreement shall set forth the following agreements by such
Person: (i) to be bound by this Agreement; (ii) to assume the
rights, powers and responsibilities of a General Partner pursuant
to the terms of this Agreement accruing after such selection,
(iii) to amend this Agreement to reflect the removal or
withdrawal of the removed or withdrawn General Partner and the
appointment of such Substitute General Partner, (iv) to perform
the duties and the responsibilities of a General Partner (which
shall automatically relieve the removed or withdrawn General
Partner of all obligations arising after the Removal Date or
Withdrawal Date pursuant to the terms of this Agreement, except
as specifically provided in this Agreement); and (v) to record,
file and publish any certificates or documents as may be
appropriate to evidence or effect such removal or withdrawal,
substitution and release, including a Certificate of Amendment.
Upon effective substitution of a new general partner, this
Agreement shall remain in effect and the business of the
Partnership shall be continued.
14.7 Indemnification. Upon the selection of a Substitute
General Partner, the Partnership shall indemnify and defend and
hold the removed General Partner harmless from and against all
liabilities of the Partnership arising after the Removal Date or
Withdrawal Date, except to the extent arising primarily from acts
or events occurring prior thereto, to the extent caused by the
events giving rise to the removal or any prohibited withdrawal,
or to the extent inconsistent with the General Partner's
exculpation or indemnification provided in Sections 11.4 and 11.5
hereof. The Substitute General Partner shall provide or cause
the Partnership to provide satisfactory evidence of such
indemnification to the removed or withdrawn General Partner.
27<PAGE>
14.8 Conversion of a General Partner's Interest.
(a) Within thirty (30) days after the Removal Date, the
interest of the removed General Partner in the Partnership as of
the Removal Date shall be converted into an interest as an
Assignee of a Limited Partner who does not become a Substitute
Limited Partner pursuant to Section 13.2 hereof equal to the
interest so converted, and the removed General Partner shall
become such an Assignee provided that:
(i) Such Assignee shall become a Substitute Limited Partner
when, if at all, the cause of the removal of such Assignee as a
General Partner has been fully cured; and
(ii) If such Assignee does not become a Substitute Limited
Partner pursuant to Section 14(a)(i) hereof, such Assignee
nevertheless shall be considered to be a Limited Partner for
purposes of Section 16.1(c) hereof. If such Assignee ("First
Assignee") further assigns all or a portion of its interest in
the Partnership pursuant to the provisions of Section 13.1 hereof
to an Assignee ("Second Assignee") who is not an Affiliate of the
First Assignee, the Second Assignee shall become a Substitute
Limited Partner if the conditions set forth in Section 13.3 are
met.
(b) Within thirty (30) days after the Withdrawal Date, the
interest of the withdrawn General Partner in the Partnership as
of the Withdrawal Date shall be converted into an interest as a
Limited Partner equal to the interest so converted and the
withdrawn General Partner shall become a Substitute Limited
Partner of the Partnership.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND
TERMINATION OF THE PARTNERSHIP
15.1 Events Of Dissolution. The Partnership shall dissolve
and commence winding up and liquidating upon the first to occur
of any of the following:
(a) The date specified in Section 5.1 hereof;
(b) The consent of each General Partner and a Majority in
Interest of the Limited Partners to dissolve;
(c) The sale or other distribution of all or substantially
all of the property of the Partnership and the collection and
distribution of the proceeds thereof;
(d) The continued conduct of the business of the
Partnership becoming illegal;
(e) The "Insolvency" of a General Partner, as defined
below, unless the Partnership is continued pursuant to Section
15.2 hereof;
28<PAGE>
(f) An event of withdrawal of a General Partner pursuant to
Section 17-801(3) of the Act, unless the Partnership is continued
pursuant to Section 15.2 hereof; or
(g) The entry of a judicial decree of dissolution.
For purposes of this Agreement, "Insolvency" of a General Partner
shall mean: (a) an adjudication that such General Partner is
bankrupt or insolvent, or the entry of an order for relief
against it under Chapter 7 of the Federal Bankruptcy Code, 11
U.S.C. 101-1330, as amended (the "Bankruptcy Code") or any other
applicable bankruptcy or insolvency statute or law; (b) the
making by it of an assignment for the benefit of creditors; (c)
the filing by it of a voluntary petition in bankruptcy or a
petition for relief under any Section of the Bankruptcy Code or
any other applicable bankruptcy or insolvency statute or law; (d)
the filing by it of a petition or answer seeking for it any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute,
law or regulation; (e) the filing by it of any answer or other
pleading admitting or failing to contest the material allegations
of any such petition; (f) its seeking, consenting to or
acquiescence in the appointment of a trustee, conservator,
receiver or liquidator for it or for all or any substantial part
of its assets; (g) the commencement of any proceeding against
such General Partner seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation (unless such
proceeding is dismissed within ninety (90) days from the date of
commencement thereof); or (h) the appointment without its consent
or acquiescence of a trustee, conservator, receiver or liquidator
for it or for all or any substantial part of its assets (unless
such appointment is vacated or stayed no later than ninety (90)
days from its effective date; provided, however, that if the
appointment is stayed, such appointment shall be vacated within
ninety (90) days after the expiration of any such stay); and
provided, however, that if such General Partner continues to
operate its business as a debtor in possession, then an event of
Insolvency shall not be deemed to have occurred, and such General
Partner shall remain as a General Partner of the Partnership.
15.2 Right to Continue the Partnership's Business. In the
event of the Insolvency or withdrawal of a General Partner
pursuant to Section 15.1(e) or 15.1(f) hereof, respectively, the
Partnership shall dissolve as provided in Section 15.1 hereof
unless:
(a) If there is at least one other General Partner, that
General Partner elects to continue the business of the
Partnership; or
(b) If there is no other General Partner, or there is a
General Partner but such General Partner does not elect to
continue the business of the Partnership, then, within ninety
(90) days after such Insolvency or withdrawal, all Partners agree
29<PAGE>
in writing to continue the business of the Partnership and to the
appointment, effective as of the date of such Insolvency or
withdrawal, of a successor General Partner.
15.3 Liquidation.
(a) Except as otherwise set forth in Section 15.2 hereof,
upon dissolution of the Partnership, the General Partners shall
take (or cause to be taken) a full accounting of the
Partnership's assets and liabilities as of the date of such
dissolution and, subject to the rights of the General Partners or
their successors to continue the business of the Partnership for
the purpose of winding up its affairs, the General Partners shall
proceed with reasonable promptness to liquidate the Partnership's
assets (including, without limitation, by way of the sale,
assignment, exchange, lease, sublease or other disposition of any
or all of the assets of the Partnership) and to terminate its
business; provided, however, that the Partnership's interest in
the Project Partnership may, with the consent of a Majority in
Interest of the Limited Partners, be distributed in kind to the
extent that the liquidation thereof is not necessary to satisfy
the requirements of clauses (i), (ii) and (iii) below. In the
event that there is no remaining General Partner, the winding up
of the affairs of the Partnership and the liquidation of its
assets shall be conducted by such Person as may be selected by a
Majority in Interest of the Limited Partners, which Person is
hereby authorized to do any and all acts and things authorized by
law for these purposes and is entitled to the compensation
approved by a court of competent jurisdiction.
The cash proceeds from such liquidation shall be applied in
the following order:
(i) First, to the payment of all taxes, debts and other
obligations and liabilities of the Partnership, and all necessary
expenses of liquidation thereof; provided, however, that all
debts, obligations and other liabilities of the Partnership as to
which personal liability exists with respect to any Partner
shall, to the extent permitted by applicable law, be satisfied,
or a reserve established therefor, prior to the satisfaction of
any debt, obligation or other liability of the Partnership as to
which no such personal liability exists;
(ii) Second, to the establishing of reserves deemed
reasonably necessary to satisfy contingent liabilities or
obligations of the Partnership;
(iii) Third, to the reduction, prorata, among all such then
outstanding loans, of first principal and then, to the extent
available, interest on all loans made by the Partners to the
Partnership; and
(iv) Fourth, to the Partners, in accordance with the
relative amounts of the positive balances (if any) in their
30<PAGE>
respective Capital Accounts, after giving effect to all
contributions, distributions and allocations for all periods.
(b) Except as provided above in the event there is no
remaining General Partner, the General Partners shall administer
the liquidation of the Partnership and the termination of its
business but shall receive no compensation. The General Partners
shall be allowed a reasonable time for the orderly liquidation of
the Partnership's assets and the discharge of liabilities to
creditors so as to minimize losses resulting from the liquidation
of the Partnership's assets.
15.4 Termination. Upon compliance with the foregoing, the
General Partners or their successors in interest, as the case may
be, shall file or cause to be filed a Certificate of Cancellation
of the Partnership and the Partnership thereupon shall be
terminated.
15.5 Compliance With Timing Requirements of Regulations.
In the event the Partnership is "liquidated" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall
be made pursuant to this Article XV to the Partners who have
positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in
his Capital Account after giving effect to all contributions,
distributions and allocations for all taxable years, including
the year during which such liquidation occurs), such 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. In the discretion of the
General Partners, a prorata portion of the distributions that
would otherwise be made to the Partners and pursuant to this
Article XV may be:
(a) distributed to a trust established for the benefit of
the Partners for the purposes of liquidating Partnership assets,
collecting amounts owed to the Partnership, and paying any
contingent or unforeseen 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 and 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 this Agreement; or
(b) 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 XVI
MISCELLANEOUS PROVISIONS
31<PAGE>
16.1 Amendments.
(a) Except for amendments made in accordance with Section
16.1(b) hereof, this Agreement may be amended only with the
written consent of the General Partners and a Majority in
Interest of the Limited Partners.
(b) In addition to any amendments otherwise authorized
herein, amendments may be made to this Agreement by the General
Partners, acting without the consent of any Limited Partner, to
substitute or admit any additional Limited Partners to the extent
allowed by this Agreement.
(c) Notwithstanding Sections 16.1(a) and 16.1(b) hereof, no
amendment may be made pursuant to this Section 16.1 without the
unanimous written consent of all Partners unless such amendment
(i) is not adverse to the interests of the Limited Partners, (ii)
is consistent with Article XI and Article XII hereof, (iii) does
not affect the method of Distributions set forth in Article VII
hereof, and (iv) does not affect the limited liability of the
Limited Partners contemplated by Section 12.2 hereof.
16.2 Notices. Any notice, payment, demand or communication
required or permitted to be given by a Partner pursuant to any
provision of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered
personally to the party to whom the same is directed or five (5)
business days after deposit in the United States mail, registered
or certified, postage and charges prepaid, addressed to the other
Partner, as applicable, at the applicable address specified on
Exhibit A attached hereto. A Partner may change his or her
address for purposes of notice by a writing sent in accordance
with this Section 16.2 to the General Partners.
16.3 Power of Attorney. Each Limited Partner hereby makes,
constitutes and appoints each General Partner, with full power of
substitution, such Limited Partner's true and lawful attorney,
for it and in its name, place, stead and benefit, to sign,
execute, swear, file and record the Certificate, and, subject to
any applicable consent requirements contained in this Agreement,
to sign, execute, certify, swear, acknowledge, file and record
amendments to or cancellation and termination of the Certificate
and fictitious business name statements. The foregoing grant of
authority is hereby declared to be irrevocable and a power
coupled with an interest and shall survive the bankruptcy or
dissolution of any Person hereby giving such power and the
transfer or assignment of the whole or any portion of the Limited
Partnership Interest of such Person; provided, however, that in
the event of a Transfer by such Limited Partner of all of such
Limited Partner's Limited Partnership Interest, the foregoing
power of attorney of the transferor Limited Partner shall survive
such transfer until such time, if any, as the transferee shall
have been duly admitted to the Partnership as a Substitute
Limited Partner.
32<PAGE>
Each Limited Partner agrees to execute and deliver all
documents, instruments and conveyances which may be required of
the Partnership by law in Delaware, or any other applicable
jurisdiction, or by Federal or state securities laws or other
applicable laws, to the extent that the signature of such Limited
Partner is required thereon.
16.4 Severability. If any provision of this Agreement
shall be invalid, illegal or unenforceable in any applicable
jurisdiction, the validity, legality and enforceability of the
remaining provisions, or of such provision in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
16.5 Application of Delaware Law. This Agreement, and the
application or interpretation hereof, shall be governed,
construed and enforced in accordance with the laws of the State
of Delaware.
16.6 Arbitration. In the event of a dispute with respect to
any issue under this Agreement, the matter involved in the
disagreement shall, upon demand of any party hereto involved in
such dispute (herein a "disputing party") be submitted to
arbitration in the manner hereinafter provided in these
procedures (the "Procedures"). Submission to arbitration, as
hereinafter provided, shall be a condition precedent to any right
to institute proceedings at law. Notwithstanding the foregoing,
arbitration pursuant to this Section 16.6 shall not apply to the
mere act (or failure to act) by a Partner in the giving or
withholding of consent, approval or disapproval with respect to
any matter pursuant to this Agreement, except as to the issue of
reasonableness, where such Partner's consent, approval or
disapproval is subject to a reasonableness standard.
The Procedures are as follows:
(a) Submission of Dispute. The disputing parties will make
every reasonable effort to resolve disputes, claims and
controversies prior to any such dispute, claim or controversy
reaching a state that requires arbitration. However, should any
controversy arise between the disputing parties as to which the
disputing parties are unable to effect a satisfactory resolution
and which, under the terms and provisions of this Agreement, may
be submitted to arbitration, such controversy shall be submitted
to arbitration in Los Angeles County, California in accordance
with the terms and provisions of these Procedures and in
accordance with the rules then prevailing of the American
Arbitration Association (or any successor organization) to the
extent that such rules are not inconsistent with the provisions
of these Procedures.
(b) Selection of Arbitrator. A disputing party desiring to
submit to arbitration any such controversy shall furnish its
demand for arbitration in writing to each other disputing party,
which demand shall contain a brief statement of the matter in
33<PAGE>
controversy, as well as a list containing the names of three (3)
suggested arbitrators from which list, or from other sources, the
disputing parties shall choose one (1) mutually acceptable
arbitrator. If the disputing parties are unable to agree upon the
identity of a single arbitrator within ten (10) days from the
receipt of such demand, then any disputing party, on behalf of
and upon notice to each other disputing party, may request
appointment of a single arbitrator by the American Arbitration
Association (or any organization successor thereto) in accordance
with its rules then prevailing. If the American Arbitration
Association (or such organization successor thereto) should fail
to appoint the arbitrator within fifteen (15) days after such
request is made, then any disputing party may apply, upon notice
to the other disputing party, to the court as provided in
California Code of Civil Procedure Section 1281.6 or any
successor provision for the appointment of such arbitrator. The
arbitrator chosen or appointed pursuant to these Procedures shall
not be a past or present officer, director or employee of any
party to the dispute or any of its affiliates.
(c) Procedural Rules.
(i) Each disputing party shall furnish the arbitrator and
each other disputing party with a written statement of matters it
deems to be in controversy for purposes of the arbitration
procedures. Such statement shall also include all arguments,
contentions and authorities which it contends substantiate its
position. Each disputing party shall also submit a proposed award
to the arbitrator and each other disputing party.
(ii) Such arbitrator shall render his decision as soon as
possible but not later than thirty (30) days after conclusion of
hearings before such arbitrator. The decision shall be in
writing and counterpart copies thereof shall be delivered to each
of the disputing parties. The decision shall adopt, unchanged
and in its entirety, the award proposed by one of the disputing
parties.
(d) Atorney's Fees. The prevailing party in the
arbitration shall be entitled to recover reasonable attorneys'
fees and other costs incurred in the arbitration, in addition to
any other relief to which it may be entitled. The non-prevailing
party shall also bear the expense of the arbitrator and all other
expenses of the arbitration. The arbitrator shall determine
which is the "prevailing party" whether or not the dispute
proceeds to a final award.
16.7 Confidential Information. Each of the Partners shall
treat and maintain as confidential any and all confidential
and/or proprietary information, including without limitation
financial information, technical information and know-how and
development plans and strategies, received from or pertaining to
the other Partner or any Affiliate thereof, the Partnership or
the Project; provided, however, that the foregoing obligation
shall not apply to information which (a) was or becomes known or
34<PAGE>
generally available to the public through no breach of this
Agreement by any Partner, (b) was or is disclosed to the public
by a third party having the right to do so, or (c) is required to
be disclosed by law or legal process. A Partner may disclose
confidential information to its advisors to the extent reasonably
necessary for business purposes or to a proposed transferee of
all or a portion of such Partner"s interest in the Partnership to
the extent reasonably necessary for the proposed transferee to
evaluate the proposed acquisition of the Partnership interest,
provided that the Person to whom such confidential information is
proposed to be disclosed enters into a confidentiality agreement
with such Partner (with the Partnership need as a third-party
beneficiary of such confidentiality agreement) obligating such
Person to confidentiality in the same manner as such Person
would be obligated under this Section 16.7 if such Person were a
Partner.
16.8 Headings. Headings at the beginning of each Article
and Section of this Agreement are solely for the convenience of
the Partners and are not a part of this Agreement.
16.9 Entire Agreement. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof.
16.10 Gender and Number. With respect to words used in
this Agreement, the singular form shall include the plural form,
the masculine gender shall include the feminine or neuter gender,
and vice versa, as the context requires.
16.11 Successors. This Agreement shall be binding on and
inure to the benefit of the respective successors, assigns and
personal representatives of the parties hereto, except to the
extent of any contrary provision of this Agreement.
16.12 Consents and Agreements. Any and all consents and
agreements provided for or permitted by this Agreement shall be
in writing and a signed copy thereof shall be filed and kept with
the books of the Partnership.
16.13 Attorneys' Fees. If any legal action or arbitration
or other proceeding is brought by any party hereto for the
enforcement of this Agreement or as a result of a breach, default
or misrepresentation in connection with any of the provisions of
this Agreement', any successful or prevailing party shall be
entitled to recover from the party that does not prevail
reasonable attorneys" fees and other costs incurred by the
prevailing party in such action or proceeding, in addition to any
other relief to which that party may be entitled.
16.14 No Injunction. The parties hereto agree and
acknowledge that in the event of a breach by any party hereto of
any obligation hereunder (other than the obligations set forth in
Section 16.7 hereof), the damage caused any other party shall not
be irreparable and the remedy of damages shall not be so
insufficient as to give rise to a right of injunctive or other
35<PAGE>
equitable relief, and the parties hereto acknowledge that their
rights and remedies in the event of any such breach shall be
limited to the right, if any, to recover damages in an action at
law.
16.15 Counterparts. This Agreement may be executed in
counterparts by each of the Partners, all of which taken together
shall be deemed one original.
16.16 Covenant to Sign Documents. Each Partner shall
execute, with acknowledgment or affidavit if required, all
documents and writings reasonably necessary or expedient in the
creation of the Partnership and the achievement of its purpose
and the implementation of the provisions of this Agreement. Each
Partner hereby represents and warrants that the individual
signing this Agreement on its behalf is duly authorized to
execute and deliver this Agreement on behalf of such Partner.
16.17 Time of Essence. All times and dates in this
Agreement shall be of the essence.
16.18 Force Majeure. The respective obligations of each
Partner set forth in this Agreement, other than the obligation to
pay money, shall be suspended while it is prevented from
complying therewith, in whole or in part, by weather conditions,
labor accidents or incidents, rules and regulations of any
Federal, state, or other governmental agency, delays in
transportation, inability to obtain necessary materials in the
open market, or other cause of the same or other character beyond
the reasonable control of such Partner. Any Partner asserting a
force majeure condition shall immediately notify the other
Partners in writing of the occurrence of such condition, and the
estimated duration thereof. In addition, the Partner affected by
force majeure shall immediately notify the other partners upon
cessation thereof. Each Partner shall cooperate so as to remedy
any force majeure condition as expeditiously as reasonably
possible.
16.19 No Partition. No Partner nor any legal
representative, successor, heir or assignee of any Partner shall
have the right to partition the Partnership Property or any part
thereof or interest therein, or to file a complaint or institute
any proceeding at law or in equity to partition the Partnership
Property or any part thereof or interest therein. Each Partner,
for itself and its legal representatives, heirs, successors and
assigns, hereby waives any such rights. The Partners intend that
during the term of this Agreement, the rights of the Partners and
their successors in interest, as among themselves, shall be
governed solely by the terms of this Agreement and, to the extent
consistent with this Agreement, by the Act.
16.20 Not for Benefit of Creditors. The provisions of this
Agreement are intended only for the regulation of relations among
Partners, putative Partners and the Partnership; provided that
NCO is the intended beneficiary of, and shall have the power to
36<PAGE>
enforce, the provision for the reimbursement of NCO set forth in
Section 6.1(c) hereof. Subject to such exception, this Agreement
is not intended for the benefit of non-Partner creditors and does
not grant any rights to non-Partner creditors.
16.21 Withholding. The General Partners shall comply with
any income tax withholding obligations that may be imposed from
time to time by the Code with respect to distributions or income
allocations to Partners.
16.22 Representations of Limited Partners. Each Limited
Partner represents to the Partnership and the General Partners
that: (a) it is acquiring its Limited Partnership Interest for
its own account for investment and not with a view to or for sale
in connection with any distribution of such Limited Partnership
Interest (but subject, nevertheless, to any requirement of law
that the disposition of its property remain within its control at
all times); (b) it understands that the interests in the
Partnership have not been registered under the Securities Act or
the applicable securities laws of Delaware or any other state,
and must be held indefinitely unless the interests are so
registered or an exemption from such registration is available;
(c) it has such knowledge and experience in business matters that
it is capable of evaluating the risks and merits of its
investment in the Partnership; and (d) it has been afforded
adequate opportunity to question the management of NCP Syracuse
and its Affiliates, the Partnership and the Project Partnership
concerning the Partnership and the Project Partnership and the
business conducted or to be conducted by each.
16.23 Waiver. No waiver of any provision of this Agreement
shall be deemed effective unless contained in awaiting signed by
the party against whom the waiver is sought to be enforced. No
failure or delay by any party in exercising any right, power or
remedy under this Agreement shall operate as a waiver of any such
right, power or remedy, and no waiver of any breach or failure to
perform shall be deemed a waiver of any subsequent breach or
failure to perform or of any other right arising under this
Agreement.
16.24 Construction. Every covenant, term and provision of
this Agreement shall be construed simply according to its fair
meaning and not strictly for or against any Partner.
16.25 Incorporation by Reference. Every exhibit, schedule
and other appendix attached to this Agreement and referred to
herein is hereby incorporated in this Agreement by reference.
16.26 Further Action. Each Partner, upon the reasonable
request of a General Partner, agrees to execute, acknowledge and
deliver any documents which may be reasonably necessary,
appropriate or desirable to carry out the provisions of this
Agreement.
37<PAGE>
16.27 Variation of Pronouns. All pronouns and any
variations thereof shall be deemed to refer to masculine,
feminine or neuter, singular or plural, as the identity of the
Person or Persons may require.
38<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the Effective Time.
"GENERAL PARTNERS"
NCP SYRACUSE, INC.,
a Delaware corporation
By:__________________________________
SYRACUSE INVESTMENT, INC.,
a Delaware corporation
By:__________________________________
"LIMITED PARTNERS"
STEWART & STEVENSON SERVICES, INC.,
a Texas corporation,
By:__________________________________
SYRACUSE INVESTMENT, INC.,
a Delaware corporation
By:__________________________________
METLIFE CAPITAL CORPORATION,
a Delaware corporation
By:__________________________________
39<PAGE>
EXHIBIT A
FIRST
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SYRACUSE ORANGE PARTNERS. L.P.
Contributions by Partners
Pursuant to Section 6.1
Name Cash Contribution
General Partners
NCP Syracuse, Inc. $ 1,797,000
1100 Town & Country Road, Suite 800
Orange, California 92668
Syracuse Investment, Inc. $ 180,000
1100 Town & Country Road, Suite 800
Orange, California 92668
Limited Partners
MetLife Capital Corporation $12,500,000
10900 NE 8th Street, Suite 1300
Bellevue, Washington 98004
Stewart & Stevenson Services, Inc. $ 3,000,000
2707 North Coop West
Houston, Texas 77008
Syracuse Investment, Inc. $12,190,000
1100 Town & Country Road, Suite 800
Orange, California 92668
TOTAL: $29,667,000
40<PAGE>
EXHIBIT B
FIRST
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SYRACUSE ORANGE PARTNERS, L.P.
Definitions
Certain capitalized terms used in the Agreement have the
following meanings:
Act shall mean the Delaware Revised Uniform, Limited
Partnership Act, as amended from time to time, subject to the
provisions of Section 12.3(r) hereof.
Adjusted Capital Account Deficit shall mean, with respect to
any Limited Partner, the deficit balance, if any, in such Limited
Partner's Capital Account as of the end of the relevant fiscal
year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such
Limited Partner is obligated to restore pursuant to any provision
of this Agreement or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in
Sections 1.704-l(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Section
1.704l(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
Affiliate shall mean a Person (including a Subsidiary)
which directly or indirectly controls, or is controlled by, or is
under common control with, another Partner, including any limited
partnership of which such other Partner or any Subsidiary or
Affiliate of such other Partner is the general partner.
Agent shall have the meaning set forth in the Financing
Agreement.
Agreement or Partnership Agreement shall mean this First
Amended and Restated Limited Partnership Agreement, as amended
from time to time. Words such as "herein," "hereinafter,"
"hereof," "hereto," and "hereunder" refer to this Agreement as a
whole, unless the context otherwise requires.
Assignee shall mean a person who has acquired from a Partner
a beneficial interest in Profits, Losses, other allocations and
41<PAGE>
Distributions, but who is not a Substitute Limited Partner or
Substitute General Partner.
Bankruptcy Code shall have the meaning set forth in Section
15.1 hereof.
Capital Account shall mean, with respect to any Partner, the
Capital Account maintained for such Partner in accordance with
the following provisions:
(i) The Capital Accounts of the Partners who were parties
to the Prior Agreement shall, immediately prior to the Effective
Time, be equal to their Capital Accounts as determined pursuant
to the provisions of the Prior Agreement. Thereafter, the
Capital Accounts of such Partners shall be adjusted in accordance
with the following provisions, and the Capital Accounts of
MetLife and any other Persons who become Partners shall be
determined in accordance with the following provisions.
(ii) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions (including such
Partner's Capital Contributions made pursuant to Section 6.1
hereof), such Partner's distributive share of Profits and any
items in the nature of income or gain which are specially
allocated pursuant to Section 4 or Section 5 of Exhibit C hereof,
and the amount of any Partnership liabilities assumed by such
Partner or which are secured by any Partnership Property
distributed to such Partner.
(iii) To each Partner's Capital Account there shall be
debited the amount of cash and the Gross Asset Value of any
Partnership Property distributed to such Partner pursuant to any
provision of this Agreement, such Partner's distributive share of
Losses and any items in the nature of expenses or losses which
are specially allocated pursuant to Section 4 or Section 5 of
Exhibit C hereof, and the amount of any liabilities of such
Partner assumed by the Partnership or which are secured by any
property contributed by such Partner to the Partnership.
(iv) In the event all or a portion of an interest in the
Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent it relates to the transferred
interest.
(v) In determining the amount of any liability for purposes
of clauses (ii) and (iii) above, there shall be taken into
account Code Section 752(c) and any other applicable provisions
of the Code and Regulations.
The foregoing provisions and the other Provisions of this
Agreement relating to the maintenance of Capital Accounts are
intended to comply with Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such
Regulations. In the event the General Partners shall determine
42<PAGE>
that it is prudent 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 Partners), are computed in order to
comply with such Regulations, the General Partners may, with the
prior written consent of each Partner, which consent shall not be
unreasonably withheld, make such modification, provided that it
is not likely to have a material effect on the amounts
distributable to any Partner pursuant to Article XV hereof upon
the dissolution of the Partnership. The General Partners also
shall, with the prior written consent of each Partner, which
consent shall not be unreasonably withheld, (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
Regulations Section 1.704-l(b)(2)(iv)(g), and (ii) make any
appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to comply with Regulations
Section 1.704-1(b).
Capital Contributions shall mean, with respect to any
Partner, the amount of money and the initial Gross Asset Value of
any property (other than money) contributed to the Partnership
with respect to the interest in the Partnership held by such
Partner. The principal amount of a promissory note which is not
readily traded on an established securities market and which is
contributed to the Partnership by the maker of the note shall not
be included in the Capital Account of any Partner until the
Partnership makes a taxable disposition of the note or until (and
to the extent) principal payments are made on the note, all in
accordance with Regulations Section l.704-l(b)(2)(iv)(d)(2).
Cash Available for Distribution shall mean, at any time
shall mean such cash on hand and in financial institutions as in
the General Partners' reasonable discretion is then available for
distribution to the Partners after (i) all costs and expenses
incurred by or on behalf of the Partnership have been paid or
reimbursed and all current debts and obligations of the
Partnership have been paid or provisions therefor have been made,
(ii) reserves have been set aside by the General Partners (which
reserves shall be determined by the General Partners in their
reasonable discretion), and (iii) adequate provision has been
made for the satisfaction of debt service requirements (if any).
Certificate shall mean the Certificate of Limited
Partnership.
Code shall mean the Internal Revenue Code of 1986, as
amended from time to time (or any corresponding provisions of
succeeding law).
Cogeneration Facility shall have the meaning set forth in
the Recitals to this Agreement.
43<PAGE>
Depreciation shall mean, for each fiscal year or other
period, an amount equal to the depreciation, amortization or
other cost recovery deduction allowable with respect to an asset
for such year or other period, 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 year or other
period, 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 year or other period bears to such beginning adjusted
tax basis; provided, however, that if the federal income tax
depreciation, amortization, or other cost recovery deduction for
such year is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.
Distribution shall mean any distribution by the Partnership
to the Partners, as provided in Section 7.1 hereof.
Effective Time shall mean the moment on December 24, 1992
immediately after the execution of the Investment Agreement by
all parties thereto.
FARALP shall have the meaning set forth in the Recitals to
this Agreement.
Financing Agreement shall mean that certain Financing
Agreement, dated as of April 5, 1991 by and among the Project
Partnership, each of the Banks (as defined in the Financing
Agreement) party thereto, and Algemene Bank Nederland N.V.,
Cayman Islands Branch, as agent for such Banks, related to the
Project, as amended, supplemented or otherwise modified or
replaced and in effect from time to time.
Final Flip Point shall occur on the first day on which the
MetLife Parties have achieved a 15% IRR.
GAAP shall mean generally accepted accounting principles in
effect from time to time in the United States, consistently
applied.
General Partner and General Partners have the meanings set
forth in the introduction to this Agreement.
Good Cause shall have the meaning set forth in Section 14.1
hereof.
Gross Asset Value shall mean, with respect to any asset, the
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 determined by the contributing Partner
and the Partnership;
44<PAGE>
(ii) The Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective gross fair market values,
as determined by all 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 (provided that the Partners agree
that (1) the gross fair market value of each Partnership asset
immediately after the Effective Time is equal to the existing
Gross Asset Value of such asset immediately prior to the
Effective Time, increased, in the case of the Partnership's
interest in the Project Partnership, by the amount of the Capital
Contributions of the Partners pursuant to Section 6.1 hereof, and
(2) accordingly, the Gross Asset Values of Partnership assets
shall not be otherwise adjusted as of the Effective Time by
reason of the admission of MetLife as a Partner); (B) the
distribution by the Partnership to a Partner of more than a de
minimis amount of Partnership Property as consideration for an
interest in the Partnership; and (C) the liquidation of the
Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however that adjustments pursuant
to clauses (A) and (B) above shall be made only if the General
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; and
(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 Regulation Section 1.704-l(b)(2)(iv)(m) and Section 4(g) of
Exhibit C hereof; provided, however, that Gross Asset Values
shall not be adjusted pursuant to this clause (iv) to the extent
the General Partners reasonably determine that an adjustment
pursuant to clause (ii) above is necessary or appropriate in
connection with a transaction that would otherwise result in an
adjustment pursuant to this clause (iv). If the Gross Asset
Value of an asset has been determined or adjusted pursuant to
clause (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.
Insolvency shall have the meaning set forth in Section 15.1
hereof.
Investment Agreement shall have the meaning set forth in the
Recitals to this Agreement.
IRR means, as of any date, the discount rate at which the
present value (discounted on a quarterly basis) as of such date
45<PAGE>
of all distributions to the MetLife Parties pursuant to this
Agreement and all income tax benefits accruing to the MetLife
Parties with respect to allocations to the MetLife Parties
pursuant to Exhibit C hereto is equal to the present value
(discounted on a quarterly basis) as of such date of all Capital
Contributions by MetLife and all applicable income taxes borne by
the MetLife Parties with respect to allocations to the MetLife
Parties pursuant to Exhibit C.
For purposes of the definition of IRR:
(a) Income tax benefits accruing to the MetLife Parties and
income taxes borne by the MetLife Parties with respect to
allocations to the MetLife Parties pursuant to Exhibit C shall be
based on a federal income tax rate of 34% (regardless of what the
actual maximum tax rate is and regardless of the actual federal
income tax rate to which any MetLife Party is subject);
(b) All tax allocations to the MetLife Parties with respect
to a taxable year of the Partnership shall be deemed to occur
ratably on the last day of each calendar quarter (subject to
reasonable estimates by the General Partners of the annual tax
allocations to the MetLife Parties for a particular year);
(c) Distributions to the MetLife Parties during a calendar
quarter shall be deemed to occur on the last day of such calendar
quarter; and
(d) The receipt by any MetLife Party of payment by the
Partnership of interest on and principal of any loans made by
such MetLife Party shall not be taken into account in calculating
the IRR.
IRS means the Internal Revenue Service.
Keep Requirement shall have the meaning set forth in Section
11.3 hereof.
Limited Partner and Limited Partners shall have the meanings
set forth in the introduction to this Agreement. The terms
"Limited Partner" and "Limited Partners" also shall mean, for
purposes of Exhibit C, the maintenance of Capital Accounts, and
the distribution provisions of this Agreement, an Assignee or
Assignees of a Limited Partnership Interest or Limited
Partnership Interests, as the context requires.
Limited Partnership Interest means a Limited Partners right,
title and interest in the Partnership, including without
limitations such Limited Partner's rights and obligations with
respect thereto under this Agreement.
Liquidating Event shall mean (i) a sale, transfer,
conveyance, distribution, exchange, lease, taking or other
disposition of Partnership assets, or related series of such
events, which results in or arises from the dissolution and
46<PAGE>
liquidation of the Partnership, or (ii) any such event occurring
with respect to the Project Partnership.
Majority in Interest of the Limited Partners shall mean the
following:
(a) Except as provided in clause (c) below, all times prior
to the Final Flip Point, those MetLife Parties who hold of record
more than fifty percent (50%) of the aggregate Sharing Ratios of
the MetLife Parties;
(b) At all times on or after the Final Flip Point, those
Limited Partners who hold of record more than fifty percent (50%)
of the aggregate Sharing Ratios of the Limited Partners; and
(c) At all times prior to, on or after the Final Flip Point,
with respect to the references in Section 12.1 of this Agreement
to Sections 3.1(b) and 3.2(b) of the Project Partnership
Agreement (other than a Partner Loan pursuant to such Section
3.2(b) to expand the capacity of the Project in excess of the
capacity set forth in Recital A of this Agreement), those Limited
Partners who hold of record more than fifty percent (50%) of the
aggregate Sharing Ratios of the Limited Partners.
MetLife shall mean MetLife Capital Corporation, a Delaware
corporation.
MetLife Parties shall mean MetLife (so long as it is a
partner) and each of its successors in interest as a Partner (so
long as such successor in interest is a Partner).
NCP Syracuse shall mean NCP Syracuse, Inc., a Delaware
corporation.
Nonrecourse Deductions shall have the meaning given such
term in Section 1.704-2(b)(1) of the Regulations.
Nonrecourse Liability shall have the meaning given to such
term in Section 1.704-2(b)(3) of the Regulations.
Partner shall mean each General Partner, each Limited
Partner and any other Person who becomes a Substitute General
Partner or Limited Partner pursuant to the terms of this
Agreement. The term "Partner" also shall mean, for purposes of
Exhibit C, the maintenance of Capital Accounts, and the
distribution provisions of this Agreement, an Assignee of a
Partner.
Partner Nonrecourse Debt Minimum Gain shall mean an amount,
with respect to each Partner Nonrecourse Debt, equal to the
Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the
Regulations.
47<PAGE>
Partner Nonrecourse Debt shall have the meaning given to
such term in Section 1.704-2(b)(4) of the Regulations.
Partner Nonrecourse Deductions shall have the meaning given
to such term in Sections 1.704-2(i)(1) and 1.7042(i)(2) of the
Regulations.
Partnership shall mean Syracuse Orange Partners, L.P., a
Delaware limited partnership, as such partnership may from time
to time be constituted.
Partnership Accountants shall have the meaning set forth in
Section 9.6 hereof.
Partnership Minimum Gain shall have the meaning given to
such term in Sections 1.704-2(b)(2) and 1.704-2(d) of the
Regulations.
Partnership Property shall mean the Partnership's right,
title and interest as a limited partner of the Project
Partnership and any other property of the Partnership, real,
personal or mixed, whether tangible or intangible.
Person shall mean any natural person, firm, partnership,
trust estate, association, corporation or other entity.
Procedures shall have the meaning set forth in Section 16.6
hereof.
Prior Agreement shall have the meaning set forth in the
Recitals to this Agreement.
Profits and Losses shall mean, for each fiscal year or other
period beginning on or after the Effective Time, an amount equal
to the Partnership's taxable income or loss for such year or
period, determined in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss or deduction
required to be stated separately pursuant to Code Section
703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in
computing Profits or Losses shall be added to such taxable income
or loss;
(ii) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-
1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses shall be subtracted from such taxable income or
loss;
(iii) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (ii) or (iii) of the
48<PAGE>
definition of Gross Asset Value, the amount of such adjustment
shall be taken into account as gain or loss from the disposition
of such asset for purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of
Partnership Property with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation
for such fiscal year or other period, computed in accordance with
the definition of Depreciation; and
(vi) Notwithstanding any other provision of the definition
of Profits and Losses, any items which are specially allocated
pursuant to Section 4 or Section 5 of Exhibit C hereof shall not
be taken into account in computing Profits or Losses.
Prohibited Transferee shall have the meaning set forth in
Section 13.1 hereof.
Project has the meaning set forth in the Recitals to this
Agreement.
Project Partnership shall have the meaning set forth in the
Recitals to this Agreement.
Project Partnership Agreement shall have the meaning forth
in the Recitals to this Agreement.
Regulations shall mean the Income Tax Regulations
promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of
succeeding regulations).
Removal Date shall have the meaning set forth in Section
14.2 hereof.
Removal Notice shall have the meaning set forth in Section
14.1 hereof.
Required Opinion shall mean an opinion of counsel, the form
of which, including reasonable assumptions made therein, shall be
reasonably acceptable to the General Partners, that a specified
Transfer (i) may be effected without registration or
qualification by the Partnership under the Securities Act and any
applicable state securities laws, (ii) will not result in a
termination of the Partnership or the Project Partnership under
the Code, (iii) will not result in the Partnership or the Project
Partnership being treated as an association taxable as a
corporation under the Code, (iv) will not result in the
49<PAGE>
Partnership or the Project Partnership or any Affiliate of a
Partner or a partner of the Project Partnership becoming subject
to regulation under the Public Utility Holding Company Act of
1935 (or the rules and regulations promulgated thereunder) or
becoming otherwise subject to increased regulatory burdens, (v)
will not result in the Project ceasing to be exempt from
regulation as a result of changing its status as a "qualifying
facility" under the Public Utilities Regulatory Policies Act of
1978 (or the rules and regulations promulgated thereunder), (vi)
will not constitute a violation of or default under the Financing
Agreement, (vii) will not result in the transferee being a
"Prohibited Transferee" under the Project Partnership Agreement,
and (viii) such other matters relating to corporate
authorization and the like as are reasonably required by the
General Partners.
Securities Act shall mean the Securities Act of 1933, as
amended.
Security shall have the meaning set forth in Section 2(1) of
the Securities Act.
Sharing Ratio shall mean, with respect to each Partner at
any particular time, the percentage share of Distributions that
such Partner would be entitled to receive pursuant to Section 7.1
hereof if $1.00 were distributed to the Partners pursuant Section
7.1 hereof at such time.
Specially Adjusted Capital Account shall mean, with respect
to each Partner, such Partner's Capital Account as of the end of
the relevant period after crediting to such Capital Account any
amounts which such Partner is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5).
Stewart & Stevenson means Stewart & Stevenson Services,
Inc., a Texas corporation.
Subsidiary shall mean, with respect to a Person, a
corporation in which such Person owns, directly or indirectly,
more than 50% of the Voting Stock.
Substitute General Partner shall mean a Person who has
assumed the rights, powers and responsibilities of a General
Partner pursuant to Article XIV hereof.
Substitute General Partner Agreement shall have the meaning
set forth in Section 14.6 hereof.
Substitute Limited Partner shall mean an Assignee who has
become a Limited Partner pursuant to Article XIII hereof, having
all of the rights of the transferring Limited Partner, including
without limitation, the right to vote on any of the matters on
which a Limited Partner is entitled to vote pursuant to this
Agreement.
50<PAGE>
Syracuse Investment means Syracuse Investment, Inc., a
Delaware corporation.
Tax Matters Partner shall have the meaning set forth in
Section 8.2 hereof.
Transfer shall have the meaning set forth in Section 13.1
hereof.
Voting Stock shall mean securities, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect
the corporate directors (or Persons performing a similar
function).
Withdrawal Date shall have the meaning set forth in Section
14.4 hereof.
Withdrawal Notice shall have the meaning set forth in
Section 14.4 hereof.
51<PAGE>
EXHIBIT C
FIRST
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SYRACUSE ORANGE PARTNERS, L.P.
Allocations of Profits and Losses
1. Allocations Under Prior Agreement. All allocations for
the period commencing with the formation of the Partnership
through the day immediately preceding the date on which the
Effective Time occurs shall be pursuant to the provisions of the
Prior Agreement. All allocations for periods beginning on or
after such date shall be pursuant to the provisions of this
Exhibit C.
2. Profits.
(a) Allocations Not Arising From a Liquidation Event. After
giving effect to the special allocations set forth in Sections 4
and 5 of this Exhibit C, Profits for any fiscal year or other
period other than those arising from a Liquidating Event shall be
allocated to the Partners as follows:
(i) For all periods ending prior to the Final Flip Point,
Profits shall be allocated (A) 8.09% to Stewart & Stevenson, and
(B) 91.91% among the MetLife Parties, Syracuse Investment and NCP
Syracuse in such proportions as may be necessary so that, as
quickly as possible, the Specially Adjusted Capital Accounts for
such Partners are in the ratios of (with 91.91 percentage points
as the base) 13.00 percentage points for the MetLife Parties (in
proportion to their Sharing Ratios), 1.00 percentage point for
Syracuse Investment (in its capacity as a General Partner), 67.91
percentage points for Syracuse Investment (in its capacity as a
Limited Partner), and 10.00 percentage points for NCP Syracuse.
(ii) For all periods beginning on or after the Final Flip
Point, Profits shall be allocated among the Partners in such
proportions as may be necessary so that, as quickly as possible,
the Specially Adjusted Capital Accounts of the Partners are in
the ratios of 13.00% for the MetLife Parties (in proportion to
their Sharing Ratios), 8.09% for Stewart & Stevenson, 1.00% for
Syracuse Investment (in its capacity as a General Partner),
67.91% for Syracuse Investment (in its capacity as a Limited
Partner), and 10.00% for NCP Syracuse.
(b) Allocations Arising From a Liquidating Event. After
giving effect to the special allocations set forth in Sections 4
and 5 of this Exhibit C, Profits arising from a Liquidating Event
shall be allocated to the Partners as follows:
52<PAGE>
(i) First, to the Partners having negative Capital Account
balances, to the extent available, in proportion to such negative
balances until all such negative Capital Accounts are increased
to zero, such Capital Account balances to be determined in each
case after giving effect to all contributions,
distributions and allocations for all periods other than those
occurring pursuant to this Section 2(b) and clause (iv) of
Section 15.3(a) of the Partnership Agreement; and
(ii) Second, to the Partners, the remainder of such Profits
in the proportions and in the amounts that result in the positive
balance in each Partner's Capital Account (after giving effect to
all contributions, distributions and allocations for all periods
other than those occurring pursuant to this Section 2(b) and
clause (iv) of Section 15.3(a) of the Partnership Agreement)
being equal to an amount which such Partner would be entitled to
receive if such positive balance constituted an amount of Cash
Available for Distribution under Section 7.1 of the Partnership
Agreement with such Profits being allocated in the same manner
under clause (a), then clause (b) and finally clause (c),
successively, of such Section 7.1 as such Cash Available for
Distribution would have been distributed thereunder.
3. Losses. After giving effect to the special allocations
set forth in Sections 4 and 5 of this Exhibit C, Losses for any
fiscal year or other period shall be allocated as follows:
(a) Except as provided in Section 3(b) of this Exhibit C,
Losses shall be allocated to the Partners as follows:
(i) For all periods ending prior to the Final Flip Point,
Losses shall be allocated 8.09% to Stewart & Stevenson and 91.91%
as follows:
(A) First, entirely to the MetLife Parties (in proportion to
their Sharing Ratios) until the aggregate of the MetLife Parties~
Specially Adjusted Capital Accounts are zero; and
(B) The balance, if any, 1.00% to Syracuse Investment (in
its capacity as a General Partner), 89.00% to Syracuse Investment
(in its capacity as a Limited Partner), and 10.00% to NCP
Syracuse.
(ii) For all periods beginning on or after the Final Flip
Point, Losses shall be allocated among the Partners in such
proportions as may be necessary so that, as quickly as possible,
the Specially Adjusted Capital Accounts of the Partners are in
ratios of 13.00% for the MetLife Parties (in proportion to their
Sharing Ratios), 8.09% for Stewart & Stevenson, 1.00% for
Syracuse Investment (in its capacity as a General Partner),
67.91% for Syracuse Investment (in its capacity as a Limited
Partner) and 10.00% for NCP Syracuse.
(b) The Losses allocated pursuant to Section 3(a) of this
Exhibit C shall not exceed the maximum amount of Losses that can
53<PAGE>
be so allocated without causing any Limited Partner to have an
Adjusted Capital Account Deficit at the end of any fiscal year.
All Losses in excess of the limitation set forth in this Section
3(b) shall be allocated to NCP Syracuse.
4. Special Allocations. The following special allocations
shall be made in the following order:
(a) Partnership Minimum Gain Chargeback. Except as
provided in Section 1.704-2(f) of the Regulations,
notwithstanding any other provision of this Exhibit C, if there
is a net decrease in Partnership Minimum Gain during any
Partnership fiscal year, each Partner shall be specially
allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain,
determined in accordance with Regulations Section 1.704-2(g).
Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to
each Partner pursuant thereto. The items to be so allocated
shall be determined in accordance with Sections 1.7042(f)(6) and
1.704-2(j)(2) of the Regulations. This Section 4(a) is intended
to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently
therewith.
(b) Partner Nonrecourse Debt Minimum Gain Chargeback.
Except as otherwise provided in Section 1.704-2(i)(4) of the
Regulations, notwithstanding any other provision of this Exhibit
C except Section 4(a) of this Exhibit C, if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to
a Partner Nonrecourse Debt during any Partnership 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
Regulations, shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent
years) in an amount equal to the portion of such Partner's share
of the net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be
determined in accordance with Sections 1.7042(i)(4) and
1.704-2(j)(2) of the Regulations. This Section 4(b) is intended
to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently
therewith.
(c) Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or
distributions described in Section 1.704-l(b)(2)(ii)(d)(4), (5)
or (6) of the Regulations, items of Partnership income and gain
shall be specially allocated to each such Partner in an amount
54<PAGE>
and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Partner
as quickly as possible, provided that an allocation pursuant to
this Section 4 (c) shall be made only if and to the ex~cent that
such Partner would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Exhibit C have been
tentatively made as if this Section 4 (c) were not in the
Agreement.
(d) Gross Income Allocation. In the event any Partner has a
deficit Capital Account at the end of any Partnership fiscal year
which is in excess of the sum of (i) the amount such Partner is
obligated to restore pursuant to any provision of this Agreement
and (ii) the amount such Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g) and 1.704-2(i)(5), 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 4(d) shall be made only if
and to the extent that such Partner would have a deficit Capital
Account in excess of such sum after all other allocations
provided for in this Exhibit C have been tentatively made as if
this Section 4(d) and Section 4(c) of this Exhibit C were not in
the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other period shall be specially allocated to the
Partners as follows:
(i) For all periods prior to the Final Flip Point,
Nonrecourse Deductions shall be allocated 56.00% to the MetLife
Parties (in proportion to their Sharing Ratios), 8.09% to Stewart
& Stevenson, 1.00% to Syracuse Investment (in its capacity as a
General Partner), 24.91% to Syracuse Investment (in its capacity
as a Limited Partner), and 10.00% to NCP Syracuse.
(ii) For all periods beginning on or after the Final Flip
Point, Nonrecourse Deductions shall be allocated 10.00% to the
MetLife Parties (in proportion to their Sharing Ratios), 8.09% to
Stewart & Stevenson, 1.00% to Syracuse Investment (in its
capacity as a General Partner), 70.91% to Syracuse Investment (in
its capacity as a Limited Partner), and 10.00% to NCP Syracuse.
(f) Partner Nonrecourse Deductions. Any Partner
Nonrecourse Deductions for any fiscal year or other period shall
be allocated to the Partner who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable in accordance
with Regulations Section 1.704-2(i)(1).
(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
Regulations Section 1.704-l(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such
55<PAGE>
adjustment to the 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 a manner
consistent with the manner in which their Capital Accounts are
requiredto be adjusted pursuantto such Sectionof the Regulations.
(h) Gross Income Allocations to Match Pre-Flip
Distributions. All or a portion of the items of Partnership
income or gain, if any, remaining after taking into account the
special allocations in Sections 4(a) through 4(g) of this Exhibit
C, shall be specially allocated to the Partners in proportion to
the cumulative distributions each has received pursuant to
Sections 7.1(a) and 7.l(b) of the Agreement until the aggregate
amounts allocated to each Partner pursuant to this Section 4(h)
for all periods are equal to such cumulative distributions to
such Partner.
5. Curative Allocations. The allocations set forth in
Sections 3 (b), 4(a), 4(b), 4(c), 4(d), 4(e), 4(f) and 4(g) of
this Exhibit (the "Regulatory Allocations") are intended to
comply with certain requirements of the Regulations. It is the
intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items
of Partnership income, gain, loss or deduction pursuant to this
Section 5. Therefore, notwithstanding any other provision of
this Exhibit C (other than the Regulatory Allocations), the
General Partners shall make (subject to the approval of a
Majority in Interest of the Limited Partners, which approval may
not be unreasonably withheld or delayed) 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
were not part of the Agreement and all Partnership items were
allocated pursuant to Sections 2 and 3 of this Exhibit C. In
exercising their discretion under this Section 5, the General
Partners shall take into account future Regulatory Allocations
under Sections 4(a) and 4(b) that, although not yet made, are
likely to offset other Regulatory Allocations previously made
under Sections 4(e) and 4(f) of this Exhibit C.
6. Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or any
other items allocable to any period, and for purposes of
determining the varying interests of Partners for any taxable
year of the Partnership for which any Partner was not a Partner
for all of such year, Profits, Losses, and any such other items
and the varying interests of the Partners shall be determined by
the General Partners, subject to the approval of a Majority in
Interest of the Limited Partners, which approval may not be
unreasonably withheld or delayed, using any permissible method
56<PAGE>
under Code Section 706 and the Regulations thereunder. For the
taxable year during which MetLife is admitted to the Partnership,
the General Partners shall select a clearly permissible method
under Code Section 706 and the Regulations thereunder which
results in the greatest allocation to the MetLife Parties of
Losses.
(b) Except as otherwise provided in this Agreement, all
items of Partnership income, gain, loss, deduction, and any other
allocations not otherwise provided for shall be divided among the
Partners in the same proportions as they share Profits or Losses,
as the case may be, for the year.
(c) The Partners are aware of the income tax consequences of
the allocations made by this Exhibit C and hereby agree to be
bound by the provisions of this Exhibit C in reporting their
shares of Partnership income and loss for income tax purposes.
(d) Solely for the purpose of determining a Partner,s
proportionate share of the "excess nonrecourse liabilities" of
the Partnership within the meaning of Regulations Section 1.752-
3(a)(3), the Partners' interests in Partnership profits shall be
as set forth in Section 2(a)(ii) of this Exhibit C.
(e) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the General Partners shall endeavor to treat
Distributions as having been made from proceeds of Nonrecourse
Liabilities or Partner Nonrecourse Debt only to the extent that
such Distributions would cause or increase an Adjusted Capital
Account Deficit for any Limited Partner.
(f) The MetLife Parties' shares of Distributions pursuant to
Sections 7.1(a), 7.1(b) and 7.1(c) of the Agreement vary
depending on the achievement of designated IRRs. The achievement
of the designated IRRs depends on numerous factors including the
operating results of the Project Partnership and the Partnership,
the realization by the Partnership of certain income tax
consequences and the allocation of those consequences to the
Partners including the MetLife Parties, as set forth in this
Exhibit C. If the actual allocations of the Partnership
originally reported to the MetLife Parties for one or more years
are subsequently adjusted in any manner, a possible consequence
may be that, after taking into account such adjustments, the
MetLife Parties' shares of Distributions were shifted from
Section 7.1(a) to Section 7.1(b), or from Section 7.1(b) to
Section 7.1(c), earlier or later than such shares would have
shifted if the allocations as finally adjusted had been the
allocations originally the MetLife Parties. In such event, the
following provisions shall apply:
(i) If any such shift occurred earlier than the date on
which it would have occurred had the allocations as adjusted been
the allocations originally reported to the MetLife Parties, then
(A) the allocations to the MetLife Parties shall be adjusted in
such manner as may be necessary to place the MetLife Parties in
57<PAGE>
the same position for federal income tax reporting purposes as
they would have been in if such adjusted allocations had been the
allocations originally reported to the MetLife Parties, and (B)
the MetLife Parties' shares of Distributions shall be adjusted in
such manner as may be necessary to place the MetLife Parties in
the same position for purposes of Distributions as they would
have been in if the MetLife Parties' shares of Distributions had
shifted from Section 7.1(a) to Section 7.1(b), or from Section
7.1(b) to Section 7.1(c), at the proper times after taking into
account such adjustments.
(ii) If any such shift occurred later than the date on which
it would have occurred had the allocations as adjusted been the
allocations originally reported to the MetLife Parties, then (A)
the allocations to NCP Syracuse and Syracuse Investment shall be
adjusted in such manner as may be necessary to place such
Partners in the same position for federal income tax reporting
purposes as they would have been in if such adjusted allocations
had been the allocations originally reported to them, and (B)
their shares of Distributions shall be adjusted in such manner as
may be necessary to place them in the same position for purposes
of Distributions as they would have been in if their shares of
Distributions had shifted from Section 7.1(a) to Section 7.1(b),
or from Section 7.1(b) to Section 7.1(c), at the proper times
after taking into account such adjustments, provided that
adjustments pursuant to this paragraph (ii) shall be made only
with respect to adjustments for which the statute of limitations
under the Code has not expired (as of the date of such
adjustments) for the MetLife Parties to file amended federal
income tax returns reflecting such adjustments (regardless of
whether the MetLife Parties actually file amended returns and
regardless of the actual tax consequences of such adjustments).
(iii) For purposes of this Section 6(f): (A) any
adjustments to the allocations and Distributions to the MetLife
Parties, or to NCP Syracuse and Syracuse Investment, as the case
may be, pursuant to Section 6(f)(i) or 6(f)(ii) shall be made,
(1) with respect to any shift described in Section 6(f)(i),
first, by adjusting the allocations and Distributions to NCP
Syracuse, and second, if necessary, by adjusting the allocations
and Distributions to Syracuse Investment (but not to Stewart &
Stevenson), with such adjustments reallocated among the MetLife
Parties in proportion to their relative shares of allocations and
Distributions, and (2) with respect to any shift described in
Section 6(f)(ii), by adjusting the allocations and Distributions
to the MetLife Parties, with such adjustments reallocated between
NCP Syracuse and Syracuse Investment in proportion to their
relative shares of allocations and Distributions, (B) no
adjustments shall be made to the allocations and Distributions to
the MetLife Parties or to NCP Syracuse and Syracuse Investment,
as the case may be, unless the allocations originally reported to
the MetLife Parties caused the MetLife Parties' shares of
Distributions to shift from Section 7.1(a) to Section 7.1(b), or
from Section 7.1(b) to Section 7.1(c), earlier or later than such
shares would have shifted based on the adjusted allocations; and
58<PAGE>
(C) under no circumstances shall the MetLife Parties' shares of
Distributions pursuant to Section 7.1 of the Agreement for any
period exceed 56.00%.
(iv) Nothing contained herein shall be construed as a
guarantee of the operating results of the Project Partnership or
the Partnership or the tax consequences of an investment in the
Partnership, and no adjustment shall be made hereunder due to any
change in the tax characteristics applicable or relating to any
of the MetLife Parties.
7. Tax Allocations: Code Section 704(c). In accordance with
Code Section 704(c) and the Regulations thereunder, income, gain,
loss and deduction with respect to any property contributed to
the capital of the Partnership shall, solely for tax purposes, be
allocated among the 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 clause (i) of the
definition of Gross Asset Value).
In the event the Gross Asset Value of any Partnership asset
is adjusted pursuant to clause (ii) of the definition of Gross
Asset Value, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal
income tax purposes and its Gross Asset Value in the same manner
as under Code Section 704(c) and the Regulations thereunder.
Any elections or other decisions relating to such
allocations shall be made by the General Partners in a manner
consistent with the purpose and intention of this Agreement.
Allocations pursuant to this Exhibit C are solely for purposes of
federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner~s Capital
Account or share of Profits, Losses, other items or distributions
pursuant to any provision of this Agreement.
59<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the Effective Time.
"GENERAL PARTNERS"
NCP SYRACUSE, INC.,
a Delaware corporation
By:_____________________________
SYRACUSE INVESTMENT, INC.,
a Delaware corporation
By:_____________________________
"LIMITED PARTNERS"
STEWART & STEVENSON SERVICES,
INC.,
a Texas corporation
By: ____________________________
SYRACUSE INVESTMENT, INC.,
a Delaware corporation
By:_____________________________
METLIFE CAPITAL CORPORATION,
a Delaware corporation
By:_____________________________
60<PAGE>
FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
SYRACUSE ORANGE PARTNERS, L.P.
Contributions by Partners
Pursuant to Section 6.1
Name Cash Contribution
General Partners
NCP Syracuse, Inc. $ 1,797,000
1100 Town & Country Road, Suite 800
Orange, California 92668
Syracuse Investment, Inc. $ 180,000
1100 Town & Country Road, Suite 800
Orange, California 92668
Limited Partners
MetLife Capital Corporation $12,500,000
10900 NE 8th Street, Suite 1300
Bellerue, Washington 98004
Stewart & Stevenson Services, Inc. $ 3,000,000
2707 North Coop West
Houston, Texas 77008
Syracuse Investment. Inc. $12,190,000
1100 Town & Country Road, Suite 800
Orange, California 92668
TOTAL: $29,667,000
61<PAGE>
EXHIBIT B
FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SYRACUSE ORANGE PARTNERS. L.P.
Definitions
Certain capitalized terms used in the Agreement have the
following meanings:
Act shall mean the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time, subject to the
provisions of Section 12.3(r) hereof.
Adjusted Capital Tax Account Deficit shall mean, with
respect to any Limited Partner, the deficit balance, if any, in
such Limited Partner's Capital Account as of the end of the
relevant fiscal year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account any amounts which such
Limited Partner is obligated to restore pursuant to any provision
of this Agreement or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Section
1.7041(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
Affiliate shall mean a Person (including a Subsidiary)
which directly or indirectly controls, or is controlled by, or is
under common control with, another Partner, including any limited
partnership of which such other Partner or any Subsidiary or
Affiliate of such other Partner is the general partner.
Agent shall have the meaning set forth in the Financing
Agreement.
Agreement or Partnership Agreement shall mean this First
Amended and Restated Limited Partnership Agreement, as amended
from time to time. Words such as "herein," "hereinafter,"
"hereof," "hereto," and "hereunder" refer to this Agreement as a
whole, unless the context otherwise requires.
Assignee shall mean a Person who has acquired from a Partner
a beneficial interest in Profits, Losses, other allocations and
Distributions, but who is not a Substitute Limited Partner or
Substitute General Partner.
62<PAGE>
Bankruptcy Code shall have the meaning set forth in Section
15.1 hereof.
Capital Account shall mean, with respect to any Partner, the
Capital Account maintained for such Partner in accordance with
the following provisions:
(i) The Capital Accounts of the Partners who were parties
to the Prior Agreement shall, immediately prior to the Effective
Time, be equal to their Capital Accounts as determined pursuant
to the provisions of the Prior Agreement. Thereafter, the
Capital Accounts of such Partners shall be adjusted in accordance
with the following provisions, and the Capital Accounts of
MetLife and any other Persons who become Partners shall be
determined in accordance with the following Provisions.
(ii) To each Partner's Capital Account there shall be
credited such Partner's Capital Contributions (including such
Partner's Capital Contributions made pursuant to Section 6.1
hereof), such Partner's distributive share of Profits and any
items in the nature of income or gain which are specially
allocated pursuant to Section 4 or Section 5 of Exhibit C hereof,
and the amount of any Partnership liabilities assumed by such
Partner or which are secured by any Partnership Property
distributed to such Partner.
(iii) To each Partner's Capital Account there shall be
debited the amount of cash and the Gross Asset Value of any
Partnership Property distributed to such Partner pursuant to any
provision of this Agreement, such Partner's distributive share of
Losses and any items in the nature of expenses or losses which
are specially allocated pursuant to Section 4 or Section 5 of
Exhibit C hereof, and the amount of any liabilities of such
Partner assumed by the Partnership or which are secured by any
property contributed by such Partner to the Partnership.
(iv) In the event all or a portion of an interest in the
Partnership is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent it relates to the transferred
interest.
(v) In determining the amount of any liability for purposes
of clauses (ii) and (iii) above, there shall be taken into
account Code Section 752(c) and any other applicable provisions
of the Code and Regulations.
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are
intended to comply with Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such
Regulations. In the event the General Partners shall determine
that it is prudent 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
63<PAGE>
secured by contributed or distributed property or which are
assumed by the Partnership or Partners), are computed in order to
comply with such Regulations, the General Partners may, with the
Prior written consent of each Partner, which consent shall not be
unreasonably withheld, make such modification, provided that it
is not likely to have a material effect on the amounts
distributable to any Partner pursuant to Article XV; hereof upon
the dissolution of the Partnership. The General Partners also
shall, with the prior written consent of each Partner, which
consent shall not be unreasonably withheld, (i) make any
adjustments that are necessary 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 Regulations Section 1.704-
1(b)(2)(iv)(g), and (ii) make any appropriate modifications in
the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b).
Capital Contributions shall mean, with respect to any
Partner, the amount of money and the initial Gross Asset Value of
any property (other than money) contributed to the Partnership
with respect to the interest in the Partnership held by such
Partner. The principal amount of a Promissory note which is not
readily traded on an established securities market and which is
contributed to the Partnership by the maker of the note shall not
be included in the Capital Account of any Partner until the
Partnership makes a taxable disposition of the note or until (and
to the extent) Principal payments are made on the note, all in
accordance with Regulations Section 1-704-1(b)(2)(iv)(d)(2).
Cash Available for Distribution shall mean, at any time
shall mean such cash on hand and in financial institutions as in
the General Partners, reasonable discretion is then available for
distribution to the Partners after (i) all costs and expenses
incurred by or on behalf of the Partnership have been paid or
reimbursed and all current debts and obligations of the
Partnership have been paid or Provisions therefor have been made,
(ii) reserves have been set aside by the General Partners (which
reserves shall be determined by the General Partners in their
reasonable discretion), and (iii) adequate Provision has been
made for the satisfaction of debt service requirements (if any).
Certificate shall mean the Certificate of Limited
Partnership.
Code shall mean the Internal Revenue Code of 1986, as
amended from time to time (or any corresponding provisions of
succeeding law).
Cogeneration Facility shall have the meaning set forth in
the Recitals to this Agreement.
Depreciation shall mean, for each fiscal year or other
period, an amount equal to the depreciation, amortization or
other cost recovery deduction allowable with respect to an asset
64<PAGE>
for such year or other period, 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 year or other
period, 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 year or other period bears to such beginning adjusted
tax basis; provided, however, that if the federal income tax
depreciation, amortization, or other cost recovery deduction for
such year is zero, Depreciation shall be determined with
reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.
Distribution shall mean any distribution by the Partnership
to the Partners, as provided in Section 7.1 hereof.
Effective Time shall mean the moment on December 24, 1992
immediately after the execution of the Investment Agreement by
all parties thereto.
FARALP shall have the meaning set forth in the Recitals to
this Agreement.
Financing Agreement shall mean that certain Financing
Agreement, dated as of April 5, 1991 by and among the Project
Partnership, each of the Banks (as defined in the Financing
Agreement) party thereto, and Algemene Bank Nederland N.V.,
Cayman Islands Branch, as agent for such Banks, related to the
Project, as amended, supplemented or otherwise modified or
replaced and in effect from time to time.
Final Flip Point shall occur on the first day on which the
MetLife Parties have achieved a 15% IRR.
GAAP shall mean generally accepted accounting principles in
effect from time to time in the United States, consistently
applied.
General Partner and General Partners have the meanings set
forth in the introduction to this Agreement.
Good Cause shall have the meaning set forth in Section 14.1
hereof.
Gross Asset Value shall mean, with respect to any asset, the
asserts 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 determined by the contributing Partner
and the Partnership;
(ii) The Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective gross fair market values,
65<PAGE>
as determined by all 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 (provided that the Partners agree
that (1) the gross fair market value of each Partnership asset
immediately after the Effective Time is equal to the existing
Gross Asset Value of such asset immediately prior to the
Effective Time, increased, in the case of the Partnership's
interest in the Project Partnership, by the amount of me Capital
Contributions of the Partners pursuant to Section 6.1 hereof, and
(2) accordingly, the Gross Asset Values of Partnership assets
shall not be otherwise adjusted as of the Effective Time by
reason of the admission of MetLife as a Partner); (B) the
distribution by the Partnership to a Partner of more than a de
minimis amount of Partnership Property as consideration for an
interest in the Partnership; and (C) the liquidation of the
Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however that adjustments pursuant
to clauses (A) and (B) above shall be made only if the General
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; and
(iv) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments 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
Regulation Section 1-704-1(b)(2)(iv)(m) and Section 4(g) of
Exhibit C hereof; provided, however, that Gross Asset Values
shall not be adjusted pursuant to this clause (iv) to the extent
General Partners reasonably determine that an adjustment clause
(ii) above is necessary or appropriate in connection with a
transaction that would otherwise result in an this clause (iv).
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to clause (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.
Insolvency shall have the meaning set forth in Section 15.1
hereof.
Investment Agreement shall have the meaning set forth in the
Recitals to this Agreement.
IRR means, as of any date, the discount rate at which the
present value (discounted on a quarterly basis) as of such date
of all distributions to the MetLife Parties pursuant to this
Agreement and all income tax benefits accruing to the MetLife
66<PAGE>
Parties with respect to allocations to the MetLife Parties
pursuant to Exhibit C hereto is equal to the present value
(discounted on a quarterly basis) as of such date of all Capital
Contributions by MetLife and all applicable income taxes borne by
the MetLife Parties with respect to allocations to the MetLife
Parties pursuant to Exhibit C.
For purposes of the definition of IRR:
(a) Income tax benefits accruing to the MetLife Parties and
income taxes borne by the MetLife Parties with respect to
allocations to the MetLife Parties pursuant to Exhibit C shall be
based on a federal income tax rate of 34% (regardless of what the
actual maximum tax rate is and regardless of the actual federal
income tax rate to which any MetLife Party is subject);
(b) All tax allocations to the MetLife parties with respect
to a taxable year of the Partnership shall be deemed to occur
ratably on the last day of each calendar quarter (subject to
reasonable estimates by the General Partners of the annual tax
allocations to the MetLife Parties for a particular year);
(c) Distributions to the MetLife Parties during a calendar
quarter shall be deemed to occur on the last day of such calendar
quarter; and
(d) The receipt by any MetLife Party of payment by the
Partnership of interest on and principal of any loans made by
such MetLife Party shall not be taken into account in calculating
the IRR.
IRS means the Internal Revenue Service.
Keep Requirement shall have the meaning set forth in Section
11.3 hereof.
Limited Partner and Limited Partners shall have the meanings
set forth in the introduction to this Agreement. The terms
"Limited Partner" and "Limited Partners" also shall mean, for
purposes of Exhibit C, the maintenance of Capital Accounts, and
the distribution provisions of this Agreement, an Assignee or
Assignees of a Limited Partnership Interest or Limited
Partnership Interests, as the context requires.
Limited Partnership Interest, means a Limited Partner's
right, title and interest in the Partnership, including without
limitations such Limited Partner's rights with respect thereto
under this Agreement and obligations with respect thereto under
this Agreement.
Liquidating Event shall mean (i) a sale, transfer,
conveyance, distribution, exchange, lease, taking or other
disposition of Partnership assets, or related series of such
events, which results in or arises from the dissolution and
67<PAGE>
liquidation of the Partnership, or (ii) any such event occurring
with respect to the Project Partnership.
Majority in Interest of the Limited Partners shall mean the
following:
(a) Except as provided in clause (c) below, at all times
prior to the Final Flip Point, those MetLife Parties who hold of
record more than fifty percent (50%) of the aggregate Sharing
Ratios of the MetLife Parties;
(b) At all times on or after the Final Flip Point, those
Limited Partners who hold of record more than fifty percent (50%)
of the aggregate Sharing Ratios of the Limited Partners; and
(c) At all times prior to, on or after the Final Flip
Point, with respect to the references in Section 12.1 of this
Agreement to Sections 3.1(b) and 3.2(b) of the Project
Partnership Agreement (other than a Partner Loan pursuant to such
Section 3.2(b) to expand the capacity of the Project in excess of
the capacity set forth in Recital A of this Agreement), those
Limited Partners who hold of record more than fifty percent (505)
of the aggregate Sharing Ratios of the Limited Partners.
MetLife shall mean MetLife Capital Corporation, a Delaware
corporation.
MetLife Parties shall mean MetLife (so long as it is a
Partner) and each of its successors in interest as a Partner (so
long as such successor in interest is a Partner).
NCP Syracuse shall mean NCP Syracuse, Inc., a Delaware
corporation.
Nonrecourse Deductions shall have the meaning given to such
term in Section 1.704-2(b)(3) of the Regulations.
Partner shall mean each General Partner, each Limited
Partner and any other Person who becomes a Substitute General
Partner or Limited Partner pursuant to the terms of this
Agreement. The term Partner also shall mean, for purposes of
Exhibit C, the maintenance of Capital Accounts, and the
distribution provisions of this Agreement, an Assignee of a
Partner.
Partner Nonrecourse Debt Minimum Gain shall mean an amount,
with respect to each Partner Nonrecourse Debt, equal to the
Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Section 1.704-2(i)(3) of the
Regulations.
Partner Nonrecourse Debt shall have the meaning given to
such term in Section 1.704-2(b)(4) of the Regulations.
68<PAGE>
Partner Nonrecourse Deductions shall have the meaning given
to such term in Sections 1.704-2(i)(2) of the Regulations.
Partnership shall mean Syracuse Orange Partners, L.P., a
Delaware limited partnership, as such partnership may from time
to time be constituted.
Partnership Accountants shall have the meaning set forth in
Section 9.6 hereof.
Partnership Minimum Gain shall have the meaning given to
such term in Sections 1.704-2(b)(2) and 1.704-2(d) of the
Regulations.
Partnership Property shall mean the Partnership's right,
title and interest as a limited partner of the Project
Partnership and any other property of the Partnership, real,
personal or mixed, whether tangible or intangible.
Person shall mean any natural person, firm, partnership,
trust estate, association, corporation or other entity.
Procedures shall have the meaning set forth in Section 16.6
hereof.
Prior Agreement shall have the meaning set forth in the
Recitals to this Agreement.
Profits and Losses shall mean, for each fiscal year or other
period beginning on or after the Effective Time, an amount equal
to the Partnership's taxable income or loss for such year or
period, determined in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss or deduction
required to be stated separately pursuant to Code Section
703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(i) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into in computing
Profits or Losses shall be added to such taxable income or loss;
(ii) An expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-
1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses shall be subtracted from such taxable income or
loss;
(iii) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (ii) or (iii) of the
definition of Gross Asset Value, the amount of such adjustment
shall be taken into account as gain or loss from the disposition
of such assets for purposes of computing Profits and Losses;
69<PAGE>
(iv) Gain or loss resulting from any disposition of
Partnership Property with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization and other
cost recovery deductions taken into account in computing such
taxable income or loss, there shall be taken into account
Depreciation for such fiscal year or other period, computed in
accordance with the definition of Depreciation; and
(vi) Notwithstanding any other provision of the definition
of Profits and Losses, any items which are specially allocated
pursuant to Section 4 or Section 5 of Exhibit C hereof shall not
be taken into account in computing Profits and Losses.
Prohibited Transferee shall have the meaning set forth in
Section 13.1 hereof.
Project has the meaning set forth in the Recitals to this
Agreement.
Project Partnership shall have the meaning set forth in the
Recitals to this Agreement.
Regulations shall mean the Income Tax Regulations
promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of
succeeding regulations).
Removal Date, shall have the meaning set forth in Section
14.2 hereof.
Removal Notice shall have the meaning set forth in Section
14.1 hereof.
Required Opinion shall mean an opinion of counsel, the form
of which, including reasonable assumptions made therein, shall be
reasonably acceptable to the General Partners, that a specified
Transfer (i) may be effected without registration or the
Partnership under the Securities Act and any applicable state
securities laws, (ii) will not result in a termination of the
Partnership or the Project Partnership under the Code, (iii) will
not result in the Partnership or the Project Partnership being
treated as an association taxable as a corporation under the
Code, (iv) will not result in the Partnership or the Project
Partnership or any Affiliate of a Partner or a partner of the
Project Partnership becoming subject to regulation under the
Public Utility Holding Company Act of 1935 (or the rules and
regulations promulgated thereunder) or becoming otherwise subject
to increased regulatory burdens, (v) will not result in the
Project ceasing to be exempt from regulation as a result of
changing its status as a "qualifying facility" under the Public
70<PAGE>
Utilities Regulatory Policies Act of 1978 (or the rules and
regulations promulgated thereunder), (vi) will not constitute a
violation of or default under the Financing Agreement, (vii) will
not result in the transferee being a "Prohibited Transferee"
under the Project Partnership Agreement, and (viii) such other
matters relating to corporate authorization and the like as are
reasonably required by the General Partners.
Securities Act shall mean the Securities Act of 1933, as
amended.
Security shall have the meaning set forth in Section 2(1) of
the Securities Act.
Sharing Ratio shall mean, with respect to each Partner at
any particular time, the percentage share of Distributions that
such Partner would be entitled to receive pursuant to Section 7.1
hereof if $1.00 were distributed to the Partners pursuant to
Section 7.1 hereof at such time.
Specially Adjusted Capital Account shall mean, with respect
to each Partner, such Partner's Capital Account as of the end of
the relevant period after crediting to such Capital Account any
amounts which such Partner is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5).
Stewart & Stevenson means Stewart & Stevenson Services,
Inc., a Texas corporation.
Subsidiary shall mean, with respect to a Person, a
corporation in which such Person owns, directly or indirectly,
more than 50% of the Voting Stock.
Substitute General Partner shall mean a Person who has
assumed the rights, powers and responsibilities of a General
Partner pursuant to Article XIV hereof.
Substitute General Partner Agreement shall have the meaning
set forth in Section 14.6 hereof.
Substitute Limited Partner shall mean an Assignee who has
become a Limited Partner pursuant to Article XIII hereof, having
all of the rights of the transferring Limited Partner, including
without limitation, the right to vote on any of the matters on
which a Limited Partner is entitled to vote pursuant to this
Agreement.
Syracuse Investment means Syracuse Investment, Inc., a
Delaware corporation.
Tax Matters Partner shall have the meaning set forth in
Section 8.2 hereof.
71<PAGE>
Transfer shall have the meaning set forth in Section 13.1
hereof.
Voting Stock shall mean securities, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect
the corporate directors (or Persons performing a similar
function).
Withdrawal Date shall have the meaning set forth in Section
14.4 hereof.
Withdrawal Notice shall have the meaning set forth Section
14.4 hereof.
72<PAGE>
EXHIBIT C
FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SYRACUSE ORANGE PARTNERS. L.P.
Allocations of Profits and Losses
1. Allocations Under Prior Agreement. All allocations for
the period commencing with the formation of the Partnership
through the day immediately preceding the date on which the
Effective Time occurs shall be pursuant to the provisions of the
Prior Agreement. All allocations for periods beginning on or
after such date shall be pursuant to the provisions of this
Exhibit C.
2. Profits.
(a) Allocations Not Arising From a Liquidating Event.
After giving effect to the special allocations set forth in
Sections 4 and 5 of this Exhibit C, Profits for any fiscal year
or other period other than those arising from a Liquidating Event
shall be allocated to the Partners as follows:
(i) For all periods ending prior to the Final Flip Point,
Profits shall be allocated (A) 8.09% to Stewart & Stevenson, and
(B) 91.91% among the MetLife Parties, Syracuse Investment and NCP
Syracuse in such proportions as may be necessary so that, as
quickly as possible, the Specially Adjusted Capital Accounts for
such Partners are in the ratios of (with 91.91 percentage points
as the base) 13.00 percentage points for the MetLife Parties (in
proportion to their Sharing Ratios), 1.00 percentage point for
Syracuse Investment (in its capacity as a General Partner), 67.91
percentage points for Syracuse Investment (in its capacity as a
Limited Partner), and 10.00 percentage points for NCP Syracuse.
(ii) For all periods beginning on or after the Final Flip
Point, Profits shall be allocated among the Partners in such
proportions as may be necessary so that, as quickly as possible,
the Specially Adjusted Capital Accounts of the Partners are in
the ratios of 13.00% for the MetLife Parties (in proportion to
their Sharing Ratios), 8.09% for Stewart & Stevenson, 1.00% for
Syracuse Investment (in its capacity as a General Partner),
67.91% for Syracuse Investment (in its capacity as a Limited
Partner), and 10.00% for NCP Syracuse.
(b) Allocations Arising From a Liquidation Event. After
giving effect to the special allocations set forth in Sections 4
and 5 of this Exhibit C, Profits arising from a Liquidating
Event shall be allocated to the Partners as follows:
(i) First, to the Partners having negative Capital Account
balances, to the extent available, in proportion to such negative
balances until all such negative Capital Accounts are increased
73<PAGE>
to zero, such Capital Account balances to be determined in each
case after giving effect to all contributions, distributions and
allocations for all periods other than those occurring pursuant
to this Section 2(b) and clause (iv) of Section 15.3(a) of the
Partnership Agreement; and
(ii) Second, to the Partners, the remainder of such Profits
in the proportions and in the amounts that result in the positive
balance in each Partner's Capital Account (after giving effect to
all contributions, distributions and allocations for all periods
other than those occurring pursuant to this Section 2(b) and
clause (iv) of Section 15.3(a) of the Partnership Agreement)
being equal to an amount which such Partner would be entitled to
receive if such positive balance constituted an amount of Cash
Available for Distribution under Section 7.1 of the Partnership
Agreement with such Profits being allocated in the same manner
under clause (a), then clause (b) and finally clause (c),
successively, of such Section 7.1 as such Cash Available for
Distribution would have been distributed thereunder.
3. Losses. After giving effect to the special allocations
set forth in Sections 4 and 5 of this Exhibit C, Losses for any
fiscal year or other period shall be allocated as follows:
(a) Except as provided in Section 3(b) of this Exhibit C,
Losses shall be allocated to the Partners as follows:
(i) For all periods ending prior to the Final Flip Point,
Losses shall be allocated 8.09% to Stewart & Stevenson and 91.91%
as follows:
(A) First, entirely to the MetLife Parties (in proportion
to their Sharing Ratios) until the aggregate of the MetLife
Parties' Specially Adjusted Capital Accounts are zero; and
(B) The balance, if any, 1.00% to Syracuse Investment (in
its capacity as a General Partner), 89.00% to Syracuse Investment
(in its capacity as a Limited Partner), and 10.00% to NCP
Syracuse.
(ii) For all periods beginning on or after the Final Flip
Point, Losses shall be allocated among the Partners in such
proportions as may be necessary so that, as quickly as possible,
the Specially Adjusted Capital Accounts of the Partners are in
ratios of 13.00% for the MetLife Parties (in proportion to their
Sharing Ratios), 8.09% for Stewart & Stevenson, 1.00% for
Syracuse Investment (in its capacity as a General Partner),
67.91% for Syracuse Investment (in its capacity as a Limited
Partner) and 10.00% for NCP Syracuse.
(b) The Losses allocated pursuant to Section 3(a) of this
Exhibit C shall not exceed the maximum amount of Losses that can
be so allocated without causing any Limited Partner to have an
Adjusted Capital Account Deficit at the end of any fiscal year.
74<PAGE>
All Losses in excess of the limitation set forth in this Section
3(b) shall be allocated to NCP Syracuse.
4. Special Allocations. The following special allocations
shall be made in the following order:
(a) Partnership Minimum Gain Chargeback. Except as
provided in Section 1.704-2(f) of the Regulations,
notwithstanding any other provision of this Exhibit C, if there
is a net decrease in Partnership Minimum Gain during any
Partnership fiscal year, each Partner shall be specially
allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain,
determined in accordance with Regulations Section 1.704-2(g).
Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to
each Partner pursuant thereto. The items to be so allocated
shall be determined in accordance with Sections 1.7042(f)(6) and
1.704-2(j)(2) of the Regulation. This Section 4(a) is intended
to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently
therewith.
(b) Partner Nonrecourse Debt Minimum Gain Chargeback.
Except as otherwise provided in Section 1.704-2(i)(4) of the
Regulations, notwithstanding any other provision of this Exhibit
C except Section 4(a) of this Exhibit C, if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to
a Partner Nonrecourse Debt during any Partnership 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
Regulations, shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent
years) in an amount equal to the portion of such Partner's share
of the net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4). Allocations
pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be
determined in accordance with Sections 1.7042(i) (4) and
1.704-2(j) (2) of the Regulations. This Section 4(b) is intended
to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently
therewith.
(c) Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or
distributions described in Section 1.704-l(b)(2)(ii)(d)(4), (5)
or (6) of the Regulations, items of Partnership income and gain
shall be specially allocated to each such Partner in an amount
and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit of such Partner
75<PAGE>
as quickly as possible, provided that an allocation pursuant to
this Section 4(c) shall be made only if and to the extent that
such Partner would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Exhibit C have been
tentatively made as if thisSection 4(c) were not in theAgreement.
(d) Gross Income Allocation. In the event any Partner has a
deficit Capital Account at the end of any Partnership fiscal year
which is in excess of the sum of (i) the amount such Partner is
obligated to restore pursuant to any provision of this Agreement
and (ii) the amount such Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g) and 1.704-2(i)(5), 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 4(d) shall be made only if
and to the extent that such Partner would have a deficit Capital
Account in excess of such sum after all other allocations
provided for in this Exhibit C have been tentatively made as if
this Section 4(d) and Section 4(c) of this Exhibit C were not in
the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other period shall be specially allocated to the
Partners as follows:
(i) For all periods prior to the Final Flip Point,
Nonrecourse Deductions shall be allocated 56.00% to the MetLife
Parties (in proportion to their Sharing Ratios), 8.09% to Stewart
& Stevenson, 1.00% to Syracuse Investment (in its capacity as a
General Partner), 24.91% to Syracuse Investment (in its capacity
as a Limited Partner), and 10.00% to NCP Syracuse.
(ii) For all periods beginning on or after the Final Flip
Point, Nonrecourse Deductions shall be allocated 10.00% to the
MetLife Parties (in proportion to their Sharing Ratios), 8.09% to
Stewart & Stevenson, 1.00% to Syracuse Investment (in its
capacity as a General Partner), 70.91% to Syracuse Investment (in
its capacity as a Limited Partner), and 10.00% to NCP Syracuse.
(f) Partner Nonrecourse Deduction. Any Partner Nonrecourse
Deductions for any fiscal year or other period shall be allocated
to the Partner who bears the economic risk of loss with respect
to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(1).
(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
Regulations Section 1.704-l(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such the
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
76<PAGE>
specially allocated to the Partners in a manner consistent with
the manner in which their Capital Accounts are required to be
adjusted pursuant to such Section of the Regulations.
(h) Gross Income Allegations to Match Pre-Flip
Distributions. All or a portion of the items of Partnership
income or gain, if any, remaining after taking into account the
special allocations in Sections 4(a) through 4(g) of this Exhibit
C, shall be specially allocated to the Partners in proportion to
the cumulative distributions each has received pursuant to
Sections 7.1(a) and 7.1(b) of the Agreement until the aggregate
amounts allocated to each Partner pursuant to this Section 4(h)
for all periods are equal to such cumulative distributions to
such Partner.
5. Curative Allocations. The allocations set forth in
Sections 3(b), 4(a), 4(b), 4(c), 4(d), 4(e), 4(f) and 4(g) of
this Exhibit C (the "Regulatory Allocations") are intended to
comply with certain requirements of the Regulations. It is the
intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other
Regulatory Allocations or with special allocations of other items
of Partnership income, gain, loss or deduction pursuant to this
Section 5. Therefore, notwithstanding any other provision of
this Exhibit C (other than the Regulatory Allocations), the
General Partners shall make (subject to the approval of a
Majority in Interest of the Limited Partners, which approval may
not be unreasonably withheld or delayed) 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 were not part of the Agreement and all
Partnership items were allocated pursuant to Sections 2 and 3 of
this Exhibit C. In exercising their discretion under this Section
5, the General Partners shall take into account future Regulatory
Allocations under Sections 4(a) and 4(b) that, although not yet
made, are likely to offset other Regulatory Allocations
previously made under Sections 4(e) and 4(f) of this Exhibit C.
6. Other Allocation Rules.
(a) For purposes of determining the Profits, Losses, or any
other items allocable to any period, and for purposes of
determining the varying interests of Partners for any taxable
year of the Partnership for which any Partner was not a Partner
for all of such year, Profits, Losses, and any such other items
and the varying interests of the Partners shall be determined by
the General Partners, subject to the approval of a Majority in
Interest of the Limited Partners, which approval may not be
unreasonably withheld or delayed, using any permissible method
under Code Section 706 and the Regulations thereunder. For the
taxable year during which MetLife is admitted to the Partnership,
the General Partners shall select a clearly permissible method
77<PAGE>
under Code Section 706 and the Regulations thereunder which
results in the greatest allocation to the MetLife Parties of
Losses.
(b) Except as otherwise provided in this Agreement, all
items of Partnership income, gain, loss, deduction, and any other
allocations not otherwise provided for shall be divided among the
Partners in the same proportions as they share Profits or Losses,
as the case may be, for the year.
(c) The Partners are aware of the income tax consequences of
the allocations made by this Exhibit C and hereby agree to be
bound by the provisions of this Exhibit C in reporting their
shares of Partnership income and loss for inc
ome tax purposes.
(d) Solely for the purpose of determining a Partner's
proportionate share of the "excess nonrecourse liabilities" of
the Partnership within the meaning of Regulations Section 1.752-
3(a)(3), the Partners' interests in Partnership profits shall be
as set forth in Section 2(a)(ii) of this Exhibit C.
(e) To the extent permitted by Section 1.704-2(h)(3) of the
Regulations, the General Partners shall endeavor to treat
Distributions as having been made from proceeds of Nonrecourse
Liabilities or Partner Nonrecourse Debt only to the extent that
such Distributions would cause or increase an Adjusted Capital
Account Deficit for any Limited Partner.
(f) The MetLife Parties' shares of Distributions pursuant to
Sections 7.1(a), 7.1(b) and 7.1(c) of the Agreement vary
depending on the achievement of designated IRRs. The achievement
of the designated IRRs depends on numerous factors including the
operating results of the Project Partnership and the Partnership,
the realization by the Partnership of certain income tax
consequences and the allocation of those consequences to the
Partners including the MetLife Parties, as set forth in this
Exhibit C. If the actual allocations of the Partnership
originally reported to the MetLife Parties for one or more years
are subsequently adjusted in any manner, a possible consequence
may be after taking into account such adjustments, the MetLife
Parties' shares of Distributions were shifted from Section 7.1(a)
Section 7.1(b) or from Section 7.1(b) to Section 7.1(c), earlier
or later than such shares would have shifted if the allocations
as finally adjusted had been the allocations originally the
MetLife Parties. In such event, the following provisions shall
apply:
(i) If any such shift occurred earlier than the date on
which it would have occurred had the allocations as adjusted been
the allocations originally reported to the MetLife Parties, then
(A) the allocations to the MetLife Parties shall be adjusted in
such manner as may be necessary to place the MetLife Parties in
the same position for federal income tax reporting purposes as
they would have been in if such adjusted allocations had been the
78<PAGE>
allocations originally reported to the MetLife Parties, and (B)
the MetLife Parties' shares of Distributions shall be adjusted in
such manner as may be necessary to place the MetLife Parties in
the same position for purposes of Distributions as they would
have been in if the MetLife Parties' shares of Distributions had
shifted from Section 7.1(a) to Section 7.1(b), or from Section
7.1(b) to Section 7.1(c), at the proper times after taking into
account such adjustments.
(ii) If any such shift occurred later than the date on which
it would have occurred had the allocations as adjusted been the
allocations originally reported to the MetLife Parties, then (A)
the allocations to NCP Syracuse and Syracuse Investment shall be
adjusted in such manner as may be necessary to place such
Partners in the same position for federal income tax reporting
purposes as they would have been in if such adjusted allocations
had been the allocations originally reported to them, and (B)
their shares of Distributions shall be adjusted in such manner as
may be necessary to place them in the same position for purposes
of Distributions as they would have been in if their shares of
Distributions had shifted from Section 7.1(a) to Section 7.1(b),
or from Section 7.1(b) to Section 7.1(c), at the proper times
after taking into account such adjustments, provided that
adjustments pursuant to this paragraph (ii) shall be made only
with respect to adjustments for which the statute of limitations
under the Code has not expired (as of the date of such
adjustments) for the MetLife Parties to file amended federal
income tax returns reflecting such adjustments (regardless of
whether the MetLife Parties actually file amended returns and
regardless of the actual tax consequences of such adjustments).
(iii) For purposes of this Section 6(f): (A) any
adjustments to the allocations and Distributions to the MetLife
Parties, or to NCP Syracuse and Syracuse Investment, as the case
may be, pursuant to Section 6(f)(i) or 6(f)(ii) shall be made,
(1) with respect to any shift described in Section 6(f)(i),
first, by adjusting the allocations and Distributions to NCP
Syracuse, and second, if necessary, by adjusting the allocations
and Distributions to Syracuse Investment (but not to Stewart &
Stevenson), with such adjustments reallocated among the MetLife
Parties in proportion to their relative shares of allocations and
Distributions, and (2) with respect to any shift described in
Section 6(f)(ii), by adjusting the allocations and Distributions
to the MetLife Parties, with such adjustments reallocated between
NCP Syracuse and Syracuse Investment in proportion to their
relative shares of allocations and Distributions; (B) no
adjustments shall be made to the allocations and Distributions to
the MetLife Parties or to NCP Syracuse and Syracuse Investment,
as the case may be, unless the allocations originally reported to
the MetLife Parties caused the MetLife Parties' shares of
Distributions to shift from Section 7.1(a) to Section 7.1(b), or
from Section 7.1(b) to Section 7.1(c), earlier or later than such
shares would have shifted based on the adjusted allocations; and
(C) under no circumstances shall the MetLife Parties' shares of
79<PAGE>
Distributions pursuant to Section 7.1 of the Agreement for any
period exceed 56.00%.
(iv) Nothing contained herein shall be construed as a
guarantee of the operating results of the Project Partnership or
the Partnership or the tax consequences of an investment in the
Partnership, and no adjustment shall be made hereunder due to any
change in the tax characteristics applicable or relating to any
of the MetLife Parties.
7. Tax Allocations: Code Section 704(c). In accordance with
Code Section 704(c) and the Regulations thereunder, income, gain,
loss and deduction with respect to any property contributed to
the capital of the Partnership shall, solely for tax purposes, be
allocated among the 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 clause (i) of the
definition of Gross Asset Value).
In the event the Gross Asset Value of any Partnership asset
is adjusted pursuant to clause (ii) of the definition of Gross
Asset Value, subsequent allocations of income, gain, loss and
deduction with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal
income tax purposes and its Gross Asset Value in the same manner
under Code Section 704(c) and the Regulations thereunder.
Any elections or other decisions relating to such
allocations shall be made by the General Partners in a manner
consistent with the purpose and intention of this Agreement.
Allocations pursuant to this Exhibit C are solely for purposes of
federal, state and local taxes and shall not affect, or in any
way be taken into account in computing, any Partner's Capital
Account or share of Profits, Losses, other items or distributions
pursuant to any provision of this Agreement.
80<PAGE>
Exhibit B-5(a)(ii)
FIRST AMENDMENT TO
FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF
SYRACUSE ORANGE PARTNERS, L.P.
This First Amendment to First Amended and Restated
Limited Partnership Agreement of Syracuse Orange Partners, L.P.
(the "First Amendment") dated as of January 1, 1995 is made by
NCP Syracuse, Inc., a Delaware corporation ("NCP Syracuse"), and
Syracuse Investment, Inc., a Delaware corporation ("Syracuse
Investment").
WHEREAS, NCP Syracuse and Syracuse Investment (collectively,
the "General Partners") are the general partners of Syracuse
Orange Partners, L.P. (the "Partnership") and Syracuse Investment
is also a limited partner of the Partnership; and
WHEREAS, Syracuse Investment has transferred to NCP Energy,
Inc., a California corporation ("NCP Energy"), a 4.9% limited
partner interest (the "4.9% Interest") in the Partnership (the
"Transfer"); and
WHEREAS, pursuant to that certain Consent to Assignment
dated as of even date herewith, the General Partners have
consented to the Transfer and admitted NCP Energy as a
"Substitute Limited Partner" (as defined in that certain First
Amended and Restated Limited Partnership Agreement of Syracuse
Orange Partners, L.P., dated as of December 16, 1992, by and
among NCP Syracuse, Syracuse Investment, MetLife Capital
Corporation, a Delaware corporation, and Stewart & Stevenson
Services, Inc., a Texas corporation ("Partnership Agreement"))
with respect to the 4.9% Interest; and
WHEREAS, Section 16.1(b) of the Partnership Agreement
authorizes the General Partners to amend the Partnership
Agreement to substitute or admit any additional Limited Partners
to the extent allowed therein without the consent of any Limited
Partner of the Partnership.
NOW, THEREFORE, for good and valuable consideration, the
parties hereto, intending to be legally bound hereby, agree as
follows:
1. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Partnership
Agreement.
2. Sections 7.1(a)-(c) of the Partnership Agreement are hereby
amended and restated in their entirety to read as follows:
(a) First, 56.00% to the MetLife Parties (in
proportion to their Sharing Ratios), 8.09% to Stewart &
1<PAGE>
Stevenson, 20.01% to Syracuse Investment (in its Limited
Partner capacity), 4.9% to NCP Energy, 1.00% to Syracuse
Investment (in its General partner capacity), and 10.00% to
NCP Syracuse, in each case until the MetLife Parties have
achieved an IRR equal to 10.00%; and
(b) Second, 19.00% to the MetLife Parties (in
proportion to their Sharing Ratios), 8.09% to Stewart &
Stevenson, 57.01% to Syracuse Investment (in its Limited
Partner capacity), 4.9% to NCP Energy, 1.00% to Syracuse
Investment (in its General Partner capacity), and 10.00% to
NCP Syracuse, in each case until the MetLife Parties have
achieved an IRR equal to 15.00%; and
(c) Third, the balance of all Distributions, 13.00% to
the MetLife Parties (in proportion to their Sharing Ratios),
8.09% to Stewart & Stevenson, 63.01% to Syracuse Investment
(in its Limited Partner capacity), 4.9% to NCP Energy, 1.00%
to Syracuse Investment (in its General Partner capacity),
and 10.00% to NCP Syracuse.
3. The definition of "Limited Partner and Limited Partners" in
Exhibit B of the Partnership Agreement is hereby amended and
restated in its entirety to read as follows:
Limited Partner and Limited Partners shall mean
MetLife, Stewart & Stevenson, Syracuse Investment, NCP
Energy and any other Person admitted to the Partnership as a
limited partner in accordance with the terms of this
Agreement. The terms "Limited Partner" and "Limited
Partners" also shall mean, for purposes of Exhibit C, the
maintenance of Capital Accounts, and the distribution
provisions of this Agreement, an Assignee or Assignees of a
Limited Partnership Interest or Limited Partnership
Interests, as the context requires.
4. Exhibit B of the Partnership Agreement is hereby amended by
adding the following definition following the definition of
MetLife Parties:
NCP Energy shall mean NCP Energy, Inc., a California
corporation.
5. Sections 2(a)(i)-(ii) of Exhibit C of the Partnership
Agreement are hereby amended and restated in their entirety to
read as follows:
(i) For all periods ending prior to the Final Flip
Point, Profits shall be allocated (A) 8.09% to Stewart &
Stevenson, and (B) 91.91% among the MetLife Parties,
Syracuse Investment, NCP Energy and NCP Syracuse in such
proportions as may be necessary so that, as quickly as
possible, the Specially Adjusted Capital Accounts for such
Partners are in the ratios of (with 91.91 percentage points
as the base) 13.00 percentage points for the MetLife
2<PAGE>
Parties (in proportion to their Sharing Ratios), 1.00
percentage point for Syracuse Investment (in its capacity as
General Partner), 63.01 percentage points for Syracuse
Investment (in its capacity as a Limited Partner), 4.9
percentage points for NCP Energy, and 10.00 percentage
points for NCP Syracuse.
(ii) For all periods beginning on or after the Final
Flip Point, Profits shall be allocated among the Partners
in such proportions as may be necessary so that, as quickly
as possible, the Specially Adjusted Capital Accounts for
such Partners are in the ratios of 13.00% for the MetLife
Parties (in proportion to their Sharing Ratios), 8.09% for
Stewart & Stevenson, 1.00% for Syracuse Investment (in its
capacity as General Partner), 63.01% for Syracuse
Investment (in its capacity as a Limited Partner), 4.9% for
NCP Energy, and 10.00% for NCP Syracuse.
6. Section 3(a)(i)(B) of Exhibit C of the Partnership Agreement
is hereby amended and restated in its entirety to read as
follows:
(B) The balance, if any, 1.00% to Syracuse
Investment (in its capacity as a General Partner), 84.10%
to Syracuse Investment (in its capacity as a Limited
Partner), 4.9% to NCP Energy, and 10.00% to NCP Syracuse.
7. Section 3(a)(ii) of Exhibit C of the Partnership Agreement
is hereby amended and restated in its entirety to read as
follows:
(ii) For all periods beginning on or after the Final
Flip Point, Losses shall be allocated among the Partners in
such proportions as may be necessary so that, as quickly as
possible, the Specially Adjusted Capital Accounts for such
Partners are in the ratios of 13.00% for the MetLife Parties
(in proportion to their Sharing Ratios), 8.09% for Stewart &
Stevenson, 1.00% for Syracuse Investment (in its capacity as
General Partner), 63.01% for Syracuse Investment (in its
capacity as a Limited Partner), 4.9% for NCP Energy, and
10.00% for NCP Syracuse.
8. Sections 4(e)(i)-(ii) of Exhibit C of the Partnership
Agreement are hereby amended and restated in their entirety to
read as follows:
(i) For all periods ending prior to the Final Flip
Point, Nonrecourse Deductions shall be allocated 56.00% to
the MetLife Parties (in proportion to their Sharing Ratios),
8.09% to Stewart & Stevenson, 1.00% to Syracuse Investment
(in its capacity as a General Partner), 20.01% to Syracuse
Investment (in its capacity as a Limited Partner), 4.9% to
NCP Energy, and 10.00% to NCP Syracuse.
3<PAGE>
(ii) For all periods beginning on or after to the Final
Flip Point, Nonrecourse Deductions shall be allocated
10.00% to the MetLife Parties (in proportion to their
Sharing Ratios), 8.09% to Stewart & Stevenson, 1.00% to
Syracuse Investment (in its capacity as a General Partner),
66.01% to Syracuse Investment (in its capacity as a Limited
Partner), 4.9% to NCP Energy, and 10.00% to NCP Syracuse.
9. Section 6(f)(ii)(A) of Exhibit C of the Partnership
Agreement is hereby amended by adding a comma and the words "NCP
Energy" after the words "NCP Syracuse."
10. Section 6(f)(iii) of Exhibit C of the Partnership Agreement
is hereby amended and restated in its entirety to read as
follows:
(iii) For purposes of this Section 6(f): (A) any
adjustments to the allocations and Distributions to the
MetLife Parties, or to NCP Syracuse, Syracuse Investment and
NCP Energy, as the case may be, pursuant to Section 6(f)(i)
or 6(f)(ii) shall be made, (1) with respect to any shift
described in Section 6(f)(i), first, by adjusting the
allocations and Distributions to NCP Syracuse, and second,
if necessary, by adjusting the allocations and Distributions
to Syracuse Investment and NCP Energy (but not Stewart &
Stevenson) in proportion to their relative shares of
allocations and Distributions, with such adjustments
reallocated among the MetLife Parties in proportion to their
relative shares of allocations and Distributions, and (2)
with respect to any shift described in Section 6(f)(ii), by
adjusting the allocations and Distributions to the MetLife
Parties, with such adjustments reallocated between NCP
Syracuse, Syracuse Investment and NCP Energy in proportion
to their relative shares of allocations and Distributions;
(B) no adjustments shall be made to the allocations and
Distributions to the MetLife Parties or to NCP Syracuse,
Syracuse Investment and NCP Energy, as the case may be,
unless the allocations originally reported to the MetLife
Parties caused the MetLife Parties' shares of Distributions
to shift from Section 7.1(a) to Section 7.1(b), or from
Section 7.1(b) to Section 7.1(c), earlier or later than such
shares would have shifted based on the adjusted allocations;
and (C) under no circumstances shall the MetLife Parties'
shares of Distributions pursuant to Section 7.1 of the
Agreement for any period exceed 56.00%.
11. Except as modified by this Amendment, the Partnership
Agreement shall continue in full force and effect.
12. This Amendment may be executed in any number of
counterparts, each of which shall be an original but such
counterparts shalltogether constitute one andthe same instrument.
4<PAGE>
IN WITNESS WHEREOF, each of the General Partners have
executed this First Amendment as of the date first written above.
NCP SYRACUSE, INC.
By:
Name:
Title:
SYRACUSE INVESTMENT, INC.
By:
Name:
Title:
ACKNOWLEDGED AND AGREED:
NCP ENERGY, INC.
By:
Name:
Title:
5<PAGE>
Exhibit B-5(a)(iii)
ASSIGNMENT OF PARTNERSHIP INTEREST
Syracuse Investment, Inc. ("Syracuse Investment"), in
accordance with the terms of the Second Amendment to Stock
Purchase and Sale Agreement, dated as of January 1, 1995 by and
among North Canadian Oils Limited, North Canadian Resources,
Inc., Energy Initiatives, Inc. and NCP Energy, Inc. (formerly
North Canadian Power Incorporated; "NCP Energy"), hereby sells,
transfers and assigns to NCP Energy, all of its right, title and
interest in and to a 4.9% Limited Partnership Interest in
Syracuse Orange Partners, L.P. (the "4.9% Interest") entitling
NCP Energy, during the term of the Partnership Agreement, to,
among other things, receive 4.9% of all Distributions and all
allocations with respect to such 4.9% Limited Partnership
Interest. NCP Energy shall succeed to Syracuse Investment's
Capital Account with respect to such 4.9% Limited Partnership
Interest as of the date hereof. The Capital Account of NCP
Energy with respect to the 4.9% Interest shall be equal to the
product of (a) 4.9% and (b) the aggregate sum of the Capital
Accounts of all Partners as of January 1, 1995. The Capital
Account of Syracuse Investment shall be correspondingly decreased
or increased to reflect the allocation of capital to NCP Energy.
All capitalized terms not otherwise defined herein shall have the
respective meanings assigned to those terms in the First Amended
and Restated Limited Partnership Agreement of Syracuse Orange
Partners, L.P., dated as of December 16, 1992 by and among NCP
Syracuse, Inc., Syracuse Investment, MetLife Capital Corporation
and Stewart & Stevenson Services, Inc.
IN WITNESS WHEREOF, the undersigned has executed this
Assignment of Partnership Interest as of this 1st day of January,
1995.
SYRACUSE INVESTMENT, INC.
By:
Name:
Title:
ACKNOWLEDGED:
NCP ENERGY, INC.
By:
Name:
Title:
1<PAGE>
Exhibit B-5(a)(iv)
PROMISSORY NOTE
$2,722,500.00 Dated: January 1, 1995
FOR VALUE RECEIVED, the undersigned, North Canadian
Resources, Inc., a Delaware corporation ("NCRI"), hereby promises
to pay to the order of NCP Energy, Inc. ("NCP"), the principal
sum of $2,722,500, payable in installments as described in the
next succeeding paragraph, provided, however, that such principal
shall be payable only if and to the extent that Syracuse
Investment, Inc., a Delaware corporation and wholly-owned
subsidiary of NCRI ("Investment"), receives Distributions (as
defined below).
The principal installment due and payable for each year
through maturity of this Note shall be calculated by multiplying
(x) the Annual Rate for such year set forth in Schedule A
attached hereto by (y) $2,722,500.
NCRI hereby promises to pay interest on the principal
balance of this Note at the rate of 10.6% per annum, which
interest shall (i) compound monthly to the extent not paid, and
(ii) be prepaid to the extent required by clause "fourth" of the
succeeding paragraph, provided, however, that such interest shall
be payable only if and to the extent that Investment receives
Distributions.
1<PAGE>
Payments under this Note shall be due and payable on the
first business day after Investment receives a Distribution, and
shall be applied first, to all theretofore scheduled and unpaid
principal installments including for the year in which the
Distribution was received; second, to all accrued but unpaid
compound interest; third, to all currently due and payable
interest; fourth, to prepay future interest in inverse order
computed after giving effect to all principal paid to date and
assuming (i) all future scheduled principal installments are paid
on the December 31 of each year when due and (ii) any unpaid
scheduled payments of principal are paid at maturity; and fifth,
to prepay future scheduled principal installments in inverse
order of maturity.
As used herein, the term "Distributions" means all payments,
proceeds and other distributions, whether in cash or in kind, and
whether constituting "Cash Available for Distribution", as
defined in the First Amended and Restated Limited Partnership
Agreement of Syracuse Orange Partners, L.P. ("SOP"), dated as of
December 16, 1992, as hereafter amended or modified from time to
time ("SOP Partnership Agreement"), or otherwise (including upon
liquidation or dissolution), which Investment receives on or
after the date hereof in respect of its entire limited partner
interest owned by it in SOP (the "Interest"). On the date hereof
the Interest consists of a 20.01% limited partner interest in
SOP. The Interest is subject to increases in the future in
accordance with Section 7.1 of the SOP Partnership Agreement,
which increases shall consist of both (i) the increases directly
2<PAGE>
applicable to such 20.01% interest and (ii) the increases
applicable to the 4.9% interest sold to NCP on the date hereof
pursuant to that certain Assignment of Partnership Interest
between Investment and NCP.
In the event that Investment receives a Distribution in
kind, NCRI may satisfy its obligations under this Note in an
amount equal to the fair market value of such Distribution either
(x) by paying to NCP an amount in cash equal to such fair market
value or (y) by delivering such Distribution to NCP (duly
endorsed, if necessary).
NCRI hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise and no delay in exercising,
any rights hereunder on the part of the holder hereof shall
operate as a waiver of such rights.
For Federal income tax purposes, NCRI hereby agrees with the
holder of this Note as follows:
(i) The Note will be treated as a debt obligation.
(ii) No interest (or original issue discount) will be
reported by either the holder or NCRI except to the extent
that payments are made under the Note (including for this
purpose Distributions which are paid to the holder).
3<PAGE>
(iii) Payments made under the Note will be considered
to be interest to the extent of the interest earned but
unpaid pursuant to the terms of said Note, and thereafter as
principal.
(iv) Notwithstanding the foregoing clauses (i) through
(iii), either NCRI or the holder may report the Note in a
different manner if required to do so either (A) on audit by
the Internal Revenue Service, after contesting the matter in
good faith, or (B) under regulations promulgated by the
Internal Revenue Service after the date hereof, which
regulations are obligatory with respect to the Note. In
either of these circumstances, at the holder's request, the
parties will negotiate in good faith to restructure the Note
and related Assignment Agreement in a manner that minimizes
the resulting adverse tax effect to the holder, without a
substantial tax cost to NCRI (compared with the tax effect
contemplated in clauses (i) through (iii)).
This Note is subject to the restrictions on transferability
contained in and may be transferred only in accordance with that
certain Purchase Options Agreement, dated as of January 1, 1995,
among NCRI, NCP, NCP Syracuse, Inc. and Syracuse Investment, Inc.
4<PAGE>
This promissory note shall be governed by, and construed in
accordance with, the laws of the State of New York.
NORTH CANADIAN RESOURCES, INC.
By: ___________________________
Name:
Title:
5<PAGE>
Exhibit B-5(a)(v)
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of January 1, 1995, between
SYRACUSE INVESTMENT, INC., a Delaware corporation ("Investment"),
and NCP ENERGY, INC. (formerly North Canadian Power
Incorporated), a California corporation ("NCP").
WHEREAS, Investment owns a 24.91% limited partner interest
in Syracuse Orange Partners, L.P., a Delaware limited partnership
("SOP"), and a 1% general partner interest in SOP (the "GP
Interest");
WHEREAS, pursuant to that certain Partnership Interest
Assignment Agreement, dated as of the date hereof, Investment is
selling to NCP a 4.9% limited partner interest in SOP (the "4.9%
Sale"); and
WHEREAS, Investment desires to enter into certain additional
transactions relating to the balance of Investment's limited
partner interest in SOP.
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Assignment and Payment.
(a) Investment hereby irrevocably assigns and
transfers to NCP the Distributions (as defined in the Note
referred to below), provided, however, that the aggregate amount
of Distributions so assigned and transferred to NCP shall be
1<PAGE>
limited to an amount equal to the aggregate amount of unpaid
principal and accrued and unpaid interest determined pursuant to
the Note. In consideration therefor, NCP hereby pays to
Investment, by wire transfer of immediately available funds,
$2,722,500, receipt of which is hereby acknowledged by
Investment.
(b) Investment is hereby delivering to Berlack,
Israels & Liberman, as escrow agent ("BIL"), a promissory note of
NCRI, in the form of Exhibit A hereto, which evidences NCP's
right to receive the Distributions (the "Note"). In the event
that NCP determines that an appropriate order of the Securities
and Exchange Commission under the Public Utility Holding Company
Act of 1935 ("SEC Order") is required for NCP to acquire the
Note, BIL shall hold the Note in escrow pending receipt of the
SEC Order. Nothing herein contained shall, however, in any way
effect or detract from Investment's obligations to pay
Distributions to NCP or NCP's right to receive and collect the
same as herein provided, pending release of the Note from escrow.
(c) As used herein, the term "Distributions" shall
have the meaning set forth in the Note. The parties understand
and agree that amounts paid by NCRI pursuant to the Note shall
discharge Investment's obligation to pay the related
Distributions to NCP hereunder.
2. Representations and Warranties.
(a) Investment hereby represents and warrants to NCP
as follows:
(i) This Agreement and the Note have each been
duly authorized, executed and delivered by Investment
2<PAGE>
and NCRI, as applicable, and constitute valid and
legally binding obligations of Investment and NCRI, as
applicable, enforceable in accordance with their
respective terms.
(ii) The execution, delivery and performance of
this Agreement and the Note by Investment and NCRI, as
applicable, are not prohibited by, do not violate or
conflict with any provision of, or result in a default
(or constitute an event which with notice or lapse of
time or both, would become a default) under:
(A) Investment's or NCRI's Certificate
of Incorporation or by-laws;
(B) Any order, decree or judgment of any
court, governmental authority or arbitration body
to which Investment or NCRI or their respective
assets is bound or subject;
(C) Any law or regulation applicable to
Investment or NCRI; or
(D) Any contract, agreement or other
instrument to which Investment or NCRI is a
party or by which their respective assets are
bound or subject.
(iii) No consent, approval or authorization of,
or filing of any certificate, notice, application,
report or other document with any governmental
authority, is required on the part of Investment in
connection with the valid execution and delivery of
this Agreement by Investment or the performance by
3<PAGE>
Investment of any of its obligations hereunder or on
the part of NCRI in connection with the valid
execution and delivery of the Note by NCRI or the
performance by NCRI of any of its obligations
thereunder.
(iv) Investment is the sole record and
beneficial owner of the Interest, free and clear of all
liens, security interests, claims, pledges, charges or
other encumbrances whatsoever ("Encumbrances"), and has
the absolute right, power and capacity to assign and
transfer, and is hereby assigning and transferring, the
Distributions to NCP pursuant to the terms hereof free
and clear of any Encumbrances whatsoever.
(b) NCP hereby represents and warrants to Investment
as follows:
(i) This Agreement has been duly authorized,
executed and delivered by NCP and constitutes a valid
and legally binding obligation of NCP, enforceable in
accordance with its terms.
(ii) The execution, delivery and performance of
this Agreement by NCP are not prohibited by, do not
violate or conflict with any provision of, or result in
a default (or constitute an event which with notice or
lapse of time or both, would become a default) under:
(A) NCP's Certificate of Incorporation or
by-laws;
(B) Any order, decree or judgment of any
court, governmental authority or arbitrative body
4<PAGE>
issued after June 13, 1994 to which NCP or its
assets is bound or subject;
(C) Any law or regulation applicable to
NCP (subject to the authorizations referred to in
clause (iii) below); or
(D) Any contract, agreement or other
instrument entered into after June 13, 1994 to
which NCP is a party or by which its assets are
bound or subject.
(iii) No consent, approval or authorization of or
filing of any certificate, notice, application, report
or other document with, any governmental authority is
required on the part of NCP in connection with the
valid execution and delivery of this Agreement by NCP
or the performance by NCP of its obligations hereunder
(other than those which have been obtained or made, the
SEC Order and filing of Certificates pursuant to Rule
24 under the Public Utility Holding Company Act of
1935).
3. Security.
(a) In order to secure Investment's obligations
hereunder and NCRI's obligations under the Note, Investment is
hereby executing and delivering to NCP a security agreement in
the form of Exhibit B hereto pursuant to which Investment is
granting to NCP a security interest in the Interest.
4. Covenants of NCP. NCP agrees that if and to the extent
that it receives any payments hereunder or on the Note which
relate to a Distribution from SOP to Investment that is
5<PAGE>
subsequently required to be returned by Investment to SOP as
having been made in violation of the SOP partnership agreement or
Section 17-607 of the Delaware Limited Partnership Act, NCP will,
promptly upon request, pay to NCRI an amount equal to such
Distribution. In the event NCP pays any such amount to NCRI, the
principal and interest balances payable under the Note to which
such payment originally was applied against shall be restored.
5. Notices.
All notices, requests, demands and other communications
hereunder shall be in writing and shall be personally delivered
or sent by facsimile transmission with confirming copy sent by
overnight courier (such as Express mail, Federal Express, etc.)
and a delivery receipt obtained and addressed to the intended
recipient as follows:
(a) If to Investment:
c/o Norcen Energy Resources Limited
715 Fifth Avenue, S.W.
Calgary, Alberta T2P 2X7
Telecopy: (403) 231-0111
Attn: Vice President - Legal
with a copy to:
McDermott, Will & Emery
227 West Monroe
Chicago, IL 60606
Telecopy: (312) 984-7700
Attn: William J. McGrath
(b) If to NCP:
c/o Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
Telecopy: (201) 263-6977
Attn: Bruce L. Levy
6<PAGE>
with a copy to:
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
Telecopy: (212) 704-0196
Attn: Douglas E. Davidson, Esq.
Any party may change its address for receiving notice by giving
written notice to the others named above. All such notices shall
be given as provided above, and shall be effective immediately
upon confirmation of facsimile or completion of personal
delivery.
6. Relationship of Parties; Conversion Agreement.
(a) The parties expressly acknowledge and agree that
neither this Agreement nor the assignment of the Distributions
hereunder is intended to, and shall in no way, constitute a sale,
assignment or transfer to NCP of the Interest (as defined in the
Note) or any portion thereof. Accordingly, Investment shall for
all purposes remain the record and beneficial owner of the
Interest, the limited partner in SOP in respect thereof and
entitled to exercise in its sole and absolute discretion all
rights, including without limitation voting rights, in respect
thereof.
(b) In the event that all necessary governmental
approvals (including of the Securities and Exchange Commission
under the Public Utility Holding Company Act of 1935) and third
party consents (including of project lenders and partners in SOP)
required to effect the transfer of the Interest to NCP have been
received, granted or obtained, at either party's request both
parties hereto shall use all reasonable efforts (including by
delivering such legal opinions, certificates and other documents
7<PAGE>
as may be reasonably requested) to effect such transfer, upon
consummation of which this Agreement shall be terminated and the
Note cancelled.
7. Miscellaneous.
(a) Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same Agreement.
(b) Applicable Law. This Agreement shall be governed
by and construed in accordance with the internal substantive laws
of the State of New York. Should any provision of this Agreement
be determined to be invalid, void or unenforceable by a court of
competent jurisdiction for any reason, the remaining provisions
shall remain in full force and effect. The parties consent to
the non-exclusive jurisdiction of the New York federal and state
courts with respect to disputes arising under this Agreement or
the Note.
(c) Headings. The section and other headings
contained in this Agreement are for convenience of reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Construction. This Agreement has been negotiated
by Investment and by NCP, and their respective legal counsel, and
legal or equitable principles that might require the construction
of this Agreement or any provision hereof against the party
drafting this Agreement shall not apply in any construction or
interpretation of this Agreement.
8<PAGE>
(e) Currency. All references herein to dollars are to
United States dollars.
(f) Further Assurances. At the request of NCP,
Investment shall promptly execute and deliver all such documents
and instruments, and take such other action, as NCP may
reasonably request in order to effect the transfer of the
Distributions to NCP and otherwise to carry out the terms and
provisions of this Agreement.
(g) Amendment and Waiver. No amendment or waiver of
any provision of this Agreement shall be effective unless the
same shall be in writing and signed by the parties hereto, and
then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given.
(h) Survival. The representations and warranties of
the parties hereto shall survive the issuance of the Note.
9<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed on the date first written above.
SYRACUSE INVESTMENT, INC. NCP ENERGY, INC.
By: ___________________________ By:
Name: Name:
Title: Title:
10<PAGE>
Exhibit B-5(a)(vi)
PURCHASE OPTIONS AGREEMENT
PURCHASE OPTIONS AGREEMENT, dated as of January 1, 1995,
among NORTH CANADIAN RESOURCES, INC., a Delaware corporation
("NCRI"), NCP SYRACUSE, INC., a Delaware corporation
("Syracuse"), SYRACUSE INVESTMENT, INC., a Delaware corporation
("Investment"), and NCP ENERGY, INC. (formerly North Canadian
Power Incorporated), a California corporation ("NCP").
WHEREAS, Syracuse is the managing general partner of Project
Orange Associates, L.P. ("POA") and Syracuse Orange Partners,
L.P. ("SOP");
WHEREAS, pursuant to certain Management Agreements dated as
of the date hereof (the "Management Agreements"), between
Syracuse and NCP, NCP has, among other things, agreed to manage
and operate the Syracuse Cogeneration Project, which is owned by
POA and SOP;
WHEREAS, pursuant to a certain Assignment of Partnership
Interest dated as of the date hereof, Investment has sold to NCP
a 4.9% limited partner interest in SOP (the "4.9% Interest");
WHEREAS, pursuant to a certain Assignment Agreement dated as
of the date hereof ("Assignment Agreement"), Investment has
assigned to NCP Investment's right, title and interest in and to
distributions from SOP in respect of its remaining limited
partner interest in SOP, which is evidenced by a note from NCRI
("Note") (such assignment and the Note being collectively
referred to as the "Distribution Note");
1<PAGE>
WHEREAS, (a) Syracuse and Investment are each wholly owned
subsidiaries of NCRI, (b) Syracuse owns a 10% general partner
interest in SOP and a 1% general partner interest in POA
(collectively, the "Syracuse GP Interests"), and (c) Investment
owns a 1% general partner interest in SOP (the "Investment GP
Interest") and, subject to the Distribution Rights, a 20.01%
limited partner interest in SOP (which is subject to increase in
accordance with Section 7.1 of the First Amended and Restated
Limited Partnership Agreement of SOP dated as of December 16,
1992) (the "Investment LP Interest", and collectively with the
Investment GP Interest, the "Investment Interests"); and
WHEREAS, the parties desire to set forth certain additional
rights and agreements in connection with the foregoing
transactions.
NOW, THEREFORE, in consideration of the premises, and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1A. Syracuse Purchase Rights.
(a) On the terms set forth in this Section 1A,
Syracuse or its designee shall have the right to acquire and
purchase from NCP, in whole but not in part, the following (the
"Repurchase Right"):
(i) all right and interest of NCP in and to the
Management Agreements;
(ii) the 4.9% Interest; and
2<PAGE>
(iii) the Distribution Note (the items specified in
clauses (i), (ii) and (iii) being collectively referred to
as the "Syracuse Interest"),
for aggregate consideration equal to the Syracuse Interest
Purchase Price (as such term is defined in Exhibit A hereto).
(b) Syracuse may exercise the Repurchase Right at any
time in its sole discretion by providing notice thereof
("Repurchase Notice") to NCP, which notice shall be irrevocable.
The closing of the purchase and sale of the Syracuse Interest
shall take place on the 45th business day after delivery of the
Repurchase Notice. At the closing, (i) NCP shall sell, assign
and transfer (collectively, a "Transfer") to Syracuse or its
designee all of its right, title and interest in and to the
Syracuse Interest, such Transfer to be made pursuant to
assignment instruments in substantially the form of Exhibit B
hereto (without representation or warranty except as provided in
this Agreement) ("Assignment Instruments"), (ii) Syracuse shall
pay or cause to be paid the Syracuse Interest Purchase Price to
an account designated by NCP by wire transfer of immediately
available funds, and (iii) Syracuse or its designee shall assume
all obligations of NCP under the Management Agreements pursuant
to an assumption agreement in substantially the form of Exhibit C
hereto ("Assumption Agreement").
(c) Notwithstanding anything in this Section 1A to the
contrary, (i) in the event, but only in the event, that the
Management Agreements are properly terminated by Syracuse in
accordance with Section 2.01(c) thereof as a result of a default
by NCP thereunder (a "Default Termination"), Syracuse may
3<PAGE>
nevertheless exercise (but shall not be obligated to exercise)
the Repurchase Right with respect to the 4.9% Interest and the
Distribution Note only, in which case the Syracuse Interest
Purchase Price shall be adjusted as set forth in Exhibit A; and
(ii) in the event but only in the event that both (1) the
Management Agreements have terminated and the Buy-Out Amount (as
defined in the Management Agreement for POA) has become due and
payable, and (2) such termination did not result from a Special
Termination (as defined below), NCP shall have the right in its
sole discretion to cause Syracuse to exercise the Repurchase
Right with respect to the 4.9% Interest and the Distribution Note
only by providing irrevocable notice thereof to Syracuse (and in
the absence of such notice, Syracuse may not otherwise exercise
the Repurchase Right), in which case the closing shall occur on
the 45th business day after the delivery of such notice to
Syracuse in the same manner and on the same terms as if Syracuse
had provided a Repurchase Notice under this paragraph (c);
provided, however, that in the case of a purchase pursuant to
this clause (ii), the purchase price shall not exceed $4,642,500.
As used herein, the term "Special Termination" means a
termination of the Management Agreements resulting from the
removal of Syracuse as the managing general partner of POA as
provided by a final non-appealable judgment in favor of the
plaintiffs in the proceeding entitled G.A.S. Orange Partners,
L.P., G.A.S. Orange Development, Inc., G.A.S. Alternative
Systems, Inc., and Adam H. Victor v. NCP Syracuse, Inc., North
Canadian Power Incorporated and Syracuse Orange Partners, L.P.,
94 CV 752 (N.D.N.Y.).
4<PAGE>
(d) Notwithstanding the provisions of this Section 1A,
the Repurchase Right granted to Syracuse hereunder shall
immediately and forever terminate, without further action by any
party hereto (i) should Syracuse, having provided a Repurchase
Notice, default in its obligation to pay or cause to be paid the
Syracuse Interest Purchase Price at the scheduled closing, or
(ii) in the event of a sale of the Syracuse Interest pursuant to
Section 2(c) hereof or (iii) except as expressly provided by
Section 1A(c), following a termination of the Management
Agreements.
1B. NCP Purchase Right.
(a) On the terms set forth in this Section 1B, NCP or
its designee shall have the right to acquire and purchase the
Syracuse GP Interests and the Investment Interests (collectively,
the "Subsidiary Interests") from Syracuse and Investment
(collectively, the "NCRI Subs") or, at NCP's option, the
outstanding shares of capital stock of the NCRI Subs
(collectively, the "Shares") from NCRI, in whole but not in part
(the "NCP Repurchase Right") for an aggregate purchase price
equal to the NCRI Interest Purchase Price (as such term is
defined in Exhibit A hereto).
(b) NCP may exercise the NCP Repurchase Right at any
time in its sole discretion by providing notice thereof ("NCP
Repurchase Notice") to NCRI, which notice shall be irrevocable.
The closing of the purchase and sale of the Subsidiary Interests
or Shares, as applicable, shall take place on the 45th business
day after the Consents Receipt Date (as defined in Section 5
below). At the closing, (i) NCRI or the NCRI Subs, as
5<PAGE>
applicable, shall transfer the Shares or the Subsidiary
Interests, as applicable, by delivery of the certificates
evidencing the Shares along with stock powers duly endorsed or in
blank or Assignment Instruments, as applicable, and (ii) NCP
shall pay or cause to be paid the NCRI Interest Purchase Price by
wire transfer of immediately available funds to an account
designated by NCRI.
(c) Notwithstanding the provisions of this Section 1B,
the NCP Repurchase Right granted to NCP hereunder shall
immediately and forever terminate, without further action by any
party hereto, (i) should NCP, having provided an NCP Repurchase
Notice, default in its obligation to pay or cause to be paid the
NCRI Interest Purchase Price at the scheduled closing or (ii) in
the event of a sale of the Shares or Subsidiary Interests
pursuant to Section 3(c) hereof.
2. Restrictions on NCP Transfers.
(a) NCP may Transfer the Syracuse Interest, in whole
but not in part, only in accordance with the provisions of this
Section 2.
(b) If NCP desires to Transfer the Syracuse Interest,
NCP shall first offer to sell the same to Syracuse by delivering
a written notice thereof (the "First Offer Notice") to Syracuse
which shall state the proposed purchase price (the "Offer
Price"). Syracuse shall have the exclusive right to accept such
offer on or before the 30th day following its receipt of the
First Offer Notice (the "Expiration Date"), by providing an
irrevocable notice of acceptance thereof to NCP ("Acceptance
Notice"). If Syracuse so accepts, the closing of the purchase
6<PAGE>
and sale of the Syracuse Interest shall occur on the 15th
business day following the Consent Receipts Date. At the
closing, (i) NCP shall Transfer to Syracuse or its designee all
of its right, title and interest in and to the Syracuse Interest,
such Transfer to be made pursuant to Assignment Instruments, (ii)
Syracuse shall pay or cause to be paid the Offer Price to an
account designated by NCP by wire transfer of immediately
available funds, and (iii) Syracuse or its designee shall assume
all obligations of NCP under the Management Agreements pursuant
to an Assumption Agreement.
(c) If Syracuse shall not have provided an Acceptance
Notice to NCP on or before the Expiration Date (or if Syracuse
shall have previously declined to exercise such right), then NCP
shall have 270 days from the Expiration Date (or such necessary
longer period, if any, pending any necessary approval by any
governmental or regulatory authority having jurisdiction being
sought in good faith by appropriate proceedings promptly
initiated and diligently conducted) (the "Offer Period") within
which to consummate the Transfer of the Syracuse Interest, at a
price equal to or greater than the product of (i) .90 and (ii)
the Offer Price. If no such sale occurs within the Offer Period,
the Syracuse Interest shall again be subject to all of the
restrictions on Transfer set forth in this Section 2.
(d) Notwithstanding the provisions of this Section 2,
the restrictions in this Section 2 on NCP's right to Transfer the
Syracuse Interest shall immediately and forever terminate (i)
should Syracuse, having provided an Acceptance Notice, default in
its obligation to pay or cause to be paid the Offer Price at the
7<PAGE>
scheduled closing or (ii) if earlier, following a Transfer of the
Syracuse Interest by NCP pursuant to Section 2(c) hereof.
3. Restrictions on NCRI Transfers.
(a) NCRI may Transfer the Shares, and the NCRI Subs
may Transfer the Subsidiary Interests, in whole but not in part,
only in accordance with the provisions of this Section 3.
(b) If NCRI desires to Transfer the Shares or if the
NCRI Subs desire to Transfer the Subsidiary Interests, the
transferor ("Transferor") shall first offer to sell the same to
NCP by delivering to NCP a First Offer Notice which shall state
the Offer Price. NCP shall have the exclusive right to accept
such offer on or before the Expiration Date, by providing to the
Transferor an Acceptance Notice. If NCP so accepts, the closing
of the purchase and sale of the Shares or Subsidiary Interests,
as applicable, shall occur on the 15th business day following the
Consents Receipts Date. At the closing, (i) the Transferor shall
Transfer to NCP or its designee all of its right, title and
interest in and to the Shares or the Subsidiary Interests, as
applicable, by delivery of the certificates evidencing the Shares
along with stock powers duly endorsed or in blank or Assignment
Instruments, as applicable, and (ii) NCP shall pay or cause to be
paid the Offer Price by wire transfer of immediately available
funds to an account designated by the Transferor.
(c) If NCP shall not have provided an Acceptance
Notice to the Transferor on or before the Expiration Date (or if
NCP shall have previously declined to exercise such right), then
the Transferor shall have the Offer Period within which to
consummate the Transfer of the Shares or Subsidiary Interests, as
8<PAGE>
applicable, at a price equal to or greater than the product of
(i) .90 and (ii) the Offer Price. If no such sale occurs within
the Offer Period, the Shares or Subsidiary Interests, as
applicable, shall again be subject to all of the restrictions on
Transfer set forth in this Section 3.
(d) Notwithstanding the provisions of this Section 3,
the restrictions in this Section 3 on NCRI's and the NCRI Subs'
right to Transfer the Shares and the Subsidiary Interests shall
immediately and forever terminate (i) should NCP, having provided
an Acceptance Notice, default in its obligation to pay or cause
to be paid the Offer Price at the scheduled closing or (ii) if
earlier, following a Transfer of the Shares or Subsidiary
Interests, as applicable, pursuant to Section 3(c) hereof.
4A. Drag-Along Transfers.
(a) So long as NCP or a Permitted Assignee (as defined
in Section 5(i) hereof) of NCP owns the Syracuse Interest, NCRI
or the NCRI Subs, as applicable, shall have the right, in
connection with a Transfer of the Shares or the Subsidiary
Interests, to require NCP to sell the Syracuse Interest to the
purchaser simultaneously with said Transfer (or, if later, the
Consents Receipt Date), at a purchase price equal to the Syracuse
Interest Purchase Price.
(b) So long as NCRI or a Permitted Assignee of NCRI
owns the Shares, or so long as the NCRI Subs or a Permitted
Assignee of the NCRI Subs owns the Subsidiary Interests, NCP
shall have the right, in connection with a Transfer of the
Syracuse Interest, to require NCRI to sell the Shares or the NCRI
Subs to sell the Subsidiary Interests (at NCP's sole discretion)
9<PAGE>
to the purchaser, simultaneously with said Transfer (or, if
later, the Consents Receipt Date), at a purchase price equal to
the NCRI Interest Purchase Price.
(c) The party requiring the sale under this Section 4A
is herein referred to as the "Call Optionee", and the party (or
parties) being required to sell is herein referred to as the
"Call Seller". The Call Optionee may exercise its call right
under Section 4A(a) or 4A(b) by providing notice thereof to the
Call Seller not less than ten days prior to the closing of the
related Transfer, such notice to be irrevocable (unless the
underlying Transfer fails to close). At the closing, the Call
Optionee shall pay or cause to be paid the applicable purchase
price to the Call Seller by wire transfer of immediately
available funds to an account designated by the Call Seller, and
the parties shall execute and deliver such Assignment
Instruments, an Assumption Agreement, and/or stock powers, as
applicable, and such legal opinions and certificates as are
reasonably requested, necessary to effect such Transfer.
4B. Tag-Along Transfers.
(a) Subject to the limitation in paragraph (c) below,
NCP shall have the right in connection with a Transfer of the
Shares or Subsidiary Interests by NCRI or the NCRI Subs, as
applicable, to require the transferor to use all reasonable
efforts to cause the buyer to also agree to purchase the Syracuse
Interest from NCP, simultaneously with said Transfer (or, if
later, the Consents Receipt Date), at a purchase price equal to
the Syracuse Interest Purchase Price.
10<PAGE>
(b) Subject to the limitation in paragraph (c) below,
Syracuse shall have the right, in connection with a Transfer of
the Syracuse Interest by NCP, to require NCP to use all
reasonable efforts to cause the buyer to also agree to purchase
the Subsidiary Interests from Syracuse and Investment (or, in
such buyer's sole discretion, the Shares from NCRI),
simultaneously with said Transfer (or, if later, the Consents
Receipt Date), at a purchase price equal to the NCRI Interest
Purchase Price.
(c) The party requiring the sale under this Section 4B
is referred to herein as the "Tag-Along Party", and the interests
and other rights to be sold by the Tag-Along Party are referred
to herein as the "Tag-Along Interest." The Tag-Along Party may
exercise a tag-along right under Section 4B(a) or 4B(b) only if
(i) the underlying Transfer was subject to the first offer
restriction provided in Section 2 or 3, as applicable, and the
Tag-Along Party declined to exercise such right of first offer,
and (ii) on or before the Expiration Date relating to such right
of first offer, the Tag-Along Party provided notice of its
exercise of the tag-along right to the transferor, such notice to
be irrevocable (unless the underlying Transfer fails to close).
(d) Assuming the transferor has, with the exercise of
reasonable efforts, caused the buyer to agree to purchase the
Tag-Along Interest, at the closing the buyer shall pay the
applicable purchase price to the Tag-Along Party by wire transfer
of immediately available funds to an account designated by the
Tag-Along Party, and the parties shall execute and deliver such
Assignment Instruments, an Assumption Agreement and/or stock
11<PAGE>
powers, as applicable, and such legal opinions and certificates
as are reasonably requested, necessary to effect such Transfer.
5. Certain Closing Procedures.
(a) The closing for any Transfer under Sections 1
through 4 hereof shall take place at 10:00 a.m. at the offices of
NCP's counsel in New York, New York or at such other time and
location as the parties may agree.
(b) With respect to any Transfer of a partnership
interest in SOP or POA, the parties shall (i) execute and deliver
such additional documentation, if any, in form and substance
reasonably acceptable to them, as is required by the applicable
partnership agreement to effect such transfer and any related
substitution of partners or as may be reasonably requested by the
parties; and (ii) exercise good faith reasonable efforts to
obtain any and all required consents of third parties (including
from project lenders or partners in SOP or POA) and governmental
authorizations necessary to effect the Transfer.
(c) As used herein, "Consents Receipt Date" means,
with respect to a Transfer, the first date on which any and all
necessary third party consents (including of project lenders and
partners in SOP and POA) and governmental authorizations
(including of the Securities and Exchange Commission under the
Public Utility Holding Company Act of 1935) required to effect
such Transfer have been received, granted or obtained. The party
exercising a right hereunder to Transfer or require a Transfer
shall be responsible at its sole cost and expense for obtaining
any such third party consents and governmental authorizations,
12<PAGE>
provided that the other parties shall cooperate and assist such
party in all reasonable respects.
6. Representations and Warranties.
(a) NCRI, Investment and Syracuse each hereby
represents and warrants to NCP, and NCP hereby represents and
warrants to NCRI, Investment and Syracuse, as follows:
(i) This Agreement has been duly authorized,
executed and delivered by it and constitutes its valid
and legally binding obligation, enforceable in
accordance with its terms.
(ii) The execution, delivery and performance of
this Agreement by it are not prohibited by, do not
violate or conflict with any provision of, or result in
a default (or constitute an event which with notice or
lapse of time or both, would become a default) under:
(A) Its Certificate of Incorporation or by-
laws;
(B) Any order, decree or judgment of any
court, governmental authority or arbitrative body
(which in the case of NCP, is issued after June
13, 1994) to which it or its assets is bound or
subject;
(C) Any law or regulation applicable to it
(except in the case of NCP, subject to receipt of
the orders referred to in clause (iii) below); or
(D) Except as set forth on Exhibit D hereto,
any contract, agreement or other instrument (which
in the case of NCP, is entered into after June 13,
13<PAGE>
1994) to which it is a party or by which its
assets are bound or subject.
(iii) No consent, approval or authorization of or
filing of any certificate, notice, application, report
or other document with, any governmental authority is
required on its part in connection with the valid
execution and delivery of this Agreement by it or the
performance by it of its obligations hereunder (other
than, in the case of NCP, such orders as may be
required of the Securities and Exchange Commission
under the Public Utility Holding Company Act of 1935).
(b) Additional Representations of NCRI. NCRI hereby
represents and warrants to NCP that NCRI is the sole record and
beneficial owner of the Shares, free and clear of all liens,
security interests, claims, pledges, charges or other
encumbrances whatsoever ("Encumbrances"), and, subject to receipt
of the consents listed in Exhibit D, has the absolute right,
power and capacity to Transfer, and if and when required by this
Agreement to do so, will Transfer, the Shares pursuant to the
terms hereof free and clear of any Encumbrances whatsoever.
(c) Additional Representations of Investment.
Investment hereby represents and warrants to NCP as follows:
(i) Investment has been formed for the sole
purpose of holding limited and general partnership
interests in SOP; it is not engaged in any other
business; and, following consummation of the sale of
the 4.9% Interest, it will have (A) no assets other
than the Investment Interests or (B) any liabilities or
14<PAGE>
obligations other than those created by, and is not a
party to any contract or other agreement other than,
this Agreement or as set forth in Exhibit F hereto.
(ii) Except as set forth in Exhibit E hereto,
Investment is the sole record and beneficial owner of
the Investment Interests, free and clear of all
Encumbrances whatsoever, and, subject to receipt of the
consents listed in Exhibit D, has the absolute right,
power and capacity to Transfer, and if and when
required by this Agreement to do so, will Transfer, the
Investment Interests pursuant to the terms hereof free
and clear of any Encumbrances whatsoever.
(d) Additional Representations of Syracuse. Syracuse
hereby represents and warrants to NCP as follows:
(i) Syracuse has been formed for the sole purpose
of holding the Syracuse GP Interests; it is not engaged
in any other business; and, it has no (A) assets other
than the Syracuse GP Interests or (B) any liabilities
or obligations other than those created by, and is not
a party to any contract or other agreement other than,
this Agreement, or as set forth in Exhibit F hereto.
(ii) Except as set forth in Exhibit E hereto,
Syracuse is the sole record and beneficial owner of the
Syracuse GP Interests, free and clear of all
Encumbrances whatsoever, and, subject to receipt of the
consents listed in Exhibit D, has the absolute right,
power and capacity to Transfer, and if and when
required by this Agreement to do so, will Transfer, the
15<PAGE>
Syracuse GP Interests pursuant to the terms hereof free
and clear of any Encumbrances whatsoever.
(e) Additional Representations of NCP. NCP hereby
represents and warrants to the other parties hereto as follows:
(i) Except as set forth in Exhibit E hereto, NCP
has not created any Encumbrances with respect to its
rights under the Management Agreement and, subject to
receipt of the consents listed in Exhibit D and the
orders referred to in Section 6(a)(iii), has the
absolute right, power and capacity to Transfer such
rights, and if and when required by this Agreement to
do so, will Transfer such rights pursuant to the terms
hereof free and clear of any such Encumbrances
whatsoever.
(ii) Except as set forth in Exhibit E hereto, NCP
is the sole owner of the Distribution Note and the 4.9%
Interest free and clear of any Encumbrances whatsoever,
and, subject to receipt of the consents listed in
Exhibit D and the orders referred to in Section
6(a)(iii), has the absolute right, power and capacity
to Transfer, and if and when required by this Agreement
to do so, will Transfer the same pursuant to the terms
hereof free and clear of any Encumbrances whatsoever.
7. Covenants of NCRI. NCRI shall cause:
(i) the NCRI Subs to maintain their existence as
corporations in good standing under Delaware law, and not to:
(a) merge or consolidate, or sell or otherwise
transfer the Syracuse GP Interests or the Investment
16<PAGE>
Interests (except pursuant to the terms hereof), or
issue any instruments convertible into or exercisable
for the same; or
(b) engage in any business other than holding the
Syracuse GP Interests and the Investment Interests, as
applicable; or
(c) create or suffer to exist any Encumbrance on
the Syracuse GP Interests or the Investment Interests;
and
(ii) Syracuse to comply with its obligations under
Section 1A(c)(ii) hereof and Section 2.03 of that certain
Management Agreement for Project Orange Associates, L.P., dated
as of the date hereof, between Syracuse and NCP.
8. Notices.
All notices, requests, demands and other communications
hereunder shall be in writing and shall be personally delivered
or sent by facsimile transmission with confirming copy sent by
overnight courier (such as Express mail, Federal Express, etc.)
and a delivery receipt obtained and addressed to the intended
recipient as follows:
(a) If to NCRI, Syracuse or Investment:
c/o Norcen Energy Resources Limited
715 Fifth Avenue, S.W.
Calgary, Alberta, T2P 2X7
Telecopy: (403) 231-0111
Attn: Vice President - Legal
with a copy to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, IL 60606
17<PAGE>
Telecopy: (312) 984-7700
Attn: William McGrath
(b) If to NCP:
c/o Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
Telecopy: (201) 263-6977
Attn: Bruce L. Levy
with a copy to:
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
Telecopy: (201) 704-0196
Attn: Douglas E. Davidson, Esq.
Any party may change its address for receiving notice by giving
written notice to the others named above. All such notices shall
be given as provided above, and shall be effective immediately
upon confirmation of facsimile or completion of personal
delivery.
9. Miscellaneous.
(a) Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same Agreement.
(b) Applicable Law. This Agreement shall be governed
by and construed in accordance with the internal substantive laws
of the State of New York. Should any provision of this Agreement
be determined to be invalid, void or unenforceable by a court of
competent jurisdiction for any reason, the remaining provisions
shall remain in full force and effect. The parties consent to
the non-exclusive jurisdiction of the New York federal and state
courts with respect to disputes arising under this Agreement.
18<PAGE>
(c) Headings. The section and other headings
contained in this Agreement are for convenience of reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Construction. This Agreement has been negotiated
by the parties, and their respective legal counsel, and legal or
equitable principles that might require the construction of this
Agreement or any provision hereof against the party drafting this
Agreement shall not apply in any construction or interpretation
of this Agreement.
(e) Currency. All references herein to dollars are to
United States dollars.
(f) Further Assurances. At the request of a party,
the other parties hereto shall promptly execute and deliver all
such documents and instruments, and take such other action, as
such party may reasonably request in order to carry out the terms
and provisions of this Agreement.
(g) Amendment and Waiver. No amendment or waiver of
any provision of this Agreement shall be effective unless the
same shall be in writing and signed by the parties hereto, and
then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which
given.
(h) Survival. The representations and warranties of
the parties hereto shall survive any Transfer effected pursuant
hereto.
(i) Assignment. No party hereto may assign any of its
rights hereunder to any person other than a Permitted Assignee
19<PAGE>
without the prior consent of the other parties hereto. As used
herein, "Permitted Assignee" means, (i) in the case of NCRI,
Investment and Syracuse, any direct or indirect wholly owned
United States subsidiary of Norcen Energy Resources Limited which
(in the case of NCRI) succeeds to NCRI's business; and (ii) in
the case of NCP, any direct or indirect wholly owned subsidiary
of General Public Utilities Corporation or Energy Initiatives,
Inc. Prior to the effectiveness of any assignment to a Permitted
Assignee, the assignee shall become a party to this Agreement and
expressly assume the obligations of the assignor pursuant to a
written instrument delivered to all parties hereto.
Notwithstanding anything to the contrary contained herein, the
restrictions on Transfer in Sections 2 and 3 hereof, and the
right to require a Transfer pursuant to Section 4 hereof, shall
not apply with respect to Transfers of the Shares, Subsidiary
Interests and Syracuse Interest to a Permitted Assignee of the
transferor who has become a party to this Agreement in accordance
with the immediately preceding sentence.
(j) Transfer Taxes. With respect to any Transfer
made pursuant to the terms hereof, the seller in all cases shall
be required to pay any and all stock transfer, sales, real
property transfer and gains, and other similar taxes applicable
thereto.
(k) SOP Undertaking. NCRI, Investment and NCP
agree that in the event that (i) all obligations under the Note
and Assignment Agreement have been discharged in full and (ii)
SOP has not theretofore terminated, they will use good faith and
reasonable efforts to implement a transaction (without any
20<PAGE>
additional payment by NCP) to provide NCP with the benefit of any
future distributions in respect of Investment's limited partner
interest in SOP, which transaction (A) shall be reflected by
documentation reasonably acceptable to such parties and (B) shall
not result in a substantial tax cost to NCRI (compared with the
tax effect of the Note and Assignment Agreement).
21<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed on the date first written above.
SYRACUSE INVESTMENT, INC. NCP ENERGY, INC.
By: ___________________________ By:
Name: ___________________________
Title: Name:
Title:
NCP SYRACUSE, INC. NORTH CANADIAN RESOURCES, INC.
By: ___________________________ By:
Name: ___________________________
Title: Name:
Title:
22<PAGE>
[Purchase Options Agreement]
Exhibit A
Certain Purchase Price Terms
1. "Syracuse Interest Purchase Price" means [see 1A(a)]
2. "NCRI Interest Purchase Price" means [see 1B(a)]
3. In the event the Repurchase Right is exercised in accordance
with Section 1A(c) following a termination of the Management
Agreements, the Syracuse Interest Purchase Price shall be
adjusted as follows:
23<PAGE>
[Purchase Options Agreement]
Exhibit B
Form of Assignment Instruments
24<PAGE>
[Purchase Options Agreement]
Exhibit C
Form of Assumption Agreement
25<PAGE>
[Purchase Options Agreement]
Exhibit D
Consents
All parties: Such consents as may be required for any Transfer
contemplated herein under: (i) the project
financing agreements for POA; (ii) the partnership
agreements for POA and SOP, and (iii) those
certain letters each dated on or about the date
hereof and addressed to Metlife Capital
Corporation from North Canadian Oils Limited,
Syracuse and NCP.
26<PAGE>
[Purchase Options Agreement]
Exhibit E
Title/Encumbrances
1. Syracuse has pledged its partnership interest in POA to the
POA project lenders pursuant to a Pledge and Security
Agreement dated as of April 5, 1991.
2. Investment has pledged its limited partnership interest in
SOP to NCP pursuant to a Security Agreement dated as of
January 1, 1995.
3. As contemplated by the Assignment Agreement, the Note is
being held in escrow pending receipt of an appropriate order
of the Securities and Exchange Commission under the Public
Utility Holding Company Act of 1935.
4. Syracuse has pledged all of its rights to receive management
fees from POA to the POA project lenders pursuant to the
above-referenced Pledge and Security Agreement. Pursuant to
the Management Agreement for POA, Syracuse has assigned such
fees to NCP, subject to such pledge.
27<PAGE>
[Purchase Options Agreement]
Exhibit F
Contracts
Investment and Syracuse: All contracts to which Investment or
Syracuse, as applicable, is a party as
set forth in Schedule A to that certain
Second Amendment to Stock Purchase and
Sale Agreement, dated the date hereof,
by and among NCO, NCRI, and Energy
Initiatives, Inc.
Syracuse: 1. Partnership agreements for SOP and
POA.
2. Syracuse Letter to MetLife Capital
Corporation dated January 1, 1995.
3. Syracuse Letter to NCP, related to
litigation commenced by Adam Victor
et.al, dated January 1, 1995.
Investment: 1. Partnership Agreement for SOP.
28<PAGE>
Exhibit B-5(g)
MANAGEMENT AGREEMENT
FOR
PROJECT ORANGE ASSOCIATES, L.P.
This MANAGEMENT AGREEMENT FOR PROJECT ORANGE
ASSOCIATES, L.P. ("Agreement"), dated as of the 1st day of
January, 1995, by and between NCP Energy, Inc., a California
corporation ("NCP"), and NCP Syracuse, Inc., a Delaware
corporation ("GP").
W I T N E S S E T H:
WHEREAS, Project Orange Associates, L.P., a Delaware
limited partnership ("POA"), owns and operates a gas-fired
cogeneration facility (the "Facility") located near Syracuse
University in Syracuse, New York;
WHEREAS, GP is a general partner and the Managing
General Partner (as defined below) of POA;
WHEREAS, concurrently with the execution and delivery
of this Agreement, NCP is acquiring a limited partner and certain
other economic interests in Syracuse Orange Partners, L.P.,
which, in turn, is a limited partner of POA;
WHEREAS, GP desires to contract with NCP to perform the
services required to be provided by GP as the managing general
partner ("Managing General Partner") of POA under that certain
Second Amended and Restated Agreement of Limited Partnership of
Project Orange Associates, L.P., dated as of December 16, 1992,
by and among G.A.S. Orange Partners, L.P., Syracuse Orange
Partners, L.P. and NCP Syracuse, Inc. (said agreement, as amended
from time to time, the "Partnership Agreement"); and
WHEREAS, NCP desires to perform such services for GP
and on behalf of GP for POA.
NOW, THEREFORE, in consideration of the mutual
covenants herein contained and intending to be legally bound, the
parties hereto agree as follows:
Article 1 - Retention of NCP to Perform the Services.
1.01 Beginning on the date hereof and continuing until
the end of the Term hereof (determined and defined as
set forth below), NCP shall provide to POA on behalf of
GP, all of the services required of GP as the Managing
General Partner of POA under the Partnership Agreement
as in effect on the date hereof, notwithstanding any
amendment or revision thereof (the "Services"), includ-
1<PAGE>
ing, but not limited to, the services set forth in
Schedule 1 attached hereto.
1.02 In consideration for the Services, GP shall pay
to NCP all fees, reimbursements and payments
(collectively, the "Fees") payable to GP for or in
connection with the performance of the obligations of
GP as Managing General Partner in accordance with the
terms and conditions of the Partnership Agreement as in
effect on the date hereof, notwithstanding any
amendment or revision thereof, provided, however, that
if and to the extent that GP incurs costs and expenses
in connection with the performance by GP of such of its
obligations as Managing General Partner which may not
be performed by NCP under the Partnership Agreement, as
in effect on the date hereof, or this Agreement, or the
exercise of such of its rights as Managing General
Partner which may not be exercised by NCP under the
Partnership Agreement, as in effect on the date hereof,
or this Agreement, and for which GP is entitled to
reimbursement or payment under the Partnership
Agreement, GP shall not be obligated to pay to NCP the
amount of such reimbursement or payment and the amount
thereof shall be excluded from the Fees.
1.03 Subject to any security interest, assignment,
pledge or other right granted by POA or GP in the Fees
to secure POA's performance of its obligations under
that certain Financing Agreement, dated as of April 5,
1991, by and among POA, City of Syracuse Industrial
Development Agency, ABN AMRO Bank, N.V. (successor to
Algemene Bank Nederland N.V., Cayman Islands Branch) as
Agent for the Banks party thereto, and the Banks party
thereto, as amended (the "Financing Agreement") and any
restrictions on payment of the Fees set forth in the
Partnership Agreement, as in effect on the date hereof,
or the Financing Agreement, GP hereby assigns to NCP
all of its right, title and interest in and to the Fees
and, to the extent not inconsistent with the
Partnership Agreement, consents to and shall direct the
payment of such fees, reimbursements and payments
directly to NCP by POA. GP hereby covenants and agrees
that it will not permit POA to reduce the amount of the
Fees from the amount payable on the date hereof.
1.04 NCP shall be subject to the limitations,
restrictions and requirements to obtain consents and
approvals from the partners of POA in the performance
of the Services to the same extent as GP would be
subject to such limitations, restrictions and
requirements in the performance of its duties as
Managing General Partner of POA.
1.05 It is expressly understood and agreed that the
parties to this Agreement do not intend, and this
2<PAGE>
Agreement shall not be deemed, to delegate or grant to
NCP any authority whatever to exercise any of GP's
rights under the Partnership Agreement as the Managing
General Partner or a general partner of POA, including,
without limitation, any voting, approval or consent
rights respecting any matter. GP shall for all
purposes be and remain a general partner and the
Managing General Partner of POA.
Article 2 - Term
2.01 The term ("Term") of this Agreement shall
commence on the date first above written and shall
terminate on the earliest to occur of:
(a) the dissolution or other termination of POA;
(b) the withdrawal or removal of GP as a general
partner or the Managing General Partner of POA
pursuant to the Partnership Agreement;
(c) at the option of the non-breaching party, the
occurrence of an Event of Default, as defined
below; and
(d) 180 days after the receipt by NCP of written
notice from GP that this Agreement shall
terminate.
2.02 NCP may terminate this Agreement at its option in
the event the amounts payable to NCP hereunder are
materially reduced, for example, but without
limitation, as a result of an inability of the
Partnership to pay the Fees due to a default under the
Financing Agreement.
2.03 GP shall pay to NCP the Buyout Amount, defined and
calculated as set forth in Schedule 2 hereto, upon the
termination of this Agreement due to:
(a) a dissolution or other termination of POA at
the election of GP and/or any affiliate or
affiliates of GP;
(b) the dissolution or other termination of POA
as a result of a material breach by GP of the
Partnership Agreement or the gross negligence or
willful misconduct of GP;
(c) the withdrawal of GP as a general partner or
the Managing General Partner of POA, or the
removal of GP as a General Partner or the Managing
General Partner of POA as a result of the material
breach by GP of the Partnership Agreement or the
3<PAGE>
gross negligence, willful misconduct or breach of
fiduciary duty by GP;
(d) an Event of Default arising out of a material
breach of this Agreement by GP; or
(e) the termination of this Agreement under
Section 2.02, above, as a result of a material
reduction in the amounts payable to NCP hereunder
or at the election of GP and/or any affiliate or
affiliates of GP.
2.04 "Event of Default" shall mean a material breach of
this Agreement which shall remain uncured after written
notice of such breach has been received by the
breaching party and a reasonable time to cure such
breach, in any event not less than 90 days, has
expired.
Article 3 - Liability; Indemnification
3.01 NCP shall perform its obligations hereunder with
the same degree of care as would be required of GP by
POA under the Partnership Agreement as in effect on the
date hereof.
3.02 Neither NCP, any of its officers, directors or
employees nor any of its affiliates or their officers,
directors or employees, shall have any liability
hereunder, including, but not limited to, liability for
any loss, cost or expense suffered by POA, which arises
out of any act or failure to act of NCP if NCP, in good
faith, determined that its course of conduct was in the
best interests of POA (and, in the case of any
affirmative action taken on behalf of POA, reasonably
believed such action to be within the scope of the
authority granted to GP under the Partnership
Agreement) and such action or inaction does not
constitute gross negligence or willful misconduct or
does not cause GP to breach its fiduciary duty to POA
or to materially breach the Partnership Agreement, as
in effect on the date hereof.
3.03 Notwithstanding anything to the contrary set
forth herein, this Agreement shall not impose on NCP
any fiduciary duty to POA or any partner of POA.
3.04 NCP shall not enter into any contract,
arrangement, agreement or other transaction on behalf
of POA with any affiliate of NCP, or cause POA to lend
or borrow money to or from any such affiliate, without
the prior written consent of GP.
4<PAGE>
3.05 GP shall indemnify, defend and hold NCP harmless
from and against any liability, loss or expense,
including without limitation, reasonable attorneys'
fees, litigation costs, settlement amounts and
judgments, incurred for any act or omission of GP,
unless such act or omission is the direct result of the
gross negligence or willful misconduct of NCP or a
breach of this Agreement by NCP which directly causes
GP to breach its fiduciary duty to POA or to materially
breach the Partnership Agreement as in effect on the
date hereof.
3.06 GP shall indemnify, defend and hold NCP harmless
from and against any liability, loss or expense,
including without limitation, reasonable attorneys'
fees, litigation costs, settlement amounts and
judgments, incurred by NCP for any act or omission of
NCP performed or omitted by NCP in good faith and
reasonably believed by NCP to be within the scope of
the authority granted to GP under the Partnership
Agreement and in the best interests of POA, unless such
act or omission constitutes gross negligence or willful
misconduct or causes GP to breach its fiduciary duty to
POA or to materially breach the Partnership Agreement,
as in effect on the date hereof.
3.07 Subject to any security interest, assignment,
pledge or other right granted by POA or GP to secure
POA's obligations under the Financing Agreement or any
restrictions on the right to receive indemnification
set forth in the Partnership Agreement as in effect on
the date hereof or the Financing Agreement, GP hereby
assigns to NCP all of GP's right, title and interest in
and to any and all payments GP shall become entitled to
receive in respect of its rights under the Partnership
Agreement to be indemnified against claims, losses,
suits, expenses, costs and liabilities, to the extent
any such losses, suits, expenses, costs or liabilities
are suffered or incurred by NCP. GP shall fully
exercise its rights to be indemnified by POA for the
benefit of NCP and shall cooperate with NCP in the
enforcement of such rights.
3.08 NCP shall indemnify, defend and hold GP harmless
from and against any liability, loss or expense,
including without limitation, reasonable attorneys'
fees, litigation costs, settlement amounts and
judgments, incurred by GP for any act or omission of
NCP constituting gross negligence or willful misconduct
or which causes GP to breach its fiduciary duty to POA
or to materially breach the Partnership Agreement, as
in effect on the date hereof.
3.09 NCP shall have no liability hereunder for any
special, indirect or consequential damages arising out
5<PAGE>
of any act or omission to act including, but not
limited to, any loss, cost or expense suffered by POA,
any reduction of distributions made by POA or any
reduction in the capital account of any partner of POA,
notwithstanding the assertion of any claim for such
damages based upon this Agreement, contract, tort
(including negligence), strict liability, breach of
fiduciary duty or any other theory of law or equity,
except if and to the extent such damages are
proximately caused by the gross negligence or willful
misconduct of NCP or a breach of this Agreement which
directly causes GP to breach its fiduciary duty to POA
or to materially breach the Partnership Agreement as in
effect on the date hereof.
Article 4 - Appointment of NCP as Attorney-in-Fact.
4.01 GP does hereby irrevocably constitute and appoint
NCP, for the duration of the Term, its true and lawful
agent and attorney-in-fact, with full power and
authority in its name, place and stead to make,
execute, sign, acknowledge, swear to, deliver, file and
record at the appropriate public offices, such
contracts, certificates, applications, and other
documents and instruments, and any amendments thereto,
as may be necessary or appropriate in the performance
of this Agreement by NCP.
4.02 Notwithstanding the provisions of Section 4.01,
above, NCP shall not execute any amendment of a Project
Document, as defined in the Financing Agreement, unless
GP shall have approved such amendment in writing. For
purposes hereof, in the event GP fails to respond to a
request made by NCP for GP's approval of a proposed
amendment of a Project Document, which includes the
form of such amendment, within 10 business days of GP's
receipt of such request GP, shall be deemed to have
approved such amendment as required hereby.
Article 5 - Assignment.
5.01 Neither party hereto may assign this Agreement or
any rights or obligations hereunder without the prior
written consent of the other party, which shall not be
unreasonably withheld or delayed. Notwithstanding the
foregoing, NCP may assign this Agreement to any wholly-
owned direct or indirect subsidiary of Energy
Initiatives, Inc., a Delaware corporation, with or
without the consent of GP. Any assignment or attempted
assignment of this Agreement not in conformity with
this Article 5 shall be void ab initio.
6<PAGE>
5.02 Upon the assignment of this Agreement as permitted
hereby and the assumption by the assignee of all of
assignor's obligations and liabilities hereunder, the
assignor shall have no further obligations or
liabilities hereunder.
Article 6 - Miscellaneous.
6.01 This Agreement is entered into solely for the
benefit of GP and NCP. Neither party hereto intends
that this Agreement inure to the benefit of any party
other than the parties signatory hereto. No party
other than the parties signatory hereto shall have any
rights hereunder or any right to enforce this Agreement
on behalf of either party hereto.
6.02 All notices, requests, demands and other
communications hereunder shall be in writing and shall
be personally delivered or sent by facsimile
transmission with confirming copy sent by overnight
courier (such as Express mail, Federal Express, etc.)
and a delivery receipt obtained and addressed to the
intended recipient as follows:
(a) If to GP:
NCP Syracuse, Inc.
c/o Norcen Energy Resources Limited
715- 5th Ave S.W.
Calgary, Alberta T2P2X7
Attention: Vice President, Legal
with a copy to:
McDermott, Will & Emery
227 West Monroe
Chicago, IL 60606
Attention: William McGrath
(b) If to NCP:
NCP Energy, Inc.
c/o Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, NJ 07054
Attention: President
with a copy to:
Berlack, Israels & Liberman
120 West 45th Street
New York, NY 10036
Attention: Douglas E. Davidson
7<PAGE>
Any party may change its address for receiving notice
by giving written notice to the others named above.
All such notices shall be given as provided above, and
shall be effective immediately upon confirmation of
facsimile or completion personal delivery.
6.03 This Agreement may be executed in two or more
counterparts, each of which shall be deemed an
original, but all of which together shall constitute
one and the same Agreement.
6.04 This Agreement shall be governed by and construed
in accordance with the internal substantive laws of the
State of New York. Should any provision of this
Agreement be determined to be invalid, void or
unenforceable by a court of competent jurisdiction for
any reason, the remaining provisions shall remain in
full force and effect. The parties consent to the non-
exclusive jurisdiction of the New York federal and
state courts with respect to disputes arising under
this Agreement.
6.05 The section and other headings contained in this
Agreement are for convenience of reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.06 This Agreement has been negotiated by the
parties, and their respective legal counsel, and legal
or equitable principles that might require the
construction of this Agreement or any provision hereof
against the party drafting this Agreement shall not
apply in any construction or interpretation of this
Agreement.
6.07 No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be
in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective
only in the specific instance and for the specific
purpose for which given.
8<PAGE>
IN WITNESS WHEREOF, each of the parties have caused
this Agreement to be duly executed on the date first written
above.
NCP SYRACUSE, INC.
By:____________________________
Name:
Title:
NCP ENERGY, INC.
By:____________________________
Name:
Title:
9<PAGE>
Schedule 1
10<PAGE>
Schedule 2
Buyout Amount
11<PAGE>
MANAGEMENT AGREEMENT
FOR
SYRACUSE ORANGE PARTNERS, L.P.
This MANAGEMENT AGREEMENT FOR SYRACUSE ORANGE PARTNERS,
L.P. ("Agreement"), dated as of the 1st day of January, 1995, by
and between NCP Energy, Inc., a California corporation ("NCP"),
and NCP Syracuse, Inc., a Delaware corporation ("GP").
W I T N E S S E T H:
WHEREAS, Syracuse Orange Partners, L.P. ("SOP") is a
Delaware limited partnership and is a limited partner in Project
Orange Associates, L.P., a Delaware limited partnership which
owns and operates a gas-fired cogeneration facility (the
"Facility") located near Syracuse University in Syracuse, New
York;
WHEREAS, GP is a general partner and the Managing
General Partner (as defined below) of SOP;
WHEREAS, concurrently with the execution and delivery
of this Agreement, NCP is acquiring a limited partner and certain
other economic interests in SOP;
WHEREAS, GP desires to contract with NCP to perform the
services required to be provided by GP as the managing general
partner ("Managing General Partner") of SOP under that certain
First Amended and Restated Agreement of Limited Partnership of
Syracuse Orange Partners, L.P. a Delaware Limited Partnership,
dated as of December 16, 1992, by and among GP, Syracuse
Investment, Inc., MetLife Capital Corporation and Stewart and
Stevenson Services, Inc. (said agreement, as amended from time to
time, the "Partnership Agreement"); and
WHEREAS, NCP desires to perform such services for GP
and on behalf of GP for SOP.
NOW, THEREFORE, in consideration of the mutual
covenants herein contained and intending to be legally bound, the
parties hereto agree as follows:
Article 1 - Retention of NCP to Perform the Services.
1.01 Beginning on the date hereof and continuing until
the end of the Term hereof (determined and defined as
12<PAGE>
set forth below), NCP shall provide to GP and to SOP on
behalf of GP, all of the services required of GP as the
Managing General Partner of SOP under the Partnership
Agreement as in effect on the date hereof,
notwithstanding any amendment or revision thereof (the
"Services").
1.02 In consideration for the Services, GP shall pay
to NCP all reimbursements and payments (collectively,
the "Payments") payable to GP for or in connection with
the performance of the obligations of GP as Managing
General Partner in accordance with the terms and
conditions of the Partnership Agreement as in effect on
the date hereof, notwithstanding any amendment or
revision thereof, provided, however, that if and to the
extent that GP incurs costs and expenses in connection
with the performance by GP of such of its obligations
as Managing General Partner which may not be performed
by NCP under the Partnership Agreement, as in effect on
the date hereof, or this Agreement, or the exercise of
such of its rights as Managing General Partner which
may not be exercised by NCP under the Partnership
Agreement, as in effect on the date hereof, or this
Agreement, and for which GP is entitled to
reimbursement or payment under the Partnership
Agreement, GP shall not be obligated to pay to NCP the
amount of such reimbursement or payment and the amount
thereof shall be excluded from the Payments.
1.03 GP hereby assigns to NCP all of its right, title
and interest in and to the Payments, consents to the
payment by SOP of such reimbursements and payments
directly to NCP and directs that SOP make such payments
directly to NCP. GP hereby covenants and agrees that
it will not permit SOP to reduce the amount of the
Payments from the amount payable on the date hereof.
1.04 NCP shall be subject to the limitations,
restrictions and requirements to obtain consents and
approvals from the partners of SOP in the performance
of the Services to the same extent as GP would be
subject to such limitations, restrictions and
requirements in the performance of its duties as
Managing General Partner of SOP.
1.05 It is expressly understood and agreed that the
parties to this Agreement do not intend, and this
Agreement shall not be deemed, to delegate or grant to
NCP any authority whatever to exercise any of GP's
rights under the Partnership Agreement as the Managing
General Partner or a general partner of SOP, including,
without limitation, any voting, approval of consent
rights respecting any matter. GP shall for all
purposes be and remain a general partner and the
Managing General Partner of SOP.
13<PAGE>
Article 2 - Term
2.01 The term ("Term") of this Agreement shall
commence on the date first above written and shall
expire on the earliest to occur of:
(a) the dissolution or other termination of SOP;
(b) the withdrawal or removal of GP as a general
partner of SOP pursuant to the Partnership
Agreement;
(c) the occurrence of an Event of Default, as
defined below;
(d) the receipt by NCP of written notice from GP
that this Agreement shall terminate not earlier
than 180 days after delivery of such notice, or
(e) the termination of that certain Management
Agreement for Project Orange Associates, L.P., of
even date herewith, by and between GP and NCP.
2.03 NCP may terminate this Agreement at its option in
the event the amounts payable to NCP hereunder are
materially reduced.
2.04 "Event of Default" shall mean a material breach of
this Agreement by NCP which shall remain uncured after
written notice of such breach has been received by NCP
and a reasonable time to cure such breach, in any event
not less than 90 days, has expired.
Article 3 - Liability; Indemnification
3.01 NCP shall perform its obligations hereunder with
the same degree of care as would be required of GP by
SOP under the Partnership Agreement as in effect on the
date hereof.
3.02 Neither NCP, any of its officers, directors or
employees nor any of its affiliates or their officers,
directors or employees, shall have any liability
hereunder, including, but not limited to, liability for
any loss, cost or expense suffered by SOP, which arises
out of any act or failure to act of NCP if NCP, in good
faith, determined that its course of conduct was in the
best interests of SOP (and, in the case of any
affirmative action taken on behalf of SOP, reasonably
believed such action to be within the scope of the
authority granted to GP under the Partnership
Agreement) and such action or inaction does not
constitute gross negligence or willful misconduct or
14<PAGE>
does not cause GP to breach its fiduciary duty to SOP
or to materially breach the Partnership Agreement as in
effect on the date hereof.
3.03 Notwithstanding anything to the contrary set
forth herein, this Agreement shall not impose on NCP
any fiduciary duty to SOP or any partner of SOP.
3.04 NCP shall not enter into any contract,
arrangement, agreement or other transaction on behalf
of SOP with any affiliate of NCP, or cause SOP to lend
or borrow money to or from any such affiliate, without
the prior written consent of GP.
3.05 GP shall indemnify, defend and hold NCP harmless
from and against any liability, loss or expense,
including without limitation, reasonable attorneys'
fees, litigation costs, settlement amounts and
judgments, incurred for any act or omission of GP,
unless such act or omission is the direct result of the
gross negligence or willful misconduct of NCP or a
breach of this Agreement by NCP which directly causes
GP to breach its fiduciary duty to POA or to materially
breach the Partnership Agreement as in effect on the
date hereof.
3.06 GP shall indemnify, defend and hold NCP harmless
from and against any liability, loss or expense,
including without limitation, reasonable attorneys'
fees, litigation costs, settlement amounts and
judgments, incurred by NCP for any act or omission of
NCP performed or omitted by NCP in good faith and
reasonably believed by NCP to be within the scope of
the authority granted to NCP under the Partnership
Agreement and in the best interests of SOP, unless such
act or omission constitutes gross negligence or willful
misconduct or causes GP to breach its fiduciary duty to
SOP or to materially breach the Partnership Agreement,
as in effect on the date hereof.
3.07 GP hereby assigns to NCP all of GP's right, title
and interest in and to any and all payments GP shall
become entitled to receive in respect of its rights
under the Partnership Agreement to be indemnified
against claims, losses, suits, expenses, costs and
liabilities, to the extent any such losses, suits,
expenses, costs or liabilities are suffered or incurred
by NCP. GP shall fully exercise its rights to be
indemnified by SOP for the benefit of NCP and shall
cooperate with NCP in the enforcement of such rights.
3.08 NCP shall indemnify, defend and hold GP harmless
from and against any liability, loss or expense,
including without limitation, reasonable attorneys'
fees, litigation costs, settlement amounts and
15<PAGE>
judgments, incurred by GP for any act or omission of
NCP constituting gross negligence or willful misconduct
or which causes GP to breach its fiduciary duty to SOP
or to materially breach the Partnership Agreement, as
in effect on the date hereof.
3.09 NCP shall have no liability hereunder for any
special, indirect or consequential damages arising out
of any act or omission to act including, but not
limited to, any loss, cost or expense suffered by SOP,
any reduction of distributions made by SOP or any
reduction in the capital account of any partner of SOP,
notwithstanding the assertion of any claim for such
damages based upon this Agreement, contract, tort
(including negligence), strict liability, breach of
fiduciary duty or any other theory of law or equity,
except if and to the extent any such damages are
proximately caused by the gross negligence or willful
misconduct of NCP or a breach of this Agreement which
directly causes GP to breach its fiduciary obligation
to SOP or to materially breach the Partnership
Agreement, as in effect on the date hereof.
Article 4 - Appointment of NCP as Attorney-in-Fact.
4.01 GP does hereby irrevocably constitute and appoint
NCP, for the duration of the Term, its true and lawful
agent and attorney-in-fact, with full power and
authority in its name, place and stead to make,
execute, sign, acknowledge, swear to, deliver, file and
record at the appropriate public offices, such
contracts, certificates, applications, and other
documents and instruments, and any amendments thereto,
as may be necessary or appropriate in the performance
of this Agreement by NCP.
Article 5 - Assignment.
5.01 Neither party hereto may assign this Agreement or
any rights or obligations hereunder without the prior
written consent of the other party, which shall not be
unreasonably withheld or delayed. Notwithstanding the
foregoing, NCP may assign this agreement to any wholly-
owned direct or indirect subsidiary of Energy
Initiatives, Inc., a Delaware corporation, with or
without the consent of GP. Any assignment or attempted
assignment of this Agreement not in conformity with
this Article 5 shall be void ab initio.
5.02 Upon the assignment of this Agreement as permitted
hereby and the assumption by the assignee of all of
assignor's obligations and liabilities hereunder, the
assignor shall have no further obligations or
liabilities hereunder.
16<PAGE>
Article 6 - Miscellaneous.
6.01 This Agreement is entered into solely for the
benefit of GP and NCP. Neither party hereto intends
that this Agreement inure to the benefit of any party
other than the parties signatory hereto. No party
other than the parties signatory hereto shall have any
rights hereunder or any right to enforce this Agreement
on behalf of either party hereto.
6.02 All notices, requests, demands and other
communications hereunder shall be in writing and shall
be personally delivered or sent by facsimile
transmission with confirming copy sent by overnight
courier (such as Express mail, Federal Express, etc.)
and a delivery receipt obtained and addressed to the
intended recipient as follows:
(a) If to GP:
NCP Syracuse, Inc.
c/o Norcen Energy Resources Limited
715- 5th Ave S.W.
Calgary, Alberta T2P2X7
Attention: Vice President, Legal
with a copy to:
McDermott, Will & Emery
227 West Monroe
Chicago, IL 60606
Attention: William McGrath
(b) If to NCP:
NCP Energy, Inc.
c/o Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, NJ 07054
Attention: President
with a copy to:
Berlack, Israels & Liberman
120 West 45th Street
New York, NY 10036
Attention: Douglas E. Davidson
Any party may change its address for receiving notice
by giving written notice to the others named above.
All such notices shall be given as provided above, and
17<PAGE>
shall be effective immediately upon confirmation of
facsimile or completion personal delivery.
6.03 This Agreement may be executed in two or more
counterparts, each of which shall be deemed an
original, but all of which together shall constitute
one and the same Agreement.
6.04 This Agreement shall be governed by and construed
in accordance with the internal substantive laws of the
State of New York. Should any provision of this
Agreement be determined to be invalid, void or
unenforceable by a court of competent jurisdiction for
any reason, the remaining provisions shall remain in
full force and effect. The parties consent to the non-
exclusive jurisdiction of the New York federal and
state courts with respect to disputes arising under
this Agreement.
6.05 The section and other headings contained in this
Agreement are for convenience of reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.06 This Agreement has been negotiated by the
parties, and their respective legal counsel, and legal
or equitable principles that might require the
construction of this Agreement or any provision hereof
against the party drafting this Agreement shall not
apply in any construction or interpretation of this
Agreement.
6.07 No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be
in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective
only in the specific instance and for the specific
purpose for which given.
18<PAGE>
IN WITNESS WHEREOF, each of the parties have caused
this Agreement to be duly executed on the date first written
above.
NCP SYRACUSE, INC.
By:____________________________
Name:
Title:
NCP ENERGY, INC.
By:____________________________
Name:
Title:
19<PAGE>
Exhibit B-16(a)
EXECUTION COPY
FIRST AMENDMENT TO
PASCO INTERESTS OPTION AGREEMENT
This First Amendment to Pasco Interests Option
Agreement, dated January 1, 1995 (the "First Amendment"), by and
among North Canadian Resources, Inc., a Delaware corporation
("NCRI"), Pasco Interest Holdings Inc., a Delaware corporation
("PIHI"), Dade Investment L.P., a Delaware limited partnership
("DIL") and PAS Power Co., a Florida corporation ("PAS"), (NCRI,
PIHI, DIL and PAS being collectively referred to herein as the
"Parties").
WITNESSETH:
WHEREAS, the Parties entered into the Pasco Interests
Option Agreement, dated as of June 13, 1994 (the "Option"),
whereby among other things, PIHI granted to DIL the option to
purchase the Federal QF Interest, as defined therein; and
WHEREAS, the Parties desire to amend the Option as set
forth herein.
NOW, THEREFORE, in consideration of $1.00 and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound.
The Parties agree as follows:
1. Paragraph 1.5(a) of the Option is hereby amended
to read in its entirety as follows:
"(a) the earlier of (i) December 31, 1995, and
(ii) 90 days following the earlier of (x) the issuance of a final
non-appealable order of the Florida Public Service Commission
("Florida PSC") in the proceeding entitled In re: Petition for
Declaratory Statement Regarding Application of Rule 75-17.0832,
F.A.C. to certain Negotiated Contracts for Purchase of Firm
Capacity and Energy by Florida Power Corporation (Docket No.
940771-EQ) (the "Florida Power Proceeding"), and (y) the binding
settlement of the Florida Power Proceeding and the case entitled
Pasco Cogen, Ltd. v. Florida Power Corporation, Case No. 94-5531-
CA (Sixth Judicial Circuit, Pasco County, Florida)."
2. Except as amended hereby, the Option shall remain
in full force and effect in accordance with its terms.<PAGE>
IN WITNESS WHEREOF, each of the Parties has caused this
First Amendment to be executed by the undersigned thereunto duly
authorized on the date first above written.
NORTH CANADIAN RESOURCES, INC.
By:__________________________________
Name:
Title:
PASCO INTEREST HOLDINGS INC.
By:__________________________________
Name:
Title:
PAS POWER CO.
By:__________________________________
Name:
Title:
DADE INVESTMENT, L.P.
By: NCP Dade Power Incorporated,
General Partner
By:__________________________________
Name:
Title:
2<PAGE>
