SUBLEASE
This Sublease (this "Sublease") is made and entered into as of January
14, 2004 (the "Effective Date"), by and between WESTERN STATES GEOTHERMAL
COMPANY, a Delaware corporation ("Sublessor") and XXXXX POWER PARTNERS, a Nevada
general partnership ("Sublessee" and, together with Sublessor, the "Parties,"
with Sublessee and Sublessor each being referred to herein as a "Party"), in
light of the following facts and circumstances:
A. This Sublease covers and relates to that certain real property
located in Xxxxxxxxx County, Nevada, described on Exhibit A attached hereto and
incorporated herein by this reference (the "Premises"), and a right of access to
the Premises over a portion of the Property (as defined below).
B. The Premises comprise a portion of a larger property (the
"Property") originally leased by Southern Pacific Land Company to Xxxxxxxx
Petroleum Company pursuant to that certain Lease dated August 1, 1976, for which
a Memorandum of Geothermal Lease was recorded on September 27, 1976, in Book
102, Page 467, as Document No. 148247 in the Official Records of Xxxxxxxxx
County, Nevada (the "Official Records"), as amended, partially quitclaimed,
partially surrendered and partially terminated (the "Master Lease"). A copy of
the Master Lease is attached hereto and incorporated herein by this reference as
Exhibit B. The Property is currently owned by Xxxxx X. Xxxxx, as to an undivided
55% interest, Xxxxx X. Xxxxxxx, Trustee of the Xxxxx X. Xxxxxxx Revocable Trust
Dated August 24, 1996, as to an undivided 20% interest, and Xxxxxxx Xxxxx and
Xxxxxx Xxxxx, as to an undivided 25% interest (collectively, "Owner").
C. Sublessee owns and operates a geothermal electrical generating
facility located on the Premises, together with the facilities, improvements,
buildings, machinery, equipment and other appurtenances related thereto located
on the Premises, as more particularly described on Exhibit C attached hereto and
incorporated herein by this reference (collectively, and together with any
additional or replacement facilities as described in Section 10.7 hereof, the
"Facility").
D. The Parties previously entered into that certain Facility Operating
Lease dated as of February 1, 1998 (the "Original Operating Lease"), a
Memorandum of which was recorded in the Official Records on April 13, 1998, as
Instrument No. 312852. The Parties also entered into a second (unrecorded)
Facility Operating Lease dated as of July 1, 2001 (together with the Original
Operating Lease, the "Previous Leases") to replace the Original Operating Lease.
E. The Parties wish to terminate the Previous Leases and enter into
this Sublease, which shall supersede the Previous Leases and any other leases or
subleases between the Parties entered into prior to the Effective Date with
respect to the Premises or any part thereof.
F. This Sublease is being made so that Sublessee may design, construct,
own, operate, maintain, repair, replace and remove the Facility on the Premises,
and may have access to the Facility, during the term of this Sublease.
NOW, THEREFORE, in consideration of agreements herein contained, and
for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties do hereby agree as follows:
1. SUBLEASE. Sublessor hereby subleases to Sublessee the Premises. In
addition, Sublessor hereby grants and subleases to Sublessee a non-exclusive
right of access to the Facility on, over and along that certain road (as now
existing or as in the future relocated, the "Road") that connects the Facility
to the boundary of Section 28 in Township 22 North, Range 27 East, M.D.B.&M.
(the "Right of Access"), and to US Highway 40.
2. SCOPE AND PURPOSE OF THIS SUBLEASE. This Sublease is for the purpose
of permitting Sublessee (i) to design, construct, own, operate, maintain,
repair, replace and remove the Facility, (ii) to undertake on the Premises any
and all activities necessary to generate from the Facility electrical energy and
transmit such energy from the Facility along, across, through, over or under the
Premises, (iii) to use the Right of Access for access, ingress and egress to and
from the Facility and (iv) to exercise all other rights with respect to the
Premises and the Right of Access that Sublessor has under and pursuant to the
Master Lease, as and to the extent reasonably required or desirable in
connection with the Facility.
3. TERM. This Sublease shall have a term ("Term") commencing on the
Effective Date and, unless otherwise terminated pursuant to the terms of this
Sublease, continuing for a period of twenty (20) years thereafter. In no event,
however, shall the Term of this Sublease extend beyond the term of the Master
Lease.
4. TERMINATION OF PREVIOUS LEASES. The Parties hereby terminate the
Previous Leases and agree that the Previous Leases shall be of no further force
or effect.
5. PAYMENTS BY SUBLESSEE. As full and complete payment for the use of
the Premises and the Right of Access pursuant to the terms of this Sublease:
5.1 RENT. Commencing upon execution of this Sublease, and thereafter
on each anniversary of the Effective Date during the Term, Sublessee shall pay
to Sublessor the sum of One Hundred Dollars ($100.00), which shall be referred
to herein as the "Rent."
5.2 PAYMENT OF PROPERTY TAXES. Sublessor shall be responsible for
and shall pay when due any property taxes and assessments levied against the
Property or any improvements thereon (other than taxes for which the Owner is
responsible under the Master Lease). Nothing herein shall preclude Sublessor
from paying any tax under protest or from appealing or otherwise contesting any
tax or assessment, provided the taxes are not permitted to be delinquent.
5.3 SHARING OF ROAD COSTS. Sublessee shall reimburse Sublessor for
its pro rata share of the costs of operation and maintenance of the Road, which
share shall be determined in good faith by Ormat Nevada, Inc., the operator of
the Facility.
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6. OWNERSHIP OF FACILITY. Sublessor shall have no ownership or other
interest in the Facility or any portion thereof installed on the Premises, and
Sublessee may remove any or all of the Facility at any time provided that, in so
doing, Sublessee shall comply with the requirements of the Master Lease for the
restoration of any disturbed land.
7. RESERVATION OF RIGHTS BY SUBLESSOR.
7.1 RIGHTS WITH RESPECT TO THE PREMISES AND THE ROAD. Sublessor
hereby reserves the right to undertake any activities (whether on or in
connection with the Premises or the Road) permitted by the Master Lease that are
not inconsistent with the rights of Sublessee hereunder, including, without
limitation, the right to grant or otherwise enter into other subleases, access
rights and similar agreements with other persons, entities and agencies (each, a
"Person"), as well as the right to use and to cross the Premises and the Right
of Access, and to grant or assign such use and crossing rights (or undivided or
subordinate interests therein) to others; provided, however, that (i) in
utilizing such reserved rights, Sublessor and its grantees, assignees and
sublessees shall not unreasonably interfere with Sublessee's use of the Premises
or the Right of Access and (ii) Sublessee shall not be liable for any property
or other taxes attributable to Sublessor's or such grantee's, assignee's or
sublessee's utilization of such reserved rights.
7.2 RIGHTS WITH RESPECT TO OTHER LANDS. Sublessor and its grantees,
assignees and sublessees shall have the unrestricted right to use and conduct
activities on any other lands adjacent to or in the vicinity of the Premises
(including, without limitation, other portions of the Property) for any purpose,
including, without limitation, the right to develop, operate and maintain
geothermal electrical generating and transmission facilities, in each case
without notice to or the consent of Sublessee.
8. MUTUAL INDEMNIFICATION.
8.1 SUBLESSOR INDEMNIFICATION. Sublessor hereby agrees to indemnify,
defend (by counsel satisfactory to Sublessee) and hold harmless Sublessee and
Sublessee's members, partners, shareholders, principals, directors, trustees,
employees, agents, contractors, affiliates, representatives, invitees or
licensees, or anyone claiming thereunder, and their successors and assigns
(each, a "Sublessee Related Person"), from and against all claims, demands,
losses, liabilities, damages, injuries, expenses, costs (including, without
limitation, court costs, attorneys' fees and consultants' fees), causes of
action, counterclaims, suits, proceedings, investigations or other actions (of
any kind or nature), at law, in equity or otherwise, whether known or unknown,
foreseen or unforeseen (collectively, "Claims"), that arise out of or in
connection with (i) the use, operation or occupancy of the Premises or the Right
of Access by, or the actions or inactions (whether or not negligent) of,
Sublessor or anyone acting on behalf or with permission of Sublessor, except
that Sublessor shall not be obligated to so indemnify Sublessee or any of the
Sublessee Related Persons to the extent of any Claim arising from or caused by
the gross negligence or willful misconduct of Sublessee or any of the Sublessee
Related Persons acting within the scope of their authority on behalf of
Sublessee, (ii) any breach of any covenant, representation or warranty made by
Sublessor hereunder,
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(iii) any property damage or physical injury to any Person caused by Sublessor's
operations, (iv) any violation by Sublessor or anyone acting on behalf or with
permission of Sublessor of any applicable statute, ordinance, regulation or
permit, (v) any breach by Sublessor of any of the covenants regarding Hazardous
Materials or Environmental Laws (as those terms are defined below) set forth in
this Sublease or in the Master Lease and (vi) to the extent caused or allowed by
Sublessor or anyone acting on behalf or with permission of Sublessor, the
presence on or under, or the escape, seepage, leakage, spillage, discharge,
emission or release from, onto or into the Property or any part thereof, any
other land, the atmosphere, any watercourse, body of water or groundwater, of
any Hazardous Materials. The indemnification set forth in this Section shall
survive the expiration or termination of this Sublease.
8.2 SUBLESSEE INDEMNIFICATION. Sublessee hereby agrees to indemnify,
defend (by counsel satisfactory to Sublessor) and hold harmless Sublessor and
Owner and their respective members, partners, shareholders, principals,
directors, trustees, employees, agents, contractors, affiliates,
representatives, invitees or licensees, or anyone claiming thereunder, and their
successors and assigns (each, a "Sublessor Related Person"), from and against
all Claims that arise out of or in connection with (i) the use, operation or
occupancy of the Premises, the Right of Access or the Facility by, or the
actions or inactions (whether or not negligent) of, Sublessee or anyone acting
on behalf or with permission of Sublessee, except that Sublessee shall not be
obligated to so indemnify Sublessor or any of the Sublessor Related Persons to
the extent of any Claim arising from or caused by the gross negligence or
willful misconduct of Sublessor or any of the Sublessor Related Persons acting
within the scope of their authority on behalf of Sublessor, (ii) any breach of
any covenant, representation or warranty made by Sublessee hereunder, (iii) any
property damage or physical injury to any Person caused by Sublessee's
operations, (iv) any violation by Sublessee or anyone acting on behalf or with
permission of Sublessee of any applicable statute, ordinance, regulation or
permit, (v) the failure of Sublessee to surrender possession of the Premises
upon the expiration or earlier termination of this Sublease, (vi) any breach by
Sublessee of any of the covenants regarding Hazardous Materials or Environmental
Laws (as those terms are defined below) set forth in this Sublease or in the
Master Lease and (vii) to the extent caused or allowed by Sublessee or anyone
acting on behalf or with permission of Sublessee, the presence on or under, or
the escape, seepage, leakage, spillage, discharge, emission or release from,
onto or into the Property or any part thereof, any other land, the atmosphere,
any watercourse, body of water or groundwater, of any Hazardous Materials. The
indemnification set forth in this Section shall survive the expiration or
termination of this Sublease.
8.3 INDEMNIFICATION PROCEDURE. When required to indemnify a Party in
accordance with Sections 8.1 or 8.2 hereof, the Party required hereunder to
provide such indemnification shall assume on behalf of such indemnified Party
and conduct with due diligence and in good faith the defense of any such claim
against such Party, whether or not the indemnifying Party shall be joined
therein, and the indemnified Party shall cooperate with the indemnifying Party
in such defense. Subject to the immediately preceding sentence, the indemnifying
Party shall have charge and direction of the defense and settlement of such
claim; provided, however, that (i) no settlement shall be made without the
indemnified Party's prior written consent and (ii) without relieving the
indemnifying Party of its obligations hereunder or
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impairing the indemnifying Party's right to control the defense or settlement
thereof, the indemnified Party may elect to participate through separate counsel
in the defense of any such claim, but the fees and expenses of such counsel
shall be at the expense of such indemnified Party unless (a) the employment of
counsel by such indemnified Party has been authorized in writing by the
indemnifying Party, (b) the indemnified Party shall have reasonably concluded
(based on an opinion of counsel to such indemnified Party) that there exists a
material conflict of interest between the indemnifying Party and such
indemnified Party in the conduct of the defense of such claim (in which case the
indemnifying Party shall not have the right to control the defense or settlement
of such claim, on behalf of such indemnified Party) or (c) the indemnifying
Party shall not have assumed, or shall not have employed counsel to assume, the
defense of such claim within a reasonable time after notice of the commencement
thereof. In each of such cases, the reasonable fees and expenses of counsel
shall be at the expense of the indemnifying Party.
9. MATTERS RELATING TO THE MASTER LEASE.
9.1 MUTUAL COVENANT NOT TO PERMIT A DEFAULT. Each Party shall
promptly and timely perform and observe all covenants, terms and conditions for
which such Party may be responsible under this Sublease. Sublessor shall
promptly and timely perform and observe all covenants, terms and conditions for
which Sublessor may be responsible under the Master Lease. Neither Sublessee, on
the one hand, nor Sublessor, on the other, shall permit a default in such
performance and observance. Without limiting the generality of the foregoing,
Sublessor shall be responsible for, and shall pay, all payments due to Owner
under and pursuant to the Master Lease, except for any payments (including,
without limitation, indemnity obligations) arising out of Sublessee's use of or
acts or omissions on or with respect to the Premises or the Right of Access,
which payments shall be Sublessee's obligation.
9.2 MUTUAL RIGHT TO CURE PAYMENT DEFAULTS. Each Party shall promptly
notify the other Party in writing of any claim by the Owner of any breach or
default under the Master Lease or this Sublease. Each Party hereby grants to the
other Party the right (but neither shall have the obligation) to cure the
granting Party's default in the performance of any of its obligations,
covenants, conditions or agreements contained in the Master Lease, in the case
of Sublessor, or in this Sublease, in the case of Sublessee, if the granting
Party does not promptly cure such default after written notice thereof.
Sublessee shall also have the right, in the event of an uncured default by
Sublessor under the Master Lease, to obtain a direct lease from the Owner (with
respect solely to the Premises and the Right of Access) in lieu of this
Sublease. Each Party, to the extent it is in default, shall, upon demand,
reimburse the other Party for all costs, including reasonable attorneys' fees
and expenses, incurred in curing such default. Any exercise or non-exercise of a
Party's rights to cure a default shall not constitute a waiver of any other
rights or remedies it may have under this Sublease or under applicable law.
9.3 TERMINATION OR AMENDMENT OF MASTER LEASE. Sublessor shall not
terminate the Master Lease, nor amend the Master Lease in any way that could
reasonably be expected to have a material adverse effect on Sublessee's
operation of the Facility or use of the Road, without the prior written consent
of Sublessee, which consent shall not be unreasonably withheld, conditioned or
delayed.
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9.4 SUBLESSEE'S OBLIGATIONS WITH RESPECT TO THE MASTER LEASE.
Sublessee takes and accepts this Sublease, the Premises, the Right of Access and
the Road subject to all of the terms and conditions of the Master Lease, and
Sublessee shall observe and abide by all of the terms and conditions of the
Master Lease as the same may reasonably be expected to apply to or affect the
operation of the Facility or use of the Road. Notwithstanding anything that may
be construed to the contrary in this Sublease, this Sublease does not and shall
not grant to Sublessee any rights, interests or benefits greater than those
provided to or permitted Sublessor under the Master Lease; and this Sublease,
the Premises, the Right of Access and any other rights, benefits and interests
granted or provided to Sublessee hereunder are and shall in all respects be
limited by and taken subject to the terms, conditions and provisions of the
Master Lease. Without limiting the generality of the foregoing, and
notwithstanding anything that may be construed to the contrary in this Sublease:
9.4.1 Sublessee shall not take (or permit anyone acting on
behalf or with permission of Sublessee to take) or fail to take (or permit
anyone acting on behalf or with permission of Sublessee to fail to take) any
action, where such action or failure would constitute a default under, or would
be inconsistent with the terms and provisions of, the Master Lease; and
Sublessee shall at all times comply with such terms and provisions.
9.4.2 In the event that any of the terms, conditions or
obligations set forth in this Sublease are inconsistent with or contradict any
of the terms, conditions or obligations set forth in the Master Lease, then this
Sublease shall control over the Master Lease to the extent that this Sublease
conveys fewer rights or benefits, or imposes greater limitations, requirements
or obligations on a Party; otherwise the terms, conditions and obligations set
forth in the Master Lease shall control.
9.4.3 Sublessee hereby assumes and agrees to perform all
obligations of Sublessor under the Master Lease that are applicable to, or that
would bind Sublessor in connection with, this Sublease, the Premises or the
operations or activities of Sublessee under this Sublease or in connection with
the Facility.
10. OTHER COVENANTS OF SUBLESSEE.
10.1 MITIGATION AND MONITORING. To the extent that there are
mitigation and monitoring requirements applicable to Sublessee's activities on
the Premises imposed by any governmental agency, Sublessee shall be responsible
for and shall cause said mitigation and monitoring requirements to be fulfilled
in accordance with the requirements of such agency.
10.2 INSURANCE. At all times during the Term hereof, Sublessee
shall, at its expense, maintain a broad form comprehensive coverage policy of
public liability insurance insuring itself, and insuring Sublessor and Owner as
additional insureds, against loss or liability caused by its activities on or
use of the Premises or Right of Access, in an amount not less than One Million
Dollars ($1,000,000) of combined single limit liability coverage per occurrence,
accident or incident, which has a commercially reasonable deductible.
Certificates of such insurance shall be provided to Sublessor and Owner upon
written request.
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10.3 REQUIREMENTS OF GOVERNMENTAL AGENCIES. Sublessee shall comply
in all material respects with all laws, ordinances, statutes, orders and
regulations of any governmental agency applicable to the Facility, the Road or
the activities of Sublessee or anyone acting on behalf or with permission of
Sublessee on or with respect to the Premises or the Road. Except to the extent
that the same could impose obligations or liability on Sublessor or Owner,
Sublessee shall have the right, in its sole discretion, to contest by
appropriate legal proceedings, brought in the name of Sublessee or in the names
of Sublessee and Sublessor where appropriate or required, the validity or
applicability to the Premises, the Facility or the Road of any law, ordinance,
statute, order, regulation, property assessment or the like now or hereafter
made or issued by any federal, state, county, local or other governmental agency
or entity. Sublessor shall cooperate in every reasonable way in such contest, at
no out-of-pocket expense to Sublessor. Any such permitted contest or proceeding,
including any maintained in the name of Sublessor, shall be controlled and
directed by Sublessee, but Sublessee shall protect Sublessor and Owner from
Sublessee's failure to observe or comply during the contest with the contested
law, ordinance, statute, order, regulation or property assessment.
10.4 PAYMENT OF COSTS. Sublessee shall pay when due all costs and
expenses associated with or arising out of the design, construction, ownership,
operation, maintenance, repair, replacement and removal of the Facility.
10.5 CONSTRUCTION LIENS. Sublessee shall keep the Premises and the
Road free and clear of all liens and claims of liens for labor or services
performed on, and materials, supplies or equipment furnished to, the Premises or
the Road, in connection with Sublessee's use thereof pursuant to this Sublease;
provided, however, that if Sublessee wishes to contest any such lien for which
it is responsible hereunder, Sublessee shall, within sixty (60) days after it
receives notice of the filing of such lien, remove such lien from the Premises
and the Road, pursuant to applicable law.
10.6 HAZARDOUS MATERIALS. Sublessee shall not violate, and shall
indemnify Owner and Sublessor against any violation by Sublessee or Sublessee's
agents or contractors of, any federal, state or local law, ordinance or
regulation ("Environmental Laws") relating to the generation, manufacture,
production, use, storage, release or threatened release, discharge, disposal,
transportation or presence of any substance, material or waste ("Hazardous
Materials") on or under the Premises or the Road, which is now or hereafter
classified as hazardous or toxic, or which is regulated under current or future
federal, state or local laws or regulations.
10.7 REPOWERING. After obtaining Sublessor's written approval of the
design thereof and specifications therefor, which shall not be unreasonably
withheld, conditioned or delayed, Sublessee shall have the right to repower the
Facility, install replacement turbines and other equipment and machinery on the
Premises, or demolish the Facility and replace it with a new facility on the
Premises, so as to enable Sublessee to continue to generate electricity from the
Premises. So long as Sublessor's approval thereof has been obtained as above
provided, Sublessor agrees to cooperate with Sublessee in order to obtain the
required permits and approvals for the same.
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10.8 MATTERS OF RECORD. Sublessee acknowledges that this Sublease is
subject to all matters of record.
11. TERMINATION OF THIS SUBLEASE.
11.1 EXPIRATION OF TERM. This Sublease shall terminate upon the
first to occur of the following events:
11.1.1 Upon the expiration of the Term, as set forth in
Section 3 hereof; and
11.1.2 Subject to Section 14 hereof, upon written notice from
Sublessor, in the event of an uncured Event of Default hereunder.
11.2 EFFECT OF TERMINATION. Upon termination of this Sublease,
Sublessee shall (a) upon written request by Sublessor or Owner, execute and
record a quitclaim deed to Sublessor of all of Sublessee's right, title and
interest in and to the Premises and the Road, and (b) as soon as practicable
thereafter, remove all facilities, improvements and personal property
(including, without limitation, the Facility) from the Premises and restore the
Premises to a good and clean condition. Sublessee shall also comply with any
land or soil restoration requirements of any governmental authority having
jurisdiction over the Premises. If Sublessee shall fail to remove its
facilities, improvements and personal property (including, without limitation,
the Facility) within the time period permitted by the Master Lease, and to
fulfill any and all land and soil restoration obligations, Sublessor or Owner
may do so, in which case Sublessee shall reimburse Sublessor or Owner, as the
case may be, for the reasonable costs of removal and restoration.
11.3 POSSESSION AND QUIET ENJOYMENT. So long as no default by
Sublessee hereunder shall have occurred and be continuing, neither Sublessor nor
any of its affiliates, permitted successors or assigns shall disturb Sublessee's
peaceful and quiet use and possession of the Premises or use of the Road.
12. ASSIGNMENT. Sublessee shall not assign or otherwise transfer any of
its rights or obligations under this Sublease except as follows:
12.1 To the holder of any debt of Sublessee (or to the trustee or
collateral agent of such holder), pursuant to the terms of a mortgage, trust,
security agreement, indenture or other instrument of indebtedness to which
Sublessee and such holder of debt (or such trustee) are parties, as security for
bonds or other indebtedness of Sublessee, past or future;
12.2 To a successor which acquires substantially all of the assets
of Sublessee; provided, that such successor assumes or is otherwise bound to
perform, all of Sublessee's obligations under this Sublease, as if such
successor were an original party to this Sublease;
12.3 To any Person with whom Sublessee merges or combines; or
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12.4 To any other Person with the prior written consent of Sublessor
(which consent shall not be unreasonably withheld, conditioned or delayed);
provided, that such Person assumes or is otherwise bound to perform, all of
Sublessee's obligations under this Sublease, as if such Person were an original
party to this Sublease; and provided, further, that such Person shall be
financially responsible.
Subject to the foregoing provisions, and to the requirement that any
assignee or transferee of Sublessee shall provide written notice to Sublessor
and the Owner of any such assignment or transfer, this Sublease shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns. Upon request, each Party agrees to provide a written consent to
assignment containing customary lender protective and estoppel provisions to any
lenders to the other Party.
13. DEFAULT AND REMEDIES.
13.1 EVENTS OF DEFAULT. Any one of the following shall be deemed to
be an event of default by Sublessee hereunder (an "Event of Default"):
13.1.1 Failure on the part of Sublessee to make any payment of
Rent or any other monetary amount due under this Sublease within ten (10) days
after Sublessee's receipt of a written notice of default from Sublessor (a
"Notice of Default") with regard to such nonpayment.
13.1.2 With respect to any non-monetary default under this
Sublease, failure of Sublessee to cure the same within thirty (30) days after
Sublessee's receipt of a Notice of Default from Sublessor with regard to such
default; provided, however, that if Sublessee's default is of a nature such that
it cannot reasonably be cured within such thirty (30) day period, then Sublessee
shall not be deemed to be in default of this Sublease provided that Sublessee
commences to cure such default within such thirty (30) day period and thereafter
diligently and continuously prosecutes such cure to completion; and if Sublessee
fails so to do, the same shall be deemed to be an Event of Default.
13.1.3 The commencement of any of the following proceedings,
with such proceeding not being dismissed within sixty (60) days after it has
begun: (i) this Sublease being taken on execution or by other process of law;
(ii) Sublessee being judicially declared bankrupt or insolvent according to law;
(iii) an assignment being made of the property of Sublessee for the benefit of
creditors; (iv) a receiver, guardian, conservator, trustee in involuntary
bankruptcy or other similar officer being appointed by a court of competent
jurisdiction to take charge of all or any substantial part of Sublessee's
property; or (v) a petition being filed for the reorganization of Sublessee
under any provisions of 11 U.S.C. xx.xx. 101 et seq., as the same may be amended
from time to time, or any other federal or state law now or hereafter enacted.
13.1.4 Sublessee filing a petition for reorganization or for
rearrangement under, or otherwise availing itself of any provision of, the
Bankruptcy Code or any federal or
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state law now or hereafter enacted providing a plan or other means for a debtor
to settle, satisfy or extend the time for the payment of debts.
13.2 REMEDIES. Whenever any uncured Event of Default shall have
occurred and be continuing, Sublessor may, at its option, take any one or more
of the following actions, as Sublessor in its sole discretion shall elect, to
the extent permitted by and subject to compliance with applicable law:
13.2.1 Terminate Sublessee's rights under this Sublease and
take possession of the Premises by any lawful means. In such event Sublessor
shall be entitled to recover from Sublessee (a) the unpaid Rent which had been
earned at the time of termination, (b) the worth at the time of award of the
amount by which the unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that Sublessee
proves could have been reasonably avoided, (c) the worth at the time of award of
the amount by which the unpaid Rent for the balance of the term of this Sublease
after the time of the award exceeds the amount of such rental loss that the
Sublessee proves could be reasonably avoided, (d) any other amount necessary to
compensate Sublessor for all the detriment proximately caused by Sublessee's
failure to perform its obligations under this Sublease or which in the ordinary
course of things would be likely to result therefrom, including without
limitation the cost of evicting Sublessee from the Premises, expenses of
reletting (including, without limitation, necessary renovation and alteration)
and reasonable attorneys' fees and (e) any other amounts permitted by applicable
law. The worth at the time of the award of the amount referred to in provision
(d) of the immediately preceding sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of the award plus one percent (1%). Efforts by Sublessor to mitigate
damages caused by Sublessee's default shall not constitute a waiver of
Sublessor's right to recover damages hereunder. If termination of this Agreement
is obtained by unlawful detainer, Sublessor shall have the right to recover in
such proceeding any unpaid Rent and any damages as are recoverable therein, or
Sublessor may reserve the right to recover all or any part thereof in a separate
suit.
13.2.2 Collect, by suit or otherwise, each installment of Rent
or other sums that become due hereunder, or enforce, by suit or otherwise,
performance or observance of any agreement, covenant or condition hereof on the
part of Sublessee to be performed or observed. Sublessor's acts of maintenance,
efforts to relet or appointment of a receiver to protect Sublessor's interests
shall not be deemed to constitute a termination of Sublessee's right to
possession.
13.2.3 Cause a receiver to be appointed to take possession of
Sublessee's Facility and/or the Premises, or to collect the Rent or any other
profits therefrom; provided, however, that the appointment of such receiver
shall not constitute an election on the part of Sublessor to terminate this
Sublease, unless notice of termination is given to Sublessee.
13.2.4 Exercise any other right or remedy that may now or
hereafter be available to Sublessor under applicable law or proceed by
appropriate court action to enforce the terms hereof or to recover damages for
the breach hereof; provided, however, that any
10
termination of this Sublease shall not relieve Sublessee from liability under
any indemnity provision of this Sublease as to matters occurring or accruing
during the term hereof or by reason of Sublessee's occupancy or use of the
Premises or the Road.
13.3 SUBLESSOR'S RIGHT TO PERFORM. If an Event of Default shall have
occurred and be continuing, then, in addition to any rights or remedies of
Sublessor under Section 13.2 hereof, within five (5) days after notice (or in
case of an emergency, without notice) to Sublessee, Sublessor may, at its option
and without any obligation to do so, make any payment to be made by Sublessee
pursuant to the terms hereof or perform any obligation to be performed by
Sublessee pursuant to the terms hereof. The costs and expenses of any such
payment or performance by Sublessor (including reasonable attorneys' and other
professionals' fees and expenses) shall be deemed to be Rent hereunder and shall
be due and payable by Sublessee upon demand, along with interest thereon as
provided in Section 13.4 hereof.
13.4 INTEREST. In addition to any rights or remedies of Sublessor
under Sections 13.2 and 13.3 hereof, (i) any Rent not received by Sublessee
within fifteen (15) days following the date on which it was due shall bear
interest from the sixteenth (16th) day after it was due until paid and (ii) any
amounts expended under Section 13.3 hereof shall bear interest from the date
expended until paid. In each such case, the interest charged shall be equal to
the lesser of (a) the prime rate then from time to time charged by Bank of
America NT & SA plus four percent (4%) or (b) the highest rate of interest
permitted to be charged under applicable law.
13.5 SPECIFIC PERFORMANCE. The Parties hereby acknowledge that money
damages would not be a sufficient remedy for a breach of this Sublease, and that
irreparable harm would result if this Sublease were not specifically enforced.
Therefore, in addition to any rights or remedies of Sublessor under Sections
13.2, 13.3 and 13.4 hereof, at Sublessor's option, Sublessee's obligations
hereunder shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith to the extent permitted by
applicable law.
13.6 CUMULATIVE REMEDIES. No remedy referred to in this Section 13
is intended to be exclusive, but each shall be cumulative and in addition to any
other remedy referred to above or otherwise available to Sublessor at law or in
equity; and the exercise or beginning of exercise by Sublessor of any one or
more of such remedies shall not preclude the simultaneous or later exercise by
Sublessor of any or all of such remedies. To the extent permitted by applicable
Law, Sublessee hereby waives any rights now or hereafter conferred by statute or
any other law that may limit or modify any of Sublessor's rights or remedies
under this Section 13.
14. MORTGAGEE PROTECTION. For purposes of this Sublease, any mortgage,
deed of trust or other security interest in Sublessee's interest under this
Sublease shall be referred to as a "Leasehold Mortgage." Any Person who is the
beneficiary of a Leasehold Mortgage (a "Leasehold Mortgagee") shall, for so long
as its Leasehold Mortgage is in existence and until the lien thereof has been
extinguished, be entitled to the protections set forth in this Section 14.
11
14.1 LEASEHOLD MORTGAGEE'S RIGHT TO POSSESSION, RIGHT TO ACQUIRE AND
RIGHT TO ASSIGN. Leasehold Mortgagee shall have the absolute right: (i) to
assign its security interest; (ii) to enforce its lien and acquire title to this
Sublease by any lawful means; (iii) to take possession of and operate the
Premises or any portion thereof and to perform all obligations to be performed
by Sublessee hereunder, or to cause a receiver to be appointed to do so; and
(iv) to acquire this Sublease by foreclosure or by an assignment in lieu of
foreclosure and thereafter to assign or transfer this Sublease to a third party.
Sublessor's consent shall not be required for the acquisition of this Sublease
by a third party who acquires the same by foreclosure or assignment in lieu of
foreclosure and agrees to assume Sublessee's obligations hereunder.
14.2 NOTICE OF DEFAULT: OPPORTUNITY TO CURE. As a precondition to
exercising any rights or remedies as a result of any alleged default by
Sublessee, Sublessor shall give written notice of the default to Leasehold
Mortgagee concurrently with delivery of its Notice of Default to Sublessee,
specifying in detail the alleged default and the required remedy. In the event
that Sublessor gives such a written notice of default, the following provisions
shall apply:
14.2.1 A "monetary default" means failure to pay when due any
Rent, real property taxes, insurance premiums or other monetary obligation of
Sublessee under this Sublease; any other event of default is a "non-monetary
default."
14.2.2 The Leasehold Mortgagee shall have the same period
after receipt of such notice of default to remedy the default, or cause the same
to be remedied, as is given to Sublessee after Sublessee's receipt of its Notice
of Default, plus, in each instance, the following additional time periods: (i)
thirty (30) days, for a total of forty-five (45) days after receipt of the
notice of default in the event of any monetary default; and (ii) sixty (60)
days, for a total of ninety (90) days after receipt of the notice of default in
the event of any non-monetary default, provided that such 90-day period shall be
extended for the time reasonably required for the Leasehold Mortgagee to
complete such cure, including the time required for the Leasehold Mortgagee to
perfect its right to cure such non-monetary default by obtaining possession of
the Premises (including possession by a receiver) or by instituting foreclosure
proceedings, provided the Leasehold Mortgagee acts with reasonable and
continuous diligence. The Leasehold Mortgagee shall have the absolute right to
substitute itself for Sublessee and perform the duties of Sublessee hereunder
for purposes of curing such defaults. Sublessor expressly consents to such
substitution, agrees to accept such performance, and authorizes the Leasehold
Mortgagee (or its employees, agents, representatives or contractors) to enter
upon the Premises and the Road to complete such performance with all the rights,
privileges and obligations of the original Sublessee hereunder. Sublessor shall
not terminate this Sublease prior to expiration of the cure periods available to
a Leasehold Mortgagee as set forth above.
14.2.3 During any period of possession of the Premises by a
Leasehold Mortgagee (or a receiver requested by such Leasehold Mortgagee) and/or
during the pendency of any foreclosure proceedings instituted by a Leasehold
Mortgagee, the Leasehold Mortgagee shall pay or cause to be paid the Rent and
all other monetary charges payable by Sublessee hereunder which have accrued and
are unpaid at the commencement of said period and those which accrue
12
thereafter during said period. Following acquisition of this Sublease by the
Leasehold Mortgagee or its assignee or designee as a result of either
foreclosure or acceptance of an assignment in lieu of foreclosure, or by a
purchaser at a foreclosure sale, this Sublease shall continue in full force and
effect and the Leasehold Mortgagee or party acquiring title to this Sublease
shall, as promptly as reasonably possible, commence the cure of all defaults
hereunder and thereafter diligently process such cure to completion, whereupon
Sublessor's right to terminate this Sublease based upon such defaults shall be
deemed waived; provided, however, that the Leasehold Mortgagee or party
acquiring title to this Sublease shall not be required to cure those defaults
which are not reasonably susceptible of being cured or performed by such party
("Non-curable Defaults"). Non-curable Defaults shall be deemed waived by
Sublessor upon completion of foreclosure proceedings or acquisition of
Sublessee's interest in this Sublease by such party.
14.2.4 Any Leasehold Mortgagee or other party who acquires
this Sublease pursuant to foreclosure or assignment in lieu of foreclosure shall
not be liable to perform the obligations imposed on Sublessee by this Sublease
incurred or accruing after such party no longer has ownership of this Sublease
or possession of the Premises.
14.2.5 Neither the bankruptcy nor the insolvency of Sublessee
shall be grounds for terminating this Sublease as long as the Rent and all other
monetary charges payable by Sublessee hereunder are paid by the Leasehold
Mortgagee in accordance with the terms of this Sublease.
14.2.6 Nothing herein shall be construed to extend this
Sublease beyond the Term or to require a Leasehold Mortgagee to continue
foreclosure proceedings after the default has been cured. If the default is
cured and the Leasehold Mortgagee discontinues foreclosure proceedings, this
Sublease shall continue in full force and effect.
14.3 NEW LEASE TO MORTGAGEE. If this Sublease is rejected pursuant
to bankruptcy law or other law affecting creditors' rights, the Sublessor shall,
upon written request from Leasehold Mortgagee within ninety (90) days after any
such event, create a new sublease in favor of the Leasehold Mortgagee, on the
following terms and conditions:
14.3.1 The term of the new sublease shall commence on the date
of rejection and shall continue for the remainder of the Term of this Sublease,
at the same rent and subject to the same terms and conditions as set forth in
this Sublease.
14.3.2 The new sublease shall be created within thirty (30)
days after receipt by Sublessor of written notice of the Leasehold Mortgagee's
election to enter the new sublease, provided said Leasehold Mortgagee: (i) pays
to Sublessor all Rent and other monetary charges payable by Sublessee under the
terms of this Sublease up to the date of creation of the new sublease, as if
this Sublease had not been rejected, less the Rent actually collected by
Sublessor from Sublessee; (ii) performs all other obligations of Sublessee under
the terms of this Sublease, to the extent performance is then due and
susceptible of being cured and performed by the Leasehold Mortgagee; and (iii)
agrees in writing to perform, or cause to be performed, all
13
non-monetary obligations which have not been performed by Sublessee and would
have accrued under this Sublease up to the date of commencement of the new
sublease, except those obligations which constitute Non-curable Defaults as
defined above. To the extent permitted by applicable law, any new sublease
granted to the Leasehold Mortgagee shall enjoy the same priority as this
Sublease over any lien, encumbrance or other interest created by Sublessor.
14.3.3 At the option of the Leasehold Mortgagee, the new
sublease may be executed by a designee of such Leasehold Mortgagee without the
Leasehold Mortgagee assuming the burdens and obligations of the Sublessee
thereunder.
14.3.4 If more than one Leasehold Mortgagee makes a written
request for a new sublease pursuant hereto, the new sublease shall be delivered
to the Leasehold Mortgagee requesting the same whose Leasehold Mortgage is prior
in lien, and the written request of any other Leasehold Mortgagee whose lien is
subordinate shall be void and of no further force or effect.
14.3.5 The provisions of this Section 14.3 shall survive the
termination, rejection or disaffirmance of this Sublease and shall continue in
full force and effect thereafter to the same extent as if this Section were a
separate and independent contract made by Sublessor, Sublessee and such
Leasehold Mortgagee, and, from the effective date of such termination, rejection
or disaffirmation of this Sublease to the date of execution and delivery of such
new sublease, such Leasehold Mortgagee may use and enjoy the Premises and the
Road without hindrance by Sublessor or any Person claiming by, through or under
Sublessor; provided that all of the conditions for the new sublease as set forth
herein have been complied with.
14.4 LEASEHOLD MORTGAGEE'S CONSENT TO AMENDMENT, TERMINATION OR
SURRENDER. Notwithstanding any provision of the Agreement to the contrary, the
Parties agree that so long as there exists an unpaid Leasehold Mortgage, this
Sublease shall not be modified or amended in any respect that is material and
adverse to Sublessee, and Sublessor shall not accept a surrender of the Premises
or any part thereof or a cancellation or release of this Sublease from Sublessee
prior to expiration of the Term, in each case without the prior written consent
of the Leasehold Mortgagee. This provision and the other provisions of this
Section 14 are for the express benefit of and shall be enforceable by such
Leasehold Mortgagee.
14.5 NO MERGER. There shall be no merger of this Sublease with the
master leasehold estate or the fee estate by reason of the fact that this
Sublease or any interest therein may be held, directly or indirectly, by or for
the account of any Person or Persons who shall own the master leasehold estate
or the fee estate or any interest therein, and no such merger shall occur unless
and until all Persons at the time having an interest in the fee estate, all
Persons having an interest in the master leasehold estate and all Persons
(including Leasehold Mortgagee) having an interest in this Sublease shall join
in a written instrument effecting such merger and shall duly record the same.
15. NOTICES. Except as otherwise expressly provided by law, any and all
notices or other communications required or permitted by this Sublease to be
given to Sublessee
14
or to Sublessor shall be in writing and shall be effective upon receipt when
sent by facsimile machine during normal office hours, or when personally
delivered, or upon receipt when mailed in the United States mail, first class,
postage prepaid, addressed as follows:
If to Sublessor: Western States Geothermal Company
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Fax: (000) 000-0000
If to Sublessee: Xxxxx Power Partners
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Fax: (000) 000-0000
Each Party hereto may change its address for the purpose of this Section 15 by
giving written notice of such change to the other Party in the manner provided
in this Section.
16. ESTOPPEL CERTIFICATES. Each Party shall, promptly following written
request therefor, execute estoppel certificates in favor of the other Party,
Sublessor, the Leasehold Mortgagee or any Person designated by any thereof
(each, a "Requesting Party"), certifying as to such matters as the Requesting
Party may reasonably request, including, without limitation, that no default
then exists under this Sublease (or, if a default does then exist, specifying
the nature of such default).
17. APPLICABLE LAW. The laws of the State of Nevada, without reference
to the principles regarding conflict of laws, are applicable to and controlling
of all questions, matters or issues arising from, based upon or related to this
Sublease, including, but not restricted to, the construction and interpretation
hereof and the performance hereunder.
18. ATTORNEYS' FEES. Should suit be commenced between the Parties
concerning this Sublease, including the rights and duties of either Party in
relation hereto or under the Master Lease, the Party prevailing in such suit
shall be entitled, in addition to such other relief as may be granted by the
court, to its reasonable attorneys' fees and costs.
19. PARTIAL INVALIDITY. Should any provision of this Sublease be held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions of this Sublease shall remain in full force and effect, and
the Parties shall negotiate in good faith to replace such invalid, void or
unenforceable provision.
20. AMENDMENT. Subject to Section 14.4 hereof, this Sublease may be
amended only by a writing executed by both of the Parties.
21. NO THIRD PARTY BENEFICIARIES. Except as expressly provided herein,
the Parties intend that there be no third party beneficiaries of this Sublease.
15
22. MEMORANDUM OF SUBLEASE. The Parties consent to the recordation of a
memorandum of this Sublease in Xxxxxxxxx County, Nevada.
23. NON-MERGER. This Sublease shall not be deemed to relieve or release
either of the Parties from any of their respective representations, warranties
or obligations under other written agreements relating to the subject matter
hereof. This Sublease incorporates all oral agreements of the Parties with
respect to the subject matter hereof; however, all written agreements of the
Parties are expressly excluded, shall continue in full force and effect
according to their respective terms and are not deemed merged herein.
24. RELATIONSHIP OF PARTIES; OBLIGATIONS SEVERAL. Nothing contained in
this Sublease shall be construed to create an association, joint venture, trust
or partnership, or to impose a trust or partnership covenant, obligation or
liability on or with regard to any Party or the Parties. Each Party shall be
individually responsible for its own covenants, obligations and liabilities
under this Sublease. The rights, duties, obligations and liabilities under this
Sublease of each of the Parties are intended to be several, not joint or
collective, and neither Party shall be jointly or severally liable under this
Sublease for the acts, omissions or obligations under this Sublease of the other
Party.
25. COOPERATION; FURTHER ASSURANCES. Each Party shall promptly
cooperate with the other Party in good faith and shall perform such further acts
as may be necessary or appropriate to carry out and accomplish the intent of
this Sublease, and each Party shall promptly execute and deliver and, if
appropriate, acknowledge and cause to be recorded, any such additional
documents, instruments and certificates as the other Party may reasonably
request to carry out and fulfill the transactions, and permit the exercise of
such rights and obligations, as are contemplated hereunder, or to otherwise
effectuate the purpose and intent of this Sublease; provided, however, that all
costs associated with such cooperation, performance and execution shall be borne
by the Party requesting the same.
26. LIMITATION OF LIABILITY. No claim shall be made by a Party against
the other Party or against any of such other Party's employees, agents,
representatives, independent contractors, successors or assigns for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or under any other theory of liability arising out of or related to
the transactions contemplated by this Sublease, or any act, omission or event
occurring in connection therewith; and each Party hereby waives, releases and
agrees not to xxx upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor. In addition,
Sublessee specifically agrees to look solely to Sublessor's interest in the
Premises for any judgment from Sublessor; it being specifically agreed that
neither Sublessor nor anyone claiming under Sublessor shall ever be personally
liable for any such judgment.
27. SECURITY MEASURES. Sublessor shall have no duty, express or
implied, to provide or obtain guard services or other security measures to or
for the Facility, the Premises, the Road, or any portion thereof. Sublessee
assumes all responsibility for obtaining guard
16
services or other security measures for the protection of the Facility, the
Premises and the Road from the acts of third Persons.
28. MISCELLANEOUS. The use herein of (a) the neuter gender includes the
masculine and the feminine and (b) the singular number includes the plural,
whenever the context so requires. Captions in this Sublease are inserted for
convenience of reference only and do not define, describe or limit the scope or
intent of this Sublease or any of the terms hereof. All Exhibits referred to
herein are incorporated herein by reference. Time is of the essence of this
Sublease, and of each and every covenant, term, condition and provision hereof.
All rights to indemnification contained in this Sublease, and all of the
covenants and agreements of the Parties contained herein that are to be
performed on or after the expiration or earlier termination hereof, shall
survive such expiration or earlier termination without limitation as to time.
All provisions of this Sublease to be observed or performed by Sublessee are
both covenants and conditions. This Sublease shall be construed equally as
between the Parties, and shall not be construed against the Party responsible
for its drafting. A Party's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of such Party's consent to, or
approval of, any subsequent or similar act, or be construed as the basis of an
estoppel to enforce any provision of this Sublease requiring such consent. This
Sublease may be executed in counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one and the same
document.
29. SUCCESSORS AND ASSIGNS. Until such time as this Sublease terminates
as provided herein, the Premises and Right of Access shall be held, conveyed,
assigned, hypothecated, encumbered, leased, used and occupied subject to the
covenants, terms and provisions set forth in this Sublease, which covenants,
terms and provisions shall run with the Premises and each portion thereof and
interest therein, and shall be binding upon and inure to the benefit of the
Parties and each other Person having any interest therein during their ownership
thereof, and their respective permitted grantees, heirs, executors,
administrators, successors and assigns.
SIGNATURES FOLLOW ON NEXT PAGE
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IN WITNESS WHEREOF, the Parties have executed and delivered this
Sublease as of the Effective Date.
WESTERN STATES GEOTHERMAL COMPANY, XXXXX POWER PARTNERS,
a Delaware corporation a Nevada general partnership
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------------------
By: ORNI 1 LLC,
Name: Xxxxxx Xxxxxxxx a general partner
---------------------------------------------------
By: /s/ Xxxxxx Xxxxxxxx
Its: Assistant Secretary -----------------------------------------------
---------------------------------------------------
Name: Xxxxxx Xxxxxxxx
---------------------------------------------
Its: Assistant Secretary
----------------------------------------------
Ormat Funding Corp., Manager
----------------------------------------------
By: ORNI 2 LLC,
a general partner
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxxxxx
----------------------------------------------
Its: Assistant Secretary
----------------------------------------------
Ormat Funding Corp., Manager
----------------------------------------------
1
EXHIBIT A
PROPERTY LOCATION
-----------------
EXHIBIT A
Commencing at the Northeast corner of Section 21, Township 22 North, Range 27
East, M.D.B. & M.; thence S 00(degree) 14'54" W a distance of 2641.77 feet, to
the east 1/4 corner of said Section 21; thence S 45(degree) 04'09" W a distance
of 2845.29 feet, to a point on an existing fence, also the point of beginning;
thence N 00(degree) 44'52" W a distance of 260.0 feet; thence S 89(degree)
15'08" W a distance of 230.0 feet; thence S 00(degree) 44'52" E a distance of
277.07 feet; thence 89 39'56" E a distance of 179.86 feet; thence N 00(degree)
17'48" W a distance of 20.47 feet thence N 89(degree) 15'09" E a distance of
50.0 feet, to the point of beginning.
Prepared by:
Xxxxxx X. Xxxxxxx P.L.S
Lumos & Associates Inc. [STAMP]
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
EXHIBIT B
MASTER LEASE
THIS LEASE, made in duplicate this 1st day of August, 1976, by and between
SOUTHERN PACIFIC LAND COMPANY, a California corporation, ________ hereinafter
called "Lessor" and XXXXXXXX PETROLEUM COMPANY, a Delaware corporation, ______
hereinafter called "Lessee".
WITNESSETH:
1. Lessor hereby grants, leases and lets, subject to the provisions hereof,
the exclusive right to explore, prospect, drill for, produce, treat, extract,
take, process, remove and utilize all products of geothermal processes,
including, but not limited to, hot brine, hot water, hot rock, and indigenous
steam; steam and other gases; hot water and hot brines resulting from water, gas
or other fluids (whether liquid or gaseous) artificially introduced into
geothermal formations hereinafter referred to as "geothermal energy"; and any
mineral or minerals (exclusive of oil, petroleum and hydrocarbon gas) which are
found in solution or in association with or entrained in such steam, hot water
or hot brines, hereinafter referred to as "substances", and storing, taking,
removing, transporting, and disposing of same, an undivided 50 percent interest
in that certain land situated, lying and being in the County of Xxxxxxxxx, State
of Nevada, _________ hereinafter referred to as "Leased Premises", more
particularly described on Exhibit "A" attached hereto and made a part hereof.
TOGETHER with the right to inject and reinject geothermal effluents from
operations hereunder in the leased premises and use so much of the leased
premises as may be required by Lessee for the drilling and operation of xxxxx
thereon for the purposes hereof, and to construct and maintain thereon
buildings, structures and equipment, including, but not limited to generation
and transmission of electric power, mineral processing, waste water disposal,
pipe lines, transmission lines, power lines, ponds and roads, in connection with
operations hereunder; provided however, that Lessee agrees to use for such
purpose only so much of the leased premises as shall be reasonably necessary for
Lessee's operations thereon.
Subject to easements, leases, licenses and restrictions affecting the
leased premises.
Reserving unto Lessor, its successors and assigns, the following:
(a) The right to construct, maintain and use tracks, roads, trails,
ditches, pipe lines, communication devices, and facilities relating thereto in,
upon, over and across the leased premises, and
(b) The right to use the leased premises for all other purposes not
inconsistent with or which shall not interfere with the right of the Lessee
hereunder to use the leased premises.
(c) The exclusive right to all minerals other than those leased hereunder,
including, but not limited to, oil, petroleum, natural hydrocarbon gas, and
other hydrocarbons.
-2-
2. This lease shall be for a primary term of ten years from and after the
date first herein written and for so long thereafter, as there:
(a) shall be commercial production of said geothermal energy and substances
from the leased premises and/or
(b) drilling, re-drilling, deepening or remedial operations are being
prosecuted on a continuous basis on the leased premises.
3. Lessee agrees to pay to Lessor in advance as of the date of this lease
the sum of $1.00 __ per acre of the leased premises as rental for the first year
of this lease and to pay to Lessor in advance for the second year of the lease
on or before the 1st day of August __ 1977, and annually thereafter during the
remaining period this lease is in effect, on or before the same day and month of
each succeeding year, an annual advance minimum royalty at the rate of $1.00 per
acre for each acre then covered by this lease.
In the event Lessee uses the surface of a portion or portions of the leased
premises for the construction and operation of facilities for mineral
processing, electric or power generation or waste water disposal, ponds or
plants, exclusive of the portions of the leased premises used for the drilling
and operation of xxxxx and construction and maintenance of pipe lines,
transmission lines, roads and ditches, Lessee agrees to pay to Lessor, in
addition to the above minimum royalty, an annual advance surface rental during
the period of such use equivalent to 9 1/2% of the
-3-
current value used in the assessment by the country in which lands are located
as to the portions of the leased premises so used, which is in effect for each
year the use is made.
4. Lessee shall commence drilling a well for said geothermal energy and
substances on the leased premises within the primary term, and shall continue
the work of drilling said well with due diligence until completion, and
thereafter shall commence and drill such other xxxxx as may be required to
assure Lessee of a supply of said geothermal energy and substances or any of
them in such amounts as its requirements from the leased premises may demand,
provided that the spacing of xxxxx drilled upon the leased premises shall not be
less than the spacing of xxxxx drilled upon adjoining land, and provided further
that this lease shall terminate at the end of the tenth year from the date
hereof as to the acreage hereunder then in excess of the result of multiplying
the number of xxxxx then capable of producing said geothermal energy and
substances in paying quantities times six hundred and forty acres, and that the
locations of the portions of the leased premises which shall remain subject to
this lease shall be selected by Lessee
Lessee shall keep each well drilled on the leased premises producing at the
rate deemed by Lessee to be most conducive to efficient operation of the well
and to maximum production of said geothermal energy and substances covered
hereby; provided, however, that if Lessee's well or xxxxx on land adjoining the
leased premises are not produced to capacity, then Lessee may produce from
-4-
the xxxxx on the leased premises at the same ratio that the actual production
bears to potential production of Lessee's well or xxxxx being produced on
adjoining land.
In the event Lessee fails to commence drilling a well within the primary
term of this lease or the leased premises or land pooled therewith as provided
herein, this lease shall terminate except as otherwise provided.
5. A well shall be deemed completed:
(a) When formations or mechanical difficulties are encountered which, in
Lessee's judgment, render further drilling of such well unprofitable or
unsuccessful and because of such fact further drilling operations thereon are
discontinued;
(b) When a well has been drilled to a depth of _________ thousand feet and
the drilling operation is discount _______
(c) Lessee has ceased drilling a well and it __________ ____ capable of
producing said geothermal energy _____________ __ any of them in quantities
deemed by Lessee sufficient to warrant __ continuance of its operation.
6. Lessee agrees to pay to Lessor as royalty:
(a) one-tenth of the gross proceeds received by Lessee from the sale of
geothermal energy at the point of sale.
(b) on all other leased substances produced therefrom, three percent of the
gross proceeds during the first ten years of the commercial production of said
substance and five percent of the gross proceeds thereafter received by Lessee.
Gross proceeds,
-5-
for the purpose of this lease, shall be the sales price received by Lessee at
the point of sale, less transportation costs from Lessee's plant to sales point.
Lessor shall have the right to receive its royalty in kind.
7. Lessor does hereby lease to Lessee the exclusive right to use said
leased premises for the slant drilling of xxxxx having their surface locations
upon either the leased premises or adjoining land and having their well bores
passing through the subsurface of the leased premises, for the production of
said geothermal energy and substances, and having their production intervals
beneath land other than the leased premises or land included in any unit created
under provisions of section 11 hereof, such xxxxx being hereinafter referred to
as "slant xxxxx", together with the exclusive right to drill core holes through
the subsurface of the leased premises to other land to obtain geological
information.
Unless sooner terminated, either in whole or in part as hereinafter
provided, the primary term of this lease of rights for slant xxxxx shall be
contemporaneous with the primary term of this lease, and for as long thereafter
as said geothermal energy and substances are produced in paying quantities from
land other than the leased premises by slant xxxxx, or Lessee in good faith
conducts slant drilling operations in the leased premises.
As payment for the slant well rights, hereby leased, Lessee agrees to pay
to Lessor, at the times and in the manner hereinafter
-6-
provided, an overriding royalty to the production from each slant well drilled
by Lessee as follows:
(a) two percent of the gross proceeds received by ________ from the sale of
geothermal energy, at the point of sa___________
(b) one percent of the gross proceeds received by ____________ on all other
leased substances produced therefrom. ______________ for the purpose of this
lease, shall be the sales price received by Lessee at the point of sale, less
transportation costs from Lessee's plant to sales point.
The advance minimum royalty paid by Lessee to Lessor, under the provisions
of Section 3 hereof, shall not be credited against any overriding royalties from
production from slant xxxxx drilled under the provisions hereof.
Lessor agrees to pay a pro rata share, which shall be in the proportion
that its overriding royalty bears to the total production from slant xxxxx
drilled under this section, of the amount of any license, severance, or
production tax levied by any governmental agency on, or measured by, the
substances produced. Lessor agrees to pay the same pro rata share of the mineral
rights taxes upon the land beneath which slant xxxxx have their producing
intervals. Lessee agrees to pay, or cause to be paid, the remainder of any and
all such taxes.
The obligation of Lessee hereunder with respect to the drilling and
operating of all slant xxxxx, and its right to suspend or delay operations
therein, shall be those provided in
-7-
such leases in which Lessee has or may acquire an interest embracing the land
beneath which slant xxxxx drilled hereunder have their producing intervals.
Lessee shall keep true and correct records of its operations conducted in,
and of the production from, slant xxxxx. Lessee shall, when requested to do so
by Lessor, furnish to Lessor a copy of the drilling log and electric log, and of
the directional survey of the bore of, each slant well drilled by Lessee
hereunder. Lessee shall furnish Lessor, with each overriding royalty payment, a
statement of the production from each slant well showing in detail the
computation of Lessor's overriding royalty. Lessee's records shall be open for
inspection by Lessor at all reasonable times.
9. Lessee shall have the right to commingle, for the purpose of utilizing,
selling or processing minerals, geothermal energy and substances produced from
the leased land, with geothermal energy and substances produced from other land
and to meter or gauge the production of said geothermal energy and substances
from the leased premises, and to compute and pay royalty to Lessor on the basis
of such production as so determined. Lessee agrees to pay to Lessor on or before
the last day of each and every month the royalties accrued and payable hereunder
for the preceding calendar month, and in making such royalty payments Lessee
shall deliver to Lessor statements setting forth the basis.
-8-
for determination of such royalty. In the event that the production of said
geothermal energy and substances from the leased premises or from land in the
general area of the leased premises should at any time exceed the demand
therefor or the facilities for use thereof, and Lessee elects to reduce the
total volume of said geothermal energy and substances produced or consumed, then
in that event, xxxxx participating on a commingling basis shall be reduced in a
percentage amount equal to the proportion of the whole in light of good
engineering practices.
In the event all or any part of the leased premises is pooled (as provided
for in Section 11), with other land, then Lessor shall receive as royalty on
production from the pooled acreage only such portion of the royalty as the
amount of Lessor's acreage placed in the unit, bears to the total acreage 50
pooled in the unit involved.
Lessee shall not be required to account to Lessor for, or to pay royalty on
said geothermal energy and substances produced by Lessee on the leased premises
which are not utilized, saved or sold, or on power generated by Lessee and used
by Lessee in Lessee's operations on or with respect to the leased premises for
or in connection with the development, processing and production of said
geothermal energy and substances.
The annual advance minimum royalty provided in Section 3 payable by Lessee
to Lessor shall be credited against the obligation
-9-
of Lessee to pay the royalties which accrue only during the annual period for
which paid, but the annual surface rental provided for in Section 3 shall not be
so credited. The surface rental and royalties hereinabove provided for shall be
a lien upon any and all of said geothermal energy and substances removed from or
stored upon the leased premises and upon any improvements or personal property
of Lessee upon the leased premises.
9. In the event Lessor at the time of making this lease owns a less
interest in the leased premises than one hundred per cent of the rights herein
leased to Lessee, then the rentals and royalties accruing hereunder shall be
paid to Lessor only in the same proportions which Lessor's interest bears to a
one hundred per cent interest in the leased premises. Notwithstanding the
foregoing, should Lessor hereafter acquire any additional right, title or
interest in or to the leased premises, it shall be subject to the provisions
hereof to the same extent as if owned by Lessor at the date hereof, and any
increase in payments of money hereunder necessitated thereby shall commence with
the payment next following receipt by Lessee of satisfactory evidence of
Lessor's acquisition of such additional interest.
10. In the event Lessee shall, except by Lessor, be lawfully deprived of
possessing, or rights hereunder to, the leased premises, or any portion or
portions thereof. Lessee shall notify Lessor as to the circumstances thereto;
whereupon Lessor may, at Lessor's option, either reinstall Lessee in possession
as to said rights
-10-
or terminate this lease as to the leased premises, or the portion or portions
thereof, as to which Lessee is so deprived, by notice to Lessee to that effect
and the tender of the sum of One Hundred Dollars, plus the total amount of any
sums other than taxes, theretofore paid by the Lessee hereunder, for said
rights; whereupon no claims for damages whatsoever kind or character incurred by
Lessee by reason of such de-possession shall be chargeable against Lessor.
11. Lessee is hereby given the right to combine or pool all or part of said
leased premises with land either adjoining the leased premises or in the
immediate vicinity thereof, so as to create by such combining or pooling one or
more operating units of contiguous acreage for the production of said
substances; provided, however, that no such unit shall substantially exceed
2,560 acres, or the land embraced in four sections of land according to United
States survey and that the designation of such unit shall be made of the land to
be pooled not later than thirty days after the first well drilled on the unit is
placed upon production, and shall define the area which shall constitute the
pool. In the event production of said geothermal energy and substances is
obtained from any land included within any such unit, whether or not from land
covered by this lease, there shall be allocated to the leased premises included
in such unit, for the purpose of royalty determination, only that proportion of
the entire production from such unit that the acres of the leased premises in
such unit bears to the total acres in such unit, and royalty payable under this
lease
-11-
with respect to leased premises included in such unit shall be computed only on
that portion of such production so allocated to the leased premises. In the
event of the failure of Lessor's or any other owner's title as to any portion of
the land included in such pooled unit, such portion of such land shall be
excluded in allocating production from such pooled unit; provided however,
Lessee shall not be held to account for any production allocated to any land
excluded from any such pooled unit unless and until Lessee has actual knowledge
of the circumstances requiring such exclusion. For the purpose of determining
drilling obligations in such unit, the entire acreage so pooled shall be treated
as if it were covered by one lease and the drilling of a well in any part of
such unit, whether or not on land covered by this lease, shall fulfill Lessee's
drilling obligations under this lease to the same extent as if it were drilled
on the leased premises and no offset obligations shall accrue as between the
several tracts of land included within any pooled unit. As to such unit (unless
a producing well is located on such pooled unit at the time the unit is
created), Lessee agrees to commence drilling operations within one year after it
is so created, but in any event within the primary term of this lease, and shall
be obligated to drill at least one well for each six hundred and forty acres in
the unit.
12. Lessee shall have the right to use such water in, on, from or
appurtenant to the leased premises as Lessee may reasonably require in
connection with Lessee's operations hereunder on the
-12-
leased premises, without payment therefor to Lessor other than such cost as
Lessor may have incurred therefor; provided that such use by Lessee shall not
interfere with Lessor's requirements with respect to the use thereof on the land
subject to this lease or Lessor's contractual commitments for the use thereof on
land other than the leased premises, and that Lessee shall obtain any necessary
governmental permission therefor and shall comply with applicable statutes,
ordinances and governmental orders and regulations with respect thereto.
Applications to governmental agencies for permission to appropriate water and
geothermal energy within and underlying the leased premises shall be made on
behalf of Lessor and shall be made for beneficial use appurtenant to Lessor's
land described in Section 1 hereof. The permission so granted shall be subject
to the leasehold interest of Lessee and all the terms, covenants and conditions
under this lease.
13. If at any time during the term of this lease, a well is drilled for
said geothermal energy and substances upon land not in the ownership of Lessor,
which is adjacent to the leased premises and within 1,320 feet of the boundary
lines of a unit into which the leased premises or portions thereof may be
pooled, and said well is placed in commercial production for a period of six
months, Lessee shall commence drilling within six months thereafter on the
leased premises and within 1,320 feet from the common boundary line, an offset
well within approximately the same distance from the common boundary line as
said well on adjoining land is located, but in any event either on the leased
premises or on land
-13-
with which the leased premises may be pooled, and to proceed diligently to drill
to completion said offset well to the zone or horizon from which said well on
the adjacent land is producing, provided, however, that Lessee shall not be
required to commence drilling said offset well if there is already a well being
drilled or there is a producing well on the leased premises or on land with
which the leased premises is pooled within such offset distance of said well on
adjoining land.
14. Lessee may, at Lessee's option, at any time surrender and quitclaim
Lessee's rights under this lease in and to all or any portion of the leased
premises and shall be released thereupon from all obligations thereafter with
respect to the land surrendered and quitclaimed.
15. Lessee's obligations hereunder, except for payment of taxes, advance
annual minimum royalty and surface rentals under Section 3, and to drill xxxxx
under Section 13, shall be suspended and the primary term of this lease shall be
extended, while Lessee is prevented from complying therewith by strikes,
lockouts, riots, action of the elements, accidents, delays in transportation,
inability to secure labor or materials in the open market, laws, rules or
regulations by any governmental agency, authority or representative having
jurisdiction, inability to secure or absence of a market for commercial sale of
substances developed on or from the leased premises, or other matters or
conditions beyond the reasonable control of Lessee, whether or not similar to
the conditions or matters in this paragraph specifically enumerated.
-14-
16. If at the expiration of the primary term or at any time or times
thereafter while this lease shall remain in force and effect, Lessee has
discovered on the leased premises geothermal energy and substances in quantities
which in Lessee's opinion, may be commercially produced, but said leased
geothermal energy and substances are not being produced, processed or marketed
because of technical or other problems or due to lack of market for such
geothermal energy and substances which is acceptable to Lessee and Lessee is not
than engaged in operations for the purpose of producing, processing or marketing
leased geothermal energy and substances, Lessee may pay as a minimum royalty for
the next ensuing twelve months on or before the expiration date of the primary
term hereof or within ninety days from the suspension of all operations
contemplated hereby, the sum of one dollar per acre for each acre then covered
by this lease and if such payment is made or tendered, it will be considered
that the geothermal energy and substances covered by this lease are being
produced from said premises in paying quantities. In like manner and upon like
payments annually this lease may be extended for additional twelve month
periods, provided, however, that this lease cannot be extended beyond the
primary term by reason of the royalty payments provided in this paragraph for a
longer term than five consecutive years.
17. Upon the violation by Lessee of any of the terms, covenants or
conditions of this lease, and failure to take steps
-15-
to remedy the default within sixty days after receipt of written notice from
Lessor to do so, then at the option of Lessor, this lease shall fortwith cease
and terminate, and all rights of Lessee in and to said leased premises shall be
at an end, except that Lessee shall have the right to retain and hold under this
lease any forty acre subdivision in which a well is producing commercially or is
being drilled, and with respect to which Lessee is not in default. The waiver by
Lessor of any breach of any covenant or condition hereof shall not be a waiver
of any other or subsequent breach hereof, nor of any other covenant or condition
hereof.
18. Upon surrender by Lessee of Lessee's rights hereunder in while or in
part, or upon termination of Lessee's rights hereunder, or any part hereof, in
any manner herein provided, Lessee shall peaceably surrender possession thereof
to Lessor and Lessee shall quitclaim to Lessor all right, title and interest of
Lessee in the leased premises in the condition received.
19. Derricks, buildings, structures, improvements, equipment, machinery,
appliances and personal property placed by Lessee upon the leased premises shall
be and remain the property of Lessee, and Lessee shall have the obligation, at
the option of the Lessor at any time prior to the expiration of six months after
the termination of this lease, to remove the same.
20. Lessee agrees to keep full records of the operations on, and production
and sales of said geothermal energy and substances from the leased premises
independently of and separate from any
-16-
other property operated by Lessee and to notify Lessor promptly of discovery of
any of said geothermal energy and substances on the leased premises, and to
furnish to Lessor on or before the last day of each month a true statement of
all production and sales of said geothermal energy and substances during the
preceding month in a form satisfactory to Lessor. All records of such production
and sales shall, at all reasonable times, be open to the inspection of Lessor's
agents and representatives.
21. Lessee will keep an accurate log and casing record showing the progress
of drilling, character of formations encountered or drilled through, and casing
in each well in which drilling shall have been done on the leased premises, and
furnish Lessor a copy thereof upon the completion of or the abandonment of each
well, and a true copy of all surface and subsurface surveys made of each well
drilled under this lease. Lessor's duly appointed agents and representatives
shall have access at all reasonable times to all of the xxxxx and to Lessee's
property in and upon said leased premises. Lessor shall make such observations
and measurements at its sole risk and expense and agrees to indemnify and hold
Lessee harmless against all claims and demands of such agents and
representatives arising as a result of such observations and measurements.
Lessee shall carry on Lessee's operations hereunder in a careful and
workmanlike manner, and in accordance with all laws, ordinances and governmental
orders and regulations governing the
-17-
same.
22. Lessee agrees to pay before delinquency all taxes and assessments which
have been or shall be lawfully levied and assessed on the mineral rights covered
hereunder in the leased premises, and on the buildings, structures, equipment
and other personal property or improvements placed, maintained or used by Lessee
on the leased premises, and on the geothermal energy and substances stored
thereon and not belonging to Lessor. Lessee may deduct the royalty proportion of
the taxes and assessments on mineral rights covered hereunder in the leased
premises in each fiscal year, paid by Lessee, from the royalties due and payable
to Lessor for production during each successive twelve months' period subsequent
to the day and month in such fiscal year on which the first installment of such
taxes and assessments become delinquent. The above amount of the taxes and
assessments for a particular fiscal year so paid shall be deductible only from
the royalties due and payable during the twelve months' period which immediately
succeeds the date of delinquency of the first installment in such fiscal year.
Lessee agrees to pay to Lessor annually, within fifteen days after demand, an
amount equal to the working interest proportion of the real property taxes and
assessments paid by Southern Pacific Land Company or Southern Pacific
Transportation Company on the land overlying or occupied by the leased premises
(except on buildings, structures and other improvements thereon not owned,
maintained or used by Lessee) each fiscal year of the term of this lease,
prorated from the date of this lease, for the first such year and for each
fiscal year thereafter during the term of this lease.
-18-
of the crop destroyed. Upon the written request of Lessor, Lessee agrees to lay
below plow depth all pipe lines, except steam-gathering and transmission lines
or other hot water lines, which Lessee constructs through cultivated fields, and
to fence all sump holes or other excavations to safeguard livestock on the land
subject to this lease. Upon completion or abandonment of any well drilled on the
leased premises, or upon the termination of this lease, Lessee shall abandon all
xxxxx in accord with applicable regulations level and fill all sump holes and
excavations and shall remove all debris and shall leave the premises in a clean
and sanitary condition. Lessee, in Lessee's operations, on the leased premises
shall at all times have due and proper regard for the health, welfare and safety
of Lessor and of Lessor's tenants occupying the land subject to this lease. Any
xxxxx drilled by Lessee hereunder shall be drilled in such manner so as not to
affect any existing potable water well or water xxxxx of Lessor on the leased
premises. Sufficient casing shall be set and cemented in such xxxxx drilled by
Lessee so as to seal off and protect known potable waters developed in any such
water well or water xxxxx.
25. In the event Lessor deems it necessary to file an action to enforce
Lessor's rights hereunder, the prevailing party shall be entitled to recover
reasonable attorney's fees and court costs for the prosecution or defense of the
litigation.
26. Any notice or statement herein requested or required to be given by one
party to the other shall be in writing. Delivery
-19-
of such written notice or statement to Lessor shall be conclusively taken as
sufficient if and when deposited in the United States mail, with the postage
thereon fully prepaid, certified, addressed to Lessor at:
Southern Pacific Land Company
Southern Pacific Building
One Market Plaza - Room 200
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Payments to Lessor shall be made at the above address. Delivery of such
notice or statement to Lessee shall be conclusively taken as sufficient if and
when deposited in the United States mail, with postage thereon fully prepaid,
certified, addressed to Lessee at:
Xxxxxxxx Petroleum Company
Attn: Manager, Geothermal Operations
X.X. Xxx 000
Xxx Xxx, Xxxxxxxxxx 00000
Any party hereto may, by written notice, change their address to any other
location for the above purposes.
27. If Lessee is adjudicated a bankrupt, or shall make an assignment for
the benefit of creditors, or file a voluntary petition under any law having for
its purpose the adjudication of Lessee a bankrupt, or the extension of time of
payment, composition, adjustment, modification, settlement or satisfaction of
the liabilities of Lessee, or a receiver be appointed for the property of
-20-
Lessee by reason of the insolvency of Lessee, notwithstanding anything to the
contrary elsewhere in this lease, Lessor shall have the right to terminate this
lease and to take exclusive possession of the leased premises. The acceptance of
rent or other payments for the use of the leased premises shall not constitute a
waiver of Lessor's right to terminate this lease as above set forth.
28. This instrument is a lease and is not and shall not ever be held or
interpreted to be a mining partnership or partnership of any kind, or in any
sense whatsoever, the intention of the parties hereto being to establish and
create between themselves only the relationship of Lessor and Lessee in
accordance with the provisions hereof.
29. The rate of $1.00 per acre in Sections 3 and 16 hereof and the
obligation of Lessee to reimburse Lessor for real property taxes and assessments
equal to Lessee's working interest proportion in Section 22 hereof shall be
subject to pro-ration in the same percentage as the undivided interest of Lessee
specified in Section 1 hereof.
30. This lease shall not be assigned nor sublet, in whole or in part
without the prior written consent of Lessor, which consent shall not be
unreasonably withheld. Subject to the above, the provisions hereof shall inure
to the benefit of, and be binding upon the successors and assigns of the parties
hereto.
-21-
31. The parties hereto agree to enter into a memorandum form of this lease
for recording purposes which shall incorporate by reference the provisions
hereof.
32. Time and specific performance are the essence of this lease.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed as of the day and year first hereinabove written.
XXXXXXXX PETROLEUM COMPANY, Lessee
By /s/ Illegible
----------------------------------
Attorney-in-Fact
SOUTHERN PACIFIC LAND COMPANY, Lessor
By /s/ Illegible
----------------------------------
Assistant General Manager, Natural
Resources
Attest /s/ Illegible
------------------------------
Assistant Secretary
-22-
STATE OF CALIFORNIA )
) ss.
City and County of San Francisco )
On this 9th day of September in the year One Thousand Nine Hundred and
Seventy Six before Mme., XXXXXXX X. XXXXXXXX, a Notary Public in and for the
City and County of San Francisco, State of California, personally appeared
(One Market St.)
X. X. Xxxxxxx
X. X. X'Xxxxxxx
known to me to be the Asst. Gen. Mgr., Natural Resources
Assistant Secretary
of the corporation _____ described in and that executed the within instrument,
and also known to me to be the person _____ who executed it on behalf of the
corporation ______ the ___ named and _______________ acknowledged to me that
such corporation _______ executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at my office in the City and County of San Francisco, the day and year in
this certificate first above written.
Corporation /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Notary Public in and for the City and
County of San Francisco, State of
California.
My Commission Expires October 29, 1978
------------------------------
[SEAL]
XXXXXXX X. XXXXXXXX
NOTARY PUBLIC CALIFORNIA
PRINCIPAL PLACE OF BUSINESS IN
CITY AND COUNTY OF
SAN FRANCISCO
______________________________
------------------------------
EXHIBIT A
Attached to and made a part of Lease No. SPL-655 dated August 1, 1976, between
Southern Pacific Land Company, "Lessor" and Xxxxxxxx Petroleum Company "Lessee".
Xxxxxxxxx County, Nevada
Township 23 North, Range 27 East, M.D.M.
Section 1: All - 640.96 acres
Section 3: All - 644.73
Section 5: All - 639.76
Section 7: All - 640.00
Section 9: All - 640.00
Section 11: All - 640.00
Section __: All - 640.00
Section 15: All - 640.00
Section 17: All - 640.00
Section 19: All - 640.40
Section 21: All - 640.00
Section 23: All - 640.00
Section 25: All - 640.00
Section 27: All - 640.00
Section 29: All - 640.00
Section 31: All - 640.32
Section 33: All - 640.00
Section 35: All - except 6.80 acres in Southern Pacific
Transportation Company right-of-way,
633.20 acres
Township 21 North, Range 28 East, M.D.M.
Section 1: All - except 55.63 acres in Southern Pacific
Transportation Company right-of-way,
501.89 acres
Section 3: All - 633.28
Section 5: All - 634.00
Section 7: All - 654.56
Section 9: All - 640.00
Section 17: All - 640.00
Township 22 North, Range 26 East, M.D.M.
Section 3: All - 640.96 acres
Section 15: All - 640.00
Section 23: All - 640.00
Township 22 North, Range 27 East, M.D.M.
Section 1: X/0, XX/0, X/0, XX/0
Section _: All - ___.__ acres
Section 5: All - 673.96
Section 7: All - 606.64
Section 9: All - 640.00
Section 11: All - 640.00
Section 13: All - 647.40
Section 15: All - 640.00
Section 17: All - 640.00
Section 19: All - 608.44
Section 21: All - 640.00
Section 23: All - 640.00
Section 25: All - 642.48
Section 27: All - 640.00
Section 29: All - 640.00
Section 31: All - 605.78
Section 33: All - 615.44
Section 35: All - 597.12
Township 22 North, Range 28 East, M.D.M.
Section 3: All - 639.40 acres
Section 5: All - 635.96
Section 7: E/2, E/2 W/2, W/2 SW/4, SW/4 NW/4
605.08 acres
Section 9: All - 640.00
Section 11: All - 640.00
Section 13: All - 640.00
Section 15: All - 640.00
Section 17: All - 640.00
Section 19: All - 659.04
Section 21: All - 637.93
Section 23: All - 640.00
Section 25: All - 640.00
Section 27: All - 640.00
Section 29: All - 640.00
Section 31: All - 659.44
Section 33: All - 640.00
Section 35: All - 640.00
Township 23 North, Range 27 East, M.D.M.
Section 25: All- 640.00 acres
Section 27: All- 640.00
Section 29: S/2, S/2 NE/4, SE/4 NW/4, NE/4 NE/4
480.00 acres
Section 33: S/2, W/2 NW/4, E/2 NE/4, SW/4 NE/4, SE/4 NW/4
527.12 acres
Section 35: All - 580.76
_____________________ acres
EXHIBIT C
PROPERTY DESCRIPTION
--------------------
EXHIBIT C
Inventory of Plant Equipment
Installed Equipment 1/2/2003
--------------------------------------------------------------------------------
Number of
installed
units Component Description/detail
--------------------------------------------------------------------------------
1 Steam Turbine Manuf: Transamerica Delaval
Model: XJSF
Detail: 9 stage, dual pressure steam turbine
1 Gear Reducer Manuf: Philadelphia Gear Corporation
Model: 17HSA
Detail: High speed gear reducer
HP - 16,220
Ratio - 2.023 to 1
1 Generator Manuf: Electric Machinery Mfg.
Model: 84106-SE frame
Detail: Ser #:184346-11
13,800 volts
3 phase
526 amps
11,000 KW Ind. Generator
Spares: See attached Turbine Spares list
1 Cooling Tower Manuf: Marley Cooling Tower Company
Model: 478-4, 5-02
Detail: 2 cell, Induced draft, class 400
counterflow serial #:478-12-422-85
2 Cooling tower Manuf: Marley
geareducer Model: Series 32.2
Detail: Reduction ratio: 10.16/1
Spares: 1 complete unit
2 Cooling Tower Manuf: Seimens Allis
Fan Motors Model: Frame 144
Detail: 100 HP, 480 volt, 3 phase
Spares: 1 complete unit
2 Cooling Tower Manuf: Worthington
pumps Model: 10LR-18A
Detail: 4350 GPM, 37 psi, 125 HP
Spares: bearings and seals
2 Cooling tower Manuf: Seimens Allis
pump motor Model: Frame 144
Detail: 125 HP, 480 volt, 3 phase, 1180
Spares: 1 complete unit
2 Condensate Manuf: Xxxxx Xxxxxxx
pumps Model: VMT24RXM
Detail: Vertical can pump, 1 stage
4430 GPM, 66 psi, 150 HP
Spares: 2 complete units
--------------------------------------------------------------------------------
EXHIBIT C
Inventory of Plant Equipment
Installed Equipment
--------------------------------------------------------------------------------
Number of
installed
units Component Description/detail
--------------------------------------------------------------------------------
2 Condensate Manuf: Seimens Allis
pump motor Model: Frame 449
Detail: 150 HP, 480 volt, 3 phase, 1200 RPM
Spares: bearings
2 Reinjection Manuf: Xxxxxxx - Willamette Co
pumps Model: 4X6X14B CAP (ser # 2H453/4)
Detail: 1200 GPM, 700 psi, 300 HP
Spares: 1 complete unit
2 Reinjection Manuf: Seimens Allis
pump motor Model: Frame 509US
Detail: 300 HP, 480 volt, 3 phase, 3560 RPM
Spares: bearings (on order)
1 High Pressure Manuf: B & J Welding
Seperator Model: serial # 1788
Detail: 61,000 gal Capacity pressure vessel
120 psig rated at 650 F
1 Low Pressure Manuf: Xxxxx Metal Products
Seperator Model: AU 8678
Detail: 20,303 cal capacity pressure vessel
120 psig rated at 650 F
1 Condensor Manuf: Winston
Model: serial # 4093
Detail: 1740 cal capacity pressure vessel
120 psig rated at 650 F
--------------------------------------------------------------------------------
