CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
Exhibit 10.4.6
GEOTHERMAL RESOURCES LEASE
THIS LEASE is entered into this 18th day of November, 1983, by and
between s SIERRA PACIFIC POWER COMPANY, a Nevada corporation ("Lessor"), and
GEOTHERMAL DEVELOPMENT ASSOCIATES, a Nevada corporation ("Lessee").
1. INTEREST GRANTED:
In consideration of the covenants and agreements contained
herein, Lessor hereby grants and leases to Lessee the exclusive right and
privilege to drill for, extract, produce, remove, utilize, sell, and dispose of
geothermal steam and associated geothermal resources as defined in NRS 322.005,
(hereinafter called "geothermal resources"), in or under that certain parcel of
property located in Washoe County, Nevada, and consisting of approximately
thirty (30) acres, as more particularly described in Exhibit "A," which is
attached hereto and incorporated herein by reference, together with:
(a) The non-exclusive right to conduct within the leased area
geological and geophysical exploration;
(b) The right to construct or erect and to use, operate, and
maintain within the leased area, together with ingress and egress
thereupon, all xxxxx, pumps, pipes, pipe lines, buildings,
plants, sumps, brine pits, reservoirs, tanks, waterworks, pumping
stations, roads, electric power generating plants, transmission
lines, industrial facilities, electric telegraph or telephone
lines, and such other works and structures and to use so much of
the surface of the land as may be necessary or reasonably
convenient for the production, utilization, and processing of
geothermal resources or for the full enjoyment of the rights
granted by this Lease, subject to applicable laws and
regulations. Although the use of the leased area for an electric
generating plant and/or transmission facilities is authorized
hereunder, the location of such facilities and the terms of
occupancy therefor shall be set forth in a separate agreement
between the parties.
(c) The non-exclusive right to drill potable water xxxxx in
accordance with Nevada statutory water laws within the leased
area and to use the water produced therefrom for operation of the
leased lands, free of costs, provided
that such drilling and development are conducted in such a way
that they do not interfere with Lessor's activities on the leased
land.
(d) The right, without the payment of royalties hereunder, to
reinject into the leased lands geothermal resources and
condensates to the extent that such resources and condensates are
not utilized, but their reinjection is necessary for operation
under this Lease in the recovery or processing of geothermal
resources. If the Lessee, pursuant to a plan approved by the
Nevada Division of Environmental Protection, disposes of the
useable brine and waste products into underlying formations, it
may do so without the payment of royalties.
All of the activities described above shall be conducted for the
primary purpose of the generation of electrical power through the use of
geothermal resources. Nothing in this Lease shall be construed as prohibiting
the use, for other purposes, of spent geothermal resources produced on the
leased property.
2. TERM:
The term of this Lease shall commence upon the date of its
execution and subject to the conditions set forth below shall continue for a
term of twenty (20) years and for so long thereafter as geothermal resources are
produced or utilized in commercial quantities on the leased property, or lands
pooled or unitized therewith.
3. RENTALS AND ROYALTIES:
(a) Annual Rental. For each lease year prior to the commencement
of production of geothermal resources in commercial quantities on
the leased lands, the Lessee shall pay the Lessor on or before
the anniversary date of the lease a rental of *** Dollars ($***)
per acre or a fraction thereof. If no production of electrical
energy has been achieved on the leased property by the end of the
third year of the lease term, and the parties have not entered
into a written agreement to extend the lease term, this Lease
shall automatically terminate as to both parties.
(b) After Lessee has commenced the production of electrical
energy, Lessee may, at its option, suspend or defer such
production. If Lessee does not then resume production within one
year, Lessee shall pay rent for the year, in arrears, as
described in Paragraph 3(a) hereinabove. If production is
suspended
*** Confidential material redacted and filed separately with the Commission.
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for more than eighteen (18) months at any one time, this
agreement shall terminate automatically as to both parties.
(c) Royalty. On or before the last day of the calendar month
after the month of commencement of production in commercial
quantities of geothermal resources and thereafter on a monthly
basis, the Lessee shall pay to the Lessor:
(i) A royalty of ***
(ii) A royalty of ***
(iii) A royalty of ***, and utilized by Seller for the ***
The value of said resource shall be considered ***
(iv) A royalty of ***. In the event Lessee elects to process
***, Lessor's royalty share shall bear its proportionate share of
such ***. For the purpose of this Lease, the ***
4. TAXES AND ASSESSMENTS:
Lessee shall pay all taxes levied against its improvements on the
leased land. Lessor shall pay its royalty share, and Lessee shall pay the
remaining portion of any and all taxes assessed on geothermal resources from the
leased land in the following manner:
(a) Commencing with the effective date of this Lease and prior to
the actual production of geothermal resources, Lessor shall pay
and bear its royalty share,
*** Confidential material redacted and filed separately with the Commission.
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and Lessee shall pay and bear the remaining portion of any and
all taxes attributable to an assessment of geothermal resources
on said leased land.
(b) After the commencement of production of geothermal resources
from the leased land, Lessor shall pay its royalty share, and
Lessee shall pay the remaining portion of any and all taxes
assessed upon geothermal resources and also of all severance,
production, license, and other taxes and assessments levied or
assessed on account of the production of geothermal resources
from the leased land.
In the event Lessor's royalty share of such taxes exceeds
one-half of the amount of Lessor's rental shut-in royalty and/or royalty
payments hereunder for the year in which such taxes are payable, Lessee shall
advance such excess on Lessor's behalf and recoup such advance out of one-half
of Lessor's royalty income once commercial production has commenced on the
leased lands. Lessor shall pay before delinquency all other taxes and
assessments on the leased land and improvements. However, Lessee is hereby
authorized to pay any taxes and assessments on behalf of Lessor and may, if it
so desires, deduct the amounts so paid from royalties or monies due Lessor
hereunder.
5. XXXXX:
(a) Lessee shall not drill or operate water xxxxx or take water
in such a way as to injure water xxxxx, ponds or reservoirs of
Lessor or interfere with or restrict the supply of water to
Lessor or its tenants for domestic, livestock or agricultural
use. If Lessee elects to permanently abandon any well drilled by
Lessee or the leased land, Lessor shall have the option of
requiring in writing that Lessee turn over such well to Lessor,
and at that time Lessor shall pay Lessee for the salvage value of
the material and equipment in and on said well. If Lessor so
elects, Lessee agrees to plug such well at the bottom of the
surface casing according to the requirements of the State
Engineer in order to prevent contamination of freshwater bearing
formations as a result of Lessee's drilling operations.
(b) Subject to the terms of this Paragraph 5, within six (6)
months after abandonment of any well, including those
abandonments resulting from termination of this Lease, Lessee
shall remove all machinery, material and
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structures used in connection with said well and not used in its
other operations, if any, on the leased land, and shall fill in
and level off all excavations, pits, or other alterations to the
surface of the leased land caused in connection with said well,
and, insofar as practical, shall restore the leased land and the
means of ingress and egress to as good a condition as existed
when Lessee commenced operations under this Lease, except
reasonable wear and tear, acts of nature and conditions beyond
the control of Lessee.
6. COMINGLING, POOLING AND UNITIZATION:
(a) Lessee shall have the right to comingle (for purposes of
storing, transporting, handling, utilizing, selling or
processing) geothermal resources produced or extracted from the
leased land and lands pooled, unitized or combined therewith,
with similar substances produced or extracted from other lands or
units. In the event of such comingling, Lessee shall meter, gauge
or measure, according to prevalent industry standards, the
production from the leased land, or from the unit or units
including the leased land or other units or lands, as applicable,
and compute and pay Lessor's royalty attributable to Lessor's
land on the basis of such production as so determined or
allocated.
(b) Lessee may, as a recurring right for drilling, development or
operating purposes, pool, unitize, or combine all or part of the
leased land into a unit with any other land or lands (whether
held by Lessee or others), whether or not adjacent or contiguous,
which Lessee desires to develop or operate as a unit. Such a unit
shall be officially created upon Lessee's filing in the official
records of Washoe County a notice of such unitization, describing
said unit. Any well (whether or not Lessee's well) commenced,
drilled, drilling and/or producing or being capable of producing
in any part of such unit shall for all purposes of this Lease be
deemed a well commenced, drilled, drilling and/or producing on
the leased land, and the Lessee shall have the same rights and
obligations with respect thereto and the drilling and producing
operations upon the lands from time to time included within any
such unit as Lessee would have if such lands constituted the
leased lands; provided, however, that
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notwithstanding this or any other provision or provisions of this
Lease to the contrary:
(i) Production as to which royalty is payable from any such
well or xxxxx drilled upon any such unit, whether located on the
leased land or other lands, shall be allocated to the leased land
in the proportion that the acreage of the leased land in such
unit bears to the total acreage of such unit. Such allocated
portion thereof shall for all purposes be considered as having
been produced from the leased land, and the royalty payable under
this Lease with respect to the leased land in such unit shall be
payable only upon that proportion of production so allocated, and
(ii) If taxes of any kind are levied or assessed (other than
taxes on the surface and on Lessor's improvements), any portion
of which is chargeable to Lessor under the provisions of this
Lease, then this share of such taxes to be borne by Lessor shall
be in proportion to the share of the production from such unit
allocated to the leased land.
7. RESERVATIONS TO LESSOR:
All rights in the leased area not granted to Lessee by this Lease
are hereby reserved to Lessor. Without limiting the generality of the foregoing,
such reserved rights include:
(a) Disposal - the right to sell or otherwise dispose of the
surface of the leased lands or any resource in the leased lands
under existing laws, or laws hereinafter enacted, subject to the
rights of the Lessee under this Lease.
(b) Rights of Way - the right to authorize geological and
geophysical explorations on the leased land which do not
interfere with or endanger actual operations under this Lease and
the right to grant such easements or rights of way for joint or
several use upon, through, or in the leased area for steam lines
and other public or private purposes which do not interfere with
or endanger planned or actual operations or facilities
constructed under this Lease.
(c) Mineral Rights - the ownership of the right to extract
minerals, oil, hydrocarbon gas, and helium from the leased lands.
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(d) Casing - the right to acquire the well and casing at the fair
market value of the casing where the Lessee finds only potable
water, and such water is not required in lease operations.
(e) Measurements - the right to measure geothermal resources and
to sample any production thereof.
8. DEFAULT AND TERMINATION:
Whenever the Lessee fails to comply with any of the terms and
provisions of this Lease, and does not commence to remedy such failure within
ninety (90) days after receipt of written notice from Lessor, the Lessor may (a)
suspend operations until the requested action is taken to correct the
non-compliance, or (b) cancel this Lease by delivering written notice of its
intent to do so to Lessee. Such cancellation shall be effective immediately upon
delivery of said notice. The following property shall be excepted from any Lease
termination hereunder as a result of default: (a) each and any well then capable
of producing in commercial quantities the substances covered by this Lease, and
in respect to which Lessee is not in default; and (b) rights of way and
easements across lands subject to such Lease termination, which rights of way
and easements are necessary for conducting Lessee's operations on or in the
vicinity of the lands retained, including sites for electric generating units.
Lessee may terminate this Lease at any time upon six (6) months
written notice to Lessor. During the six-month period, Lessee shall remove all
generation equipment and plant, treat all xxxxx in accordance with the
appropriate provisions of Paragraph 5 above, and return the leased land to a
condition as near as possible to its state prior to Lessee's entry thereon.
9. INDEMNIFICATION:
The Lessee shall indemnity and hold harmless Lessor, its
officers, agents and employees from any and all claims for liability of any kind
arising from or connected with Lessee's activities and operations under this
Lease. Lessee shall pay to the person beneficially interested in the damaged
object all damages caused by Lessee's operations on the surface of the leased
land, including but not limited to damages to growing crops, pasture and
improvements on the leased land, or to animals or livestock. Lessee agrees to
take reasonable steps to prevent its operations from:
(a) Causing or contributing to soil erosion, or to the injury to
soil conserving structures on the leased land;
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(b) Polluting the waters of reservoirs, springs, streams or water
xxxxx on the leased land;
(c) Damaging crops or pasture, consistent with the purposes of
this Lease; or
(d) Harming or injuring in any way the animals or livestock owned
by Lessor or his tenants, or kept or pastured on the leased land,
including the erection and maintenance of fences, gates and
cattle guards where necessary for such purposes.
In no event shall Lessor be indemnified for liability or loss
resulting from its sole negligence.
10. CONDEMNATION:
Eminent domain proceedings resulting in the condemnation of a
part of the premises leased herein, but leaving the remaining premises
reasonably useable by Lessee for the purposes of the activities described in
Paragraph 1 above, will not terminate this Lease unless Lessor and Lessee
mutually agree to such termination. The effect of any such partial condemnation
will be to terminate the Lease as to the portion of the premises condemned, and
the Lease of the remainder of the premises shall remain intact. Lessee hereby
assigns and transfers to Lessor any claim it may have to compensation for
damages or award as a result of any condemnation, that does not materially
impair its ability to carry out the activities described in Paragraph 1.
11. PERMITTING:
Lessee shall obtain and maintain any and all permits, licenses,
and governmental approvals necessary for the conduct of Lessee's activities on
the leased land. All labor to be performed and material to be furnished in the
operations hereunder shall be at the sole cost and expense of Lessee, and Lessee
shall hold Lessor free and harmless from liability thereunder. Lessee shall keep
the leased premises fully protected against any and all liens of every character
arising from or connected with Lessee's operations hereunder.
12. ASSIGNMENTS AND SUBLEASES:
(a) Neither party shall voluntarily assign this Lease without the
prior written consent of the other party, unless the assignment
is to a partnership in which one of the parties to this Lease is
a general partner.
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(b) In the event that either party to this Lease wishes to assign
this Lease to a corporation or other entity, which does not fall
into subsection (a) above, said party shall provide the other
party with written notice of such intent. Said written notice
shall describe the financial structure and assets of the
potential assignee in sufficient detail to permit the noticed
party to evaluate the effect of the assignment on its interest in
this Lease and the even-dated Agreement For the Purchase and Sale
of Electricity executed by the parties hereto. The noticed party
shall have thirty (30) days from its receipt of the notice to
consent or refuse to consent to the assignment. Failure to give
written consent or refusal within said thirty-day period shall be
deemed consent by the noticed party. In no event shall consent to
any assignment be unreasonably withheld.
(c) In the event Lessee is contemplating an assignment such as
described in subsection (b) above, Lessor shall have a prior
right to regain Lessee's rights under the Lease, together with
any and all related improvements, at the price and on the terms
of the intended assignment. Lessor may exercise this right by
notifying Lessee of its intent to do so by the end of the
thirty-day period described in subsection (b) above. Such notice
shall also be deemed a refusal of consent to the assignment of
Lessee's rights to a third party.
Subject to the provisions of this Paragraph, all obligations
hereunder shall be binding upon, and every benefit hereof shall inure to, the
heirs, executors, administrators, successors and assigns of the respective
parties hereto.
13. NOTICES:
Lessor may give any notice or deliver any document hereunder to
Lessee by mailing the same by registered mail addressed to Lessee at:
Geothermal Development Associates
000 Xxxxxxx Xxxxxx
Xxxx, Xxxxxx 00000
or by delivering the same in person to the above-referenced address Lessee.
Lessee may give any notice or deliver any document hereunder to Lessor by
mailing the same by registered mail addressed to Lessor at:
Sierra Pacific Power Company
Attention: Xxx Xxxxx
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P.O. Box 10100
Xxxx, Xxxxxx 00000
or by delivering the same to Lessor in person. For purposes of this Paragraph,
either party may change its address by written notice to the other. In case of
any notice or document delivered by registered mail, the same shall be deemed
delivered when deposited in any U.S. Post Office, properly addressed as herein
provided, with postage fully prepaid. Lessee may make any payment due Lessor to
Lessor personally or by mail at the address of Lessor given above.
14. CONDITION:
The obligations of both parties under this Lease are conditioned
upon the Public Service Commission of Nevada's approval of the pricing
provisions in the parties' even-dated Agreement for the Purchase and Sale of
Electricity as a portion of Lessor's purchased power costs. If such approval is
not received, this Lease shall be considered null and void.
///
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IN WITNESS WHEREOF, the parties hereto have executed this Lease
as of the day and year first above written.
LESSOR:
SIERRA PACIFIC POWER COMPANY
By /s/ Indecipherable
---------------------------------
Title: Sr. Vice President
-----------------------------
LESSEE:
GEOTHERMAL DEVELOPMENT
ASSOCIATES
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By /s/ X. Xxxxxx Booths
---------------------------------
Title: President
----------------------------
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SECOND AMENDMENT TO
GEOTHERMAL RESOURCES LEASE
THIS AGREEMENT is entered into as of the date of its execution by and
between SIERRA PACIFIC POWER COMPANY, A Nevada Corporation ("Lessor") and FAR
WEST HYDROELECTRIC FUND, LTD., a Utah Limited Partnership ("Lessee").
1. RECITALS. This Amendment is based on the following facts:
a. On November 18, 1983, Lessor and Geothermal Development Associates
entered into an Agreement for the Purchase and Sale of Electricity ("the
Original Power Purchase Agreement") and a Geothermal Resources Lease ("the
Lease") for a geothermal generation project to be located near Steamboat
Springs, Nevada. The parties amended the Lease on January 7, 1985, and the
Original Power Purchase Agreement on March 6, 1987. Both the Original Power
Purchase Agreement, as amended, and the Lease, as amended, are currently in
effect.
b. Through a series of assignments, to which Lessor consented, Far West
Hydroelectric Fund, Ltd. is the current Lessee under the Lease, as well as
the Seller under the Original Power Purchase Agreement.
c. Far West Capital, Inc. wishes to construct a geothermal generating
facility which consists of a 2.0 XX xxxxx (1.8 MW net) expansion at the
Steamboat Project ("Plant") on the land subject to the Lease, the output of
which will be sold to Lessor pursuant to a new Long-Term Agreement for the
Purchase and Sale of Electricity of even date herewith ("the New Power
Purchase Agreement"). Lessor and Lessee wish to amend the Lease to
accommodate the Plant on the leased property and delineate a method of
calculating royalty payments to be made by Lessee on the output of the
Plant.
d. Lessee intends to sublease a portion of the leased property to Far West
Capital, Inc.
In consideration of these facts, the parties agree as follows:
2. AMENDED PROVISION. Section 3(c) (i) of the Lease is hereby amended to read as
follows:
1
3.(c) ROYALTY - At the end of the Billing Period during which the initial
production of geothermal resources in commercial quantities from the Plant
("the Initial Operation") occurs and at the end of each monthly Billing
Period thereafter, the Lessee shall pay Lessor royalties calculated as
follows:
(i) A royalty of *** percent (***%) on the ***, plant which is the
subject of the Original Power Purchase Agreement.
(ii) A royalty, calculated *** from the Plant for the previous Billing
Period which is the subject of the New Power Purchase Agreement.
(iii) A royalty of *** percent (***%) on the *** from any other power
plant built upon or utilizing geothermal resources from the leased lands,
or land pooled or unitized therewith.
A "Billing Period" shall mean the time period between established meter
reading dates.
3. STATUS OF AMENDMENT. It is expressly understood and agreed by the parties
hereto that this Amendment is supplemental to the Lease. It is further
understood and agreed that all the terms, conditions and provisions of the
Lease, unless specifically modified herein, are to apply to this Amendment and
are made a part of this Amendment as though they were expressly written,
incorporated and included herein.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment this
29th day of October 1988.
LESSOR:
SIERRA PACIFIC POWER COMPANY
By /s/ Xxxxxxx Xxxxxxx
--------------------------------------
*** Confidential material redacted and filed separately with the Commission.
2
Title: Vice President Electric Resources
---------------------------------
LESSEE:
FAR WEST HYDROELECTRIC FUND LTD.
By /s/ Indecipherable
--------------------------------------
Title: Gen. Partner
----------------------------------
Date: 10/27/88
----------------------------------
3
THIRD AMENDMENT TO
GEOTHERMAL RESOURCES LEASE
THIS THIRD AMENDMENT to Geothermal Resources Lease is entered into as of the
date of its execution, by and between Sierra Pacific Power Company, a Nevada
corporation ("Lessor") and Far West Electric Energy Fund, L.P., a Delaware
limited partnership (formerly Far West Hydroelectric Fund, Ltd. a Utah limited
partnership before its change of name and change of domicile) ("Lessee").
RECITALS.
a. On November 13, 1983, Lessor and Geothermal Development Associates
entered into an Agreement for the Purchase and Sale of Electricity (the
"Original Power Purchase Agreement"). As the result of a series of assignments
consented to by Lessor, Lessee has become the seller under the Original Power
Purchase Agreement, which Agreement was amended on March 6, 1987.
b. An unrecorded Geothermal Resources Lease dated November 18, 1983, was
executed by Sierra Pacific Power Company as Lessor, and Geothermal Development
Associates, as Lessee, as disclosed by a Memorandum of Lease by and between
Sierra Pacific Power Company and Geothermal Development Associates dated January
7, 1985, and recorded in Book 2115, page 321, as Document No. 971913 of said
Official Records (the "Lease"). Said Lease was amended by an unrecorded Letter
Amendment by and between Sierra Pacific Power Company and Geothermal Development
Associates dated January 7, 1985, as disclosed by the above Memorandum of Lease
and by an Amended Memorandum of Lease by and between the same parties dated
January 7, 1985, and recorded in Book 2116, page 812, as Document No. 972684 of
said Official Records. Said Lease was assigned by Geothermal Development
Associates to Ormat Systems Inc. by an Assignment of Lease dated September 26,
1985, and recorded in Book 2272, page 643 as Document 1043163 of said Official
Records, further assigned by Ormat Systems Inc. to Bonneville Pacific
Corporation by an Assignment of Lease dated September 26, 1985, and recorded in
Book 2272, page 647 as Document No. 1043164 of said Official Records, further
assigned by Bonneville Pacific Corporation to Far West Capital, Inc. ("FWC") by
an Assignment of Lease dated December 12, 1985, and recorded in Book 2272, page
750 as Document No. 1043167 of said Official Records, and further assigned by
FWC to Far West
1
Hydroelectric Fund, Ltd. by Assignment of lease dated December 12, 1985, and
recorded in Book 2272, page 756, as Document No. 1043168 of said Official
Records, all of said assignments being disclosed by that certain Memorandum of
Lease, Assignments of Lease and Purchase Agreement by and among Geothermal
Development Associates, Ormat Systems Inc., Bonneville Pacific Corporation, FWC,
Far West Hydroelectric Fund, Ltd. and Sierra Pacific Power Company dated
December 31, 1985, and recorded in Book 2317, page 368 as Document 1062824 of
said Official Records. Said Lease was further amended by a Second Amendment to
Geothermal Resources Lease by and between Sierra Pacific Power Company and Far
West Hydroelectric Fund, Ltd. dated October 29, 1988.
c. Lessee constructed and is operating a five megawatt geothermal power
plant ("Original Power Plant") on the leased property which is delivering power
to the Lessor under the Original Power Purchase Agreement.
x. Xxxxxx entered into a Long Term Agreement for the Purchase and Sale of
Electricity with FWC (the "1-A Power Purchase Agreement") dated October 29,
1988, and a Special Facilities Agreement ("Special Facilities Agreement") dated
October 29, 1988. The 1-A Power Purchase Agreement, and the Special Facilities
Agreement both relate to the 1.8 MW expansion of the Original Power Plant (the
"1-A Expansion"). The 1-A Expansion is located on the leased property which is
subleased to FWC. FWC has now assigned its rights and interests in the 1-A Power
Purchase Agreement and the Special Facilities Agreement to 1-A Enterprises, a
Nevada General Partnership ("1-A") and Lessor consented to said assignments on
August 18, l989.
e. Lessee and 1-A have requested and Lessor has agreed that certain
portions of the Lease be modified or clarified.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
1. Section 3(c) of the Lease is hereby amended to add the following:
(v) Any such payments made under this section shall be made by Lessee
within thirty (30) days of receipt of an invoice from Lessor requesting said
payment. Should Lessee fail to pay the amount of such invoice, Lessor may offset
future payments to Lessee under the applicable Original Power Purchase Agreement
or the 1-A Power Purchase Agreement by such amount. Such rights shall apply only
to amounts that become due and payable pursuant to this Lease, as amended.
2
2. Section 12 of the Lease is hereby amended to read as follows:
12. ASSIGNMENTS AND SUBLEASES:
a. Neither party shall voluntarily assign this Lease without the prior
written consent of the other party, unless the assignment is to a partnership in
which one of the parties to this Lease is a general partner.
b. In the event that either party to this Lease wishes to assign this Lease
to a corporation or other entity, which does not fall into subsection (a) above,
said party shall provide the other party with written notice of such intent.
Such written notice shall describe the financial structure and assets of the
potential assignee in sufficient detail to permit the noticed party to evaluate
the effect of the assignment on its interest in this Lease and the even-dated
Agreement For The Purchase and Sale of Electricity executed by the parties
hereto. The noticed party shall have thirty (30) days from its receipt of the
notice to consent or refuse to consent to the assignment. Failure to give
written consent or refusal within said thirty-day period shall be deemed consent
by the noticed party. In no event shall consent to any assignment be
unreasonably withheld.
c. In the event Lessee is contemplating an assignment such as described in
subsection (b) above, Lessor shall have a prior right to regain Lessee's rights
under the Lease, together with any and all related improvements, at the price
and on the terms of the intended assignment. Lessor may exercise this right by
notifying Lessee of its intent to do so by the end of the thirty-day period
described in subsection (b) above. Such notice shall also be deemed a refusal of
consent to the assignment of Lessee's rights to a third party. Subject to the
provisions of this paragraph, all obligations under this Lease as amended shall
be binding upon, and every benefit hereof shall inure to, the heirs, executors,
administrators, successors, and assigns of the respective parties thereto.
d. Subject to subsections (a), (b), and (c) above, which refer to a
complete assignment of interest, from time to time and with prior written notice
to Lessor and without Lessor's consent, Lessee's leasehold estate in the leased
land and Lessee's right, title and interest as tenant in the Lease as amended
may be assigned for security purposes and be encumbered by one or more deeds of
trust, mortgages, security agreements, sale-and-leaseback arrangements,
leveraged leases or other security instruments or devices to secure a debt or
debts or other similar obligation or obligations.
3
e. From time to time and with the prior written consent of the Lessor, the
Lessee or its Sublessee may enter into Subleases of the leased property. Any
Sublessee may with notice to the Lessor and the Lessee but without their consent
may encumber its subleasehold interest by one or more deeds of trust, mortgages,
security agreements, sale-and-leaseback arrangements, leveraged leases or other
security instruments or devices to secure a debt or debts or other similar
obligation or obligations.
3. Lessor hereby grants to Lessee and its successors, assigns and sublessees the
right to use the easement, 45.0 feet in width described in that certain Basement
Agreement dated October 18, 1971, and recorded November 3, 1971, as Document No.
224422 at Book 589, page 533 in the Official Records of Washoe County, Nevada,
for roadway and electric utility purposes over, upon and across the property
described therein and subject to the terms thereof, which Easement Agreement is
attached hereto as Exhibit C and made a part hereof.
4. It is expressly understood and agreed by the parties hereto that this
Amendment is supplemental to the Lease. It is further understood and agreed that
all of the terms, conditions and provisions of this Lease, as amended, unless
specifically modified herein, are to apply to this Amendment and are made a part
of this Amendment as though they were expressed, incorporated and included
herein.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and year first above written.
LESSOR:
SIERRA PACIFIC POWER COMPANY
By /s/ Indecipherable
------------------------
Title: Sr. Vice President
--------------------
LESSEE:
GEOTHERMAL DEVELOPMENT
ASSOCIATES
By /s/ Indecipherable
------------------------
Title: President
--------------------
4
