Exhibit 10.17(a)
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SAGEBRUSH MANAGEMENT AND MAINTENANCE AGREEMENT
THIS SAGEBRUSH MANAGEMENT AND MAINTENANCE AGREEMENT ("Agreement") is
made and entered into as of September 1, 1989 by and among Sagebrush, a
California general partnership ("Partnership"), the undersigned partners of the
Partnership, being all of the Sagebrush partners ("Partners"), and ToyoWest
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Management Company, a California corporation ("Manager"), with respect to the
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RECITALS
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A. The Partnership is in the process of building a high voltage
transmission line of approximately 46 miles in length to be located in Xxxx
County and in Los Angeles County, California. The transmission line, when
completed, will include, without limitation, real property rights, poles,
fences, wires, cabling, transformers, safety equipment and meters that are
necessary or required to transmit efficiently the electrical power generated by
Qualifying Facilities to be owned by the Partners or Partner Affiliates (the
"Projects"), first to the Southern California Edison Company ("SCE") substation
at Antelope, California, and subsequently to the SCE substation at Xxxxxxx,
California (the "Transmission Line").
B. The Transmission Line is to be acquired, constructed and erected
pursuant to that certain Amended and Restated Development Agreement dated as of
September 1, 1989, among the Partnership, the Partners, and XxxxXxxx XX, a
California general partnership, successor to SeaWest Industries, Inc. as
Construction Manager under the Development Agreement ("Development Agreement").
C. The Partnership was formed for the sole purpose of developing,
constructing, owning, operating and maintaining the Transmission Line for the
benefit of the Partners.
D. The Partnership's Second Amended and Restated General Co-Ownership
Partnership Agreement, dated as of September 1, 1989, as amended ("Partnership
Agreement"), contemplates that the Partnership will engage a third party to be
responsible for the day-to-day management of the Partnership and for the
service, maintenance and repair of the Transmission Line.
E. The Partnership, the Partners, and SeaWest Power Systems, Inc.
("SeaWest Power") entered into that certain Management Agreement dated October
24, 1988 (the "Prior Management Agreement") for the purpose of providing
day-to-day management services for the Partnership.
F. The Partnership desires to retain Manager to undertake the
day-to-day management of the Partnership's operations and affairs and to provide
for the servicing, maintenance and repair of the Transmission Line, all on the
terms provided below.
NOW, THEREFORE, in consideration of the promises and covenants set
forth herein, and for other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Partnership, the Partners and Manager do
hereby agree as follows:
1. Definitions
Unless otherwise defined herein, capitalized terms shall have the
meaning given to such terms in the Partnership Agreement.
2. Engagement
The Partnership and the Partners hereby retain Manager, and Manager
hereby agrees to be retained, for the purpose of performing the day-to-day
management of the operations and affairs of the Partnership and providing for
the maintenance, service, and repair of the Transmission Line, subject to the
terms and conditions set forth in this Agreement.
3. Termination and Prior Agreement
The Partnership and the Partners hereby terminate the Prior Management
Agreement and acknowledge receipt from SeaWest Power of its consent to the
termination of the Prior Management Agreement effective upon the execution
hereof.
4. Fee and Expense Reimbursement
4.1. General. In consideration of the services Manager is providing
to the Partnership hereunder, and the obligations Manager is assuming hereby,
each Partner shall enter into separate fee and expense reimbursement agreements
(the "Fee Agreements") with Manager. The Fee Agreements shall comply with the
provisions of the Partnership Agreement and shall provide for each Partner to
pay a fixed annual fee for the services of Manager under this Agreement, and to
pay its pro rata portion of the expenses provided in Sections 5.3 and 5.4 below.
As long as there is at least one Fee Agreement in effect between Manager and a
Partner, and such Partner is not in breach under the Fee Agreement, Manager
shall perform the services provided in Section 5 below.
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4.2. Benefit. Each Partner recognizes and agrees that to the extent
it is in breach of its payment obligation under its Fee Agreement, such Partner
shall have no right to make any claim against Manager for any breach of
Manager's obligations under this Agreement, except if the failure to pay results
from a claim that Manager is in breach of its obligations under this Agreement.
5. Scope of Services; Consent of Partners
Manager is hereby authorized and empowered by the Partnership and the
Partners, from and after the date of this Agreement, and Manager agrees with the
Partnership and the Partners, to undertake and to discharge the duties and
obligations set forth in this Section 5. Except as set forth below in this
Section 5, Manager shall have no authority to act on behalf of the Partnership
or any Partner. Notwithstanding any other provision of this Agreement, Manager
shall not perform any act which requires, under the Partnership Agreement, the
consent of the Partners or any of them without first obtaining such consent as
provided in the Partnership Agreement. References in this Agreement to any
consent, approval or decision of the Partners or the Partnership shall mean such
consent, approval or decision as is required by, or provided in, the Partnership
Agreement. The services, duties and obligations to be performed by the Manager
as are set forth in Sections 5.1 and 5.2 shall be performed by Manager for the
fixed fee set forth in the Fee Agreement with each Partner and at no other cost
or expense to the Partnership or to any Partner. The cost of insurance,
deductibles, repairs, taxes and litigation that are described in Sections 5.3
and 5.4 are reimbursable expenses of the Partnership and shall be for the
account of the Partners, pro rata in accordance with each Partner's Percentage
Interest. Otherwise, all expenses associated with the performance of Manager's
duties and obligations hereunder shall be for the account of and borne by the
Manager.
5.1. Management of the Partnership. Manager shall manage the
day-to-day operations and affairs of the Partnership and, in connection
herewith, shall have the following duties and obligations:
5.1.1. Negotiation and Execution of Contracts. To negotiate, enter
into, execute, acknowledge or amend agreements relating to the Transmission Line
on behalf of the Partnership and the Partners, with the consent of the Partners
as required by the Partnership Agreement. Except for services set forth in
Sections 5.1 and 5.2 that Manager is to perform for its fixed fee, Manager shall
not enter into any agreement, or amend, modify, or give waivers with respect
thereto, pursuant to this Agreement with any party directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
the Manager (a "Manager Affiliate"), except pursuant to an arms-length
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transaction at fair market terms and conditions and provided further that
Manager shall disclose to the Partners the existence, terms and conditions of
any such agreement and make available, at the request of any Partner, a copy of
any such agreement. A Manager Affiliate shall mean with respect to the Manager
any other person that directly or indirectly controls or is controlled by or is
under common control with the person in question or who holds or beneficially
owns 25% or more of the equity or beneficial interest in the specified person or
25% or more of any class of voting security of the specified person. For
purposes of the definition of a Manager Affiliate, the term "control" (including
the correlative meanings of the terms "controlled by" or "under common control
with"), as used with respect to any party, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such party, whether through the ownership of voting securities or
by contract or otherwise.
5.1.2. Southern California Edison Company ("SCE"). To represent
the Partnership in its dealings with SCE in connection with the Transmission
Line and in connection with such other agreements and documents as may be
required by SCE in connection with development, construction, and operation of
the Transmission Line.
5.1.3. Governmental Actions. To take such action as may be
necessary or appropriate to comply promptly with any orders or requirements
affecting the Transmission Line imposed by any Federal, state or local
government having jurisdiction over the Transmission Line unless all of the
Active Partners of the Partnership affirmatively instructs it to the contrary
in writing. Manager shall give written notice to the Partnership and to the
Partners of any such order or requirement promptly upon its receipt thereof,
and the Partnership and the Partners similarly shall give prompt written notice
to Manager of any such order or notice received by the Partnership.
5.1.4. Service Contractors. To employ and supervise from time to
time persons, firms or corporations, all being independent contractors, to
render services generally needed to accomplish the purposes of this Agreement;
provided that Manager shall not have any authority to engage any such person
who is not an independent contractor or any such person who is a Manager
Affiliate except in accordance with section 5.1.1, and Manager shall not have
any authority to engage any individual as an employee of the Partnership.
5.1.5. Advances. To advance monies to the Partnership, up to
$50,000 at any one time outstanding, upon such terms and conditions as Manager
shall deem advisable and proper, for emergency repairs to the Transmission Line
or for other reimbursable expenses, with any amounts, together with interest
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thereon at a rate equal to the lower of (A) the rate publicly announced from
time to time by Bank of America as its prime rate and (B) the highest rate
permitted by applicable law, to be repaid by the Partners in proportion to
their respective Percentage Interests as set forth in the Fee Agreements.
5.1.6. Records and Accounting. To maintain proper, complete, and
accurate books and records of account, in accordance with and as required by the
Partnership Agreement, using a calendar year unless otherwise instructed by a
Majority in Interest of the Active Partners, or as required by law, and in
accordance with generally accepted accounting principles using a method of
accounting mutually acceptable to the Partners, or as may be required by law,
whichever is applicable, and including such records and financial reports as may
be necessary for the timely and proper preparation of each Partner's tax return
in accordance with the Partnership Agreement. Any Partner or its duly authorized
representative shall have the right to inspect and examine said books of account
and records during reasonable business hours. If requested by any Partner or
Partners, there shall be an annual audit of the financial books and records of
the Partnership conducted by a firm of independent certified public accountants
mutually acceptable to the Partners requesting the audit, with any additional
costs or expenses incurred in connection therewith by Manager to be reimbursed
by the Partner or Partners requesting the audit.
5.1.7. Tax Returns. In accordance with the Partnership Agreement
and subject to, and without interfering with, the duties of the Tax Matters
Partner under the Partnership Agreement, to prepare or cause to be prepared for
the Partnership all required tax returns and other reports and to take such
other actions as are required under Section 8.5 of the Partnership Agreement.
5.1.8. Financial Reporting. To prepare or cause to be prepared
such financial and operational reports as the Partnership may from time to time
reasonably request.
5.1.9. Partnership Filings. To prepare and file, or cause to be
prepared and filed, all partnership certificates, fictitious business name
statements, and partnership statements as may be required by law.
5.1.10. General. To execute, acknowledge and deliver any and all
instruments and take such other steps as are reasonably necessary to effectuate
the foregoing and as are consistent therewith and incidental thereto.
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5.2. Maintenance, Service and Repair of Transmission Line. Manager
shall maintain, service and repair (except as otherwise provided below) the
Transmission Line and, in connection therewith, Manager shall have the following
duties and obligations:
5.2.1. Maintenance and Operating Plan. To prepare a maintenance
and operating plan for the Transmission Line which shall include (i) a detailed
staffing plan which shall include job descriptions and a detailed organizational
chart; (ii) a summary of training to be provided to employees; (iii) a list of
records and logs to be maintained by Manager; (iv) a summary of standard
operating procedures to be implemented by Manager; (v) a summary of planned and
preventive maintenance procedures; and (vi) a summary of accident prevention
procedures to be implemented by Manager.
5.2.2. Maintenance Schedule. To prepare and issue a detailed
general maintenance schedule including required procedures to maintain the
Transmission Line in good operating condition in accordance with Section 5.2.6,
and comply with such schedule (which may be revised from time to time by
Manager to enable Manager to comply with applicable federal, state or local
laws, rules, regulations or permits relating to the Project) which general
maintenance schedule shall be effective unless disapproved by a Majority in
Interest of the Active Partners.
5.2.3. Safety. To maintain the Transmission Line in safe
operating condition and prepare written safety procedures to be adhered to by
all employees and service contractors of Manager and visitors to the
Transmission Line.
5.2.4. Emergencies. To promptly carry out any and all activities
necessary to deal with situations of emergency involving risks to persons or
property or interfering with the normal conduct of the operation of the
Transmission Line.
5.2.5. Operating Budget. On or prior to October 31, 1989, and
on or prior to each anniversary thereof, Manager shall submit to each of the
Active Partners a budget (an "Operating Budget") for the next succeeding
calendar year of expenditures in connection with the ownership and operation of
the Transmission Line that are not covered by Manager's compensation under the
Fee Agreements. Each Operating Budget shall be approved by a Majority in
Interest of the Active Partners, as that term is defined in the Partnership
Agreement. If, in any year, a Majority in Interest of the Active Partners does
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not approve a proposed operating Budget within thirty (30) days after Manager
has delivered such proposed Operating Budget to the Partners, the Operating
Budget for the next succeeding calendar year shall be identical to the
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Operating Budget for such year, except that the amount allocated for each item
in the Operating Budget for the next succeeding calendar year shall be
increased from the amount allocated to such item for the current calendar year
by the percentage increase, if any, in the United States Department of Labor,
Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers-Los
Angeles. It is recognized that the failure of a Majority in Interest of the
Active Partners to approve a proposed Operating Budget may result in there
being insufficient funds to meet Partnership expenses and, in this event,
Manager shall not be obligated to make up with its own funds any deficiency not
provided by the Partners.
5.2.6. Maintenance and Service. Manager shall inspect, maintain
and service the Transmission Line in accordance and compliance with (i) Prudent
Utilities Practices; (ii) all applicable laws, regulations, authorizations,
consents, approvals, variances, orders, licenses, permits and declarations of
governmental authorities; (iii) requirements imposed by any utility to whom
power is being delivered through the Transmission Line; (iv) all maintenance and
service recommendations, requirements or specifications of the manufacturers of
components of the Transmission Line as are required to enforce warranty claims
against such manufacturers or which are otherwise established by such
manufacturers as recommended operating procedures; (v) all maintenance standards
with respect, to similar equipment owned or operated by Manager; and (vi) any
requirements necessary for the procurement or the maintenance of any insurance
policies that the Active Partners shall deem necessary or desirable to maintain
with respect to the Transmission Line. For purposes of this Agreement, "Prudent
Utilities Practices" shall mean those practices, methods, equipment,
specifications and standards of safety and performance, as the same may change
from time to time, commonly used in connection with transmission lines in the
southwestern region of the United States of a type and size similar to the
Transmission Line and recognized as good, safe, and prudent engineering
practices in connection with the operation, maintenance, repair, and use of
electrical and other equipment, facilities and improvements, of such
transmission line, with commensurate standards of safety, performance,
dependability, efficiency and economy. Manager shall, on the basis of each such
inspection, prepare and deliver to each Partner a report describing the
condition of the Transmission Line and setting forth all current maintenance and
service requirements with respect to the Transmission Line and all action taken
since the preceding inspection, or proposed to be taken prior to the next
inspection, with respect to the maintenance and service of the Transmission
Line.
5.2.7. Repairs. Manager shall repair any damage to the
Transmission Line, and shall replace any worn out or defective components of
the Transmission Line in accordance with Prudent Utilities Practices; provided,
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however, that to the extent damage to the Transmission Line is caused by
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casualty, Manager's obligation to repair shall be limited as provided in
Section 5.3.3 below.
5.3. Insurance. To the extent that the Partners provide Manager with
funds under the Fee Agreements, or to the extent of advances under Section
5.1.5, Manager shall cause the Partnership, the Partners, the Partner
Affiliates, the Manager and the Transmission Line to be insured for activities
associated with the Transmission Line, shall cause the insurance deductibles to
be paid in the event of a loss, and shall cause insured and uninsured damage to
the Transmission Line to be repaired or otherwise handled, as follows:
5.3.1. Coverages. To arrange for the following insurance
coverage and pay the corresponding premiums promptly upon receipt from the
Partners of funds therefor, or to the extent of advances under Section 5.1.5:
(a) Workers' compensation insurance for Manager's employees as
required by the State of California, including, without limitation, employer's
liability insurance in an amount of not less than $1,000,000 per occurrence;
(b) Comprehensive Automobile Liability insurance, covering all owned,
non-owned and hired vehicles with a minimum limit of liability of $1,000,000
combined single limit for bodily injury and property damage, under which the
Partnership and each Partner, its Partner Affiliate and their designees shall
appear as additional named insureds;
(c) Commercial General Liability insurance, under which the
Partnership and each Partner, its Partner Affiliate and their designees shall
appear as additional named insureds, covering products-completed operations,
blanket contractual, independent contractors, "XCU" coverage, broad-form
property damage and personal injury exposures, subject to a minimum limit of
$1,000,000 combined single limit for bodily injury and property damage for each
occurrence and $2,000,000 combined single limit in the aggregate. Coverage shall
be maintained on an "occurrence" basis.
(d) All risk property damage insurance, including coverage for damages
due to the error or fault of Manager in the performance of the services set
forth in this Agreement, under which the Partnership and each Partner and their
designees shall appear as additional named insureds for the full replacement
cost of the Transmission Line and every component thereof, and providing for a
deductible not exceeding $25,000 per occurrence.
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(e) Umbrella Liability or Excess Liability insurance, written on an
"occurrence", basis, in amounts not less than $19,000,000, and subject to the
terms of the underlying insurance as set forth in this Section 5.3.1.
In the event that any or all of such coverages are not available on commercially
reasonable terms, Manager shall so inform the Active partners and provide to the
Active Partners, as a Section 5.3 cost, an assessment of an independent
insurance consultant as to what coverages are available at what cost, and a
Majority in Interest of the Active Partners shall instruct Manager whether to
arrange for the coverages. The insurance described in clauses (b) through (e)
above shall be endorsed to be primary to any insurance maintained by or on
behalf of any Partner, its Partner Affiliate or their designees.
5.3.2. Deductibles. To make payments of deductibles under
insurance policies promptly following receipt from the Partners of funds
therefor, or to the extent of advances under Section 5.1.5.
5.3.3. Repairs. To cause damage to the Transmission Line to be
repaired, whether such damage is caused by insured or uninsured casualty,
promptly upon receipt of insurance proceeds and/or funds from the Partners, or
to the extent of advances under Section 5.1.5, in connection with such damage;
provided, however, that if such insurance proceeds or funds exceed $250,000 then
Manager shall not expend any such proceeds or funds for the repair of the
Transmission Line (except for emergency repairs) unless Manager shall have first
delivered to the Active Partners the Manager's plan for the repair of the
Transmission Line, which plan shall take into account, among other things, the
availability of one or more fixed price contracts for such repair and of surety
bonds in respect of the performance of each person performing such repairs. The
Manager shall proceed to effect such repairs unless instructed otherwise by a
Majority in Interest of the Active Partners.
5.4. Taxes and Litigation. To the extent that the Partners provide
Manager with funds under the Fee Agreements, or to the extent of advances under
Section 5.1.5, Manager shall pay and do the following:
5.4.1. Taxes. To pay any and all taxes owed to state or local
taxing authorities, franchise fees, licensing fees, and other land use fees
owed to state or local authorities, and easement and crossing permit fees owed
to the holders thereof, incurred by the Partnership or in connection with
ownership or operation of the Transmission Line, promptly upon receipt from the
Partners of funds therefor, or to the extent of advances under Section 5.1.5,
and to notify the Partners of the amount and nature of such payments.
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5.4.2. Litigation. Subject to the approval of the Partners, to
retain legal counsel and take other action with respect to any claims or
demands made or lawsuits filed by or against the Partnership, or with respect
to any administrative or other governmental proceedings instituted against or
involving the Partnership, and to pay any judgments, fines, penalties, or other
amounts resulting therefrom promptly upon receipt from the Partners of funds
therefor.
5.4.3. Tax Matters Partner. To pay the Tax Matters Partner for
all reasonable expenses incurred by it in connection with carrying out its
duties as Tax Matters Partner pursuant to Section 8.4 of the Partnership
Agreement (other than those expenses paid pursuant to a Tax Indemnity
Agreement).
5.5. Exclusions. Anything to the contrary in this Agreement
notwithstanding, Manager shall have no responsibility or liability for
performing any other obligations of the Partnership not expressly undertaken by
Manager pursuant to Section 5 of this Agreement.
5.6. Manager as Sole Provider of Services. During the term of this Agreement,
and provided that Manager is not in breach of any obligation under this
Agreement, neither the Partnership nor any Partner shall directly, or cause or
allow any person other than Manager to, service, maintain, or repair all or any
portion of the Transmission Line without the express prior written consent of
Manager except as provided in the Development Agreement or with respect to any
warranty work performed under a warranty of all or part of the Transmission
Line.
5.7. Disconnection with Transmission Line. Each Partner hereby
acknowledges that in connection with the performance of Manager's obligations to
maintain, service, and repair the Transmission Line, it will be necessary from
time to time to disconnect all of the Projects from the Transmission Line.
Consistent with Section 5.2 hereof and subject to the more detailed provisions
of the Technical Use Agreements to be executed by each Partner and the
Partnership, Manager shall use its best efforts to coordinate, where possible
and reasonable, the scheduling of the services to be performed hereunder at
times when power production of the Projects is likely to be at its minimum. When
possible and reasonable, Manager will provide advance notice to each Partner of
scheduled downtime.
5.8. Independent Contractor. It is not the intent of the Parties
hereto to create an agency relationship by this Agreement. Manager shall perform
its duties hereunder as an independent contractor, and not as a general agent or
joint venture. Manager and Manager Affiliates do now, and in the future may,
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represent the Partnership or one or more of the Partners in other capacities and
represent and perform services for owners of other wind energy projects or for
other clients, be they consortia of wind energy project owners or other persons,
groups or companies. In the event that the relationship between Manager and the
Partnership or any Partner is deemed to be one of agent and principal, the
Partnership and each Partner acknowledges that such multiple representation by
Manager may be deemed to result in potential conflicts. So long as Manager is
not in breach of its 'duties and obligations to the Partnership and the Partners
pursuant to this Agreement, such multiple representation and the potential
conflicts resulting therefrom shall not constitute a violation of any duty or
obligation owed by Manager, as an agent, to the Partnership and the Partners, as
principals, and the Partnership and the Partners, to the fullest extent allowed
by law, hereby waive any and all claims and damages against Manager arising
solely from any such multiple representation or the existence of any such
conflicts.
5.9. Time Devoted to Business. Manager shall devote such time to the
performance of its duties hereunder as is required to carry out those duties.
5.10. Lease of Partner's Project. Any Partner or Partner Affiliate may
lease its interest in a Project under a lease and related documents
(collectively, a "Lease") pursuant to which such Partner's or such Partner
Affiliates lessee agrees, among other things, to operate the Project (or
interest therein) in a manner such that the Project will retain its character as
a Qualifying Facility, and to assume and discharge all of the Partner's
obligations under this Agreement, its Fee Agreement and its Technical Use
Agreement. Such Partner or such Partner Affiliate shall, and shall be entitled
to, grant to the lessee pursuant to such Lease a license to utilize such
Partner's right to use the Transmission Line for the Project (or interest
therein) subject to the Lease and to assign its obligations under this
Agreement, its Fee Agreement and its Technical Use Agreement, for a term
coextensive with the term of the Lease. During the term of any such Lease,
Manager shall look to the lessee for the payment and discharge of such Partner's
obligations which have been assigned to and assumed by such lessee. A partner
shall give prompt written notice to the Partnership and the Manager of the
making and expiration or earlier termination of any Lease. The Manager shall
give prompt written notice to the affected Partner if any lessee defaults in the
payment and discharge of any assumed obligation, and such Partner shall not be
considered in default of such obligations hereunder if such default is cured
within sixty (60) days of receipt of such notice from the Manager.
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5.11. Covenants of Manager. The Manager agrees that:
(a) Toyo Construction Company will own 50% of the voting shares of
Manager and SeaWest Industries, Inc. will own directly or indirectly, 50% of the
voting shares of Manager;
(b) Manager shall cause its shareholders to make initial capital
contributions of $250,000 and shall not make any Restricted Payments at any time
that Manager's Tangible Net Worth is less than (or as a result of such dividend
or distribution would be less than) $250,000. "Restricted Payments" shall mean:
(a) any dividend or other distribution on account of any ownership interest in
Manager, and any redemption, purchase or other acquisition for value of any
ownership interest in Manager, or any warrants, options or other rights to
acquire any such interests; (b) any payment or distribution of cash or other
property by Manager to or in respect of any loan or other obligation owed by
Manager to any affiliate of Manager except for repayments of principal and
interest on borrowings from such affiliate (each, an "Affiliate Advance") to
fund advances made pursuant to Section 5.1.5 hereof; or (c) forgiveness of any
obligations owed to Manager by an affiliate of Manager. "Tangible Net Worth"
shall mean the stockholders' equity of Manager minus the following (to the
extent reflected in determining such stockholders' equity): (a) all write-ups.
in the book value of any asset owned by such Person and (b) all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, organization or
developmental expenses and other intangible items; provided, that any Affiliate
Advance and the obligation to reimburse advances pursuant to Section 5.1.5 shall
be disregarded in the calculation of Tangible Net Worth.
(c) Manager shall maintain at all times a subcontract for the service
and repair of the Transmission Line with a transmission line service company
reasonably acceptable to the Active Partners of the Partnership; provided that
Manager shall not be in default in this provision if, in the process of changing
service companies, there is no such subcontract for a period of forty-five (45)
days.
6. Term and Termination
6.1. Term of Agreement. The term of this Agreement shall commence on
the date hereof, and the term shall continue in effect, unless earlier
terminated in accordance herewith, until the earlier of (1) the liquidation of
the Partnership or (2) September 30, 2003 ("Basic Term").
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6.2. Termination. This Agreement may be terminated prior to the
expiration of its Basic Term for any of the following reasons:
6.2.1. For Cause. The Partnership shall have the right to
terminate this Agreement without the consent of Manager in the event that the
Partnership, in good faith and on a reasonable basis, has determined Manager
to be in material breach of its duties and responsibilities under this
Agreement, which breach Manager has failed to cure within thirty (30) days
after receipt of written notice thereof from the Partnership, or in the event
of gross negligence, fraud or willful misconduct. This notice of termination
shall specify the cause for termination and grounds upon which such cause is
based and shall be effective upon expiration of said thirty (30) day period
unless cured prior to expiration of such period.
6.2.2. By Written Agreement. The written agreement of the
Partnership, the Partners and Manager to terminate this Agreement.
6.3. Procedures upon Termination. Upon termination of this Agreement as set
forth in Section 5.2, the following shall occur:
6.3.1. Dismissal. Manager shall be relieved of all responsibility
hereunder and shall have no further duties and obligations under this Agreement
except as specified in this Section 6.3.
6.3.2. Records. As soon as practicable after termination, Manager
shall, upon the request of the Partnership, provide to the Partnership at
Manager's principal place of business all documents, books and records of the
partnership in Manager's possession pertaining to Manager's duties and
responsibilities under this Agreement.
6.4. Non-Waiver of Rights. The termination of this Agreement shall be
without prejudice to any other rights or remedies which the Partnership, the
Partners, or Manager may have against the others hereunder, and no termination
of this Agreement shall constitute a waiver, release or estoppel by either the
Partnership, the Partners or Manager of any rights, action or cause of action it
may have against the others.
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7. Indemnification and Partner Defaults
7.1. Indemnification.
7.1.1. Manager to Partnership and Partners. Manager shall
indemnify the Partnership, each Partner, each Partner Affiliate, and each
Partner's (and each Partner Affiliate's) officers, directors, employees,
lessees, lenders and agents. ("Partnership Indemnitees"), and shall defend, save
and hold each partnership Indemnitee harmless from and against all liabilities,
losses, damages, penalties, claims, demands, actions, and related costs and
expenses, incurred by or asserted against a Partnership Indemnitee as a result
of the ownership, use or operation of the Transmission Line, to the extent that
such liabilities, losses, damages, penalties, claims, demands, actions, costs
and expenses arise out of or result from the fraud, negligence or willful
misconduct of Manager, or its officers, directors, employees or agents, or from
the breach by Manager of any of its duties or obligations under this Agreement.
7.1.2. Partnership and Partners to Manager. The Partnership and
the Active Partners, severally and not jointly or jointly and severally, shall
indemnify Manager and its officers, directors, shareholders and employees
("Manager Indemnitees") and shall defend, save and hold each Manager Indemnitee
harmless from and against all liabilities, losses, damages, penalties, claims,
demands, actions, and related costs and expenses, incurred by or asserted
against a Manager Indemnitee as a result of the use or operation of the
Transmission Line, to the extent that such liabilities, losses, damages,
penalties, claims, demands, actions, costs and expenses do not arise out of or
result from the fraud, negligence or willful misconduct of Manager, or its
officers, directors, shareholders or employees, or from the breach by Manager of
any of its duties or obligations under this Agreement.
7.1.3. Cross-Indemnity Among Partners. Each Partner (an
"Indemnitor"), for and on behalf of itself and its agents, successors and
assigns shall defend, indemnify and hold harmless each other Partner (or Partner
Affiliate), and each other Partner's (or Partner's Affiliate's) agents (or
Partner's Affiliate), successors and assigns (each, an "Indemnitee"), from and
against any and all losses, liabilities, claims and damages incurred by or
asserted against an Indemnitee as a result of the negligence or willful
misconduct of such Indemnitor or such Indemnitor's breach of any of its duties
or obligations under this Agreement or its Fee Agreement. All of the obligations
of the Partners under this Agreement and the Fee Agreement shall be several
obligations, and shall not be joint obligations or Joint and several
obligations.
-14-
7.2. Authority of Manager with Respect to Defaults by Partners. If
there has been an Event of Default, as defined below, that has not been cured as
provided below, Manager, without further consent or approval of the Partners,
shall have the power and authority pursuant hereto to exercise the disconnect
remedy set forth in Section 7.2.3 below.
7.2.1. Events of Default. Upon the failure of any Partner, Partner
Affiliate, or lessee of a Partner or Partner Affiliate Pursuant to Section 5.11
(collectively, for purposes of this Section 7.2, "Defaulting Partner") to make
any payment when due or to perform any material obligation under or pursuant to
the Partnership Agreement, the Technical Use Agreement, the Fee Agreement, or
this Agreement, Manager shall give written notice thereof (which notice shall
reference this Section 7.2) to all Partners and to lessees, lessors and secured
lenders of their Projects who have requested in writing to be so notified. Any
such failure shall constitute an event of default ("Events of Default.") for
purposes of this Section 7.2; provided, however, that, except as otherwise
required by the Partnership Agreement, the disconnection remedy described below
shall not be available in the case of a failure to perform a material obligation
other than a payment obligation under any such agreement unless failure to
disconnect the Defaulting Partner's Project might have a material and adverse
effect, on the Partnership or the Project of any non-defaulting Partner
(including but not limited to any adverse effect on the utility, value or
economic life of the Transmission Line, the expected income tax benefits of such
non-defaulting Partner or Partner Affiliate, or the status of such
non-defaulting Partner's or Partner Affiliate's Project as a Qualifying Facility
or the inclusion of the Transmission Line as a part of one or more Qualifying
Facilities) if the Defaulting Partner's Project is allowed to remain connected
to the Transmission Line, In accordance with, and subject to the limitation set
forth in, Section 5.1.5, the Manager shall advance the unpaid amount owed by a
Defaulting Partner for expenses reimbursable by such Defaulting Partner under
this Agreement.
7.2.2. Cure of Events of Default. The Event of Default may be
cured by the Defaulting Partner or by any one or more of the non-defaulting
Partners, although they shall have no obligation to do so, or by other
interested parties by delivering to Manager, within thirty (30) days after the
date of the notice of default, evidence satisfactory to Manager that, in the
event of a payment default, the amount due, together with interest on such
amount at the rate specified in Section 5.1.5, has been received by the party
concerned in accordance with the agreement under which the payment is owed or
that, in the event of a non-payment default, the obligation to be performed has
been performed or that performance thereof has been waived by the party having
power to waive the performance of such obligation, or, if it is capable of being
-15-
cured but not within the 30 day period referred to above, diligent efforts have
been commenced within such 30 day period to cure the Event of Default and
prosecuted to completion within ninety (90) days; provided, however, that
Manager need not permit such extended efforts to cure and shall exercise its
authority to disconnect the Defaulting Partner's Project if it concludes, in its
sole discretion, that the on-going Event of Default could jeopardize the
Qualifying Facility status of the Transmission Line, could have a material
adverse effect on the Partnership or the Transmission Line, or would involve
circumstances where disconnection would be permitted under Section 7.3 hereof.
The payment or performance of the obligations of a Defaulting Partner by a non-
defaulting Partner shall not be deemed a cure of such default of any Defaulting
Partner unless the nondefaulting Partner specifically notifies the Manager of
such intention. Absent such notification, such default shall not be deemed
cured, and the Manager shall not reconnect such Defaulting Partner to the
Transmission Line until such Defaulting Partner has paid the Manager an amount
sufficient to repay or reimburse such nondefaulting Partner or Partners in full
for its or their expenditures (including the cost of any cure effected
otherwise than by the payment or money), the amount so repaid or reimbursed to
include interest at the rate specified in Section 5.1.5.
7.2.3. Exercise of Disconnect Remedy. In the event of an Event of
Default which is not cured pursuant to section 7.2.2 hereof, Manager shall
exercise on behalf of the Partnership the disconnection remedy provided hereby
as follows:
(i) Defaulting Partner Not Delivering Energy as Part of a Group. In the
case of a Defaulting Partner whose Project is interconnected with the
Transmission Line in such a manner that the Partnership has the ability to
disconnect that Project without adversely affecting the ability of any
non-defaulting Partner's Project to use the Transmission Line, then Manager
shall disconnect the Project of the Defaulting Partner at that point under the
control of the Partnership at which the electrical energy of such Defaulting
Partner's Project is delivered to the Transmission Line. Subject to Section
7.2.6 hereof, Manager shall reconnect such Project at such time that the Event
or Events of Default have been cured, provided that at such time the Defaulting
Partner whose Project was disconnected can demonstrate that it, is in compliance
with all of the terms and conditions of this Agreement and its Fee Agreement.
(ii) Defaulting Partner Delivering Energy as Part of a Group. In the
case of a Defaulting partner whose Project delivers its electrical energy
jointly with the Projects of one or more additional Partners to the Transmission
Line in a manner such that the Partnership does not have the ability to
disconnect that Project without adversely affecting the ability of a non-
-16-
defaulting partner to use the Transmission Line, then Manager shall send a
written notice to the Shared Use Manager (as defined in Section 7.2.4 hereof),
with copies to each other Partner who delivers electrical energy jointly with
the Defaulting Partner and to any lessees or lessors of such Partners' Projects
or their secured lenders who have requested in writing to Manager to be so
notified, instructing the Shared Use Manager to disconnect the Defaulting
Partner's Project at the point of interconnection under the control of the
Shared Use Manager. The written notice shall instruct the Shared Use Manager
to reconnect the Defaulting Partner's Project only upon receipt of a second
written notice from Manager that it has received evidence satisfactory to
Manager, in its sole discretion, that the Defaulting Partner has cured the
Event of Default and has demonstrated that it is in compliance with all of the
terms and conditions of this Agreement and its Fee Agreement. In the event that
the Shared Use Manager does not disconnect the Defaulting Partner's Project
within three (3) days of receipt of the written notice from Manager, Manager
shall by direct action disconnect the Defaulting Partner's project at a point
under the control of the Partnership, notwithstanding that such disconnection
may result in the disconnection of the Projects of one or more non-Defaulting
Partners which deliver electrical energy as part of a group with the Defaulting
Partner. Notwithstanding the provisions of this subparagraph (ii), if the
electrical energy of the Projects of two or more Defaulting Partners is
delivered jointly to the Transmission Line and an Event of Default has occurred
and is continuing with respect to each such Defaulting Partner, then Manager
shall disconnect, and reconnect as provided in subparagraph (i) above, the
group of Projects at the point under the Partnership's control where such group
of projects interconnect with the Transmission Line provided that such
disconnection does not adversely affect the ability of any non-defaulting
Partner to use the Transmission Line.
The disconnect remedy provided to manager on behalf of the Partnership
under this Section 7.2 is in addition to any other remedies Manager, or the
Partnership or any Partner, may have at law or equity against the Defaulting
Partner hereunder or under the Partnership Agreement, the Technical Use
Agreement, or the Fee Agreement.
7.2.4. Further Condition to Use Transmission Line. Any Partner
whose Project delivers its electrical energy to the Transmission Line jointly
with the Projects of one or more additional Partners in such a manner that the
Partnership does not have the ability to disconnect that Project without
adversely affecting the ability of another Partner to use the Transmission Line
shall, as a condition to commencing to use the Transmission Line, present
evidence satisfactory to Manager, in manager's sole discretion, of contractual
-17-
arrangements conferring power and authority on a person (referred to in this
Agreement as the "Shared Use Manager") to disconnect such Partner's project at
a point at or prior to the point where the electrical energy of such Project is
combined with that of projects of other Partners. Such contractual arrangements
shall specifically acknowledge and reference this Section 7.2 and shall
unconditionally obligate, without grace period or additional time to cure, the
Shared Use Manager to immediately disconnect a Defaulting Partner's Project
upon receipt of the written notice described in Section 7.2.3 hereof. The
continuation of such contractual obligations or the substitution of alternative
contractual arrangements satisfactory to Manager in its sole discretion shall
remain a continuing condition to the entitlement of such Partner to continue
to use the Transmission Line.
7.2.5. Continuing Obligations. Notwithstanding that Manager or a
Shared Use Manager has disconnected the Defaulting Partner's Project, such
Defaulting Partner shall not thereby be deemed excused from the payment or
performance of any obligations which were due or to be performed at or as of the
time of such disconnection or as may accrue during any period of noncompliance
or disconnection.
7.2.6. Purchase of Defaulting Partner's Partnership Interest.
(a) At any time after one year from the date that Defaulting Partner's
Project has been disconnected as a result of this Section 7.2 by Manager or by a
Shared Use Manager, and provided that the Project has not been reconnected in
accordance with Section 7.2 hereof, all or a portion of the Defaulting Partner's
Partnership Interest may be purchased by any other Partner or Partners for an
amount sufficient to cure any payment defaults of the Defaulting Partner
corresponding to the portion of the Defaulting Partner's Partnership Interest to
be so transferred and reassigned. Upon such payment, the Partnership Interest or
portion thereof of the Defaulting Partner shall be deemed transferred and
reassigned to the Partner or Partners who made such payment on behalf of the
Defaulting Partner.
(b) At any time after two years from the date that a Partner's Project
has been disconnected as a result of this Section 7.2 by Manager or by a Shared
Use Manager, and provided that the Project has not been reconnected in
accordance with Section 7.2 and no Partner or Partners have acquired the
Defaulting Partner's Partnership Interest pursuant to subsection (a) of this
Section 7.2.6, and assuming that the Manager is owed unpaid fees under the Fee
Agreement for the Defaulting Partner, then the Manager shall have the right to
purchase the Defaulting Partner's Partnership Interest for the amount owed by
said Defaulting Partner under its Fee Agreement and to have said Partnership
Interest transferred to it upon compliance by Manager with relevant provisions
of the Partnership Agreement.
-18-
7.3. Disconnection for Emergency or System Integrity. Manager shall
have the authority, at its reasonable discretion, to curtail acceptance of
deliveries of electrical energy to the Transmission Line or disconnect some or
all of the Projects from the Transmission Lien at any time, with or without
notice, when Manager believes that such action is appropriate or required to
maintain a Project or Projects in compliance with the terms and conditions of
the Technical Use Agreements. Manager shall endeavor to minimize the degree of
curtailment and the time of disconnection to the extent possible consistent with
Prudent Utilities Practices and its duties and obligations hereunder and shall
return the Transmission Lien to normal operating condition as soon as
practicable after the condition or conditions giving rise to the curtailment or
disconnection have ceased to exist.
7.4. Remedies Not Exclusive. The remedies herein are cumulative and are
not exclusive of any other remedies provided by law or in equity.
8. Force Majeure
8.1. Limitations. Except for obligations to pay money or to make
payments of money, any party to this Agreement shall be excused for any delay or
failure to perform its duties and obligations under this Agreement, but only to
the extent that such failure or delay is caused by an event of Force Majeure as
set forth in Section 8.2 hereof. If an event set forth in Section 8.2 hereof
causes a delay or failure in performance of only a portion of the obligations of
a party under this Agreement, then only that portion of performance which was
delayed or prevented by such cause shall be deemed excused, and the performance
of all other obligations off a party not so delayed shall not be excused by an
event of Force Majeure. Delay or failure in performance by any party to this
Agreement which is the result of an event set forth in Section 8.2 shall be
deemed excused for a period no longer than the delay or failure in performance
caused by such event.
8.2. Force Majeure. Except for obligations to pay money or to make
payments of money, no delay or failure in performance by any Party to this
Agreement shall constitute a default under this Agreement if, and only to the
extent, such delay or failure is caused by occurrences beyond the control and
without the fault or negligence of such party, including but not limited to
flood, drought, earthquake, storm, fire, pestilence, lightning, and other
-19-
natural catastrophes, unusual inclement weather, unavoidable casualties,
epidemics, acts of God or the public enemy, war, riot, civil disturbance or
disobedience, explosion, strike, labor dispute, delays in performance by
others, expropriation or confiscation of facilities, changes of applicable law,
compliance with any order of any governmental authority, or failure, threat of
failure or sabotage of facilities which have been maintained in accordance with
good engineering and operating practices in California, so long as such party
makes good faith and reasonable efforts to remedy the delays or failures in
performance caused thereby. Notwithstanding the foregoing, any delay in
performance due to events or other causes which could have been anticipated
and which, through the exercise or reasonable diligence could have been
avoided, shall constitute a default hereunder.
8.3. Notice. Each party wishing to make use of this Section 8 shall
give written notice to all other parties as soon after becoming aware of the
delay or failure in performance caused by an event of Force Majeure as is
reasonably possible, but in any event within two (2) working days after such
party becomes aware of such delay or failure.
9. Arbitration
9.1. Any controversy, claim or dispute between the parties hereto
arising out of or related to this Agreement or the Fee Agreements or the breach
hereof or thereof, which cannot be settled amicably by the parties, shall be
submitted for arbitration in accordance with the provisions contained herein and
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("Rules"); provided, however, that notwithstanding any provisions of
such Rules, the parties shall have the right to take depositions and obtain
discovery regarding the subject matter of the arbitration, as provided in Title
III of Part 4 (commencing with Section 1985) of the California Code of Civil
Procedure. Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction. The arbitrators shall determine all questions of
fact and law relating to any controversy, claim or dispute hereunder, including
but not limited to whether or not any such controversy, claim or dispute is
subject to the arbitration provisions contained herein. Nothing in this Section
9 shall be deemed to require the Manager to forgo exercise of the disconnection
remedy provided for herein pending the resolution of such controversy, claim or
dispute if the Manager believes it is otherwise entitled to exercise such
remedy.
9.2. Any party desiring arbitration shall serve on the other parties
and the Los Angeles Office of the American Arbitration Association, in
accordance with the aforesaid Rules, its Notice of Intent to Arbitrate
-20-
("Notice"), accompanied by the name of the arbitrator selected by the party
serving the Notice. A second arbitrator shall be chosen by the other parties,
and a third arbitrator shall be chosen by the two arbitrators so selected.
If the parties upon whom the Notice is served fail to select an arbitrator and
to advise the other party of the selection within fifteen (15) days after the
receipt of the Notice, the second arbitrator shall be selected by the first
arbitrator. If the two arbitrators so chosen cannot agree upon a third
arbitrator within ten (10) days after the appointment of a second arbitrator,
the third arbitrator shall be selected in accordance with the Rules. The
arbitration proceedings provided hereunder are hereby declared to be self-
executing, and it shall not be necessary to petition a court to compel
arbitration.
9.3. If a controversy, claim or dispute arises between the parties
hereunder which is subject to the arbitration provisions hereunder, and there
exists or later arises a controversy, claim or dispute between either of these
parties and any third party, which controversy, claim or dispute arises out of
or relates to the same transaction or series of transactions, said third party
controversy, claim or dispute shall be consolidated with the arbitration
proceedings hereunder; provided, however, that any such third party must be a
--------
party to an agreement with one or more parties to this Agreement which provides
for arbitration of disputes thereunder in accordance with rules and procedures
substantially the same in all material respects as provided for herein or, if
not, must consent to arbitration as provided for hereunder.
9.4. All arbitration proceedings shall be held in Los Angeles,
California.
9.5. Notice of the demand for arbitration shall be filed in writing
with the other parties to this Agreement and with the American Arbitration
Association. The demand for arbitration shall be made within a reasonable time
after the claim, dispute or other matter in question has arisen, and in no event
shall it, be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statutes of limitations.
10. Miscellaneous
10.1. Representations and Warranties. Each Partner represents and
warrants to Manager and each other Partner, and Manager represents and warrants
to each Partner, that (a) such party is duly organized and validly existing in
good standing under the laws of its state of incorporation or organization, and
has the corporate or partnership power and authority necessary to carry on its
business as presently conducted, to own or hold under lease its properties and
-21-
to enter into and perform its obligations hereunder; (b) the execution,
delivery and performance by such party of this Agreement has been duly
authorized by all necessary corporate or partnership action on the part of such
party and does not or will not require the consent or approval of the
stockholders or partners of such party, other than such consents or approvals
as have been duly obtained, given or accomplished; (c) this Agreement has been
duly executed or delivered by such party, and constitutes its legal, valid and
binding agreement, enforceable against it in accordance with its terms. Manager
further represents and warrants to the Partnership and each Partner that (x) it
has obtained in its name all authorizations, consents, approvals, waivers,
exceptions, variances, order, licenses, permits, exemptions, publications,
filings, notices to and declarations of or with any governmental entity (each,
a "Governmental Action") that are necessary or desirable under applicable
existing laws and regulations in connection with the performance by Manager of
its obligations hereunder; (y) each such Governmental Action is in full force
and effect; and (z) there is no proceeding pending, or to the best knowledge
of Manager threatened, which seeks, or may be reasonably expected, to rescind,
terminate, modify or suspend any such Governmental Action.
10.2. Waiver. Unless otherwise expressly provided herein, no delay or
omission by the parties hereto in exercising any right or remedy provided for
herein shall constitute a waiver of such right or remedy nor shall it be
construed as a bar to or a waiver of any such right or remedy on any future
occasion.
10.3. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit, of the successors and assigns of the Partnership,
the Partners, and Manager. This Agreement is also intended to inure to the
benefit of each Partner Affiliate and its successors and assigns. No party may
assign or transfer this Agreement, in whole or in part, without the prior
written consent of the other parties, which consent shall nor, be unreasonably
withheld, except that it is expressly recognized and agreed that each Partner
may, subject to the terms and conditions of the Partnership Agreement, assign or
transfer this Agreement in connection with any assignment or transfer of its
Partnership Interest permitted pursuant to Section 12.2 of the Partnership
Agreement.
10.4. Addresses and Notices. The address of each party hereto for all
purposes hereof shall be the address set forth below or such other address of
which all other parties hereto have received written notice. All communications
or notices provided for or permitted hereunder shall be in writing, and may be
personally delivered (including delivery by private courier services), or sent
by telex, telecopy or other direct written electronic means, charges prepaid, or
by overnight express mail charges prepaid, or the party entitled thereto.
-22-
Any communication or notice so personally delivered shall be deemed to have
been validly and effectively given on the date of such delivery. Any
communication or notice so transmitted by telex, telecopy or other direct
written electronic means shall be deemed to have been validly and effectively
given on the day on which it is transmitted so long as it is received during
normal business hours, otherwise, the next succeeding business day. Any
communication sent by overnight express mail shall be deemed to have been
validly and effectively given on the business day following the day on which it
was deposited in the United States mail.
If to Manager: ToyoWest Management Company
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attention: President
If to Partnership: Sagebrush, a California
general partnership
0000 Xxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: Manager
If to Partners, to
each as indicated
below:
Alpha Mariah, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attention: President
Beta Mariah, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attention: President
Gamma Mariah, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attention: President
Delta Mariah, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attention: President
-00-
Xxxxx Xxxxxx, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attention: President
If to Beta Xxxxxx: c/o U.S. Trust of California, N.A.
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Corporate Trust
Department
With a copy to:
CIBC Leasing, Inc
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx
If to Alpha Xxxxxx or
Beta Willow: c/o Bankers Trust Company
of California, N.A.
00 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust and
Agency Group
With a copy to:
EDS Financial Corporation
0000 X. Xxxx Xxxxxxxxx Xxxx
0-X
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxx X. Xxx
If to Alpha Xxxxxx
(Prime)
or to Beta Willow
(Prime): c/o Bankers Trust Company of
California, N.A.
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust and
Agency Group
-24-
With copies to:
ESI Energy, Inc.
000 Xxxxxxxxxx Xxxxxx, #000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Vice President
and
Dewey, Ballantine, Bushby,
Palmer & Wood 000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
With a copy to:
Sagebrush Partner Eleven, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Twelve, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Thirteen, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn : President
Sagebrush Partner Fourteen, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Fifteen, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
-25-
Sagebrush Partner Sixteen, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Seventeen, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Eighteen, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Nineteen, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Twenty, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
Sagebrush Partner Twenty-One, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000-0000
Attn: President
-26-
10.5. Governing Law. This Agreement shall be construed in accordance
with the laws of the State of California.
10.6. Effects of Section Headings. Section headings appearing in this
Agreement are inserted for convenience of reference only, and shall in no way be
construed to be interpretations of the provisions hereof.
10.7. Third Party Beneficiaries. The Partner Affiliate of any Partner
is an express third party beneficiary of this Agreement.
10.8. Amendments. This Agreement may be modified or amended only by an
instrument in writing signed by the Manager and the Partners as required by the
Partnership Agreement or their duly authorized representatives.
10.9. Attorneys' Fees. In the event of any litigation or arbitration to
enforce the provisions of this Agreement, the prevailing party in such
litigation or arbitration shall be entitled to reasonable attorneys, fees and
costs as fixed by the court or arbitrator.
10.10. Further Acts and Assurances. Each of the parties hereto shall do
such further acts, shall perform such further actions, and shall execute and
deliver such additional agreements and instruments as the other party may
reasonably require to consummate, evidence or confirm the agreements and
understandings contained herein in the manner contemplated hereby.
10.11. Severability; Partial Invalidity. The various provisions of this
Agreement are severable. If any provision of this Agreement is found to be
invalid by any court, the invalidity of such provision shall not affect the
validity of the remaining provisions hereof.
10.12. Entire Agreement. The terms and conditions set forth herein
constitute the complete and exclusive statement of the agreement between the
Partnership, the Partners, and Manager relating to management of the Partnership
and the service, maintenance, and repair of the Transmission Line. No prior
statement or correspondence shall modify or affect the terms and conditions
hereof.
10.13. Counterparts. This Agreement may be executed by the parties in
one or more counterparts, all of which taken together shall constitute one and
the same instrument. Although Agreement is dated as of the date first above
written for convenience, the actual date of execution hereof by the hereto is
the date set forth below and this Agreement shall be effective on, and shall not
-27-
be binding upon any of the parties hereto, until the date set forth below.
-28-
IN WITNESS WHEREOF, the Partnership, the Partners, and Manager have
caused this Sagebrush Management and Maintenance Agreement to be executed on
October 26, 1989 and shall be effective on said date as of the date first above
--
written.
SAGEBRUSH, MANAGER
A California general Toyo West Management Company
partnership ----------------------------
a California Corporation
By Alpha Xxxxxx, Inc., By /s/ Xxxxxx Xxxx
a California corporation ----------------------------
Name: Xxxxxx Xxxx
Individually and as Title:
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President
By Alpha Xxxxxx (Prime), Inc.,
a California corporation
Individually and as
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Beta Xxxxxx, Inc.,
a California corporation
Individually and as
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President
By Alpha Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Beta Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Gamma Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Delta Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Alpha Willow, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Beta Willow, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President
By Beta Willow (Prime), Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Eleven, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Twelve, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Thirteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Fourteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Fifteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Sixteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Seventeen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Eighteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Nineteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Twenty, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Twenty-One, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
CONSENT OF SEAWEST POWER SYSTEMS
FOR VALUABLE CONSIDERATION, including the release of the Partnership
and the Partners set forth below, SeaWest Power Systems, Inc., a California
corporation ("SeaWest") , does hereby consent to the termination as of the date
hereof of that certain Management Agreement dated as of October 24, 1988 ("Prior
Management Agreement") by and among SeaWest, Sagebrush, a California general
partnership ("Partnership") and all of the partners of Sagebrush (the
"Partners"), and does hereby fully release the Partnership and the Partners from
any and all liabilities, duties and obligations under the Prior Management
Agreement.
Executed as of October 26, 1989.
----------
SeaWest Power Systems, Inc.
By /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Acceptance of Consent:
The Partnership and the Partners do hereby accept the consent of
SeaWest to the termination of the Prior Management Agreement, and the
Partnership and the Partners do hereby fully release SeaWest from any and all
liabilities, duties and obligations under the Prior Management Agreement.
Executed as of October 26, 1989.
----------
SAGEBRUSH,
A California general
partnership
By Alpha Xxxxxx, Inc.,
a California corporation
Individually and as
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President
By Alpha Xxxxxx (Prime), Inc.,
a California corporation
Individually and as
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title:President
By Beta Xxxxxx, Inc.,
a California corporation
Individually and as
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President
By Alpha Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Beta Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Gamma Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Delta Mariah, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Alpha Willow, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
By Beta Willow, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: Executive Vice President
By Beta Willow (Prime), Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Eleven, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Twelve, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Thirteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Fourteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Fifteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Sixteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Seventeen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Eighteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Nineteen, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Twenty, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
By Sagebrush Partner Twenty-One, Inc.,
a California corporation
Individually and as a
General Partner
By /s/ Xxxxxx Xxxx
-------------------------------
Name: Xxxxxx Xxxx
Title: President
