GROUND LEASE
THIS GROUND LEASE (the "LEASE") is made as of October 13, 1998(the
"EFFECTIVE DATE"), by and between IMPERIAL MAGMA, a Nevada corporation
("LANDLORD") and SALTON SEA POWER L.L.C., a Delaware limited liability company
("TENANT").
RECITALS
A. Affiliates of Landlord and Tenant currently own and operate eight
geothermal electrical generating facilities in the Salton Sea area of Imperial
County, California, commonly known as the "Vulcan Plant", "Xxxx Plant", "Xxxxxx
Plant", "Leathers Plant" and "Salton Sea Units 1, 2, 3 and 4" (collectively,
the "EXISTING PLANTS").
B. Each of the Existing Plants and its wellfield is operated pursuant to
an easement or profit-a-prendre that entitles such Existing Plant to extract
heat from geothermal brine for electrical generating purposes. After the
Existing Plants extract heat from the geothermal brine, the partially-cooled
geothermal fluid (the "SPENT GEOTHERMAL EFFLUENT") is piped back to the
wellfield for reinjection.
C. Tenant intends to construct an additional 49 megawatt (net)
geothermal electrical facility, to be known as "Salton Sea Unit 5", which will
utilize the residual heat in the Spent Geothermal Effluent flowing from Salton
Sea Units 1, 2, 3 and 4, and which will be located just to the south thereof on
land owned in fee by Landlord, which land is the subject of this Lease.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the
covenants and conditions herein contained, and other valuable consideration, the
receipt of which is hereby acknowledged, Landlord and Tenant agree as follows:
ARTICLE I - DEFINITIONS
1.1 Unless the context shall otherwise require, the following
capitalized terms used herein shall have the following meanings:
1.1.1 "DAMAGES" means any losses, damages, liabilities, claims,
judgments, liens, penalties, costs and expenses, including, without limitation,
reasonable attorneys' and consultants' fees.
1.1.2 "FACILITY" means that certain 49 megawatt (net) geothermal
electrical generating facility to be known as Salton Sea Unit 5 which Tenant
intends to construct on the Premises, together with all buildings, structures,
improvements, fixtures, pipelines, utility installations, machinery, equipment
and other items associated therewith or related thereto which are or will be
located on the Premises.
1.1.3 "FACILITY SITE" shall have the meaning given in Section 16.1
hereof.
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1.1.4 "FINANCING" means construction financing and any subsequent term
financing for the Facility.
1.1.5 "GOVERNMENTAL APPROVALS" means all applicable authorizations,
consents, approvals, permissions, permits, franchises, licenses, waivers,
exceptions or variances of, and any filings, applications and declarations
submitted in order to obtain any of the same from, any Governmental Authority.
1.1.6 "GOVERNMENTAL AUTHORITY" means any federal, state or local
governmental body, or any political subdivision, agency, subagency or
instrumentality thereof, including, without limitation, the courts and any
quasi-adjudicative bodies with jurisdiction.
1.1.7 "LANDLORD'S FACILITIES" means any facilities, structures, xxxxx,
pipelines, improvements, machinery and equipment constructed, installed or
located on the Premises pursuant to (a) the Senior Rights or (b) Landlord's
Reserved Rights.
1.1.8 "LANDLORD'S RESERVED RIGHTS" shall have the meaning given in
Section 2.2 hereof.
1.1.9 "LAW" or "LAWS" means all applicable laws, statutes, ordinances,
rules, regulations, decrees, policies, orders, permits, requirements, judgments,
decisions, injunctions and findings of or issued by any Governmental Authority.
1.1.10 "LENDER" means the lender or lenders collectively advancing all
or a portion of the Financing, and their respective agents, trustees (including,
without limitation, collateral agents, security agents and loan trustees),
grantees, successors and assigns.
1.1.11 "LENDER'S LIEN" means any security interest taken by the
Lender in Tenant's right, title and interest under this Lease.
1.1.12 "LENDER'S LOAN DOCUMENTS" means all instruments, agreements and
other documents evidencing or relating to the Financing and/or the security
therefor.
1.1.13 "MATERIAL ADVERSE IMPACT" means a material adverse impact on
(a) the financial position or results of operation of the Facility, (b) the
validity or priority of the Lender's Lien, (c) the ability of Tenant to perform
its material obligations under the Lender's Loan Documents or (d) the ability of
the Lender to enforce any of the payment obligations under the Lender's Loan
Documents.
1.1.14 "OFFICIAL RECORDS" means the official records of the County of
Imperial, State of California.
1.1.15 "OPTIONED PREMISES AREA" shall have the meaning given in
Section 16.3 hereof.
1.1.16 "PARTIAL TERMINATION OPTION" shall have the meaning given in
Section 16.3 hereof.
1.1.17 "PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
Governmental Authority.
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1.1.18 "PREMISES" means the real property described on Exhibit "A"
attached hereto; subject, however, to the right of Landlord to terminate the
Lease as to the Optioned Premises Area as provided in Article 16 hereof.
1.1.19 "RESERVED AREA" shall have the meaning given in Section 16.1
hereof.
1.1.20 "SENIOR RIGHTS" shall have the meaning given in Section 2.5
hereof.
ARTICLE 2 - LEASE
2.1 Landlord hereby leases the Premises to Tenant, and Tenant hereby
leases the Premises from Landlord, on the terms and conditions, and subject to
the reservations, set forth in this Lease.
2.2 Landlord hereby reserves from the leasehold estate granted to Tenant
hereunder the right to use the Premises for any purpose or purposes whatsoever
("LANDLORD'S RESERVED RIGHTS"). Without limiting the generality of the
foregoing, included within Landlord's Reserved Rights shall be the right to,
from time to time: (a) drill, operate and maintain xxxxx and wellsites; (b)
develop, construct, operate and maintain (i) additional geothermal electrical
generating facilities, (ii) mineral extraction and processing facilities, (iii)
other commercial or industrial facilities, (iv) pipelines and pumps (whether for
the transportation of geothermal fluids, mineral solutions, water and/or other
fluids or substances), (v) transmission facilities, including without
limitation, transmission or collector lines, interconnections, transformers,
circuit breakers, footings, towers, poles, crossarms, guy lines, anchors or
wires, (vi) control, communications or radio relay systems, (vii) safety
protection facilities, (viii) signs, (ix) sumps, ponds, evaporation, settling or
storage basins, (x) roads and (xi) construction laydown facilities; (c) conduct
any other activities and operations and install or construct any other
improvements, equipment or machinery, which Grantee reasonably determines to be
necessary, useful or convenient in connection with, or incidental to, any of the
foregoing; or (d) for any purpose, but in a commercially reasonable manner,
"tap" into any pipelines or other facilities carrying or containing any
geothermal or other fluids, including, without limitation, Spent Geothermal
Effluent, together with ingress and ingress to and from, and access over, the
Premises for any of the foregoing purposes.
2.3 Notwithstanding the foregoing, (a) Landlord shall not exercise
Landlord's Reserved Rights in a manner that would reasonably be expected to have
a Material Adverse Impact, (b) Landlord shall use its best efforts to minimize
the effect of its use of the Facility Site under Section 2.2 hereof on Tenants
construction, operation and maintenance of the Facility and (c) and Landlord
shall pay all reasonable costs actually incurred by Tenant as a result of
Landlord's exercise of Landlord's Reserved Rights on the Facility Site.
2.4 Tenant shall not at any time during the term of this Lease, without
the prior written consent of Landlord, which consent may be withheld in
Landlord's sole discretion, (a) construct or install any structure, building,
well, pipeline or other improvements, equipment or machinery in or on the
Reserved Area, (b) grade or otherwise disturb the surface of the Reserved Area
or (c) except as otherwise expressly provided in this Lease, conduct any other
activities or operations in or on the Reserved Area.
2.5 Tenant acknowledges and agrees that its rights under this Lease are
and shall at all times remain junior, subordinate and subject to the right,
title and interest (collectively, the "SENIOR RIGHTS") of: (a) Magma Land
Company I, a Nevada Corporation, and its grantees, assignees, successors and
assigns, under that certain Mineral Lease dated as of August 13,1958,
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between Xxxxx X. Xxxxxx (formerly Xxxxx X. Xxxxxxxx and later Xxxxx X. Xxxxxx)
and Salton Sea Power Company, recorded on August 14, 1958, in Book 1002, Page
211 of the Official Records, as heretofore and hereafter amended, supplemented,
restated or superseded; and (b) Magma Land Company I, a Nevada Corporation, and
its grantees, assignees, successors and assigns, under that certain Amended and
Restated Easement Grant Deed and Agreement Regarding Rights For Geothermal
Development dated as of February 23, 1994, between Magma Land Company I, a
Nevada corporation, and Salton Sea Brine Processing L.P., a California limited
partnership, a Short Form of which was recorded on February 28, 1994 in Book
1762, Page 152 of the Official Records as File No. 1994-0004910, as heretofore
and hereafter amended, supplemented, restated or superseded.
2.6 Landlord's Reserved Rights and any other rights reserved by Landlord
in this Lease shall be freely assignable by Landlord, in part or in whole, to
its grantees, assignees, successors and assigns.
ARTICLE 3 - TERM
3.1 The term of this Lease shall commence upon the Effective Date, and,
unless sooner terminated as provided in this Lease, shall expire on the date
which is thirty-three (33) years after the Effective Date.
ARTICLE 4 - RENT
4.1 Tenant shall pay to Landlord, without abatement, deduction or
offset, "BASE ANNUAL RENT" for the Premises, commencing on the Effective Date
and continuing thereafter on the first day of each calendar year throughout the
term of this Lease, in an amount equal to (a) Two Hundred and Fifty Dollars
($250.00) multiplied by (b) the number of acres of the Facility Site.
4.2 The Base Annual Rent shall be subject to adjustment every five (5)
years as follows:
4.2.1 On every fifth (5th) anniversary of the Effective Date, the Base
Annual Rent shall be adjusted to reflect the increase, if any, in the Consumer
Price Index published by the Bureau of Labor Statistics of the Department of
Labor for All Urban Consumers, All Items, for the Los Angeles-Anaheim-Riverside
Metropolitan Area (the "CPI") as follows: The Base Annual Rent amount provided
in Section 4.1 hereof shall be multiplied by a fraction, the numerator of which
shall be the CPI for the month of August immediately preceding such adjustment,
and the denominator of which shall be the CPI for the month of August, 1998. The
sum so calculated shall constitute the new Base Annual Rent hereunder, but in no
event shall such new Base Annual Rent be less than the Base Annual Rent payable
for the year immediately preceding such adjustment.
4.2.2 In the event that the publication of the CPI shall be
transferred to any other Governmental Authority or shall be discontinued, then
the index most nearly the same as the CPI, as determined in good faith by
Landlord, shall be used to make such adjustments.
4.2.3 Tenant shall continue to pay Base Annual Rent at the rate
previously in effect until the next adjustment, if any, is determined.
Thereafter, the Base Annual Rent shall be paid at the increased rate.
4.3 Rent for any period during the term hereof which is for less than
one year shall be prorated based on a three hundred and sixty-five (365) day
year. Rent shall be payable in lawful
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money of the United States to Landlord at the address stated herein or to such
other persons or at such other places as Landlord may designate in writing.
ARTICLE 5 - TAXES, ASSESSMENTS AND UTILITIES
5.1 Tenant shall pay all real and personal property taxes and
assessments, general or special, levied against (a) this Lease or any right,
title or interest of Tenant in the Premises and (b) the Facility, including,
without limitation, any possessory interest, license, production, severance or
excise taxes, but excluding income, inheritance and estate taxes (collectively,
"TENANT'S TAXES"); provided, however, that Landlord shall pay all real and
personal property taxes and assessments, general or special, levied against (i)
any right, title or interest of Landlord in the Reserved Area and/or (ii) any of
Landlord's Facilities.
5.2 Tenant shall pay all Tenant's Taxes before delinquency, whether
chargeable against Landlord or Tenant. Tenant shall make all payments of
Tenant's Taxes directly to the charging Governmental Authority before
delinquency and before any fine, interest or penalty shall become due or be
imposed by operation of Law for their nonpayment, and, at the election of
Landlord to be exercised from time to time by notice to Tenant, shall either be
paid to Landlord or directly to the charging Governmental Authority. If the
payment of any or all of the Tenants Taxes in installments is permitted (whether
or not interest accrues on the unpaid balance), Tenant may, at Tenant's
election, utilize the permitted installment method, but shall pay each
installment (with any interest) before delinquency.
5.3 All payments of Tenant's Taxes shall be prorated, on the basis of a
365-day year, for the applicable portion of the tax fiscal years at the
commencement and expiration of the term of this Lease.
5.4 If Tenant's Taxes are assessed together with the taxes assessed
against the assets described in clauses (i) and (ii) of Section 5.1 hereof or
together with taxes on any other real or personal property of Landlord or any
other Person, then Landlord shall, in good faith, separate out Tenant's Taxes
from such other taxes, using any reasonable method of allocation as Landlord may
determine.
5.5 Tenant may contest the legal validity or amount of any of Tenant's
Taxes, and may institute such proceedings as Tenant considers necessary or
appropriate in connection therewith. If Tenant contests any of Tenant's Taxes,
then Tenant may withhold or defer payment or pay under protest, but shall
protect Landlord, the Premises, the Facility and Landlord's Facilities from and
against any tax lien imposed in connection with such non-payment, by surety bond
or other appropriate security reasonably acceptable to Landlord.
5.6 Tenant shall pay, before the same become delinquent, all charges for
gas, electricity, sewage, water, telephone, trash removal and other similar or
dissimilar public services or commodities furnished to the Facility Site and/or
the Facility during the term of this Lease, including all installation,
connection and disconnection charges.
5.7 It is the intent of the parties hereto that the rent provided in
this Lease shall be absolutely net to Landlord with respect to the Facility
Site, and that, except as otherwise expressly provided in this Lease, Tenant
shall pay all costs and charges of every kind and nature incurred for, against,
or in connection with the Facility Site which may arise or become due from and
after the Effective Date and during the term hereof, including, without
limitation, all Tenant's Taxes, utilities, insurance premiums and maintenance
costs; provided, however, that nothing herein shall
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be construed as requiring Tenant to pay any installment of interest or principal
owing on any encumbrance against the Premises for which Landlord is the obligor.
All such costs and charges at the commencement and the end of the term of this
Lease shall be appropriately prorated between the parties.
ARTICLE 6 - USE
6.1 Subject to Section 2.4 hereof, Tenant shall use and permit the use
of the Premises only for the construction, operation, maintenance, repair and
replacement of the Facility.
6.2 Tenant shall, at Tenant's expense, promptly comply in all material
respects with all Laws now in effect or which may hereafter come into effect
during the term hereof, relating in any manner to the Premises or the occupation
and use by Tenant of the Facility Site. Further, Tenant shall comply in all
material respects with any covenants, conditions and restrictions of record and
with the requirements of any fire insurance underwriters or rating bureaus.
Tenant shall conduct its business in a lawful and commercially reasonable
manner, and shall not use or permit the use of the Premises in any manner that
will create waste or nuisance. Tenant shall indemnify, defend and hold harmless
Landlord from and against any and all Damages which may be imposed upon or
incurred by Landlord or asserted against Landlord by any Person, arising out of
or attributable to Tenant's activities or operations on the Premises.
6.3 Tenant shall, at Tenant's expense, comply in all material respects
with all environmental Laws now in effect or which may come into effect during
the term hereof, including, without limitation, the Resource Conversation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Hazardous Materials Transportation Act, the Toxic Substances
Control Act, the Clean Air Act, the Clean Water Act, the California Hazardous
Waste Control Act, the California Hazardous Substance Act, the Xxxxxx-Cologne
Water Quality Control Act and all applicable regulations promulgated pursuant
thereto.
6.4 Without limiting the generality of Section 6.2 hereof, Tenant shall
indemnify, defend and hold harmless Landlord from and against any and all
Damages which may be imposed upon or incurred by Landlord or asserted against
Landlord by any third Person in connection with any violation of the provisions
of Section 6.3 hereof, arising out of or attributable to the assets, business or
operations of Tenant at, on or with respect to the Premises.
6.5 Without in any way limiting the scope of Tenant's obligations under
the indemnification provisions of Section 6.4 hereof, but subject to Landlord's
obligation under Section 2.3 hereof to pay all reasonable costs actually
incurred by Tenant as a result of Landlord's exercise of Landlord's Reserved
Rights on the Facility Site, Tenant shall be responsible for all investigations,
studies, cleanup, corrective action or response or remedial action required by
any Governmental Authority now or hereafter authorized to regulate environmental
matters or by any consent decree, or court or administrative order now or
hereafter applicable to the Premises, or by any Law now or hereafter in effect.
6.6 As between Landlord and Tenant, Tenant shall have the responsibility
and right to participate in the management and control of all investigations and
any environmental cleanup, remediation or related activities. However, Tenant
may not negotiate with or fulfill any requirements or claims made by a
Governmental Authority or third Person, or settle or contest such requirements
or third-party claims without the express approval of Landlord which consent
will not be unreasonably withheld or delayed, and Landlord shall have the right
to participate fully in any and
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all meetings, negotiations or decisions relevant to the investigation or
remediation of any violation of the provisions of this Article 6.
6.7 Tenant hereby accepts the Premises in its condition existing as of
the Effective Date, subject to (a) all applicable Laws governing and regulating
the use of the Premises, (b) all recorded easements, covenants, conditions,
restrictions and other matters of record, (c) the Senior Rights and (d)
Landlord's Reserved Rights. Tenant acknowledges that it has satisfied itself by
its own independent investigation that the Facility Site is suitable for its
intended use, and that neither Landlord nor Landlord's agents or employees has
made any representation or warranty as to the present or future suitability of
the Facility Site for the conduct of Tenant's business or operations.
ARTICLE 7 - MAINTENANCE AND REPAIRS
7.1 Throughout the term, Tenant shall, at Tenant's sole cost and
expense, maintain the Facility Site in good condition and repair, ordinary wear
and tear excepted, in accordance with (a) all Laws, (b) any insurance
underwriting board or insurance inspection bureau having or claiming
jurisdiction and (c) any insurance company insuring all or any part thereof;
except to the extent any damage to the Facility Site arises from the exercise by
the Landlord of its Reserved Rights.
7.2 Tenant shall maintain and repair, in accordance with reasonable
engineering standards, any dikes and levees now or hereafter located on the
Premises; except to the extent any damage to any such dike or levee arises from
the exercise by the Landlord of its Reserved Rights.
7.3 Landlord reserves the right to enter the Premises and to take and
utilize the soils and rock contained therein as fill for flood control purposes,
at no charge to Landlord; provided, however, that (a) in exercising its rights
under this Section 7.3, Landlord shall not take any action that would reasonably
be expected to have a Material Adverse Impact and (b) Landlord shall indemnify,
defend and hold harmless Tenant from and against any and all Damages, whether or
not arising out of third-party claims, which may be imposed upon or incurred by
Tenant or asserted against Tenant by any other Person, arising out of or
attributable to Landlord's use of any such soils and/or rock on the Facility
Site, except to the extent caused by the negligence or wilful acts of Tenant.
7.4 Tenant hereby waives any claim against Landlord for Damages caused
by any change or changes in the level of the Salton Sea, including, without
limitation, Damages caused by flooding, seepage or other circumstances, and
Tenant hereby agrees that such waiver is part of the consideration to Landlord
under this Lease.
ARTICLE 8 - ALTERATIONS AND ADDITIONS
8.1 Tenant shall be entitled, at its own cost and expense, to construct,
install, erect, maintain, repair and operate the Facility on the Facility Site.
If Tenant constructs the Facility, then it shall obtain and maintain in force
all Governmental Approvals necessary or appropriate in connection therewith.
8.2 Landlord's approval shall not be required for Tenant's minor
alterations or additions to the Facility, so long as such alterations or
additions does not have a Construction Cost in excess of One Million Dollars
($1,000,000). As used herein, the term "CONSTRUCTION COST" collectively includes
all costs that would constitute the basis of a valid claim or claims under the
mechanic's
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lien Laws, including, without limitation, costs for any demolition or removal of
existing improvements, equipment or machinery or parts thereof, as well as costs
for the preparation, construction and completion of new improvements, equipment
or machinery. Any alterations or additions to the Facility which have a
Construction Cost in excess of One Million Dollars ($1,000,000), shall require
Landlord's prior written content, which shall not unreasonably be withheld.
Construction of the Facility, and any alterations and additions thereto, whether
or not requiring Landlord's consent hereunder, shall be completed in a good and
workmanlike manner and of good quality and materials.
8.3 Tenant shall use only reputable licensed contractors in constructing
and repairing the Facility and in making any alterations or additions thereto,
and Landlord may require Tenant to provide to Landlord, at Tenant's sole cost
and expense, a lien and completion bond in an amount equal to one and one-half
(1 1/2) times the estimated cost of such construction and/or such alterations or
additions, as the case may be, to insure Landlord against liability for any
mechanic's and materialmen's liens and to ensure completion of the work. Should
Tenant make any alterations or additions without the prior written consent of
Landlord where such consent is required hereunder, or use other than a reputable
licensed contractor, Landlord may, at any time during the term of this Lease,
require that Tenant remove any part or all of the same from the Premises.
8.4 Tenant shall pay, when due, all claims for labor or materials
furnished to or for Tenant at or for use on the Premises, which claims are or
may be secured by any mechanic's or materialmen's lien against the Premises, the
Facility or any interest therein.
8.5 Tenant shall give Landlord not less than ten (10) days notice prior
to Tenant's commencement of construction of the Facility or any alterations or
additions thereto, and Landlord shall have the right to post notices of
non-responsibility in or on the Premises as provided by Law. If Tenant shall, in
good faith, contest the validity of any mechanic's or materialmen's lien or
claim, then Tenant shall, at its sole expense, defend itself and Landlord
against the same and shall pay and satisfy any adverse judgment that may be
rendered thereon before the enforcement thereof, upon the condition that if
Landlord shall so require, Tenant shall furnish to Landlord a surety bond
satisfactory to Landlord in an amount equal to such contested lien or claim,
indemnifying Landlord against liability for the same and holding the Premises,
the Facilities and Landlord's Facilities free from the effect of such lien or
claim. In addition, Landlord may require Tenant to pay Landlord's reasonable
attorneys' fees and costs in participating in such action, if Landlord shall
decide it is in Landlord's best interest to so participate.
8.6 Notwithstanding any other provision of this Lease, the Facility and
all of Tenant's other fixtures and personal property, whether or not affixed to
the Premises, shall be deemed severed from and not a part of the underlying real
property and shall not merge therewith, and, subject to the rights of Landlord
under Section 9.3 hereof, shall remain the property of Tenant at all times
during and after the term of this Lease, and may be removed by Tenant from the
Premises.
ARTICLE 9 - DAMAGE OR DESTRUCTION; TERMINATION
9.1 If the Facility or any portion thereof is damaged or destroyed
during the term of this Lease, then, subject to the provisions of the Lender's
Loan Documents, and following written notice to Landlord, Tenant may elect to:
(a) repair, restore or remedy such damage or destruction; or
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(b) dismantle and raze the Facility in accordance with Section 9.2
hereof, and, upon Tenant's completion of the requirements set forth in such
Section 9.2, each of Tenant or Landlord, by written notice to the other, shall
be entitled to terminate this Lease.
9.2 Within a reasonable period of time (not to exceed one hundred and
twenty (120) days) after (a) Tenant delivers notice to Landlord of its intent to
dismantle and raze the Facility under Section 9.1 hereof or (b) the expiration
or earlier termination by Landlord of this Lease, Tenant shall, at its sole cost
and expense, in accordance with good operating practice and in compliance with
Law, (i) remove the Facility from the Premises, (ii) demolish and remove all
foundations and fix all excavations associated with the Facility, return the
surface of the Premises to grade, and leave such surface safe and free from
debris and (iii) surrender the Premises to Landlord in good condition and
repair. Notwithstanding the foregoing, Tenant shall not remove the Facility or
any portion thereof from the Premises (or take any other actions required under
this Section 9.2 with respect thereto), to the extent that Landlord has
exercised the option set forth in Section 9.3 hereof.
9.3 Notwithstanding any other provision of this Lease, upon the
expiration or earlier termination by Landlord of this Lease, or upon receipt by
Landlord of Tenant's notice of its intent to dismantle and raze the Facility
under Section 9.1 hereof, as the case may be, Landlord shall have an option to
acquire all or any portion or portions of the Facility from Tenant, whereupon:
(a) in the event Landlord desires to exercise such option in connection with the
expiration of this Lease, such option shall be exercised by written notice to
Tenant not less than one hundred and twenty (120) days before the expiration
date of this Lease; (b) in the event Landlord desires to exercise such option in
connection with the earlier termination by Landlord of this Lease, such option
shall be exercised by written notice given concurrently with the notice of such
termination; or (c) in the event Landlord desires to exercise such option in
connection with its receipt of notice of Tenant's election to dismantle and raze
the Facility as provided in Section 9.1 hereof, such option shall be exercised
by written notice to Tenant within thirty (30) days following Landlord's receipt
of such notice from Tenant. In each such case, such notice shall specify which
portions (or all, if Landlord so elects) of the Facility are to be acquired by
Landlord. In the event Landlord exercises such option as provided herein, then
it shall pay to Tenant an amount equal to the fair market value of the portions
(or all, if applicable) of the Facility to be acquired by Landlord (which fair
market value shall be determined as of the date on which Landlord exercises such
option), and payment of such amount shall be deemed payment in full for those
portions (or all, if applicable) of the Facility so acquired from Tenant. In the
event Landlord and Tenant cannot agree upon such fair market value, then the
same shall be determined by an independent appraiser appointed by the American
Arbitration Association at the request of either party hereto, and the
determination made by such independent appraiser shall be conclusive and binding
in all respects upon the parties hereto. Upon the payment of such sum, (i)
Tenant shall, by documents and instruments reasonably satisfactory to Landlord,
assign, transfer and convey to Landlord those portions (or all, if applicable)
of the Facility so acquired by Landlord, and all personal property, Governmental
Approvals and contract rights associated therewith and (ii) Landlord shall, by
documents and instruments reasonably satisfactory to Tenant, assume Tenant's
obligations with respect to those portions (or all, if applicable) of the
Facility so acquired by Landlord. Notwithstanding the foregoing, the option
granted to Landlord under this Section 9.3 shall be subject and subordinate to
the Lender's Lien and to any rights of the Lender under Article 11 hereof.
ARTICLE 10 - ASSIGNMENT AND SUBLETTING
10.1 Subject to Article 11 hereof, Tenant shall not voluntarily or by
operation of Law, transfer, assign, alienate, license, sublet or grant to any
Person all or any portion of the right, title
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or interest then held by it in the Premises or under this Lease without first
obtaining the prior written consent of Landlord, which shall not unreasonably be
withheld.
ARTICLE 11 -RIGHTS OF LENDER
11.1 Tenant may, from time to time in one or more transactions, without
obtaining the consent of Landlord, hypothecate, mortgage, pledge or alienate all
or any portion of Tenant's right, title and interest under this Lease to the
Lender. Tenant or the Lender shall give written notice to Landlord of the
Lender's Lien and the Lender's address for notices hereunder; provided, however,
that any failure to give such notice shall not be grounds for denying the Lender
the rights and protections provided in this Article 11, so long as Landlord has
received actual notice of the Lender's Lien.
11.2 Any surrender or abandonment in whole or in part of this Lease, any
material amendment hereto or any termination hereof other than in accordance
with Article 14 hereof, in each case which would then reasonably be expected to
have a Material Adverse Effect (as that term is defined in the Lender's Loan
Documents), shall be ineffective and of no force or effect unless and until the
prior written consent of the Lender has been obtained thereto.
11.3 The Lender shall have the right, but not the obligation, at any
time prior to the termination of this Lease, and without the payment of any
penalty, to (a) make any payments due hereunder, (b) do any other act or thing
required of Tenant hereunder and (c) do any act or thing that may be necessary
or appropriate to be done in the performance and observance of the terms hereof
to prevent any default under or termination of this Lease. All payments so made
and all things so done and performed by the Lender shall be as effective to
prevent any default under or termination of this Lease as they would have been
if made, done and performed by Tenant instead of by the Lender.
11.4 Tenant shall not be in default or material default under this Lease
unless Tenant fails to perform the obligations required of it hereunder within
the time periods set forth in this Lease, including all applicable cure periods.
If Tenant fails to cure any default hereunder within the time so provided, then,
commencing upon receipt by the Lender of written notice from Landlord to the
effect that Tenant has failed to cure such default within such time, the Lender
shall have an additional thirty (30) days to cure such default if such default
is a monetary default, or ninety (90) days to cure such default if such default
is a non-monetary default; provided, however, that if any such non-monetary
default cannot reasonably be cured within such additional ninety (90) day
period, then the Lender shall have such additional time to cure such
non-monetary default as is reasonably necessary under the circumstances, so long
as (a) the Lender shall have fully cured within such thirty (30) day period any
default in the performance of any monetary obligations of Tenant hereunder, (b)
the Lender shall have fully cured within such ninety (90) day period any default
in the performance of any non-monetary obligations of Tenant hereunder that can
reasonably be cured within such ninety (90) day period and shall thereafter
continue to faithfully perform all such monetary and other obligations and to
diligently pursue such cure to completion and (c) if possession of the Premises
is reasonably required in order to effect such cure, the Lender shall have
acquired Tenant's interest hereunder or commenced foreclosure or other
appropriate proceedings in the nature thereof within such ninety (90) day period
or prior to the expiration thereof, and shall be diligently prosecuting any such
proceedings to completion. All rights of Landlord to terminate this Lease as a
result of the occurrence of any default by Tenant shall be subject to, and
expressly conditioned upon, (i) the Lender's having received the notice
specified above in this Section 11.4 and (ii) the Lender's having failed to take
the actions set forth in this Section 11.4.
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11.5 Any default or material default by Tenant under this Lease that
cannot be remedied by the Lender shall nevertheless be deemed to have been
remedied so long as (a) the Lender shall have taken the actions described in
clauses (a), (b) and (c) of Section 11.4 hereof within the time periods
provided therein, (b) if the Lender shall have commenced foreclosure or other
appropriate proceedings in the nature thereof under clause (c) of Section 11.4
hereof, then the Lender shall have completed such foreclosure or other
appropriate proceedings or otherwise obtained possession of the Premises and (c)
the Lender shall perform all obligations of Tenant under this Lease which arise
thereafter and which can reasonably be performed by the Lender.
11.6 If the Lender is prohibited by any process or injunction issued by
any court or by reason of any action of any court having jurisdiction over any
bankruptcy, reorganization, insolvency or other debtor-relief proceeding
involving Tenant, from commencing or prosecuting foreclosure or other
appropriate proceedings in the nature thereof, then the times specified in
Sections 11.4 and 11.5 hereof for commencing or prosecuting such foreclosure or
other proceedings shall be extended for the period of such prohibition.
11.7 Landlord shall deliver to the Lender a duplicate copy of any and
all notices of default that Landlord may from time to time deliver to Tenant
pursuant to the provisions hereof, and such copies shall be delivered to the
Lender at, or as near as possible to, the same time such notices are delivered
to Tenant. No notice of default by Landlord to Tenant hereunder shall be deemed
to have been given unless and until a copy thereof shall have been delivered to
the Lender as provided in this Section 11.7.
11.8 Foreclosure of the Lender's Lien or any sale thereunder, whether by
judicial proceedings or otherwise, or any conveyance or transfer of the interest
of Tenant under this Lease from Tenant to the Lender through, or in lieu of,
foreclosure or other appropriate proceedings in the nature thereof, shall not
require the consent of Landlord or constitute a breach of any provision of or a
default under this Lease, and upon such foreclosure, sale or conveyance Landlord
shall recognize the Lender, or any other foreclosure sale purchaser, as the
tenant hereunder. In the event the Lender becomes the tenant under this Lease as
provided herein, then the Lender shall be personally liable for the obligations
of Tenant under this Lease only for the period of time that the Lender remains
the tenant hereunder, and the Project Lender shall have the right to assign this
Lease without any restriction otherwise imposed on Tenant hereunder; provided,
however, that the assignee of the Lender shall have expressly assumed all of the
obligations of Tenant hereunder.
11.9 Upon Landlord's receipt of any notice in the nature of a notice of
default with respect to any obligation of Landlord secured by any lien upon the
Premises, Landlord shall immediately deliver a copy of such notice to Tenant and
to the Lender. If and whenever Tenant or the Lender shall deem it necessary or
appropriate to do so in order to protect its respective rights under this Lease,
it may, at its option, pay and discharge any mortgage or other lien (including,
without limitation, the lien of general or special property taxes or
assessments) attached to the Premises or any portion thereof, and in such event
it shall be subrogated to all the rights of the mortgagee, beneficiary, owner or
holder of such mortgage or other lien.
11.10 In the event that this Lease is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within
sixty (60) days after such rejection, the Lender shall so request, Landlord
shall execute and deliver to the Lender a new ground lease of the Premises. Such
new ground lease shall be for a term equal to the remainder of the term of this
Lease before giving effect to such rejection, and shall contain the same
covenants, agreements, terms, provisions and limitations as contained in this
Lease (except for any requirements which shall have been fulfilled by Tenant
prior to such rejection).
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11.11 Landlord and Tenant acknowledge, agree and covenant that
notwithstanding the union of the fee simple title with any right, title or
interest in the leasehold estate created hereby or under any other document or
instrument in Landlord, Tenant, Lender, or any other Person, whether by purchase
or otherwise, it is the declared intention of the parties hereto that the
separation of the fee simple estate and the leasehold estate shall be maintained
and that a merger shall not take place without the prior written consent of the
Lender.
11.12 Tenant and Landlord shall cooperate in including herein, by
suitable amendment from time to time, any provision which the Lender or any
proposed Lender reasonably requests for the purpose of implementing the
Lender-protective provisions contained in this Article 11 and affording the
Lender or proposed Lender reasonable protection of its Lender's Lien in the
event of a default by Tenant; provided, however, that Landlord shall not be
required to include herein any additional provision which materially impairs the
rights of Landlord under this Lease. Tenant and Landlord each agree to execute
and deliver (and to acknowledge, if necessary for recording purposes) any
document or instrument necessary to give effect to any such provision.
11.13 Landlord or Tenant (the "RESPONDING PARTY") shall at anytime upon
not less than ten (10) days' prior written notice from the other party hereto or
from the Lender (the "REQUESTING PARTY") execute, acknowledge and deliver to the
Requesting Party a statement in writing (a) certifying, as applicable, that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect) and the date to which any payments due hereunder are
paid in advance, if any, and (b) acknowledging that there are not, to the
Responding Party's knowledge, any uncured defaults hereunder on the part of the
other party hereto, or specifying such defaults if any are claimed. Any such
statements may be conclusively relied upon by the Requesting Party and by any
prospective purchaser or lessee of, or lender proposing to take a security
interest in, the Facility, the Premises or any portion thereof or interest
therein. The failure of the Responding Party to deliver such statement within
such time shall be conclusive upon such Responding Party that (i) this Lease is
in full force and effect and has not been modified and (ii) there are no uncured
defaults in the performance of the other party hereto.
11.14 The Lender shall be an express third party beneficiary of the
covenants contained in this Lease, with rights and benefits under, and the
ability to enforce, this Lease.
ARTICLE 12 - INSURANCE
12.1 At all times during the term of this Lease, Tenant shall procure
and maintain the following policies of insurance, each of which (a) shall be
obtained from an insurance company rated at least B+ by A.M. Best Company and
(b) shall provide that it cannot be canceled or terminated without at least
thirty (30) days prior notice to Landlord:
12.1.1 Workers compensation insurance as required by Law
12.1.2 Comprehensive general liability insurance with a limit of no
less than $1,000,000, combined single limit, bodily injury and property damage,
for each occurrence; and
12.1.3 Excess public liability insurance in the form of an umbrella
policy, which umbrella policy shall afford coverage of not less than $5,000,000
per occurrence over and above the coverage provided by the policy described in
Section 12.1.2 hereof.
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12.2 Notwithstanding the foregoing, for so long as the Lender's Loan
Documents remain in effect, Tenant shall procure and maintain such policies of
insurance, in such amounts and containing such provisions, as are required under
the Lender's Loan Documents.
12.3 In the event that Tenant has not renewed or replaced any insurance
policy required under this Article 12 within ten (10) days prior to the
cancellation or termination thereof, then Landlord shall be entitled (but not
obligated) to cause such policy or policies to be renewed or replaced, and shall
be entitled to invoice Tenant for the premiums paid by Landlord in connection
with such renewal or replacement. Tenant shall reimburse Landlord for the amount
of such invoice within ten (10) days after receipt thereof, and Tenant's failure
to so reimburse Landlord within such ten (10) day period shall be a material
default hereunder.
ARTICLE 13 - CONDEMNATION
13.1 Subject to any applicable provisions of the Lender's Loan
Documents, in the event of a taking of all or any portion of the Facility Site
by eminent domain or by inverse condemnation for any public or quasi-public use
under any Law, the proceeds therefrom shall be distributed (a) first, to Tenant
to the extent of all amounts necessary to pay in full any sums outstanding under
the Financing and (b) second, to the parties hereto in accordance with their
interests as they may appear.
ARTICLE 14 - DEFAULT AND REMEDIES
14.1 Subject to the provisions of Article 11 hereof, the occurrence of
any one or more of the following events shall constitute a material default by
Tenant under this Lease:
14.1.1 The vacation or abandonment of the Premises by Tenant for a
continuous period of sixty (60) days or more, whether or not the rent is paid.
14.1.2 The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder within five (5) business days
after the same shall become due, where such failure shall continue for a period
of five (5) business days after written notice thereof from Landlord to Tenant.
14.1.3 The failure by Tenant to observe or perform any of the material
covenants, conditions or provisions of this Lease to be observed or performed by
Tenant other than those referenced in Section 14.1.2 hereof, where such failure
shall continue for a period of thirty (30) days after written notice thereof
from Landlord to Tenant; provided, however, that if the nature of Tenant's
noncompliance is such that more than thirty (30) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said thirty (30) day period and thereafter diligently
pursues such cure to completion.
14.1.4 (a) The making by Tenant of any general arrangement for the
benefit of creditors, (b) Tenant's becoming a "debtor" as defined in II U.S.C.
(Section)101, unless, in the case of a petition filed against Tenant, the same
is dismissed within sixty (60) days after filing, (c) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located on the Premises or of Tenant's interest under this Lease, where
possession is not restored within sixty (60) days, or (d) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest under this Lease, where such
seizure is not discharged within sixty (60) days.
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14.2 Subject to the provisions of Article 11 hereof, in the event of
any material default of this Lease by Tenant, Landlord may at any time
thereafter, with or without notice or demand and without limiting Landlord in
the exercise of any right or remedy which Landlord may have by reason of such
default, take any of the following actions:
14.2.1 Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate, and
Tenant shall, subject to Section 9.2 hereof, immediately surrender possession of
the Premises to Landlord. In such event, Landlord shall be entitled to recover
from Tenant all damages incurred by Landlord by reason of Tenant's default,
including, but not limited to: (a) the unpaid rent which had been earned at the
time of termination; (b) the amount by which the unpaid rent which would have
been earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; (c) the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; and (d) any other amount necessary to compensate Landlord
for the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease.
14.2.2 Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have vacated or abandoned
the Premises. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent as it becomes due hereunder.
14.2.3 Pursue any other remedy now or hereafter available to Landlord
under the Laws of the State of California.
14.3 Landlord shall not be in default in the performance of its
obligations under this Lease unless Landlord fails to perform the obligations
required of Landlord hereunder within sixty (60) days after written notice by
Tenant to Landlord, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than sixty (60) days are required for its performance, then
Landlord shall not be in default if Landlord commences performance within such
sixty (60) day period and thereafter diligently pursues the same to completion.
14.4 Tenant hereby acknowledges that the late payment by Tenant to
Landlord of any installment of rent or any other sum due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Accordingly, if any installment
of rent or any other sum due from Tenant hereunder shall not be received by
Landlord within ten (10) days after such amount shall be due, then, without any
requirement for notice to Tenant, Tenant shall pay to Landlord a late charge
equal to six percent (6%) of such overdue amount. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Landlord
will incur by reason of such late payment by Tenant. Acceptance of such late
charge by Landlord shall in no event constitute a waiver of Tenant's default
with respect to such overdue amount, or prevent Landlord from exercising any of
the other rights and remedies granted hereunder.
14.5 Except as expressly provided herein, any amount due to Landlord
hereunder that is not paid when due shall bear interest at the greater of (a)
ten percent (10%) per annum or (b) five percent (5%) per annum above the
discount rate established by the Federal Reserve Bank of San Francisco on
advances to member banks under Section 13 or 13(a) of the Federal Reserve Act as
in effect on the Effective Date, from the date due until fully paid. Payment of
such interest shall not excuse or cure any default by Tenant under this Lease.
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ARTICLE 15 - MISCELLANEOUS LEASE PROVISIONS
15.1 Landlord and its agents shall have the right to enter the Premises
and inspect the Facility and the operations and activities of Tenant, at any
reasonable time and from time to time. Landlord shall indemnify, defend and hold
harmless Tenant from and against any and all Damages which may be imposed upon
or incurred by Tenant or asserted against Tenant by any third Person, arising
out of or attributable to such inspection of the Facility, except to the extent
caused by the negligence or wilful acts of Tenant.
15.2 Upon Tenant's paying the rent for the Premises and observing and
performing all of the covenants, conditions and provisions on Tenant's part to
be observed and performed hereunder, Tenant shall have quiet possession of the
Premises for the entire term hereof subject to all of the provisions of this
Lease.
15.3 Tenant hereby acknowledges that Landlord shall have no obligation
whatsoever to provide guard service or other security measures for the benefit
of the Premises or the Facility. Tenant assumes all responsibility for the
protection of Tenant, its agents, invitees and their property from the acts of
third parties.
15.4 Tenant shall surrender possession of the Premises to Landlord at
the expiration or earlier termination of the term of this Lease. If Tenant fails
to surrender the Premises at the expiration or earlier termination of this
Lease, Tenant shall defend and indemnify Landlord from all liability and expense
resulting from such failure, including, without limitation, claims made by any
succeeding tenant founded on or resulting from such failure by Tenant.
15.5 If Tenant, with Landlord's consent, remains in possession of the
Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Tenant, except that the rent payable
shall be one hundred and twenty-five percent (125%) of the rent payable
immediately preceding the termination date of this Lease.
15.6 No waiver by Landlord of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provisions. The acceptance of rent hereunder by Landlord
shall not be deemed a waiver of any preceding breach by Tenant of any provision
hereof, other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
15.7 No remedy or election of or by Landlord hereunder shall be deemed
exclusive, but shall, wherever possible, be cumulative with all other remedies
available at Law or in equity.
15.8 All monetary obligations of Tenant to Landlord under the terms of
this Lease shall be deemed to be rent.
15.9 Landlord reserves to itself the right, from time to time, to grant
such easements, rights and dedications as Landlord deems necessary or desirable,
and to cause the recordation of final, parcel or other maps or restrictions, so
long as such easements, rights, dedications, maps and restrictions would not
reasonably be expected to have a Material Adverse Impact. Tenant shall promptly
execute any of the aforementioned documents reasonably requested by Landlord,
and its failure to do so shall constitute a material default under this Lease.
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ARTICLE 16 - RESERVED AREA
16.1 Landlord and Tenant acknowledge that Landlord may in the future
record one or more parcel or final maps (collectively, the "MAP,") subdividing
the Premises into two or more separate parcels or lots complying with the
California Subdivision Map Act (Govt. Code (section) 66410 at seq.) consisting
of: (a) the site of the Facility, which shall be the land described in Exhibit
"B" attached hereto (the "FACILITY SITE"); and (b) one or more other parcels,
which shall together or collectively consist of the remainder of the Premises
(the "RESERVED AREA").
16.2 Tenant shall, at Landlord's expense and at no cost to Tenant,
cooperate in all respects with Landlord's efforts to obtain and record the Map,
including, without limitation, by executing any and all documents and
instruments as may reasonably be required by Landlord or any applicable
Governmental Authority in connection therewith.
16.3 Landlord shall have an option (the "PARTIAL TERMINATION OPTION") to
at any time terminate this Lease as to all or any part of the Reserved Area, by
delivering written notice (the "PARTIAL TERMINATION NOTICE") to Tenant
describing the portion or portions of the Reserved Area as to which this Lease
is to terminate (such portion or portions, together, the "OPTIONED PREMISES
AREA") together with the payment to Tenant of the sum of Ten Dollars ($10.00),
which shall be the entire consideration for such termination; provided, however,
that Landlord's right to exercise the Partial Termination Option shall be
contingent upon, and the Partial Termination Notice shall not be given until
after, the approval and recordation of the Map by the County of Imperial. The
term of the Partial Termination Option shall be the same as, and shall run
concurrently with, the term of this Lease as set forth in Article 3 hereof.
16.4 At such time as (a) the Map shall have been recorded in the
Official Records and (b) Tenant shall have received the Partial Termination
Notice (along with the Ten Dollars ($10.00) consideration provided in Section
16.3 hereof), (i) Tenant shall promptly execute, acknowledge, deliver and cause
to be recorded in the Official Records a quitclaim deed satisfactory to Landlord
pursuant to which Tenant shall quitclaim to Landlord all its right, title and
interest in and to the Optioned Premises Area and (ii) Tenant shall cause the
Lender to promptly execute, acknowledge, deliver and cause to be recorded in the
Official Records a partial release of the Lender's Lien satisfactory to
Landlord, pursuant to which the Lender shall release all its right, title and
interest in and to the Optioned Premises Area; and upon the recordation of such
quitclaim deed and such partial release, Tenant shall surrender and deliver
possession of the Optioned Premises Area to Landlord. By taking a security
interest in this Lease, the Lender unconditionally and irrevocably agrees to
execute, acknowledge, deliver and cause said partial release to be recorded as
and when provided in this Section 16.4. In no event shall any such quitclaim
entitle Tenant to any reduction in or offset against any of the rents or other
payments due to Landlord hereunder.
16.5 Without limitation on Landlord's Reserved Rights, Landlord shall
have the right to designate a right of way on, over, across and through the
Facility Site for nonexclusive ingress, egress and use by Landlord for purposes
of access to any portion of the Reserved Area and/or for the construction,
installation, operation and maintenance of utility lines or pipelines in
connection with any geothermal electrical generating facility, mineral
processing facility and/or other commercial or industrial facility or
improvements hereafter constructed in, on or under the Reserved Area, so long as
such right of way would not reasonably be expected to have a Material Adverse
Impact.
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ARTICLE 17 - NOTICES
17.1 Any notices, statements, demands, correspondence or other
communications required or permitted to be given hereunder shall be in writing
and shall be given (a) personally, (b) by certified or registered mail, postage
prepaid, return receipt requested, or (c) by overnight or other courier or
delivery service, freight prepaid, to the following address, or, in the case of
notices to the Lender, as provided in the notice of the Lender's Lien delivered
to Landlord under Section 11.1 hereof.
If to Landlord:
Imperial Magma
000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attn: Office of the General Counsel
If to Tenant:
Salton Sea Power L.L.C.
000 Xxxxx 00xx Xxxxxx
Xxxxx 000-X
Xxxxx, Xxxxxxxx 00000
Attn: Office of the General Counsel
Except as otherwise provided in Article 11 hereof, (i) notices delivered by hand
shall be deemed received when delivered and (ii) notices sent by certified or
registered mail or by overnight or other courier or delivery service shall be
deemed received on the first to occur of (A) five (5) days after deposit in the
United States mail or with such overnight or other courier or delivery service,
addressed to such address or addresses, (B) written acceptance of delivery by
the recipient or (C) written rejection of delivery by the recipient. Each party
hereto may change its address for receipt of notices by sending notice hereunder
of such change to the other party hereto in the manner specified in this
Section, and the Lender may change its address for receipt of notices by sending
notice hereunder to each of the parties hereto in the manner specified in this
Section. Notwithstanding the foregoing, amounts payable to Landlord hereunder
shall be deemed paid three (3) days after a valid check for the same, addressed
to Landlord's address above, is deposited in the United States mail, first-class
postage prepaid.
ARTICLE 18 - FORCE MAJEURE
18.1 Neither Landlord nor Tenant shall be liable in damages to the other
for any act, omission or circumstance (an "EVENT OF FORCE MAJEURE") occasioned
by or in consequence of any acts or omissions of the other party hereto, acts of
God, acts of the public enemy, wars, blockades, insurrections, riots, civil
disturbances, strikes, lockouts, delays in transportation, epidemics,
landslides, lightning, earthquakes, fires, storms, floods, explosions, sabotage,
the binding order of any Governmental Authority which has been contested in good
faith, the failure of any Governmental Authority to issue any Governmental
Approval within one hundred and twenty (120) days after an application for the
same has been submitted, the effect of any Laws, or any other event or
circumstance beyond the reasonable control of such party which prevents or
hinders such party from performing its obligations hereunder, whether or not
similar to the matters and conditions
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herein enumerated. In no event, however, shall an Event of Force Majeure
relieve Tenant from the obligation to pay rents or any other payments due to
Landlord under this Lease.
ARTICLE 19 - GENERAL PROVISIONS
19.1 In addition to any other indemnities herein set forth, each party
hereto (the "INDEMNIFYING PARTY") shall indemnify, defend and hold harmless the
other party hereto (the "INDEMNIFIED PARTY") from and against any and all
Damages which may be imposed upon or incurred by the Indemnified Party or
asserted against the Indemnified Party by any third Person, arising out of or
attributable to the failure of the Indemnifying Party to perform its obligations
as provided in this Lease.
19.2 The parties hereto shall cooperate each with the other to fully
effectuate the purposes and intent of this Lease. Without limiting the
generality of the foregoing, the parties hereto covenant that they will execute,
cause to be acknowledged and deliver any documents or instruments reasonably
necessary to implement the intentions expressed or implied herein.
19.3 The parties shall execute, cause to be acknowledged and deliver a
memorandum of this Lease, which shall be recorded in the Official Records, and
shall be in the form attached hereto as Exhibit "C".
19.4 If either party hereto commences litigation for the enforcement,
termination, cancellation or rescission hereof, or for damages for the breach
hereof, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and court and other costs incurred.
19.5 Each provision of this Lease performable by Tenant shall be deemed
both a covenant and a condition. As used herein, the neuter gender includes the
masculine and the feminine, and the singular number includes the plural, and
vice versa. This Lease shall be governed by the Laws of the State of California.
This Lease shall be construed equally as against the parties hereto, and shall
not be construed against the party responsible for its drafting. Time is of the
essence with respect to the obligations to be performed under this Lease. All
exhibits to which reference is made in this Lease are incorporated into this
Lease. Captions in this Lease are inserted for convenience of reference only and
do not define, describe or limit the scope or intent of this Lease or any of the
terms hereof.
19.6 This Lease contains all agreements of the parties hereto with
respect to the subject matter of this Lease, and all prior or contemporaneous
agreements, understandings, correspondence and negotiations, whether oral or
written, pertaining to the subject matter of this Lease, shall be of no further
force or effect, and are superseded hereby.
19.7 Any obligations referred to herein to be performed at any time
after the expiration or termination of this Lease, and all indemnities and hold
harmless agreements provided herein, shall survive the expiration or earlier
termination of this Lease.
19.8 No amendment or modification of this Lease or any provision hereof
shall be effective unless in writing and signed by the parties in interest at
the time of the amendment.
19.9 The invalidity of any provision of this Lease as determined by a
court of competent jurisdiction shall in no way affect the validity of any other
provision hereof.
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19.10 This Lease and the covenants contained herein shall be binding
upon and inure to the benefit of the parties hereto and their respective
grantees, assignees, successors and assigns.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the date first above written.
LANDLORD:
IMPERIAL MAGMA, a
Nevada corporation
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
TENANT:
SALTON SEA POWER L.L.C., a Delaware
limited liability company
By:XX Xxxxxx Sea Inc., a
Delaware corporation, its
Manager
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
