Exhibit 10.1
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RESERVATION OF RIGHTS AGREEMENT
This RESERVATION OF RIGHTS AGREEMENT (this "Agreement") dated as of June
23, 2005 (the "Effective Date") is hereby entered into between PAMC Management
Corporation, a Colorado corporation ("PAMC") and Zond Pan Aero Windsystem
Partners I, a California limited ("ZWP").
W I T N E S S E T H
A. WHEREAS, PAMC and Southern California Edison ("SCE") have entered into
that certain Reformed Standard Offer 1 As-Available Capacity and Energy Power
Purchase dated June 23, 2005 (the "Power Purchase Agreement"), providing for the
sale to SCE of capacity and associated energy generated by qualifying facilities
at the site described in the Power Purchase Agreement (the "Operating Site");
and
B. WHEREAS, in connection with the Power Purchase Agreement, PAMC and SCE
have entered into that certain Interconnection Facilities Agreement dated June
23, 2005 (the "Interconnection Agreement") providing for the interconnection of
the generating facilities located at the Operating Site to the SCE transmission
system at the substation (the "Mesa Substation") located at the Operating Site.
C. WHEREAS, PAMC, in entering into the Power Purchase Agreement and the
Interconnection Agreement, acted on its own behalf and, as project manager, on
behalf of unidentified other owners who, along with PAMC, are collectively
referred to as the seller in Power Purchase Agreement and the Interconnection
Agreement; and
D. WHEREAS, pursuant to that certain Wind Park Easement Agreement dated as
of September 7, 1984 (as amended, the "Wind Park Easement") by and between Mesa
Wind Developers, a California joint venture ("MWD") and ZWP, ZWP has installed
and operates wind turbine generators with a total nameplate rating of 19.5
megawatts ("MW") (the "Turbines") on a portion of the Operating Site and uses
certain collection lines and related equipment and the Mesa Substation owned by
MWD and located at the Operating Site; and
E. WHEREAS, PAMC desires to reserve to ZWP as a seller under the Power
Purchase Agreement and the Interconnection Agreement, and ZWP as a seller under
the Power Purchase Agreement and the Interconnection Agreement desires to
reserve from PAMC, a portion of the entitlement to sell to SCE capacity and
associated energy under the Power Purchase Agreement, all on the terms and
conditions of this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Reservation of Rights.
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(a) On and as of the Effective Date, ZWP shall be an owner and a seller
under the Power Purchase Agreement and the Interconnection Agreement. On the
terms and conditions set forth herein, as of the Effective Date, PAMC reserves
to ZWP (i) a portion of the entitlement to sell capacity and associated energy
under the Power Purchase Agreement aggregating 19.5 MW and (ii) a portion of the
entitlement to reserve and use the interconnection facilities (the
"Interconnection Facilities"), as described in the Interconnection Agreement to
transmit such energy to SCE (collectively, the "Reserved Interest").
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(b) Each party agrees that the reservation of the Reserved Interest
hereunder does not constitute an assignment of any of PAMC's rights, ownership
interest, duties, responsibilities and obligations under the Power Purchase
Agreement and Interconnection Agreement and is solely intended to memorialize
the amount of capacity and associated energy that ZWP can deliver as an owner
and seller under the Power Purchase Agreement and Interconnection Agreement.
Notwithstanding any other terms or provisions contained in this Agreement, PAMC
shall at all times remain liable under the Power Purchase Agreement and
Interconnection Agreement to perform all of its duties and obligations under the
Power Purchase Agreement and the Interconnection Agreement to the same extent as
if this Agreement had not been executed.
(c) Notwithstanding anything herein to the contrary, ZWP (i) shall comply
with all terms and conditions of the Power Purchase Agreement and the
Interconnection Agreement to the extent applicable to a seller and an owner
thereunder and (ii) shall not take any action, nor refuse to take any action
required to be taken by it as a seller under the Power Purchase Agreement or the
Interconnection Agreement to permit compliance by PAMC as the counterparty to
SCE under the Power Purchase Agreement and the Interconnection Agreement.
Section 2. Purchase, Sale and Delivery Obligations
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(a) During the term of this Agreement, ZWP shall, through PAMC, as Project
Manager (as defined in the Power Purchase Agreement), deliver to SCE all
capacity and associated energy with respect to the Reserved Interest.
(b) ZWP shall deliver the electric power from the Turbines to the Mesa
Substation for delivery to the SCE transmission system pursuant to the
Interconnection Agreement.
Section 3. Disposition of Revenues and Expenses.
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(a) All revenues and other payments received by PAMC from the sale of
capacity and energy to SCE under the Power Purchase Agreement (collectively, the
"Revenues") shall be held in trust for the benefit of ZWP and the other sellers
under the Power Purchase Agreement. Each such seller shall be entitled to the
portion of such Revenues equal to (i) the Revenues multiplied by (ii) a fraction
(A) the numerator of which shall equal the aggregate metered production of such
seller's wind turbines during the period applicable to such Revenues and (B) the
denominator of which shall equal the aggregate metered production of the wind
turbines of all the sellers that delivered power to SCE under the Power
Agreement during the period applicable to such Revenues. PAMC shall pay to ZWP
the portion of the Revenues received with respect to any calendar month within
thirty (30) days of the receipt of such Revenues from SCE.
(b) All fees, expenses and costs incurred by PAMC under the Power Purchase
Agreement and the Interconnection Agreement, including interconnection and
maintenance costs any other costs incurred by PAMC under the Power Purchase
Agreement and the Interconnection Agreement, shall be allocated among ZWP and
the other sellers under the Power Purchase Agreement as follows: (i) the fees,
expenses and costs multiplied by (ii) a fraction (A) the numerator of which
shall equal the aggregate installed nameplate capacity of each such seller
during the applicable period which such cost or expense is incurred and (B) the
denominator of which shall equal the aggregate installed nameplate capacity of
all the sellers that delivered power to SCE under the Power Purchase Agreement
during the applicable period which such cost or expense is incurred. PAMC shall
be permitted to reduce and withhold from any payment to ZWP set forth in Section
3(a) by the amount of any such costs and expenses allocated to ZWP pursuant to
this Section 3(b).
Section 4. Term. The term of this Agreement shall commence on
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the date hereof and shall continue in effect until December 31, 2005, provided
however that ZWP may terminate this Agreement upon thirty (30) days advance
written notice to PAMC.
Section 5. Representations, Warranties and disclaimers of PAMC.
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(a) PAMC represents and warrants to ZWP, as of the Effective Date, as
follows:
(i) PAMC has full power and authority, and has taken all action necessary,
to execute and deliver this Agreement and any and all other documents required
or permitted to be executed or delivered by it in connection with this Agreement
and to fulfill its obligations under, and to consummate the transactions
contemplated by, this Agreement;
(ii) this Agreement constitutes the legal, valid and binding obligations of
PAMC enforceable against PAMC in accordance with its terms;
(iii) the making and performance by PAMC of this Agreement and any other
documents required or permitted to be executed or delivered by it in connection
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with this Agreement do not and will not violate any law or regulation of the
jurisdiction of its organization or any other law or regulation applicable to
it, any provision of its charter or by laws (or comparable constituent
documents), or any order of any court or regulatory body and will not result in
the breach of, or constitute a default, or require any consent, under any
agreement, instrument or document to which it is a party or by which it or any
of its property may be bound or affected;
(iv) all authorizations, consents, approvals, and licenses of, all filings
or registrations with and all actions by any governmental authority necessary
for the validity or enforceability of the obligations of PAMC under this
Agreement have been obtained and no other approvals or other authorizations are
required in connection herewith; and
(b) Except as expressly provided in Section 5(a), PAMC makes no
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representation or warranty as to, and shall have no responsibility to ZWP for:
(i) the due authorization, execution or deliver of the Power Purchase
Agreement by SCE;
(ii) the legality, validity, binding effect or enforceability of the Power
Purchase Agreement or any of the terms, covenants or conditions contained
therein;
(iii) the performance or observance by SCE (at any time, whether prior to
or after the Effective Date) of any of the provisions of the Power Purchase
Agreement (or any of SCE's or such other person's or entity's other obligations
in connection therewith);
(iv) (except as otherwise expressly provided herein) any other matter
relating to SCE or any other person, the Reserved Interest, or the Power
Purchase Agreement.
Section 6. Representations, Warranties, and Agreements of ZWP.
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(a) ZWP hereby represents and warrants to PAMC, as of the Effective Date,
that:
(i) ZWP has full power and authority, and has taken all action necessary,
to execute and deliver this Agreement and any and all other documents required
or permitted to be executed or delivered by it in connection with this Agreement
and to fulfill its obligations under, and to consummate the transactions
contemplated by, this Agreement;
(ii) this Agreement constitutes the legal, valid and binding obligations of
ZWP enforceable against ZWP in accordance with its terms;
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(iii) the making and performance by ZWP of this Agreement and any other
documents required or permitted to be executed or delivered by it in connection
with this agreement do not and will not violate any law or regulation applicable
to it, any provision of its charter or by-laws (or comparable constituent
documents) or any order of any court or regulatory body and will not result in
the breach of, or constitute a default, or require any consent, under any
agreement, instrument or document to which it is a party or by which it or any
of its property may be bound or affected;
(iv) all authorizations, consents, approvals, and licenses of, all filings
or registrations with and all actions by any governmental authority necessary
for the validity or enforceability of the obligations of ZWP under this
Agreement have been obtained and no other approvals or other authorizations are
required in connection herewith; and
(v) ZWP has fully reviewed the terms of the Power Purchase Agreements and
has independently and without reliance upon PAMC and based on such documents and
information as ZWP has deemed appropriate made its own decision to enter into
this Agreement.
Section 7. Further Assurances. PAMC and ZWP hereby agree to execute and
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deliver such other instruments, and take such other action, as either party may
reasonably request in connection with the transaction contemplated by this
Agreement.
Section 8. Expenses. Each party hereto shall bear its own expenses in
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connection with the execution, delivery and performance of this Agreement.
Section 9. Miscellaneous.
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(a) Notices. All notices or other communications required or permitted
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hereunder or by law shall, unless otherwise provided herein, be in writing,
shall be personally delivered, sent by facsimile, or sent by registered,
certified, or express mail, and deposited in the mail with the postage prepaid,
addressed to PAMC or ZWP at the addresses set forth below. Notices mailed as
provided herein shall be deemed received on the third business day following the
mailing day. Notice of change of address shall be given by written notice in the
manner detailed in this Section 9(a).
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(b) Amendment, Modification or Waiver. No amendment, modification or waiver
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of any provision of this Agreement may be binding upon either party without the
written consent of such party.
(c) Successors and Assigns. This Agreement shall be binding upon and inure
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to the benefit of the parties hereto and their respective successors and
permitted assigns.
(d) Assignments. Neither party hereto may assign any of its rights or
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obligations hereunder without the prior written consent of the other party.
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(e) Captions. The captions and section headings appearing herein are
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included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
(f) Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall constitute one and the same instrument, and
each of the parties hereto may execute his Agreement by signing any such
counterpart.
(g) GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA. EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF
CALIFORNIA AND OF ANY CALIFORNIA STATE COURT SITTING IN LOS ANGELES, CALIFORNIA
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(h) Liability for Losses or Damages. No party shall be liable for lost or
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prospective profits or any other special, punitive, exemplary, consequential,
incidental, or indirect losses or damages (in tort, contract or otherwise) under
or in respect of this Agreement.
(i) Severability. Any provision of this Agreement held to be invalid,
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illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provision hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
NOTICE ADDRESS: Zond Windsystem Partners I, a
-------------- California limited partnership
Zond PanAero Windsystem Partners I,
c/o Enron Wind LLC
0000 Xxxxx Xxxxxx
Xxxxx 0000 By: Zond Windsystem Management
Xxxxxxx, XX 00000 LLC, its general partner
By: /s/ Xxxx Xxxx
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Name: Xxxx Xxxx
Title: President and Chief
Executive Officer
NOTICE ADDRESS: PAMC Management Corporation
-------------- Colorado corporation
PAMC Management Corporation
X.X. Xxx 000 By: /s/ Xxxxxx Xxxxxx
000 Xxxxx Xxxx Xxxxxx --------------------------
Xxxxxxxx, XX 00000
Name: Xxxxxx Xxxxxx
Title: President
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