Exhibit 10.8(j)
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RESERVATION OF RIGHTS AGREEMENT
This RESERVATION OF RIGHTS AGREEMENT (this "Agreement") dated as of
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February 15, 2006 is hereby entered into between Enron Wind Systems, LLC, a
California limited liability company ("EWS") and Zond Windsystem Partners, Ltd.
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Series 85-A, a California limited partnership ("ZWP 85-A").
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WITNESSETH
A. WHEREAS, EWS and Southern California Edison Company ("SCE") are parties
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to (i) that certain Power Purchase Agreement dated June 14, 1984 and referred to
as QFID Number 6043 (the "Monolith I PPA") and (ii) that certain Power Purchase
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Agreement dated June 14, 1984 and referred to as QFID Number 6044 (the "Monolith
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II PPA" and together with the Monolith I PPA, the "Power Purchase Agreements"),
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B. WHEREAS, in connection with the production of electrical energy from
that certain wind power project owned by ZWP 85-A (the "Wind Power Project"),
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ZWP 85-A desires to reserve from EWS a portion of the entitlement to sell
certain capacity and associated energy to SCE under each of the Power Purchase
Agreements, all on the terms and conditions of this Agreement.
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 the terms and conditions set forth herein, as of the Effective Date
(as defined below), (i) EWS reserves to ZWP 85-A a portion of the entitlement to
sell capacity and associated energy to SCE under the Monolith I PPA aggregating
14.6 MW at any one time (the "Monolith I Reserved Interest") and (ii) EWS
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reserves to ZWP 85-A a portion of the entitlement to sell capacity and energy
to SCE under the Monolith II PPA aggregating 1 MW at any one time (the "Monolith
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II Reserved Interest" and together with the Monolith I Reserved Interest, the
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"Reserved Interests").
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(b) Each party agrees that the reservation of the Reserved Interests
hereunder does not constitute an assignment by EWS of any of its rights, duties,
responsibilities and obligations under the Power Purchase Agreements and is
solely intended to memorialize the amount of capacity and associated energy that
ZWP 85-A can deliver as a seller under the Power Purchase Agreements.
Notwithstanding any other terms or provisions contained in this Agreement, (i)
EWS shall at all times remain liable under the Power Purchase Agreements to
perform all of its duties and obligations under such Power Purchase Agreements
to the same extent as if this Agreement had not been executed and (ii) ZWP 85-A
shall not be obligated to perform any of the obligations or duties of EWS
arising under the Power Purchase Agreements. Notwithstanding the forgoing, ZWP
85-A shall
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not take any action or fail to take any act in connection with the delivery of
power to SCE from the Wind Power Project under the Power Purchase Agreements
that will cause EWS to be in breach of or default under either of the
Power Purchase Agreements.
Section 2. Purchase, Sale and Delivery Obligations. During the term of this
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Agreement, ZWP 85-A shall, through EWS, as project manager, deliver to SCE
through the existing transmission system and pursuant to the Power Purchase
Agreements all capacity and associated energy with respect to the Wind Power
Project, provided that such deliveries shall not at any one time exceed the
Reserved Interests. Nothing in this Section 2 or elsewhere in this Agreement is
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intended to impose any penalties or other liabilities on ZWP 85-A for not
producing and delivering to SCE any particular amount of electric energy in any
year or during the term of this Agreement.
Section 3. Disposition of Revenues and Allocation of Expenses.
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(a) All revenues and other payments received by EWS from SCE in connection
with the sale of capacity and energy to SCE under each of the Power Purchase
Agreements (collectively, the "Revenues") shall be held for the benefit of all
the sellers under the Power Purchase Agreements. 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 that delivered power to SCE under the
applicable Power Purchase Agreement 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 such Power Purchase Agreement during the period applicable to such
Revenues.
(b) All fees, expenses and costs incurred by EWS under each of the Power
Purchase Agreements, including back feed electricity, maintenance costs any
other costs incurred by EWS under the Power Purchase Agreements (collectively,
the "Costs"), shall be allocated among the sellers under each of the Power
Purchase Agreements as follows: (i) the Costs multiplied by (ii) a fraction (A)
the numerator of which shall equal the aggregate installed nameplate capacity of
the wind turbines of each such seller that delivered power to SCE under the
applicable Power Purchase Agreement during the applicable period which such
Costs were incurred and (B) the denominator of which shall equal the aggregate
installed nameplate capacity of all the sellers that delivered power to SCE
under such Power Purchase Agreement during the applicable period which such
Costs were incurred. EWS shall be permitted to reduce and withhold from any
payment to be made to ZWP 85-A pursuant to Section 3(a) the amount of any such
Costs allocated to such party pursuant to this Section 3(b) and any payments due
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to EWS pursuant to Section 5 of this Agreement.
Section 4. Term. The term of this Agreement shall commence on the Effective
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Date (as defined below) and shall continue in effect until June 30, 2006,
provided that EWS shall have the right to terminate this Agreement by giving ten
(10) days prior written notice to ZWP 85-A.
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Section 5. Compensation. As compensation for the rights granted to ZWP 85-A
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under this Agreement with respect to the Power Purchase Agreements, ZWP 85-A
agrees to pay to EWS an amount (each a "Royalty Payment") equal to 45% of the
Net Operating Proceeds attributable to the period commencing on February 15,
2006 and ending on the last day that ZWP 85-A delivers power to SCE under the
Power Purchase Agreement. ZWP 85-A shall pay a Royalty Payment to EWS within
sixty (60) days following the end of each calendar month during the term of this
Agreement. For the purposes of this Agreement, the term "Net Operating Proceeds"
shall mean, with respect to any period, the positive difference, if any, between
(x) the gross receipts received with respect to such period from the sale of
electricity generated by the Wind Power Project and all amounts received in lieu
of receipts from the sale of electricity and (y) all payments incurred and
relating to such period by ZWP 85-A in respect to the operation, management,
maintenance and repair of the Wind Power Project (other than payments due with
respect to this Agreement).
Section 6. Effective Date. This Agreement shall be effective as of January
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1, 2006 (the "Effective Date").
Section 7. Further Assurances. The parties 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
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permitted 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 the parties 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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NOTICE OF ADDRESS:
Zond Windsystem Partners, Ltd. Series 85-A
c/o Enron Wind Systems, LLC
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Enron Wind Systems, LLC
0000 Xxxxx Xxxxxx
0
Xxxxx 0000
Xxxxxxx, XX 00000
(b) Amendment, Modification or Waiver. No amendment, modification or
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waiver 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
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inure 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
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or obligations hereunder without the prior written consent of the other party,
which consent may be withheld in its sole discretion.
(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 this Agreement by signing any such
counterpart.
(g) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of California.
(h) Liability for Losses or Damages. No party shall be liable for
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lost or 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
provisions 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 hereto have executed this Agreement as of
the date first above written.
Zond Windsystem Partners, Ltd. Series
85-A, a California limited partnership
By: Zond Windsystems Management III
LLC, its general partner
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
Enron Wind Systems, LLC,
a California limited liability company
By: Enron Wind LLC,
its sole member
By: Enron Renewable Energy Corp.,
Its sole member
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, President
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