PURCHASE AND SALE AGREEMENT
between
THE BURLINGTON NORTHERN AND
SANTA FE RAILWAY COMPANY
as Seller
and
XXXXX POWER PARTNERS
as Buyer
Dated
June 1, 2004
---------------------------
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND REFERENCES...........................................2
ARTICLE II AGREEMENT TO SELL AND PURCHASE......................................4
ARTICLE III PURCHASE PRICE.....................................................4
ARTICLE IV CONDITION AND TITLE.................................................4
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER.............................7
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER.............................9
ARTICLE VII CERTAIN COVENANTS OF SELLER PENDING CLOSING.......................10
ARTICLE VIII CLOSING OF TRANSACTION...........................................10
ARTICLE IX CERTAIN ACCOUNTING ADJUSTMENTS.....................................13
ARTICLE X TAX-DEFERRED EXCHANGE...............................................15
ARTICLE XI CASUALTY LOSS......................................................15
ARTICLE XII TERMINATION, DEFAULT AND REMEDIES.................................15
ARTICLE XIII NOTICES..........................................................16
ARTICLE XIV COMMISSIONS.......................................................17
ARTICLE XV MISCELLANEOUS MATTERS..............................................18
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TABLE OF EXHIBITS
Exhibit "A" Description of Property
Exhibit "B" Form of Deed
Exhibit "C" Form of Assignment of Rights
Exhibit "D" Form of Easement
Exhibit "E" Geothermal Lease Documentation
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("AGREEMENT") dated June 1, 2004 (the
"EFFECTIVE DATE"), is made by and between THE BURLINGTON NORTHERN AND SANTA FE
RAILWAY COMPANY, a Delaware corporation ("SELLER"), and XXXXX POWER PARTNERS, a
Nevada general partnership ("BUYER").
RECITALS:
---------
WHEREAS, Seller owns or otherwise controls certain geothermal and mineral
interests and surface rights related to certain real property (the "LAND")
located at Xxxxx'x Hot Springs, Xxxxxxxxx County, Nevada, such Land being
further described on EXHIBIT "A" attached hereto and incorporated herein by this
reference;
WHEREAS, certain types of Mineral Interests (as hereinafter defined) are
currently leased to Xxxxx Power Partners, a Nevada general partnership, under
that certain Geothermal Lease (as amended from time to time, the "GEOTHERMAL
LEASE") dated October 10, 1984, between Xxxxxx Geothermal, Inc.
(predecessor-in-interest to Xxxxx Power Partners) and Southern Pacific Land
Company (predecessor-in-interest to Seller), such types of Mineral Interests
leased to Xxxxx Power Partners being more particularly described in the
Geothermal Lease;
WHEREAS, Seller desires to sell, and Buyer desires to purchase, all of
Seller's right, title and interest in and to the Mineral Interests;
WHEREAS, Seller desires to assign, and Buyer desires to acquire, all of
Seller's right, title and interest in and to the Geothermal Lease; provided
further that Buyer agrees to assume all obligations of Seller under the
Geothermal Lease;
WHEREAS, Seller desires to grant, and Buyer desires to obtain, a perpetual
and exclusive access and maintenance easement in the form attached hereto as
EXHIBIT "D" ("EASEMENT") to, from and across the Land so that it may develop and
otherwise enjoy its right, title and interest in and to the Mineral Interests
and its rights as successor to Grantor under the Geothermal Lease, and to also
permit it to fulfill its obligations as successor to Grantor under the
Geothermal Lease; and
WHEREAS, Seller and Buyer deem it in their mutual best interests to execute
and deliver this Agreement.
AGREEMENTS:
-----------
NOW, THEREFORE, in consideration of ten dollars ($10.00), the receipt of
which is hereby acknowledged by Seller from Buyer, the costs incurred by Buyer
to perform due diligence in connection with the transactions contemplated by
this Agreement, and the mutual covenants and agreements contained herein, Seller
and Buyer do hereby agree as follows:
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ARTICLE I
DEFINITIONS AND REFERENCES
--------------------------
Section 1.1 Certain Defined Terms. When used in this Agreement, the
following terms shall have the respective meanings assigned to them in this
SECTION 1.1 or in the section, subsections or other subdivisions referred to
below:
"AFFIDAVIT" shall have the meaning assigned to such term in SECTION
8.2(A)4.
"AGREEMENT" shall mean this Purchase and Sale Agreement, including all
exhibits, as hereafter changed, amended or modified in accordance with the terms
hereof.
"APEX" shall have the meaning assigned to such term in SECTION 10.1.
"ASSIGNMENT OF RIGHTS" shall have the meaning assigned to such term in
SECTION 10.1.
"BEST OF SELLER'S KNOWLEDGE" shall have the meaning set forth in SECTION
5.9.
"CLOSING" and "CLOSING DATE" shall have the meanings assigned to such terms
in SECTION 8.1.
"CODE" shall have the meaning assigned to such term in SECTION 10.1.
"DEED" shall have the meaning assigned to such term in SECTION 8.2(A)1.
"XXXXXXX MONEY" shall have the meaning assigned to such term in SECTION
3.2.
"EASEMENT" shall have the meaning assigned to such term in the Recitals.
"ENVIRONMENTAL LAW(S)" shall mean any federal, state or local statute,
regulation, code, rule, ordinance, order, judgment, decree, injunction or common
law pertaining in any way to the protection of human health or the environment,
including without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Toxic
Substances Control Act, and any similar or comparable state or local law.
"GEOTHERMAL LEASE" shall have the meaning assigned to such term in the
Recitals.
"GEOTHERMAL LESSEE" shall mean Xxxxx Power Partners, a Nevada general
partnership, and its permitted successors and assigns.
"HAZARDOUS SUBSTANCE(S)" means any hazardous, toxic, radioactive or
infectious substance, material or waste as defined, listed or regulated under
any Environmental Law, and includes without limitation petroleum oil and any of
its fractions.
"INFORMATION" shall have the meaning assigned to such term in SECTION 4.4.
"LAND" shall have the meaning assigned to such term in the Recitals.
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"MINERALS" shall include, without limitation, (i) geothermal energy and
products of geothermal energy including but not limited to hot brine, hot water,
hot rock, indigenous steam and other gases, hot water and hot brines resulting
from water, gas, or other fluids (whether liquid or gaseous), artificially
introduced into geothermal energy and any substances which are found in solution
or in association with such steam, hot water or hot brines; (ii) all substances
defined as "oil", "gas" and "minerals" under applicable laws; and (iii) all
other substances that may be classified as metalliferous elements or
nonmetalliferous elements, together with all compounds and byproducts thereof;
specifically including, but not limited to, oil, gas and other hydrocarbons;
carbon dioxide, helium, coalbed methane and other gases, whether or not produced
in association with oil and gas; coal, potassium, peat and lignite, regardless
of the method used to mine and remove the same and regardless of the effect of
such mining and removal upon the surface estate, including the destruction
thereof; uranium, thorium or other fissionable materials; iron ore, bauxite and
other metallic ores and metallic minerals, including copper, silver and gold;
sulphur, whether in a solid, liquid or gaseous state and regardless whether or
not produced in association with oil and gas; sand, gravel, clay, scoria,
caliche and limestone, granite or other stone or rock, regardless of the method
used to quarry, mine or remove the same; and salt, saltwater and brine; together
with all other minerals and mineral substances whatsoever, known and unknown,
whether similar or dissimilar to those specifically named herein. As used
herein, the terms "HOT WATER," "STEAM" and "THERMAL ENERGY" each shall mean
natural geothermal water and/or steam, and shall also mean the natural heat of
the earth and the energy present in, resulting from or created by, or which may
be extracted from, the natural heat of the earth or the heat present below the
surface of the earth, in whatever form such heat or energy occurs.
"MINERAL INTERESTS" shall mean 100% of all the right, title and interest in
all Minerals in, on and under the Land.
"NET FUNDS DUE FROM BUYER" shall have the meaning assigned to such term in
SECTION 8.2(C).
"NET FUNDS DUE TO/FROM SELLER" shall have the meaning assigned to such term
in SECTION 8.2(C).
"PERMITTED ENCUMBRANCES" shall have the meaning assigned to such term in
SECTION 4.3.
"PROPERTY INTERESTS" shall have the meaning assigned to such term in
SECTION 2.1.
"PURCHASE PRICE" shall have the meaning assigned to such term in SECTION
3.1.
"QUALIFIED INTERMEDIARY" shall have the meaning assigned to such term in
SECTION 10.1.
"READILY AVAILABLE FUNDS" shall have the meaning assigned to such term in
SECTION 8.2(B)1.
"SETTLEMENT STATEMENT" shall have the meaning assigned to such term in
SECTION 8.2(C).
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"TAX-DEFERRED EXCHANGE" shall have the meaning assigned to such term in
SECTION 10.1.
"TITLE BINDER" shall have the meaning assigned to such term in SECTION 4.3.
"TITLE COMPANY" shall have the meaning assigned to such term in SECTION
3.2.
"TITLE POLICY" shall have the meaning assigned to such term in SECTION 4.3.
ARTICLE II
AGREEMENT TO SELL AND PURCHASE
------------------------------
Section 2.1 Property Interests. Subject to the provisions and terms
contained herein, Seller and Buyer agree that Seller will (a) sell to Buyer all
of Seller's right, title and interest in and to the Mineral Interests, (b)
assign to Buyer all of Seller's right, title and interest in and to the
Geothermal Lease and (c) grant to Buyer the Easement. The Mineral Interests,
Geothermal Lease and Easement are sometimes referred to herein collectively as
the "PROPERTY INTERESTS".
ARTICLE III
PURCHASE PRICE
--------------
Section 3.1 Purchase Price. In consideration of the sale of the Mineral
Interests, the assignment of the Geothermal Lease and grant of the Easement from
Seller to Buyer, at Closing (as hereinafter defined) Buyer shall pay Readily
Available Funds (as hereinafter defined) to Seller in the amount of $1,750,000
("PURCHASE PRICE"). Seller and Buyer acknowledge and agree that $1,200,000 of
the Purchase Price shall be allocated to the Mineral Interests. At Closing, the
Xxxxxxx Money (as hereinafter defined) shall be applied to the Purchase Price.
Section 3.2 Xxxxxxx Money. Contemporaneously with the execution of this
Agreement, Buyer has paid to Xxxxxxx Title of Xxxxxxxxx County (the "TITLE
COMPANY"), with offices at 0000 Xxxx Xxx., Xxx. X, Xxxxxx, XX 00000, as escrow
agent, xxxxxxx money in the amount of $0.00 (such amount being herein called the
"XXXXXXX MONEY"). The Xxxxxxx Money shall be held by Title Company in escrow in
an interest-bearing account in accordance with the provisions hereof, all
interest accrued on the Xxxxxxx Money shall become a part thereof, and all
further references to the Xxxxxxx Money in this Agreement shall include such
accrued interest. Immediately upon deposit with Title Company, the Xxxxxxx Money
shall become non-refundable to the Buyer except as expressly provided in SECTION
12.2 of this Agreement. In the event the transaction contemplated hereby is
consummated in accordance with the terms hereof, the Xxxxxxx Money shall be
applied to the Purchase Price to be paid by Buyer at the Closing.
ARTICLE IV
CONDITION AND TITLE
-------------------
Section 4.1 AS-IS SALE; DISCLAIMER OF WARRANTIES. BUYER HAS PREVIOUSLY MADE
AN INSPECTION OF THE PROPERTY INTERESTS AND THE LAND AND HAS KNOWLEDGE OR WILL
OBTAIN KNOWLEDGE AS TO THE PAST USE AND CONDITION OF THE PROPERTY INTERESTS AND
THE LAND, INCLUDING THE FACT THAT THE LAND AND CERTAIN OF THE PROPERTY
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INTERESTS ARE SUBJECT TO THE RIGHTS OF THE GEOTHERMAL LESSEE UNDER THE
GEOTHERMAL LEASE. BASED UPON THIS INSPECTION AND KNOWLEDGE, BUYER IS AWARE OF
THE CONDITION OF THE LAND AND THE PROPERTY INTERESTS AND BUYER SPECIFICALLY
ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER IN
ARTICLE V, BUYER IS: (I) PURCHASING ALL OF SELLER'S RIGHT, TITLE AND INTEREST IN
AND TO THE MINERAL RIGHTS, (II) ACQUIRING ALL OF SELLER'S RIGHT, TITLE AND
INTEREST AS LANDLORD IN AND TO THE GEOTHERMAL LEASE, (III) ASSUMING ALL OF
SELLER'S OBLIGATIONS AS LANDLORD UNDER THE GEOTHERMAL LEASE AND (IV) ACCEPTING
SELLER'S GRANT OF THE EASEMENT, ALL OF THE FOREGOING BEING ON AN "AS-IS WITH ALL
FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS, INCLUDING THOSE
RELATING TO THE ENVIRONMENTAL CONDITION OF THE LAND AND THE PROPERTY INTERESTS.
BUYER FURTHER ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
OF SELLER IN ARTICLE V, BUYER IS NOT RELYING ON ANY REPRESENTATION OR
WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM SELLER AND BUYER
HEREBY WAIVES, RELEASES AND DISCHARGES FOREVER SELLER FROM ANY AND ALL PRESENT
OR FUTURE CLAIMS OR DEMANDS AND ANY AND ALL DAMAGES, LOSS, INJURY, LIABILITY,
CLAIMS OR COSTS INCLUDING FINES, PENALTIES AND JUDGMENTS, ATTORNEYS' FEES AND
COURT COSTS (COLLECTIVELY, "LOSSES"), AS TO ANY MATTERS CONCERNING THE LAND OR
THE PROPERTY INTERESTS, INCLUDING WITHOUT LIMITATION: (A) SELLER'S EXTENT OF
INTEREST IN THE LAND AND THE PROPERTY INTERESTS; (B) THE EXISTENCE AND EXTENT OF
ANY OIL, GAS OR MINERAL RESERVES; (C) THE PHYSICAL CONDITION OF THE LAND AND THE
PROPERTY INTERESTS AND ANY DEFECTS THEREOF; (D) THE PRESENCE OF ANY HAZARDOUS
SUBSTANCES, WASTES OR CONTAMINANTS IN, ON OR UNDER THE LAND; (E) THE CONDITION
OR EXISTENCE OF ANY OF THE ABOVE GROUND OR UNDERGROUND STRUCTURES OR
IMPROVEMENTS IN, ON OR UNDER THE LAND; (F) THE CONDITION OF TITLE TO THE LAND
AND THE PROPERTY INTERESTS; (G) THE COMPLIANCE OF THE LAND AND THE PROPERTY
INTERESTS WITH APPLICABLE LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
GOVERNMENTAL OR OTHER AUTHORITY WITH JURISDICTION OVER THE LAND OR THE PROPERTY
INTERESTS; AND (H) THE NATURE AND EXTENT OF ANY RIGHT-OF-WAY, EASEMENT, LEASE,
POSSESSION, LIEN, ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHER
AGREEMENTS AFFECTING THE LAND OR THE PROPERTY INTERESTS. SELLER HEREBY DISCLAIMS
ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE QUANTITY,
QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY, SAFETY, SUITABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE RELATING TO THE LAND AND THE PROPERTY
INTERESTS, SUCH WAIVER BEING ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY.
SELLER SHALL NOT BE RESPONSIBLE TO BUYER OR ITS SUCCESSORS OR ASSIGNS FOR ANY
DAMAGES RELATING TO
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THE QUANTITY, QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY, SAFETY,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE RELATING TO THE LAND OR
PROPERTY INTERESTS, OR THE CONFORMITY OF ANY SUCH LAND OR PROPERTY INTERESTS TO
BUYER'S INTENDED USES. For purposes of this Agreement, Losses shall include,
without limitation, (a) the cost of any investigation, removal, remedial or
other response action that is required by any Environmental Law, that is
required by judicial order or by order of or agreement with any governmental
authority, or that is necessary or otherwise is reasonable under the
circumstances, (b) losses for injury or death of any person, and (c) losses
arising under any Environmental Law enacted after transfer.
Section 4.2 Interest in Rail Corridor. Buyer acknowledges that one or more
other parties, including, but not limited to, various American nations, may
have, or may have claim to have, ownership rights in certain segments of certain
of Seller's rail corridors, and may claim that Buyer also must obtain rights
from it (or them) in order to occupy, or access, the Property Interests, and
that, in some cases such claims may be valid. Buyer acknowledges that Seller's
ownership interest in many of its rail corridors is a determinable fee, a
railroad right of way or a rail service easement, which shall terminate when
Seller either: (i) ceases to use those rail corridors for railroad purposes; or
(ii) uses such rail corridors for purposes found to be inconsistent with use of
the corridors for railroad purposes, and that in such circumstances, Seller's
right to convey interests in any such rail corridor, or rights under any
easement grant of any such rail corridor, may be subject to termination as of
the date the circumstances set forth in either (i) or (ii) above (unless Buyer
improves the quality of title to the rail corridor by obtaining a patent or deed
from the federal government, if appropriate, or acquiring additional property
interests from third parties).
Section 4.3 Title Binder. Buyer may obtain, at Buyer's sole cost and
expense, a Commitment for Title Insurance ("TITLE BINDER") issued by the Title
Company showing title to the Land and the Mineral Interests in Seller and
committing to issue an owner's title policy or other title policy ("TITLE
POLICY") acceptable to Buyer in the amount of the Purchase Price insuring that
Buyer owns the Property Interests, subject to all liens, claims, easements,
restrictions, covenants, mineral and royalty interests, and any other matters of
whatsoever nature, if any, affecting the Property Interests (collectively, the
"PERMITTED ENCUMBRANCES"). Seller shall have no obligation whatsoever to cure or
otherwise address any title matters or issues disclosed in the Title Binder.
Notwithstanding any provision to the contrary in this Section 4.3, Seller shall
execute and deliver to Title Company at the Closing, for recording in the
Official Records of Xxxxxxxxx County, Nevada, a reconveyance all the Property
Interests ("Reconveyance") encumbered by the lien of that certain Deed of Trust
recorded October 19, 1995 as Document No. 293039, as re-recorded November 13,
1996 as Document No. 301715 ("Deed of Trust").
Section 4.4 Information Disclaimer. Any and all information related to the
Property and provided to Buyer by Seller ("INFORMATION"), if any, shall be
delivered without any representation or warranty as to the completeness or
accuracy of the data or other information contained therein, and all such
Information is furnished to Buyer solely as a courtesy, and Seller has neither
verified the accuracy of any statements or other information therein contained,
the method used to compile such Information nor the qualifications of the
persons preparing such
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Information. The Information is provided on an AS-IS, WHERE-IS BASIS, AND BUYER
EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS OF SELLER
HEREIN, SELLER MAKES NO REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF QUANTITY,
QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE AS TO THE INFORMATION. Notwithstanding the foregoing, to the
Best of Seller's Knowledge (as hereinafter defined), none of the Information is
untrue or incorrect. Except to the extent that disclosure is, in the opinion of
Buyer's counsel, legally required, all such Information shall be held by Buyer
prior to the Closing in strict confidence, and, without Seller's prior written
consent, prior to the Closing Buyer: (i) shall not divulge to any third party
any of the Information and shall not use the Information in Buyer's business,
except in connection with the evaluation of the acquisition of the Property
Interests; (ii) shall ensure that the Information is disclosed only to such of
Buyer's officers, directors, employees, consultants, investors and lenders as
have actual need for the Information in evaluating the Property Interests; (iii)
shall act diligently to prevent any further disclosure of the Information; and
(iv) shall, if the Closing does not occur, promptly return to Seller (without
keeping copies) all Information. From and after the Closing, Seller shall keep
all Information in strict confidence and, without Buyer's prior written consent,
Seller shall not use the Information in competition with Buyer or disclose the
information to any third party, except to the extent that such disclosure is, in
the opinion of Seller's counsel, legally required.
Section 4.5 Survival. Notwithstanding anything herein to the contrary, all
of the terms and provisions of this ARTICLE IV shall survive the Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
This ARTICLE V relates solely to the Property Interests which are conveyed
and granted pursuant to this Agreement. Seller represents and warrants to Buyer,
to the Best of Seller's Knowledge and solely in connection with the Property
Interests, the following as of the Effective Date of this Agreement:
Section 5.1 Organization and Existence. Seller is duly organized, validly
existing, and in good standing under the laws of the State of Delaware. Seller
is duly qualified to transact business and is in good standing in the state of
Nevada.
Section 5.2 Power and Authority. Seller has the power and authority to
execute, deliver, and perform this Agreement and each other agreement,
instrument, or document executed or to be executed by Seller in connection with
the transactions contemplated hereby to which it is a party and to consummate
the transactions contemplated hereby and thereby. The execution, delivery, and
performance by Seller of this Agreement and each other agreement, instrument, or
document executed or to be executed by Seller in connection with the
transactions contemplated hereby to which it is a party, and the consummation by
it of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary action of Seller.
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Section 5.3 Valid and Binding Agreement. This Agreement has been duly
executed and delivered by Seller and constitutes, and each other agreement,
instrument, or document executed or to be executed by Seller in connection with
the transactions contemplated hereby to which it is a party has been, or when
executed will be, duly executed and delivered by Seller and constitutes, or when
executed and delivered will constitute, a valid and legally binding obligation
of Seller, enforceable against it in accordance with their respective terms,
except that such enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) equitable principles which may limit the availability
of certain equitable remedies (such as specific performance) in certain
instances.
Section 5.4 Non-Contravention. To the Best of Seller's Knowledge, neither
the execution, delivery, and performance by Seller of this Agreement and each
other agreement, instrument, or document executed or to be executed by Seller in
connection with the transactions contemplated hereby to which it is a party nor
the consummation by it of the transactions contemplated hereby and thereby do
and will conflict with or result in a violation of any provision of the charter,
bylaws or other governing instruments of Seller.
Section 5.5 Approvals. To the Best of Seller's Knowledge, no consent,
approval, order, or authorization of, or declaration, filing, or registration
with, any court or governmental agency or of any third party is required to be
obtained or made by Seller in connection with the execution, delivery, or
performance by Seller of this Agreement, each other agreement, instrument, or
document executed or to be executed by Seller in connection with the
transactions contemplated hereby to which it is a party or the consummation by
it of the transactions contemplated hereby and thereby.
Section 5.6 No Alienation. To the Best of Seller's Knowledge, Seller has
not sold, assigned, conveyed, or transferred or contracted (or if contracted,
such contract has been terminated) to sell, assign, convey or transfer any right
or title to, or interest in, the Property Interests, other than as set forth in
the Geothermal Lease.
Section 5.7 No Commitments. To the Best of Seller's Knowledge, Seller has
incurred no expenses, and has made no commitments to make expenditures
(including Seller has not entered into any agreements that would obligate Buyer
to make expenditures), in connection with (and no other obligations or
liabilities have been incurred which would adversely affect) the ownership or
operation of the Property Interests after the Effective Date, other than any
that Seller may be obligated to make under the Geothermal Lease.
Section 5.8 Section 1445. Seller is not a "foreign person" as defined in
Section 1445 of the Internal Revenue Code of 1986, as amended.
Section 5.9 Seller's Actual Knowledge. For purposes of this Agreement,
wherever the term "BEST OF SELLER'S Knowledge" or words of similar import are
used, it shall be deemed to mean the actual knowledge of Xxxxxx Xxxxxxxxxx, at
the Effective Date without any obligation on his part to investigate such
matter. Notwithstanding anything herein to the contrary, the representations and
warranties contained in this ARTICLE V shall survive the Closing hereunder for a
period of one (1) year only.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents to Seller, as of the Effective Date of this Agreement and
as of the Closing Date, that:
Section 6.1 Organization and Existence. Buyer's General Partners, ORNI 1
LLC and ORNI 2 LLC, are duly organized, legally existing and qualified, to the
extent qualification is necessary, to do business in the State of Nevada.
Section 6.2 Power and Authority. Buyer has full power and corporate
authority to execute, deliver, and perform this Agreement and each other
agreement, instrument, or document executed or to be executed by Buyer in
connection with the transactions contemplated hereby to which it is a party and
to consummate the transactions contemplated hereby and thereby. The execution,
delivery, and performance by Buyer of this Agreement and each other agreement,
instrument, or document executed or to be executed by Buyer in connection with
the transactions contemplated hereby to which it is a party, and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action of Buyer.
Section 6.3 Valid and Binding Agreement. This Agreement has been duly
executed and delivered by Buyer and constitutes, and each other agreement,
instrument, or document executed or to be executed by Buyer in connection with
the transactions contemplated hereby to which it is a party has been, or when
executed will be, duly executed and delivered by Buyer and constitutes, or when
executed and delivered will constitute, a valid and legally binding obligation
of Buyer, enforceable against it in accordance with their respective terms,
except that such enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (b) equitable principles which may limit the availability
of certain equitable remedies (such as specific performance) in certain
instances.
Section 6.4 Non-Contravention. The execution, delivery, and performance by
Buyer of this Agreement and each other agreement, instrument, or document
executed or to be executed by Buyer in connection with the transactions
contemplated hereby to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (a) conflict
with or result in a violation of any provision of the charter, bylaws or other
governing instruments of Buyer, (b) conflict with or result in a violation of
any provision of, or constitute (with or without the giving of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any bond, debenture, note, mortgage,
indenture, lease, contract, agreement, or other instrument or obligation to
which Buyer is a party or by which Buyer or any of its Property Interests may be
bound, (c) result in the creation or imposition of any lien or other encumbrance
upon the Property Interests of Buyer, or (d) violate any applicable law, rule or
regulation binding upon Buyer.
Section 6.5 Approvals. No consent, approval, order, or authorization of, or
declaration, filing, or registration with, any court or governmental agency or
of any third party is
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required to be obtained or made by Buyer in connection with the execution,
delivery, or performance by Buyer of this Agreement and each other agreement,
instrument, or document executed or to be executed by Buyer in connection with
the transactions contemplated hereby to which it is a party or the consummation
by it of the transactions contemplated hereby and thereby.
Section 6.6 No Pending Litigation. There are no pending suits, actions, or
other proceedings in which Buyer is a party which affect the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
ARTICLE VII
CERTAIN COVENANTS OF SELLER PENDING CLOSING
-------------------------------------------
From the Effective Date hereof until Closing:
Section 7.1 Restrictions on Certain Actions. Seller will not, without
Buyer's prior consent:
(a) expend any funds, or make any commitments to expend funds
(including entering into new agreements which would obligate Seller to
expend funds), or otherwise incur any other obligations or liabilities, in
connection with the ownership or operation of the Property Interests after
the Effective Date, other than routine expenses incurred in the normal
course of business, except in the event of an emergency requiring immediate
action to protect life or preserve the Property Interests;
(b) sell, transfer or abandon any portion of the Property Interests;
or
(c) release (or permit to terminate), or modify or reduce its rights
under the Geothermal Lease, or grant any consent or approval under or in
connection with the any of the Property Interests.
Section 7.2 Payment of Expenses. Seller will cause all expenses directly
incurred by Seller relating directly to the ownership of the Property Interests
prior to the Closing Date to be promptly paid and discharged, except for
expenses disputed in good faith and upon resolution of the dispute Seller shall
pay any expenses for which Seller is legally responsible with respect thereto.
ARTICLE VIII
CLOSING OF TRANSACTION
----------------------
Section 8.1 The Closing. The closing (herein called the "CLOSING") of the
transaction contemplated hereby shall take place in the offices of the Title
Company on or before June 30, 2004 provided, however, that Seller may extend
such date by written notice to Buyer to no later than July 6, 2004, or at such
other date as the Buyer and Seller may mutually agree upon (the date of Closing
pursuant to this Section being herein called the "CLOSING DATE"). In the event
Closing occurs in July, 2004, royalty payments due under the Geothermal Lease
will be paid to Seller only through the end of June, 2004. The Closing may take
place in person at the Title
10
Company or in escrow pursuant to escrow instructions given by each of the
parties in compliance with the terms of this Agreement.
Section 8.2 Concurrent Conditions. At the Closing, all of the following
shall occur, all of which shall be deemed concurrent conditions:
(a) Seller, at Seller's sole cost and expense, shall deliver or cause
to be delivered to Title Company, as escrow agent, for the immediate
disbursement and delivery by the Title Company as hereinafter set forth,
the following:
1. A Deed ("DEED"), in form and substance identical to that
attached hereto as EXHIBIT "B" and by this reference made a part
hereof, fully executed and acknowledged by Seller, conveying to Buyer
title to the Mineral Interests and assigning the Geothermal Lease to
Buyer, subject to the Permitted Encumbrances.
2. The Easement, in form and substance identical to that attached
hereto as EXHIBIT "D" and by this reference made a part hereof, fully
executed and acknowledged by Seller.
3. The Memorandum of Easement, ("Memorandum") in form and
substance identical to that attached as EXHIBIT "B" to EXHIBIT "D"
hereto, and by this reference made a part hereof, fully executed and
acknowledged by Seller.
4. The Assignment of Rights (as hereinafter defined), in form and
substance identical to that attached hereto as EXHIBIT "C" and by this
reference made a part hereof, fully executed by Seller and the
Qualified Intermediary (as hereinafter defined) in triplicate
originals.
5. An Affidavit ("AFFIDAVIT") that Seller is not a "foreign
person" as defined in Section 1445 of the Internal Revenue Code of
1986, as amended.
6. The Reconveyance.
7. The Settlement Statement (as hereinafter defined) prepared by
the Title Company for execution by Seller, fully executed by Seller.
8. Evidence reasonably satisfactory to Buyer and the Title
Company that Seller (and the person executing the closing documents on
behalf of Seller) has the full right, power, and authority to perform
this Agreement and complete the Closing hereunder.
(b) Buyer, at Buyer's sole cost and expense, shall deliver or cause to
be delivered to Title Company, as escrow agent, for the immediate
disbursement and delivery by the Title Company as hereinafter set forth,
the following:
1. Immediately available funds in the form of a federal wire
transfer, certified or cashier's check, or such other means of funding
acceptable to the Title Company so as to constitute readily available
funds for immediate disbursement
11
by Title Company ("READILY AVAILABLE FUNDS") in an amount equal to the
Purchase Price less the Xxxxxxx Money (which shall be applied to the
Purchase Price as hereinafter discussed) plus such additional funds as
may be necessary to pay for the costs charged to Buyer under SECTION
8.4 below and to reflect the prorations under ARTICLE IX below.
2. The Deed, fully executed and acknowledged by Buyer.
3. The Easement, fully executed and acknowledged by Buyer.
4. The Memorandum, fully executed and acknowledged by Buyer.
5. The Assignment of Rights, fully executed by Buyer in
triplicate originals.
6. The Settlement Statement prepared by the Title Company for
execution by Buyer, fully executed by Buyer.
7. Evidence reasonably satisfactory to Seller and the Title
Company that Buyer (and the person executing the closing documents on
behalf of Buyer) has the full right, power, and authority to perform
this Agreement and complete the Closing hereunder.
(c) At the Closing, Title Company shall prepare for execution by each
party a Settlement Statement ("SETTLEMENT STATEMENT(S)") which shall (i)
show the net funds due from Buyer ("NET FUNDS DUE FROM BUYER") and the net
funds due to/from Seller ("NET FUNDS DUE TO/FROM SELLER"), (ii) reflect the
funding and disbursement of cash funds necessary to close the transaction
and the application of all Xxxxxxx Money toward the Purchase Price, (iii)
reflect the payoff by Seller of any liens against the Property Interests,
and (iv) reflect the allocation of costs between the parties as provided
herein and other prorations, credits and other adjustments provided for
herein.
(d) Title Company shall issue to Buyer the Title Policy.
Section 8.3 Closing of Escrow. Upon satisfaction and delivery of all of the
matters described in SECTION 8.2 above, Title Company shall act as escrow agent
in closing the transaction hereunder and shall:
(a) Record the Deed and the Memorandum in the Deed Records of
Xxxxxxxxx County, Nevada with instructions for the recorder to return the
original executed and recorded Deed and Memorandum to Buyer.
(b) Deliver an original executed counterpart of the Assignment of
Rights to each of Seller, Buyer and Qualified Intermediary.
(c) Deliver the original Easement to Buyer with a copy to Seller.
12
(d) Execute and deliver to each respective party its respective
Settlement Statement.
(e) Deliver the original Affidavit to Buyer.
(f) Release the Xxxxxxx Money from escrow and apply the same to the
Purchase Price, and, subject to the allocation of costs and prorations as
described in SECTION 8.4 and ARTICLE IX below, release the Purchase Price
to Seller.
Section 8.4 Allocation of Closing Costs. Closing costs shall be allocated
as follows:
(a) Seller shall pay:
1. its own attorneys' fees,
2. one-half (1/2) of all real property transfer taxes,
3. one-half (1/2) of the escrow fees charged by Title Company,
and
4. one-half (1/2) of the cost to record the Deed and Easement.
(b) Buyer shall pay:
1. its own attorneys' fees,
2. one-half (1/2) of all real property transfer taxes,
3. one-half (1/2) of the escrow fees charged by the Title
Company,
4. one-half (1/2) of the cost to record the Deed and Easement,
and
5. the premium and all other costs related to or in connection
with the issuance of a Standard Title Policy, and any additional
premium or charge to obtain extended coverage or any other
endorsements or additional coverages Buyer may obtain relative to
the Owner Policy (but Seller gives no assurances that any such
endorsements or coverages are available and shall have no
responsibility with respect thereto).
ARTICLE IX
CERTAIN ACCOUNTING ADJUSTMENTS
------------------------------
Section 9.1 Adjustments. Subject to the provisions of SECTION 9.2(C),
SECTION 9.3 AND SECTION 9.4 below, appropriate adjustments shall be made between
Buyer and Seller so that (a) all expenses which are incurred in connection with
the Property Interests after the Closing Date will be borne by Buyer, and all
rent, royalties and other proceeds that the landlord is entitled to receive
after the Closing Date under the Geothermal Lease or otherwise in connection
with the Land after the Closing Date will be received by Buyer, and (b) all
expenses which are incurred in connection with the Property Interests before the
Closing Date will be borne by Seller and all
13
rent, royalties and other proceeds that the landlord is entitled to receive
before the Closing Date under the Geothermal Lease or otherwise in connection
with the Land will be received by Seller. It is agreed that, in making such
adjustments (i) ad valorem taxes assessed with respect to a period which the
Closing Date splits shall be prorated based on the number of days in such period
which fall on each side of the Closing Date (with the day on which the Closing
Date falls being counted in the period after the Closing Date), and (ii) no
consideration shall be given to the local, state or federal income tax
liabilities of any party.
Section 9.2 Closing and Post-Closing Accounting Settlements.
(a) At or before Closing, the parties shall determine, based upon the
best information reasonably available to them, the amount of the
adjustments provided for in SECTION 9.1. If the amount of adjustments so
determined which would result in a credit to Buyer exceed the amount of
adjustments so determined which would result in a credit to Seller, Buyer
shall receive a credit, for the amount of such excess, against the Purchase
Price to be paid at Closing, and, if the converse is true, Buyer shall pay
to Seller, at Closing (in addition to amounts otherwise then owed), the
amount of such excess in Readily Available Funds.
(b) On or before 90 days after Closing, Buyer and Seller shall review
any additional information which may then be available pertaining to the
adjustments provided for in SECTION 9.1, shall determine if any additional
adjustments (whether the same be made to account for expenses or revenues
not considered in making the adjustments made at Closing, or to correct
errors made in such adjustments) should be made beyond those made at
Closing, and shall make any such adjustments by appropriate payments from
Seller to Buyer or from Buyer to Seller.
(c) If Buyer discovers any rents, royalties or other proceeds to which
Seller is entitled in connection with the Property Interest with respect to
any period prior to the Closing Date but which Seller has not previously
billed or received, Buyer and Seller shall each receive one-half (1/2) of
such rents, royalties or other proceeds.
Section 9.3 Sales Taxes. No sales, transfer or similar tax will be
collected at Closing from Buyer in connection with this transaction. If,
however, this transaction is later deemed to be subject to sales, transfer or
similar tax, at any time, for any reason, Seller and Buyer shall each pay
one-half of such sales, transfer or similar tax levied on or otherwise in
connection with the transaction Closed hereunder. If one party pays such sales,
transfer or similar tax in full, the other party agrees upon notice of such
payment to promptly reimburse the paying party for its one-half share of such
tax.
Section 9.4 Ad Valorem Taxes on Land. From and after Closing, Buyer agrees
to assume and be solely responsible for payment of all ad valorem and similar
taxes and assessments affecting the Land and the Property Interests. Buyer
covenants and agrees to pay such amounts to the appropriate taxing authorities
on or before delinquency thereof and shall indemnify and hold Seller harmless
from and against any and all such taxes and subsequent assessments and all
interest and penalties thereon. Notwithstanding anything herein to the contrary,
the terms and provisions of this SECTION 9.4 shall survive the Closing.
14
ARTICLE X
TAX-DEFERRED EXCHANGE
---------------------
Section 10.1 Tax-Deferred Exchange. Seller reserves the right to assign its
rights, but not its obligations, under this Agreement to Apex Property & Track
Exchange, Inc. ("APEX"), a qualified intermediary ("QUALIFIED INTERMEDIARY")
within the meaning of Section 1031 of the Internal Revenue Code of 1986, as
amended (the "CODE"), for the purpose of completing a tax-deferred exchange
under the provisions of Code Section 1031 and the regulations promulgated
thereunder ("TAX-DEFERRED EXCHANGE"). Seller shall bear all expenses associated
with the use of the Qualified Intermediary or necessary to qualify this
transaction as a Tax-Deferred Exchange, and, except as otherwise provided
herein, shall protect, reimburse, indemnify and hold harmless Buyer from and
against any and all reasonable and necessary additional costs, expenses,
including attorneys' fees and liabilities which Buyer may incur as a result of
Seller's use of the Qualified Intermediary or the qualification of this
transaction as a Tax-Deferred Exchange pursuant to Section 1031. Buyer shall
cooperate with Seller with respect to this Tax-Deferred Exchange, and upon
Seller's request, shall execute such documents as may be required to effect this
Tax-Deferred Exchange, including without limitation the Assignment of Rights
Under Contract ("ASSIGNMENT OF RIGHTS") attached hereto as EXHIBIT "C".
ARTICLE XI
CASUALTY LOSS
-------------
Section 11.1 Casualty Loss. In the event any fire, casualty or catastrophic
loss materially and adversely affects the Property Interests or the revenue
stream from the Geothermal Lease after the Effective Date but prior to Closing,
Buyer may terminate this Agreement and the parties shall have no further
obligations to one another hereunder other than the obligations under SECTIONS
12.4, 15.4 and ARTICLE XIV, which will survive such termination.
ARTICLE XII
TERMINATION, DEFAULT AND REMEDIES
---------------------------------
Section 12.1 Seller's Rights and Remedies. If Buyer fails or refuses to
consummate the purchase of the Property Interests pursuant to this Agreement at
the Closing, or fails to perform any of Buyer's other obligations hereunder
either prior to or at the Closing for any reason other than termination of this
Agreement by Buyer pursuant to a right to so terminate expressly set forth in
this Agreement or Seller's failure to perform Seller's obligations under this
Agreement, and if Buyer fails to cure any such default within five (5) days
after written notice thereof from Seller (provided, however, there shall be no
notice and opportunity to cure for Buyer's failure to close the transaction on
the Closing Date so as to extend the Closing Date), then Seller shall have, as
Seller's sole and exclusive remedy, the right to either (i) enforce specific
performance of Buyer's obligations under this Agreement; or (ii) terminate this
Agreement by giving written notice thereof to Buyer prior to or at the Closing,
whereupon neither party hereto shall have any further rights or obligations
hereunder, other than the obligations under SECTIONS 12.4, 15.4 and ARTICLE XIV,
and Title Company shall deliver the Xxxxxxx Money to Seller as liquidated
damages, free of any claims by Buyer or any other person with respect thereto.
It is agreed that the Xxxxxxx Money to which the Seller is entitled under a
termination under item (ii) above is a reasonable forecast of just compensation
for the harm that would be caused by Buyer's breach,
15
and that the harm that would be caused by such breach is one that is incapable
or very difficult of accurate estimation. Notwithstanding the forgoing, Seller
may pursue all rights and remedies available at law or in equity against Buyer
with respect to any Right of Entry Agreement executed by Buyer or any closing
document delivered in connection with this Agreement.
Section 12.2 Buyer's Rights and Remedies. If Seller fails or refuses to
consummate the sale of the Property Interests pursuant to this Agreement at the
Closing, or fails to perform any of Seller's other obligations hereunder either
prior to or at the Closing for any reason other than the termination of this
Agreement by Seller pursuant to a right to so terminate expressly set forth in
this Agreement or Buyer's failure to perform Buyer's obligations under this
Agreement, and if Seller does not cure such failure to perform within five (5)
days after written notice of such failure from Buyer to Seller (provided,
however, there shall be no notice and opportunity to cure for Seller's failure
to close the transaction on the Closing Date so as to extend the Closing Date),
then Buyer, as Buyer's sole and exclusive remedy, shall have the right to either
(i) enforce specific performance of Seller's obligations under this Agreement or
(ii) terminate this Agreement by giving written notice thereof to Seller prior
to or at the Closing whereupon neither party hereto shall have any further
rights or obligations hereunder, other than the obligations under SECTIONS 12.4,
15.4 AND ARTICLE XIV, and Title Company shall deliver the Xxxxxxx Money to
Buyer, free of any claims by Seller or any other person with respect thereto. In
no event shall Buyer have any claim against Seller for damages in the event of
such termination.
Section 12.3 Specific Performance. In those instances in which this
Agreement provides that a party is entitled to specific performance, it is
agreed that the other party waives all defenses to specific performance in such
instances and that all requirements, under legal rules and principles, to the
right to pursue specific performance for a breach shall have been satisfied,
including without limitation any requirement that: (1) this Agreement is a valid
and binding agreement which is definite and certain in its terms, (2) this
Agreement is free from unfairness, fraud or overreaching and is enforceable
without injustice, (3) no adequate remedy at law exists for such breach, and (4)
enforcement by specific performance will not be inequitable, oppressive or
unconscionable.
Section 12.4 Disbursement of Xxxxxxx Money. In the event either Seller or
Buyer becomes entitled to the Xxxxxxx Money (or portion thereof) upon
cancellation of this Agreement in accordance with its terms, Buyer and Seller
covenant and agree to deliver a letter of instruction to the Title Company
directing disbursement of the Xxxxxxx Money (or portion thereof) to the party
entitled thereto.
ARTICLE XIII
NOTICES
-------
Section 13.1 Notices. All notices and other communications required under
this Agreement shall (unless otherwise specifically provided herein) be in
writing and be delivered personally, by recognized commercial courier or
delivery service (which provides a receipt), by telecopier (with receipt
acknowledged), or by registered or certified mail (postage prepaid), at the
following addresses:
16
If to Seller: The Burlington Northern and Santa Fe Railway Company
0000 Xxx Xxxx Xx.
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
With a copy to: The Burlington Northern and Santa Fe Railway Company
0000 Xxx Xxxx Xx
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxx
Fax No.: (000) 000-0000
If to Buyer: Xxxxx Power Partners
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention:Xxxxxxx Xxxxxx
Fax No.: (000) 000-0000
With a copy to: Xxxxxx Xxxxxx & Xxxxxxx
00 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
Fax No.: (000) 000-0000
and shall be considered delivered on the date of receipt. Either Buyer or Seller
may specify as its proper address any other post office address within the
continental limits of the United States by giving notice to the other party, in
the manner provided in this ARTICLE XIII, at least ten (10) days prior to the
effective date of such change of address.
ARTICLE XIV
COMMISSIONS
-----------
Section 14.1 Commissions.
(a) Seller agrees to indemnify and hold harmless Buyer from and
against any and all claims, obligations, actions, liabilities, losses,
damages, costs or expenses (including court costs and attorneys fees) of
any kind or character arising out of or resulting from any agreement,
arrangement or understanding alleged to have been made by, or on behalf of,
Seller with any broker or finder in connection with this Agreement or the
transaction contemplated hereby.
(b) Buyer agrees to indemnify and hold harmless Seller from and
against any and all claims, obligations, actions, liabilities, losses,
damages, costs or expenses (including court costs and attorneys fees) of
any kind or character arising out of or resulting from any agreement,
arrangement or understanding alleged to have been made
17
by, or on behalf of, Buyer with any broker or finder in connection with
this Agreement or the transaction contemplated hereby.
ARTICLE XV
MISCELLANEOUS MATTERS
---------------------
Section 15.1 Survival of Provisions. All representations and warranties of
Seller or Buyer contained in this Agreement, any Exhibit or in any certificate
delivered at the Closing shall survive the Closing for a period of one (1) year
from the Closing Date.
Section 15.2 Further Assurances. In order to effectuate and provide Buyer
with the benefits of the transactions contemplated hereby, after the Closing,
Seller and Buyer shall execute and deliver, and shall otherwise cause to be
executed and delivered, from time to time, such further instruments, notices and
other documents, and do such other and further acts and things, as may be
reasonably necessary to more fully and effectively assign, transfer and convey
the Property Interests to Buyer and to effectuate Seller's Tax-Deferred
Exchange.
Section 15.3 Binding Effect; Successors and Assigns. The Agreement shall be
binding on the parties hereto and their respective successors and permitted
assigns. Neither party shall have the right to assign its rights under this
Agreement, without the prior written consent of the other party first having
been obtained. Notwithstanding anything contained in this SECTION 15.3 or
elsewhere in this Agreement to the contrary, however, this Agreement may be
assigned by either party to an Affiliate of such party without the other party's
consent; provided, however, that any assignment of this Agreement by Buyer to an
Affiliate shall not release Buyer from its obligations to Seller under this
Agreement. For purposes of this Agreement, an "Affiliate" is any person or
entity (1) that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, a party, or (2)
that is or becomes a parent, successor or affiliate of a party, or is a
successor of a party by reason of merger, consolidation or reorganization.
Section 15.4 Expenses. Each party shall bear and pay all attorney's fees
and expenses incurred by it in connection with the transaction contemplated by
this Agreement. Except as otherwise set forth in this Agreement, each party
shall bear one-half (1/2) of all costs and expenses, including escrow closing
fees, incurred in connection with the Closing and the recordation of the Deed
and the Easement or otherwise to evidence the transactions consummated
hereunder.
Section 15.5 Entire Agreement - Time of the Essence. This Agreement
contains the entire understanding of the parties hereto with respect to subject
matter hereof and supersedes all prior agreements, understandings, negotiations,
and discussions among the parties with respect to such subject matter. Time is
of the essence in this Agreement.
Section 15.6 Public Statements. Seller and Buyer shall consult with each
other with regard to all publicity and other releases at or prior to Closing
concerning this Agreement and the transactions contemplated hereby and, except
as required by applicable law or the applicable rules or regulations of any
governmental body or stock exchange, neither party shall issue any publicity or
other release without the prior consent of the other party.
18
Section 15.7 Injunctive Relief. The parties hereto acknowledge and agree
that irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Except to the extent otherwise provided in the other
provisions of this Agreement, it is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Agreement, and shall be entitled to enforce specifically the provisions
of this Agreement, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the parties may be
entitled under this Agreement or at law or in equity.
Section 15.8 Amendments. This Agreement may be amended, modified,
supplemented, restated or discharged (and provisions hereof may be waived) only
by an instrument in writing signed by the party against whom enforcement of the
amendment, modification, supplement, restatement or discharge (or waiver) is
sought.
Section 15.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Texas applicable
to a contract executed and performed in such State, without giving effect to
conflicts of laws principles requiring the application of the law of another
State.
Section 15.10 Multiple Counterparts; Fax. This instrument may be executed
in a number of identical counterparts, each of which for all purposes is to be
deemed an original, and all of which constitute collectively, one instrument. It
is not necessary that each party hereto execute the same counterpart so long as
identical counterparts are executed by each such party hereto. This instrument
may be validly executed and delivered by facsimile or other electronic
transmission.
Section 15.11 Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future Laws, such
provision will be fully severable and this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision is not a part
hereof, and the remaining provisions hereof will remain in full force and
effect. In lieu of any illegal, invalid or unenforceable provision herein, there
will be added automatically as a part of this Agreement a provision as similar
in its terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
Section 15.12 Construction. The parties acknowledge that each party and, if
it so chooses, its counsel have reviewed and revised this Agreement and that the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party must not be employed in the interpretation
of this Agreement or any amendments or exhibits hereto.
Section 15.13 Headings. All section headings herein are for convenience of
reference only and are not part of this Agreement, and no construction or
inference shall be derived therefrom. Wherever required by the context, any
gender includes the other gender, the singular includes the plural, and the
plural includes the singular. Each defined term herein may be used in its
singular or plural form whether or not so defined.
Section 15.14 Attorney's Fees and Costs. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing
party will be
19
entitled to reasonable attorney's fees, costs, and necessary disbursements in
addition to any other relief to which it may be entitled.
Section 15.4 Business Days. If the Closing Date or the day for performance
of any act required under this Agreement falls on a Saturday, Sunday or legal
holiday, then the Closing Date or the day for such performance, as the case may
be, shall be the next following regular business day.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date set forth below each party's signature, to be effective, however,
as of the Effective Date set forth above.
SELLER:
THE BURLINGTON NORTHERN AND SANTA FE RAILWAY
COMPANY, a Delaware corporation
By: /s/ Xxxxx X. X'Xxxx
-----------------------------------------
Name: Xxxxx X. X'Xxxx
-----------------------------------------
Title: Asst. Vice President Prop. & Fac. Mgt.
-----------------------------------------
Date:
-----------------------------------------
BUYER:
XXXXX POWER PARTNERS,
A NEVADA GENERAL PARTNERSHIP
By: ORNI 1 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------
Title: Assistant Secretary
--------------------------------
Date: June 1, 2004
--------------------------------
By: ORNI 2 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
--------------------------------
Title: Assistant Secretary
--------------------------------
Date: June 1, 2004
--------------------------------
20
EXHIBIT "A"
-----------
DESCRIPTION OF PROPERTY
-----------------------
Description of Property located in Xxxxxxxxx County, Nevada:
An area of 4480 acres, more or less, consisting of:
All of Section 31-Township 23 North, Range 27 East, M.D.M.; and
All of Sections 1, 3, 11, 13, 15, and 00- Xxxxxxxx 00 Xxxxx, Xxxxx 26 East,
M.D.M.
1
EXHIBIT "B"
-----------
FORM OF DEED
------------
A PORTION OF APNS: 000-000-00;
000-000-00; 000-000-00;
000-000-00; 000-000-00;
000-000-00; 000-000-00
MAIL TAX STATEMENTS TO, AND
WHEN RECORDED, RETURN TO:
Xxxxx Power Partners
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
DEED
For and in consideration of ten dollars ($10.00) and other good and
valuable consideration in hand paid, the receipt and sufficiency of which are
hereby acknowledged, THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a
Delaware corporation, and/or its assigns ("GRANTOR"), does hereby convey,
assign, transfer, set over and deliver to XXXXX POWER PARTNERS, a Nevada general
partnership ("GRANTEE"), with an address of 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxx
00000, and its successors and assigns, all of Grantor's right, title and
interest in and to:
(i) the Minerals in, on and under the land ("LAND") located as further
described on EXHIBIT "A" attached hereto (the "MINERAL INTERESTS"),
and
(ii) the lease described on EXHIBIT "A" attached hereto (the "GEOTHERMAL
LEASE"),
all of the foregoing being referred to herein as the "PROPERTY"; BUT
SPECIFICALLY EXCLUDING ANY AND ALL SURFACE RIGHTS IN AND TO THE LAND, WHICH
SURFACE RIGHTS ARE RESERVED AND RETAINED BY GRANTOR, provided however, if that
certain Easement of even date herewith ever terminates then Grantee shall have
no right to use the surface to explore for and produce the Minerals as the
dominant estate.
For purposes of this Deed, "MINERALS" shall include, without limitation,
(i) geothermal energy and products of geothermal energy including but not
limited to hot brine, hot water, hot rock, indigenous steam and other gases, hot
water and hot brines resulting from water, gas, or other fluids (whether liquid
or gaseous), artificially introduced into geothermal energy and any substances
which are found in solution or in association with such steam, hot water or hot
brines; (ii) all substances defined as "oil", "gas" and "minerals" under
applicable laws; and (iii) all other substances that may be classified as
metalliferous elements or nonmetalliferous elements, together with all compounds
and byproducts thereto; specifically including, but not limited to, oil, gas and
other hydrocarbons; carbon dioxide, helium, coalbed methane and other gases,
whether or not produced in association with oil and gas; coal, potassium, peat
and lignite, regardless of the method used to mine and remove the same and
regardless of the effect of such mining and removal upon the surface estate,
including the destruction thereof; uranium, thorium or other fissionable
materials; iron ore, bauxite and other metallic ores and metallic minerals,
1
including copper, silver and gold; sulphur, whether in a solid, liquid or
gaseous state and regardless whether or not produced in association with oil and
gas; sand, gravel, clay, scoria, caliche and limestone, granite or other stone
or rock, regardless of the method used to quarry, mine or remove the same; and
salt, saltwater and brine; together with all other minerals and mineral
substances whatsoever, known and unknown, whether similar or dissimilar to those
specifically named herein, in, on and under the Land. As used herein, the terms
"HOT WATER," "STEAM" and "THERMAL ENERGY" each shall mean natural geothermal
water and/or steam, and shall also mean the natural heat of the earth and the
energy present in, resulting from or created by, or which may be extracted from
the natural heat of the earth or the heat present below the surface of the
earth, in whatever form such heat or energy occurs.
The conveyance and assignment of the Mineral Interests and Geothermal Lease
from Grantor to Grantee is subject to the following continuing covenants, to
which Grantee has indicated its acceptance by its signature below:
1. This Deed is granted and accepted without warranty of title of any kind,
express or implied but with full substitution and subrogation of Grantee, and
all persons claiming by, through and under Grantee, to the extent assignable, in
and to all covenants and warranties by Grantor's predecessors in title and with
full subrogation of all rights accruing under the statutes of limitation or
prescription under the laws of various states in which the Property is located.
It is the intent of Grantor to convey particular rights in property as
specifically described in this Deed, including all rights as to after acquired
title by Grantor, and not just a chance of title. Consequently, this instrument
is a conveyance without warranties, as provided herein, and not a quitclaim.
2. AS-IS SALE; DISCLAIMER OF WARRANTIES. GRANTEE HAS PREVIOUSLY MADE AN
INSPECTION OF THE PROPERTY AND THE LAND AND HAS KNOWLEDGE AS TO THE PAST USE AND
CONDITION OF THE PROPERTY AND THE LAND, INCLUDING THE FACT THAT THE LAND AND
CERTAIN OF THE MINERAL INTERESTS ARE SUBJECT TO THE RIGHTS OF THE GEOTHERMAL
LESSEE UNDER THE GEOTHERMAL LEASE. BASED UPON THIS INSPECTION AND KNOWLEDGE,
GRANTEE IS AWARE OF THE CONDITION OF THE LAND AND THE PROPERTY AND GRANTEE
SPECIFICALLY ACKNOWLEDGES THAT GRANTEE IS: (I) PURCHASING ALL OF GRANTOR'S
RIGHT, TITLE AND INTEREST IN AND TO THE MINERALS, (II) ACQUIRING ALL OF
GRANTOR'S RIGHT, TITLE AND INTEREST AS LANDLORD IN AND TO THE GEOTHERMAL LEASE,
AND (III) ASSUMING ALL OF GRANTOR'S OBLIGATIONS AS LANDLORD UNDER THE GEOTHERMAL
LEASE. ALL OF THE FOREGOING BEING ON AN "AS-IS WITH ALL FAULTS" BASIS WITH ANY
AND ALL PATENT AND LATENT DEFECTS, INCLUDING THOSE RELATING TO THE ENVIRONMENTAL
CONDITION OF THE LAND AND THE PROPERTY. GRANTEE FURTHER ACKNOWLEDGES THAT,
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF GRANTOR AS SELLER IN ARTICLE V
OF THE PURCHASE AGREEMENT, GRANTEE IS ACCEPTING THIS GRANT OF MINERALS "AS-IS
AND WITH ALL FAULTS". EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF GRANTOR
AS SELLER IN ARTICLE V OF THE PURCHASE AGREEMENT, GRANTEE IS NOT RELYING ON ANY
REPRESENTATION OR
2
WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM GRANTOR AND GRANTEE
HEREBY WAIVES, RELEASES AND DISCHARGES FOREVER GRANTOR FROM ANY AND ALL PRESENT
OR FUTURE CLAIMS OR DEMANDS AND ANY AND ALL DAMAGES, LOSS, INJURY, LIABILITY,
CLAIMS OR COSTS INCLUDING FINES, PENALTIES AND JUDGMENTS, ATTORNEYS' FEES AND
COURT COSTS (COLLECTIVELY, "LOSSES") AS TO ANY MATTERS CONCERNING THE LAND OR
THE PROPERTY, INCLUDING WITHOUT LIMITATION: (A) GRANTOR'S EXTENT OF INTEREST IN
THE LAND AND THE PROPERTY; (B) THE EXISTENCE AND EXTENT OF ANY OIL, GAS OR
MINERAL RESERVES; (C) THE PHYSICAL CONDITION OF THE LAND AND THE PROPERTY AND
ANY DEFECTS THEREOF; (D) THE PRESENCE OF ANY HAZARDOUS SUBSTANCES, WASTES OR
CONTAMINANTS IN, ON OR UNDER THE LAND; (E) THE CONDITION OR EXISTENCE OF ANY OF
THE ABOVE GROUND OR UNDERGROUND STRUCTURES OR IMPROVEMENTS IN, ON OR UNDER THE
LAND; (F) THE CONDITION OF TITLE TO THE LAND AND THE PROPERTY; (G) THE
COMPLIANCE OF THE LAND AND THE PROPERTY WITH APPLICABLE LAWS, RULES, ORDINANCES
OR REGULATIONS OF ANY GOVERNMENTAL OR OTHER AUTHORITY WITH JURISDICTION OVER THE
LAND OR THE PROPERTY; AND (H) THE NATURE AND EXTENT OF ANY RIGHT-OF-WAY,
EASEMENT, LEASE, POSSESSION, LIEN, ENCUMBRANCE, LICENSE, RESERVATION, CONDITION
OR OTHER AGREEMENTS AFFECTING THE LAND OR THE PROPERTY. GRANTOR HEREBY DISCLAIMS
ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE QUANTITY,
QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY, SAFETY, SUITABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE RELATING TO THE LAND AND THE PROPERTY, SUCH
WAIVER BEING ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY. GRANTOR SHALL
NOT BE RESPONSIBLE TO GRANTEE OR ITS SUCCESSORS OR ASSIGNS FOR ANY DAMAGES
RELATING TO THE QUANTITY, QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY,
SAFETY, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE RELATING TO THE LAND
OR PROPERTY, OR THE CONFORMITY OF ANY SUCH LAND OR PROPERTY TO GRANTEE'S
INTENDED USES. For purposes of this instrument, Losses shall include, without
limitation, (a) the cost of any investigation, removal, remedial or other
response action that is required by any Environmental Law (defined below), that
is required by judicial order or by order of or agreement with any governmental
authority, or that is necessary or otherwise is reasonable under the
circumstances, (b) losses for injury or death of any person, and (c) losses
arising under any Environmental Law enacted after transfer.
3. TO THE FULLEST EXTENT PERMITTED BY LAW, GRANTEE SHALL RELEASE,
INDEMNIFY, DEFEND AND HOLD HARMLESS GRANTOR AND ITS SUCCESSORS AND ASSIGNS
(COLLECTIVELY, "INDEMNITEES") FOR, FROM AND AGAINST ANY AND ALL LOSSES AND COSTS
OF INVESTIGATION, REMOVAL AND REMEDIATION AND GOVERNMENTAL OVERSIGHT COSTS
(COLLECTIVELY, "LIABILITIES") OF ANY NATURE, KIND OR DESCRIPTION OF ANY PERSON
OR ENTITY DIRECTLY OR INDIRECTLY ARISING OUT OF, RESULTING FROM OR RELATED TO
(IN WHOLE OR IN PART): (I) OPERATIONS
3
CONDUCTED ON THE PROPERTY FROM AND AFTER THE EFFECTIVE DATE INCLUDING, WITHOUT
LIMITATION, THE OBLIGATION TO PLUG AND ABANDON ANY XXXXX IN ACCORDANCE WITH ALL
APPLICABLE STATUTES AND REGULATIONS OF ANY GOVERNMENTAL AUTHORITY HAVING
JURISDICTION OVER SUCH MATTERS, (II) ANY EXACERBATION OF ANY EXISTING
ENVIRONMENTAL CONDITION OF THE PROPERTY, INCLUDING WITHOUT LIMITATION THE
PRESENCE OF ANY HAZARDOUS SUBSTANCES IN, ON OR UNDER THE PROPERTY, AND (III) ANY
ACT OR OMISSION OF GRANTEE OR GRANTEE'S CONTRACTORS, SUBCONTRACTORS, ASSIGNEES,
TENANTS, INVITEES, LICENSEES, AFFILIATES, SUBSIDIARIES OR OTHERS ENTERING THE
LAND BY OR THROUGH GRANTEE (COLLECTIVELY, "INVITEES"), EVEN IF SUCH LIABILITIES
ARISE FROM OR ARE ATTRIBUTED TO, IN WHOLE OR IN PART, ANY NEGLIGENCE OF ANY
INDEMNITEE. THE ONLY LIABILITIES WITH RESPECT TO WHICH LESSEE'S OBLIGATION TO
INDEMNIFY THE INDEMNITEES DOES NOT APPLY ARE LIABILITIES TO THE EXTENT
PROXIMATELY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AN
INDEMNITEE. This indemnity specifically includes the obligation of Grantee to
remove, close, remediate, reimburse or take other actions requested or required
by any governmental agency concerning any Hazardous Substances or contaminants
on the land or related to or affecting the property interests. Grantor's rights
hereunder are in addition to any other rights Grantor may have at law or in
equity.
4. The term "HAZARDOUS SUBSTANCE" means any hazardous, toxic, radioactive
or infectious substance, material or waste as defined, listed or regulated under
any Environmental Law, and includes without limitation petroleum oil and any of
its fractions. The term "ENVIRONMENTAL LAW" means any federal, state or local
statute, regulation, code, rule, ordinance, order, judgment, decree, injunction
or common law pertaining in any way to the protection of human health or the
environment, including without limitation, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Toxic Substances Control Act, and any similar or comparable
state or local law.
5. Upon written notice from Grantor, Grantee agrees to assume the defense
of any lawsuit or other proceeding brought against any Indemnitee by any entity,
for any claim for which Grantee has an obligation to indemnify, save and hold
harmless any Indemnitee. Grantee shall pay all costs incident to such defense,
including, but not limited to, attorneys' fees, investigators' fees, litigation
and appeal expenses, settlement payments, and amounts paid in satisfaction of
judgments. If indemnification pursuant to Section 3 is sought, Grantor shall
give written notice to Grantee of the event giving rise to the obligation to
indemnify, describing in reasonable detail the factual basis for such claim, and
shall allow Grantee to assume and conduct the defense of the claim or action
with counsel reasonably satisfactory to Grantor, and cooperate with Grantee in
the defense thereof; provided, however, that the omission to give such notice to
Grantee shall not relieve the Grantee from any liability which it may have to
the Grantor, except to the extent that Grantee is prejudiced by the failure to
give such notice. Grantor shall have the right to employ separate counsel to
represent Grantor if Grantor is advised by counsel that an actual conflict of
interest makes it advisable for Grantor to be represented by separate counsel.
4
6. Grantee agrees to assume and be solely responsible for payment of all ad
valorem and similar taxes and assessments affecting the Land and the Property
for the calendar year 2004 and for all years thereafter, and Grantee covenants
and agrees to pay such amounts to the appropriate taxing authorities on or
before delinquency thereof and shall indemnify and hold Grantor harmless from
and against any and all such taxes and subsequent assessments and all interest
and penalties thereon.
7. This Deed is executed by Grantor and accepted by Grantee subject to all
liens, claims, easements, restrictions, covenants, mineral and royalty
interests, and any other matters of whatsoever nature, if any, affecting the
Property (herein collectively called "PERMITTED ENCUMBRANCES").
8. All of the terms, provisions, covenants and agreements herein contained
shall extend to and be binding upon Grantor and Grantee, their respective
successors and assigns.
9. Grantee covenants and agrees to execute that certain Assignment of
Rights and all other documents required by Grantor so as to permit
Grantor to complete a tax-deferred exchange relative to the Property
using a "Qualified Intermediary" pursuant Section 1031 of the Internal
Revenue Code of 1986, as amended, and Treas. Reg. ss. 1.1031(k)-1(g).
10. APPLICABLE LAW. All questions concerning the interpretation or
application of provisions of this deed shall be decided according to
the substantive Laws of the State where the Land is located without
regard to conflicts of law provisions.
TO HAVE AND TO HOLD the Property together with all and singular the rights
and appurtenances thereto in anywise belonging unto Grantee, its successors and
assigns forever, subject to the Permitted Encumbrances as referenced above, but
without any warranty of title or warranty of any kind whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this Deed as of the
1st day of June, 2004.
5
GRANTOR:
THE BURLINGTON NORTHERN AND SANTA
FE RAILWAY COMPANY, a Delaware
corporation
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
GRANTEE:
XXXXX POWER PARTNERS,
A NEVADA GENERAL PARTNERSHIP
By: ORNI 1 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------
Title: Assistant Secretary
------------------------------
Date: June 1, 2004
------------------------------
By: ORNI 2 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------
Title: Assistant Secretary
------------------------------
Date: June 1, 2004
------------------------------
[Exhibits and acknowledgment pages to be attached prior to execution by Grantor
and Grantee]
6
EXHIBIT "C"
FORM OF ASSIGNMENT OF RIGHTS
----------------------------
ASSIGNMENT OF RIGHTS
THIS ASSIGNMENT OF RIGHTS ("ASSIGNMENT OF RIGHTS") is by and between THE
BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation
(hereinafter called "EXCHANGOR"), XXXXX POWER PARTNERS, a Nevada general
partnership (hereinafter called "BUYER"), and APEX PROPERTY & TRACK EXCHANGE,
INC., a Massachusetts corporation, of 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000, (hereinafter called "ASSIGNEE").
RECITALS
Whereas, Buyer and Exchangor have previously entered into an agreement
dated June 1, 2004 ("PURCHASE AGREEMENT"), pursuant to which Exchangor agreed to
sell and convey to Buyer: (i) all of Exchangor's right, title and interest in
and to those certain mineral interests ("MINERAL INTERESTS") underlying certain
land owned or controlled by Exchangor (the "LAND") further described on EXHIBIT
"A" attached hereto and incorporated herein by this reference, and (ii) certain
rights ("LANDLORD RIGHTS") and obligations of Exchangor as landlord under that
certain Geothermal Lease ("GEOTHERMAL LEASE") affecting the Land dated October
10, 1984, between Xxxxxx Geothermal, Inc. and Southern Pacific Land Company
(predecessor-in-interest to Exchangor). The Mineral Rights and Landlord Rights
are sometimes referred to herein collectively as the "RELINQUISHED PROPERTY".
Whereas, under the Purchase Agreement, Exchangor agreed to assign the
rights to the Purchase Agreement, but not the obligations and warranties, over
to Assignee, as it pertains to the Relinquished Property.
AGREEMENTS
Now, therefore, for the premises and mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Exchangor hereby assigns to Assignee all of the Exchangor's rights under
the Purchase Agreement, as contemplated by Treasury Regulations Section 1.1031
(k)-1(g)(4)(v). Exchangor's obligations and warranties under the Purchase
Agreement remain with Exchangor, including the authority to issue a Deed
transferring legal title to the Relinquished Property over to Buyer.
2. Assignee previously represented, warranted and covenanted to Exchangor,
under the Master Exchange Agreement dated January 1, 1997, that it will not
transfer, assign, mortgage or hypothecate the rights that it is receiving from
the Exchangor and that Assignee shall not amend, terminate, modify, supplement
or otherwise alter any term, condition or other provision of the Purchase
Agreement. At the same time the Deed goes into effect transferring legal title
to the Buyer, rights received under this Assignment of Rights are transferred to
Exchangor.
1
3. Assignee is participating in this transaction only as a Qualified
Intermediary and that for purposes of any dispute regarding the Relinquished
Property, Exchangor and Buyer shall look solely to each other with respect to
resolving any such dispute and neither one shall look to the Assignee. This
shall be binding upon and shall inure to the respective heirs, successors and
assigns of Exchangor and Buyer.
4. This Assignment of Rights may be executed in multiple counterparts, each
of which shall, for all purposes, be deemed an original, but which together
shall constitute one and same instrument. Counterparts of this Assignment of
Rights may be exchanged via electronic facsimile machines and any electronic
facsimile of any party's signature shall be deemed to be an original signature
for all purposes; provided, however that if counterparts are so executed by
facsimile machines, then upon request of any party original signatures will be
exchanged promptly thereafter.
In Witness Whereof, the parties hereto have executed this Assignment of
Rights, to be effective as of the date on which the last party hereto signs.
EXCHANGOR:
THE BURLINGTON NORTHERN AND
SANTA FE RAILWAY COMPANY,
a Delaware corporation
By: Date:
-------------------------------------- ----------------------
Name:
-----------------------------------
Title:
-----------------------------------
ASSIGNEE:
APEX PROPERTY & TRACK EXCHANGE, INC.,
a Massachusetts corporation
By: Date:
-------------------------------------- ----------------------
Name:
-----------------------------------
Title:
-----------------------------------
2
BUYER:
XXXXX POWER PARTNERS,
A NEVADA GENERAL PARTNERSHIP
By: ORNI 1 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx Date: June 1, 2004
------------------------------- ----------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------
Title: Assistant Secretary
-------------------------------
By: ORNI 2 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx Date: June 1, 2004
------------------------------- ----------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------
Title: Assistant Secretary
-------------------------------
[Exhibit "A" (Description of Relinquished Property) to be attached prior to
execution by Exchangor, Buyer and Assignee]
3
EXHIBIT "D"
FORM OF EASEMENT
----------------
EASEMENT AGREEMENT
This Easement AGREEMENT ("EASEMENT") is made and entered into as of the 1st
day of June, 2004 ("EFFECTIVE DATE"), by and between THE BURLINGTON NORTHERN AND
SANTA FE RAILWAY COMPANY, a Delaware corporation ("GRANTOR"), and XXXXX POWER
PARTNERS, a Nevada general partnership ("GRANTEE").
RECITALS:
---------
A. Pursuant to that certain Purchase and Sale Agreement dated June 1, 2004
("PURCHASE AGREEMENT"), Grantor has contemporaneously executed and delivered a
Deed conveying all of Grantor's right, title and interest in and to minerals in,
on and under the land (the "LAND") located at or near Xxxxx'x Hot Springs,
Xxxxxxxxx County, Nevada described on EXHIBIT "A" attached hereto and
incorporated herein by this reference.
B. Certain types of mineral rights are leased to Xxxxx Power Partners, a
Nevada general partnership (the "GEOTHERMAL LESSEE"), under that certain
Geothermal Lease ("GEOTHERMAL LEASE") dated October 10, 1984, between Xxxxxx
Geothermal, Inc. (predecessor-in-interest to Xxxxx Power Partners) and Southern
Pacific Land Company (predecessor-in-interest to Grantor). Pursuant to the
Purchase Agreement, Grantor agreed to assign, and Grantee agreed to accept, all
of Grantor's right, title and interest under the Geothermal Lease. Additionally,
Grantee agreed to assume all obligations of Grantor under the Geothermal Lease.
C. In order for Grantee to develop and use the surface of the land for
developing and producing its right, title and interest in and to the Minerals
and its rights under the Geothermal Lease, and to also permit it to fulfill its
obligations under the Geothermal Lease, Grantee desires to obtain, and Grantor
desires to grant, a perpetual and exclusive easement to, from and across the
Land, subject to the terms and conditions set forth herein below.
NOW, THEREFORE, for and in consideration of the premises and mutual
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
AGREEMENTS:
-----------
SECTION 1 GRANTING OF EASEMENT.
--------------------
1.1 Grant. Grantor does hereby grant unto Grantee an exclusive and
perpetual easement ("EASEMENT") over the Land (the Land is also herein referred
to as the "EASEMENT AREA"), as further described on EXHIBIT "A" attached hereto
and incorporated herein by this reference, for the purposes of developing and
using the Land, without limitation, for the purpose of exploring, prospecting,
drilling, producing, treating, extracting, processing, removing, utilizing,
marketing, injecting, reinjecting, storing, taking, removing, leasing,
transporting and disposing of Minerals (as hereinafter defined) (collectively,
the "EASEMENT PURPOSES"), including without limitation the following:
(a) the right to use all or any portion of the surface and the
subsurface of the Easement Area for the storage of Minerals, water and
drilling fluids; and
(b) the right to use all or any portion of the surface and the
subsurface of the Easement Area for the drilling and operating of xxxxx and
the construction and maintenance of buildings, structures and equipment
including but not limited to those necessary for the generation and
transmission of electric power, mineral processing, waste water disposal,
pipelines, transmission lines, power lines, ponds and roads (collectively,
the "IMPROVEMENTS"), in connection with the operations hereunder;
but excluding any right to use the Property for railroad purposes.
1.2 Habendum Clause. To Have and To Hold the Easement together with all and
singular the rights and appurtenances thereto in anywise belonging unto Grantee,
its successors and assigns forever.
1.3 Minerals.
(a) For purposes of this Easement, "MINERALS" shall include, without
limitation, (i) geothermal energy and products of geothermal energy
including but not limited to hot brine, hot water, hot rock, indigenous
steam and other gases, hot water and hot brines resulting from water, gas,
or other fluids (whether liquid or gaseous), artificially introduced into
geothermal energy and any substances which are found in solution or in
association with such steam, hot water or hot brines; (ii) all substances
defined as "oil", "gas" and "minerals" under applicable Laws (as
hereinafter defined); and (iii) all other substances that may be classified
as metalliferous elements or nonmetalliferous elements, together with all
compounds and byproducts thereof; specifically including, but not limited
to, oil, gas and other hydrocarbons; carbon dioxide, helium, coalbed
methane and other gases, whether or not produced in association with oil
and gas; coal, potassium, peat and lignite, regardless of the method used
to mine and remove the same and regardless of the effect of such mining and
removal upon the surface estate, including the destruction thereof;
uranium, thorium or other fissionable materials; iron ore, bauxite and
other metallic ores and metallic minerals, including copper, silver and
gold; sulphur, whether in a solid, liquid or gaseous state and regardless
whether or not produced in association with oil and gas; sand, gravel,
clay, scoria, caliche and limestone, granite or other stone or rock,
regardless of the method used to quarry, mine or remove the same; and salt,
saltwater and brine; together with all other minerals and mineral
substances whatsoever, known and unknown, whether similar or dissimilar to
those specifically named herein, in, on and under the Easement Area.
(b) As used herein, the terms "HOT WATER," "STEAM" and "THERMAL
ENERGY" each shall mean natural geothermal water and/or steam, and shall
also mean the natural heat of the earth and the energy present in,
resulting from or created by, or which may be extracted from, the natural
heat of the earth or the heat present below the surface of the earth, in
whatever form such heat or energy occurs.
1.4 Easement Encumbrances. The Easement is granted subject to the rights of
the Geothermal Lessee under the Geothermal Lease and any and all restrictions,
covenants, easements and other encumbrances of whatsoever nature, if any,
relating to the Easement Area, and to all zoning laws, regulations, and
ordinances of municipal and other governmental authorities, if any.
SECTION 2 AS-IS SALE; DISCLAIMER OF WARRANTIES. GRANTEE HAS PREVIOUSLY MADE AN
INSPECTION OF THE LAND AND HAS KNOWLEDGE OR WILL OBTAIN KNOWLEDGE AS TO THE PAST
USE AND CONDITION OF THE LAND, INCLUDING THE FACT THAT THE LAND IS SUBJECT TO
THE RIGHTS OF THE GEOTHERMAL LESSEE UNDER THE GEOTHERMAL LEASE. BASED UPON SUCH
INSPECTION AND KNOWLEDGE, GRANTEE IS AWARE OF THE CONDITION OF THE LAND AND
GRANTEE SPECIFICALLY ACKNOWLEDGES THAT GRANTEE IS ACCEPTING GRANTOR'S GRANT OF
THE EASEMENT, ON AN "AS-IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND
LATENT DEFECTS, INCLUDING THOSE RELATING TO THE ENVIRONMENTAL CONDITION OF THE
LAND AND THE MINERALS. GRANTEE FURTHER ACKNOWLEDGES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF GRANTOR AS SELLER IN ARTICLE V OF THE PURCHASE
AGREEMENT, GRANTEE IS NOT RELYING ON ANY REPRESENTATION OR WARRANTIES, EXPRESS
OR IMPLIED, OF ANY KIND WHATSOEVER FROM GRANTOR AND GRANTEE HEREBY WAIVES,
RELEASES AND DISCHARGES FOREVER GRANTOR FROM ANY AND ALL PRESENT OR FUTURE
CLAIMS OR DEMANDS AND ANY AND ALL DAMAGES, LOSS, INJURY, LIABILITY, CLAIMS OR
COSTS INCLUDING FINES, PENALTIES AND JUDGMENTS, ATTORNEYS' FEES AND COURT COSTS
(COLLECTIVELY, "LOSSES") AS TO ANY MATTERS CONCERNING THE LAND OR THE PROPERTY,
INCLUDING WITHOUT LIMITATION: (A) GRANTOR'S EXTENT OF INTEREST IN THE LAND AND
THE PROPERTY; (B) THE EXISTENCE AND EXTENT OF ANY OIL, GAS OR MINERAL RESERVES;
(C) THE PHYSICAL CONDITION OF THE LAND AND THE PROPERTY AND ANY DEFECTS THEREOF;
(D) THE PRESENCE OF ANY HAZARDOUS SUBSTANCES, WASTES OR CONTAMINANTS IN, ON OR
UNDER THE LAND; (E) THE CONDITION OR EXISTENCE OF ANY OF THE ABOVE GROUND OR
UNDERGROUND STRUCTURES OR IMPROVEMENTS IN, ON OR UNDER THE LAND; (F) THE
CONDITION OF TITLE TO THE LAND AND THE PROPERTY; (G) THE COMPLIANCE OF THE LAND
AND THE PROPERTY WITH APPLICABLE LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
GOVERNMENTAL OR OTHER AUTHORITY WITH JURISDICTION OVER THE LAND OR THE PROPERTY;
AND (H) THE NATURE AND EXTENT OF ANY RIGHT-OF-WAY, EASEMENT, LEASE, POSSESSION,
LIEN, ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHER AGREEMENTS AFFECTING
THE LAND OR THE PROPERTY. GRANTOR HEREBY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, WHETHER EXPRESS OR IMPLIED, AS TO THE QUANTITY, QUALITY, CONDITION,
HABITABILITY, MERCHANTABILITY, SAFETY, SUITABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE RELATING TO THE LAND AND THE PROPERTY, SUCH WAIVER BEING ABSOLUTE,
COMPLETE, TOTAL AND UNLIMITED IN ANY WAY. GRANTOR SHALL NOT BE
RESPONSIBLE TO GRANTEE OR ITS SUCCESSORS OR ASSIGNS FOR ANY DAMAGES RELATING TO
THE QUANTITY, QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY, SAFETY,
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE RELATING TO THE LAND OR
PROPERTY, OR THE CONFORMITY OF ANY SUCH LAND OR PROPERTY TO GRANTEE'S INTENDED
USES. For purposes of this instrument, Losses shall include, without limitation,
(a) the cost of any investigation, removal, remedial or other response action
that is required by any Environmental Law (defined below), that is required by
judicial order or by order of or agreement with any governmental authority, or
that is necessary or otherwise is reasonable under the circumstances, (b) losses
for injury or death of any person, and (c) losses arising under any
Environmental Law enacted after transfer.
This Easement Agreement is executed by Grantor and accepted by Grantee
subject to all liens, claims, easements, restrictions, covenants, mineral and
royalty interests, and any other matters of whatsoever nature, if any, affecting
the Easement Area (herein collectively called "PERMITTED ENCUMBRANCES").
SECTION 3 INDEMNITY. TO THE FULLEST EXTENT PERMITTED BY LAW, GRANTEE SHALL
RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS GRANTOR AND ITS SUCCESSORS AND
ASSIGNS (COLLECTIVELY, "INDEMNITEES") FOR, FROM AND AGAINST ANY AND ALL LOSSES
AND COSTS OF INVESTIGATION, REMOVAL AND REMEDIATION AND GOVERNMENTAL OVERSIGHT
COSTS (COLLECTIVELY, "LIABILITIES") OF ANY NATURE, KIND OR DESCRIPTION OF ANY
PERSON OR ENTITY DIRECTLY OR INDIRECTLY ARISING OUT OF, RESULTING FROM OR
RELATED TO (IN WHOLE OR IN PART): (I) OPERATIONS CONDUCTED ON THE PROPERTY FROM
AND AFTER THE EFFECTIVE DATE INCLUDING, WITHOUT LIMITATION, THE OBLIGATION TO
PLUG AND ABANDON ANY XXXXX IN ACCORDANCE WITH ALL APPLICABLE STATUTES AND
REGULATIONS OF ANY GOVERNMENTAL AUTHORITY HAVING JURISDICTION OVER SUCH MATTERS,
(II) ANY EXACERBATION OF ANY EXISTING ENVIRONMENTAL CONDITION OF THE PROPERTY,
INCLUDING WITHOUT LIMITATION THE PRESENCE OF ANY HAZARDOUS SUBSTANCES IN, ON OR
UNDER THE PROPERTY, AND (III) ANY ACT OR OMISSION OF GRANTEE OR GRANTEE'S
INVITEES (DEFINED BELOW), EVEN IF SUCH LIABILITIES ARISE FROM OR ARE ATTRIBUTED
TO, IN WHOLE OR IN PART, ANY NEGLIGENCE OF ANY INDEMNITEE. THE ONLY LIABILITIES
WITH RESPECT TO WHICH LESSEE'S OBLIGATION TO INDEMNIFY THE INDEMNITEES DOES NOT
APPLY ARE LIABILITIES TO THE EXTENT PROXIMATELY CAUSED BY THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF AN INDEMNITEE. This indemnity specifically includes the
obligation of Grantee to remove, close, remediate, reimburse or take other
actions requested or required by any governmental agency concerning any
hazardous substances or contaminants on the land or related to or affecting the
property interests. Grantor's rights hereunder are in addition to any other
rights Grantor may have at law or in equity.
The term "HAZARDOUS SUBSTANCE" means any hazardous, toxic, radioactive or
infectious substance, material or waste as defined, listed or regulated under
any Environmental Law, and
includes without limitation petroleum oil and any of its fractions. The term
"ENVIRONMENTAL LAW" means any federal, state or local statute, regulation, code,
rule, ordinance, order, judgment, decree, injunction or common law pertaining in
any way to the protection of human health or the environment, including without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Toxic Substances
Control Act, and any similar or comparable state or local law.
Upon written notice from Grantor, Grantee agrees to assume the defense of
any lawsuit or other proceeding brought against any Indemnitee by any entity,
for any claim for which Grantee has an obligation to indemnify, save and hold
harmless any Indemnitee. Grantee shall pay all costs incident to such defense,
including, but not limited to, attorneys' fees, investigators' fees, litigation
and appeal expenses, settlement payments, and amounts paid in satisfaction of
judgments. If indemnification pursuant to Section 3 is sought, Grantor shall
give written notice to Grantee of the event giving rise to the obligation to
indemnify, describing in reasonable detail the factual basis for such claim, and
shall allow Grantee to assume and conduct the defense of the claim or action
with counsel reasonably satisfactory to Grantor, and cooperate with Grantee in
the defense thereof; provided, however, that the omission to give such notice to
Grantee shall not relieve the Grantee from any liability which it may have to
the Grantor, except to the extent that Grantee is prejudiced by the failure to
give such notice. Grantor shall have the right to employ separate counsel to
represent Grantor if Grantor is advised by counsel that an actual conflict of
interest makes it advisable for Grantor to be represented by separate counsel.
SECTION 4 COMPLIANCE WITH LAWS AND SAFETY RULES. In Grantee's use of the Land
for Easement Purposes, Grantee shall comply, and shall cause its contractors,
subcontractors, assignees, tenants, invitees, licensees, affiliates,
subsidiaries or others entering the Easement Area by or through Grantee
(collectively, "INVITEES") performing activities on the Easement Area or
entering the Easement Area to perform such activities in compliance with all
applicable federal, state and local laws, regulations, ordinances, restrictions,
covenants and court or administrative decisions and orders (collectively,
"LAWS").
SECTION 5 EMERGENCY OR SAFETY HAZARD. In the event that any condition on or
resulting from the Easement Area presents an emergency or safety hazard, Grantee
or Grantee's Invitees shall immediately remedy such condition.
SECTION 6 INSURANCE. Grantee and/or its successors and assigns, as applicable,
shall, at their sole cost and expense, procure and maintain during the life of
this Easement the following insurance coverage:
Comprehensive general liability insurance, with contractual liability
endorsement insuring the indemnity thereinafter set forth, for the mutual
benefit of Grantor and Grantee against claims for personal injury or death or
property damage in or about the Easement with such limits as may reasonably
requested by Grantor, but no less than combined single limits of Five Million
Dollars ($5,000,000) per occurrence and in annual aggregate in the event of
bodily injury or death of any number of persons in any one accident, and
including broad form property damage coverage. All such insurance shall be
primary insurance, and the policies shall provide that any right of subrogation
against Grantor is waived.
B. Business Automobile Insurance. This insurance shall contain a combined
single limit of at least $1,000,000 per occurrence and in annual aggregate, and
include coverage for, but not limited to the following:
o Any and all vehicles owned, used or hired
o Bodily injury and property damage
B. Grantee shall also maintain worker's compensation insurance covering all
persons employed by it in the conduct of its business on or within the Easement.
All policy(ies) required above (excluding Workers Compensation) shall
include a severability of interest endorsement and shall name Railway as an
additional insured with respect to work performed under this agreement.
Severability of interest and naming Railway as additional insureds shall be
indicated on the certificate of insurance.Provided Grantee is Xxxxx Power
Partners, then Grantee may self insure. If this easement has been assigned so
that Grantee is no longer Xxxxx Power Partners, then Grantee shall no longer be
allowed to self-insure without the prior written consent of Railway, which will
not be unreasonably withheld or delayed. If self insurance is permitted or
consented as provided herein, any deductible, self-insured retention or other
financial responsibility for claims shall be covered directly by Grantee in lieu
of insurance. Any and all Railway liabilities that would otherwise, in
accordance with the provisions of this Agreement, be covered by Grantee's
insurance will be covered as if Grantee elected not to include a deductible,
self-insured retention, or other financial responsibility for claims.
Prior to commencing the Work, Grantee shall furnish to Railway an
acceptable certificate(s) of insurance including an original signature of the
authorized representative evidencing the required coverage, endorsements, and
amendments and referencing the contract audit/folder number if available. The
policy(ies) shall contain a provision that obligates the insurance company(ies)
issuing such policy(ies) to notify Railway in writing at least 30 days prior to
any cancellation, non-renewal, substitution or material alteration.
Any insurance policy shall be written by a reputable insurance company
acceptable to Railway or with a current Best's Guide Rating of A- and Class VII
or better, and authorized to do business in the state(s) in which the service is
to be provided.The fact that insurance (including, without limitation,
self-insurance) is obtained by Grantee shall not be deemed to release or
diminish the liability of Grantee including, without limitation, liability under
the indemnity provisions of this Easement Agreement. Damages recoverable by
Railway shall not be limited by the amount of the required insurance coverage.
For purposes of this section, Railway shall mean "Burlington Northern Santa
Fe Corporation", "The Burlington Northern and Santa Fe Railway Company" and the
subsidiaries, successors, assigns and affiliates of each.
SECTION 7 ENVIRONMENTAL.
7.1 Compliance with Environmental Laws. Grantee and its Invitees shall
comply with all federal, state and local environmental laws in its use of the
Easement Area, including, but not limited to, the Resource Conservation and
Recovery Act, as amended (RCRA), the Clean
Water Act, the Oil Pollution Act, the Hazardous Materials Transportation Act,
CERCLA (collectively referred to as the "ENVIRONMENTAL LAWS"). Neither Grantee
nor its Invitees shall maintain a treatment, storage, transfer or disposal
facility, or underground storage tank, as defined by Environmental Laws on the
Easement Area. Neither Grantee nor its Invitees shall handle, transport, release
or suffer the release of "hazardous waste" or "hazardous substances", as
"hazardous waste" and "hazardous substances" may now or in the future be defined
by any Environmental Laws.
7.2 Notice of Release. Grantee shall give Grantor immediate notice to
Grantor's Resource Operations Center at (000) 000-0000 of any release of
hazardous substances on or from the Easement Area, violation of Environmental
Laws, or inspection or inquiry by governmental authorities charged with
enforcing Environmental Laws with respect to Grantee's or its Invitee's use of
the Easement Area. Grantee shall use the best efforts to promptly respond to any
release on or from the Easement Area caused by Grantee's or its Invitee's use of
the Easement Area. Grantee also shall give Grantor immediate notice of all
measures undertaken on behalf of Grantee to investigate, remediate, respond to
or otherwise cure such release or violation.
7.3 Remediation of Release. In the event that Grantor has notice from
Grantee or otherwise of a release or violation of Environmental Laws was caused
by Grantee's or its Invitee's use of the Easement Area, Grantor may require
Grantee, at Grantee's sole risk and expense, to take timely measures to
investigate, remediate, respond to or otherwise cure such release or violation
affecting the Easement Area; provided, that such requirements are not in
conflict with the regulations, orders, policies or other requirements of
applicable agency responsible for enforcing Environmental Laws in the Easement
area. If during the construction or subsequent maintenance of any Improvements,
soils or other materials considered to be environmentally contaminated are
exposed, Grantee will remove and safely dispose of said contaminated soils.
Determination of soils contamination and applicable disposal procedures thereof,
will be made only by an agency having the capacity and authority to make such a
determination.
7.4 Preventative Measures. Grantee shall promptly report to Grantor in
writing any conditions or activities upon the Land caused by Grantee's or its
Invitee's use of the Easement Area known to Grantee which create a risk of harm
to persons, property or the environment and shall take whatever action is
reasonably necessary to prevent injury to persons or property arising out of
such conditions or activities; provided, however, that Grantee's reporting to
Grantor shall not relieve Grantee of any obligation whatsoever imposed on it by
this Easement Agreement. Grantee shall promptly respond to Grantor's request for
information regarding said conditions or activities.
7.5 Right of Inspection. Grantor is hereby granted the right to enter the
Land at reasonable times to inspect the Easement Area to the extent reasonably
necessary to determine if Grantee is in compliance with its obligations under
this SECTION 7, provided that the Grantor shall not unreasonably interfere with
use of the Easement Area.
SECTION 8 PERSONAL PROPERTY RESPONSIBILITY. ALL PERSONAL PROPERTY, INCLUDING,
BUT NOT LIMITED TO, FIXTURES, EQUIPMENT, OR RELATED MATERIALS UPON THE EASEMENT
AREA OR THE PROPERTY WILL
BE AT THE RISK OF GRANTEE ONLY, AND NO INDEMNITEE WILL BE LIABLE FOR ANY DAMAGE
THERETO OR THEFT THEREOF, WHETHER OR NOT DUE IN WHOLE OR IN PART TO THE
NEGLIGENCE OF ANY INDEMNITEE UNLESS DUE TO THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF AN INDEMNITEE OR WHOLLY CAUSED BY THE SOLE NEGLIGENCE OF AN
INDEMNITEE.
SECTION 9 DEFAULT AND TERMINATION.
9.1 Specific Performance. If at any time Grantee fails to perform its
obligations under this Easement Agreement, Grantor shall be entitled to specific
performance of the unperformed obligations. Furthermore, if (i) Grantee defaults
in any of the covenants or agreements of Grantee contained in this Easement
Agreement, and (ii) such default continues uncured for a period of thirty (30)
days after Grantee receives written notice from Grantor specifying the default;
Grantor may enter the Easement Area and remedy such default on Grantee's behalf
and Grantee shall reimburse Grantor for any expenses incurred in connection
therewith within 30 days after demand therefor.
9.2 Remedies. The remedies set forth in this SECTION 9 shall be in addition
to, and not in limitation of, any other remedies that Grantor may have at law or
in equity. Notwithstanding anything to the contrary, in no event shall Grantor
have any right to terminate or declare a forfeiture of this Easement Agreement
or the interest in the Land granted to Grantee herein and any such right is
hereby forever waived and released
SECTION 10 SURRENDER OF EASEMENT AREA. Grantee may at any time surrender its
rights and obligations under this Easement Agreement by recording in the land
records for the jurisdiction in which the Easement Area is located a written
release that so provides. Upon any such surrender of the Easement Grantee shall,
at its sole cost and expense, immediately perform the following:
(a) remove all of Grantee's Improvements and all appurtenances thereto
from the Easement Area at Grantor's sole discretion; and
(b) restore any physical damage to the Easement Area arising from,
growing out of, or connected with, Grantee's or its Invitees' use of the
Easement Area;
(c) remedy any unsafe conditions on the Easement Area created or to
the extent aggravated by Grantee; and
(d) leave the Easement Area in the condition that existed as of the
Execution Date.
Notwithstanding any surrender or other termination of this Easement Agreement,
all of Grantee's indemnification obligations and any other obligations that have
accrued but have not been satisfied under this Easement Agreement prior to the
termination date shall survive such termination.
SECTION 11 LIENS. Grantee shall promptly pay and discharge any and all liens
arising out of any construction, alterations or repairs done, suffered or
permitted to be done by Grantee on the
Easement Area. Grantor is hereby authorized to post any notices or take any
other action upon or with respect to the Easement Area that is or may be
permitted by Law to prevent the attachment of any such liens to any portion of
the Property or the Easement Area; provided, however, that failure of Grantor to
take any such action shall not relieve Grantee of any obligation or liability
under this SECTION 11 or any other section of this Easement Agreement.
SECTION 12 TAX EXCHANGE. Grantor reserves the right to assign this Easement
Agreement to Apex Property & Track Exchange, Inc. ("APEX"). Apex is a qualified
intermediary within the meaning of Section 1031 of the Internal Revenue Code of
1986, as amended, and Treas. Reg. ss. 1.1031(k)-1(g), for the purpose of
completing a tax-deferred exchange under said Section 1031 ("TAX-DEFERRED
EXCHANGE"). Grantor shall bear all expenses associated with the use of Apex, or
necessary to qualify this transaction as a Tax-Deferred Exchange, and, except as
otherwise provided herein, shall protect, reimburse, indemnify and hold harmless
Grantee from and against any and all reasonable and necessary additional costs,
expenses, including attorneys' fees and liabilities which Grantee may incur as a
result of Grantor's use of Apex or the qualification of this transaction as a
tax-deferred transaction pursuant to Section 1031. Grantee shall cooperate with
Grantor with respect to this Tax-Deferred Exchange, and upon Grantor's request,
shall execute such documents as may be required to effect this Tax-Deferred
Exchange, including, without limitation, the Assignment of Rights Under Easement
Agreement attached hereto as EXHIBIT "C".
SECTION 13 NOTICES. Any notice required or permitted to be given hereunder by
one party to the other shall be in writing and the same shall be given and shall
be deemed to have been served and given if (i) placed in the United States mail,
certified, return receipt requested, or (ii) deposited into the custody of a
nationally recognized overnight delivery service, addressed to the party to be
notified at the address for such party specified below, or to such other address
as the party to be notified may designate by giving the other party no less than
thirty (30) days' advance written notice of such change in address.
If to Grantor: The Burlington Northern and Santa Fe Railway Company
2500 Xxx Xxxx Dr. - AOB3
Xxxx Xxxxx, Xxxxx 00000
Attn: Director of Real Estate
With a copy to: The Burlington Northern and Santa Fe Railway Company
0000 Xxx Xxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxx Biilderback
If to Grantee: Xxxxx Power Partners
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xxxxxxx Xxxxxx
With a copy to: Ormat Nevada, Inc.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xxx Xxxxxxxx
SECTION 14 RECORDATION. It is understood and agreed that this Easement Agreement
will not be placed on public record. Grantor and Grantee shall execute a
Memorandum of Easement in the form attached hereto as EXHIBIT "B" (the
"MEMORANDUM OF EASEMENT"), which Memorandum of Easement shall be recorded in the
real estate records in the county where the Easement Area is located. Grantor
and Grantee shall each pay one-half of the cost of recording the Memorandum of
Easement.
SECTION 15 APPLICABLE LAW. All questions concerning the interpretation or
application of provisions of this Easement Agreement shall be decided according
to the substantive Laws of the State where the Easement Area is located without
regard to conflicts of law provisions.
SECTION 16 CONFIDENTIALITY. Grantor and Grantee shall each maintain in absolute
confidence the terms and conditions of this Easement Agreement and any other
aspect relating to the Easement, to the extent not set forth in the Memorandum
of Easement This confidentiality provision shall not preclude Grantee or Grantor
from disclosing and discussing this Easement Agreement with its attorneys,
accountants, officers, agents, lenders, guarantors, contracting parties,
assignees and contractors on a need to know basis or as authorized by the other
party or required by Law.
SECTION 17 GRANTEE'S FIRST RIGHT OF REFUSAL. Grantor shall not enter into any
legally binding obligation ("SALES OBLIGATION") to sell any interest retained by
Grantor in the Land unless and until (a) it has first offered, in writing, to
enter into such Sales Obligation with Grantee and (b) Grantee has rejected, in
writing, or failed to accept such written offer within the time period it is to
be open for acceptance. If Grantee rejects or fails to enter into such Sales
Obligation within said time period, Grantor may enter such Sales Obligation (it
must contain identical terms to those contained in the offer to Grantee) with
another person at any time within ninety (90) days after Grantee rejects or
fails to accept such offer. If Grantor does not enter into such Sales Obligation
with another person within such ninety (90) day period, then Grantor must again
offer to enter into such Sales Obligation with Grantee before entering into it
with another person. Each offer to Grantee that is required in this Section must
remain open for acceptance by Grantee for a period of at least ten (10) business
days. If Grantee enters into such Sales Obligation and thereafter breaches any
of its obligations therein then Grantee's rights pursuant to this Section shall
terminate and be of no further force and effect.
SECTION 18 JOINT AND SEVERAL LIABILITY. In the event that Grantee consists of
two or more parties, all the covenants and agreements of Grantee herein
contained shall be the joint and several covenants and agreements of such
parties.
SECTION 19 SUCCESSORS AND ASSIGNS. This instrument and all of the terms,
covenants and provisions hereof shall inure to the benefit of and be binding
upon each of the parties hereto and their respective legal representatives,
successors and assigns and shall run with and be binding upon the Easement Area.
SECTION 20 ATTORNEY'S FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Easement Agreement, the prevailing party
or parties shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which such party or parties may
be entitled.
SECTION 21 SEVERABILITY. If any provision of this Easement Agreement is held to
be illegal, invalid or unenforceable under present or future Laws, such
provision will be fully severable and this Easement Agreement will be construed
and enforced as if such illegal, invalid or unenforceable provision is not a
part hereof, and the remaining provisions hereof will remain in full force and
effect. In lieu of any illegal, invalid or unenforceable provision herein, there
will be added automatically as a part of this Easement Agreement, a provision as
similar in its terms to such illegal, invalid or unenforceable provision as may
be possible and be legal, valid and enforceable.
SECTION 22 ENTIRE AGREEMENT. This Easement Agreement is the full and complete
agreement between Grantor and Grantee with respect to all matters relating to
Grantee's use of the Easement Area, and supersedes any and all other agreements
between the parties hereto relating to Grantee's use of the Easement Area as
described herein. However, nothing herein is intended to terminate any surviving
obligation of Grantee or Grantee's obligation to defend and hold Grantor
harmless in any prior written agreement between the parties.
Witness the execution of this Easement as of the Effective Date first set forth
above.
GRANTOR:
THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware
corporation
By: /s/ Xxxxx X. X'Xxxx
--------------------------------------------
Name: Xxxxx X. X'Xxxx
--------------------------------------------
Title: Asst. Vice President Prop. & Fac. Mgt.
--------------------------------------------
GRANTEE:
XXXXX POWER PARTNERS,
A NEVADA GENERAL PARTNERSHIP
By: ORNI 1 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------------
Title: Assistant Secretary
-------------------------------------
By: ORNI 2 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------------
Title: Assistant Secretary
-------------------------------------
EXHIBIT "A"
DESCRIPTION OF LAND AND EASEMENT AREA
-------------------------------------
Description of Land and Easement Area located in Xxxxxxxxx County, Nevada
An area of 4480 acres, more or less, consisting of:
All of Section 31-Township 23 North, Range 27 East, M.D.M.; and
All of Sections 1, 3, 11, 13, 15, and 00- Xxxxxxxx 00 Xxxxx, Xxxxx 00 Xxxx,
X.X.X.
X XXXXXXX XX XXXX: 000-000-00;
000-000-00; 000-000-00;
000-000-00; 000-000-00;
000-000-00; 000-000-00
MAIL TAX STATEMENTS TO, AND
WHEN RECORDED, RETURN TO:
Xxxxx Power Partners
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
--------------------------------------------------------------------------------
EXHIBIT "B"
MEMORANDUM OF EASEMENT
----------------------
THIS MEMORANDUM OF EASEMENT is hereby executed this 1st day of June, 2004,
by and between THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware
corporation ("GRANTOR"), whose address for purposes of this instrument is 0000
Xxx Xxxx Xxxxx, Xxxx Xxxxx, Xxxxx 00000, and XXXXX POWER PARTNERS, a Nevada
general partnership ("GRANTEE"), whose address for purposes of this instrument
is 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxx 00000, which terms "Grantor" and "Grantee"
shall include, wherever the context permits or requires, singular or plural, and
the heirs, legal representatives, successors and assigns of the respective
parties:
WITNESSETH:
WHEREAS, Grantor owns certain real property situated in Xxxxxxxxx County,
Nevada, as described on EXHIBIT "A" attached hereto and incorporated herein by
reference (the "PROPERTY');
WHEREAS, Grantor and Grantee entered into an Easement Agreement, dated June
1, 2004 (the "EASEMENT AGREEMENT") which set forth, among other things, the
terms of an easement granted by Grantor to Grantee on, under, over and across a
portion of the Property (the "EASEMENT"); and
WHEREAS, Grantor and Grantee desire to memorialize the terms and conditions
of the Easement Agreement of record.
For valuable consideration the receipt and sufficiency of which are hereby
acknowledged. Grantor does grant unto Grantee and Grantee does hereby accept
from Grantor the Easement over and across that portion of the Property described
on EXHIBIT "B" attached hereto and made a part hereof.
The term of the Easement is perpetual. Provisions regulating the use and
purposes of the Easement are set forth in detail in the Easement Agreement and
Grantor and Grantee agree to abide by the terms of the Easement Agreement.
The Easement Agreement is incorporated herein by this reference in its
entirety for all purposes as though written out at length herein, and both the
Easement Agreement and this Memorandum of Easement shall be deemed to constitute
a single instrument or document. This Memorandum of Easement is not intended to
amend, modify, supplement, or supersede any of the provisions of the Easement
Agreement and, to the extent there may be any conflict or inconsistency between
the Easement Agreement or this Memorandum of Easement, the Easement Agreement
shall control.
IN WITNESS WHEREOF, Grantor and Grantee have executed this Memorandum of
Easement to as of the date and year first above written.
GRANTOR:
THE BURLINGTON NORTHERN AND SANTA
FE RAILWAY COMPANY, a Delaware
corporation
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
GRANTEE:
XXXXX POWER PARTNERS,
A NEVADA GENERAL PARTNERSHIP
By: ORNI 1 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------
Title: Assistant Secretary
------------------------------
By: ORNI 2 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------
Title: Assistant Secretary
------------------------------
Exhibits need to be attached.
STATE OF _______________ ss.
ss.
COUNTY OF ______________ ss.
This instrument was acknowledged before me on the ___ day of _________________,
2004, by ______________________ (name) as __________________________________
(title) of THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware
corporation.
----------------------------------------
Notary Public
(Seal)
My appointment expires:_________________
STATE OF NEVADA ss.
ss.
COUNTY OF WASHOE ss.
This instrument was acknowledged before me on the 1st day of June, 2004, by
Xxxxxx Xxxxxxxx (name) as Assistant Secretary (title) of ORNI 1 LLC, a Delaware
limited liability company.
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------
[STAMP] Notary Public
(Seal)
My appointment expires: 2-24-2007
----------
STATE OF NEVADA ss.
ss.
COUNTY OF WASHOE ss.
This instrument was acknowledged before me on the 1st day of June, 2004, by
Xxxxxx Xxxxxxxx (name) as Assistant Secretary (title) of ORNI 2 LLC, a Delaware
limited liability company.
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------
[STAMP] Notary Public
(Seal)
My appointment expires: 2-24-2007
----------
EXHIBIT "C"
Assignment of Rights Under Easement Agreement
APEX PROPERTY & TRACK EXCHANGE, INC., a Massachusetts corporation, of 0000
Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, (hereinafter called
"ASSIGNEE"), THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware
corporation, (hereinafter called "EXCHANGOR"), and XXXXX POWER PARTNERS, a
Nevada general partnership (hereinafter called "GRANTEE").
WHEREAS, Exchangor and Grantee heretofore entered into an Easement
Agreement dated June 1, 2004 (the "AGREEMENT"), wherein Exchangor, for adequate
and sufficient consideration, agrees to grant to Grantee certain easement rights
as more particularly described therein (hereinafter called the "EASEMENT").
WHEREAS, the Agreement specifically reserves for Exchangor the right to
assign to Assignee all of Exchangor's rights under the Agreement, but not its
obligations and warranties, for purpose of consummating a like kind exchange as
contemplated under Section 1031 of the Internal Revenue Code of 1986, as
amended.
NOW, THEREFORE, Exchangor hereby assigns to Assignee all of the Exchangor's
rights under the Agreement, as contemplated by Treasury Regulations Section
1.1031 (k)-1(g)(4)(v), including all deposits received prior to granting said
Easement. Exchangor's obligations and warranties under the Agreement remain with
the Exchangor, including the authority to grant said Easement directly to the
Grantee.
At the same time the Easement is granted to the Grantee, rights received by
Assignee pursuant to this Assignment of Rights are hereby transferred to the
Exchangor.
Assignee is participating in this transaction only as a Qualified
Intermediary and that for purposes of any dispute regarding the Easement,
Exchangor and Grantee shall look solely to each other with respect to resolving
any such dispute and neither one shall look to the Assignee. This shall be
binding upon and shall inure to the respective heirs, successors and assigns of
Exchangor and Grantee.
This instrument may be executed in any number of counterparts, each of
which, when duly executed, shall constitute an original hereof.
[THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Assignment of
Rights Under Agreement, to be effective as of the date on which the last party
hereto signs.
EXCHANGOR:
THE BURLINGTON NORTHERN AND
SANTA FE RAILWAY COMPANY, a Delaware corporation
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
Date:
-----------------------------------
ASSIGNEE:
APEX PROPERTY & TRACK EXCHANGE, INC.,
a Massachusetts corporation
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Date:
------------------------------------
GRANTEE:
XXXXX POWER PARTNERS,
A NEVADA GENERAL PARTNERSHIP
By: ORNI 1 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------------
Title: Assistant Secretary
-----------------------------------
Date: June 1, 2004
-----------------------------------
By: ORNI 2 LLC,
a Delaware limited liability company,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------------
Title: Assistant Secretary
-----------------------------------
Date: June 1, 2004
-----------------------------------
EXHIBIT "E"
GEOTHERMAL LEASE DOCUMENTATION
[to be attached]
