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GROUND LEASE
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THIS GROUND LEASE (the "Lease") is made as of November 24,
1993, by and between IMPERIAL IRRIGATION DISTRICT, an irrigation district
organized and existing under the laws of the State of California ("Landlord"),
and SALTON SEA POWER GENERATION L.P., a California limited partnership and
SALTON SEA BRINE PROCESSING L.P., a California limited partnership (together,
"Tenant").
ARTICLE 1 DEFINITIONS
1.1 Unless the context shall otherwise require, the following
capitalized terms used herein shall have the following meanings:
1.1.1 "DAMAGES" means any losses, damages, liabilities,
claims, judgments, liens, penalties, costs and expenses, including, without
limitation, reasonable attorneys' and consultants' fees.
1.1.2 "EFFECTIVE DATE" means November 24, 1993.
1.1.3 "FACILITIES" means those certain geothermal electrical
power generating facilities commonly known as Unocal Salton Sea Units 1 and 2,
together with all ▇▇▇▇▇ and wellsites, pipelines, utility installations,
machinery, equipment, buildings and other items associated therewith or related
thereto and located on the Premises.
1.1.4 "FINANCING" means term financing for the Facilities and,
if Tenant so elects, for the construction and subsequent term financing of any
Increased Capacity Improvements, whether in the same or separate transactions.
1.1.5 "GEOTHERMAL LEASE" means that certain Lease dated as of
November 29, 1960, between Landlord and ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, recorded on November 29, 1960 in Book 1064, Page 526 of Official
Records of Imperial County, (a) as amended prior to November 24, 1993, (b) as
amended and restated by that certain Amended and Restated Geothermal Lease and
Agreement dated as of November 24, 1993, between Landlord and Magma Land and (c)
as hereafter amended or supplemented.
1.1.6 "INCREASED CAPACITY IMPROVEMENTS" means any increase in
the combined installed capacity of the Facilities as such capacity existed as of
the Effective Date, which directly results from (a) the replacement of existing
generators in one or more of the Facilities with generators of a higher
nameplate rating, (b) the installation of additional generators in one or more
of the Facilities, (c) the reconstruction or replacement of a Facility for the
purpose of increasing its installed capacity and/or (d) any additional
geothermal electrical power generating facility which may in the future be
constructed on the Premises.
1.1.7 "LAW" OR "LAWS" means all applicable laws, statutes,
ordinances, rules, regulations and orders of any federal, state or local
governmental agency.
1.1.8 "MAGMA LAND" means Magma Land Company I, a Nevada
corporation, and its grantees, successors and assigns.
1.1.9 "PERSON" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a governmental agency.
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1.1.10 "PREMISES" means the real property described on Exhibit
"A" attached hereto.
1.1.11 "PROJECT LENDER" means the lender or lenders
collectively advancing all or a portion of the Financing, and their respective
agents, trustees (including, without limitation, collateral agents, security
agents and loan trustees), grantees, successors and assigns.
1.1.12 "PROJECT LENDER'S LIEN" means any security interest
taken by the Project Lender in Tenant's right, title and interest under this
Lease.
1.1.13 "PROJECT LENDER'S LOAN DOCUMENTS" means all
instruments, agreements and other documents evidencing or relating to the
Financing and/or the security therefor.
1.1.14 "RENTAL COMMENCEMENT DATE" means January 1, 1994.
ARTICLE 2 LEASE
2.1 Landlord hereby leases the Premises to Tenant, and Tenant
hereby leases the Premises from Landlord, on the terms and conditions, and
subject to the reservations, set forth in this Lease.
2.2 The rights of Tenant under this Lease are and shall remain
junior, subordinate and subject to:
2.2.1 The right, title and interest of Magma Land under the
Geothermal Lease. Without limiting the generality of the foregoing, the rights
of Tenant hereunder shall be subject to the rights of Magma Land to use the
Premises for any operations, activities and purposes permitted under the
Geothermal Lease, including, without limitation, for: (a) drilling, producing,
transporting, injecting and processing geothermal substances in connection with
the operation of the Facilities and any Increased Capacity Improvements; and (b)
for Operations (as that term is defined in the Geothermal Lease) in connection
with, for the benefit of and for purposes incidental to Operations on lands in
the vicinity of and outside the Premises, including, without limitation, the
right to (i) drill and maintain ▇▇▇▇▇ on the Premises which bottomhole on lands
other than the Premises and (ii) install and maintain pipelines on the Premises
which carry geothermal substances to or from lands other than the Premises.
2.2.2 The right, title and interest of Magma Land and Salton
Sea Brine Processing L.P. under that certain Easement Grant Deed and Agreement
Regarding Rights for Geothermal Development dated as of March 31, 1993.
2.2.3 The rights of the lessee under that certain
Agricultural Lease effective July 1, 1993, between Landlord and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇, which Landlord represents, warrants and covenants to Tenant
(a) will expire on June 30, 1994, and will not be renewed, extended or replaced
and (b) does not affect the portion of the Premises upon which the Facilities
are situated.
ARTICLE 3 TERM
3.1 The term of this Lease shall commence upon the Effective Date,
and, unless sooner terminated as provided in this Lease, shall expire on
November 24, 2026.
ARTICLE 4 RENT
4.1 Tenant shall pay to Landlord, without abatement, deduction or
offset, "Base Annual Rent" for the Premises, commencing on the Rental
Commencement Date and continuing thereafter on the first day of each calendar
year throughout the term of this Lease, in the amount of Forty-Six Thousand,
Eight Hundred Dollars ($46,800.00).
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4.2 The Base Annual Rent shall be subject to adjustment every five
(5) years as follows:
4.2.1 On every fifth (5th) anniversary of the Rental
Commencement Date, the Base Annual Rent shall be adjusted to reflect the
increase, if any, in the Consumer Price Index published by the Bureau of Labor
Statistics of the Department of Labor for All Urban Consumers, All Items, for
the Los Angeles-Anaheim-Riverside Metropolitan Area (the "CPI"), as follows: The
Base Annual Rent amount provided in Section 4.1 hereof shall be multiplied by a
fraction, the numerator of which shall be the CPI for the month of September
immediately preceding such adjustment, and the denominator of which shall be the
CPI for the month of September, 1993. The sum so calculated shall constitute the
new Base Annual Rent hereunder, but in no event shall such new Base Annual Rent
be less than the Base Annual Rent payable for the year immediately preceding
such adjustment.
4.2.2 In the event that the publication of the CPI shall be
transferred to any other governmental agency or shall be discontinued, then the
index most nearly the same as the CPI, as determined in good faith by Landlord,
shall be used to make such adjustments.
4.2.3 Tenant shall continue to pay Base Annual Rent at the
rate previously in effect until the next adjustment, if any, is determined.
Thereafter, the Base Annual Rent shall be paid at the increased rate.
4.3 Rent for any period during the term hereof which is for less
than one year shall be prorated based on a three hundred and sixty-five (365)
day year. Rent shall be payable in lawful money of the United States to Landlord
at the address stated herein or to such other persons or at such other places as
Landlord may designate in writing.
ARTICLE 5 TAXES, ASSESSMENTS AND UTILITIES
5.1 Tenant shall pay all real and personal property taxes and
assessments, general or special, levied against (a) this Lease or any right,
title or interest of Tenant in the Premises, (b) the Facilities and any
Increased Capacity Improvements and/or (c) any geothermal substances used to
fuel the Facilities and any Increased Capacity Improvements, including, without
limitation, any possessory interest, license, production, severance or excise
taxes, but excluding income, inheritance and estate taxes.
5.1.1 All payments of real property taxes shall be prorated,
on the basis of a 365-day year, for the applicable portion of the tax fiscal
years at the commencement and expiration of the term of this Lease.
5.1.2 If the Premises are assessed together with other real
or personal property of Landlord apart from the Premises, the taxes imposed on
the entire assessed property shall be prorated, and Tenant shall pay that amount
which equals the product obtained by multiplying the entire tax by a fraction,
the numerator of which equals the value of the Premises and the denominator of
which equals the value of all of the property so assessed.
5.1.3 Tenant may contest the legal validity or amount of any
taxes for which Tenant is responsible under this Lease, and may institute such
proceedings as Tenant considers necessary or appropriate in connection
therewith. If Tenant contests any such taxes, Tenant may withhold or defer
payment or pay under protest, but shall protect Landlord and the Premises from
any lien by surety bond or other appropriate security reasonably acceptable to
Landlord. Landlord hereby appoints Tenant as Landlord's attorney-in-fact for the
purpose of making all payments to any taxing authorities and for the purpose of
contesting any taxes affecting the Premises, conditioned on Tenant's preventing
any liens from being levied on the Premises or on Landlord by reason of the
non-payment of such taxes.
5.2 Tenant agrees to pay, before the same become delinquent, all
charges for gas, electricity, sewage, water, telephone, trash removal, and other
similar or dissimilar public services or commodities furnished to the
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Premises, the Facilities or any Increased Capacity Improvements during the term
of this Lease, including all installation, connection and disconnection charges.
5.3 It is the intent of the parties hereto that the rent provided
in this Lease shall be absolutely net to Landlord, and that, except as otherwise
expressly provided in this Lease, Tenant shall pay all costs and charges of
every kind and nature incurred for, against, or in connection with the Premises
which may arise or become due from and after the Rental Commencement Date and
during the term hereof, including, without limitation, all taxes, utilities,
insurance premiums and maintenance costs; provided, however, that nothing herein
shall be construed as requiring Tenant to pay any installment of interest or
principal owing on any encumbrance against the Premises for which Landlord is
the obligor. All such costs and charges at the commencement and the end of the
term of this Lease shall be appropriately prorated between the parties.
ARTICLE 6 USE
6.1 Tenant shall use and permit the use of the Premises only for
the construction, maintenance, repair, replacement and operation of the
Facilities and any Increased Capacity Improvements, and for any uses associated
therewith or incidental thereto. Further, Tenant may plant, irrigate, fertilize,
nurture and harvest crops on the Premises, or permit licensees or subtenants to
do the same, and any rentals from such agricultural use shall belong exclusively
to Tenant.
6.2 Tenant shall, at Tenant's expense, promptly comply with all
Laws now in effect or which may hereafter come into effect during the term
hereof, relating in any manner to the Premises or the occupation and use by
Tenant of the Premises. Tenant shall conduct its business in a lawful and
commercially reasonable manner, and shall not use or permit the use of the
Premises in any manner that will create waste or nuisance. Except as otherwise
provided in this Lease, Tenant shall indemnify, defend and hold harmless
Landlord from and against any and all Damages which may be imposed upon or
incurred by Landlord or asserted against Landlord by any third Person, arising
out of or attributable to Tenant's operations on the Premises.
6.3 Notwithstanding Section 6.2 hereof (in which the clause "in
all material respects" has not been used to modify the effect of the word
"comply" in the first sentence thereof), Tenant shall, at Tenant's expense,
comply in all material respects with all environmental Laws now in effect or
which may come into effect during the term hereof, including, without
limitation, the Resource Conversation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, the Clean Air Act, the
Clean Water Act, the California Hazardous Waste Control Act, the California
Hazardous Substance Act, the ▇▇▇▇▇▇-Cologne Water Quality Control Act and all
applicable regulations promulgated pursuant thereto.
6.4 Tenant shall indemnify, defend and hold harmless Landlord from
and against any and all Damages which may be imposed upon or incurred by
Landlord or asserted against Landlord by any third Person in connection with any
violation of the provisions of Section 6.3 hereof, arising out of or
attributable to (a) the assets, business, or operations of Tenant at or on the
Premises or (b) any acts or omissions of or by Union Oil Company of California
on the Premises prior to March 31, 1993, which, were said Union Oil Company of
California a party hereto, would constitute a material violation of Section 6.3
hereof.
6.5 Without in any way limiting the scope of Tenant's obligations
under the indemnification provisions of Section 6.4 hereof, Tenant shall be
responsible for all investigations, studies, cleanup, corrective action or
response or remedial action required by any local, state or federal governmental
agency now or hereafter authorized to regulate environmental matters or by any
consent decree, or court or administrative order now or hereafter applicable to
the Premises, or by any Law now or hereafter in effect.
6.6 As between Landlord and Tenant, Tenant shall have the
responsibility and right to manage and control all investigations and any
environmental cleanup, remediation, or related activities, and may negotiate
with
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and fulfill any requirements or claims made by a governmental entity or third
party, and may settle or contest such requirements or third-party claims.
6.7 Tenant hereby accepts the Premises in its condition existing
as of the Effective Date, subject to all applicable Laws governing and
regulating the use of the Premises, and all recorded easements, covenants,
conditions, restrictions and other matters of record (including, without
limitation, the Geothermal Lease), and Tenant accepts this Lease subject
thereto. Tenant acknowledges that it has satisfied itself by its own independent
investigation that the Premises are suitable for its intended use, and that
neither Landlord nor Landlord's agents or employees has made any representation
or warranty as to the present or future suitability of the Premises for the
conduct of Tenant's business.
ARTICLE 7 MAINTENANCE, REPAIRS AND ALTERATIONS
7.1 Throughout the term, Tenant shall, at Tenant's sole cost and
expense, maintain the Premises in good condition and repair, ordinary wear and
tear excepted, in accordance with all Laws; provided, however, that subject to
the provisions of any Project Lender's Loan Documents, Tenant shall not be
required to repair, restore or remedy any damage to or destruction of the
Facilities, and may instead elect to raze the improvements so damaged or
destroyed, and provided further, that following any such razing, Tenant shall be
entitled to terminate this Lease and the obligation to pay rent contained
herein, so long as Tenant complies with Section 7.4 hereof.
7.2 Tenant shall be free to make any alterations or additions to
the Premises, and may from time to time construct any Increased Capacity
Improvements and any other improvements permitted under Section 6.1 hereof,
subject to the following:
7.2.1 Tenant shall pay when due, all claims for labor or
materials furnished to or for Tenant at or for use on the Premises, which claims
are or may be secured by any mechanic's or materialmen's lien against the
Premises, and shall indemnify and defend Landlord against any such liens or
claims of lien.
7.2.2 If Tenant shall, in good faith, contest the validity of
any lien, claim or demand, then Tenant shall, at its sole expense, defend itself
and Landlord against the same and shall pay and satisfy any adverse judgment
that may be rendered thereon before the enforcement thereof against Landlord or
the Premises, upon the condition that if Landlord shall require, Tenant shall
furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to
such contested lien claim or demand, indemnifying Landlord against liability for
the same and holding the Premises free from the effect of such lien or claim.
7.3 Notwithstanding any other provision of this Lease, the
Facilities, any Increased Capacity Improvements and any of Tenant's other
fixtures and personal property, whether or not affixed to the Premises, shall be
deemed severed from and not a part of the underlying real property and shall not
merge therewith, and shall remain the property of Tenant at all times during and
after the term of this Lease, and may be removed by Tenant from the Premises;
and all insurance proceeds received in connection with any damage to or
destruction of the Facilities, any Increased Capacity Improvements and/or such
other property shall belong exclusively to Tenant.
7.4 Within a reasonable period of time (not to exceed one hundred
and eighty (180) days) after the expiration or earlier termination of the term
of this Lease, Tenant shall, in accordance with good operating practice and in
compliance with Law, (a) remove from the Premises the Facilities, any Increased
Capacity Improvements and any and all other facilities, structures, pipelines,
machinery, equipment, fixtures and personal property (except ▇▇▇▇▇ and casings)
located on the Premises, (b) level and fill all sump holes and mud pits and cap
or plug any ▇▇▇▇▇ constructed or drilled on the Premises, (c) to the extent
reasonably practicable, demolish and remove all foundations, fix all
excavations, return the Premises to grade, and leave the Premises safe and free
from debris and (d) surrender the Premises to Landlord in good condition and
repair, ordinary wear and tear excepted.
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Notwithstanding the foregoing, Tenant shall not be required to remove from the
Premises any facilities, structures, pipelines, machinery, equipment and other
fixtures or personal property installed or constructed by, or take any other
actions required in this Section 7.4 with respect to the property or activities
of, Magma Land or any Transferee (as that term is defined in the Geothermal
Lease) other than Salton Sea Brine Processing L.P., in each case to the extent
such installation, construction and operations were conducted pursuant to the
rights reserved to Magma Land under the Geothermal Lease.
7.5 Tenant shall maintain and repair, in accordance with
reasonable engineering standards, all those dikes and levees on the Premises, if
any, which Tenant is from time to time expressly required to maintain and repair
pursuant to any applicable permit issued by the County of Imperial in connection
with Tenant's operations, and Landlord assumes no responsibility therefor;
provided, however, that Landlord shall maintain and repair, in accordance with
reasonable engineering standards, all dikes and levees on other property of
Landlord in the vicinity of the Premises (except those dikes and levees which
Magma Land is required to maintain and repair pursuant to the provisions of the
Geothermal Lease), and Tenant assumes no responsibility therefor.
7.6 Tenant shall be entitled, without charge, to use in connection
with its operations or for maintaining or repairing any dike or levee, any earth
or rock located on the Premises; provided, however, that notwithstanding Section
7.4 hereof, Tenant shall not be responsible for fixing any excavations or
returning the Premises to grade to the extent that (a) such use of earth or rock
was for the purpose of maintaining or repairing any dike or levee or (b) soils
were taken or utilized by Landlord under Section 7.7 hereof.
7.7 Landlord reserves the right to enter the Premises and to take
and utilize the soils contained therein as fill for flood control purposes, at
no charge to Landlord; provided, however, that (a) in exercising its rights
under this Section 7.7, Landlord shall not interfere with or cause any material
delay, or increase in the cost of, Tenant's operations on the Premises and (b)
Landlord shall indemnify, defend and hold harmless Tenant from and against any
and all Damages, whether or not arising out of third-party claims, which may be
imposed upon or incurred by Tenant or asserted against Tenant by any other
Person, arising out of or attributable to such entry and use of such soils by
Landlord. Without limiting the generality of the foregoing, Landlord shall not
take or use any soil from any portion of the Premises which, at the time of such
entry by Landlord, is being used as, or has been set aside for, the site of any
facilities, well pads or other improvements, nor shall Landlord's use of such
soils impair the lateral or subjacent support for any such site. In the event of
any conflict between the rights of Landlord to take and utilize soils under this
Section 7.7 and the rights of Tenant to use earth or rock under Section 7.6
hereof, the rights of Landlord under this Section 7.7 shall take priority.
7.8 Notwithstanding any other provision of this Lease, each party
hereto hereby waives any claim against the other party hereto for Damages caused
by any change or changes in the level of the Salton Sea; provided, however, that
such waiver shall not apply to Damages which may be imposed upon or incurred by
a party hereto or asserted against a party hereto by a third Person, arising out
of or attributable to the gross negligence or intentional acts or omissions of
the other party hereto or the failure of such other party to perform its
obligations under Section 7.5 hereof. The parties hereto agree that such waiver
shall include, without limitation, Damages caused by flooding, seepage or other
circumstances attributable to any change or changes in the level of the Salton
Sea, and that such waiver is part of the consideration under this Lease.
ARTICLE 8 ASSIGNMENT AND SUBLETTING
8.1 Tenant may, at any time and from time to time during the term
of this Lease, without the consent of Landlord, transfer, assign, alienate,
license, sublet or grant to any Person all or any portion of the right, title or
interest then held by it in the Premises or under this Lease (a "Transfer").
8.2 Notwithstanding Section 8.1 hereof, but subject to Article 9
hereof, any Transfer of all of the right, title and interest of Tenant under
this Lease shall require the consent of Landlord, which consent shall not
unreasonably be withheld; provided, however, that without the consent of
Landlord, Tenant shall be free to Transfer
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all or any portion of the right, title or interest held by it in the Premises or
under this Lease: (a) to (i) any affiliate of Tenant, (ii) any partnership in
which Tenant or an affiliate of Tenant is a general partner or (iii) any Person
for whom Tenant or an affiliate of Tenant acts as the operator of the Premises;
or (b) through a sale-leaseback transaction, so long as Tenant or an affiliate
of Tenant is the lessee in such sale-leaseback transaction.
8.3 In the event that Landlord's consent to a Transfer is required
under Section 8.2 hereof, Tenant shall submit a written request to Landlord for
such consent, which request shall be accompanied by reasonably pertinent details
concerning the Person to whom such Transfer is proposed to be made, and Landlord
shall have forty-five (45) calendar days in which to approve or disapprove of
such Transfer. Landlord's failure to disapprove of such Transfer within such
forty-five (45) day period shall be conclusively deemed to constitute Landlord's
approval thereof. In no event shall Landlord be entitled to require the payment
of any additional consideration in exchange for its approval of any Transfer
requiring its consent hereunder.
8.4 Upon any Transfer of less than all of the right, title and
interest of Tenant under this Lease, Tenant shall be and remain ultimately
liable to Landlord for the performance of all obligations hereunder.
8.5 Upon (a) a Transfer of all the right, title and interest of
Tenant under this Lease, (b) the assumption by the assignee of all remaining
obligations of Tenant hereunder and (c) the giving of Landlord's consent thereto
if so required under Section 8.2 hereof, Tenant shall be released from, and
shall have no further obligations or liability hereunder.
ARTICLE 9 RIGHTS OF LENDER
9.1 Tenant may, from time to time in one or more transactions,
without obtaining the consent of Landlord, hypothecate, mortgage, pledge or
alienate all or any portion of Tenant's right, title and interest under this
Lease to the Project Lender. Tenant or the Project Lender shall give written
notice to Landlord of the Project Lender's Lien and the Project Lender's address
for notices hereunder; provided, however, that any failure to give such notice
shall not be grounds for denying the Project Lender the rights and protections
provided in this Article 9, so long as Landlord has received actual notice of
the Project Lender's Lien.
9.2 Any surrender or abandonment in whole or in part of this
Lease, or any material amendment hereto or termination hereof, shall be
ineffective and of no force or effect unless and until the prior written consent
of the Project Lender has been obtained thereto.
9.3 The Project Lender shall have the right, but not the
obligation, at any time prior to the expiration or earlier termination of this
Lease, and without the payment of any penalty, to (a) make any payments due
hereunder, (b) do any other act or thing required of Tenant hereunder and (c) do
any act or thing that may be necessary or appropriate to be done in the
performance and observance of the terms hereof to prevent any default under or
termination of this Lease. All payments so made and all things so done and
performed by the Project Lender shall be as effective to prevent any default
under or termination of this Lease as they would have been if made, done and
performed by Tenant instead of by the Project Lender; provided, however, that no
such payment or performance shall by itself be deemed to create a
landlord-tenant relationship between Landlord and such Project Lender.
9.4 Tenant shall not be in default under this Lease unless Tenant
fails to perform the obligations required of it hereunder within the time
periods set forth herein, including all applicable cure periods. If Tenant fails
to cure any default hereunder within the time so provided, then, commencing upon
receipt by the Project Lender of written notice from Landlord to the effect that
Tenant has failed to cure such default within such time, the Project Lender
shall have an additional thirty (30) days to cure such default if such default
is a monetary default, or ninety (90) days to cure such default if such default
is a non-monetary default; provided, however, that if any such non-monetary
default cannot reasonably be cured within such additional ninety (90) day
period, then the Project Lender shall have such additional time to cure such
non-monetary default as is reasonably necessary under the
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circumstances, so long as (a) the Project Lender shall have fully cured within
such ninety (90) day period any default in the performance of any non-monetary
obligations of Tenant hereunder that can reasonably be cured within such ninety
(90) day period and shall thereafter continue to faithfully perform all such
monetary and other obligations and to diligently pursue such cure to completion
and (b) if possession of the Premises is reasonably required in order to effect
such cure, the Project Lender shall have acquired Tenant's interest hereunder or
commenced foreclosure or other appropriate proceedings in the nature thereof
within such ninety (90) day period or prior to the expiration thereof, and shall
be diligently prosecuting any such proceedings to completion. All rights of
Landlord to terminate this Lease as a result of the occurrence of any default by
Tenant shall be subject to, and expressly conditioned upon, (i) the Project
Lender's having received the notice specified above in this Section 9.4 and (ii)
the Project Lender's having failed to take the actions set forth in this Section
9.4.
9.5 Any default by Tenant under this Lease that cannot be remedied
by the Project Lender shall nevertheless be deemed to have been remedied so long
as (a) the Project Lender shall have taken the actions described in clauses (a)
and (b) of Section 9.4 hereof within the time periods provided therein, (b) if
the Project Lender shall have commenced foreclosure or other appropriate
proceedings in the nature thereof under clause (b) of Section 9.4 hereof, then
the Project Lender shall have completed such foreclosure or other appropriate
proceedings or otherwise obtained possession of the Premises and (c) the Project
Lender shall perform all obligations of Tenant under this Lease which arise
thereafter and which can reasonably be performed by the Project Lender.
9.6 If the Project Lender is prohibited by any process or
injunction issued by any court or by reason of any action of any court having
jurisdiction over any bankruptcy, reorganization, insolvency or other
debtor-relief proceeding involving Tenant, from commencing or prosecuting
foreclosure or other appropriate proceedings in the nature thereof, then the
times specified in Sections 9.4 and 9.5 hereof for commencing or prosecuting
such foreclosure or other proceedings shall be extended for the period of such
prohibition.
9.7 Landlord shall deliver to the Project Lender a duplicate copy
of any and all notices of default that Landlord may from time to time deliver to
Tenant pursuant to the provisions hereof, and such copies shall be delivered to
the Project Lender at, or as near as possible to, the same time such notices are
delivered to Tenant. No notice of default by Landlord to Tenant hereunder shall
be deemed to have been given unless and until a copy thereof shall have been
delivered to the Project Lender as provided in this Section 9.7.
9.8 Foreclosure of the Project Lender's Lien or any sale
thereunder, whether by judicial proceedings or otherwise, or any conveyance or
transfer of the interest of Tenant under this Lease from Tenant to the Project
Lender through, or in lieu of, foreclosure or other appropriate proceedings in
the nature thereof, shall not require the consent of Landlord or constitute a
breach of any provision of or a default under this Lease, and upon such
foreclosure, sale or conveyance Landlord shall recognize the Project Lender, or
any other foreclosure sale purchaser, as Tenant hereunder. In the event the
Project Lender becomes the Tenant under this Lease as provided herein, then the
Project Lender shall be personally liable for the obligations of Tenant under
this Lease only for the period of time that the Project Lender remains the
Tenant hereunder, and the Project Lander shall have the right to assign this
Lease without any restriction otherwise imposed on Tenant hereunder; provided,
however, that the assignee of the Project Lender shall have expressly assumed
all of the obligations of Tenant hereunder. Notwithstanding any other provision
of this Lease, in the event that the Project Lender (a) performs any monetary or
other obligation of Tenant under this Lease, (b) acquires any portion of the
right, title or interest in the leasehold estate created by this Lease, (c)
continues Tenant's operation of the Premises, the Facilities and/or any
Increased Capacity Improvements under this Lease and/or (d) becomes personally
liable to Landlord hereunder, then the Project Lender's liability to Landlord
shall be limited by and to the Project Lender's right, title and interest, if
any, in the Facilities and any Increased Capacity Improvements, and Landlord
shall have no recourse against the Project Lender in excess of, and other than
to proceed against, such right, title and interest; provided, however, that in
the event the Project Lender continues the operations of Tenant on the Premises
for a period of time (commencing on the date the Project Lender obtains
possession of the Premises) in excess of two (2) years, then the foregoing
8
limitation on liability shall not exculpate the Project Lender from personal
liability to Landlord for Damages incurred by Landlord arising out of or
attributable to the negligent or intentional acts of the Project Lender on the
Premises.
9.9 Upon Landlord's receipt of any notice in the nature of a
notice of default with respect to any obligation of Landlord secured by any lien
upon the Premises, Landlord shall immediately deliver a copy of such notice to
Tenant and to the Project Lender. If and whenever Tenant or the Project Lender
shall deem it necessary or appropriate to do so in order to protect its
respective rights under this Lease, it may, at its option, pay and discharge any
mortgage or other lien attached to the Premises or any portion thereof, and in
such event it shall be subrogated to all the rights of the mortgagee,
beneficiary, owner or holder of such mortgage or other lien.
9.10 In the event that this Lease is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within
sixty (60) days after such rejection, the Project Lender shall so request,
Landlord shall execute and deliver to the Project Lender a new ground lease of
the Premises. Such new ground lease shall be for a term equal to the remainder
of the term of this Lease before giving effect to such rejection, and shall
contain the same covenants, agreements, terms, provisions and limitations as
contained in this Lease (except for any requirements which shall have been
fulfilled by Tenant prior to such rejection).
9.11 Landlord and Tenant acknowledge, agree and covenant that
notwithstanding the union of the fee simple title with any right, title or
interest in the leasehold estate created hereby or under any other document or
instrument in Landlord, Tenant, Project Lender, or any other Person, whether by
purchase or otherwise, it is the declared intention of the parties hereto that
the separation of the fee simple estate and the leasehold estate shall be
maintained and that a merger shall not take place without the prior written
consent of the Project Lender.
9.12 Tenant and Landlord shall cooperate in including herein, by
suitable amendment from time to time, any provision which any Project Lender or
proposed Project Lender reasonably requests for the purpose of implementing the
Project Lender-protective provisions contained in this Article 9 and affording
the Project Lender or proposed Project Lender reasonable protection of its
Project Lender's Lien in the event of a default by Tenant; provided, however,
that Landlord shall not be required to include herein any additional provision
which materially impairs the rights of Landlord under this Lease. Tenant and
Landlord each agree to execute and deliver (and to acknowledge, if necessary for
recording purposes) any document or instrument necessary to give effect to any
such provision.
9.13 Landlord shall, upon not less than ten (10) days prior written
notice from Tenant or from any existing or proposed Project Lender (the
"Requesting Party"), execute, acknowledge and deliver to the Requesting Party a
statement in writing (a) certifying that this Lease has not been modified and is
in full force and effect (or, if so modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which any payments due under this Lease are paid in
advance, if any, and (b) acknowledging that there are not, to Landlord's
knowledge, any uncured defaults under this Lease on the part of Tenant, or
specifying such defaults if any are claimed. Any such statements may be
conclusively relied upon by the Requesting Party. The failure of Landlord to
deliver such statement within such time shall be conclusive upon Landlord that
this Lease is in full force and effect and has not been modified, and that there
are no uncured defaults in the performance of Tenant hereunder.
9.14 The Project Lender shall be an express third party beneficiary
of the covenants contained in this Lease, with rights and benefits under, and
the ability to enforce, this Lease.
ARTICLE 10 INSURANCE
10.1 At all times during the term of this Lease, Tenant shall
procure and maintain the following policies of insurance, each of which shall be
obtained from an insurance company rated at least B+ by A.M. Best Company and
shall provide that it cannot be canceled or terminated without at least thirty
(30) days prior notice to Landlord:
10.1.1 Worker's compensation insurance as required by Law;
9
10.1.2 Comprehensive general liability insurance with a limit
of no less than $1,000,000, combined single limit, bodily injury and property
damage, for each occurrence; and
10.1.3 Excess public liability insurance in the form of an
umbrella policy, which umbrella policy shall afford coverage of not less than
$5,000,000 per occurrence over and above the coverage provided by the policy
described in Section 10.1.2 hereof.
10.2 In the event that Tenant has not renewed or replaced any such
insurance policy within ten (10) days prior to the cancellation or termination
thereof, then Landlord shall be entitled to cause such policy or policies to be
renewed or replaced, and shall be entitled to invoice Tenant for the premiums
paid by Landlord in connection with such renewal or replacement. Tenant shall
reimburse Landlord for the amount of such invoice within ten (10) days after
receipt thereof, and Tenant's failure to so reimburse Landlord within such ten
(10) day period shall be a material default hereunder.
ARTICLE 11 CONDEMNATION
11.1 In the event of a taking by eminent domain or by inverse
condemnation for any public or quasi-public use under any Law, the proceeds
therefrom shall be distributed (a) first, to Tenant to the extent of all amounts
necessary to pay in full all sums outstanding under the Financing and (b)
second, to the parties hereto in accordance with their interests as they may
appear (which, in the case of Tenant, shall include, without limitation, the
Facilities, any Increased Capacity Improvements and any lost income therefrom);
provided, however, that Landlord shall not exercise its eminent domain powers in
any manner which would in whole or in part deny Tenant the rights and benefits
provided in this Lease.
ARTICLE 12 DEFAULT AND REMEDIES
12.1 Subject to the provisions of Article 9 hereof, the occurrence
of any one or more of the following events shall constitute a material default
by Tenant under this Lease:
12.1.1 The failure by Tenant to make any payment of rent or
any other payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of thirty (30) business days
after written notice thereof from Landlord to Tenant.
12.1.2 The failure by Tenant to observe or perform any of the
material covenants, conditions or provisions of this Lease to be observed or
performed by Tenant other than those referenced in Section 12.1.1 hereof, where
such failure shall continue for a period of sixty (60) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's noncompliance is such that more than sixty (60) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said sixty (60) day period and thereafter
diligently pursues such cure to completion.
12.1.3 (a) The making by Tenant of any general arrangement for
the benefit of creditors, (b) Tenant's becoming a "debtor" as defined in 11
U.S.C. section 101, unless, in the case of a petition filed against Tenant, the
same is dismissed within sixty (60) days after filing, (c) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located on the Premises or of Tenant's interest under this Lease, where
possession is not restored within sixty (60) days, or (d) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest under this Lease, where such
seizure is not discharged within sixty (60) days. In the event that any
provision of this Section 12.1.3 is contrary to any applicable Law, such
provision shall be of no force or effect.
10
12.2 Subject to the provisions of Article 9 hereof, in the event of
any material default of this Lease by Tenant, Landlord may take any of the
following actions:
12.2.1 Terminate Tenant's right to possession of the Premises
by any lawful means, in which case this Lease and the term hereof shall
terminate, and Tenant shall immediately surrender possession of the Premises to
Landlord. In such event, Landlord shall be entitled to recover from Tenant all
damages incurred by Landlord by reason of Tenant's default, including, but not
limited to: (a) the unpaid rent which had been earned at the time of
termination; (b) the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; (c) the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; and (d) any other amount necessary to compensate Landlord
for the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease.
12.2.2 Maintain Tenant's right to possession, in which case
this Lease shall continue in effect whether or not Tenant shall have vacated or
abandoned the Premises. In such event, Landlord shall be entitled to enforce all
of Landlord's rights and remedies under this Lease, including the right to
recover the rent as it becomes due hereunder.
12.2.3 Pursue any other remedy now or hereafter available to
Landlord under the Laws or judicial decisions of the State of California.
12.3 Tenant hereby acknowledges that the late payment by Tenant to
Landlord of any installment of rent or any other sum due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Accordingly, if any installment
of rent or any other sum due from Tenant hereunder shall not be received by
Landlord within ten (10) days after such amount shall be due, then Tenant shall
pay to Landlord a late charge equal to six percent (6%) of such overdue amount.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of such late payment by
Tenant. Acceptance of such late charge by Landlord shall in no event constitute
a waiver of Tenant's default with respect to such overdue amount, or prevent
Landlord from exercising any of the other rights and remedies granted hereunder.
12.4 Except as expressly provided herein, any amount due to
Landlord hereunder that is not paid when due shall bear interest at the greater
of (a) ten percent (10%) per annum or (b) five percent (5%) per annum above the
discount rate established by the Federal Reserve Bank of San Francisco on
advances to member banks under Section 13 or 13(a) of the Federal Reserve Act as
in effect on the Rental Commencement Date, from the date due until fully paid.
Payment of such interest shall not excuse or cure any default by Tenant under
this Lease.
12.5 Notwithstanding any other provision of this Lease, Landlord
shall not commence any action or proceeding in which termination of this Lease
is sought as a remedy unless Landlord also includes therein a prayer for
damages; nor shall Landlord allege, in any such action or proceeding, that it
should be entitled to terminate this Lease because damages would be an
inadequate remedy. Tenant shall conclusively be deemed to have remedied any
default upon which such a prayer for termination of this Lease is based, if,
within thirty (30) days after the entry of a final, non-appealable judgment in
such action or proceeding (or, if such action or proceeding is appealable but
has not been appealed, then within thirty (30) days following the end of the
applicable appeal period), Tenant pays to Landlord the full amount of the
damages awarded to Landlord in such action or proceeding. The failure of Tenant
to pay to Landlord the full amount of such damages award within such thirty (30)
day period shall, subject to the rights of the Project Lender set forth in
Article 9 hereof, entitle Landlord to terminate this Lease by giving written
notice of such termination to Tenant and to the Project Lender.
12.6 Except in connection with the failure of Tenant to pay a
damages award under and within the time period set forth in Section 12.5 hereof,
Tenant may cure any monetary default hereunder by depositing the amount in
controversy (not including claimed consequential, special, exemplary or punitive
damages) in escrow with any
11
reputable third party escrow, or by interpleading the same, which amount shall
remain undistributed until final decision by a court of competent jurisdiction
or upon agreement of the parties hereto.
ARTICLE 13 MISCELLANEOUS LEASE PROVISIONS
13.1 Landlord may, at all reasonable times and upon reasonable
notice to Tenant, enter on and inspect the Premises; provided, however, that
such entry and inspection shall be conducted so as to not unreasonably interfere
with Tenant's operations. The foregoing inspection rights shall be exercised
only at the sole risk and cost of Landlord, and Landlord shall indemnify, defend
and hold harmless Tenant from and against any and all Damages which may be
imposed upon or incurred by Tenant or asserted against Tenant by any third
Person, arising out of or attributable to such entry on or inspection of the
Premises, and any activities conducted by or on behalf of Landlord in connection
therewith.
13.2 Tenant hereby acknowledges that Landlord shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises. Tenant assumes all responsibility for the
protection of Tenant, its agents, invitees and their property from the acts of
third parties.
13.3 Tenant shall surrender possession of the Premises to Landlord
at the expiration or earlier termination of the term of this Lease. If Tenant
fails to surrender the Premises at the expiration or earlier termination of this
Lease, Tenant shall defend and indemnify Landlord from all liability and expense
resulting from the delay or failure to do so, including, without limitation,
claims made by any succeeding tenant founded on or resulting from Tenant's
failure to do so.
13.4 If Tenant, with Landlord's consent, remains in possession of
the Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Tenant, except that the rent payable
shall be one hundred and twenty-five percent (125%) of the rent payable
immediately preceding the termination date of this Lease.
13.5 No waiver by Landlord of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provisions. The acceptance of rent hereunder by Landlord
shall not be a waiver of any preceding breach by Tenant of any provision hereof,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
13.6 No remedy or election hereunder shall be deemed exclusive but
shall, wherever possible, be cumulative with all other remedies at Law or in
equity.
13.7 All monetary obligations of Tenant to Landlord under the terms
of this Lease shall be deemed to be rent.
ARTICLE 14 NOTICES
14.1 Any notices, statements, demands, correspondence or
other communications required or permitted to be given hereunder shall be in
writing and shall be given (a) personally, (b) by certified or registered mail,
postage prepaid, return receipt requested, or (c) by overnight or other courier
or delivery service, freight prepaid, to the following address, or, in the case
of notices to the Project Lender, as provided in the notice of the Project
Lender's lien delivered to Landlord under Section 9.1 hereof.
12
If to Landlord:
Imperial Irrigation District
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary, Board of Directors
If to Tenant:
Salton Sea Power Generation ▇.▇.
▇▇▇▇▇▇ Sea Brine Processing L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Except as otherwise provided in Article 9 hereof, (i) notices delivered by hand
shall be deemed received when delivered and (ii) notices sent by certified or
registered mail or by overnight or other courier or delivery service shall be
deemed received on the first to occur of (A) five (5) days after deposit in the
United States mail or with such overnight or other courier or delivery service,
addressed to such address or addresses, (B) written acceptance of delivery by
the recipient or (C) written rejection of delivery by the recipient. Each party
hereto may change its address for receipt of notices by sending notice hereunder
of such change to the other party hereto in the manner specified in this
Section, and the Project Lender may change its address for receipt of notices by
sending notice hereunder to each of the parties hereto in the manner specified
in this Section. Notwithstanding the foregoing, amounts payable to Landlord
hereunder shall be deemed paid three (3) days after a check for the same,
addressed to Landlord's address above, is deposited in the United States mail,
first-class postage prepaid.
ARTICLE 15 FORCE MAJEURE
15.1 Neither Landlord nor Tenant shall be liable in damages to the
other for any act, omission or circumstance (an "Event of Force Majeure")
occasioned by or in consequence of any acts or omissions of the other party
hereto, acts of God, acts of the public enemy, wars, blockades, insurrections,
riots, civil disturbances, strikes, lockouts, delays in transportation,
epidemics, landslides, lightning, earthquakes, fires, storms, floods,
explosions, sabotage, the binding order of any court or governmental authority
which has been contested in good faith, the failure of any governmental
authority to issue any permit, entitlement, approval or authorization within one
hundred and twenty (120) days after an application for the same has been
submitted, the effect of any Laws, or any other event or circumstance beyond the
reasonable control of such party which prevents or hinders such party from
performing its obligations hereunder, whether or not similar to the matters and
conditions herein enumerated. In no event, however, shall an Event of Force
Majeure relieve Tenant from the obligation to pay rent or any other payment due
under this Lease.
ARTICLE 16 GENERAL PROVISIONS
16.1 In addition to any other indemnities herein set forth, each
party hereto (the "Indemnifying Party") shall indemnify, defend and hold
harmless the other party hereto (the "Indemnified Party") from and against any
and all Damages, whether or not arising out of third-party claims, which may be
imposed upon or incurred by the Indemnified Party or asserted against the
Indemnified Party by any third Person, arising out of or attributable to the
failure of the Indemnifying Party to perform its obligations as provided in this
Lease.
16.2 The parties hereto shall cooperate each with the other to
fully effectuate the purposes and intent of this Lease. Without limiting the
generality of the foregoing, the parties covenant that they will execute, cause
to be acknowledged and deliver any documents or instruments reasonably necessary
to implement the intentions expressed or implied herein.
13
16.3 Tenant shall, at its own expense, obtain such governmental
approvals as shall be necessary to cause the Premises to comply with any Laws
relating to subdivision or zoning. Without limiting the generality of Section
16.2 hereof, Landlord shall fully cooperate with Tenant's efforts to obtain such
governmental approvals and, promptly upon written notice from Tenant, shall
execute and deliver any and all applications, documents and instruments
necessary or appropriate, in the reasonable discretion of Tenant, to apply for,
process, obtain and/or implement all or any portion or element of any such
governmental approval.
16.4 The partners in Salton Sea Power Generation L.P. and Salton
Sea Brine Processing L.P. shall be entitled to (a) merge or by other corporate
reorganization combine the same into a single entity, or replace one or both of
the same with one or more other entities, and Landlord acknowledges and agrees
that no such merger or replacement shall have any affect on the rights and
obligations of the parties under this Lease.
16.5 The parties shall execute, cause to be acknowledged and deliver a
memorandum of this Lease, which shall be recorded in the Official Records of
Imperial County, California, and shall be in the form attached hereto as Exhibit
"B".
16.6 If either party hereto commences litigation for the
enforcement, termination, cancellation or rescission hereof, or for damages for
the breach hereof, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and court and other costs incurred.
16.7 Each provision of this Lease performable by Tenant shall be
deemed both a covenant and a condition. As used herein, the neuter gender
includes the masculine and the feminine, and the singular number includes the
plural, and vice versa. This Lease shall be governed by the Laws of the State of
California. This Lease shall be construed equally as against the parties hereto,
and shall not be construed against the party responsible for its drafting. Time
is of the essence with respect to the obligations to be performed under this
Lease. All exhibits to which reference is made in this Lease are incorporated
into this Lease. The liability of Salton Sea Power Generation L.P. and Salton
Sea Brine Processing L.P. hereunder shall be joint and several.
16.8 This Lease contains all agreements of the parties with respect
to the subject matter of this Lease, and all prior or contemporaneous
agreements, understandings, correspondence and negotiations, whether oral or
written, pertaining to the subject matter of this Lease, shall be of no further
force or effect, and are superseded hereby.
16.9 Any obligations referred to herein to be performed at any time
after the expiration or termination of this Lease, and all indemnities and hold
harmless agreements provided herein, shall survive the expiration or earlier
termination of this Lease.
16.10 No termination or amendment of any of the provisions of this
Lease shall be effective unless in writing, signed by the parties in interest at
the time of the amendment.
16.11 The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
16.12 This Lease and the covenants contained herein shall be binding
upon and inure to the benefit of the parties hereto and their respective
grantees, assignees, successors and assigns.
14
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the date first above written.
LANDLORD:
IMPERIAL IRRIGATION DISTRICT,
an irrigation district organized and existing
under the laws of the State of California
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Its: Vice Chairman
---------------------------------------
TENANT:
SALTON SEA POWER GENERATION L.P.,
a California limited partnership
By: Salton Sea Power Company,
a Nevada corporation, its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President, Secretary
--------------------------------
SALTON SEA BRINE PROCESSING L.P.,
a California limited partnership
By: Salton Sea Power Company,
a Nevada corporation, its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President, Secretary
---------------------------------
15
EXHIBIT "A"
Description of the Premises
The following real property located in the County of Imperial, State of
California:
▇▇▇▇ ▇ ▇▇▇ ▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ OF THE NORTHWEST
QUARTER OF SECTION 5, TOWNSHIP 12 SOUTH, RANGE 13 EAST, SAN
BERNADINO MERIDIAN, ACCORDING TO OFFICIAL PLAT THEREOF;
EXCEPTING THEREFROM ALL MINERALS (INCLUDING, WITHOUT
LIMITATION, ALL GEOTHERMAL SUBSTANCES) LYING BELOW THE SURFACE
OF SAID LAND.
EXHIBIT "B"
Memorandum of Ground Lease
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Salton Sea Power Generation ▇.▇.
▇▇▇▇▇▇ Sea Brine Processing L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------------------------------------
Assessor's Parcel Number: ▇▇▇-▇▇▇-▇▇.
The undersigned declare that this document conveys leasehold
rights for a definite term of years, and hence NO DOCUMENTARY TRANSFER TAX IS
DUE.
The real property described herein is located in an
unincorporated area of Imperial County, State of California.
MEMORANDUM OF GROUND LEASE
THIS MEMORANDUM OF GROUND LEASE (the "Memorandum") is made as
of November 24, 1993, at San Diego, California, between IMPERIAL IRRIGATION
DISTRICT, an irrigation district organized and existing under the laws of the
State of California ("Landlord"), and SALTON SEA POWER GENERATION L.P., a
California limited partnership and SALTON SEA BRINE PROCESSING L.P., a
California limited partnership (together, "Tenant").
1 This Memorandum is executed concurrently with that certain
Ground Lease of even date herewith, between Landlord and Tenant (the "Lease").
2 Pursuant to the Lease, Landlord hereby leases to Tenant,
on all of the terms and conditions and subject to all of the reservations
contained in the Lease, the real property described on Exhibit "A" attached
hereto.
3 The term of the Lease shall commence upon the date first
above written, and, unless sooner terminated as provided in the Lease, shall
expire on November 24, 2026.
4 The terms and conditions of the Lease are incorporated
herein by reference. This Memorandum is prepared for the purpose of recordation
only, and in no way modifies the terms and conditions of the Lease. If there is
any inconsistency between the terms and conditions of this Memorandum and the
terms and conditions of the Lease, the terms and conditions of the Lease shall
control.
IN WITNESS WHEREOF, the parties have executed this Memorandum
as of the date first above written.
LANDLORD:
IMPERIAL IRRIGATION DISTRICT,
an irrigation district organized and existing
under the laws of the State of California
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Its: Vice Chairman
---------------------------------------
TENANT:
SALTON SEA POWER GENERATION L.P.,
a California limited partnership
By: Salton Sea Power Company,
a Nevada corporation, its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President, Secretary
--------------------------------
SALTON SEA BRINE PROCESSING L.P.,
a California limited partnership
By: Salton Sea Power Company,
a Nevada corporation, its general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President, Secretary
---------------------------------
ACKNOWLEDGMENTS
STATE OF California )
-------------------------
)
COUNTY OF San Diego )
------------------------
On December 21, 1993, before me, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Notary Public,
personally appeared ▇▇▇ ▇. ▇▇▇▇▇, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Notary Public
STATE OF California )
-------------------------
)
COUNTY OF San Diego )
------------------------
On December 21, 1993, before me, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Notary Public,
personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Notary Public
EXHIBIT "A"
Description of the Premises
The following real property located in the County of Imperial, State of
California:
▇▇▇▇ ▇ ▇▇▇ ▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ OF THE NORTHWEST
QUARTER OF SECTION 5, TOWNSHIP 12 SOUTH, RANGE 13 EAST, SAN
BERNADINO MERIDIAN, ACCORDING TO OFFICIAL PLAT THEREOF;
EXCEPTING THEREFROM ALL MINERALS (INCLUDING, WITHOUT
LIMITATION, ALL GEOTHERMAL SUBSTANCES) LYING BELOW THE SURFACE
OF SAID LAND.
================================================================================
FIRST AMENDMENT TO GROUND LEASE
================================================================================
THIS FIRST AMENDMENT TO GROUND LEASE (the "Amendment") is made
as of December 15, 1993, by and between IMPERIAL IRRIGATION DISTRICT, an
irrigation district organized and existing under the laws of the State of
California ("Landlord"), and SALTON SEA POWER GENERATION L.P., a California
limited partnership and SALTON SEA BRINE PROCESSING L.P., a California limited
partnership (together, "Tenant").
A. Landlord and Tenant are parties to that certain Ground
Lease dated as of November 24, 1993, which affects the real property described
in Exhibit "A" attached hereto (the "ground Lease").
B. Landlord and Tenant desire to amend the Ground Lease as
provided herein.
NOW THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, Landlord
and Tenant hereby agree as follows:
1. Section 6.4 of the Ground Lease is hereby deleted in its
entirety and replaced with the following:
6.4 Tenant shall indemnify, defend and hold
harmless Landlord from and against any and all
Damages which may be imposed upon or incurred by
Landlord or asserted against Landlord by any third
Person in connection with any violation of the
provisions of Section 6.3 hereof, arising out of or
attributable to (a) the assets, business, or
operations of Tenant at or on the Premises or (b) any
acts or omissions of or by Union Oil Company of
California on the Premises prior to March 31, 1993,
which, were said Union Oil Company of California a
party hereto, would constitute a material violation
of Section 6.3 hereof.
2. In the event that any inconsistency exists between the
terms and provisions of this Amendment and the terms and provisions of the
Ground Lease, the terms and provisions of this Amendment shall prevail, and any
such inconsistent terms and provisions contained herein shall be construed as
superseding and amending the terms and provisions of the Ground Lease. Except as
expressly modified by this Amendment, the Ground Lease shall be unchanged and
shall remain in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the date first above written.
LANDLORD:
IMPERIAL IRRIGATION DISTRICT,
an irrigation district organized and existing
under the laws of the State of California
By: /s/ illegible
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
TENANT:
SALTON SEA POWER GENERATION L.P.,
a California limited partnership
By: Salton Sea Power Company,
a Nevada corporation, its general partner
By: /s/ illegible
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
SALTON SEA BRINE PROCESSING L.P.,
a California limited partnership
By: Salton Sea Power Company,
a Nevada corporation, its general partner
By: /s/ illegible
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
EXHIBIT "A"
Description of the Premises
The following real property located in the County of Imperial, State of
California:
▇▇▇▇ ▇ ▇▇▇ ▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ OF THE NORTHWEST
QUARTER OF SECTION 5, TOWNSHIP 12 SOUTH, RANGE 13 EAST, SAN
BERNADINO MERIDIAN, ACCORDING TO OFFICIAL PLAT THEREOF;
EXCEPTING THEREFROM ALL MINERALS (INCLUDING, WITHOUT
LIMITATION, ALL GEOTHERMAL SUBSTANCES) LYING BELOW THE SURFACE
OF SAID LAND.