Exhibit 10.63
FUTURE REVENUE AGREEMENT
This Future Revenue Agreement ("Agreement") is made by and between
Caithness Energy LLC, Caithness Acquisition Company, (collectively "Caithness
Parties") and CalEnergy Company, Inc. ("CalEnergy").
Whereas, Caithness Parties and CalEnergy have entered into a Purchase
Agreement of even date herewith ("Purchase Agreement"); and
Whereas, there are certain potential opportunities for energy sales to
the U.S. Government related to the Projects, as defined in the Purchase
Agreement.
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Caithness Parties and CalEnergy
agree as follows:
1. Definitions. Capitalized terms not otherwise defined herein shall
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have the meaning set forth in the Purchase Agreement; provided, however, that as
used herein, the Phrase "Projects or expansions thereof" include, without
limitation, any facilities related to in any way to the geothermal resources
currently or in the future held by or for the benefit of the Partnerships or
Partnership Interests.
2. Contingent Payments. Buyer agrees that to the extent it, directly
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or indirectly, in respect of the Projects or expansions thereof, at any time in
the future enters into a power sales, steam exchange, energy conversion,
geothermal lease, or similar agreement or arrangement extracting economic value
from the Projects or expansions thereof or the related geothermal resources
(whether alone or with partners or third party participation) with the U.S.
Government or any agency or department thereof (including, without limitation,
the Department of the Navy (collectively, the "Government")) in any way related
to the generation, consumption or sale of electricity sold to, in conjunction
with, for the benefit of or through the Government other than an extension,
amendment, renewal or replacement of Contract No. N62474-79-C-5382 dated
December 6, 1979, as amended and assigned, between China Lake Joint Venture and
the United States Department of Navy ("Navy Contract") or Geothermal Resources
Lease No. CA-11402 with the United States of America, acting through the
Department of the Interior ("BLM Lease") provided the electricity is not sold
to, in conjunction with, for the benefit of or through the Government (referred
to herein as the "New Navy Contract"); then Buyer shall pay or cause the
Companies or the Partnerships to pay to Seller a share of revenue in cash equal
to one-seventh of the gross revenues paid by (or other value attributable to any
such agreement with) the U.S. Government or any agency or department thereof in
connection with such agreement or arrangement.
3. Noncompete. CalEnergy agrees that neither it nor its Affiliates
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will solicit, other than through public tenders for energy sales, agreements for
the sale in California of electricity (i) to the U.S. Government through the
Department of the Navy for a period
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of 5 years after the date hereof from geothermal resources, or (ii) to any
person from geothermal resources produced from the Coso KGRA for a period of
five (5) years after the date hereof.
4. Term. This Agreement shall expire on the date five years after
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the Closing Date; provided, however, that if a New Navy Contract has been
entered into by the Caithness Parties, the Partnerships or their Affiliates,
this Agreement shall automatically extend until the expiration of the term of
any New Navy Contract or any renewal, extension or replacement thereof.
5. Assignment. Neither this Agreement nor any of the rights or
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obligations hereunder may be assigned by any party without the prior written
consent of the other parties. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other person shall have any right,
benefit or obligation under this Agreement as a third party beneficiary or
otherwise. Buyer shall not transfer any of its direct or indirect interests in
the Partnerships without causing such transferee to assume its obligations
hereunder.
6. Notices. All notices, requests, demands and other communications
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which are required or may be given under this Agreement shall be in
writing and shall be deemed to have been duly given when received if personally
delivered; when transmitted if transmitted by facsimile; the day after it is
sent, if sent for next day delivery to a domestic address by a recognized
overnight delivery service (e.g., Federal Express); and upon receipt, if sent by
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certified or registered mail, return receipt requested. In each case notice
shall be sent to:
If to CalEnergy addressed to:
CalEnergy Company, Inc.
302 South 36th Street, Suite 400
Omaha, Nebraska 68131
Attention: General Counsel
Fax No.: (402) 231-1658
If to the Caithness Parties addressed to:
Caithness Energy LLC
41st Floor
1114 Avenue of the Americas
New York, NY 10036-7790
Attention: President
Fax No.: 212-921-9239
with copy to:
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Thomas Harnsberger, Esq.
Riordan & McKinzie
300 South Grand Avenue
29th Floor
Los Angeles, CA 90071
Fax No.: 213-229-8550
and to such other places and with such other copies as either party may
designate as to itself by written notice to the others.
7. Choice of Law. This Agreement shall be construed, interpreted and
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the rights of the parties determined in accordance with the laws of the State of
California, except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.
8. Amendments and Waivers. This Agreement may not be amended except
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by an instrument in writing signed on behalf of each of the parties hereto. No
amendment, supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
9. Multiple Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10. Invalidity. In the event that any one or more of the provisions
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contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
11. Captions. The titles, captions or headings of the Articles and
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Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
12. Cumulative Remedies. All rights and remedies of either party
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hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
13. Entire Agreement. This Agreement, the Purchase Agreement and
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any other agreements or minutes executed pursuant to the terms of the Purchase
Agreement
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including, without limitation, agreements in the form attached as Exhibits to
the Purchase Agreement, constitute the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof.
14. Survival. The covenants contained in this Agreement shall survive
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Closing and shall be enforceable by the Caithness Parties and CalEnergy.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed on their respective behalf, by their respective officers
thereunto duly authorized, all as of the day and year first above written.
CALENERGY
CALENERGY COMPANY, INC.,
a Delaware corporation
BY: /s/ Steven A. McArthur
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Title: Executive V.P.
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CAITHNESS PARTIES
CAITHNESS ENERGY L.L.C.
a Delaware limited liability company
BY: /s/ Christopher T. McCallion
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Title: __________________________
CAITHNESS ACQUISITION COMPANY,
LLC
a Delaware limited liability company
BY: /s/ Christopher T. McCallion
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Title: __________________________
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