EXHIBIT 10.35
AMENDED AND RESTATED
OPERATING AND MAINTENANCE AGREEMENT
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BY AND BETWEEN
CALENERGY OPERATING COMPANY,
a Delaware corporation
AND
LEATHERS, L.P.,
a California limited partnership
TABLE OF CONTENTS
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Page
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1. Definitions...................................................2
2. Operator's Services...........................................2
3. Standard of Services..........................................4
4. Personnel.....................................................5
5. Inspection....................................................5
6. Change in Duties; Notification................................5
7. Responsibilities of Owner.....................................6
8. Facilities Revenue Fund.......................................6
9. Guaranteed Capacity Payment...................................6
10. Reimbursement Charges.........................................7
11. Subcontracting................................................8
12. Term and Termination .........................................8
13. Indemnification ..............................................9
14. Non-Waiver of Breach .........................................9
15. Arbitration ..................................................9
16. Attorneys' Fees .............................................10
17. Force Majeure ...............................................10
18. Invalid Provision ...........................................11
19. Assignment ..................................................12
20. Governing Law ...............................................12
21. Entire Agreement - Amendments ...............................12
22. Communications ..............................................12
23. Counterparts ................................................13
24. Exhibits ....................................................13
25. Third Party Beneficiaries ...................................13
26. Headings ....................................................13
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TABLE OF EXHIBITS
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Section
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Exhibit "A" Guaranteed Capacity Payment 9.1
Target Levels
4
TABLE OF SCHEDULES
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Section
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Schedule "Z" Schedule of Defined Terms 1.1
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AMENDED AND RESTATED
OPERATING AND MAINTENANCE AGREEMENT
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PREAMBLE
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THIS AMENDED AND RESTATED OPERATING AND MAINTENANCE AGREEMENT (the
"Agreement") is made as of June 17, 1996, by and between CALENERGY OPERATING
COMPANY, a Delaware corporation ("Operator"), and LEATHERS, L.P., a California
limited partnership ("Owner").
RECITALS
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A. Owner owns the Leathers Facility located in the Salton Sea Known
Geothermal Resource Area ("SSKGRA").
B. Owner intends to operate the Leathers Facility under the
following operating agreements: (i) an Administrative Services Agreement by
and between Owner and Operator, pursuant to which Operator will provide
certain administrative services to Owner for the operation of the Leathers
Facility in addition to the Services provided hereunder; (ii) a Technology
Transfer Agreement by and between Owner and Magma Power Company, a Nevada
corporation ("Magma"), pursuant to which Magma will provide Owner with the
nonexclusive right to use certain "Technology" and "Know-How" in connection
with the operation of the Leathers Facility; (iii) a Ground Lease by and
between Owner, as lessee, and Magma, as lessor, pursuant to which Magma will
lease to Owner the real property upon which the Leathers Facility is located;
(iv) an Easement Grant Deed and Agreement Regarding Rights for Geothermal
Development by and between Owner and Magma pursuant to which Magma will supply
Owner with the right to extract Geothermal Brine and use geothermal
brine-derived steam which is necessary to operate the Leathers Facility; and
(v) a Power Purchase Contract by and between Owner and Southern California
Edison Company.
C. Owner desires to exploit Operator's personnel resources, and to
that end Owner desires to employ, hire or otherwise retain Operator for
purposes of performing the day-to-day operations at the Leathers Facility.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follow:
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AGREEMENT
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1. Definitions.
1. Unless the context shall otherwise require, capitalized
terms used and not otherwise defined herein shall have the respective meanings
assigned thereto in Schedule Z hereto both of which shall be incorporated by
reference herein.
2. Operator's Services. In consideration of the payment by
Owner to Operator of the Guaranteed Capacity Payment and the Reimbursement
Charges, Operator agrees to perform during the term of this Agreement the
following services (the "Services"):
(a) Operator shall operate, maintain, and repair (or cause
to be operated, maintained, and repaired) the equipment associated with
the Leathers Facility, including all work normally considered part of the
operational and maintenance activities for facilities similar to the
Leathers Facility, and shall engage, supervise, and be responsible for any
and all personnel and Subcontractors necessary for the continuous
operation of the Leathers Facility. Notwithstanding the provisions of
Section 2(f) hereof, when specialized maintenance and repairs to the
Leathers Facility are required which cannot reasonably be performed by
Operator, Operator will subcontract with original equipment manufacturers
or similarly qualified personnel acceptable to Owner. Said operations,
maintenance, and repairs will be provided in accordance with the
requirements determined by Owner during the term of this Agreement. Owner
may modify, delete or supplement said requirements from time to time as
Owner, in its sole discretion, deems appropriate. Notice of any changes or
modifications in service requirements which may occur shall be provided by
Owner to Operator in writing. If Operator, in the exercise of good faith,
believes that an emergency exists and that certain changes or
modifications in service requirements are required to avoid or mitigate
serious damage to the Leathers Facility or injury to its personnel or
others, Operator may make such changes or modifications, to the extent so
necessary and required.
(b) Consistent with good engineering and operations
practices, Operator shall provide its Services so as to optimize both the
profitability of the Leathers Facility and the useful life of the
equipment as well as minimize downtime for repairs. Subject to the
provisions of this Agreement, Operator shall provide all labor, material,
and equipment necessary for such purposes.
(c) Operator shall develop and implement a preventive
maintenance program based upon, among other things, information and
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procedures provided to Operator by Owner, which shall include on-going
operational maintenance. This preventive maintenance program shall be
implemented and carried out by Operator in accordance with the
specifications provided by Owner.
(d) Operator shall implement and maintain a Leathers
Facility safety and loss prevention program. Operator shall take all
reasonable precautions for the safety of its employees and shall comply
with all applicable provisions of federal, state and municipal laws,
building codes and insurance policies to prevent accidents or injuries to
persons or damage to property within or about the Leathers Facility.
(e) Operator shall maintain, inventory, and procure
replacement Spare Parts and specialized tools in order to maximize the
continuous operation of the Leathers Facility, and procure, inventory, and
maintain chemicals, consumables and working supplies necessary to carry
out the Services. Owner will provide a location for storage of Spare
Parts, chemicals, consumables and supplies.
(f) Subject to Owner's prior approval, Operator may
subcontract to qualified Subcontractors, including, without limitation,
Affiliates of Operator, such routine or non-routine work as is necessary
to perform scheduled or unscheduled maintenance and repairs, annual
inspections, and equipment overhauls; Operator shall supervise all work
subcontracted. The subcontracting of any work to outside Subcontractors
shall in no way relieve or excuse Operator from any of its obligations
under this Agreement with respect to said work. Subcontracts with
Affiliates of Operator shall be on a competitive and arms-length basis.
All charges associated with work subcontracted by Operator shall be billed
to Owner in accordance with Section 10 hereof.
(g) Operator shall arrange for scheduled testing and
recalibration to assure accuracy of scales, metering units (geothermal and
electric) and associated recording devices.
(h) Operator shall be responsible for providing security
for the Leathers Facility.
(i) Subject to shutdowns for scheduled maintenance,
Operator shall to the maximum extent achievable under the law and pursuant
to the terms of the Leathers Power Purchase Contract, use its best efforts
to maintain the Leathers Facility in operation, producing energy at its
full rated capacity, twenty-four (24) hours per day, seven (7) days per
week throughout the entire year, including legal and other holidays,
unless otherwise directed by Owner.
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(j) At the request of Owner, Operator shall assist Owner
in obtaining any franchises, permits, licenses, easements, or
rights-of-way necessary for continued operation of the Leathers Facility.
(k) Operator shall employ such staff as is reasonably
necessary to perform routine, ministerial record keeping and
administrative functions of the Del Ranch Facility as reasonably required
by Owner for its use in billings, accounting for receipts and payments,
complying with governmental laws and regulations, with generally
acceptable accounting principles and with reporting requirements of any
Leathers Facility finance agreement or other agreement of Owner.
(l) Operator shall pursue warranty claims on behalf of
Owner.
(m) Operator shall establish and maintain such bank
accounts in the name and on behalf of Owner as may be necessary or
desirable for the performance of its obligations hereunder. All such
accounts and all amounts from time to time deposited therein shall be and
remain the property of Owner and shall be subject to withdrawal by Owner
from time to time in its discretion.
(n) Operator shall operate the Leathers Facility in
compliance with all permit conditions and applicable laws.
(o) Operator shall dispose of all Geothermal Brine Scale
and all Partially Spent Geothermal Brine from the operation of the
Leathers Facility (unless utilized by Magma pursuant to Section 2.3.3 of
the Easement Agreement) and all Totally Spent Geothermal Brine to the
extent Owner is required to dispose thereof pursuant to the Easement
Agreement.
(p) Operator shall be responsible for discharging all
duties and obligations, and protecting all rights, of Owner under the
Credit Facility, the Limited Partnership Agreement, the Leathers Power
Purchase Contract and the other Operating Agreements.
3. Standard of Services. Operator agrees to use good faith
efforts to perform all Services in accordance with the reasonable, good, and
prudent business practices applicable to the geothermal electrical generating
production industry and in a manner no less favorable than practices employed
by operators of other power production geothermal electrical generating
facilities, including, without limitation, Magma. Operator shall exercise its
good faith efforts to ensure that:
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(a) the Leathers Facility shall at all times be kept in
as near "as new" condition, ordinary wear and tear and Owner's operating
requirements considered, as can reasonably be achieved;
(b) the Services shall be rendered in accordance with
manufacturers' and systems designers' specifications as delivered to
Operator by Owner;
(c) the Leathers Facility shall at all times be operated
and the Services shall at all times be provided in accordance with all of
the terms of the Operating Agreements and all applicable codes,
governmental requirements or court orders (including, without limitation,
all zoning, environmental protection, pollution, sanitary, and safety
laws) except to the extent compliance with such requirements has been
excused or exempted by the applicable governmental or judicial authority;
(d) the Leathers Facility shall be operated in a manner
required such that the Leathers Facility is a "qualifying facility" as
provided in 18 C.F.R. ss. 292.203, as the same may be amended from time to
time; and
(e) the Leathers Facility shall be operated at all times
in such a manner that it shall comply with all safety and other
requirements of insurance policies in effect at said times with respect to
the Leathers Facility or any part thereof and with the reasonable request
of insurers and that all warranties with respect to the Leathers Facility
or any part thereof shall be kept in full force and effect.
4. Personnel. Operator shall provide and employ qualified
plant management, operations and maintenance personnel in sufficient numbers
to accomplish its Services hereunder and to comply with sound engineering and
operations practices. During the term of this Agreement, a duly authorized
on-site manager shall represent Operator at all times. Allpersonnel shall meet
minimum job qualifications associated with their positions as determined
mutually by Owner and by Operator. Operator's personnel shall possess
experience and training equal to standards generally set within the industry
to operate and maintain substantially similar equipment. Operator will use its
best efforts to hire competent and experienced personnel at competitive
compensation.
5. Inspection. Operator shall ensure that the Leathers
Facility and all records of the Leathers Facility will at all times be open to
Owner for inspection and review of operations and maintenance practices.
6. Change in Duties; Notification. Owner shall notify
Operator of the execution or amendment of each Operating Agreement and the
Limited Partnership
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Agreement which affects the Leathers Facility or the operation thereof and
which directly relates to the performance of Operator's duties under this
Agreement. Owner shall furnish to Operator a description of the provisions of
such agreement or amendment which directly relates to the performance of
Operator's duties under this Agreement in sufficient detail to enable Operator
to satisfactorily perform its duties hereunder.
7. Responsibilities of Owner. Owner will bear responsibility
for, among other things, reviewing and approving all required plans, budgets
and schedules in a timely fashion.
8. Facilities Revenue Fund. Subject to the provisions of the
Credit Facility and related loan documents regarding accounts:
1. Operator shall deposit all revenues received by Owner
in connection with the operation of the Facilities into the Revenue Fund (as
defined in the Credit Facility and related loan documents).
2. Operator is authorized to withdraw monies from the
Revenue Fund to pay costs of performing its obligations only to the extent
that the funds are then available in the Revenue Fund and such payments are
authorized pursuant to the terms of this Agreement and the Credit Facility and
related loan documents.
9. Guaranteed Capacity Payment. As an inducement to Operator
to operate the Leathers Facility, to the extent reasonably possible, in such a
manner as to, among other things, earn the maximum Total Electricity Revenues
possible on behalf of Owner, Owner shall pay Operator a fee (the "Guaranteed
Capacity Payment") calculated as follows:
1. The Guaranteed Capacity Payment, to the extent earned
by Operator, shall be paid to Operator on the last day of each of Owner's
fiscal years (or as soon thereafter as is reasonably practicable, but in no
event later than the next succeeding March 31) in an amount which is, for each
of Owner's fiscal years from 1989 through 1998 inclusive, the sum of the
following amounts:
(a) ten percent (10%) of the amount of Total
Electricity Revenues earned by Owner in such year in excess of the
amount listed in column A of Exhibit "A" with respect to such year up
to and including the amount listed in column B of Exhibit "A" with
respect to such year; plus
(b) twenty-five percent (25%) of the amount
of Total Electricity Revenues earned by Owner in such year in excess
of the amount listed in column B of Exhibit "A" with respect to such
year.
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2. The Guaranteed Capacity Payment, to the extent earned
by Operator, shall be paid to Operator on the last day of each of Owner's
fiscal years (or as soon thereafter as is reasonably practicable, but in no
event later than the next succeeding March 31) in an amount which is, for each
of Owner's fiscal years from 1999 through the end of the term of this
Agreement inclusive, the sum of the following amounts:
(a) ten percent (10%) of the amount of Total
Electricity Revenues earned by Owner in such year in excess of the
amount which is obtained by multiplying 268,056,000 by the Average
Annual Energy Price for such year up to and including the amount
which is obtained by multiplying 297,840,000 by the Average Annual
Energy Price for such year; plus
(b) twenty-five percent (25%) of the amount of Total
Electricity Revenues earned by Owner in such year in excess of the
amount which is obtained by multiplying 297,840,000 by the Average
Annual Energy Price for such year.
3. To the extent that there are not sufficient funds
to pay the Guaranteed Capacity Payment, any such shortfall (the "Accrued
Guaranteed Capacity Payment") shall accrue and be payable to Operator, with
interest thereon at a rate of seven percent (7%) per annum, on the next date
for payment of the Guaranteed Capacity Payment and any Accrued Guaranteed
Capacity Payment shall be paid prior to the Guaranteed Capacity Payment due on
the date on which such payment is made.
10. Reimbursement Charges.
1. In consideration of the provision by Operator to
Owner of the Services and in addition to the amounts payable to Operator
pursuant to Section 9 hereof, within ten (10) days after Owner has received an
invoice from Operator specifying the Services rendered to Owner by Operator
and the amount of actual costs and expenses incurred by Operator in rendering
such Services, Owner shall pay to Operator such specified amount. As used in
this Section 10, "actual costs and expenses incurred by Operator" includes,
without limitation, (a) the actual cost to Operator of goods and materials
used by Operator in rendering Services, (b) the pro rata cost to Operator of
personnel providing labor or services in the course of Operator's provision of
Services, (c) the portion of the cost of invested capital incurred by Operator
for the purchase of machinery and equipment used by Operator in connection
with the provision of Services fairly allocable to the use of such machinery
and equipment for performing the Services hereunder, taking into consideration
factors including the extent to which Operator can reasonably expect to earn a
return on its invested capital by utilizing such machinery and equipment for
providing services other than to the Leathers Facility and (d) the actual cost
to Operator, without any mark-up by Operator whatsoever, of retaining a
Subcontractor, whether an Affiliate of Operator or otherwise, in connection
with the provision of Services.
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2. With respect to any calculation of actual costs
and expenses or any allocation of costs contemplated by Section 10.1 hereof,
Owner shall be bound by Operator's determination thereof unless the same is
clearly erroneous.
11. Subcontracting. Without limiting the generality of
any provision contained herein concerning the same subject matter as this
Section 11, in the event Operator determines it to be reasonably necessary to
render the Services required hereunder through a Subcontractor, Operator may
subcontract with Affiliates of Operator, and Owner hereby consents to such
subcontracting for all purposes of this Agreement. For purposes of this
Agreement, any Services performed by such Affiliates shall be deemed to have
been performed by Operator.
12. Term and Termination.
1. Unless terminated as provided in Section 18
hereof, by written agreement between Owner and Operator as provided in Section
21 hereof, or as hereinafter provided in this Section 12, this Agreement shall
remain in effect until, and shall terminate on March 14, 2020.
2. In the event of a material default by either
party in the performance of its duties, obligations or undertakings under this
Agreement, the other party shall have the right to give written notice to the
defaulting party advising such party of the specific default involved and, if
within thirty (30) days after such notice the defaulting party shall not have
remedied or commenced diligently to remedy the default, the other party shall
have the right, in addition to any other rights and remedies it may have, to
terminate this Agreement upon ten (10) days' written notice to the defaulting
party.
3. Notwithstanding any other provision of this
Agreement, and in addition to any other right it may have, Operator shall have
the right to terminate this Agreement, effective immediately, if, at any time,
Owner is adjudged bankrupt or insolvent, or files a petition in bankruptcy or
an answer admitting the material facts recited in such a petition filed by
another, or is put or decides to go into dissolution or liquidation (other
than in connection with a merger, consolidation or amalgamation), or otherwise
discontinues business, makes an assignment for the benefit of its creditors or
any other general arrangement with its creditors, becomes insolvent or unable
to meet its current payments, or has a receiver or other custodian of any kind
appointed to administer any substantial amount of its property, or otherwise
seeks to take advantage of any bankruptcy or insolvency statute now or
hereafter in effect.
4. If this Agreement is terminated prior to the
expiration of its terms, Owner and Operator shall have the following rights,
remedies and obligations in addition to any other rights, remedies and
obligations they may have:
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(a) Owner shall pay Operator the Guaranteed Capacity
Payment, if any, earned by Operator as of the date this Agreement is
effectively terminated in the manner and subject to the conditions provided
for in Section 9 hereof.
(b) Owner shall pay Operator all amounts due and
payable to Operator under Section 10 hereof as of the date the Agreement is
effectively terminated.
13. Indemnification.
1. Owner shall defend, indemnify and hold Operator
and its agent and employees harmless from and against any and all other
liabilities, claims, damages, losses and expenses, including attorneys' fees
and costs and expenses of litigation or arbitration, of every kind and nature
arising out of the course of performance of this Agreement by Owner or
Operator and shall, upon request of Operator, defend all suits arising out of
or resulting from the performance of this Agreement by Owner or Operator,
provided that such liability, claim, damage, loss or expense is not
attributable to the gross negligence or willful misconduct of Operator.
2. Operator shall defend, indemnify and hold Owner
and its agents and employees harmless from and against any and all liabilities,
claims, damages, losses and expenses, including attorneys' fees and costs and
expenses of litigation or arbitration, of every kind and nature arising out of
Operator's gross negligence or willful misconduct in the course of Operator's
performance of this Agreement and shall, upon request of Owner, defend all
suits arising out or resulting from Operator's gross negligence or willful
misconduct in the performance of this Agreement.
14. Non-Waiver of Breach. Either party hereto may
specifically waive any breach of this Agreement by the other party, but no
such waiver shall be deemed to have been given unless such waiver is in
writing, signed by the waiving party and specifically designates the breach
waived, nor shall any such waiver constitute a continuing waiver of similar or
other breaches.
15. Arbitration. All disputes arising under this
Agreement shall be settled by arbitration. The party desiring such arbitration
shall give written notice to that effect to the other party and in such notice
shall appoint as an arbitrator a disinterested person of recognized competence
in the area at issue. Within fifteen (15) days thereafter, the other party
shall, by written notice to the originating party, appoint a second person
similarly qualified as the second arbitrator. The arbitrators thus appointed
shall appoint a third person similarly qualified as the third arbitrator, and
such three arbitrators shall as promptly as possible determine such matter
with the parties, each being entitled to present evidence and argument to the
arbitrators; provided, however, that:
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(a) if the second arbitrator shall not have been
appointed as aforesaid, the first arbitrator shall determine such
matter; and
(b) if the two arbitrators appointed by the party
shall be unable to agree upon the appointment of a third arbitrator
within fifteen (15) days after the appointment of the second
arbitrator, they shall give written notice of such failure to agree
to the parties, and, if the parties fail to agree upon the selection
of such third arbitrator within fifteen (15) days thereafter, then
within ten (10) days thereafter, either of the parties upon written
notice to the other party may apply for such appointment to the
Federal District Court or District Court in Omaha, Nebraska.
The arbitrator or arbitrators shall only interpret and
apply the terms and provisions of this Agreement and shall not change any such
terms or provisions or deprive either party of any right or remedy expressly
or impliedly provided for in this Agreement.
The determination of the majority of the arbitrators or the
sole arbitrator, as the case may be, shall, to the extent permitted by law, be
conclusive upon the parties. The arbitrator or arbitrators shall give written
notice to the parties stating their determination, and shall furnish to each a
copy of such determination signed by them. In the event of the failure,
refusal or inability of any arbitrator to act, a new arbitrator shall be
appointed in his stead, which appointment shall be made in the same manner as
hereinbefore provided for the appointment of the arbitrator so failing,
refusing or unable to act.
16. Attorneys' Fees. If either party hereto commences
litigation or arbitration for the judicial or other interpretation,
enforcement, termination, cancellation or rescission hereof, or for damages
for the breach hereof, the prevailing party in any such action, trial,
arbitration or appeal thereon shall be entitled to its reasonable attorneys'
fees and court, arbitration and other costs incurred, to be paid by the losing
party as fixed by the court or arbitrator in the same or a separate suit, and
whether or not such action is pursued to decision or judgment.
17. Force Majeure.
1. Neither Owner nor Operator shall be liable in
damages to the other for any act, omission or circumstance ("Event of Force
Majeure") occasioned by or in consequence of any acts of God, acts of the
public enemy, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, civil disturbances, explosions,
sabotage, the binding order of any court or governmental authority which has
been resisted in good faith by all reasonable legal means, Federal, State or
local laws, or other event or circumstance not within the control of such
party preventing such party from performing its obligations hereunder, whether
caused or
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occasioned by, or happening on account of, the act or omission of one of the
parties, not within the control of the party claiming suspension and which by
the exercise of due diligence such party is unable to prevent or overcome.
2. Such Events of Force Majeure shall not relieve
Owner or Operator of liability in the event of either party's concurring
negligence or in the event of either party's failure to use due diligence to
remedy the situation and to remove the cause in an adequate manner and with
all reasonable dispatch, nor shall such Events of Force Majeure relieve either
party of liability unless such party shall give notice and full particulars of
the same in writing to the other party within ten (10) days of the occurrence
relied on. In no event, however, shall an Event of Force Majeure relieve Owner
from the obligation of making payments due under this Agreement at the time of
such occurrence. The parties agree that should any Event of Force Majeure
remain in existence for a period of six (6) months, this Agreement may be
terminated by the party not claiming suspension of the Agreement under such
Event of Force Majeure upon the giving of written notice by such party to the
other; provided, however, that such six (6) month period shall be extended for
a reasonable time so long as throughout such six (6) month period the party
claiming suspension of this Agreement under the Event of Force Majeure has
diligently proceeded to terminate the Event of Force Majeure and continues to
do so throughout such extension.
18. Invalid Provision.
1. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provisions were omitted; provided, however, that if
any of the provisions of Sections 9, 10 or 11 hereof are held invalid or
unenforceable by any court or other relevant authority, Owner and Operator
shall hold consultations over a period of ninety (90) days, commencing
immediately, in an effort to work out satisfactory terms for continuation of
this Agreement. If Owner and Operator do not reach agreement within this
period, Operator shall have the right to terminate this Agreement, effective
immediately.
2. In the event that any provision, term, condition
or object of this Agreement may be in conflict with any law, measure, ruling,
court judgment (by consent or otherwise), or regulation of the government of
the United States of America, and the legal counsel of either party shall
advise that in their considered opinion such conflict, or a reasonable
possibility of such conflict, exists, then either party may propose to the
other appropriate modifications of this Agreement to avoid such conflict. In
such case, if an agreement of modification is not reached within ninety (90)
days from such proposal, the party making such proposal, after sixty (60)
days' written notice to the other party, may terminate the agreement in its
entirety as of a date subsequent to such sixty (60) days, and which shall be
specified in such notice.
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19. Assignment. Subject to Section 11 hereof, neither
Owner nor Operator shall grant, assign or otherwise convey any of their
respective rights or delegate any of their respective obligations under this
Agreement without the prior written consent of the other party which shall not
be unreasonably withheld.
20. Governing Law. The existence, validity, construction,
operation and effect of this Agreement shall be determined in accordance with
and governed by the laws of the State of California. This Agreement shall be
construed equally as against the parties hereto, and shall not be construed
against the party responsible for its drafting.
21. Entire Agreement - Amendments. This Agreement
constitutes the entire agreement of the parties and the provisions hereof
shall supersede any and all prior agreements or understandings relating to the
same subject matter. Without limiting the generality of the foregoing, from
and after the date hereof, the terms of the Operating and Maintenance
Agreement dated as of March 14, 1988 (the "Original Operating and Maintenance
Agreement") between Owner and Operator shall be amended to read in their
entirety as set forth in this Agreement and the terms of this Agreement shall
govern and control the rights and obligations of the parties in and with
respect to the matters herein set forth, notwithstanding any conflict between
the terms of this Agreement and the terms of the Original Operating and
Maintenance Agreement. This Agreement may be amended only by a writing signed
by a duly authorized representative of both parties.
22. Communications. All notices, requests, offers and
other communications required or permitted to be made under this Agreement
shall be in writing and shall be deemed to have been duly given and received,
regardless of when and whether received, either: (a) on the day of delivery,
if delivered:
To Operator at:
CalEnergy Operating Company
302 South 36th Street
Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
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To Owner at:
Leathers, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
or at such other address as either party most recently may have designated in
writing to the other party for such purpose; or (b) on the day sent, when sent
by prepaid telex, telegram, cable or radiogram, and confirmed the same day by
prepaid first-class registered airmail, addressed to Operator or Owner, as the
case may be, at their respective addresses aforesaid.
23. Counterparts. This Agreement may be executed in
counterparts and any number of counterparts signed in the aggregate by the
parties hereto shall constitute a single original instrument.
24. Exhibits. All exhibits and schedules attached hereto
are hereby incorporated herein by this reference.
25. Third Party Beneficiaries. The covenants contained
herein are made solely for the benefit of the properties, parties and
successors and assigns of such parties as specified herein, and shall not be
construed as having been intended to benefit any third party not a party to
this Agreement.
26. Headings. The headings herein are for reference only
and shall not affect the construction of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
OWNER:
LEATHERS, L.P.,
a California limited partnership
By: CALENERGY OPERATING COMPANY,
a Delaware corporation,
as General Partner
By: /S/ John G. Sylvia
--------------------------
Name: John G. Sylvia
--------------------------
Title: Senior Vice President
--------------------------
OPERATOR:
CALENERGY OPERATING COMPANY,
a Delaware corporation
By: /S/ John G. Sylvia
--------------------------
Name: John G. Sylvia
--------------------------
Title: Senior Vice President
--------------------------
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Exhibit "A"
Guaranteed Capacity Payment Target Levels
-----------------------------------------
($000s)
Column Column
Year A B
- ---- ------ ------
1989 27,391 30,435
1990 28,738 31,944
1991 30,078 33,433
1992 31,955 35,518
1993 34,099 37,901
1994 36,243 40,283
1995 38,656 42,964
1996 40,800 45,346
1997 43,481 48,324
1998 46,161 51,303
15