Exhibit 10.16(b)
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FIRST AMENDMENT TO SECOND
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AMENDED AND RESTATED SAGEBRUSH
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GENERAL CO-OWNERSHIP PARTNERSHIP AGREEMENT
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THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED SAGEBRUSH GENERAL CO-
OWNERSHIP PARTNERSHIP AGREEMENT ("First Amendment") is made and entered into as
of December 1, 1990 by and among ALPHA MARIAH, INC., a California corporation
("Alpha Mariah" or "AM"), ALPHA MARIAH (PRIME), INC., a California corporation
("Alpha Mariah (Prime)" or "AM-1"), BETA MARIAH, INC., a California corporation
("Beta Mariah" or "BM") , BETA MARIAH (PRIME), INC., a California corporation
("Beta Mariah (Prime)" or "BM-1"), GAMMA MARIAH, INC., a California corporation
("Gamma Mariah" or "GM") , DELTA MARIAH, INC., a California corporation ("Delta
Mariah" or "DM") , ALPHA WILLOW, INC., a California corporation ("Alpha Willow"
or "AW"), BETA JOSHUA, INC., a California corporation ("Beta Joshua" or "BJ"),
ALPHA JOSHUA, INC., a California corporation ("Alpha Joshua" or "AJ") ALPHA
JOSHUA (PRIME), INC., a California corporation ("Alpha Joshua (Prime)" or
"AJ-1"), BETA WILLOW, INC., a California corporation ("Beta Willow" or "BW"),
BETA WILLOW (PRIME), INC., a California corporation ("Beta Willow (Prime)" or
"BW-1"), SAGEBRUSH PARTNER ELEVEN, INC., a California corporation ("SP11"),
SAGEBRUSH PARTNER TWELVE, INC., a California corporation ("SP12"), SAGEBRUSH
PARTNER THIRTEEN, INC., a California corporation ("SP13"), SAGEBRUSH PARTNER
FOURTEEN, INC., a California corporation ("SP14"), SAGEBRUSH PARTNER FIFTEEN,
INC., a California corporation ("SP15"), SAGEBRUSH PARTNER SIXTEEN, INC., a
California corporation ("SP16"), SAGEBRUSH PARTNER SEVENTEEN, INC., a
California corporation ("SP17"), SAGEBRUSH PARTNER EIGHTEEN, INC., a California
corporation ("SP18"), SAGEBRUSH PARTNER NINETEEN, INC., a California corporation
("SP19"), SAGEBRUSH PARTNER TWENTY, INC., a California corporation ("SP20"), and
SAGEBRUSH PARTNER TWENTY-ONE, INC. , a California corporation ("SP21")
(collectively, the "Partners").
WITNESSETH
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WHEREAS, the Partners entered into a Second Amended and Restated Sagebrush
General Co-ownership Partnership Agreement dated as of September 1, 1989 (the
"Agreement") to reflect their understanding of how they intend to develop,
build, own and operate jointly an electrical power transmission line from a
point near Mojave, California to Southern California Edison Company's Substation
at Vincent, California (the "Transmission Line"); and
Whereas, the Partners wish to amend the Agreement to add two Partners to the
Partnership, to reflect certain changes in their respective Partnership
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Interests, to provide for a period of temporary use of the Transmission Line, to
waive certain provisions of the Agreement in connection with transfer of the
shares of certain Partners, and to correct certain typographical errors;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
Partners do hereby amend the Agreement in accordance with the terms and
conditions set forth in this First Amendment.
1. Definitions.
Unless otherwise defined herein, or unless the context otherwise
requires, all capitalized terms used herein which are defined in the Agreement
shall have the same meanings in this First Amendment as are ascribed to them in
the Agreement.
2. Amendment.
The Partners agree that the Agreement shall be, and hereby is, amended
in the following respects, with effect from the date first above written:
A. Alpha Mariah (Prime) and Beta Mariah (Prime) are each hereby
admitted to the Partnership as Partners. By execution of this first
Amendment, each agrees to be bound by all of the terms of the Agreement
and this First Amendment. At the same time as execution of this First
Amendment, each shall execute the Management and Maintenance Agreement, a
Fee Agreement, and the Option Agreement.
B. there shall be added to the Agreement a new Section 8.1.3 and a new
Section 8.1.4, which shall read in their entirety as follows:
"8.1.3. Alpha Mariah, Alpha Mariah (Prime), Beta Mariah, Beta Mariah
(Prime) and Gamma Mariah shall each be deemed to be Active Partners,
notwithstanding the non-fulfillment of the condition specified in
Section 8.1.1(i) above, for a temporary period commencing on August
17, 1990 and ending on the earlier of June 30, 1991 or the date of
transfer of all of the beneficial interest in the stock of such
Partner (the "Second Temporary Period"), and shall be entitled to use,
or to license SeaWest Industries, Inc., Toyo Energy Corporation, or
the proposed lessee or its Partner Affiliate to use, the Transmission
Line in accordance with the terms of this Amended Agreement for the
purposes of activation of the power purchase agreement commonly known
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as Desert Winds II and completion of construction and performance
testing of a Project being developed for and to be acquired by such
Partner or Partner Affiliate. Upon the conclusion of the Second
Temporary Period, each of the Partners named in this Section 8.1.3
shall cease to be Active Partners (and the temporary use of the
Transmission Line permitted pursuant to this Section shall terminate)
unless such Partner shall have satisfied all of the conditions to
becoming an Active Partner set forth in Section 8.1.1 above
C. Notwithstanding anything in Section 15 or any other section of the
Agreement to the contrary, Delta Mariah shall be permitted to, and hereby
does, withdraw from the Partnership effective immediately.
D. The Capital Contributions of AM, AM-1, BM, BM-1, GM and DM for
purposes of Section 6.1(a) of the Agreement shall be as set forth below:
Partner Capital Contributions
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AM $ 924,040
AM-1 $ 852,960
BM $ 965,120
BM-1 $ 890,880
GM $2,290,000
DM $ 0
E. The cash and Contributed Property of AM, AM-1, BM, BM-1, GM and DM
for purposes of Section 6.1(d) of this Agreement shall be as set forth
below:
Contributed
Partner Cash Property
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AM 0 396,954
AM-1 0 366,419
BM 0 414,601
BM-1 0 382,709
GM 0 983,749
DM 0 0
F. Notwithstanding anything in the Agreement to the contrary, a portion
of the Partnership Interests currently allocated to and held by Alpha Mariah
and Beta Mariah, and all of the Partnership Interest currently allocated to
Delta Mariah, shall be re-allocated to Alpha Mariah (Prime), Beta Mariah
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(Prime), and Gamma Mariah, so that the Project MW, Percentage Interests,
Allocated MW and Capital Contribution allocated to each of them shall
hereafter be as shown on Exhibit A attached to this First Amendment.
Exhibit A attached to this First Amendment shall replace the Exhibit A
originally attached to the Agreement, and any references in the Agreement
to Exhibit A shall hereafter be interpreted to refer to Exhibit A to this
First Amendment.
G. In connection with the transfers of the shares of Alpha Mariah,
Alpha Mariah (Prime), Beta Mariah, Beta Mariah (Prime), Gamma Mariah, SP15,
SP16, SP17, SP18, SP19 and SP20, the Partnership and the Partners hereby
waive (i) the requirement for an opinion of Partnership counsel as under
Section 12.2 (vii) (a) of the Agreement, and (ii) any right to object to
the transfers permitted hereunder, including during the thirty (30) day
objection period provided in Section 12.2 of the Agreement. With respect to
the requirement for an opinion of Partnership counsel as required by Section
12.2 (vii) (b) and (c) of the Agreement, the Partnership and the Partners
agree that, (i) with respect to SP15 and SP16, the opinions of Newman &
Holtzinger, P.C., delivered simultaneously with execution of this First
Amendment, shall satisfy such requirement, (ii) with respect to SP17, SP18,
SP19 and SP20, the opinion of Morrison & Foerster, delivered simultaneously
with execution of this First Amendment, shall satisfy such requirement, and
(iii) with respect to Alpha Mariah, Alpha Mariah (Prime), Beta Mariah, Beta
Marish (Prime) and Gamma Marish, the opinion of Winston & Strawn, delivered
simultaneously with the closing of the sale of shares of each, shall satisfy
such requirement. Each such share transfer shall be immediately effective
upon compliance with Section 12.2 (i)through (vi) of the Agreement with
respect to such transfer.
H. Notwithstanding any other provision of this Agreement, the rights of
Alpha Willow, SP11, SP12, SP13, SP14 and SP21 (together with their Partner
Affiliates, the "LIFO Partners") to use the Transmission Line shall be
subject to the following limitation. If at any time, and for any reason
other than force majeure affecting the Transmission Line, (1) the
Transmission Line is incapable of delivering power at its designed capacity,
availability or voltage and curtailment of the Projects of the LIFO Partners
would improve the capability of the Transmission Line to deliver power at
its designed capacity, availability and voltage, or (ii) the Transmission
Line line losses exceed 1.14%, the excess line losses have an adverse effect
on the Projects of Alpha Mariah, Alpha Mariah (Prime), Beta Mariah, Beta
Marish (Prime), or Gamma Mariah or their Partner Affiliates, and curtailment
of the Projects of the LIFO Partners would reduce or eliminate such excess
line losses, or (iii) the Transmission Line line losses for either of the
power purchase contracts commonly known as Desert Winds I and Desert Winds
III exceed the levels experienced immediately prior to addition of the
Projects of the LIFO Partners to the Transmission Line, the excess line
losses have an adverse effect on the Projects of Alpha Joshua, Alpha Joshua
(Prime), Beta Joshua, Beta Willow or Betha Willow (Prime) or their Partner
Affiliates, and curtailment of the Projects of the LIFO Partners would
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reduce or eliminate such excess line losses, then the Projects of the LIFO
Partners shall be curtailed. The provisions hereof do not affect the rights
of Manager to curtail or disconnect the Project of a Partner under Section
4 of the Partner's Technical Use Agreement. Any curtailment under this
provision shall be in an amount sufficient to cause the Transmission Line
to deliver power at its designed capacity, availability and voltage, or to
reduce the Transmission Line line losses, as applicable, up to and
including the Projects of all of the LIFO Partners. The Manager shall
determine whether the Projects of the LIFO Partners should be curtailed.
Any curtailment shall continue until the Manager shall determine that
reconnecting the Projects of the LIFO Partners shall not result in the
recurrence of the event giving rise to the curtailment. The LIFO Partners
shall agree among themselves the priority of curtailment of their respective
Projects, and any curtailment under these provisions shall occur according
to such priority. If the LIFO Partners fail to advise the Manager of the
priority of curtailment, the Manager shall have discretion to determine
which of the Projects of the LIFO partners to curtail. In the event of any
curtailment under this provision, the Manager shall cooperate with the LIFO
Partners to attempt to eliminate the cause of such curtailment, provided
that any expenses in connection with such cooperation shall be paid by the
LIFO Partners. The Partners agree that these provisions shall be inserted
in the Management and Maintenance Agreement and that the Manager shall
enforce these provisions. The Technical Use Agreements of each of the LIFO
Partners shall also incorporate these provisions.
I. With respect to the Management and Maintenance Agreement and the Fee
Agreement of each Partner, Sagebrush and each of the Partners acknowledge
for the benefit of ToyoWest Management Inc. that the other party to the
Management and Maintenance Agreement and each of the Fee Agreements is
ToyoWest Management Inc., notwithstanding misstatement of the name of
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ToyoWest Management Inc. in the Management and Maintenance Agreement and
certain of the Fee Agreements. With respect to the Agreement, each Partner
acknowledges that the Agreement is deemed properly executed and delivered
by Beta Willow (Prime), Inc., notwithstanding that its name is incorrectly
stated on the signature page thereof.
Except as expressly modified by this First Amendment, the terms and conditions
of the Agreement shall remain in full force and effect
3. Miscellaneous Provisions.
The provisions of Sections 17.1 through 17.11, inclusive, of the
Agreement are incorporated herein by reference, and shall apply to this
Amendment as if fully set out herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the dates set forth below the signatures of their respective representatives
ALPHA JOSHUA, INC., BETA WILLOW, INC.,
a California corporation a California corporation
By: /s/ Geoffrey Hawks By: /s/ Geoffrey Hawke
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Its: President Its: President
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Date: Dec 28 1990 Date: Dec 28 1990
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ALPHA JOSHUA (PRIME), INC., BETA WILLOW (PRIME)
a California corporation a California corporation
By: /s/ Keneth W. Obey By: /s/ Keneth W. Obey
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Its: President Its: President
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Date: Dec 28 1990 Date: Dec 28 1990
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BETA JOSHUA, INC., ALPHA WILLOW, INC.,
a California corporation a California corporation
By: /s/ By: /s/ Robert L. Eisen
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Its: President Its: Vice President
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Date: Dec 28 1990 Date: Dec 28 1990
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ALPHA MARIAH, INC., BETA MARIAH, INC.
a California corporation a California corporation
By: /s/ Robert L. Eisen By: /s/ Robert L. Eisen
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Its: Vice President Its: Vice President
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Date: Dec 28 1990 Date: Dec 28 1990
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ALPHA MARIAH (PRIME), INC., BETA MARIAH (PRIME), INC.,
a California corporation a California corporation
By: /s/ Robert L. Eisen By: /s/ Robert L. Eisen
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Its: Vice President Its: Vice President
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Date: Dec 28 1990 Date: Dec 28 1990
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GAMMA MARIAH, INC., SAGEBRUSH PARTNER ELEVEN, INC.,
a California corporation a California corporation
By: /s/ Robert L. Eisen By: /s/ Robert L. Eisen
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Its: Vice President Its: Vice President
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Date: Dec 28 1990 Date: Dec 28 1990
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DELTA MARIAH, INC., SAGEBRUSH PARTNER TWELVE, INC.,
a California corporation a California corporation
By: /s/ Robert L. Eisen By: /s/ Robert L. Eisen
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Its: Vice President Its: Vice President
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Date: Dec 28 1990 Date: Dec 28 1990
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SAGEBRUSH PARTNER THIRTEEN, INC., SAGEBRUSH PARTNER FOURTEEN, INC.,
a California corporation a California corporation
By: /s/ Robert L. Eisen By: /s/ Robert L. Eisen
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Its: Vice President Its: Vice President
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Date: Dec 28 1990 Date: Dec 28 1990
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SAGEBRUSH PARTNER FIFTEEN, INC., SAGEBRUSH PARTNER SIXTEEN, INC.,
a California corporation a California corporation
By: /s/ Kenneth C. Karas By: /s/ Kenneth C. Karas
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Its: President Its: Vice President
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Date: Dec 28 1990 Date: Dec 28 1990
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SAGEBRUSH PARTNER SEVENTEEN, INC., SAGEBRUSH PARTNER EIGHTEEN, INC.,
a California corporation a California corporation
By: /s/ Kenneth C. Karas By: /s/ Kenneth C. Karas
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Its: President Its: President
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Date: Dec 28 1990 Date: Dec 28 1990
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SAGEBRUSH PARTNER NINETEEN, INC., SAGEBRUSH PARTNER TWENTY, INC.,
a California corporation a California corporation
By: /s/ Leo B. Helzel By: /s/ Kenneth C. Karas
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Its: Vice President Its: President
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Date: Dec 28 1990 Date: Dec 28 1990
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SAGEBRUSH PARTNER TWENTY-ONE, INC.,
a California corporation
By: /s/ Robert L. Eiser
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Its: Vice President
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Date: Dec 28 1990
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EXHIBIT A
Percentage Interests
Project Percentage Allocated Capital
Partner MW Interests MW Contribution
- -------- --------- ----------- ---------- --------------
BJ 25.000 MW 6.55% 27.500 MW $1,974,000
AJ 15.600 MW 4.09% 17.160 MW 1,232,400
AJ PRIME 14.400 MW 3.77% 15.840 MW 1,137,600
BW 15.600 MW 4.09% 17.160 MW 1,232,400
BW PRIME 14.400 MW 3.77% 15.840 MW 1,137,600
AM 11.700 MW 3.06% 12.870 MW 924,040
AM PRIME 10.800 MW 2.83% 11.880 MW 852,000
BM 12.220 MW 3.20% 13.442 MW 965,120
BM PRIME 11.280 MW 2.95% 12.408 MW 890,880
GM 29.000 MW 7.60% 31.900 MW 2,290,000
DM 0 MW 0% 0 MW 0
AW 3.500 MW 0.92% 3.850 MW 277,000
SP11 27.110 MW 7.10% 29.821 MW 2,141,000
SP12 9.300 MW 2.44% 10.230 MW 736,000
SP13 5.030 MW 1.32% 5.533 MW 398,000
SP14 14.560 MW 3.81% 16.016 MW 1,149,000
SP15 77.000 MW 20.17% 84.700 MW 6,081,000
SP16 22.050 MW 5.78% 24.255 MW 1,743,000
SP17 14.400 MW 3.77% 15.840 MW 1,137,000
SP18 21.600 MW 5.66% 23.760 MW 1,706,000
SP19 1.800 MW 0.47% 1.980 MW 142,000
SP20 20.150 MW 5.28% 22.165 MW 1,592,000
SP21 5.318 MW 1.36% 5.850 MW 411,000
Total: 381.818 MW 100.00% 20.000 MW $30,150,000