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HomeMy WebLinkAbout5 D Land leaseAGREEMENT TO DEVELOP AND OPERATE WIND POWER FACILITIES by and among Sitnasuak Native Corporation, Bering Straits Native Corporation and Banner Wind, LLC September 2, 2008 TABLE OF CONTENTS 1. DEFINITIONS Agreement Affiliate ANSCA Best Efforts BSNC BW Facilities Green Tag Gross Revenues Hazardous Substances Lands Native Party and Parties Production Royalty Release Shareholder Sand and Gravel SNC Subsistence 2. GRANT OF LEASE 2.1. Grant of Lease of Surface Estate 2.2 BW's Rights 3. TERM OF AGREEMENT 4. PRODUCTION ROYALTY 4.1 Reservation of Production Royalty 4.2 Payment of Production Royalty 4.3 Records 4.4 Sale of Facility 5. BSNC'S USE OF THE SUBSURFACE ESTATE 6. SAND AND GRAVEL USE 7. ACCESS: WATER 8. OPERATIONS 8.1 Conduct of Operations 8.2 Hazardous Substances (a) Conformance With Laws and Procedures (b) Reporting 8.3 Prohibitions 8.4 Cultural and Archeological Finds 9. INDEMNIFICATION 10. INSURANCE 11. LIENS 12. RECLAMATION 12.1 Reclamation Policy 12.2 Reclamation Policy 12.3 Reclamation Plan 12.4 Completion of Reclamation 13. DISPOSITION OF FACILITIES AND OTHER PROPERTY UPON TERMINATION 14. REAL PROPERTY TAXES 15. VOLUNTARY TERMINATION BY BW 16. TERMINATION FOR MATERIAL BREACH 17. EFFECT OF TERMINATION 18. SURRENDER OF POSSESSION AND RECONVEYANCE 19. CONDEMNATION 20. ASSIGNMENT 20.1 Assignment by BW 20.2 Assignment by the Owners 20.3 Notice of Assignment 21. ROTATION SCHEDULES 22. DISPUTE RESOLUTION 22.1 Arbitration of Disputes 22.2 Definition of Dispute 22.3 Submission to Mediation 22.4 Submission to Arbitration 22.5 Selection and Qualification of Arbitrators 22.6 Arbitration Hearing and Procedure 22.7 Non -Material Breach 22.8 Material Breach 22.9 Termination and Damages 22.10 Arbitration Expenses 23. NOTICES, PAYMENTS AND DELIVERY 23.1 Written Notices 23.2 Delivery by Mail 23.3 Delivery by Electronic Communication 23.4 Delivery by Personal Service 23.5 Change of Address 24. GENERAL PROVISIONS 24.1 United States Currency 24.2 Time 24.3 Waiver 24.4 Remedies 24.5 Counterparts 24.6 Further Actions 24.7 Modification and Agreement 24.8 Entire Agreement 24.9 Law Governing 24.10 Construction 24.11 Severability 24.12 Binding Effect 24.13 Paragraph Headings SCHEDULE A - LANDS AGREEMENT TO DEVELOP AND OPERATE WIND POWER FACILITIES THIS AGREEMENT (the "Agreement'), made and entered into as of the 2nd day of September, 2008, by and among Sitnasuak Native Corporation ("SNC'), an Alaska corporation the address of which is P.O. Box 905, Nome, Alaska 99762, Bering Straits Native Corporation ("BSNC"), an Alaska corporation the address of which is P.O. Box 1008, Nome, Alaska 99762, and Banner Wind, LLC ("BW") , an Alaskan limited liability company, having an office and place of business at 400 Bering Street, Nome, Alaska, 99762. SNC and BSNC are collectively referred to herein as "the Owners." WITNESSETH: WHEREAS, SNC and BSNC respectively own the surface and subsurface estate of certain lands located in the Cape Nome Recording District, State of Alaska, as more particularly described in the attached Schedule A ("the Lands"); and WHEREAS, the Owners and BW desire to enter into an arrangement under which BW would develop and operate wind power facilities located on the Lands. NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Owners and BW hereby agree as follows: 1. DEFINITIONS. Agreement The term "Agreement' means this Agreement to Develop and Operate Wind Power Facilities. Affiliate. The term "Affiliate" means any entity which controls, is controlled by, or is under common control with a party to this Agreement 4 ANCSA. The term "ANCSA" means the Alaska Native Claims Settlement Act, 43 U.S.C. 1601, et sea., as amended. Best Efforts. The term "Best Efforts" means the exercise of all reasonable means and diligence to satisfy an obligation. BSNC. The term "BSNC" means Bering Straits Native Corporation. BW. The term "BW" means Banner Wind, LLC. Facilities. The term "Facilities" means a wind farm, including wind turbines and related power lines, substations and structures. Green Tag. The term "Green Tag" means any transaction in which the electric power generated by the Facilities is not physically delivered to BW's customer, but rather the environmental benefits created by the Facilities, in exchange for a payment to BW, are attributed to that customer. Gross Revenues. The term "Gross Revenues" means the gross sales realized by BW in connection with the sale of electric power generated by the Facilities to a utility or any other third party. Gross Revenues excludes any tax credits or Green Tag sale benefits that BW may receive in connection with the operation of the Facilities. Hazardous Substances. The term "Hazardous Substances" means any pollutants, hazardous waste or hazardous substances as defined in or pursuant to the Resource Conservation Recovery Act (42 U.S.C. § 6901 et seg.) ("RCRA"), as now or hereafter amended, the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. 9601 et seg.) ("CERCLA") as now or hereafter amended, other federal, state or local environmental law, ordinance, rule or regulation (including AS 46.03.822 as now or hereafter amended), governing the possession, use, transportation or disposal of hazardous substances, wastes or pollutants. 5 Lands. The term "Lands" means all rights, titles, and interests in and to the surface estate of the lands described in Schedule A attached hereto. Native. The term "Native" means the stockholder of any corporation formed under ANCSA whose stock carries voting rights, and the descendants and spouses of such stockholders. Party and Parties. The term "party" means SNC, BSNC, or BW. The term "parties" means SNC, BSNC, and BW. Production Royalty. The term "Production Royalty" shall mean five percent (5%) of the Gross Revenues realized by BW. Release. The term "Release", when used in connection with Hazardous Substances, shall mean a release that is reportable to the applicable authorities under RCRA, or other similar federal or Alaska law, as amended. Shareholder. Unless the context suggests otherwise, the term "Shareholder" means a person who is a shareholder of either SNC or BSNC. Sand and Gravel. The term "Sand and Gravel", whether capitalized or not, means the unconsolidated sedimentary deposits of sand and grave. SNC. The term "SNC" means Sitnasuak Native Corporation, an Alaska native village corporation. Subsistence. The term "Subsistence" means the non -wasteful, customary and traditional uses by rural Alaska residents of wild, renewable resources for personal or family consumption, for the making or selling of handicraft articles, for barter, sharing, or for customary trade, and when the context so requires, includes all wild, renewable resources used for Subsistence. 2 2. GRANT OF LEASE 2.1 Grant of Lease of Surface Estate. Subject to the terms, conditions, exceptions and reservations herein contained, and for the term provided herein, SNC hereby grants, leases and demises exclusively to BW, its successors and assigns, all rights, titles, interests and estates now owned or hereafter acquired by SNC in and to the surface estate of the Lands for the purpose of the development and operation of Facilities, provided, however, that in exercising all of the foregoing rights, BW shall not carry out activities which interfere with either Owner's operations on lands not included within the Lands, specifically including that certain Exploration and Option Agreement dated June 24, 2008, between BSNC's affiliate Golden Glacier, Inc. and the Alaska Gold Company. 2.2 BW's Rights. In furtherance of the grant made in this Section 2, BW shall have the following rights: (a) to enter upon the Lands for the purpose of constructing, developing, and operating (i) wind turbines for the production of electric power, (ii) a medium voltage power collection system and communications network so as to interconnect the individual wind turbines, and (III) one or more substations which will serve to increase the voltage for connection to a high voltage transmission system; (b) to install buried telephone or power lines, septic tanks, sewer systems, water wells or lines, fuel lines, pilings, and foundations; (c) to.develop, reclaim and rehabilitate the Lands in conformance with the provisions of this Agreement; and (d) to take any and all other actions which are necessary or desirable to enable BW to conduct its operations under this Agreement generally. 3. TERM OF AGREEMENT. The term of this Agreement shall commence on the date of this Agreement and remain in full force and effect through December 31, 2018, and as long thereafter as there is commercial production of electric power from the Lands, unless sooner terminated in accordance with the terms and provisions of this Agreement. For purposes of this Section 3, commercial production of electric power shall be deemed to exist only if Facilities, capable of producing electric power in reasonable commercial quantities and for sale on a commercial basis, have been constructed on the Lands and such Facilities have operated at least once within the three (3) most recently completed calendar years on a regularly scheduled basis for ninety (90) consecutive days. 4. PRODUCTION ROYALTY. 4.1 Reservation of Production Royalty. The Owners hereby reserve, and BW shall pay to the Owners, the following Production Royalty: Five percent (5%) of all Gross Revenues realized by BW in connection with the sale of electric power generated by the Facilities for each month during which this Agreement is in effect. 4.2 Payment of Production Royalty. BW shall deliver 70% of the Production Royalty to SNC, and 30% of the Production Royalty to BSNC, as to all Gross Revenues received by BW during any month for which electric power is produced and sold form the Lands, on or before the 15th day of the following month, together with a copy of each relevant invoice issued by BW in connection with such payment. The Owners shall be responsible for all income taxes and other payments, if any, associated with the receipt of the Production Royalty. 8 4.3 Records. BW shall keep and maintain detailed records of its operations on the Lands, including but not limited to, a detailed operations log of the days and hours during which commercial quantities of electric power are produced from the Lands, and the amount of Gross Revenues received. 4.4 Sale of Facility In the event BW sells the Facilities, or the ownership of BW itself is sold or otherwise transferred to Nome Joint Utility System ("NJUS"), or some other third party, so that there are no direct sales of electric power from the owner of the Facilities to a utility, then the Production Royalty for a given year shall equal 5% of the product obtained by utilizing the following formula: Production Royalty = .05[A x B x C] = D; Where A = Average cost per gallon of diesel fuel purchased by NJUS for such year; B = Total number of gallons of diesel fuel consumed by NJUS during such year; C = Total number of kilowatts produced from the Facility for such year and D = Total number of kilowatts produced by NJUS for such year, but excluding any production attributable to the Facilities. Example: Assume A = $6.00, B = 2,000,000 gallons, C = 3,000,000 kilowatts, and D = 31,200,000 kilowatts, then the Production Royalty = .05[$6.00 x 2,000,000 x 3,000,000] = 31,200,000 = $57,692.31. The Production Royalty will be paid as per Section 4.2. 5. BSNC'S USE OF THE SUBSURFACE ESTATE. This Agreement shall not restrict or otherwise limit BSNC's right, or that of its lessee, to explore and develop the subsurface estate of the Lands so long as such 0 exploration and development operations can be performed with minimal disturbance to any Facilities BW may construct on the Lands. BSNC's commercial development of the subsurface estate gf the Lands shall be undertaken so as to minimize the interruption of any electric power generated by the Facilities. In this regard, BSNC shall assume the cost of temporarily decommissioning or relocating individual wind turbines located on the Lands. 6. SAND AND GRAVEL USE. This Agreement does not convey or otherwise authorize BW to utilize any of the sand or gravel or other minerals located on the Lands, except that BW may disturb the subsurface estate of the Lands for ordinary "cut and fill" operations, so long as such operations are consistent with standard professional engineering and maintenance practices, and so long as BW notifies BSNC at least fifteen days in advance before any such operations commence. 7. ACCESS: WATER. The Owners have informed BW that they do not own any water rights appurtenant to the Lands and have not made any applications to acquire any such rights 8. OPERATIONS. 8.1 Conduct of Operations. BW shall conduct all of its operations under this Agreement in a workmanlike manner in accordance with the standards common to the electric industry, and shall use its Best Efforts to comply with any and all applicable laws, regulations, and permits; provided, however, that BW shall have the right to contest in good faith any such law, regulation, or permit, or the application thereof. 8.2 Hazardous Substances. 10 (a) Conformance With Laws and Procedures. BW shall use its Best Efforts to conduct all its operations in conformance with the requirements of all applicable laws, regulations and ordinances relating to Hazardous Substances; provided, however, that BW shall have the right to contest in good faith any such laws, regulations and ordinances or the application thereof. (b) Reporting. BW shall deliver to each Owner copies of all reports and filings required by law to be made in connection with the use, release or disposal of any Hazardous Substances on the Lands promptly after filing the same with the applicable governmental agencies. 8.3 Prohibitions. BW shall not undertake or permit the sale or use of alcoholic beverages or controlled substances on the Lands and shall not permit hunting, fishing or gathering of artifacts by its employees or contractors on the Lands or the Owners' surrounding lands without the prior written consent of the Owners (which consent shall be within the sole discretion of the Owners). 8.4 Cultural and Archeological Finds. BW shall promptly notify the Owners whenever, in the course of conducting operations pursuant to this Agreement, any cemetery, archeological, anthropological or historic site or artifact is discovered. To the best of the Owners' knowledge, no such site has been identified. Upon being so notified, the Owners shall promptly, but not later than ten (10) days after such notice, inspect, in conjunction with BW, such objects or sites. BW and the Owners shall take such action as they deem reasonably necessary and desirable to protect and preserve such objects or sites. All activities undertaken pursuant to this Section 8.4 shall be in compliance with the Native American Graves Protection and Repatriation Act, 25 U.S.C. § 3001 et sea. 11 9. INDEMNIFICATION. BW shall defend, indemnify, and hold harmless the Owners from and against any and all claims, damages, losses, liabilities, or expenses (including but not limited to reasonable legal, accounting, consulting, engineering, and other fees and any claims or liabilities under any applicable environmental law, including CERCLA) (the "Claims or Liabilities") which may be asserted against, imposed upon, or reasonably incurred by the Owners as a result of any action, suit, or proceeding commenced or claim or liability asserted by any third party or parties (including but not limited to a governmental entity) and which arise out of or result in any way from the activities and operations of BW prior to and under this Agreement; provided, however, that BW's obligation to defend, indemnify, and hold harmless hereunder shall not apply to any Claims or Liabilities that arise as a result of (1) any disputes between SNC or BSNC; (2) any dispute between SNC or BSNC and one or more Shareholders in a derivative action or otherwise relating to the execution, delivery, performance or administration of this Agreement by the Owners; (3) the negligent acts, omissions, or willful misconduct of BSNC or SNC, their agents, employees, or Affiliates; or (4) activities or actions of either Owner or their predecessors -in -interest or any other third party occurring prior to the date of this Agreement. The Owners will indemnify, defend and hold BW harmless from claims or liabilities arising under 1, 2, 3 and 4 above (except for activities or actions of any other third party occurring prior to the date of this Agreement). 10. INSURANCE. . BW shall procure and furnish evidence to GGI of a comprehensive general liability insurance policy with $250,000 deductibles in the following amounts: ® Bodily injury - $1 million each occurrence and $2 million aggregate. 12 • Property damage - $1 million each occurrence and $2 million aggregate. • Umbrella liability - $5 million each occurrence and $5 million aggregate. Said policy shall cover BW's operations hereunder and shall name SNC and BSNC as additional insureds. It is understood that said insurance policies shall be so written that no insurance company shall have any recourse against SNC or BSNC, by way of subrogation or otherwise, or any loss covered by or paid or payable under said policies. BW shall provide SNC and BSNC with a Certificate of Insurance or other satisfactory evidence of compliance with this section. The insurance policy must also provide 30 days notice to BSNC and SNC prior to cancellation of insurance. 11. LIENS. BW shall be solely responsible for paying for all labor performed upon or materials furnished to the Lands at the request of BW. BW shall keep the Lands free and clear of any and all mechanic's, mining, labor or materialmen's liens arising from the performance of labor upon or the furnishing of materials to the Lands, except those liens arising by operation of law for which payment is not yet due. BW may contest the validity of any such lien that may be filed if BW provides reasonable security to the Owners as may be required by applicable law. BW shall post and record notices of non -responsibility for the benefit of the Owners pursuant to AS 34.35.065 and AS 34.35.150 and any other applicable laws. 12. RECLAMATION 12.1 Reclamation Policy. BW will reclaim all disturbed Lands affected by its operations and shall use its Best Efforts to conduct such reclamation at the earliest possible time following cessation of use. Such reclamation shall require BW to use its Best Efforts to return the Lands to a stable and productive condition to the extent 13 reasonably practicable in accordance with Section 12.2 below. Such reclamation shall include without limitation the stabilization, reshaping, contouring and revegetation (where reasonably practicable) of all Lands affected by the operations of BW. Subject to the other provisions of this Section 12, the obligation to perform reclamation in accordance with this Section 12 shall accrue when Lands are affected by BW's operations. 12.2 Reclamation Policv. BW will reclaim all Lands disturbed hereunder in accordance with its reclamation plan (the "Reclamation Plan") to be prepared prior to commencement of commercial sales from the Facilities and any laws or regulations applicable to such reclamation activities. The Reclamation Plan shall provide for reclamation within the following guidelines: (a) The parties recognize that reclamation of disturbed lands is desirable. (b) Reclamation shall be generally designed (i) to mitigate potential long-term danger to human life and the subsistence needs of the Natives of the BSNC Region; and (ii) to the extent reasonably practicable, to mitigate adverse visual or unaesthetic conditions and to restore the Lands to a condition compatible with surrounding lands. The parties shall work together in good faith to develop additional subsistence habitat on lands not disturbed by BW's operations hereunder where appropriate and prudent. (c) Disturbed land shall be restored so as to blend with the surrounding terrain to the extent reasonably practicable and consistent with good industry environmental practice. Ml (d) Where available in appropriate quantities and to the extent practicable, topsoil shall be separately removed and stockpiled for final application after shaping of disturbed areas has been completed. (e) Appropriate measures shall be taken to control or reduce erosion, landslides and water runoff to the extent reasonably practicable. (f) Fisheries and wildlife habitats shall be rehabilitated to the extent reasonably practicable. (g) To the extent reasonably practicable, disturbed areas shall, through seeding, fertilization and other appropriate means, be revegetated with a diverse vegetative cover of species native to the area and similar to that on adjoining areas. 12.3 Reclamation Plan. BW shall prepare a proposed Reclamation Plan stating its intended reclamation actions on a site -specific basis to satisfy its obligations under this Section 12 and shall submit such plan and any revisions or material amendments thereto to the Owners for their review and approval. Within a reasonable time the Owners shall approve the proposed Reclamation Plan and any revisions or amendments thereto if it substantially satisfies the requirements of this Section 12. The approved Reclamation Plan, as amended from time to time hereunder, shall establish BW's reclamation obligations under this Section 12 as to the specific circumstances and conditions considered therein. The Reclamation Plan shall be delivered to the Owners prior to the commencement of commercial sales from the Facilities. 12.4 Completion of Reclamation. BW's obligations under this Section 12 shall be satisfied at such time as all applicable government agencies have approved BW's reclamation of the Lands under the Reclamation Plan, and when such agencies have approved such additional reclamation as required by applicable law as a result of 15 changed circumstances not foreseen in such plan ("Additional Reclamation Obligations"), or have otherwise certified that BW has fulfilled all such obligations provided, however, that in the event there is no governmental agency with appropriate judicial or administrative authority to compel compliance with the Reclamation Plan and the Additional Reclamation Obligations, the Reclamation Plan (as supplemented by the Additional Reclamation Obligations) shall be converted into a reclamation contract between the parties and BW's obligations under this Section 12 shall then be fulfilled upon completion of the obligations under the reclamation contract. Nothing contained in this Section 12 shall relieve BW of its other obligations under this Agreement, including without limitation its indemnity obligations. 13. DISPOSITION OF FACILITIES AND OTHER PROPERTY UPON TERMINATION Upon termination of this Agreement, for all or a portion of the Lands, BW shall with due diligence carry out the reclamation activities specified in Section 12.1. Not later than thirty-six (36) months following the date of termination, BW shall remove the Facilities, together with all buildings, equipment, materials and other objects then present on such Lands, except that SNC may designate some of the Facilities, buildings, and other fixtures which it wishes to exempt from this removal requirement. SNC shall advise BW of its designation of exempt Facilities within one hundred -eighty days (180) days of the termination date. BW may accept or reject such designation, in its sole discretion. If BW elects to accept such designation, then SNC shall assume full responsibility for all reclamation required under this Agreement for the Lands beneath such Facilities and shall indemnify BW against any environmental liability arising from Lands beneath such Facilities. If any such Facilities not specifically exempted by SNC 16 hereunder remain on the Lands after all obligations have been fulfilled by BW and after the expiration of said thirty-six (36) month period, SNC may, upon thirty (30) days written notice to BW, remove such improvements at BW's expense. Nothing contained in this section is intended to require SNC to remove any facilities or improvements, if SNC decides it may not wish to do so. 14. REAL PROPERTY TAXES BW shall pay any and all real property taxes and assessments relating to the Owners' interest in the Lands levied by the State of Alaska, any municipality or any other governmental entity, except for interest retained by the Owners. Such taxes and assessments shall be prorated for any year in which this Agreement is in effect for only a portion of the relevant tax or assessment year. BW shall pay any and all taxes or assessments levied or accrued after the expiration or termination of this Agreement until BW removes improvements pursuant to its obligations under Section 13 ("Disposition of Facilities") above. The Owners shall promptly deliver to BW copies of any and all notices which they receive relating to any such taxes or assessments. BW shall have the right, but not the obligation, to contest the amount or validity of any such taxes or assessments, and may pay under protest or withhold payment of all or any portion thereof for so long as it may contest the levy or assessment thereof in good faith in appropriate administrative or judicial proceedings. If payment is withheld, any amount so withheld shall be retained in an escrow or other suitable separate account as a contingency against possible future payment. Any fees for such an account shall be paid out of interest earned on the funds in the account. In the event of any such contest, the Owners shall cooperate fully with BW and shall execute any and all documents reasonably necessary to permit BW to pursue such contest. BW shall not 17 permit or suffer the Lands, or any part thereof, to be conveyed, or the Owners' title thereto to be lost, as the result of nonpayment of any such tax or assessment for which BW is responsible and with respect to which BW has received notice. BW shall furnish to the Owners duplicate receipts for all such taxes and assessments when paid. 15. VOLUNTARY TERMINATION BY BW BW may terminate this Agreement at any time by delivering written notice to that effect to the Owners, which termination shall be effective on the 180th day after the effective date of receipt of such notice or on a later date specified in the notice. 16. TERMINATION FOR MATERIAL BREACH The failure of a party to keep or perform any material obligation on its part to be kept or performed according to the terms and provisions of this Agreement shall, at the election of any other party, constitute a material breach of this Agreement unless cured as hereinafter provided. In the event of any such material breach by a party, another party desiring to assert a claim of material breach shall first deliver to BW and all other parties to this agreement a written notice of its intention to declare a material breach of this Agreement which specifies the particular material breach or breaches. The defaulting party shall then have, (a) in the case of any failure to pay money, ten (10) days after delivery of such notice, or (b) in all other cases, thirty (30) days after delivery of such notice, in which to cure such specified material breach or breaches. If a specified material breach is not cured within said ten (10) days or thirty (30) days (whichever is applicable), or if a specified material breach other than a failure to pay money is of such a nature that it cannot be cured within said thirty (30) days and the defaulting party fails to commence to cure such material breach within said thirty (30) 18 days or fails thereafter to proceed to cure such material breach with reasonable diligence, the party claiming material breach may terminate this Agreement by delivering a written notice to that effect to the defaulting party. If the defaulting party disputes in good faith that a material breach exists, it shall deliver to the other parties a written notice to that effect and (a) the dispute shall be resolved in accordance with Section 22 of this Agreement and (b) the time to cure any such material breach shall be tolled (but not the defaulting party's obligation to make payments under Section 4 above) while the dispute is being resolved. Except as otherwise provided in Section 15 ("Voluntary Termination by BW") above and Section 19 ("Condemnation") below, this Agreement may be terminated only on the basis of a material breach which is not cured. 17. EFFECT nF TERMINATIQN. If this Agreement expires or is terminated for any reason whatsoever, the parties shall be relieved of all further rights, obligations and liabilities under this Agreement, except for rights, obligations or liabilities (including but not limited to any rights, obligations or liabilities arising under Sections 8 ("Operations"), 9 ("Indemnification"), 10 ("Insurance"), 11 ("Liens"), 13 ("Reclamation") or 14 ("Real Property Taxes") above or Sections 18 ("Surrender of Possession and Reconveyance") below) accrued prior to the effective date of expiration or termination. 18. SURRENDER OF POSSESSION AND RECONVEYANCE. Upon the expiration or termination of this Agreement, BW (a) shall surrender the Lands to the Owners except to the extent BW needs or desires to retain possession of the Lands to exercise, fulfill or discharge any rights, obligations or liabilities of BW that accrued prior to the expiration or termination of this Agreement; and (b) shall execute, acknowledge and deliver to the Owners a quitclaim deed conveying to the appropriate 19 Owner all right, title and interest of BW in and to the Lands which it acquired under the terms of this Agreement. If BW needs or desires to retain possession of the Lands after the expiration or termination of this Agreement to exercise, fulfill or discharge any accrued rights, obligations or liabilities of BW, then on or before the effective date of expiration or termination of this Agreement BW shall deliver to the Owners a notice describing in reasonable detail the accrued rights, obligations and liabilities of BW which BW needs or desires to exercise, fulfill or discharge and the operations which BW will undertake to exercise, fulfill or discharge such accrued rights, obligations and liabilities. 19. CONDEMNATION. In the event of the total taking of the Lands or a partial taking thereof which substantially interferes with the operations of BW under this Agreement, BW shall have the right to terminate this Agreement within thirty (30) days of said taking by delivering written notice to that effect to the Owners. If BW does not exercise said right to terminate this Agreement, the obligations and liabilities of BW to the Owners hereunder shall be equitably adjusted and the condemnation award shall be apportioned among the parties in accordance with their respective interests at the time of taking. The parties specifically reserve the right to take such action as they deem appropriate to assure such condemnation award is in accordance with their respective interests under this Agreement. 20. ASSIGNMENT. 20.1 Assignment by BW. The rights and obligations of BW under this Agreement may be assigned in whole or in part at any time to an Affiliate of BW which agrees in writing to be bound by the terms and provisions of this Agreement. Any other assignment by BW of its rights or obligations under this Agreement shall require the PTO] prior written consent of the Owners, which consent shall be the sole discretion of the Owners. Any assignee of BW shall agree in writing to be bound by the terms and provisions of this Agreement and such provision shall be incorporated in and made part of each such instrument of assignment or transfer. 20.2 Assignment by the Owners. The rights and obligations of either Owner under this Agreement may not be assigned whole or in part at any time without the prior written consent of BW, which consent shall not be unreasonably withheld. Any assignee of an Owner shall agree in writing to be bound by the provisions of this Agreement. All assignments which an Owner or its successors or assigns may grant shall be subject and subordinate to the rights and interests granted hereunder to BW and shall not prevent or interfere in any way with any of BW's operations under this Agreement. The provisions of the last preceding sentence shall be incorporated in and made a part of each such instrument of assignment or transfer. 20.3 Notice of Assignment. No assignment shall be binding upon a non -assigning party unless and until written notice thereof is delivered to the non -assigning party. 21. ROTATION SCHEDULES. In keeping with the Owners' desire that no permanent communities be developed on the Lands, all rotation schedules for employees at the Facilities shall be arranged so that no employee would be a permanent resident on the Lands. 22. DISPUTE RESOLUTION. 21 22.1 Arbitration of Disputes. All disputes, controversies and claims (collectively "Disputes") arising between or among (i) BW and the Owners, or (ii) SNC and BSNC (Where the dispute is between BW and the Owners, SNC and BSNC shall be treated as a single party for purposes of this Section 22.) and in connection with this Agreement including without limitation, those relating to damages, shall be resolved pursuant to the provisions of this Section 22 22.2 Definition of Dispute. Without limiting the generality of the foregoing, the following shall be considered Disputes for the purpose of this Section 22: (a) All questions relating to the interpretation of this Agreement and the breach or non-performance of any obligation, warranty or condition hereunder; (b) All questions relating to whether a party has, in breach of the terms of the Agreement, denied or rejected a claim or demand of the other party pursuant to the terms of this Agreement; and (c) All questions as to whether the right to arbitrate any such Dispute under this Agreement exists. 22.3 Submission to Mediation. If a dispute arises out of or relates to this Agreement, or the alleged breach thereof, and if said dispute cannot be settled through good faith negotiations, the parties agree to first endeavor to settle the dispute in an amicable manner by non -binding mediation administered by the American Arbitration Association under its then current Commercial Mediation Rules, before resorting to Arbitration. Notwithstanding the foregoing, ant party may simultaneously submit any such dispute to arbitration, pursuant to this Section 22, and such arbitration shall be conducted on a de novo basis. 22 22.4 Submission to Arbitration. In the event the parties are unable to resolve any such Dispute through good faith negotiations, any party may demand that the Dispute be submitted to arbitration. Such demand shall be made upon the other party in writing and shall state the issue to be arbitrated. 22.5 Selection and Qualification of Arbitrators. Within twenty (20) days of the date of a submission to the other party of a Dispute to arbitration, the party requesting arbitration shall notify the other party, in writing, of the identity of its arbitrator. Within ten (10) days of the date of the receipt of the identity of the arbitrator, the party receiving the same shall notify the other party of the identity of its arbitrator. Within twenty (20) days thereafter the two arbitrators so selected shall select a third arbitrator ("Neutral Arbitrator'). The three arbitrators are referred to herein as the "Arbitration Panel". The parties agree to select arbitrators who have been unrelated to them or any affiliate of theirs by employment or a contractual arrangement for the three years immediately preceding the arbitration. If the two party -selected arbitrators are unable to agree on a third arbitrator within twenty (20) days, the selection shall be made by the American Arbitration Association pursuant to its Commercial Arbitration Rules then in effect. Each arbitrator selected shall be a person of reasonable experience in the area which is the subject of the arbitration which may include, but shall not be limited to, the mining industry. 22.6 Arbitration Hearing and Procedure. (a) The arbitration hearing shall take place in Nome, Alaska or such other location as is mutually agreed upon by the parties and at a time selected by the Neutral Arbitrator after consultation with the parties but in no event later than one -hundred twenty (120) days after selection of the Neutral Arbitrator. 23 (b) Except as provided in this Section 38, all proceedings will be governed by the Uniform Arbitration Act of the State of Alaska. (c) Prior to the hearing, the parties may take depositions and exchange documents as are requested by the other party. Any issues concerning scope of discovery, timing of discovery, and related matters, shall be submitted to the Neutral Arbitrator for resolution. (d) In connection with the hearing: (i) the parties may submit such pre -hearing and post -hearing memoranda as allowed by the Arbitration Panel, and (li) each party may call witnesses and offer evidence supporting their position: provided, however, the names of all witnesses and copies of all documents or other non -testimonial evidence shall be exchanged between the parties at least fifteen (15) days prior to the commencement of the hearing, and (iii) the arbitration hearing shall be transcribed. (e) The award of the Arbitration Panel shall be rendered no later than sixty (60) days from the conclusion of the hearing. The Arbitration Panel shall submit to each of the parties its award, in writing, together with a written memoranda containing (i) a statement of the question(s) or matter(s) which was the subject of the Dispute; (ii) the Arbitration Panel's findings of fact and conclusions with respect thereto upon which their decision was based; (iii) the Arbitration Panel's final award with respect thereto; and (iv) should the matter involve a breach of the Agreement, the cure required to correct the breach and the time in which the defaulting party has to effectuate such cure, so long as the same is consistent with the terms of the Agreement including, but not limited to, this Section 38 and its subparts. 24 (f) The award shall be final and binding on the parties to the arbitration and judgment thereon may be entered and the award otherwise enforced in a court of competent jurisdiction in the State of Alaska. 22.7 Non -Material Breach. If the award of the Arbitration Panel is that a non- material breach has occurred, then the defaulting party shall have a reasonable time under the circumstances (which shall be determined by the Arbitration Panel and which shall be specified in their award, but which in any event shall not be less than thirty (30) days after the award of the Arbitration Panel) in which to cure or diligently commence to cure, any such breach. This Agreement may not be terminated on the basis of a non- material breach; provided that if the breaching party does not cure such non -material breach in the time specified in the Arbitration Panel's award, then the breach shall be deemed a non -cured material breach, and the non -defaulting party may elect to terminate this Agreement. 22.8 Material Breach. If the award of the Arbitration Panel is that a material breach has occurred and such material breach is not cured, or the party committing such material breach has not diligently commenced such cure, within a reasonable time under the circumstances (which shall be determined by the Arbitration Panel and which shall be specified in their award, but which in any event shall not be less than thirty (30) days after the award of the Arbitration Panel) the non -defaulting party may, subject to Sections 17 and 22.9 elect to terminate this Agreement. Any such election shall be effective upon sixty (60) days prior written notice given not more than sixty (60) days after the termination of the period specified above within which such breach may be cured. 25 22.9 Termination and Damages. In the event the non -defaulting party terminates this Agreement on account of a material breach, the parties hereto shall be relieved of all further rights, obligations and liabilities whether such rights, obligations, or liabilities are known or unknown at the time of such expiration or termination and whether such rights, obligations or liabilities are asserted after such expiration or termination except for the payment of monies due and owing on or before the date of the termination and except for rights and obligations specified in Section 17 ("Effect of Termination"). This Section shall not be construed to limit in any way a party's right to recover through arbitration damages caused by any breach, whether material or non- material. 22.10 Arbitration Expenses. The non -prevailing party, as designated by the Arbitration Panel, shall pay all costs and expenses of the arbitration or injunctive court proceedings. Costs shall only include the arbitrator's fees and expenses, expenses for the arbitration hearing facility, transcriber's costs and fees, fees charged by the American Arbitration Association, if any, and the prevailing parties' reasonable attorney and expert witness fees incurred in connection with the arbitration. 23. NOTICES, PAYMENTS AND DELIVERY. 23.1 Written Notices. All notices contemplated by this Agreement shall be in writing. 23.2 Delivery by Mail. Any notice, payment or other document contemplated by this Agreement may be delivered by mail if mailed by United states certified or registered mail, return receipt requested, postage prepaid and addressed as follows: (a) If to SNC: Sitnasuak Native Corporation P11 Attention: President P.O. Box 905 Nome, AK 99762 Telephone: (907) 443-2632 Fax No. (907) 443-3063 (b) If to BSNC Bering Straits Native Corporation Attention: President P.O. Box 1008 Nome, Alaska 99762 Telephone No.: 907-443-5252 Fax No.: 907-443-2985 (c) If to BW Banner Wind, LLC Attention: Management Board 400 Bering Street Nome, Alaska 99762 Telephone No.: 907-443-2632 Fax No.: 907-443-3063 23.3 Delivery by Electronic Communication. Any notice or other document contemplated by this Agreement may be delivered by electronic communication at the party's telecopy number described in Section 23.2 ("Delivery by Mail") above or at such other telecopy number as the party may designate in writing pursuant to Section 23.5 ("Change of Address") below. Delivery by electronic communication must be followed by a delivery by mail or by personal service as described in Section 23.2 ("Delivery by Mail") or 23.4 ("Delivery by Personal Service"), respectively, and shall be deemed effective and complete only when the notice or document has been delivered pursuant to Section 23.2 ("Delivery by Mail") or 23.4 ("Delivery by Personal Service"), as applicable. 27 23.4 Delivery by Personal Service. Any notice, payment or other document contemplated by this Agreement may be delivered by personally serving said notice, payment or other document upon the party at the address indicated in Section 23.2 ("Delivery by Mail") above or at such other address as the party may designate in writing pursuant to Section 23.5 ("Change of Address") below. In the event of delivery by personal service, no mailing of the notice, payment or other document shall be necessary and delivery shall be deemed effective and complete on the date of said personal service. 23.5 Change of Address. The address to which a party desires that notices, payments and other documents be delivered may be changed at any time by giving written notice to that effect to the other parties. 24. GENERAL PROVISIONS. 24.1 United States Currency. All references to dollars in this Agreement refer to United States currency. 24.2 Time. Time is of the essence of this Agreement. 24.3 Waiver. The failure of any party to insist upon the strict performance of any provision of this Agreement or to exercise any right, power or remedy consequent upon a breach thereof shall not constitute a waiver by said party of any such provision, breach or subsequent breach of the same or any other provision. 24.4 Remedies. Except as otherwise provided in this Agreement, the parties shall be entitled to any.and all remedies provided by law, or in equity. 24.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute a single agreement. This Agreement shall not become binding VO upon any party unless and until each party has executed at least one counterpart of this Agreement (which counterpart need not be the same counterpart executed by the other party) and has then forwarded a copy of the signature page of said counterpart to every other party certifying that it is a true and correct copy of the signature page of the Agreement. 24.6 Further Actions. The parties hereby agree to take any and all actions and execute, acknowledge and deliver any and all documents reasonably necessary to effect the purposes of this Agreement. 24.7 Modification of Agreement. This Agreement may be modified only by a document in writing executed by all of the parties hereto. 24.8 Entire Agreement. This Agreement together with all Exhibits and Attachments hereto embodies the entire lease and understanding between the parties and supersedes all prior leases and understandings, whether written or oral, relating to the subject matter hereof. 24.9 Law Governing. This Agreement shall be interpreted and construed in accordance with, and governed and enforced in all respects by, the laws of the State of Alaska. 24.10 Construction. Each party has had the assistance of counsel in negotiating and drafting this Agreement, so the rule calling for agreements to be construed against the drafter shall not apply. 24.11 Severability. If any provision of this Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Agreement and any other application of such provision shall not be affected thereby. 29 24.12 Implied Covenants. No implied covenants are contained in this Agreement. 24.13 Binding Effect. The rights, obligations, and liabilities set forth in or arising under this Agreement shall extend to, be binding upon, and inure to the benefit of the successors and assigns of the respective parties. 24.14 Paragraph Headings. The descriptive paragraph headings throughout this Agreement are for convenience and reference only, and the words contained therein shall not be held to expand, modify, amplify or aid in the interpretation or construction of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first hereinabove set forth. STATE OF ALASKA SITNASUAK NATIVE CORPORATION 1, a� 'YAM OR BERING STRAITS NATIVE CORPORATION By: Its: w"- BANNER WIND, LLC 30 ) ss. SECOND JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on the day of, 2008, at Nome, Alaska, the foregoing instrument acknowledged before me by the President of SITNASUAK NATIVE CORPORATION., an Alaska corporation, on behalf of said corporation. IN WITNESS WHEREOF, I have hereunto s my hand and official seal. Nota in nd for Alaska My Commission Expires STATE OF ALASKA ) ) ss. SECOND JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on the '^ day of Sep 2008, at Nome, Alaska, the foregoing instrument acknowledged before me by 7 i-, '-T, -z -o I- , the Pre ';010nf- of BERING STRAITS NATIVE CORPORATION, an Alaska corporation, on behalf of said corporation. WHEREOF, I have hereunto sot my hand and offir4ial "aal, M, t;.'. 47 ^5 4� STATE OF°9fiC�ASKj SECOND JUDICIAL DISTRICT Notary Public in and for Alask . My Commission Expires: 4 ) ss. THIS IS TO CERTIFY that on the day of 5e r 2008 at Nome, Alaska, the foregoing instru ent acknowledged �before me by lyQ�d F'05fer , a PjY_6iGt" f of BANNER WIND, LLC, an Kaska limited liability company, on behalf of said company. IN HEREOF, I have hereunto set my hand and official seal. r ®® Notary Public in and for Alaska LgLAG My Commission Expires: q-7-- °-PCB 31 32 /145750 SCHEDULE "A" TO AGREEMENT TO DEVELOP AND OPERATE WIND POER FACILITIES DESCRIPTION OF THE LANDS 33 The lands contained within the Wind Farm area are described as follows: Kateel River Meridian, Alaska T. 10 S., R. 34 W. Section35: SW 1/4 SW 1/4 SW 1/4, E 1/2 SW 1/4 SW 1/4, W 1/2SE 1/4 SW 1/4 T. 11S., R. 34 W. S e c t i o n 3: E 1/2 S E 1/4 N E 1/4, S E 1/4 N E 1/4 N E 1/4, E 1/2 N E 1/4 S E 1/4 Section 2: W 1/2 NW 1/4, W 1/2 NE 1/4 NW 1/4, W 1/2 NW 1/4 SW 1/4 Aggregating approximately 220 acres. The following easements are defined herein for access and service to the Wind Farm Lands: Easement 1: An easement, 100 feet in width, from FAS 1311 in Section 25, T. 10 S., R. 34 W., KRM, westerly through the SE 1/4 of Section 25, T. 10 S., R. 34 W., KRM, thence Southwesterly through Section 35, T. 10 S., R. 34 W., KRM to the NW 1/4 of Section 2, T. 11 S., R. 34 W. KRM, for access to the Land Farm Lands Described herein. Easement 2: An easement, 100 feet width, from FAS 131, known as the Nome to Teller Road, in the SW 1/4 of Section 3, T. 11 S., R. 34 W., KRM, northeasterly in the direction of VABM 592, located near the intersection of Section 2 and 3, T. 11 S., R. 34 W., KRM, for the purposes of constructing and maintaining an electrical intertie with the Wind Farm Lands. I.reryi, , a fi w. '.. t4- , Tl.;VmK