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
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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.
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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.
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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.
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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
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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.
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(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.
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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.
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• 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
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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
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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
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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
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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)
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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
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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
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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