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HomeMy WebLinkAboutUnalakleet Bering Straits Native Corporation Wind Power Facilities Agreement - May 2009 - REF Grant 2195401AGREEMENT TO DEVELOP AND OPERATE WIND POWER FACILITIES by and among Bering Straits Native Corporation and Unalakleet Valley Electric Cooperative, Inc. May 29, 2009 TABLE OF CONTENTS 1. DEFINITIONS Agreement Affiliate ANSCA Best Efforts BSNC UVEC 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 Subsurface Estate 2.2 UVEC's Rights 3. TERM OF AGREEMENT 4. RENT 4.1 Reservation of Rent 4.2 Payment of Rent 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. REAL, PROPERTY TAXES 14. VOLUNTARY TERMINATION BY UVEC 15. TERMINATION FOR MATERIAL BREACH 16. EFFECT OF TERMINATION 17. SURRENDER OF POSSESSION AND RECONVEYANCE 18. CONDEMNATION 19. ASSIGNMENT 19.1 Assignment by UVEC 19.2 Assignment by Owner 19.3 Notice of Assignment 20. ROTATION SCHEDULES 21. DISPUTE RESOLUTION 21.1 Arbitration of Disputes 21.2 Definition of Dispute 21.3 Submission to Mediation 21.4 Submission to Arbitration 21.5 Selection and Qualification of Arbitrators 21.6 Arbitration Hearing and Procedure 21.7 Non -Material Breach 21.8 Material Breach 21.9 Termination and Damages 21.10 Arbitration Expenses 22. NOTICES, PAYMENTS AND DELIVERY 22.1 Written Notices 22.2 Delivery by Mail 22.3 Delivery by Electronic Communication 22.4 Delivery by Personal Service 22.5 Change of Address 23. GENERAL PROVISIONS 23.1 United States Currency 23.2 Time 23.3 Waiver 23.4 Remedies 23.5 Counterparts 23.6 Further Actions 23.7 Modification and Agreement 23.8 Entire Agreement 23.9 Law Governing 23.10 Construction 23.11 Severability 23.12 Binding Effect 23.13 Paragraph Headings SCHEDULE A - LANDS 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. Facilities. The term "Facilities" means a wind farm, including wind turbines and related power lines, substations and structures. Green Tact. The term "Green Tag" means any transaction in which the electric power generated by the Facilities is not physically delivered to UVEC's customer, but rather the environmental benefits created by the Facilities, in exchange for a payment to UVEC, are attributed to that customer. Gross Revenues. The term "Gross Revenues" means the gross sales realized by UVEC 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 UVEC 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 se ("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. Lands. The term "Lands" means all rights, titles, and interests in and to the subsurface estate of the lands described in Schedule A attached hereto. 5 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" shall mean either BSNC, or UVEC. The term "parties" means BSNC and UVEC. 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 BSNC. Sand and Gravel. The term "Sand and Gravel", whether capitalized or not, means the unconsolidated sedimentary deposits of sand and gravel. 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. Inc. UVEC. The term "UVEC" means Unalakleet Valley Electric Cooperative, 6 2. GRANT OF LEASE 2.1 Grant of Lease of Subsurface Estate. Subject to the terms, conditions, exceptions and reservations herein contained, and for the term provided herein, BSNC hereby grants, leases and demises exclusively to UVEC, its successors and assigns, all rights, titles, interests and estates now owned or hereafter acquired by BSNC in and to the subsurface estate of the Lands for the purpose of the development and operation of Facilities. 2.2 UVEC's Rights. In furtherance of the grant made in this Section 2, UVEC 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 UVEC 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, 2034, and as long thereafter as there is commercial production of electric power from the Lands, unless sooner 7 terminated in accordance with the terms purposes of this Section 3, commercial prow di exist only if Facilities, capable of producin c quantities and for sale on a commercial bas is such Facilities have operated at least once v calendar years on a regularly scheduled bay 4. RENT. IM 4.1 Reservation of Rent. The Ow n BSNC, the following one time rent payme, = nt value of a series of annual payments throes u one-time annual payment has been agreed 4.2 Payment of Rent. UVEC sh a form of a letter acknowledging a donation n exchange for this written acknowledgemen- t, UVEC any additional payments for its u e duration of the stated lease term. Shoul� 9 Id accept tax deductable donations, both part- it ie renegotiate the terms and conditions docurr- in terms of this lease by either party must be -�= m information documenting UVEC's inabi■ E iGi Renegotiations can include the termination c 5. BSNC'S USE OF THE SUBSURFACIDW ___ CI This Agreement shall not restrict of r lessee, to explore and develop the subs u1 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. RENT. 4.1 Reservation of Rent. The Owner hereby reserves, and UVEC shall pay to BSNC, the following one time rent payment which has been calculated as the present value of a series of annual payments throughout the duration of the lease term. The one-time annual payment has been agreed upon by both parties to be: $70,000. 4.2 Payment of Rent. UVEC shall deliver the rent payment to BSNC in the N�Z'L form of a letter acknowledging a donation by BSNC in the amount of $70,000. In exchange for this written acknowledgement, BSNC waives its right to collect or charge UVEC any additional payments for its use of the lands described herein within the duration of the stated lease term. Should it be determined that UVEC is unable to accept tax deductable donations, both parties also agree to extend reasonable efforts to renegotiate the terms and conditions documented herein. Any desire to renegotiate the terms of this lease by either party must be doocumented in writing and accompanied by information documenting UVEC's inability to accept tax deductible donations. Renegotiations can include the termination of this agreement if desired by both parties. 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 8 exploration and development operations can be performed with minimal disturbance to any Facilities UVEC may construct on the Lands. BSNC's commercial development of the subsurface estate of 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 UVEC to utilize any of the sand or gravel or other minerals located on the Lands, except that UVEC 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 UVEC notifies BSNC at least fifteen days in advance before any such operations commence. 7. ACCESS: WATER. The Owner has informed UVEC 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. UVEC 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 UVEC shall have the right to contest in good faith any such law, regulation, or permit, or the application thereof. 8.2 Hazardous Substances. 9 (a) Conformance With Laws and Procedures. UVEC 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 UVEC shall have the right to contest in good faith any such laws, regulations and ordinances or the application thereof. (b) Reporting. UVEC shall deliver to BSNC 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. UVEC 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 BSNC`s surrounding lands without the prior written consent of BSNC (which consent shall be within the sole discretion of BSNC). 8.4 Cultural and Archeological Finds. UVEC shall promptly notify BSNC 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 BSNCs knowledge, no such site has been identified. Upon being so notified, BSNC shall promptly, but not later than ten (10) days after such notice, inspect, in conjunction with UVEC, such objects or sites. UVEC and BSNC 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. 10 9. INDEMNIFICATION. UVEC shall defend, indemnify, and hold harmless BSNC 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 BSNC 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 UVEC prior to and under this Agreement; provided, however, that UVEC'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 dispute between BSNC and one or more Shareholders in a derivative action or otherwise relating to the execution, delivery, performance or administration of this Agreement by BSNC; (2) the negligent acts, omissions, or willful misconduct of BSNC or their agents, employees, or Affiliates; or (3) activities or actions of BSNC or its predecessors -in -interest or any other third party occurring prior to the date of this Agreement. BSNC will indemnify, defend and hold UVEC harmless from claims or liabilities arising under 1, 2, and 3 above (except for activities or actions of any other third party occurring prior to the date of this Agreement). 10. INSURANCE. UVEC shall procure and furnish evidence to BSNC 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. • Property damage - $1 million each occurrence and $2 million aggregate. 11 • Umbrella liability - $5 million each occurrence and $5 million aggregate. Said policy shall cover UVEC's operations hereunder and shall name BSNC as an additional insured. It is understood that said insurance policies shall be so written that no insurance company shall have any recourse against BSNC, by way of subrogation or otherwise, or any loss covered by or paid or payable under said policies. UVEC shall provide 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 prior to cancellation of insurance. 11. LIENS. UVEC shall be solely responsible for paying for all labor performed upon or materials furnished to the Lands at the request of UVEC. UVEC 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. UVEC may contest the validity of any such lien that may be filed if UVEC provides reasonable security to BSNC as may be required by applicable law. UVEC shall post and record notices of non -responsibility for the benefit of BSNC pursuant to AS 34.35.065 and AS 34.35.150 and any other applicable laws. 12. RECLAMATION 12.1 Reclamation Policy. UVEC 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 UVEC to use its Best Efforts to return the Lands to a stable and productive condition to the extent reasonably practicable in accordance with Section 12.2 below. Such reclamation shall 12 include without limitation the stabilization, reshaping, contouring and revegetation (where reasonably practicable) of all Lands affected by the operations of UVEC. 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 UVEC's operations. 12.2 Reclamation Policy. UVEC 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: desirable. (a) The parties recognize that reclamation of disturbed lands is (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 UVEC'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. 13 (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. UVEC 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 BSNC for review and approval. Within a reasonable time BSNC 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 UVEC's reclamation obligations under this Section 12 as to the specific circumstances and conditions considered therein. The Reclamation Plan shall be delivered to BSNC prior to the commencement of commercial sales from the Facilities. 12.4 Completion of Reclamation. UVEC's obligations under this Section 12 shall be satisfied at such time as all applicable government agencies have approved UVEC'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 14 changed circumstances not foreseen in such plan ("Additional Reclamation Obligations"), or have otherwise certified that UVEC 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 UVEC'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 shah relieve UVEC of its other obligations under this Agreement, including without limitation its indemnity obligations. 13. REAL PROPERTY TAXES UVEC shall pay any and all real property taxes and assessments relating to BSNCs interest in the Lands levied by the State of Alaska, any municipality or any other governmental entity, except for interest retained by BSNC. 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. UVEC shall pay any and all taxes or assessments levied or accrued after the expiration or termination of this Agreement until UVEC removes improvements. The Owner shall promptly deliver to UVEC copies of any and all notices which they receive relating to any such taxes or assessments. UVEC 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 15 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, BSNC shall cooperate fully with UVEC and shall execute any and all documents reasonably necessary to permit UVEC to pursue such contest. UVEC shall not permit or suffer the Lands, or any part thereof, to be conveyed, or BSNCs title thereto to be lost, as the result of nonpayment of any such tax or assessment for which UVEC is responsible and with respect to which UVEC has received notice. UVEC shall furnish to BSNC duplicate receipts for all such taxes and assessments when paid. 14. VOLUNTARY TERMINATION BY UVEC UVEC may terminate this Agreement at any time by delivering written notice to that effect to BSNC, 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. 15. 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 UVEC 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 16 (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) days or fails thereafter to proceed to cure such material breach with reasonable diligence, the parry 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 UVEC") above and Section 19 ("Condemnation") below, this Agreement may be terminated only on the basis of a material breach which is not cured. 16. EFFECT OF TERMINATION. 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 S ("Operations"), 9 ("Indemnification"), 10 ("Insurance"), 11 ("Liens"), or 13 ("Real Property Taxes") above or Sections 17 ("Surrender of Possession and Reconveyance") below) accrued prior to the effective date of expiration or termination. 17. SURRENDER OF POSSESSION AND RECONVEYANCE. Upon the expiration or termination of this Agreement, UVEC (a) shall surrender the Lands to BSNC except to the extent UVEC needs or desires to retain possession of 11N the Lands to exercise, fulfill or discharge any rights, obligations or liabilities of UVEC that accrued prior to the expiration or termination of this Agreement; and (b) shall execute, acknowledge and deliver to BSNC a quitclaim deed conveying to the appropriate Owner all right, title and interest of UVEC in and to the Lands which it acquired under the terms of this Agreement. if UVEC 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 UVEC, then on or before the effective date of expiration or termination of this Agreement UVEC shall deliver to BSNC a notice describing in reasonable detail the accrued rights, obligations and liabilities of UVEC which UVEC needs or desires to exercise, fulfill or discharge and the operations which UVEC will undertake to exercise, fulfill or discharge such accrued rights, obligations and liabilities. 18. CONDEMNATION. In the event of the total taking of the Lands or a partial taking thereof which substantially interferes with the operations of UVEC under this Agreement, UVEC shall have the right to terminate this Agreement within thirty (30) days of said taking by delivering written notice to that effect to BSNC. If UVEC does not exercise said right to terminate this Agreement, the obligations and liabilities of UVEC to BSNC 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. 19. ASSIGNMENT. 18 19.1 Assignment by UVEC. The rights and obligations of UVEC under this Agreement may be assigned in whole or in part at any time to an Affiliate of UVEC which agrees in writing to be bound by the terms and provisions of this Agreement. Any other assignment by UVEC of its rights or obligations under this Agreement shall require the prior written consent of BSNC, which consent shall be the sole discretion of BSNC. Any assignee of UVEC 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. 19.2 Assignment by BSNC. The rights and obligations of the Owner under this Agreement may not be assigned whole or in part at any time without the prior written consent of UVEC, which consent shall not be unreasonably withheld. Any assignee of the Owner shall agree in writing to be hound by the provisions of this Agreement. All assignments which the Owner or its successors or assigns may grant shall be subject and subordinate to the rights and interests granted hereunder to UVEC and shall not prevent or interfere in any way with any of UVEC'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. 19.3 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. 20. ROTATION SCHEDULES. In keeping with BSNCs 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. 19 21. DISPUTE RESOLUTION. 21.1 Arbitration of Disputes. All disputes, controversies and claims (collectively "Disputes") arising between or among UVEC and BSNC, and in connection with this Agreement including without limitation, those relating to damages, shall be resolved pursuant to the provisions of this Section 22 21.2 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. 21.3 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. 21.4 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 20 Dispute be submitted to arbitration. Such demand shall be made upon the other party in writing and shall state the issue to be arbitrated. 21.5 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. 21.6 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. (b) Except as provided in this Section 38, all proceedings will be governed by the Uniform Arbitration Act of the State of Alaska. OM (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 (ii) 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. 22 (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. 21.7 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. 21.8 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 16 and 21.9 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. 23 21.9 Termination and Damages. In the event the non -defaulting parry 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. 21.10 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. 22. NOTICES. PAYMENTS AND DELIVERY. 22.1 Written Notices. All notices contemplated by this Agreement shall be in writing. 22.2 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 BSNC 24 Bering Straits Native Corporation Attention: President P.O. Box 1008 Nome, Alaska 99762 Telephone No.: 907-443-5252 Fax No.: 907-443-2985 (b) If to UVEC Unalakleet Valley Electric Cooperative, Inc. P.O. Box 186 Unalakleet, Alaska 99684 Telephone No.: 907- Fax No.: 907-624-3009 22.3 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 22.2 ("Delivery by Mail") above or at such other telecopy number as the party may designate in writing pursuant to Section 22.5 ("Change of Address") below. Delivery by electronic communication must be followed by a delivery by mail or by personal service as described in Section 22.2 ("Delivery by Mail") or 22.4 ("Delivery by Personal Service"), respectively, and shall be deemed effective and complete only when the notice or document has been delivered pursuant to Section 22.2 ("Delivery by Mail") or 22.4 ("Delivery by Personal Service"), as applicable. 22.4 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 parry at the address indicated in Section 22.2 ("Delivery by Mail") above or at such other address as the party may designate in writing pursuant to Section 22.5 ("Change of Address") below. In the event of delivery by personal service, no mailing of the notice, payment or other document shall be 25 necessary and delivery shall be deemed effective and complete on the date of said personal service. 22.5 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. 23. GENERAL PROVISIONS. 23.1 United States Current . All references to dollars in this Agreement refer to United States currency. 23.2 Time. Time is of the essence of this Agreement. 23.3 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. 23.4 Remedies. Except as otherwise provided in this Agreement, the parties shall be entitled to any and all remedies provided by law, or in equity. 23.5 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 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. 26 23.6 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. 23.7 Modification of Agreement. This Agreement may be modified only by a document in writing executed by all of the parties hereto. 23.8 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. 23.9 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. 23.10 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. 23.11 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. 23.12 Implied Covenants. No implied covenants are contained in this Agreement. 23.13 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. 27 23.14 Paraoraph 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. BERING STRAITS NATIVE CORPORATION By, Its: UNALAKLEET VALLEY ELECTRIC COOPERATIVE, INC. By v-�- its STATE OF ALASKA ) ) ss, SECOND JUDICIAL DISTRICT THIS IS TO CERTIFY that on the 2a day of f 2009, at Lorne, Alaska, the foregoins instrument acknowledged before me bye 4`i A f 1 G A 6 6 L , the VPtAh)h -0) }--6"vr<-O of BERING STRAITS NATIVE CORPORATION, an Alaska corporation, on behalf of said corporation. IN WITNESS WHEREOF, I have My 28 set my hand and official sea]. is In and for Alaska sion Expires: 678 STATE OF ALASKA ) ) ss. SECOND JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on the day of fl , 2009 at Unalakleet, Alaska, the foregoing instrument acknowledged before me by 1Go,0i ' To\"ja-k-o , a of Unalakleet Valley Electric Cooperative, Inc., an Alaska company, on behalf of said company. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. ,P ' � Notary blic in and for Alaska �►OTA My Commission Expires: S-c3-2-0 0 pV$L1G ,r bA 0= ���►rI11i ►����,� 29 SCHEDULE "A" TO AGREEMENT TO DEVELOP AND OPERATE WIND POWER FACILITIES DESCRIPTION OF THE LANDS 30 LEGAL DESCRIPTION FOR UVEC WIND TURBINE LEASE LOT LOCATED IN UNALAKLEET, ALASKA That portion of Section 23, Township 18 South, Range 11 West, Kateel River Meridian, Alaska, described as follows: Commencing at Corner 3 of US Survey 9363 marked by a 3-1/4" BLM brass capped monument as shown of the official BLM plat of US Survey 9363 dated as officially filed on April 15, 1991 and later as described and shown as the northwest corner of Tract B, Kayoukluk Replat filed as plat 2006-16 in the Cape Nome Recording District; thence N89°59'28"E along the northern boundary line of Tract B and Tract C, Kayoukluk Replat a distance of 744.01 feet to a point on the northern boundary line of Kayoukluk Replat marking the TRUE POINT OF BEGINNING; thence N00°00' 00"E a distance of 1338.44 feet to a point on the easternmost right-of-way line of the Unalakleet Landfill Road, ADOT Project STP-- 0002(47)/66482 recorded as Record of Survey 2003-16 in the Cape Nome Recording District; thence in a northeasterly direction along the eastern right-of- way of the Unalakleet Landfill Road a distance of 553.01 feet to a point on the eastern right-of-way of the Unalakleet Landfill Road; thence S00°00'00"E a distance of 1,821.02 feet to a point on the northern boundary line of Kayoukluk Replat; thence S89"5928"W along the northern boundary line of Kayoukluk Replat a distance of 270.00 feet to the POINT OF BEGINNING, containing 9.79 Acres, more or less.