20051025Affidavit.pdf

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Dean J. Miller ISB #1968
McDEVITf & MILLER LLP
420 West Bannock Street
O. Box 2564.83701
Boise, ID 83702
Tel: [phone]
Fa.~: 208.336.6912
ioe~mcdevitt-miller.com
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Attorneys for Magic Wind, UC,
ORIGINAL
IN THE MA TIER OF TIlE PETITION OF
IDAHO PO~R CONW ANY FOR AN
ORDER TEMPORARILY SUSPENDING
IDAHO PO~R'S PURPA OBLIGATION TO
ENTER INTO CONTRACTS TO PURCHASE
ENERGY GENERATED BY WIND.
PO~RED S~L PO~R PRODUCTION
FACILITIES.
BEFORE THE IDAHO PUBLIC UTILITIES CONTh1ISSION
J:PC-03 - -3 ~Case No.
AFFIDA VIT OF ARMAND
ECKERT
STATE OF IDAHO
: ss
County of Twin Falls)
Armand Eckert, being fust duly sworn upon an oath, deposes and says:
I am a principle member of Magic Wind LLC ("Magic Wind") and make this Affidavit in
support of Magic Wind's Motion to Determine Exemption Status, filed herewith. I am over the age
of 21 years, and make this Affidavit of my own knowledge.
Magic Wind meets the exemption criteria specified in Commission Order No. 29839 for the
following reasons:
AFFIDAVIT OF ARMAND ECKERT.
Threshold Criteria
Power Purchase Agreement
Idaho Power Company has received from Magic Wind a developer originated signed
Purchase Power Agreement prior to July 1 2005. The agreement was signed by us and was hand
delivered and received by Idaho Power Company on June 14, 2005.
Interconnection Request
Magic Wind submitted to Idaho Power Company prior to July 1 , 2005 a complete Request
for Interconnection on forms provided by Idaho Power Company. It was signed by me on June 15,
2005 and was received by Idaho Power on June 17, 2005. The Request was accompanied by a
check in payment of the required fees and was received and deposited by Idaho Power Company on
June 17 2005 for the interconnection fee deposit. Subsequently, we have inquired of Idaho Power
Company as to the status of the interconnection study, but have received no reply.
Secondary Criteria
Wind Study
Attached as Exhibit A is a memo by Brian Jackson of Renaissance Engineering & Design
summarizing his analysis of the wind study currently being done for Magic Wind LLC. That study
was initialized in May 2005 and has been updated monthly since June 30, 2005.
Site Access and Control
The lands where the wind turbines will be located are on existing private land owned in fee
simple by Magic Irrigators, Inc. That company is owned 25% each by Granville Eckert, Norman
Eckert, Armand Eckert, and Kenneth Elkin. Those four individuals are also primary owners of
Magic Wind LLC. A formal easement agreement, Exhibit B, attached hereto, has been executed
between Magic Irrigators and Magic Wind. Two existing private roads, one on each side of the
project are owned by Magic Irrigators, Inc. and they intersect with the Twin Falls county road one-
AFFIDA VIT OF ARMAND ECKERT. 2
half mile away from the site. The Twin Falls Highway District has already been notified of this
project and the District has executed the required permit, Exhibit C, attached hereto.
Wind Turbines
Confidential Exhibit C , which will be made available upon execution of a Protective
Agreement, is a Memorandum of Understanding between Magic Wind and a
development/investment firm known as Blue Ribbon Energy LLC. Blue Ribbon, or its principles
have a commitment from Clipper Windpower Inc., a leading manufacturer of wind turbines for
delivery of eight (8) 2.5MW turbines in the spring of 2006. The commitment was received before
July 1 2005 is still in effect as of this date.
Project Financing
Confidential Exhibit C which will be made available upon execution of a Protective
Agreement, establish, with the degree of certainty that can reasonably be expected at this stage of
the project, the likely existence of adequate financing. Based on my experience in the industry, I do
not believe any investor-whether it be an institutional funder, or private venture funder-will
enter into a binding legal commitment until a Purchase Power Agreement (PP A) has been executed.
This project is unique, however, in that the original Suzlon turbines were purchased before the
project PP A was fmalized. Arrangements were made for the Clipper turbines before the end of June
2005 and the appropriate fmancing was arranged at that time.
Permitting and Licensing
In addition to roadway permits, discussed above, during the week of June 13, 2005, Magic
Wind applied to the Twin Falls County Planning and Zoning Administration for a Conditional Use
Permit. Notice of the Application was given to 19 entities and agencies including Twin Falls
County Assessor s Office, U.S. Bureau of Land Management, Twin Falls Canal Company, Idaho
Department of Agriculture, Idaho Department of Lands, Idaho Department of Water Resources
AFFIDAVIT OF ARMAND ECKERT. 3
OCT-20-05 THU 12: 23 PM ECKERT & SONS F AX NO.12085434993 P.
, iwnmcntal Prolcc\ioI' Agency, Idaho Department of Fjsh and Game, Twjn Falls Highw:'I~'
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I. Idaho Agl;cullurc Aviation Assodation, Inc., Idaho Manufactured lIousing AssodatiC':),
i \1:.office, U.S. Soil Conservatjon Map, Southern Idaho Regional Comrnun1calion CCtltr.
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~rttnll Comr\1unlty Action Agency, South Centra) District Health Department. Twin Falb,
:d~, liarks & Rel;reation, Twin Falls County Sheriff's Department , and Twin Falls County V'l(~.
.';,, '
!,., On Octobt;r 11 2005 the Planning and Zonjng Administration approved the Teque~ted
" . '
~IJiti'.)nal Use Permit.
t-'urrher your affiant sayeth not.
Dated this :;J (/1!:!-day of October, 2005,~f !fZr.
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Annand Eckert
, ,
TL OF IDAHO
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!ill'l \'1' Twin FalJ~ )
On lhi~.aoPaay of October, 2005. before me
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Ckf1M /IlL..-. a notary publk,
. ""'lIl dly al)pc.arcJ Al1nand Eckert known or identified to me to be the person whose nanl~ 1~'
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l:n:.,~d to the within instrument, and acknowledged to me tI e executed the same.
------..
Notary Public or IpAHO
Residing at: geit;L.
Commission E;1(.p.1-::;J./-o-h
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CERTIFICATE OF SERVICE
I hereby certify that on the it~ay of October, 2005, I caused to be served, via the method(s)
indicated below, true and correct copies of the foregoing document, upon:
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, ID 83720-0074
i i e\vell(G),puc.state. id. us
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Scott Woodbury
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, ID 83720-0074
swoodbu~puc.state.id
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Barton L. Kline
Monica B. Moen
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise, ill 83707
BKline~idahopower .com
MMoen~idahopower.com
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Linda Nordstrom
Pacifi Corp
825 NE Multnomah, Suite 1800
Portland, OR 97232
Fax: [phone]
lisa. no rdstro m~pac if! corp. com
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Bob Lively
Pacificorp
One Utah Center, 23rd Floor
201 S. Main Street
Salt Lake City, UT 84140
Fax: [phone]
bob .Ii vel y~paciticorp. com
Hand Delivered
S. Mail
Fax
Fed. Express
Email
AFFIDAVIT OF ARMAND ECKERT. 5
William 1. Batt
John R. Hammond, Jr.
Batt & Fisher, LLP
U S Bank Plaza, 5th Floor
101 South Capital Boulevard
O. Box 1308
Boise, ID 83701
Fax: [phone]
rh(~ battfisher. com
wib~battfisher.com
Hand Delivered
S. Mail
Fax
Fed. Express
Email
Michael Heckler
Director of Marketing & Development
Windland Incorporated
7669 West Riverside Drive, Suite 102
Boise, ID 83714
Fax: [phone]
mhec kl er windland. co m
Hand Delivered
S. Mail
. Fax
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Email
Peter J. Richardson
James T. Carkulis
Richardson & 0' Leary PLLC
99 East State Street
O. Box 1849
Eagle, ID 83616
Fax: [phone]
peter(G),richardsonando learv . com
Hand Delivered
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Fax
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Email
Glenn Ikemoto
Principal
Energy Vision, LLC
672 Blair Avenue
Piedmont, CA 94611
Fax: [phone]
glenniC?l)pacbell.net
Hand Delivered
S. Mail
Fax
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Email
AFFIDAVIT OF ARMAND ECKERT. 6
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Richard L. Storro
Director, Power Supply
and David Meyer
1411 E. Mission Ave.
O. Box 3727, MSC-
Spokane, W A 99220-3727
Fax: [phone]
di c k. storrouv,avistaco com
david. meyer(fYavistacorp. com
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S. Mail
Fax
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Email
R. Blair Strong
Paine, Hamblen, Coffin, Brooke &
Miller LLP
717 West Sprague Ave., Suite 1200
Spokane, WA 99201-3505
Fax: [phone]
r. blair .strong(fYpainehamblen.com
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Fax
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Email
J. R. Simplot Company
Attn: David Hawk
Director, Energy Natural Resources
999 Main Street
P. O. Box 27
Boise, Idaho 83702
[phone]
Fax: [phone]
dhawk~simplot.com
Hand Delivered
S. Mail
Fax
Fed. Express
Email
R. Scott Pasley
Assistant General Counsel
J. R. Simp lot Company
999 Main Street
P. O. Box 27
Boise, Idaho 83702
[phone]
[phone] telefax
spasley~simplot.com
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AFFIDAVIT OF ARMAND ECKERT - 7
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William M. Eddie
Advocates for the West
O. Box 1612
Boise, ID 83701
billeddie(tVrmci.net
Hand Delivered
S. Mail
Fax
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AFFIDA VIT OF ARMAND ECKERT - 8
RENAISSAHCE ENGINEERING DESIGN
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August 15 , 2005
MA G I C WIND LLC
716-B East 4900 North
Buhl, Idaho 83316
A TTN: ARMAND ECKERT
Wind Analysis Summary Memo
Dear Annand
This memo is intended to summarize a portion of the data analysis work which
has been done to date on your project in support of your letter to Idaho Power
indicating "substantial progress" and "project maturity" per the Commission
language.
I have performed the required comparisons to the long term data sets with
pennission from a particular site approximately 20 miles to the north of you and
have great news. The initial comparisons which indicated a comparable resource
have proven better than our expectations. When you first asked me to perfonn a
site assessment on your property in March 2005, I admit I drove out somewhat
reluctantly. However, as you may remember I did get excited on seeing the site
itself and even told you I thought this was one of the better locations I've seen. I
encouraged you to get anemometers ordered and installed and you followed
through. The good news is the correlation is coming out better than I imagined.
Note Chart 1 shows a daily comparison of about 6000 overlapping data points and
has a close parallel to the reference which we have long term data and a capacity
factor of approximately 31 % depending on the turbines involved. Chart 2 shows
the exciting news when the data is, sorted and the top 2000 points (those over
15mph) are charted. Magic is looking like it will be almost 10% higher capacity
fa~tor in output which is correlating at this point to around 35% net capacity
factor over an annual basis. That is great news. Of course we only have specific
data for this spring, but the close correlation at this point is very substantial.
7800 Alfalfa Lane, Melba Idaho 83641 ph 208-495-1111 fax [phone]
brian~c lever. ideas.com
Exhibit A
Page 1 of9
RENAISSAIiCE ENGINEERING DESIGN
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Also as a summary, the site you have correlates to the wind rose exceptionally
well and will allow a close turbine spacing, though since you are using larger
2MW class turbines that won t be a problem. Note the wind rose comparisons
and especially the frequency distribution comparisons which show a significant
amount of higher winds in the 20 to 30 mph range which is the generation area.
Also, since the wind energy varies with the velocity cubed, the higher mph bins
are worth a tremendous amount more energy. I took dates and reference data off
for the presentation here to protect anything of strategic importance. If we need
to show more information, then that is possible.
The final package for the investors is almost complete, though we will be
continuously updating our data correlation work each month.
I would like to close and re-emphasize this is one of the best sites in the state....it
has an excellent ridge, it is located on fann ground, it is near county roads
distribution lines and within two miles of a major substation. This project is
ready to go if we can just get the PP A in place.
Sincerely,
d~~
Brian D. Jackson, PE MBA CEM
Project Engineer
7800 Alfalfa Lane, Melba Idaho 83641 ph 208-495-1111 fax [phone]
brian~c lever- ideas. com
Exhibit A
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Exhibit A
Page 9 of 9
WINDPARK EASEMENT AGREEMENT
TIllS WINDP ARK EASEl'4ENT AGREE!vfENT ("This Agreement") is entered into asof June 14, 2005 (the "Eff&;tive Date ) by and between Magic IITigators, Inc., the landowner ("the Owner ) and Magic Wind LLC, an Idaho Limited Liability Company ("theDeveloper
).
Owner and Developer are sometimes herein referred to as the "Parties
RECIT ALS
Owner owns certain real property located in Twin Falls County, in the State of
Idaho , and more particularly described in Exhibit A attached hereto (the
Property
) .
Developer desires to obtain certain easements and other rights with respect to the
Properties in order for Developer to develop, install, own, and operate a windenergy conversion system on the Property.
Owner desires to grant to Developer certain easements and other rights over the
Property on the terms and conditions contained herein.
NOW, THEREFORE, for a valuable consideration, the receipt and sufficiency of whichare hereby acknowledged, Owner and Developer hereby agree as follows:
A G REE:rvIENT
1. Grant of Easement.Owner hereby grants and conveys to Developer (i) an
exclusive wind energy easement on, over, under and across all of the Property for
the free flow of wind, wind resource evaluation, wind energy development
energy storage system, energy transmission and related wind energy development
uses, all as described in Section 3.1 below (the Wind Development Easement"
(H) a non-exclusive easement on, over, under and across the Property for
transmission lines for electricity and communications and related facilities and for
a substation or interconnection facilities, if needed, all as described in Section 3.below (the "Transmission Easement"), and (iii) a non-exclusive easement on, overand across any and all access routes to and from the Property for purposes of
ingress and egress to and from the Property, all as described in Section 3.3 below(the "Access Easement") (collectively, the easements granted in (i), (ii), (Hi) arehereinafter refecred to as the "Easements ). The Easements and other rights
granted by Owner in this Agreement are easements in gross and are personal to
Developer for the benefit of Developer, its successors and assigns, as owner of theEasements.
Exhibit B
Page 1 of 16
2. Term
The tenn of the Easement and this Agreement (the "Term ), shallcommence on))1e Effective Date and shall continue until the expiration of
the Operating'Phase , unless sooner terminated as provided herein. As used
herein , the term "Operating Phase" shall mean the period commencing upon
the first production and sale of wind energy by Developer or its successorsor assigns on the Property or any portion thereof (the "CommercialOperation Date ), and ending forty (40) years thereafter. The parties agreeto execute and record a supplemental memorandum of this Agreement
setting forth the expiration date of the Tenn within ninety (90) days after the
beginning of the Operating Phase has been detennined. In the eventdeveloper fails to attain the Operating Phase of the wind development withinthree (3) years of the Effective Date, the Owner may tenninate thisAgreement. However, it is the tentative intent that the Developer will obtain
the Operating Phase by December 31 2005.
Continuing Easement.If Developer elects to tenninate the easements and
rights set forth in subparagraph (i) of Section 1 above in accordance with
Section 8.2 below, Developer, unless otherwise extended by the Parities
may still continue to have and enjoy the Transmission Easement and theAccess Easement granted in subparagraphs (ii) and (iii) of Section 1 , abovefor an additional two (2) years in exchange for payment to Owner of $200per easement acre per year.
3. Permitted Uses of the Property.The Easements described above shall permit
Developer to use the Property for the following uses, and no others:
~e of Wind Energy and Development Easement.:.The WindDevelopment Easement grants to Developer the exclusive right to erect,install, construct, replace, maintain, repair and operate wind energy
conversion systems on the Property, including the use of all wind that passes
over the Property, as Developer determines in its sole discretion. Without
limiting the generality of the foregoing, this Section 3.1 shall include theinstallation, construction, maintenance and operation of any and all
equipment and improvements necessary or useful for the conversion of wind
energy into electricity, including, but not limited to, wind turbines,
distribution wires, transmission wires, electric transfonners, if any, energystorage facilities, telecommunications equipment, power generationfacilities to be operated in conjunction with wind turbines installations
roads, anemonmeters , meteorological towers and wind measurement
equipment, control buildings, storage facilities, maintenance yards, and
related facilities and equipment, but shall not include the construction
installation or erection of any temporary or pennanent residential structures.
Developer shall detennine the size, type, manufacture and exact location ofsuch wind energy conversion systems in its sole discretion , but Developer
Exhibit B
Pa2e 2 of 16
shalJ not locate, position or place any wind turbines , unless otherwise agreedto by the Parties, within one thousand (1 000') of any occupied residence as
such residence exists on the Effective Date without Owner s prior writtenconsent. In adffition, the Wind Development Easement shall pennit
Developer to tonduct such tests and inspections, including wind speed testsand soils and geologic inspections, as Developer deems necessary or
desirable in connection with its development of a wind energy conversion
system on the Property.
Scope of Transmission Easement.The Transmission Easement grants
Developer the non-exclusive, so long as any other use does not interfere
with Developer s easement, right to erect, install, construct, replace
maintain, repair, operate and use (i) underground and/or overhead
distribution and transmission lines, cables and related facilities for the
transmission of electrical energy and communications and (ii) one or more
substations and interconnection or switching facilities , if any, from which
Developer and others may interconnect to a utility transmission system or
the transmission system of another purchaser of electrical energy, all
together with appropriate rights of way on, along and across the Property.
The Transmission Easement unless otherwise extended by the Parties, willterminate two (2) years after the termination of this Agreement. The
existence of this Transmission Easement shall, however, not become effective until Developer shall have generated electric energy through the
installation of wind turbines on Owner s property pursuant to the Wind
Energy and Development Easement described in Section 3.1 above and shallremain in effect only so long as Developer continues to generate such
electric energy on Owner s property.
Scope of Access Easement.The Access Easement grants to Developer (a)
the non-exclusive right of access, ingress and egress to and from the
Property and any facilities and equipment installed thereon or on adjacent
property or elsewhere over and across the Property by means of existing
roads or otherwise and by such route or routes as Developer may construct
form time to time. The routes or roads will be engineered approximately
fourteen (14) feet in width. The Access Easement, unless otherwiseextended by the Parties, will terminate two (2) years after the t~rmination of
this Agreement.
3.4 Waiver of Setback Requirements.Owner hereby consents to Developer
location of wind energy conversion systems or related facilities or
equipment at any location upon the Property and any adjacent properties
including at or near the property lines under the tenns and conditions herein.
Developer shall provide to Owner for Owner s review the layout and
location of the wind energy conversion systems, roads, transmission lines,
related facilities or equipment upon the Property. Owner may provide
advice on the layout and location. Developer will work in good faith with
the Owner to address any of Owner s concerns over the layout and location
Exhibit B
Page 3 of 16
however, Developer retains the power and control to select the final location
of wind energy conversion systems, roads, transmission lines, related
facilities , or equipment upon the Property. Developer without waiving itspower or cont~ over the final layout and location, agrees, to the extent
possible, to c~rdinate such selection as not to unreasonably interfere with
Owner s agric\;lltural activities. The Developer in good faith shall consultand coordinate with Owner on placement of wind energy conversion
systems and all related components to determine if any impact may occur on
. current agricultural operation conditions and shall use all commercially
reasonable efforts to locate wind conversion related systems as to minimally
impact the current agricultural methods employed by Owner. Owner
consent of final turbine placement shall not be unreasonably withheld.
Furthermore, in the event that the location of any portion of any wind
energy conversion system or related facilities or equipment to be installed or
constructed on the Property or any adjacent properties along or near
property lines is limited or restricted by any private agreements or
restrictions or any laws, rules or ordinances of any government agency,
Owner shall cooperate with and assist Developer in obtaining waivers or
variances from such requirements and shall execute all documents
evidencing Owner s agreement to the elimination of such requirements.
This Section 3.4 shall survive the termination of this Agreement.
Ownership of Installed Property.All property installed on the Property by
Developer, its successors or assigns, whether real , personal or mixed, shall
remain the property of Developer and shall be removable by Developer at
any time, subject to Section 8.3 below.
4. Payments to Owner.
Payment Due Prior to Commencement of Commercial Operation.
Beginning on the Effective Date and continuing through the Commercial
Operation Date, Developer shall pay to Owner an annual fee of $43,200.00.Such fee to be paid in four quarterly payments ten (10) days after the end of
each calendar quarter (i.e. March, June, September and December).
Reimbursement to Owner of Certain Development Expenses to Owner.
Developer agrees to reimburse owner for all costs Owner has expended
relating to the development of this project, including by not limited to the
deposit fee for the interconnect fees, for the purchase of the anemonmeters,
for consulting fees and for any and all legal fees in perfecting the purchase
power agreement and other agreements or disputes as they relate to this
project.
Exhibit B
Page 4 of 16
5. Developer Covenants.Developer covenants, represents and walTants to Owner as
follows as of the Effecti ve Date:
Compliance with Law.Developer shall at all times comply in all material
respects with~lI valid laws, ordinances, rules, regulations 'and statutes of
any governmental agency applicable to Developer s operations on and use
of the Property.
Payment of Taxes and Other Charges.Developer shall be responsible for
any increase in real property taxes levied against the Property attributable to
Developer s installation of improvements on the Property owned by, or
under the control of Developer, which improvements may include the wind
energy conversion system, power transmission and interconnection
facilities, if any, and other fixtures and equipment owned by Developer and
located on the Property. Developer will also pay when due all charges for
gas , water, electricity and other utilities used by Developer on the Property.
Liens.Developer shall keep Owner s interest in the Property free and clear
of all liens and claims of liens for labor and services performed on, and
materials, supplies and equipment furnished to the Property in connection
with Developer s use of the Property.
5.4 Hazardous Substances.Developer shall not violate, and shall indemnify
Owner against any violation by Developer, of any law, statute, order
ordinance, rule or regulation relating to the generation, manufacture,
storage, use release or threatened release, disposal, transportation or
presence of any substance which is defined as a "hazardous substance
deleterious substance
, "
hazardous material", toxic substance
, "
solid
waste" or "hazardous waste" in any applicable federal, state or local law
statute or ordinance on or under the Property. This Section in not intended
to apply to the legal and appropriate application of substances to mitigate or
control weeds.
Indemnification.Developer shall indemnify, defend (using counsel
satisfactory to Owner) and hold hannless Owner s members, partners,
mortgages , officers, employees and agents (each, an "Owner Indemnified
Party ) against any and allosses, damages, claims, expenses and other
liabilities resulting from or arising out of, either wholly or in part (i) any
operations of Developer on the Property, (H) any negligent act or negligent
failure to act on the part of Developer or anyone else engaged in doing work
for Developer, or (Hi) any breach of this Agreement by Developer. This
indemnification shall survive the termination of this Agreement. This
indemnification shall not apply to losses, damages, claims , expenses and
other liabilities caused solely by any negligent or deliberate act or omission
on the part of any Owner Indemnified Party.
Exhibit B
Pa2e 5 of 16
Insurance.Developer agrees to maintain liability insurance covering itsactivities on the Property and to name Owner as an additional insured. Suchcoverage shall have a minimum combined OCCUITence and annual limitationof $5 million, W'ovided that such amount may be provided as part of ablanket polic-1covering other properties. Developer agrees to supply Owner
with such certificates and other evidence of insurance as Owner mayreasonably request.
Damage to Growing Crops.In the event that Developer , its contractorsor subcontractors' activities on the Property pursuant to this Agreement
causes damage to any of Owner s growing crops on the Property, Developer
agrees to pay to Owner an amount equal to all of Owner s out-of-pocketlosses due to such damage to such growing crops, which shall be an amountequal to the revenue that the Owner would have received on the open marketfor said damaged crops during the growing season during which crops were
damaged or destroyed. Payment shall be made by Developer within thirty(30) days after completion of construction of Developer s entire windsystem project on the Property.
Weeds.Developer agrees to coordinate with the Owner to implement
reasonable appropriate weed mitigation measures on the Property.
Fences and Gates.Developer, its agents, employees, and invitees shall beresponsible to open and close any gates accessing the Owner s property, andto repair both the fences and gates from any damage caused by their opening
and closing of the gates in the course of gaining access to the Property.
Developer will be responsible for any gates left open and for any time spent
by Owner gathering livestock that strayed from Owner s property as a resultof Developer s or its agents or employees leaving a gate open.
Pro ect s Ex ansion. The Developer shall take initiative to maximizeopportunities to further wind energy conversion systems on the Owner
property under the terms and conditions of this Agreement.
6. Owner Covenants.Owner convents, represents and warrants to Developer as
follows as of the Effective Date:
QJ.Owner s Authority.Owner is the sole owner of Property. Owner and eachperson signing this Agreement on behalf of Owner have the full unrestricted
power and authority to execute and deli ver this Agreement and grant the
easements and rights herein granted. All persons having any ownership orpossessory interest in the Property (including spouses) have consented to the
terms of this Agreement and hereby give authority to the person signing this
document to sign such document on their behalf. Further, each spouse
hereby grants and agrees that any rights of community property, homestead
dower, contribution, and the like shall be subject and subordinate to this
Exhibit B
Pa2e 6 of 16
Agreement and the easement rights granted hereby. Owner hereby releasesand waives all rights under and by virtue of any applicable homestead
exemption laws as to the easements and rights granted hereunder.
Liens and Tenants.There are no liens, encumbrances, leases , mortgagesdeeds of trust, fractured interests, mineral or oil and gas rights, or otherexceptions to Owner s fee title ownership of the Property except as specified
in Exhibit C, if any, attached hereto. Owner represents and warrants thatthere are no tenants on the Property, except those specified in Exhibit D, ifany, attached hereto. Owner covenants and agrees that, during the Term, itshall not permit or grant tenancy rights in the Property to any entity or
person unless and until both the Owner and such tenant have executed
agreements presented by Developer subordinating such tenancy to the
Easements granted herein and/or protecting Developer from disturbance by
the tenant of Developer s use of the Easements (the "SubordinationAgreements). Furthennore, in the event that any entity or person holds or
comes to hold any form of tenancy on the Property during the Term without
having previously executed a Subordination Agreements, Owner shall notifyDeveloper within ten (10) days of gaining knowledge of such tenancy, andboth Owner and such tenant shall execute Subordination Agreements
presented by Developer within fifteen (15) days of such presentation byDeveloper.
6.3 No Interference.As long as no "Event of Default" (as this term is defined inSection 8 below) caused by the Developer has occulTed' and is' Gontinuing,Developer shall have the quiet use and enjoyment of the Property and all
wind that passes over the Property in accordance with the terms of this
Agreement without any suit, trouble or interference of any kind by Owner or
any party claiming through Owner. Owner may use the Property foragricultural, recreational, or other beneficial purposes, including oil and gas
exploration or any other mineraI exploration or extraction (see Section 6.3.below, for additional limitations on these uses) agreed to by the Parties, so
long as the use does not interfere with Developer s use of the Property.Owner will not otherwise use the Property for any sue or take any other
action which interferes with or is incompatible with Developer s use of theProperty as permitted by this Agreement or which in any way interferes with
the wind flow across the Property. Owner may build, construct, reconstructor locate improvement(s) on the Property, provided that any such
improvement(s) shall not (i) interfere with the wind flow across the
Property, (ii) interfere with or obstruct Developer s operations on the
Property, nor (iii) impede or obstruct Developer s access to the Property. In
. no event during the Term of the Agreement shall Owner construct, build orlocate or allow others to construct or locate any structure within one
thousand five hundred feet (1 500') of the Developer s improvements
including the wind conversion system and associated facilities as more
Exhibit B
Page 7 of 16
particularly described in Section 3 , above. Owner shall not construct or
locate , or allow others to construct or locate, wind turbines or other similarprojects on any property adjacent to the Property which is within fivethousand (5 O~) of Develop~r s imp~~vements, includi~g the windconverSIon s~tem, and assocIated faCIlItIes as more partIcularly descnbedin Section 3, above. Owner will not sell, transfer, assign, or encumber theProperty or grant any license, easement, or other right with respect to theProperty which could interfere with Developer s operations. Developer shallhave the right to remedy any such interference by any appropriate means
and the cost thereof shall be immediately reimbursed to Developer by
Owner, with interest at a rate equal to the rate of ten percent (10%) per
annum or the maximum rate pennitted by law and may be offset by
Developer against amounts owed to Owner under this Agreement. Ownershall have equal and parallel rights in connection with remedies as set forth
in the prior sentence.
Oil, Gas and MineraI Exploration and Extraction.Owner reserves theright to lease the Property for oil and gas exploration, extraction andtransportation by pipelines. Any exploration, extraction , or pipelineactivities arising from a mineral lease executed by Owner subsequent
to this Windpark Easement Agreement must be compatible with
Developer s use of the Property, and will not hann, interfere with, putat risk, or jeopardize any of the Developer s improvement, includingany infrastructure or improvements located in the subsurface, it beingunderstood and agreed that Owner does not own any mineral rights
appurtenant to the land which is the subject of this Agreement and has
no control over the exploration and development activities undertaken
by the holder of those rights. In addition, no such exploration or
extraction arising fonn a mineral lease executed by Owner subsequentto this Windpark Easement Agreement shall interfere with Developer
rights granted pursuant to this Agreement. Any damage to
Developer s infrastructure and improvements as a result of the
exploration or extraction of oil, gas, minerals arising from a mineral
lease executed by Owner subsequent to this Windpark Easement
Agreement shall be the responsibility of the Owner. Developer
reserves the right for reimbursement for repairs to such infrastructure
and improvements if damage is caused by others leasing or otherwise
using the Property for oil, gas, and mineral exploration and extraction.
2 Owner s Right to Generate.So long as it does not interfere with
Developer s use of the Property, Owner reserves the right to install and
construct wind generation and transmission lines or Owner s ownconsumptive use provided that Owner will not install or operate
generating turbines with combined name plate capacity of greater than
65 kilowatts (KW).
Exhibit B
Page 8 of 16
6.4 Hazardous Substances.Owner shall not violate, and shall indemnifyDeveloper against any violation by Owner of, any law, statute, orderordinance, rule or regulation relating to the generation, manufacturestorage, use, rel~ase or threatened release, disposal, transportation orpresence of a.;y substance which is defined as a "hazardous substancedeleterious substance
, "
hazardous material"
, "
toxic substance , or "solidwaste
, "
hazardous waste" in any applicable federal, state or local lawstatute or ordinance, on or under the Property. This Section is not intended
to apply to the legal and appropriate application of substances to mitigate orcontrol obnoxious weeds.
6.5 Indemnification.Owner shall indemnify, defend (using counsel satisfactory
to Developer) and hold hannless Developer and Developer s members,partners, mortgagees, officers, employees and agents (each , a "Developerindemnified Party ) against any and an losses, damages, claims , expensesand other liabilities resulting solely form or arising solely out of (i) any
operations of Owner on the Property, (ii) any negligent act or negligent
failure to act on the part of Owner or anyone else engaged in doing work for
Owner, or (iii) any breach of this Agreement by Owner. This
indemnification shall survive the termination of this Agreement. This
indemnification shall not apply to losses, damages, claims, expenses andother liabilities caused either wholly or in part by any negligent or deliberate
act or omission on the part of any Developer Indemnified Party.
Owner s responsibility to indemnify Developer under Section 6.5 iscapped at One Million Dollars ($1,000,000), unless an insurance
policy is in place which provides for greater coverage. In the event ofoil, gas, mineral exploration or extraction activities commence on the
Property by Owner or other party, the cap of Owner s responsibility toindemnify Developer under Section 6.5 is increased to Five Million
Dollars ($5,000 000).
7. Encumbrances; Required Notices to Mortgages.
Right to Encumber.Developer shall have the right at any time to mortgage
to any entity (herein, a "Mortgagee ) all or any part of Developer s interestunder this Agreement and the easements and rights created by this
Agreement without the consent of Owner.
Covenants for Mortgagees Benefit.Should Developer mortgage any of its
interest hereunder as provided in Section 7.1 above, Developer and Ownerexpressly agree between themselves and for the benefit of any Mortgagees
as follows:
Exhibit B
Page 9 of 16
(a) The Parties will not cancel or modify this Agreement without the priorwritten consent of each of the Mortgagees, which consent shall not be
unreasonably withheld or delayed.
(b) Each Mo~gee shall the right to do any act or thing required to be
perfonned by Developer under this Agreement, and Owner shall accept
any such act or thing performed by a Mortgagee under this Agreement
as if such act or thing was done by Developer itself.
(c) No default which requires the giving of notice to Developer shall beeffective unless a similar notice is given to all of the Mortgagees which
have recorded and/or given Owner personal notice of their secured
interest in Developer s property. If Owner shall become entitled to
tenninate this Agreement due to an uncured default by Developer
Owner will not terminate this Agreement unless it has first given written
notice of such uncured default and of its intent to terminate this
Agreement to each Mortgagee which have recorded and/or given Owner
personal notice of their secured interest in Developer s property and has
given each such Mortgagee at least thirty (30) additional days to cure the
default to prevent such termination of this Agreement. Furthermore, ifwithin such thirty (30) day period such Mortgagee notifies Owner that it
must foreclose on Developer s interest or otherwise take possession of
Developer s interest under this Agreement in order to cure the default.
Owner shall not tenninate this Agreement and shall permit such
Mortgagee a sufficient period of time as may be necessary for such
Mortgagee, with the exercise of due diligence, to foreclose or acquire
Developer s interest under this Agreement and to perform or cause to be
perfonned all of the covenants and agreements to be performed and
observed by Developer. Upon the sale or transfer of any interest in the
easements and rights granted hereunder by any such Mortgagee, suchMortgagee shall have no further duties or obligations hereunder.
(d) In case of the this Agreement as a result of any default or the
bankruptcy, insolvency or appointment of a receiver in bankruptcy for
Developer, Owner shall give prompt notice to all Mortgagees which
have recorded and/or given Owner personal notice of their secured
interest in Developer s property. Owner shall , upon written request of
the first priority Mortgagee which has recorded and/or given Owner
personal notice of their secured interest in Developer s property, made
within forty (40) days after notice to such Mortgagee, enter into a new
easement agreement with such Mortgagee, or its designee, within twenty
(20) days after the receipt of such request. Such new easement
agreement shall be effective as of the date of the tennination of this
Agreement by reason of default by Developer, and shall be for a term
equal to the remainder of the Term of this Agreement and upon the same
terms, covenants, conditions and agreements as contained in this
Exhibit B
Page 10 of 16
Agreement. Upon the execution of any such new easement agreement
such Mortgagee shall (i) pay Owner any amounts which are due Owner
from Developer, (ii) pay Owner any and all amounts which would have
been due under this Agreement (had this Agreement not been
tenninatee(from the date of tennination of this Agreement to the date of
the new easement agreement, and (iii) agree in writing to perfonn or
cause to be perfonned all of the other covenants and agreements set
forth in this Agreement to be perfonned by Developer to the extent that
Developer failed to perfonn the same prior to the execution and deli veryof the new easement agreement.
(e) Owner is only obligate to notify those Mortgagees and Creditors of
Developer that Developer identified in writing to Owner or which have
recorded their mortgage or otherwise provided Owner with written
notice of their security interest in Developer s property.
8. Defaults; Tennination.
Defaults.Each of the following events shall constitute and "Event ofDefault" by a party and, subject to Section 7.2 above, shall permit the non-
defaulting party to tenninate this Agreement and/or pursue all other
appropriate remedies available at law or equity:
(a) The failure or omission by either party to pay amounts to be paid
hereunder when due, and such failure or omission has continued for
thirty (30) days after written notice from the other party;
(b) The failure or omission by either party to observe, keep or perfonn any
of the other terms, agreements or conditions set forth in this Agreement
and such failure or omission has continued for thirty (30) days ( or such
longer reasonable period of time required to cure such failure or
omission, if such failure or omission cannot reasonably be cured with a
thirty (30) day period) after written notice from the other party; or
(c) A party files for protection or liquidation under the bankruptcy laws of
the United States or any other jurisdiction or has an involuntary petition
in bankruptcy or a request for the appointment or a receiver filed against
it and such involuntary petition or request is not dismissed within sixty
(60) days after filing.
Tennination by Develo~Developer may tenninate this Agreement at
any other time by giving Owner at least three (3) months' written notice and
paying Owner a tennination fee equal to the Minimum Rent applicable to a
three (3) month time period. Upon tennination of this Agreement,
Developer shall execute and record a quitclaim deed, or other appropriate
instrument, to Owner of all of Developer s right, title and interest in and to
Exhibit B
Pa2e 11 of 16
the Property, which is not otherwise inconsistent with any surviving
provisions of this Agreement.
SuITender of r:operty.Upon the expiration or earlier termination of this
Agreement J2)(veloper shall peaceably and quietly leave, suITender andreturn the Prop~rty to Owner in the condition in which it was at the
commencement of this Agreement. Developer agrees and hereby covenants
to dismantle and remove all equipment, improvements, fixtures and other
property owned or installed by Developer or its affiliates on the Property
(prov"ided that all footings and foundations shall be to a depth of three (3)
feet below the surface of the ground and covered with soil) within one
hundred eighty (180) days from the date of termination, all of which shall beat Developer s sole cost and expense. In addition to any other remedies
available to Owner, should Developer fail to remove such property within
one hundred eighty (180) days from the expiration or earlier termination of
this Agreement, any and all property remaining on the Property beyond such
one hundred eighty (180) day removal period shall be deemed abandoned to
Owner and Developer hereby agrees to relinquish any and all rights to any
such property, it being nonetheless understood and agreed that Owner shall
be under no obligation to accept such abandonment.
9. Condemnation.Should title or possession of all of the Property be taken in
Condemnation proceedings by a government agency, governmental body or other
private party under the exercise of the right of eminent domain, or should a partial
taking render the remaining portion of the Property wholly unsuitable for
Developer s use then this Agreement shall tenninate upon the vesting of title or
taking of possession. All payments made on account of any taking by eminent
domain shall be made to Owner, except that Developer shall be entitled to any
award made for the reasonable removal and relocation costs of any removable
property that Developer has the right to remove, and for the loss and damage to
any such property that Developer elects or is required not to remove, and for the
loss of use of the Property by Developer. It is agreed that Developer shall have
the right to participate in any settlement proceedings and that Owner shall not
enter into any binding settlement agreement without the prior written consent of
Developer, which shall not be unreasonably withheld.
10. Miscellaneous
10.1 Force Majeure - Delays.If performance of any act required by this
Agreement to be performed by either party is prevented or delayed by
reason of any act of God, strike, lockout, labor trouble, inability to secure
materials, restrictive governmental laws or regulations , or any other cause
not the fault of the party required to perform the act, the affected party, upon
gi ving notice to the other party, shall be excused from such performance to
the extent of and for the duration of such prevention, restriction or delay.
Exhibit B
Paile 12 of 16
10.2 Assi gnment.Developer shall at all times have the right to sell, assignencumber, transfer, or grant easements to any or all of its rights and interests
under this Agreement without Owner s consent' provided , however, that anyand all such transfers shall be expressly made subject to all of the tenns
covenants anrconditions of this Agreement. No such sale, assignmenttransfer, or easement shall relieve Developer of its obligation under this
Agreement unless Developer assigns its entire interest hereunder, in whichevent Developer shall have no continuing liability, except that Developer
shall remain a guarantor of all obligations assumed by it in Section 8.
above to return the property to the cond~tion that is was in at the
commencement of this Agreement. The burdens of the easements and rights
contained in this Agreement shall run with and against the Property and
shall be a charge and burden thereon for the duration of this Agreement and
shaIl be binding upon and against Owner and its successors, assigns,
permittees, licensees, lessees, employees, and agents. The easements shall
inure to the benefit of Developer and its successors, assigns, permittees,
licensees, lessees, employees and agents.
10.3 Notices.All or other communications required or permitted hereunder
including notices to Mortgagees, shall, unless otherwise provided herein, bein writing, shall be personally delivered, delivered by reputable overnight
courier, or sent by registered or certified mail, return receipt requested, andpostage prepaid, addressed to the parties at the following addresses:
Owner: Magic Irrigators, Inc.
700 East 4795 North
Buhl, Idaho 83316
Developer: Magic Wind LLC
716-B East 4900 North
Buhl, Idaho 83316
10.4 Further Assurances.Each of the parties to this Agreement agrees to perform
all such acts (including but not limited to, executing and delivering such
instruments and documents) as reasonably may be necessary to fully
effectuate each and all of the purposes and intent of this Agreement,
including reasonable amendments hereto as may be required by any
Mortgagee or required in connection with the transfer by Developer of the
rights granted under this Agreement. Owner expressly agrees that it will
from time to time enter into reasonable non-disturbance agreements with
any Mortgagee which requires such an agreement providing that Owner
shall recognize the rights of the Mortgagee and not disturb its possession of
the Property so long as it is not in default of any of the provisions of this
Agreement. Owner agrees that within ten (10) days after receipt of a written
request by Developer it shall: (a) join in all grants for rights-of-way and
easements for electric and other public utilities and facilities and any other
Exhibit B
Page 13 of 16
electric power purpose including any power transmission line as Developershall deem necessary or desirable for its development and use of the
Property; and (b) join with Developer in requesting any and all zoning
changes or other land use permits and/or approvals necessary for
Developer' s .~elopment and use of the Property as contemplated by this
Agreement.
10.5 fu!!mpel Certificates.Each party agrees that is shall, at any time during theTenn of this Agreement within ten (10) days after a written request by the
other party, execute, acknowledge and deliver to the requesting party a
written statement certifying that this Agreement is unmodified and in full
force and effect (or modified and stating the modifications), the dates on
which the payments and any other charges have been paid, and that there areno defaults existing or that defaults exist and stating the nature of such
defaults.
10.6 No Waiver.No waiver of any right under this Agreement shall be effective
for any purpose unless in writing, signed by the party hereto possessing the
right, nor shall any such waiver be construed to be a waiver of any
subsequent right, term or provision of this Agreement.
10.7 Entire Agreement.This Agreement, together with its attached exhibits
contains the entire agreement between the parties hereto with respect to the
subject matter hereof and any prior agreements, discussions or
understandings, written or oral, are superseded by this Agreement and shall
be of no force or effect. No addition or modification of any tenn or
provision of this Agreement shall be effective unless set forth in writing and
signed by each of the parties.
10.8 Governing Law.The terms and provisions of this Agreement shall be
interpreted in "accordance with the laws of the State of Idaho applicable to
contracts made and to be performed within such State and without reference
to the choice of law principles of such State or any other state. In the event
of any dispute between the parties hereto, the Idaho state district court for
the Fourth Judicial District, Twin Falls County, Idaho shall be the sole
venue for any legal proceedings arising there from.
10.Interpretation.The parties agree that the terms and provisions of this
Agreement embody their mutual intent and that such terms and conditions
are not to be construed more liberally in favor, nor more strictly against
either party.
10.10 Partial Invalidly.Should any term or provision of this Agreement, or theapplication thereof to any person or circumstance, to any extent, be invalidor unenforceable, the remainder of this Agreement or the application of such
term of provision to persons or circumstances other than those to which it is
held invalid or unenforceable, shall not be effected thereby, and each
Exhibit B
Page 14 of 16
, ,
remaining tenn and provision of this Agreement shall be valid andenforceable to the fullest extent pennitted by law.
10.11 Counterparts.This Agreement may be executed in two or more
counterparts-$ach of which shall be deemed an original and aU of whichtaken together, shall constitute one and the same instrument.
10.12 Attorney s Fees.The prevailing party in any action or proceeding for the
enforcement, protection , or establishment of any right or remedy under this
Agreement or for the interpretation of this Agreement shaH be entitled torecover its reasonable attorney s fees and costs in connection with such
action or proceeding from the non-prevailing party.
10.13 Memorandum.The parties shall execute and record a memorandum of this
Agreement in the fonn attached hereto as Exhibit B.
IN WITNESS WHEREOF, Owner and Developer enter into this Agreement as of the
Effecti ve Date.
I/J
ftI 1:( fu;t
On behalf of the Owner: Nonnan M. Eckert, Vice-President
Magic Irrigators, Inc.
An Idaho Corporation
c:b
On behalf of the Devel-;J. A~and M. Eckert, Secretary
Magic Wind LLC
An Idaho Limited Liability Company
Effective Date: June 15, 2005
Exhibit B
Page 15 of 16
EXHIBIT A
DESCRIPTION OF PROPERTY
Township 9S Range 13 E, Section 2 - El/2SEl/4, W1I2SEl/4 and Section 11 -El/2NWl/4, Wl/2NEI/4.
Also attached to this Exhibit A is the legal document proving ownership of such property.
Exhibit B
Page 16 of 16