RESERVATION OF RIGHTS AGREEMENT

 

                                                                    Exhibit 10.1

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                         RESERVATION OF RIGHTS AGREEMENT

 

 

     This RESERVATION OF RIGHTS AGREEMENT (this "Agreement") dated as of June

23, 2005 (the "Effective Date") is hereby entered into between PAMC Management

Corporation, a Colorado corporation ("PAMC") and Zond Pan Aero Windsystem

Partners I, a California limited ("ZWP").

 

                               W I T N E S S E T H

 

     A. WHEREAS, PAMC and Southern California Edison ("SCE") have entered into

that certain Reformed Standard Offer 1 As-Available Capacity and Energy Power

Purchase dated June 23, 2005 (the "Power Purchase Agreement"), providing for the

sale to SCE of capacity and associated energy generated by qualifying facilities

at the site described in the Power Purchase Agreement (the "Operating Site");

and

 

     B. WHEREAS, in connection with the Power Purchase Agreement, PAMC and SCE

have entered into that certain Interconnection Facilities Agreement dated June

23, 2005 (the "Interconnection Agreement") providing for the interconnection of

the generating facilities located at the Operating Site to the SCE transmission

system at the substation (the "Mesa Substation") located at the Operating Site.

 

     C. WHEREAS, PAMC, in entering into the Power Purchase Agreement and the

Interconnection Agreement, acted on its own behalf and, as project manager, on

behalf of unidentified other owners who, along with PAMC, are collectively

referred to as the seller in Power Purchase Agreement and the Interconnection

Agreement; and

 

     D. WHEREAS, pursuant to that certain Wind Park Easement Agreement dated as

of September 7, 1984 (as amended, the "Wind Park Easement") by and between Mesa

Wind Developers, a California joint venture ("MWD") and ZWP, ZWP has installed

and operates wind turbine generators with a total nameplate rating of 19.5

megawatts ("MW") (the "Turbines") on a portion of the Operating Site and uses

certain collection lines and related equipment and the Mesa Substation owned by

MWD and located at the Operating Site; and

 

     E. WHEREAS, PAMC desires to reserve to ZWP as a seller under the Power

Purchase Agreement and the Interconnection Agreement, and ZWP as a seller under

the Power Purchase Agreement and the Interconnection Agreement desires to

reserve from PAMC, a portion of the entitlement to sell to SCE capacity and

associated energy under the Power Purchase Agreement, all on the terms and

conditions of this Agreement; and

 

 

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     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements

contained herein, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties hereto agree as

follows:

 

     Section 1. Reservation of Rights.

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     (a) On and as of the Effective Date, ZWP shall be an owner and a seller

under the Power Purchase Agreement and the Interconnection Agreement. On the

terms and conditions set forth herein, as of the Effective Date, PAMC reserves

to ZWP (i) a portion of the entitlement to sell capacity and associated energy

under the Power Purchase Agreement aggregating 19.5 MW and (ii) a portion of the

entitlement to reserve and use the interconnection facilities (the

"Interconnection Facilities"), as described in the Interconnection Agreement to

transmit such energy to SCE (collectively, the "Reserved Interest").

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     (b) Each party agrees that the reservation of the Reserved Interest

hereunder does not constitute an assignment of any of PAMC's rights, ownership

interest, duties, responsibilities and obligations under the Power Purchase

Agreement and Interconnection Agreement and is solely intended to memorialize

the amount of capacity and associated energy that ZWP can deliver as an owner

and seller under the Power Purchase Agreement and Interconnection Agreement.

Notwithstanding any other terms or provisions contained in this Agreement, PAMC

shall at all times remain liable under the Power Purchase Agreement and

Interconnection Agreement to perform all of its duties and obligations under the

Power Purchase Agreement and the Interconnection Agreement to the same extent as

if this Agreement had not been executed.

 

     (c) Notwithstanding anything herein to the contrary, ZWP (i) shall comply

with all terms and conditions of the Power Purchase Agreement and the

Interconnection Agreement to the extent applicable to a seller and an owner

thereunder and (ii) shall not take any action, nor refuse to take any action

required to be taken by it as a seller under the Power Purchase Agreement or the

Interconnection Agreement to permit compliance by PAMC as the counterparty to

SCE under the Power Purchase Agreement and the Interconnection Agreement.

 

     Section 2. Purchase, Sale and Delivery Obligations

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     (a) During the term of this Agreement, ZWP shall, through PAMC, as Project

Manager (as defined in the Power Purchase Agreement), deliver to SCE all

capacity and associated energy with respect to the Reserved Interest.

 

     (b) ZWP shall deliver the electric power from the Turbines to the Mesa

Substation for delivery to the SCE transmission system pursuant to the

Interconnection Agreement.

 

     Section 3. Disposition of Revenues and Expenses.

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                                       2

 

<PAGE>

 

     (a) All revenues and other payments received by PAMC from the sale of

capacity and energy to SCE under the Power Purchase Agreement (collectively, the

"Revenues") shall be held in trust for the benefit of ZWP and the other sellers

under the Power Purchase Agreement. Each such seller shall be entitled to the

portion of such Revenues equal to (i) the Revenues multiplied by (ii) a fraction

(A) the numerator of which shall equal the aggregate metered production of such

seller's wind turbines during the period applicable to such Revenues and (B) the

denominator of which shall equal the aggregate metered production of the wind

turbines of all the sellers that delivered power to SCE under the Power

Agreement during the period applicable to such Revenues. PAMC shall pay to ZWP

the portion of the Revenues received with respect to any calendar month within

thirty (30) days of the receipt of such Revenues from SCE.

 

     (b) All fees, expenses and costs incurred by PAMC under the Power Purchase