Exhibit 10.1
------------
--------------------------------------------------------------------------------
WINDSYSTEM CONSTRUCTION AGREEMENT
By and Between
ZOND WINDSYSTEM PARTNERS, LTD. SERIES 85-B,
a California Limited Partnership
and
ZOND CONSTRUCTION CORPORATION III,
a California corporation
as of
September 9, 1985
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Section Heading Page
------- ------- ----
1. DEFINITIONS..................................................... 1
2. CONSTRUCTION OF TURBINES, RELATED TURIBINE EQUIPMENT
AND POWER SUBSTATION........................................... 3
3. OTHER OBLIGATIONS OF ZCC III.................................... 4
3.1 Labor, Materials, Etc....................................... 4
3.2 Subcontractors.............................................. 4
3.3 Construction Safety......................................... 4
3.4 Requirements of Authorities................................. 5
3.5 Certain Amounts Payable by ZCC III.......................... 5
3.6 Mechanics' Liens............................................ 5
3.7 Protection of Persons and Property.......................... 5
3.8 Insurance................................................... 6
3.9 Clean Up.................................................... 6
3.10 Interconnection............................................. 6
3.11 Compliance with Other Agreements............................ 6
3.12 Sales Taxes................................................. 6
4. COMPLETION DATES AND TITLE TRANSFER............................. 6
4.1 Completion Date and Obligation to Purchase.................. 6
4.2 Title Transfer.............................................. 8
5. PAYMENT TO ZCC III FOR CONSTRUCTION............................. 8
5.1 Fixed Contract Price........................................ 8
5.2 Payment of Contract Price................................... 8
5.3 Withholds by the Partnership................................ 9
6. WARRANTIES..................................................... 10
6.1 Warranties of Manufacturer................................. 10
6.2 Five Year Warranty of ZCC III.............................. 10
6.3 Warranties of Contractors.................................. 11
6.4 No Production Guarantee.................................... 11
6.5 Warranty Disclaimer........................................ 11
6.6 Single Purpose Entity...................................... 11
7. INDEMNIFICATION................................................ 12
8. DAMAGE OR DESTRUCTION OF THE TURBINES RELATED
TURBINE EQUIPMENT OR POWER SUBSTATION PRIOR TO
COMPLETION.................................................... 12
8.1 Damage or Destruction Insured.............................. 12
i
8.2 Damage or Destruction Not Insured......................... 13
9. TERMINATION................................................... 13
9.1 Special Event of Termination.............................. 13
9.2 Other Events of Termination............................... 13
9.3 Remedies Upon Occurrence of Other Events of Termination... 14
10. MISCELLANEOUS................................................. 14
10.1 Time of the Essence....................................... 14
10.2 Assignment and Transfer to Other Parties.................. 14
10.3 Notices................................................... 14
10.4 Waiver.................................................... 14
10.5 Attorneys' Fees........................................... 15
10.6 Patents, Etc.............................................. 15
10.7 Documentation............................................. 15
10.8 No Partnership, Etc....................................... 15
10.9 Dedication................................................ 15
10.10 Further Assurances........................................ 16
10.11 Binding Effect............................................ 16
10.12 Governing Law............................................. 16
10.13 Interpretation............................................ 16
10.14 Partial Invalidity........................................ 16
10.15 Headings, References and Exhibits......................... 16
10.16 Counterparts.............................................. 16
10.17 Entire Agreement; Amendments.............................. 17
Exhibits Attached
Exhibit A - Location Plan
Exhibit B - Legal Description of the Operating Site
Exhibit C - Form of Turbine Completion Certificate and ▇▇▇▇ of Sale
Exhibit D - Form of Power Substation Completion Certificate and ▇▇▇▇ of Sale
Exhibit E - Form of Power Transfer Facilities Completion Certificate
ii
WINDSYSTEM CONSTRUCTION AGREEMENT
THIS WINDSYSTEM CONSTRUCTION AGREEMENT ("Agreement") is made by and
between ZOND WINDSYSTEM PARTNERS, LTD. SERIES 85-B, a California Limited
Partnership ("the Partnership"), and ZOND CONSTRUCTION CORPORATION III, a
California corporation ("ZCC III"), as of the 9th day of September, 1985. Unless
otherwise defined herein, terms appearing in initially capitalized letters shall
have the same meaning as that set forth in the Confidential Private Placement
Memorandum of the Partnership (the "Memorandum") dated September 9, 1985.
WHEREAS:
A. The Partnership desires to purchase from ZCC III a system of
constructed and operational Turbines, Related Turbine Equipment and the Power
Substation, all on the terms and conditions of this Agreement; and
B. ZCC III desires to construct the Turbines, the Related Turbine
Equipment pertaining thereto and the Power Substation in accordance with the
terms and conditions of this Agreement.
NOW, THEREFORE, the Partnership and ZCC III agree as follows:
1. DEFINITIONS
As used in the Agreement, the following terms shall have the following
designated meaning:
1.1 "Admission Date" shall mean the date on which the Limited
Partners are admitted to the Partnership.
1.2 "Agreement" shall mean this Windsystem Construction Agreement
1.3 "Authorities" shall mean all applicable Federal, state,
municipal and local agencies or governmental bodies having jurisdiction over the
Operating Site and the construction contemplated by this Agreement which shall
include, without limitation, any applicable agency or governmental body of ▇▇▇▇
County, California.
1.4 "Contractor" shall mean any person or entity retained by ZCC
III (including Zond acting as general contractor) in connection with the
assembly, installation and construction of the Turbines, the Related Turbine
Equipment and the Power Substation.
1.5 "Contract Price" shall mean the total price payable by the
Partnership to ZCC III for the purchase of (i) the Required Number of Turbines,
(ii) the Related Turbine Equipment, and (iii) the Power Substation which are to
be constructed and installed
1
pursuant to the provisions of this Agreement, and which shall equal the product
of the Required Number of Turbines and $168,000.
1.6 "Location Plan" shall mean the site plans prepared by ZCC III,
designating the specific locations within the Operating Site upon which the
Turbines will be constructed pursuant to this Agreement, copies of which are
attached hereto as Exhibit A, as such Location Plan may be amended from tithe to
time by ZCC III prior to the date of the purchase of the turbines by the
Partnership hereunder.
1.7 "Location Sites" shall mean up to two hundred forty (240) of
those certain sites which are set forth in the Location Plan, upon which ZCC III
shall designate the Required Number of Turbines to be constructed, as such sites
may change from time to time as determined by ZCC III.
1.8 "Operating Site" shall mean the real property located in
Tehachapi, ▇▇▇▇ County, California, more fully described on the attached Exhibit
B.
1.9 "Partnership" shall mean Zond Windsystem Partners, Ltd Series
85-B, a California Limited Partnership.
1.10 "Power Agreement" shall mean those certain several Power
Purchase Contracts between SCE and Zond which were assigned by Zond to the
Partnership pursuant to the Assignment of Power Purchase Contracts.
1.11 "Power Substation" shall mean the 30MW power substation
constructed and installed by ZCC III at the Operating Site.
1.12 "Power Transfer Facilities" shall mean the 66KV power transfer
line and the equipment interconnecting such 66KV power transfer line to the
power grid owned by SCE proximate to the Operating Site.
1.13 "Related Turbine Equipment" shall mean the concrete pad upon
which each Turbine is situated; the insulated wire cable connecting each Turbine
to an intermediate step-up transformer; and the intermediate step-up
transformers.
1.14 "Required Number of Turbines" shall mean the total number of
Turbines required to be purchased by the Partnership hereunder pursuant to the
provisions of Section 2 below.
1.15 "Turbines" shall mean the Vestas Model V17 wind turbine
generator, each having a rated capacity of 100KW, and each being equipped with
two generators, a controller and a supporting steel lattice tower.
1.16 "SCE" shall mean Southern California Edison Company a
California public utility.
2
1.17 "Series B Purchase Note" shall mean any note given by the
Partnership to ZCC III in partial payment for the Turbines, Related Turbine
Equipment and Power Substation purchased by the Partnership from ZCC III
hereunder.
1.18 "Vestas" shall mean Vestas Energy A/S, a Danish corporation.
1.19 "VNA" shall mean Vestas North America Limited a California
corporation.
1.20 "Wind Park Easement Agreement" shall mean the Wind Park
Easement Agreement between ZCC III and the Partnership.
1.21 "Wind Power Generating Facility Warranty Agreement" shall mean
that certain Wind Power Generating Facility Warranty Agreement between Vestas
and any purchaser designated in accordance with the provisions of Section 5.2
thereof and acknowledged by VNA, a copy of which is attached as Exhibit C to the
Wind Turbine Generator Purchase Agreement.
1.22 "Windsystem Management Agreement" shall mean the Windsystem
Management Agreement between Zond and the Partnership.
1.23 "Wind Turbine Generator Purchase Agreement" shall mean that
certain 1985 Wind Turbine Generator Purchase Agreement between VNA and Zond.
1.24 "ZCC III" shall mean Zond Construction Corporation III, a
California corporation and a wholly owned subsidiary of Zond.
1.25 "Zond" shall mean Zond Systems, Inc., a California
corporation.
2. CONSTRUCTION OF TURBINES, RELATED TURBINE EQUIPMENT AND POWER
SUBSTATION
Upon execution and delivery of this Agreement by the Partnership, ZCC
III agrees to commence construction of the Turbines, the Related Turbine
Equipment and the Power Substation, and to pursue construction diligently to
completion in accordance with the provisions of this Agreement.
ZCC III shall construct, and the Partnership shall purchase from ZCC
III at the Contract Price pursuant to and on the terms hereof:
(a) Two hundred forty (240) Turbines ("the Required Number of
Turbines") which shall be located on the Location Sites
determined by ZCC III; provided, however, that if the total
number of Regular Partnership Units available for subscription
have not been subscribed for and fully paid on the Admission
Date, the following Required Number of Turbines shall be
determined in the following manner: One Hundred (100) plus
such number of Turbines as the Partnership shall specify upon
a date which is not later than ten (10) days after the
Admission Date. The Required
3
Number of Turbines shall in any event be constructed on those
sites constituting a portion of the Location Sites as
determined by ZCC III;
(b) the Related Turbine Equipment pertaining to the Required
Number of Turbines purchased pursuant to clause (a) above; and
(c) the Power Substation.
3. OTHER OBLIGATIONS OF ZCC III
3.1 Labor, Materials, Etc.
ZCC III agrees to furnish, at its sole cost, all labor,
materials, tools, permits, insurance, transportation, equipment, supervision and
all other matters necessary to commence and complete the construction of the
Required Number of Turbines, the Related Turbine Equipment pertaining thereto
and the Power Substation in accordance with this Agreement.
3.2 Subcontractors
ZCC III shall employ only competent and experienced
Contractors and shall not employ any unfit person or Contractor not skilled in
discharging its obligations hereunder. ZCC III shall at all times maintain
competent supervision of, and enforce strict discipline and good order among,
its employees and Contractors. The Partnership hereby acknowledges and consents
to the Construction Agreement between ZCC III and Zond dated as of September 9,
1985 pursuant to which Zond has agreed to construct for ZCC III the Turbines,
the Related Turbine Equipment and the Power Substation.
3.3 Construction Safety
ZCC III shall monitor the construction on a continuing basis
to assure that all of ZCC III's operations (including the activities of the
Contractors) under this Agreement are conducted in a safe manner and in full
compliance with all such applicable published requirements of the Occupational
Safety and Health Administration under the Occupational Safety and Health Act of
1970 (the "OSHA requirements") and all applicable published requirements of the
California Occupational Safety and Health Administration under the California
Health and Safety Act (the "CAL-OSHA requirements"). Any failure to strictly
comply with such OSHA requirements or CAL-OSHA requirements will be deemed a
material breach of contract such as to justify the Partnership's right to
immediately remove ZCC III from the performance of its construction obligations
under this Agreement. If, as a result of the actions or conduct of ZCC III or
its Contractors, the Partnership should become a party to or otherwise involved
in OSHA proceedings of any kind related to OSHA requirements or in CAL-OSHA
proceedings of any kind related to CAL-OSHA requirements, ZCC III will promptly
pay upon demand any attorneys' fees, costs of corrective action and other costs
incurred by the Partnership as a result thereof.
4
3.4 Requirements of Authorities
ZCC III acknowledges that it has inspected and accepted the
Operating Site and existing conditions, has examined and understands the
Location Plan and is familiar with all laws, regulations, codes, ordinances and
rules pertinent to the construction contemplated in this Agreement. In
connection with the construction of the Required Number of Turbines, the Related
Turbine Equipment pertaining thereto and the Power Substation, ZCC III shall
provide all items required by the Authorities, shall obtain all approvals and
permits required by the Authorities and shall observe and comply with all
requirements of the Authorities. If any approvals or permits or requirements of
the Authorities are inconsistent with the Location Plan or any provisions of
this Agreement, the approvals or permits or requirements of the Authorities
shall control and all obligations in connection therewith shall be at the sole
cost of ZCC III.
3.5 Certain Amounts Payable by ZCC III
3.5.1 Charges. ZCC III shall promptly pay, and shall use
all cash payments received from the Partnership under this Agreement to pay, all
valid charges for labor (including fringe benefits), equipment and materials
used in the construction and installation of (i) the Required Number of
Turbines, (ii) the Related Turbine Equipment pertaining thereto and (iii) the
Power Substation, including, without limitation, contributions to fringe benefit
trusts required by any collective bargaining agreements to which ZCC III is a
party or by which ZCC III is bound. ZCC III shall not use any such cash payments
for any other purpose until payment in full of all such valid charges
3.5.2 Fees and Taxes. ZCC III shall pay when due all
Federal, state, county, municipal or local taxes, fees, permit fees, charges,
licenses or assessments pertaining to the construction and installation
contemplated in this Agreement, including without limitation withholding and
similar employee taxes, and shall hold the Partnership harmless from any
liability in connection with the preceding.
3.6 Mechanics' Liens
At all times from the date of this Agreement until and
including the date of the purchase thereof by the Partnership hereunder, ZCC III
shall keep the (i) Required Number of Turbines, (ii) the Related Turbine
Equipment pertaining thereto, (iii) the Power Substation, (iv) the Location
Sites and (v) the Operating Site free from all claims and liens arising out of
labor and materials furnished by ZCC III and its Contractors, and shall
indemnify and hold the Partnership free and harmless from any cost or expense on
account of the assertion of any such claim or lien.
3.7 Protection of Persons and Property
ZCC III shall take (and shall cause its Contractors to take)
every practicable precaution not to damage or injure any persons or property in
the performance of its duties under this Agreement.
5
3.8 Insurance
At all times from the date of this Agreement until the date of
the purchase thereof by the Partnership hereunder, ZCC III, at its sole cost,
shall obtain and maintain or cause to be maintained the property damage and
business interruption insurance coverage substantially identical to the policy
issued by Continental Insurance Company under the September 6, 1985 Insurance
Binder from ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, as in effect on the date hereof, covering the
Required Number of Turbines, the Related Turbine Equipment pertaining thereto
and the Power Substation.
3.9 Clean Up
Upon completion of the construction of the Required Number of
Turbines, the Related Turbine Equipment pertaining thereto and the Power
Substation, ZCC III, at its sole cost, shall remove all construction debris and
surplus material from the Operating Site.
3.10 Interconnection
ZCC III, at its sole cost, shall cause the interconnection of
the Required Number of Turbines and the Power Substation with the SCE power
transmission system.
3.11 Compliance with Other Agreements
In constructing the Required Number of Turbines, the Related
Turbine Equipment pertaining thereto and the Power Substation, ZCC III shall
comply with all requirements of the Power Agreement and the Wind Park Easement
Agreement and the Project Loan.
3.12 Sales Taxes
ZCC III shall be solely responsible for and shall pay any
sales taxes which may be owing any applicable governmental agency in connection
with the construction and delivery to the Partnership of the Required Number of
Turbines, the Related Turbine Equipment pertaining thereto and the Power
Substation.
4. COMPLETION DATES AND TITLE TRANSFER
4.1 Completion Date and Obligation to Purchase
The construction of a Turbine shall be deemed to be completed
on the date which is the later to occur of (i) the date upon which such Turbine
is certified to be operational by Vestas or one of its authorized
representatives, which include VNA and Zond, (ii) the date upon which the Power
Substation is certified by ZCC III or Zond to be operational, (iii) the date
upon which the Power Transfer Facilities are certified to be operational by
Zond, and (iv) the date upon which SCE provides its written approval for
operation of the Interconnection Facilities (to the extent required by the Power
Agreement). ZCC III shall use its best efforts to complete construction of the
Required
6
Number of Turbines, the Related Turbine Equipment pertaining thereto and the
Power Substation and place the Turbines in service by November 15, 1985 but no
later than December 29, 1985.
In the event that on the Admission Date (i) the construction
of 100 or more, but less than all, of the Required Number of Turbines and the
Related Turbine Equipment pertaining thereto has been so completed, (ii) the
Construction of the Power Substation has been certified by ZCC III or Zond to be
operational, (iii) the Power Transfer Facilities have been certified by Zond to
be operational, and (iv) SCE has provided its written approval for the operation
of the Interconnection Facilities (to the extent required by the Power
Agreement), the Partnership shall purchase on the Admission Date that number of
Turbines whose construction has been then completed, together with the Related
Turbine Equipment pertaining thereto and the Power Substation. Thereafter, the
Partnership shall purchase additional Turbines, and the Related Turbine
Equipment pertaining thereto, in groups of not less than fifty (50) Turbines
upon the completion of the construction of such Turbines.
Anything above to the contrary notwithstanding, the
Partnership shall not be obligated to purchase any Turbines or Related Turbine
Equipment pertaining thereto (i) greater than the Required Number of Turbines
and the Related Turbine Equipment pertaining thereto, (ii) whose construction is
not completed by, and which are not ready to be immediately placed in service
by, December 29, 1985, (iii) in the event that the Power Substation has not been
certified by ZCC III or Zond to be operational by, and is not ready to be
immediately placed in service by, December 29, 1985, (iv) if the Power Transfer
Facilities have not been certified by Zond to be operational by, and are not
ready to be immediately placed in service by, December 29, 1985; (v) if SCE has
not provided its written approval for operation of the Interconnection
Facilities by December 29, 1985; (vi) unless at the time of such purchase there
shall be in effect insurance substantially in the form described in the
Memorandum under the caption "Windsystem Insurance - Systems Performance
Policies"; and (vii) unless at the time of such purchase, the Wind Park Easement
Agreement and the Windsystem Management Agreement are each in effect.
Upon purchase of Turbines and the Related Turbine Equipment
pertaining thereto, ZCC III shall transfer good and marketable title thereto by
executing and delivering to the Partnership a Turbine Completion Certificate and
▇▇▇▇ of Sale substantially in the form of Exhibit C attached hereto ("Turbine
Completion Certificate"). The Partnership shall accept such completion and
transfer by executing an acknowledgment of the Turbine Completion Certificate as
provided therein. ZCC III hereby represents to the Partnership that ZCC III's
execution and delivery of each Turbine Completion Certificate affirms that
Vestas, VNA or Zond has certified the Turbines specified thereon as operational
pursuant to the provisions of Section 3 of the Wind Power Generating Facility
Warranty Agreement. In the same manner, ZCC III shall transfer title to the
Power Substation to the Partnership by executing and delivering to the
Partnership a Power Substation Completion Certificate and ▇▇▇▇ of Sale
substantially in the form of Exhibit D attached hereto (the "Power Substation
Completion Certificate"). In addition, Zond shall certify that the Power
Transfer Facilities are operational by executing and
7
delivering to the Partnership a Power Transfer Facilities Completion Certificate
substantially in the form of Exhibit E hereto (the "Power Transfer Facilities
Completion Certificate").
4.2 Title Transfer
Title to the Turbines, the Related Turbine Equipment
pertaining thereto and the Power Substation, which the Partnership acquires in
accordance with this Agreement, shall pass from ZCC III to the Partnership upon
completion in accordance with Section 4.1 and execution of the Turbine
Completion Certificate and the Power Substation Completion Certificate, as the
case may be, by ZCC III and the Partnership, but not earlier than the Admission
Date, free and clear of any encumbrances, liens, security interests or other
charges (including, without limitation, any of the preceding of ZCC III, Zond,
VNA or Vestas or any lender to any of them), except any of the preceding which
are created in writing by, or with the written consent of, the Partnership. ZCC
III shall indemnify and hold the Partnership free and harmless against all such
encumbrances, liens, security interests and other charges (except any of the
preceding which are created in writing by, or with the written consent of, the
Partnership) and any damages, costs, charges and expenses (including, without
limitation, reasonable attorneys' fees) incurred by the Partnership in
connection therewith.
ZCC III agrees to indemnify and hold the Partnership harmless
on an after-tax basis against any loss or delay in the Partners' ability to
claim tax benefits derived from the ownership of Turbines, Related Turbine
Equipment pertaining thereto and the Power Substation purchased by the
Partnership hereunder which results from the taking or omitting to take any
action by ZCC III or any of its Contractors which would cause the Turbines to be
deemed to have been placed in service prior to the date on which title to such
Turbines and the Related Turbine Equipment pertaining thereto passes from ZCC
III to the Partnership.
5. PAYMENT TO ZCC III FOR CONSTRUCTION
5.1 Fixed Contract Price
The Contract Price is a fixed price. The Partnership shall not
be liable to pay more to ZCC III than the Contract Price, and the Partnership
shall not be entitled to a reduction in the Contract Price if such cost of
construction is less than the Contract Price.
5.2 Payment of Contract Price
5.2.1 Payment by the Partnership. On the Admission Date,
the Partnership shall pay ZCC III that portion of the Contract Price in full
payment for the number of Turbines then purchased pursuant to Section 4.1 above,
together with the Related Turbine Equipment pertaining thereto and the Power
Substation, which is equal to the product of $168,000 and the number of Turbines
then purchased. Such payment shall be made at the time of the execution of the
related Turbine Completion Certificate and the Power Substation Completion
Certificate by ZCC III and the Partnership and the Power Transfer Facilities
Completion Certificate by Zond. Upon each purchase of additional
8
Turbines and the Related Turbine Equipment pertaining thereto in accordance with
the provisions of Section 4.1 above, the Partnership shall pay that portion of
the Contract Price, in full payment for such Turbines and the Related Turbine
Equipment pertaining thereto, which is equal to the product of $168,000 and the
number of Turbines then purchased. Such payment shall be made at the time of the
execution of the related Turbine Completion Certificate by ZCC III and the
Partnership.
Forty-nine percent (49%) of the Contract Price payable upon
each purchase of Turbines shall be paid in cash or by check, with the balance of
the Contract Price being represented by a Series B Purchase Note which shall be
in such form as the parties shall agree. Each Series B Purchase Note shall bear
interest, compounded semiannually, at the greater of (i) 11.25% per annum and
(ii) the lowest rate then in effect to avoid imputed interest under the Internal
Revenue Code of 1954, as amended, and the regulations thereunder, and shall be
secured by such Turbines, the Related Turbine Equipment pertaining thereto, the
Power Substation and by such other collateral as the Partnership and ZCC III
shall agree, all as set forth in a security agreement executed by the
Partnership and ZCC III.
5.2.2 No Waiver. No payment to ZCC III shall constitute
acceptance or approval of any defective construction previously performed by ZCC
III. The Partnership has the right to pay for construction that is defective
without correction of the defect and may back-charge ZCC III the amount of the
loss sustained due to the defect and to deduct such amounts from payments
thereafter becoming due to ZCC III.
5.3 Withholds by the Partnership
The Partnership shall be entitled to establish reasonable
reserves from payments due or becoming due to ZCC III under the following
conditions:
5.3.1 Defects. ZCC III's failure to correct or cause to be
corrected defective work.
5.3.2 Subcontractor Claims. Receipt of information that
Contractors or other persons entitled to do so have filed, or have threatened to
file, mechanics' liens or stop notice claims due to ZCC III's failure to make
payments when due to such Contractors or persons.
5.3.3 Damages. Damage by ZCC III or its employees or by
Contractors to the Required Number of Turbines, the Related Turbine Equipment
pertaining thereto or the Power Substation, purchased by the Partnership
hereunder.
5.3.4 Inspection. Failure of ZCC III's construction to pass
any required inspections.
5.3.5 Unauthorized Changes. Construction or attempted
construction of an item different from that required by this Agreement unless
ordered in writing by the Partnership.
9
5.3.6 Claims Against ZCC III. Should the Partnership still
have a claim remaining against ZCC III after offsetting against amounts owed
under the Windsystem Management Agreement or the Wind Park Easement Agreement,
the Partnership may make a claim against amounts owing to ZCC III under this
Agreement; provided that under no circumstances may the Partnership offset such
claim or any other claim against amounts owing to ZCC III under the Series B
Purchase Note.
6. WARRANTIES
6.1 Warranties of Manufacturer
Prior to the execution of any Turbine Completion Certificate
by ZCC III and the Partnership and as a condition of the Partnership's
obligation to purchase the Turbines covered thereby, ZCC III (i) shall cause the
Partnership to be designated as the "Purchaser" under Section 5.2 of the Wind
Power Generating Facility Warranty Agreement, so that all warranties in the Wind
Power Generating Facility Warranty Agreement shall run to, and in favor of, the
Partnership, with respect to the number of Turbines covered thereby and (ii)
shall cause Zond to assign and transfer to the Partnership, for the benefit of
the Partnership, all representations and warranties made by VNA in the Wind
Turbine Generator Purchase Agreement.
6.2 Five Year Warranty of ZCC III
(a) ZCC III hereby represents and warrants to, and agrees
with, the Partnership that, for a period of five (5) years after the date of a
Turbine Completion Certificate with respect to any Turbines which are purchased
by the Partnership hereunder, that all such Turbines, and all Related Turbine
Equipment pertaining thereto, shall have been constructed under this Agreement
in a good and workmanlike manner. During each such five-year warranty period,
ZCC III, at its sole cost, shall provide for field inspection of the particular
portion of the Turbines to verify failure, establish probable cause and
determine what corrective action is required. ZCC III, at its sole cost, shall
cause all corrective action to be taken as soon as possible if such action is
required because of the breach by ZCC III of its representation, warranty and
agreement contained in this Section; provided, however, that ZCC III shall have
no obligations under this Section 6.2 with respect to any Turbine or the Related
Turbine Equipment pertaining thereto, which is moved from its original Location
Site other than by ZCC III or with the written consent of ZCC III, or if repair
or replacement thereof is required as the result of: (i) repair, maintenance,
alteration or modification of such Turbine, or Related Turbine Equipment
pertaining thereto, by persons other than Zond, Zond-authorized personnel or
other persons using procedures approved by Zond or its authorized representative
(provided that Zond shall then be ready, willing and able to make such repair,
maintenance, alteration or modification to the reasonable satisfaction of the
Partnership); (ii) misuse, neglect or abuse, accident or alteration; (iii)
normal wear or tear; or (iv) causes beyond the reasonable control of ZCC III
(including, without limitation, acts of nature such as floods, earthquakes and
storms).
10
(b) ZCC III hereby represents and warrants to, and agrees with
the Partnership that, for a period of five (5) years from the date of the Power
Substation Completion Certificate, the Power Substation shall have been
constructed in a good and workmanlike manner. ZCC III shall assign to the
Partnership any warranties made to ZCC III by the manufacturers of the
components of the Power Substation or, with respect to the Power Transfer
Facilities, by Zond. During such five-year warranty period, ZCC III, at its sole
cost, shall provide for field inspection of the Power Substation to verify
failure, establish probable cause and determine what corrective action is
required. ZCC III, at its sole cost, shall cause all corrective action to be
taken as soon as possible if such action is required because of the breach by
ZCC III of its representation, warranty and agreement contained in this Section.
(c) IN NO EVENT SHALL ZCC III BE LIABLE FOR ANY LOST PROFITS
OR INCIDENTAL OR CONSEQUENTIAL DAMAGES AS A RESULT OF THE BREACH OF ANY
REPRESENTATION, WARRANTY OR AGREEMENT CONTAINED HEREIN.
6.3 Warranties of Contractors
ZCC III shall obtain from all Contractors, and shall assign to
the Partnership, all warranties of the Contractors against defects in materials
and workmanship to the extent such warranties are obtainable and transferable.
ZCC III shall reasonably assist the Partnership in enforcing any such
warranties.
6.4 No Production Guarantee
In no event shall any provisions of this Agreement be
construed as a guaranty or warranty by ZCC III that the Turbines will generate
any minimum amount of electricity in any particular period.
6.5 Warranty Disclaimer
EXCEPT AS OTHERWISE SET FORTH IN THIS SECTION 6, ZCC III
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
TURBINES AND THE RELATED TURBINE EQUIPMENT.
6.6 Single Purpose Entity
ZCC III hereby represents to the Partnership that it was
formed for the sole purpose of entering into and performing under this Agreement
and the transactions contemplated herein or in the Memorandum (and under similar
transactions with Zond Windsystem Partners, Ltd. Series 85-A) and that it will
engage in no other activities other than those contemplated hereby and those
necessary to maintain its legal existence and good standing as a corporation, to
maintain its records in the normal course of business or such activities as may
be required under the Project Loan.
11
7. INDEMNIFICATION
In addition to any other obligations of ZCC III under this Agreement
(including, without limitation, ZCC III's obligations to provide insurance), ZCC
III shall indemnify and hold the Partnership free and harmless against all
claims, demands, liabilities, proceedings, damages, costs, charges and expenses
(including, without limitation, reasonable attorneys' fees) resulting from or
attributable to the negligent act or omission of ZCC III, its affiliates or its
employees or its Contractors or resulting from or attributable to any activity,
work or things done, permitted or suffered by ZCC III, its affiliates or its
employees or its Contractors in, on or about the Operating Site or elsewhere or
resulting from or attributable to any failure of ZCC III to perform its
obligations under this Agreement; provided, however, that nothing herein
contained shall be deemed to render ZCC III liable for or to indemnify the
Partnership against any liability or damages to the extent attributable to or
resulting from the negligent acts or omissions of the Partnership or its agents
or authorized representatives (which for purposes of this Agreement do not
include ZCC III, its affiliates or its Contractors).
The Partnership agrees to indemnify and hold ZCC III free and harmless
against any and all actions, claims, losses, damages, injuries, liabilities,
costs, charges and expenses of any kind or nature (including the attorneys' fees
of ZCC III incurred by ZCC III in the proper performance of its duties under
this Agreement) to the extent resulting from or attributable to the fault or
neglect of the Partnership.
8. DAMAGE OR DESTRUCTION OF THE TURBINES RELATED TURBINE EQUIPMENT OR
POWER SUBSTATION PRIOR TO COMPLETION
8.1 Damage or Destruction Insured
Should all or any portion of the Required Number of Turbines,
the Related Turbine Equipment pertaining thereto, or the Power Substation be
damaged or destroyed prior to execution of a Completion Certificate by ZCC III
and the Partnership with respect to such Turbines, the Related Turbine Equipment
pertaining thereto, or the Power Substation, with or without the fault or
neglect of ZCC III or any of its employees or agents or Contractors, and the
damage or destruction is covered by any of the insurance policies described in
Section 3.8, the Partnership shall have the option to either (i) terminate this
Agreement with respect to the damaged or destroyed Turbines, the Related Turbine
Equipment pertaining thereto, or the Power Substation and have no further
liability therefor to ZCC III hereunder, in which event ZCC III shall be paid
all insurance proceeds pertaining to such Turbines, the Related Turbine
Equipment pertaining thereto, or the Power Substation or (ii) direct ZCC III to
cause the repair and restoration of such Turbines, the Related Turbine Equipment
pertaining thereto, or the Power Substation utilizing all insurance proceeds
pertaining to such Turbines, the Related Turbine Equipment pertaining thereto,
or the Power Substation, and with any cost in excess of such proceeds to be paid
for by ZCC III. In the event the Partnership directs ZCC III to cause such
repair and restoration, ZCC III shall commence forthwith such repair and
restoration and complete same as soon as possible and in any event not later
than ninety (90) days after the date the Partnership so directs ZCC III.
12
8.2 Damage or Destruction Not Insured
Should all or any portion of the Turbines, the Related Turbine
Equipment pertaining thereto, or the Power Substation be damaged or destroyed
prior to execution of a Completion Certificate with respect to such Turbines,
the Related Turbine Equipment pertaining thereto, or the Power Substation, with
or without the fault or neglect of ZCC III or any of its employees or agents or
Contractors, and the damage or destruction is not covered by any of the
insurance policies described in Section 3.8 (provided that such non-coverage by
such insurance policies shall not have resulted from ZCC III's failure to obtain
such insurance or to make required and timely premium payments upon such
insurance), the Partnership shall have the option to either (i) terminate this
Agreement with respect to the damaged or destroyed Turbines, the Related Turbine
Equipment pertaining thereto, or the Power Substation and have no obligation to
acquire the same or (ii) direct ZCC III to cause the repair and restoration of
such Turbines, the Related Turbine Equipment pertaining thereto, or the Power
Substation with the cost thereof to be paid for by the Partnership; provided,
however, that the per Turbine cost of such repair or restoration shall in no
event exceed $168,000. In the event the Partnership directs ZCC III to cause
such repair and restoration, ZCC III shall commence forthwith such repair and
restoration and complete the same as soon as possible and in any event not later
than ninety (90) days after the date the Partnership so directs ZCC III.
9. TERMINATION
9.1 Special Event of Termination
If the minimum number of Regular Partnership Units required to
be sold has not been subscribed for and the offering is terminated, the
Partnership thereafter may terminate this Agreement by written notice to ZCC
III. In the event of such termination, neither the Partnership nor ZCC III shall
have any obligations whatsoever (other than as set forth in Section 6 of this
Agreement, which obligations shall survive the termination of this Agreement) to
the other and ZCC III shall be entitled to retain all Turbines, the Related
Turbine Equipment, pertaining thereto and the Power Substation then constructed
or in the process of construction.
9.2 Other Events of Termination
In addition to any other termination rights in this Agreement,
the Partnership may, by giving at least seventy-two (72) hours prior written
notice to ZCC III, specifying the reason therefor, terminate this Agreement for
any of the following causes:
9.2.1 Default. If ZCC III fails to perform its obligations
substantially in accordance with the terms of this Agreement and, after
seventy-two (72) hours prior written notice from the Partnership specifying the
nature of the alleged default, fails to cure such default (or, in the case of a
default which cannot with due diligence be cured within a period of 72 hours, if
ZCC III fails to proceed promptly to prosecute the curing of such default with
all due diligence).
13
9.2.2 Dissolution. If ZCC III dissolves or the legal
existence of ZCC III is terminated, unless a successor entity reasonably
satisfactory to the Partnership agrees to be bound by and to perform all of the
duties and obligations of ZCC III under this Agreement.
9.3 Remedies Upon Occurrence of Other Events of Termination
Should the Partnership terminate this Agreement as provided in
Section 9.2, such termination of this Agreement shall be without prejudice to
any other rights or remedies which either the Partnership or ZCC III may have
against the other.
10. MISCELLANEOUS
10.1 Time of the Essence
Time for performance by ZCC III of each and all of its
obligations under this Agreement is of the essence.
10.2 Assignment and Transfer to Other Parties
Neither ZCC III nor the Partnership shall transfer or assign
this Agreement or any benefit or interest herein, without the prior written
consent of the other, which consent shall not be unreasonably withheld;
provided, however, that ZCC III may collaterally assign its rights under this
Agreement as security for loans made by unaffiliated lenders which are incurred
for the purpose of meeting its obligations hereunder and ZCC III is authorized
to subcontract any portion of its duties under this Agreement to a third party
who shall be reasonably acceptable to the Partnership or to delegate its
obligations hereunder, in the ordinary course of its business, without reducing
the scope of ZCC III's undertakings, obligations and commitments to the
Partnership. The Partnership hereby acknowledges that ZCC III has appointed Zond
as general contractor to ZCC III for the construction of the Turbines, the
Related Turbine Equipment and the Power Substation pursuant to the terms of a
certain Construction Agreement between Zond and ZCC III, and consents to Zond's
acting as general contractor pursuant thereto.
10.3 Notices
Any notice permitted or required to be given to either party
shall be deemed to have been given upon personal delivery or on the second
business day after the date of deposit in the United States mail, first-class
registered or certified, postage prepaid, addressed to the party for whom
intended at the address appearing on the signature page of this Agreement, or at
such other address of which notice has been given as provided by this Section.
10.4 Waiver
Neither party hereto shall be deemed to have waived any of its
rights or remedies hereunder unless such waiver be in writing and signed by said
party or its duly authorized representative, and then only to the extent
specifically set forth therein. A
14
waiver of one event shall not be construed as constituting a bar or waiver of
any right or remedy with respect to a subsequent event.
10.5 Attorneys' Fees
If either the Partnership or ZCC III brings 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, the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
costs in connection with such action or proceeding, whether or not taxable, as
awarded by the trier of fact in such action or proceeding.
10.6 Patents, Etc.
The construction of the Turbines, the Related Turbine
Equipment and the Power Substation shall not be construed as granting to the
Partnership any license or other right therein or to any patent, copyright,
trademark or other similar proprietary right now or hereafter applicable
thereto. ZCC III hereby indemnifies and holds the Partnership free and harmless
against any and all actions, claims, losses, damages, injuries, liabilities,
costs, charges and expenses of any kind of nature (including the attorneys' fees
of the Partnership) resulting from any claim or infringement of any patent,
copyright, trademark or other proprietary right now or hereafter applicable to
the Turbines, the Related Turbine Equipment and the Power Substation based upon
the Partnership's ownership and operation thereof.
10.7 Documentation
All documentation with respect to the Turbines which is
furnished to the Partnership is solely for the Partnership's internal use. All
such documentation shall be maintained in a safe place by the Partnership and
the Partnership shall take appropriate measures to prevent the unauthorized
disclosure thereof.
10.8 No Partnership, Etc.
The relationship of the Partnership and ZCC III under this
Agreement is that of independent contractors. Nothing in this Agreement shall be
deemed to constitute the Partnership or ZCC III a partner of the other. The
employees and any Contractors of ZCC III in performing the obligations of ZCC
III under this Agreement shall not be deemed to be the agents or employees or
Contractors of the Partnership, and ZCC III hereby assumes all responsibility
for the acts or omissions of such employees and Contractors.
10.9 Dedication
The undertakings of ZCC III in this Agreement are for the sole
benefit of the Partnership and nothing in this Agreement shall constitute the
dedication of ZCC III's or the Partnership's property or services to the public
nor affect ZCC III's or the Partnership's status as an independent entity and
not as a public utility.
15
10.10 Further Assurances
Each party agrees to do, execute, acknowledge and deliver all
and every such further acts, assurances, documents and instruments as may be
reasonably requested by the other to effect the purpose and intent of this
Agreement. The parties further agree to cooperate with any lenders to each other
and to provide such information and to take such actions as such lenders may
reasonably request in connection with this Agreement.
10.11 Binding Effect
This Agreement shall be binding upon the parties and their
respective permitted assignees, successors-in-interest and legal
representatives.
10.12 Governing Law
The terms and provisions of this Agreement shall be construed
in accordance with the laws of the State of California
10.13 Interpretation
The Partnership and ZCC III agree that the terms and
provisions of this Agreement embody their mutual intent and that they are not to
be construed more liberally in favor of, nor more strictly against, any party
hereto.
10.14 Partial Invalidity
If any term or provision of this Agreement, or the application
thereof to any person or circumstance shall, to any extent, be invalid or
enforceable, the remainder of this Agreement or the application of such term or
provision to persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be affected thereby, and each remaining term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
10.15 Headings, References and Exhibits
The headings contained in this Agreement are for purposes of
reference and convenience only and shall not limit or otherwise affect the
meaning of this Agreement. Unless otherwise indicated, all references to
Sections are to Sections in this Agreement. All exhibits attached to this
Agreement are incorporated herein by this reference.
10.16 Counterparts
This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which, when taken together, shall
constitute one and the same instrument.
16
10.17 Entire Agreement; Amendments
This Agreement supersedes all previous agreements,
understandings, negotiations and proposals between the Partnership and ZCC III
relating to the subject matter of this Agreement. This Agreement may not be
altered or amended except by an instrument in writing signed by ZCC III and the
Partnership.
17
ZCC III and the Partnership each acknowledge and agree that no representation,
warranty or inducement has been made to it regarding the subject matter of this
Agreement which is not expressly set forth in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Windsystem
Construction Agreement as set forth below.
"ZCC III"
ZOND CONSTRUCTION CORPORATION III,
a California corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dated: September 11, 1985 By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------ ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Vice President
General Counsel
"PARTNERSHIP"
ZOND WINDSYSTEM PARTNERS, LTD SERIES 85-B,
a California Limited Partnership
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By its authorized General Partner:
Zond Windsystems Management
Corporation IV, a California corporation
Dated: September 11, 1985 By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------ ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Vice President
General Counsel
18
GUARANTY
The undersigned corporation hereby guarantees the performance
of Zond Construction Corporation III under the Windsystem Construction Agreement
between Zond Construction Corporation III and Zond Windsystem Partners, Ltd.
Series 85-B to which this Guaranty is attached.
ZOND SYSTEMS, INC.,
a California corporation
Dated: September 11, 1985 By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------ ---------------------------------------t-
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
General Counsel
19
LOCATION PLAN
See Exhibit A
to the Construction Agreement
dated September 9, 1985 between
Zond Systems, Inc. and
Zond Construction Corporation III
Exhibit A
to the
Windsystem Construction Agreement
A-1
EXHIBIT B
LEGAL DESCRIPTION OF THE OPERATING SITE
ALL OF SECTION 33, TOWNSHIP 32 SOUTH, RANGE 34 EAST, MOUNT DIABLO MERIDIAN, IN
THE UNINCORPORATED AREA OF THE COUNTY OF ▇▇▇▇, STATE OF CALIFORNIA, ACCORDING TO
THE OFFICIAL PLAT THEREOF.
EXCEPT THAT PORTION OF SAID SECTION 33, THAT IS INCLUDED WITHIN THE LAND
DESCRIBED AS PARCEL IF IN THE FINAL ORDER OF CONDEMNATION HAD IN ▇▇▇▇ COUNTY
SUPERIOR COURT, CASE NO. 101028, A CERTIFIED COPY THEREOF WAS RECORDED JULY 23,
1970 IN BOOK 4420 PAGE 123, OFFICIAL RECORDS.
ALSO EXCEPT ALL THAT PORTION WITHIN THE RIGHT OF WAY, 200 FEET WIDE OF THE
SOUTHERN PACIFIC RAILROAD COMPANY AS GRANTED BY ACT OF CONGRESS OF JULY 27,
1866.
B-1
EXHIBIT C
FORM OF TURBINE COMPLETION CERTIFICATE AND ▇▇▇▇ OF SALE
ZOND CONSTRUCTION CORPORATION III ("ZCC III") hereby certifies to ZOND
WINDSYSTEM PARTNERS, LTD. SERIES 85-B (the "Partnership") that the construction
and installation of the (i) Turbines whose serial numbers are listed on the
attached Annex 1, and (ii) the Related Turbine Equipment pertaining thereto, a
description of which is set forth on such Annex 1, was completed on
______________, 1985 (the "Completion Date") in accordance with Section 4.1 of
the Windsystem Construction Agreement between the Partnership and ZCC III
("Construction Agreement"). ZCC III further certifies to the Partnership that
such Turbines have not been placed in service as of the date hereof.
KNOW ALL MEN BY THESE PRESENTS: That for and in consideration of
payments made by the Partnership to ZCC III pursuant to the Construction
Agreement and other good and valuable consideration, receipt of which is hereby
acknowledged, ZCC III hereby sells, assigns and transfers to the Partnership all
of ZCC III's right, title and interest (i) in and to the Turbines and all
components thereof, and (ii) in and to the Related Turbine Equipment pertaining
thereto (together with all rights of ZCC III in respect of the warranties or
other claims against the manufacturer or vendor to ZCC III of, the Turbines and
the Related Turbine Equipment pertaining thereto) to have and to hold for itself
and for its successors and assigns to their own use and benefit forever.
ZCC III hereby warrants to the Partnership that the Turbines, all
components of the Turbines and the Related Turbine Equipment pertaining thereto,
are, as of the date hereof, free from any mortgage, pledge, lien, charge,
encumbrance, lease or security interest (other than the Series B Purchase
Note(s) made by the Partnership in favor of ZCC III and issued in respect of the
purchase of the Turbines, the Related Turbine Equipment pertaining thereto and
the Power Substation pertaining thereto as contemplated by the Construction
Agreement, or such other interests as have been approved by the Partnership) and
that ZCC III has full right, title and authority as to all persons to sell the
same as aforesaid; and ZCC III hereby covenants with the Partnership that ZCC
III will, to the extent of the foregoing warranty, warrant and defend all such
components against the claims and demands of all persons.
ZCC III hereby warrants to the Partnership that all amounts due and
payable as of the date hereof to any other party or ZCC III with respect to the
Turbines and the Related Turbine Equipment pertaining thereto have been duly
paid and no further amounts are owed or will be owing to any party or ZCC III
with respect thereto.
C-1
IN WITNESS WHEREOF, ZCC III has caused this instrument to be executed
this_____________day of____________________, 1985.
"ZCC III"
ZOND CONSTRUCTION CORPORATION III,
a California corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By
-----------------------------------------
The Partnership hereby accepts the Turbines and the Related Turbine
Equipment pertaining thereto, described above, and the passage of title thereto,
all as set forth above; provided, however, that by doing so, the Partnership
does not waive any rights or remedies it may have against ZCC III or others
under the Construction Agreement or otherwise.
"PARTNERSHIP"
ZOND WINDSYSTEM PARTNERS, LTD. SERIES 85-B,
a California Limited Partnership
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By its authorized General Partner:
Zond Windsystems Management Corporation IV,
a California corporation
Dated:_____________________ By
-----------------------------------------
C-2
EXHIBIT D
FORM OF COMPLETION CERTIFICATE AND ▇▇▇▇ OF SALE
ZOND CONSTRUCTION CORPORATION III ("ZCC III") hereby certifies to ZOND
WINDSYSTEM PARTNERS, LTD. SERIES 85-B (the "Partnership") that the construction
and installation of the Power Substation was completed on , 1985 (the
"Completion Date") in accordance with Section 4.1 of the Windsystem Construction
Agreement between the Partnership and ZCC III ("Construction Agreement"). ZCC
III further certifies to the Partnership that the Power Substation has not been
placed in service as of the date hereof.
KNOW ALL MEN BY THESE PRESENTS: That for and in consideration of
payments made by the Partnership to ZCC III pursuant to the Construction
Agreement and other good and valuable consideration, receipt of which is hereby
acknowledged, ZCC III hereby sells, assigns and transfers to the Partnership all
of ZCC III's right, title and interest in and to the Power Substation (together
with all rights of ZCC III in respect of the warranties or other claims against
the manufacturer or vendor to ZCC III of the Power Substation and, with respect
to the Power Transfer Facilities, against Zond), to have and to hold for itself
and for its successors and assigns to their own use and benefit forever.
ZCC III hereby warrants to the Partnership that the Power Substation
is, as of the date hereof, free from any mortgage, pledge, lien, charge,
encumbrance, lease or security interest (other than the Series B Purchase
Note(s) made by the Partnership in favor of ZCC III and issued in respect of the
purchase of the Turbines, the Related Turbine Equipment pertaining thereto and
the Power Substation as contemplated by the Construction Agreement, or such
other interests as have been approved by the Partnership) and that ZCC III has
full right, title and authority as to all persons to sell the same as aforesaid;
and ZCC III hereby covenants with the Partnership that ZCC III will, to the
extent of the foregoing warranty, warrant and defend all such components against
the claims and demands of all persons.
ZCC III hereby warrants to the Partnership that all amounts due and
payable as of the date hereof to any other party or ZCC III with respect to the
Power Substation have been duly paid and no further amounts are owed or will be
owing to any party or ZCC III with respect thereto.
D-1
IN WITNESS WHEREOF, ZCC III has caused this instrument to be executed
this_____________day of____________________, 1985.
"ZCC III"
ZOND CONSTRUCTION CORPORATION III,
a California corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By
-----------------------------------------
The Partnership hereby accepts the Power Substation described above,
and the passage of title thereto, all as set forth above; provided; however,
that by doing so, the Partnership does not waive any rights or remedies it may
have against ZCC III or others under the Construction Agreement or otherwise.
"PARTNERSHIP"
ZOND WINDSYSTEM PARTNERS, LTD. SERIES 85-B,
a California Limited Partnership
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By its authorized General Partner:
Zond Windsystems Management Corporation IV,
a California corporation
Dated:_____________________ By
-----------------------------------------
D-2
Exhibit E
FORM OF POWER TRANSFER FACILITIES COMPLETION CERTIFICATE
Zond Systems, Inc. ("Zond") hereby certifies to each of Zond
Windsystem Partners, Ltd. Series 85-A and Zond Windsystem Partners, Ltd. Series
85-B that the construction of the Power Transfer Facilities (as defined in the
hereinafter defined Construction Agreement) was completed on , 1985 in
accordance with Section 5.2 of that certain Construction Agreement dated as of
September 9, 1985, between Zond and ZCC III ("Construction Agreement").
ZOND
ZOND SYSTEMS, INC.,
a California corporation
State License No. 414292
Dated:_____________________ By
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President-
Chief Operating and
Chief Financial Officer
E-1