Exhibit 10.5(a)
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PURCHASE NOTE AND SECURITY AGREEMENT
(SERIES A)
THIS PURCHASE NOTE AND SECURITY AGREEMENT (SERIES A) ["Agreement"] is
entered into as of the 7th day of November, 1985 by and between ZOND
CONSTRUCTION CORPORATION III, a California corporation ("ZCC III"), and ZOND
WINDSYSTEM PARTNERS, LTD. SERIES 85-A, a California limited partnership (the
"Debtor"), the general partner of which is Zond Windsystems Management
Corporation III, a California corporation (the "General Partner").
R E C I T A L S
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A. ZCC III and the Debtor have previously entered into a Windsystem
Construction Agreement dated as of September 9, 1985 (the "Series A Construction
Agreement"), pursuant to which ZCC III has agreed to sell to the Debtor, and the
Debtor has agreed to purchase from ZCC III, certain property more specifically
described in paragraphs (a), (b) and (c) of Section 2.2 below (collectively the
"Windsystem"), including up to 160 Vestas Model V17 wind turbine generators,
certain concrete pads, cables and step-up transformers for said wind turbine
generators and a 30 MW power substation. The Windsystem will be located and
operated on certain real property located in Tehachapi, ▇▇▇▇ County, California
and more specifically described on the attached Exhibit A (the "Operating
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Site").
B. A portion of the purchase price of the Windsystem will be evidenced by
one or more promissory notes (individually a "Series A Purchase Note" and
collectively the "Series A Purchase Notes"). Certain requirements as to the
content of and security for the Series A Purchase Notes are set forth in Section
5.2.1 of the Series A Construction Agreement. Subject to and in accordance with
such requirements, ZCC III and the Debtor desire to enter into this Agreement to
provide, among other things, for the making and securing of the Series A
Purchase Notes.
C. ZCC III expects to obtain permanent financing (the "Term Loan") from one
or more lenders (collectively the "Lender") in relation to the sale of the
Windsystem to the Debtor. In connection with the Term Loan, ZCC III will issue a
promissory note (the "Term Loan Note") secured in part by the Series A Purchase
Notes and a collateral assignment of all of ZCC III's right, title and interest
under this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants set forth below, ZCC III and the Debtor agree as follows:
1. Series A Purchase Notes.
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1.1 Form and Content. The Series A Purchase Notes shall, as to form
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and content, conform to the attached Exhibit B, with the blank spaces provided
to be filled in appropriately.
1.2 Secured Obligations. The Series A Purchase Notes shall be secured
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as more specifically provided in Section 2 and shall be additionally secured by
a Series A Deed of Trust and Assignment of Rents (the "Deed of Trust") in the
form of the attached Exhibit C, with the blank spaces provided to be filled in
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appropriately.
1.3 Non-Recourse. The Series A Purchase Notes and any and all
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obligations of the Debtor under this Agreement and the Deed of Trust shall be
without recourse to the Debtor, and in the event of any failure by the Debtor to
pay any amount when due or payable (at the stated time of maturity or upon
acceleration or otherwise) under any or all of the Series A Purchase Notes, this
Agreement and/or the Deed of Trust or in the event of the occurrence of an Event
of Default (this and all subsequent references to an Event of Default shall mean
an Event of Default as defined in Section 9.1), ZCC III's sole recourse shall be
to the collateral described in Section 2 and/or in the Deed of Trust and the
Debtor shall in no event be personally liable under the Series A Purchase Note,
this Agreement or the Deed of Trust.
1.4 Unconditional Obligations. All payments to be made under the
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Series A Purchase Notes shall be unconditional, and shall not be subject to
offset, defense or counterclaim for so long as the Series A Purchase Notes
remain outstanding.
2. Security Interests.
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2.1 Grant of Security Interest. The Debtor hereby grants to ZCC III,
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and ZCC III shall have, to secure the Series A Purchase Notes and any and all
payment obligations of the Debtor under this Agreement and the Deed of Trust, a
security interest in the following, to the extent a security interest may be
created in any or all of the following under Division 9 of the California
Commercial Code:
(a) the Windsystem Collateral (as defined in Section 2.2);
(b) the Intangible Collateral (as defined in Section 2.3);
(c) any and all bank accounts from time to time maintained by the
Debtor;
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(d) all other personal property, excluding the Indemnification Rights
(as defined in Section 2.3), but including without limitation all goods,
inventory, equipment, accounts, accounts receivable, contract rights, general
intangibles, chattel paper, instruments and documents, and fixtures, whether
presently or hereafter owned by the Debtor, and wherever located; and
(e) all substitutions and replacements for, accessions to and proceeds
of the foregoing.
2.2 Windsystem Collateral. "Windsystem Collateral" shall mean:
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(a) all Vestas Model V17 wind turbine generators, each having a rated
capacity of 100 KW and equipped with two generators, a controller and a
supporting steel lattice tower, and all other parts or components thereof, sold
by ZCC III to the Debtor under the Series A Construction Agreement (the
"Turbines");
(b) all concrete pads located at the Operating Site, and all
intermediate step-up transformers for use in connection with the Turbines
together with all wire cable for use in connecting such intermediate step-up
transformers to the Turbines, and all parts and components thereof, sold by ZCC
III to the Debtor under the Series A Construction Agreement (the "Turbine
Related Equipment");
(c) the 30 MW power substation located at the Operating Site, and all
parts and components thereof, sold by ZCC III to the Debtor under the Series A
Construction Agreement (the "Power Substation"); and
(d) all insurance proceeds paid or payable to the Debtor under the
insurance policies (other than proceeds of any liability insurance policies
payable to the Debtor) maintained by or for the benefit of the Debtor with
respect to the Turbines, the Turbine Related Equipment, the Power Substation and
any other property of the Debtor.
2.3 Intangible Collateral. "Intangible Collateral" shall mean the
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following (other than any rights of the Debtor set forth in the below-described
agreements to be defended, indemnified or held harmless or to receive any
payments made or to be made pursuant to any obligation to such effect, all of
the foregoing being collectively the "Indemnification Rights"):
(a) the Power Purchase Contract designated Monolith I (the "Power
Agreement") dated June 22, 1984 between Zond Systems, Inc., a California
corporation ("Zond"), and Southern California Edison Company, a California
public utility, as assigned by Zond to the Debtor pursuant to the
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Assignment of Power Purchase Contracts (the "Power Assignment") dated as of
September 9, 1985 between Zond and the Debtor, together with the Power
Assignment;
(b) the Windsystem Management Agreement (the "Series A Management
Agreement") dated as of September 9, 1985 between the Debtor and Zond;
(c) the Series A Construction Agreement;
(d) the Wind Power Generating Facility Warranty Agreement (the
"Warranty Agreement") made by Vestas Energy A/S, a Danish corporation, in favor
of one or more purchasers to be subsequently designated, as referred to in the
Series A Construction Agreement;
(e) the Assignment (the "Warranty Assignment") dated as of September
9, 1985 between ZCC III and the Debtor, by which ZCC III assigned to the Debtor
certain representations and warranties of Zond contained in the Construction
Agreement dated as of September 9, 1985 between Zond and ZCC III;
(f) the 1985 Tower Warranty executed by Vestas North America Limited,
a California corporation, in favor of the Debtor;
(g) the Series A Wind Park Easement Agreement (the "Series A Easement
Agreement") dated as of September 9, 1985 between the Debtor and ZCC III;
(h) the Grant of Easement (Western Access) (Series A) [the "Series A
Access Easement"] dated as of September 9, 1985 between Zond and the Debtor;
(i) the Grant of Easement (Interconnect) (Series A) [the "Series A
Interconnect Easement] dated as of September 9, 1985 between Zond and the
Debtor;
(j) the Series A Power Transfer Facilities Agreement dated as of
September 9, 1985 between Zond and the Debtor;
(k) the Non-Disturbance Agreement dated as of September 9, 1985
between Zond and the Debtor;
(1) any and all payments or monies (other than payments or monies
received pursuant to any Indemnification Rights) received or to be received
under any of the foregoing, including without limitation any and all proceeds
from the sale of electricity under the Power Agreement as assigned to the Debtor
by the Power Assignment;
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(m) any additional agreements to which the Debtor is a party, or
warranties assigned or running to the Debtor, and which relate to the ownership
and operation of the Windsystem; and
(n) any replacements, substitutions, modifications, amendments or
proceeds of any of the foregoing.
2.4 No Assumption. The grant of the security interests provided for in
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Section 2.1 and the exercise by ZCC III of any of its rights and remedies under
this Agreement, the Deed of Trust or otherwise do not and shall not constitute,
and shall not be construed to constitute, an assumption by or transfer to ZCC
III of any obligations of the Debtor, or any other party, under any of the
agreements included in the Intangible Collateral, or any other agreements to
which the Debtor is a party, all of which shall continue to be obligations of
the Debtor and such other parties, respectively.
2.5 No Merger. Neither the Debtor's grant of a security interest to
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ZCC III under Section 2.1 or the Deed of Trust in any agreement to which ZCC III
is also a party, including without limitation the Series A Construction
Agreement, the Warranty Assignment and the Series A Easement Agreement, nor the
exercise by any assignee or successor of the Debtor with respect to any rights
under this Agreement, the Deed of Trust or otherwise relating to any such
security interest, shall constitute a merger of the interests in such agreement
or otherwise result in any extinguishment or termination of any such agreement.
3. Representations and Warranties.
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In order to induce ZCC III to enter into this Agreement and to accept
the Series A Purchase Notes in partial payment of the purchase price of the
Windsystem, the Debtor represents and warrants to ZCC III that:
3.1 Organization and Powers. The Debtor is a limited partnership duly
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organized and validly existing under the laws of the State of California, has
full power to own its properties and to conduct its business as now being
conducted and is in good standing in each jurisdiction in which the character of
its business or its ownership of property so requires. The Debtor has and will
have full power, authority and legal right to execute, deliver and perform its
obligations under the Series A Purchase Notes, this Agreement and the Deed of
Trust and to grant the security interests granted under this Agreement and the
Deed of Trust.
3.2 Authorization; Absence of Conflicts; Approvals. The execution,
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delivery and performance by the Debtor of the Series A Purchase Notes, this
Agreement and the Deed of Trust (a) have been duly authorized by all requisite
action of the Debtor and the General Partner, (b) will not (i) violate
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the Debtor's partnership agreement or any provision of any law or any
governmental or agency rule or regulation applicable to it, (ii) violate or
constitute a default under any indenture, agreement, license or other instrument
to which the Debtor or the General Partner is a party or by which the Debtor or
the General Partner or any of their respective properties may be bound, (iii)
violate any order of any court, tribunal or governmental agency binding upon the
Debtor or the General Partner or their respective properties, or (iv) result in
the creation of any lien of any nature whatsoever upon any properties or assets
of the Debtor or the General Partner, except as contemplated or permitted
hereby, and (c) do not require any license, consent or approval of any
governmental agency or regulatory authority.
3.3 Binding Obligations. This Agreement constitutes, and upon
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execution and delivery by the Debtor the Series A Purchase Notes and the Deed of
Trust will constitute, legal, valid, and binding obligations of the Debtor
enforceable against the Debtor in accordance with their respective terms.
3.4 Litigation. There are no actions, suits, proceedings (including
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proceedings by or before any arbitrator or administrative agency) pending or, to
the knowledge of the Debtor, threatened against the Debtor or the General
Partner which, if adversely determined, would have a material adverse affect on
the financial condition or business of the Debtor.
3.5 Conflicting Agreements. Neither the Debtor nor the General Partner
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is a party to any agreement or instrument that adversely affects the operation
or nature of the Debtor's business, property or assets or its ability to perform
its obligations under the Series A Purchase Notes, this Agreement or the Deed of
Trust. Neither the Debtor nor the General Partner is in default under any
agreement for borrowed money or under any other material agreement in any manner
which would materially adversely affect Debtor's ability to perform its
obligations under the Series A Purchase Notes, this Agreement or the Deed of
Trust.
3.6 Public Utility Regulation. Neither the execution or delivery of
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the Series A Purchase Notes, this Agreement and/or the Deed of Trust, nor the
due performance by any of the parties thereto of their respective obligations
thereunder, nor the proper exercise of any of their rights thereunder, will,
solely as a result thereof, cause ZCC III to become subject to regulation as a
public utility under the Federal Power Act, as amended, or to be an "electric
utility company" or a "holding company" as defined in the Public Utility Holding
Company Act of 1935, as amended. No orders, approvals or filings are necessary
to prevent classification under Federal law of ZCC III as a public utility,
electric utility company or holding company.
3.7 Security Interests. The security interests granted under this
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Agreement will, upon attachment and proper filing of appropriate UCC financing
statements with the Office of
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the California Secretary of State in Sacramento, California, appropriate
UCC fixture filings in the Office of the County Recorder of ▇▇▇▇ County,
California and appropriate UCC transmitting utility filings with the Office of
the California Secretary of State, Sacramento, California and proper giving of
appropriate notices to the organizations with which the Debtor's bank accounts
are at any time maintained and the issuers of any insurance policies maintained
by or for the benefit of the Debtor with respect to the Windsystem (such filings
and notices being a condition to ZCC III's taking of any Series A Purchase Note
as more specifically provided in Section 4.2), (i) be perfected under the
California Commercial Code (the "UCC"), (ii) be entitled to all of the rights,
benefits and priorities provided by the UCC, as applicable, and (iii) be first
in priority and superior to all other security interests and liens of third
parties arising under the UCC, whether presently existing or hereafter arising,
in the same collateral.
4. Conditions Precedent.
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The obligation of ZCC III to take a Series A Purchase Note as partial
payment under the Series A Construction Agreement (each date on which the Debtor
delivers a Series A Purchase Note to ZCC III being a "Closing") is in each
instance subject at the time of delivery of any such Series A Purchase Note, to
the satisfaction of the following conditions:
4.1 Agreements in Full Force and Effect. Prior to the issuance of the
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initial Series A Purchase Note, the Debtor shall have executed the Deed of Trust
and recorded same in the office of the county recorder of ▇▇▇▇ County,
California, and the Deed of Trust and this Agreement shall be in full force and
effect.
4.2 Filings and Recordings. Prior to the issuance of the initial
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Series A Purchase Note, all filings, recordings, notices and actions as may be
required by law to establish, perfect, preserve and protect ZCC III's rights in
and to the collateral covered by this Agreement and the Deed of Trust shall have
been made, given or taken, it being understood that any filing or recording fees
incurred in connection therewith shall be for the account of ZCC III.
4.3 Series A Purchase Note. The Series A Purchase Note delivered to
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ZCC III shall be signed by the Debtor and shall conform to the attached Exhibit
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B, with the blank spaces filled in appropriately.
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4.4 No Default. At the time of each Closing there shall exist no Event
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of Default described in Section 9.1(a) with respect to any Series A Purchase
Note previously delivered by the Debtor to ZCC III.
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4.5 Representations and Warranties. At the time of each Closing, and
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immediately after giving effect thereto, all representations and warranties
contained herein, in the Deed of Trust or otherwise made in writing by the
Debtor in connection herewith or therewith shall be true and correct in all
material respects with the same force and effect as though such representations
and warranties had been made on and as of such time.
4.6 Representative's Certificate. At the time of each Closing, there
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shall have been delivered to ZCC III a certificate, dated as of the date of such
Closing, signed by an authorized representative of the General Partner to the
effect set forth in Sections 4.4 and 4.5.
4.7 Cash Reserve. At the time of each Closing, the Debtor shall have
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funded the Cash Reserve (as defined in Section 5.1) in the amount of $6,325 per
Turbine purchased at such Closing.
4.8 ZCC III as Designated Purchaser. At the time of each Closing,
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Vestas North America Limited shall have provided to ZCC III a writing in which
it designates ZCC III and its successors and assigns as a "Designated Purchaser"
under the Warranty Agreement with respect to the Turbines involved in such
Closing, which designation is made effective as of the date on which ZCC III
takes possession of such Turbines upon the occurrence and continuance of an
Event of Default.
4.9 Title Insurance. Prior to the issuance of the initial Series A
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Purchase Note, the Debtor shall have caused to be issued to ZCC III a lender's
policy of title insurance issued by Ticor Title Insurance Company of California
("Ticor") insuring that the Debtor is the owner of the grantee's rights under
the Series A Easement Agreement, the Series A Access Easement and the Series A
Interconnect Easement and that ZCC III has a lien thereon under the Deed of
Trust subject to such exceptions as ZCC III may approve, which policy of title
insurance shall be on Ticor's standard form and be for an amount not to exceed
$5,000,000.
5. Cash Reserve
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5.1 Cash Reserve Account. The Debtor shall establish a cash reserve
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depositary trust account and maintain in such account a cash reserve (the "Cash
Reserve") for use in accordance with Section 5.3.
5.2 Minimum Reserve Level. The "Minimum Reserve Level" of the Cash
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Reserve at any particular time shall mean an amount equal to (a) the number of
Turbines then owned by the Debtor, which number shall include any Turbines which
have been damaged or destroyed by an Insured Property Loss (as defined in
Section 6.5) and as to which the Debtor, pursuant to the applicable provisions
of Section 6.5 and within the 60 day period pro-
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vided therein, has either elected or may elect to make replacement or
repair, multiplied by (b) $6,325. In the event the Debtor makes any payments
from the Cash Reserve as permitted under Section 5.3, replenishment of the Cash
Reserve to the Minimum Reserve Level shall not be required; provided, however,
that at any time the amount of the Cash Reserve is less than the Minimum Reserve
Level, the Debtor shall be subject to the distribution restrictions set forth in
Section 7.8.
5.3 Permitted Disbursement. The Debtor shall make payments from the
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Cash Reserve solely for the following purposes (but not necessarily in the
following order): (a) making payments under the Series A Purchase Notes, this
Agreement and the Deed of Trust; (b) performing necessary repair and maintenance
on the Windsystem; (c) paying real property taxes and assessments; and (d)
paying insurance premiums on the insurance polices required by Section 6.
6. Insurance.
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6.1 Existing Policies. The Debtor presently maintains or is a named
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insured under the insurance policies (individually an "Existing Policy," and
collectively the "Existing Policies") described on the attached Exhibit D.
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6.2 Obligation to Maintain Insurance. The Debtor shall maintain or
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remain as a named insured under the Existing Policies or under such other
insurance policies (collectively with the Existing Policies, the "Insurance
Policies") as are substantially similar to the Existing Policies in all
respects, including without limitation insured risks, coverage amounts, excluded
risks and deductible amounts, and as are issued by insurance companies
reasonably acceptable to ZCC III; provided, however, that the Debtor shall not
be obligated to renew any Windsystem performance policies, or renewals thereof,
included in the Insurance Policies which expire at any time after the elapse of
five years from the date of this Agreement if at the time of such expiration the
following conditions are satisfied: (a) no Event of Default has occurred and is
then continuing, and (b) the amount of the Cash Reserve is equal to or greater
than the Minimum Reserve Level. ZCC III shall be a named insured under each of
the Insurance Policies, and the Insurance Policies shall not be cancellable for
nonpayment of premiums other than as provided therein. Upon demand by ZCC III at
any time, the Debtor shall furnish proof of compliance with the requirements of
this Section 6.
6.3 Insurance Certificate. Within 90 days after the close of each
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fiscal year of the Debtor, the Debtor shall furnish to ZCC III a letter from
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (or such other insurance broker of nationally recognized
standing as the Debtor may retain from time to time) describing the insurance
coverage
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as then in effect under the Insurance Policies and certifying that such
coverage is in compliance with the requirements of Section 6.2.
6.4 Notices and Claims. The Debtor shall promptly furnish to ZCC III
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copies of any notice relating to any of the Insurance Policies and received by
the Debtor from any of the issuers of any of the Insurance Policies. The Debtor
shall promptly file all necessary claims under the Insurance Policies after
consultation with ZCC III and in accordance with all of the applicable terms
and conditions of such Insurance Policies. The Debtor and ZCC III agree to
cooperate to the extent reasonably necessary in the preparation and verification
of such claims.
6.5 Use of Insurance Proceeds. All insurance proceeds in excess of
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$50,000 per loss occurrence paid to the Debtor in respect of a loss claimed or
for which a claim can be made under any property damage policy or policies or
the property loss (whether or not by casualty) coverage provisions of any
Windsystem performance policy or policies maintained by or for the benefit of
Debtor (an "Insured Property Loss") shall be used by the Debtor in accordance
with the following:
(a) Upon the occurrence of an Insured Property Loss in respect of
which insurance proceeds are received by the Debtor in excess of $50,000, the
Debtor may elect to replace or repair any property with respect to which such
proceeds were paid by so notifying ZCC III within 60 days after receipt of such
payment, and upon making such election shall have 320 days to complete the
replacement or repair of such property.
(b) If the Debtor does not elect to replace or repair all or any
Turbines included in such property within such 60 day period, the Debtor shall
prepay the Series A Purchase Notes in an amount which bears the same proportion
to the then outstanding principal balance of the Series A Purchase Notes plus
accrued interest thereon as the rated capacity of all Turbines damaged by such
Insured Property Loss and which the Debtor does not so elect to repair or
replace, bears to the total rated capacity of all Turbines (including such
damaged Turbines) then owned by the Debtor. The amount of any such prepayment
shall be allocated among the Series A Purchase Notes in proportion to their
respective unpaid balances of principal and accrued interest. Any such
prepayment shall be applied pro rata or as otherwise required by applicable tax
law or regulation to each outstanding installment so as to maintain the level
payment character of the Series A Purchase Notes.
(c) In the event that the Debtor makes an election to replace or
repair as provided for in paragraph (b) of this Section 6.5, such proceeds shall
be applied to the costs of replacement or repair as such costs are incurred by
the Debtor, with the remaining balance, if any, applied to prepay the Series A
Purchase Notes.
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7. Certain Covenants.
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The Debtor covenants and agrees with ZCC III as follows:
7.1 Type of Business. The Debtor shall not enter into any business
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other than as contemplated by the Debtor's Confidential Private Placement
Memorandum dated September 25, 1985 (the "Offering Memorandum").
7.2 Preservation of Existence. The Debtor shall not liquidate, wind up
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or dissolve its affairs, and shall maintain and preserve its existence and its
right to carry on its business as contemplated by the Offering Memorandum and
duly procure all necessary renewals and extensions thereof, and use reasonable
efforts to maintain, preserve and renew all necessary rights, powers, privileges
and franchises, including without limitation the rights granted to the Debtor
under the Intangible Collateral.
7.3 Sale of Assets, Etc. The Debtor shall not convey, sell, lease or
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otherwise dispose of (or agree to do any of the foregoing at any future time)
all or any portion of the Windsystem (other than any property included in the
Windsystem which sustains major damage and which the Debtor does not choose to
repair or replace) or all or substantially all its property or assets, or any
part of such property or assets essential to the conduct of its business as
contemplated by the Offering Memorandum.
7.4 Compliance with Laws, Agreements, Etc. The Debtor shall comply
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with all applicable laws, statutes and regulations in respect of the conduct of
its business. Without limiting the generality of the foregoing, the Debtor shall
cause the Windsystem to be operated in compliance with (a) all applicable laws,
ordinances, rules and regulations of Federal, state, county or municipal
governments or agencies now in force or that may be enacted hereafter
(including, without limitation, environmental and land use legislation), (b) all
applicable requirements of the Intangible Collateral and the Insurance Policies
and (c) the operations and maintenance manuals supplied by Vestas Energy A/S, a
Danish corporation.
7.5 Investments. The Debtor shall not invest in (by capital
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contribution or otherwise), suffer to exist any investment in, or acquire or
purchase or make any commitment to purchase the obligations or capital stock of,
or other indicia of equity rights in, any individual, firm, corporation,
association, trust or other enterprise or any governmental or political
subdivision or agency, department or instrumentality thereof (collectively, a
"Person"), except (a) the purchase of direct or indirect obligations of the
Government of the United States of America with remaining terms of less than one
year, (b) certificates of deposit maturing no more than one year from the date
of
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issue and issued by banks organized under the laws of the United States or
any State thereof having a capital surplus and undivided profits of not less
than $100,000,000 and the senior debt of which is rated at ▇▇▇▇▇ "▇▇" by
Standard and Poor's Corporation or ▇▇▇▇▇'▇ Investor Services, Inc. and
(c) commercial paper of domestic corporations having the highest rating of both
Standard & Poor's Corporation and ▇▇▇▇▇'▇ Investor Services, Inc.
Notwithstanding the foregoing, the provisions of this Section 7.5 shall not
apply with respect to any funds of the Debtor deposited in the Partnership Trust
Account (as defined and referred to in the Depository Trust Agreement dated as
of September 25, 1985 between Manufacturers Hanover Trust Company and the Debtor
[the "Depository Trust Agreement"]) pursuant to the Depository Trust Agreement.
7.6 Bank Accounts. The Debtor shall maintain all of its trust and
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depositary accounts with banks whose certificates of deposit would be permitted
investments of the Debtor under Section 7.5.
7.7 Guarantees and Other Liabilities. The Debtor shall not purchase or
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repurchase (or agree, contingently or otherwise, so to do) the indebtedness of,
or assume, guarantee (directly or indirectly or by an instrument having the
effect of assuring another's payment or performance of any obligation or
capability of so doing, or otherwise), endorse or otherwise become liable,
directly or indirectly, in connection with the obligations, stock or dividends
of any Person, except
(a) by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business;
(b) as permitted under Section 7.5;
(c) trade obligations incurred in the ordinary course of business and
in an aggregate amount outstanding at any one time not to exceed $750,000; and
(d) advances from the General Partner or any affiliate of Zond (other
than by ZCC III pursuant to Section 13), provided that such advances are
specifically acknowledged to be subordinate in right of payment to the Series A
Purchase Notes.
7.8 Distributions. The Debtor shall not make any distributions
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(whether of earnings or of capital and whether in the form of cash or of
property) to any of its partners when (a) an Event of Default has occurred and
is continuing or will occur upon giving effect to such distribution, (b) the
Cash Reserve balance is less than the Minimum Reserve Level or (c) the
Debtor has not reimbursed ZCC III for amounts outstanding and reimbursable by
the Debtor under Section 13. Distributions (if any) to partners of the Debtor
shall be made annually within 90 days after the anniversary date of the issuance
of the first Series A Purchase Note.
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7.9 ERISA. The Debtor shall not establish, maintain or contribute to
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any plan to which Title IV of ERISA applies.
7.10 Limitation on Actions Affecting Public Utility Regulation. The
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Debtor shall not take or omit to take any action in respect of its business if,
solely as a consequence of such action or omission, ZCC III becomes subject to
regulation under, or is considered to be an "electric utility company" or a
"holding company" as defined in the Public Utility Holding Company Act of 1935,
as amended, or any laws or regulations of the State of California regarding
public utilities.
7.11 Reports, Notices and Certificates. The Debtor shall furnish to
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ZCC III:
(a) promptly after the filing thereof, and in any event within 90
days after the end of the applicable quarter with respect to quarterly reports
and within 120 days after the end of the applicable year period with respect to
annual reports, a copy of any report filed by the Debtor with the Securities and
Exchange Commission pursuant to Section 13(a) of the Securities Exchange Act of
1934, as amended;
(b) within 120 days after the end of each fiscal year of the Debtor,
copies of the Debtor's financial statements for and as at the close of such
fiscal year, audited by the Debtor's independent certified public accountants
(who shall be an accounting firm of nationally recognized standing selected by
the Debtor and reasonably satisfactory to ZCC III), a copy of the auditors
report with respect to such financial statements and a certificate of such
auditors certifying that in making such audit they have obtained no knowledge of
the existence of any Event of Default or, if in the opinion of such accountants
any such Event of Default exists, specifying the nature and status thereof;
(c) concurrently with the materials to be furnished under paragraph
(b) above, a certificate signed by the Chief Financial Officer of the General
Partner to the effect that after due inquiry he has no knowledge of the
occurrence and continuance of an Event of Default, or a description of any Event
of Default as to which he has such knowledge and a statement as to what the
General Partner proposes to do to resolve such Event of Default;
(d) promptly after becoming aware thereof, notice of the following:
the occurrence of any material casualty loss; the occurrence of any Event of
Default, the nature and period of existence thereof and the action which the
Debtor proposes to take with respect thereto; any meritorious action, proceeding
or claim which is not fully covered by insurance and which has been commenced or
asserted against the Debtor or any of its assets, and any dispute between the
Debtor and any govern-
-13-
mental regulatory body which, in any case, would materially adversely
affect the operations, business, assets or condition (financial or otherwise) of
the Debtor; and
(e) promptly after delivery or receipt thereof, copies of all
material documents, notices and other papers furnished by or to the Debtor under
the agreements included in the Intangible Collateral (including but not limited
to copies of the quarterly reports rendered to the Debtor under the Series A
Management Agreement).
7.12 Inspection of Books and Assets. The Debtor shall allow any
------------------------------
representative of ZCC III to visit and inspect, upon reasonable telephonic
notice to the Debtor, the Debtor or any of its properties, to examine its books
of record and account and to discuss its affairs, finances and accounts with its
officers, all at such reasonable times and as often as ZCC III may
reasonably request.
7.13 No Impairment. The Debtor shall not take any action which will
-------------
materially impair in any way the value of the Windsystem Collateral or the
Intangible Collateral (provided, that the Debtor shall have no obligation to
upgrade or maintain the Windsystem except to the extent covered, and in
accordance with, the operations and maintenance manual supplied by Vestas Energy
A/S, a Danish corporation), or operate the Windsystem contrary to the manner
contemplated by the Offering Memorandum.
7.14 Amendments to Documents. The Debtor shall not amend, modify,
-----------------------
change, terminate or permit to be terminated any of the agreements included in
Intangible Collateral or waive any of its rights thereunder, without the prior
written consent of ZCC III (which consent shall not be unreasonably withheld)
other than in the ordinary course of administering the Windsystem.
7.15 Payment of Charges. The Debtor shall pay and discharge all taxes
------------------
(other than sales taxes payable by ZCC III with respect to the Windsystem in
connection with the sale of the Windsystem to the Debtor), assessments and
governmental charges or levies imposed upon it or its property or assets, prior
to the date on which penalties attach thereto, and lawful claims which, if
unpaid, might become a lien upon its property or assets not permitted or
contemplated hereby, provided that the Debtor shall not be required to pay any
such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if adequate reserves with respect thereto have
been set up by the Debtor.
7.16 Permitted Liens. The Debtor shall maintain its assets and
---------------
properties free and clear from any and all claims, liens, security interests,
encumbrances, rights or interests of any third parties arising by, through or
under the Debtor, except for the following (collectively the "Permitted Liens"):
-14-
(a) any security interests created under this Agreement or the Deed
of Trust;
(b) liens for taxes, assessments and other governmental charges
either not yet payable or being contested by the Debtor in good faith;
(c) mechanics liens, materialmans liens or similar liens which are
inchoate, or which are being contested by the Debtor in good faith and which
shall either have been removed within 30 days or have been bonded against in an
amount reasonably satisfactory to ZCC III; and
(d) other liens or encumbrances which do not arise in connection with
the borrowing of money by the Debtor and which do not materially impair any of
the Windsystem Collateral or the Intangible Collateral or materially interfere
with the use and operation of the Windsystem, or which are specifically listed
in title insurance policy exceptions approved by ZCC III pursuant to Section
4.9.
7.17 Location of Windsystem. The Windsystem shall at all times be
----------------------
located at the Operating Site.
7.18 Chief Executive Office. The chief executive office of the Debtor
----------------------
is presently located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The
Debtor shall give ZCC III prompt written notice, and if at all possible at least
30 days' prior written notice, of any change in location of the Debtor's chief
executive office, and in any event shall take such steps in connection with any
such change as ZCC III may reasonably require to maintain perfection of the
security interests granted under this Agreement.
8. Filings and Further Assurances.
------------------------------
8.1 Filings. At the request of ZCC III, the Debtor shall promptly sign
-------
and deliver to ZCC III such financing statements, fixture filings and UCC-2
forms, or forms similar thereto, all in a form acceptable to ZCC III, as ZCC III
reasonably deems necessary to perfect and maintain perfection of the security
interests granted under this Agreement.
8.2 Further Assurances. The Debtor shall perform all acts, do all
------------------
things and make, execute and endorse all additional and further documents,
assurances and instruments as ZCC III may reasonably require to assure to ZCC
III the rights granted to ZCC III under this Agreement.
9. Events of Default and Acceleration.
----------------------------------
9.1 Events of Default. The occurrence of any or all of the following
-----------------
shall constitute an event of default (each an "Event of Default") under this
Agreement:
-15-
(a) the Debtor shall fail to pay when due any installment of
principal or interest under any of the Series A Purchase Notes, or the Debtor
shall have asserted and be continuing to assert against ZCC III any offset,
defense or counterclaim in respect of any amounts owing under the Series A
Purchase Notes;
(b) any representation of the Debtor made in this Agreement shall
prove to have been untrue in any material respect when made and shall continue
to be untrue and material at the time an Event of Default is declared based
thereon;
(c) the Debtor shall have breached any of the provisions of, or shall
have failed to perform any of the obligations to be performed by Debtor under,
Section 6.2, 7.1, 7.2, 7.7, 7.8, 7.13, 7.14 or 7.16, which breach or failure
to perform shall be continuing;
(d) the Debtor shall fail to pay any amounts due hereunder or under
any Series A Purchase Note (other than the payment of installments of principal
or interest under any Series A Purchase Note) or breach any of the provisions
of, or fail to perform any of the obligations to be performed by the Debtor
under, any Section of this Agreement other than the Sections listed in paragraph
(c) above, and, within 30 days after ZCC III's written notice thereof to the
Debtor, the Debtor shall have failed to cure such breach or default in
performance or, if such breach or default is incapable of cure within 30 days,
the Debtor shall fail to promptly commence and diligently proceed to cure such
breach or default as promptly as possible;
(e) the occurrence and continuance of any default (as provided
specifically in Section 4.01(b) of the Deed of Trust, and which is not cured
within any applicable cure period) under the Deed of Trust;
(f) any involuntary dissolution proceeding shall be commenced against
the Debtor which shall not have been dismissed within 60 days from the
institution thereof; or a voluntary dissolution proceeding shall be commenced by
the Debtor;
(g) any receiver, liquidator or trustee shall be appointed for the
Debtor or any substantial portion of its properties or assets which appointment
shall not have been terminated within 60 days;
(h) the Debtor shall become insolvent, or shall make a general
assignment for the benefit of creditors, or shall be unable, or shall admit in
writing its inability, to pay its debts as they fall due; or
(i) any bankruptcy, reorganization or other proceeding shall be
commenced by or against the Debtor under any bankruptcy, insolvency or other
laws for the relief of debtors
-16-
which in the case of such a proceeding commenced against the Debtor shall
not have been dismissed within 60 days from the institution thereof.
9.2 Acceleration of the Notes. Upon the occurrence and continuance of
-------------------------
any Event of Default, ZCC III may, by giving written notice to the Debtor,
accelerate and declare immediately due and payable the outstanding principal
balance of, and interest accrued thereon at the applicable rate of interest
specified in the Series A Purchase Notes, all of the Series A Purchase Notes,
and such principal and interest shall thereupon be immediately due and payable
without presentment, demand, protest or notice of any other kind, all of which
are hereby waived by the Debtor to the fullest extent permitted by law;
provided, however, such acceleration shall occur automatically and without
notice in the event of the occurrence of the Events of Default specified in
paragraphs (f), (g), (h) or (i) of Section 9.1.
10. Remedies on Default.
-------------------
Upon the occurrence of any Event of Default, or at any time thereafter
if such Event of Default shall be continuing, ZCC III shall have, in addition to
and without limiting any other rights and remedies it may have under the Series
A Purchase Notes, this Agreement, the Deed of Trust or as may otherwise be
available at law or in equity, all of the following rights and remedies,
subject, however, to the limitations of Section 11:
10.1 Rights of Secured Party. ZCC III shall have all of the rights and
-----------------------
remedies of a secured party under the Commercial Code of California and, as
applicable, under the Uniform Commercial Code as adopted in any other
jurisdiction.
10.2 Possession of Windsystem. ZCC III shall have the right to take
------------------------
possession of all or any part of the Windsystem, wherever located, or by
appropriate proceedings, appoint a receiver to take possession thereof pending
disposition and, at the option of ZCC III, remove all or any part of the
Windsystem from such location. If ZCC III chooses to dispose of all or any part
of the Windsystem at and from such location, ZCC III may render all or any part
of the Windsystem unusable pending such disposition.
10.3 Delivery of Windsystem to ZCC III. ZCC III shall have the right
---------------------------------
to require the Debtor to assemble and deliver, at the Debtor's expense, all or
any part of the Windsystem to ZCC III at the Operating Site.
10.4 Disposition of Windsystem by ZCC III. ZCC III may, without any
------------------------------------
obligation to resort to other security, at any time and from time to time, but
only after ZCC III has given to the Debtor not less than ten days written,
telegraphic or telex notice of its intention to dispose of all or any part the
Windsystem, lease all or any part of the Windsystem on such
-17-
terms and in such manner as it deems appropriate, or sell, resell, transfer,
assign, dispose of, and deliver all or any part of the Windsystem at the same or
different times, and all right, title and interest therein, at public or private
sale, for cash, upon credit or for future delivery, and at such price or prices
and on such terms as ZCC III may determine, with the amounts realized from any
such sale to be applied in the manner provided in Section 12 of this Agreement.
10.5 Rights Related to Disposition. In connection with any disposition
-----------------------------
of all or any part of the Windsystem by ZCC III, whether pursuant to judicial or
non-judicial foreclosure, ZCC III may do the following:
(a) bid for the purchase of all or any part of the Windsystem, and by
such purchase acquire absolute right, title and interest therein; and
(b) for itself and for and on behalf of the Debtor, make and deliver
to any purchaser of all or any part of the Windsystem a good and sufficient ▇▇▇▇
of sale or other evidence of transfer of all right, title and interest
therein to such purchaser.
10.6 Effect of Disposition. Any disposition of the Windsystem pursuant
---------------------
to Section 10.4 shall divest all of the Debtor's right, title and interest
therein, and shall perpetually bar the Debtor and its successors and assigns,
and any other party claiming through any of them, from making any claims or
demands with respect thereto.
10.7 Collection of Monies. ZCC III shall have the right to notify or
--------------------
require the Debtor to notify any party obligated to make payments to the Debtor
(to the extent such payments are subject to the security interests granted under
this Agreement) under any of the agreements included in the Intangible
Collateral to make such payments directly to ZCC III or to such special account
of ZCC III or otherwise as may be established for collection of such payments,
and shall have the further right to require the Debtor to promptly turn over to
ZCC III any monies or instruments, such instruments to be appropriately endorsed
over to ZCC III, received by the Debtor as or for any such payments. For
purposes only of execising ZCC III's rights under this Section 10.7,
the Debtor hereby authorizes ZCC III, as the Debtor's duly constituted attorney-
in-fact, to endorse any instruments payable to the Debtor and received by ZCC
III under this Section 10.7.
10.8 Further Assurances. The Debtor shall perform all acts, do all
------------------
things and make, execute and endorse all additional and further documents,
assurances and instruments as ZCC III may reasonably require to enforce its
rights and remedies under this Section 10.
-18-
10.9 Waiver of Notices, Etc. Except as to the notice of intent to
------------------------
sell required under Section 10.4, the Debtor may exercise any of its rights
under this Section 10 without demand, advertisement or notice (except as
required by law), all of which (to the extent permitted by law) are hereby
expressly waived by the Debtor.
11. Limitations on Remedies.
-----------------------
11.1 Retention of Windsystem. ZCC III may not retain (other than
------------------------
pursuant to Section 10.5(a)) all or any part of the Windsystem in exchange
for the release or cancellation of any or all of the Series A Purchase Notes
without the prior written consent of the Debtor.
11.2 Return of Windsystem. In the event that ZCC III takes possession
--------------------
of all or any part of the Windsystem pursuant to Section 10 and, prior to any
sale or other permanent disposition thereof, or the making of any binding
commitment or agreement to make such sale or permanent disposition, is paid
indefeasibly by the Debtor all amounts owed by the Debtor under the Series A
Purchase Notes, this Agreement and the Deed of Trust, ZCC III shall promptly
assign to the Debtor all of its right, title and interest therein on a where
is and as is basis, and permit the Debtor to retake possession.
12. Application of Monies
---------------------
12.1 Order of Application. Subject to Section 12.2, any monies
--------------------
received by ZCC III upon exercising any of its rights under Section 10 shall be
applied, to the extent available, first, to the payment of all costs (including
-----
reasonable attorneys' fees) properly incurred by ZCC III and allocable to
enforcement and collection of amounts due under the Series A Purchase Notes and
under this Agreement; second , to the payment of accrued and unpaid interest
------
under the Series A Purchase Notes; and third, to the payment of the outstanding
-----
principal balance of the Series A Purchase Notes.
12.2 Proceeds as to Turbines. Any proceeds realized by ZCC III on
-----------------------
the disposition of any of the Turbines pursuant to Section 10.4 shall be applied
only to obligations under the Series A Purchase Note issued with respect to such
Turbines.
12.3 Surplus/Deficiency. Any surplus of monies remaining after
------------------
application pursuant to Section 12.1 shall be promptly paid over to the Debtor
or such other persons as may be legally entitled to receive the same. In no
event shall the Debtor be liable for any deficiency.
-19-
13. Payments on Behalf of the Debtor.
--------------------------------
ZCC III shall be entitled to pay such sums for the account and at the
expense of the Debtor as may be necessary to cure any breaches by the Debtor
which are occasioned by the failure of Debtor to pay when due (a) the amount of
premiums due under the Insurance Policies, or (b) amounts required to be paid by
it pursuant to the Series A Easement Agreement or the Series A Management
Agreement. Debtor agrees that it will reimburse ZCC III for such sums, together
with interest thereon at a rate equal to 15% per annum from the date of payment
by ZCC III to the date of reimbursement by the Debtor, prior to the Debtor
making any distribution of cash or property to its partners.
14. Miscellaneous.
-------------
14.1 Assignment and Transfer to Other Parties. The Debtor shall not
----------------------------------------
transfer or assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of ZCC III. The Debtor hereby
expressly agrees that ZCC III may assign to the Lender, or any trustee for the
Lender, to secure the Term Loan Note and all of the obligations of ZCC III to
the Lender in connection with the Term Loan, all of ZCC III's right, title and
interest in to, and under the Series A Purchase Notes, this Agreement and the
Deed of Trust. The Debtor shall provide such reasonable cooperation as may be
required to facilitate issuance of the Term Loan Note, which cooperation shall
include, but not be limited to, the extension of reasonable representations and
warranties to the Lender, or any trustee for the Lender.
14.2 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, to the following addresses, or to such
other address of which notice has been given as provided by this Section 14.2:
To the Debtor: Zond Windsystem Partners, Ltd. Series 85-A,
a California Limited Partnership
c/o Zond Windsystems Management
Corporation III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
To ZCC III: Zond Construction Corporation III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-20-
and, until the first to occur of (a) the payment in full of all amounts due
under the Series A Purchase Notes, this Agreement and the Deed of Trust or
(b) the payment in full of all amounts due to the Lender pursuant to the Term
Loan Note or in connection with the Term Loan, a copy to the Lender, as and at
the address designated by ZCC III to the Debtor.
14.3 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 waiver on one occasion shall not be construed
as continuing or as a bar to or waiver of any right or remedy on any other
occasion.
14.4 Attorneys' Fees. If either the Debtor 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.
14.5 No Partnership, Etc. Nothing in this Agreement shall be deemed to
-------------------
constitute the Debtor or ZCC III a partner of, or joint venturer with, the
other.
14.6 Binding Effect. This Agreement shall be binding upon the Debtor
--------------
and ZCC III and their respective permitted assignees, successors-in-interest and
legal representatives.
14.7 Governing Law. The terms and provisions of this Agreement shall
-------------
be construed in accordance with the laws of the State of California.
14.8 Interpretation. The Debtor 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, either of
them.
14.9 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 unenforceable, 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.
14.10 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
-21-
to Sections are to Sections in this Agreement. All exhibits attached to
this Agreement are incorporated herein by this reference.
14.11 Number and Gender. Where appropriate, words in the singular
-----------------
include the plural, and vice versa, and words in any gender include the
corresponding words in any other gender.
14.12 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same instrument.
14.13 Entire Agreement. This Agreement supersedes all previous
----------------
agreements, understandings, negotiations and proposals between the Debtor 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 the Debtor
and ZCC III and, for so long as there remains unpaid any amounts due to the
Lender under the Term Loan Note or in connection with the Term Loan, consented
to by the Lender. The Debtor and ZCC III 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 or
the Construction Agreement.
14.14 Termination of Interest. ZCC III agrees that it will not
-----------------------
exercise any right of disposition of property in which a security interest is
granted to it pursuant to this Agreement or the Deed of Trust until the
occurrence and continuance of an Event of Default. ZCC III further agrees that
it will no longer have any right or interest in any property or rights granted
to it pursuant to this Agreement or the Deed of Trust and the Debtor will have
no further duties and obligations under this Agreement and the Deed of Trust
when the Series A Purchase Notes and any amounts owed under this Agreement and
the Deed of Trust have been indefeasibly paid in full to ZCC III, at which time
this Agreement shall terminate, and ZCC III shall, when and as requested by the
Debtor, confirm such termination to the Debtor and any third party in writing
and by filing appropriate UCC-2, or other similar form of, termination
statements and taking such action as may be necessary to cause the full
reconveyance of the Deed of Trust.
-22-
IN WITNESS WHEREOF, the parties have executed this Purchase Note and
Security Agreement (Series A) by its duly authorized representatives.
Debtor ZCC III
------ -------
ZOND WINDSYSTEM PARTNERS, ZOND CONSTRUCTION CORPORATION III,
LTD. SERIES 85-A, a a California corporation
California Limited Partnership ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By its authorized General
Partner By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Zond Windsystems Management Senior Vice President -
Corporation III, a California General Counsel
corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President -
General Counsel
-23-
EXHIBIT A
TO
SERIES A PURCHASE NOTE AND SECURITY AGREEMENT
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.
EXHIBIT A
-24-
AND WHEN RECORDED MAIL TO:
Zond Construction Corporation III
c/o Zond Systems, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
SERIES A DEED OF TRUST AND ASSIGNMENT OF RENTS
----------------------------------------------
THIS SERIES A DEED OF TRUST AND ASSIGNMENT OF RENTS ("Deed of Trust") is
made as of the 7TH day of November, 1985, by ZOND WINDSYSTEM PARTNERS, LTD.
SERIES 85-A, A CALIFORNIA LIMITED PARTNERSHIP ("Trustor"), to TICOR TITLE
INSURANCE COMPANY OF CALIFORNIA, as trustee ("Trustee"), for the benefit of ZOND
CONSTRUCTION CORPORATION III, a California corporation ("Beneficiary").
▇. ▇▇▇▇▇ AND OBLIGATIONS SECURED
----------------------------
▇. ▇▇▇▇▇
-----
1.01 Trustor hereby irrevocably grants, transfers and assigns to
Trustee, in trust, with power of sale, all right, title and interest of Trustor
in and to all real property interests of Trustor and to which Trustor is
entitled including without limitation all right, title, and interest of Trustor
in and to the following:
(a) Series A Wind Park Easement Agreement dated as of
September 9, 1985 (the "Series A Wind Park Easement Agreement") between
Beneficiary and Trustor, as it relates to that certain real property situated in
▇▇▇▇ County, California, defined in the Series A Wind Park Easement Agreement as
the "Property" and described in Exhibit A attached hereto and made a part hereof
("Land"); ---------
(b) Grant of Easement (Western Access) (Series A) dated as of
September 9, 1985 (the "Series A Access Easement Agreement") between Zond
Systems, Inc., a California corporation ("Zond"), and Trustor as it relates to
the Land and that certain real property situated in ▇▇▇▇ County, California,
owned by Zond, defined in the Series A Access Easement Agreement as the
"Servient Tenement" and described in Exhibit B attached hereto and made a part,
hereof ("Zond Land"); ---------
(c) Grant of Easement (Interconnect) (Series A) dated as of
September 9, 1985 (the "Series A Grant of Interconnect Easement Agreement")
between Zond and Trustor as it relates to the Land and the Zond Land; and
(d) Series A Power Transfer Facilities Agreement dated as of
September 9, 1985 (the "Series A PTF Agreement") between Zond and Trustor as it
relates to the Land and the Zond Land and the shared use of the "Power Transfer
Facilities" (as defined in the Series A PTF Agreement).
The Series A Wind Park Easement Agreement, the Series A
Access Easement Agreement, the Series A Grant of Interconnect Easement
Agreement and the Series A PTF Agreement are referred to collectively herein as
the "Series A Wind Park Agreements."
B. Obligations Secured
-------------------
1.02. The grant, transfer and assignment made in Paragraph 1.01 is
for the purpose of securing:
(a) Payment of that non-recourse promissory note of even
date herewith with an original principal amount of $8,568,000.00
("Series A Purchase Note") by Trustor in favor of Beneficiary in
partial payment by Trustor to Beneficiary of the purchase price
of a portion of the following purchased by Trustor from
Beneficiary pursuant to the Windsystem Construction Agreement
dated as of September 9, 1985 (the "Series A Construction
Agreement"): certain property (collectively the "Windsystem")
more specifically described in paragraphs (a), (b) and (c) of
Section 2.2 of the Series A Security Agreement (as defined in the
next sentence) including without limitation up to 160 Vestas
Model V17 wind turbine generators, certain concrete pads, cables
and step-up transformers for such wind turbine generators and a
30MW power substation. The Series A Purchase Note is also secured
by security interests granted by Trustor to Beneficiary in
certain property of Trustor pursuant to a Purchase Note and
Security Agreement (Series A) dated as of November 7, 1985
("Series A Security Agreement") between Trustor, as debtor, and
Beneficiary, as secured party.
(b) Payment of any other non-recourse promissory note made
by Trustor in favor of Beneficiary in partial payment by Trustor
to Beneficiary of the purchase price of any portion of the
Windsystem purchased by Trustor from Beneficiary pursuant to the
Series A Construction Agreement when such other nonrecourse
promissory note (also called a "Series A Purchase Note" in this
Deed
-2-
of Trust) recites that it is secured by this Deed of Trust
and certain security interests as provided in the Series A
Security Agreement.
(c) Any sums due to Beneficiary by Trustor pursuant to any
of the terms of this Deed of Trust.
II. COVENANTS OF TRUSTOR
--------------------
A. Series A Wind Park Agreements
-----------------------------
2.01 Trustor agrees that:
(a) It shall keep and perform each and every material
obligation of Trustor in the Series A Wind Park Agreements,
including without limitation the payment of all royalty payments
owed by it under the Series A Wind Park Easement Agreement. If
Trustor is in default under Section 8.1.1 or Section 8.1.2 of the
Series A Wind Park Easement Agreement or is in breach of any
material obligation of it in the Series A Access Easement
Agreement, the Series A Grant of Interconnect Easement Agreement
or the Series A PTF Agreement, and such default or breach is not
otherwise cured by Trustor, Beneficiary may, at its option but
without any obligation to do so, take any action necessary or
desirable to cure any such default or breach, Beneficiary being
authorized to utilize all right, title and interest of Trustor in
and to the Series A Wind Park Agreements for such purposes,
consistent with the conditions of Paragraph 5.02. Trustor,
immediately on demand, shall pay to Beneficiary all costs of
Beneficiary incurred in curing any such default or breach.
(b) It shall give immediate notice to the then holder of
this Deed of Trust (other than Beneficiary) of any receipt by
Trustor of any notice from Beneficiary of an event of default by
Trustor pursuant to Section 8.1.1 or 8.1.2 of the Series A Wind
Park Easement Agreement.
(c) It shall give immediate notice to the then holder of
this Deed of Trust of any receipt by Trustor of any notice from
Zond that Trustor is in breach of any material obligation of it
in the Series A Access Easement Agreement, the Series A Grant of
Interconnect Easement Agreement or the Series A PTF Agreement.
(d) The obligations of Trustor under this Deed of Trust
shall be deemed to be in addition to Trustor's obligations with
respect to similar obligations contained in the Series A Wind
Park
-3-
Agreements, and the inclusion in this Deed of Trust of any
obligations relating to similar obligations contained in the
Series A Wind Park Agreements shall not restrict or limit
Trustor's duties to keep and perform promptly all of its
obligations under the Series A Wind Park Agreements; provided,
however, that nothing in this Deed of Trust shall be construed as
requiring the taking of or the omitting to take any action by
Trustor or Beneficiary which would cause Trustor to be in default
under Section 8.1.1 or 8.1.2 of the Series A Wind Park Easement
Agreement or to be in breach under the Series A Access Easement
Agreement, the Series A Grant of Interconnect Easement Agreement
or the Series A PTF Agreement.
(e) So long as this Deed of Trust is in effect, there shall
be no merger of the Series A Wind Park Agreements or any one or
more of them or any interest or interests therein nor of the
estates created thereby with the fee interest in the Land or the
Zond Land by reason of the fact that the Wind Park Easement
Agreements or any one or more of them or such interest or
interests therein or such estates may be held directly or
indirectly by or for the account of any person who shall hold any
other dominant estate in the Land or the Zond Land, and Trustor
and Beneficiary agree that the holding of the Series A Wind Park
Agreements or any one or more of them or of such interests or
estates by the same person shall not result in a merger of the
Series A Wind Park Agreements or any one or more of them or of
such interests or estates. In the event Trustor acquires an
interest in any estate, title or interest in the Land or the Zond
Land other than its interest in the Series A Wind Park
Agreements, this Deed of Trust shall attach to and cover and be a
lien upon such interest in such other estate, title or interest
so acquired, and such interest shall, without further assignment,
mortgage or conveyance, become and be subject to the lien of and
covered by this Deed of Trust. Trustor shall notify Beneficiary
of any such acquisition by Trustor and, on written request by
Beneficiary, shall cause to be executed and recorded all such
other and further assurances or other instruments in writing as
may, in the opinion of Beneficiary, be required to carry out the
intent of this subparagraph (e).
(f) No surrender (except a surrender upon the expiration of
the stated term of the Series A Wind Park Agreements) by Trustor
of its right, title and interest in and to the Series A Wind Park
Agreements, or any portion thereof or of any interest therein,
and
-4-
no termination of the Series A Wind Park Agreements by
Trustor (except as provided in the Series A Wind Park Agreements)
shall be valid or effective, and neither Trustor's right, title
and interest in and to the Series A Wind Park Agreements nor the
terms thereof may be assigned, amended, modified, or subordinated
to any mortgage, easement, right of way, or to any other
interest, either orally or in writing, without the prior written
consent of Beneficiary so long as the lien of this Deed of Trust
is in effect.
(g) If the Series A Wind Park Agreements or any one or more
of them are for any reason whatsoever terminated prior to the
expiration of their respective stated terms and, if pursuant to
any provision of any one or more of the Series A Wind Park
Agreements or otherwise, Beneficiary or its designee shall
acquire from the granting party or the fee owner a new easement
or right of way and/or other rights identical or similar to those
in the particular one or more terminated Series A Wind Park
Agreements, Trustor shall have no right, title or interest in or
to such new estate created thereby.
2.02 Trustor shall not commit any violation of any law,
ordinance, rule, regulation or order of any governmental authority having
jurisdiction over Trustor's right, title and interest in and to the Series A
Wind Park Agreements.
B. Payments
--------
2.03 Trustor shall pay the principal, interest and other charges
due under each and every Series A Purchase Note according to its terms.
2.04 Trustor shall pay immediately after expenditure, all sums
expended or expenses properly incurred by Trustee and/or Beneficiary under any
of the terms of this Deed of Trust.
C. Rents
-----
2.05 For so long as any amounts due under any Series A Purchase
Note remain unpaid and as additional security, Trustor gives and confers upon
Beneficiary the right, power and authority to collect all of Trustor's right,
title and interest in any income, rents, issues and profits of Trustor's right,
title and interest in and to the Series A Wind Park Agreements; provided,
however, until the occurrence of an event of default in respect of Trustor under
this Deed of Trust as provided in Paragraph 4.01 (hereinafter an "Event of
Default"), Trustor reserves the right to collect any such income, rents, issues
and profits as they become due and payable. When such an Event of Default in
-5-
respect of Trustor has occurred and is continuing, Beneficiary may at any
time, either in person, by agent or by a receiver to be appointed by a court of
competent jurisdiction, and without regard to the adequacy of any security for
the obligations secured by this Deed of Trust, ▇▇▇ for or otherwise collect such
income, rents, issues and profits (including any past due and unpaid) and apply
that collected, less costs of collection including reasonable attorney's fees,
against the obligations secured by this Deed of Trust in such order as
Beneficiary may determine. It is understood and agreed that neither the
foregoing assignment of income, rents, issues and profits to Beneficiary nor the
exercise by Beneficiary of any of its rights or remedies under this Paragraph
2.05 or Paragraph 3.01 shall be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to Trustor's right, title and interest in and to the Series A Wind Park
Agreements or the use or enjoyment of Trustor's right, title and interest in and
to the Series A Wind Park Agreements, subject to the conditions of Paragraph
5.02.
D. Other Covenants
---------------
2.06 Trustor agrees to execute such documents and take such
action as Beneficiary shall reasonably determine to be necessary or desirable to
further evidence or continue the lien of this Deed of Trust.
2.07 Trustor agrees to pay all reasonable attorney's fees, costs
and expenses in connection with any proper action and/or actions which may be
brought, upon the occurrence of an Event of Default, for the foreclosure of this
Deed of Trust, and/or for possession of Trustor's right, title and interest in
and to the Series A Wind Park Agreements, and/or for appointment of a receiver,
and/or for the enforcement as provided in this Deed of Trust of any covenant or
right in this Deed of Trust.
III. CERTAIN RIGHTS OF BENEFICIARY
-----------------------------
3.01 Should an Event of Default have occurred and be continuing,
then Beneficiary may, after notice to and demand upon Trustor, without releasing
Trustor from any such Event of Default and without waiving Beneficiary's right
to declare an Event of Default or impairing any declaration of such Event of
Default or election to cause Trustor's right, title and interest in and to the
Series A Wind Park Agreements to be sold or any sale proceeding predicated
thereon:
(a) Make or do the same in such manner and to such extent as
Beneficiary may deem reasonably necessary to protect the security
of this Deed of Trust, Beneficiary being authorized to use, enter
upon and take possession of Trustor's right, title and
-6-
interest in and to the Series A Wind Park Agreements for
such purpose consistent with the conditions of Paragraph 5.02;
and
(b) Commence, appear in and/or defend any action or
proceeding purporting to affect the security of this Deed of
Trust, the interests, rights, powers and/or duties of Beneficiary
under this Deed of Trust, whether brought by or against Trustor
or Beneficiary.
Beneficiary shall not be under any obligation to make any of the payments
or do any of the acts referred to in this Paragraph 3.01.
IV. DEFAULTS AND REMEDIES
---------------------
A. Defaults
--------
4.01 An Event of Default under this Deed of Trust shall occur if
any of the following events shall occur and be continuing:
(a) There occurs an Event of Default as defined and
specified in Section 9.1 of the Security Agreement.
(b) Trustor fails to perform any of its obligations under
this Deed of Trust, and, within 30 days after Beneficiary's
written notice thereof to Trustor, Trustor shall not have cured
such failure or, if such failure is incapable of cure within 30
days, Trustor shall not promptly commence and diligently proceed
to cure such failure as promptly as possible.
B. Remedies
--------
4.02 In the event of any Event of Default by Trustor under this
Deed of Trust as provided in Paragraph 4.01, then and in each such event,
Beneficiary may declare all sums secured hereby immediately due and payable
either by commencing an action to foreclose this Deed of Trust as a mortgage or
by the delivery to Trustee of a written declaration of default and demand for
sale and of written notice of default and of election to cause the right, title
and interest of Trustor in and to the Series A Wind Park Agreements to be sold,
which notice Trustee shall cause to be duly filed for record. Should Beneficiary
elect to foreclose by exercise of the power of sale herein, Beneficiary shall
also deposit with Trustee this Deed of Trust and the Series A Purchase Notes
and such receipts and evidence of expenditures made and secured by this Deed of
Trust as Trustee may require, and notice of sale having been given as then
required by law and after lapse of such time as may then be required by law
after recordation of such notice of default, Trustee, without demand on Trustor,
-7-
shall sell the right, title and interest of Trustor in and to the Series A Wind
Park Agreements at the time and place of sale fixed by Trustee in said notice of
sale, as a whole, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may postpone sale
by public announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time fixed by
the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the right, title and interest of Trustor in and to the Series A Wind
Park Agreements so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including Trustor, Trustee or
Beneficiary, may purchase at such sale, and upon payment in full (or credit bid
by Beneficiary) shall own the right, title and interest of Trustor in and to the
Series A Wind Park Agreements. Any deed of conveyance provided by Trustee or
Beneficiary may provide that the granting of the interest so conveyed shall not
result in a merger with any other interest or estate held by the grantee of such
deed, and the actual holding of dominant and subordinate interests or estates
shall not result in a merger of such interests or estates.
4.03 Beneficiary, from time to time before Trustee's sale, may
rescind any such notice of default and of election to cause the right, title and
interest of Trustor in and to the Series A Wind Park Agreements to be sold by
executing and delivering to Trustee a written notice of such rescission, which
notice, when recorded, shall also constitute a cancellation of any such prior
declaration of default and demand for sale. The exercise by Beneficiary of such
right of rescission shall not constitute a waiver of any Event of Default then
existing or subsequently occurring, or impair the right of Beneficiary to
execute and deliver to Trustee, as above provided, other declarations of default
and demand for sale, and notices of default, and of election to cause the
right, title and interest of Trustor in and to the Series A Wind Park Agreements
to be sold to satisfy the obligations hereof, nor otherwise affect any
provision, agreement, covenant or condition of this Deed of Trust or any of the
rights, obligations or remedies under this Deed of Trust of Beneficiary or
Trustee or Trustor.
4.04 After deducting all costs, fees and expenses of Trustee and
of this Trust, including the cost of evidence of title in connection with sale
and attorneys' fees, Trustee shall apply the proceeds of sale to payment of: all
sums expended under the terms hereof, not then repaid, with accrued interest at
the rate applicable under the first Series A Purchase Note at the time of
such expenditure; all other sums then secured by this Deed of Trust; and the
remainder, if any, to the person or persons legally entitled thereto.
-8-
4.05 Beneficiary and Trustee shall not exercise any right of
disposition of the right, title and interest of Trustor in and to the Series A
Wind Park Agreements until the occurrence and continuance of an Event of
Default.
4.06 If Beneficiary at any time holds additional security for any
obligations secured by this Deed of Trust, it may enforce the terms of this Deed
of Trust or otherwise realize upon the same upon the occurrence and continuance
of an Event of Default, at its option, either before or concurrently herewith or
after a sale is made under this Deed of Trust, and may apply the proceeds upon
the indebtedness secured by this Deed of Trust without affecting the status of
or waiving any right to exhaust all or any other security, including the
security under this Deed of Trust, and without waiving any Event of Default or
any right or power whether exercised under this Deed of Trust or contained in
this Deed of Trust or in any such other security.
4.07 No remedy in this Deed of Trust conferred upon or reserved
to Trustee or Beneficiary is intended to be exclusive of any other remedy in
this Deed of Trust or by law provided or permitted, but each shall be cumulative
and shall be in addition to every other remedy given under this Deed of Trust or
now or hereafter existing at law or in equity or by statute. Every power or
remedy given under this Deed of Trust to Trustee or Beneficiary or to which
either of them may be otherwise entitled, may be exercised concurrently or
independently from time to time and as of ten as may be deemed expedient by
Trustee or Beneficiary and either of them may pursue inconsistent remedies.
V. MISCELLANEOUS PROVISIONS
------------------------
5.01 By accepting payment of any sum secured by this Deed of
Trust after its due date or in an amount less than the sum due, Beneficiary does
not waive its rights to require prompt payment when due of all other sums so
secured or to declare an Event of Default as provided in this Deed of Trust in
the event sums due are only partially paid.
5.02 Trustor authorizes Beneficiary and its agents, employees or
workmen, to use and enter at any reasonable time any part of Trustor's right,
title and interest in and to the Series A Wind Park Agreements for the purposes
of inspecting the same and of performing any of the acts Beneficiary is
authorized to perform under this Deed of Trust. Such use, entry and performance
shall be consistent with the terms of the Series A Wind Park Agreements and any
other agreements affecting the Series A Wind Park Agreements or the Land or the
Zond Land including without limitation those to which Beneficiary or any of its
affiliates are a party.
-9-
5.03 This Deed of Trust applies to, inures to the benefit of, and
binds Beneficiary, Trustee, Trustor and their respective heirs, legatees,
devisees, administrators, successors and assigns. The term "Beneficiary" shall
mean the owner and holder, including pledgees, of the Series A Purchase Notes,
whether or not named as Beneficiary in this Deed of Trust. Whenever the context
so requires in this Deed of Trust, the masculine gender includes the feminine
and/or neuter, and the singular number includes the plural.
5.04 Trustee, upon presentation to it of any affidavit signed by
or on behalf of Beneficiary, setting forth any fact or facts showing a default
by Trustor in its obligations under this Deed of Trust, is authorized to accept
as true and conclusive all facts and statements in such affidavit and to act
under this Deed of Trust in complete reliance thereon.
5.05 If any provision of this Deed of Trust should be held
unenforceable or void, then such provision shall be deemed separable from the
remaining provisions and shall in no way affect the validity of this Deed of
Trust. Unless otherwise indicated, all references to paragraphs are to
paragraphs in this Deed of Trust.
5.06 Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law.
5.07 Trustee shall be under no obligation to notify Beneficiary
or Trustor of any action or proceeding of any kind in which Trustor, Beneficiary
and/or Trustee shall be a party, unless brought by Trustee, or of any pending
sale under any other deed of trust.
5.08 Beneficiary may, from time to time, by a written instrument
executed and acknowledged by Beneficiary and recorded in ▇▇▇▇ County,
California, substitute a successor or successors for Trustee named herein or
acting under this Deed of Trust.
5.09 All notices under this Deed of Trust shall be deemed to have
been duly given if mailed by the United States registered or certified mail,
with return receipt requested, postage prepaid to the following addresses (or to
such other addresses as shall be given in writing by any party to the others)
and shall be deemed completed upon any such mailing:
To Trustor: Zond Windsystem
Partners, Ltd. Series 85-A,
a California Limited Partnership
c/o Zond Windsystems Management
Corporation III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
To Beneficiary: Zond Construction Corporation III
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
In the event of any strike or occurrence of another similar event which
interrupts mail service, notices may be served personally upon an individual,
partner, or an officer or director of a corporation which is or is part of the
party being served hereunder.
5.10 Trustor requests that a copy of any notice of default and of
any notice of sale under this Deed of Trust be mailed to Trustor at its address
determined in accordance with Paragraph 5.09.
5.11 Beneficiary and Trustee shall have no right or interest in
the right, title and interest of Trustor in and to the Series A Wind Park
Agreements when the obligations secured by this Deed of Trust have been
indefeasibly repaid or performed. Upon written request of Beneficiary stating
that all sums secured by this Deed of Trust have been paid and upon surrender to
Trustee of this Deed of Trust and the Series A Purchase Notes for cancellation
and retention and upon payment of its fees, Trustee shall reconvey, without any
covenant or warranty, express or implied, the right, title and interest of
Trustor in and to the Series A Wind Park Agreements then held by Trustee under
this Deed of Trust. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled
thereto."
5.12 By acceptance of this Deed of Trust, Beneficiary agrees
that, in the event of any Event of Default by Trustor under this Deed of Trust
or any event of default under the Series A Purchase Notes or the Series A
Security Agreement, Beneficiary's sole recourse shall be to the security granted
in this
-11-
Deed of Trust and in the Series A Security Agreement and Trustor shall in
no event be personally liable under the Series A Purchase Notes, the Series A
Security Agreement and this Deed of Trust.
5.13 This Deed of Trust shall be construed and enforced in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day
first written above.
ZOND WINDSYSTEM PARTNERS, LTD. SERIES 85-A,
A CALIFORNIA LIMITED PARTNERSHIP
By its general partner:
Zond Windsystems Management
Corporation III,
a California corporation
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President and
General Counsel
STATE OF CALIFORNIA )
) ss.
COUNTY OF Los Angeles )
On November 7, 1985, before me, the undersigned, a Notary Public in
and for said State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, personally known to
me or proved to me on the basis of satisfactory evidence to be the person who
executed the within instrument as the Senior Vice President and General Counsel
of Zond Windsystems Management Corporation III, the corporation that executed
the within instrument as the general partner of Zond Windsystem Partners, Ltd.
Series 85-A, a California Limited Partnership, the partnership that executed the
within instrument, and acknowledged to me that such corporation executed the
same as such partner and that such partnership executed the same.
WITNESS my hand and official seal.
-----------------------------------
Signature /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | OFFICIAL SEAL |
-------------------------- | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
| NOTARY PUBLIC - CALIFORNIA |
| LOS ANGELES COUNTY |
| My comm. expires June 22, 1997|
-----------------------------------
-12-
EXHIBIT A
TO
SERIES A DEED OF TRUST AND ASSIGNMENT OF RENTS
Legal Description of the "Property" and the "Land":
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.
EXHIBIT A
-13-
EXHIBIT B
TO
SERIES A DEED OF TRUST AND ASSIGNMENT OF RENTS
Legal Description of Zond Land:
A. ALL OF FRACTIONAL SECTION 31, 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.
B. THE NORTH HALF, SOUTH HALF OF THE SOUTHEAST QUARTER, NORTHEAST QUARTER OF
THE SOUTHEAST QUARTER OF SECTION 32, 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 IN DRY SALT LAKE AS SAID LAKE IS SO DESIGNATED AND
SHOWN UPON THE OFFICE SURVEY OF SAID TOWNSHIP RETURNED TO THE GENERAL LAND
OFFICE AT WASHINGTON, D.C. AND APPROVED BY THE SURVEYOR GENERAL OF
CALIFORNIA ON MAY 14, 1856.
EXHIBIT B
-14-
I hereby certify under penalty of perjury that the notary
seal of [▇▇▇▇▇ ▇. ▇▇▇▇▇▇]
---------------------------------------------------------
affixed to the within document, while not being photographically
reproducible, can be read. I further certify that the said notary
commission expires on [6-22-87]
-------------------------------------------
The notary bond and commission is filed in Los Angeles
----------------------
County.
Place of execution [Bakersfield]
----------------------------------------------
Date 11-19-85
------------------------------------------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------
(Signature and firm Name, if, any)